AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.2

$85,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 26, 2009

among

SUNSTONE HOTEL PARTNERSHIP, LLC,

as Borrower ,

SUNSTONE HOTEL INVESTORS, INC.,

as the Parent ,

THE SUBSIDIARY GUARANTORS NAMED HEREIN,

as Subsidiary Guarantors ,

THE INITIAL LENDERS, INITIAL ISSUING BANK AND

SWING LINE BANK NAMED HEREIN,

as Initial Lenders, Initial Issuing Bank and Swing Line Bank,

CITICORP NORTH AMERICA, INC.,

as Administrative Agent and as Collateral Agent ,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Syndication Agent ,

CALYON NEW YORK BRANCH,

as Co-Syndication Agent,

KEYBANK NATIONAL ASSOCIATION,

as Documentation Agent ,

and

CITIGROUP GLOBAL MARKETS INC.

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and Joint Book Running Managers

TABLE OF CONTENTS

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 26, 2009 (this “ Agreement ”) among SUNSTONE HOTEL PARTNERSHIP, LLC, a Delaware limited liability company (the “ Borrower ”), SUNSTONE HOTEL INVESTORS, INC., a Maryland corporation (the “ Parent ”), the entities listed on the signature pages hereof as the guarantors (together with any Additional Guarantors (as hereinafter defined) acceding hereto pursuant to Section 7.05, the “ Subsidiary Guarantors ”), the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the initial lenders (the “ Initial Lenders ”), CITIBANK, N.A., as the initial issuer of Letters of Credit (as hereinafter defined) (the “ Initial Issuing Bank ”), the Swing Line Bank (as hereinafter defined), CITICORP NORTH AMERICA, INC. (“ CNAI ”), as administrative agent (together with any successor administrative agent appointed pursuant to Article VIII, the “ Administrative Agent ”) for the Lender Parties (as hereinafter defined), CNAI, as collateral agent (together with any successor collateral agent appointed pursuant to Article VIII, the “ Collateral Agent ”; together with the Administrative Agent, the “ Agents ”) for the Secured Parties (as hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as syndication agent, CALYON NEW YORK BRANCH, as co-syndication agent, KEYBANK NATIONAL ASSOCIATION, as documentation agent, and CITIGROUP GLOBAL MARKETS INC. (“ CGMI ”) and WACHOVIA CAPITAL MARKETS, LLC, as joint lead arrangers and joint book running managers (the “ Arrangers ”).

PRELIMINARY STATEMENTS

(1) Pursuant to that certain Revolving Credit Agreement dated as of July 17, 2006 by and among the Borrower, the Parent, the guarantors identified therein, the Lender Parties (as defined therein), and CNAI, as administrative agent for such Lender Parties, as amended (the “ Existing Credit Agreement ”), such Lender Parties extended certain commitments to make certain credit facilities available to the Borrower.

(2) The Borrower, the Agents, the Arrangers, and the Lender Parties party to the Existing Credit Agreement desire to amend and restate the Existing Credit Agreement to modify the terms and covenants of the credit facility provided thereunder.

NOW, THEREFORE, in consideration of the premises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Credit Agreement to read in its entirety as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ Additional Guarantor ” has the meaning specified in Section 7.05.

“ Adjusted EBITDA ” means (a) EBITDA for the consecutive four fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, less (b) the FF&E Reserve for all Assets for such four fiscal quarters; provided , however , that in the case of any Redevelopment Asset with respect to which Substantial Completion has occurred:

(A) at any date of determination occurring during the second fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the EBITDA attributable to such Redevelopment Asset for the fiscal quarter of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) four,

(B) at any date of determination occurring during the third fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the EBITDA attributable to such Redevelopment Asset for the two fiscal quarters of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) two, and

(C) at any date of determination occurring during the fourth fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the EBITDA attributable to such Redevelopment Asset for the three fiscal quarters of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) 1.33333;

provided further that the Adjusted EBITDA attributable to any Redevelopment Asset for any measurement period shall not be less than zero.

“ Adjusted Net Operating Income ” means, with respect to any Borrowing Base Asset, (a) the Net Operating Income attributable to such Borrowing Base Asset for the consecutive four fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, less (b) an amount equal to the FF&E Reserve for such Borrowing Base Asset for the consecutive four fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable; provided , however , that calculations of Adjusted Net Operating Income which pertain to any Borrowing Base Asset managed by Interstate as of or following the end of any such fiscal period will be calculated on a pro forma annualized basis as if managed by Interstate for all of such period and any prior fiscal periods; provided further that in the case of any Redevelopment Asset with respect to which Substantial Completion has occurred:

(A) at any date of determination occurring during the second fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the Net Operating Income attributable to such Redevelopment Asset for the fiscal quarter of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) four,

 

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(B) at any date of determination occurring during the third fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the Net Operating Income attributable to such Redevelopment Asset for the two fiscal quarters of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) two, and

(C) at any date of determination occurring during the fourth fiscal quarter of the Parent following Substantial Completion, the amount described in clause (a) above attributable to such Redevelopment Asset shall be deemed equal to (1) the Net Operating Income attributable to such Redevelopment Asset for the three fiscal quarters of the Parent most recently ended (subject to a seasonality adjustment satisfactory to the Administrative Agent based on actual results for the calendar year immediately prior to commencement of renovation and rehabilitation work), multiplied by (2) 1.33333;

provided still further that the Adjusted Net Operating Income attributable to any Redevelopment Asset for any measurement period shall not be less than zero.

“ Administrative Agent ” has the meaning specified in the recital of parties to this Agreement.

“ Administrative Agent’s Account ” means the account of the Administrative Agent maintained by the Administrative Agent with Citibank, N.A., at its office at 2 Penns Way, Suite 200, New Castle, Delaware 19720, ABA No. 021000089, Account No. 36852248, Account Name: Agency/Medium Term Finance, Reference: Sunstone, Attention: Global Loans/Agency, or such other account as the Administrative Agent shall specify in writing to the Lender Parties.

“ Advance ” means a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance.

“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to vote 15% or more of the Voting Interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

“ Agents ” has the meaning specified in the recital of parties to this Agreement.

“ Agreement ” has the meaning specified in the recital of parties to this Agreement.

“ Agreement Value ” means, for each Hedge Agreement, on any date of determination, an amount determined by the Administrative Agent equal to: (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc. (the “ Master Agreement ”), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on such date of determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party”, and (iii) the Administrative Agent was the sole party determining such payment amount (with the

 

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Administrative Agent making such determination pursuant to the provisions of the form of Master Agreement); or (b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent based on the settlement price of such Hedge Agreement on such date of determination, or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by the Administrative Agent as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized terms used and not otherwise defined in this definition shall have the respective meanings set forth in the above described Master Agreement.

“ Annual Budget ” means an operating budget for each Borrowing Base Asset prepared by the Borrower, including all planned Capital Expenditures and FF&E budgeted information for each Borrowing Base Asset for the applicable Fiscal Year or other period.

“ Applicable Lending Office ” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

“ Applicable Margin ” means, at any date of determination, a percentage per annum determined by reference to the Leverage Ratio and Fixed Charge Coverage Ratio as set forth below:

 

The Applicable Margin for each Base Rate Advance shall be determined by reference to the Leverage Ratio and the Fixed Charge Coverage Ratio in effect from time to time and the Applicable Margin for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing shall be determined by reference to the Leverage Ratio and the Fixed Charge Coverage Ratio in effect on the first day of such Interest Period; provided, however, that (a) no change in the Applicable Margin resulting from the Leverage Ratio shall be effective until three Business Days after the date on which the Administrative Agent receives (x) the financial statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be, and (y) a certificate of the Chief Financial Officer of the Borrower demonstrating the Leverage Ratio and the Fixed Charge Coverage Ratio, (b) the Applicable Margin shall be at Pricing Level II for so long as the Borrower has not submitted to the Administrative Agent as and when required under Section 5.03(b) or (c), as applicable, the information described in clause (a) of this proviso, and (c) if the Leverage Ratio and the Fixed Charge Coverage Ratio result in differing Pricing Levels, then the higher Pricing Level shall apply.

