Document:

Exhibit 10.1

                                                                EXECUTION COPY

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                         SALE AND SERVICING AGREEMENT

                                    between

                       DAIMLERCHRYSLER AUTO TRUST 2005-B
                                    Issuer,

                                      and

                  DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
                              Seller and Servicer

                            Dated as of May 1, 2005

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<CAPTION>

                                   ARTICLE I

                                  Definitions

<S>                   <C>                                                                                        <C>
Section 1.01          Definitions.................................................................................1
Section 1.02          Other Definitional Provisions..............................................................13

                                  ARTICLE II

                           Conveyance of Receivables

Section 2.01          Conveyance of Receivables..................................................................14
Section 2.02          Conveyance of Fixed Value Payments and Fixed Value Finance Charges.........................15
Section 2.03          Fixed Value Securities.....................................................................15

                                  ARTICLE III

                                The Receivables

Section 3.01          Representations and Warranties of Seller with Respect to the Receivables...................16
Section 3.02          Repurchase upon Breach.....................................................................19
Section 3.03          Custody of Receivable Files................................................................20
Section 3.04          Duties of Servicer as Custodian............................................................20
Section 3.05          Instructions; Authority To Act.............................................................21
Section 3.06          Custodian's Indemnification................................................................21
Section 3.07          Effective Period and Termination...........................................................21
Section 3.08          Representations and Warranties as to the Security Interest of the Issuer in the Receivables21

                                  ARTICLE IV

                  Administration and Servicing of Receivables

Section 4.01          Duties of Servicer.........................................................................22
Section 4.02          Collection and Allocation of Receivable Payments...........................................23
Section 4.03          Realization upon Receivables...............................................................23
Section 4.04          Physical Damage Insurance..................................................................23
Section 4.05          Maintenance of Security Interests in Financed Vehicles.....................................24
Section 4.06          Covenants of Servicer......................................................................24
Section 4.07          Purchase of Receivables upon Breach........................................................24
Section 4.08          Servicing Fee..............................................................................24
Section 4.09          Servicer's Certificate.....................................................................24
Section 4.10          Annual Statement as to Compliance; Notice of Default.......................................25
Section 4.11          Annual Independent Certified Public Accountants' Report....................................25

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Section 4.12          Access to Certain Documentation and Information Regarding Receivables......................26
Section 4.13          Servicer Expenses..........................................................................26
Section 4.14          Appointment of Subservicer.................................................................26

                                   ARTICLE V

                           Distributions; Reserve Account; Statements to Certificateholders and Noteholders

Section 5.01          Establishment of Deposit Account...........................................................26
Section 5.02          Collections................................................................................28
Section 5.03          Application of Collections.................................................................29
Section 5.04          Additional Deposits........................................................................29
Section 5.05          Distributions..............................................................................29
Section 5.06          Reserve Account............................................................................30
Section 5.07          Statements to Noteholders and Certificateholders...........................................31
Section 5.08          Net Deposits...............................................................................32

                                  ARTICLE VI

                                  The Seller

Section 6.01          Representations of Seller..................................................................32
Section 6.02          Preservation of Existence..................................................................33
Section 6.03          Liability of Seller; Indemnities...........................................................34
Section 6.04          Merger or Consolidation of, or Assumption of Obligations of, Seller........................35
Section 6.05          Limitation on Liability of Seller and Others...............................................35
Section 6.06          Seller May Own Notes.......................................................................35

                                  ARTICLE VII

                                 The Servicer

Section 7.01          Representations of Servicer................................................................36
Section 7.02          Indemnities of Servicer....................................................................37
Section 7.03          Merger or Consolidation of, or Assumption of Obligations of, Servicer......................38
Section 7.04          Limitation on Liability of Servicer and Others.............................................38
Section 7.05          DCS Not To Resign as Servicer..............................................................39

                                 ARTICLE VIII

                                    Default

Section 8.01          Servicer Default...........................................................................39
Section 8.02          Appointment of Successor...................................................................40
Section 8.03          Notification to Noteholders and Certificateholders.........................................41

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Section 8.04          Waiver of Past Defaults....................................................................41

                                  ARTICLE IX

                                  Termination

Section 9.01          Optional Purchase of All Receivables.......................................................41

                                   ARTICLE X

                                 Miscellaneous

Section 10.01         Amendment..................................................................................42
Section 10.02         Protection of Title to Trust...............................................................43
Section 10.03         Notices....................................................................................45
Section 10.04         Assignment by the Seller or the Servicer...................................................45
Section 10.05         Limitations on Rights of Others............................................................45
Section 10.06         Severability...............................................................................46
Section 10.07         Separate Counterparts......................................................................46
Section 10.08         Headings...................................................................................46
Section 10.09         Governing Law..............................................................................46
Section 10.10         Assignment by Issuer.......................................................................46
Section 10.11         Nonpetition Covenants......................................................................46
Section 10.12         Limitation of Liability of Owner Trustee and Indenture Trustee.............................47

SCHEDULE A        Schedule of Receivables
SCHEDULE B        Location of Receivable Files
SCHEDULE C        Schedule of YSOA

EXHIBIT A                  Form of Distribution Statement to Noteholders........................................A-1
EXHIBIT B                  Form of Servicer's Certificate.......................................................B-1
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         SALE AND SERVICING AGREEMENT dated as of May 1, 2005, between
         DAIMLERCHRYSLER AUTO TRUST 2005-B, a Delaware statutory trust (the
         "Issuer"), and DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC, a Michigan
         limited liability company, as seller and servicer.

         WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with automobile retail installment sale contracts
generated by DaimlerChrysler Services North America LLC in the ordinary course
of business; and

         WHEREAS DaimlerChrysler Services North America LLC is willing to sell
such receivables to, and to service such receivables on behalf of, the Issuer;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:

                                  ARTICLE I

                                  Definitions
                                  -----------

         Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

         "Amortizing Payment" means, with respect to each Fixed Value
Receivable and each Collection Period prior to the date on which the Fixed
Value Payment relating to such Receivable is due, the amount specified in the
applicable Contract in the payment schedule as the "Amount of Each Payment",
except that in the case of a prepayment, liquidation or repurchase by the
Seller or purchase by the Servicer, the Amortizing Payment shall be equal to
the aggregate "Amount of Each Payment" that has not yet been paid for the
period through and including the last payment prior to the date when the Fixed
Value Payment is due less the amount of the unearned finance charges under the
related Contract allocable to such amount in accordance with the Servicer's
customary procedures.

         "Amortizing Payment Finance Charge" means, with respect to each
payment collected on a Fixed Value Receivable, the finance charge included in
such payment (as determined in accordance with the Servicer's customary
procedures) that is allocable to the related Principal Balance.

         "Amount Financed" means (i) with respect to a Standard Receivable,
the amount advanced under such Standard Receivable toward the purchase price
of the Financed Vehicle and any related costs and (ii) with respect to a Fixed
Value Receivable, an amount equal to the present value of the fixed level
payment monthly installments (not including the amount designated as the Fixed
Value Payment) under such Fixed Value Receivable, assuming that each payment
is made on the due date in the month in which such payment is due, discounted
at the APR for such Fixed Value Receivable.

         "Annual Percentage Rate" or "APR" of a Receivable means the annual
rate of finance charges stated in the related Contract.

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         "Basic Documents" means the Indenture, the Trust Agreement, the
Administration Agreement and the Purchase Agreement.

         "Certificateholders" has the meaning assigned to such term in the
Trust Agreement.

         "Certificates" has the meaning assigned to such term in the Trust
Agreement.

         "Class" means any one of the classes of Notes.

         "Class A-1 Final Scheduled Payment Date" means May 8, 2006.

         "Class A-1 Noteholder" means the Person in whose name a Class A-1
Note is registered in the Note Register.

         "Class A-2 Final Scheduled Payment Date" means December 10, 2007.

         "Class A-2 Noteholder" means the Person in whose name a Class A-2
Note is registered in the Note Register.

         "Class A-3 Final Scheduled Payment Date" means September 8, 2009.

         "Class A-3 Noteholder" means the Person in whose name a Class A-3
Note is registered in the Note Register.

         "Class A-4 Final Scheduled Payment Date" means July 8, 2010.

         "Class A-4 Noteholder" means the Person in whose name a Class A-4
Note is registered in the Note Register.

         "Class B Final Scheduled Payment Date" means October 11, 2011.

         "Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.

         "Collection Period" means a calendar month (or in the case of the
first Collection Period, the period from but excluding May 2, 2005 to and
including May 31, 2005). The "related Collection Period" for a Payment Date is
the Collection Period ending immediately prior to such Payment Date. Unless
otherwise specified, any amount stated as of the last day of a Collection
Period or as of the first day of a Collection Period shall give effect to the
following calculations as determined as of the close of business on such last
day: (1) all applications of collections and (2) all distributions to be made
on the related Payment Date.

         "Company" means DaimlerChrysler Retail Receivables LLC, a Michigan
limited liability company, and any successor in interest or, if the Rights (as
defined in the Purchase Agreement) have been assigned to a Person that becomes
a transferee in accordance with Section 5.05 of the Purchase Agreement, such
transferee Person and any successor in interest.

         "Contract" means a motor vehicle retail installment sale contract.

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         "Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 388 Greenwich Street, 14th Floor, New York, New York 10013,
Attention: Structured Finance Agency and Trust, DCAT 2005-B; or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (of which address such successor Indenture Trustee
will notify the Noteholders and the Seller).

         "Cutoff Date" means May 2, 2005.

         "DCS" means DaimlerChrysler Services North America LLC, a Michigan
limited liability company, or its successors.

         "Dealer" means the dealer who sold a Financed Vehicle and who
originated and assigned the related Receivable to DCS under an existing
agreement between such dealer and DCS.

         "Delivery" when used with respect to Trust Account Property means:

                  (a) with respect to bankers' acceptances, commercial paper,
         negotiable certificates of deposit and other obligations that
         constitute "instruments" within the meaning of Section 9-102(a)(47)
         of the UCC and are susceptible of physical delivery, transfer thereof
         to the Indenture Trustee or its nominee or custodian by physical
         delivery to the Indenture Trustee or its nominee or custodian
         endorsed to, or registered in the name of, the Indenture Trustee or
         its nominee or custodian or endorsed in blank, and, with respect to a
         certificated security (as defined in Section 8-102 of the UCC)
         transfer thereof (i) by delivery of such certificated security
         endorsed to, or registered in the name of, the Indenture Trustee or
         its nominee or custodian or endorsed in blank to a securities
         intermediary (as defined in Section 8-102 of the UCC) and the making
         by such securities intermediary of entries on its books and records
         identifying such certificated securities (as defined in Section 8-102
         of the UCC) of the Indenture Trustee or its nominee or custodian or
         (ii) by delivery thereof to a "clearing corporation" (as defined in
         Section 8-102 of the UCC) and the making by such clearing corporation
         of appropriate entries on its books reducing the appropriate
         securities account of the transferor and increasing the appropriate
         securities account of a securities intermediary by the amount of such
         certificated security, the identification by the clearing corporation
         on its books and records that the certificated securities are
         credited to the sole and exclusive securities account of the
         securities intermediary, the maintenance of such certificated
         securities by such clearing corporation or a custodian or the nominee
         of such clearing corporation subject to the clearing corporation's
         exclusive control, and the making by such securities intermediary of
         entries on its books and records identifying such certificated
         securities as being credited to the securities account of the
         Indenture Trustee or its nominee or custodian (all of the foregoing,
         "Physical Property"), and, in any event, any such Physical Property
         in registered form shall be in the name of the Indenture Trustee or
         its nominee or custodian; and such additional or alternative
         procedures as may hereafter become appropriate to effect the complete
         transfer of ownership of any such Trust Account Property (as defined
         herein) to the Indenture Trustee or its nominee or custodian,
         consistent with changes in applicable law or regulations or the
         interpretation thereof;

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                  (b) with respect to any securities issued by the U.S.
         Treasury, the Federal Home Loan Mortgage Corporation or by the
         Federal National Mortgage Association that are book-entry securities
         held through the Federal Reserve System pursuant to Federal
         book-entry regulations, the following procedures, all in accordance
         with applicable law, including applicable Federal regulations and
         Articles 8 and 9 of the UCC: book-entry registration of such Trust
         Account Property to an appropriate book-entry account maintained with
         a Federal Reserve Bank by a securities intermediary which is also a
         "depository" pursuant to applicable Federal regulations; the
         identification by the Federal Reserve Bank of such book-entry
         securities on its record being credited to the securities
         intermediary's securities account; the making by such securities
         intermediary of entries in its books and records identifying such
         book-entry security held through the Federal Reserve System pursuant
         to Federal book-entry regulations as being credited to the Indenture
         Trustee's securities account; and such additional or alternative
         procedures as may hereafter become appropriate to effect complete
         transfer of ownership of any such Trust Account Property to the
         Indenture Trustee or its nominee or custodian, consistent with
         changes in applicable law or regulations or the interpretation
         thereof; and

                  (c) with respect to any item of Trust Account Property that
         is an uncertificated security under Article 8 of the UCC and that is
         not governed by clause (a) above, registration on the books and
         records of the issuer thereof in the name of the securities
         intermediary, the sending of a confirmation by the securities
         intermediary of the purchase by the Indenture Trustee or its nominee
         or custodian of such uncertificated security, the making by such
         securities intermediary of entries on its books and records
         identifying such uncertificated certificates as belonging to the
         Indenture Trustee or its nominee or custodian.

         "Deposit Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i).

         "Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.

         "Eligible Institution" means (a) a depository institution organized
under the laws of the United States of America or any one of the states
thereof or the District of Columbia (or any domestic branch of a foreign
bank), which (i) has either (A) a long-term unsecured debt rating of "AAA" or
better by Standard & Poor's and "A1" or better by Moody's or (B) a certificate
of deposit rating of "A-1+" by Standard & Poor's and "P-1" or better by
Moody's, or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies and (ii) whose deposits are insured by the
FDIC or (b) the corporate trust department of the Indenture Trustee or the
Owner Trustee. If so qualified, the Indenture Trustee or the Owner Trustee may
be considered an Eligible Institution for the purposes of clause (a) of this
definition.

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         "Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:

                  (a) direct obligations of, and obligations fully guaranteed
         as to the full and timely payment by, the United States of America;

                  (b) demand deposits, time deposits or certificates of
         deposit of any depository institution or trust company incorporated
         under the laws of the United States of America or any state thereof
         (or any domestic branch of a foreign bank) and subject to supervision
         and examination by Federal or State banking or depository institution
         authorities; provided, however, that at the time of the investment or
         contractual commitment to invest therein, the commercial paper or
         other short-term unsecured debt obligations (other than such
         obligations the rating of which is based on the credit of a Person
         other than such depository institution or trust company) thereof
         shall have a credit rating from each of the Rating Agencies in the
         highest applicable rating category granted thereby;

                  (c) commercial paper, variable amount notes or other short
         term debt obligations having, at the time of the investment or
         contractual commitment to invest therein, a rating from each of the
         Rating Agencies in the highest applicable rating category granted
         thereby;

                  (d) investments in money market or common trust funds having
         a rating from each of the Rating Agencies in the highest applicable
         rating category granted thereby (including funds for which the
         Indenture Trustee or the Owner Trustee or any of their respective
         Affiliates is investment manager or advisor);

                  (e) bankers' acceptances issued by any depository
         institution or trust company referred to in clause (b) above;

                  (f) repurchase obligations with respect to any security that
         is a direct obligation of, or fully guaranteed by, the United States
         of America or any agency or instrumentality thereof the obligations
         of which are backed by the full faith and credit of the United States
         of America, in either case entered into with a depository institution
         or trust company (acting as principal) described in clause (b);

                  (g) repurchase obligations with respect to any security or
         whole loan, entered into with (i) a depository institution or trust
         company (acting as principal) described in clause (b) above (except
         that the rating referred to in the proviso in such clause (b) shall
         be "A-1" or higher in the case of Standard & Poor's) (such depository
         institution or trust company being referred to in this definition as
         a "financial institution"), (ii) a broker/dealer (acting as
         principal) registered as a broker or dealer under Section 15 of the
         Exchange Act (a "broker/dealer") the unsecured short-term debt
         obligations of which are rated "P-1" by Moody's and at least "A-1" by
         Standard & Poor's at the time of entering into such repurchase
         obligation (a "rated broker/dealer"), (iii) an unrated broker/dealer
         (an "unrated broker/dealer"), acting as principal, that is a
         wholly-owned subsidiary of a non-bank holding company the unsecured
         short-term debt obligations of which are rated "P-1" by Moody's and
         at least "A-1" by Standard & Poor's at the time of entering into

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         such repurchase obligation (a "Rated Holding Company") or (iv) an
         unrated subsidiary (a "Guaranteed Counterparty"), acting as
         principal, that is a wholly-owned subsidiary of a direct or indirect
         parent Rated Holding Company, which guarantees such subsidiary's
         obligations under such repurchase agreement; provided that the
         following conditions are satisfied:

                           (A) the aggregate amount of funds invested in
                  repurchase obligations of a financial institution, a rated
                  broker/dealer, an unrated broker/dealer or Guaranteed
                  Counterparty in respect of which the Standard & Poor's
                  unsecured short-term ratings are "A-1" (in the case of an
                  unrated broker/dealer or Guaranteed Counterparty, such
                  rating being that of the related Rated Holding Company)
                  shall not exceed 20% of the sum of the then outstanding
                  principal amount of the Notes (there being no limit on the
                  amount of funds that may be invested in repurchase
                  obligations in respect of which such Standard & Poor's
                  rating is "A-1+" (in the case of an unrated broker/dealer or
                  Guaranteed Counterparty, such rating being that of the
                  related Rated Holding Company));

                           (B) in the case of the amount allocated to the
                  Reserve Account, the rating from Standard & Poor's in
                  respect of the unsecured short-term debt obligations of the
                  financial institution, rated broker/dealer, unrated
                  broker/dealer or Guaranteed Counterparty (in the case of an
                  unrated broker/dealer or Guaranteed Counterparty, such
                  rating being that of the related Rated Holding Company)
                  shall be "A-1+";

                           (C) the repurchase obligation must mature within 30
                  days of the date on which the Indenture Trustee or the
                  Issuer, as applicable, enters into such repurchase
                  obligation;

                           (D) the repurchase obligation shall not be
                  subordinated to any other obligation of the related
                  financial institution, rated broker/dealer, unrated
                  broker/dealer or Guaranteed Counterparty;

                           (E) the collateral subject to the repurchase
                  obligation is held, in the appropriate form, by a custodial
                  bank on behalf of the Indenture Trustee or the Issuer, as
                  applicable;

                           (F) the repurchase obligation shall require that
                  the collateral subject thereto shall be marked to market
                  daily;

                           (G) in the case of a repurchase obligation of a
                  Guaranteed Counterparty, the following conditions shall also
                  be satisfied:

                                            (i) the Indenture Trustee or the
                           Issuer, as applicable, shall have received an
                           opinion of counsel (which may be in-house counsel)
                           to the effect that the guarantee of the related
                           Rated Holding Company is a legal, valid and binding
                           agreement of the Rated Holding Company, enforceable
                           in accordance with its terms, subject as to
                           enforceability to bankruptcy, insolvency,
                           reorganization and moratorium or other similar

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<PAGE>

                           laws affecting creditors' rights generally and to
                           general equitable principles;

                                            (ii) the Indenture Trustee or the
                           Issuer, as applicable, shall have received (x) an
                           incumbency certificate for the signer of such
                           guarantee, certified by an officer of such Rated
                           Holding Company and (y) a resolution, certified by
                           an officer of the Rated Holding Company, of the
                           board of directors (or applicable committee
                           thereof) of the Rated Holding Company authorizing
                           the execution, delivery and performance of such
                           guarantee by the Rated Holding Company;

                                            (iii) the only conditions to the
                           obligation of such Rated Holding Company to pay on
                           behalf of the Guaranteed Counterparty shall be that
                           the Guaranteed Counterparty shall not have paid
                           under such repurchase obligation when required (it
                           being understood that no notice to, demand on or
                           other action in respect of the Guaranteed
                           Counterparty is necessary) and that the Indenture
                           Trustee or the Issuer shall make a demand on the
                           Rated Holding Company to make the payment due under
                           such guarantee;

                                            (iv) the guarantee of the Rated
                           Holding Company shall be irrevocable with respect
                           to such repurchase obligation and shall not be
                           subordinated to any other obligation of the Rated
                           Holding Company; and

                                            (v) each of Standard & Poor's and
                           Moody's has confirmed in writing to the Indenture
                           Trustee or Issuer, as applicable, that it has
                           reviewed the form of the guarantee of the Rated
                           Holding Company and has determined that the
                           issuance of such guarantee will not result in the
                           downgrade or withdrawal of the ratings assigned to
                           the Notes; and

                           (H) the repurchase obligation shall require that
                  the repurchase obligation be overcollateralized and shall
                  provide that, upon any failure to maintain such
                  overcollateralization, the repurchase obligation shall
                  become due and payable, and unless the repurchase obligation
                  is satisfied immediately, the collateral subject to the
                  repurchase agreement shall be liquidated and the proceeds
                  applied to satisfy the unsatisfied portion of the repurchase
                  obligation; or

                  (h) any other investment with respect to which the Issuer or
         the Servicer has received written notification from the Rating
         Agencies that the acquisition of such investment as an Eligible
         Investment will not result in a withdrawal or downgrading of the
         ratings assigned to the Notes.

         "FDIC" means the Federal Deposit Insurance Corporation.

         "Final Scheduled Maturity Date" means October 11, 2011.

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         "Financed Vehicle" means an automobile or light-duty truck, together
with all accessions thereto, securing an Obligor's indebtedness under the
respective Standard Receivable or Fixed Value Receivable.

         "Fitch" means Fitch, Inc., or its successor.

         "Fixed Value Finance Charge" means, with respect to each payment
collected on a Fixed Value Receivable, the finance charge included in such
payment (as determined in accordance with the Servicer's customary procedures)
that is allocable to the related Fixed Value Payment.

         "Fixed Value Payment" means, with respect to each Fixed Value
Receivable, the amount specified on the applicable Contract as the "Amount of
Fixed Value Payment" reduced (i) in the case of a prepayment or repurchase, by
the amount of the unearned finance charges under the Contract allocable to
such payment in accordance with the Servicer's customary procedures and (ii)
in the case of a liquidation, by the excess of Liquidation Proceeds collected
by the Servicer over the Amortizing Payment on such date.

         "Fixed Value Receivable" means any Contract listed on Schedule A
(which Schedule may be in the form of microfiche) that provides for
amortization of the loan over a series of fixed level payment monthly
installments in accordance with the simple interest method, but also requires
a final payment that is greater than the scheduled monthly payments and is due
after payment of such scheduled monthly payments and that may be made by (i)
payment in full in cash of a fixed value amount, (ii) return of the Financed
Vehicle to the Servicer provided certain conditions are satisfied or (iii)
refinancing the final fixed value payment in accordance with specified
conditions. No Fixed Value Receivables will be transferred to the Trust.

         "Fixed Value Securities" has the meaning assigned to such term in
Section 2.03.

         "Indenture" means the Indenture dated as of May 1, 2005, between the
Issuer and the Indenture Trustee.

         "Indenture Trustee" means the Person acting as Indenture Trustee
under the Indenture, its successors in interest and any successor trustee
under the Indenture.

         "Initial Overcollateralization Amount" means $35,040,900.84.

         "Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial

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part of its property, or the making by such Person of any general assignment
for the benefit of creditors, or the failure by such Person generally to pay
its debts as such debts become due, or the taking of action by such Person in
furtherance of any of the foregoing.

         "Investment Earnings" means, with respect to any Payment Date, the
investment earnings (net of losses and investment expenses), if any, on
amounts on deposit in the Deposit Account to be applied on such Payment Date
pursuant to Section 5.01(b).

         "Issuer" means DaimlerChrysler Auto Trust 2005-B.

         "Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.

         "Liquidated Receivable" means any Receivable liquidated by the
Servicer through the sale of a Financed Vehicle or otherwise.

         "Liquidation Proceeds" means, with respect to any Liquidated
Receivable, the moneys collected in respect thereof, from whatever source on a
Liquidated Receivable during the Collection Period in which such Receivable
became a Liquidated Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Liquidated Receivable.

         "Moody's" means Moody's Investors Service, Inc., or its successor.

         "Note Principal Distribution Account" means the subaccount that is
part of the Deposit Account and is designated as such, established and
maintained pursuant to Section 5.01.

         "Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes and Class B Notes.

         "Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.

         "Officer's Certificate" means a certificate signed by the chairman of
the board, any vice president, the controller or any assistant controller, the
president, a treasurer, assistant treasurer, secretary or assistant secretary
of the Seller, the Company or the Servicer, as appropriate.

         "OMSC Receivable" means any Standard Receivable acquired by DCS from
the Overseas Military Sales Corporation, or its successor.

         "Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Seller, the Company or the
Servicer, which counsel shall be acceptable to the Indenture Trustee, the
Owner Trustee or the Rating Agencies, as applicable.

         "Original Pool Balance" means $2,137,500,207.96.

                                      9
<PAGE>

         "Overcollateralization Amount" means, with respect to any Payment
Date, (i) the Related Pool Balance minus (ii) the Securities Amount minus
(iii) the YSOA.

         "Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.

         "Owner Trustee" means the Person acting as Owner Trustee under the
Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.

         "Payment Date" means, with respect to each Collection Period, the
eighth day of the following month or, if such day is not a Business Day, the
immediately following Business Day, commencing on June 8, 2005.

         "Payment Determination Date" means, with respect to any Payment Date,
the Business Day immediately preceding such Payment Date.

         "Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.

         "Pool Balance" means, as of the close of business on the last day of
a Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Liquidated Receivables).

         "Principal Balance" of a Receivable, as of the close of business on
any date of determination, means the Amount Financed minus the sum of (i) the
portion of all payments made by or on behalf of the related Obligor on or
prior to such day and allocable to principal using the Simple Interest Method
and (ii) the principal portion of the Purchase Amount paid with respect to the
Receivable.

         "Priority Principal Distribution Amount" means, with respect to a
Payment Date, the excess, if any, of (i) the Outstanding Amount of the Class A
Notes immediately prior to such Payment Date over (ii) (a) the Related Pool
Balance minus (b) the YSOA for such Payment Date.

         "Purchase Agreement" means the Purchase Agreement dated as of May 1,
2005, between the Seller and the Company.

         "Purchase Amount" means the amount, as of the close of business on
the last day of a Collection Period, required to prepay in full a Receivable
under the terms thereof including interest to the end of the month of
purchase.

         "Purchased Receivable" means a Receivable purchased as of the close
of business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or by the Seller pursuant to Section 3.02.

         "Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Seller, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer. Any notice required to be given to a

                                      10
<PAGE>

Rating Agency pursuant to this Agreement shall also be given to Fitch,
although Fitch shall not be deemed to be a Rating Agency for any purposes of
this Agreement.

         "Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Company, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes.

         "Receivable" means (i) any Standard Receivable and (ii) the
Amortizing Payments with respect to any Fixed Value Receivable.

         "Receivable Files" means the documents specified in Section 3.03.

         "Related Pool Balance" means, with respect to any Payment Date, the
Pool Balance as of the end of the related Collection Period.

         "Required Principal Distribution Amount" means, with respect to a
Payment Date, the greater of (i) the Outstanding Amount of the Class A-1 Notes
immediately prior to such Payment Date and (ii) the excess, if any, of (a) the
Outstanding Amount of the Notes immediately prior to such Payment Date over
(b) (I) the Related Pool Balance for such Payment Date minus (II) the YSOA for
such Payment Date minus (III) the Target Overcollateralization Amount for such
Payment Date.

         "Reserve Account" means the subaccount that is part of the Deposit
Account and is designated as such, established and maintained pursuant to
Section 5.01.

         "Reserve Account Initial Deposit" means the initial deposit of cash
and Eligible Investments in the amount of $5,005,000.00 made by the Seller
into the Deposit Account on the Closing Date.

         "Securities Amount" means, with respect to any Payment Date, the sum
of the aggregate Outstanding Amount of the Notes after giving effect to
payments of principal made on the Notes on such Payment Date.

         "Seller" means DCS and its successors in interest to the extent
permitted hereunder.

         "Servicer" means DCS, as the servicer of the Receivables, and each
successor to DCS (in the same capacity) pursuant to Section 7.03 or 8.02.

         "Servicer Default" means an event specified in Section 8.01.

         "Servicer's Certificate" means a certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit B.

         "Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08.

                                      11
<PAGE>

         "Servicing Fee Rate" means 1/12 of 1.00%.

         "Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by a
fraction, the numerator of which is the number of days elapsed since the
preceding payment of interest was made, the denominator of which is 365, and
the remainder of such payment is allocable to principal.

         "Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.

         "Specified Reserve Amount" means, with respect to any Payment Date,
an amount equal to the Reserve Account Initial Deposit.

         "Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., or its successor.

         "Standard Receivable" means any Contract listed on Schedule A (which
Schedule may be in the form of microfiche) that is not a Fixed Value
Receivable.

         "Target Overcollateralization Amount" means, with respect to a
Payment Date, the greater of (A) the product of 5.00% times P and (B) the OC
Floor, where:

         P = (a) the Related Pool Balance for such Payment Date minus
             (b) the YSOA for such Payment Date

         OC Floor = the lesser of (a) P and (b) the product of 1.50% times P/i/

         P/i/ = the Original Pool Balance minus the initial YSOA

         "Total Distribution Amount" means, for any Payment Date and the
Collection Period preceding such Payment Date, the sum of the following
amounts, without duplication: (a) all collections on Receivables (including
payments relating to refunds of extended warranty protection plan costs or of
physical damage, credit life or disability insurance policy premiums, but only
to the extent that such costs or premiums were financed by the respective
obligor as of the date of the related Contract), (b) all Liquidation Proceeds
of Receivables that became Liquidated Receivables in accordance with the
Servicer's customary servicing procedures, (c) the Purchase Amount of each
Receivable that became a Purchased Receivable in such Collection Period and
(d) Investment Earnings deposited in the Deposit Account during such
Collection Period.

         "Trust" means the Issuer.

         "Trust Account Property" means the Deposit Account, all amounts and
investments held from time to time in the Deposit Account (whether in the form
of deposit accounts, Physical

                                      12
<PAGE>

Property, book-entry securities, uncertificated securities or otherwise),
including the Reserve Account Initial Deposit, and all proceeds of the
foregoing.

         "Trust Agreement" means the Amended and Restated Trust Agreement
dated as of May 1, 2005, among the Seller, the Company and the Owner Trustee.

         "Trust Officer" means, in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary, Assistant Secretary
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and, with respect to the Owner Trustee, any officer or any
agent acting pursuant to a power of attorney by the Owner Trustee in the
Corporate Trust Administration Department of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the Basic
Documents on behalf of the Owner Trustee.

         "YSOA" means, with respect to a Payment Date, the dollar amount set
forth opposite such Payment Date in Schedule YSOA; provided that the YSOA for
a Payment Date shall not be greater than the Related Pool Balance for such
Payment Date.

         Section 1.02 Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.

         (b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

         (c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.

         (d) The words "hereof", "herein", "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 of this Agreement; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" and its variants shall be deemed
to be followed by "without limitation".

         (e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.

                                      13
<PAGE>

         (f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.

         (g) For all purposes of this Agreement and the Basic Documents,
interest with respect to all Classes of Notes other than the Class A-1 Notes
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months; and interest with respect to the Class A-1 Notes shall be computed on
the basis of the actual number of days in each applicable Class A-1 Interest
Accrual Period divided by 360.

                                  ARTICLE II

                           Conveyance of Receivables
                           -------------------------

         Section 2.01 Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Seller of $1,591,817,286 (which
amount represents the Original Pool Balance less (i) the Reserve Account
Initial Deposit, (ii) the Initial Overcollateralization Amount, (iii) the
initial YSOA, (iv) the Class A-1 Principal Balance and (v) certain other
discounts and expenses of the Issuer), the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse (subject
to the obligations of the Seller set forth herein), all right, title and
interest of the Seller in and to:

               (a) the Receivables and all moneys received thereon after May
         2, 2005;

               (b) the security interests in the Financed Vehicles granted by
         Obligors pursuant to the Receivables and any other interest of the
         Seller in such Financed Vehicles;

               (c) any proceeds with respect to the Receivables from claims on
         any physical damage, credit life or disability insurance policies
         covering Financed Vehicles or Obligors;

               (d) any proceeds from recourse to Dealers with respect to
         Receivables with respect to which the Servicer has determined in
         accordance with its customary servicing procedures that eventual
         payment in full is unlikely;

               (e) any Financed Vehicle that shall have secured a Receivable
         and shall have been acquired by or on behalf of the Seller, the
         Servicer, the Company or the Trust;

               (f) all funds on deposit from time to time in the Deposit
         Account (including without limitation any subaccount thereof),
         including the Reserve Account Initial Deposit, and in all investments
         and proceeds thereof (including all income thereon); and

               (g) the proceeds of any and all of the foregoing.

                                      14
<PAGE>

               The Seller hereby directs the Issuer to issue the Certificates
         to the Company. The Seller and the Issuer acknowledge that
         $402,000,000.00 of the purchase price of the Receivables owed by the
         Issuer to the Seller pursuant to this Section 2.01 (which amount is
         not included in the first sentence of Section 2.01) shall be offset
         by the Issuer against delivery of the Class A-1 Notes to the order of
         the Seller.

         Section 2.02 Conveyance of Fixed Value Payments and Fixed Value
Finance Charges. Promptly following the transfer to the Issuer of the
Receivables on the Closing Date, the Issuer shall, without further action
hereunder, be deemed to sell, transfer, assign, set over and otherwise convey
to the Seller, effective as of the Closing Date, without recourse,
representation or warranty, all the right, title and interest of the Issuer in
and to the Fixed Value Payments and the Fixed Value Finance Charges, if any,
all monies due and to become due and all amounts received with respect thereto
and all proceeds thereof, subject to Section 5.03(b).

         Section 2.03 Fixed Value Securities. (a) At any time after the
Closing Date, at the option of the Seller and upon 10 days prior notice to the
Owner Trustee and the Indenture Trustee, the Seller will be permitted to sell
to the Issuer, and the Issuer shall be obligated to purchase from the Seller
(subject to the availability of funds), all or any portion of the Fixed Value
Payments and/or Fixed Value Finance Charges, if any, subject to the terms and
conditions described below. Upon any such sale, (x) the Seller and the Owner
Trustee will enter into an amendment to this Agreement and the Basic Documents
to provide for, at the election of the Seller, the issuance of certificates
representing ownership interests in the Trust to the extent of such Fixed
Value Payments and/or Fixed Value Finance Charges or the issuance of
indebtedness by the Issuer secured by such Fixed Value Payments (collectively,
the "Fixed Value Securities") and to make any other provisions herein or
therein that are necessary or desirable in connection therewith and (y) the
Owner Trustee will enter into any other agreements or instruments related
thereto as requested by the Seller; provided, however, that the Owner Trustee
may, but shall not be obligated to, enter into any such amendment, agreement
or instrument that affects the Owner Trustee's own rights, duties or
immunities under this Agreement or any other Basic Document; and provided,
further, that the obligation of the Issuer to purchase such Fixed Value
Payments and/or Fixed Value Finance Charges and of the Owner Trustee to enter
into any such amendment or other agreement or instrument is subject to the
following conditions precedent:

               (i) such amendment and other agreements and instruments, in
         forms satisfactory to the Owner Trustee and, in the case of
         amendments or agreements to be executed and delivered by the
         Indenture Trustee, in forms satisfactory to the Indenture Trustee,
         shall have been executed by each other party thereto and delivered to
         the Owner Trustee or the Indenture Trustee as appropriate;

               (ii) the Seller shall have delivered to the Owner Trustee and
         the Indenture Trustee an Officer's Certificate and an Opinion of
         Counsel to the effect that each condition precedent (including the
         requirement with respect to all required filings) provided by this
         Section has been complied with and such amendment or other agreement
         or instrument is authorized or permitted by this Agreement;

               (iii) the Rating Agency Condition shall have been satisfied
         with respect to such sale and issuance;

                                      15
<PAGE>

               (iv) such sale and issuance and such amendment or other
         agreement or instrument shall not adversely affect in any material
         respect the interest of any Noteholder or Certificateholder, and the
         Seller shall have provided to the Owner Trustee and the Indenture
         Trustee an Officer's Certificate to such effect;

               (v) the Owner Trustee and the Indenture Trustee shall have
         received an Opinion of Counsel to the effect that such sale and
         issuance will not have any material tax consequence to any Noteholder
         or Certificateholder; and

               (vi) all filings and other actions required to continue the
         first perfected interest of the Trust in the Owner Trust Estate and
         the Indenture Trustee in the Collateral shall have been duly made or
         taken by the Seller.

         (b) Except as described in Section 10.04, the Seller will not sell,
transfer, assign, set over or otherwise convey the Fixed Value Payments and
Fixed Value Finance Charges other than to the Issuer pursuant to paragraph
(a).

                                 ARTICLE III

                                The Receivables
                                ---------------

         Section 3.01 Representations and Warranties of Seller with Respect to
the Receivables. The Seller makes the following representations and warranties
as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the sale, transfer and assignment of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.

               (a) Characteristics of Receivables. Each Standard Receivable
         and Fixed Value Receivable (A) was originated in the United States of
         America by a Dealer for the retail sale of a Financed Vehicle in the
         ordinary course of such Dealer's business, was fully and properly
         executed by the parties thereto, was purchased by the Seller from
         such Dealer under an existing dealer agreement, (B) has created or
         shall create a valid, subsisting and enforceable first priority
         security interest in favor of the Seller and is assignable by the
         Seller to the Issuer and by the Issuer to the Indenture Trustee, (C)
         contains customary and enforceable provisions such that the rights
         and remedies of the holder thereof are adequate for realization
         against the collateral of the benefits of the security, and (D)
         generally provides for level monthly payments (provided, that the
         payment in the first or last month in the life of the Standard
         Receivable or Fixed Value Receivable may be minimally different from
         the level payments and that the payment in the last month of a Fixed
         Value Receivable may be a Fixed Value Payment) that fully amortize
         the Amount Financed by maturity and yield interest at the Annual
         Percentage Rate. No Receivable conveyed to the Issuer on the Closing
         Date is an OMSC Receivable or has forced-placed physical damage
         insurance.

               (b) Schedule of Receivables. The information set forth in
         Schedule A to this Agreement is true and correct in all material
         respects as of the opening of business on the

                                      16
<PAGE>

         applicable Cutoff Date, and no selection procedures believed to be
         adverse to the Noteholders or Certificateholders were utilized in
         selecting the Receivables. The computer tape or other listing
         regarding the Standard Receivables and the Fixed Value Receivables
         made available to the Issuer and its assigns (which computer tape or
         other listing is required to be delivered as specified herein) is
         true and correct in all respects.

               (c) Compliance with Law. Each Standard Receivable and Fixed
         Value Receivable and the sale of the Financed Vehicle complied at the
         time it was originated or made and, at the execution of this
         Agreement, complies in all material respects with all requirements of
         applicable federal, state and local laws and regulations thereunder,
         including usury laws, the federal Truth-in-Lending Act, the Equal
         Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt
         Collection Practices Act, the Federal Trade Commission Act, the
         Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B
         and Z, the Texas Consumer Credit Code and State adaptations of the
         National Consumer Act and of the Uniform Consumer Credit Code, and
         other consumer credit laws and equal credit opportunity and
         disclosure laws.

               (d) Binding Obligation. Each Standard Receivable and Fixed
         Value Receivable represents the genuine, legal, valid and binding
         payment obligation in writing of the Obligor, enforceable by the
         holder thereof in accordance with its terms.

               (e) No Government Obligor. None of the Standard Receivables or
         Fixed Value Receivables is due from the United States of America or
         any State or from any agency, department or instrumentality of the
         United States of America or any State.

               (f) Security Interest in Financed Vehicle. Immediately prior to
         the sale, assignment and transfer thereof, each Standard Receivable
         and Fixed Value Receivable shall be secured by a validly perfected
         first security interest in the Financed Vehicle in favor of the
         Seller as secured party or all necessary and appropriate actions have
         been commenced that would result in the valid perfection of a first
         security interest in the Financed Vehicle in favor of the Seller as
         secured party.

               (g) Receivables in Force. No Standard Receivable or Fixed Value
         Receivable has been satisfied, subordinated or rescinded, nor has any
         Financed Vehicle been released from the lien granted by the related
         Standard Receivable or Fixed Value Receivable in whole or in part.

               (h) No Amendments. No Standard Receivable or Fixed Value
         Receivable has been amended such that the amount of the Obligor's
         scheduled payments has been increased.

               (i) No Waiver. No provision of a Standard Receivable or Fixed
         Value Receivable has been waived.

               (j) No Defenses. No right of rescission, setoff, counterclaim
         or defense has been asserted or threatened with respect to any
         Standard Receivable or Fixed Value Receivable.

                                      17
<PAGE>

               (k) No Liens. To the best of the Seller's knowledge, no liens
         or claims have been filed for work, labor or materials relating to a
         Financed Vehicle that are liens prior to, or equal to or coordinate
         with, the security interest in the Financed Vehicle granted by any
         Standard Receivable or Fixed Value Receivable.

               (l) No Default. No Standard Receivable or Fixed Value
         Receivable has a payment that is more than 30 days overdue as of the
         related Cutoff Date, and, except as permitted in this paragraph, no
         default, breach, violation or event permitting acceleration under the
         terms of any Standard Receivable or Fixed Value Receivable has
         occurred; and no continuing condition that with notice or the lapse
         of time would constitute a default, breach, violation or event
         permitting acceleration under the terms of any Standard Receivable or
         Fixed Value Receivable has arisen; and the Seller has not waived and
         shall not waive any of the foregoing.

               (m) Insurance. The Seller, in accordance with its customary
         procedures, has determined that, at the origination of the Standard
         Receivable or Fixed Value Receivable, the Obligor had obtained
         physical damage insurance covering the Financed Vehicle and under the
         terms of the Standard Receivable and Fixed Value Receivable the
         Obligor is required to maintain such insurance.

               (n) Title. It is the intention of the Seller that the transfer
         and assignment herein contemplated constitute a sale of the Standard
         Receivables and Fixed Value Receivables from the Seller to the Issuer
         and that the beneficial interest in and title to the Standard
         Receivables and Fixed Value Receivables not be part of the debtor's
         estate in the event of the filing of a bankruptcy petition by or
         against the Seller under any bankruptcy law. No Standard Receivable
         or Fixed Value Receivable has been sold, transferred, assigned or
         pledged by the Seller to any Person other than the Issuer.
         Immediately prior to the transfer and assignment herein contemplated,
         the Seller had good and marketable title to each Standard Receivable
         and Fixed Value Receivable free and clear of all Liens, encumbrances,
         security interests and rights of others and, immediately upon the
         transfer thereof, the Issuer shall have good and marketable title to
         each Standard Receivable and Fixed Value Receivable, free and clear
         of all Liens, encumbrances, security interests and rights of others;
         and the transfer has been perfected under the UCC.

               (o) Lawful Assignment. No Standard Receivable or Fixed Value
         Receivable has been originated in, or is subject to the laws of, any
         jurisdiction under which the sale, transfer and assignment of such
         Standard Receivable or Fixed Value Receivable or any Receivable under
         this Agreement or the Indenture is unlawful, void or voidable.

               (p) All Filings Made. All filings (including UCC filings)
         necessary in any jurisdiction to give the Issuer a first perfected
         ownership interest in the Standard Receivable and Fixed Value
         Receivables, and to give the Indenture Trustee a first perfected
         security interest therein, shall have been made.

               (q) One Original. There is only one original executed copy of
         each Standard Receivable and Fixed Value Receivable.

                                      18
<PAGE>

               (r) Maturity of Receivables. Each Standard Receivable and Fixed
         Value Receivable has a final maturity date on or before April 3,
         2011.

               (s) Scheduled Payments. (A) Each Standard Receivable and Fixed
         Value Receivable has a first scheduled due date on or prior to the
         end of the month following the related Cutoff Date and (B) no
         Standard Receivable or Fixed Value Receivable has a payment that is
         more than 30 days overdue as of the related Cutoff Date, and has a
         final scheduled payment date no later than the Final Scheduled
         Maturity Date.

               (t) Location of Receivable Files. The Receivable Files are kept
         at one or more of the locations listed in Schedule B.

               (u) Remaining Maturity. The latest scheduled maturity of any
         Standard Receivable or Fixed Value Receivable shall be no later than
         the Final Scheduled Maturity Date.

               (v) Outstanding Principal Balance. Each Standard Receivable and
         Fixed Value Receivable has an outstanding principal balance of at
         least $1,000.00.

               (w) No Bankruptcies. No Obligor on any Standard Receivable or
         Fixed Value Receivable as of the related Cutoff Date was noted in the
         related Receivable File as the subject of a bankruptcy proceeding.

               (x) No Repossessions. No Financed Vehicle securing any Standard
         Receivable or Fixed Value Receivable is in repossession status.

               (y) Chattel Paper. Each Standard Receivable and Fixed Value
         Receivable constitutes "tangible chattel paper" as defined in the
         UCC.

               (z) Agreement. The representations of the Seller in Section
         6.01 are true and correct.

               (aa) Financing. As of the Cutoff Date, approximately 94.29% of
         the aggregate principal balance of the Receivables, constituting
         approximately 90.65% of the number of Receivables, represents new
         vehicles; approximately all of the Receivables are Simple Interest
         Receivables; and none of the Receivables are Fixed Value Receivables.
         The aggregate principal balance of the Receivables, as of the Cutoff
         Date is $2,137,500,207.96.

         Section 3.02 Repurchase upon Breach. The Seller, the Servicer or the
Owner Trustee, as the case may be, shall inform the other parties to this
Agreement and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the Seller's representations and warranties made pursuant to
Section 3.01 or 6.01. Unless any such breach shall have been cured by the last
day of the second Collection Period following the discovery thereof by the
Owner Trustee or receipt by the Owner Trustee of written notice from the
Seller or the Servicer of such breach, the Seller shall be obligated to
repurchase any Receivable materially and adversely affected by any such breach
as of such last day (or, at the Seller's option, the last day of the first
Collection Period following the discovery). In consideration of the repurchase
of any such

                                      19
<PAGE>

Receivable, the Seller shall remit the Purchase Amount, in the manner
specified in Section 5.04. Subject to the provisions of Section 6.03, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Seller to repurchase
Receivables pursuant to this Section, subject to the conditions contained
herein.

         Section 3.03 Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee as
custodian of the following documents or instruments which are hereby or will
hereby be constructively delivered to the Indenture Trustee, as pledgee of the
Issuer, as of the Closing Date with respect to each Receivable:

               (a) the fully executed original of the Standard Receivable or
         Fixed Value Receivable;

               (b) the original credit application fully executed by the
         Obligor;

               (c) the original certificate of title or such documents that
         the Servicer or the Seller shall keep on file, in accordance with its
         customary procedures, evidencing the security interest of the Seller
         in the Financed Vehicle; and

               (d) any and all other documents that the Servicer or the Seller
         shall keep on file, in accordance with its customary procedures,
         relating to a Standard Receivable or Fixed Value Receivable, an
         Obligor or a Financed Vehicle.

         Section 3.04 Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and maintain such accurate and complete accounts, records and computer
systems pertaining to each Receivable File as shall enable the Issuer to
comply with this Agreement. In performing its duties as custodian the Servicer
shall act with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to the receivable files relating to all
comparable automotive receivables that the Servicer services for itself or
others. The Servicer shall conduct, or cause to be conducted, periodic audits
of the Receivable Files held by it under this Agreement and of the related
accounts, records and computer systems, in such a manner as shall enable the
Issuer or the Indenture Trustee to verify the accuracy of the Servicer's
record keeping. The Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Receivable Files and
maintain its accounts, records and computer systems as herein provided and
shall promptly take appropriate action to remedy any such failure. Nothing
herein shall be deemed to require an initial review or any periodic review by
the Issuer or the Indenture Trustee of the Receivable Files.

         (b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or

                                      20
<PAGE>

their respective duly authorized representatives, attorneys or auditors a list
of locations of the Receivable Files and the related accounts, records and
computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.

         (c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall release any Receivable File to the Indenture
Trustee, the Indenture Trustee's agent or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may
designate, as soon as practicable.

         Section 3.05 Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.

         Section 3.06 Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and
each of their respective officers, directors, employees and agents for any and
all liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or
asserted against the Trust, the Owner Trustee or the Indenture Trustee or any
of their respective officers, directors, employees and agents as the result of
any improper act or omission in any way relating to the maintenance and
custody by the Servicer as custodian of the Receivable Files; provided,
however, that the Servicer shall not be liable to the Owner Trustee for any
portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Owner Trustee, and the Servicer shall not be liable to
the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.

         Section 3.07 Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section. If DCS shall resign as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of any Servicer shall
have been terminated under Section 8.01, the appointment of such Servicer as
custodian shall be terminated by the Indenture Trustee or by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount of the Notes or,
with the consent of Holders of the Notes evidencing not less than 25% of the
Outstanding Amount of the Notes, by the Owner Trustee, in the same manner as
the Indenture Trustee or such Holders may terminate the rights and obligations
of the Servicer under Section 8.01. The Indenture Trustee or, with the consent
of the Indenture Trustee, the Owner Trustee may terminate the Servicer's
appointment as custodian, with cause, at any time upon written notification to
the Servicer and, without cause, upon 30 days' prior written notification to
the Servicer. As soon as practicable after any termination of such
appointment, the Servicer shall deliver the Receivable Files to the Indenture
Trustee or the Indenture Trustee's agent at such place or places as the
Indenture Trustee may reasonably designate.

         Section 3.08 Representations and Warranties as to the Security
Interest of the Issuer in the Receivables. The Seller makes the following
representations and warranties to the Issuer.

                                      21
<PAGE>

The representations and warranties speak as of the execution and delivery of
this Agreement and as of the Closing Date, and shall survive the sale of the
Trust Estate to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.

         (a) This Agreement creates a valid and continuing security interest
(as defined in the UCC) in the Receivables in favor of the Trust, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from the Seller.

         (b) The Receivables constitute "tangible chattel paper" within the
meaning of Article 9 of the UCC.

