Document:

Exhibit 10.2

 

 

 

CREDIT AGREEMENT

 

Dated as of December 3, 2010

 

among

 

SPT REAL ESTATE SUB II, LLC,

as the Borrower,

 

and

 

STARWOOD PROPERTY TRUST, INC.

 

and

 

THE SUBSIDIARIES OF

STARWOOD PROPERTY TRUST, INC.

FROM TIME TO TIME PARTY HERETO,

as Guarantors,

 

and

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

and

 

The Other Lenders Party Hereto

 

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND
  ACCOUNTING TERMS

  	
  1

  
	
   

  	
   

  
	
  1.01

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
  Other Interpretive Provisions

  	
  26

  
	
  1.03

  	
  Accounting Terms

  	
  27

  
	
  1.04

  	
  Rounding

  	
  28

  
	
  1.05

  	
  Times of Day

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. THE COMMITMENTS
  AND LOANS

  	
  28

  
	
   

  	
   

  	
   

  
	
  2.01

  	
  Term Loans

  	
  28

  
	
  2.02

  	
  Borrowings, Conversions and Continuations of Loans

  	
  28

  
	
  2.03

  	
  Prepayments

  	
  29

  
	
  2.04

  	
  Termination or Reduction of Commitments

  	
  32

  
	
  2.05

  	
  Collections

  	
  32

  
	
  2.06

  	
  Interest

  	
  34

  
	
  2.07

  	
  Fees

  	
  34

  
	
  2.08

  	
  Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate

  	
  34

  
	
  2.09

  	
  Evidence of Debt

  	
  35

  
	
  2.10

  	
  Payments Generally; Administrative Agent’s Clawback

  	
  35

  
	
  2.11

  	
  Sharing of Payments by Lenders

  	
  37

  
	
  2.12

  	
  Extension of Maturity Date

  	
  37

  
	
  2.13

  	
  Defaulting Lenders

  	
  39

  
	
  2.14

  	
  Increase in Commitments

  	
  40

  
	
   

  	
   

  
	
  ARTICLE III. TAXES, YIELD
  PROTECTION AND ILLEGALITY

  	
  41

  
	
   

  	
   

  
	
  3.01

  	
  Taxes

  	
  41

  
	
  3.02

  	
  Illegality

  	
  45

  
	
  3.03

  	
  Inability to Determine Rates

  	
  46

  
	
  3.04

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
  46

  
	
  3.05

  	
  Compensation for Losses

  	
  47

  
	
  3.06

  	
  Mitigation Obligations; Replacement of Lenders

  	
  48

  
	
  3.07

  	
  Survival

  	
  48

  
	
   

  	
   

  
	
  ARTICLE IV. CONDITIONS
  PRECEDENT

  	
  48

  
	
   

  	
   

  
	
  ARTICLE V. REPRESENTATIONS
  AND WARRANTIES

  	
  51

  
	
   

  	
   

  	
   

  
	
  5.01

  	
  Existence, Qualification and Power

  	
  51

  
	
  5.02

  	
  Authorization; No Contravention

  	
  51

  
	
  5.03

  	
  Governmental Authorization; Other Consents

  	
  52

  
	
  5.04

  	
  Binding Effect

  	
  52

  
				

 

i

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  
	
  5.05

  	
  Financial Statements; No Material Adverse Effect

  	
  52

  
	
  5.06

  	
  Litigation

  	
  53

  
	
  5.07

  	
  No Default

  	
  53

  
	
  5.08

  	
  Ownership of Property; Liens

  	
  53

  
	
  5.09

  	
  Environmental Compliance

  	
  53

  
	
  5.10

  	
  Insurance

  	
  53

  
	
  5.11

  	
  Taxes

  	
  54

  
	
  5.12

  	
  ERISA Compliance

  	
  54

  
	
  5.13

  	
  Subsidiaries; Equity Interests

  	
  55

  
	
  5.14

  	
  Margin Regulations; Investment Company Act

  	
  55

  
	
  5.15

  	
  Disclosure

  	
  55

  
	
  5.16

  	
  Compliance with Laws

  	
  56

  
	
  5.17

  	
  Taxpayer Identification Number

  	
  56

  
	
  5.18

  	
  Intellectual Property; Licenses, Etc.

  	
  56

  
	
  5.19

  	
  Solvency

  	
  56

  
	
  5.20

  	
  Casualty, Etc.

  	
  56

  
	
  5.21

  	
  [Intentionally Omitted]

  	
  56

  
	
  5.22

  	
  Collateral Documents

  	
  56

  
	
  5.23

  	
  Anti-Money Laundering and Economic Sanctions Laws

  	
  57

  
	
  5.24

  	
  REIT Status; Stock Exchange Listing

  	
  57

  
	
  5.25

  	
  Eligible Assets

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. AFFIRMATIVE
  COVENANTS

  	
  58

  
	
   

  	
   

  	
   

  
	
  6.01

  	
  Financial Statements

  	
  58

  
	
  6.02

  	
  Certificates; Other Information

  	
  59

  
	
  6.03

  	
  Notices

  	
  61

  
	
  6.04

  	
  Payment of Obligations

  	
  61

  
	
  6.05

  	
  Preservation of Existence, Etc.

  	
  61

  
	
  6.06

  	
  [Intentionally Omitted]

  	
  61

  
	
  6.07

  	
  Maintenance of Insurance

  	
  62

  
	
  6.08

  	
  Compliance with Laws

  	
  62

  
	
  6.09

  	
  Books and Records

  	
  62

  
	
  6.10

  	
  Inspection Rights

  	
  62

  
	
  6.11

  	
  Use of Proceeds

  	
  62

  
	
  6.12

  	
  Additional Loan Parties

  	
  62

  
	
  6.13

  	
  Compliance with Environmental Laws

  	
  63

  
	
  6.14

  	
  Further Assurances

  	
  63

  
	
  6.15

  	
  Maintenance of REIT Status; New York Stock Exchange Listing

  	
  63

  
	
  6.16

  	
  Information Regarding Collateral

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. NEGATIVE
  COVENANTS

  	
  64

  
	
   

  	
   

  	
   

  
	
  7.01

  	
  Liens

  	
  64

  
	
  7.02

  	
  Investments

  	
  64

  
	
  7.03

  	
  Indebtedness

  	
  65

  
	
  7.04

  	
  Fundamental Changes

  	
  65

  
	
  7.05

  	
  Dispositions

  	
  66

  
				

 

ii

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  
	
  7.06

  	
  Restricted Payments

  	
  67

  
	
  7.07

  	
  Change in Nature of Business

  	
  67

  
	
  7.08

  	
  Transactions with Affiliates

  	
  67

  
	
  7.09

  	
  [Intentionally Omitted]

  	
  67

  
	
  7.10

  	
  Use of Proceeds

  	
  68

  
	
  7.11

  	
  Amendments, Waivers and Terminations of Certain Agreements

  	
  68

  
	
  7.12

  	
  Financial Covenants

  	
  68

  
	
  7.13

  	
  Accounting or Tax Changes

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. EVENTS OF
  DEFAULT AND REMEDIES

  	
  69

  
	
   

  	
   

  	
   

  
	
  8.01

  	
  Events of Default

  	
  69

  
	
  8.02

  	
  Remedies Upon Event of Default

  	
  71

  
	
  8.03

  	
  Application of Funds

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. ADMINISTRATIVE
  AGENT

  	
  72

  
	
   

  	
   

  	
   

  
	
  9.01

  	
  Appointment and Authority

  	
  72

  
	
  9.02

  	
  Rights as a Lender

  	
  72

  
	
  9.03

  	
  Exculpatory Provisions

  	
  72

  
	
  9.04

  	
  Reliance by Administrative Agent

  	
  73

  
	
  9.05

  	
  Delegation of Duties

  	
  73

  
	
  9.06

  	
  Resignation of Administrative Agent

  	
  74

  
	
  9.07

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
  74

  
	
  9.08

  	
  [Intentionally Omitted]

  	
  74

  
	
  9.09

  	
  Administrative Agent May File Proofs of Claim

  	
  74

  
	
  9.10

  	
  Collateral and Guaranty Matters

  	
  75

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. CONTINUING
  GUARANTY

  	
  76

  
	
   

  	
   

  	
   

  
	
  10.01

  	
  Guaranty

  	
  76

  
	
  10.02

  	
  Rights of Lenders

  	
  77

  
	
  10.03

  	
  Certain Waivers

  	
  77

  
	
  10.04

  	
  Obligations Independent

  	
  77

  
	
  10.05

  	
  Subrogation

  	
  77

  
	
  10.06

  	
  Termination; Reinstatement

  	
  77

  
	
  10.07

  	
  Subordination

  	
  78

  
	
  10.08

  	
  Stay of Acceleration

  	
  78

  
	
  10.09

  	
  Condition of the Borrower

  	
  78

  
	
  10.10

  	
  Limitations on Enforcement

  	
  78

  
	
  10.11

  	
  Contribution

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. MISCELLANEOUS

  	
  79

  
	
   

  	
   

  	
   

  
	
  11.01

  	
  Amendments, Etc.

  	
  79

  
	
  11.02

  	
  Notices; Effectiveness; Electronic Communication

  	
  81

  
	
  11.03

  	
  No Waiver; Cumulative Remedies; Enforcement

  	
  83

  
	
  11.04

  	
  Expenses; Indemnity; Damage Waiver

  	
  83

  
	
  11.05

  	
  Payments Set Aside

  	
  85

  
				

 

iii

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  11.06

  	
  Successors and Assigns

  	
  85

  
	
  11.07

  	
  Treatment of Certain Information; Confidentiality

  	
  89

  
	
  11.08

  	
  Right of Setoff

  	
  90

  
	
  11.09

  	
  Interest Rate Limitation

  	
  91

  
	
  11.10

  	
  Counterparts; Integration; Effectiveness

  	
  91

  
	
  11.11

  	
  Survival of Representations and Warranties

  	
  91

  
	
  11.12

  	
  Severability

  	
  91

  
	
  11.13

  	
  Replacement of Lenders

  	
  92

  
	
  11.14

  	
  Governing Law; Jurisdiction; Etc.

  	
  93

  
	
  11.15

  	
  Waiver of Jury Trial

  	
  94

  
	
  11.16

  	
  No Advisory or Fiduciary Responsibility

  	
  94

  
	
  11.17

  	
  Electronic Execution of Assignments and Certain Other
  Documents

  	
  94

  
	
  11.18

  	
  USA PATRIOT Act

  	
  95

  
	
  11.19

  	
  ENTIRE AGREEMENT

  	
  95

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
  S-1

  
				

 

iv

 

SCHEDULES

 

	
   

  	
  I

  	
  Guarantors

  
	
   

  	
  2.01

  	
  Commitments
  and Applicable Percentages

  
	
   

  	
  5.05

  	
  Supplement
  to Interim Financial Statements

  
	
   

  	
  5.12(d)

  	
  Pension
  Plans

  
	
   

  	
  5.13

  	
  Subsidiaries; Equity Interests

  
	
   

  	
  7.08

  	
  Transactions with Affiliates

  
	
   

  	
  11.02

  	
  Administrative
  Agent’s Office; Certain Addresses for Notices

  

 

EXHIBITS

 

	
   

  	
  Form of

  
	
   

  	
   

  	
   

  
	
   

  	
  A

  	
  Loan
  Notice

  
	
   

  	
  B

  	
  Note

  
	
   

  	
  C

  	
  Compliance
  Certificate

  
	
   

  	
  D-1

  	
  Assignment
  and Assumption

  
	
   

  	
  D-2

  	
  Administrative
  Questionnaire

  
	
   

  	
  E

  	
  Pledge
  Agreement

  
	
   

  	
  F

  	
  Security
  Agreement

  
	
   

  	
  G

  	
  Solvency
  Certificate

  
	
   

  	
  H

  	
  United
  States Tax Compliance Certificate

  
	
   

  	
  I

  	
  Certification
  of Market Value of Near Cash Securities

  

 

v

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is entered into as of December 3,
2010,  among SPT REAL ESTATE SUB II, LLC, a
Delaware limited liability company (the “Borrower”), STARWOOD PROPERTY
TRUST, INC., a Maryland corporation (the “Parent”), CERTAIN SUBSIDIARIES
OF THE PARENT, as Guarantors, each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and
BANK OF AMERICA, N.A., as Administrative Agent.

 

The Borrower has requested that the Lenders
extend credit in the form of term loans, and the Lenders are willing to do so
on the terms and conditions set forth herein.

 

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

 

ARTICLE I.  DEFINITIONS AND ACCOUNTING TERMS

 

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

 

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

 

“Administrative Agent’s Office” means
the Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 11.02, or such other address or account as the
Administrative Agent may from time to time notify to the Borrower and the
Lenders.

 

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

 

“Advance Rate” means, at any time, the
ratio (expressed as a percentage) at such time of (i) Total Outstandings
to (ii) the Market Value of the Eligible Assets.

 

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

 

“Agent Parties” has the meaning
specified in Section 11.02(c).

 

“Aggregate Commitments” means the
Commitments of all the Lenders.  The
Aggregate Commitments shall be $125,195,000 on the Closing Date.

 

“Aggregate Deficit Amount” has the
meaning specified in Section 10.11.

 

“Aggregate Excess Amount” has the
meaning specified in Section 10.11.

 

“Agreement” means this Credit
Agreement.

 

 

“Anti-Money Laundering Laws” means any
and all laws, judgments, orders, executive orders, decrees, ordinances, rules,
regulations, statutes, case law or treaties applicable to a Loan Party, its
Subsidiaries or Affiliates, related to terrorism financing or money laundering
including any applicable provision of Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (USA PATRIOT Act) of 2001 (Title III of Pub. L. 107-56)
and The Currency and Foreign Transactions Reporting Act (also known as the “Bank
Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and
1951-1959).

 

“Applicable Percentage” means with
respect to any Lender at any time, a percentage (carried out to the ninth
decimal place) equal to (i) on the Closing Date, a fraction the numerator
of which is such Lender’s Commitment and the denominator of which is the
Aggregate Commitments and (ii) thereafter, a fraction the numerator of
which is the principal amount of such Lender’s Term Loan at such time and the
denominator of which is the aggregate principal amount of all of the Lenders’
Term Loans.  The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.

 

“Applicable Rate” means (i) from
the Closing Date to the date on which the Administrative Agent and the Lenders
receive the report accompanying the monthly financial statements referred to in
Section 6.02(i) for the month ending December 31, 2010,
1.35% per annum for Base Rate Loans and 2.35% for Eurodollar Rate Loans and
(ii) thereafter, the applicable percentage per annum set forth below
determined by reference to the Facility Debt Yield:

 

	
   

  	
   

  	
   

  	
   

  	
  Applicable Rate

  	
   

  
	
  Pricing Level

  	
   

  	
  Facility Debt Yield

  	
   

  	
  Eurodollar Rate

  	
   

  	
  Base Rate

  	
   

  
	
  1

  	
   

  	
  > 27

  	
  %

  	
  2.35

  	
  %

  	
  1.35

  	
  %

  
	
  2

  	
   

  	
  < 27

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  

 

Any increase or decrease in the Applicable
Rate resulting from a change in the Facility Debt Yield shall become effective
immediately upon the applicable determination of the Facility Debt Yield.

 

Notwithstanding the foregoing, if at any time
Pledged Asset EBITDA is deemed to equal zero in accordance with the definition
thereof, then Pricing Level 2 shall apply and shall remain in effect until the
date on which the Facility Debt Yield is determined to be greater than 27%.

 

For purposes of this definition, Facility Debt
Yield as of any date will be determined by reference to the monthly report that
is most recently required to be delivered pursuant to Section 6.02(i) unless
as of such date of determination Pledged Asset EBITDA is deemed to equal zero
in accordance with the definition thereof, in which case the Facility Debt
Yield will be deemed to be less than 27% as of the applicable date of determination.

 

Notwithstanding anything to the contrary
contained in this definition, the determination of the Applicable Rate for any
period shall be subject to the provisions of Section 2.08(b).

 

2

 

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

 

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

 

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

 

“Audited Financial Statements” means
the audited consolidated balance sheet of the Parent and its consolidated
Subsidiaries for the fiscal year ended December 31, 2009, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year of the Parent and its consolidated Subsidiaries,
including the notes thereto.

 

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

 

“Base Rate”  means for any day a fluctuating rate per
annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%,
(b) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America as its “prime rate,” and (c) the
Eurodollar Rate plus 1.00%.  The “prime
rate” is a rate set by Bank of America based upon various factors including
Bank of America’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate.  Any change in such prime rate announced by
Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.

 

“Base Rate Loan” means that portion of
the Term Loans or a Borrowing that bears
interest based on the Base Rate.

 

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

 

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

 

“Borrowing” means Term Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period.

 

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

 

“Capital Lease Obligations” means, with
respect to any Person, the amount of all obligations of such Person to pay rent
or other amounts under a lease of property to the extent and in the amount that
such obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person.

 

3

 

“Cash Equivalents” means:

 

(a)                                  United States dollars (including such dollars as are held as overnight
bank deposits and demand deposits with banks);

 

(b)                                 marketable direct obligations issued by, or unconditionally guaranteed
by, the United States Government or issued by any agency or instrumentality
thereof and backed by the full faith and credit of the United States of America,
in each case maturing within one year from the date of acquisition thereof;

 

(c)                                  marketable direct obligations issued by any State of the United States
of America or any political subdivision of any such State or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating of at least A-2 from
S&P or at least P-2 of Moody’s;

 

(d)                                 commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-2 from S&P or at least P-2 from Moody’s;

 

(e)                                  time deposits, demand deposits, certificates of deposit, Eurodollar
time deposits, time deposit accounts, term deposit accounts or bankers’
acceptances maturing within one year from the date of acquisition thereof or
overnight bank deposits, in each case, issued by any bank organized under the
laws of the United States of America or any State thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $500.0 million; and

 

(f)                                    investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (a) through (e) above.

 

“Cash Liquidity” means, at any time
with respect to the Parent and its Subsidiaries, on a consolidated basis, the
amount of Unrestricted Cash held by such Persons at such time.

 

“Cash Sweep Reference Date” has the
meaning specified in Section 2.03(b)(ii).

 

“Change in Law” means the occurrence,
after the date of this Agreement (or, with respect to any Lender which becomes
a party hereto after the date of this Agreement, the date such Lender becomes a
party hereto), of any of the following: (a) the adoption or taking effect
of any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, guideline or directive (whether or not having the force of law) by any
Governmental Authority.

 

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

 

(a)                                  prior to an internalization of management by the Parent, neither the
Manager nor any Affiliate of the Manager is the manager of the Parent;

 

4

 

(b)                                 after such time as the Parent is internally managed, any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934), directly or indirectly,
of a percentage of the total voting power of all classes of Equity Interests of
the Parent entitled to vote generally in the election of directors, of 20% or
more;

 

(c)                                  change in Control of the Manager and/or Starwood Capital Group Global,
L.P. from the Person or Persons who are directly or indirectly Controlling such
entities on the date hereof; or

 

(d)                                 the Parent shall cease to own and control, directly or indirectly,
100% of the outstanding Equity Interests of the Borrower.

 

Notwithstanding the foregoing, the
Administrative Agent and the Required Lenders shall not be deemed to approve or
to have approved any internalization of management by the Parent as a result of
this definition or any other provision herein, other than to the extent
actually approved pursuant to Section7.14.

 

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

 

“CMBS” means mortgage pass-through certificates
or other securities issued pursuant to a securitization of commercial real
estate loans.

 

“Code” means the Internal Revenue Code
of 1986.

 

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

 

“Collateral Documents” means,
collectively, the Security Agreement, the Pledge Agreement, any Control
Agreement and each of the other agreements, instruments or documents that
creates or perfects or purports to create or perfect a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.