“ Appraisal ” means an appraisal complying with the requirements of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, commissioned by and prepared for the account of the Administrative Agent (for the benefit of the Lenders) by a MAI

 

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appraiser selected by the Administrative Agent in consultation with the Borrower, and otherwise in scope, form and substance satisfactory to the Administrative Agent, including any Appraisal delivered on the Closing Date.

“ Appraised Value ” means, for any Borrowing Base Asset, the “as-is” fair market value of such Borrowing Base Asset shown in the most recent Appraisal of such Borrowing Base Asset.

“ Approved Electronic Communications ” means each Communication that any Loan Party is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information materials required to be delivered pursuant to Sections 5.03(b), (c), (e), (g), and (l); provided , however , that, solely with respect to delivery of any such Communication by any Loan Party to the Administrative Agent and without limiting or otherwise affecting either the Administrative Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Administrative Agent in connection with any such posting, “Approved Electronic Communication” shall exclude (i) any notice of borrowing, letter of credit request, swing loan request, notice of conversion or continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Borrowing, (ii) any notice pursuant to Section 2.06(a) and any other notice relating to the payment of any principal or other amount due under any Loan Document prior to the scheduled date therefor, (iii) all notices of any Default or Event of Default and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Borrowing or other extension of credit hereunder or any condition precedent to the effectiveness of this Agreement.

“ Approved Electronic Platform ” has the meaning specified in Section 9.02(c).

“ Approved Manager ” means a nationally recognized hotel manager (a) with (or controlled by a Person or Persons with) at least ten years of experience in the hotel management industry, (b) that has hotels under management that have been rated “upscale” or better by Smith Travel Research, (c) that is engaged pursuant to a written management agreement, and (d) that has entered into a subordination agreement, in form and substance reasonably satisfactory to the Administrative Agent. For purposes of this definition, the term “control” (including the term “controlled by”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

“ Arrangers ” has the meaning specified in the recital of parties to this Agreement.

“ Assets ” means Hotel Assets, Development Assets, Redevelopment Assets and Joint Venture Assets.

“ Assigned Rights and Obligations ” has the meaning specified in Section 2.17(a).

“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by the Administrative Agent, in accordance with Section 9.07 and in substantially the form of Exhibit D hereto.

“ Assignments of Leases ” has the meaning specified in Section 3.01(a)(iii).

 

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“ Available Amount ” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

“ Bankruptcy Law ” means any applicable law governing a proceeding of the type referred to in Section 6.01(f) or Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“ Base Rate ” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the highest of (a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time, as Citibank, N.A.’s base rate, (b)   ¹ / 2 of 1% per annum above the Federal Funds Rate, and (c) the one-month Eurodollar Rate plus 1% per annum.

“ Base Rate Advance ” means an Advance that bears interest as provided in Section 2.07(a)(i).

“ Borrower ” has the meaning specified in the recital of parties to this Agreement.

“ Borrower’s Account ” means the account of the Borrower maintained by the Borrower with Wells Fargo Bank, N.A. at its office in San Francisco, California, ABA No. 121 000 248, Account No. 4121 048 995, or such other account as the Borrower shall specify in writing to the Administrative Agent.

“ Borrowing ” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Lenders or a Swing Line Borrowing.

“ Borrowing Base Asset Value ” means, for any Borrowing Base Asset, the Appraised Value thereof.

“ Borrowing Base Assets ” means only those Hotel Assets or Redevelopment Assets (a) listed on Schedule II hereto as of the Closing Date and (b) added to Schedule II after the Closing Date after becoming a Borrowing Base Asset in accordance with Section 5.01(j)(ii), but excluding, in each case, any Hotel Assets or Redevelopment Assets that have been removed as Borrowing Base Assets in accordance with Section 5.02(d)(ii)(C).

“ Borrowing Base Certificate ” means a certificate in substantially the form of Exhibit F hereto, duly certified by the Chief Financial Officer (or such person performing similar functions) of the Parent.

“ Borrowing Base Conditions ” means, with respect to any Hotel Asset or Redevelopment Asset, that such Hotel Asset or Redevelopment Asset (a) is located in the United States of America; (b) has been in operation for at least one year; (c) is rated “upscale”, “upper upscale” or better by Smith Travel Research; (d) is wholly-owned indirectly by the Borrower either in fee or subject to a Qualifying Ground Lease; (e) unless such Asset has been designated as a Redevelopment Asset pursuant to the terms of this Agreement, is operating and open to the public; (f) is free of all material structural defects or architectural deficiencies, title defects, environmental conditions or other materially adverse matters; (g) is operated under a nationally recognized brand by an Approved Manager or any other manager approved by the Administrative Agent; (h) is not subject to any direct or indirect, secured or unsecured Debt either at the Subsidiary Guarantor level or at any other tier of the Loan Party ownership structure (other than

 

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(i) the Loan Parties’ Obligations under the Loan Documents, (ii) the Exchangeable Notes in existence on the Closing Date and (iii) any Debt at the Parent or the Borrower level that is not prohibited by the terms of the Loan Documents); (i) is not, and no interest of the Borrower or any of its Subsidiaries therein is, subject to any Lien (other than Permitted Liens) or any Negative Pledge; (j) is owned by a Subsidiary Guarantor that satisfies the Subsidiary Guarantor Requirements; (k) none of the Borrower’s or the Parent’s direct or indirect ownership interest in such Subsidiary is subject to any Lien (other than Permitted Liens) or any Negative Pledge; and (l) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain the consent of any Person: (i) to create Liens on such Asset as security for Debt of the Borrower or such Subsidiary, as applicable, and (ii) to sell, transfer or otherwise dispose of such Asset.

“ Borrowing Base Debt Service Coverage Ratio ” means, at any date of determination, the ratio of (a) the aggregate Adjusted Net Operating Income for all Borrowing Base Assets to (b) the payments that would be required to be made over a twelve-month period on an assumed Debt in an aggregate principal amount equal to the Facility Exposure at such date, assuming a twenty-five year amortization schedule, level payments of interest and applying an interest rate equal to the greater of (i) 8.50% per annum and (ii) the one-month Eurodollar Rate plus the Applicable Margin.

“ Borrowing Base Leverage ” means, at any date of determination, the ratio, expressed as a percentage, of (a) the Facility Exposure to (b) the Total Borrowing Base Asset Value.

“ Business Day ” means a day of the year on which banks are not required or authorized by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.

“ Capital Expenditures ” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).

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

“ Carved Out Assets ” means the assets listed on Schedule V hereto.

“ Cash Equivalents ” means any Permitted Investments to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens (other than Liens created under the Collateral Documents) and having a maturity of not greater than 90 days from the date of issuance thereof.

“ Cash Management Agreement ” means the Cash Management Agreement among the Borrower, the Subsidiary Guarantors identified therein and the Collateral Agent, for the ratable benefit of the Secured Parties, dated as of the Closing Date, in form and substance satisfactory to the Administrative Agent, as amended from time to time.

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

“ Certification of Non-Foreign Status ” means an affidavit, signed under penalty of perjury by an authorized officer of each Loan Party that owns or leases a Borrowing Base Asset,

 

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stating (a) that such Loan Party is not a “foreign corporation,” “foreign partnership,” “foreign trust,” or “foreign estate,” as those terms are defined in the Internal Revenue Code and the regulations promulgated thereunder, (b) such Loan Party’s U.S. employer identification number, and (c) the address of such Loan Party’s principal place of business. Such affidavit shall be consistent with the requirements of the regulations promulgated under Section 1445 of the Internal Revenue Code, and shall otherwise be in form and substance acceptable to the Administrative Agent.

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

“ CGMI ” has the meaning specified in the recital of parties to this Agreement.

“ Change of Control ” means the occurrence of any of the following: (a) any Person or two or more Persons acting in concert shall have acquired and shall continue to have following the date hereof beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of the Parent (or other securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Parent; or (b) during any period of up to 12 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 12-month period were directors of the Parent shall cease for any reason to constitute a majority of the board of directors of the Parent; or (c) any Person or two or more Persons acting in concert shall have acquired and shall continue to have following the date hereof, by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, the power to direct, directly or indirectly, the management or policies of the Parent, other than contracts and agreements in effect as of the date hereof, copies of which have been delivered to the Administrative Agent prior to the Closing Date; or (d) the Parent ceases to be the sole managing member of the Borrower; or (e) the Parent ceases to be the legal and beneficial owner of more than 50% of the membership interests of the Borrower; or (f) the Parent shall create, incur, assume or suffer to exist any Lien on the Equity Interests in the Borrower owned by it.