         (c) The Seller owns and has good and marketable title to the
Receivables free and clear of any lien, claim or encumbrance of any Person.

         (d) The Seller has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Receivables granted to the Issuer hereunder.

         (e) Other than the security interest granted to the Issuer pursuant
to this Agreement, the Seller has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Receivables. The Seller
has not authorized the filing of and is not aware of any financing statements
against the Seller that include a description of collateral covering the
Receivables other than any financing statement relating to the security
interest granted to the Seller hereunder or that has been terminated. The
Seller is not aware of any judgment or tax lien filings against it.

         (f) The Servicer as custodian for the Issuer has in its possession
all original copies of the contracts that constitute or evidence the
Receivables. The contracts that constitute or evidence the Receivables do not
have any marks or notations indicating that they have been pledged, assigned
or otherwise conveyed to any Person other than the Issuer.

                                  ARTICLE IV

                  Administration and Servicing of Receivables
                  -------------------------------------------

         Section 4.01 Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it
services for itself or others. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to Obligors,
reporting tax information to Obligors, accounting for collections and
furnishing monthly and annual statements to the Owner Trustee and the
Indenture Trustee with respect to distributions. Subject to the provisions of
Section 4.02, the Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the

                                      22
<PAGE>

Indenture Trustee, the Certificateholders and the Noteholders or any of them,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Issuer
(in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Owner Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders. The Owner
Trustee shall upon the written request of the Servicer furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.

         Section 4.02 Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer shall allocate collections between principal and
interest in accordance with the customary servicing procedures it follows with
respect to all comparable automotive receivables that it services for itself
or others. The Servicer may grant extensions, rebates or adjustments on a
Standard Receivable or Fixed Value Receivable; provided, however, that if the
Servicer extends the date for final payment by the Obligor of any Receivable
beyond the Final Scheduled Maturity Date, it shall promptly repurchase the
Standard Receivable or Fixed Value Receivable from the Issuer in accordance
with the terms of Section 4.07. The Servicer may in its discretion waive any
late payment charge or any other fees that may be collected in the ordinary
course of servicing a Standard Receivable or Fixed Value Receivable. The
Servicer shall not agree to any alteration of the interest rate or the
originally scheduled payments on any Standard Receivable or Fixed Value
Receivable.

         Section 4.03 Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of automotive receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
in its discretion that such repair and/or repossession will increase the
Liquidation Proceeds by an amount greater than the amount of such expenses.

         Section 4.04 Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage

                                      23
<PAGE>

insurance covering the Financed Vehicle as of the execution of the Standard
Receivable or Fixed Value Receivable.

         Section 4.05 Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Standard Receivable and Fixed Value Receivable in the
related Financed Vehicle. The Servicer is hereby authorized to take such steps
as are necessary to re-perfect such security interest on behalf of the Issuer
and the Indenture Trustee in the event of the relocation of a Financed Vehicle
or for any other reason.

         Section 4.06 Covenants of Servicer. The Servicer shall not release
the Financed Vehicle securing any Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment
in full by the Obligor thereunder or repossession, nor shall the Servicer
impair the rights of the Issuer, the Indenture Trustee, the Certificateholders
or the Noteholders in such Receivable, nor shall the Servicer increase the
number of scheduled payments due under a Standard Receivable or Fixed Value
Receivable.

         Section 4.07 Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected
by such breach as of such last day. If the Servicer takes any action during
any Collection Period pursuant to Section 4.02 that impairs the rights of the
Issuer, the Indenture Trustee, the Certificateholders or the Noteholders in
any Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of the
two preceding sentences, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.04. Subject to Section 7.02, the sole remedy of
the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders
or the Noteholders with respect to a breach pursuant to Section 4.02, 4.05 or
4.06 shall be to require the Servicer to purchase Receivables pursuant to this
Section. The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to this Section.

         Section 4.08 Servicing Fee. The Servicing Fee for a Payment Date
shall equal the product of (a) the Servicing Fee Rate (or, in the case of the
initial Collection Period, the product of (i) a fraction, the numerator of
which is equal to the number of days (based on a 30-day month) elapsed from
and excluding the Cutoff Date through the last day of such initial Collection
Period and the denominator of which is 360 and (ii) 1.00%), and (b) the Pool
Balance as of the first day of the preceding Collection Period. The Servicer
shall also be entitled to all late fees, prepayment charges, and other
administrative fees or similar charges allowed by applicable law with respect
to the Receivables, collected (from whatever source) on the Receivables, plus
any reimbursement pursuant to the last paragraph of Section 7.02.

         Section 4.09 Servicer's Certificate. Not later than 11:00 A.M. (New
York time) on each Payment Determination Date, the Servicer shall deliver to
the Owner Trustee, each Paying

                                      24
<PAGE>

Agent, the Indenture Trustee and the Seller, with a copy to the Rating
Agencies, a Servicer's Certificate containing all information necessary to
make the distributions to be made on the related Payment Date pursuant to
Sections 5.05 and 5.06 for the related Collection Period. Receivables to be
purchased by the Servicer or to be repurchased by the Seller shall be
identified by the Servicer by account number with respect to such Receivable
(as specified in Schedule A).

         Section 4.10 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture Trustee,
on or before April 30 of each year beginning April 30, 2006, an Officer's
Certificate, dated as of December 31 of the preceding year, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
(or such shorter period in the case of the first such Officer's Certificate)
and of its performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officers and
the nature and status thereof. The Indenture Trustee shall send a copy of such
certificate and the report referred to in Section 4.11 to the Rating Agencies.
A copy of such certificate and the report referred to in Section 4.11 may be
obtained by any Certificateholder, Noteholder or Note Owner by a request in
writing to the Owner Trustee addressed to the Corporate Trust Office. Upon the
telephone request of the Owner Trustee, the Indenture Trustee will promptly
furnish the Owner Trustee a list of Noteholders as of the date specified by
the Owner Trustee.

         (b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(a) or (b).

         Section 4.11 Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Seller or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before April 30 of each year beginning April 30, 2006, a report addressed to
the managers of the Servicer, to the effect that such firm has examined the
financial statements of DCS and issued its report thereon and that such
examination (a) was made in accordance with generally accepted auditing
standards and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (b) included tests relating to automotive loans serviced for
others in accordance with the requirements of the Uniform Single Attestation
Program for Mortgage Bankers (the "Program"), to the extent the procedures in
such Program are applicable to the servicing obligations set forth in this
Agreement; and (c) except as described in the report, disclosed no exceptions
or errors in the records relating to automobile and light-duty truck loans
serviced for others that, in the firm's opinion, paragraph four of such
Program requires such firm to report. Notwithstanding the foregoing in this
Section 4.11, the Servicer, in its sole discretion, may cause to be delivered,
in lieu of the report referred to above in this Section 4.11, the attestation
report of a registered public accounting firm that would be required to be
filed in respect of the Trust under the Exchange Act if periodic reports under
Section 15(d) of the Exchange Act, or any successor provision thereto, were
required to be filed in respect of the Trust.

                                      25
<PAGE>

         Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

         Section 4.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders
and Noteholders access to the Receivable Files in such cases where the
Certificateholders or Noteholders shall be required by applicable statutes or
regulations to review such documentation. Access shall be afforded without
charge, but only upon reasonable request and during the normal business hours
at the offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the
Servicer to provide access to information as a result of such obligation shall
not constitute a breach of this Section.

         Section 4.13 Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Certificateholders and Noteholders.

         Section 4.14 Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Rating Agency Condition shall
have been satisfied in connection therewith; and provided, further, that the
Servicer shall remain obligated and be liable to the Issuer, the Owner
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for
the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by
virtue of the appointment of such subservicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Receivables. The fees and expenses of the subservicer shall
be as agreed between the Servicer and its subservicer from time to time, and
none of the Issuer, the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.

                                  ARTICLE V

                        Distributions; Reserve Account;
                        -------------------------------
               Statements to Certificateholders and Noteholders
               ------------------------------------------------

         Section 5.01 Establishment of Deposit Account. (a) The Servicer, for
the benefit of the Noteholders and the Certificateholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account (the
"Deposit Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders and the
Certificateholders. The Servicer shall establish the Note Principal
Distribution Account and the Reserve Account as subaccounts that are part of
the Deposit Account.

         (b) Funds on deposit in the Deposit Account shall be invested (1) by
the Indenture Trustee in Eligible Investments selected in writing by the
Servicer or an investment manager

                                      26
<PAGE>

selected by the Servicer or (2) by an investment manager in Eligible
Investments selected by such investment manager; provided that (A) such
investment manager shall be selected by the Servicer, (B) such investment
manager shall have agreed to comply with the terms of this Agreement as it
relates to investing such funds, (C) any investment so selected by such
investment manager shall be made in the name of the Indenture Trustee and
shall be settled by a Delivery to the Indenture Trustee that complies with the
terms of this Agreement as it relates to investing such funds, and (D) prior
to the settlement of any investment so selected by such investment manager the
Indenture Trustee shall affirm that such investment is an Eligible Investment.
The Servicer will direct all investments through written approval. In the
event the Indenture Trustee must invest funds on deposit in the Deposit
Account, the Indenture Trustee will follow the most recent written direction
of the Servicer. It is understood and agreed that the Indenture Trustee shall
not be liable for any loss arising from an investment in Eligible Investments
made in accordance with this Section 5.01(b). All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders and
the Certificateholders, as applicable; provided, that on each Payment
Determination Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit in the Deposit Account (to the extent
such interest and income is on deposit in the Deposit Account at the end of
the related Collection Period) shall be deemed to constitute a portion of the
Total Distribution Amount for the related Payment Date. Other than as
permitted by the Rating Agencies, funds on deposit in the Deposit Account
shall be invested in Eligible Investments that will mature on or before the
next Payment Date.

         (c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Deposit Account and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Deposit Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders, as
applicable. If, at any time, the Deposit Account ceases to be an Eligible
Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Deposit
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Deposit Account.

                  (ii) With respect to the Trust Account Property, the
         Indenture Trustee agrees, by its acceptance hereof, that:

                           (A) any Trust Account Property that is held in
                  deposit accounts shall be held solely in the Eligible
                  Deposit Accounts, subject to the last sentence of Section
                  5.01(c)(i); and each such Eligible Deposit Account shall be
                  subject to the exclusive custody and control of the
                  Indenture Trustee, and the Indenture Trustee shall have sole
                  signature authority with respect thereto;

                           (B) any Trust Account Property that constitutes
                  Physical Property shall be delivered to the Indenture
                  Trustee in accordance with paragraph (a) of the definition
                  of "Delivery" and shall be held, pending maturity or
                  disposition, solely by the Indenture Trustee or a securities
                  intermediary (as such term is defined in Section 8-102 of
                  the UCC) acting solely for the Indenture Trustee;

                                      27
<PAGE>

                           (C) any Trust Account Property that is a book-entry
                  security held through the Federal Reserve System pursuant to
                  federal book-entry regulations shall be delivered in
                  accordance with paragraph (b) of the definition of
                  "Delivery" and shall be maintained by the Indenture Trustee,
                  pending maturity or disposition, through continued
                  book-entry registration of such Trust Account Property as
                  described in such paragraph; and

                           (D) any Trust Account Property that is an
                  "uncertificated security" under Article VIII of the UCC and
                  that is not governed by clause (C) above shall be delivered
                  to the Indenture Trustee in accordance with paragraph (c) of
                  the definition of "Delivery" and shall be maintained by the
                  Indenture Trustee, pending maturity or disposition, through
                  continued registration of the Indenture Trustee's (or its
                  nominee's) ownership of such security.

                  (iii) The Servicer shall have the power, revocable by the
         Indenture Trustee or by the Owner Trustee with the consent of the
         Indenture Trustee, to instruct the Indenture Trustee to make
         withdrawals and payments from the Deposit Account for the purpose of
         permitting the Servicer to carry out its respective duties hereunder
         or permitting the Indenture Trustee to carry out its duties under the
         Indenture.

         Section 5.02 Collections. Subject to the continued satisfaction of
the commingling conditions described below, the Servicer shall remit to the
Deposit Account all payments by or on behalf of the Obligors with respect to
the Receivables (other than Purchased Receivables and not including Fixed
Value Payments), all Liquidation Proceeds collected during the related
Collection Period, prior to 11:00 A.M. (New York time) on the related Payment
Date. Notwithstanding the foregoing, if any of the commingling conditions
ceases to be met, the Servicer shall remit to the Deposit Account all payments
by or on behalf of the Obligors with respect to the Receivables (other than
Purchased Receivables and not including Fixed Value Payments), all Liquidation
Proceeds within two Business Days of receipt thereof. The commingling
conditions are as follows: (i) DCS must be the Servicer, (ii) no Servicer
Default shall have occurred and be continuing and (iii) (x) DaimlerChrysler
North America Holding Corporation must maintain a short-term rating of at
least "A-1" by Standard & Poor's and "P-1" by Moody's or (y) if daily
remittances occur hereunder, prior to ceasing daily remittances, the Rating
Agency Condition shall have been satisfied (and any conditions or limitations
imposed by the Rating Agencies in connection therewith are complied with).
Notwithstanding anything herein to the contrary, so long as DCS is the
Servicer, DCS may withhold from the deposit into the Deposit Account any
amounts indicated on the related Servicer's Certificate as being due and
payable to DCS or the Seller and pay such amounts directly to DCS or the
Seller, as applicable. For purposes of this Article V, the phrase "payments by
or on behalf of Obligors" shall mean payments made with respect to the
Receivables by Persons other than the Servicer or the Seller. In the event the
commingling conditions cease to be met, the Servicer shall make daily
remittance of collections to the Deposit Account within two Business Days of
receipt thereof; provided however, daily remittance may commence no later than
five Business Days following a reduction of DaimlerChrysler North America
Holding Corporation's short-term ratings below "A-1" by Standard & Poor's or
"P-1" by Moody's.

                                      28
<PAGE>

         Section 5.03 Application of Collections. (a) All collections for the
Collection Period shall be applied by the Servicer as follows:

                  With respect to each Receivable (other than a Purchased
         Receivable), payments by or on behalf of the Obligor shall be applied
         to interest and principal in accordance with the Simple Interest
         Method.

         (b) All collections of finance charges on a Fixed Value Receivable
(as determined in accordance with the Servicer's customary procedures) shall
be applied, first, to the Amortizing Payment Finance Charges due and unpaid on
the related Principal Balance and then to the Fixed Value Finance Charges due
and unpaid on the related Fixed Value Payment. The Servicer shall release to
the Company the Collections allocated to Fixed Value Finance Charges pursuant
to the preceding sentence. All Liquidation Proceeds with respect to any Fixed
Value Receivable shall be applied first to the related Receivable and only
after the payment in full of the Principal Balance thereof plus accrued but
unpaid interest thereon shall any such Liquidation Proceeds be applied to, or
constitute, the related Fixed Value Payment.

         Section 5.04 Additional Deposits. The Servicer and the Seller shall
deposit or cause to be deposited in the Deposit Account the aggregate Purchase
Amount with respect to Purchased Receivables and the Servicer shall deposit
therein all amounts to be paid under Section 9.01. The Servicer will deposit
the aggregate Purchase Amount with respect to Purchased Receivables when such
obligations are due, unless the Servicer shall not be required to make daily
deposits pursuant to Section 5.02. All such other deposits shall be made on
the Payment Determination Date for the related Collection Period.

         Section 5.05 Distributions.

         (a) (i) On each Payment Determination Date, the Servicer shall
calculate all amounts required to be distributed to the Noteholders and the
Certificateholders and all amounts to be allocated within the Deposit Account
as described below. For purposes of this Section, the Servicing Fee for the
related Payment Date and any previously unpaid Servicing Fees shall be
deducted from the Total Distribution Amount at any time on or prior to the
Payment Date. If the Total Distribution Amount during a Collection Period has
reached a level which covers the payments due pursuant to clauses (A), (B),
(C), (D) and (E) of Section 5.05(a)(ii), then for the remainder of the
Collection Period the Servicer may net the amounts, if any, distributable
pursuant to clause (F) of Section 5.05(a)(ii) out of the Total Distribution
Amount before depositing the Total Distribution Amount into the Deposit
Account and pay such amounts directly to the related recipient.

                  (ii) Subject to Section 5.04(b) of the Indenture, on each
         Payment Date the Servicer shall instruct the Indenture Trustee (based
         on the information contained in the Servicer's Certificate delivered
         on the related Payment Determination Date pursuant to Section 4.09)
         to make the following allocations and distributions by 11:00 A.M.
         (New York time), to the extent of the Total Distribution Amount (net
         of the Servicing Fee for such Payment Date and any previously unpaid
         Servicing Fees and any amount payable pursuant to Section
         5.05(a)(ii)(F) that has already been deducted pursuant to Section
         5.05(a)(i)), in the following order of priority:

                                      29
<PAGE>

                           (A) allocate to the Class A Noteholders for
                  distribution pursuant to Section 8.02 of the Indenture, from
                  such net Total Distribution Amount, an amount equal to the
                  accrued and unpaid interest due on the Class A Notes on such
                  Payment Date;

                           (B) credit, from such net Total Distribution Amount
                  remaining after the application of clause (A), the Priority
                  Principal Distribution Amount to the Note Principal
                  Distribution Account;

                           (C) allocate to the Class B Noteholders for
                  distribution pursuant to Section 8.02 of the Indenture, from
                  such net Total Distribution Amount remaining after the
                  application of clauses (A) and (B), an amount equal to the
                  accrued and unpaid interest due on the Class B Notes;

                           (D) allocate to the Reserve Account, from such net
                  Total Distribution Amount remaining after the application of
                  clauses (A), (B) and (C), the amount required, if any, such
                  that the amount therein is the Specified Reserve Amount;

                           (E) credit, from such net Total Distribution Amount
                  remaining after the application of clauses (A), (B), (C) and
                  (D), an amount equal to (x) the Required Principal
                  Distribution Amount minus (y) the Priority Principal
                  Distribution Amount to the Note Principal Distribution
                  Account; and

                           (F) distribute to the Holders of the Certificates
                  such net Total Distribution Amount remaining after the
                  application of clauses (A), (B), (C), (D) and (E).

For the avoidance of doubt, if payment of the Notes has been accelerated and
such declaration of acceleration has not been rescinded in accordance with the
Indenture, then such Total Distribution Amount shall be applied in accordance
with Section 5.04(b) of the Indenture.

         Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Deposit Account hereunder until the
Certificates are retired.

         Notwithstanding anything herein to the contrary, if payment of the
Notes has been accelerated under the Indenture because of an Event of Default,
then collections in respect of the Receivables will be applied pursuant to
Section 5.04(b) of the Indenture.

         (b) On each Payment Date the amounts credited to the Note Principal
Distribution Account shall be applied in accordance with Section 8.02(c)(iii)
of the Indenture.

         Section 5.06 Reserve Account. (a) On the Closing Date, the Owner
Trustee will deposit, on behalf of the Seller, the Reserve Account Initial
Deposit into the Deposit Account from the net proceeds of the sale of the
Notes which amount shall be allocated to the Reserve Account.

         (b) [RESERVED]

                                      30
<PAGE>

         (c) (i) In the event that the Total Distribution Amount (after the
payment of the Servicing Fee and any previously unpaid Servicing Fees) with
respect to any Collection Period is less than the accrued and unpaid interest
on the Notes on a Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Payment Date an amount
equal to such deficiency, to the extent of funds available therein, and
allocate such amount for distribution to the Noteholders.

                  (ii) In the event that the amount allocated for distribution
         to the Noteholders pursuant to Sections 5.05(a)(ii)(B) and (E) is
         insufficient to make payments of principal on (A) the Class A-1 Notes
         so that the Outstanding Amount for the Class A-1 Notes equals zero on
         the Class A-1 Final Scheduled Payment Date; (B) the Class A-2 Notes
         so that the Outstanding Amount for the Class A-2 Notes equals zero on
         the Class A-2 Final Scheduled Payment Date; (C) the Class A-3 Notes
         so that the Outstanding Amount for the Class A-3 Notes equals zero on
         the Class A-3 Final Scheduled Payment Date; (D) the Class A-4 Notes
         so that the Outstanding Amount for the Class A-4 Notes equals zero on
         the Class A-4 Final Scheduled Payment Date or (E) the Class B Notes
         so that the Outstanding Amount of the Class B Notes equals zero on
         the Class B Final Scheduled Payment Date, the Servicer shall instruct
         the Indenture Trustee to withdraw from the Reserve Account on such
         Class Final Scheduled Payment Date an amount equal to such
         deficiency, to the extent of funds available therein, and allocate
         such amount for distribution to the related Noteholders in accordance
         with this Sale and Servicing Agreement.

                  (iii) In the event that the Outstanding Amount of the Notes
         exceeds the Related Pool Balance, the Servicer shall instruct the
         Indenture Trustee to withdraw from the Reserve Account on the related
         Payment Date an amount equal to such excess, to the extent of funds
         available therein, and allocate such amount for distribution to the
         Noteholders.

         (d) Subject to Section 9.01, amounts will continue to be applied
pursuant to Section 5.05(a) following payment in full of the Outstanding
Amount of the Notes until the Pool Balance is reduced to zero. Following the
payment in full of the aggregate Outstanding Amount of the Notes and of all
other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders and Certificateholders and the termination
of the Trust, any amount then allocated to the Reserve Account shall be
distributed to the Company.

         Section 5.07 Statements to Noteholders and Certificateholders. On
each Payment Date, the Servicer shall make available via its website to the
Owner Trustee, the Rating Agencies, the Noteholders and the Certificateholders
and provide to the Indenture Trustee and each Paying Agent a statement
substantially in the form of Exhibit A, setting forth at least the following
information as to the Notes, to the extent applicable:

                  (i) the amount of such distribution allocable to principal
         allocable to each Class of Notes;

                  (ii) the amount of such distribution allocable to interest
         allocable to each Class of Notes;

                                      31
<PAGE>

                  (iii) the outstanding principal amount of each Class of
         Notes as of the close of business on the last day of the preceding
         Collection Period, after giving effect to payments allocated to
         principal reported under clause (i) above;

                  (iv) the amount of the Servicing Fee paid to the Servicer
         with respect to the related Collection Period;

                  (v) the amount allocated to the Reserve Account on such
         Payment Determination Date after giving effect to allocations thereto
         and withdrawals therefrom to be made on the next following Payment
         Date, if any; and

                  (vi) the Pool Balance as of the close of business on the
         last day of the related Collection Period.

         Each amount set forth on the Payment Date statement under clauses
(i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of
original principal amount of a Note.

         Section 5.08 Net Deposits. As an administrative convenience, unless
the Servicer is required to remit collections daily, the Servicer will be
permitted to make the deposit of collections on the Receivables and Purchase
Amounts for the Collection Period net of distributions to be made to the
Servicer with respect to the Collection Period. The Servicer, however, will
account to the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders as if all deposits, distributions and transfers were made
individually.

                                  ARTICLE VI

                                  The Seller
                                  ----------

         Section 6.01 Representations of Seller. The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.

                  (a) Organization and Good Standing. The Seller is duly
         organized and validly existing as a limited liability company in good
         standing under the laws of the State of Michigan, with the power and
         authority as a limited liability company to own its properties and to
         conduct its business as such properties are currently owned and such
         business is presently conducted, and had at all relevant times, and
         has, the power, authority and legal right to acquire and own the
         Standard Receivables and the Fixed Value Receivables.

                  (b) Due Qualification. The Seller is duly qualified to do
         business as a foreign limited liability company in good standing, and
         has obtained all necessary licenses and approvals, in all
         jurisdictions in which the ownership or lease of property or the
         conduct of its business shall require such qualifications.

                                      32
<PAGE>

                  (c) Power and Authority. The Seller has the power and
         authority as a limited liability company to execute and deliver this
         Agreement and to carry out its terms; the Seller has full power and
         authority to sell and assign the property to be sold and assigned to
         and deposited with the Issuer, and the Seller shall have duly
         authorized such sale and assignment to the Issuer by all necessary
         action as a limited liability company; and the execution, delivery
         and performance of this Agreement has been duly authorized by the
         Seller by all necessary action as a limited liability company.

                  (d) Binding Obligation. This Agreement constitutes a legal,
         valid and binding obligation of the Seller enforceable in accordance
         with its terms.

                  (e) No Violation. The consummation of the transactions
         contemplated by this Agreement and the fulfillment of the terms
         hereof do not conflict with, result in any breach of any of the terms
         and provisions of, or constitute (with or without notice or lapse of
         time) a default under, the articles of organization or operating
         agreement of the Seller, or any indenture, agreement or other
         instrument to which the Seller is a party or by which it is bound; or
         result in the creation or imposition of any Lien upon any of its
         properties pursuant to the terms of any such indenture, agreement or
         other instrument (other than pursuant to this Agreement and the Basic
         Documents); or violate any law or, to the best of the Seller's
         knowledge, any order, rule or regulation applicable to the Seller of
         any court or of any federal or state regulatory body, administrative
         agency or other governmental instrumentality having jurisdiction over
         the Seller or its properties.

                  (f) No Proceedings. To the Seller's best knowledge, there
         are no proceedings or investigations pending or threatened before any
         court, regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the Seller or its
         properties: (i) asserting the invalidity of this Agreement, the
         Indenture or any of the other Basic Documents, the Notes or the
         Certificates, (ii) seeking to prevent the issuance of the Notes or
         the Certificates or the consummation of any of the transactions
         contemplated by this Agreement, the Indenture or any of the other
         Basic Documents, (iii) seeking any determination or ruling that might
         materially and adversely affect the performance by the Seller of its
         obligations under, or the validity or enforceability of, this
         Agreement, the Indenture, any of the other Basic Documents, the Notes
         or the Certificates or (iv) which might adversely affect the federal
         or state income tax attributes of the Notes or the Certificates.

         Section 6.02 Preservation of Existence. During the term of this
Agreement, the Seller will keep in full force and effect its existence and
rights as a limited liability company (or another legal entity) under the laws
of the jurisdiction of its organization and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and
the transactions contemplated hereby. In addition, all transactions and
dealings between the Seller and its Affiliates (including the Company) will be
conducted on an arm's-length basis.

                                      33
<PAGE>

         Section 6.03 Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement:

                  (a) The Seller shall indemnify, defend and hold harmless the
         Issuer, the Owner Trustee, the Indenture Trustee, the Company and the
         Servicer and any of the officers, directors, employees and agents of
         the Issuer, the Owner Trustee and the Indenture Trustee from and
         against any taxes that may at any time be asserted against any such
         Person with respect to the transactions contemplated herein and in
         the Basic Documents, including any sales, gross receipts, general
         corporation, tangible personal property, privilege or license taxes
         (but, in the case of the Issuer, not including any taxes asserted
         with respect to, and as of the date of, the sale of the Receivables
         to the Issuer or the issuance and original sale of the Certificates
         and the Notes, or asserted with respect to ownership of the
         Receivables, or federal or other income taxes arising out of
         distributions on the Certificates or the Notes) and costs and
         expenses in defending against the same.

                  (b) The Seller shall indemnify, defend and hold harmless the
         Issuer, the Owner Trustee, the Indenture Trustee, the Company, the
         Certificateholders and the Noteholders and any of the officers,
         directors, employees and agents of the Issuer, the Owner Trustee and
         the Indenture Trustee from and against any loss, liability or expense
         incurred by reason of (i) the Seller's willful misfeasance, bad faith
         or negligence in the performance of its duties under this Agreement,
         or by reason of reckless disregard of its obligations and duties
         under this Agreement and (ii) the Seller's or the Issuer's violation
         of federal or state securities laws in connection with the offering
         and sale of the Notes and the Certificates.

                  (c) The Seller shall indemnify, defend and hold harmless the
         Owner Trustee and the Indenture Trustee and their respective
         officers, directors, employees and agents from and against all costs,
         expenses, losses, claims, damages and liabilities arising out of or
         incurred in connection with the acceptance or performance of the
         trusts and duties herein and in the Trust Agreement contained, in the
         case of the Owner Trustee, and in the Indenture contained, in the
         case of the Indenture Trustee, except to the extent that such cost,
         expense, loss, claim, damage or liability: (i) in the case of the
         Owner Trustee, shall be due to the willful misfeasance, bad faith or
         negligence (except for errors in judgment) of the Owner Trustee or,
         in the case of the Indenture Trustee, shall be due to the willful
         misfeasance, bad faith or negligence (except for errors in judgment)
         of the Indenture Trustee; or (ii) in the case of the Owner Trustee,
         shall arise from the breach by the Owner Trustee of any of its
         representations or warranties set forth in Section 7.03 of the Trust
         Agreement.

                  (d) The Seller shall pay any and all taxes levied or
         assessed upon all or any part of the Owner Trust Estate.

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such

                                      34
<PAGE>

payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Seller, without interest.

         Section 6.04 Merger or Consolidation of, or Assumption of Obligations
of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Seller shall be a party or (c) which may succeed to the properties and
assets of the Seller substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every
obligation of the Seller under this Agreement, shall be the successor to the
Seller hereunder without the execution or filing of any document or any
further act by any of the parties to this Agreement; provided, however, that
(i) immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 shall have been breached and no
Servicer Default, and no event that, after notice or lapse of time, or both,
would become a Servicer Default shall have occurred and be continuing, (ii)
the Seller shall have delivered to the Owner Trustee and the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (iii) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully
to preserve and protect the interest of the Owner Trustee and Indenture
Trustee, respectively, in the Receivables and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall
be conditions to the consummation of the transactions referred to in clauses
(a), (b) or (c) above.

         Section 6.05 Limitation on Liability of Seller and Others. The Seller
and any director, officer, employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.

         Section 6.06 Seller May Own Notes. The Seller and any Affiliate
thereof may in its individual or any other capacity become the owner or
pledgee of Notes with the same rights as it would have if it were not the
Seller or an Affiliate thereof, except as expressly provided herein or in any
Basic Document. The Seller shall not own any Notes unless the Rating Agency
Condition is satisfied.

                                      35
<PAGE>

                                 ARTICLE VII

                                 The Servicer
                                 ------------

         Section 7.01 Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.

               (a) Organization and Good Standing. The Servicer is duly
         organized and validly existing as a limited liability company in good
         standing under the laws of the state of its formation, with the power
         and authority as a limited liability company to own its properties
         and to conduct its business as such properties are currently owned
         and such business is presently conducted, and had at all relevant
         times, and has, the power, authority and legal right to acquire, own,
         sell and service the Standard Receivables and the Fixed Value
         Receivables and to hold the Receivable Files as custodian.

               (b) Due Qualification. The Servicer is duly qualified to do
         business as a foreign limited liability company in good standing, and
         has obtained all necessary licenses and approvals, in all
         jurisdictions in which the ownership or lease of property or the
         conduct of its business (including the servicing of the Standard
         Receivables and the Fixed Value Receivables as required by this
         Agreement) shall require such qualifications.

               (c) Power and Authority. The Servicer has the power and
         authority as a limited liability company to execute and deliver this
         Agreement and to carry out its terms; and the execution, delivery and
         performance of this Agreement has been duly authorized by the
         Servicer by all necessary action as a limited liability company.

               (d) Binding Obligation. This Agreement constitutes a legal,
         valid and binding obligation of the Servicer enforceable in
         accordance with its terms.

               (e) No Violation. The consummation of the transactions
         contemplated by this Agreement and the fulfillment of the terms
         hereof shall not conflict with, result in any breach of any of the
         terms and provisions of, or constitute (with or without notice or
         lapse of time) a default under, the articles of organization or
         operating agreement of the Servicer, or any indenture, agreement or
         other instrument to which the Servicer is a party or by which it is
         bound; or result in the creation or imposition of any Lien upon any
         of its properties pursuant to the terms of any such indenture,
         agreement or other instrument (other than this Agreement); or violate
         any law or, to the best of the Servicer's knowledge, any order, rule
         or regulation applicable to the Servicer of any court or of any
         federal or state regulatory body, administrative agency or other
         governmental instrumentality having jurisdiction over the Servicer or
         its properties.

               (f) No Proceedings. To the Servicer's best knowledge, there are
         no proceedings or investigations pending or threatened before any
         court, regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the

                                      36
<PAGE>

         Servicer or its properties: (i) asserting the invalidity of this
         Agreement, the Indenture, any of the other Basic Documents or the
         Notes, (ii) seeking to prevent the issuance of the Notes or the
         consummation of any of the transactions contemplated by this
         Agreement, the Indenture or any of the other Basic Documents, (iii)
         seeking any determination or ruling that might materially and
         adversely affect the performance by the Servicer of its obligations
         under, or the validity or enforceability of, this Agreement, the
         Indenture, any of the other Basic Documents or the Notes or (iv)
         relating to the Servicer and which might adversely affect the federal
         or state income tax attributes of the Notes.

               (g) No Insolvent Obligors. As of the related Cutoff Date, no
         Obligor on a Standard Receivable or Fixed Value Receivable is shown
         on the Receivable Files as the subject of a bankruptcy proceeding.

         Section 7.02 Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement:

               (a) The Servicer shall indemnify, defend and hold harmless the
         Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders,
         the Certificateholders, the Company and the Seller and any of the
         officers, directors, employees and agents of the Issuer, the Owner
         Trustee and the Indenture Trustee from and against any and all costs,
         expenses, losses, damages, claims and liabilities arising out of or
         resulting from the use, ownership or operation by the Servicer or any
         Affiliate thereof of a Financed Vehicle.

               (b) The Servicer shall indemnify, defend and hold harmless the
         Issuer, the Owner Trustee, the Indenture Trustee, the Seller, the
         Company, the Certificateholders and the Noteholders and any of the
         officers, directors, employees and agents of the Issuer, the Owner
         Trustee and the Indenture Trustee from and against any and all costs,
         expenses, losses, claims, damages and liabilities to the extent that
         such cost, expense, loss, claim, damage or liability arose out of, or
         was imposed upon any such Person through, the negligence, willful
         misfeasance or bad faith of the Servicer in the performance of its
         duties under this Agreement or by reason of reckless disregard of its
         obligations and duties under this Agreement.

         For purposes of this Section, in the event of the termination of the
rights and obligations of DCS (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.02.

         Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Servicer shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person
shall promptly repay such amounts to the Servicer, without interest.

                                      37
<PAGE>

         Section 7.03 Merger or Consolidation of, or Assumption of Obligations
of, Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party, (c) which may succeed to the properties and
assets of the Servicer substantially as a whole or (d) with respect to the
Servicer's obligations hereunder, which is a legal entity 50% or more of the
voting power of which is owned, directly or indirectly, by DaimlerChrysler AG
or an affiliate of or successor to DaimlerChrysler AG or an affiliate of such
successor, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect to
such transaction, no Servicer Default and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Owner Trustee
and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement
of assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been complied
with, (iii) the Rating Agency Condition shall have been satisfied with respect
to such transaction, (iv) immediately after giving effect to such transaction,
the successor to the Servicer shall become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement and
(v) the Servicer shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and the Indenture Trustee,
respectively, in the Receivables and reciting the details of such filings or
(B) no such action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii),
(iii), (iv) and (v) above shall be conditions to the consummation of the
transactions referred to in clause (a), (b) or (c) above.

         Section 7.04 Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the managers, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any manager,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.

         Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the Basic Documents

                                      38
<PAGE>

and the rights and duties of the parties to this Agreement and the Basic
Documents and the interests of the Certificateholders under this Agreement and
the Noteholders under the Indenture.

         Section 7.05 DCS Not To Resign as Servicer. Subject to the provisions
of Section 7.03, DCS shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon a determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law and cannot be cured. Notice of any such
determination permitting the resignation of DCS shall be communicated to the
Owner Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall (i) have assumed the responsibilities and obligations of DCS in
accordance with Section 8.02 and (ii) have become the Administrator under the
Administration Agreement in accordance with Section 8 of such Agreement.

                                 ARTICLE VIII

                                    Default
                                    -------

         Section 8.01 Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:

                  (a) any failure by the Servicer to deposit in the Deposit
         Account any required payment or to direct the Indenture Trustee to
         make any required distributions therefrom, which failure continues
         unremedied for a period of five Business Days after written notice of
         such failure is received by the Servicer from the Owner Trustee or
         the Indenture Trustee or after discovery of such failure by an
         officer of the Servicer; or

                  (b) failure by the Servicer or the Seller, as the case may
         be, duly to observe or to perform in any material respect any other
         covenants or agreements of the Servicer or the Seller (as the case
         may be) set forth in this Agreement or any other Basic Document,
         which failure shall (i) materially and adversely affect the rights of
         Certificateholders or Noteholders and (ii) continue unremedied for a
         period of 60 days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given (A)
         to the Servicer or the Seller (as the case may be) by the Owner
         Trustee or the Indenture Trustee or (B) to the Servicer or the Seller
         (as the case may be), and to the Indenture Trustee by the Holders of
         Notes, evidencing not less than 25% of the Outstanding Amount of the
         Notes, or if the Notes are no longer Outstanding, Holders (as defined
         in the Trust Agreement) of Certificates evidencing Percentage
         Interests (as defined in the Trust Agreement) aggregating at least
         25%; or

                  (c) the occurrence of an Insolvency Event with respect to
         the Seller, the Servicer or the Company;

                                      39
<PAGE>

then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Owner Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 7.02 hereof) of
the Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Receivables or otherwise,
shall, without further action, pass to and be vested in the Indenture Trustee
or such successor Servicer as may be appointed under Section 8.02; and,
without limitation, the Indenture Trustee and the Owner Trustee are hereby
authorized and empowered to execute and deliver, for the benefit of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of the Receivables and
related documents, or otherwise. The predecessor Servicer shall cooperate with
the successor Servicer, the Indenture Trustee and the Owner Trustee in
effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter
be received by it with respect to any Receivable. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of a Servicer
Default, the Owner Trustee shall give notice thereof to the Rating Agencies.

         Section 8.02 Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (i) the date 45 days from the delivery to the Owner Trustee
and the Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and (ii) the date upon which the predecessor Servicer shall become unable to
act as Servicer, as specified in the notice of resignation and accompanying
Opinion of Counsel. In the event of the Servicer's termination hereunder, the
Indenture Trustee shall appoint a successor Servicer, and the successor
Servicer shall accept its appointment (including its appointment as
Administrator under the Administration Agreement as set forth in Section
8.02(b)) by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer and the
Indenture Trustee shall be entitled to the Servicing Fee. Notwithstanding the
above, the Indenture Trustee shall, if it shall be unwilling or legally unable
so to act, appoint or petition a court of competent jurisdiction to appoint
any established institution, having a net worth of not less than $100,000,000
and whose

                                      40
<PAGE>

regular business shall include the servicing of automotive receivables, as the
successor to the Servicer under this Agreement.

         (b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall (i) be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement and (ii) become the Administrator under the
Administration Agreement in accordance with Section 8 of the Administration
Agreement.

         (c) The Servicer may not resign unless it is prohibited from serving
as such by law.

         Section 8.03 Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders, and the Indenture Trustee shall give prompt written
notice thereof to Noteholders and the Rating Agencies.

         Section 8.04 Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes or, if the
Notes are no longer Outstanding, the Holders (as defined in the Trust
Agreement) of Certificates evidencing not less than a majority of the
Percentage Interests (as defined in the Trust Agreement) may, on behalf of all
Noteholders or the Holders of the Certificates, as the case may be, waive in
writing any default by the Servicer in the performance of its obligations
hereunder and its consequences, except a default in making any required
allocations or distributions from the Deposit Account in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto.

                                  ARTICLE IX

                                  Termination
                                  -----------

         Section 9.01 Optional Purchase of All Receivables. (a) As of the last
day of any Collection Period as of which the then outstanding Pool Balance is
10% or less of the Original Pool Balance and the Class A-1 Notes, Class A-2
Notes and Class A-3 Notes have been paid in full or will be paid in full on
the next Payment Date, the Servicer shall have the option to purchase the
Owner Trust Estate, other than the Deposit Account; provided, however, that,
unless Moody's agrees otherwise, the Servicer may not effect any such purchase
if the rating of the DaimlerChrysler North America Holding Corporation's
long-term debt obligations is less than "Baa3" by Moody's, unless the Owner
Trustee and the Indenture Trustee shall have received an Opinion of Counsel to
the effect that such purchase would not constitute a fraudulent conveyance. To
exercise such option, the Servicer shall deposit pursuant to Section 5.04 in
the Deposit Account an amount equal to the aggregate Purchase Amount for the
Receivables (including defaulted Receivables), plus the appraised value of any
such other property held by

                                      41
<PAGE>

the Trust other than the Deposit Account, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Deposit Account pursuant
to the preceding sentence, together with any other funds in the Deposit
Account, is greater than or equal to the sum of the outstanding principal
amount of the Notes and all accrued but unpaid interest (including any overdue
interest and premium) thereon.

         (b) Notice of the exercise of the option in Section 9.01(a) shall be
given by the Servicer to the Owner Trustee and the Indenture Trustee on or
prior to the last day of the Collection Period referred to in Section 9.01(a).

                                  ARTICLE X

                                 Miscellaneous
                                 -------------

         Section 10.01 Amendment. This Agreement may be amended by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement
or for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement (including for the
issuance of Fixed Value Securities pursuant to Section 2.03) or of modifying
in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.

         This Agreement may also be amended from time to time by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee, the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders (as defined in
the Trust Agreement) of outstanding Certificates evidencing not less than a
majority of the Percentage Interests (as defined in the Trust Agreement) for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes or the Percentage Interests
(as defined in the Trust Agreement), the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all the
outstanding Notes and the Holders (as defined in the Trust Agreement) of all
the outstanding Certificates.

         Prior to the execution of any such amendment the Servicer will
provide written notification of the substance of such amendment to each of the
Rating Agencies.

         Promptly after the execution of any such amendment or consent
pursuant to either of the two preceding paragraphs, the Owner Trustee shall
furnish written notification of the substance

                                      42
<PAGE>

of such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies.

         It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.

         Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties
or immunities under this Agreement or otherwise.

         Section 10.02 Protection of Title to Trust. (a) The Seller shall file
such financing statements and cause to be filed such continuation statements,
all in such manner and in such places as may be required by law fully to
preserve, maintain and protect the interest of the Issuer and of the Indenture
Trustee in the Receivables and in the proceeds thereof. The Seller shall
deliver (or cause to be delivered) to the Owner Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.

         (b) Neither the Seller nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-506 of
the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.

         (c) Each of the Seller and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any change in the jurisdiction in which it is organized if,
as a result of such change, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal
executive office, within the United States of America.

         (d) The Servicer shall maintain accounts and records as to each
Standard Receivable and each Fixed Value Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Standard Receivable or Fixed Value Receivable, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to)
each Standard Receivable or Fixed Value Receivable and the amounts from time
to time deposited in the Deposit Account in respect of such Standard
Receivable or Fixed Value Receivable.

                                      43
<PAGE>

         (e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Standard Receivables
and the Fixed Value Receivables, the Servicer's master computer records
(including any backup archives) that refer to a Standard Receivable or Fixed
Value Receivable shall indicate clearly the interest of the Issuer and the
Indenture Trustee in such Standard Receivable or Fixed Value Receivable and
that such Standard Receivable or Fixed Value Receivable is owned by the Issuer
and has been pledged to the Indenture Trustee. Indication of the Issuer's and
the Indenture Trustee's interest in a Standard Receivable or Fixed Value
Receivable shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Receivable shall have been paid in
full or repurchased.

         (f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Standard
Receivable or Fixed Value Receivable, shall indicate clearly that such
Standard Receivable or Fixed Value Receivable has been sold and is owned by
the Issuer and has been pledged to the Indenture Trustee.

         (g) The Servicer shall permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit and make copies of and
abstracts from the Servicer's records regarding any Standard Receivable or
Fixed Value Receivable.

         (h) Upon request, the Servicer shall furnish to the Owner Trustee or
to the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables and
to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.

         (i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:

                  (1) promptly after the execution and delivery of this
         Agreement and of each amendment hereto, an Opinion of Counsel stating
         that, in the opinion of such counsel, either (A) all financing
         statements and continuation statements have been filed that are
         necessary fully to preserve and protect the interest of the Owner
         Trustee and the Indenture Trustee in the Receivables, and reciting
         the details of such filings or referring to prior Opinions of Counsel
         in which such details are given, or (B) no such action shall be
         necessary to preserve and protect such interest; and

                  (2) within 90 days after the beginning of each calendar year
         beginning with the first calendar year beginning more than three
         months after the Cutoff Date, an Opinion of Counsel, dated as of a
         date during such 90-day period, stating that, in the opinion of such
         counsel, either (A) all financing statements and continuation
         statements have been filed that are necessary fully to preserve and
         protect the interest of the Owner Trustee and the Indenture Trustee
         in the Receivables, and reciting the details of such

                                      44
<PAGE>

         filings or referring to prior Opinions of Counsel in which such
         details are given, or (B) no such action shall be necessary to
         preserve and protect such interest.

Each Opinion of Counsel referred to in clause (1) or (2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.

         (j) The Seller shall, to the extent required by applicable law, cause
the Notes to be registered with the Commission pursuant to Section 12(b) or
Section 12(g) of the Exchange Act within the time periods specified in such
sections.

         Section 10.03 Notices. All demands, notices, communications and
instructions upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this Agreement shall be in
writing, personally delivered, electronically delivered or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Seller or the Servicer, to DaimlerChrysler
Services North America LLC, 27777 Inkster Road, Farmington Hills, Michigan
48334, Attention of Assistant Secretary ((248) 427- 2565), (b) in the case of
the Issuer or the Owner Trustee, at the Corporate Trust Office (as defined in
the Trust Agreement), (c) in the case of the Indenture Trustee, at the
Corporate Trust Office, (d) in the case of Moody's, to Moody's Investors
Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York
10007, (e) in the case of Standard & Poor's, via electronic delivery to
Servicer_reports@sandp.com, or if not available in electronic format, to
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., 55 Water Street, New York, New York 10004, Attention of Asset Backed
Surveillance Department and (f) in the case of Fitch, to Fitch, Inc., One
State Street Plaza, Attention: Auto ABS Group, New York, N.Y. 10004, Attention
of Structured Finance Asset Backed Securities; or, as to each of the
foregoing, at such other address as shall be designated by written notice to
the other parties.

         Section 10.04 Assignment by the Seller or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in the remainder of this Section, as provided in Sections 6.04 and 7.03 herein
and as provided in the provisions of this Agreement concerning the resignation
of the Servicer, this Agreement may not be assigned by the Seller or the
Servicer. The Issuer and the Servicer hereby acknowledge and consent to the
conveyance and assignment (i) by the Seller to the Company pursuant to the
Purchase Agreement and (ii) by the Company to a limited liability company or
other Person (provided that conveyance and assignment is made in accordance
with Section 5.05 of the Purchase Agreement), of any and all of the Seller's
rights and interests (and corresponding obligations, if any) hereunder with
respect to receiving amounts from the Reserve Account and with respect to
receiving and conveying any Fixed Value Payments, and the Issuer and the
Servicer hereby agree that the Company, and any such assignee of the Company,
shall be entitled to enforce such rights and interests directly against the
Issuer as if the Company, or such assignee of the Company, were itself a party
to this Agreement.

         Section 10.05 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Company (and any
assignee of the Company pursuant to Section 10.04), the Servicer, the Issuer,
the Owner Trustee, the Certificateholders, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be

                                      45
<PAGE>

construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.

         Section 10.06 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

         Section 10.07 Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

         Section 10.08 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         Section 10.09 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

         Section 10.10 Assignment by Issuer. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee pursuant to the Indenture for
the benefit of the Noteholders of all right, title and interest of the Issuer
in, to and under the Receivables and/or the assignment of any or all of the
Issuer's rights and obligations hereunder to the Indenture Trustee.

         Section 10.11 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer and the Seller shall not, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, acquiesce, petition or otherwise
invoke or cause the Issuer or the Company (or any assignee of the Company
pursuant to Section 10.04) to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer or the Company (or any assignee of the Company pursuant to Section
10.04) under any federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or the Company (or any assignee of the
Company pursuant to Section 10.04) or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer or the
Company (or any assignee of the Company pursuant to Section 10.04).

         (b) Notwithstanding any prior termination of this Agreement, the
Servicer shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Seller under any federal or state bankruptcy, insolvency or
similar law, or appointing

                                      46
<PAGE>

a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.

         Section 10.12 Limitation of Liability of Owner Trustee and Indenture
Trustee. (a)Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Deutsche Bank Trust Company Delaware not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Deutsche Bank Trust Company Delaware in its
individual capacity or, except as expressly provided in the Trust Agreement,
as beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the
Issuer. For all purposes of this Agreement, in the performance of its duties
or obligations hereunder or in the performance of any duties or obligations of
the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.

         (b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Citibank, N.A., not in its individual capacity
but solely as Indenture Trustee and in no event shall Citibank, N.A. have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.

                                      47
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.

                                DAIMLERCHRYSLER AUTO TRUST 2005-B

                                By:  DEUTSCHE BANK TRUST COMPANY DELAWARE,
                                     not in its individual capacity but
                                     solely as Owner Trustee on behalf of
                                     the Trust

                                     By:     /s/ Michele H. Y. Voon
                                         ------------------------------
                                     Name:  Michele H. Y. Voon
                                     Title:   Attorney-In-Fact

                                DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
                                Seller and Servicer

                                By:  /s/ M. L. Davis
                                   --------------------
                                Name:   M. L. Davis
                                Title: Assistant Controller

Acknowledged and accepted
as of the day and year
first above written:

CITIBANK, N.A.,
not in its individual capacity
but solely as Indenture Trustee

By:    /s/ John Hannon
    ----------------------
Name:   John Hannon
Title:    Associate

<PAGE>

                                                                    SCHEDULE A

                            Schedule of Receivables
                            -----------------------

        Delivered to the Owner Trustee and Indenture Trustee at Closing

                                  Schedule A

<PAGE>

                                                                    SCHEDULE B

                         Location of Receivable Files
                         ----------------------------

1. 3433 Progress Drive, Bensalem PA 19020.
2. 1202 Avenue R, Grand Prairie, TX 75050.