 

“Collection Account” has the meaning
specified in Section 2.05(a).

 

“Commitment” means, as to each Lender,
its obligation to make a Term Loan to the Borrower pursuant to Section 2.01
in an aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender’s name on Schedule 2.01 or in
the Assignment and Assumption or New Lender Joinder Agreement pursuant to which
such Lender becomes a party hereto, as applicable, as such amount may be
increased by such Lender pursuant to Section 2.14 or otherwise adjusted
from time to time in accordance with this Agreement.

 

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

 

5

 

“Contingent Liabilities” means, with
respect to any Person as of any date of determination, all of the following as
of such date:  (a) liabilities and
obligations (including any Guarantees) of such Person in respect of “off-balance
sheet arrangements” (as defined in the Off-Balance Sheet Rules defined below),
(b) obligations, including Guarantees, whether or not required to be
disclosed in the footnotes to such Person’s financial statements, guaranteeing
in whole or in part any Non-Recourse Indebtedness, lease, dividend or other
obligation, excluding, however, (i) contractual indemnities (including any
indemnity or price-adjustment provision relating to the purchase or sale of
securities or other assets), and (ii) guarantees of non-monetary
obligations which have not yet been called on or quantified, of such Person or
any other Person, and (c) forward commitments or obligations to fund or
provide proceeds with respect to any loan or other financing which is
obligatory and non-discretionary on the part of the lender.  The amount of any Contingent Liabilities
described in the preceding clause (b) shall be deemed to be (i) with
respect to a guarantee of interest or interest and principal, or operating
income guarantee, the sum of all payments required to be made thereunder
(which, in the case of an operating income guarantee, shall be deemed to be
equal to the debt service for the note secured thereby), through (x) in
the case of an interest or interest and principal guarantee, the stated date of
maturity of the obligation (and commencing on the date interest could first be
payable thereunder), or (y) in the case of an operating income guarantee,
the date through which such guarantee will remain in effect, and (ii) with
respect to all guarantees not covered by the preceding clause (i), an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as recorded on the balance sheet and in the
footnotes to the most recent financial statements of such Person.  “Off-Balance Sheet Rules” means the
Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet
Arrangements and Aggregate Contractual Obligations, Securities Act Release Nos.
33-8182; 34-47264; FR-67 International Series Release No. 1266 File No.
S7-42-02, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified of 17 CFR Parts 228,
229 and 249).

 

“Contractual Obligation” means, as to
any Person, any provision of any securities issued by such Person or of any
indenture, mortgage, deed of trust, deed to secure debt, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by
which it or any of its property or assets are bound or are subject.

 

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

 

“Control Agreement” means a deposit
account control agreement or securities account control agreement, as
applicable, executed by a Loan Party, the Administrative Agent and the applicable
depository bank or securities intermediary granting the Administrative Agent
control over the applicable deposit account or securities account, which
agreement shall be in form and substance satisfactory to the Administrative
Agent.

 

“Debtor Relief Laws” means the
Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, 

 

6

 

rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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

 

“Default Rate” means an interest rate
equal to (i) the Base Rate plus (ii) the Applicable Rate
applicable to Base Rate Loans plus (iii) 2% per annum.

 

“Defaulting
Lender” means, subject to Section 2.13(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder, including in respect of its Term Loan, within
three (3) Business Days of the date required to be funded by it hereunder, (b)
has notified the Borrower, the Administrative Agent or any Lender that it does
not intend to comply with its funding obligations or has made a public
statement to that effect with respect to its funding obligations hereunder or
under other agreements in which it commits to extend credit, (c) has failed,
within three (3) Business Days after request by the Administrative Agent, to
confirm in a manner satisfactory to the Administrative Agent that it will
comply with its funding obligations, or (d) has, or has a direct or indirect
parent company that has, (i) become the subject of a proceeding under any
Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or a custodian appointed for it,
or (iii) taken any action in furtherance of, or indicated its consent to,
approval of or acquiescence in any such proceeding or appointment; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority.

 

“Disposition” or “Dispose” means
the sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.

 

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

 

“EA Principal Payment” has the meaning
specified in Section 2.03(b)(v).

 

“EBITDA” with respect to the
Parent and its Subsidiaries on a consolidated basis for any Test Period, an
amount equal to the sum of (a) Net Income (or loss) (prior to any impact from
minority interests or joint venture net income and before deduction of any
dividends on preferred stock), plus the following (but only to the extent actually
included in determination of such Net Income (or loss)): (i) depreciation and
amortization expense, (ii) Interest Expense, (iii) income tax expense, and (iv)
extraordinary or non-recurring gains and losses, plus (b) such Person’s
proportionate share of Net Income of the joint venture investments and
unconsolidated Affiliates of such Person, all with respect to such Test Period,
plus (c) amounts deducted in accordance with GAAP in respect of other non-cash
expenses in determining such Net Income for such Person.

 

7

 

“Economic Sanctions Laws” means any and
all laws, judgments, orders, executive orders, decrees, ordinances, rules,
regulations, statutes, case law or treaties applicable to a Loan Party, its
Subsidiaries or Affiliates relating to economic sanctions and terrorism
financing, including any applicable provisions of the Trading with the Enemy
Act (50 U.S.C. App. §§ 5(b) and 16, as amended), the International
Emergency Economic Powers Act, (50 U.S.C. §§ 1701-1706, as amended) and
Executive Order 13224 (effective September 24, 2001), as amended.

 

“Eligible Assets” means all right,
title and interest of the Borrower in and to (i) the “Senior Loan” (as defined
in the Offering Circular) acquired by the Borrower from Bank of America on the
Closing Date (or from any Person after the Closing Date), including, the Senior
Loan Agreement (as defined in the Offering Circular), all instruments
evidencing such interest and all other documents and agreements delivered in
connection therewith (including, without limitation, the Co-Lender Agreement,
the Servicing Agreement, the Custodial Agreement and the Interim Servicing
Agreement (as each such term is defined in the Offering Circular)), and (ii) if
and to the extent that the Borrower exchanges its interest in any or all of the
“Senior Loan” referenced in clause (i) above for an Additional Certificate (as
such term is defined in the Offering Circular) pursuant to the terms of an
Additional Trust Asset Transfer Agreement (as such term is defined in the
Offering Circular, each such Additional Certificate and all other documents and
agreements delivered in connection therewith (including, without limitation,
the Trust Agreement), together with, in the case of each of clauses (i) and
(ii), all collateral securing the same and all principal, interest and other
income, distributions, receipts, payments, collections, prepayments,
recoveries, proceeds (including insurance and condemnation proceeds) and other
payments or amounts of any kind paid, received, collected, recovered or
distributed on, or in connection with or in respect thereof.

 

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

 

“Embargoed Person” means any party that
(i) is publicly identified on the most current list of “Specially
Designated Nationals and Blocked Persons” published by the U.S. Treasury
Department’s Office of Foreign Assets Control (“OFAC”) or
(ii) resides, is organized or chartered, or has a place of business in a
country or territory that is the subject of OFAC sanctions programs.

 

“Environment” means ambient air, indoor
air, surface water, groundwater, drinking water, soil, surface and subsurface
strata, and natural resources such as wetlands, flora and fauna.

 

“Environmental Laws” means any and all
Federal, state, local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, agreements or governmental
restrictions relating to pollution or the protection of the Environment or of
human health (to the extent related to exposure to Hazardous Materials),
including those relating to the manufacture, generation, handling, transport,
storage, treatment, Release or threat of Release of Hazardous Materials.

 

“Environmental Liability” means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of the 

 

8

 

Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release
or threatened Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

 

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

 

“Equity Interests” means, with respect
to any Person, (a) any share, interest, participation and other equivalent
(however denominated) of capital stock of (or other ownership, equity or profit
interests in) such Person, (b) any warrant, option or other right for the purchase
or other acquisition from such Person of any of the foregoing, (c) any security
convertible into or exchangeable for any of the foregoing, and (d) any other
ownership or profit interest in such Person (including 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.

 

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

 

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

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension
Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which such
entity was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that
a Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Pension Plan amendment as a termination
under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of
proceedings to terminate a Pension Plan; (f) any event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; (g) the
determination that any Pension Plan is considered an at-risk plan or a plan in
endangered or critical status within the meaning of Sections 430, 431 and 432
of the Code or Sections 303, 304 and 305 of ERISA; (h) the imposition of
any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate; or (i) a failure by the Borrower or any ERISA Affiliate to meet
all applicable requirements under the Pension Funding Rules in respect of a
Pension Plan, whether or not waived, or the failure by the Borrower or any
ERISA Affiliate to make any required contribution to a Multiemployer Plan.

 

9

 

“Eurodollar Rate” means:

 

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

 

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

 

“Eurodollar Rate Loan” means that
portion of the Term Loans or a Borrowing that bears interest at a rate based on
clause (a) or clause (b)(ii) of the definition of “Eurodollar Rate.”

 

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

 

“Excluded Taxes” means, with respect to
the Administrative Agent, any Lender or any other recipient of any payment to
be made by or on account of any obligation of any Loan Party hereunder or under
any other Loan Documents, (a) Taxes imposed on or measured by its overall
net income (however denominated), franchise Taxes imposed on it (in lieu of net
income Taxes), and any similar Taxes imposed on or measured by the net income
of such person, or gross receipts Taxes imposed in lieu of net income taxes, by
a jurisdiction (or any political subdivision thereof) as a result of such
recipient being organized or having its principal office in such jurisdiction,
or as a result of a present or former connection between such recipient and
such jurisdiction (other than any such connection arising solely from such
recipient having executed, delivered or performed its obligations or received a
payment under, any Loan Document) or, in the case of any Lender, in having its
applicable Lending Office in such jurisdiction, (b) any 

 

10

 

Taxes in the nature of the branch profits tax
within the meaning of Section 884 of the Code imposed by any jurisdiction
described in clause (a), (c) other than an assignee pursuant to a request
by the Borrower under Section 11.13, any United States  federal withholding tax that is imposed on amounts payable
to such Person other than as a result of a Change in Law occurring after (1)
the date that such Person became a party to this Agreement, or (2) with respect
to an assignment, participation, acquisition, or designation of a new Lending
Office, the effective date of such assignment, participation, acquisition or
designation, except, in each case, to the extent and at the rate that such
Person’s predecessor was entitled to such amounts (or in the case of a
designation of a new Lending Office, to the extent that such Person was
entitled to such amounts with respect to its prior Lending Office),
(d) any withholding Tax that is attributable to such Person’s failure to
comply with Section 3.01(e) hereto, and (e) any United States federal withholding Tax that is imposed on amounts
payable to any Lender or other Person as a result of any law in effect as of
the Closing Date and any amounts that would not have been imposed but for a
failure by a Lender (or any financial institution through which any payment is
made to such Lender) (including a participant and any other recipient of any
payment hereunder) to comply with the procedures, certifications, information
reporting, disclosure, or other related requirements of newly enacted Sections
1471-1474 of the Code and any amended or successor version that is
substantively comparable.

 

“Extension
Notice” has the meaning specified in Section 2.12(a).

 

“Extension
Reference Rate” has the meaning specified in clause (b)(i) of the
definition of “Reference Advance Rate.”

 

“Facility Debt Yield” means, as of any date
of determination with respect to any Measurement Period, the ratio (expressed
as a percentage) of:

 

(a)                                  an amount equal to (i) the Pledged Asset EBITDA for such Measurement
Period, multiplied by (ii) the sum of (x) the
aggregate principal balance as of the last day of such Measurement Period of
the portion of the Senior Loan included as part of Eligible Assets under clause
(i) of such defined term plus (y) the
product of the Borrower’s Certificate Percentage as of the last day of such
Measurement Period multiplied by
the aggregate principal balance as of the last day of such Measurement Period of
the portion of the Senior Loan then held by the Trust, divided by
(iii) the aggregate principal balance of the Senior Loan as of the last day of
such Measurement Period, to

 

(b)                                 the Total Outstandings as of the last day of such Measurement Period.

 

For purposes of this definition, (1) “Borrower’s
Certificate Percentage” shall mean as of the last day of any Measurement Period
a fraction, the numerator of which is the aggregate Certificate Balance as of
the last day of such Measurement Period of the Additional Certificates included
as part of the Eligible Assets under clause (ii) of such defined term (or, with
respect to any such Additional Certificate in which the Borrower only has a
beneficial ownership interest, the Borrower’s beneficial ownership percentage
interest of the Certificate Balance of such Additional Certificate), and the
denominator of which is the aggregate Certificate Balance as of the last day of
such Measurement Period of all Certificates, and (2) the following terms shall 

 

11

 

have the meanings set forth in the Offering
Circular:  “Senior Loan”, “Certificate
Balance”, “Additional Certificates”, “Trust”, “Trust Asset Transfer Agreement”
and “Certificate.”

 

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

 

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

 

“Fee Letter” means the letter
agreement, dated December 3, 2010, between the Borrower and Bank of America.

 

“Fitch” means Fitch Ratings and its
successors.

 

“Fixed Charge Coverage Ratio” means,
with respect to the Parent and its Subsidiaries on a consolidated basis for any
Test Period the ratio of (i) EBITDA for such Test Period to
(ii) Fixed Charges for such Test Period.

 

“Fixed Charges” means, with respect to
the Parent and its Subsidiaries on a consolidated basis for any Test Period,
the sum of (a) debt service, (b) all preferred dividends, (c) Capital Lease
Obligations paid or accrued during such Test Period, (d) capital expenditures
(if any), and (e) any amounts payable under any Ground Lease.

 

“Foreign Lender” means any Lender that
is organized under the Laws of a jurisdiction other than that in which the
Borrower is resident for tax purposes. 
For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

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

 

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

 

“GAAP” means generally accepted
accounting principles in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the 

 

12

 

accounting profession in the United States,
that are applicable to the circumstances as of the date of determination.

 

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

 

“Grantor” means the applicable Loan
Party that is party to a Collateral Document.

 

“Ground Lease” means a ground lease
containing the following terms and conditions: 
(a) a remaining term (exclusive of any unexercised extension
options) of thirty (30) years or more from the Closing Date, (b) the right
of the lessee to mortgage and encumber its interest in the leased property
without the consent of the lessor or with such consent given, (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 agreement
of such lessor 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,
(d) reasonable transferability of the lessee’s interest under such lease,
including ability to sublease, and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder of
the leasehold estate demised pursuant to a ground lease.

 

“Guarantee” means, with respect to any
Person (the “guaranteeing person”), any obligation of (a) the
guaranteeing person or (b) another Person (including any bank under any letter
of credit) to induce the creation of the obligations for which the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends, Contractual Obligation, Swap Contract or other obligations or
indebtedness (the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation, or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
that the term “Guarantee” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any Guarantee
of any guaranteeing person shall be deemed to be the maximum stated amount of
the primary obligation relating to such Guarantee (or, if less, the maximum
stated liability set forth in the instrument embodying such Guarantee); provided,
that in the absence of any such stated amount or stated liability, the amount
of such Guarantee shall be such guaranteeing person’s maximum anticipated
liability in respect thereof as reasonably determined by such Person in good
faith.  The term “Guarantee” as a verb
has a corresponding meaning.

 

13

 

“Guarantors” means, collectively, at
any time (i) the Parent, (ii) each Subsidiary of the Parent listed on Schedule I
hereto and (iii) each other Subsidiary of the Parent (other than the Borrower)
that becomes a guarantor of the Obligations pursuant to Section 6.12.

 

“Guaranty” means the Guaranty made by
the Guarantors under Article X in favor of the Secured Parties.

 

“Hazardous Materials” means all
explosive or radioactive substances or wastes and all hazardous or toxic
substances or wastes, including petroleum or petroleum distillates, natural
gas, natural gas liquids, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes
and all other substances, wastes, chemicals, pollutants, contaminants or
compounds of any nature in any form regulated pursuant to any Environmental
Law.

 

“Increase
Effective Date” has the meaning specified in Section 2.14(d).

 

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

 

(a) obligations in respect of money
borrowed (including principal, interest, assumption fees, prepayment fees,
yield maintenance charges, penalties, exit fees, contingent interest and other
monetary obligations whether choate or inchoate and whether by loan, the
issuance and sale of debt securities or the sale of property or assets to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets, or otherwise);

 

(b) obligations, whether or not for
money borrowed (i) represented by notes payable, letters of credit or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, (iii) 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, or (iv) in connection with the issuance of
preferred equity or trust preferred securities;

 

(c) Capital Lease Obligations;

 

(d) reimbursement obligations under any
letters of credit or acceptances (whether or not the same have been presented
for payment);

 

(e) Off—Balance Sheet Obligations;

 

(f) obligations to purchase, redeem,
retire, defease or otherwise make any payment in respect of any mandatory
redeemable stock issued by such Person or any other Person (inclusive of
forward equity contracts), valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends;

 

(g) as applicable, all obligations of
such Person (but not the obligation of others) in respect of any keep well
arrangements, credit enhancements, contingent or future 

 

14

 

funding obligations, purchase obligations, repurchase
obligations, sale/buy—back agreements, takeout commitments or forward equity
commitments, in each case evidenced by a binding agreement (excluding any such
obligation to the extent the obligation can be satisfied by the issuance of
Equity Interests (other than mandatory redeemable stock));

 

(h) net obligations under any Swap
Contract not entered into as a hedge against existing indebtedness, in an
amount equal to the Swap Termination Value thereof;

 

(i) all Non—Recourse Indebtedness,
recourse indebtedness and all indebtedness of other Persons which such Person
has guaranteed or is otherwise recourse to such Person;

 

(j) 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 Liens permitted
hereunder) 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; provided, that if such Person has not assumed or
become liable for the payment of such indebtedness, then for the purposes of
this definition the amount of such indebtedness shall not exceed the market
value of the property subject to such Lien;

 

(k) all Contingent Liabilities;

 

(l) all obligations of such Person
incurred in connection with the acquisition or carrying of fixed assets by such
Person or obligations of such Person to pay the deferred purchase or
acquisition price of property or assets, including contracts for the deferred
purchase price of property or assets that include the procurement of services;

 

(m) indebtedness of general
partnerships of which such Person is liable as a general partner (whether
secondarily or contingently liable or otherwise); and

 

(n) obligations to fund capital
commitments under any articles or certificate of incorporation or formation,
by-laws, partnership, limited liability company, operating or trust agreement
and/or other organizational, charter or governing documents, subscription
agreement or otherwise.

 

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

 

“Indemnified Taxes” means Taxes other
than Excluded Taxes.

 

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

 

“Information” has the meaning specified
in Section 11.07.

 

“Initial Maturity Date” means December
3, 2013.

 

15

 

“Insolvency Event” means, with respect
to any Person, (a) the filing of a decree or order for relief by a court
having jurisdiction in the premises with respect to such Person or any
substantial part of its assets or property in an involuntary case under any
applicable Insolvency 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 assets or 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 thirty (30) days, (b)
the commencement by such Person of a voluntary case under any applicable
Insolvency Law now or hereafter in effect, (c) the consent by such Person
to the entry of an order for relief in an involuntary case under any Insolvency
Law, (d) 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 part of its assets
or property, (e) the making by such Person of any general assignment for
the benefit of creditors, (f) the admission in a legal proceeding of the
inability of such Person to pay its debts generally as they become due, (g) the
failure by such Person generally to pay its debts as they become due, or (h) the
taking of action by such Person in furtherance of any of the foregoing.

 

“Insolvency Laws” means Title 11 of the
United States Code and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments and similar debtor relief laws from time
to time in effect affecting the rights of creditors generally.

 

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

 

“Interest Expense” means, with respect
to the Parent and its Subsidiaries on a consolidated basis for any Test Period,
the amount of total interest expense incurred by such Person, including
capitalized or accruing interest (but excluding interest funded under a
construction loan), all with respect to such Test Period.