“ Closing Date ” means June 26, 2009.

“ CNAI ” has the meaning specified in the recital of parties to this Agreement.

“ Collateral Agent ” has the meaning specified in the recital of parties to this Agreement.

“ Collateral ” means all “Collateral” and all “Mortgaged Property” referred to in the Collateral Documents and all other property that is or is intended to be subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties and will include, without limitation, all Borrowing Base Assets.

“ Collateral Documents ” means the Security Agreement, the Cash Management Agreement, the Control Agreement, the Mortgages, the Assignments of Leases and any other agreement, each as amended from time to time, that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

“ Commitment ” means a Revolving Credit Commitment, a Swing Line Commitment or a Letter of Credit Commitment.

 

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“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Loan Document or otherwise transmitted between the parties hereto relating this Agreement, the other Loan Documents, any Loan Party or its Affiliates, or the transactions contemplated by this Agreement or the other Loan Documents including, without limitation, all Approved Electronic Communications.

“ Conditional Approval Notice ” has the meaning specified in Section 5.01(j).

“ Consent Request Date ” has the meaning specified in Section 9.01(b).

“ Consolidated ” refers to the consolidation of accounts in accordance with GAAP.

“ Consolidated Total Assets ” means, at any date of determination, the aggregate book value at such date of all Assets of the Parent and its Subsidiaries, as determined in accordance with GAAP.

“ Contingent Obligation ” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends or other payment Obligations (“ primary obligations ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement or (c) any Obligation of such 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 (A) for the purchase or payment of any such primary obligation or (B) 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, assets, 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 holder of such primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“ Control Agreement ” has the meaning specified in the Cash Management Agreement.

“ Controlled Subsidiary ” means any Subsidiary of a Loan Party (i) the accounts of which are Consolidated with the accounts of the Borrower in accordance with GAAP, and (ii) with respect to which the Borrower possesses the power to direct or cause the direction of the disposition, financing, and refinancing of the assets of such Subsidiary, whether through the ownership of Voting Interests, by contract or otherwise.

“ Conversion ”, “ Convert ” and “ Converted ” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.07(d), 2.09 or 2.10.

 

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“ Customary Carve-Out Agreement ” has the meaning specified in the definition of Non-Recourse Debt.

“ Debt ” of any Person means, without duplication for purposes of calculating financial ratios, (a) all Debt for Borrowed Money of such Person, (b) all Obligations of such Person for the deferred purchase price of property or services other than trade payables incurred in the ordinary course of business and not overdue by more than 60 days, (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person (other than (i) Preferred Interests that are issued by any Loan Party or Subsidiary thereof and classified as either equity or minority interests pursuant to GAAP and (ii) the Series C Cumulative Convertible Redeemable Preferred Stock issued by the Parent) or any warrants, rights or options to acquire such Equity Interests, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Contingent Obligations of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations; provided , however , that in the case of the Parent and its Subsidiaries, “Debt” shall include, without duplication, (i) the JV Pro Rata Share of Debt of any Joint Venture if the aggregate amount of all Investments by the Loan Parties and their Subsidiaries in Joint Ventures made after the Closing Date exceeds $5,000,000 (exclusive of Investments in the Doubletree JV up to an aggregate amount of $45,000,000); and (ii) any Debt of any Joint Venture that is recourse (other than in respect of Customary Carve-Out Agreements) to the Parent or any of its Subsidiaries, including by reason of any such Person being a general partner in such Joint Venture; and except to the extent described in the foregoing clauses (i) and (ii), the Debt of any Joint Venture shall be excluded from “Debt” of the Parent and its Subsidiaries.

“ Debt for Borrowed Money ” of any Person means all items that, in accordance with GAAP, would be classified as indebtedness on a Consolidated balance sheet of such Person (less a proportionate adjustment for minority interests); provided , however , that in the case of the Parent and its Subsidiaries “Debt for Borrowed Money” shall also include, without duplication, the JV Pro Rata Share of Debt for Borrowed Money for each Joint Venture if the aggregate amount of all Investments by the Loan Parties and their Subsidiaries in Joint Ventures made after the Closing Date exceeds $5,000,000 (exclusive of Investments in the Doubletree JV up to an aggregate amount of $45,000,000); and provided further that as used in the definition of “Fixed Charge Coverage Ratio”, in the case of any acquisition or disposition of any direct or indirect interest in any Asset (including through the acquisition of Equity Interests) by the Parent or any of its Subsidiaries during the consecutive four fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, the term “Debt for Borrowed Money” (a) shall include, in the case of an acquisition, any Debt for Borrowed Money directly relating to such Asset existing immediately following such acquisition computed as if such indebtedness also existed for the portion of such period that such Asset was not owned by the

 

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Parent or such Subsidiary, and (ii) shall exclude, in the case of a disposition, for such period any Debt for Borrowed Money to which such Asset was subject to the extent such Debt for Borrowed Money was repaid or otherwise terminated upon the disposition of such Asset.

“ Debtor Subsidiary ” has the meaning specified in Section 6.01(f).

“ Default ” means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

“ Default Termination Notice ” has the meaning specified in Section 2.01(b).

“ Deliverables ” means, with respect to a Proposed Borrowing Base Asset:

(i) each of the items set forth in Sections 3.01(a)(ii), (iii), (xi), (xii) and (xiii), mutatis mutandis , in each case in respect of the Proposed Borrowing Base Asset;

(ii) a revised Schedule II hereto reflecting the addition of such Proposed Borrowing Base Asset, provided that, for purposes of the definition of the term Borrowing Base Assets, such revised Schedule II shall become effective only upon satisfaction of each of the conditions set forth in Section 5.01(j)(ii);

(iii) if the proposed addition date set forth in the Proposal Package is different from the actual addition date, a new certificate of the type described in clause (iii)(D) in the definition of Proposal Package updated to account for the actual addition date;

(iv) evidence satisfactory to the Administrative Agent in its reasonable discretion that the applicable owner and lessee of such Proposed Borrowing Base Asset and each direct and indirect parent thereof (other than the Parent and the Borrower) shall have complied with the Subsidiary Guarantor Requirements;

(v) each of the items set forth in Section 5.01(j)(i), as applicable; and

(vi) such other approvals, opinions or documents as any Lender Party through the Administrative Agent may reasonably request.

“ Development Assets ” means all Real Property acquired for development into Hotel Assets that, in accordance with GAAP, would be classified as development property on a Consolidated balance sheet of the Parent and its Subsidiaries. For the avoidance of doubt, Development Assets shall exclude any Redevelopment Asset.

“ Disclosed Litigation ” has the meaning specified in Section 3.01(e).

“ Domestic Lending Office ” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“ Doubletree JV ” means the Joint Venture interest in the Doubletree Guestsuites Times Square with Investments therein by the Parent and its Subsidiaries as of the Closing Date in an aggregate amount of $40,000,000.

 

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“ EBITDA ” means , for any measurement period, the sum of (i) net income (or net loss) from continuing operations (excluding gains (or losses) from extraordinary and unusual items), (ii) interest expense, (iii) income tax expense, (iv) depreciation expense, (v) amortization expense, (vi) gains (or losses) from sales of assets and (vii) to the extent subtracted in computing net income, (A) impairment charges and (B) income attributable to minority interests, in each case of the Parent and its Subsidiaries determined on a Consolidated basis and in accordance with GAAP for such period; provided, however, that for purposes of this definition, (1) in the case of any acquisition or disposition of any direct or indirect interest in any Asset (including through the acquisition of Equity Interests) by the Parent or any of its Subsidiaries during such period, EBITDA will be adjusted (y) in the case of an acquisition, by adding thereto an amount equal to the acquired Asset’s actual EBITDA (computed as if such Asset was owned by the Parent or one of its Subsidiaries for the entire period) generated during the portion of such period that such Asset was not owned by the Parent or such Subsidiary, and (z) in the case of a disposition, by subtracting therefrom an amount equal to the actual EBITDA generated by the Asset so disposed of for such period, (2) the EBITDA attributable to any Redevelopment Asset for any measurement period shall not be less than zero, (3) any portion of EBITDA attributable to Equity Interests in Joint Ventures shall be disregarded, but only for so long as the aggregate amount (without duplication) of all Investments by the Loan Parties and their Subsidiaries in Joint Ventures after the Closing Date is not greater than $5,000,000 (exclusive of Investments in the Doubletree JV up to an aggregate amount of $45,000,000), absent which EBITDA shall be deemed to include the JV Pro Rata Share of all items described in this definition above attributable to any Joint Venture, and (4) EBITDA shall be adjusted to remove any impact from (x) non-cash amortization of stock grants to members of the Parent’s management, (y) straight line rent leveling adjustments required under GAAP, and (z) amortization of intangibles pursuant to Statement of Financial Accounting Standards number 141.