                                  Schedule B

<PAGE>

                                                                    SCHEDULE C

                               Schedule of YSOA

         "YSOA" means, with respect to any Payment Date, the amount specified
below with respect to such Payment Date:

Closing Date....................      $100,459,307.12
June 2005.......................        96,684,015.80
July 2005.......................        92,985,104.77
August 2005.....................        89,363,319.08
September 2005..................        85,819,251.17
October 2005....................        82,353,372.17
November 2005...................        78,965,423.61
December 2005...................        75,654,584.19
January 2006....................        72,420,588.42
February 2006...................        69,261,092.08
March 2006......................        66,173,228.25
April 2006......................        63,156,486.72
May 2006........................        60,211,332.32
June 2006.......................        57,338,240.09
July 2006.......................        54,537,726.58
August 2006.....................        51,810,173.19
September 2006..................        49,156,018.81
October 2006....................        46,575,810.96
November 2006...................        44,070,110.44
December 2006...................        41,639,290.49
January 2007....................        39,283,608.22
February 2007...................        37,003,432.00
March 2007......................        34,799,155.12
April 2007......................        32,671,200.58
May 2007........................        30,620,075.76
June 2007.......................        28,646,197.13
July 2007.......................        26,749,880.34
August 2007.....................        24,931,462.52
September 2007..................        23,191,230.57
October 2007....................        21,528,551.50
November 2007...................        19,941,881.59
December 2007...................        18,428,931.26
January 2008....................        16,987,804.95
February 2008...................        15,617,436.16
March 2008......................        14,316,291.46
April 2008......................        13,083,006.76

May 2008........................       $11,914,528.51
June 2008........................      $10,809,530.87
July 2008........................        9,767,615.10
August 2008......................        8,787,958.01
September 2008...................        7,869,255.27
October 2008.....................        7,010,613.22
November 2008....................        6,210,562.00
December 2008....................        5,467,272.18
January 2009.....................        4,779,499.70
February 2009....................        4,146,246.93
March 2009.......................        3,566,617.71
April 2009.......................        3,040,344.20
May 2009.........................        2,566,944.93
June 2009........................        2,145,675.86
July 2009........................        1,775,364.61
August 2009......................        1,454,150.12
September 2009...................        1,179,818.02
October 2009.....................          949,765.22
November 2009....................          760,714.44
December 2009....................          607,726.49
January 2010.....................          484,310.19
February 2010....................          384,253.27
March 2010.......................          300,127.36
April 2010.......................          228,735.04
May 2010.........................          169,405.24
June 2010........................          121,277.05
July 2010........................           83,199.21
August 2010......................           53,928.22
September 2010...................           32,265.15
October 2010.....................           17,130.32
November 2010....................            7,563.27
December 2010....................            2,454.27
January 2011.....................              397.16
February 2011....................                6.78
March 2011.......................                2.41
April 2011.......................                0.37
May 2011.........................         $      0.00

     The YSOA has been calculated for each Payment Date as the sum of the
amount for each Receivable equal to the excess, if any, of

                                  Schedule C

<PAGE>

o    the scheduled payments due on such Receivable for each future
     Collection Period discounted to present value as of the end of the
     preceding Collection Period at the APR of such Receivable, over

o    the scheduled payments due on the Receivable for each future Collection
     Period discounted to present value as of the end of the preceding
     Collection Period at 8.5%.

     For purposes of such calculation, future scheduled payments on the
Receivables are assumed to be made on their scheduled due dates without any
delays, defaults or prepayments.

                                  Schedule C

<PAGE>

                                                                     EXHIBIT A

                 Form of Distribution Statement to Noteholders
                 ---------------------------------------------

DaimlerChrysler Services North America LLC
DaimlerChrysler Auto Trust 2005-B Payment Date Statement to Noteholders

------------------------------------------------------------------------------

Amount of Principal Paid to:

Class A-1 Notes:      ($ per $1,000 original principal amount)
Class A-2 Notes:      ($ per $1,000 original principal amount)
Class A-3 Notes:      ($ per $1,000 original principal amount)
Class A-4 Notes:      ($ per $1,000 original principal amount)
Class B Notes:        ($ per $1,000 original principal amount)

Amount of Interest Paid to:

Class A-1 Notes:      ($ per $1,000 original principal amount)
Class A-2 Notes:      ($ per $1,000 original principal amount)
Class A-3 Notes:      ($ per $1,000 original principal amount)
Class A-4 Notes:      ($ per $1,000 original principal amount)
Class B Notes:        ($ per $1,000 original principal amount)

Total Distribution Amount:

Note Balance
   Class A-1 Notes
   Class A-2 Notes
   Class A-3 Notes
   Class A-4 Notes
   Class B Notes

Servicing Fee
Servicing Fee Per $1,000 Note

Reserve Account Balance

Pool Balance

                                      A-1

<PAGE>

                                                                     EXHIBIT B

                        Form of Servicer's Certificate
                        ------------------------------
<TABLE>
<CAPTION>
DaimlerChrysler Services North America LLC                                              Distribution Date: [    ]
DaimlerChrysler Auto Trust 2005-B Monthly Servicer's Certificate                        Page 1 of 2
-----------------------------------------------------------------------------------------------------------------

     <S>                                                            <C>                         <C>
     Payment Determination Statement Number
     Distribution Date
     Dates Covered                                                  From and Including          To and Including
     -------------                                                  ------------------          ----------------
         Collections Period
         Accrual Period
         30/360 Days
         Actual/360 Days

                                                                         Number of
     Collateral Pool Balance Data                                        Accounts                   $ Amount
     ----------------------------                                        --------                   --------
     Pool Balance - Beginning of Period
     Collections of Installment Principal
     Collections Attributable to Full Payoffs
     Principal Amount of Repurchases
     Principal Amount of Gross Losses
                                                                                              ---------------------
     Pool Balance - End of Period
                                                                                              ---------------------

     Pool Statistics                                                                              End of Period
     ---------------                                                                          ---------------------
     Initial Pool Balance (Pool Balance at the Purchase Date)
     Pool Factor (Pool Balance as a Percent of Initial Pool
     Balance)
     Ending O/C Amount
     Coverage Ratio (Ending Pool Balance as a Percent of
         Ending Notes)
     Cumulative Net Losses
     Net Loss Ratio (3 mo. Weighted Avg.)
     60+ Days Delinquency Amount
     Delinquency Ratio (3 mo. Weighted Avg.)
     Weighted Average APR
     Weighted Average Remaining Term (months)
     Weighted Average Seasoning (months)

                                     B-1

<PAGE>

                                                                     EXHIBIT B

                        Form of Servicer's Certificate
                        ------------------------------

DaimlerChrysler Services North America LLC                                              Distribution Date: [ ]
DaimlerChrysler Auto Trust 2005-B Monthly Servicer's Certificate                        Page 2 of 2
--------------------------------------------------------------------------------------------------------------

Cash Sources
     Collections of Installment Principal
     Collections Attributable to Full
     Payoffs
     Principal Amount of Repurchases                     Target Overcollateralization Amount
     Recoveries on Loss Accounts                         -----------------------------------
     Collections of Interest                             Original O/C Amount
     Investment Earnings
     Reserve Account
                                        ---------                                                    ---------
     Total Sources
                                        =========
Cash Uses
     Servicer Fee
     Note Interest
     Reserve Fund
     Priority Principal Distribution
     Amount
     Regular Principal Distribution Amount
     Distribution to Certificateholders
                                        ---------
     Total Cash Uses
                                        =========
Administrative Payment
Total Principal and Interest Sources
Investment Earnings in Deposit Account
Cash Reserve in Deposit Account
Servicer Fee (withheld)
Distribution to Certificateholders
                                        ---------
     Payment Due to Deposit Account
                                        =========
                                                                                  Principal                Interest
                                            Beginning    Ending      Principal    per $1000   Interest     per $1000
                                            Balance      Balance     Payment      Face        Payment      Face
                                            -------------------------------------------------------------------------
Notes
-----
Class A-1                @     %
Class A-2                @     %
Class A-3                @     %
Class A-4                @     %
Class B                @     %
     Total Notes
                                            =====================================             ============
</TABLE>

      * Class A-1 Interest is computed on an Actual/360 Basis. Days in current
period.

                                     B-2EXHIBIT 10.1

 

 

EXECUTION COPY

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of May 23, 2005

 

by and among

 

HOSPITALITY PROPERTIES TRUST,

as Borrower

 

Each of 

 

WACHOVIA CAPITAL MARKETS, LLC,

and

RBS SECURITIES CORPORATION,

as Joint Lead Arrangers

 

WACHOVIA CAPITAL MARKETS, LLC,

as Sole Book Manager,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

THE ROYAL BANK OF SCOTLAND PLC,

as Syndication Agent,

 

CALYON NEW YORK BRANCH, 

ROYAL BANK OF CANADA,

and

SUMITOMO MITSUI BANKING CORPORATION

as Documentation Agents,

 

and

 

THE FINANCIAL INSTITUTIONS INITIALLY SIGNATORY HERETO

AND THEIR ASSIGNEES PURSUANT TO SECTION 12.5.,

as Lenders

 

 

 

 

 

TABLE OF CONTENTS

 

	
            Article I. Definitions
 	
            1
 	
             

	
             
	
            Section 1.1.  Definitions.
 	
            1
 	
             

	
             
	
            Section 1.2.  General; References to Times.
 	
            26
 	
             

	
            Article II. Credit Facility
 	
            27
 	
             

	
             
	
            Section 2.1.  Revolving Loans.
 	
            27
 	
             

	
             
	
            Section 2.2.  Swingline Loans.
 	
            28
 	
             

	
             
	
            Section 2.3.  Letters of Credit.
 	
            30
 	
             

	
             
	
            Section 2.4.  Rates and Payment of Interest on Loans.
 	
            34
 	
             

	
             
	
            Section 2.5.  Number of Interest Periods.
 	
            35
 	
             

	
             
	
            Section 2.6.  Repayment of Loans.
 	
            35
 	
             

	
             
	
            Section 2.7.  Prepayments.
 	
            35
 	
             

	
             
	
            Section 2.8.  Continuation.
 	
            36
 	
             

	
             
	
            Section 2.9.  Conversion.
 	
            36
 	
             

	
             
	
            Section 2.10.  Notes.
 	
            36
 	
             

	
             
	
            Section 2.11.  Voluntary Reductions of the Commitment.
 	
            37
 	
             

	
             
	
            Section 2.12. Expiration or Maturity Date of Letters of Credit Past Termination Date.
 	
            37
 
	
             
	
            Section 2.13.  Amount Limitations.
 	
            37
 	
             

	
             
	
            Section 2.14.  Increase of Commitments.
 	
            38
 	
             

	
             
	
            Section 2.15.  Extension of Termination Date.
 	
            38
 	
             

	
            Article III. Payments, Fees and Other General Provisions
 	
            39
 	
             

	
             
	
            Section 3.1.  Payments.
 	
            39
 	
             

	
             
	
            Section 3.2.  Pro Rata Treatment.
 	
            39
 	
             

	
             
	
            Section 3.3.  Sharing of Payments, Etc.
 	
            40
 	
             

	
             
	
            Section 3.4.  Several Obligations.
 	
            41
 	
             

	
             
	
            Section 3.5.  Minimum Amounts.
 	
            41
 	
             

	
             
	
            Section 3.6.  Fees.
 	
            41
 	
             

	
             
	
            Section 3.7.  Computations.
 	
            42
 	
             

	
             
	
            Section 3.8.  Usury.
 	
            42
 	
             

	
             
	
            Section 3.9.  Agreement Regarding Interest and Charges.
 	
            42
 	
             

	
             
	
            Section 3.10.  Statements of Account.
 	
            43
 	
             

	
             
	
            Section 3.11.  Defaulting Lenders.
 	
            43
 	
             

	
             
	
            Section 3.12.  Taxes.
 	
            44
 	
             

	
            Article IV. Yield Protection, Etc.
 	
            46
 	
             

	
             
	
            Section 4.1.  Additional Costs; Capital Adequacy.
 	
            46
 	
             

	
             
	
            Section 4.2.  Suspension of LIBOR Loans.
 	
            47
 	
             

	
             
	
            Section 4.3.  Illegality.
 	
            48
 	
             

	
             
	
            Section 4.4.  Compensation.
 	
            48
 	
             

	
             
	
            Section 4.5.  Affected Lenders.
 	
            48
 	
             

	
             
	
            Section 4.6.  Treatment of Affected Loans.
 	
            49
 	
             

	
             
	
            Section 4.7.  Change of Lending Office.
 	
            50
 	
             

						

 

 

 

 

	
             
	
            Section 4.8.  Assumptions Concerning Funding of LIBOR Loans.
 	
            50
 	
             

	
            Article V. Conditions Precedent
 	
            50
 	
             

	
             
	
            Section 5.1.  Initial Conditions Precedent.
 	
            50
 	
             

	
             
	
            Section 5.2.  Conditions Precedent to All Loans and Letters of Credit.
 	
            53
 	
             

	
             
	
            Section 5.3.  Conditions as Covenants.
 	
            53
 	
             

	
            Article VI. Representations and Warranties
 	
            53
 	
             

	
             
	
            Section 6.1.  Representations and Warranties.
 	
            53
 	
             

	
             
	
            Section 6.2.  Survival of Representations and Warranties, Etc.
 	
            59
 	
             

	
            Article VII. Affirmative Covenants
 	
            60
 	
             

	
             
	
            Section 7.1.  Preservation of Existence and Similar Matters.
 	
            60
 	
             

	
             
	
            Section 7.2.  Compliance with Applicable Law and Material Contracts.
 	
            60
 	
             

	
             
	
            Section 7.3.  Maintenance of Property.
 	
            60
 	
             

	
             
	
            Section 7.4.  Conduct of Business.
 	
            61
 	
             

	
             
	
            Section 7.5.  Insurance.
 	
            61
 	
             

	
             
	
            Section 7.6.  Payment of Taxes and Claims.
 	
            61
 	
             

	
             
	
            Section 7.7.  Visits and Inspections.
 	
            61
 	
             

	
             
	
            Section 7.8.  Use of Proceeds; Letters of Credit.
 	
            62
 	
             

	
             
	
            Section 7.9.  Environmental Matters.
 	
            62
 	
             

	
             
	
            Section 7.10.  Books and Records.
 	
            62
 	
             

	
             
	
            Section 7.11.  Further Assurances.
 	
            62
 	
             

	
             
	
            Section 7.12.  New Subsidiaries/Guarantors.
 	
            63
 	
             

	
             
	
            Section 7.13.  REIT Status.
 	
            63
 	
             

	
             
	
            Section 7.14.  Exchange Listing.
 	
            63
 	
             

	
            Article VIII. Information
 	
            64
 	
             

	
             
	
            Section 8.1.  Quarterly Financial Statements.
 	
            64
 	
             

	
             
	
            Section 8.2.  Year-End Statements.
 	
            64
 	
             

	
             
	
            Section 8.3.  Compliance Certificate.
 	
            65
 	
             

	
             
	
            Section 8.4.  Other Information.
 	
            65
 	
             

	
            Article IX. Negative Covenants
 	
            68
 	
             

	
             
	
            Section 9.1.  Financial Covenants.
 	
            68
 	
             

	
             
	
            Section 9.2.  Indebtedness.
 	
            69
 	
             

	
             
	
            Section 9.3. Certain Permitted Investments.
 	
            69
 	
             

	
             
	
            Section 9.4.  Investments Generally.
 	
            70
 	
             

	
             
	
            Section 9.5.  Liens; Negative Pledges; Other Matters.
 	
            71
 	
             

	
             
	
            Section 9.6.  Restricted Payments.
 	
            71
 	
             

	
             
	
            Section 9.7.  Merger, Consolidation, Sales of Assets and Other Arrangements.
 	
            72
 
	
             
	
            Section 9.8.  Fiscal Year.
 	
            72
 	
             

	
             
	
            Section 9.9.  Modifications to Advisory Agreement and Other Material Contracts.
 	
            73
 
	
             
	
            Section 9.10.  Transactions with Affiliates.
 	
            73
 	
             

	
             
	
            Section 9.11.  ERISA Exemptions.
 	
            73
 	
             

					

 

 

 

 

	
            Article X. Default
 	
            73
 
	
             
	
            Section 10.1.  Events of Default.
 	
            73
 
	
             
	
            Section 10.2.  Remedies Upon Event of Default.
 	
            77
 
	
             
	
            Section 10.3.  Remedies Upon Default.
 	
            78
 
	
             
	
            Section 10.4.  Allocation of Proceeds.
 	
            78
 
	
             
	
            Section 10.5.  Collateral Account.
 	
            79
 
	
             
	
            Section 10.6.  Performance by Agent.
 	
            80
 
	
             
	
            Section 10.7.  Rights Cumulative.
 	
            80
 
	
            Article XI. The Agent
 	
            80
 
	
             
	
            Section 11.1.  Authorization and Action.
 	
            80
 
	
             
	
            Section 11.2.  Agent’s Reliance, Etc.
 	
            81
 
	
             
	
            Section 11.3.  Notice of Defaults.
 	
            82
 
	
             
	
            Section 11.4.  Wachovia as Lender.
 	
            82
 
	
             
	
            Section 11.5.  Approvals of Lenders.
 	
            82
 
	
             
	
            Section 11.6.  Lender Credit Decision, Etc.
 	
            83
 
	
             
	
            Section 11.7.  Indemnification of Agent.
 	
            84
 
	
             
	
            Section 11.8.  Successor Agent.
 	
            84
 
	
             
	
            Section 11.9.  Titled Agents.
 	
            85
 
	
            Article XII. Miscellaneous
 	
            85
 
	
             
	
            Section 12.1.  Notices.
 	
            85
 
	
             
	
            Section 12.2.  Expenses.
 	
            86
 
	
             
	
            Section 12.3.  Setoff.
 	
            87
 
	
             
	
            Section 12.4.  Litigation; Jurisdiction; Other Matters; Waivers.
 	
            87
 
	
             
	
            Section 12.5.  Successors and Assigns.
 	
            88
 
	
             
	
            Section 12.6.  Amendments.
 	
            91
 
	
             
	
            Section 12.7.  Nonliability of Agent and Lenders.
 	
            92
 
	
             
	
            Section 12.8.  Confidentiality.
 	
            92
 
	
             
	
            Section 12.9.  Indemnification.
 	
            92
 
	
             
	
            Section 12.10.  Termination; Survival.
 	
            94
 
	
             
	
            Section 12.11.  Severability of Provisions.
 	
            94
 
	
             
	
            Section 12.12.  GOVERNING LAW.
 	
            95
 
	
             
	
            Section 12.13.  Counterparts.
 	
            95
 
	
             
	
            Section 12.14.  Obligations with Respect to Loan Parties.
 	
            95
 
	
             
	
            Section 12.15.  Limitation of Liability.
 	
            95
 
	
             
	
            Section 12.16.  Entire Agreement.
 	
            95
 
	
             
	
            Section 12.17.  Construction.
 	
            96
 
	
             
	
            Section 12.18.  LIABILITY OF TRUSTEES, ETC.
 	
            96
 
	
             
	
            Section 12.19.  Patriot Act.
 	
            96
 
	
             
	
            Section 12.20.  NO NOVATION.
 	
            96
 
			

 

 

 

 

 

	
            SCHEDULE 1.1.(a)
 	
            Applicable Margin
 	
             

	
            SCHEDULE 1.1.(b)
 	
            Facility Fee
 	
             

	
            SCHEDULE 1.1.(c)
 	
            List of Loan Parties
 	
             

	
            SCHEDULE 6.1.(b)
 	
            Ownership Structure
 	
             

	
            SCHEDULE 6.1.(f)
 	
            Title to Properties; Liens
 	
             

	
            SCHEDULE 6.1.(g)
 	
            Indebtedness and Guaranties
 	
             

	
            SCHEDULE 6.1.(h)
 	
            Material Contracts
 	
             

	
            SCHEDULE 6.1.(i)
 	
            Litigation
 	
             

	
            SCHEDULE 6.1.(k)
 	
            Financial Statements
 	
             

	
            SCHEDULE 6.1.(y)
 	
            List of Unencumbered Assets
 
												

 

 

	
            EXHIBIT A
 	
            Form of Assignment and Acceptance Agreement
 
	
            EXHIBIT B
 	
            Form of Guaranty
 	
             

	
            EXHIBIT C
 	
            Form of Notice of Borrowing
 	
             

	
            EXHIBIT D
 	
            Form of Notice of Continuation
 	
             

	
            EXHIBIT E
 	
            Form of Notice of Conversion
 	
             

	
            EXHIBIT F
 	
            Form of Notice of Swingline Borrowing
 	
             

	
            EXHIBIT G
 	
            Form of Swingline Note
 	
             

	
            EXHIBIT H
 	
            Form of Revolving Note
 	
             

	
            EXHIBIT I
 	
            Form of Compliance Certificate
 	
             

 

 

 

 THIS AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of May 23, 2005 by and among HOSPITALITY PROPERTIES TRUST, a real estate investment trust formed under the laws of the State of Maryland (the “Borrower”), each of WACHOVIA CAPITAL MARKETS, LLC and RBS SECURITIES CORPORATION, as Joint Lead Arrangers (each a “Joint Lead Arranger”), WACHOVIA CAPITAL MARKETS, LLC, as Sole Book Manager (the “Sole Book Manager”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent, THE ROYAL BANK OF SCOTLAND PLC, as Syndication Agent (the “Syndication Agent”), each of CALYON NEW YORK BRANCH, ROYAL BANK OF CANADA and SUMITOMO MITSUI BANKING CORPORATION, as Documentation Agent (each a “Documentation Agent”), and each of the financial institutions initially a signatory hereto together with their assignees
pursuant to Section 12.5.(d).

 

WHEREAS, certain of the Lenders and other financial institutions have made available to Borrower a $350,000,000 revolving credit facility on the terms and conditions contained in that certain Credit Agreement dated as of March 26, 2002 (as amended and in effect immediately prior to the date hereof, the “Existing Credit Agreement”) by and among the Borrower, such Lenders, certain other financial institutions, the Agent and the other parties thereof; and

 

WHEREAS, the Agent and the Lenders desire to amend and restate the terms of the Existing Credit Agreement to make available to the Borrower a revolving credit facility in the initial amount of $750,000,000, which will include a $50,000,000 letter of credit subfacility and a $50,000,000 swingline subfacility, on the terms and conditions contained herein.  

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree that the Existing Credit Agreement is amended and restated as follows:

 

ARTICLE I. DEFINITIONS

Section 1.1.  Definitions.

In addition to terms defined elsewhere herein, the following terms shall have the following meanings for the purposes of this Agreement:

 

“Accession Agreement” means an Accession Agreement substantially in the form of Annex I to the Guaranty.

 

	
            “Additional Costs” has the meaning given that term in Section 4.1.
 

 

“Adjusted EBITDA” means, with respect to a Person for a given period, such Person’s EBITDA for such period determined on a consolidated basis less the sum of (a) any FF&E Reserves to the extent included in EBITDA and (b) the excess, if any, with respect to each Hotel or Hotel Pool (as applicable) of such Person, of (i) 4.0% of total gross room revenues of such Hotel or Hotel Pool for such period over (ii) the FF&E Reserve actually funded during such period or prefunded for such period with respect to such Property or Hotel Pool pursuant to the applicable Operating Agreement or any related Ancillary Agreement, and (c) to the extent 

 

 

 

included in EBITDA, replacement reserves for (i) any Property that is not a Hotel and is part of a Hotel Pool included in Unencumbered Hotels, or (ii) Other Acceptable Properties.

 

“Adjusted Eurodollar Rate” means, with respect to each Interest Period for any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest Period by (b) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America to residents of the United States of America).

 

“Advisory Agreement” means that certain Advisory Agreement dated as of January 1, 1998 by and between the Borrower and RMR.

 

“Affiliate” means any Person (other than the Agent or any Lender):  (a) directly or indirectly controlling, controlled by, or under common control with, the Borrower; (b) directly or indirectly owning or holding ten percent (10.0%) or more of any Equity Interest in the Borrower; or (c) ten percent (10.0%) or more of whose voting stock or other Equity Interest is directly or indirectly owned or held by the Borrower.  For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise.
The Affiliates of a Person shall include any officer or director of such Person.

 

“Agent” means Wachovia Bank, National Association, as contractual representative for the Lenders under the terms of this Agreement, and any of its successors.

 

	
            “Agreement Date” means the date as of which this Agreement is dated.
 

 

“Ancillary Agreement” means, with respect to any Operating Agreement, any material incidental agreement with respect to such Operating Agreement (including, by way of example, guarantees, franchise agreements, and, in the case of Leases, management agreements not constituting Operating Agreements) to which the Borrower or any Subsidiary is a party.

 

“Applicable Law” means all applicable provisions of constitutions, statutes, laws, rules, regulations and orders of all governmental bodies and all orders and decrees of all courts, tribunals and arbitrators.

 

“Applicable Margin” means the percentage per annum determined, at any time, based on the range into which the Borrower’s Credit Rating then falls, in accordance with the levels in the table set forth in Schedule 1.1.(a) (each a “Level”).  Any change in the Borrower’s Credit Rating which would cause it to move to a different Level in such table shall effect a change in the Applicable Margin on the Business Day on which such change occurs.  During any period in 

 

- 6 -

 

 

 

which the Borrower has received Credit Ratings that are not equivalent, the Applicable Margin shall be determined by the higher of such two Credit Ratings; provided, however, that if the ratings of S&P and Moody’s are two pricing Levels apart, then the Applicable Margin shall be based on the Level that falls between the Levels that correspond to the ratings of S&P and Moody’s. During any period for which the Borrower has received a Credit Rating from only one Rating Agency, then the Applicable Margin shall be determined based on such Credit Rating.  During any period for which the Borrower has not received a Credit Rating from either Rating Agency, then the Applicable Margin shall be determined based on Level 4.  As of the Agreement Date, the Applicable Margin is determined based on Level 3.

 

“Approved Fund” means any Person (other than a natural person) (a) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b) that is administered or managed by (i) a Lender, (ii) an affiliate of a Lender or (c) an entity or an affiliate of an entity that administers or manages a Lender.

 

“Asset Under Development” means, as of any date of determination, any Property on which construction of new income-producing improvements has been commenced and is continuing.  If such construction consists of the construction of tenant or comparable improvements, as opposed to material expansion of such Property or any “ground up” development, such Property shall not be considered to be an Asset Under Development.  In addition, to the extent any Property includes a revenue-generating component (e.g. an existing Hotel) and a building under development, such revenue-generating component shall not be considered to be an Asset Under Development but such building under development shall be considered to be an Asset Under Development.  Further, no Hotel shall be considered an Asset Under Development if the opening date with
respect to such Hotel has occurred. 

 

	
            “Assignee” has the meaning given that term in Section 12.5.(d).
 

 

“Assignment and Acceptance Agreement” means an Assignment and Acceptance Agreement among a Lender, an Assignee and the Agent, substantially in the form of Exhibit A.

 

“Base Rate” means the per annum rate of interest equal to the greater of (a) the Prime Rate or (b) the Federal Funds Rate plus one-half of one percent (0.5%).  Any change in the Base Rate resulting from a change in the Prime Rate or the Federal Funds Rate shall become effective as of 12:01 a.m. on the Business Day on which each such change occurs.  The Base Rate is a reference rate used by the Lender acting as the Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged by the Lender acting as the Agent or any other Lender on any extension of credit to any debtor.

 

“Base Rate Loan” means a Revolving Loan bearing interest at a rate based on the Base Rate.

 

“Base Payments” means the minimum base rent or owner’s priority payment that an Owner is entitled to receive under an Operating Agreement.  The term excludes: (a) payments (such as real estate taxes, insurance premiums, and costs of maintenance) that the Operating 

 

- 7 -

 

 

 

Agreement requires the Operator to pay third parties; (b) any element of rent or owner’s priority payment that is conditional, contingent, or not yet capable of determination; and (c) FF&E Reserves.  If Operating Agreement(s) for multiple Hotels do not separately allocate Base Payments to such Hotels, then Base Payments shall be reasonably allocated among such Hotels (where necessary) in a manner satisfactory to Agent.

 

“Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

 

“Borrower” has the meaning set forth in the introductory paragraph hereof and shall include the Borrower’s successors and permitted assigns.

 

“Business Day” means (a) any day other than a Saturday, Sunday or other day on which banks in Charlotte, North Carolina or New York, New York are authorized or required to close and (b) with reference to a LIBOR Loan, any such day that is also a day on which dealings in Dollar deposits are carried out in the London interbank market.

 

	
            “Capitalization Rate” means 9.0%.
 

 

“Capitalized Lease Obligation” means obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.  The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation as would be required to be reflected on the balance sheet prepared in accordance with GAAP of the applicable Person as of the applicable date.

 

“Cash Equivalents” means:  (a) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (b) certificates of deposit with maturities of not more than one year from the date acquired issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank at the time of the acquisition thereof has capital and unimpaired surplus in excess of $500,000,000.00 and which bank or its holding company at the time of the acquisition thereof has a short-term commercial paper
rating of at least A-2 or the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into only with commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at the time of the acquisition thereof at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s, in each case with maturities of not more than one year from the date acquired; and (e) investments in money market funds registered under the Investment Company Act of 1940, which have at the time of the acquisition thereof net assets of at least $500,000,000.00 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.

 

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“Collateral Account” means a special non-interest bearing deposit account or securities account maintained by, or on behalf of, the Agent and under its sole dominion and control, for the benefit of the Lenders.

 

“Commitment” means, as to each Lender (other than the Swingline Lender), such Lender’s obligation (a) to make Revolving Loans pursuant to Section 2.1., (b) to issue (in the case of the Lender then acting as Agent) or participate in (in the case of the other Lenders) Letters of Credit pursuant to Section 2.3.(a) and 2.3.(i), respectively (but in the case of the Lender acting as the Agent excluding the aggregate amount of participations in the Letters of Credit held by the other Lenders), and (c) to participate in Swingline Loans pursuant to Section 2.2.(e), in each case, in an amount up to, but not exceeding, the amount set forth for such Lender on its signature page hereto as such Lender’s “Commitment Amount” or as set forth in the applicable Assignment and Acceptance Agreement, as
the same may be reduced from time to time pursuant to Section 2.11., increased pursuant to Section 2.14., or as appropriate to reflect any assignments to or by such Lender effected in accordance with Section 12.5.

 

“Commitment Percentage” means, as to each Lender, the ratio, expressed as a percentage, of (a) the amount of such Lender’s Commitment to (b) the aggregate amount of the Commitments of all Lenders hereunder; provided, however, that if at the time of determination the Commitments have terminated or been reduced to zero, the “Commitment Percentage” of each Lender shall be the Commitment Percentage of such Lender in effect immediately prior to such termination or reduction.

 

	
            “Compliance Certificate” has the meaning given that term in Section 8.3.
 

 

“Continue”, “Continuation” and “Continued” each refers to the continuation of a LIBOR Loan from one Interest Period to another Interest Period pursuant to Section 2.8.

 

“Convert”, “Conversion” and “Converted” each refers to the conversion of a Revolving Loan of one Type into a Revolving Loan of another Type pursuant to Section 2.9.

 

“Credit Event” means any of the following: (a) the making (or deemed making) of any Loan, (b) the Conversion of a Loan and (c) the issuance of a Letter of Credit.

 

“Credit Rating” means, with respect to a Person, the lowest rating assigned by a Rating Agency to each series of rated senior unsecured long term indebtedness of such Person.

 

“Debt Service” means, for any period, the sum of:  (a) Interest Expense of the Borrower and its Subsidiaries determined on a consolidated basis for such period and (b) all regularly scheduled principal payments made with respect to Indebtedness of the Borrower and its Subsidiaries during such period, other than any balloon, bullet or similar principal payment which repays such Indebtedness in full.

 

“Default” means any of the events specified in Section 10.1., whether or not there has been satisfied any requirement for the giving of notice, the lapse of time, or both.

 

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            “Defaulting Lender” has the meaning set forth in Section 3.11.
 

 

	
            “Derivatives Contract” means any “swap agreement” as defined in 11 U.S.C. § 101.
 

 

“Derivatives Termination Value” means, in respect of any one or more Derivatives Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Derivatives Contracts, the termination value(s) thereof determined in accordance with GAAP.

 

“Developable Property” means (a) any Property on which there are no improvements (excluding land which is leased under a net lease to a third party) or (b) any Property (or portion thereof) acquired by the Borrower or any Subsidiary for the purpose of being developed.  Developable Property shall not include any Property that is an Asset Under Development.

 

	
            “Dollars” or “$” means the lawful currency of the United States of America.
 

 

“Due Diligence Reports” means, as to any Hotel Pool or individual Hotel not in a Hotel Pool, (a) an Operating Agreement Abstract and (b) such other information as the Agent may reasonably request in order to evaluate such Hotel Pool or Hotel.

 

“EBITDA” means, with respect to a Person for a given period: (a) net income (or loss) of such Person for such period determined on a consolidated basis exclusive of the following (to the extent included in determination of such net income (loss)): (i) depreciation and amortization; (ii) interest expense; (iii) income tax expense; and (iv) extraordinary or non-recurring gains and losses; plus (b)  such Person’s pro rata share of EBITDA of its Unconsolidated Affiliates.  Straight line rent leveling adjustments, deferred percentage rent and deferred hotel operating income adjustments and amortization of intangibles pursuant to Statement of Financial Accounting Standards No. 141 and the like required under GAAP, shall be disregarded in determinations
of EBITDA (to the extent such adjustments would otherwise have been included in the determination of EBITDA).

 

“Effective Date” means the later of: (a) the Agreement Date; and (b) the date on which all of the conditions precedent set forth in Section 5.1. shall have been fulfilled or waived in writing by the Requisite Lenders.

 

“Eligible Assignee” means (a) a Lender, (b) an affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Agent and (ii) unless a Default or Event of Default shall exist, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“Environmental Laws” means any Applicable Law relating to environmental protection or the manufacture, storage, disposal or clean-up of Hazardous Materials including, without limitation, the following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the Resource 

 

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Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental Protection Agency and any applicable rule of common law and any judicial interpretation thereof relating primarily to the environment or Hazardous Materials.

 

“Equity Interest” means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security (other than a security constituting Indebtedness) convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant,
option, right or other interest is authorized or otherwise existing on any date of determination.

 

“Equity Issuance” means any issuance by a Person of any Equity Interest and shall in any event include the issuance of any Equity Interest upon the conversion or exchange of any security constituting Indebtedness that is convertible or exchangeable, or is being converted or exchanged, for Equity Interests.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect from time to time.

 

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

 

“Event of Default” means any of the events specified in Section 10.1., provided that any requirement for notice or lapse of time or any other condition has been satisfied.

 

“Excluded Subsidiary” means any Subsidiary (a) holding title to or beneficially owning assets which are or are intended to become collateral for any Secured Indebtedness of such Subsidiary, or being a beneficial owner of a Subsidiary holding title to or beneficially owning such assets (but having no material assets other than such beneficial ownership interests) and (b) which (i) is, or is expected to be, prohibited from Guarantying the Indebtedness of any other Person pursuant to any document, instrument or agreement evidencing such Secured Indebtedness or (ii) is prohibited from Guarantying the Indebtedness of any other Person pursuant to a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition or anticipated
condition to the extension of such Secured Indebtedness.

 

“Existing Credit Agreement” has the meaning given such term in the first “WHEREAS” clause of this Agreement.  

 

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“Facility Fee” means the per annum percentage in the table set forth in Schedule 1.1.(b) corresponding to the Level at which the “Applicable Margin” is determined in accordance with the definition thereof. As of the Agreement Date, the Facility Fee equals 0.20%.

 

“Fair Market Value” means, with respect to (a) a security listed on a principal national securities exchange, the price of such security as reported on such exchange by any widely recognized reporting method customarily relied upon by financial institutions and (b) with respect to any other property, the price which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Agent by federal funds dealers selected by the Agent on such day on such transaction as determined by the Agent.

 

“Fees” means the fees and commissions provided for or referred to in Section 3.6. and any other fees payable by the Borrower hereunder or under any other Loan Document.

 

“FF&E Reserve” means, for any period and with respect to a given Property or Hotel Pool, an amount equal to the amount that the Operating Agreement or any Ancillary Agreement for such Property or Hotel Pool requires the Operator to reserve during such period for (i) replacements and renewals to such Property’s or Hotel Pool’s furnishings, fixtures and equipment, (ii) routine repairs and maintenance to buildings which are normally capitalized under GAAP and (iii) major repairs, alterations, improvements, renewals or replacements to building structures, roofs or exterior façade, or for mechanical, electrical, HVAC, plumbing or vertical transportation systems.

 

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

 

“Fixed Charges” means, for any period, the sum (without duplication) of (a) Debt Service for such period and (b) Preferred Dividends for such period.

 

“Floating Rate Debt” means all Indebtedness of the Borrower and its Subsidiaries which bears interest at fluctuating rates (and in any event shall include all Loans and other Indebtedness of the Borrower under any of the Loan Documents) and for which the Borrower or any such Subsidiary has not obtained Interest Rate Agreements which  effectively cause such variable rates to be equivalent to fixed rates less than or equal to (a) the rate (as reasonably determined by the Agent) borne by United States 10-year Treasury Notes at the time the applicable Interest Rate Agreement became effective plus (b) 3.0%.

 

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“Funds From Operations” means, for any period, (a) net income of the Borrower for such period determined on a consolidated basis exclusive of the following (to the extent included in the determination of such net income): (i) depreciation and amortization; (ii) gains and losses from extraordinary or non-recurring items; (iii) gains and losses on sales of real estate; (iv) gains and losses on investments in marketable securities; and (v) provisions/benefits for income taxes for such period, plus (b) FF&E Reserves required under Operating Agreements but not included in net income, plus (c) the Borrower’s share of Funds From Operations from Unconsolidated Affiliates. Straight line rent leveling adjustments, deferred percentage rent and deferred hotel operating income adjustments and amortization of intangibles pursuant to
Statement of Financial Accounting Standards No. 141 required under GAAP shall be disregarded in determinations of Funds From Operations (to the extent such adjustments otherwise would be included in the determination of Funds From Operations).

 

“GAAP” means 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 entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

 

“Governing Documents” of any Person means the declaration of trust, certificate or articles of incorporation, by-laws, partnership agreement or operating or members agreement, as the case may be, and any other organizational or governing documents, of such Person.

 

“Governmental Approvals” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

 

“Governmental Authority” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity (including, without limitation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.

 

 “Ground Lease” means a ground lease containing the following terms and conditions: (a) either (i) a remaining term (taking into account extensions which may be effected by the lessee without the consent of the lessor) of no less than 30 years from the Agreement Date, or (ii) the right of the lessee to purchase the property on terms reasonably acceptable to the Agent; (b) the right of the lessee to mortgage and encumber its interest in the leased property; (c) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; and (d) free transferability of
the lessee’s interest under such lease, including ability to sublease, subject to only reasonable consent provisions.

 

 

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“Guarantor” means any Person that is a party to the Guaranty as a “Guarantor” and in any event shall include each Material Subsidiary (unless an Excluded Subsidiary or an Unleveraged Non-Domestic Subsidiary).

 

“Guaranty”, “Guaranteed” or to “Guarantee” as applied to any obligation means and includes:  (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation whether by: (i) the purchase of securities or obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property or the purchase or
sale of services primarily for the purpose of enabling the obligor with respect to such obligation to make any payment or performance (or payment of damages in the event of nonperformance) of or on account of any part or all of such obligation, or to assure the owner of such obligation against loss, (iii) the supplying of funds to or in any other manner investing in the obligor with respect to such obligation, (iv) repayment of amounts drawn down by beneficiaries of letters of credit (including Letters of Credit), or (v) the supplying of funds to or investing in a Person on account of all or any part of such Person’s obligation under a Guaranty of any obligation or indemnifying or holding harmless, in any way, such Person against any part or all of such obligation.  As the context requires, “Guaranty” shall also mean the Guaranty to which the Guarantors are parties substantially in the form of Exhibit B.

 

“Hazardous Materials” means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic substances” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity or “EP toxicity” (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any
flammable substances or explosives or any radioactive materials; (d) asbestos in any form; (e) toxic mold; and (f) electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million.

 

“Hotel” means any Property, the improvements on which are operated as a hotel, inn or the providing of lodging or leisure services, together with any incidental improvements on such Property operated in connection with such hotel, inn, lodging or leisure facility.

 

“Hotel Net Cash Flow” means the net operating cash flow of a Hotel, after (a) all taxes (except income taxes), insurance, salaries, utilities, and other operating expenses, all sums that the applicable Operating Agreement or any related Ancillary Agreement requires the applicable Operator to pay (excluding (i) all items payable to such Operator that are subordinated to Base Payments and (ii) Base Payments), and (b) the greater of (a) FF&E Reserves, or (b) 4.0% of total gross room revenues for such period.  Hotel Net Cash Flow shall be determined as of any date based on the last four completed fiscal quarters of the Person that owns such Hotel (subject to reasonable adjustment or interpolation to accommodate differences between such Person’s fiscal 

 

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quarters and those of its Operator).

 

“Hotel Pool” means any group of two or more Properties, substantially all of the value of which is attributable to Hotels, that are (a) leased to or managed by an Operator pursuant to a single Operating Agreement, or (b) leased or managed pursuant to Operating Agreements that are cross-defaulted (as to defaults by Operator), together with all other Properties whose Operating Agreements are cross-defaulted (as to defaults by Operator) with such Operating Agreement.

 

“Indebtedness” means, with respect to a Person, at the time of computation thereof, all of the following (without duplication): (a) all obligations of such Person in respect of money borrowed; (b) all obligations of such Person, whether or not for money borrowed (1) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (2) evidenced by bonds, debentures, notes or similar instruments, or (3) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property or services rendered; (c) Capitalized Lease Obligations of such Person; (d) all reimbursement obligations of such
Person under any letters of credit or acceptances (whether or not the same have been presented for payment); (e) all obligations, contingent or otherwise, of such Person under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing arrangement if the transaction giving rise to such obligation (1) is considered indebtedness for borrowed money for tax purposes but is classified as an operating lease under GAAP and (2) does not (and is not required pursuant to GAAP to) appear as a liability on the balance sheet of such Person; (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person, valued at the greater of its voluntary or involuntary liquidation preference; (g) all obligations of such Person in respect of any take-out commitment or forward equity commitment (excluding, in
the case of the Borrower and its Subsidiaries, any such obligation that can be satisfied solely by the issuance of Equity Interests (other than Mandatorily Redeemable Stock)); 
 (h) all Indebtedness of other Persons which such Person has Guaranteed or is otherwise recourse to such Person, valued at the lesser of (1) the stated or determinable amount of the Indebtedness such Person Guaranteed or, if the amount of such Indebtedness is not stated or determinable, the maximum reasonably anticipated liability in respect thereof, and (2) the amount of any express limitation on such Guaranty; (i) all Indebtedness of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) through (i) of the definition thereof) on property or assets owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness or other payment obligation, valued, in the case of any such Indebtedness as to which recourse for the payment thereof is expressly limited to the property or assets on which such Lien is granted, at the lesser of (1) the stated or determinable amount of the Indebtedness that is so secured or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) and (2) the Fair Market Value of such property or assets; and (j) such Person’s pro rata share of the Indebtedness of any Unconsolidated Affiliate of such Person.  

 

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            “Intellectual Property” has the meaning given that term in Section 6.1.(t).
 

 

“Interest Expense” means, with respect to a Person for any period of time, (a) the interest expense, whether paid, accrued or capitalized (without deduction of consolidated interest income) of such Person for such period plus (b) in the case of the Borrower, the Borrower’s pro rata share of Interest Expense of its Unconsolidated Affiliates. Interest Expense shall exclude any amortization of (i) deferred financing fees and (ii) debt discounts (but only to the extent such discounts do not exceed 3.0% of the initial face principal amount of such debt).

 

“Interest Period” means with respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan is made or the last day of the next preceding Interest Period for such Loan and ending 7 days, or one, three, six or (to the extent available from all Lenders) twelve months thereafter, as the Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the case may be, except that each Interest Period (other than an Interest Period of 7 days) that commences on the last Business Day of a calendar month shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest Period would otherwise end after the Termination Date, such Interest Period shall end on the Termination Date; and (ii) each Interest Period that would
otherwise end on a day which is not a Business Day shall end on the immediately following Business Day (or, in the case of any Interest Period other than one having a duration of 7 days, if such immediately following Business Day falls in the next calendar month, on the immediately preceding Business Day).

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar contractual agreement or arrangement entered into with a nationally recognized financial institution then having an Investment Grade Rating for the purpose of protecting against fluctuations in interest rates.

 

	
            “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
 

 

“Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following:  (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Property or other asset, the acquisition thereof.  Any commitment to make an Investment in any other
Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment.  Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

 

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“Investment Grade Rating” means a Credit Rating of BBB-/Baa3 (or equivalent) or higher from both Rating Agencies.

 

“Lease” means a (sub)lease of a Property between the Borrower or a Subsidiary, as (sub)lessor, and an Operator, as (sub)lessee; provided that unless the Agent otherwise approves, a (sub)lease of a Property from the Borrower or a Subsidiary to a TRS or any other Subsidiary of the Borrower shall be deemed not to be a “Lease” for purposes of this Agreement.

 

	
            “L/C Commitment Amount” equals $50,000,000.
 

 

“Lender” means each financial institution from time to time party hereto as a “Lender”, together with its respective successors and permitted assigns, and as the context requires, includes the Swingline Lender.

 

“Lending Office” means, for each Lender and for each Type of Loan, the office of such Lender specified as such on its signature page hereto or in the applicable Assignment and Acceptance Agreement, or such other office of such Lender as such Lender may notify the Agent and the Borrower in writing from time to time.

 

	
            “Letter of Credit” has the meaning given that term in Section 2.3.(a).
 

 

“Letter of Credit Documents” means, with respect to any Letter of Credit, collectively, any application therefor, any certificate or other document presented in connection with a drawing under such Letter of Credit and any other agreement, instrument or other document governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations.

 

“Letter of Credit Liabilities” means, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement Obligations of the Borrower at such time due and payable in respect of all drawings made under such Letter of Credit.  For purposes of this Agreement, a Lender (other than the Lender acting as the Agent) shall be deemed to hold a Letter of Credit Liability in an amount equal to its participation interest in the related Letter of Credit under Section 2.3.(i), and the Lender acting as the Agent shall be deemed to hold a Letter of Credit Liability in an amount equal to its retained interest in the related Letter of Credit after giving effect to the acquisition by the Lenders other than the Lender
acting as the Agent of their participation interests under such Section.

 

“LIBOR” means, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.  If for any reason such rate is not available, the term “LIBOR” shall mean, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on the Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 

 

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11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on the Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates.  If for any reason none of the foregoing rates is available, LIBOR shall be, for any Interest Period, the rate per annum reasonably determined by the Agent as the rate of interest at which Dollar deposits in the approximate amount of the LIBOR Loan comprising part of such borrowing would be offered by the Agent to major banks in the London interbank Eurodollar market at their request at or about 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.

 

	
            “LIBOR Loans” means Revolving Loans bearing interest at a rate based on LIBOR.
 

 

“Lien” as applied to the property of any Person means:  (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge, lien, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; (c) the filing of any financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction, other than a financing statement filed (i) in respect of a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor provision) of the Uniform Commercial Code as in effect in an applicable jurisdiction or (ii) in connection with a sale or other disposition of accounts or other assets not prohibited by this Agreement in a transaction not otherwise constituting or giving rise to a Lien; and (d) any agreement by such Person to grant, give or otherwise convey any of the foregoing.

 

	
            “Loan” means a Revolving Loan or a Swingline Loan.
 

 

“Loan Document” means this Agreement, each Note, each Letter of Credit Document, the Guaranty and each other document or instrument now or hereafter executed and delivered by a Loan Party in connection with, pursuant to or relating to this Agreement.

 

“Loan Party” means each of the Borrower and each other Person who guarantees all or a portion of the Obligations and/or who pledges any collateral security to secure all or a portion of the Obligations.  Schedule 1.1.(c) sets forth the Loan Parties in addition to the Borrower as of the Agreement Date.

 

“Managing Trustee” means either Mr. Barry M. Portnoy or Mr. Gerard M. Martin, both having a business address c/o RMR.

 

“Management Agreement” means an agreement pursuant to which the Borrower or a Subsidiary, as Owner, contracts for the management and operation of a Property by an Operator.  In the event a Property is subject to both a Lease and an agreement that would otherwise constitute a Management Agreement under this definition, such agreement shall be treated as an 

 

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Ancillary Agreement with respect to such Lease rather than as a Management Agreement for purposes of this Agreement, 

 

“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity Interest of such Person which by the terms of such Equity Interest (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity Interests), (b) is convertible into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in whole or in part (other than an Equity Interest which is redeemable solely in exchange for common stock or other equivalent common Equity
Interests), in each case on or prior to the date on which all Revolving Loans are scheduled to be due and payable in full.

 

“Material Adverse Effect” means a materially adverse effect on (a) the business, assets, liabilities, financial condition, results of operations or business prospects of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower or any other Loan Party to perform its obligations under any Loan Document to which it is a party, (c) the validity or enforceability of any of the Loan Documents, (d) the rights and remedies of the Lenders and the Agent under any of the Loan Documents or (e) the timely payment of the principal of or interest on the Loans or other amounts payable in connection therewith.

 

“Material Contract” means any contract or other arrangement (other than Loan Documents), whether written or oral, to which the Borrower, any Subsidiary or any other Loan Party is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect, and in any event shall include the Advisory Agreement. 

 

“Material Plan” means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $10,000,000.

 

“Material Subsidiary” means any Subsidiary to which 2.0% or more of Total Asset Value is, directly or indirectly, attributable.

 

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

 

“Multiemployer Plan” means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period.

 

“Negative Pledge” means a provision of any agreement (other than this Agreement or any other Loan Document) that prohibits or limits the creation or assumption of any Lien on any assets of a Person or entitles another Person to obtain or claim the benefit of a Lien on any assets 

 

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of such Person; provided, however, the following shall not constitute a Negative Pledge for purposes of this Agreement: an agreement (a) that (i) establishes a maximum ratio of unsecured debt to unencumbered assets, or of secured debt to total assets, or otherwise conditions a Person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person’s ability to encumber its assets, or (ii) limits cross-collateralization of specific assets or pools of assets with other assets or pools of assets or otherwise imposes documentary, procedural or other conditions or requirements in connection with a Person’s encumbering its assets, but (b) that does not generally prohibit (i) the encumbrance of its assets or (ii) the encumbrance of specific assets.