 

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

 

“Interest Period” means as to each
Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate
Loan is disbursed or (in the case of any Eurodollar Rate Loan) converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in a Loan Notice; provided
that:

 

(i)                                     any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such 

 

16

 

Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding Business
Day;

 

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

 

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

 

Notwithstanding the foregoing, the Interest
Period shall be one Business Day for each Borrowing of a Eurodollar Rate Loan
that bears interest at a rate based on clause (b)(ii) of the definition of
“Eurodollar Rate.”

 

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

 

“Laws” means, collectively, all
international, foreign, Federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

 

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

 

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

 

“Leverage Ratio” means, with respect to
the Parent and its Subsidiaries, on a consolidated basis, as of any date of
determination, the ratio as of such date of (i) Total Indebtedness of the
Parent, to (ii) Total Assets of the Parent.

 

“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, easement,
right-of-way or other encumbrance on title to real property, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or nature
whatsoever (including any 

 

17

 

conditional sale or other title retention
agreement, and any financing lease having substantially the same economic
effect as any of the foregoing).

 

“Loan Documents” means this Agreement,
each Note, the Fee Letter and the Collateral Documents.

 

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

 

“Loan Parties” means, collectively, the
Borrower and the Guarantors.

 

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

 

“Mandatory Prepayment Event” means any
occurrence that gives rise to a requirement to make a prepayment under Section 2.03(b).

 

“Manager” means SPT Management, LLC, a
Delaware limited liability company.

 

“Market Value” means, as of any date of
determination, the market value of the Eligible Assets as determined by the
Administrative Agent in its sole discretion on a daily basis, using methodology
and parameters determined and applied by the Administrative Agent in its sole
discretion.

 

“Material Adverse Effect” means
(a) a material adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower, the Parent or the Parent
and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party; or (d) a material adverse effect upon the
Collateral or the validity, enforceability, perfection or priority of the
Administrative Agent’s Liens on the Collateral.

 

“Maturity Date” means the later of
(a) the Initial Maturity Date and (b) if the Initial Maturity Date is
extended pursuant to Section 2.12, such extended maturity date as
determined pursuant to such Section; provided,
however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the next
preceding Business Day.

 

“Measurement Period” means , as of any
date of determination, the twelve (12)-month period ending on the last day of
the month immediately preceding such date of determination.

 

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

 

“Multiemployer Plan” means any employee
benefit plan of the type described in Section 4001(a)(3) of ERISA, to
which the Borrower or any ERISA Affiliate makes or is 

 

18

 

obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make contributions.

 

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

 

“Near Cash Liquidity” means, with
respect to the Parent and its Subsidiaries on a consolidated basis, as of any
date of determination, the market value of Near Cash Securities held by the
Parent and its Subsidiaries as of such date. 
“Market Value” of Near Cash Securities shall be determined on a
quarterly basis through bids obtained from independent third party
broker-dealers reasonably acceptable to the Administrative Agent.

 

“Near Cash Securities” means
(i) CMBS having, at all times, a maturity or weighted average life of
twelve (12) months or less as determined by the applicable service,
(ii) RMBS having a duration of twelve (12) months or less as determined by
the Parent (and, at the Administrative Agent’s request, the assumptions used in
such determination shall be provided to the Administrative Agent for the
Administrative Agent’s review), in each case, having a rating of Baa3 or BBB
(or the equivalent) or higher by at least one Rating Agency (it being
acknowledged that such securities may also have a lower rating from one or more
Rating Agencies) or (iii) other public or privately placed securities
approved by the Administrative Agent.

 

“Net Cash Proceeds” means, with respect
to any issuance or sale by the Parent of any of its Equity Interests, the
excess of (i) the sum of the cash and Cash Equivalents received by the
Parent in connection with such issuance or sale, less (ii) the
underwriting discounts and commissions, and other out-of-pocket expenses,
incurred by the Parent in connection with such issuance or sale.

 

“Net Income” means, with respect to any
Test Period, the net income of Parent and its Subsidiaries on a consolidated
basis for such Test Period as determined in accordance with GAAP.

 

“New Lender Joinder Agreement” has the
meaning specified in Section 2.14(c).

 

“Non-Recourse Indebtedness” means
Indebtedness of a Person for borrowed money in respect of which recourse for
payment (except for customary exceptions for fraud, misapplication of funds,
environmental indemnities, Insolvency Events, non-approved transfers or
other events) is contractually limited to specific assets of such Person
encumbered by a Lien securing such Indebtedness.

 

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

 

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

 

19

 

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

 

“OFAC”
has the meaning set forth in the definition of “Embargoed Person.”

 

“Off-Balance Sheet Obligations” means,
with respect to any Person and any date, to the extent not included as a
liability on the balance sheet of such Person, all of the following with
respect to such Person as of such date: (a) monetary obligations under any
financing lease or so—called “synthetic,” tax retention or off—balance sheet
lease transaction which, upon the application of any Insolvency Laws, would be
characterized as indebtedness, (b) monetary obligations under any sale and
leaseback transaction which does not create a liability on the balance sheet of
such Person, or (c) any other monetary obligation arising with respect to
any other transaction which (i) is characterized as indebtedness for tax
purposes but not for accounting purposes, or (ii) is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheet of such Person (for purposes of this clause (c),
any transaction structured to provide tax deductibility as interest expense of
any dividend, coupon or other periodic payment will be deemed to be the
functional equivalent of a borrowing).

 

“Offering Circular” means that certain
Offering Circular, dated November 18, 2010, relating to approximately
$2,458,894,115 of Banc of America Large Loan, Inc. Pass-Through
Certificates Series 2010-HLTN.

 

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

 

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

 

“Overadvance Amount” means, as of any
date of determination, an amount equal to the positive difference (if any)
between (i) the Total Outstandings at such time multiplied by the then
effective Advance Rate and (ii) the Total Outstandings at such time
multiplied by the then Reference Advance Rate.

 

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

 

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

 

20

 

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

 

“PBGC” means the Pension Benefit
Guaranty Corporation.

 

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

 

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

 

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

 

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

 

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

 

“Platform” has the meaning specified in
Section 6.02.

 

“Pledge Agreement” means the Pledge Agreement
between the Parent and the Administrative Agent, dated as of the Closing Date,
substantially in the form of Exhibit E.

 

“Pledged Asset EBITDA” means, as of any
date of determination with respect to any Measurement Period, an amount equal
to the sum of Hilton Worldwide, Inc.’s (i) Adjusted EBITDA (as
defined in the Offering Circular) plus (ii) “Corporate Overhead” minus
(iii) “Timeshare” minus (iv) “Other Income”, in each case, for
such Measurement Period and, in the case of clauses (ii), (iii) and (iv), as
reported in the monthly reporting package described in the Offering Circular; provided, that “Pledged Asset EBITDA” shall be deemed to be
equal to zero at any time from and after the Borrower’s failure to deliver the
report required under Section 6.02(i) by the earlier of (a) the
third Business Day after it receives the applicable monthly financial
statements to be furnished pursuant to the “Hilton Loan Documents” (as defined
in the Security Agreement) or (b) the 45th day following the date that
monthly financial statements for the applicable Measurement Period to be
furnished pursuant to the “Hilton Loan Documents” (as defined in the Security
Agreement) are required to be delivered thereunder, in each case until such time as the Borrower is able to determine
the Pledged Asset EBITDA and delivers the related report under Section 6.02(i).

 

“Rating Agency” means each of Fitch,
Moody’s and S&P.

 

“Reference Advance Rate” means:

 

21

 

(a)                                  prior to the Initial Maturity Date:

 

(i)                                     70% on the Closing Date and at any time thereafter until such time (if
any) that the Borrower is required to make a prepayment under Section 2.03(b)(iii)(B) or
Section 2.03(b)(iv);

 

(ii)                                  60% at any time following the occurrence of a Mandatory Prepayment
Event arising under Section 2.03(b)(iii)(B) so long as no
Mandatory Prepayment Event has theretofore arisen under Section 2.03(b)(iv);

 

(iii)                               50% at any time following the occurrence of a Mandatory Prepayment
Event arising under Section 2.03(b)(iv) so long as no
Mandatory Prepayment Event has theretofore arisen under Section 2.03(b)(iii)(B);
and

 

(iv)                              40% at any time following the occurrence of Mandatory Prepayment
Events under both Section 2.03(b)(iii)(B) and Section 2.03(b)(iv);
and

 

(b)                                 on and after the Initial Maturity Date:

 

(i)                                     on the Initial Maturity Date (and thereafter unless and until one of
the following clauses becomes applicable), a rate that is 10% lower than the
Reference Advance Rate in effect on the day prior to the Initial Maturity Date
as determined in accordance with the foregoing clauses of this definition
(i.e., in the case where the Reference Advance Rate is 70% on the day prior to
the Initial Maturity Date, the Reference Advance Rate on the Initial Maturity
Date shall be 60%) (the Reference Advance Rate on the Initial Maturity Date
being referred to herein as the “Extension Reference Rate”);

 

(ii)                                  a rate that is 10% lower than the Extension Reference Rate at any time
following the occurrence of a Mandatory Prepayment Event arising under Section 2.03(b)(iii)(B) on
or after the Initial Maturity Date so long as no Mandatory Prepayment Event has
theretofore arisen under Section 2.03(b)(iii)(B) or Section 2.03(b)(iv) (i.e.,
50% in the case where the Extension Reference Rate is 60%);

 

(iii)                               a rate that is 20% lower than the Extension Reference Rate at any time
following the occurrence of a Mandatory Prepayment Event arising under Section 2.03(b)(iv) on
or after the Initial Maturity Date so long as no Mandatory Prepayment Event has
theretofore arisen under Section 2.03(b)(iii)(B) or Section 2.03(b)(iv) (i.e.,
40% in the case where the Extension Reference Rate is 60%); and

 

(iv)                              at any time following the occurrence of Mandatory Prepayment Events
arising under both Section 2.03(b)(iii)(B) and Section 2.03(b)(iv) on
or after the Initial Maturity Date, the greater of (A) 30% and (B) the
rate that is 30% lower than the Extension Reference Rate (i.e., 30% in the case
where the Extension Reference Rate is 60%).

 

22

 

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

 

“REIT” means a Person satisfying the
conditions and limitations set forth in Section 856(b) and 856(c) of
the Code which are necessary to qualify such Person as a “real estate
investment trust,” as defined in Section 856(a) of the Code.

 

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

 

“Release” means any release, spill,
emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping,
emptying, injection or leaching of any Hazardous Material into the Environment,
or into, from or through any building, structure or facility.

 

“Relevant Payment” has the meaning
specified in Section 10.11.

 

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

 

“Required Lenders” means, as of any
date of determination, Lenders holding in the aggregate more than 50% of the
Total Outstandings; provided that the portion of the Total Outstandings
held or deemed held by any Defaulting Lender shall be excluded for purposes of
making a determination of Required Lenders.

 

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

 

“Restricted Payment” means any dividend
or other distribution (whether in cash, securities or other property) with
respect to any capital stock or other Equity Interest of any Person or any of
its Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account
of any return of capital to any Person’s stockholders, partners or members (or
the equivalent of any thereof), or any option, warrant or other right to
acquire any such dividend or other distribution or payment.

 

“RMBS” means mortgage pass-through
certificates or other securities issued pursuant to a securitization of
residential mortgage loans.

 

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

 

23

 

“Secured Parties” means, collectively,
the Administrative Agent, the Lenders, each co-agent or sub-agent appointed by
the Administrative Agent from time to time pursuant to Section 9.05,
and the other Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Collateral Documents.

 

“Security Agreement” means the Security
Agreement between the Borrower and the Administrative Agent, dated as of the
Closing Date, substantially in the form of Exhibit F.

 

“Senior Debt Yield” means, as of any
date of determination with respect to any Measurement Period, the ratio
(expressed as a percentage) of (i) Pledged Asset EBITDA for such
Measurement Period to (ii) the aggregate outstanding principal balance of
the “Senior Loan” (as defined in the Offering Circular) as of the last day of
such Measurement Period.

 

“Significant Subsidiary” means, at any
date of determination, each Subsidiary or group of Subsidiaries of the Parent (a)
whose total assets at the last day of the most recent fiscal period for which
financial statements have been delivered pursuant to clause (a) or (b) of Section 6.01
were equal to or greater than 10% of the consolidated total assets of the
Parent and its Subsidiaries at such date or (b) whose gross revenues for
the most recently completed period of four fiscal quarters for which financial
statements have been delivered pursuant to clause (a) or (b) of Section 6.01
were equal to or greater than 10% of the consolidated gross revenues of the
Parent and its Subsidiaries for such period, in each case, determined in
accordance with GAAP (it being understood that such calculations shall be
determined in the aggregate for all Subsidiaries of the Company subject to any
of the events specified in clause (e), (f), (g) or (h) of Section 8.01).

 

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

 

“Solvency
Certificate”  means a Solvency Certificate of the chief financial officer of the
Parent, substantially in the form of Exhibit G.

 

“S&P” means Standard &
Poor’s Ratings Group and its successors.

 

“Stretch Advance Rate” means, at any
time, a percentage that is 5% greater than the then Reference Advance Rate
(i.e., in the case where the Reference Advance Rate is 60%, the Stretch Advance
Rate shall be 65%).

 

24

 

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

 

“Swap Contract” means any and all rate
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement.

 

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

 

“Tangible Net Worth” means, as of any
date of determination, with respect to any Person, all amounts which would be
included under capital or shareholder’s equity (or any like caption) on a
balance sheet of such Person, minus (a) amounts owing to such Person from
any Affiliate thereof, or from officers, employees, partners, members, directors,
shareholders or other Persons similarly affiliated with such Person or any
Affiliate thereof, (b) Intangible Assets and (c) prepaid taxes and/or
expenses, all on or as of such date.

 

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

 

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

 

“Test Period” means the time period
commencing on the first day of each calendar quarter through and including the
last day of such calendar quarter.

 

“Threshold Amount” means (i) with
reference to the Borrower, $100,000 and (ii) with reference to any other
Loan Party or any Significant Subsidiary thereof (other than the Borrower), $25,000,000.

 

25

 

“Total Assets” means, with respect to
the Parent, as of any date of determination, an amount equal to the aggregate
book value of all assets owned by the Parent on a consolidated basis and the
proportionate share of assets owned by non-consolidated Subsidiaries of the
Parent, less (a) amounts owing to the Parent or any of its
Subsidiaries from any Affiliate thereof, or from officers, employees, partners,
members, directors, shareholders or other Persons similarly affiliated with the
Parent or any Affiliate thereof, (b) Intangible Assets and (c) prepaid
taxes and expenses, all on or as of such date of determination; provided,
however, that “Total Assets” shall exclude the assets reflected on the
Parent’s consolidated balance sheet financed pursuant to the United States’
government’s TALF program.

 

“Total Indebtedness” means, with
respect to the Parent, as of any date of determination, all Indebtedness (other
than Contingent Liabilities not reflected on Parent’s consolidated balance
sheet), plus the proportionate share of all Indebtedness (other than
Contingent Liabilities not reflected on Parent’s consolidated balance sheet) of
all non-consolidated Affiliates of Parent, on or as of such date of
determination; provided, however, that “Total Indebtedness” shall
exclude the $171,349,642.62 of Indebtedness reflected on the Parent’s
consolidated balance sheet obtained in connection with the United States’
government’s TALF program.

 

“Total Outstandings” means, at any
time, the aggregate outstanding principal amount of the Term Loans then
outstanding.

 

“Type” means, when used in reference to
the Term Loans or any Borrowing, whether the rate of interest on the Term
Loans, or on that portion of the Term Loans comprising such Borrowing, is
determined by reference to the Base Rate or the Eurodollar Rate.

 

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

 

“Unrestricted Cash” means (i) cash
and Cash Equivalents (other than prepaid rents and security deposits made under
tenant leases) held by the Parent or any of its Subsidiaries that are not
subject to any Lien (excluding statutory liens in favor of any depositary bank
where such cash is maintained), minus (ii) amounts included in the
foregoing clause (i) that are with an entity other than the Parent or any
of its Subsidiaries as deposits or security for Contractual Obligations.

 

“Wholly Owned Unrestricted Subsidiary”
means, as to any Person as of any date of determination, any other Person (i) all
of the Equity Interests of which (other than directors’ qualifying shares
required by law) is owned directly and/or through other Wholly Owned
Unrestricted Subsidiaries by such Person and (ii) who is not, as of such
date of determination, prohibited from becoming a guarantor of the Obligations
under the express terms of its Organization Documents or any contract,
instrument or other agreement to which such Person is a party.

 

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

 

(a)           The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and 

 

26

 

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

 

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

 

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

 

1.03        Accounting Terms.

 

(a)           Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed
herein.

 

(b)           Changes in GAAP; Changes in Accounting Policies or
Reporting Practices.  If at any
time any change in GAAP, or any change in accounting policies or reporting
practices of the Parent or any of its Subsidiaries that are permitted by but
not required under, GAAP, would affect the computation of any financial ratio
or requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change(s) (subject
to the approval of the Required Lenders); provided  that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP and the accounting policies and reporting practices (as
the case may be) in effect prior to such change(s) and (ii) the
Borrower shall provide to the 

 

27

 

Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change(s).

 

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

 

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

 

ARTICLE II.  THE COMMITMENTS AND LOANS

 

2.01        Term Loans.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make a term loan (each such loan, a “Term
Loan”) to the Borrower on the Closing Date, in an aggregate amount not to
exceed the amount of such Lender’s Commitment. 
The amounts borrowed under this Section 2.01 and repaid or
prepaid may not be reborrowed.  Term
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.  Each Lender hereby represents
and warrants that, on and as of the Closing Date, it is a “qualified purchaser”
(within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder) and a “qualified institutional buyer” (within the
meaning of Rule 144A under the Securities Act of 1933, as amended).

 

2.02        Borrowings, Conversions and
Continuations of Loans.

 

(a)           Each Borrowing, each conversion of Borrowings from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be
made upon the Borrower’s irrevocable notice to the Administrative Agent, which
may be given by telephone.  Each such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) three (3) Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans (other
than Eurodollar Rate Loans referred to in the following clause (ii)) or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Eurodollar Rate Loans made on or prior to
the 10th day following the Closing Date or any
Borrowing of Base Rate Loans.  Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.  Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Borrowing
of or conversion to Base Rate Loans shall be in a principal amount of $500,000
or a whole multiple of $100,000 in excess thereof.  Each Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Borrowing,
a conversion of a Borrowing from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Term Loans to be borrowed (in the case of
the initial Loan Notice), converted or continued, (iv) the Type of
Borrowing to be borrowed or to which existing 

 

28

 

Borrowings are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto (which
shall be one, two, three or six months). 
If the Borrower fails to specify a Type of Loan in a Loan Notice or if
the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Borrowing shall be made as, or converted to,
Base Rate Loans.  Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans.  If the Borrower requests a
Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any
such Loan Notice, but fails to specify an Interest Period, it will be deemed to
have specified an Interest Period of one month.

 

(b)           Following receipt of a Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its
Term Loan, and if no timely notice of a conversion or continuation is provided
by the Borrower, the Administrative Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans described in the
preceding subsection.  In the case of the
initial Borrowing, each Lender shall make the amount of its Term Loan available
to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Closing
Date.  Upon satisfaction of the
conditions set forth in Article IV, the Administrative Agent shall
make all funds so received available to the Borrower in like funds as received
by the Administrative Agent either by (i) crediting the account of the Borrower
on the books of Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided
to (and reasonably acceptable to) the Administrative Agent by the Borrower.