“ Effective Date ” means the first date on which the conditions set forth in Article III shall be satisfied.

“ Eligible Assignee ” means (a) with respect to the Revolving Credit Facility, (i) a Lender; (ii) an Affiliate or Fund Affiliate of a Lender; (iii) a commercial bank organized under the laws of the United States, or any State thereof, respectively, and having total assets in excess of $500,000,000; (iv) a savings and loan association or savings bank organized under the laws of the United States or any State thereof, and having total assets in excess of $500,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having total assets in excess of $500,000,000, so long as such bank is acting through a branch or agency located in the United States; (vi) the central bank of any country that is a member of the OECD; (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having total assets in excess of $500,000,000; and (viii) any other Person approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed, and (b) with respect to the Letter of Credit Facility, a Person that is an Eligible Assignee under subclause (iii) or (v) of this definition and is approved by the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 9.07, approved by the Borrower, such approval not to be unreasonably withheld or delayed; provided, however, that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

 

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“ Environmental Action ” means any judicial action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged environmental injury or threat to health or safety relating to any hazardous materials or the protection of the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“ Environmental Law ” means any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or legally-binding agency interpretation, policy or guidance relating to pollution or protection of the environment, health and safety as it relates to Hazardous Materials or natural resources, including, without limitation, (a) those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials, and (b) with respect to any Assets located in California, the California Integrated Waste Management Act (California Public Resources Code Section 40000, et seq); Title 7.3 of the California Government Code Section 66758 et seq; Title 14, Division 7 of the California Code of Regulations; Title 23, Division 3, Chapter 15 of the California Code of Regulations; and all other applicable provisions of the California Health and Safety Code, the California Public Resources Code, the California Government Code and the California Water Code.

“ 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, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

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

“ ERISA Affiliate ” means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

“ ERISA Event ” means (a)(i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to

 

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Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

“ Eurocurrency Liabilities ” has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“ Eurodollar Lending Office ” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Administrative Agent.

“ Eurodollar Rate ” means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period equal to such Interest Period or, if for any reason such rate is not available, the average (rounded upward, if necessary, to the nearest 1/100 of 1%, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered by the principal office of the Reference Bank in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to the Reference Bank’s Eurodollar Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period (or, if the Reference Bank shall not have such a Eurodollar Rate Advance, $1,000,000) and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period; provided , however , that if at any time the Eurodollar Rate calculated as provided above shall be lower than 1.50% per annum, the Eurodollar Rate shall be deemed to be 1.50% per annum for the purposes of this Agreement.

“ Eurodollar Rate Advance ” means an Advance that bears interest as provided in Section 2.07(a)(ii).

“ Eurodollar Rate Reserve Percentage ” means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference

 

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to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

“ Events of Default ” has the meaning specified in Section 6.01.

“ Exchangeable Notes ” means the 4.60% Exchangeable Senior Notes due 2027 issued pursuant to that certain Indenture, dated as of June 18, 2007, as amended by the (a) First Supplemental Indenture, dated as of June 18, 2007, (b) Second Supplemental Indenture, dated as of June 27, 2007, (c) Third Supplemental Indenture, dated as of July 29, 2008 and (d) Fourth Supplemental Indenture, dated as of May 20, 2009, each among the Borrower, as issuer, the Parent, Wells Fargo Bank, National Association, as trustee, and the other parties identified therein, and as such Indenture may be further amended from time to time.

“ Existing Credit Agreement ” has the meaning specified in the Preliminary Statements to this Agreement.

“ Existing Debt ” means Debt of each Loan Party and its Subsidiaries outstanding immediately prior to the Closing Date, including all outstanding Debt under the Loan Documents (as defined in the Existing Credit Agreement).

“ Existing Letters of Credit ” means the letters of credit listed on Schedule III hereto issued under the Existing Credit Agreement.

“ Extension Date ” has the meaning specified in Section 2.16.

“ Facility ” means the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility.

“ Facility Exposure ” means, at any date of determination, the sum of the aggregate principal amount of all outstanding Advances and the Available Amount under all outstanding Letters of Credit.

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Letter ” means the fee letter dated as of the Closing Date among the Borrower, CNAI and CGMI, as the same may be amended from time to time.

“ FF&E ” has the meaning specified in the Security Agreement.

“ FF&E Reserve ” means, with respect to any Asset for any fiscal period, an amount equal to 4% of total revenues from the operation of such Asset during such fiscal period.

“ Fiscal Year ” means a fiscal year of the Parent and its Consolidated Subsidiaries ending on December 31 in any calendar year.

 

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“ Fixed Charge Coverage Ratio ” means, at any date of determination, the ratio of (a) Adjusted EBITDA to (b) the sum of (i) interest (including capitalized interest) payable on, and amortization of debt discount in respect of (but not including any amortization of financing costs or prepayment penalties), all Debt for Borrowed Money (provided that to the extent interest on Debt for Borrowed Money is assessed at a floating rate, then for purposes of this definition such interest shall be calculated based upon the actual interest that was due and payable on such Debt for Borrowed Money during the applicable period), in each case of or by the Parent and its Subsidiaries for the consecutive four (4) fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, plus (ii) scheduled amortization of principal amounts of all Debt for Borrowed Money payable (not including maturities) by the Parent and its Subsidiaries for the consecutive four (4) fiscal quarters of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, plus (iii) all dividends declared and payable, but not yet paid, on any Preferred Interests by the Parent and its Subsidiaries for the fiscal quarter of the Parent most recently ended for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable, multiplied by four. Notwithstanding the foregoing, there shall be a pro forma adjustment to the Fixed Charge Coverage Ratio to account for any reduction or increase in the principal amount of Debt outstanding under the Exchangeable Notes during the applicable measurement period and the effect of such reduction or increase on debt service payments due and payable thereunder.

“ Forward Sale Agreement ” means any forward sale or similar agreement relating to the Equity Interests of the Parent.

“ Fund Affiliate ” means, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Funds From Operations ” means, with respect to the Parent, net income (computed in accordance with GAAP), excluding net income from minority interests, gains (or losses) from sales of property and extraordinary and unusual items, plus depreciation and amortization, and after adjustments for unconsolidated Joint Ventures, provided that Funds From Operations shall exclude any impairment charges, prepayment penalties and deferred financing costs. Adjustments for unconsolidated Joint Ventures will be calculated to reflect funds from operations on the same basis.

“ GAAP ” has the meaning specified in Section 1.03.

“ Guaranteed Obligations ” has the meaning specified in Section 7.01.

“ Guarantor ” means the Parent and each Subsidiary Guarantor.

“ Guaranty ” means the Guaranty by the Guarantors pursuant to Article VII, together with any and all Guaranty Supplements delivered pursuant to Section 5.01(j), as each may be amended from time to time.

 

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“ Guaranty Supplement ” means a supplement entered into by an Additional Guarantor in substantially the form of Exhibit C hereto.

“ Hazardous Materials ” means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and mold and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“ Hedge Agreements ” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

“ Hedge Bank ” means any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Hedge Agreement.

“ Hotel Asset ” means Real Property (other than any Joint Venture Asset) that operates or is intended to be operated as a hotel, resort or other lodging for transient use of rooms or is a structure from which a hotel, resort or other lodging for transient use of rooms is operated or intended to be operated.