 

“Net Proceeds” means with respect to any Equity Issuance by a Person, the aggregate amount of all cash and the Fair Market Value of all other property received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by such Person in connection with such Equity Issuance.

 

“Non-Domestic Property” means a Property located outside a state, territory or commonwealth of the United States of America (including without limitation Puerto Rico and the U.S. Virgin Islands) or the District of Columbia.  Notwithstanding the foregoing, the two hotels currently owned by the Borrower located in Ontario, Canada are deemed not to be Non-Domestic Properties for purposes of this Agreement.

 

“Nonrecourse Indebtedness” means, with respect to a Person, Indebtedness for borrowed money in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, and other similar exceptions to nonrecourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness.

 

	
            “Note” means a Revolving Note or a Swingline Note.
 

 

“Notice of Borrowing” means a notice in the form of Exhibit C to be delivered to the Agent pursuant to Section 2.1.(b) evidencing the Borrower’s request for a borrowing of Revolving Loans.

 

“Notice of Continuation” means a notice in the form of Exhibit D to be delivered to the Agent pursuant to Section 2.8. evidencing the Borrower’s request for the Continuation of a LIBOR Loan.

 

“Notice of Conversion” means a notice in the form of Exhibit E to be delivered to the Agent pursuant to Section 2.9. evidencing the Borrower’s request for the Conversion of a Loan from one Type to another Type.

 

“Notice of Swingline Borrowing” means a notice in the form of Exhibit F to be delivered to the Agent pursuant to Section 2.2. evidencing the Borrower’s request for a Swingline Loan.

 

 

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“Obligations” means, individually and collectively: (a) the aggregate principal balance of, and all accrued and unpaid interest on, all Loans; (b) all Reimbursement Obligations and all other Letter of Credit Liabilities; and (c) all other indebtedness, liabilities, obligations, covenants and duties of the Borrower and the other Loan Parties owing to the Agent, the Swingline Lender or any Lender of every kind, nature and description, under or in respect of this Agreement or any of the other Loan Documents, including, without limitation, the Fees and indemnification obligations, whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any promissory note.

 

“OFAC” means U.S. Department of the Treasury’s Office of Foreign Assets Control and any successor Governmental Authority.

 

	
            “Operating Agreement” means any Lease or Management Agreement.
 

 

“Operating Agreement Abstract” means, as to any Operating Agreement for a Hotel Pool or individual Hotel not in a Hotel Pool, an abstract of such Operating Agreement and any Ancillary Agreements in form and substance reasonably acceptable to the Agent, which shall include a reasonably detailed description of the following for such Operating Agreement and Ancillary Agreements: (a) all rent and priority payments due to the Owner payable under such Operating Agreement, including a description of Base Payments and other components of rent and priority payments due to the Owner payable under such Operating Agreement, (b) the term (including provisions for extension) of the Operating Agreement and any related Ancillary Agreements, (c) reserves for items of the type described in the definition of FF&E Reserve,
(d) security deposits and other similar deposits required to made by the Operator, (e) the terms of any Guaranty of such Operating Agreement, including without limitation, the identity of the guarantor(s), any collateral security for the obligations of such guarantor(s) and any provisions providing for reduction or release of the obligations of such guarantor(s) thereunder, (f) termination events, (g) the terms of any Ancillary Agreements for the Hotel Pool or Hotel subject to such Operating Agreement, (h) a summary of any restrictions on the Owner’s ability to sell, encumber, pledge, mortgage or otherwise grant Liens upon the Properties subject to such Operating Agreement, (i) restrictions, requirements or other provisions regarding the hotel brand name, trademark or trade name under which the Operator may operate any Hotel subject to such Operating Agreement, and (j) any materials terms that are unusual in nature or not contained in the majority of the
Operating Agreements or Ancillary Agreement for the Unencumbered Hotels at such time.

 

“Operator” means the (sub)lessee or manager of a Property pursuant to an Operating Agreement, provided that unless the Agent otherwise approves, any such (sub)lessee or manager which is a TRS or other Subsidiary of the Borrower or an Affiliate of the Borrower (including, without limitation, RMR, or any Managing Trustee) shall be deemed not to be an “Operator” for purposes of this Agreement. 

 

 “Operator Deposits” means the following:  (a) any cash or Cash Equivalent that secures the payment of Base Payments, an Operator’s obligations under such Operator’s Operating Agreement or the obligations of a manager or franchisor under an Ancillary Agreement (including, without limitation, any cash or Cash Equivalent deposited in connection with a 

 

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Guaranty of an Operator’s obligations under an Operating Agreement or of the payment of Base Payments); or (b) the total amount of any deferred purchase price payable by the Borrower or any of its Subsidiaries to an Operator or an Operator’s Affiliates, against which purchase price the Borrower or such Subsidiary, as applicable, is entitled, pursuant to such Operator’s Operating Agreement, to offset Base Payments, damages resulting from such Operator’s default under its Operating Agreement or from a default by a manager or franchisor under an Ancillary Agreement.  

 

“Other Acceptable Property” means any Property not otherwise qualifying as an Unencumbered Hotel which the Requisite Lenders have agreed in their sole discretion and in writing is to be included as an Unencumbered Asset.  

 

“Owner” means the Borrower or a Subsidiary in it capacity as (sub)lessor or owner pursuant to an Operating Agreement.

 

	
            “Participant” has the meaning given that term in Section 12.5.(c).
 

 

	
            “PBGC” means the Pension Benefit Guaranty Corporation and any successor agency.
 

 

“Permitted Liens” means, as to any Person: (a) Liens securing taxes, assessments and other charges or levies imposed by any Governmental Authority (excluding any Lien imposed pursuant to any of the provisions of ERISA) or the claims of materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (i) are not at the time required to be paid or discharged under Section 7.6., or (ii) are the responsibility of a financially responsible Operator to discharge; (b) Liens consisting of deposits or pledges made, in the ordinary course of business, in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar Applicable Laws; (c) Liens consisting of encumbrances in the
nature of zoning restrictions, easements, and rights or restrictions of record on the use of real property, which do not materially detract from the value of such property or impair the use thereof in the business of such Person and, in the case of the Borrower or any Subsidiary, Liens granted by any tenant on its leasehold estate in a Property which are subordinate to the interest of the Borrower or a Subsidiary in such Property; (d) Liens in existence as of the Agreement Date and set forth in Part II of Schedule 6.1.(f); (e) deposits to secure trade contracts (other than for Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (f) the lessor’s interest in property leased to the Borrower or any of its Subsidiaries pursuant to a lease permitted by this Agreement; (g) the interests of tenants, operators, franchisors, or managers of Properties;
(h) Liens in favor of the Agent for the benefit of the Lenders; and (i) Liens which are also secured by restricted cash or Cash Equivalents of equal or greater value.

 

“Person” means an individual, corporation, partnership, limited liability company, association, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

 

 

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“Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (a) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (b) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

 

“Post-Default Rate” means, in respect of any principal of any Loan or any other Obligation that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum equal to four percent (4.0%) plus the Base Rate as in effect from time to time.

 

“Preferred Dividends” means, for any given period and without duplication, all Restricted Payments accrued or paid (and in the case of Restricted Payments paid, which were not accrued during a prior period) during such period on Preferred Stock issued by the Borrower or a Subsidiary.  Preferred Dividends shall not include dividends or distributions paid or payable (a) solely in Equity Interests (other than Mandatorily Redeemable Stock) payable to holders of such class of Equity Interests; (b) to the Borrower or a Subsidiary; or (c) constituting or resulting in the redemption of Preferred Stock, other than scheduled redemptions not constituting balloon, bullet or similar redemptions in full.

 

“Preferred Stock” means, with respect to any Person, Equity Interests in such Person which are entitled to preference or priority over any other Equity Interest in such Person in respect of the payment of dividends or distribution of assets upon liquidation or both.

 

“Prime Rate” means the rate of interest per annum announced publicly by the Lender acting as the Agent as its prime rate from time to time.  The Prime Rate is not necessarily the best or the lowest rate of interest offered by the Lender acting as the Agent or any other Lender.

 

“Principal Office” means the office of the Agent located at One Wachovia Center, Charlotte, North Carolina, or such other office of the Agent as the Agent may designate from time to time.

 

“Property” means any parcel of real property, together with all improvements thereon, owned or leased pursuant to a Ground Lease by the Borrower or any Subsidiary.

 

“Rating Agencies” means S&P and Moody’s.  If either such corporation ceases to act as a securities rating agency or ceases to provide ratings with respect to the senior long-term unsecured debt obligations of the Borrower, then the Borrower may designate as a replacement Rating Agency Fitch or any other nationally recognized securities rating agency acceptable to the Agent.

 

	
            “Register” has the meaning given that term in Section 12.5.(e).
 

 

 

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“Regulatory Change” means, with respect to any Lender, any change effective after the Agreement Date in Applicable Law (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks, including such Lender, of or under any Applicable Law (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any Governmental Authority or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy.

 

“Reimbursement Obligation” means the absolute, unconditional and irrevocable obligation of the Borrower to reimburse the Agent for any drawing honored by the Agent under a Letter of Credit.

 

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

 

“RMR” means Reit Management & Research, LLC, together with its successors and permitted assigns.

 

“Requisite Lenders” means, as of any date, Lenders having at least 66 2/3% of the aggregate amount of the Commitments (excluding Defaulting Lenders who, accordingly, are not entitled to vote), or, if the Commitments have been terminated or reduced to zero, Lenders holding at least 66 2/3% of the principal amount of the Loans and Letter of Credit Liabilities (excluding Defaulting Lenders who, accordingly, are not entitled to vote).  For purposes of this definition, a Lender (other than the Swingline Lender) shall be deemed to hold a Swingline Loan or a Letter of Credit Liability to the extent such Lender has acquired a participation therein under the terms of this Agreement and has not failed to perform its obligations in respect of such participation.

 

“Responsible Officer” means (a) with respect to the Borrower, the Borrower’s President or Treasurer or any Managing Trustee of the Borrower and (b) with respect to any other Loan Party, such Loan Party’s chief executive officer or chief financial officer.

 

“Restricted Payment” means: (a) any dividend or other distribution, direct or indirect, on account of any Equity Interest of the Borrower or any of its Subsidiaries now or hereafter outstanding, except a dividend payable solely in Equity Interests of identical class to the holders of that class; (b) any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interest of the Borrower or any of its Subsidiaries now or hereafter outstanding; and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of the Borrower or any of its Subsidiaries now or hereafter outstanding.

 

“Revolving Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.1.(a).

 

	
            “Revolving Note” has the meaning given that term in Section 2.10.(a).
 

 

 

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“Sanctioned Entity” means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a Person resident in, in each case, a country that is subject to a sanctions program identified on the list maintained by the OFAC and published from time to time, as such program may be applicable to such agency, organization or Person.

 

“Sanctioned Person” means a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by the OFAC as published from time to time.

 

“Secured Indebtedness” means, with respect to a Person as of any given date, the aggregate principal amount of all Indebtedness of such Person outstanding at such date and that is secured in any manner by any Lien, and in the case of the Borrower and the Guarantors, shall include (without duplication) the Borrower’s and such Guarantors’ pro rata share of the Secured Indebtedness of its Unconsolidated Affiliates.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, together with all rules and regulations issued thereunder.

 

“Solvent” means, when used with respect to any Person, that (a) the fair value and the fair salable value of its assets (excluding any Indebtedness due from any affiliate of such Person) are each in excess of the fair valuation of its total liabilities (including all contingent liabilities computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that could reasonably be expected to become an actual and matured liability); (b) such Person is able to pay its debts or other obligations in the ordinary course as they mature; and (c) such Person has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged.

 

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

 

“Stated Amount” means the amount available to be drawn by a beneficiary under a Letter of Credit from time to time, as such amount may be increased or reduced from time to time in accordance with the terms of such Letter of Credit.

 

“Subsidiary” means, for any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts of which are consolidated with those of such Person pursuant to GAAP.

 

“Swingline Commitment” means the Swingline Lender’s obligation to make Swingline Loans pursuant to Section 2.2. in an amount up to, but not exceeding, $50,000,000, as such amount may be reduced from time to time in accordance with the terms hereof.

 

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“Swingline Lender” means Wachovia Bank, National Association, together with its respective successors and assigns.

 

“Swingline Loan” means a loan made by the Swingline Lender to the Borrower pursuant to Section 2.2.(a).

 

“Swingline Note” means the promissory note of the Borrower payable to the order of the Swingline Lender in a principal amount equal to the amount of the Swingline Commitment as originally in effect and otherwise duly completed, substantially in the form of Exhibit G.

 

“Tangible Net Worth” means, as of any given time: (a) the unallocated gross book value (exclusive of depreciation and amortization) of all real estate assets of the Borrower and its Subsidiaries that constitute Properties at such time; plus (b) the book value of other assets (excluding any real estate assets) of the Borrower and its Subsidiaries; less (c) all amounts appearing on the assets side of a consolidated balance sheet of the Borrower for assets separately classified as intangible assets under GAAP (except for allocations of property purchase prices pursuant to Statement of Financial Accounting Standards No. 141 and the like); less (d) all Total Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis; less (e) all other liabilities of the Borrower and its Subsidiaries determined on a consolidated basis (except liabilities resulting from allocations of property purchase prices pursuant to Statement of Financial Accounting Standards No. 141 and the like).

 

	
            “Taxes” has the meaning given that term in Section 3.12.
 

 

“Termination Date” means June 30, 2009, or such later date to which the Termination Date may be extended pursuant to Section 2.15., or such earlier date on which the Commitments are terminated pursuant to Section 2.11., 10.2. or otherwise.

 

“Titled Agent” means any of the Joint Lead Arrangers, Sole Book Manager, the Syndication Agent or the Documentation Agents, and their respective successors and permitted assigns.

 

“Total Asset Value” means the sum of the following (without duplication) of the Borrower and its Subsidiaries for the fiscal quarter most recently ended: (a)(i) with respect to all Properties owned (or leased pursuant to a Ground Lease) by the Borrower or any Subsidiary for the entire fiscal quarter most recently ending, Adjusted EBITDA attributable to such Properties for such period multiplied by (ii) 4 and divided by (iii) the Capitalization Rate; (b)  the purchase price paid for any Property acquired during such fiscal quarter (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements but including amounts retained as Operator Deposits, and
prior to allocations of property purchase prices pursuant to Statement of Financial Accounting Standards No. 141 and the like); (c) all cash and cash equivalents; (d) accounts receivable that are not (i) owing in excess of 90 days as of the end of such fiscal quarter or (ii) being contested in writing by the obligor in respect thereof (in which case only such portion being contested shall be excluded from Total Asset Value); (e) prepaid taxes and operating expenses as of the end of such fiscal 

 

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quarter; (f) the book value of all Developable Property as of the end of such fiscal quarter; (g) the book value of all other tangible assets (excluding land or other real property) as of the end of such fiscal quarter; (h) the book value of all Unencumbered Mortgage Notes as of the end of such fiscal quarter; and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower. 

 

“Total Indebtedness” means, as of a given date, all liabilities of the Borrower and its Subsidiaries which would, in conformity with GAAP, be properly classified as a liability on a consolidated balance sheet of the Borrower and its Subsidiaries as of such date (except liabilities resulting from allocations of property purchase prices pursuant to Statement of Financial Accounting Standards No. 141 and the like), and in any event shall include (without duplication): (a) all Indebtedness of the Borrower and its Subsidiaries; (b) the Borrower’s pro rata share of Indebtedness of its Unconsolidated Affiliates; (c) the aggregate amount of all Operator Deposits (other than those Operator Deposits held by a Loan Party or an Unleveraged Non-Domestic Subsidiary in connection with Operating Agreements for which a
monetary default exists and has existed for a period of 30 days or more); and (d) net obligations of the Borrower and its Subsidiaries under any Derivatives Contracts not entered into as a hedge against existing Indebtedness, in an amount equal to the Derivatives Termination Value thereof.

 

“TRS” means a Subsidiary of the Borrower that is a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Internal Revenue Code.

 

“Type” with respect to any Loan, refers to whether such Loan is a LIBOR Loan or Base Rate Loan.

 

“Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

 

“Unencumbered Asset” means any (a) Unencumbered Hotel, (b) Unencumbered Mortgage Note, or (c)  Other Acceptable Property.

 

“Unencumbered Asset Certificate” has the meaning given that term in Section 8.3.

 

“Unencumbered Asset Value” means, as of the end of a fiscal quarter, the sum of: (a) unrestricted cash of the Borrower and its Subsidiaries; (b)(i) Adjusted EBITDA for the fiscal quarter most recently ended attributable to Unencumbered Hotels owned or leased by the Borrower or any Subsidiary for the entire fiscal quarter of the Borrower most recently ended, multiplied by (ii) 4 divided by (iii) the Capitalization Rate; (c) the purchase price paid for any Unencumbered Hotel acquired during such fiscal quarter (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (d) the book value of all Unencumbered Mortgage Notes of the Borrower and its Subsidiaries (excluding any
Unencumbered Mortgage Note (i) where the obligor is more than 30 days past due with respect to any payment obligation or (ii) secured by a Non-Domestic 

 

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Property); and (e) with respect to all Other Acceptable Properties, the value of each such Property determined in accordance with the valuation method established by the Requisite Lenders when the Requisite Lenders approved of such Property as an Other Acceptable Property.  To the extent that (w) the sum of the book value of Unencumbered Mortgage Notes would, in the aggregate, account for more than 10.0% of Unencumbered Asset Value, such excess shall be excluded; (x)  Properties leased by the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary pursuant to a Ground Lease having a remaining term of less than 50 years (taking into account extensions which may be effected by the lessee without the consent of the lessor) would, in the aggregate, account for more than 10.0% of Unencumbered Asset Value, such excess shall be excluded; (y) Non-Domestic Properties which are not Other
Acceptable Properties would, in the aggregate, account for more than 20% of Unencumbered Asset Value, such excess shall be excluded; and (z) Properties which are not hotels, inns or lodging facilities (or incidental improvements in connection with such hotels, inns or lodging facilities) and are not Other Acceptable Properties would, in the aggregate, account for more than 20% of Unencumbered Asset Value, such excess shall be excluded.  If an Unencumbered Hotel or Unencumbered Mortgage Note is not owned as of the last day of a quarter then such asset shall be excluded from the foregoing calculations.

 

“Unencumbered EBITDA” means, for a given period the aggregate Adjusted EBITDA attributable to the Unencumbered Hotels, Unencumbered Mortgage Notes and Other Acceptable Properties; provided that for purposes of this definition, revenues of an applicable Person during any applicable period constituting payments or accruals for payments of amounts more than 30 days past due and any related reserves shall be excluded in the calculation of such Person's EBITDA for such period.

 

“Unencumbered Hotels” means every Hotel Pool and Hotel that is not in a Hotel Pool that satisfy all of the following requirements: 

 

(a)               such Hotel or each Property in such Hotel Pool is (i) owned in fee simple solely by the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary or (ii) leased solely by the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary pursuant to a Ground Lease;

 

(b)               such Hotel, or in the case of a Hotel Pool, each Property in such Hotel Pool (i) is not an Asset Under Development and (ii) is in service;

 

(c)               neither such Hotel (or in the case of a Hotel Pool, no Property in such Hotel Pool), nor any interest of the Borrower, such Guarantor or such Unleveraged Non-Domestic Subsidiary therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) through (i) of the definition thereof or Liens in favor of the Borrower, a Guarantor or such Unleveraged Non-Domestic Subsidiary) or to any Negative Pledge;

 

(d)               if such Hotel or Hotel Pool is owned or leased by a Subsidiary, (i) none of the Borrower’s direct or indirect ownership interest in such Subsidiary is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) 

 

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through (i) of the definition thereof or Liens in favor of the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary) or to any Negative Pledge, and (ii)  such Subsidiary has not directly or indirectly guarantied or assumed liability for any Indebtedness of any Subsidiary that is not a Guarantor or an Unleveraged Non-Domestic Subsidiary;

 

(e)               such Hotel, or in the case of a Hotel Pool, each Property in such Hotel Pool, is free of all structural defects or major architectural deficiencies, title defects, environmental conditions or other adverse matters which, collectively, materially impair the value of such Property or Hotel Pool;

 

(f)                such Hotel or Hotel Pool shall be subject to agreements containing terms and conditions which provide the Borrower with substantially the same benefits and risks as Operating Agreements and Ancillary Agreements of Unencumbered Hotels as of the Agreement Date, or otherwise satisfactory to the Agent, with Persons reasonably satisfactory to Agent; and

 

(g)               such Hotel or Hotel Pool (i) has been designated by the Borrower as an “Unencumbered Hotel” on Schedule 6.1(y) or on an Unencumbered Asset Certificate delivered by the Borrower to the Agent pursuant to Section 8.3 or 8.4(o), and (ii) has not been removed voluntarily by the Borrower from “Unencumbered Hotels” pursuant to Section 8.4(p).

 

“Unencumbered Mortgage Note” means a promissory note satisfying all of the following requirements:  (a) such promissory note is owned solely by the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary; (b) such promissory note is secured by a Lien on real property and the improvements on which, include, but are not limited to, a hotel, inn or other lodging or leisure facility or other improvements of a type similar to improvements located on the Properties as of the Agreement Date; (c) neither such promissory note, nor any interest of the Borrower, such Guarantor or an Unleveraged Non-Domestic Subsidiary therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) through (i) of the definition thereof or Liens in favor of the Borrower, a Guarantor
or an Unleveraged Non-Domestic Subsidiary) or to any Negative Pledge; (d) if such promissory note is owned by a Subsidiary, (i) none of the Borrower’s direct or indirect ownership interest in such Subsidiary is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) through (i) of the definition thereof or Liens in favor of the Borrower, a Guarantor or Unleveraged Non-Domestic Subsidiary) or to any Negative Pledge and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to sell, transfer or otherwise dispose of such promissory note without the need to obtain the consent of any Person; (d) such real property and related improvements are not subject to (i) any other Lien (other than Permitted Liens of the types described in clauses (a) through (c) or (e) through (i) of the definition thereof or Liens in favor of the Borrower, a Guarantor or an Unleveraged Non-Domestic Subsidiary)
or (ii) any environmental conditions or other adverse matters which, individually or collectively, materially impair the value of such real property or related improvements; (e) the obligor in respect of such promissory note is not an Affiliate of the Borrower or RMR; (f) if the Borrower or any Subsidiary were to acquire such real property and related improvements, no Default or Event of 

 

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Default would result from such acquisition; and (g) such promissory note  (i) has been designated by the Borrower as an “Unencumbered Mortgage Note” on Schedule 6.1(y) or on an Unencumbered Asset Certificate delivered by the Borrower to the Agent pursuant to Section 8.3 or 8.4(o), and (ii) has not been removed by the Borrower from “Unencumbered Mortgage Notes” pursuant to Section 8.4(p).

 

“Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (a) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

 

“Unleveraged Non-Domestic Subsidiary” means any Subsidiary (a) the principal Properties of which are Non-Domestic Properties, and (b) which does not have Indebtedness having an aggregate outstanding principal amount in excess of 5.0% of the total assets of such Subsidiary (excluding Indebtedness owed to the Borrower or one or more Guarantors).

 

“Unsecured Debt Service” means, for a given period, Debt Service for such period, with respect to Unsecured Indebtedness of the Borrower and its Subsidiaries.

 

“Unsecured Indebtedness” means, with respect to a Person as of any given date, the aggregate principal amount of all Indebtedness of such Person outstanding at such date that is not Secured Indebtedness (excluding Indebtedness associated with Unconsolidated Affiliates that is not Guaranteed by a Loan Party) and in the case of the Borrower shall include (without duplication) Indebtedness that does not constitute Secured Indebtedness.

 

“Wachovia” means Wachovia Bank, National Association, together with its successors and assigns.

 

“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors’ qualifying shares) are at the time directly or indirectly owned or controlled by such Person or one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person.

 

Section 1.2.  General; References to Times.

Unless otherwise indicated, all accounting terms, ratios and measurements shall be interpreted or determined in accordance with GAAP in effect as of the Agreement Date.  References in this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated.  References in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or 

 

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agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, supplemented, restated or otherwise modified as of the date of this Agreement and from time to time thereafter to the extent not prohibited hereby and in effect at any given time.  Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter.  Unless explicitly set forth to the contrary, a reference to “Subsidiary” means a Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate of the Borrower.  Titles and captions of
Articles, Sections, subsections and clauses in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.  Unless otherwise indicated, all references to time are references to Charlotte, North Carolina time.

 

ARTICLE II. CREDIT FACILITY

Section 2.1.  Revolving Loans.

(a)               Generally.  Subject to the terms and conditions hereof, during the period from the Effective Date to but excluding the Termination Date, each Lender severally and not jointly agrees to make Revolving Loans to the Borrower in an aggregate principal amount at any one time outstanding up to, but not exceeding, the amount of such Lender’s Commitment.  Subject to the terms and conditions of this Agreement, during the period from the Effective Date to but excluding the Termination Date, the Borrower may borrow, repay and reborrow Revolving Loans hereunder.

 

(b)               Requesting Revolving Loans.  The Borrower shall give the Agent notice pursuant to a Notice of Borrowing or telephonic notice of each borrowing of Revolving Loans.  Each Notice of Borrowing shall be delivered to the Agent before 11:00 a.m. (i) in the case of LIBOR Loans, on the date three Business Days prior to the proposed date of such borrowing and (ii) in the case of Base Rate Loans, on the date one Business Day prior to the proposed date of such borrowing.  Any such telephonic notice shall include all information to be specified in a written Notice of Borrowing and shall be promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing sent to the Agent by telecopy on the same day of the giving of
such telephonic notice.  The Agent will transmit by telecopy the Notice of Borrowing (or the information contained in such Notice of Borrowing) or the information contained in a telephonic notice of borrowing (if such telephonic notice is received prior to a Notice of Borrowing) to each Lender promptly upon receipt by the Agent.  Each Notice of Borrowing or telephonic notice of each borrowing shall be irrevocable once given and binding on the Borrower.

 

(c)               Disbursements of Revolving Loan Proceeds.  No later than 1:00 p.m. on the date specified in the Notice of Borrowing, each Lender will make available for the account of its applicable Lending Office to the Agent at the Principal Office, in immediately available funds, the proceeds of the Revolving Loan to be made by such Lender.  With respect to Revolving Loans to be made after the Effective Date, unless the Agent shall have been notified by any Lender prior to the specified date of borrowing that such Lender does not intend to make available to the Agent the Revolving Loan to be made by such Lender on such date, the Agent may assume that such Lender will make the proceeds of such Revolving Loan available to the 

 

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Agent on the date of the requested borrowing as set forth in the Notice of Borrowing and the Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower the amount of such Revolving Loan to be provided by such Lender.  Subject to satisfaction of the applicable conditions set forth in Article V. for such borrowing, the Agent will make the proceeds of such borrowing available to the Borrower no later than 2:00 p.m. on the date and at the account specified by the Borrower in such Notice of Borrowing.

 

(d)               Loans Outstanding under Existing Credit Agreement.  The Borrower and the Lenders agree that as of the Effective Date all Revolving Loans (as defined in the Existing Credit Agreement) shall be deemed to be Revolving Loans outstanding hereunder.  Accordingly, as of the Effective Date, such Revolving Loans shall be allocated among Lenders in accordance with their respective Commitment Percentages, and each Lender agrees to make such payments to the other Lenders and any Person who ceased to be a “Lender” under the Existing Credit Agreement upon the Effective Date in such amounts as are necessary to effect such allocation.  All such payments shall be made to the Agent for the account of the Person to be paid and shall be made
on a net basis.

 

Section 2.2.  Swingline Loans.

(a)               Swingline Loans.  Subject to the terms and conditions hereof, during the period from the Effective Date to but excluding the Termination Date, the Swingline Lender agrees to make Swingline Loans to the Borrower in an aggregate principal amount at any one time outstanding up to, but not exceeding, the amount of the Swingline Commitment.  If at any time the aggregate principal amount of the Swingline Loans outstanding at such time exceeds the Swingline Commitment in effect at such time, the Borrower shall immediately pay the Agent for the account of the Swingline Lender the amount of such excess.  Subject to the terms and conditions of this Agreement, the Borrower may borrow, repay and reborrow Swingline Loans hereunder.

 

(b)               Procedure for Borrowing Swingline Loans.  The Borrower shall give the Agent and the Swingline Lender notice pursuant to a Notice of Swingline Borrowing or telephonic notice of each borrowing of a Swingline Loan.  Each Notice of Swingline Borrowing shall be delivered to the Swingline Lender no later than 3:00 p.m. on the proposed date of such borrowing.  Any such telephonic notice shall include all information to be specified in a written Notice of Swingline Borrowing and shall be promptly confirmed in writing by the Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline Lender by telecopy on the same day of the giving of such telephonic notice.  On the date of the requested Swingline Loan and subject to
satisfaction of the applicable conditions set forth in Article V. for such borrowing, the Swingline Lender will make the proceeds of such Swingline Loan available to the Borrower in Dollars, in immediately available funds, at the account specified by the Borrower in the Notice of Swingline Borrowing not later than 11:00 a.m. on such date if the Swingline Lender received such Notice of Swingline Borrowing by 9:00 a.m. on such date, and otherwise not later than 4:00 p.m. on such date.

 

(c)               Interest.  Swingline Loans shall bear interest at a per annum rate equal to the Base Rate plus the Applicable Margin for Base Rate Loans (or at such other rate or rates as the 

 

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Borrower and the Swingline Lender may agree from time to time in writing).  Interest payable on Swingline Loans is solely for the account of the Swingline Lender.  All accrued and unpaid interest on Swingline Loans shall be payable on the dates and in the manner provided in Section 2.4. with respect to interest on Base Rate Loans (except as the Swingline Lender and the Borrower may otherwise agree in writing in connection with any particular Swingline Loan).

 

(d)               Swingline Loan Amounts, Etc.  Each Swingline Loan shall be in the minimum amount of $1,000,000 and integral multiples of $500,000 or such other minimum amounts agreed to by the Swingline Lender and the Borrower.  Any voluntary prepayment of a Swingline Loan must be in integral multiples of $100,000 or the aggregate principal amount of all outstanding Swingline Loans (or such other minimum amounts upon which the Swingline Lender and the Borrower may agree) and in connection with any such prepayment, the Borrower must give the Swingline Lender prior written notice thereof no later than 10:00 a.m. on the date of such prepayment.  The Swingline Loans shall, in addition to this Agreement, be evidenced by the Swingline Note.

 

(e)               Repayment and Participations of Swingline Loans.  The Borrower agrees to repay each Swingline Loan within one Business Day of demand therefor by the Swingline Lender and in any event, within 5 Business Days after the date such Swingline Loan was made.  Notwithstanding the foregoing, the Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Swingline Loans on the Termination Date (or such earlier date as the Swingline Lender and the Borrower may agree in writing).  In lieu of demanding repayment of any outstanding Swingline Loan from the Borrower in respect of which the Agent has not either (x) received a Notice of Borrowing indicating that such Swingline Loan is to be
repaid with the proceeds thereof or (y) received notice from the Borrower that it intends to repay such Swingline Loan on a specified date and, in the case of this clause (y) only, such Swingline Loan is not repaid by 11:30 a.m. on such date, the Swingline Lender may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), request a borrowing of Revolving Loans (which shall be Base Rate Loans) from the Lenders in an amount equal to the principal balance of such Swingline Loan.  The limitations of Section 3.5.(a) shall not apply to any borrowing of Base Rate Loans made pursuant to this subsection.  The Swingline Lender shall give notice to the Agent of any such borrowing of Base Rate Loans not later than 12:00 noon on the proposed date of such borrowing, and the Agent shall promptly give notice to the Lenders of any such borrowing of Base Rate Loans.  No later than 2:00 p.m. on such date, each Lender will make
available to the Agent at the Principal Office for the account of Swingline Lender, in immediately available funds, the proceeds of the Base Rate Loan to be made by such Lender.  The Agent shall pay the proceeds of such Base Rate Loans to the Swingline Lender, which shall apply such proceeds to repay such Swingline Loan.    At the time each Swingline Loan is made, each Lender shall automatically (and without any further notice or action) be deemed to have purchased from the Swingline Lender, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Commitment Percentage in such Swingline Loan.  If the Lenders are prohibited from making Loans required to be made under this subsection for any reason, including without limitation, the occurrence of any Default or Event of Default described in Section 10.1.(f) or 10.1.(g), upon notice from the Agent or the Swingline Lender, each Lender severally agrees to pay to the Agent for the
account of the Swingline Lender in respect of such participation the amount of such 

 

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Lender’s Commitment Percentage of each outstanding Swingline Loan.  If such amount is not in fact made available to the Swingline Lender by any Lender, the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with accrued interest thereon for each day from the date of demand thereof, at the Federal Funds Rate.  If such Lender does not pay such amount forthwith upon the Swingline Lender’s demand therefor, and until such time as such Lender makes the required payment, the Swingline Lender shall be deemed to continue to have outstanding Swingline Loans in the amount of such unpaid participation obligation for all purposes of the Loan Documents (other than those provisions requiring the other Lenders to purchase a participation therein).  Further, such Lender shall be deemed to have assigned any and all payments made of principal and interest on its Loans, and
any other amounts due to such Lender hereunder, to the Swingline Lender to fund Swingline Loans in the amount of the participation in Swingline Loans that such Lender failed to purchase pursuant to this Section until such amount has been purchased (as a result of such assignment or otherwise).  A Lender’s obligation to make payments in respect of a participation in a Swingline Loan shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including without limitation, (i) any claim of setoff, counterclaim, recoupment, defense or other right which such Lender or any other Person may have or claim against the Agent, the Swingline Lender or any other Person whatsoever, (ii) the occurrence or continuation of a Default or Event of Default (including without limitation, any of the Defaults or Events of Default described in Sections 10.1.(f) or 10.1.(g)) or the termination of any Lender’s Commitment, (iii) the existence (or
alleged existence) of an event or condition which has had or could have a Material Adverse Effect, (iv) any breach of any Loan Document by the Agent, any Lender or the Borrower or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

Section 2.3.  Letters of Credit.

(a)               Letters of Credit.  Subject to the terms and conditions of this Agreement, the Agent, on behalf of the Lenders, agrees to issue for the account of the Borrower during the period from and including the Effective Date to, but excluding, the date 30 days prior to the Termination Date one or more letters of credit (each a “Letter of Credit”) up to a maximum aggregate Stated Amount at any one time outstanding not to exceed the L/C Commitment Amount.

 

(b)               Terms of Letters of Credit.  At the time of issuance, the amount, form, terms and conditions of each Letter of Credit, and of any drafts or acceptances thereunder, shall be subject to approval by the Agent and the Borrower.  Notwithstanding the foregoing, in no event may the expiration date of any Letter of Credit extend beyond the earlier of (i) the date one year from its date of issuance or (ii) the Termination Date.

 

(c)               Requests for Issuance of Letters of Credit.  The Borrower shall give the Agent written notice (or telephonic notice promptly confirmed in writing) at least 5 Business Days prior to the requested date of issuance of a Letter of Credit, such notice to describe in reasonable detail the proposed terms of such Letter of Credit and the nature of the transactions or obligations proposed to be supported by such Letter of Credit, and in any event shall set forth with respect to such Letter of Credit (i) the proposed initial Stated Amount, (ii) the beneficiary or beneficiaries, 

 

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and (iii) the proposed expiration date.  The Borrower shall also execute and deliver such customary letter of credit application forms as requested from time to time by the Agent.  Provided the Borrower has given the notice prescribed by the first sentence of this subsection and subject to Section 2.13. and the other terms and conditions of this Agreement, including, without limitation, the satisfaction of any applicable conditions precedent set forth in Article V., the Agent shall issue the requested Letter of Credit on the requested date of issuance for the benefit of the stipulated beneficiary and will notify each Lender of the issuance of such Letter of Credit within a reasonable time after the issuance thereof.  Upon the written request of the Borrower, the Agent shall deliver to the Borrower a copy of each issued Letter of Credit within a reasonable time after the date of issuance thereof.
To the extent any term of a Letter of Credit Document is inconsistent with a term of any Loan Document, the term of such Loan Document shall control.

 

(d)               Reimbursement Obligations.  Upon receipt by the Agent from the beneficiary of a Letter of Credit of any demand for payment under such Letter of Credit, the Agent shall promptly notify the Borrower of the amount to be paid by the Agent as a result of such demand and the date on which payment is to be made by the Agent to such beneficiary in respect of such demand; provided, however, the Agent’s failure to give, or delay in giving, such notice shall not discharge the Borrower in any respect from the applicable Reimbursement Obligation.  The Borrower hereby unconditionally and irrevocably agrees to pay and reimburse the Agent for the
amount of each demand for payment under such Letter of Credit on or prior to the date on which payment is to be made by the Agent to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind (other than notice as provided in this subsection).  Upon receipt by the Agent of any payment in respect of any Reimbursement Obligation, the Agent shall promptly pay to each Lender that has acquired a participation therein under the second sentence of Section 2.3.(i) such Lender’s Commitment Percentage of such payment.

 

(e)               Manner of Reimbursement.  Upon its receipt of a notice referred to in the immediately preceding subsection (d), the Borrower shall advise the Agent whether or not the Borrower intends to borrow hereunder to finance its obligation to reimburse the Agent for the amount of the related demand for payment.  If the Borrower fails to so advise the Agent, or if the Borrower fails to reimburse the Agent for a demand for payment under a Letter of Credit by the date of such payment, then (i) if the applicable conditions contained in Article V. would permit the making of Revolving Loans, the Borrower shall be deemed to have requested a borrowing of Revolving Loans (which shall be Base Rate Loans) in an amount equal to the unpaid
Reimbursement Obligation and the Agent shall give each Lender prompt notice (which shall be no later than 12:00 p.m.) of the amount of the Revolving Loan to be made available to the Agent which each Lender shall make available to the Agent not later than 2:00 p.m. on such date and (ii) if such conditions would not permit the making of Revolving Loans, the provisions of subsection (j) of this Section shall apply.  The limitations of Section 3.5.(a) shall not apply to any borrowing of Base Rate Loans under this subsection.

 

(f)                Effect of Letters of Credit on Commitments.  Upon the issuance by the Agent of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Commitment of each Lender shall be deemed to be utilized for all purposes of this Agreement in an amount equal to the product of (i) such Lender’s Commitment Percentage and (ii) the sum of 

 

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(A) the Stated Amount of such Letter of Credit plus (B) any related Reimbursement Obligations then outstanding.

 

(g)               Agent’s Duties Regarding Letters of Credit; Unconditional Nature of Reimbursement Obligation.  In examining documents presented in connection with drawings under Letters of Credit and making payments under such Letters of Credit against such documents, the Agent shall only be required to use the same standard of care as it uses in connection with examining documents presented in connection with drawings under letters of credit in which it has not sold participations and making payments under such letters of credit.  The Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing,
neither the Agent nor any of the Lenders shall be responsible for (i) the form, validity, sufficiency, accuracy, genuineness or legal effects of any document submitted by any party in connection with the application for and issuance of or any drawing honored under any Letter of Credit even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit, or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telex, telecopy or otherwise, whether or not
they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit, or of the proceeds thereof; (vii) the misapplication by the beneficiary of any Letter of Credit, or the proceeds of any drawing under any Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Agent or the Lenders.  None of the above shall affect, impair or prevent the vesting of any of the Agent’s or any Lender’s rights or powers hereunder.  Any action taken or omitted to be taken by the Agent under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create against the Agent or any Lender any liability to the Borrower or any Lender.  In this connection, the obligation of the Borrower to reimburse the Agent for any drawing made under any
Letter of Credit shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including without limitation, the following circumstances: (A) any lack of validity or enforceability of any Letter of Credit Document or any term or provisions therein; (B) any amendment or waiver of or any consent to departure from all or any of the Letter of Credit Documents; (C) the existence of any claim, setoff, defense or other right which the Borrower may have at any time against the Agent, any Lender, any beneficiary of a Letter of Credit or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or in the Letter of Credit Documents or any unrelated transaction; (D) any breach of contract or dispute between the Borrower, the Agent, any Lender or any other Person; (E) any demand, statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein or made in connection therewith being untrue or inaccurate in any respect whatsoever; (F) any non-application or misapplication by the beneficiary of a Letter of Credit or any other Person of the proceeds of any drawing under such Letter of Credit; (G) payment by the Agent under any 

 

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Letter of Credit against presentation of a draft or certificate which does not strictly comply with the terms of such Letter of Credit; and (H) any other act, omission to act, delay or circumstance whatsoever that might, but for the provisions of this Section, constitute a legal or equitable defense to or discharge of the Borrower’s Reimbursement Obligations.  Notwithstanding anything to the contrary contained in this Section or Section 12.9., but not in limitation of the Borrower’s unconditional obligation to reimburse the Agent for any drawing made under a Letter of Credit as provided in this Section, the Borrower shall have no obligation to indemnify the Agent or any Lender in respect of any liability incurred by the Agent or such Lender arising solely out of the gross negligence or willful misconduct of the Agent or such Lender in respect of a Letter of Credit as actually and finally
determined by a court of competent jurisdiction.  Except as otherwise provided in this Section, nothing in this Section shall affect any rights the Borrower may have with respect to the  gross negligence or willful misconduct of the Agent or any Lender with respect to any Letter of Credit.

 

(h)               Amendments, Etc.  The issuance by the Agent of any amendment, supplement or other modification to any Letter of Credit shall be subject to the same conditions applicable under this Agreement to the issuance of new Letters of Credit (including, without limitation, that the request therefor be made through the Agent), and no such amendment, supplement or other modification shall be issued unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such amended, supplemented or modified form or (ii) the Requisite Lenders shall have consented thereto.  In connection with any such amendment, supplement or other modification, the Borrower
shall pay the Fees, if any, payable under the last sentence of Section 3.6.(b).

 

(i)                Lenders’ Participation in Letters of Credit.  Immediately upon the issuance by the Agent of any Letter of Credit each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Agent, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Commitment Percentage of the liability of the Agent with respect to such Letter of Credit and each Lender thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to the Agent to pay and discharge when due, such Lender’s Commitment Percentage of the Agent’s liability under such Letter of Credit.  In
addition, upon the making of each payment by a Lender to the Agent in respect of any Letter of Credit pursuant to the immediately following subsection (j), such Lender shall, automatically and without any further action on the part of the Agent or such Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Agent by the Borrower in respect of such Letter of Credit and (ii) a participation in a percentage equal to such Lender’s Commitment Percentage in any interest or other amounts payable by the Borrower in respect of such Reimbursement Obligation (other than the Fees payable to the Agent pursuant to the second and last sentences of Section 3.6.(b)).

 

(j)                Payment Obligation of Lenders.  Each Lender severally agrees to pay to the Agent on demand in immediately available funds in Dollars the amount of such Lender’s Commitment Percentage of each drawing paid by the Agent under each Letter of Credit to the extent such amount is not reimbursed by the Borrower pursuant to Section 2.3.(d); provided, however, that in respect of any drawing under any Letter of Credit, the maximum amount that any Lender shall be 

 

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required to fund, whether as a Revolving Loan or as a participation, shall not exceed such Lender’s Commitment Percentage of such drawing.  Each Lender’s obligation to make such payments to the Agent under this subsection, and the Agent’s right to receive the same, shall be absolute, irrevocable and unconditional and shall not be affected in any way by any circumstance whatsoever, including without limitation, (i) the failure of any other Lender to make its payment under this subsection, (ii) the financial condition of the Borrower or any other Loan Party, (iii) the existence of any Default or Event of Default, including any Event of Default described in Section 10.1.(f) or 10.1.(g) or (iv) the termination of the Commitments.  Each such payment to the Agent shall be made without any offset, abatement, withholding or deduction whatsoever.

 

(k)               Information to Lenders.  Upon the request of any Lender from time to time, the Agent shall deliver to such Lender information reasonably requested by such Lender with respect to each Letter of Credit then outstanding.  Other than as set forth in this subsection, the Agent shall have no duty to notify the Lenders regarding the issuance or other matters regarding Letters of Credit issued hereunder.  The failure of the Agent to perform its requirements under this subsection shall not relieve any Lender from its obligations under Section 2.3.(j).

 

Section 2.4.  Rates and Payment of Interest on Loans.

(a)               Rates.  The Borrower promises to pay to the Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of the making of such Loan to but excluding the date such Loan shall be paid in full, at the following per annum rates:

 

(i)                during such periods as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time to time) plus the Applicable Margin; and

 

(ii)               during such periods as such Loan is a LIBOR Loan, at the Adjusted Eurodollar Rate for such Loan for the Interest Period therefor plus the Applicable Margin.

 

Notwithstanding the foregoing, during the continuance of an Event of Default, the Borrower shall pay to the Agent for the account of each Lender interest at the Post-Default Rate on the outstanding principal amount of any Loan made by such Lender, on all Reimbursement Obligations and on any other amount payable by the Borrower hereunder or under the Notes held by such Lender to or for the account of such Lender (including without limitation, accrued but unpaid interest to the extent permitted under Applicable Law).

 

(b)               Payment of Interest.  Accrued interest on each Loan shall be payable (i) in the case of a Base Rate Loan, monthly in arrears on the first day of each calendar month, (ii) in the case of a LIBOR Loan, on the last day of each Interest Period therefor, and if such Interest Period is longer than three months, at three month intervals following the first day of such Interest Period, and (iii) in the case of any Loan, upon the payment, prepayment or Continuation thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid, Continued or Converted).  Interest payable at the Post-Default Rate shall be payable from time to time on demand.  Promptly after the determination
of any interest 

 

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rate provided for herein or any change therein, the Agent shall give notice thereof to the Lenders to which such interest is payable and to the Borrower.  All determinations by the Agent of an interest rate hereunder shall be conclusive and binding on the Lenders and the Borrower for all purposes, absent manifest error.

 

(c)               Ratings Change.  If the Applicable Margin shall change as a result of a change in the Borrower’s Credit Rating and then within a 90-day period change back to the Applicable Margin in effect at the beginning of such period as a result of another change in such Credit Rating, and (i) if the initial change in the Applicable Margin were an increase, then the Borrower will receive as a credit against its Obligations any incremental interest expense with respect to the Loans and the Facility Fee for the period during which the increase existed and (ii) if the initial change in the Applicable Margin were a decrease, then the Borrower shall promptly pay to the Agent for the benefit of the Lenders additional interest with
respect to the Loans and additional Facility Fees for the period during which the decrease existed determined as if such decrease had not occurred.

 

Section 2.5.  Number of Interest Periods.

There may be no more than 6 different Interest Periods for LIBOR Loans outstanding at the same time.

 

Section 2.6.  Repayment of Loans.

The Borrower shall repay the entire outstanding principal amount of, and all accrued but unpaid interest on, the Loans, together with all other amounts then outstanding under this Agreement, on the Termination Date.

 

Section 2.7.  Prepayments.

(a)               Optional.  Subject to Section 4.4., the Borrower may prepay any Loan at any time without premium or penalty.  The Borrower shall give the Agent at least one Business Day’s prior written notice of the prepayment of any Revolving Loan and the Agent shall give each Lender notice of any such prepayment promptly upon receipt of such notice from the Borrower.

 

(b)               Mandatory.  If at any time the aggregate principal amount of all outstanding Revolving Loans, together with the aggregate amount of all Letter of Credit Liabilities and the aggregate principal amount of all outstanding Swingline Loans, exceeds the aggregate amount of the Commitments in effect at such time, the Borrower shall immediately pay to the Agent for the accounts of the Lenders the amount of such excess.  Such payment shall be applied to pay all amounts of principal outstanding on the Loans and any Reimbursement Obligations pro rata in accordance with Section 3.2. and if any Letters of Credit are outstanding at such time the remainder, if any, shall be deposited into the Collateral Account for application as provided in
Section 10.5.  If any outstanding LIBOR Loans are paid by reason of this subsection (b) prior to the end of the applicable Interest Period therefor, the Borrower shall pay all amounts due under Section 4.4.

 

 

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Section 2.8.  Continuation.

So long as no Default or Event of Default shall exist, the Borrower may on any Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan.  Each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period.  Each selection of a new Interest Period shall be made by the Borrower giving to the Agent a Notice of Continuation not later than 11:00 a.m. on the third Business Day prior to the date of any such Continuation.  Such notice by the Borrower of a Continuation shall be by telephone or telecopy, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loans and portions thereof subject to such
Continuation and (c) the duration of the selected Interest Period, all of which shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder.  Each Notice of Continuation shall be irrevocable by and binding on the Borrower once given.  Promptly after receipt of a Notice of Continuation, the Agent shall notify each Lender by telecopy, or other similar form of transmission, of the proposed Continuation.  If the Borrower shall fail to select in a timely manner a new Interest Period for any LIBOR Loan in accordance with this Section, or if a Default or Event of Default shall exist at such time, such Loan will automatically, on the last day of the current Interest Period therefor, Convert into a Base Rate Loan notwithstanding the first sentence of Section 2.9. or the Borrower’s failure to comply with any of the terms of such Section.

 

Section 2.9.  Conversion.

So long as no Default or Event of Default shall exist, the Borrower may on any Business Day, upon the Borrower’s giving of a Notice of Conversion to the Agent, Convert all or a portion of a Revolving Loan of one Type into a Revolving Loan of another Type.  Any Conversion of a LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of an Interest Period for such LIBOR Loan and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the Borrower shall pay accrued interest to the date of Conversion on the principal amount so Converted.  Each such Notice of Conversion shall be given not later than 11:00 a.m. on the Business Day prior to the date of any proposed Conversion into Base Rate Loans and on the third Business Day prior to the date of any proposed Conversion into LIBOR Loans.  Promptly after receipt of a Notice of Conversion, the Agent shall notify each
Lender by telecopy, or other similar form of transmission, of the proposed Conversion.  Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing) or telecopy in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan.  Each Notice of Conversion shall be irrevocable by and binding on the Borrower once given.