 

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

 

(d)           The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for Eurodollar Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

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

 

2.03        Prepayments.

 

(a)           Optional.  The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay the
Term Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later
than 11:00 a.m. (A) three (3) Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of
Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in
a principal amount of $1,000,000 or a whole multiple of $100,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans shall be in a 

 

29

 

principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding.  Each
such notice shall specify the date and amount of such prepayment and the Type(s) of
Term Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the
Interest Period(s) of such Term Loans. 
The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s Applicable Percentage
of such prepayment.  If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.  Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05.  Subject to Section 2.13, each
such prepayment shall be applied to the Loans of the Lenders in accordance with
their respective Applicable Percentages.

 

(b)           Mandatory.

 

(i)            The Borrower shall repay in
full the outstanding balance of all Term Loans on the earlier of:

 

(A)          the Maturity Date, and

 

(B)           the second Business Day
following the date (if any) that the Market Value of the Eligible Assets is
equal to zero.

 

(ii)           If for any reason on any
date (a “Cash Sweep Reference Date”) either:

 

(A)          the then effective Advance
Rate is greater than the then Reference Advance Rate but less than the then
Stretch Advance Rate then, all amounts then and thereafter on deposit in the
Collection Account will be applied immediately to prepay the Term Loans; provided
that such requirement to apply such amounts (1) will not apply unless the
Overadvance Amount exceeds $500,000 as of the applicable Cash Sweep Reference
Date and (2) will cease to apply once the effective Advance Rate is no
longer greater than the then Reference Advance Rate, or

 

(B)           the Senior Debt Yield as of
the last day of the then most recently ended Measurement Period is determined
to be less than 12%, then, on and after the date of such determination of
Senior Debt Yield, all amounts on deposit in the Collection Account will be
applied immediately to prepay the Term Loans; for purposes of any determination
under this clause, the Senior Debt Yield will be determined by reference to the
most recently delivered monthly report that is required to be delivered
pursuant to Section 6.02(i) with respect to the applicable
Measurement Period unless as of such date of determination Pledged Asset EBITDA
is deemed to equal zero in accordance with the definition thereof, in which
case the Senior Debt Yield will be deemed to be less than 12% as of the
applicable date of determination.

 

(iii)          If for any reason on any
date:

 

30

 

(A)          the effective Advance Rate
is greater than the then Stretch Advance Rate, the Borrower shall within two (2) Business
Days of such occurrence prepay the Term Loans in an aggregate amount sufficient
to cause the then effective Advance Rate to be no greater than the then
Reference Advance Rate;

 

(B)           the Senior Debt Yield as of
the last day of the then most recently ended Measurement Period is determined
to be less than 12%, the Borrower shall within two (2) Business Days
following the date of such determination of Senior Debt Yield, prepay the Term
Loans in an aggregate amount sufficient, immediately after giving effect to
such prepayment, to cause the effective Advance Rate to be no greater than the
then Reference Advance Rate; for purposes of any determination under this
clause, the Senior Debt Yield will be determined by reference to the most
recently delivered monthly report that is required to be delivered pursuant to Section 6.02(i) with
respect to the applicable Measurement Period unless as of such date of
determination Pledged Asset EBITDA is deemed to equal zero in accordance with
the definition thereof, in which case the Senior Debt Yield will be deemed to
be less than 12% as of the applicable date of determination; or

 

(C)           the Facility Debt Yield as
of the last day of the then most recently ended Measurement Period is
determined to be less than 24.5%, the Borrower shall within two (2) Business
Days following the date of such determination of Facility Debt Yield, prepay
the Term Loans in an aggregate amount sufficient to cause the Facility Debt
Yield, on a pro forma basis after giving effect to
such prepayment, to be at least equal to 24.5%; for purposes of any
determination under this clause, the Facility Debt Yield will be determined by
reference to the most recently delivered monthly report that is required to be
delivered pursuant to Section 6.02(i) with respect to the
applicable Measurement Period unless as of such date of determination Pledged
Asset EBITDA is deemed to equal zero in accordance with the definition thereof,
in which case the Facility Debt Yield will be deemed to be equal to 24.5% as of
the applicable date of determination.

 

(iv)          On the first date (if any)
that any amount owing under or in respect of any Eligible Asset is for any
reason overdue or otherwise delinquent for a period of sixty (60) days or more,
or if the Borrower is unable for any reason to determine (by reference to
monthly financial statements required to be furnished pursuant to the “Hilton
Loan Documents” (as defined in the Security Agreement)) the Facility Debt Yield
for a period of 120 consecutive days, then the Borrower shall within two (2) Business
Days following such date prepay the Term Loans in an aggregate amount
sufficient, immediately after giving effect to such prepayment, to cause the
effective Advance Rate to be no greater than the then Reference Advance Rate.

 

(v)           Upon receipt by the Borrower
of any amount in respect of a payment on account of the principal of an
Eligible Asset (whether by virtue of an amortization payment, a prepayment, an
enforcement or otherwise) (each, an “EA Principal Payment”), the
Borrower shall within two (2) Business Days following such date prepay 

 

31

 

the Term Loans in an
aggregate equal to the product of (x) the amount of such EA Principal
Payment, multiplied by (y) the then Reference Advance Rate.

 

(vi)          The obligations of the
Borrower to make prepayments pursuant to the foregoing clauses of this Section 2.03(b) are
independent obligations, and no prepayment made pursuant to any clause of this Section 2.03(b) (other
than a prepayment in full of all Term Loans) shall relieve the Borrower of its
obligation to make any other prepayment that is required to be made under any
other clause hereof.  If at any time the
Borrower is required to make prepayments of the Term Loans pursuant to more
than one of clauses (ii) through (v) of this Section 2.03(b),
then until such time as all such required prepayments have been made all
prepayments made by the Borrower pursuant to this Section 2.03(b) shall
be deemed as having been applied in the following order for purposes of
determining whether any such prepayment requirement has been satisfied:

 

First, to prepayments of the Term Loans required at such time pursuant to Section 2.03(b)(iii) (irrespective
of the date that such required prepayments are required to be paid pursuant to
such Sections), until such time as all such prepayments have been made in full;

 

Second, to prepayments of the Term Loans required at such time pursuant to Section 2.03(b)(ii),
until such time as all such prepayments have been made in full;

 

Third, to prepayments of the Term Loans required at such time pursuant to Section 2.03(b)(iv),
until such time as all such prepayments have been made in full; and

 

Fourth, to prepayments of the Term Loans required at such time pursuant to Section 2.03(b)(v),
until such time as all such prepayments have been made in full.

 

2.04        Termination or Reduction of
Commitments.  The
Aggregate Commitments shall automatically terminate upon the making of the Term
Loans on the Closing Date.

 

2.05        Collections.

 

(a)           Collection Account.  On or prior to the Closing Date, the Borrower
shall establish an account (the “Collection Account”) with Bank of
America that is subject to a Control Agreement. 
All funds on deposit in the Collection Account shall be collateral
security for the Obligations.  The
Collection Account shall be an interest-bearing account, with all accrued
interest to become part of the balance in the Collection Account.  The
Borrower agrees the Borrower shall include all interest and earnings on any
such balance as its income (and, if the Borrower is a partnership or other
pass-through entity, the income of all partners, members or beneficiaries, as
the case may be), and shall be the owner of all funds on deposit in the Collection
Account for federal and applicable state and local tax purposes.

 

(b)           The Borrower will on the Closing Date instruct (and
after the Closing Date will continue to instruct), the applicable obligor,
agent, trustee, servicer or sub-servicer (as the case may be) with respect to
the Eligible Assets to deposit or otherwise transfer into the Collection
Account all principal, interest and other income, distributions, receipts,
payments, collections, prepayments, recoveries, proceeds (including insurance
and condemnation proceeds) and other 

 

32

 

payments or amounts of any kind paid, received,
collected, recovered or distributed on, or in connection with or in respect of
the Eligible Assets.  The Borrower shall not make any change in the
foregoing instructions.  The Borrower
shall provide to the Administrative Agent a written report within five (5) Business
Days following each deposit or other transfer into the Collection Account,
which report identifies the amount included in such deposit or transfer in
respect of principal, interest and other sums paid in respect of Eligible
Assets.  Each such report will include
the Borrower’s calculation of the amount that Bank of America is authorized to
debit and apply to the Obligations as contemplated in clause (c) of this Section 2.05.

 

(c)           The Administrative Agent shall have the exclusive
right to manage and control all funds in the Collection Account, but the
Administrative Agent shall have no fiduciary duty with respect to such
deposited funds.  With respect to each deposit or other transfer of funds
into the Collection Account, promptly following the Administrative Agent’s
receipt of the report referred to in clause (b) above with respect to such
deposit or transfer the Administrative Agent shall:

 

(i)            cause an amount equal to any
interest on the Term Loans then due and payable to be applied to pay such
Obligations;

 

(ii)           cause an amount equal to the
amount of any prepayment that is then due and payable pursuant to Section 2.03(b) to
be to be applied to pay such Obligations;

 

(iii)          cause an amount equal to any
then due and payable Obligations not described in the foregoing clauses (i) or
(ii) to be applied to pay such Obligations; and

 

(iv)          after application of funds
as described in the foregoing clauses (i) through (iii), transfer any
remaining funds on deposit in the Collection Account by wire transfer to an
account designated by the Borrower, but if and only if each of the
following conditions are satisfied at the time:

 

(A)          no Default or Event of
Default shall exist; and

 

(B)           the Borrower is not required
to make a prepayment of the Term Loans pursuant to Section 2.03
(irrespective of the date that such prepayments are required to be paid
pursuant to such Section).

 

(d)           Any account fees and charges may be deducted from
the balance, if any, in the Collection Account.  The Collection Account
may be established and held in such name or names as the Administrative Agent
may deem appropriate, including in the name of the Administrative Agent for the
Lenders.  The Borrower hereby constitutes and appoints the Administrative
Agent and any officer or agent of the Administrative Agent its true and lawful
attorneys-in-fact with full power of substitution to open the Collection Account
and to do any and every act that the Borrower might do on its own behalf to
fulfill the terms of this Section 2.05.  To the extent
permitted by law, the Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof.  It is understood and
agreed that this power of attorney, which shall be deemed to be a power coupled
with an interest, cannot be revoked.

 

33

 

2.06        Interest.

 

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

 

(b)           (i)            While any Event of Default exists, the Borrower
shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

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

 

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

 

2.07        Fees.  In addition to certain fees described in Section 2.12(b)(iii):

 

(a)           The Borrower shall pay to Bank of America, for its
own account, the fee in the amount and at the time specified in the Fee
Letter.  Such fee shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

 

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

 

2.08        Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.  (a) All computations of interest for
Base Rate Loans (including Base Rate Loans determined by reference to the
Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. 
All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year).  Interest shall accrue on the Term
Loans for the day on which the Term Loans are made, and shall not accrue on the
Term Loans, or any portion thereof, for the day on which the Term Loans or such
portion is paid, provided that if the Term Loans are repaid on the same
day on which it is made it shall, subject to Section 2.10(a), bear
interest for one day.  Each determination
by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent demonstrable error.

 

(b)           If,
for any reason, the Parent or the Administrative Agent or the Required Lenders
determine(s) that (i) the Facility Debt Yield as calculated by the
Loan Parties (or any of them) as of any applicable date was inaccurate and (ii) a
proper calculation of the Facility Debt Yield would have resulted in higher
pricing for such period, the Borrower shall immediately and

 

34

 

retroactively be obligated to pay to the
Administrative Agent for the account of the Lenders, promptly on demand by the
Administrative Agent (or, after the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower under the Bankruptcy Code of
the United States, automatically and without further action by the
Administrative Agent or any Lender), an amount equal to the excess of the
amount of interest and fees that should have been paid for such period over the
amount of interest and fees actually paid for such period.  This paragraph shall not limit the rights of
the Administrative Agent or any Lender, as the case may be, under any other
provision of this Agreement or any other Loan Document.  The Borrower’s obligations under this
paragraph shall survive the repayment of all other Obligations hereunder.

 

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

 

2.10        Payments Generally;
Administrative Agent’s Clawback.

 

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

 

(b)           (i)  Funding by Lenders; Presumption by
Administrative Agent.  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed Closing Date that such Lender will not make available to the
Administrative Agent such Lender’s Term Loan, the Administrative Agent may
assume that such Lender has made such Term Loan 

 

35

 

available on such date in accordance with Section 2.02
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if
a Lender has not in fact made its Term Loan available to the Administrative
Agent, then the applicable Lender and the Borrower jointly and severally agree
to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Administrative Agent in
connection with the foregoing, and (B) in the case of a payment to be made
by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping
period, the Administrative Agent shall promptly remit to the Borrower the
amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the Term
Loans to the Administrative Agent, then the amount so paid shall constitute
such Lender’s Term Loan included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

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

 

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

 

(c)           Failure to Satisfy Conditions Precedent.  If any Lender makes available to the
Administrative Agent funds for the Term Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Administrative Agent
because the conditions to the Term Loans set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make the Term Loans and to make payments pursuant to Section 11.04(c) are
several and not joint.  The failure of
any Lender to make its Term Loan or to make any payment under Section 11.04(c) on
any date required hereunder shall not relieve any other Lender of its 

 

36

 

corresponding obligation to do so on such date, and
no Lender shall be responsible for the failure of any other Lender to so make
its Term Loan, or to make its payment under Section 11.04(c).

 

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

 

2.11        Sharing of Payments by Lenders.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on the Term Loan made by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of the Term Loans and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify
the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Term Loans, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Term Loans and other amounts owing them, provided
that:

 

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

 

(ii)           the provisions of this Section shall
not be construed to apply to (x) any payment made by or on behalf of the
Borrower pursuant to and in accordance with the express terms of this Agreement
(including the application of funds arising from the existence of a Defaulting
Lender), or (y) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Term Loan to any assignee or participant, other than an assignment to
the Borrower or any Affiliate thereof (as to which the provisions of this Section shall
apply).

 

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

 

2.12        Extension of Maturity Date.

 

(a)           Requests for Extension.  The Borrower may, by written notice to the
Administrative Agent (such notice, an “Extension Notice”) not earlier
than 60 days and not later than 30  days prior to
the Initial Maturity Date, request that the Lenders extend the Maturity Date
for an additional twelve (12) months from the Initial Maturity Date.  The Administrative Agent shall distribute any
such Extension Notice promptly following its receipt thereof.

 

37

 

(b)           Conditions Precedent to
Effectiveness of Maturity Date Extension.  As conditions precedent to
such extension, the Borrower shall, on or prior to the Initial Maturity Date,
satisfy each of the following requirements for such extension to become
effective:

 

(i)            The Administrative Agent
shall have received an Extension Notice within the period required under
subsection (a) above;

 

(ii)           On the date of such
Extension Notice and both immediately before and immediately after giving
effect to such extension of the Maturity Date, no Default or Event of Default
shall have occurred and be continuing;

 

(iii)          The Borrower shall have paid
to the Administrative Agent, for the pro rata benefit of the Lenders based on
their respective Applicable Percentage as of such date, an extension fee in an
amount equal to 0.25% of the Total Outstandings as of the Initial Maturity Date
(it being agreed that such fee shall be fully earned when paid and shall not be
refundable for any reason);

 

(iv)          The Administrative Agent
shall have received evidence satisfactory to it that the Senior Debt Yield, as
at the date of the most recent monthly financial statements furnished pursuant
to the “Hilton Loan Documents” (as defined in the Security Agreement), is at least
15%;

 

(v)           The Borrower
shall have made a prepayment of the Term Loans in an aggregate amount
sufficient, immediately after giving effect to such prepayment, to cause the
effective Advance Rate to be no greater than the Extension Reference Rate;

 

(vi)          The
Administrative Agent shall have received a certificate of each Loan Party dated
as of the Initial Maturity Date signed by a Responsible Officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to
such extension and (ii) certifying that, before and after giving effect to
such extension, (A) the representations and warranties contained in Article V
and the other Loan Documents are true and correct in all material respects on
and as of the Initial Maturity Date, except (x) to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, (y) any
representation or warranty that is already by its terms qualified as to “materiality”,
“Material Adverse Effect” or similar language shall be true and correct in all
respects as of such date after giving effect to such qualification and
(z) for purposes of this Section 2.12, the representations and
warranties contained in subsections (a) and (b) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to
subsections (a) and (b), respectively, of Section 6.01, and
(B) no Default exists;

 

(vii)         The Borrower shall have
delivered to the Administrative Agent a Solvency Certificate executed on behalf
of each of the Loan Parties (with respect to the Solvency of each such Loan
Party both before and after giving effect to such extension); and

 

(viii)        The Borrower and the other
Loan Parties shall have delivered to the Administrative Agent such
reaffirmations of their respective obligations under the Loan 

 

38

 

Documents (after giving
effect to the extension), and acknowledgments and certifications that they have
no claims, offsets or defenses with respect to the payment or performance of
any of the Obligations, including, without limitation, reaffirmations of each
of the Pledge Agreement, the Security Agreement and Guaranty, executed by the
Loan Parties party thereto.

 

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

 

(i)            Waivers and Amendments.  That Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in Section 11.01.

 

(ii)           Reallocation of Payments.  Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of that
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII
or otherwise, and including any amounts made available to the Administrative
Agent by that Defaulting Lender pursuant to Section 11.08), shall
be applied at such time or times as may be determined by the Administrative
Agent as follows: first, to the payment of any
amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment of any amounts owing to the Lenders
as a result of any judgment of a court of competent jurisdiction obtained by
any Lender against that Defaulting Lender as a result of that Defaulting Lender’s
breach of its obligations under this Agreement; third,
so long as no Default or Event of Default exists, to the payment of any amounts
owing to the Borrower as a result of any judgment of a court of competent
jurisdiction obtained by the Borrower against that Defaulting Lender as a
result of that Defaulting Lender’s breach of its obligations under this
Agreement; and fourth, to that Defaulting Lender
or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of the Term
Loans in respect of which that Defaulting Lender has not fully funded its
appropriate share and (y) the Term Loans were made at a time when the
conditions set forth in Article IV were satisfied or waived, such
payment shall be applied solely to pay the Loans of all non-Defaulting Lenders
on a pro rata basis prior to being applied to the payment of the Term Loan of
that Defaulting Lender.  Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed
paid to and redirected by that Defaulting Lender, and each Lender irrevocably
consents hereto.

 

(b)           Defaulting Lender Cure.  If the Borrower and the Administrative Agent
agree in writing in their sole discretion that a Defaulting Lender should no
longer be deemed to be a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein that Lender will, to the
extent applicable, purchase that portion of outstanding Term Loans of the other
Lenders or take such other actions as the Administrative Agent may determine to
be necessary to cause the Loans to be held on a pro rata basis by the Lenders
in accordance with their Applicable Percentages, whereupon that Lender will
cease to be a Defaulting Lender; 

 

39

 

provided that no adjustments will be
made retroactively with respect to fees accrued or payments made by or on
behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the
affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

 

2.14        Increase in Commitments.

 

(a)           Request for Increase.  Provided there exists no Default, upon notice
to the Administrative Agent (which shall promptly notify the Lenders), the
Borrower may from time to time, request an increase in the Term Loans by
an amount (for all such requests) not exceeding $24,805,000; provided
that (i) any such request for an increase shall be in a minimum amount of
$5,000,000 and (ii) the Borrower may make a maximum of three (3) such
requests.  At the time of sending such
notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten (10) Business Days from the date of
delivery of such notice to the Lenders).

 

(b)           Lender
Elections to Increase.  Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Term Loans and, if so, whether by an amount equal to, greater than, or
less than its ratable portion (based on such Lender’s Applicable Percentage) of
such requested increase.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Term Loans.