“ Hotel Management Agreements ” means, collectively, (a) the Hotel Management Agreement, dated as of April 20, 2005, between Fairmont Hotels and Resorts (U.S.) Inc. and Sunstone MacArthur Lessee, Inc., (b) the Management Agreement, dated June 9, 1989, between CSL Newporter, Ltd. and Hyatt Corporation, as assigned to Newporter Beach Hotel Investments LLC pursuant to an Assignment of Management Agreement, Consent, and Nondisturbance Agreement, dated as of March 6, 1995, as further assigned to NorthCoast Hotels, L.L.C. pursuant to a Consent and Assumption Agreement, dated as of April, 1996, as further assigned to Patriot American Hospitality Partnership, L.P. pursuant to an Assignment of Lease Agreement, dated November 30, 1998, as further assigned to Wyndham International Operation Partnership, L.P. pursuant to an Assignment and Assumption of Management Agreements, dated as of December 1, 1998, as further assigned to Wyndham International Operating Partnership, L.P. pursuant to an Assignment of Agreement, dated as of November 17, 2000, as further assigned to WHP Hotel Lessee-1, Inc. pursuant to an Assignment and Assumption of Agreements, dated December 5, 2002, and as further assigned to Sunstone Jamboree Lessee, Inc. pursuant to an Assignment and Assumption Agreement (Hyatt Regency Newport Beach), dated as of May 13, 2005, (c) the Management Agreement, dated as of June 23, 2005, between Renaissance Hotel Management Company, LLC and WSRH LAX Airport, L.L.C., as assigned to Sunstone LA Airport Lessee Inc., (d) the Hotel Management, dated as of October 26, 2004, between Rochester RIBM Lessee, Inc. and Sunstone Hotel Properties, Inc., (e) the Hotel Management Agreement, dated as of June, 2005, between Sunstone Center Court Lessee, Inc. and Sunstone Hotel Properties, Inc., and (f) with respect to any Borrowing Base Asset added to the Collateral after the Closing Date in accordance with the terms of Section 5.01(j), the management agreement between the Manager of such Borrowing Base Asset and the applicable Subsidiary Guarantor, in each case as amended from time to time to the extent permitted under the Loan Documents.

“ Indemnified Costs ” has the meaning specified in Section 8.05(a).

“ Indemnified Party ” has the meaning specified in Section 7.06(a).

“ Information ” has the meaning specified in Section 9.10(a).

 

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“ Initial Extension of Credit ” means the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit hereunder.

“ Initial Issuing Bank ” has the meaning specified in the recital of parties to this Agreement.

“ Initial Lenders ” has the meaning specified in the recital of parties to this Agreement.

“ Insufficiency ” means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

“ Intellectual Property ” means (a) patents and patent applications, (b) trademarks, service marks, trade names, trade dress and domain names, together with the goodwill associated exclusively therewith, (c) copyrights, including copyrights in computer software, (d) trade secrets and know-how, and (e) registrations and applications for registration of the foregoing.

“ Interest Period ” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months, as the Borrower may, upon notice received by the Administrative Agent not later than 12:00 Noon (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance that ends after the Termination Date;

(b) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

(c) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(d) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ Interstate ” means Interstate Hotels & Resorts, Sunstone Hotel Properties, Inc. or any of their respective successors or assigns.

 

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“ Interstate Master Agreement ” means the Master Agreement, dated October 26, 2004, between Sunstone TRS Lessee Inc. and Sunstone Hotel Properties, Inc., as amended from time to time to the extent permitted under the Loan Documents.

“ Investment ” in any Person means any loan or advance to such Person, any purchase or other acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of the definition of “ Debt ” in respect of such Person.

“ Issuing Bank ” means the Initial Issuing Bank and any other Lender approved as an Issuing Bank by the Administrative Agent and the Borrower and any Eligible Assignee to which a Letter of Credit Commitment hereunder has been assigned pursuant to Section 9.07 so long as each such Lender or each such Eligible Assignee expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the Administrative Agent of its Applicable Lending Office and the amount of its Letter of Credit Commitment (which information shall be recorded by the Administrative Agent in the Register) for so long as such Initial Issuing Bank, Lender or Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment.

“ Joint Venture ” means any Person (a) in which the Parent or any of its Subsidiaries holds any Equity Interest, (b) that is not a Subsidiary of the Parent or any of its Subsidiaries and (c) the accounts of which would not appear on the Consolidated financial statements of the Parent.

“ Joint Venture Assets ” means, with respect to any Joint Venture at any time, the assets owned by such Joint Venture at such time.

“ JV Equity Value ” means, with respect to any Joint Venture, (a) the undepreciated book value of Investments by the Borrower and any of its Subsidiaries in such Joint Venture in accordance with GAAP, less (b) the JV Pro Rata Share of all Debt of such Joint Venture; provided , however , that for each New Acquisition JV, the Borrower shall have a one-time option (exercised by notice to the Administrative Agent) to elect to compute the “JV Equity Value” of such New Acquisition JV as either (A)(1) the undepreciated book value of Investments by the Borrower and any of its Subsidiaries in such New Acquisition JV in accordance with GAAP less (2) the JV Pro Rata Share of all Debt of such Joint Venture, or (B)(1) the JV Pro Rata Share of the purchase price paid for the Joint Venture Asset owned by such New Acquisition JV less (2) the JV Pro Rata Share of all Debt of such New Acquisition JV.

“ JV Fee Income ” means, for any measurement period, all income of the Parent and any of its Subsidiaries from asset management fees, financing fees, renovation fees or other fees received from Joint Ventures during such period.

“ JV Pro Rata Share ” means, with respect to any Joint Venture at any time, the fraction, expressed as a percentage, obtained by dividing (a) the total book value of all Equity Interests in such Joint Venture held by the Parent and any of its Subsidiaries by (b) the total book value of all outstanding Equity Interests in such Joint Venture at such time.

“ L/C Account Collateral ” has the meaning specified in Section 2.18(a).

 

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“ L/C Cash Collateral Account ” means an account of the Borrower to be maintained with the Administrative Agent, in the name of the Administrative Agent and under the sole control and dominion of the Administrative Agent and subject to the terms of this Agreement.

“ L/C Related Documents ” has the meaning specified in Section 2.04(c)(ii)(A).

“ Lender Party ” means any Lender, the Swing Line Bank or any Issuing Bank.

“ Lenders ” means the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

“ Letter of Credit Advance ” means an advance made by any Issuing Bank or any Lender pursuant to Section 2.03(c).

“ Letter of Credit Agreement ” has the meaning specified in Section 2.03(a).

“ Letter of Credit Commitment ” means, with respect to any Issuing Bank at any time, the amount set forth opposite such Issuing Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or, if such Issuing Bank has entered into one or more Assignment and Acceptances, set forth for such Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Issuing Bank’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“ Letter of Credit Facility ” means, at any time, an amount equal to the lesser of (a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time, and (b) $25,000,000, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“ Letters of Credit ” has the meaning specified in Section 2.01(b).

“ Leverage Ratio ” means, at any date of determination, the ratio of (a)(i) Total Debt minus (ii) the amount, if any, all restricted and unrestricted cash and Cash Equivalents on hand of the Parent and its Subsidiaries to (b) EBITDA at such date.

“ Lien ” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

“ Liquidity ” means, at the date of determination, the sum of (a) all unrestricted cash and Cash Equivalents of the Parent and its Subsidiaries, plus (b) the amount, if any, by which the aggregate Revolving Credit Commitments exceeds the Facility Exposure.

“ Loan Documents ” means (a) this Agreement, (b) the Notes, (c) the Fee Letter, (d) each Letter of Credit Agreement, (e) each Guaranty Supplement, (f) the Collateral Documents, and (g) the Post Closing Letter, in each case, as amended.

“ Loan Parties ” means the Parent, the Borrower and the Subsidiary Guarantors.

“ Low Fixed Charge Coverage Period ” has the meaning specified in Section 5.04(a)(iii).