 

Section 2.10.  Notes.

(a)               Revolving Note.  The Revolving Loans made by each Lender shall, in addition to this Agreement, also be evidenced by a promissory note of the Borrower substantially in the form of Exhibit H (each a “Revolving Note”), payable to the order of such Lender in a principal 

 

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amount equal to the amount of its Commitment as originally in effect and otherwise duly completed.

 

(b)               Records.  The date, amount, interest rate, Type and duration of Interest Periods (if applicable) of each Loan made by each Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and such entries shall be binding on the Borrower absent manifest error.

 

(c)               Lost, Stolen, Destroyed or Mutilated Notes.  Upon receipt by the Borrower of (i) written notice from a Lender that a Note of such Lender has been lost, stolen, destroyed or mutilated, and (ii) (A) in the case of loss, theft or destruction, an unsecured agreement of indemnity from such Lender in form reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon surrender and cancellation of such Note, the Borrower shall at its own expense execute and deliver to such Lender a new Note dated the date of such lost, stolen, destroyed or mutilated Note.

 

Section 2.11.  Voluntary Reductions of the Commitment.

The Borrower shall have the right to terminate or reduce the aggregate unused amount of the Commitments (for which purpose use of the Commitments shall be deemed to include the aggregate amount of Letter of Credit Liabilities and the aggregate principal amount of all outstanding Swingline Loans) at any time and from time to time without penalty or premium upon not less than 15 Business Days prior written notice to the Agent of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction and shall be irrevocable once given and effective only upon receipt by the Agent.  The Agent will promptly transmit such notice to each Lender.  The Commitments may not be reduced below $200,000,000 in the aggregate unless the Borrower terminates the Commitments in their entirety, and, once terminated or reduced, the Commitments may not be
increased or reinstated.  Any reduction in the aggregate amount of the Commitments shall result in a proportionate reduction (rounded to the next lowest integral multiple of multiple of $100,000) in the Swingline Commitment and the L/C Commitment Amount.

 

Section 2.12.  Expiration or Maturity Date of Letters of Credit Past Termination Date.

If on the date (the “Facility Termination Date”) the Commitments are terminated (whether voluntarily, by reason of the occurrence of an Event of Default or otherwise), there are any Letters of Credit outstanding hereunder, the Borrower shall, on or before the Facility Termination Date, pay to the Agent an amount of money equal to the Stated Amount of such Letter(s) of Credit for deposit into the Collateral Account.  

 

Section 2.13.  Amount Limitations.

Notwithstanding any other term of this Agreement or any other Loan Document, no Lender shall be required to make a Loan, the Agent shall not be required to issue a Letter of Credit and no reduction of the Commitments pursuant to Section 2.11. shall take effect, if immediately after the making of such Loan, the issuance of such Letter of Credit or such reduction in the Commitments the aggregate principal amount of all outstanding Revolving 

 

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Loans, together with the aggregate principal amount of all outstanding Swingline Loans and the aggregate amount of all Letter of Credit Liabilities, would exceed the aggregate amount of the Commitments at such time.

 

Section 2.14.  Increase of Commitments.

Subject to the approval of the Agent (which shall not be unreasonably withheld or delayed), the Borrower shall have the right to request increases in the aggregate amount of the Commitments (provided that there shall be no more than three such increases in the Commitments and after giving effect to any such increase in the Commitments pursuant to this Section, the aggregate amount of the Commitments shall not exceed $1,500,000,000) by providing written notice to the Agent, which notice shall be irrevocable once given.  Each such increase in the Commitments must be in an aggregate minimum amount of $35,000,000 and integral multiples of $10,000,000 in excess thereof.  No Lender shall be required to increase its Commitment and any new Lender becoming a party to this Agreement in connection with any such requested increase must be an Eligible Assignee.
In the event a new Lender or Lenders become a party to this Agreement, or if any existing Lender agrees to increase its Commitment, such Lender shall on the date it becomes a Lender hereunder (or increases its Commitment, in the case of an existing Lender) (and as a condition thereto) purchase from the other Lenders its Commitment Percentage (as determined after giving effect to the increase of Commitments) of any outstanding Revolving Loans, by making available to the Agent for the account of such other Lenders at the Principal Office, in same day funds, an amount equal to the sum of (A) the portion of the outstanding principal amount of such Revolving Loans to be purchased by such Lender plus (B) the aggregate amount of payments previously made by the other Lenders under Sections 2.2.(e) or 2.3.(j) which have not been repaid plus (C) interest accrued and unpaid to and as of such date on such portion of the outstanding principal amount of such Revolving Loans.
The Borrower shall pay to the Lenders amounts payable, if any, to such Lenders under Section 4.4. as a result of the prepayment of any such Revolving Loans.  No increase of the Commitments may be effected under this Section if either (x) a Default or Event of Default shall be in existence on the effective date of such increase or (y) any representation or warranty made or deemed made by the Borrower or any other Loan Party in any Loan Document to which any such Loan Party is a party is not (or would not be) true or correct on the effective date of such increase (except for representations or warranties which expressly relate solely to an earlier date).  In connection with any increase in the aggregate amount of the Commitments pursuant to this subsection, (a) any Lender becoming a party hereto shall execute such documents and agreements as the Agent may reasonably request and (b) the Borrower shall make appropriate arrangements so that each new Lender, and any existing
Lender increasing its Commitment, receives a new or replacement Note, as appropriate, in the amount of such Lender’s Commitment within 2 Business Days of the effectiveness of the applicable increase in the aggregate amount of Commitments.

 

Section 2.15.  Extension of Termination Date.

The Borrower may request that the Agent and the Lenders extend the current Termination Date by one year by executing and delivering to the Agent at least 30 days but not more than 90 days prior to the current Termination Date, a written request for such extension.  The Agent shall forward to each Lender a copy of any such request delivered to the Agent promptly upon receipt thereof.  Subject to satisfaction of the following conditions, the Termination Date shall be 

 

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extended for one year: (a) no Default or Event of Default shall exist as of the date of the current Termination Date or would exist immediately after giving effect to the requested extension; (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party would be true and correct immediately after giving effect to the requested extension of the Termination Date, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder and (c) the Borrower shall have paid the Fees payable under Section 3.6.(d). The Termination Date may only be extended one
time pursuant to this Section.

 
 

ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

Section 3.1.  Payments.

Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Borrower under this Agreement or any other Loan Document shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Agent at its Principal Office, not later than 2:00 p.m. on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day).  Subject to Sections 3.2. and 3.3., the Agent may (but shall not be obligated to) debit the amount of any such payment which is not made by such time from any special or general deposit account of the Borrower with the Agent (with notice to the Borrower).  The Borrower shall, at the time of making each payment under this Agreement or any Note, specify to the Agent the
amounts payable by the Borrower hereunder to which such payment is to be applied.  Each payment received by the Agent for the account of a Lender under this Agreement or any Note shall be paid to such Lender at the applicable Lending Office of such Lender no later than 5:00 p.m. on the date of the Agent’s receipt thereof.  If the Agent fails to pay such amount to a Lender as provided in the previous sentence, the Agent shall pay interest on such amount until paid at a rate per annum equal to the Federal Funds Rate from time to time in effect.  If the due date of any payment under this Agreement or any other Loan Document would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall be payable for the period of such extension.

 

Section 3.2.  Pro Rata Treatment.

Except to the extent otherwise provided herein: (a) each borrowing from the Lenders under Section 2.1.(a) shall be made from the Lenders, each payment of the Fees under Section 3.6.(a), the first sentence of Section 3.6.(b) and Sections 3.6.(c) and (d)  shall be made for the account of the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.11. shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments; (b) each payment or prepayment of principal of Revolving Loans by the Borrower shall be made for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Revolving Loans held by them, provided that if immediately prior to giving effect to any such payment in respect of any Revolving Loans the outstanding
principal amount of the Revolving Loans shall 

 

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not be held by the Lenders pro rata in accordance with their respective Commitments in effect at the time such Loans were made, then such payment shall be applied to the Revolving Loans in such manner as shall result, as nearly as is practicable, in the outstanding principal amount of the Revolving Loans being held by the Lenders pro rata in accordance with their respective Commitments; (c) each payment of interest on Revolving Loans by the Borrower shall be made for the account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders; (d) the making, Conversion and Continuation of Revolving Loans of a particular Type (other than Conversions provided for by Section 4.6.) shall be made pro rata among the Lenders according to the amounts of their respective Commitments (in the case of making of Revolving Loans) or their
respective Revolving Loans (in the case of Conversions and Continuations of Revolving Loans) and the then current Interest Period for each Lender’s portion of each Loan of such Type shall be coterminous; (e) the Lenders’ participation in, and payment obligations in respect of, Letters of Credit under Section 2.3., shall be pro rata in accordance with their respective Commitments; and (f) the Lenders’ participation in, and payment obligations in respect of, Swingline Loans under Section 2.2., shall be pro rata in accordance with their respective Commitments.  All payments of principal, interest, fees and other amounts in respect of the Swingline Loans shall be for the account of the Swingline Lender only (except to the extent any Lender shall have acquired a participating interest in any such Swingline Loan pursuant to Section 2.2.(e)).

 

Section 3.3.  Sharing of Payments, Etc.

If a Lender shall obtain payment of any principal of, or interest on, any Loan made by it to the Borrower under this Agreement, or shall obtain payment on any other Obligation owing by the Borrower or a Loan Party through the exercise of any right of set-off, banker’s lien or counterclaim or similar right or otherwise or through voluntary prepayments directly to a Lender or other payments made by the Borrower to a Lender not in accordance with the terms of this Agreement and such payment should be distributed to the Lenders pro rata in accordance with Section 3.2. or Section 10.4., as applicable, such Lender shall promptly purchase from the other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans made by the other Lenders or other Obligations owed to such other Lenders in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such payment (net of any reasonable expenses which may be incurred by such Lender in obtaining or preserving such benefit) pro rata in accordance with Section 3.2. or Section 10.4.  To such end, all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored.  The Borrower agrees that any Lender so purchasing a participation (or direct interest) in the Loans or other Obligations owed to such other Lenders may exercise all rights of set-off, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans in the amount of such participation.  Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or obligation of the Borrower.

 

 

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Section 3.4.  Several Obligations.

No Lender shall be responsible for the failure of any other Lender to make a Loan or to perform any other obligation to be made or performed by such other Lender hereunder, and the failure of any Lender to make a Loan or to perform any other obligation to be made or performed by it hereunder shall not relieve the obligation of any other Lender to make any Loan or to perform any other obligation to be made or performed by such other Lender.

 

Section 3.5.  Minimum Amounts.

(a)               Borrowings and Conversions.  Except as otherwise provided in Sections 2.2.(e) and 2.3.(e), each borrowing of Base Rate Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess thereof (or in any case, the aggregate amount of the unused Commitments).  Each borrowing of and each Conversion to LIBOR Loans shall be in the aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in excess of that amount.

 

(b)               Prepayments.  Each voluntary prepayment of Revolving Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in excess thereof (or, if less, the aggregate principal amount of Revolving Loans then outstanding).

 

(c)               Reductions of Commitments.  Each reduction of the Commitments under Section 2.11. shall be in an aggregate minimum amount of $10,000,000 and integral multiples of $5,000,000 in excess thereof.

 

(d)               Letters of Credit.  The initial Stated Amount of each Letter of Credit shall be at least $500,000.

 

Section 3.6.  Fees.

(a)               Facility Fees.  The Borrower agrees to pay to the Agent for the account of each Lender a facility fee equal to the average daily amount of the Commitment of such Lender (whether or not utilized) times the Facility Fee for the period from and including the Agreement Date to but excluding the date such Lender’s Commitment is terminated or reduced to zero or the Termination Date, such fee to be paid in arrears on (i) the last Business Day of March, June, September and December in each year, (ii) the date of each reduction in the Commitments (but only on the amount of the reduction) and (iii) on the Termination Date.

 

(b)               Letter of Credit Fees.  The Borrower agrees to pay to the Agent for the account of each Lender a letter of credit fee at a rate per annum equal to the Applicable Margin for LIBOR Loans times the daily average Stated Amount of each Letter of Credit for the period from and including the date of issuance of such Letter of Credit (x) to and including the date such Letter of Credit expires or is terminated or (y) to but excluding the date such Letter of Credit is drawn in full and is not subject to reinstatement, as the case may be.  In addition, the Borrower shall pay to the Agent for its own account and not the account of any Lender, a fronting fee in respect of each Letter of Credit at the rate equal to one-eighth of one
percent (0.125%) per annum on the daily average Stated Amount of such Letter of Credit for the period from and including the date of 

 

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issuance of such Letter of Credit (A) to and including the date such Letter of Credit expires or is terminated or (B) to but excluding the date such Letter of Credit is drawn in full.  The fees provided for in the immediately preceding two sentences shall be nonrefundable and payable in arrears (i) on the last Business Day of March, June, September and December in each year, (ii) on the Termination Date, (iii) on the date the Commitments are terminated or reduced to zero and (iv) thereafter from time to time on demand of the Agent.  The Borrower shall pay directly to the Agent from time to time on demand all commissions, charges, costs and expenses in the amounts customarily charged by the Agent from time to time in like circumstances with respect to the issuance of each Letter of Credit, drawings, amendments and other transactions relating thereto.

 

(c)               Administrative and Other Fees.  The Borrower agrees to pay the administrative and other fees of the Agent as may be agreed to in writing from time to time.

 

(d)               Extension Fees. If, pursuant to Section 2.15., the Termination Date is extended, the Borrower agrees to pay to the Agent for the account of each Lender an extension fee equal to 0.20% of each such Lender’s Commitment at the time of such extension.  Payment of such fees shall be a condition precedent to the effectiveness of any such extension.

 

Section 3.7.  Computations.

Unless otherwise expressly set forth herein, any accrued interest on any Loan, any Fees or any other Obligations due hereunder shall be computed on the basis of a year of 360 days and the actual number of days elapsed.

 

Section 3.8.  Usury.

In no event shall the amount of interest due or payable on the Loans or other Obligations exceed the maximum rate of interest allowed by Applicable Law and, if any such payment is paid by the Borrower or any other Loan Party or received by any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the respective Lender in writing that the Borrower elects to have such excess sum returned to it forthwith.  It is the express intent of the parties hereto that the Borrower not pay and the Lenders not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Borrower under Applicable Law.

 

Section 3.9.  Agreement Regarding Interest and Charges.

The parties hereto hereby agree and stipulate that the only charge imposed upon the Borrower for the use of money in connection with this Agreement is and shall be the interest specifically described in Section 2.4.(a)(i) and (ii) and in Section 2.2.(c).  Notwithstanding the foregoing, the parties hereto further agree and stipulate that all agency fees, syndication fees, facility fees, closing fees, letter of credit fees, underwriting fees, default charges, late charges, funding or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement for costs and expenses paid by the Agent or any Lender to third parties or for damages incurred by the Agent or any Lender, or any other similar amounts are charges made to compensate the Agent or any such Lender for underwriting or administrative services and costs or losses 

 

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performed or incurred, and to be performed or incurred, by the Agent and the Lenders in connection with this Agreement and shall under no circumstances be deemed to be charges for the use of money.  All charges other than charges for the use of money shall be fully earned and nonrefundable when due.

 

Section 3.10.  Statements of Account.

The Agent will account to the Borrower monthly with a statement of Loans, Letters of Credit, accrued interest and Fees, charges and payments made pursuant to this Agreement and the other Loan Documents, and such account rendered by the Agent shall be deemed conclusive upon Borrower absent manifest error.  The failure of the Agent to deliver such a statement of accounts shall not relieve or discharge the Borrower from any of its obligations hereunder.

 

Section 3.11.  Defaulting Lenders.

(a)               Generally.  If for any reason any Lender (a “Defaulting Lender”) shall fail or refuse to perform any of its obligations under this Agreement or any other Loan Document to which it is a party within the time period specified for performance of such obligation or, if no time period is specified, if such failure or refusal continues for a period of two Business Days after notice from the Agent, then, in addition to the rights and remedies that may be available to the Agent or the Borrower under this Agreement or Applicable Law, such Defaulting Lender’s right to participate in the administration of the Loans, this Agreement and the other Loan Documents, including without limitation, any right to vote in respect of, to
consent to or to direct any action or inaction of the Agent or to be taken into account in the calculation of the Requisite Lenders, shall be suspended during the pendency of such failure or refusal.  If a Lender is a Defaulting Lender because it has failed to make timely payment to the Agent of any amount required to be paid to the Agent hereunder (without giving effect to any notice or cure periods), in addition to other rights and remedies which the Agent or the Borrower may have under the immediately preceding provisions or otherwise, the Agent shall be entitled (i) to collect interest from such Defaulting Lender on such delinquent payment for the period from the date on which the payment was due until the date on which the payment is made at the Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction of the defaulted payment and any related interest, any amounts otherwise payable to such Defaulting Lender under this Agreement or any other Loan
Document and (iii) to bring an action or suit against such Defaulting Lender in a court of competent jurisdiction to recover the defaulted amount and any related interest.  Any amounts received by the Agent in respect of a Defaulting Lender’s Loans shall not be paid to such Defaulting Lender and shall be held uninvested by the Agent and either applied against the purchase price of such Loans under the following subsection (b) or paid to such Defaulting Lender upon the Defaulting Lender’s curing of its default.

 

(b)               Purchase or Cancellation of Defaulting Lender’s Commitment.  Any Lender who is not a Defaulting Lender shall have the right, but not the obligation, in its sole discretion, to acquire all of a Defaulting Lender’s Commitment.  Any Lender desiring to exercise such right shall give written notice thereof to the Agent and the Borrower no sooner than 2 Business Days and not later than 5 Business Days after such Defaulting Lender became a Defaulting Lender.  If more than one Lender exercises such right, each such Lender shall have the right to acquire an amount of such Defaulting Lender’s Commitment in proportion to the Commitments of the other 

 

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Lenders exercising such right.  If after such 5th Business Day, the Lenders have not elected to purchase all of the Commitment of such Defaulting Lender, then the Borrower may, by giving written notice thereof to the Agent, such Defaulting Lender and the other Lenders, either (i) demand that such Defaulting Lender assign its Commitment to an Eligible Assignee subject to and in accordance with the provisions of Section 12.5.(d) for the purchase price provided for below or (ii) terminate the Commitment of such Defaulting Lender, whereupon such Defaulting Lender shall no longer be a party hereto or have any rights or obligations hereunder or under any of the other Loan Documents (except as expressly provided in this subsection (b)).  No party hereto shall have any obligation whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee.  Upon any such purchase or
assignment, the Defaulting Lender’s interest in the Loans and its rights hereunder (but not its liability in respect thereof or under the Loan Documents or this Agreement to the extent the same relate to the period prior to the effective date of the purchase) shall terminate on the date of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest to the purchaser or assignee thereof, including an appropriate Assignment and Acceptance Agreement and, notwithstanding Section 12.5.(d), shall pay to the Agent an assignment fee in the amount of $7,000.  The purchase price for the Commitment of a Defaulting Lender shall be equal to the amount of the principal balance of the Loans outstanding and owed by the Borrower to the Defaulting Lender.  Prior to payment of such purchase price to a Defaulting Lender, the Agent shall apply against such purchase price any amounts retained by the Agent pursuant to the
last sentence of the immediately preceding subsection (a).  The Defaulting Lender shall be entitled to receive amounts owed to it by the Borrower under the Loan Documents which accrued prior to the date of the default by the Defaulting Lender, to the extent the same are received by the Agent from or on behalf of the Borrower.  There shall be no recourse against any Lender or the Agent for the payment of such sums except to the extent of the receipt of payments from any other party or in respect of the Loans.

 

Section 3.12.  Taxes.

(a)               Taxes Generally.  All payments by the Borrower of principal of, and interest on, the Loans and all other Obligations shall be made free and clear of and without deduction for any present or future excise, stamp or other taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes) that would not be imposed but for a connection between the Agent or a Lender and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the activities of the Agent or such Lender pursuant to or in respect of this Agreement or any other Loan
Document), (iii) any taxes imposed on or measured by any Lender’s assets, net income, receipts or branch profits, (iv) any taxes arising after the Agreement Date solely as a result of or attributable to a Lender changing its designated Lending Office after the date such Lender becomes a party hereto, and (v) any taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges to the extent imposed as a result of the failure of the Agent or a Lender, as applicable, to provide and keep current (to the extent legally able) any certificates, documents or other evidence required to qualify for an exemption from, or reduced rate of, any such taxes fees, duties, levies, imposts, charges, deductions, withholdings or other charges or required by the immediately following subsection (c) to be furnished by the Agent or such Lender, as applicable (such non-excluded 

 

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items being collectively called “Taxes”).  If any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any Applicable Law, then the Borrower will:

 

(i)                pay directly to the relevant Governmental Authority the full amount required to be so withheld or deducted;

 

(ii)               promptly forward to the Agent an official receipt or other documentation satisfactory to the Agent evidencing such payment to such Governmental Authority; and

 

(iii)              pay to the Agent for its account or the account of the applicable Lender, as the case may be, such additional amount or amounts as is necessary to ensure that the net amount actually received by the Agent or such Lender will equal the full amount that the Agent or such Lender would have received had no such withholding or deduction been required.

 

(b)               Tax Indemnification.  If the Borrower fails to pay any Taxes when due to the appropriate Governmental Authority or fails to remit to the Agent, for its account or the account of the respective Lender, as the case may be, the required receipts or other required documentary evidence, the Borrower shall indemnify the Agent and the Lenders for any incremental Taxes, interest or penalties that may become payable by the Agent or any Lender as a result of any such failure.  For purposes of this Section, a distribution hereunder by the Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.

 

(c)               Tax Forms.  Prior to the date that any Lender or participant organized under the laws of a jurisdiction outside the United States of America becomes a party hereto, such Person shall deliver to the Borrower and the Agent such certificates, documents or other evidence, as required by the Internal Revenue Code or Treasury Regulations issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms), properly completed, currently effective and duly executed by such Lender or participant establishing that payments to it hereunder and under the Notes are (i) not subject to United States Federal backup withholding tax or (ii) not subject to United States Federal
withholding tax under the Internal Revenue Code because such payment is either effectively connected with the conduct by such Lender or participant of a trade or business in the United States or totally exempt from United States Federal withholding tax by reason of the application of the provisions of a treaty to which the United States is a party or such Lender is otherwise wholly exempt.  In addition, any such Lender or participant shall deliver to the Borrower and the Agent further copies of any such certificate, document or other evidence on or before the date that any such certificate, document or other evidence expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it, in each case establishing that payments to it hereunder and under the Notes are (i) not subject to United States Federal backup withholding tax or (ii) not subject to United States Federal withholding tax under the Internal
Revenue Code because such payment is either effectively connected with the conduct by such Lender or participant of a trade or business in the United States or totally exempt from United States Federal withholding tax by reason of the application of the provisions of a treaty to which the United States is a party or such Lender or participant, as 

 

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applicable, is otherwise wholly exempt, unless an event (including, without limitation, any change in Applicable Law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such certificates, documents and other evidence wholly inapplicable or which would prevent such Lender or participant, as applicable, from duly completing and delivering any such certificates, documents or other evidence form with respect to it, and such Lender or participant, as applicable, so advises the Borrower and the Agent in writing.

 

ARTICLE IV. YIELD PROTECTION, ETC.

Section 4.1.  Additional Costs; Capital Adequacy.

(a)               Additional Costs.  The Borrower shall promptly pay to the Agent for the account of a Lender from time to time such amounts as such Lender may determine to be necessary to compensate such Lender for any costs incurred by such Lender that it determines are attributable to its making or maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any reduction in any amount receivable by such Lender under this Agreement or any of the other Loan Documents in respect of any of such Loans or such obligation or the maintenance by such Lender of capital in respect of its Loans or its Commitment (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting
from any Regulatory Change that:  (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or any of the other Loan Documents in respect of any of such Loans or its Commitment (other than taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges which are excluded from the definition of Taxes pursuant to the first sentence of Section 3.12.(a)); or (ii) imposes, modifies or deems applicable any reserve, special deposit or similar requirements (other than Regulation D of the Board of Governors of the Federal Reserve System or other reserve requirement to the extent utilized in the determination of the Adjusted Eurodollar Rate for such Loan) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender, or any commitment of such Lender (including, without limitation, the Commitment of such Lender hereunder); or (iii) has or would have the effect of
reducing the rate of return on capital of such Lender to a level below that which such Lender could have achieved but for such Regulatory Change (taking into consideration such Lender’s policies with respect to capital adequacy).

 

(b)               Lender’s Suspension of LIBOR Loans.  Without limiting the effect of the provisions of the immediately preceding subsection (a), if, by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender that includes deposits by reference to which the interest rate on LIBOR Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets that it may hold, then, if such Lender so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Lender to make or Continue, or to Convert any other Type of Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory Change ceases to be in effect (in which case the provisions of Section 4.6. shall apply).

 

 

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(c)               Additional Costs in Respect of Letters of Credit.  Without limiting the obligations of the Borrower under the preceding subsections of this Section (but without duplication), if as a result of any Regulatory Change or any risk-based capital guideline or other requirement heretofore or hereafter issued by any Governmental Authority there shall be imposed, modified or deemed applicable any tax, reserve, special deposit, capital adequacy or similar requirement against or with respect to or measured by reference to Letters of Credit and the result shall be to increase the cost to the Agent of issuing (or any Lender of purchasing participations in) or maintaining its obligation hereunder to issue (or purchase participations in) any
Letter of Credit or reduce any amount receivable by the Agent or any Lender hereunder in respect of any Letter of Credit, then, upon demand by the Agent or such Lender, the Borrower shall pay promptly, and in any event within 3 Business Days of demand, to the Agent for its account or the account of such Lender, as applicable, from time to time as specified by the Agent or a Lender, such additional amounts as shall be sufficient to compensate the Agent or such Lender for such increased costs or reductions in amount.

 

(d)               Notification and Determination of Additional Costs.  Each of the Agent and each Lender agrees to notify the Borrower of any event occurring after the Agreement Date entitling the Agent or such Lender to compensation under any of the preceding subsections of this Section as promptly as practicable; provided, however, the failure of the Agent or any Lender to give such notice shall not release the Borrower from any of its obligations hereunder; provided, however, that notwithstanding the foregoing provisions of this Section, the Agent or a Lender, as the case may be, shall not be entitled to compensation for any such amount relating to any
period ending more than six months prior to the date that the Agent or such Lender, as applicable, first notifies the Borrower in writing thereof or for any amounts resulting from a change by any Lender of its Lending Office (other than changes required by Applicable Law).  The Agent and or such Lender agrees to furnish to the Borrower a certificate setting forth the basis and amount of each request by the Agent or such Lender for compensation under this Section.  Absent manifest error, determinations by the Agent or any Lender of the effect of any Regulatory Change shall be conclusive, provided that such determinations are made on a reasonable basis and in good faith.

 

Section 4.2.  Suspension of LIBOR Loans.

Anything herein to the contrary notwithstanding, if, on or prior to the determination of any Adjusted Eurodollar Rate for any Interest Period:

 

(a)               the Agent reasonably determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for such Interest Period, or

 

(b)               the Agent reasonably determines (which determination shall be conclusive) that the Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to the Lenders of making or maintaining LIBOR Loans for such Interest Period;

 

 

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then the Agent shall give the Borrower and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of each current Interest Period for each outstanding LIBOR Loan, either repay such Loan or Convert such Loan into a Base Rate Loan.

 

Section 4.3.  Illegality.

Notwithstanding any other provision of this Agreement, if it becomes unlawful for any Lender  to honor its obligation to make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify the Borrower thereof (with a copy to the Agent) and such Lender’s obligation to make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be suspended until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 4.6. shall be applicable).

 

Section 4.4.  Compensation.

The Borrower shall pay to the Agent for the account of each Lender, upon the request of such Lender through the Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense that such Lender determines is attributable to:

 

(a)               any payment or prepayment (whether mandatory or optional) of a LIBOR Loan, or Conversion of a LIBOR Loan, made by such Lender for any reason (including, without limitation, acceleration) on a date other than the last day of the Interest Period for such Loan; or

 

(b)               any failure by the Borrower for any reason (including, without limitation, the failure of any of the applicable conditions precedent specified in Article V. to be satisfied) to borrow a LIBOR Loan from such Lender on the date requested for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on the requested date of such Conversion or Continuation.

 

Upon the Borrower’s request, any Lender requesting compensation under this Section shall provide the Borrower with a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof.  Absent manifest error, determinations by any Lender in any such statement shall be conclusive, provided that such determinations are made on a reasonable basis and in good faith.

 

Section 4.5.  Affected Lenders.

If (a) a Lender requests compensation pursuant to Section 3.12. or 4.1., and the Requisite Lenders are not also doing the same, or (b) the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(b) or 4.3. but the obligation of the Requisite Lenders shall not have been suspended under such Sections, then, so long as there does not then exist any Default or Event of Default, the Borrower may either (i) demand that such Lender (the “Affected Lender”), and upon 

 

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such demand the Affected Lender shall promptly, assign its Commitment to an Eligible Assignee subject to and in accordance with the provisions of Section 12.5.(d) for a purchase price equal to the aggregate principal balance of Loans then owing to the Affected Lender plus any accrued but unpaid interest thereon and accrued but unpaid fees owing to the Affected Lender, or (ii) pay to the Affected Lender the aggregate principal balance of Loans then owing to the Affected Lender plus any accrued but unpaid interest thereon and accrued but unpaid fees owing to the Affected Lender, whereupon the Commitment of the Affected Lender shall be terminated and the Affected Lender shall no longer be a party hereto or have any rights or obligations hereunder or under any of the other Loan Documents.  Each of the Agent and the Affected Lender shall reasonably cooperate in effectuating the replacement of such
Affected Lender under this Section, but at no time shall the Agent, such Affected Lender nor any other Lender be obligated in any way whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee.  The exercise by the Borrower of its rights under this Section shall be at the Borrower’s sole cost and expense and at no cost or expense to the Agent, the Affected Lender or any of the other Lenders.  The terms of this Section shall not in any way limit the Borrower’s obligation to pay to any Affected Lender compensation owing to such Affected Lender pursuant to Section 3.12., 4.1. or 12.9.

 

Section 4.6.  Treatment of Affected Loans.

If the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(b), 4.2. or 4.3., then such Lender’s LIBOR Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion required by Section 4.1.(b) or 4.3., on such earlier date as such Lender may specify to the Borrower with a copy to the Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 4.1. or 4.3. that gave rise to such Conversion no longer exist:

 

(a)               to the extent that such Lender’s LIBOR Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s LIBOR Loans shall be applied instead to its Base Rate Loans; and

 

(b)               all Loans that would otherwise be made or Continued by such Lender as LIBOR Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be Converted into LIBOR Loans shall remain as Base Rate Loans.

 

If such Lender gives notice to the Borrower (with a copy to the Agent) that the circumstances specified in Section 4.1. or 4.3. that gave rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders are outstanding, then such Lender’s Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR 

 

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Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments.

 

Section 4.7.  Change of Lending Office.

Each Lender agrees that it will use reasonable efforts to designate an alternate Lending Office with respect to any of its Loans affected by the matters or circumstances described in Sections 3.12., 4.1. or 4.3. to reduce the liability of the Borrower or avoid the results provided thereunder, so long as such designation is not disadvantageous to such Lender as determined by such Lender in its sole discretion, except that such Lender shall have no obligation to designate a Lending Office located in the United States of America.

 

Section 4.8.  Assumptions Concerning Funding of LIBOR Loans.

Calculation of all amounts payable to a Lender under this Article IV. shall be made as though such Lender had actually funded  LIBOR Loans through the purchase of deposits in the relevant market bearing interest at the rate applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing assumption shall be used only for calculation of amounts payable under this Article IV.

 

ARTICLE V. CONDITIONS PRECEDENT

Section 5.1.  Initial Conditions Precedent.

The obligation of the Lenders to effect or permit the occurrence of the first Credit Event hereunder, whether as the making of a Loan or the issuance of a Letter of Credit, is subject to the following conditions precedent:

 

(a)               The Agent shall have received each of the following, in form and substance satisfactory to the Agent:

 

	
            (i)
 	
            Counterparts of this Agreement executed by each of the parties hereto;
 

 

(ii)               Revolving Notes executed by the Borrower, payable to each Lender and complying with the applicable provisions of Section 2.10., and the Swingline Note executed by the Borrower;

 

(iii)              The Guaranty executed by each Guarantor existing as of the Effective Date;

 

(iv)              An opinion of Sullivan & Worcester LLP, counsel to the Loan Parties, and an opinion of Venable LLP, special Maryland counsel to the Loan Parties, addressed to the Agent and the Lenders and covering such matters as are customary for financings of the type contemplated by the Loan Documents and such other matters as the Agent may reasonably request; 

 

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(v)               The declaration of trust of the Borrower certified as of a recent date by the Department of Assessments and Taxation of the State of Maryland;

 

(vi)              A good standing certificate with respect to the Borrower issued as of a recent date by the Department of Assessments and Taxation of the State of Maryland and certificates of qualification to transact business or other comparable certificates issued by the Secretary of State (and any state department of taxation, as applicable) of each state in which the Borrower is required to be so qualified and where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

 

(vii)             A certificate of incumbency signed by the Secretary or Assistant Secretary of the Borrower with respect to each of the officers of the Borrower authorized to execute and deliver the Loan Documents to which the Borrower is a party and the officers of the Borrower then authorized to deliver Notices of Borrowing, Notices of Swingline Borrowings, Notices of Continuation and Notices of Conversion and to request the issuance of Letters of Credit;

 

(viii)            Copies, certified by the Secretary or Assistant Secretary of the Borrower, of all corporate (or comparable) action taken by the Borrower to authorize the execution, delivery and performance of the Loan Documents to which the Borrower is a party;

 

(ix)              The Governing Documents of each Guarantor certified as of a recent date by the Secretary of State of the State of formation of such Guarantor;

 

(x)               A certificate of good standing or certificate of similar meaning with respect to each Guarantor issued as of a recent date by the Secretary of State of the State of formation of each such Guarantor and certificates of qualification to transact business or other comparable certificates issued by each Secretary of State (and any state department of taxation, as applicable) of each state in which such Guarantor is required to be so qualified and where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

 

(xi)              A certificate of incumbency signed by the Secretary or Assistant Secretary (or other individual performing similar functions) of each Guarantor with respect to each of the officers of such Guarantor authorized to execute and deliver the Loan Documents to which such Guarantor is a party;

 

(xii)             Copies certified by the Secretary or Assistant Secretary of each Guarantor (or other individual performing similar functions) of (i) the by-laws of such Guarantor, if a corporation, the operating agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity and (ii) all corporate, partnership, member or other necessary action taken by such Guarantor to authorize the execution, delivery and performance of the Loan Documents to which it is a party;

 

 

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(xiii)            A copy of  (y) all Operating Agreements, all Ancillary Agreements and the Advisory Agreement, in each case certified as true, correct and complete by the chief operating officer or chief financial officer of the Borrower, and (z) an Operating Agreement Abstract with respect to each Operating Agreement for the Unencumbered Hotels;

 

(xiv)            The Fees then due and payable under Section 3.6., and any other Fees payable to the Agent and the Lenders on or prior to the Effective Date;

 

(xv)            A Compliance Certificate calculated as of December 31, 2004; and

 

(xvi)            Such other documents, agreements and instruments as the Agent on behalf of the Lenders may reasonably request; and

 

	
            (b)
 	
            In the good faith judgment of the Agent and the Lenders:
 

 

(i)                There shall not have occurred or become known to the Agent or any of the Lenders any event, condition, situation or status since the date of the information contained in the financial and business projections, budgets, pro forma data and forecasts concerning the Borrower and its Subsidiaries delivered to the Agent and the Lenders prior to the Agreement Date that has had or could reasonably be expected to result in a Material Adverse Effect;

 

(ii)               No litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding shall be pending or threatened which could reasonably be expected to (1) result in a Material Adverse Effect or (2) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect the ability of the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party;

 

(iii)              The Borrower and its Subsidiaries shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (1) any Applicable Law or (2) any agreement, document or instrument to which the Borrower or any other Loan Party is a party or by which any of them or their respective properties is bound, except for such approvals, consents, waivers, filings and notices the receipt, making or giving of which would not reasonably be likely to (A) have a Material Adverse Effect, or (B) restrain or enjoin, impose materially burdensome conditions
on, or otherwise materially and adversely affect the ability of the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party; and

 

(iv)              There shall not have occurred or exist any other material disruption of financial or capital markets that could reasonably be expected to materially and adversely affect the transactions contemplated by the Loan Documents.

 

 

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Section 5.2.  Conditions Precedent to All Loans and Letters of Credit.

The obligations of the Lenders to make any Loans and of the Agent to issue Letters of Credit are all subject to the further condition precedent that: (a) no Default or Event of Default shall exist as of the date of the making of such Loan or date of issuance of such Letter of Credit or would exist immediately after giving effect thereto; (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct on and as of the date of the making of such Loan or date of issuance of such Letter of Credit with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such
earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder and (c) in the case of the borrowing of Loans, the Agent shall have received a timely Notice of Borrowing or Notice of Swingline Borrowing, as the case may be.  Each Credit Event shall constitute a certification by the Borrower to the effect set forth in the preceding sentence (both as of the date of the giving of notice relating to such Credit Event and, unless the Borrower otherwise notifies the Agent prior to the date of such Credit Event, as of the date of the occurrence of such Credit Event).  In addition, if such Credit Event is the making of a Loan or the issuance of a Letter of Credit, the Borrower shall be deemed to have represented to the Agent and the Lenders at the time such Loan is made or Letter of Credit is issued that all conditions to the occurrence of such Credit Event contained in this Article V. have been satisfied.

 

Section 5.3.  Conditions as Covenants.

If the Lenders make any Loans, or the Agent issues a Letter of Credit, prior to the satisfaction of all conditions precedent set forth in Sections 5.1. and 5.2., the Borrower shall nevertheless cause such condition or conditions to be satisfied within 5 Business Days after the date of the making of such Loans or the issuance of such Letter of Credit.  

 

ARTICLE VI. REPRESENTATIONS AND WARRANTIES

Section 6.1.  Representations and Warranties.

In order to induce the Agent and each Lender to enter into this Agreement and to make Loans and issue Letters of Credit, the Borrower represents and warrants to the Agent and each Lender as follows:

 

(a)               Organization; Power; Qualification.  Each of the Borrower and its Subsidiaries is a corporation, partnership or other legal entity, duly organized or formed, validly existing and in good standing under the jurisdiction of its incorporation or formation, has the power and authority to own or lease its respective properties and to carry on its respective business as now being and hereafter proposed to be conducted and is duly qualified and is in good standing as a foreign corporation, partnership or other legal entity, and authorized to do business, in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization and where the failure to be so qualified or
authorized would have, in each instance, a Material Adverse Effect.

 

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(b)               Ownership Structure.  As of the Agreement Date Part I of Schedule 6.1.(b) is a complete and correct list of all Subsidiaries of the Borrower setting forth for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding any Equity Interests in such Subsidiary, (iii) the nature of the Equity Interests held by each such Person, (iv) the percentage of ownership of such Subsidiary represented by such Equity Interests and (v) whether such Subsidiary is a Material Subsidiary, an Excluded Subsidiary and/or an Unleveraged Non-Domestic Subsidiary.  Except as disclosed in such Schedule, as of the Agreement Date (i) each of the Borrower and its Subsidiaries owns, free
and clear of all Liens, and has the unencumbered right to vote, all outstanding Equity Interests in each Person shown to be held by it on such Schedule, (ii) all of the issued and outstanding capital stock of each such Person organized as a corporation is validly issued, fully paid and nonassessable and (iii) there are no outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including, without limitation, any stockholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or outstanding securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, any such Person.  As of the Agreement Date Part II of Schedule 6.1.(b) correctly sets forth all Unconsolidated Affiliates of the Borrower, including the correct legal name of such Person, the type of legal entity which each such Person is, and all Equity
Interests in such Person held directly or indirectly by the Borrower.

 

(c)               Authorization of Agreement, Etc.  The Borrower has the right and power, and has taken all necessary action to authorize it, to borrow and obtain other extensions of credit hereunder.  The Borrower and each other Loan Party has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform each of the Loan Documents to which it is a party in accordance with their respective terms and to consummate the transactions contemplated hereby and thereby.  The Loan Documents to which the Borrower or any other Loan Party is a party have been duly executed and delivered by the duly authorized officers of such Person and each is a legal, valid and binding obligation of such Person enforceable against
such Person in accordance with its respective terms except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations (other than the payment of principal) contained herein or therein may be limited by equitable principles generally.

 

(d)               Compliance of Loan Documents with Laws, Etc.  The execution, delivery and performance of this Agreement, the Notes and the other Loan Documents to which the Borrower or any other Loan Party is a party in accordance with their respective terms and the borrowings and other extensions of credit hereunder do not and will not, by the passage of time, the giving of notice, or both:  (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to the Borrower or any other Loan Party; (ii) conflict with, result in a breach of or constitute a default under the organizational documents of the Borrower or any other Loan Party, or any indenture, agreement or other instrument to which
the Borrower or any other Loan Party is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any other Loan Party.

 

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(e)               Compliance with Law; Governmental Approvals.  The Borrower, each Subsidiary and each other Loan Party is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Law (including without limitation, Environmental Laws) relating to the Borrower, a Subsidiary or such other Loan Party except for noncompliances which, and Governmental Approvals the failure to possess which, would not, individually or in the aggregate, cause a Default or Event of Default or have a Material Adverse Effect.

 

(f)                Title to Properties; Liens; Title Insurance.  As of the Agreement Date, Part I of Schedule 6.1.(f) sets forth all of the real property owned or leased by the Borrower, each other Loan Party and each other Subsidiary.  Each such Person has good, marketable and legal title to, or a valid leasehold interest in, its respective assets.  As of the Agreement Date, there are no Liens against any assets of the Borrower, any Subsidiary or any other Loan Party except for Permitted Liens.  As to all or substantially all of the Hotels, the Borrower or a Subsidiary is the named insured under a policy of title insurance issued by a title insurer licensed to do business in the jurisdiction where such Hotel is located.  As to each
such policy of title insurance (i) the coverage amount equals or exceeds the acquisition cost of the related Hotel; (ii) exceptions to title do not include any Liens, except for Permitted Liens and Liens that have been released prior to the Effective Date; (iii) no claims are pending that, if adversely determined, could reasonably be expected to have a Material Adverse Effect; and (iv) no title insurer has given notice to the insured Person that such policy of title insurance is no longer in effect.   Except for Permitted Liens, neither Borrower nor any Subsidiary has knowledge of any defect in title that could, individually or in the aggregate, have a Material Adverse Effect.

 

(g)               Existing Indebtedness.  Schedule 6.1.(g) is, as of March 31, 2005, a complete and correct listing of all Indebtedness of the Borrower and its Subsidiaries, including without limitation, Guarantees of the Borrower and its Subsidiaries, and indicating whether such Indebtedness is Secured Indebtedness or Unsecured Indebtedness.  During the period from such date to the Agreement Date, neither the Borrower nor any Subsidiary incurred any material Indebtedness except as set forth on such Schedule.  The Borrower and its Subsidiaries have performed and are in compliance with all of the terms of such Indebtedness and all instruments and agreements relating thereto, and no default or event of default, or event or condition which with
the giving of notice, the lapse of time, or both, would constitute such a default or event of default, exists with respect to any such Indebtedness.

 

(h)               Material Contracts and Operating Agreements and Ancillary Agreements.  Schedule 6.1.(h) is, as of the Agreement Date, a true, correct and complete listing of all Material Contracts, Operating Agreements and Ancillary Agreements.  Each of the Borrower, its Subsidiaries and the other Loan Parties that is a party to any Material Contract has performed and is in compliance with all of the terms of such Material Contract, and no default or event of default, or event or condition which with the giving of notice, the lapse of time, or both, would constitute such a default or event of default, exists with respect to any such Material Contract. All Operating Agreement Abstracts provided by the Borrower to the Agent accurately summarize
the relevant provisions of the Operating Agreements required to be described therein, and such Operating Agreement Abstracts are correct in all material respects. 

 

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(i)                Litigation.  Except as set forth on Schedule 6.1.(i), there are no actions, suits or proceedings pending (nor, to the knowledge of the Borrower, are there any actions, suits or proceedings threatened, nor is there any basis therefor) against or in any other way relating adversely to or affecting the Borrower, any Subsidiary or any other Loan Party or any of its respective property in any court or before any arbitrator of any kind or before or by any other Governmental Authority which could reasonably be expected to have a Material Adverse Effect.  There are no strikes, slow downs, work stoppages or walkouts or other labor disputes in progress or threatened relating to the Borrower, any Subsidiary or any other Loan Party
which could reasonably be expected to have a Material Adverse Effect.

 

(j)                Taxes.  All federal, state and other tax returns of the Borrower, any Subsidiary or any other Loan Party required by Applicable Law to be filed have been duly filed, and all federal, state and other taxes, assessments and other governmental charges or levies upon the Borrower, any Subsidiary and each other Loan Party and its respective properties, income, profits and assets which are due and payable have been paid, except any such nonpayment which is at the time permitted under Section 7.6.  As of the Agreement Date, none of the United States income tax returns of the Borrower, its Subsidiaries or any other Loan Party is under audit.  All charges, accruals and reserves on the books of the Borrower and each of its
Subsidiaries in respect of any taxes or other governmental charges are in accordance with GAAP.

 

(k)               Financial Statements.  The Borrower has furnished to each Lender copies of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries for the fiscal year ending December 31, 2004, and the related audited consolidated statements of income, shareholders’ equity and cash flow for the fiscal year ending on such date, with the opinion thereon of Ernst & Young LLP.  Such financial statements (including in each case related schedules and notes) are complete and correct and present fairly, in accordance with GAAP consistently applied throughout the periods involved, the consolidated financial position of the Borrower and its consolidated Subsidiaries as at their respective dates and the results
of operations and the cash flow for such periods.  Neither the Borrower nor any of its Subsidiaries has on the Agreement Date any material contingent liabilities, liabilities, liabilities for taxes, unusual or long-term commitments or unrealized or forward anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said financial statements or except as set forth on Schedule 6.1.(k).

 

(l)                No Material Adverse Change.  Since December 31, 2004, there has been no material adverse change in the consolidated financial condition, results of operations, business or prospects of the Borrower and its consolidated Subsidiaries taken as a whole.  Each of the Borrower, its Subsidiaries and the other Loan Parties is Solvent.

 

(m)              ERISA.  Each member of the ERISA Group is in compliance with its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan, except in each case for noncompliances which could not reasonably be expected to have a Material Adverse Effect.  As of the Agreement Date, no member of the ERISA Group has (i) sought a waiver of the minimum funding standard under 

 

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Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.

 

(n)               Not Plan Assets; No Prohibited Transaction.  None of the assets of the Borrower, any Subsidiary or any other Loan Party constitute “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder.  The execution, delivery and performance of this Agreement and the other Loan Documents, and the borrowing and repayment of amounts hereunder, do not and will not constitute “prohibited transactions” under ERISA or the Internal Revenue Code.

 

(o)               Absence of Defaults.  Neither the Borrower, any Subsidiary nor any other Loan Party is in default under its Governing Documents, and no event has occurred, which has not been remedied, cured or waived:  (i) which constitutes a Default or an Event of Default; or (ii) which constitutes, or which with the passage of time, the giving of notice, a determination of materiality, the satisfaction of any condition, or any combination of the foregoing, would constitute, a default or event of default by the Borrower, any Subsidiary or any other Loan Party under any agreement (other than this Agreement) or judgment, decree or order to which the Borrower or any Subsidiary or other Loan Party is a party or by which the Borrower or any
Subsidiary or other Loan Party or any of their respective properties may be bound where such default or event of default could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(p)               Environmental Laws.  Each of the Borrower, its Subsidiaries and the other Loan Parties has obtained all Governmental Approvals which are required under Environmental Laws and is in compliance with all terms and conditions of such Governmental Approvals which the failure to obtain or to comply with could reasonably be expected to have a Material Adverse Effect.  Except for any of the following matters that could not be reasonably expected to have a Material Adverse Effect, (i) the Borrower is not aware of, and has not received notice of, any past, present, or future events, conditions, circumstances, activities, practices, incidents, actions, or plans which, with respect to the Borrower, its Subsidiaries and each other Loan
Party, may interfere with or prevent compliance or continued compliance with Environmental Laws, or may give rise to any common-law or legal liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study, or investigation, based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, chemical, or industrial, toxic, or other Hazardous Material; and (ii) there is no civil, criminal, or administrative action, suit, demand, claim, hearing, notice, or demand letter, notice of violation, investigation, or proceeding pending or, to the Borrower’s knowledge after due inquiry, threatened, against the Borrower, its Subsidiaries and each other Loan Party relating in any way to Environmental Laws.

 

 

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(q)               Investment Company; Public Utility Holding Company.  Neither the Borrower nor any Subsidiary nor any other Loan Party is (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, (ii) a “holding company” or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any other Applicable Law which purports to regulate or restrict its ability to
borrow money or to consummate the transactions contemplated by this Agreement or to perform its obligations under any Loan Document to which it is a party.

 

(r)                Margin Stock.  Neither the Borrower, any Subsidiary nor any other Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System.

 

(s)               Affiliate Transactions.  Except as permitted by Section 9.10., neither the Borrower, any Subsidiary nor any other Loan Party is a party to or bound by any agreement or arrangement (whether oral or written) to which any Affiliate of the Borrower, any Subsidiary or any other Loan Party is a party.