 

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

 

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

 

(e)           Conditions
to Effectiveness of Increase.  As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent a certificate of each
Loan Party dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by a Responsible Officer of such Loan Party
(i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, (ii) in the case of the
Borrower, certifying that, before and after giving effect to such increase,
(A) the representations and warranties contained in Article V
and the other Loan Documents are true and correct in all material respects on
and as of the Increase Effective Date, except to the extent that (1) such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, (2) any
representation or warranty that is already by its terms qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and 

 

40

 

correct in all respects as of such date after giving
effect to such qualification and (3) except that for purposes of this Section 2.14,
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
(B) no Default exists, (C) the then effective Advance
Rate is not greater than the then Reference Advance Rate, (D) the Senior
Debt Yield, as most recently determined, is at least 12% and (E) the
Facility Debt Yield, as most recently determined, is at least 24.5% , and (iii) any
fees required to be paid under the Loan Documents in connection with such
increase shall have been paid.  The additional Term Loans shall be made by
the Lenders participating therein pursuant to the procedures set forth in Section 2.02.

 

(f)            Conflicting
Provisions.  This Section shall supersede any
provisions in Section 2.11 or 11.01 to the contrary.

 

ARTICLE III.  TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Payments Free of Taxes; Obligation to Withhold;
Payments on Account of Taxes.  (i) Any and all payments by or on
account of any obligation of any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes. 
If, however, applicable Laws require the applicable withholding agent to
withhold or deduct any Indemnified Taxes (including Other Taxes), such Tax
shall be withheld or deducted in accordance with such Laws as determined in
good faith by the applicable withholding agent.

 

(ii)           If the applicable
withholding agent shall be required by applicable Laws to withhold or deduct
any Indemnified Taxes or Other Taxes, from any payment, then (A) the
applicable withholding agent shall withhold or make such deductions, (B) the
applicable withholding agent shall timely pay the full amount withheld or
deducted to the relevant Governmental Authority in accordance with applicable
Laws, and (C) the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or all required
deductions (including deductions applicable to additional sums payable under
this Section) have been made, the Administrative Agent or Lender, as the case
may be, receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

 

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

 

(c)           Tax Indemnifications.  (i) Without limiting the provisions of
subsection (a) or (b) above, the Loan Parties shall, and do hereby,
jointly and severally, indemnify the Administrative Agent and each Lender for
any Indemnified Taxes and Other Taxes as set forth herein, and shall make
payment in respect thereof within ten (10) days after demand therefor, for
the full amount of any such Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) payable by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and 

 

41

 

reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  The Loan Parties shall also, and do hereby,
jointly and severally, indemnify the Administrative Agent, and shall make
payment in respect thereof within ten (10) days after demand therefor, for
any amount which a Lender for any reason fails to pay indefeasibly to the
Administrative Agent as required by clause (ii) of this subsection.  A certificate as to the amount of any such
payment or liability delivered to the Loan Parties by a Lender (with a copy to
the Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent demonstrable error.

 

(ii)           To the extent required by
any applicable Law, the Administrative Agent may deduct or withhold from any
payment to any Lender an amount equivalent to any applicable withholding
tax.  Without limiting the provisions of subsection
(a) or (b) above, if any Governmental Authority asserts a claim that
a Loan Party or the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered, was not properly executed or because such Lender failed to
notify the Loan Parties or the Administrative Agent of a change in
circumstances that rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), then each Lender shall, and does
hereby, indemnify and hold harmless such Loan Party and the Administrative
Agent, and shall make payment in respect thereof within ten (10) days
after demand therefor, fully for all amounts paid, directly or indirectly, by
the Administrative Agent as Taxes or otherwise, and any and all related losses,
claims, liabilities, penalties, interest and expenses (including the fees,
charges and disbursements of any counsel for such Loan Party or  the Administrative Agent), whether or not such Tax was
correctly or legally asserted.  A certificate
as to the amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent demonstrable error.  Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under this Agreement or any other Loan Document against any
amount due to the Administrative Agent under this clause (ii).  The agreements in this clause (ii) shall
survive the resignation and/or replacement of the Administrative Agent, any
assignment of rights by, or the replacement of, a Lender and the repayment,
satisfaction or discharge of all other Obligations.

 

(d)           Evidence of Payments.  As soon as practicable, after any payment of
Indemnified Taxes or Other Taxes paid by a Loan Party to a Governmental
Authority as provided in this Section 3.01, such Loan Party shall
deliver to the Administrative Agent, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of any return required by Laws to report such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

 

(e)           Status of Lenders.  Each Lender shall, at such times as are
reasonably requested by the Borrower, any other Loan Party or the
Administrative Agent, provide the Borrower, such other Loan Party and the
Administrative Agent with any documentation prescribed by Law, or reasonably
requested by the Borrower, such other Loan Party or the Administrative Agent,
certifying as to any entitlement of such Lender to an exemption from, or
reduction in, any withholding Tax with respect to any payments to be made to
such Lender under the Loan 

 

42

 

Documents. 
Each such Lender shall, whenever a lapse in time or change in
circumstances renders such documentation expired, obsolete or inaccurate in any
material respect, deliver promptly to the Borrower, the other Loan Parties and
the Administrative Agent updated or other appropriate documentation (including
any new documentation reasonably requested by the applicable withholding agent)
or promptly notify the Borrower, the other Loan Parties and the Administrative
Agent of its inability to do so.  Unless the
applicable withholding agent has received forms or other documents satisfactory
to it indicating that payments under any Loan Document to or for a Lender are
not subject to withholding tax or are subject to such Tax at a rate reduced by
an applicable tax treaty, the Borrower, the other Loan Parties, Administrative
Agent or other applicable withholding agent shall withhold amounts required to
be withheld by applicable Law from such payments at the applicable statutory
rate.

 

Without limiting the generality of the
foregoing:

 

(i)            Each Lender that is a United
States person (as defined in Section 7701(a)(30) of the Code) shall
deliver to the Borrower, the other Loan Parties and the Administrative Agent on
or before the date on which it becomes a party to this Agreement two properly
completed and duly signed original copies of Internal Revenue Service Form W-9
(or any successor form) certifying that such Lender is exempt from U.S. federal
backup withholding.

 

(ii)           Each Lender that is not a
United States person (as defined in Section 7701(a)(30) of the Code) shall
deliver to the Borrower, the other Loan Parties and the Administrative Agent on
or before the date on which it becomes a party to this Agreement (and from time
to time thereafter when required by Law or upon the reasonable request of the Borrower,
the other Loan Parties or the Administrative Agent) whichever of the following
is applicable:

 

(I)            two (2) duly completed copies of Internal Revenue Service Form W-8BEN
(or any successor forms) claiming eligibility for benefits of an income tax
treaty to which the United States of America is a party,

 

(II)           two (2) duly completed copies of Internal Revenue Service Form W-8ECI
(or any successor forms),

 

(III)         in the case of a Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a
certificate, in substantially the form of Exhibit H (any such
certificate a “United States Tax Compliance Certificate”), or any other
form approved by the Administrative Agent, to the effect that such Lender is
not (A) a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, (B) a “10 percent shareholder” of the Borrower or the Parent
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code, and that no payments in connection with the Loan Documents are
effectively connected with such Lender’s conduct of a U.S. trade or business
and (y) two (2) duly completed copies of Internal Revenue Service Form W-8BEN
(or any successor forms),

 

43

 

(IV)         to the extent a Lender is not the beneficial owner (for example, where
the Lender is a partnership, or is a Lender that has granted a participation), Internal
Revenue Service Form W-8IMY (or any successor forms) of the Lender,
accompanied by a Form W-8ECI, W-8BEN, United States Tax Compliance
Certificate, Form W-9, Form W-8IMY (or other successor forms) or any
other required information from each beneficial owner, as applicable (provided
that, if the Lender is a partnership (and not a participating Lender) and one
or more beneficial owners are claiming the portfolio interest exemption, the
United States Tax Compliance Certificate shall be provided by such Lender on
behalf of such beneficial owner(s)), or

 

(V)           any other form prescribed by applicable requirements of U.S. federal
income tax Law as a basis for claiming exemption from or a reduction in U.S.
federal withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable requirements of Law to permit
the Borrower and the Administrative Agent to determine the withholding or
deduction required to be made.

 

Each Lender shall, from time to time after the
initial delivery by such Lender of the forms described above, whenever a lapse
in time or change in circumstances renders such forms, certificates or other
evidence so delivered expired, obsolete or inaccurate, promptly (1) deliver
to the Borrower, the other Loan Parties and the Administrative Agent (in such number
of copies as shall be requested by the recipient) renewals, amendments or
additional or successor forms, properly completed and duly executed by such
Lender (or other applicable Person), together with any other certificate or
statement of exemption required in order to confirm or establish such Lender’s
(or other applicable Person’s) status or that such Lender (or other applicable
Person) is entitled to an exemption from or reduction in U.S. federal
withholding tax or (2) notify Administrative Agent, the Borrower and the
other Loan Parties of its (or other applicable Person’s) inability to deliver
any such forms, certificates or other evidence.

 

Notwithstanding any other provision of this
subsection (e), a Lender shall not be required to deliver any form that
such Lender is not legally eligible to deliver.

 

(f)            Treatment of Certain Refunds.  Unless required by applicable Laws, at no
time shall the Administrative Agent have any obligation to file for or
otherwise pursue on behalf of a Lender, or have any obligation to pay to any
Lender, any refund of Taxes withheld or deducted from funds paid for the
account of such Lender, as the case may be. 
If the Administrative Agent or any Lender determines, in its sole discretion,
that it has received a refund of any Indemnified Taxes or Other Taxes as to
which it has been indemnified by a Loan Party or with respect to which a Loan
Party has paid additional amounts pursuant to this Section, it shall pay to
such Loan Party an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by such Loan Party under
this Section with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes)
incurred by the Administrative Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund net of any Taxes payable by the
Administrative Agent or Lender), provided that the applicable Loan Party, upon
the request of the Administrative Agent or such 

 

44

 

Lender, agrees to repay the amount paid over to such
Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. 
This subsection shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to any Loan Party or any
other Person.

 

(g)           Payments made by Administrative Agent.  For the avoidance of doubt, any payments made
by the Administrative Agent to any Lender shall be treated as payments made by
the applicable Loan Party.

 

(h)           Lender treated as Partnership.  If any Lender is treated as partnership for
purposes of an applicable Indemnified Tax or Other Tax, any withholding made by
such Lender shall be treated as if such withholding had been made by the
applicable Loan Party or the Administrative Agent.

 

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

 

45

 

3.03        Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan,
(b) adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan or in connection with an existing or proposed Base Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to
a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. 
Thereafter, (x) the obligation of the Lenders to make or maintain
Eurodollar Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the
Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar
Rate component in determining the Base Rate shall be suspended, in each case
until the Administrative Agent (upon the instruction of the Required Lenders)
revokes such notice.  Upon receipt of
such notice, the Borrower may revoke any pending request for a conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a conversion to or continuation of
Base Rate Loans in the amount specified therein.

 

3.04        Increased Costs; Reserves on
Eurodollar Rate Loans.

 

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

 

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

 

(ii)           impose on any Lender or the
London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Rate Loans made by such Lender;

 

and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any portion of
such Lender’s Term Loan the interest on which is determined by reference to the
Eurodollar Rate (or, in the case of clause (ii) above, such Lender’s Term
Loan), or of maintaining its obligation to make any such Loan), or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or any other amount) then, upon request of such Lender
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered; provided, however, that Borrower’s obligations with respect to
any Taxes shall be governed solely by Section 3.01.

 

(b)           Capital Requirements.  If any Lender determines that any Change in
Law affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement, the Commitment of such Lender or the Term Loan made by 

 

46

 

such Lender, to a level below that which such Lender
or such Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s policies and the policies of such
Lender’s holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender’s holding company for any such
reduction suffered.

 

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

 

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

 

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

 

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

 

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

 

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

 

47

 

(c)           any assignment of a Eurodollar Rate Loan on a day
other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 11.13;

 

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

 

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

 

3.06        Mitigation Obligations;
Replacement of Lenders.

 

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

 

(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.04,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 3.01,
the Borrower may replace such Lender in accordance with Section 11.13.

 

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

 

ARTICLE IV.  CONDITIONS PRECEDENT

 

The effectiveness of this Agreement and
obligation of each Lender to make its Term Loan hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent’s receipt of the following,
each of which shall be originals, .pdf copies sent via electronic mail or
telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a 

 

48

 

recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and each of the
Lenders:

 

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

 

(ii)           [intentionally omitted];

 

(iii)          each of the Pledge Agreement
and the Security Agreement, duly executed by the applicable Loan Party,
together with:

 

(A)          certificates or instruments
representing any Certificated Securities included in the Collateral Documents,
accompanied by all endorsements and/or powers required by such Collateral
Documents,

 

(B)           acknowledgment copies or
stamped receipt copies of proper financing statements, duly filed under the
Uniform Commercial Code of all jurisdictions that the Administrative Agent may
deem necessary or desirable in order to perfect the Liens created under such
Collateral Documents, covering the Collateral described in such Collateral
Documents,

 

(C)           completed requests for
information listing  all effective financing statements
filed in the jurisdictions referred to in clause (B) above that name
the applicable Grantor as debtor, together with copies of such other financing
statements,

 

(D)          the Control Agreement as
referred to in Section 2.05(a) and duly executed by each of
the parties thereto, and

 

(E)           evidence that all other
actions, recordings and filings that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under such
Collateral Documents have been taken;

 

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

 

(v)           such documents and
certifications as the Administrative Agent may reasonably require to evidence
that each Loan Party is duly organized or formed, and that each Loan Party is
validly existing, in good standing and qualified to engage in business in its
jurisdiction of organization or formation;

 

(vi)          a favorable opinion of
Sidley Austin LLP, counsel to the Loan Parties, addressed to the Administrative
Agent and each Lender, as to such matters concerning the Loan Parties and the
Loan Documents as the Administrative Agent may reasonably request;

 

49

 

(vii)         a favorable opinion of DLA
Piper LLP (US), Maryland counsel to the Parent, addressed to the Administrative
Agent and each Lender, as to such matters concerning the Parent and the Loan
Documents to which the Parent is a party as the Administrative Agent may
reasonably request;

 

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

 

(ix)           a certificate signed by a
Responsible Officer of the Borrower certifying (A) that the conditions
specified in subsections (e) and (f) below have been satisfied and
(B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.

 

(x)            the absence of any action,
suit, investigation or proceeding, pending or threatened, in any court or
before any arbitrator or governmental authority that purports to materially
affect any of the Borrower, the Guarantors or any of their respective
Subsidiaries, or any transaction contemplated hereby, or that could have a
material adverse effect on any of the Borrower or the Guarantors, or any of
their respective Subsidiaries, or any transaction contemplated hereby or on the
ability of any of the Borrower or the Guarantors to perform its obligations
under the Loan Documents;

 

(xi)           a Solvency Certificate from
the Loan Parties demonstrating that each Loan Party is Solvent;

 

(xii)          [intentionally omitted];

 

(xiii)         a certificate from a
Responsible Officer of the Parent certifying that the Loan Parties are in
compliance with each of the covenants set forth in Section 7.12 on
a pro forma basis as of September 30,
2010 after giving effect to the making of the Term Loans hereunder as if made
on the first day of the Test Period ended on such date, which certificate will
include reasonably detailed calculations demonstrating such compliance; and

 

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

 

(b)           Any fees required to be paid on or before the
Closing Date shall have been paid.

 

(c)           Unless waived by the Administrative Agent, the
Borrower shall have paid all reasonable fees, charges and disbursements of
counsel to the Administrative Agent (directly to such counsel if requested by
the Administrative Agent) to the extent invoiced prior to or on the Closing
Date, plus such additional amounts of such reasonable fees, charges and
disbursements as shall constitute its reasonable estimate of such reasonable
fees, charges and disbursements 

 

50

 

incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative Agent).

 

(d)           The Lenders shall have completed a due diligence
investigation of the Parent and its Subsidiaries in scope, and with results,
satisfactory to the Lenders, and shall have been given such access to the
management, records, books of account, contracts and properties of the Parent
and its Subsidiaries and shall have received such financial, business and other
information regarding each of the foregoing Persons and businesses as they
shall have requested.

 

(e)           The representations and warranties of the Borrower
and each other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct as of the
Closing Date (except to the extent any such representation or warranty only
speaks of a different date).

 

(f)            No Default shall exist, or would result from the
making of the Term Loans or from the application of the proceeds thereof.

 

Without limiting the generality of the
provisions of the last paragraph of Section 9.03, for purposes of
determining compliance with the conditions specified in this Article IV,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.

 

ARTICLE V.  REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants to the
Administrative Agent and the Lenders that, as of the Closing Date and as of the
Initial Maturity Date (if the Initial Maturity Date has been extended pursuant
to Section 2.12):

 

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

 

5.02        Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or 

 

51

 

result in any breach or contravention of, or the
creation of any Lien under, or require any payment to be made under
(i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law; except in each case referred
to in clause (b)(i) to the extent that such conflict or violation could
not reasonably be expected to have a Material Adverse Effect.

 

5.03        Governmental Authorization; Other
Consents.  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with (a) the execution, delivery or performance by,
or enforcement against, any Loan Party of this Agreement or any other Loan
Document, (b) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (c) except for the filing of UCC
financing statements, the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature thereof) or
(d) the exercise by the Administrative Agent or any Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents.

 

5.04        Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except to the extent that the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights in general and to general principles of equity.

 

5.05        Financial Statements; No Material
Adverse Effect.

 

(a)           The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Parent and its Subsidiaries as of the
date thereof and their results of operations, cash flows and changes in
shareholders’ equity for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, of the Parent and its Subsidiaries as
of the date thereof, including liabilities for Taxes, material commitments and
Indebtedness.

 

(b)           The unaudited consolidated balance sheets of the
Parent and its Subsidiaries dated September 30, 2010, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for the fiscal quarter ended on that date (i) were prepared in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of the Parent and its Subsidiaries as of the date
thereof and their results of operations, cash flows and changes in shareholders’
equity for the period covered thereby, subject, in the case of clauses
(i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.  Schedule 5.05
sets forth all 

 

52

 

material indebtedness and other liabilities, direct
or contingent, of the Parent and its consolidated Subsidiaries as of the date
of such financial statements, including liabilities for Taxes, material
commitments and Indebtedness.

 

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

 

5.06        Litigation.  There
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of such Loan Party after due and diligent investigation, threatened
or contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against such Loan Party or any of its Subsidiaries or against
any of their properties or revenues that (a) purport to affect or pertain
to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) either individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

 

5.07        No Default.  Neither any Loan Party nor any Subsidiary
thereof is in default under or with respect to any Contractual Obligation that
could, either individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.  No Default
has occurred and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

5.08        Ownership of Property; Liens.  Each Loan Party and each of its Subsidiaries
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  The property of each Loan Party and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.

 

5.09        Environmental Compliance.  Except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, the Loan Parties and their respective
Subsidiaries: (i) are, and within the period of all applicable statutes of
limitation have been, in compliance with all applicable Environmental Laws;
(ii) hold all Environmental Permits (each of which is in full force and
effect) required for any of their current or intended operations or for any property
owned, leased, or otherwise operated by any of them; (iii) are, and within
the period of all applicable statutes of limitation have been, in compliance
with all of their Environmental Permits; and (iv) to the extent within the
control of the Loan Parties and their respective Subsidiaries, each of their
Environmental Permits will be timely renewed and complied with, any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense, and compliance with any
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.