 

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“ Management Fees ” means the management fees payable with respect to a Borrowing Base Asset calculated as follows: (a) if such Borrowing Base Asset is managed by Interstate, all actual management fees payable to Interstate for the applicable fiscal period in connection with the management of such Borrowing Base Asset or (b) if such Borrowing Base Asset is not managed by Interstate, the greater of (i) 3.0% of all rental and other income from the operation of such Borrowing Base Asset for such fiscal period and (ii) all management fees payable in respect of such Borrowing Base Asset for such fiscal period.

“ Manager ” means, for each Borrowing Base Asset, the property manager under each Hotel Management Agreement, or, if the context requires, any other property manager who is managing any Borrowing Base Asset in accordance with the terms and provisions of the Loan Documents.

“ Margin Stock ” has the meaning specified in Regulation U.

“ MassMutual Financing Pool Hotels ” means, collectively, the Courtyard by Marriott Los Angeles, the Courtyard by Marriott San Diego, the Hilton Huntington, the Holiday Inn Express San Diego (Old Town), the Holiday Inn San Diego (Downtown), the Marriott Provo, the Marriott Rochester, the Marriott Salt Lake City, the Renaissance Concourse, the Residence Inn by Marriott Manhattan Beach and the Rochester Inn & Suites.

“ Material Adverse Change ” means any material adverse change in the business, condition (financial or otherwise) or results of operations of the Borrower or the Borrower and its Subsidiaries, taken as a whole.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, condition (financial or otherwise) or operations of the Borrower and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Loan Document, (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is or is to be a party, or (d) the value of the Collateral.

“ Material Contract ” means, with respect to any Loan Party, each contract to which such Loan Party is a party involving aggregate consideration payable to or by such Loan Party in an amount of $10,000,000 or more per annum or otherwise material to the business, condition (financial or otherwise), operations, performance or properties of the Borrower and its Subsidiaries, taken as a whole.

“ Material Debt ” means (i) Recourse Debt in an outstanding principal amount (or, in the case of any Hedge Agreement, an Agreement Value) of $10,000,000 or more, either individually or in the aggregate (“ Material Recourse Debt ”), or (ii) Debt of any Loan Party or any Subsidiary of a Loan Party (other than Material Recourse Debt) that is outstanding in a principal amount (or, in the case of any Hedge Agreement, an Agreement Value) greater than or equal to $75,000,000, either individually or in the aggregate; in each case (a) whether the primary obligation of one or more of the Loan Parties or their respective Subsidiaries, (b) whether the subject of one or more separate debt instruments or agreements, and (c) exclusive of Debt outstanding under this Agreement.

“ Material Recourse Debt ” has the meaning specified in the definition of Material Debt.

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

 

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“ Mortgage Policies ” has the meaning specified in Section 3.01(a)(iii)(B).

“ Mortgages ” has the meaning specified in Section 3.01(a)(iii).

“ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

“ Multiple Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“ Negative Pledge ” means, with respect to any asset, any provision of a document, instrument or agreement (other than a Loan Document) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Debt of the Person owning such asset or any other Person.

“ Net Operating Income ” means, with respect to any Borrowing Base Asset for any applicable measurement period, (a) the total rental revenue and other revenues from the operation of such Borrowing Base Asset for such period, minus (b) all expenses and other proper charges incurred in connection with the operation and maintenance of such Borrowing Base Asset for such period, including, without limitation, repairs, real estate and chattel taxes, bad debt expenses and Management Fees, but before payment or provision for debt service charges, income taxes and depreciation, amortization, impairment charges and other non-cash expenses, all as determined in accordance with GAAP; provided , however , that the Net Operating Income attributable to any Redevelopment Asset for any measurement period shall not be less than zero.

“ New Acquisition JV ” means, at any date of determination, any Joint Venture in which the Borrower or any of its Subsidiaries has held an Equity Interest for a period of less than 18 months at such date.

“ Non-Consenting Lender ” has the meaning specified in Section 9.01(b).

“ Non-Recourse Debt ” means Debt for Borrowed Money with respect to which recourse for payment is limited to (a) any building(s) or parcel(s) of real property or any related assets encumbered by a Lien securing such Debt for Borrowed Money and/or (b) (i) the general credit of the Property-Level Subsidiary, which has incurred such Debt for Borrowed Money, and/or the Equity Interests therein and/or (ii) the general credit of the immediate parent entity of such Property-Level Subsidiary provided that such parent entity’s assets consist solely of Equity Interests in one or more Property-Level Subsidiaries and/or (iii) the general credit of the immediate parent entity of the immediate parent of such Property-Level Subsidiary (the “ grandparent entity ”) provided that such grandparent entity’s assets consist solely of Equity Interests in the immediate parent of such Property-Level Subsidiary and/or (iv) the general credit of the immediate parent entity of the grandparent entity of such Property-Level Subsidiary provided that such parent entity’s assets consist solely of Equity Interests in the grandparent of such Property-Level Subsidiary, it being understood that the instruments governing such Debt may include customary carve-outs to such limited recourse (any such customary carve-outs or

 

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agreements limited to such customary carve-outs, being a “ Customary Carve-Out Agreement ”) such as, for example, personal recourse to the Parent or any Subsidiary of the Parent for fraud, misrepresentation, misapplication or misappropriation of cash, waste, environmental claims, damage to properties, non-payment of taxes or other liens despite the existence of sufficient cash flow, interference with the enforcement of loan documents upon maturity or acceleration, voluntary or involuntary bankruptcy filings, violation of loan document prohibitions against transfer of properties or ownership interests therein and liabilities and other circumstances customarily excluded by lenders from exculpation provisions and/or included in separate indemnification and/or guaranty agreements in non-recourse financings of real estate. For the avoidance of doubt, the term “Non-Recourse Debt” shall not include Recourse Debt.

“ Note ” means a promissory note of the Borrower payable to the order of any Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender.

“ Notice of Borrowing ” has the meaning specified in Section 2.02(a).

“ Notice of Issuance ” has the meaning specified in Section 2.03(a).

“ Notice of Renewal ” has the meaning specified in Section 2.01(b).

“ Notice of Swing Line Borrowing ” has the meaning specified in Section 2.02(b).

“ Notice of Termination ” has the meaning specified in Section 2.01(b).

“ NPL ” means the National Priorities List under CERCLA.

“ Obligation ” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

“ OECD ” means the Organization for Economic Cooperation and Development.

“ Other Taxes ” has the meaning specified in Section 2.12(b).

“ Parent ” has the meaning specified in the recital of parties to this Agreement.

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

“ Patriot Act ” has the meaning specified in Section 9.12.

 

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“ PBGC ” means the Pension Benefit Guaranty Corporation (or any successor).

“ Permitted Investments ” means (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $1,000,000,000 and (c) commercial paper in an aggregate amount of not more than $50,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any State of the United States and rated at least “Prime 1” (or the then equivalent grade) by Moody’s or “A 1” (or the then equivalent grade) by S&P.

“ Permitted Liens ” means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for taxes, assessments and governmental charges or levies not yet due and payable; (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days and (ii) individually or together with all other Permitted Liens outstanding on any date of determination do not materially adversely affect the use of the property to which they relate; (c) pledges or deposits to secure obligations under workers’ compensation or unemployment laws or similar legislation or to secure public or statutory obligations; (d) easements, zoning restrictions, rights of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially adversely affect the use or value of such property for its present purposes; (e) Tenancy Leases; (f) Liens arising solely by virtue of any statutory or common law provisions relating to banks’ liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; (g) Liens created by the Loan Documents; (h) the Permitted Encumbrances (as defined in the Mortgages); and (i) such other Liens as the Administrative Agent has approved in writing in its sole discretion.

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Plan ” means a Single Employer Plan or a Multiple Employer Plan.

“ Post Closing Letter ” means the letter agreement dated as of the Closing Date between the Borrower and the Administrative Agent, as the same may be amended from time to time.

“ Post Petition Interest ” has the meaning specified in Section 7.07(b).

“ Preferred Interests ” means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or priority over any other Equity Interests issued by such Person upon any distribution of such Person’s property and assets, whether by dividend or upon liquidation.

“ Property-Level Subsidiary ” means any Subsidiary of the Borrower or any Joint Venture that holds a direct fee or leasehold interest in any single building (or group of related buildings, including, without limitation, buildings pooled for purposes of a Non-Recourse Debt financing)

 

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or parcel (or group of related parcels, including, without limitation, parcels pooled for purposes of a Non-Recourse Debt financing) of real property and related assets and not in any other building or parcel of real property.