 

(t)                Intellectual Property.  Each of the Borrower and each Subsidiary owns or has the right to use, under valid license agreements or otherwise, all material patents, licenses, franchises, trademarks, trademark rights, trade names, trade name rights, trade secrets and copyrights (collectively, “Intellectual Property”) used in the conduct of its businesses as now conducted and as contemplated by the Loan Documents, without known conflict with any patent, license, franchise, trademark, trade secret, trade name, copyright, or other proprietary right of any other Person, except for such Intellectual Property, the absence of which, and for conflicts which, could not reasonably be expected to have a Material Adverse Effect.
The Borrower and each such Subsidiary have taken all such steps as they deem reasonably necessary to protect their respective rights under and with respect to such Intellectual Property.  No material claim has been asserted by any Person with respect to the use of any Intellectual Property by the Borrower or any Subsidiary, or challenging or questioning the validity or effectiveness of any Intellectual Property.  The use of such Intellectual Property by the Borrower, its Subsidiaries and the other Loan Parties, does not infringe on the rights of any Person, subject to such claims and infringements as do not, in the aggregate, give rise to any liabilities on the part of the Borrower and its Subsidiaries that could reasonably be expected to have a Material Adverse Effect.

 

(u)               Business.  As of the Agreement Date, the Borrower and its Subsidiaries are engaged substantially in the business of the acquisition, financing, ownership, development and tenancy (through TRSs) of hotel properties and other businesses activities incidental thereto.

 

(v)               Broker’s Fees.  No broker’s or finder’s fee, commission or similar compensation will be payable with respect to the transactions contemplated hereby.  No other similar fees or commissions will be payable by any Loan Party for any other services rendered to the Borrower or any of its Subsidiaries ancillary to the transactions contemplated hereby.

 

 

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(w)              Accuracy and Completeness of Information.  No written information, report or other papers or data (excluding financial projections and other forward looking statements) furnished to the Agent or any Lender by, on behalf of, or at the direction of, the Borrower, any Subsidiary or any other Loan Party in connection with or relating in any way to this Agreement, contained any untrue statement of a fact material to the creditworthiness of the Borrower, any Subsidiary or any other Loan Party or omitted to state a material fact necessary in order to make such statements contained therein, in light of the circumstances under which they were made, not misleading.  All financial statements furnished to the Agent or any Lender by, on behalf of, or
at the direction of, the Borrower, any Subsidiary or any other Loan Party in connection with or relating in any way to this Agreement, present fairly, in accordance with GAAP consistently applied throughout the periods involved, the financial position of the Persons involved as at the date thereof and the results of operations for such periods.  All financial projections and other forward looking statements prepared by or on behalf of the Borrower, any Subsidiary or any other Loan Party that have been or may hereafter be made available to the Agent or any Lender were or will be prepared in good faith based on reasonable assumptions.  No fact is known to the Borrower which has had, or may in the future have (so far as the Borrower can reasonably foresee), a Material Adverse Effect which has not been set forth in the financial statements referred to in Section 6.1.(k) or in such information, reports or other papers or data or otherwise disclosed in writing to the Agent and the
Lenders prior to the Effective Date.  

 

(x)               REIT Status.  The Borrower qualifies, and has since 1995 qualified, as a REIT and is in compliance with all requirements and conditions imposed under the Internal Revenue Code to allow the Borrower to maintain its status as a REIT.

 

(y)               Unencumbered Assets.  As of the Agreement Date, Schedule 6.1.(y) is a correct and complete list of all Unencumbered Hotels and Unencumbered Mortgage Notes.  Each of the Properties and promissory notes included by the Borrower in calculations of Unencumbered Asset Value satisfies all of the requirements contained in the definition of an Unencumbered Hotel, Unencumbered Mortgage Note, or Other Acceptable Property, as applicable.

 

(z)               Insurance.  The Borrower or a Subsidiary maintains, or the related Operating Agreement requires the Operator thereunder to maintain, with respect to the Hotels commercially reasonable insurance with financially sound and reputable insurance companies.  As of the Agreement Date, neither the Borrower nor any Subsidiary has received notice that any such insurance has been cancelled, nonrenewed, or impaired in any way.

 

(aa)             Foreign Assets Control.  None of the Borrower, any Subsidiary or any Affiliate of the Borrower: (i) is a Sanctioned Person, (ii) has any of its assets in Sanctioned Entities, or (iii) derives any of its operating income from investments in, or transactions with, Sanctioned Persons or Sanctioned Entities.

 

Section 6.2.  Survival of Representations and Warranties, Etc.

All statements contained in any certificate, financial statement or other instrument delivered by or on behalf of the Borrower, any Subsidiary or any other Loan Party to the Agent or any Lender pursuant to or in connection with this Agreement or any of the other Loan 

 

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Documents (including, but not limited to, any such statement made in or in connection with any amendment thereto or any statement contained in any certificate, financial statement or other instrument delivered by or on behalf of the Borrower prior to the Agreement Date and delivered to the Agent or any Lender in connection with closing the transactions contemplated hereby) shall constitute representations and warranties made by the Borrower under this Agreement.  All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made at and as of the Agreement Date, the Effective Date and the date of the occurrence of any Credit Event, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically permitted hereunder.  All such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the Loan Documents and the making of the Loans and the issuance of the Letters of Credit.

 

ARTICLE VII. AFFIRMATIVE COVENANTS

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise consent in the manner provided for in Section 12.6., the Borrower shall comply with the following covenants:

 

Section 7.1.  Preservation of Existence and Similar Matters.

Except as otherwise permitted under Section 9.7., the Borrower shall preserve and maintain, and cause each Subsidiary and each other Loan Party to preserve and maintain, its respective existence, rights, franchises, licenses and privileges in the jurisdiction of its incorporation or formation and qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization and where the failure to be so authorized and qualified could reasonably be expected to have a Material Adverse Effect.

 

Section 7.2.  Compliance with Applicable Law and Material Contracts.

The Borrower shall comply, and cause each Subsidiary and each other Loan Party to comply, with (a) all Applicable Law, including the obtaining of all Governmental Approvals, the failure with which to comply could reasonably be expected to have a Material Adverse Effect, and (b) all material terms and conditions of all Material Contracts to which it is a party.

 

Section 7.3.  Maintenance of Property.

In addition to the requirements of any of the other Loan Documents, the Borrower shall, and shall cause each Subsidiary and other Loan Party to, (a) protect and preserve all of its material properties or cause to be protected and preserved, and maintain or cause to be maintained in good repair, working order and condition all tangible properties, ordinary wear and tear excepted, and (b)  make or cause to be made all needed and appropriate repairs, renewals, replacements and additions to such properties, so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

 

 

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Section 7.4.  Conduct of Business.

The Borrower shall at all times carry on, and cause its Subsidiaries and the other Loan Parties to carry on, its respective businesses as described in Section 6.1.(u).

 

Section 7.5.  Insurance.

In addition to the requirements of any of the other Loan Documents, the Borrower shall, and shall cause each Subsidiary and other Loan Party to, maintain or cause to be maintained commercially reasonable insurance with financially sound and reputable insurance companies, and from time to time deliver to the Agent or any Lender upon its request a detailed list, together with copies of all policies of the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby.

 

Section 7.6.  Payment of Taxes and Claims.

The Borrower shall, and shall cause each Subsidiary and other Loan Party to, pay and discharge or cause to be paid and discharged when due (a) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, and (b) all lawful claims of materialmen, mechanics, carriers, warehousemen and landlords for labor, materials, supplies and rentals which, if unpaid, might become a Lien on any properties of such Person; provided, however, that this Section shall not require the payment or discharge of any such tax, assessment, charge, levy or claim which is being contested in good faith by appropriate proceedings which operate to suspend the collection thereof and for which adequate reserves have been established on the books of the Borrower, such Subsidiary or such other Loan Party, as applicable, in accordance with GAAP.

 

Section 7.7.  Visits and Inspections.

The Borrower shall, and shall cause each Subsidiary and other Loan Party to, permit representatives or agents of any Lender or the Agent, from time to time after reasonable prior notice if no Event of Default shall be in existence, as often as may be reasonably requested, but only during normal business hours and at the expense of such Lender or the Agent (unless a Default or Event of Default shall exist, in which case the exercise by the Agent or such Lender of its rights under this Section shall be at the expense of the Borrower), as the case may be, to: (a) visit and inspect all properties of the Borrower or such Subsidiary or other Loan Party to the extent any such right to visit or inspect is within the control of such Person; (b) inspect and make extracts from their respective books and records, including but not limited to management letters prepared by independent
accountants; and (c) discuss with its principal officers, and its independent accountants, its business, properties, condition (financial or otherwise), results of operations and performance.  If requested by the Agent, the Borrower shall execute an authorization letter addressed to its accountants authorizing the Agent or any Lender to discuss the financial affairs of the Borrower and any Subsidiary or any other Loan Party with its accountants.

 

 

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Section 7.8.  Use of Proceeds; Letters of Credit.

The Borrower shall use the proceeds of all Loans and all Letters of Credit for the repayment of Indebtedness, the acquisition of Properties, working capital and other general business purposes only.  The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, use any part of such proceeds or Letters of Credit to (a) purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any such margin stock or (b) fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or Sanctioned Entity.

 

Section 7.9.  Environmental Matters.

The Borrower shall, and shall cause all of its Subsidiaries and the other Loan Parties to, comply, or cause to be complied, with all Environmental Laws the failure with which to comply could reasonably be expected to have a Material Adverse Effect.  If the Borrower, any Subsidiary or any other Loan Party shall (a) receive notice that any violation of any Environmental Law may have been committed or is about to be committed by such Person, (b) receive notice that any administrative or judicial complaint or order has been filed or is about to be filed against the Borrower, any Subsidiary or any other Loan Party alleging violations of any Environmental Law or requiring the Borrower, any Subsidiary or any other Loan Party to take any action in connection with the release of Hazardous Materials or (c) receive any notice from a Governmental Authority or private party alleging
that the Borrower, any Subsidiary or any other Loan Party may be liable or responsible for costs associated with a response to or cleanup of a release of Hazardous Materials or any damages caused thereby, and such notices, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, the Borrower shall provide the Agent and each Lender with a copy of such notice within 30 days after the receipt thereof by the Borrower, any Subsidiary or any other Loan Party.  The Borrower shall, and shall cause its Subsidiaries and the other Loan Parties to, take or cause to be taken promptly all actions necessary to prevent the imposition of any Liens on any of their respective properties arising out of or related to any Environmental Laws.

 

Section 7.10.  Books and Records.

The Borrower shall, and shall cause each of its Subsidiaries and the other Loan Parties to, maintain books and records pertaining to its respective business operations in such detail, form and scope as is consistent with good business practice and in accordance with GAAP.

 

Section 7.11.  Further Assurances.

The Borrower shall, at the Borrower’s cost and expense and upon request of the Agent, execute and deliver or cause to be executed and delivered, to the Agent such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Agent to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents.

 

 

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Section 7.12.  New Subsidiaries/Guarantors.

(a)               Requirement to Become Guarantor.  Within 30 days of any Person (other than an Excluded Subsidiary or an Unleveraged Non-Domestic Subsidiary) becoming a Material Subsidiary after the Effective Date, the Borrower shall deliver to the Agent each of the following items, each in form and substance satisfactory to the Agent: (i) an Accession Agreement executed by such Material Subsidiary and (ii) the items with respect to such Material Subsidiaries that would have been delivered under Sections 5.1.(a)(iv), (ix) through (xiii) and (xvi) if such Material Subsidiary had been one on the Effective Date; provided, however, promptly (and
in any event within 5 Business Days) upon any Excluded Subsidiary ceasing to be subject to the restriction which prevented it from delivering an Accession Agreement pursuant to this Section or such Unleveraged Non-Domestic Subsidiary ceasing to qualify as such, such Subsidiary shall comply with the provisions of this Section.

 

(b)               Other Guarantors.  The Borrower may, at its option, cause any Subsidiary that is not otherwise required to be a Guarantor hereunder to become a Guarantor by executing and delivering to the Agent the items required to be delivered under the immediately preceding subsection (a); provided, however, the Borrower need not provide a legal opinion with respect to any such Guarantor.

 

(c)               Release of a Guarantor.  The Borrower may request in writing that the Agent release, and upon receipt of such request the Agent shall release (subject to the terms of the Guaranty), a Guarantor from the Guaranty so long as: (i) such Guarantor meets, or will meet simultaneously with its release from the Guaranty, all of the provisions of the definition of the term “Excluded Subsidiary” or “Unleveraged Non-Domestic Subsidiary” or has ceased to be, or simultaneously with its release from the Guaranty will cease to be, a Material Subsidiary; (ii) such Guarantor is not otherwise required to be a party to the Guaranty under the immediately preceding subsection (a); (iii) no Default or Event of
Default shall then be in existence or would occur as a result of such release, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.; and (iv) the Agent shall have received such written request at least 10 Business Days prior to the requested date of release.  Delivery by the Borrower to the Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request.

 

Section 7.13.  REIT Status.

	
            The Borrower shall at all times maintain its status as a REIT.
 

 

Section 7.14.  Exchange Listing.

The Borrower shall maintain at least one class of common shares of the Borrower having trading privileges on the New York Stock Exchange or the American Stock Exchange or which is the subject of price quotations in the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotation System.

 

 

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ARTICLE VIII. INFORMATION

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise consent in the manner set forth in Section 12.6., the Borrower shall furnish to each Lender (or to the Agent if so provided below) at its Lending Office:

 

Section 8.1.  Quarterly Financial Statements.

As soon as available and in any event within 5 days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 45 days after the end of each of the first, second and third fiscal quarters of the Borrower), the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such period and the related unaudited consolidated statements of income, shareholders’ equity and cash flows of the Borrower and its Subsidiaries for such period, setting forth in each case in comparative form the figures as of the end of and for the corresponding periods of the previous fiscal year, all of which shall be certified by the chief financial officer or chief accounting officer of the Borrower, in his or her opinion, to present fairly, in accordance with GAAP as then in effect, the consolidated financial position of the
Borrower and its Subsidiaries as at the date thereof and the results of operations for such period (subject to normal year-end audit adjustments).  Together with such financial statements, the Borrower shall deliver reports, in form and detail satisfactory to the Agent, setting forth (a) a statement of Funds From Operations for the fiscal quarter then ending; (b) to the extent such information is obtained from Operators, all capital expenditures made during the fiscal quarter then ended; (c) a listing of all Properties acquired during such fiscal quarter, including the minimum rent or expected minimum return of each such Property, acquisition costs and related mortgage debt, (d) to the extent such information is obtained from Operators, the underlying occupancy, average daily revenues, revenues per available room, and Hotel Net Cash Flow for each Hotel Pool and each Hotel that is not in a Hotel Pool, and (e) such other information as the Agent may
request.

 

Section 8.2.  Year-End Statements.

As soon as available and in any event within 5 days after the same is required to be filed with the Securities and Exchange Commission (but in no event later than 90 days after the end of each fiscal year of the Borrower), the audited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of income, shareholders’ equity and cash flows of the Borrower and its Subsidiaries for such fiscal year, setting forth in comparative form the figures as at the end of and for the previous fiscal year, all of which shall be certified by (a) the chief financial officer or chief accounting officer of the Borrower, in his or her opinion, to present fairly, in accordance with GAAP as then in effect, the consolidated financial position of the Borrower and its Subsidiaries as at the date thereof and the
results of operations for such period and (b) independent certified public accountants of recognized national standing, whose certificate shall be unqualified and who shall have authorized the Borrower to deliver such financial statements and certification thereof to the Agent and the Lenders pursuant to this Agreement.  Together with such financial statements, the Borrower shall deliver a report, in form and detail reasonably satisfactory to the Agent, setting forth the underlying occupancy, average daily revenues, revenues per available room, and Hotel Net 

 

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Cash Flow for each Hotel Pool and each Hotel that is not in a Hotel Pool for such fiscal year to the extent such information is obtained from Operators.

 

Section 8.3.  Compliance Certificate.

At the time financial statements are furnished pursuant to Sections 8.1. and 8.2., and within 10 Business Days of the Agent’s request with respect to any other fiscal period, a certificate substantially in the form of Exhibit J (a “Compliance Certificate”) executed by the chief financial officer or chief accounting officer of the Borrower: (a) setting forth in reasonable detail as at the end of such quarterly accounting period, fiscal year, or other fiscal period, as the case may be, the calculations required to establish whether or not the Borrower was in compliance with the covenants contained in Sections 9.1. through 9.3. and 9.6., and (b) stating that, to the best of his or her knowledge, information and belief after due inquiry, no Default or Event of Default exists, or, if such is not the case, specifying such Default or Event of Default and
its nature, when it occurred, whether it is continuing and the steps being taken by the Borrower with respect to such event, condition or failure.  With each Compliance Certificate, Borrower shall also deliver a certificate (an “Unencumbered Asset Certificate”) executed by the chief financial officer or chief accounting officer of the Borrower that: (i) sets forth a list of all Unencumbered Hotels (with a listing of all Non-Domestic Properties which are not Other Acceptable Properties, in any Hotel Pool included in Unencumbered Hotels, together with a certification of the EBITDA attributable thereto), Unencumbered Mortgage Notes (including a listing of all Unencumbered Mortgage Notes that are secured by Non-Domestic Properties, together with a certification of the book value of such Unencumbered Mortgage Notes), and Other Acceptable Property; and (ii) certifies that all Unencumbered Hotels, Unencumbered Mortgage Notes, and Other Acceptable Property so listed fully qualify as
such under the applicable criteria for inclusion as an Unencumbered Hotel, Unencumbered Mortgage Note, or Other Acceptable Property.

 

Section 8.4.  Other Information.

(a)               Management Reports.  Promptly upon receipt thereof, copies of all management reports, if any, submitted to the Borrower or its Board of Trustees by its independent public accountants;

 

(b)               Securities Filings.  Within 5 Business Days of the filing thereof, copies of all registration statements (excluding the exhibits thereto (unless requested by the Agent) and any registration statements on Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all other periodic reports which the Borrower, any Subsidiary or any other Loan Party shall file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor) or any national securities exchange;

 

(c)               Shareholder Information.  Promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed and promptly upon the issuance thereof copies of all press releases issued by the Borrower, any Subsidiary or any other Loan Party;

 

 

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(d)               ERISA.  If and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer of the Borrower setting forth details as
to such occurrence and the action, if any, which the Borrower or applicable member of the ERISA Group is required or proposes to take;

 

(e)               Litigation.  To the extent the Borrower or any Subsidiary is aware of the same, prompt notice of the commencement of any proceeding or investigation by or before any Governmental Authority and any action or proceeding in any court or other tribunal or before any arbitrator against or in any other way relating adversely to, or adversely affecting, the Borrower or any Subsidiary or any of their respective properties, assets or businesses which could reasonably be expected to have a Material Adverse Effect, and prompt notice of the receipt of notice that any United States income tax returns of the Borrower or any of its Subsidiaries are being audited;

 

(f)                Modification of Governing Documents.  A copy of any amendment to a Governing Document of the Borrower or any other Loan Party promptly upon the Agent’s request;

 

(g)               Change of Management or Financial Condition.  Prompt notice of any change in the senior management of the Borrower, any Subsidiary or any other Loan Party and any change in the business, assets, liabilities, financial condition, results of operations or business prospects of the Borrower, any Subsidiary or any other Loan Party which has had or could reasonably be expected to have Material Adverse Effect;

 

(h)               Default.  Notice of the occurrence of any of the following promptly upon a Responsible Officer obtaining knowledge thereof: (i) any Default or Event of Default or (ii) any event which constitutes or which with the passage of time, the giving of notice, or otherwise, would constitute a default or event of default by the Borrower, any Subsidiary or any other Loan Party under any Material Contract, or any Operating Agreement or Ancillary Agreement relating 

 

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to any Unencumbered Hotel or Other Acceptable Property, to which any such Person is a party or by which any such Person or any of its respective properties may be bound;

 

(i)                Judgments.  Prompt notice of any order, judgment or decree in excess of $5,000,000 having been entered against the Borrower, any Subsidiary or any other Loan Party or any of their respective properties or assets;

 

(j)                Notice of Violations of Law.  Prompt notice if the Borrower, any Subsidiary or any other Loan Party shall receive any notification from any Governmental Authority alleging a violation of any Applicable Law or any inquiry which could reasonably be expected to have a Material Adverse Effect;

 

(k)               Material Subsidiary.  Prompt notice of any Person becoming a Material Subsidiary;

 

(l)                Material Asset Sales.  Prompt notice of the sale, transfer or other disposition of any material assets of the Borrower, any Subsidiary or any other Loan Party to any Person other than the Borrower, any Subsidiary or any other Loan Party;

 

(m)              Material Contracts.  Promptly upon the giving or receipt thereof by the Borrower or any Subsidiary, notice alleging that any party to any Material Contract, Unencumbered Mortgage Note, or any Operating Agreement or Ancillary Agreement relating to an Unencumbered Hotel or Other Acceptable Property, is in default of its obligations thereunder;

 

(n)               Financial Information Regarding Operators and Mortgagors.  If requested by the Agent and available to the Borrower or any Subsidiary on a nonconfidential basis, the Borrower shall deliver to the Agent the same reports and information with respect to each mortgagor under any Unencumbered Mortgage Note and with respect to each Operator as is required by Sections 8.1. and 8.2. with respect to the Borrower, except that: (i) every reference to the Borrower and its Subsidiaries shall be deemed to refer to such material mortgagor or Operator; and (ii) the time periods within which the Borrower shall deliver such reports as to material mortgagors and Operators shall each be 30 days longer than the time periods set forth in
Sections 8.1. and 8.2.;

 

(o)               Additions to Unencumbered Assets.  In order to add any Hotel or Hotel Pool to Unencumbered Hotels or add any promissory note to Unencumbered Mortgage Notes, the Borrower must deliver to the Agent an Unencumbered Asset Certificate reflecting such addition, together with a statement of:  (i)  the acquisition cost of such Hotel, Hotel Pool, or promissory note; and (ii)  the same information that the Borrower would be required to include in a Compliance Certificate.  The Borrower shall provide the Agent with Due Diligence Reports for any Hotel or Hotel Pool added to Unencumbered Hotels within 20 days of its delivery to the Agent of the Unencumbered Asset Certificate that added such Hotel or Hotel Pool to Unencumbered Hotels;

 

(p)               Removals from Unencumbered Assets.  Within 10 Business Days after any disposition by the Borrower, any Subsidiary or any other Loan Party of any Unencumbered 

 

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Asset or after any Unencumbered Asset ceases to qualify as an Unencumbered  Hotel, Unencumbered Mortgage Note or Other Acceptable Property, the Borrower shall deliver to the Agent an Unencumbered Asset Certificate reflecting such removal or disqualification, together with a statement of:  (i) the identity of the Unencumbered Asset being disposed of or disqualified, and (ii) the Unencumbered Asset Value attributable to such Unencumbered Asset. The Borrower also may voluntarily remove (i) any Hotel or Hotel Pool from Unencumbered Hotels, (ii) any promissory note from Unencumbered Mortgage Notes, and (iii) any Property from Other Acceptable Properties by delivering to the Agent an Unencumbered Asset Certificate reflecting such removal, together with a statement (a) that no Default or Event of Default then exists or would, upon the occurrence of such event or with the passage of time, result from such
removal, and (b) of (i) the identity of the Unencumbered Asset being removed, and (ii) the Unencumbered Asset Value attributable to such Unencumbered Asset; and

 

(q)               Other Information.  From time to time and promptly upon each request, such data, certificates, reports, statements, opinions of counsel, documents or further information regarding the business, assets, liabilities, financial condition, results of operations or business prospects of the Borrower or any of its Subsidiaries as the Agent or any Lender may reasonably request.

 

ARTICLE IX. NEGATIVE COVENANTS

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise consent in the manner set forth in Section 12.6., the Borrower shall comply with the following covenants:

 

Section 9.1.  Financial Covenants.

	
            The Borrower shall not permit:
 

 

(a)               Leverage Ratio.  The ratio of (i) Total Indebtedness to (ii) Total Asset Value, to exceed 0.55 to 1.00 at any time.

 

(b)               Minimum Fixed Charge Coverage Ratio.  The ratio of (i) Adjusted EBITDA of the Borrower and its Subsidiaries determined on a consolidated basis for the fiscal quarter most recently ending to (ii) Fixed Charges for such period, to be less than 1.75 to 1.0 at any time.

 

(c)               Secured Indebtedness.  The ratio of (i) Secured Indebtedness of the Borrower and its Subsidiaries to (ii) Total Asset Value, to be greater than 0.25 to 1.00 at any time. 

 

(d)               Unencumbered Leverage Ratio.  The ratio of (i) Unencumbered Asset Value to (ii) Unsecured Indebtedness, to be less than 1.80 to 1.00 at any time.

 

(e)               Unencumbered Interest Coverage Ratio.  The ratio of (i) Unencumbered EBITDA to (ii) Unsecured Debt Service for the Borrower’s fiscal quarter most recently ending, to be less than 2.00 to 1.00 at any time.

 

(f)                Minimum Tangible Net Worth.  Tangible Net Worth at any time to be less than (i) $1,500,000,000 plus (ii) 75% of the Net Proceeds of all Equity Issuances effected by the 

 

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Borrower or any Subsidiary (other than Equity Issuances to the Borrower or any Subsidiary) after the Agreement Date.

 

(g)               Floating Rate Debt.  The aggregate principal amount of all outstanding Floating Rate Debt to exceed, at any time, the greater of (i) 25% of Total Asset Value and (ii) the aggregate amount of the Commitments.

 

(h)               Total Assets Owned by Borrower and Guarantors.  The amount of Total Asset Value directly owned by the Borrower and the Guarantors to be less than 95.0% of Total Asset Value (excluding the amount of Total Asset Value, if any, then attributable to Excluded Subsidiaries and Unleveraged Non-Domestic Subsidiaries).

 

Section 9.2.  Indebtedness.

The Borrower shall not, and shall not permit any Subsidiary or any other Loan Party to, create, incur, assume, or permit or suffer to exist, any Indebtedness other than the following:

 

	
            (a)
 	
            the Obligations;
 

 

	
            (b)
 	
            Indebtedness set forth on Schedule 6.1.(g);
 

 

(c)               intercompany Indebtedness among the Borrower and its Wholly Owned Subsidiaries; provided, however, that the obligations of the Borrower, each Guarantor and each Unleveraged Non-Domestic Subsidiary in respect of such intercompany Indebtedness shall be subordinate to the Obligations; and

 

(d)               any other Indebtedness of a type not described above in this Section and created, incurred or assumed after the Agreement Date so long as immediately prior to the creation, incurring or assumption thereof, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.

 

Section 9.3. Certain Permitted Investments.

The Borrower shall not, and shall not permit any Subsidiary or any other Loan Party to, make any Investment in or otherwise own or hold the following items which would cause the aggregate value of all such holdings of the Borrower, such other Subsidiaries and other Loan Parties (without duplication) to exceed 25.0% of Total Asset Value at any time:

 

(a)               Investments in Persons which are not Subsidiaries, including without limitation Unencumbered Mortgage Notes and other Indebtedness owed to the Borrower or any Subsidiary and secured by real property;

 

(b)               Assets Under Development measured by the aggregate Construction Budget for all such Assets Under Development.  For purposes of this subsection, (i) “Construction Budget” means the fully-budgeted costs for the acquisition and construction of a given piece of real property (including without limitation, the cost of 

 

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acquiring such piece of real property, reserves for construction interest and operating deficits, tenant improvements, leasing commissions, and infrastructure costs) as reasonably determined by the Borrower in good faith and (ii) real property under construction to be (but not yet) acquired by the Borrower or a Subsidiary upon completion of construction pursuant to a contract in which the seller of such real property is required to complete construction prior to, and as a condition precedent to, such acquisition, shall be subject to this subsection; and

 

(c)               Real property leased by the Borrower or any Subsidiary as lessee pursuant to a ground lease, including any Ground Lease (other than any Ground Lease having a remaining term of at least 50 years (taking into account extensions which may be effected by the lessee without the consent of the lessor)).

 

Section 9.4.  Investments Generally.

The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, directly or indirectly, acquire, make or purchase any Investment, or permit any Investment of such Person to be outstanding on and after the Agreement Date, other than the following:

 

(a)               Investments in Subsidiaries in existence on the Agreement Date and disclosed on Part I of Schedule 6.1.(b);

 

(b)               Investments to acquire Equity Interests of a Subsidiary or any other Person who after giving effect to such acquisition would be a Subsidiary, so long as in each case (i) immediately prior to such Investment, and after giving effect thereto, no Default or Event of Default is or would be in existence and (ii) if such Subsidiary is (or after giving effect to such Investment would become) a Material Subsidiary and is not an Excluded Subsidiary and not an Unleveraged Non-Domestic Subsidiary, the terms and conditions set forth in Section 7.12. are satisfied;

 

(c)
               
Investments permitted under Section 9.3.;

 

(d)
               
Investments in Cash Equivalents;

 

(e)               intercompany Indebtedness among the Borrower and its Wholly Owned Subsidiaries provided that such Indebtedness is permitted by the terms of Section 9.2.; 

 

(f)                loans and advances to officers and employees for moving, entertainment, travel and other similar expenses in the ordinary course of business consistent with past practices; and 

 

(g)               any other Investment so long as immediately prior to making such Investment, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, including without limitation, a Default or Event of Default resulting from a violation of Section 7.4.

 

 

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Section 9.5.  Liens; Negative Pledges; Other Matters.

(a)               The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, create, assume, or incur any Lien (other than Permitted Liens) upon any of its properties, assets, income or profits of any character whether now owned or hereafter acquired if immediately prior to the creation, assumption or incurring of such Lien, or immediately thereafter, a Default or Event of Default is or would be in existence, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.;

 

(b)               The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, enter into, assume or otherwise be bound by any Negative Pledge except for a Negative Pledge contained in any agreement (i) evidencing Indebtedness which the Borrower or such Subsidiary may create, incur, assume, or permit or suffer to exist under Section 9.2.; (ii) which Indebtedness is secured by a Lien permitted to exist and (iii) which prohibits the creation of any other Lien on only the property securing such Indebtedness as of the date such agreement was entered into;

 
 

(c)               The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary (other than an Excluded Subsidiary) to: (i) pay dividends or make any other distribution on any of such Subsidiary’s capital stock or other equity interests owned by the Borrower or any Subsidiary; (ii) pay any Indebtedness owed to the Borrower or any Subsidiary; (iii) make loans or advances to the Borrower or any Subsidiary; or (iv) transfer any of its property or assets to the Borrower or any Subsidiary.

 

Section 9.6.  Restricted Payments.

The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, declare or make any Restricted Payment; provided, however, that:

 

(a)               the Borrower may (i) declare and make cash distributions to its common shareholders during any fiscal year in an aggregate amount not to exceed the greater of (x) the sum of (A) 90.0% of Funds From Operations of the Borrower for such period plus (B) 25.0% of the cash Net Proceeds of Equity Issuances effected by the Borrower or any Subsidiary during such period (other than Equity Issuances to the Borrower or any Subsidiary), or (y)  the minimum amount necessary for the Borrower to remain in compliance with Section 7.13. and (ii) declare and make Preferred Dividends; 

 

(b)               the Borrower may declare and make cash distributions to its shareholders of capital gains resulting from gains from certain asset sales to the extent necessary to avoid payment of taxes on such asset sales imposed under Sections 857(b)(3) and 4981 of the Internal Revenue Code;

 

(c)               the Borrower may make cash payments to repurchase outstanding shares of (i) any of its Preferred Stock, and (ii) up to $200,000,000 of common stock or other similar common Equity Interests; and

 

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(d)               Subsidiaries may declare and pay Restricted Payments to the Borrower or any other Subsidiary.

 

Notwithstanding the foregoing, but subject to the following sentence, if a Default or Event of Default shall exist, the Borrower may only declare or make cash distributions to its shareholders during any fiscal year in an aggregate amount not to exceed the minimum amount necessary for the Borrower to remain in compliance with Section 7.13.  If a Default or Event of Default specified in Section 10.1.(a), Section 10.1.(f) or Section 10.1.(g) shall exist, or if as a result of the occurrence of any other Event of Default the Obligations have been accelerated pursuant to Section 10.2.(a), the Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, make any Restricted Payments to any Person whatsoever other than to the Borrower or any Subsidiary.

 

Section 9.7.  Merger, Consolidation, Sales of Assets and Other Arrangements.

The Borrower shall not, and shall not permit any Subsidiary or other Loan Party to: (i) enter into any transaction of merger or consolidation; (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); or (iii) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, whether now owned or hereafter acquired; provided, however, that:

 

(a)               any of the actions described in the immediately preceding clauses (i) through (iii) may be taken with respect to any Subsidiary or any other Loan Party (other than the Borrower) so long as immediately prior to the taking of such action, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence;

 

(b)               the Borrower, its Subsidiaries and the other Loan Parties may lease and sublease their respective assets, as lessor or sublessor (as the case may be), in the ordinary course of their business;

 

(c)               a Person may merge with and into the Borrower so long as (i) the Borrower is the survivor of such merger, (ii) immediately prior to such merger, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence; and (iii) the Borrower shall have given the Agent and the Lenders at least 10 Business Days’ prior written notice of such merger (except that such prior notice shall not be required in the case of the merger of a Subsidiary with and into the Borrower); and

 

(d)               the Borrower and each Subsidiary may sell, transfer or dispose of assets among themselves.

 

Section 9.8.  Fiscal Year.

The Borrower shall not change its fiscal year from that in effect as of the Agreement Date.

 

 

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Section 9.9.  Modifications to Advisory Agreement and Other Material Contracts.

The Borrower shall not default in any material respect in the performance of any of its obligations under the Advisory Agreement or permit the Advisory Agreement to be canceled or terminated prior to its stated maturity.  The Borrower shall not enter into any material amendment, modification or waiver of or with respect to any of the terms of the Advisory Agreement, except for extensions thereof. With respect to Material Contracts other than the Advisory Agreement, the Borrower shall not, and shall not permit any Subsidiary or other Loan Party to, enter into any amendment or modification to any such Material Contract which could reasonably be expected to have a Material Adverse Effect. With respect to any Operating Agreement or Ancillary Agreement relating to any Unencumbered Hotel or Other Acceptable Property, the Borrower shall not, and shall not permit any Subsidiary or other Loan
Party to, enter into any amendment or modification to any such agreement if (a) such amendment or modification could reasonably be expected to have a Material Adverse Effect or (b) after giving pro forma effect to such amendment or modification, a Default or Event of Default could reasonably be expected to occur, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 9.1.  In connection with any amendment or modification to any Operating Agreement or Ancillary Agreement relating to any Unencumbered Hotel or Other Acceptable Property, the Borrower shall deliver to the Agent, within 10 Business Days’ of the Agent’s request, a Compliance Certificate calculated on a pro forma basis giving effect to such amendment or modification.

 

Section 9.10.  Transactions with Affiliates.

The Borrower shall not, and shall not permit any of its Subsidiaries or any other Loan Party to, permit to exist or enter into, any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate, except transactions in the ordinary course of and pursuant to the reasonable requirements of the business of the Borrower or any of its Subsidiaries and upon fair and reasonable terms which are no less favorable to the Borrower or such Subsidiary than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate.

 

Section 9.11.  ERISA Exemptions.

The Borrower shall not, and shall not permit any Subsidiary to, permit any of its respective assets to become or be deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder.

 

ARTICLE X. DEFAULT

Section 10.1.  Events of Default.

Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of Applicable Law or pursuant to any judgment or order of any Governmental Authority:

 

 

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(a)               Default in Payment of Principal.  The Borrower shall fail to pay when due (whether upon demand, at maturity, by reason of acceleration or otherwise) the principal of any of the Loans, or any Reimbursement Obligation.

 

(b)               Default in Payment of Interest and Other Obligations.  The Borrower shall fail to pay when due any interest on any of the Loans or any of the other payment Obligations owing by the Borrower under this Agreement or any other Loan Document, or any other Loan Party shall fail to pay when due any payment Obligation owing by such other Loan Party under any Loan Document to which it is a party, and such failure shall continue for a period of 5 Business Days.

 

(c)               Default in Performance.  (i) The Borrower shall fail to perform or observe any term, covenant, condition or agreement contained in Section 8.4.(h) or in Article IX. or (ii) the Borrower or any other Loan Party shall fail to perform or observe any term, covenant, condition or agreement contained in this Agreement or any other Loan Document to which it is a party and not otherwise mentioned in this Section and such failure shall continue for a period of 30 days after the earlier of (x) the date upon which a Responsible Officer of the Borrower or such Loan Party obtains knowledge of such failure or (y) the date upon which the Borrower has received written notice of such failure from the Agent.

 

(d)               Misrepresentations.  Any written statement, representation or warranty made or deemed made by or on behalf of the Borrower or any other Loan Party under this Agreement or under any other Loan Document, or any amendment hereto or thereto, or in any other writing or statement at any time furnished or made or deemed made by or on behalf of the Borrower or any other Loan Party to the Agent or any Lender, shall at any time prove to have been incorrect or misleading, in light of the circumstances in which made or deemed made, in any material respect when furnished or made or deemed made.

 

	
            (e)
 	
            Indebtedness Cross-Default.
 

 

(i)                The Borrower, any Subsidiary or any other Loan Party shall fail to pay when due and payable the principal of, or interest on, any Indebtedness (other than the Obligations) having an aggregate outstanding principal amount greater than or equal to (A) $25,000,000 in the case of Indebtedness that is not Nonrecourse Indebtedness or (B) $75,000,000 in the case of Indebtedness that is Nonrecourse Indebtedness (all such Indebtedness being “Material Indebtedness”); or

 

(ii)               (x) the maturity of any Material Indebtedness shall have been accelerated in accordance with the provisions of any indenture, contract or instrument evidencing, providing for the creation of or otherwise concerning such Material Indebtedness or (y) any Material Indebtedness shall have been required to be prepaid or repurchased prior to the stated maturity thereof; or

 

(iii)              any other event shall have occurred and be continuing which, with or without the passage of time, the giving of notice, or both, would permit any holder or holders of Material Indebtedness, any trustee or agent acting on behalf of such holder or holders or any other Person, to accelerate the maturity of any such Material Indebtedness 

 

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or require any such Material Indebtedness to be prepaid or repurchased prior to its stated maturity.

 

(f)                Voluntary Bankruptcy Proceeding.  The Borrower, any other Loan Party or any Subsidiary (other than (x) a Guarantor or Unleveraged Non-Domestic Subsidiary that, together with all other Guarantors and Unleveraged Non-Domestic Subsidiaries then subject to a bankruptcy proceeding or other proceeding or condition described in this subsection or the immediately following subsection, does not account for more than $25,000,000 of Total Asset Value, (y) a Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiares, all Indebtedness of which is Nonrecourse Indebtedness) then subject to a bankruptcy proceeding or other proceeding or condition described in this subsection or the immediately following
subsection, does not account for more than $50,000,000 of Total Asset Value, or (z) an Excluded Subsidiary, all Indebtedness of which is Nonrecourse Indebtedness) shall:  (i) commence a voluntary case under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter in effect); (ii) file a petition seeking to take advantage of any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts; (iii) consent to, or fail to contest in a timely and appropriate manner, any petition filed against it in an involuntary case under such bankruptcy laws or other Applicable Laws or consent to any proceeding or action described in the immediately following subsection; (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of
itself or of a substantial part of its property, domestic or foreign; (v) admit in writing its inability to pay its debts as they become due; (vi) make a general assignment for the benefit of creditors; (vii) make a conveyance fraudulent as to creditors under any Applicable Law; or (viii) take any corporate or partnership action for the purpose of effecting any of the foregoing.

 

(g)               Involuntary Bankruptcy Proceeding.  A case or other proceeding shall be commenced against the Borrower, any other Loan Party or any Subsidiary (other than (x) a Guarantor or Unleveraged Non-Domestic Subsidiary that, together with all other Guarantors and Unleveraged Non-Domestic Subsidiaries then subject to a bankruptcy proceeding or other proceeding or condition described in this subsection or the immediately preceding subsection, does not account for more than $25,000,000 of Total Asset Value, (y) a Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiaries, all Indebtedness of which is Nonrecourse Indebtedness) then subject to a bankruptcy proceeding or
other proceeding or condition described in this subsection or the immediately preceding subsection, does not account for more than $50,000,000 of Total Asset Value, or (z) an Excluded Subsidiary, all Indebtedness of which is Nonrecourse Indebtedness) in any court of competent jurisdiction seeking:  (i) relief under the Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter in effect) or under any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person, or of all or any substantial part of the assets, domestic or foreign, of such Person, and such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive calendar days, or an order granting the remedy or other relief requested in such case or proceeding against the

 

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Borrower, such Subsidiary or such other Loan Party (including, but not limited to, an order for relief under such Bankruptcy Code or such other federal bankruptcy laws) shall be entered.

 

(h)               Litigation; Enforceability.  The Borrower or any other Loan Party shall disavow, revoke or terminate (or attempt to terminate) any Loan Document to which it is a party or shall otherwise challenge or contest in any action, suit or proceeding in any court or before any Governmental Authority the validity or enforceability of this Agreement, any Note or any other Loan Document or this Agreement, any Note, the Guaranty or any other Loan Document shall cease to be in full force and effect (except as a result of the express terms thereof).

 

(i)                Judgment.  A judgment or order for the payment of money or for an injunction shall be entered against the Borrower, any Subsidiary or any other Loan Party, by any court or other tribunal and (i) such judgment or order shall continue for a period of 30 days without being paid, stayed or dismissed through appropriate appellate proceedings and (ii) either (A) the amount of such judgment or order (x) for which insurance has not been acknowledged in writing by the applicable insurance carrier (or the amount as to which the insurer has denied liability) or  (y) is not otherwise subject to indemnification or reimbursement on reasonable terms and conditions by Persons reasonably likely to honor such
indemnification or reimbursement obligations exceeds, individually or together with all other such outstanding judgments or orders entered against (1) the Borrower, any Guarantor or any Unleveraged Non-Domestic Subsidiary, $25,000,000, or (2) any other Subsidiaries, $50,000,000, or (B) in the case of an injunction or other non-monetary judgment, such judgment could reasonably be expected to have a Material Adverse Effect.

 

(j)                Attachment.  A warrant, writ of attachment, execution or similar process shall be issued against any property of the Borrower, any Subsidiary or any other Loan Party which exceeds, individually or together with all other such warrants, writs, executions and processes, (1) for the Borrower, any Guarantor or any Unleveraged Non-Domestic Subsidiary, $25,000,000, or (2) for any other Subsidiaries, $50,000,000, and such warrant, writ, execution or process shall not be discharged, vacated, stayed or bonded for a period of 30 days; provided, however, that if a bond has been issued in favor of the claimant or other Person obtaining such warrant, writ, execution or process, the issuer of such bond shall execute a waiver or
subordination agreement in form and substance satisfactory to the Agent pursuant to which the issuer of such bond subordinates its right of reimbursement, contribution or subrogation to the Obligations and waives or subordinates any Lien it may have on the assets of any Loan Party.

 

(k)               ERISA.  Any member of the ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $10,000,000 which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer, any Material Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer 

 

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Plans which could cause one or more members of the ERISA Group to incur a current payment obligation in excess of $10,000,000.

 

(l)                Loan Documents.  An Event of Default (as defined therein) shall occur under any of the other Loan Documents.

 

	
            (m)
 	
            Change of Control.
 

 

(i)                Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 15% of the total voting power of the then outstanding voting stock of the Borrower; or

 

(ii)               during any period of 12 consecutive months ending after the Agreement Date, individuals who at the beginning of any such 12-month period constituted the Board of Trustees of the Borrower (together with any new trustees whose election by such Board or whose nomination for election by the shareholders of the Borrower was approved by a vote of a majority of the trustees then still in office who were either trustees at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Trustees of the Borrower then in office; or

 

(iii)              RMR shall cease for any reason to act as the sole investment advisor to the Borrower.

 

Section 10.2.  Remedies Upon Event of Default.

	
            Upon the occurrence of an Event of Default the following provisions shall apply:
 

 

	
            (a)
 	
            Acceleration; Termination of Facilities.
 

 

(i)                Automatic.  Upon the occurrence of an Event of Default specified in Sections 10.1.(f) or 10.1.(g), (A)(i) the principal of, and all accrued interest on, the Loans and the Notes at the time outstanding, (ii) an amount equal to the Stated Amount of all Letters of Credit outstanding as of the date of the occurrence of such Event of Default for deposit into the Collateral Account and (iii) all of the other Obligations of the Borrower, including, but not limited to, the other amounts owed to the Lenders, the Swingline Lender and the Agent under this Agreement, the Notes or any of the other Loan Documents shall become immediately and automatically due and payable by the Borrower without
presentment, demand, protest, or other notice of any kind, all of which are expressly waived by the Borrower and (B) all of the Commitments, the obligation of the Lenders to make Revolving Loans, the Swingline Commitment, the obligation of the 

 

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Swingline Lender to make Swingline Loans, and the obligation of the Agent to issue Letters of Credit hereunder, shall all immediately and automatically terminate.

 

(ii)               Optional.  If any other Event of Default shall exist, the Agent shall, at the direction of the Requisite Lenders:  (A) declare (1) the principal of, and accrued interest on, the Loans and the Notes at the time outstanding, (2) an amount equal to the Stated Amount of all Letters of Credit outstanding as of the date of the occurrence of such other Event of Default for deposit into the Collateral Account and (3) all of the other Obligations, including, but not limited to, the other amounts owed to the Lenders and the Agent under this Agreement, the Notes or any of the other Loan Documents to be forthwith due and payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower and (B) terminate the Commitments, the Swingline Commitment and the obligation of the Lenders to make Loans hereunder and the obligation of the Agent to issue Letters of Credit hereunder.  

 

(b)               Loan Documents.  The Requisite Lenders may direct the Agent to, and the Agent if so directed shall, exercise any and all of its rights under any and all of the other Loan Documents.

 

(c)               Applicable Law.  The Requisite Lenders may direct the Agent to, and the Agent if so directed shall, exercise all other rights and remedies it may have under any Applicable Law.

 

(d)               Appointment of Receiver.  To the extent permitted by Applicable Law, the Agent and the Lenders shall be entitled to the appointment of a receiver for the assets and properties of the Borrower and its Subsidiaries, without notice of any kind whatsoever and without regard to the adequacy of any security for the Obligations or the solvency of any party bound for its payment, to take possession of all or any portion of the business operations of the Borrower and its Subsidiaries and to exercise such power as the court shall confer upon such receiver.

 

Section 10.3.  Remedies Upon Default.

Upon the occurrence of a Default specified in Sections 10.1.(f) or 10.1.(g), the Commitments shall immediately and automatically terminate.

 

Section 10.4.  Allocation of Proceeds.

If an Event of Default shall have occurred and the maturity of any of the Obligations has been accelerated, all payments received by the Agent under any of the Loan Documents, in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrower hereunder or thereunder, shall be applied in the following order and priority:

 

(a)               amounts due to the Agent and the Lenders in respect of fees and expenses due under Section 12.2.;

 

(b)               
 payments of interest on Swingline Loans;

 

 

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(c)               payments of interest on all other Loans and Reimbursement Obligations, to be applied for the ratable benefit of the Lenders;

 

	
            (d)
 	
            payments of principal of Swingline Loans;
 

 

(e)               payments of principal of all other Loans and Reimbursement Obligations, to be applied for the ratable benefit of the Lenders;

 

(f)                amounts to be deposited into the Collateral Account in respect of Letters of Credit;

 

(g)               amounts due the Agent and the Lenders pursuant to Sections 11.7. and 12.9.;

 

(h)               payments of all other amounts due and owing by the Borrower under any of the Loan Documents, if any, to be applied for the ratable benefit of the Lenders; and

 

(i)                any amount remaining after application as provided above, shall be paid to the Borrower or whomever else may be legally entitled thereto.

 

Section 10.5.  Collateral Account.

(a)               As collateral security for the prompt payment in full when due of all Letter of Credit Liabilities and the other Obligations, the Borrower hereby pledges and grants to the Agent, for the benefit of the Agent and the Lenders as provided herein, a security interest in all of its right, title and interest in and to the Collateral Account and the balances from time to time in the Collateral Account (including the investments and reinvestments therein provided for below).  The balances from time to time in the Collateral Account shall not constitute payment of any Letter of Credit Liabilities until applied by the Agent as provided herein.  Anything in this Agreement to the contrary notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in this Section and in Section 2.12.

 

(b)               Amounts on deposit in the Collateral Account shall be invested and reinvested by the Agent in such Cash Equivalents as the Agent shall determine in its sole discretion.  All such investments and reinvestments shall be held in the name of and be under the sole dominion and control of the Agent for the ratable benefit of the Lenders.  The Agent shall exercise reasonable care in the custody and preservation of any funds held in the Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Agent accords other funds deposited with the Agent, it being understood that the Agent shall not have any responsibility for taking any necessary steps to preserve rights against any
parties with respect to any funds held in the Collateral Account.

 

(c)               If a drawing pursuant to any Letter of Credit occurs on or prior to the expiration date of such Letter of Credit, the Borrower and the Lenders authorize the Agent to use the monies deposited in the Collateral Account and proceeds thereof to make payment to the beneficiary with respect to such drawing or the payee with respect to such presentment.  

 

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(d)               If an Event of Default exists, the Requisite Lenders may, in their discretion, at any time and from time to time, instruct the Agent to liquidate any such investments and reinvestments and apply proceeds thereof to the Obligations in accordance with Section 10.4.

 

(e)               So long as no Default or Event of Default exists, and to the extent amounts on deposit in or credited to the Collateral Account exceed the aggregate amount of the Letter of Credit Liabilities then due and owing, the Agent shall, from time to time, at the request of the Borrower, deliver to the Borrower within five Business Days after the Agent’s receipt of such request from the Borrower, against receipt but without any recourse, warranty or representation whatsoever, such amount of the credit balances in the Collateral Account as exceeds the aggregate amount of the Letter of Credit Liabilities at such time.  

 

(f)                The Borrower shall pay to the Agent from time to time such fees as the Agent normally charges for similar services in connection with the Agent’s administration of the Collateral Account and investments and reinvestments of funds therein.

 

Section 10.6.  Performance by Agent.

If the Borrower shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents, the Agent may perform or attempt to perform such covenant, duty or agreement on behalf of the Borrower after the expiration of any cure or grace periods set forth herein.  In such event, the Borrower shall, at the request of the Agent, promptly pay any amount reasonably expended by the Agent in such performance or attempted performance to the Agent, together with interest thereon at the applicable Post-Default Rate from the date of such expenditure until paid.  Notwithstanding the foregoing, neither the Agent nor any Lender shall have any liability or responsibility whatsoever for the performance of any obligation of the Borrower under this Agreement or any other Loan Document.