 

5.10        Insurance.  The properties of the Parent and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Parent, in such amounts with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Parent
or the 

 

53

 

applicable Subsidiary operates, except in the case
of Subsidiaries that are not Loan Parties where the failure to maintain such
insurance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

5.11        Taxes.  The Parent and each of its Subsidiaries have
timely filed all federal, state and other material tax returns and reports
required to be filed, and have timely paid all federal, state and other
material Taxes (whether or not shown on a tax return), including in its
capacity as a withholding agent, levied or imposed upon it or its properties,
income or assets otherwise due and payable, except those Taxes which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP, except in
the case of Subsidiaries that are not Loan Parties where the failure to do so
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.  There is no
proposed material tax assessment or other claim against, and no material tax
audit with respect to, any Loan Party or any Subsidiary.  Neither any Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement. 
Except as could not, individually or in the aggregate, reasonably be
reasonably expected to result in a Material Adverse Effect, neither any Loan
Party nor any of its Subsidiaries has ever “participated” in a “listed
transaction” within the meaning of Treasury Regulation Section 1.6011-4.

 

5.12        ERISA Compliance.

 

(a)           Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
laws.  Each Pension Plan that is intended
to be a qualified plan under Section 401(a) of the Code has received
a favorable determination letter from the Internal Revenue Service to the
effect that the form of such Plan is qualified under Section 401(a) of
the Code and the trust related thereto has been determined by the Internal
Revenue Service to be exempt from federal income tax under Section 501(a) of
the Code, or an application for such a letter is currently being processed by
the Internal Revenue Service or will be filed with the Internal Revenue Service
within the remedial amendment period.  To
the best knowledge of such Loan Party, nothing has occurred that would prevent
or cause the loss of such tax-qualified status.

 

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

 

(c)           Except for any of the following which could not
reasonably be expected to result in a Material Adverse Effect (i) no ERISA
Event has occurred, and neither such Loan Party nor any ERISA Affiliate is
aware of any fact, event or circumstance that could reasonably be expected to
constitute or result in an ERISA Event with respect to any Pension Plan or Multiemployer
Plan; (ii) as of the most recent valuation date for any Pension Plan, the
funding target attainment percentage (as defined in Section 430(d)(2) of
the Code) is 60% or higher and neither such Loan Party nor any ERISA Affiliate
knows of any facts or circumstances that could reasonably be expected to cause
the funding target attainment percentage for any such plan to drop below 60% as
of the most recent valuation date; (iii) neither such Loan Party nor any 

 

54

 

ERISA Affiliate has incurred any liability to the
PBGC other than for the payment of premiums, and there are no premium payments
which have become due that are unpaid; (iv) neither such Loan Party nor
any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069
or Section 4212(c) of ERISA; and (v) no Pension Plan has been
terminated by the plan administrator thereof nor by the PBGC, and no event or
circumstance has occurred or exists that could reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any
Pension Plan.

 

(d)           On the Closing Date, neither such Loan Party nor any
ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation
to contribute to, or liability under, any active or terminated Pension Plan
other than those listed on Schedule 5.12(d) hereto.

 

5.13        Subsidiaries; Equity Interests.  As of the Closing Date,  no
Loan Party has any Subsidiaries other than as specifically disclosed in Part (a) of
Schedule 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by a Loan Party or a Subsidiary thereof in the amounts specified on Part (a) of
Schedule 5.13 free and clear of all Liens other than Liens
permitted to exist under Section 7.01.  All of the outstanding Equity Interests in
each Loan Party have been validly issued  and  are
fully paid and nonassessable.  Set forth
on Part (b) of Schedule 5.13 is a complete and accurate
list of all Loan Parties, showing as of the Closing Date (as to each Loan
Party) the jurisdiction of its incorporation and the address of its principal
place of business.  As of the Closing
Date, the copy of the charter of each Loan Party and each amendment thereto
provided pursuant to subsection (a)(v) of Article IV is a true
and correct copy of each such document, each of which is valid and in full
force and effect.

 

5.14        Margin Regulations; Investment
Company Act.

 

(a)           Such Loan Party is not engaged and will not engage,
principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying margin
stock.  Immediately following the
application of the proceeds of the Term Loans not more than 25% of the value of
the assets (either of such Loan Party only or of the Loan Parties and their
Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01
or subject to any restriction contained in any agreement or instrument between
such Loan Party and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of Section 8.01(e) will be
margin stock.

 

(b)           None of the Parent, any Person Controlling the
Parent, or any Subsidiary of the Parent is or is required to be registered as
an “investment company” under the Investment Company Act of 1940.

 

5.15        Disclosure.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, 

 

55

 

in the light of the circumstances under which they
were made, not misleading; provided that (a) with respect to
projected financial information and other forecasts, such Loan Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time and (b) no representation is made
hereunder with respect to any reports, certificates of other information
received by the Borrower or any other Loan Party and delivered to the Administrative
Agent or any Lender with respect to the Eligible Assets.

 

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

 

5.17        Taxpayer Identification Number.  Each Loan Party’s true and correct
U.S. taxpayer identification number (or the equivalent thereof, in the
case of a Loan Party that is not organized under the laws of the United States,
any State thereof or the District of Columbia) is set forth on Schedule 11.02.

 

5.18        Intellectual Property; Licenses, Etc..  The Parent and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person,
except in the case of Subsidiaries that are not Loan Parties where the failure
to possess same could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

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

 

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

 

5.21        [Intentionally Omitted].

 

5.22        Collateral Documents.  The provisions of the Collateral Documents
are effective to create in favor of the Administrative Agent for the benefit of
the Secured Parties a legal, valid and enforceable first priority Lien (subject
to Liens permitted by Section 7.01) on all right, title and
interest of the respective Loan Parties in the Collateral described
therein.  Except for filings completed
prior to the Closing Date and as contemplated hereby and by the Collateral
Documents, no filing or other action will be necessary to perfect or protect
such Liens.

 

56

 

5.23        Anti-Money Laundering and
Economic Sanctions Laws.

 

(a)           No Loan Party, none of its Subsidiaries and, to the
knowledge of senior management of each Loan Party, none of its Affiliates and
none of the respective officers, directors, brokers or agents of such Loan
Party, such Subsidiary or Affiliate (i) has violated or is in violation of
any applicable Anti-Money Laundering Law or (ii) has engaged or engages in
any transaction, investment, undertaking or activity that conceals the
identity, source or destination of the proceeds from any category of offenses
designated in any applicable law, regulation or other binding measure
implementing the “Forty Recommendations” and “Nine Special Recommendations”
published by the Organisation for Economic Cooperation and Development’s
Financial Action Task Force on Money Laundering.

 

(b)           No Loan Party, none of its Subsidiaries and, to the
knowledge of senior management of each Loan Party, none of its Affiliates and
none of the respective officers, directors, brokers or agents of such Loan
Party, such Subsidiary or such Affiliate that is acting or benefiting in any
capacity in connection with the Term Loans is an Embargoed Person.

 

(c)           Except as otherwise authorized by OFAC, no Loan
Party, none of its Subsidiaries and, to the knowledge of senior management of
each Loan Party, none of its Affiliates and none of the respective officers,
directors, brokers or agents of such Loan Party, such Subsidiary or such
Affiliate acting or benefiting in any capacity in connection with the Term
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Embargoed
Person, (ii) deals in, or otherwise engages in any transaction related to,
any property or interests in property blocked pursuant to any applicable
Economic Sanctions Laws or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the applicable prohibitions set forth in any
Economic Sanctions Laws.

 

5.24        REIT Status; Stock Exchange
Listing.  Commencing with the Parent’s
initial taxable year ending on December 31, 2009, the Parent has been
organized and has operated in conformity with the requirements for
qualification and taxation as a REIT. 
The shares of common Equity Interests of the Parent are listed on the
New York Stock Exchange.

 

5.25        Eligible Assets. (a) Each
of the transfer of Eligible Assets to the Borrower, and the pledge of Eligible
Assets by the Borrower to the Administrative Agent pursuant to the Security
Agreement, was effected in compliance with the terms of the “Hilton Credit
Agreement” and other “Hilton Loan Documents” (as such terms are defined in the
Security Agreement, (b) the seller of such Eligible Assets received
reasonably equivalent value in consideration for the transfer of such Eligible
Assets, (c) no such transfer was made for or on account of an antecedent
debt owed by such seller to the Borrower or an Affiliate of the Borrower and (d) such
transfer is not voidable or subject to avoidance under the Bankruptcy Code.

 

57

 

ARTICLE VI.  AFFIRMATIVE COVENANTS

 

So long as any Obligation hereunder shall
remain unpaid or unsatisfied, each Loan Party shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, 6.03,
6.11, 6.12, 6.14, 6.15and 6.16) cause each
Subsidiary thereof to:

 

6.01        Financial Statements.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           as soon as available, but in any event within 90
days after the end of each fiscal year of the Parent (or, if earlier, 15 days
after the date required to be filed with the SEC (without giving effect to any
extension permitted by the SEC)) (commencing
with the fiscal year ended December 31, 2010), a consolidated
balance sheet of the Parent and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of
income or operations, changes in shareholders’ equity, and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to
be audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit;

 

(b)           as soon as
available, but in any event within 50 days after the end of each of the first
three fiscal quarters of each fiscal year of the Parent (or, if earlier, 5 days
after the date required to be filed with the SEC (without giving effect to any
extension permitted by the SEC))
(commencing with the fiscal quarter ending March 31, 2011), a
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal quarter, the related consolidated statements of income or
operations for such fiscal quarter and for the portion of the Parent’s fiscal
year then ended, and the related consolidated statements of changes in
shareholders’ equity, and cash flows for the portion of the Parent’s fiscal
year then ended, in each case setting forth in comparative form, as applicable,
the figures for the corresponding fiscal quarter of the previous fiscal year
and the corresponding portion of the previous fiscal year, all in reasonable
detail, such consolidated statements to
be certified by the chief executive officer, chief financial officer,
treasurer or controller of the Parent as fairly presenting the financial
condition, results of operations, shareholders’ equity and cash flows of the
Parent and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes;

 

(c)           [intentionally omitted];
and

 

(d)           promptly, and in any event
within three (3) Business Days following the receipt thereof by any Loan
Party, monthly financial statements furnished to such Loan Party pursuant to
the “Hilton Loan Documents” (as defined in the Security Agreement).

 

As to any information contained in materials
furnished pursuant to Section 6.02(d), the Borrower shall not be
separately required to furnish such information under subsections (a) or (b) above,
but the foregoing shall not be in derogation of the obligation of the Borrower
to furnish the 

 

58

 

information and materials described in
subsections (a) and (b) above at the times specified therein.

 

6.02        Certificates; Other Information.  Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           [intentionally omitted];

 

(b)           concurrently with the delivery of the financial
statements referred to in Sections 6.01(a) and (b) (commencing
with the delivery of the financial statements for the fiscal quarter ending
December 31, 2010), (i) a duly completed Compliance Certificate
signed by the chief executive officer, chief financial officer, treasurer or
controller of the Parent, (ii) a schedule listing all assets and
liabilities excluded from the calculation of the Leverage Ratio for the
relevant Test Period, (iii) a schedule (x) listing each of the Parent’s
Subsidiaries and setting forth, with respect to each Subsidiary, the total
assets and gross revenues for such Subsidiary as a percentage of the
consolidated total assets and consolidated gross revenue, respectively, of the
Parent and its Subsidiaries for the applicable period and (y) to the
extent the foregoing schedule demonstrates that one or more Wholly Owned
Unrestricted Subsidiaries which are not Guarantors constitute a Significant
Subsidiary, identifying each Wholly Owned Unrestricted Subsidiary that will
become a Guarantor in accordance with the provisions of Section 6.12,
and (iv) a written certification from the Borrower and the Parent of the
market value of all Near Cash Securities as of the date of such financial
statements, in substantially the form attached hereto as Exhibit I,
setting forth each of the bids obtained from the applicable broker-dealers (by
name), each of whom shall be reasonably acceptable to the Administrative Agent,
and showing all calculations and supporting materials (which delivery may,
unless the Administrative Agent, or a Lender requests executed originals, be by
electronic communication including fax or email and shall be deemed to be an
original authentic counterpart thereof for all purposes);

 

(c)           promptly after any reasonable request by the
Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of the Parent by independent
accountants in connection with the accounts or books of the Parent or any
Subsidiary, or any audit of any of them;

 

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

 

(e)           [intentionally omitted];

 

(f)            promptly, and in any event within five (5) Business
Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies
of each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any 

 

59

 

investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of any
Loan Party or any Subsidiary thereof;

 

(g)           as soon as available, the annual tax returns of the
Parent filed with the U.S. Internal Revenue Service;

 

(h)           promptly, and in any event, within five (5) Business
Days after receipt thereof by a Loan Party, any material agreements,
correspondence, documents or other information related to the Eligible Assets
and entered into or delivered after the Closing Date;

 

(i)            within three (3) Business
Days following each date that a Loan Party receives monthly financial statements
furnished pursuant to the “Hilton Loan Documents” (as defined in the Security
Agreement), the Borrower shall furnish to the Administrative Agent a written report that includes reasonably
detailed calculations of the Senior Debt Yield and the Facility Debt Yield as
of the last day of the applicable month; and

 

(j)            promptly, such additional information regarding the
business, financial or corporate affairs of any Loan Party or any Subsidiary
thereof (including, without limitation, forecasts of consolidated balance
sheets and statements of income or operations and cash flows of the Parent and
its Subsidiaries), or compliance with the terms of the Loan Documents, or any
information with respect to the Eligible Assets, in each case as the
Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to
Section 6.01(a) or (b) or Section 6.02(d) (to
the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date (i) on which the Parent posts such
documents, or provides a link thereto on the Parent’s website on the Internet
at the website address listed on Schedule 11.02; or (ii) on
which such documents are posted on the Parent’s behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that:  (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender upon its
request to the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and
each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents.  The Administrative Agent shall have no
obligation to request the delivery of or to maintain paper copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request by a Lender for
delivery, and each Lender shall be solely responsible for requesting delivery
to it or maintaining its copies of such documents.

 

Each Loan Party hereby acknowledges that the
Administrative Agent will make available to the Lenders materials and/or
information provided by or on behalf of the Loan Parties hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials
on IntraLinks or another similar electronic system (the “Platform”).

 

60

 

6.03        Notices.  Notify the Administrative Agent and each
Lender promptly following its becoming aware of:

 

(a)           the occurrence of any Default or Event of Default;

 

(b)           any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including any Material Adverse
Effect that arises by virtue of (i) any breach or non-performance of, or
any default under, a Contractual Obligation of any Loan Party or any Subsidiary
thereof; (ii) any dispute, litigation, investigation, proceeding or
suspension between any Loan Party or any Subsidiary thereof and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting any Loan Party or any
Subsidiary thereof, including pursuant to any applicable Environmental Laws;

 

(c)           the occurrence of any default or event of default
under or related to the Eligible Assets;

 

(d)           the occurrence of any ERISA Event; and

 

(e)           any material change in accounting policies or
financial reporting practices by any Loan Party or any Subsidiary thereof.

 

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

 

6.04        Payment of Obligations.  (a) Except to the extent the same are
being contested in good faith by appropriate proceedings diligently conducted
(which proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien) and adequate reserves in
accordance with GAAP are being maintained by the applicable Loan Party, pay and
discharge as the same shall become due and payable, (i) all material Tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets; (ii) all lawful claims which, if unpaid, would by
law become a Lien not permitted by the provisions of Section 7.01
upon its property; and (iii) all Indebtedness, as and when due and
payable, unless the failure to do so could not reasonably be expected to result
in an Event of Default; and (b) timely file all material tax returns
required to be filed.

 

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

 

6.06        [Intentionally Omitted].

 

61

 

6.07        Maintenance of Insurance.  Maintain with financially sound and reputable
insurance companies not Affiliates of the Loan Parties, insurance with respect
to its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons.

 

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

 

6.09        Books and Records.  (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of such Loan Party or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority
having regulatory jurisdiction over such Loan Party or such Subsidiary, as the
case may be.

 

6.10        Inspection Rights.  Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants (provided the Borrower will have the right to be present during any
discussions with such accountants), all at the expense of the Borrower and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that (a) so long as no Event of Default exists the
Administrative Agent and the Lenders may not exercise the foregoing rights more
than two (2) times in any calendar year, and (b) so long as an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.

 

6.11        Use of Proceeds.  Use the proceeds of the Term Loan only to
finance the purchase of the Eligible Assets by the Borrower.

 

6.12        Additional Loan Parties.  In accordance with the terms of this Section 6.12,
cause each Wholly Owned Unrestricted Subsidiary of the Parent (other than the
Borrower) to be a Guarantor hereunder, other than each Wholly Owned
Unrestricted Subsidiary that, when taken together with all other Wholly Owned
Unrestricted Subsidiaries of the Parent that are not Guarantors, is not a
Significant Subsidiary.  Promptly and in
any event within 10 Business Days following the date the Loan Parties become
aware that one or more Wholly Owned Unrestricted Subsidiaries which are not
Guarantors constitute a Significant Subsidiary (and in no event later than 10
Business Days after the date the Loan Parties deliver a schedule as required by
Section 6.02(b) demonstrating that one or more Wholly Owned
Unrestricted Subsidiaries which are not Guarantors constitute a Significant
Subsidiary), the Loan Parties shall (i) cause one or more 

 

62

 

Wholly Owned Unrestricted Subsidiaries that are not
already a Loan Party to execute a joinder agreement to the Guaranty in form and
substance reasonably satisfactory to the Administrative Agent such that the
Wholly Owned Unrestricted Subsidiaries of the Parent which continue to not be
Guarantors do not constitute a Significant Subsidiary, (ii) deliver to the
Administrative Agent the items referenced in clauses (iv), (v) and (vi) of
subsection (a) of Article IV with respect to each such Person
and (iii) provide the Administrative Agent with the U.S. taxpayer
identification for each such Person (or the equivalent thereof, in the event
any such Person is not organized under the laws of the United States, any State
thereof or the District of Columbia).

 

6.13        Compliance with Environmental
Laws.  Comply, and cause all lessees
and other Persons operating or occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its
operations and properties, in each case except to the extent that the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

 

6.14        Further Assurances.  Promptly upon the reasonable request by the
Administrative Agent, or any Lender through the Administrative Agent, do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, certificates, assurances and
other instruments as the Administrative Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time in order to
(i) carry out more effectively the purposes of the Loan Documents,
(ii) to the full extent permitted by applicable Law, subject any Loan
Party’s properties, assets, rights or interests to the Liens now or hereafter
intended to be covered by any of the Collateral Documents, (iii) perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(iv) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Secured Parties the rights granted or now or
hereafter intended to be granted to the Secured Parties under any Loan Document
or under any other instrument executed in connection with any Loan Document to
which any Loan Party is or is to be a party.

 

6.15        Maintenance of REIT Status; New York
Stock Exchange Listing.  The
Parent will continue its method of operation so as to enable it to meet the
requirements for qualification and taxation as a REIT for its taxable year
ending on December 31, 2010 and thereafter.  The Parent will also at all times be listed
on the New York Stock Exchange.

 

63

 

6.16        Information Regarding Collateral.  (a) Not effect, with respect to any
Grantor, any change (i) in such Grantor’s legal name, (ii) in the
location of the Borrower’s chief executive office, (iii) in such Grantor’s
identity or organizational structure, (iv) in such Grantor’s Federal
Taxpayer Identification Number (or equivalent thereof) or organizational
identification number, if any, or (v) in such Grantor’s jurisdiction of
organization (in each case, including by merging with or into any other entity,
reorganizing, dissolving, liquidating, reorganizing or organizing in any other
jurisdiction), until (A) it shall have given the Administrative Agent not
less than 30 days’ prior written notice (in the form of certificate signed
by a Responsible Officer), or such lesser notice period agreed to by the
Administrative Agent, of its intention so to do, clearly describing such change
and providing such other information in connection therewith as the
Administrative Agent may reasonably request and (B) it shall have taken
all action reasonably satisfactory to the Administrative Agent to maintain the
perfection and priority of the security interest of the Administrative Agent
for the benefit of the Secured Parties in the Collateral, if applicable.  The Borrower agrees to promptly provide the
Administrative Agent with certified Organization Documents reflecting any of
the changes described in the preceding sentence.