“ Proposal Package ” means, with respect to any Proposed Borrowing Base Asset, the following items, each in form satisfactory to the Administrative Agent and in sufficient copies for each Lender:

(i) a description in reasonable detail of the Proposed Borrowing Base Asset certified by the Chief Financial Officer (or such person performing similar functions) of the Borrower;

(ii) an Appraisal of the Proposed Borrowing Base Asset; and

(iii) a certificate of the Chief Financial Officer (or such person performing similar functions) of the Borrower confirming that:

(A) such Proposed Borrowing Base Asset satisfies all Borrowing Base Conditions or, if a waiver or discretionary approval is required with respect to any Borrowing Base Condition, a request for such waiver or discretionary approval,

(B) the addition of such Proposed Borrowing Base Asset as a Borrowing Base Asset shall not cause or result in a Default or Event of Default,

(C) the Loan Parties are in compliance with the covenants contained in Section 5.04 (both immediately before and on a pro forma basis immediately after the addition of such Proposed Borrowing Base Asset as a Borrowing Base Asset),

(D) on the proposed date of such addition, (I) the Borrowing Base Debt Service Coverage Ratio (adjusted on a pro forma basis to account for the addition) shall be equal to or greater than 1.50:1.00 and (II) the Borrowing Base Leverage (adjusted on a pro forma basis to account for the addition) shall not exceed 55%, provided that if the Fixed Charge Coverage Ratio on the proposed date of such addition is less than 1.15:1.00, the Borrowing Base Debt Service Coverage Ratio (adjusted on a pro forma basis to account for the addition) on the proposed date of such addition shall be equal to or greater than 1.75:1.00 and the Borrowing Base Leverage (adjusted on a pro forma basis to account for the addition) on the proposed date of such addition shall not exceed 45%; provided further that on the proposed date of such addition, the Borrowing Base Debt Service Coverage Ratio (adjusted on a pro forma basis to account for the addition) shall not be less than the unadjusted Borrowing Base Debt Service Coverage Ratio that existed immediately prior to the addition and the Borrowing Base Leverage (adjusted on a pro forma basis to account for the addition) shall not exceed the unadjusted Borrowing Base Leverage that existed immediately prior to the addition, and

(E) such Proposed Borrowing Base Asset is not affected by any provision in any ground lease, franchise agreement, management agreement or other agreement affecting such Proposed Borrowing Base Asset that limits the

 

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principal amount that may be secured by a Mortgage of such Proposed Borrowing Base Asset to a principal amount that is less than the Appraised Value of such Proposed Borrowing Base Asset, or if such Proposed Borrowing Base Asset is affected by any such provision, a description of such provision in reasonable detail.

“ Proposed Borrowing Base Asset ” means a Hotel Asset or Redevelopment Asset that the Borrower proposes be added as a Borrowing Base Asset in accordance with Section 5.01(j)(ii).

“ Pro Rata Share ” of any amount means, with respect to any Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the Revolving Credit Facility at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately prior to such termination).

“ Purchasing Lender ” has the meaning specified in Section 2.17(a).

“ Qualifying Ground Lease ” means a ground lease containing the following terms and conditions: (a) a remaining term (inclusive of any unexercised extension options exercisable at the option of the lessee) of 30 years or more from the date on which the Asset to which such ground lease relates was acquired by the applicable Loan Party; (b) 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; (c) reasonable transferability of the lessee’s interest under such lease, including ability to sublease; and (d) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of a leasehold estate demised pursuant to a ground lease.

“ Recourse Debt ” means Debt for which the Parent or any of its Subsidiaries has personal or recourse liability in whole or in part, exclusive of any Debt for which such personal or recourse liability is limited to obligations under Customary Carve-Out Agreements.

“ Real Property ” means all right, title and interest of the Borrower and each of its Subsidiaries in and to any land and any improvements located thereon, together with all equipment, furniture, materials, supplies and personal property in which such Person has an interest now or hereafter located on or used in connection with such land and improvements, and all appurtenances, additions, improvements, renewals, substitutions and replacements thereof now or hereafter acquired by such Person.

“ Redevelopment Assets ” means all Hotel Assets either (i) acquired by the Parent or any of its Subsidiaries with a view toward renovating or rehabilitating same at an aggregate anticipated cost in excess of 10% of the acquisition cost of such Hotel Asset, or (ii) designated by a Loan Party in a notice to the Administrative Agent as a Redevelopment Asset with respect to which the Borrower intends to renovate or rehabilitate such asset at an aggregate anticipated cost in excess of 10% of the Appraised Value thereof. Each Redevelopment Asset shall continue to be classified as a Redevelopment Asset hereunder until the date that is eighteen (18) months following the achievement of Substantial Completion with respect to such Asset, following which such Asset shall be classified as a Hotel Asset hereunder.

 

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“ Reference Bank ” means Citibank, N.A.

“ Register ” has the meaning specified in Section 9.07(d).

“ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“ REIT ” means a Person that is qualified to be treated for tax purposes as a real estate investment trust under Sections 856-860 of the Internal Revenue Code.

“ Replacement Lender ” has the meaning specified in Section 9.01(b).

“ Required Lenders ” means, at any time, Lenders owed or holding greater than 50% of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving Credit Commitments at such time. For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to any Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Lenders ratably in accordance with their respective Revolving Credit Commitments.

“ Responsible Officer ” means any officer of, or any officer of any general partner or managing member of, any Loan Party or any of its Subsidiaries.

“ Restricting Information ” has the meaning specified in Section 9.10(b).

“ Revolving Credit Advance ” has the meaning specified in Section 2.01(a).

“ Revolving Credit Commitment ” means, (a) with respect to any Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” or (b) if such Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such Lender’s “Revolving Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“ Revolving Credit Facility ” means, at any time, the aggregate amount of the Lenders’ Revolving Credit Commitments at such time.

“ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

“ Sarbanes-Oxley ” means the Sarbanes-Oxley Act of 2002, as amended.

“ Secured Obligations ” means, collectively, the “Secured Obligations” as defined in Section 2 of the Security Agreement.

“ Secured Parties ” means the Agents and the Lender Parties.

“ Securities Act ” means the Securities Act of 1933, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

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“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended to the date hereof and from time to time hereafter, and any successor statute.

“ Security Agreement ” has the meaning specified in Section 3.01(a)(ii).

“ Selling Lender ” has the meaning specified in Section 2.17(a).

“ Single Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

“ Smith Travel Research ” means Smith Travel Research or a substitute lodging industry research company proposed by the Borrower and approved by the Administrative Agent and the Required Lenders.

“ Solvent ” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person, on a going-concern basis, is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person, on a going-concern basis, 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 and (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. 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 (including, without limitation, after taking into account appropriate discount factors for the present value of future contingent liabilities), represents the amount that can reasonably be expected to become an actual or matured liability.

“ Standby Letter of Credit ” means any Letter of Credit issued under the Letter of Credit Facility, other than a Trade Letter of Credit.

“ Subordinated Obligations ” has the meaning specified in Section 7.07.

“ Subsidiary ” of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate, in each case, is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

“ Subsidiary Guarantor ” has the meaning specified in the recital of parties to this Agreement.

 

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“ Subsidiary Guarantor Requirements ” means the obligation of each Subsidiary Guarantor and each direct and indirect parent thereof (other than the Parent and the Borrower) to at all times include in its constitutive documents the provisions set forth in Schedule IV hereto (as such provisions are modified solely for the purposes of conforming to the defined terms in the constitutive documents).

“ Substantial Completion ” means, with respect to any Redevelopment Asset and as of any relevant date of determination, the substantial completion of all material renovation and rehabilitation work then planned with respect to such Asset.

“ Supplemental Collateral Agent ” has the meaning specified in Section 8.01(b).

“ Surviving Debt ” means Debt of each Loan Party and its Subsidiaries outstanding immediately before and after the Closing Date, including the Existing Letters of Credit.

“ Swing Line Advance ” means an advance made by (a) the Swing Line Bank pursuant to Section 2.01(c) or (b) any Lender pursuant to Section 2.02(b).