 

Section 10.7.  Rights Cumulative.

The rights and remedies of the Agent and the Lenders under this Agreement and each of the other Loan Documents shall be cumulative and not exclusive of any rights or remedies which any of them may otherwise have under Applicable Law.  In exercising their respective rights and remedies the Agent and the Lenders may be selective and no failure or delay by the Agent or any of the Lenders in exercising any right shall operate as a waiver of it, nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or right.

 

ARTICLE XI. THE AGENT

Section 11.1.  Authorization and Action.

Each Lender hereby appoints and authorizes the Agent to take such action as contractual representative on such Lender’s behalf and to exercise such powers under this Agreement and the other Loan Documents as are specifically delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto.  Not in limitation of the 

 

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foregoing, each Lender authorizes and directs the Agent to enter into the Loan Documents for the benefit of the Lenders.  Each Lender hereby agrees that, except as otherwise set forth herein, any action taken by the Requisite Lenders in accordance with the provisions of this Agreement or the Loan Documents, and the exercise by the Requisite Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders.  Nothing herein shall be construed to deem the Agent a trustee or fiduciary for any Lender nor to impose on the Agent duties or obligations other than those expressly provided for herein.  At the request of a Lender, the Agent will forward to such Lender copies or, where appropriate, originals of the documents delivered to the Agent pursuant to this Agreement or the other Loan Documents.  The
Agent will also furnish to any Lender, upon the request of such Lender, a copy of any certificate or notice furnished to the Agent by the Borrower, any Loan Party or any other Affiliate of the Borrower, pursuant to this Agreement or any other Loan Document not already delivered to such Lender pursuant to the terms of this Agreement or any such other Loan Document.  As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of any of the Obligations), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Requisite Lenders (or all of the Lenders if explicitly required under any other provision of this Agreement), and such instructions shall be binding upon all Lenders and all holders of any of the Obligations; provided, however, that,
notwithstanding anything in this Agreement to the contrary, the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or any other Loan Document or Applicable Law.  Not in limitation of the foregoing, the Agent shall not exercise any right or remedy it or the Lenders may have under any Loan Document upon the occurrence of a Default or an Event of Default unless the Requisite Lenders have so directed the Agent to exercise such right or remedy.

 

Section 11.2.  Agent’s Reliance, Etc.

Notwithstanding any other provisions of this Agreement or any other Loan Documents, neither the Agent nor any of its directors, officers, agents, employees or counsel shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any other Loan Document, except for its or their own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment.  Without limiting the generality of the foregoing, the Agent: (a) may treat the payee of any Note as the holder thereof until the Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Agent; (b) may consult with legal counsel (including its own counsel or counsel for the Borrower or any other Loan Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Lender or any other Person and shall not be responsible to any Lender or any other Person for any statements, warranties or representations made by any Person in or in connection with this Agreement or any other Loan Document; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any of this Agreement or any other Loan Document or the satisfaction of any conditions precedent under this Agreement or any 

 

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Loan Document on the part of the Borrower or other Persons (except for the delivery to it of any certificate or document specifically required to be delivered to it pursuant to Section 5.1.) or inspect the property, books or records of the Borrower or any other Person; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document, any other instrument or document furnished pursuant thereto or any collateral covered thereby or the perfection or priority of any Lien in favor of the Agent on behalf of the Lenders in any such collateral; and (f) shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telephone or telecopy) believed by it to be genuine and
signed, sent or given by the proper party or parties.

 

Section 11.3.  Notice of Defaults.

The Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Agent has received notice from a Lender or the Borrower referring to this Agreement, describing with reasonable specificity such Default or Event of Default and stating that such notice is a “notice of default.”  If any Lender (excluding the Lender which is also serving as the Agent) becomes aware of any Default or Event of Default, it shall promptly send to the Agent such a “notice of default.”  Further, if the Agent receives such a “notice of default”, the Agent shall give prompt notice thereof to the Lenders.

 

Section 11.4.  Wachovia as Lender.

Wachovia, as a Lender, shall have the same rights and powers under this Agreement and any other Loan Document as any other Lender and may exercise the same as though it were not the Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Wachovia in each case in its individual capacity.  Wachovia and its affiliates may each accept deposits from, maintain deposits or credit balances for, invest in, lend money to, act as trustee under indentures of, serve as financial advisor to, and generally engage in any kind of business with, the Borrower, any other Loan Party or any other affiliate thereof as if it were any other bank and without any duty to account therefor to the other Lenders.  Further, the Agent and any affiliate may accept fees and other consideration from the Borrower for services in connection with this Agreement and
otherwise without having to account for the same to the other Lenders.  The Lenders acknowledge that, pursuant to such activities, Wachovia or its affiliates may receive information regarding the Borrower, other Loan Parties, other Subsidiaries and other Affiliates (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that the Agent shall be under no obligation to provide such information to them.

 

Section 11.5.  Approvals of Lenders.

All communications from the Agent to any Lender requesting such Lender’s determination, consent, approval or disapproval (a) shall be given in the form of a written notice to such Lender, (b) shall be accompanied by a description of the matter or issue as to which such determination, approval, consent or disapproval is requested, or shall advise such Lender where information, if any, regarding such matter or issue may be inspected, or shall otherwise describe 

 

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the matter or issue to be resolved, (c) shall include, if reasonably requested by such Lender and to the extent not previously provided to such Lender, written materials and a summary of all oral information provided to the Agent by the Borrower in respect of the matter or issue to be resolved, and (d) shall include the Agent’s recommended course of action or determination in respect thereof.  Each Lender shall reply promptly, but in any event within 10 Business Days (or such lesser or greater period as may be specifically required under the Loan Documents) of receipt of such communication.  Except as otherwise provided in this Agreement and except with respect to items requiring the unanimous consent or approval of the Lenders under Section 12.6., unless a Lender shall give written notice to the Agent that it specifically objects to the recommendation or determination of the Agent
(together with a written explanation of the reasons behind such objection) within the applicable time period for reply, such Lender shall be deemed to have conclusively approved of or consented to such recommendation or determination.

 

Section 11.6.  Lender Credit Decision, Etc.

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

 

 

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Section 11.7.  Indemnification of Agent.

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

 

Section 11.8.  Successor Agent.

The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower.  The Agent may be removed as Agent under the Loan Documents for good cause by all of the Lenders (other than the Lender then acting as Agent) upon 30 days’ prior written notice to the Agent.  Upon any such resignation or removal, the Requisite Lenders (other than the Lender then acting as Agent, in the case of the removal of the Agent under the immediately preceding sentence) shall have the right to appoint a successor Agent which appointment shall, provided no Default or Event of Default shall exist, be subject to the Borrower’s approval, which approval shall not be unreasonably withheld or delayed (except 

 

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that the Borrower shall, in all events, be deemed to have approved each Lender and its affiliates as a successor Agent).  If no successor Agent shall have been so appointed in accordance with the immediately preceding sentence, and shall have accepted such appointment, within 30 days after the resigning Agent’s giving of notice of resignation or the Lenders’ removal of the resigning Agent, then the resigning or removed Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be a commercial bank having total combined assets of at least $50,000,000,000.  Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent, and the retiring or
removed Agent shall be discharged from its duties and obligations under the Loan Documents.  Such successor Agent shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or shall make other arrangements satisfactory to the current Agent, in either case, to assume effectively the obligations of the current Agent with respect to such Letters of Credit.  After any Agent’s resignation or removal hereunder as Agent, the provisions of this Article XI. shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents.

 

Section 11.9.  Titled Agents.

Each of the Titled Agents in each such respective capacity, assumes no responsibility or obligation hereunder, including, without limitation, for servicing enforcement or collection of any of the Loans, nor any duties as an agent hereunder for the Lenders.  The titles of “Joint Lead Arranger”, “Sole Book Runner”, “Syndication Agent” and “Documentation Agent” are solely honorific and imply no fiduciary responsibility on the part of the Titled Agents to the Agent, the Borrower or any Lender and the use of such titles does not impose on the Titled Agents any duties or obligations greater than those of any other Lender or entitle the Titled Agents to any rights other than those to which any other Lender is entitled.  

 

ARTICLE XII. MISCELLANEOUS

Section 12.1.  Notices.

Unless otherwise provided herein, communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered as follows:

 

	
            If to the Borrower:
 

 

Hospitality Properties Trust

400 Centre Street

Newton, Massachusetts  02458

Attention:  Mark Kleifges

	
            Telecopy Number:
 	
            (617) 969-5730
 
	
            Telephone Number:
 	
            (617) 796-8327
 

 

 

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            If to the Agent:
 

 

Wachovia Bank, National Association

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention: David M. Blackman

	
            Telecopy Number:
 	
            (704) 383-6205
 
	
            Telephone Number:
 	
            (704) 374-6272
 

 

If to a Lender:

 

To such Lender’s address or telecopy number, as applicable, set forth on its signature page hereto or in the applicable Assignment and Acceptance Agreement.

 

or, as to each party at such other address as shall be designated by such party in a written notice to the other parties delivered in compliance with this Section.  All such notices and other communications shall be effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand delivered or sent by overnight courier, when delivered.  Notwithstanding the immediately preceding sentence, all notices or communications to the Agent or any Lender under Article II. shall be effective only when actually received.  Neither the Agent nor any Lender shall incur any liability to the Borrower (nor shall the Agent incur any liability to the Lenders) for acting upon any telephonic notice referred to in this Agreement which the Agent or such Lender, as the case may be, believes in good faith to have been given by a Person authorized to deliver such notice or for otherwise
acting in good faith hereunder.

 

Section 12.2.  Expenses.

The Borrower agrees (a) to pay or reimburse the Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of, and any amendment, supplement or modification to, any of the Loan Documents (including due diligence expenses and travel expenses relating to closing), and the consummation of the transactions contemplated thereby, including the reasonable fees and disbursements of counsel to the Agent and costs and expenses in connection with the use of IntraLinks, Inc. or other similar information transmission systems in connection with the Loan Documents, (b) to pay or reimburse the Agent and the Lenders for all their reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under the Loan Documents, including the reasonable fees and disbursements of their
respective counsel (including the allocated fees and expenses of in-house counsel) and any payments in indemnification or otherwise payable by the Lenders to the Agent pursuant to the Loan Documents, (c) to pay, and indemnify and hold harmless the Agent and the Lenders from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure to pay or delay in paying, documentary, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of any of the Loan Documents, or consummation of any amendment, supplement or modification of, or any waiver or consent under or in respect of, any Loan Document, (d) to the extent not already covered by 

 

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any of the preceding subsections, to pay or reimburse the Agent and the Lenders for all their costs and expenses incurred in connection with any bankruptcy or other proceeding of the type described in Sections 10.1.(f) or 10.1.(g), including the reasonable fees and disbursements of counsel to the Agent and any Lender, whether such fees and expenses are incurred prior to, during or after the commencement of such proceeding or the confirmation or conclusion of any such proceeding, and (e) to pay or reimburse the Agent and the Lenders for any civil penalty or fine assessed by the OFAC against, and all reasonable costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof by, the Agent or any Lender as a result conduct of the Borrower or any other Loan Party that violates a sanction enforced by the OFAC.  If the Borrower shall fail to pay any amounts
required to be paid by it pursuant to this Section, the Agent and/or the Lenders may pay such amounts on behalf of the Borrower and either deem the same to be Loans outstanding hereunder or otherwise Obligations owing hereunder.

 

Section 12.3.  Setoff.

Subject to Section 3.3. and in addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, the Agent, each Lender and each Participant is hereby authorized by the Borrower, at any time or from time to time during the continuance of an Event of Default, without prior notice to the Borrower or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender or Participant subject to receipt of the prior written consent of the Agent exercised in its sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Agent, such Lender or any affiliate of the Agent or such Lender, to or for the
credit or the account of the Borrower against and on account of any of the Obligations, irrespective of whether or not any or all of the Loans and all other Obligations have been declared to be, or have otherwise become, due and payable as permitted by Section 10.2., and although such obligations shall be contingent or unmatured.  Promptly following any such set-off the Agent shall notify the Borrower thereof and of the application of such set-off, provided that the failure to give such notice shall not invalidate such set-off.

 

Section 12.4.  Litigation; Jurisdiction; Other Matters; Waivers.

(a)               EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.  ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, 

 

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THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.

 

(b)               EACH OF THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN NEW YORK, NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM.  THE BORROWER AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES.  EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

(c)               THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.

 

Section 12.5.  Successors and Assigns.

(a)               The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that the Borrower may not assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of all Lenders and any such assignment or other transfer to which all of the Lenders have not so consented shall be null and void.

 

(b)               Any Lender may make, carry or transfer Loans at, to or for the account of any of its branch offices or the office of an affiliate of such Lender except to the extent such transfer would result in increased costs to the Borrower.

 

(c)               Any Lender may at any time grant to one or more banks or other financial institutions (each a “Participant”) participating interests in its Commitment or the Obligations owing to such Lender; provided, however, (i) any such participating interest must be for a 

 

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constant and not a varying percentage interest and (ii) after giving effect to any such participation by a Lender, the amount of its Commitment, or if the Commitments have been terminated, the aggregate outstanding principal balance of Notes held by it, in which it has not granted any participating interests must be equal to $5,000,000 and integral multiples of $1,000,000 in excess thereof.  Except as otherwise provided in Section 12.3., no Participant shall have any rights or benefits under this Agreement or any other Loan Document.  A Participant shall not be entitled to receive any greater payment under Section 3.12. than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.12. unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower and the Agent, to comply with Section 3.12.(c) as though it were a Lender.  In the event of any such grant by a Lender of a participating interest to a Participant, such Lender shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which any Lender may grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided, however, such Lender may agree with the Participant that it will not, without the consent of the Participant, agree to (i) increase, or extend the term or extend the time or waive any requirement for the reduction or termination of, such Lender’s Commitment, (ii) extend the date fixed for the payment of principal of or interest on the Loans or portions thereof owing to such Lender, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon or (v) release any Guarantor (except as otherwise permitted under Section 7.12.(c)) or modify the definition of the term “Unleveraged Non-Domestic Subsidiary”.  An assignment or other transfer which is not permitted by subsection (d) below shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this subsection (c).
 Upon request from the Agent, the selling Lender shall notify the Agent and the Borrower of the sale of any participation hereunder and, if requested by the Agent, certify to the Agent that such participation is permitted hereunder.

 

(d)               Any Lender may assign to one or more Eligible Assignees (each an “Assignee”) all or a portion of its Commitment and its other rights and obligations under this Agreement and the Notes; provided, however (i) any partial assignment shall be in an amount at least equal to $5,000,000 and integral multiples of $1,000,000 in excess thereof and after giving effect to such assignment the assigning Lender retains a Commitment, or if the Commitments have been terminated, holds Notes having an aggregate outstanding principal balance, of at least $5,000,000 and integral multiples of $1,000,000 in excess thereof; and (ii) each such assignment shall be effected by means of an Assignment and Acceptance Agreement.  Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount equal to the purchase price agreed between such transferor Lender and such Assignee, such Assignee shall be deemed to be a Lender party to this Agreement as of the effective date of the Assignment and Acceptance Agreement and shall have all the rights and obligations of a Lender with a Commitment as set forth in such Assignment and Acceptance Agreement (in addition to 

 

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any Commitment previously held by it as a Lender), and the transferor Lender shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required.  Upon the consummation of any assignment pursuant to this subsection (d), the transferor Lender, the Agent and the Borrower shall make appropriate arrangements so that new Notes are issued to the Assignee and such transferor Lender, as appropriate.  In connection with any such assignment, the transferor Lender shall pay to the Agent an administrative fee for processing such assignment in the amount of $3,500.

 

(e)               The Agent shall maintain at the Principal Office a copy of each Assignment and Acceptance Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment of each Lender from time to time (the “Register”).  The Agent shall give each Lender and the Borrower notice of the assignment by any Lender of its rights as contemplated by this Section.  The Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register and copies of each Assignment and Acceptance Agreement shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent.  Upon its receipt of an Assignment and Acceptance Agreement executed by an assigning Lender, together with each Note subject to such assignment, the Agent shall, if such Assignment and Acceptance Agreement has been completed and if the Agent receives the processing and recording fee described in subsection (d) above, (i) accept such Assignment and Acceptance Agreement, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower.

 

(f)                In addition to the assignments and participations permitted under the foregoing provisions of this Section, any Lender may assign and pledge all or any portion of its Loans and its Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank, and such Loans and Notes shall be fully transferable as provided therein.  No such assignment shall release the assigning Lender from its obligations hereunder.

 

(g)               A Lender may furnish any information concerning the Borrower, any other Loan Party or any of their respective Subsidiaries or Affiliates in the possession of such Lender from time to time to Assignees and Participants (including prospective Assignees and Participants) subject to compliance with Section 12.8.

 

(h)               Anything in this Section to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to the Borrower, any other Loan Party or any of their respective Affiliates or Subsidiaries.

 

(i)                Each Lender agrees that, without the prior written consent of the Borrower and the Agent, it will not make any assignment hereunder in any manner or under any circumstances that would require registration or qualification of, or filings in respect of, any Loan or Note under the Securities Act or any other securities laws of the United States of America or of any other jurisdiction.

 

 

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Section 12.6.  Amendments.

Except as otherwise expressly provided in this Agreement, any consent or approval required or permitted by this Agreement or any other Loan Document to be given by the Lenders may be given, and any term of this Agreement or of any other Loan Document may be amended, and the performance or observance by the Borrower or any other Loan Party or any Subsidiary of any terms of this Agreement or such other Loan Document or the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Requisite Lenders (and, in the case of an amendment to any Loan Document, the written consent of each Loan Party a party thereto).  Notwithstanding the foregoing, without the prior written consent of each Lender adversely affected thereby, no amendment, waiver or consent shall
do any of the following: (i) increase the Commitments of the Lenders (except as contemplated by Section 2.14.) or subject the Lenders to any additional obligations; (ii) reduce the principal of, or interest rates that have accrued or that will be charged on the outstanding principal amount of, any Loans or Fees or other Obligations; (iii) reduce the amount of any Fees payable hereunder; (iv) postpone any date fixed for any payment of any principal of, or interest on, any Loans or any other Obligations, or extend the expiration date of any Letter of Credit beyond the Termination Date; (v) change the Commitment Percentages (except as a result of any increase in the aggregate amount of the Commitments contemplated by Section 2.14., 3.11.(b) or 4.5.) or amend or otherwise modify the provisions of Section 3.2.; (vi)  modify the definition of the term “Requisite Lenders” or modify in any other manner the number or percentage of the
Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof, including without limitation, any modification of this Section if such modification would have such effect; (vii) release any Guarantor from its obligations under the Guaranty (except as otherwise permitted under Section 7.12.(c)) or amend the definition of the term “Unleveraged Non-Domestic Subsidiary” (viii) amend the definition of the term “Unencumbered Asset Value” (or any of the definitions used in such definition for purposes of the use thereof in such definition, or the percentages or rates used in the calculation thereof); or (ix) amend or otherwise modify the provisions of Section 2.13.  Further, no amendment, waiver or consent unless in writing and signed by the Agent, in addition to the Lenders required hereinabove to take such action, shall affect the rights or duties of the Agent under this Agreement or any of the other
Loan Documents.  Any amendment, waiver or consent relating to Section 2.2. or the obligations of the Swingline Lender under this Agreement or any other Loan Document shall, in addition to the Lenders required hereinabove to take such action, require the written consent of the Swingline Lender.  No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon and any amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose set forth therein.  Except as otherwise provided in Section 11.5., no course of dealing or delay or omission on the part of the Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto.  Except as otherwise explicitly provided for herein or in any other Loan Document, no notice to or demand upon the Borrower shall entitle the Borrower to any other or further notice or demand in similar or other
circumstances.

 

 

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Section 12.7.  Nonliability of Agent and Lenders.

The relationship between the Borrower and the Lenders and the Agent shall be solely that of borrower and lender.  Neither the Agent nor any Lender shall have any fiduciary responsibilities to the Borrower and no provision in this Agreement or in any of the other Loan Documents, and no course of dealing between or among any of the parties hereto, shall be deemed to create any fiduciary duty owing by the Agent or any Lender to any Lender, the Borrower, any Subsidiary or any other Loan Party.  Neither the Agent nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower’s business or operations.

 

Section 12.8.  Confidentiality.

Except as otherwise provided by Applicable Law, the Agent and each Lender shall utilize all non-public information obtained pursuant to the requirements of this Agreement which has been identified as confidential or proprietary by the Borrower in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices but in any event may make disclosure: (a) to any of their respective affiliates (provided they shall agree to keep such information confidential in accordance with the terms of this Section); (b) as reasonably requested by any potential or actual Assignee, Participant or other transferee in connection with the contemplated transfer of any Commitment or participations therein as permitted hereunder (provided they shall agree to keep such information confidential in accordance with the terms
of this Section); (c) as required or requested by any Governmental Authority or representative thereof or pursuant to legal process or in connection with any legal proceedings or as otherwise required by Applicable Law; (d) to the Agent’s or such Lender’s independent auditors and other professional advisors (provided they shall be notified of the confidential nature of the information); (e) after the happening and during the continuance of an Event of Default, to any other Person, in connection with the exercise by the Agent or the Lenders of rights hereunder or under any of the other Loan Documents; and (f) to the extent such information (x) becomes publicly available other than as a result of a breach of this Section actually known to such Lender to be such a breach or (y) becomes available to the Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Affiliate.  Notwithstanding the foregoing, the Agent and
each Lender may disclose any such confidential information, without notice to the Borrower or any other Loan Party, to Governmental Authorities in connection with any regulatory examination of the Agent or such Lender or in accordance with the regulatory compliance policy of the Agent or such Lender.

 

Section 12.9.  Indemnification.

(a)               The Borrower shall and hereby agrees to indemnify, defend and hold harmless the Agent, any affiliate of the Agent and each of the Lenders and their respective directors, officers, shareholders, agents, employees and counsel (each referred to herein as an “Indemnified Party”) from and against any and all losses, costs, claims, damages, liabilities, deficiencies, judgments or expenses of every kind and nature (including, without limitation, amounts paid in settlement, court costs and the fees and disbursements of counsel incurred in connection with any litigation, investigation, claim or proceeding or any advice rendered in connection therewith, but excluding 

 

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losses, costs, claims, damages, liabilities, deficiencies, judgments or expenses indemnification in respect of which is specifically covered by Section 3.12. or 4.1. or expressly excluded from the coverage of such Sections) incurred by an Indemnified Party in connection with, arising out of, or by reason of, any suit, cause of action, claim, arbitration, investigation or settlement, consent decree or other proceeding (the foregoing referred to herein as an “Indemnity Proceeding”) which is in any way related directly or indirectly to: (i) this Agreement or any other Loan Document or the transactions contemplated thereby; (ii) the making of any Loans or issuance of Letters of Credit hereunder; (iii) any actual or proposed use by the Borrower of the proceeds of the Loans or Letters of Credit; (iv) the Agent’s or such Lender’s entering into this Agreement;
(v) the fact that the Agent and the Lenders have established the credit facility evidenced hereby in favor of the Borrower; (vi) the fact that the Agent and the Lenders are creditors of the Borrower and have or are alleged to have information regarding the financial condition, strategic plans or business operations of the Borrower and the Subsidiaries; (vii) the fact that the Agent and the Lenders are material creditors of the Borrower and are alleged to influence directly or indirectly the business decisions or affairs of the Borrower and the Subsidiaries or their financial condition; (viii) the exercise of any right or remedy the Agent or the Lenders may have under this Agreement or the other Loan Documents; provided, however, that the Borrower shall not be obligated to indemnify any Indemnified Party for any acts or omissions of such Indemnified Party in connection with matters described in this clause (viii) to the extent they constitute gross negligence
or willful misconduct of such Indemnified Party; or (ix) any violation or non-compliance by the Borrower or any Subsidiary of any Applicable Law (including any Environmental Law) including, but not limited to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state taxing authority or (B) any Governmental Authority or other Person under any Environmental Law, including any Indemnity Proceeding commenced by a Governmental Authority or other Person seeking remedial or other action to cause the Borrower or its Subsidiaries (or its respective properties) (or the Agent and/or the Lenders as successors to the Borrower) to be in compliance with such Environmental Laws.

 

(b)               The Borrower’s indemnification obligations under this Section shall apply to all Indemnity Proceedings arising out of, or related to, the foregoing whether or not an Indemnified Party is a named party in such Indemnity Proceeding.  In this connection, this indemnification shall cover all costs and expenses of any Indemnified Party in connection with any deposition of any Indemnified Party or compliance with any subpoena (including any subpoena requesting the production of documents).  This indemnification shall, among other things, apply to any Indemnity Proceeding commenced by other creditors of the Borrower or any Subsidiary, any shareholder of the Borrower or any Subsidiary (whether such shareholder(s) are prosecuting such Indemnity Proceeding in
their individual capacity or derivatively on behalf of the Borrower), any account debtor of the Borrower or any Subsidiary or by any Governmental Authority.

 

(c)               This indemnification shall apply to any Indemnity Proceeding arising during the pendency of any bankruptcy proceeding filed by or against the Borrower and/or any Subsidiary.

 

(d)               All out-of-pocket fees and expenses of, and all amounts paid to third-persons by, an Indemnified Party shall be advanced by the Borrower at the request of such Indemnified Party notwithstanding any claim or assertion by the Borrower that such Indemnified Party is not entitled to indemnification hereunder upon receipt of an undertaking by such Indemnified Party 

 

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that such Indemnified Party will reimburse the Borrower if it is actually and finally determined by a court of competent jurisdiction that such Indemnified Party is not so entitled to indemnification hereunder.

 

(e)               An Indemnified Party may conduct its own investigation and defense of, and may formulate its own strategy with respect to, any Indemnity Proceeding covered by this Section and, as provided above, all costs and expenses incurred by such Indemnified Party shall be reimbursed by the Borrower.  No action taken by legal counsel chosen by an Indemnified Party in investigating or defending against any such Indemnity Proceeding shall vitiate or in any way impair the obligations and duties of the Borrower hereunder to indemnify and hold harmless each such Indemnified Party; provided, however, that (i) if the Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has provided evidence reasonably satisfactory to such
Indemnified Party that the Borrower has the financial wherewithal to reimburse such Indemnified Party for any amount paid by such Indemnified Party with respect to such Indemnity Proceeding, such Indemnified Party shall not settle or compromise any such Indemnity Proceeding without the prior written consent of the Borrower (which consent shall not be unreasonably withheld or delayed).

 

(f)                If and to the extent that the obligations of the Borrower under this Section are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under Applicable Law.

 

(g)               The Borrower’s obligations under this Section shall survive any termination of this Agreement and the other Loan Documents and the payment in full in cash of the Obligations, and are in addition to, and not in substitution of, any other of their obligations set forth in this Agreement or any other Loan Document to which it is a party.

 

Section 12.10.  Termination; Survival.

At such time as (a) all of the Commitments have been terminated, (b) all Letters of Credit have terminated, (c) none of the Lenders nor the Swingline Lender is obligated any longer under this Agreement to make any Loans and (d) all Obligations (other than obligations which survive as provided in the following sentence) have been paid and satisfied in full, this Agreement shall terminate.  The indemnities to which the Agent, the Lenders and the Swingline Lender are entitled under the provisions of Sections 3.12., 4.1., 4.4., 11.7., 12.2. and 12.9. and any other provision of this Agreement and the other Loan Documents, and the provisions of Section 12.4., shall continue in full force and effect and shall protect the Agent, the Lenders and the Swingline Lender (i) notwithstanding any termination of this Agreement, or of the other Loan Documents, against events
arising after such termination as well as before and (ii) at all times after any such party ceases to be a party to this Agreement with respect to all matters and events existing on or prior to the date such party ceased to be a party to this Agreement.

 

Section 12.11.  Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or 

 

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unenforceability without invalidating the remainder of such provision or the remaining provisions or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 12.12.  GOVERNING LAW.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 12.13.  Counterparts.

This Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument.

 

Section 12.14.  Obligations with Respect to Loan Parties.

The obligations of the Borrower to direct or prohibit the taking of certain actions by the other Loan Parties as specified herein shall be absolute and not subject to any defense the Borrower may have that the Borrower does not control such Loan Parties.

 

Section 12.15.  Limitation of Liability.

Neither the Agent nor any Lender, nor any affiliate, officer, director, employee, attorney, or agent of the Agent or any Lender shall have any liability with respect to, and the Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by the Borrower in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.  The Borrower hereby waives, releases, and agrees not to sue the Agent or any Lender or any of the Agent’s or any Lender’s affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of
the other Loan Documents, or any of the transactions contemplated by this Agreement or financed hereby.

 

Section 12.16.  Entire Agreement.

This Agreement, the Notes, and the other Loan Documents referred to herein embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and thereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto.  There are no oral agreements among the parties hereto.

 

 

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Section 12.17.  Construction.

The Agent, the Borrower and each Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by the Agent, the Borrower and each Lender.

 

Section 12.18.  LIABILITY OF TRUSTEES, ETC.

	
            THE PARTIES HERETO ACKNOWLEDGE AND AGREE AS FOLLOWS:
 

 

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING THE BORROWER, DATED AUGUST 21, 1995, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”), IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME “HOSPITALITY PROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE BORROWER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE BORROWER.  ALL PERSONS DEALING WITH THE BORROWER, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE BORROWER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.  THE PROVISIONS OF THIS SECTION SHALL NOT LIMIT ANY OBLIGATIONS OF ANY LOAN PARTY OTHER THAN THE BORROWER.

 

Section 12.19.  Patriot Act.

The Lenders and the Agent each hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Agent, as applicable, to identify the Borrower in accordance with such Act.

 

Section 12.20.  NO NOVATION.

THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND AND RESTATE THE TERMS OF THE EXISTING CREDIT AGREEMENT.  THE PARTIES DO NOT INTEND THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY BORROWER UNDER OR IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE EXISTING CREDIT AGREEMENT).  

 

[Signatures on Following Pages]

 

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

 

BORROWER:

 

HOSPITALITY PROPERTIES TRUST

 

By: /s/ Mark L. Kleifges

	
            Name: Mark L. Kleifges
 
	
            Title: Treasurer
 	
             

 

 

Attest: /s/ John G. Murray

	
            Name: John G. Murray
 
	
            Title: President
 	
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent, as a Lender and as Swingline Lender

 

By:  /s/ David M. Blackman

	
            Name:  David M. Blackman
 
	
            Title:  Managing Director
 	
             

 

Commitment Amount:

 

$40,000,000

 

Lending Office (all Types of Loans):

 

Wachovia Bank, National Association

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attn:  David M. Blackman

	
            Telephone: 
 	
            (704) 383-6205
 
	
            Telecopy:
 	
            (704) 374-6272
 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

	
            By:/s/Bruce Ferguson
 	
             

	
             
	
            Name: Bruce Ferguson
 	
             

	
             
	
            Title:  
 	
            Senior Vice President
 
					

 

Commitment Amount:

 

$40,000,000

 

Lending Office (all Types of Loans):

 

The Royal Bank of Scotland plc

101 Park Avenue, 12th Floor

New York, New York 10178

Attn: Bruce Ferguson

	
            Telephone: 
 	
            (212) 401-3733
 
	
            Telecopy:
 	
            (212) 401-3456
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

ROYAL BANK OF CANADA

 

 

	
            By:/s/Dustin Craven
 	
             

	
             
	
            Name: Dustin Craven
 	
             

	
             
	
            Title:  
 	
            Attorney-in-Fact
 
					

 

Commitment Amount:

 

$33,000,000

 

Lending Office (all Types of Loans):

 

Royal Bank of Canada

New York Branch

One Liberty Plaza

New York, New York 10006-1404

 

Address for Notices:

 

Royal Bank of Canada

New York Branch

One Liberty Plaza, 3rd Floor

New York, New York 10006-1404

Attn: Manager, Loans Administration

	
            Telephone: 
 	
            (212) 428-6369
 
	
            Telecopy:
 	
            (212) 428-2372
 

 

with a copy to:

 

Royal Bank of Canada

One Liberty Plaza, 4th Floor

New York, New York 10006-1404

Attn: G. MacArthur

	
            Telephone: 
 	
            (212) 428-2324
 
	
            Telecopy:
 	
            (212) 428-6459
 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

CALYON NEW YORK BRANCH

 

 

	
            By:/s/Joseph A. Asciolla
 	
             

	
             
	
            Name: Joseph A. Asciolla
 
	
             
	
            Title:  Managing Director
 	
             

				

 

 

	
            By:/s/David Bowers
 	
             

	
             
	
            Name: David Bowers
 
	
             
	
            Title:  Director
 	
             

				

 

Commitment Amount:

 

$33,000,000

 

Lending Office (all Types of Loans):

 

Calyon New York Branch

1301 Avenue of the Americas, 18th Floor

New York, New York 10019-6022

Attn: Lodging Group – David Bowers

	
            Telephone: 
 	
            (212) 261-7831
 
	
            Telecopy:
 	
            (212) 261-7532
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

SUMITOMO MITSUI BANKING CORPORATION NEW YORK BRANCH

 

 

	
            By:/s/William M. Ginn
 	
             

	
             
	
            Name: William M. Ginn
 
	
             
	
            Title:  General Manager
 	
             

				

 

Commitment Amount:

 

$33,000,000

 

Lending Office (all Types of Loans):

 

Sumitomo Mitsui Banking Corporation 

New York Branch

277 Park Avenue, 5th Floor

New York, New York 10172

Attn: Charles Sullivan

	
            Telephone: 
 	
            (212) 224-4178
 
	
            Telecopy:
 	
            (212) 224-4887
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

ALLIED IRISH BANKS, P.L.C.

 

 

	
            By:/s/Denise Magyer
 	
             

	
             
	
            Name: Denise Magyer
 
	
             
	
            Title:  
 	
            Vice President
 	
             

					

 

 

	
            By:/s/Joseph S. Augustini
 	
             

	
             
	
            Name: Joseph S. Augustini
 
	
             
	
            Title:  
 	
            Vice President
 	
             

					

 

Commitment Amount:

 

$33,000,000

 

Lending Office (all Types of Loans):

 

Allied Irish Banks, p.l.c.

405 Park Avenue, 4th Floor

New York, New York 10022

Attn: Tony O’Reilly/Shane O’Driscoll

	
            Telephone: 
 	
            (212) 515-6847/(212) 515-6732
 
	
            Telecopy:
 	
            (212) 339-8325
 	
             

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

SOCIETE GENERALE

 

 

	
            By:/s/Jerry Parisi
 	
             

	
             
	
            Name: Jerry Parisi
 	
             

	
             
	
            Title:  
 	
            Managing Director
 
					

 

Commitment Amount:

 

$30,000,000

 

Lending Office (all Types of Loans):

 

Societe Generale

1221 Avenue of the Americas, 10th Floor

New York, New York 10020

Attn: Jerry Parisi

	
            Telephone: 
 	
            (212) 278-5448
 
	
            Telecopy:
 	
            (212) 278-7614
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

EMIGRANT SAVINGS BANK

 

 

	
            By:/s/Patricia Goldstein
 	
             

	
             
	
            Name: Patricia Goldstein
 	
             

	
             
	
            Title:  Senior Executive VP, Chief Credit Officer
 
				

 

Commitment Amount:

 

$30,000,000

 

Lending Office (all Types of Loans):

 

Emigrant Savings Bank

335 Madison Avenue

New York, New York 10017

Attn: Patricia Goldstein

	
            Telephone: 
 	
            (212) 350-2330
 
	
            Telecopy:
 	
            (212) 350-2371
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

PNC BANK, N.A.

 

 

	
            By:/s/David C. Curran
 	
             

	
             
	
            Name: David C. Curran
 
	
             
	
            Title:  Vice President
 	
             

				

 

Commitment Amount:

 

$30,000,000

 

Lending Office (all Types of Loans):

 

PNC Bank, N.A.

1600 Market Street, 30th Floor

Philadelphia, Pennsylvania 19103

Attn: David Curran

	
            Telephone: 
 	
            (215) 585-7707
 
	
            Telecopy:
 	
            (215) 585-5806
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK OF MONTREAL

 

 

	
            By:/s/Thomas A. Batterham
 	
             

	
             
	
            Name: Thomas A. Batterham
 
	
             
	
            Title:  Managing Director
 	
             

				

 

Commitment Amount:

 

$27,500,000

 

Lending Office (all Types of Loans):

 

Bank of Montreal

111 West Monroe, 10W

Chicago, Illinois 60603

Attn: Eduardo Mendoza

	
            Telephone: 
 	
            (312) 461-7521
 
	
            Telecopy:
 	
            (312) 293-5852
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

MIZUHO CORPORATE BANK, LTD.

 

 

	
            By:/s/Yulchi Hirashima
 	
             

	
             
	
            Name: Yulchi Hirashima
 	
             

	
             
	
            Title:  Deputy General Manager
 
				

 

Commitment Amount:

 

$27,500,000

 

Lending Office (all Types of Loans):

 

Mizuho Corporate Bank, Ltd.

1251 Avenue of the Americas

New York, New York 10020-1104

Attn: Roy Brubaker, VP

	
            Telephone: 
 	
            (212) 282-3487
 
	
            Telecopy:
 	
            (212) 282-4488
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

UNITED OVERSEAS BANK LIMITED, 

NEW YORK AGENCY

 

 

	
            By:/s/Kwong Yew Wong
 	
             

	
             
	
            Name: Kwong Yew Wong
 	
             

	
             
	
            Title:  FVP and General Manager
 
				

 

 

	
            By:/s/Philip Cheong
 	
             

	
             
	
            Name: Philip Cheong
 	
             

	
             
	
            Title:  Vice President and Deputy
 
	
             
	
            General Manager
 	
             

						

 

 

Commitment Amount:

 

$27,500,000

 

Lending Office (all Types of Loans):

 

United Overseas Bank Limited, 

New York Agency 

592 Fifth Avenue, 10th Floor

New York, New York 10036

Attn: Kwong Yew Wong

	
            Telephone: 
 	
            (212) 382-0088, Ext. 12
 
	
            Telecopy:
 	
            (212) 382-1881
 	
             

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

U.S. BANK NATIONAL ASSCOCIATION

 

 

	
            By:/s/Walter Whitt
 	
             

	
             
	
            Name: Walter Whitt
 	
             

	
             
	
            Title:  Vice President
 
				

 

Commitment Amount:

 

$27,500,000

 

Lending Office (all Types of Loans):

 

U.S. Bank National Asscociation

1650 Tysons Boulevard

McLean, Virginia 22102

Attn: Walter Whitt, V.P.

	
            Telephone: 
 	
            (703) 442-5491
 
	
            Telecopy:
 	
            (703) 442-5496
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK OF CHINA, NEW YORK BRANCH

 

 

	
            By:/s/Xiaojing Li
 	
             

	
             
	
            Name: Xiaojing Li
 	
             

	
             
	
            Title:  First Deputy General Manager
 
				

 

Commitment Amount:

 

$25,000,000

 

Lending Office (all Types of Loans):

 

Bank of China, New York Branch

410 Madison Avenue

New York, New York 10017

Attn: David Hoang

	
            Telephone: 
 	
            (212) 935-3101, Ext. 229
 
	
            Telecopy:
 	
            (212) 308-4993
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

	
            By:/s/Frederick G. Bright
 	
             

	
             
	
            Name: Frederick G. Bright
 
	
             
	
            Title:  Vice President
 	
             

				

 

Commitment Amount:

 

$25,000,000

 

Lending Office (all Types of Loans):

 

Wells Fargo Bank, National Association

101 Federal Street, 28th Floor

Boston, Massachusetts 02110

Attn: Frederick G. Bright

	
            Telephone: 
 	
            (617) 574-6310
 
	
            Telecopy:
 	
            (617) 261-1604
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

AMSOUTH BANK

 

 

	
            By:/s/Lee Surtees
 	
             

	
             
	
            Name: Lee Surtees
 	
             

	
             
	
            Title:  Assistant Vice President
 
				

 

Commitment Amount:

 

$25,000,000

 

Lending Office (all Types of Loans):

 

AmSouth Bank

1900 5th Avenue North BAC-15

Birmingham, Alabama 35203

Attn: Lee Surtees

	
            Telephone: 
 	
            (205) 801-0621
 
	
            Telecopy:
 	
            (205) 326-4075
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

 [Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

THE BANK OF NEW YORK

 

 

	
            By:/s/Rick Laudisi
 	
             

	
             
	
            Name: Rick Laudisi
 	
             

	
             
	
            Title:  Vice President
 
				

 

Commitment Amount:

 

$20,000,000

 

Lending Office (all Types of Loans):

 

The Bank of New York

One Wall Street, 21st Floor

New York, New York 10286

Attn: Jamia Jasper

	
            Telephone: 
 	
            (212) 635-8245
 
	
            Telecopy:
 	
            (212) 809-9526
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

LAND BANK OF TAIWAN, LOS ANGELES BRANCH

 

 

	
            By:/s/Henry C.R. Leu
 	
             

	
             
	
            Name: Henry C.R. Leu
 	
             

	
             
	
            Title:  VP & General Manager
 
				

 

Commitment Amount:

 

$20,000,000

 

Lending Office (all Types of Loans):

 

Land Bank Of Taiwan, Los Angeles Branch 

811 Wilshire Boulevard, 19th Floor

Los Angeles, California 90017

Attn: Joseph Chiuwei

	
            Telephone: 
 	
            (213) 532-3789, Ext. 129
 
	
            Telecopy:
 	
            (213) 532-3766
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

SUNTRUST BANK

 

 

	
            By:/s/Blake K. Thompson
 	
             

	
             
	
            Name: Blake K. Thompson
 
	
             
	
            Title:  Vice President
 	
             

				

 

Commitment Amount:

 

$20,000,000

 

Lending Office (all Types of Loans):

 

SunTrust Bank

8330 Boone Boulevard, 8th Floor

Vienna, Virginia 22182

Attn: Blake K. Thompson

	
            Telephone: 
 	
            (703) 442-1561
 
	
            Telecopy:
 	
            (703) 442-1570
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK OF TAIWAN, LOS ANGELES BRANCH

 

 

	
            By:/s/Bruce Yang
 	
             

	
             
	
            Name: Bruce Yang
 	
             

	
             
	
            Title:  Vice President/General Manager
 
				

 

Commitment Amount:

 

$15,000,000

 

Lending Office (all Types of Loans):

 

Bank of Taiwan, Los Angeles Branch

601 South Figueroa Street, Suite 4525

Los Angeles, California 90017

Attn: Melina Chang

	
            Telephone: 
 	
            (213) 629-6600, Ext. 155
 
	
            Telecopy:
 	
            (213) 629-6610
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

CHANG HWA COMMERCIAL BANK, LTD.

 

 

	
            By:/s/Jim C.Y. Chen
 	
             

	
             
	
            Name: Jim C.Y. Chen
 	
             

	
             
	
            Title:  VP and General Manager
 
				

 

Commitment Amount:

 

$15,000,000

 

Lending Office (all Types of Loans):

 

Chang Hwa Commercial Bank, Ltd.

685 Third Avenue, 29th Floor

New York, New York 10017

Attn: Melody Tsou

	
            Telephone: 
 	
            (212) 651-9770, Ext. 28
 
	
            Telecopy:
 	
            (212) 651-9785
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

E. SUN COMMERCIAL BANK, LTD., LOS ANGELES BRANCH

 

 

	
            By:/s/Benjamin Lin
 	
             

	
             
	
            Name: Benjamin Lin
 	
             

	
             
	
            Title: Executive Vice President &
 
	
             
	
            General Manager
 	
             

						

 

Commitment Amount:

 

$15,000,000

 

Lending Office (all Types of Loans):

 

E. Sun Commercial Bank, Ltd., Los Angeles Branch

17700 Castleton Street, Suite 500

City of Industry, California 91748

Attn: Edward Chen

	
            Telephone: 
 	
            (626) 810-2400, Ext. 224
 
	
            Telecopy:
 	
            (626) 839-4201
 	
             

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

THE INTERNATIONAL COMMERCIAL BANK OF CHINA, NEW YORK AGENCY

 

 

	
            By:/s/Tsang-Pei Hsu
 	
             

	
             
	
            Name: Tsang-Pei Hsu
 	
             

	
             
	
            Title:  Vice President and Deputy 
 
	
             
	
            General Manager
 	
             

						

 

Commitment Amount:

 

$13,000,000

 

Lending Office (all Types of Loans):

 

The International Commercial Bank Of China, 

New York Agency 

65 Liberty Street

New York, New York 10005

Attn: Louis Chang

	
            Telephone: 
 	
            (212) 815-9168
 
	
            Telecopy:
 	
            (212) 766-5006
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

CHIAO TUNG BANK CO., LTD.

NEW YORK AGENCY

 

 

	
            By:/s/Kuang-Hua Wei
 	
             

	
             
	
            Name: Kuang-Hua Wei
 	
             

	
             
	
            Title:  Senior Vice President &
 
	
             
	
            General Manager
 	
             

					

 

Commitment Amount:

 

$12,500,000

 

Lending Office (all Types of Loans):

 

Chiao Tung Bank Co., Ltd.

New York Agency

One World Financial Center, 30th Floor

200 Liberty Street

New York, New York 10281

Attn: Ifen Lee

	
            Telephone: 
 	
            (212) 285-2666, Ext. 238
 
	
            Telecopy:
 	
            (212) 285-2922
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

CHINATRUST COMMERICAL BANK, NEW YORK BRANCH

 

 

	
            By:/s/Eric Kan
 	
             

	
             
	
            Name: Eric Kan
 	
             

	
             
	
            Title:  General Manager
 
				

 

Commitment Amount:

 

$12,500,000

 

Lending Office (all Types of Loans):

 

Chinatrust Commercial Bank, New York Branch

366 Madison Avenue, 3/F

New York, New York 10017

Attn: Laurence Chui

	
            Telephone: 
 	
            (212) 457-8911
 
	
            Telecopy:
 	
            (212) 949-4774
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK OF AMERICA, N.A.

 

 

	
            By:/s/Roger C. Davis
 	
             

	
             
	
            Name: Roger C. Davis
 	
             

	
             
	
            Title:  Senior Vice President
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Bank of America, N.A.

901 Main Street, 64th Floor

Mail Code: TX1-492-64-01

Dallas, Texas 75202

Attn: Roger Davis

	
            Telephone: 
 	
            (214) 209-9505
 
	
            Telecopy:
 	
            (214) 209-0085
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

MERRILL LYNCH BANK USA

 

 

	
            By:/s/Louis Alder
 	
             

	
             
	
            Name: Louis Alder
 
	
             
	
            Title:  Director
 	
             

			

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Merrill Lynch Bank USA

15 West South Temple, Suite 300

Salt Lake City, Utah 84101

Attn: Dave Millett

	
            Telephone: 
 	
            (801) 526-8312
 
	
            Telecopy:
 	
            (801) 933-8641
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

MORGAN STANLEY BANK

 

 

	
            By:/s/Daniel Twenge
 	
             

	
             
	
            Name: Daniel Twenge
 
	
             
	
            Title:  Vice President
 	
             

				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Morgan Stanley Bank

1633 Broadway, 25th Floor

New York, New York 10019

Attn: Erma Dell’Aquila/Edward Henley

	
            Telephone: 
 	
            (212) 537-1532/2484
 
	
            Telecopy:
 	
            (212) 537-1867/1866
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK HAPOALIM B.M. 

 

 

	
            By:/s/Marc Bosc
 	
             

	
             
	
            Name: Marc Bosc
 	
             

	
             
	
            Title:  Vice President
 
				

 

 

	
            By:/s/Lenroy Hackett
 	
             

	
             
	
            Name: Lenroy Hackett
 	
             

	
             
	
            Title:  First Vice President
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Bank Hapoalim B.M.

New York Branch

1177 Avenue of the Americas

New York, New York 10036

Attn: Marc Bosc

	
            Telephone: 
 	
            (212) 782-2181
 
	
            Telecopy:
 	
            (212) 782-2382
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

BANK OF COMMUNICATIONS, 

NEW YORK BRANCH

 

 

	
            By:/s/Tu Hong
 	
             

	
             
	
            Name: Tu Hong
 	
             

	
             
	
            Title:  General Manager
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Bank Of Communications, New York Branch 

One Exchange Plaza

55 Broadway, 31st Floor

New York, New York 10006-3008

Attn: Richard Thornhill

	
            Telephone: 
 	
            (212) 376-8030. Ext. 120
 
	
            Telecopy:
 	
            (212) 376-8089
 	
             

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

CITIZENS BANK OF MASSACHUSETTS

 

 

	
            By:/s/Daniel R. Ouellette
 	
             

	
             
	
            Name: Daniel R. Ouellette
 	
             

	
             
	
            Title:  Senior Vice President
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Citizens Bank of Massachusetts

28 State Street

Boston, Massachusetts 02109

Attn: Daniel Ouellette

	
            Telephone: 
 	
            (617) 725-5602
 
	
            Telecopy:
 	
            (617) 725-5695
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

COMERICA BANK

 

 

	
            By:/s/Jessica L. Kempf
 	
             

	
             
	
            Name: Jessica L. Kempf
 	
             

	
             
	
            Title:  Assistant Vice President
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Comerica Bank

500 Woodward Avenue, 7th Floor

Detroit, Michigan 48226-3256

Attn: Jessica Kempf

	
            Telephone: 
 	
            (313) 222-6140
 
	
            Telecopy:
 	
            (313) 222-9295
 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

THE FARMERS BANK OF CHINA, LOS ANGELES BRANCH

 

 

	
            By:/s/Henry Ho
 	
             

	
             
	
            Name: Henry Ho
 	
             

	
             
	
            Title:  Vice President & General Manager
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

The Farmers Bank Of China, Los Angeles Branch

601 South Figueroa Street, Suite 3500

Los Angeles, California 90017

Attn: Irene Chen

	
            Telephone: 
 	
            (213) 489-5433
 
	
            Telecopy:
 	
            (213) 489-5195
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

FIRST HAWAIIAN BANK

 

 

	
            By:/s/Charles L. Jenkins
 	
             

	
             
	
            Name: Charles L. Jenkins
 	
             

	
             
	
            Title:  Senior Vice President
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

First Hawaiian Bank

999 Bishop Street, 11th Floor

Honolulu, Hawaii 96813

Attn: Charles L. Jenkins

	
            Telephone: 
 	
            (808) 525-6289
 
	
            Telecopy:
 	
            (808) 525-6372
 

 

 

 

 

 

 

 

 

 

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[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

TAIPEI FUBON COMMERCIAL BANK CO. LTD., LOS ANGELES BRANCH

 

 

	
            By:/s/Herbert Y.H. Lai
 	
             

	
             
	
            Name: Herbert Y.H. Lai
 	
             

	
             
	
            Title:  Senior Vice President &
 
	
             
	
            General Manager
 	
             

						

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

Taipei Fubon Commercial Bank Co. Ltd., 

Los Angeles Branch

700 South Flower Street, Suite 3300

Los Angeles, California 90017

Attn: Pinkie Chen, AVP & Loan Officer

	
            Telephone: 
 	
            (213) 225-8882
 
	
            Telecopy:
 	
            (213) 236-9155
 

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

FIRST COMMERCIAL BANK, NEW YORK AGENCY

 

 

	
            By:/s/Bruce M.J. Ju
 	
             

	
             
	
            Name: Bruce M.J. Ju
 	
             

	
             
	
            Title:  Vice President & General Manager
 
				

 

Commitment Amount:

 

$10,000,000

 

Lending Office (all Types of Loans):

 

First Commercial Bank, New York Agency

750 Third Avenue, 34th Floor

New York, New York 10017

Attn: Julie Yang

	
            Telephone: 
 	
            (212) 599-6868, ext. 214
 
	
            Telecopy:
 	
            (212) 599-6133
 	
             

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

HUA NAN COMMERCIAL BANK, LTD. 