 

(b)           With respect to the Eligible Assets, the Borrower
shall take all action necessary or required by the Loan Documents or by Law, or
requested by the Administrative Agent, to perfect, protect and more fully
evidence the Borrower’s ownership of the Eligible Assets.

 

ARTICLE VII.  NEGATIVE COVENANTS

 

So long as any Obligation hereunder shall
remain unpaid or unsatisfied:

 

7.01        Liens.  (A)  The Borrower shall not, directly or
indirectly, create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than Liens pursuant to any Loan Document.

 

(B)           No Guarantor shall, nor
shall it permit any of its Subsidiaries (other than the Borrower) to, directly
or indirectly create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than any of the following:

 

(i)                            Liens pursuant
to any Loan Document;

 

(ii)                           Liens, the
incurrence or the existence of which, shall not result in a Material Adverse
Effect or an Event of Default; and

 

(iii)                          Liens securing
Indebtedness permitted under Section 7.03(B).

 

7.02        Investments.  (A)  The Borrower shall not, directly or
indirectly, make any Investments, except Eligible Assets and Investments held
(or deemed held) by the Borrower in the Collection Account.

 

(B)           No Guarantor shall, nor
shall it permit any of its Subsidiaries (other than the Borrower) to, directly
or indirectly, make any Investment, except any of the following:

 

64

 

(i)              Investments held by such
Guarantor or such Subsidiary in the form of Cash Equivalents and Near Cash
Securities;

 

(ii)             Investments by the
Guarantors and such Subsidiaries in their respective Subsidiaries;

 

(iii)            Investments, the making of
which, in the reasonable opinion of the applicable Guarantor at the time of the
making of (or the commitment to make) such investment, shall not result in a
Material Adverse Effect or an Event of Default;

 

(iv)            the Guaranty;

 

(v)             to the extent any Investment
constitutes Indebtedness, such Indebtedness is permitted to be incurred
pursuant to Section 7.03(B); and

 

(vi)            any other Investment, provided,
that, taking into account the making of such Investment, the Loan Parties shall
be in compliance, on a pro forma
basis, with the provisions of Section 7.12.

 

7.03        Indebtedness.  (A)  The Borrower shall not, directly or
indirectly, create, incur, assume or suffer to exist any Indebtedness, except
Indebtedness under the Loan Documents.

 

(B)           No Guarantor shall, nor
shall it permit any of its Subsidiaries (other than the Borrower) to, directly
or indirectly, create, incur, assume or suffer to exist any Indebtedness,
except any of the following:

 

(i)              Indebtedness under the Loan
Documents;

 

(ii)             Indebtedness outstanding on
the Closing Date and any refinancings, refundings, renewals or extensions
thereof; provided, that taking into account such refinancing, refunding,
renewal or extension, the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.12;
and

 

(iii)            any other Indebtedness, provided,
that, taking into account the incurrence of such Indebtedness, the Loan Parties
shall be in compliance, on a pro forma
basis, with the provisions of Section 7.12.

 

7.04        Fundamental Changes.  (A)  The Borrower shall not, directly or
indirectly, merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, other than a Disposition
consummated at least 90 days following the Closing Date that consists of an
exchange of Eligible Assets as described in clause (ii) of the definition
thereof.

 

(B)           No Guarantor shall, nor
shall it permit any of its Subsidiaries (other than the Borrower) to, directly
or indirectly, merge, dissolve, liquidate, consolidate with or into another 

 

65

 

Person, or Dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to or in favor of any Person, except that, so
long as no Default has occurred and is continuing or would result therefrom:

 

(i)            any Loan Party (other than
the Borrower) may Dispose of all or substantially all of its assets (including
any Disposition that is in the nature of a liquidation, dissolution, merger or
consolidation) to another Loan Party (other than the Borrower);

 

(ii)           any Subsidiary that is not a
Loan Party may dispose of all or substantially all its assets (including any
Disposition that is in the nature of a liquidation, dissolution, merger or
consolidation) to (i) another Subsidiary that is not a Loan Party or
(ii) to a Loan Party (other than the Borrower);

 

(iii)          any Subsidiary (other than the Borrower) may merge into or consolidate
with any other Person or permit any other Person to merge into or consolidate
with it; provided, however, that in each case, immediately after
giving effect thereto in the case of any such merger to which any Loan Party
(other than the Borrower) is a party, the survivor is, or upon such merger will
by operation of law or otherwise be, a Loan Party; and

 

(iv)          any Disposition (including
any Disposition of Equity Interests) that is permitted by clause (B)(ii) or
(B)(iv) of Section 7.05.

 

7.05        Dispositions.  (A)  The Borrower shall not, directly or
indirectly, make any Disposition or enter into any agreement to make any Disposition,
other than a Disposition consummated at least 90 days following the Closing
Date that consists of an exchange of Eligible Assets as described in clause (ii) of
the definition thereof.

 

(B)           No Guarantor shall, nor
shall it permit any of its Subsidiaries (other than the Borrower) to, directly
or indirectly, make any Disposition or enter into any agreement to make any
Disposition, except:

 

(i)            Dispositions of obsolete or
worn out property, whether now owned or hereafter acquired, in the ordinary course
of business;

 

(ii)           Dispositions of property by
any Subsidiary (other than the Borrower) to a Guarantor; provided that
if the transferor of such property is a Guarantor, the transferee thereof must
be a Guarantor;

 

(iii)          Dispositions permitted by
clause (B)(i), (B)(ii) or (B)(iii) of 
Section 7.04; and

 

(iv)          any other Disposition of
assets not constituting Collateral, provided, that (i) such
Disposition shall not, in the reasonable opinion of the applicable Loan Party
at the time of such Disposition (or the commitment to enter into such
Disposition), be reasonably expected to result in a Material Adverse 

 

66

 

Effect, (ii) at the
time of such Disposition, no Default shall have occurred and be continuing or would
result therefrom and (iii) taking into account such Disposition, the Loan
Parties shall be in compliance, on a pro forma
basis, with provisions of Section 7.12.

 

7.06        Restricted Payments.  No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, declare or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except that:

 

(a)           each Subsidiary of the Parent may make Restricted
Payments to Subsidiaries that are Guarantors and any other Person that owns a
direct Equity Interest in such Subsidiary, ratably according to their
respective holdings of the type of Equity Interest in respect of which such
Restricted Payment is being made;

 

(b)           the Parent and each Subsidiary thereof may declare
and make dividend payments or other distributions payable solely in the common
stock or other common Equity Interests of such Person;

 

(c)           so long as no Default shall have occurred and be
continuing at the time of any action described below or would result therefrom,
the Parent and each Subsidiary thereof may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other
common Equity Interests;

 

(d)           the Parent shall be permitted to declare and pay
dividends on its Equity Interests or make distributions with respect thereto in
an amount for any fiscal year of the Parent equal to such amount as is
necessary for the Parent to maintain its status as a REIT; and

 

(e)           the Parent and each Subsidiary of the Parent may
make any other Restricted Payment of any asset not constituting Collateral, provided,
that (i) at the time of such Restricted Payment, no Default shall have
occurred and be continuing or would result therefrom and (ii) taking into
account such Restricted Payment, the Loan Parties shall be in compliance, on a pro forma basis, with provisions of Section 7.12.

 

7.07        Change in Nature of Business.  No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, engage in any line of business
which is not permitted to be engaged in by real estate investment trusts or
taxable REIT subsidiaries thereof.

 

7.08        Transactions with Affiliates.  No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, enter into any transaction of
any kind with any Affiliate of the Borrower, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Affiliate, provided that the
foregoing restriction shall not apply to (i) transactions between or among
the Loan Parties not prohibited hereunder, (ii) Investments and Restricted
Payments not prohibited hereunder and (iii) transactions identified on Schedule
7.08.

 

7.09        [Intentionally Omitted].

 

67

 

7.10        Use of Proceeds.  The Borrower shall not use the proceeds of
the Term Loans, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.

 

7.11        Amendments, Waivers and
Terminations of Certain Agreements.  No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, amend or otherwise change,
cancel, terminate or waive in any respect (A) the terms of any Contractual
Obligation of a Loan Party or a Subsidiary thereof except to the extent that
same could not reasonably be expected to have a Material Adverse Effect, (B) the
terms of any Organization Document of any Loan Party (other than the Borrower)
or any Subsidiary thereof except to the extent that same could not reasonably
be expected to have a material and adverse effect on the ability of any Loan
Party to perform its obligations under the Loan Documents or (C) the terms
of any Organization Document of the Borrower or any of the terms or provisions
of any agreement constituting or related to the Eligible Assets, other than
amendments and modifications that (1) do not have an adverse effect on the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party or (2) are not adverse in any respect to the
Administrative Agent or the Lenders.

 

7.12        Financial Covenants.  The Loan Parties shall not:

 

(a)           Minimum Liquidity.  At any time permit (i) Cash Liquidity to
be less than $10,000,000 or (ii) the sum of Cash Liquidity and Near Cash
Liquidity to be less than $30,000,000.

 

(b)           Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio for
any Test Period to be less than 1.50:1.00.

 

(c)           Leverage Ratio.  Permit the Leverage Ratio for any Test Period
to be greater than 0.75:1.00, in each case adjusted to remove the impact of FIN
46 and FAS 166 and 167 to the extent of related transfers to special purpose
entities in connection with bona fide securitization transactions.

 

(d)           Tangible Net Worth.  Permit Tangible Net Worth at any time to be
less than the sum of (i) $750,000,000 plus (ii) 75% of Net Cash
Proceeds received by the Parent from issuances or sales of its Equity Interests
occurring after the Closing Date.

 

7.13        Accounting or Tax Changes.  No Loan Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, (i) make any change in
accounting policies or reporting practices of the Parent or any of its
Subsidiaries that are permitted by but not required under, GAAP, in each case
without providing prompt written notice of such change to the Administrative
Agent or (ii) make any change in fiscal year except with the written
consent of the Administrative Agent.

 

68

 

ARTICLE VIII.  EVENTS OF DEFAULT AND REMEDIES

 

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

 

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

 

(b)                                 Specific
Covenants.  The
Borrower or any Loan Party, as applicable, fails to perform or observe any
term, covenant or agreement contained in any of Section 2.05, 6.01,
6.02, 6.03, 6.05, 6.10, 6.11, 6.12 or
6.15 or Article VII,
or any Grantor fails to perform or observe any term, covenant or agreement
contained in the applicable Collateral Document; or

 

(c)                                  Other Defaults.  Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for thirty (30) days; or

 

(d)                                 Representations
and Warranties.  Any
representation, warranty, certification or statement of fact made or deemed
made by or on behalf of the Borrower or any other Loan Party herein, in any
other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect (except to the extent that any such
representation or warranty is already by its terms qualified as to “materiality,”
“Material Adverse Effect” or similar language, in which case it shall be true
and correct in all respects as of such date after giving effect to such
qualification) when made or deemed made (or with respect to any representation or warranty that is
expressly stated to have been made as of a specific date, as of such specific
date); or

 

(e)                                  Cross-Default.  (i) Any Loan Party or any Significant
Subsidiary thereof (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) or (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded, or (ii) there
occurs under any Swap Contract an “Early Termination Date” (as defined in such
Swap Contract, or any similar term defined therein) resulting from any event of
default under such Swap Contract as to which a Loan Party is the “Defaulting
Party” (as defined in such Swap Contract, or any similar term defined therein);
provided, that a default, event, occurrence or condition described in
this subsection (e) shall not at any time constitute an Event of Default 

 

69

 

unless, at such time, the aggregate
outstanding amount of Indebtedness that is subject to defaults, events,
occurrences or conditions of the type described in clause (i) above,
together with the Swap Termination Value of all Swap Contracts that are subject
to defaults, events, occurrences or conditions of the type described in clause (ii) above,
exceeds in the aggregate the applicable Threshold Amount; or

 

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

 

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

 

(h)                                 Judgments.  There is entered (i) one or more final
judgments or orders for the payment of money against one or more Loan Parties
or Significant Subsidiaries thereof in an aggregate amount (with respect to all
such judgments and orders) exceeding the applicable Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 10 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)                                     ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of one or more Loan Parties or Subsidiaries
thereof to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
(with respect to all such ERISA Events) in excess of $25,000,000, or (ii) one
or more Loan Parties or ERISA Affiliates shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount (with respect to all such failures)
in excess of $25,000,000; or

 

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

 

70

 

or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

 

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

 

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

 

(m)                               REIT Status.  The Parent shall, for any reason, lose or
fail to maintain its status as a REIT.

 

8.02                        Remedies
Upon Event of Default.  If
any Event of Default occurs and is continuing, the Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders, take any
or all of the following actions:

 

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

 

(b)                                 exercise on
behalf of itself and the Lenders all rights and remedies available to it, the
Lenders under the Loan Documents;

 

provided,
however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the unpaid principal amount of all outstanding Term Loans and
all interest and other amounts as aforesaid shall automatically become due and
payable, without further act of the Administrative Agent or any Lender.

 

8.03                        Application
of Funds.  After the
exercise of remedies provided for in Section 8.02 (or after the
Term Loans have automatically become immediately due and payable as set forth
in the proviso to Section 8.02), any amounts received on account of
the Obligations shall, subject to the provisions of Section 2.13,
be applied by the Administrative Agent in the following order:

 

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

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to
the Lenders (including fees, charges and disbursements of counsel to the
respective Lenders and amounts payable under Article III), ratably
among them in proportion to the respective amounts described in this clause Second payable to them;

 

71

 

Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and other Obligations, ratably among the
Lenders in proportion to the respective amounts described in this clause Third payable to them;

 

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

 

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

 

ARTICLE IX.  ADMINISTRATIVE AGENT

 

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

 

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

 

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

 

(a)                                  shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

 

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

 

72

 

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

 

The Administrative
Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 11.01 and 8.02) or (ii) in the
absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by the Borrower or a Lender.

 

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

 

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

 

9.05                        Delegation
of Duties.  The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any 

 

73

 

such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

 

9.06                        Resignation
of Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower.  Upon receipt
of any such notice of resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States, in each case that has (or is a subsidiary of a
holding company that has) combined capital and surplus of at least
$500,000,000.  If no such successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf
of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this Section.  Upon
the acceptance of a successor’s appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of
its duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 11.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

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

 

9.08                        [Intentionally
Omitted].

 

9.09                        Administrative
Agent May File Proofs of Claim.  In case of the pendency of any
proceeding under any Debtor Relief Law or any other judicial proceeding relative
to any 

 

74

 

Loan Party, the Administrative Agent
(irrespective of whether the principal of the Term Loans shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

(a)                                  to file and
prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Term Loans and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.07 and 11.04) allowed in such judicial
proceeding; and

 

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

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Lender to make such payments
to the Administrative Agent and, in the event that the Administrative Agent
shall consent to the making of such payments directly to the Lenders, to pay to
the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections 2.07
and 11.04.

 

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

 

9.10                        Collateral
and Guaranty Matters.  The Lenders
irrevocably authorize the Administrative Agent, at its option and in its
discretion,

 

(a)                                  to release any
Lien on any property granted to or held by the Administrative Agent under any
Loan Document (i) upon payment in full of all Obligations (other than
contingent indemnification obligations) or (ii) subject to Section 11.01,
if approved, authorized or ratified in writing by the Required Lenders; and

 

(b)                                 to release the
Borrower or any Guarantor from its obligations under this Agreement or the
Guaranty, as applicable, if such Person ceases to be a Subsidiary as a result
of a transaction permitted hereunder.

 

Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing the Administrative Agent’s
authority to release any Guarantor from its obligations under the Guaranty
pursuant to this Section 9.10.

 

75

 

ARTICLE X.  CONTINUING GUARANTY

 

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

 

Anything contained
in this Guaranty to the contrary notwithstanding, it is the intention of each
Guarantor and the Secured Parties that the obligations of each Guarantor (other
than the Parent) hereunder at any time shall be limited to an aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548
of the Bankruptcy Code (Title 11, United States Code) or any comparable
provisions of any similar federal or state law. 
To that end, but only in the event and to the extent that after giving
effect to Section 10.11, such Guarantor’s obligations with respect
to the Obligations or any payment made pursuant to such Obligations would, but
for the operation of the first sentence of this paragraph, be subject to
avoidance or recovery in any such proceeding under applicable Debtor Relief
Laws after giving effect to Section 10.11, the amount of such
Guarantor’s obligations with respect to the Obligations shall be limited to the
largest amount which, after giving effect thereto, would not, under applicable
Debtor Relief Laws, render such Guarantor’s obligations with respect to the
Obligations unenforceable or avoidable or otherwise subject to recovery under
applicable Debtor Relief Laws.  To the
extent any payment actually made pursuant to the Obligations exceeds the
limitation of the first sentence of this paragraph and is otherwise subject to
avoidance and recovery in any such proceeding under applicable Debtor Relief
Laws, the amount subject to avoidance shall in all events be limited to the
amount by which such actual payment exceeds such limitation, and the
Obligations as limited by the first sentence of this paragraph shall in all
events remain in full force and effect and be fully enforceable against such
Guarantor.  The first sentence of this
paragraph is intended solely to preserve the rights of the Secured Parties
hereunder against such Guarantor in such proceeding to the maximum extent
permitted by applicable Debtor Relief Laws and neither such Guarantor, the
Borrower, any other Guarantor nor any other Person shall have any right or
claim under such sentence that would not otherwise be available under
applicable Debtor Relief Laws in such proceeding.

 

76

 

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

 

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

 

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

 

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

 

10.06                 Termination;
Reinstatement.  This
Guaranty is a continuing and irrevocable guaranty of all Obligations now or
hereafter existing and shall remain in full force and effect until all
Obligations and any other amounts payable under this Guaranty are indefeasibly
paid in 

 

77

 

full in cash. 
Notwithstanding the foregoing, this Guaranty shall continue in full
force and effect or be revived, as the case may be, if any payment by or on
behalf of the Borrower or any other Guarantor is made, or any of the Secured
Parties exercises its right of setoff, in respect of the Obligations and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by any of the Secured
Parties in their discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Laws or
otherwise, all as if such payment had not been made or such setoff had not
occurred and whether or not the Secured Parties are in possession of or have
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.  The
obligations of the Guarantors under this paragraph shall survive termination of
this Guaranty.

 

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

 

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

 

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

 

10.10                 Limitations
on Enforcement.  If, in any
action to enforce this Guaranty or any proceeding to allow or adjudicate a
claim under this Guaranty, a court of competent jurisdiction determines that
enforcement of this Guaranty against any Guarantor for the full amount of the
Obligations is not lawful under, or would be subject to avoidance under, Section 548
of the Bankruptcy Code or any applicable provision of comparable state law, the
liability of such Guarantor under this Guaranty shall be limited to the maximum
amount lawful and not subject to avoidance under such law.