LOS ANGELES BRANCH

 

 

	
            By:/s/Autumn Kung
 	
             

	
             
	
            Name: Autumn Kung
 	
             

	
             
	
            Title:  Assistant General Manager
 
				

 

Commitment Amount:

 

$5,000,000

 

Lending Office (all Types of Loans):

 

Hua Nan Commercial Bank, Ltd. 

Los Angeles Branch

707 Wilshire Boulevard, #3100

Los Angeles, California 90017

Attn: Howard Hung, Senior Manager

	
            Telephone: 
 	
            (213) 362-6666, Ext. 233
 
	
            Telecopy:
 	
            (213) 362-6617
 	
             

 

 

 

 

 

 

 

 

 

[Signatures Continued on Next Page]

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement dated as of

May 23, 2005 with Hospitality Properties Trust]

 

HUA NAN COMMERCIAL BANK, LTD. 

NEW YORK AGENCY

 

 

	
            By:/s/Jenq-Fang Geeng
 	
             

	
             
	
            Name: Jenq-Fang Geeng
 
	
             
	
            Title:  General Manager
 	
             

				

 

Commitment Amount:

 

$5,000,000

 

Lending Office (all Types of Loans):

 

Hua Nan Commercial Bank, Ltd. 

New York Agency

330 Madison Avenue, 38th Floor

New York, New York 10017

Attn: Frank Tang

	
            Telephone: 
 	
            (212) 286-1999, Ext. 111
 
	
            Telecopy:
 	
            (212) 286-1212
 	
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 1.1.(a)

 

Applicable Margin

 

 

	
             

Level
 	
            Borrower’s Credit Rating

(S&P/Moody’s (other))
 	
            Applicable Margin for LIBOR Loans
 	
            Applicable Margin for Base Rate Loans
 
	
            1
 	
            BBB+/Baa1 (or equivalent)
 	
            0.50%
 	
            0.0%
 
	
            2
 	
            BBB/Baa2 (or equivalent)
 	
            0.65%
 	
            0.0%
 
	
            3
 	
            BBB-/Baa3 (or equivalent)
 	
            0.80%
 	
            0.15%
 
	
            4
 	
            ‹BBB-/Baa3 (or equivalent)
 	
            1.20%
 	
            0.50 %
 

 

 

 

 

 

 

 

SCHEDULE 1.1.(b)

 

Facility Fee

 

 

	
            Level
 	
            Facility Fee
 
	
            1
 	
            0.15%
 
	
            2
 	
            0.20%
 
	
            3
 	
            0.20%
 
	
            4
 	
            0.25%
 

 

 

 

 

 

 

SCHEDULE 1.1(c)

 

List of Loan Parties

 

Borrower

Hospitality Properties Trust (Maryland)

 

Guarantors  

	
            HH HPT Suite Properties LLC (Delaware)
 	
             
 
	
            HH HPTCW II Properties LLC (Delaware)
 	
             
 
	
            HH HPTCY Properties LLC (Delaware)
 	
             
 
	
            HH HPTMI III Properties LLC (Delaware)
 	
             
 
	
            HH HPTRI Properties LLC (Delaware)
 	
             
 
	
            HH HPTWN Properties LLC (Delaware)
 	
             
 
	
            HPT CW Properties Trust (Maryland)
 	
             
 
	
            HPT HSD Properties Trust (Maryland)
 	
             
 
	
            HPT IHG Canada Properties Trust (Delaware)
 	
             
 
	
            HPT IHG GA Properties LLC (Maryland)
 	
             
 
	
            HPT IHG PR, Inc. (Puerto Rico)
 	
             
 
	
            HPT IHG Properties Trust (Maryland)
 	
             
 
	
            HPT IHG-2 Properties Trust (Maryland)
 	
             
 
	
            HPTLA Properties Trust (Maryland)
 	
             
 
	
            HPT Smokey Mountain LLC (Delaware)
 	
             
 
	
            HPT Suite Properties Trust (Maryland)
 	
             
 
	
            HPTCY Properties Trust (Maryland)
 	
             
 
	
            HPTMI Hawaii, Inc. (Delaware)
 	
             
 
	
            HPTMI II Properties Trust (Maryland)
 	
             
 
	
            HPTMI Properties Trust (Maryland)
 	
             
 
	
            HPTRI Properties Trust (Maryland)
 	
             
 
	
            HPTSHC Properties Trust (Maryland)
 	
             
 
	
            HPTSY Properties Trust (Maryland)
 	
             
 
	
            HPTWN Properties Trust (Maryland)
 	
             
 

 

 

 

 

 

The following schedules have been omitted and will be supplementally furnished to the Securities and Exchange Commission upon request:

 

	
            SCHEDULE 6.1.(b)  
 	
            Ownership Structure
 	
             

	
            SCHEDULE 6.1.(f)  
 	
            Title to Properties; Liens
 	
             

	
            SCHEDULE 6.1.(g)  
 	
            Indebtedness and Guaranties
 	
             

	
            SCHEDULE 6.1.(h)  
 	
            Material Contracts
 	
             

	
            SCHEDULE 6.1.(i)  
 	
            Litigation
 	
             

	
            SCHEDULE 6.1.(k)  
 	
            Financial Statements
 	
             

	
            SCHEDULE 6.1.(y)  
 	
            List of Unencumbered Assets and Unencumbered Mortgage Notes
 
												

 

 

 

 

 

 

 

 EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of ___________, 200_ (the “Agreement”) by and among _________________________ (the “Assignor”), _________________________ (the “Assignee”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”).

 

WHEREAS, the Assignor is a Lender under that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties thereto;

 

WHEREAS, the Assignor desires to assign to the Assignee, among other things, all or a portion of the Assignor’s Commitment under the Credit Agreement, all on the terms and conditions set forth herein; and

 

WHEREAS, the Agent consents to such assignment on the terms and conditions set forth herein;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

Section 1.  Assignment.  

 

(a)        Subject to the terms and conditions of this Agreement and in consideration of the payment to be made by the Assignee to the Assignor pursuant to Section 2 of this Agreement, effective as of ____________, 200_ (the “Assignment Date”), the Assignor hereby irrevocably sells, transfers and assigns to the Assignee, without recourse, a $__________ interest (such interest being the “Assigned Commitment”) in and to the Assignor’s Commitment and all of the other rights and obligations of the Assignor under the Credit Agreement, such Assignor’s Revolving Note and the other Loan Documents (representing ______% in respect of the aggregate amount of all Lenders’ Commitments), including without limitation, a principal amount of outstanding Revolving Loans equal to $_________ and all voting rights of the Assignor
associated with the Assigned Commitment, all rights to receive interest on such amount of Revolving Loans and all commitment and other Fees with respect to the Assigned Commitment and other rights of the Assignor under the Credit Agreement and the other Loan Documents with respect to the Assigned Commitment, all as if the Assignee were an original Lender under and signatory to the Credit Agreement having a Commitment equal to the amount of the Assigned Commitment.  The Assignee, subject to the terms and conditions hereof, hereby assumes all obligations of the Assignor with respect to the Assigned Commitment as if the Assignee were an original Lender under and signatory to the Credit Agreement having a Commitment equal to the Assigned Commitment, which obligations shall include, but shall not 

 

A-1

 

 

be limited to, the obligation of the Assignor to make Revolving Loans to the Borrower with respect to the Assigned Commitment, the obligation to pay the Agent amounts due in respect of draws under Letters of Credit as required under Section 2.3. of the Credit Agreement and the obligation to indemnify the Agent as provided therein (the foregoing enumerated obligations, together with all other similar obligations more particularly set forth in the Credit Agreement and the other Loan Documents, shall be referred to hereinafter, collectively, as the “Assigned Obligations”).  The Assignor shall have no further duties or obligations with respect to, and shall have no further interest in, the Assigned Obligations or the Assigned Commitment from and after the Assignment Date.

 

(b)               The assignment by the Assignor to the Assignee hereunder is without recourse to the Assignor.  The Assignee makes and confirms to the Agent, the Assignor, and the other Lenders all of the representations, warranties and covenants of a Lender under Article XI. of the Credit Agreement.  Not in limitation of the foregoing, the Assignee acknowledges and agrees that, except as set forth in Section 4 below, the Assignor is making no representations or warranties with respect to, and the Assignee hereby releases and discharges the Assignor for any responsibility or liability for: (i) the present or future solvency or financial condition of the Borrower, any Subsidiary or any other Loan Party, (ii) any representations, warranties, statements or
information made or furnished by the Borrower, any Subsidiary or any other Loan Party in connection with the Credit Agreement or otherwise, (iii) the validity, efficacy, sufficiency, or enforceability of the Credit Agreement, any other Loan Document or any other document or instrument executed in connection therewith, or the collectibility of the Assigned Obligations, (iv) the perfection, priority or validity of any Lien with respect to any collateral at any time securing the Obligations or the Assigned Obligations under the Notes or the Credit Agreement and (v) the performance or failure to perform by the Borrower or any other Loan Party of any obligation under the Credit Agreement or any other Loan Document to which it is a party.  Further, the Assignee acknowledges that it has, independently and without reliance upon the Agent, or on any affiliate or subsidiary thereof, the Assignor or any other Lender and based on the financial statements supplied by the Borrower
and such other documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to become a Lender under the Credit Agreement.  The Assignee also acknowledges that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other Loan Documents or pursuant to any other obligation.  Except as expressly provided in the Credit Agreement, the Agent shall have no duty or responsibility whatsoever, either initially or on a continuing basis, to provide the Assignee with any credit or other information with respect to the Borrower or any other Loan Party or to notify the Assignee of any Default or Event of Default.  The Assignee has not relied on the Agent as to any legal or factual matter in connection therewith or in
connection with the transactions contemplated thereunder.

 

Section 2.  Payment by Assignee.  In consideration of the assignment made pursuant to Section 1 of this Agreement, the Assignee agrees to pay to the Assignor on the Assignment Date, such amount as they may agree.

 

 

A-2

 

 

 

Section 3.  Payments by Assignor.  The Assignor agrees to pay to the Agent on the Assignment Date the administration fee, if any, payable under the applicable provisions of the Credit Agreement.

 

Section 4.  Representations and Warranties of Assignor.  The Assignor hereby represents and warrants to the Assignee that (a) as of the Assignment Date (i) the Assignor is a Lender under the Credit Agreement having a Commitment under the Credit Agreement (without reduction by any assignments thereof which have not yet become effective), equal to $____________ and that the Assignor is not in default of its obligations under the Credit Agreement; and (ii) the outstanding balance of Revolving Loans owing to the Assignor (without reduction by any assignments thereof which have not yet become effective) is $____________; and (b) it is the legal and beneficial owner of the Assigned Commitment which is free and clear of any adverse claim created by the Assignor.

 

Section 5.  Representations, Warranties and Agreements of Assignee.  The Assignee (a) represents and warrants that it is (i) legally authorized to enter into this Agreement, (ii) an “accredited investor” (as such term is used in Regulation D of the Securities Act) and (iii) an Eligible Assignee; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered in connection therewith or pursuant thereto and such other documents and information (including without limitation the Loan Documents) as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (c) appoints and authorizes the Agent to take such action as contractual representative on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof together with such powers as are reasonably incidental thereto; and (d) agrees that, if not already a Lender and to the extent of the Assigned Commitment, it will become a party to and shall be bound by the Credit Agreement and the other Loan Documents to which the other Lenders are a party on the Assignment Date and will perform in accordance therewith all of the obligations which are required to be performed by it as a Lender with respect to the Assigned Commitment.

 

Section 6.  Recording and Acknowledgment by the Agent.  Following the execution of this Agreement, the Assignor will deliver to the Agent (a) a duly executed copy of this Agreement for acknowledgment and recording by the Agent and (b) the Assignor’s Revolving Note.  Upon such acknowledgment and recording, from and after the Assignment Date, the Agent shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, Fees and other amounts) to the Assignee.  The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Assignment Date directly between themselves.

 

Section 7.  Addresses.  The Assignee specifies as its address for notices and its Lending Office for all Loans, the offices set forth on Schedule 1 attached hereto.

 

Section 8.  Payment Instructions.  All payments to be made to the Assignee under this Agreement by the Assignor, and all payments to be made to the Assignee under the Credit Agreement, shall be made as provided in the Credit Agreement in accordance with the following 

 

A-3

 

 

instructions set forth on Schedule 1 attached hereto or as the Assignee may otherwise notify the Agent.

 

Section 9.  Effectiveness of Assignment.  This Agreement, and the assignment and assumption contemplated herein, shall not be effective until (a) this Agreement is executed and delivered by each of the Assignor, the Assignee, the Agent, and if required under Section 12.5.(d) of the Credit Agreement, the Borrower, and (b) the payment to the Assignor of the amounts, if any, owing by the Assignee pursuant to Section 2 hereof and (c) the payment to the Agent of the amounts, if any, owing by the Assignor pursuant to Section 3 hereof.  Upon recording and acknowledgment of this Agreement by the Agent, from and after the Assignment Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Agreement, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Agreement, relinquish its rights (except as otherwise provided in Section 12.10. of the Credit Agreement) and be released from its obligations under the Credit Agreement; provided, however, that if the Assignor does not assign its entire interest under the Loan Documents, it shall remain a Lender entitled to all of the benefits and subject to all of the obligations thereunder with respect to its Commitment.

 

Section 10.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 11.  Counterparts.  This Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.

 

Section 12.  Headings.  Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.

 

Section 13.  Amendments; Waivers.  This Agreement may not be amended, changed, waived or modified except by a writing executed by the Assignee and the Assignor; provided, however, any amendment, waiver or consent which shall affect the rights or duties of the Agent under this Agreement shall not be effective unless signed by the Agent.

 

Section 14.  Entire Agreement.  This Agreement embodies the entire agreement between the Assignor and the Assignee with respect to the subject matter hereof and supersedes all other prior arrangements and understandings relating to the subject matter hereof.

 

Section 15.  Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

Section 16.  Definitions.  Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.

 

 

A-4

 

 

 

[Include this Section only if Borrower’s consent is required under Section 12.5.(d) Section 17.  Agreements of the Borrower.  The Borrower hereby agrees that the Assignee shall be a Lender under the Credit Agreement having a Commitment equal to the Assigned Commitment.  The Borrower agrees that the Assignee shall have all of the rights and remedies of a Lender under the Credit Agreement and the other Loan Documents as if the Assignee were an original Lender under and signatory to the Credit Agreement, including, but not limited to, the right of a Lender to receive payments of principal and interest with respect to the Assigned Obligations, and to the Revolving Loans made by the Lenders after the date hereof and to receive the commitment and other Fees
payable to the Lenders as provided in the Credit Agreement.  Further, the Assignee shall be entitled to the indemnification provisions from the Borrower in favor of the Lenders as provided in the Credit Agreement and the other Loan Documents.  The Borrower further agrees, upon the execution and delivery of this Agreement, to execute in favor of the Assignee, and if applicable the Assignor Notes as required by Section 12.5.(d) of the Credit Agreement.  Upon receipt by the Assignor of the amounts due the Assignor under Section 2, the Assignor agrees to surrender to the Borrower such Assignor’s Notes.]

 

[Signatures on Following Pages]

 

A-5

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and Acceptance Agreement as of the date and year first written above.

 

ASSIGNOR:

 

[NAME OF ASSIGNOR]

 

By: __________________________

	
            Name:______________________
 
	
            Title:_______________________
 

 

 

ASSIGNEE:

 

[NAME OF ASSIGNEE]

 

By: __________________________

	
            Name:______________________
 
	
            Title:_______________________
 

 

[Include signature of the Borrower only if required under Section 12.5.(d) of the Credit Agreement]

Agreed and consented to as of the

date first written above.

 

BORROWER:

 

HOSPITALITY PROPERTIES TRUST

 

By: __________________________

	
            Name:______________________
 
	
            Title:_______________________
 

 

 

[Signatures Continued on Following Page]

 

A-6

 

 

 

Accepted as of the date first written above.

 

AGENT:

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

 

By: __________________________

	
            Name:______________________
 
	
            Title:_______________________
 

 

 

 

A-7

 

 

 

SCHEDULE 1

 

Information Concerning the Assignee

 

	
            Notice Address:
 	
            ________________________
 

________________________

________________________

Telephone No.:____________

Telecopy No.:_____________

 

[Signatures Continued on Following Page]

 

A-8

 

 

 

Accepted as of the date first written above.

 

	
            Lending Office
 	
            ________________________
 

________________________

________________________

Telephone No.:____________

Telecopy No.:_____________

 

AGENT:

 

	
            Payment Instructions: 
 

 

 

WACHOVIA BANK, NATIONAL

	
            ASSOCIATION, as Agent
 

 

 

 

	
            By:
 	
             

	
             
	
            Name:
 
	
             
	
            Title: 
 	
             

				

 

 

A-9

 

 

 

EXHIBIT B

 

FORM OF GUARANTY

 

THIS GUARANTY dated as of May __, 2005, executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders under that certain that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the
“Lenders”), the Agent, and the other parties thereto, and (b) the Lenders and the Swingline Lender.

 

WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and the Swingline Lender have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, the Borrower owns, directly or indirectly, at least a majority of the issued and outstanding Equity Interests in each Guarantor;

 

WHEREAS, the Borrower and each of the Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Agent, the Lenders and the Swingline Lender through their collective efforts;

 

WHEREAS, each Guarantor acknowledges that it will receive direct and indirect benefits from the Agent, the Lenders and the Swingline Lender making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, each Guarantor is willing to guarantee the Borrower’s obligations to the Agent, the Lenders and the Swingline Lender on the terms and conditions contained herein; and

 

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition to the Agent and the Lenders making, and continuing to make, such financial accommodations to the Borrower.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor agrees as follows:

 

Section 1.  Guaranty.  Each Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (collectively referred to as the “Guarantied Obligations”): (a) all indebtedness and obligations owing by the Borrower to any Lender, the 

 

B-1

 

 

Swingline Lender or the Agent under or in connection with the Credit Agreement and any other Loan Document, including without limitation, the repayment of all principal of the Revolving Loans, Swingline Loans and the Reimbursement Obligations, and the payment of all interest, Fees, charges, attorneys’ fees and other amounts payable to any Lender or the Agent thereunder or in connection therewith; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; (c) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by the Lenders and the Agent in the enforcement of any of the foregoing or any obligation of such Guarantor hereunder; and (d) all other Obligations.

 

Section 2.  Guaranty of Payment and Not of Collection.  This Guaranty is a guaranty of payment, and not of collection, and a debt of each Guarantor for its own account.  Accordingly, none of the Lenders, the Swingline Lender or the Agent shall be obligated or required before enforcing this Guaranty against any Guarantor: (a)  to pursue any right or remedy any of them may have against the Borrower, any other Guarantor or any other Person or commence any suit or other proceeding against the Borrower, any other Guarantor or any other Person in any court or other tribunal; (b) to make any claim in a liquidation or bankruptcy of the Borrower, any other Guarantor or any other Person; or (c) to make demand of the Borrower, any other Guarantor or any other Person or to enforce or seek to enforce or realize upon any collateral
security held by the Lenders, the Swingline Lender or the Agent which may secure any of the Guarantied Obligations.  

 

Section 3.  Guaranty Absolute.  Each Guarantor guarantees that the Guarantied Obligations will be paid strictly in accordance with the terms of the documents evidencing the same, regardless of any Applicable Law now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Agent, the Lenders or the Swingline Lender with respect thereto.  The liability of each Guarantor under this Guaranty shall be absolute, irrevocable and unconditional in accordance with its terms and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including without limitation, the following (whether or not such Guarantor consents thereto or has notice thereof):

 

(a)               (i) any change in the amount, interest rate or due date or other term of any of the Guarantied Obligations, (ii) any change in the time, place or manner of payment of all or any portion of the Guarantied Obligations, (iii) any amendment or waiver of, or consent to the departure from or other indulgence with respect to, the Credit Agreement, any other Loan Document, or any other document or instrument evidencing or relating to any Guarantied Obligations, or (iv) any waiver, renewal, extension, addition, or supplement to, or deletion from, or any other action or inaction under or in respect of, the Credit Agreement, any of the other Loan Documents, or any other documents, instruments or agreements relating to the Guarantied Obligations or
any other instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;

 

 

B-2

 

 

 

(b)               any lack of validity or enforceability of the Credit Agreement, any of the other Loan Documents, or any other document, instrument or agreement referred to therein or evidencing any Guarantied Obligations or any assignment or transfer of any of the foregoing;

 

(c)               any furnishing to the Agent, the Lenders or the Swingline Lender of any security for the Guarantied Obligations, or any sale, exchange, release or surrender of, or realization on, any collateral securing any of the Obligations;

 

(d)               any settlement or compromise of any of the Guarantied Obligations, any security therefor, or any liability of any other party with respect to the Guarantied Obligations, or any subordination of the payment of the Guarantied Obligations to the payment of any other liability of the Borrower or any other Loan Party;

 

(e)               any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Guarantor, the Borrower, any other Loan Party or any other Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding;

 

(f)                any act or failure to act by the Borrower, any other Loan Party or any other Person which may adversely affect such Guarantor’s subrogation rights, if any, against the Borrower to recover payments made under this Guaranty;

 

(g)               any nonperfection or impairment of any security interest or other Lien on any collateral, if any, securing in any way any of the Obligations;

 

(h)               any application of sums paid by the Borrower, any other Guarantor or any other Person with respect to the liabilities of the Borrower to the Agent, the Lenders or the Swingline Lender, regardless of what liabilities of the Borrower remain unpaid;

 

(i)                any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the exercise thereof; or

 

(j)                any other circumstance which might otherwise constitute a defense available to, or a discharge of, a Guarantor hereunder (other than indefeasible payment in full).  

 

Section 4.  Action with Respect to Guarantied Obligations.  The Lenders and the Agent may, at any time and from time to time, without the consent of, or notice to, any Guarantor, and without discharging any Guarantor from its obligations hereunder, take any and all actions described in Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of any of the Guarantied Obligations, including, but not limited to, extending or shortening the time of payment of any of the Guarantied Obligations or changing the interest rate that may accrue on any of the Guarantied Obligations; (b) amend, modify, alter or supplement the Credit Agreement or any other Loan Document; (c) sell, exchange, release or otherwise deal with all, or any part, of any collateral securing any of the Obligations; (d) release any
other Loan Party or other Person liable in any manner for the payment or collection of the Guarantied Obligations; (e) exercise, or 

 

B-3

 

 

refrain from exercising, any rights against the Borrower, any other Guarantor or any other Person; and (f) apply any sum, by whomsoever paid or however realized, to the Guarantied Obligations in such order as the Lenders shall elect.

 

Section 5.  Representations and Warranties.  Each Guarantor hereby makes to the Agent, the Lenders and the Swingline Lender all of the representations and warranties made by the Borrower with respect to or in any way relating to such Guarantor in the Credit Agreement and the other Loan Documents, as if the same were set forth herein in full.  

 

Section 6.  Covenants.  Each Guarantor will comply with all covenants which the Borrower is to cause such Guarantor to comply with under the terms of the Credit Agreement or any of the other Loan Documents.

 

Section 7.  Waiver.  Each Guarantor, to the fullest extent permitted by Applicable Law, hereby waives notice of acceptance hereof or any presentment, demand, protest or notice of any kind, and any other act or thing, or omission or delay to do any other act or thing, which in any manner or to any extent might vary the risk of such Guarantor or which otherwise might operate to discharge such Guarantor from its obligations hereunder.

 

Section 8.  Inability to Accelerate Loan.  If the Agent, the Swingline Lender and/or the Lenders are prevented under Applicable Law or otherwise from demanding or accelerating payment of any of the Guarantied Obligations by reason of any automatic stay or otherwise, the Agent, the Swingline Lender and/or the Lenders shall be entitled to receive from each Guarantor, upon demand therefor, the sums which otherwise would have been due had such demand or acceleration occurred.

 

Section 9.  Reinstatement of Guarantied Obligations.  If claim is ever made on the Agent, any Lender or the Swingline Lender for repayment or recovery of any amount or amounts received in payment or on account of any of the Guarantied Obligations, and the Agent, such Lender or the Swingline Lender repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body of competent jurisdiction, or (b) any settlement or compromise of any such claim effected by the Agent, such Lender or the Swingline Lender with any such claimant (including the Borrower or a trustee in bankruptcy for the Borrower), then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding on it, notwithstanding any revocation hereof, any release
herefrom, or the cancellation of the Credit Agreement, any of the other Loan Documents, or any other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the Agent, such Lender or the Swingline Lender for the amounts so repaid or recovered to the same extent as if such amount had never originally been paid to the Agent, such Lender or the Swingline Lender.

 

Section 10.  Subrogation.  Upon the making by any Guarantor of any payment hereunder for the account of the Borrower, such Guarantor shall be subrogated to the rights of the payee against the Borrower; provided, however, that such Guarantor shall not enforce any right or receive any payment by way of subrogation or otherwise take any action in respect of any other 

 

B-4

 

 

claim or cause of action such Guarantor may have against the Borrower arising by reason of any payment or performance by such Guarantor pursuant to this Guaranty, unless and until all of the Guarantied Obligations have been indefeasibly paid and performed in full.  If any amount shall be paid to such Guarantor on account of or in respect of such subrogation rights or other claims or causes of action, such Guarantor shall hold such amount in trust for the benefit of the Agent, the Lenders and the Swingline Lender and shall forthwith pay such amount to the Agent to be credited and applied against the Guarantied Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement or to be held by the Agent as collateral security for any Guarantied Obligations existing.

 

Section 11.  Payments Free and Clear.  All sums payable by each Guarantor hereunder, whether of principal, interest, Fees, expenses, premiums or otherwise, shall be paid in full, without set-off or counterclaim or any deduction or withholding whatsoever (including any Taxes), and if any Guarantor is required by Applicable Law or by a Governmental Authority to make any such deduction or withholding, such Guarantor shall pay to the Agent, the Lenders and the Swingline Lender such additional amount as will result in the receipt by the Agent, the Lenders and the Swingline Lender of the full amount payable hereunder had such deduction or withholding not occurred or been required.

 

Section 12.  Set-off.  In addition to any rights now or hereafter granted under any of the other Loan Documents or Applicable Law and not by way of limitation of any such rights, each Guarantor hereby authorizes the Agent and each Lender, at any time during the continuance of an Event of Default, without any prior notice to such Guarantor or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender subject to receipt of the prior written consent of the Agent exercised in its sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Agent, such Lender, or any affiliate of the Agent or such
Lender, to or for the credit or the account of such Guarantor against and on account of any of the Guarantied Obligations, although such obligations shall be contingent or unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable Law, that any Participant may exercise rights of setoff or counterclaim and other rights with respect to its participation as fully as if such Participant were a direct creditor of such Guarantor in the amount of such participation.

 

Section 13.  Subordination.  Each Guarantor hereby expressly covenants and agrees for the benefit of the Agent, the Lenders and the Swingline Lender that all obligations and liabilities of the Borrower to such Guarantor of whatever description, including without limitation, all intercompany receivables of such Guarantor from the Borrower (collectively, the “Junior Claims”) shall be subordinate and junior in right of payment to all Guarantied Obligations.  If an Event of Default shall have occurred and be continuing, then no Guarantor shall accept any direct or indirect payment (in cash, property or securities, by setoff or otherwise) from the Borrower on account of or in any manner in respect of any Junior Claim until all of the Guarantied Obligations have been indefeasibly paid in full.

 

 

B-5

 

 

 

Section 14.  Avoidance Provisions.  It is the intent of each Guarantor, the Agent, the Lenders and the Swingline Lender that in any Proceeding, such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Agent, the Lenders and the Swingline Lender) to be avoidable or unenforceable against such Guarantor in such Proceeding as a result of Applicable Law, including without limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise.  The
Applicable Laws under which the possible avoidance or unenforceability of the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Agent, the Lenders and the Swingline Lender) shall be determined in any such Proceeding are referred to as the “Avoidance Provisions”.  Accordingly, to the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Guarantied Obligations for which such Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any of the Guarantied Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of such Guarantor hereunder (or any other obligations of such Guarantor to the Agent, the Lenders and the Swingline Lender), to be subject to avoidance under the Avoidance Provisions.  This Section is intended solely to preserve the rights of the Agent, the Lenders
and the Swingline Lender hereunder to the maximum extent that would not cause the obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and no Guarantor or any other Person shall have any right or claim under this Section as against the Agent, the Lenders and the Swingline Lender that would not otherwise be available to such Person under the Avoidance Provisions.

 

Section 15.  Information.  Each Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower and the other Guarantors, and of all other circumstances bearing upon the risk of nonpayment of any of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Agent, the Lenders or the Swingline Lender shall have any duty whatsoever to advise any Guarantor of information regarding such circumstances or risks.

 

Section 16.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

	
            Section 17.  Waiver of jury trial.
 

 

(a)               EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.  ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE 

 

B-6

 

 

LENDERS, THE AGENT AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.

 

(b)               EACH OF THE GUARANTORS, THE AGENT AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT LOCATED IN NEW YORK, NEW YORK, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM.  EACH GUARANTOR AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES.  EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

(c)               THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS GUARANTY.

 
 

Section 18.  Loan Accounts.  The Agent, each Lender and the Swingline Lender may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and payable with respect to the Guarantied Obligations, and in the case of any dispute relating to any of the outstanding amount, payment or receipt of any of the Guarantied Obligations or otherwise, the entries in such books and accounts shall be deemed prima facie evidence of the amounts and other matters set forth herein.  The failure of the Agent, any Lender or the Swingline Lender to maintain such books and accounts shall not in any way relieve or discharge any Guarantor of any of its obligations hereunder.

 

 

B-7

 

 

 

Section 19.  Waiver of Remedies.  No delay or failure on the part of the Agent, any Lender or the Swingline Lender in the exercise of any right or remedy it may have against any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Agent, any Lender or the Swingline Lender of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other such right or remedy.

 

Section 20.  Termination.  This Guaranty shall remain in full force and effect until indefeasible payment in full of the Guarantied Obligations and the other Obligations and the termination or cancellation of the Credit Agreement in accordance with its terms.

 

Section 21.  Successors and Assigns.  Each reference herein to the Agent or the Lenders shall be deemed to include such Person’s respective successors and assigns (including, but not limited to, any holder of the Guarantied Obligations) in whose favor the provisions of this Guaranty also shall inure, and each reference herein to each Guarantor shall be deemed to include such Guarantor’s successors and assigns, upon whom this Guaranty also shall be binding.  The Lenders and the Swingline Lender may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell any Guarantied Obligation, or grant or sell participations in any Guarantied Obligations, to any Person without the consent of, or notice to, any Guarantor and without releasing, discharging or modifying any Guarantor’s obligations
hereunder.  Each Guarantor hereby consents to the delivery by the Agent or any Lender to any Assignee or Participant (or any prospective Assignee or Participant) of any financial or other information regarding the Borrower or any Guarantor.  No Guarantor may assign or transfer its rights or obligations hereunder to any Person without the prior written consent of all Lenders and any such assignment or other transfer to which all of the Lenders have not so consented shall be null and void.

 

Section 22.  JOINT AND SEVERAL OBLIGATIONS.  THE OBLIGATIONS OF THE GUARANTORS HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.

 

Section 23.  Amendments.  This Guaranty may not be amended except in writing signed by the Requisite Lenders (or all of the Lenders if required under the terms of the Credit Agreement), the Agent and each Guarantor.

 

Section 24.  Payments.  All payments to be made by any Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Agent at the Principal Office, not later than 2:00 p.m. on the date of demand therefor.  

 

Section 25.  Notices.  All notices, requests and other communications hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given (a) to each Guarantor at its address set forth below its signature hereto, (b) to the Agent, any Lender or the Swingline Lender at its respective address for notices provided for in the Credit Agreement, or (c) as to each such party at such other address as such party shall designate in a written notice to 

 

B-8

 

 

the other parties.  Each such notice, request or other communication shall be effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand delivered, when delivered; provided, however, that any notice of a change of address for notices shall not be effective until received.

 

Section 26.  Severability.  In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 27.  Headings.  Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.

 

	
            Section 28.  Trustees, Etc. Not Liable.  
 

 

IN THE CASE OF ANY GUARANTOR THAT IS A TRUST, NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SUCH GUARANTOR SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SUCH GUARANTOR.  ALL PERSONS DEALING WITH SUCH GUARANTOR, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF SUCH GUARANTOR FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION OWING BY SUCH GUARANTOR HEREUNDER. THE PROVISIONS OF THIS SECTION SHALL NOT LIMIT ANY OBLIGATIONS OF ANY LOAN PARTY.

 

	
            Section 29.  Limitation of Liability.
 

 

Neither the Agent nor any Lender, nor any affiliate, officer, director, employee, attorney, or agent of the Agent or any Lender, shall have any liability with respect to, and each Guarantor hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by a Guarantor in connection with, arising out of, or in any way related to, this Guaranty or any of the other Loan Documents, or any of the transactions contemplated by this Guaranty, the Credit Agreement or any of the other Loan Documents.  Each Guarantor hereby waives, releases, and agrees not to sue the Agent or any Lender or any of the Agent’s or any Lender’s affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to,
this Guaranty, the Credit Agreement or any of the other Loan Documents, or any of the transactions contemplated by Credit Agreement or financed thereby.

 

	
            Section 30.  Definitions.  (a) For the purposes of this Guaranty:
 

 

“Proceeding” means any of the following: (i) a voluntary or involuntary case concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property of any Guarantor; (iii) any other proceeding under any Applicable Law, domestic or foreign, relating to bankruptcy, 

 

B-9

 

 

insolvency, reorganization, winding-up or composition for adjustment of debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by any Guarantor for
the purpose of effecting any of the foregoing.

 

(b)               Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.  

 

[Signature on Next Page]

 

B-10

 

 

 

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

 

[signed by Guarantors]

 

 

 

B-11

 

 

 

ANNEX I

 

FORM OF ACCESSION AGREEMENT

 

THIS ACCESSION AGREEMENT dated as of ____________, ____, executed and delivered by ______________________, a _____________ (the “New Subsidiary”), in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders under that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties thereto, and (b) the Lenders and the Swingline Lender.

 

WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and the Swingline Lender have agreed to make available to the Borrower certain financial accommodations on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, the Borrower owns, directly or indirectly, at least a majority of the issued and outstanding Equity Interests in the New Subsidiary;

 

WHEREAS, the Borrower, the New Subsidiary, and the existing Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Agent, the Lenders and the Swingline Lender through their collective efforts;

 

WHEREAS, the New Subsidiary acknowledges that it will receive direct and indirect benefits from the Agent, the Lenders and the Swingline Lender making such financial accommodations available to the Borrower under the Credit Agreement and, accordingly, the New Subsidiary is willing to guarantee the Borrower’s obligations to the Agent, the Lenders and the Swingline Lender on the terms and conditions contained herein; and

 

WHEREAS, the New Subsidiary’s execution and delivery of this Agreement is a condition to the Agent, the Lenders and the Swingline Lender continuing to make such financial accommodations to the Borrower.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the New Subsidiary, the New Subsidiary agrees as follows:

 

Section 1.  Accession to Guaranty.  The New Subsidiary hereby agrees that it is a “Guarantor” under that certain Guaranty dated as of May __, 2005 (as amended, supplemented, restated or otherwise modified from time to time, the “Guaranty”), made by each Subsidiary of the Borrower a party thereto in favor of the Agent, the Lenders and the Swingline Lender and assumes all obligations of a “Guarantor” thereunder, all as if the New Subsidiary had been an 

 

B-12

 

 

original signatory to the Guaranty.  Without limiting the generality of the foregoing, the New Subsidiary hereby:

 

(a)               irrevocably and unconditionally guarantees the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all Guarantied Obligations (as defined in the Guaranty);

 

(b)               makes to the Agent, the Lenders and the Swingline Lender as of the date hereof each of the representations and warranties contained in Section 5 of the Guaranty and agrees to be bound by each of the covenants contained in Section 6 of the Guaranty; and

 

	
            (c)
 	
            consents and agrees to each provision set forth in the Guaranty.
 

 

SECTION 2.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 3.  Definitions.  Capitalized terms used herein and not otherwise defined herein shall have their respective defined meanings given them in the Credit Agreement.

 

[Signatures on Next Page]

 

 

B-13

 

 

 

IN WITNESS WHEREOF, the New Subsidiary has caused this Accession Agreement to be duly executed and delivered under seal by its duly authorized officers as of the date first written above.

 

[NEW SUBSIDIARY]

 

By:______________________________

	
            Name:_________________________
 
	
            Title:__________________________
 

 

Address for Notices:

c/o Hospitality Properties Trust

400 Centre Street

Newton, Massachusetts  02458

Attention:_______________________

	
            Telecopy Number:
 	
            (___) ___-____
 
	
            Telephone Number:
 	
            (___) ___-____
 

 

 

Accepted:

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

 

By:___________________________

	
            Name:______________________
 
	
            Title:_______________________
 

 
 

 

 

B-14

 

 

 

EXHIBIT C

 

FORM OF NOTICE OF BORROWING

 

____________, 200_

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention:  David M. Blackman

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

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

 

	
            2.
 	
            The Borrower requests that such Revolving Loans be made available to the Borrower on ____________, 200_.
 

 

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

 

	
            [Check one box only]
 

 

	
            
 	
            Base Rate Loans
 	
             

	
            
 	
            LIBOR Loans, each with an initial Interest Period for a duration of:
 

 

	
            [Check one box only]
 	
            
 	
            7 days
 	
             

	
             
	
            
 	
            1 month
 	
             

	
             
	
            
 	
            3 months
 	
             

	
             
	
            
 	
            6 months
 	
             

	
             
	
            
 	
            12 months (if available)
 
							

 

 

C-1

 

 

 

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

____________________________________________________________.

 

	
            5.
 	
            The Borrower requests that the proceeds of this borrowing of Revolving Loans be made available to the Borrower by ____________________________.
 

 

The Borrower hereby certifies to the Agent and the Lenders that as of the date hereof and as of the date of the making of the requested Revolving Loans and after giving effect thereto, (a) no Default or Event of Default exists or will exist, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party are and shall be true and correct in all material respects, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Credit Agreement.  In addition, the Borrower certifies to the Agent and the Lenders that all conditions to the making of the
requested Revolving Loans contained in Article V. of the Credit Agreement will have been satisfied at the time such Revolving Loans are made.

 

If notice of the requested borrowing of Revolving Loans was previously given by telephone, this notice is to be considered the written confirmation of such telephone notice required by Section 2.1.(b) of the Credit Agreement.

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Borrowing as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

 

 

C-2

 

 

 

EXHIBIT D

 

FORM OF NOTICE OF CONTINUATION

 

____________, 200_

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention:  David M. Blackman

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

Pursuant to Section 2.8. of the Credit Agreement, the Borrower hereby requests a Continuation of a borrowing of Loans under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:

 

	
            1.
 	
            The proposed date of such Continuation is ____________, _____.
 

 

	
            2.
 	
            The aggregate principal amount of Loans subject to the requested Continuation is $________________________ and was originally borrowed by the Borrower on ____________, 200_.
 

 

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

 

	
            4.
 	
            The current Interest Period for each of the Loans subject to such Continuation ends on ________________, 200_.
 

 

 

D-1

 

 

 

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

 

	
            [Check one box only]
 	
            
 	
            7 days
 	
             

	
             
	
            
 	
            1 month
 	
             

	
             
	
            
 	
            3 months
 	
             

	
             
	
            
 	
            6 months
 	
             

	
             
	
            
 	
            12 months (if available)
 
						

 

The Borrower hereby certifies to the Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, no Default or Event of Default exists or will exist.

 

If notice of the requested Continuation was given previously by telephone, this notice is to be considered the written confirmation of such telephone notice required by Section 2.8. of the Credit Agreement.

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Continuation as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

 

D-2

 

 

 

EXHIBIT E

 

FORM OF NOTICE OF CONVERSION

 

____________, 200_

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention:  David M. Blackman

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Conversion of a borrowing of Revolving Loans of one Type into Revolving Loans of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:

 

	
            1.
 	
            The proposed date of such Conversion is ______________, 200_.
 

 

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

 

	
            [Check one box only]
 	
            
 	
            Base Rate Loans
 
	
             
	
            
 	
            LIBOR Loans
 	
             

						

 

	
            3.
 	
            The aggregate principal amount of Loans subject to the requested Conversion is $_____________________ and was originally borrowed by the Borrower on ____________, 200_.  
 

 

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

 

 

E-1

 

 

 

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

 

	
            [Check one box only]
 

 

	
            
 	
            Base Rate Loans
 	
             

	
            
 	
            LIBOR Loans, each with an initial Interest Period for a duration of:
 

 

	
            [Check one box only]
 	
            
 	
            7 days
 	
             

	
             
	
            
 	
            1 month
 	
             

	
             
	
            
 	
            3 months
 	
             

	
             
	
            
 	
            6 months
 	
             

	
             
	
            
 	
            12 months (if available)
 
							

 

The Borrower hereby certifies to the Agent and the Lenders that as of the date hereof and as of the date of the requested Conversion and after giving effect thereto, (a) no Default or Event of Default exists or will exist, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party are and shall be true and correct in all material respects, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Credit Agreement.

 

If notice of the requested Conversion was given previously by telephone, this notice is to be considered the written confirmation of such telephone notice required by Section 2.9. of the Credit Agreement.

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Conversion as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

 

E-2

 

 

 

EXHIBIT F

 

FORM OF NOTICE OF SWINGLINE BORROWING

 

____________, _____

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention:  David M. Blackman

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

	
            1.
 	
            Pursuant to Section 2.2.(b) of the Credit Agreement, the Borrower hereby requests that the Swingline Lender make a Swingline Loan to the Borrower in an amount equal to $___________________.
 

 

	
            2.
 	
            The Borrower requests that such Swingline Loan be made available to the Borrower on ____________, 200_.
 

 

	
            3.
 	
            The proceeds of this Swingline Loan will be used for the following purpose: ____________________________________________________________
 

___________________________________________________________.

 

	
            4.
 	
            The Borrower requests that the proceeds of such Swingline Loan be made available to the Borrower by ______________________________.
 

 

The Borrower hereby certifies to the Agent, the Swingline Lender and the Lenders that as of the date hereof, as of the date of the making of the requested Swingline Loan, and after making such Swingline Loan, (a) no Default or Event of Default exists or will exist, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party are and shall be true and correct in all material respects, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted under the Credit Agreement.  In addition, the Borrower certifies to the Agent and the Lenders that all
conditions to the making of the requested Swingline Loan contained in 

 

F-1

 

 

Article V. of the Credit Agreement will have been satisfied at the time such Swingline Loan is made.

 

If notice of the requested borrowing of this Swingline Loan was previously given by telephone, this notice is to be considered the written confirmation of such telephone notice required by Section 2.2.(b) of the Credit Agreement.

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Swingline Borrowing as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

 

F-2

 

 

 

EXHIBIT G

 

FORM OF SWINGLINE NOTE

 

 

	
            $50,000,000.00
 	
            May __, 2005
 

 

FOR VALUE RECEIVED, the undersigned, HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust (the “Borrower”), hereby promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Swingline Lender”) to its address at 301 S. College Street, NC0172, Charlotte, North Carolina 28288, or at such other address as may be specified in writing by the Swingline Lender to the Borrower, the principal sum of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000.00) (or such lesser amount as shall equal the aggregate unpaid principal amount of Swingline Loans made by the Swingline Lender to the Borrower under the Credit Agreement), on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount owing hereunder, at the rates and on the dates provided in the Credit Agreement.

 

The date, amount of each Swingline Loan, and each payment made on account of the principal thereof, shall be recorded by the Swingline Lender on its books and, prior to any transfer of this Note, endorsed by the Swingline Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Swingline Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the Swingline Loans.

 

This Note is the Swingline Note referred to in the Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent, and the other parties thereto, and evidences Swingline Loans made to the Borrower thereunder.  Terms used but not otherwise defined in this Note have the respective meanings assigned to them in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Swingline Loans upon the terms and conditions specified therein.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

The Borrower hereby waives presentment for payment, demand, notice of demand, notice of non-payment, protest, notice of protest and all other similar notices.

 

 

G-1

 

 

 

Time is of the essence for this Note.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Swingline Note under seal as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

Attest:________________________________

	
            Name___________________________
 	
             

	
            Title:____________________________
 

 

 

[CORPORATE SEAL]

 

 

G-2

 

 

 

SCHEDULE OF SWINGLINE LOANS

 

This Note evidences Swingline Loans made under the within-described Credit Agreement to the Borrower, on the dates and in the principal amounts set forth below, subject to the payments and prepayments of principal set forth below:

 

	
             

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

Made By
 

 

 

G-3

 

 

 

EXHIBIT H

 

FORM OF REVOLVING NOTE

 

	
            $____________________
 	
            _______________, 200_
 

 

 

FOR VALUE RECEIVED, the undersigned, HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust (the “Borrower”), hereby promises to pay to the order of ____________________ (the “Lender”), in care of Wachovia Bank, National Association, as Agent (the “Agent”) to Wachovia Bank, National Association, 301 S. College Street, NC0172, Charlotte, North Carolina 28288, or at such other address as may be specified in writing by the Agent to the Borrower, the principal sum of ________________ AND ____/100 DOLLARS ($____________) (or such lesser amount as shall equal the aggregate unpaid principal amount of Revolving Loans made by the Lender to the Borrower under the Credit Agreement (as herein defined)), on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount owing hereunder, at the
rates and on the dates provided in the Credit Agreement.

 

The date, amount of each Revolving Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, endorsed by the Lender on the schedule attached hereto or any continuation thereof, provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or hereunder in respect of the Revolving Loans made by the Lender.

 

This Note is one of the Revolving Notes referred to in the Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein.

 

Except as permitted by Section 12.5.(d) of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

 

 

H-1

 

 

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

The Borrower hereby waives presentment for payment, demand, notice of demand, notice of non-payment, protest, notice of protest and all other similar notices.

 

Time is of the essence for this Note.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving Note under seal as of the date first written above.

 

HOSPITALITY PROPERTIES TRUST

 

By: _________________________________

	
            Name:____________________________
 
	
            Title:_____________________________
 

 

 

Attest:________________________________

	
            Name___________________________
 	
             

	
            Title:____________________________
 

 

[CORPORATE SEAL]

 

 

H-2

 

 

 

SCHEDULE OF REVOLVING LOANS

 

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

 

	
             

Date of 

Loan
 	
            Principal Amount of 

Loan
 	
             

Interest Rate
 	
             

Maturity Date
 	
            Amount 

Paid or 

Prepaid
 	
            Unpaid Principal Amount
 	
             

Notation 

Made By
 

 

 

 

H-3

 

 

 

EXHIBIT I

 

FORM OF COMPLIANCE CERTIFICATE

 

_______________, 200_

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina 28288

Attention:  David M. Blackman

 

Each of the Lenders Party to the Credit Agreement referred to below

 

Ladies and Gentlemen:

 

Reference is made to that certain Amended and Restated Credit Agreement dated as of May __, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among Hospitality Properties Trust (the “Borrower”), the financial institutions party thereto and their assignees under Section 12.5. thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”) and the other parties thereto.  Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

 

Pursuant to Section 8.3. of the Credit Agreement, the undersigned hereby certifies to the Agent and the Lenders as follows:

 

(1)               The undersigned is the chief financial officer [or chief accounting officer] of the Borrower.

 

(2)               The undersigned has examined the books and records of the Borrower and has conducted such other examinations and investigations as are reasonably necessary to provide this Compliance Certificate.

 

(3)               No Default or Event of Default exists [if such is not the case, specify such Default or Event of Default and its nature, when it occurred and whether it is continuing and the steps being taken by the Borrower with respect to such event, condition or failure].

 

(4)               The representations and warranties made or deemed made by the Borrower and the other Loan Parties in the Loan Documents to which any is a party, are true and correct in all material respects on and as of the date hereof except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) and except for 

 

I-1

 

 

changes in factual circumstances specifically and expressly permitted under the Credit Agreement.

 

(5)               Attached hereto as Schedule 1 are reasonably detailed calculations establishing whether or not the Borrower and its Subsidiaries were in compliance with the covenants contained in Sections 9.1. through 9.3. and 9.6. of the Credit Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first above written.

 

 

____________________________________

Name:_______________________________

Title:_________________________________

 

 

I-2

 

 

 

Schedule 1

 

[Calculations to be Attached]

 

 

 

 

I-3

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