 

10.11                 Contribution.  At any time a payment in respect of the
Obligations is made under this Guaranty, the right of contribution of each
Guarantor (other than the Parent) against each

 

78

 

other Guarantor (other than the Parent) shall be
determined as provided in the immediately following sentence, with the right of
contribution of each Guarantor to be revised and restated as of each date on
which a payment (a “Relevant Payment”) is made on the Obligations under
this Guaranty.  At any time that a
Relevant Payment is made by a Guarantor (other than the Parent) that results in
the aggregate payments made by such Guarantor in respect of the Obligations to
and including the date of the Relevant Payment exceeding such Guarantor’s
Contribution Percentage (as defined below) of the aggregate payments made by
all Guarantors (other than the Parent) in respect of the Obligations to and
including the date of the Relevant Payment (such excess, the “Aggregate
Excess Amount”), each such Guarantor shall have a right of contribution
against each other Guarantor (other than the Parent) who either has not made
any payments or has made payments in respect of the Obligations to and
including the date of the Relevant Payment in an aggregate amount less than
such other Guarantor’s Contribution Percentage of the aggregate payments made
to and including the date of the Relevant Payment by all Guarantors (other than
the Parent) in respect of the Obligations (the aggregate amount of such
deficit, the “Aggregate Deficit Amount”) in an amount equal to
(x) a fraction the numerator of which is the Aggregate Excess Amount of
such Guarantor and the denominator of which is the Aggregate Excess Amount of
all Guarantors (other than the Parent) multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. 
A Guarantor’s right of contribution pursuant to the preceding sentences
shall arise at the time of each computation, subject to adjustment at the time
of each computation; provided, that no Guarantor may take any action to
enforce such right until all of the Obligations and any amounts payable under
this Guaranty have been indefeasibly paid and performed in full in immediately
available funds, it being expressly recognized and agreed by all parties hereto
that any Guarantor’s right of contribution arising pursuant to this Section 10.11
against any other Guarantor shall be expressly junior and subordinate to such
other Guarantor’s obligations and liabilities in respect of the Obligations and
any other obligations owing under this Guaranty.  As used in this Section 10.11,
(i) each Guarantor’s “Contribution Percentage” shall mean the
percentage obtained by dividing (x) the Adjusted Net Worth (as defined
below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all
Guarantors; (ii) the “Adjusted Net Worth” of each Guarantor shall
mean the greater of (x) the Net Worth (as defined below) of such Guarantor
and (y) zero; and (iii) the “Net Worth” of each Guarantor
shall mean the amount by which the fair saleable value of such Guarantor’s
assets on the date of any Relevant Payment exceeds its existing debts and other
liabilities (including contingent liabilities, but without giving effect to any
Obligations arising under this Guaranty) on such date.  All parties hereto recognize and agree that,
except for any right of contribution arising pursuant to this Section 10.11,
each Guarantor who makes any payment in respect of the Obligations shall have
no right of contribution or subrogation against any other Guarantor in respect
of such payment until all of the Obligations have been indefeasibly paid and
performed in full in cash.  Each of the
Guarantors recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution.  In this connection, each
Guarantor has the right to waive its contribution right against any Guarantor
to the extent that after giving effect to such waiver such Guarantor would
remain solvent, in the determination of the Required Lenders.

 

ARTICLE XI.  MISCELLANEOUS

 

11.01                 Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan 

 

79

 

Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that (i) the Administrative Agent may, without the consent of any Lender,
waive a covenant or other provision in, or a Default or Event of Default under,
this Agreement or any Loan Document if the Administrative Agent determines in
its sole discretion that such covenant, provision, Default or Event of Default,
as applicable, does not materially and adversely affect the Lenders and
(ii) notwithstanding the foregoing provisions of this Section 11.01
(including the first proviso above), no such amendment, waiver or consent
shall:

 

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

 

(b)                                 extend (except
as provided in Section 2.12) or increase the Commitment of any
Lender (or reinstate its Commitment) without the written consent of such
Lender;

 

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

 

(d)                                 reduce the
principal of, or the rate of interest specified herein on, any Loan, or
(subject to clause (ii) of the second proviso to this Section 11.01)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation
of the Borrower to pay interest at the Default Rate;

 

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

 

(f)                                    release the
Borrower or any Guarantor from its obligations under this Agreement or any
other Loan Document, without the written consent of each Lender, except as
expressly provided in the Loan Documents; or

 

(g)                                 release all or
substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender;

 

and, provided  further, that
(i) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document and (ii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties
thereto.  Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder (and any amendment,
waiver or consent which by its terms requires the 

 

80

 

consent of all Lenders or each affected Lender
may be effected with the consent of the applicable Lenders other than
Defaulting Lenders), except that (x) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender and (y) any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender that by its terms affects any Defaulting Lender more adversely
than other affected Lenders shall require the consent of such Defaulting
Lender.

 

11.02                 Notices;
Effectiveness; Electronic Communication.

 

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

 

(i)                                     if to a Loan
Party, the initial Lender or the Administrative Agent, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 11.02; and

 

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

 

Notices and other communications sent by hand
or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices and other communications
sent by telecopier shall be deemed to have been given when sent (except that,
if not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient).  Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

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

 

Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” 

 

81

 

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

 

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

 

(d)                                 Change of
Address, Etc.  Each of the
Borrower and the Administrative Agent may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to
the other parties hereto.  Each Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the Borrower and the Administrative
Agent.  In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which
notices and other communications may be sent and (ii) accurate wire
instructions for such Lender.

 

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

 

82

 

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

 

Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
authority to enforce rights and remedies hereunder and under the other Loan
Documents against the Loan Parties or any of them shall be vested exclusively
in, and all actions and proceedings at law in connection with such enforcement
shall be instituted and maintained exclusively by, the Administrative Agent in
accordance with Section 8.02 for the benefit of all the Lenders; provided,
however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies
that inure to its benefit (solely in its capacity as Administrative Agent)
hereunder and under the other Loan Documents, (b) any Lender from
exercising setoff rights in accordance with Section 11.08 (subject
to the terms of Section 2.11), or (c) any Lender from filing
proofs of claim or appearing and filing pleadings on its own behalf during the
pendency of a proceeding relative to any Loan Party under any Debtor Relief
Law; and provided, further, that if at any time there is no
Person acting as Administrative Agent hereunder and under the other Loan
Documents, then (i) the Required Lenders shall have the rights otherwise
ascribed to the Administrative Agent pursuant to Section 8.02 and
(ii) in addition to the matters set forth in clauses (b) and
(c) of the preceding proviso and subject to Section 2.11, any
Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

 

11.04                 Expenses;
Indemnity; Damage Waiver.

 

(a)                                  Costs and
Expenses.  The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable invoiced
fees, charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), provided, that the
Borrower shall not be obliged to reimburse the fees, charges and disbursements
of more than one law firm for the Administrative Agent and all Lenders in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, and (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender (including the
reasonable invoiced fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender),  and shall pay all documented fees and time
charges for attorneys who may be employees of the Administrative Agent or any
Lender, in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the
Term Loans made hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.

 

83

 

(b)                                 Indemnification
by the Borrower.  Subject to
and without duplication of the foregoing subsection (a), the Borrower hereby
indemnifies the Administrative Agent (and any sub-agent thereof), each Lender
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and holds each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and
hold harmless each Indemnitee from all fees and time charges and disbursements
for attorneys who may be employees of any Indemnitee, incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder, the consummation of the transactions contemplated hereby or
thereby, or, in the case of the Administrative Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and
the other Loan Documents, (ii) the Term Loans or the use or proposed use
of the proceeds therefrom, (iii) any actual or alleged presence or Release
of Hazardous Materials at, on, under or emanating from any property owned,
leased or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party or the
Borrower’s or such Loan Party’s directors, shareholders or creditors,
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee; and provided, further that any indemnity with
respect to Taxes shall be governed solely by Section 3.01.

 

(c)                                  Reimbursement
by Lenders.  To the
extent that the Borrower for any reason fails to indefeasibly pay any amount
required under subsection (a) or (b) of this Section to be paid
by it to the Administrative Agent (or any sub-agent thereof) or any Related
Party of the Administrative Agent, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent) or such Related Party, as the case
may be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent (or any such sub-agent) or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent).  The obligations
of the Lenders under this subsection (c) are subject to the provisions of Section 2.10(d).

 

(d)                                 Waiver of
Consequential Damages, Etc.  To the fullest extent permitted by applicable
law, no Loan Party shall assert, and the Borrower hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof.  No Indemnitee referred
to in subsection (b) above shall be liable for any damages 

 

84

 

arising from the use by unintended recipients
of any information or other materials distributed to such unintended recipients
by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

 

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

 

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

 

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

 

11.06                 Successors
and Assigns.

 

(a)                                  Successors and
Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that no Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section; or 
(iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

85

 

(b)                                 Assignments by
Lenders.  Any Lender may at any time
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Term
Loan at the time owing to it); provided that any such assignment shall
be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

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

 

(B)                                in any case not
described in subsection (b)(i)(A) of this Section, the aggregate amount of
the Commitment or, if the Commitment is not then in effect, the principal
outstanding balance of the Term Loan of the assigning Lender subject to each
such assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date,
shall not be less than $2,500,000 unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met.

 

(ii)                                  Qualified
Purchaser/Qualified Institutional Buyer. The assignee shall be, and
shall certify in the applicable Assignment and Assumption that it is, both a “qualified
purchaser” (within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder) and a “qualified
institutional buyer” (within the meaning of Rule 144A under the Securities
Act of 1933, as amended).  Any failure to
include such a certification in an Assignment and Assumption shall render such
Assignment and Assumption void ab initio and
of no force or effect for any purpose.

 

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

 

(A)                              the consent of
the Borrower (such consent not to be unreasonably withheld) shall be required
unless (1) an Event of Default has occurred and is continuing at the time
of such assignment or (2) such assignment is to a Lender, an Affiliate of
a Lender or an Approved Fund; provided that the Borrower shall be deemed
to have consented to any such assignment unless it shall object thereto by
written notice to the Administrative Agent within five (5) Business Days
after having received notice thereof; and

 

86

 

(B)                                the consent of
the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required if such assignment is to a Person that is not a Lender.

 

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

 

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

 

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

 

Subject to compliance with the foregoing
provisions of this subsection (b) and acceptance and recording thereof by
the Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, and 11.04 with respect to facts and 

 

87

 

circumstances occurring prior to the effective
date of such assignment.  Upon request,
the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender.

 

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

 

(d)                                 Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person which is, and which certifies in writing to such
Lender that it is, both a “qualified purchaser” (within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder) and a “qualified institutional buyer” (within the meaning of Rule 144A
under the Securities Act of 1933, as amended) (but excluding a natural person,
a Defaulting Lender or the Borrower or the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Term Loan owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.

 

Any agreement or instrument
pursuant to which a Lender sells such a participation shall include a
certification by the participant that it is both a “qualified purchaser”
(within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder) and a “qualified institutional buyer” (within the
meaning of Rule 144A under the Securities Act of 1933, as amended), and
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 11.01 that affects such Participant.  Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 (subject to the
requirements and limitations of such Sections)  to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.08  as though it were a Lender, provided such
Participant agrees to be subject to Section 2.11 as though it were
a Lender.

 

88

 

Each Lender that sells a
participation, acting solely for this purpose as a non-fiduciary agent of the
Borrower, shall retain a copy of each Participant’s certification as to its
status as a “qualified purchaser” and “qualified institutional buyer” described
above (and upon request of the Borrower shall provide a copy thereof to the
Borrower), and shall maintain a register on which it enters the name and
address of each Participant and the principal amounts (and related interest
amounts) of each participant’s interest in the Loans or other obligations under
this Agreement (the “Participant Register”).  The entries in the Participant Register shall
be conclusive, absent demonstrable error, and such Lender shall treat each
person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary.

 

(e)                                  Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 3.01
or 3.04  than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation and the participating Lender would have been entitled
to receive such greater payment.

 

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

 

(g)                                 Transfers to
Non-Qualified Purchasers/Qualified Institutional Buyers.  Notwithstanding anything herein to the
contrary, in no event may any Term Loan or any interest therein be assigned to
or otherwise acquired by (whether by assignment or participation or through a
swap or other derivative transaction) any Person which is not both a “qualified
purchaser” (within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder) and a “qualified
institutional buyer” (within the meaning of Rule 144A under the Securities
Act of 1933, as amended).  Any assignment
or acquisition not in compliance with the foregoing sentence shall be void ab initio and of no force or effect, and shall not be
effective to transfer any interest whatsoever herein.

 

(h)                                 Certain
Transactions. 
Notwithstanding anything herein to the contrary, no Lender will incur
any indebtedness that it believes would subject the Borrower (or any part of
the Borrower) to the “taxable mortgage pool” provisions under Code Section 7701(i) under
the anti-avoidance rules of Treasury Regulation Section 301.7701(i)-1(g).

 

11.07                 Treatment
of Certain Information; Confidentiality.  Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and
to its and its Affiliates’ respective partners, directors, officers, employees,
agents, trustees, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have 

 

89

 

jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.14(c) or
(ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to any Loan Party and its obligations,
(g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative
Agent, any Lender, or any of their respective Affiliates on a nonconfidential
basis from a source other than the Borrower. 
For purposes of this Section, “Information” means all information
received from the Parent, the Borrower or any Subsidiary thereof relating to
the Loan Parties or any Subsidiary thereof or any of their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Parent or any Subsidiary thereof, provided that, in
the case of information received from the Parent or any Subsidiary thereof
after the date hereof, such information is clearly identified at the time of
delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information
as such Person would accord to its own confidential information.

 

Each of the
Administrative Agent and the Lenders acknowledges that (a) the Information
may include material non-public information concerning the Parent or a
Subsidiary thereof, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it
will handle such material non-public information in accordance with applicable
Law, including United States Federal and state securities Laws.

 

11.08                 Right
of Setoff.  If an Event
of Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender or any such Affiliate to or for the credit or the
account of any Loan Party against any and all of the obligations of such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness; provided, that in the
event that any Defaulting Lender shall exercise any such right of setoff, (x) all
amounts so set off shall be paid over immediately to the Administrative Agent
for further application in accordance with the provisions of Section 2.13
and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent and the Lenders, and (y) the Defaulting Lender shall provide
promptly to 

 

90

 

the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. 
The rights of each Lender and their respective Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff)
that such Lender or their respective Affiliates may have.  Each Lender agrees to notify the Borrower and
the Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

11.09                 Interest
Rate Limitation. 
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law
(the “Maximum Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the
Borrower.  In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.

 

11.10                 Counterparts;
Integration; Effectiveness.   This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
otherwise provided in Article IV, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging
means shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

11.11                 Survival
of Representations and Warranties.  All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of making any Loan, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.

 

11.12                 Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable,
(a) the legality, validity and enforceability of the remaining provisions
of this Agreement and the other Loan Documents shall not be affected or 

 

91

 

impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of
this Section 11.12, if and to the extent that the enforceability of
any provisions in this Agreement relating to Defaulting Lenders shall be
limited by Debtor Relief Laws, as determined in good faith by the
Administrative Agent, then such provisions shall be deemed to be in effect only
to the extent not so limited.

 

11.13                 Replacement
of Lenders.  If any
Lender requests compensation under Section 3.04, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01,
if any Lender is a Defaulting Lender, or
if any other circumstance exists hereunder that gives the Borrower the right to
replace a Lender as a party hereto, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by, Section 11.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

(a)                                  the Borrower
shall have paid to the Administrative Agent the assignment fee specified in Section 11.06(b);

 

(b)                                 such Lender
shall have received payment of an amount equal to 100% of the outstanding
principal of its Term Loan from the assignee and any amounts payable by the
Borrower pursuant to Section 3.01, 3.04 or 3.05 from
the Borrower (it being understood that the Assignment and Assumption relating
to such assignment shall provide that any interest and fees that accrued prior
to the effective date of the assignment shall be for the account of the
replaced Lender and such amounts that accrue on and after the effective date of
the assignment shall be for the account of the replacement Lender);

 

(c)                                  in the case of
any such assignment resulting from a claim for compensation under Section 3.04
or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d)                                 such assignment
does not conflict with applicable Laws.

 

A Lender shall not
be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.  Each Lender agrees that, if the Borrower
elects to replace such Lender in accordance with this Section 11.13,
it shall promptly execute and deliver to the Administrative Agent an Assignment
and Assumption to evidence the assignment and shall deliver to the
Administrative Agent any Note (if Notes have been issued in respect of such
Lender’s Term Loan) subject to such Assignment and Assumption; provided
that the failure of any such Lender to execute an Assignment and 

 

92

 

Assumption shall not render such assignment
invalid and such assignment shall be recorded in the Register.

 

11.14                 Governing
Law; Jurisdiction; Etc.

 

(a)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAWS, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES).

 

(b)                                 SUBMISSION TO
JURISDICTION.  EACH LOAN
PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS
SECTION.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

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

 

93

 

11.15                 Waiver
of Jury Trial.  EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.16                 No
Advisory or Fiduciary Responsibility.  In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:  (i) (A) the arranging and other
services regarding this Agreement provided by the Administrative Agent are arm’s-length
commercial transactions between such Loan Party and  its
Affiliates, on the one hand, and the Administrative Agent, on the other hand,
(B) each Loan Party has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate, and (C) each Loan Party  is capable of evaluating, and understands
and accepts, the terms, risks and conditions of the transactions contemplated
hereby and by the other Loan Documents; (ii) (A) the Administrative
Agent is and has been acting solely as a principal and, except as expressly agreed
in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary for any Loan Party or any of its
Affiliates, or any other Person and (B) the Administrative Agent has no
obligation to any Loan Party  or
any of its Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent and its Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Loan Parties
and their respective Affiliates, and the Administrative Agent has no obligation
to disclose any of such interests to the Loan Parties or any of their
respective Affiliates.  To the fullest
extent permitted by law, each
Loan Party hereby waives and releases any claims that it may have against the
Administrative Agent with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated
hereby.

 

11.17                 Electronic
Execution of Assignments and Certain Other Documents.  The words “execution,” “signed,” “signature,”
and words of like import in any Assignment and Assumption or in any amendment
or other modification hereof (including waivers and consents) shall be deemed
to include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

 

94

 

11.18                 USA
PATRIOT Act.  Each Lender
that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Loan
Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of such Loan Party and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Loan Party in accordance with the Act.  Each Loan Party shall, promptly following a
request by the Administrative Agent or any Lender, provide all documentation
and other information that the Administrative Agent or such Lender requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the
Act.

 

11.19                 ENTIRE
AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

95

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  SPT REAL ESTATE SUB II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  STARWOOD PROPERTY TRUST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPT REAL ESTATE SUB I, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STARWOOD PROPERTY TRUST, INC.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPT OPERATIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STARWOOD PROPERTY TRUST, INC.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  STARWOOD PROPERTY MORTGAGE, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  88TH STREET PARTNERS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STARWOOD MORTGAGE WD, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  SPT REAL ESTATE SUB I, LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STARWOOD PROPERTY TRUST, INC.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:EXHIBIT 10.2

 

ENDORSEMENT TO 10% SENIOR SECURED CONVERTIBLE NOTE

 

Precision Optics Corporation, Inc.

New York, New York

November 30, 2010

 

The
10% Senior Secured Convertible Note dated June 25, 2008 and amended
December 11, 2008, June 25, 2010, July 26, 2010, September 15,
2010, October 15, 2010 and November 15, 2010 (the “Note”) of
Precision Optics Corporation, Inc., a Massachusetts corporation (the “Company”),
payable to the order of Special Situations Private Equity Fund, L.P. (the “Holder”)
in an aggregate principal amount of $275,000 and to which the Endorsement is
affixed is hereby amended in the following respects:

 

1.                                      The term “Stated
Maturity Date” is hereby restated to be “December 1, 2010.”

 

2.                                      Except as
expressly amended by this Endorsement, the Note remains in full force and
effect and the Company hereby reconfirms its obligations thereunder.

 

IN
WITNESS WHEREOF, the Company has caused this Endorsement to be duly executed,
and the Holder has caused this Endorsement to be duly accepted, by their respective
duly authorized representatives as of the day and year first above written.

 

 

	
   

  	
  PRECISION
  OPTICS CORPORATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Richard E. Forkey

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Richard E. Forkey

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  

 

	
  Accepted:

  	
   

  
	
   

  	
   

  
	
  SPECIAL
  SITUATIONS PRIVATE EQUITY FUND, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Adam Stettner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Adam Stettner

  	
   

  
	
   

  	
  Title:
  General Partner

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]