“ Swing Line Bank ” means CNAI, in its capacity as the Lender of Swing Line Advances, and its successors and permitted assigns in such capacity.

“ Swing Line Borrowing ” means a borrowing consisting of a Swing Line Advance made by the Swing Line Bank pursuant to Section 2.01(c) or the Lenders pursuant to Section 2.02(b).

“ Swing Line Commitment ” means, with respect to the Swing Line Bank, the amount of the Swing Line Facility set forth in Section 2.01(c), as such amount may be reduced at or prior to such time pursuant to Section 2.05.

“ Swing Line Facility ” has the meaning specified in Section 2.01(c).

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

“ Tenancy Leases ” means operating leases, subleases, licenses, occupancy agreements and rights-of-use entered into by the Borrower or any of its Subsidiaries in its capacity as a lessor or a similar capacity in the ordinary course of business that do not materially and adversely affect the use of the Real Property encumbered thereby for its intended purpose.

“ Termination Date ” means the earlier of (a) July 17, 2011, subject to the extension thereof pursuant to Section 2.16 and (b) the date of termination in whole of the Revolving Credit Commitments, the Letter of Credit Commitments and the Swing Line Commitment pursuant to Section 2.05 or 6.01.

“ Total Debt ” means, at any date of determination, all Consolidated Debt of the Parent and its Subsidiaries as at the end of the most recently ended fiscal quarter of the Parent for which financial statements are required or were required under the Existing Credit Agreement to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, of this Agreement or the Existing Credit Agreement, as applicable.

“ Total Borrowing Base Asset Value ” means an amount equal to the sum of the Borrowing Base Asset Values for all Borrowing Base Assets.

 

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“ Trade Letter of Credit ” means any Letter of Credit that is issued under the Letter of Credit Facility for the benefit of a supplier of inventory to the Borrower or any of its Subsidiaries to effect payment for such Inventory.

“ Transfer ” has the meaning specified in Section 5.02(d)(ii).

“ Type ” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

“ Unused Fee ” has the meaning specified in Section 2.08(a).

“ Unused Revolving Credit Commitment ” means, with respect to any Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Banks pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(c) and outstanding at such time.

“ Voting Interests ” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“ Welfare Plan ” means a welfare plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

“ Withdrawal Liability ” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions . In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “ from ” means “from and including” and the words “ to ” and “ until ” each mean “to but excluding”. References in the Loan Documents to any agreement or contract “ as amended ” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

SECTION 1.03. Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(g) (“ GAAP ”).

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT

SECTION 2.01. The Advances and the Letters of Credit . (a)  The Revolving Credit Advances . Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each, a “ Revolving Credit Advance ”) to the Borrower from time to time on any Business Day

 

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during the period from the date hereof until the Termination Date in an amount for each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time. Each Borrowing shall be in an aggregate amount of $1,000,000 or an integral multiple of $250,000 in excess thereof and shall consist of Revolving Credit Advances made simultaneously by the Lenders ratably according to their Revolving Credit Commitments. Within the limits of each Lender’s Unused Revolving Credit Commitment in effect from time to time and prior to the Termination Date, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).

(b) Letters of Credit . Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit and to continue any Existing Letter of Credit (set forth on Schedule III hereto) (collectively, the “ Letters of Credit ”), for the account of the Borrower from time to time on any Business Day during the period from the date hereof until 60 days before the Termination Date in an aggregate Available Amount (i) for all Letters of Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for all Letters of Credit issued by such Issuing Bank not to exceed such Issuing Bank’s Letter of Credit Commitment at such time, and (iii) for each such Letter of Credit not to exceed the Unused Revolving Credit Commitments of the Lenders at such time. No Letter of Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 60 days before the Termination Date and (A) in the case of a Standby Letter of Credit one year after the date of issuance thereof, but may by its terms be automatically renewable or renewable annually upon notice (a “ Notice of Renewal ”) given to the Issuing Bank that issued such Standby Letter of Credit and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the date of the proposed renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified the Borrower (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date of automatic renewal of its election not to renew such Standby Letter of Credit (a “ Notice of Termination ”) and (B) in the case of a Trade Letter of Credit, 60 days after the date of issuance thereof; provided , however , that the terms of each Standby Letter of Credit that is automatically renewable annually shall (x) require the Issuing Bank that issued such Standby Letter of Credit to give the beneficiary named in such Standby Letter of Credit notice of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw under such Standby Letter of Credit prior to the date such Standby Letter of Credit otherwise would have been automatically renewed and (z) not permit the expiration date (after giving effect to any renewal) of such Standby Letter of Credit in any event to be extended to a date later than 60 days before the Termination Date. If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the relevant Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement. Each Standby Letter of Credit shall contain a provision authorizing the Issuing Bank that issued such Letter of Credit to deliver to the beneficiary of such Letter of Credit, upon the occurrence and during the continuance of an Event of Default, a notice (a “ Default Termination Notice ”) terminating such Letter of Credit and giving such beneficiary 15 days to draw such Letter of Credit. Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.01(b), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.04(c) and request the issuance of additional Letters of Credit under this Section 2.01(b).

 

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(c) The Swing Line Advances . The Borrower may request the Swing Line Bank to make, and the Swing Line Bank agrees to make, on the terms and conditions hereinafter set forth, Swing Line Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date (i) in an aggregate amount not to exceed at any time outstanding $10,000,000 (the “ Swing Line Facility ”) and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments of the Lenders at such time. No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall be in an amount of $250,000 or an integral multiple of $250,000 in excess thereof and shall be made as a Base Rate Advance. Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, the Borrower may borrow under this Section 2.01(c), repay pursuant to Section 2.04(b) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(c).

SECTION 2.02. Making the Advances . (a) Except as otherwise provided in Section 2.03, each Borrowing (other than a Swing Line Borrowing) shall be made on notice, given not later than 12:00 Noon (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or not later than 10:00 A.M. (New York City time) on the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice thereof by telex or telecopier. Each such notice of a Borrowing (a “ Notice of Borrowing ”) shall be by telephone, confirmed immediately in writing, or telex or telecopier or e-mail, in each case in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance. Each Lender shall, before 12:00 Noon (New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances and 1:00 P.M. (New York City time) on the date of such Borrowing in the case of a Borrowing consisting of Base Rate Advances, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments of such Lender and the other Lenders. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account; provided, however, that the Administrative Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank or any Issuing Bank, as the case may be, and by any other Lender and outstanding on the date of such Borrowing, plus interest accrued and unpaid thereon to and as of such date, available to the Swing Line Bank or such Issuing Bank, as the case may be, and such other Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.

(b) Each Swing Line Borrowing shall be made on notice, given not later than 12:00 Noon (New York City time) on the date of the proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent. Each such notice of a Swing Line Borrowing (a “ Notice of Swing Line Borrowing ”) shall be by telephone, confirmed immediately in writing or by telecopier or e-mail, in each case specifying therein the requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the earlier of (A) the seventh day after the requested date of such Borrowing and (B) the Termination Date). The Swing Line Bank shall, before 1:00 P.M. (New York City time) on the date of such Swing Line Borrowing, make the amount thereof available to the Administrative Agent at the Administrative Agent’s Account, in same day funds. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower by crediting the Borrower’s Account. Upon written demand by the Swing Line Bank, with

 

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a copy of such demand to the Administrative Agent, each other Lender shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such other Lender, such other Lender’s Pro Rata Share of such outstanding Swing Line Advance as of the date of such demand, by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Swing Line Bank, by deposit to the Administrative Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Swing Line Advance to be purchased by such Lender. The Borrower hereby agrees to each such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which demand therefor is made by the Swing Line Bank, provided that notice of such demand is given not later than 12:00 Noon (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time. Upon any such assignment by the Swing Line Bank to any other Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and warrants to such other Lender that the Swing Line Bank is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents or any Loan Party. If and to the extent that any Lender shall not have so made the amount of such Swing Line Advance available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swing Line Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such amount for the account of the Swing Line Bank on any Business Day, such amount so paid in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by the Swing Line Bank shall be reduced by such amount on such Business Day.

(c) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $1,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.07(d)(ii), 2.09 or 2.10 and (ii) there may not be more than 10 separate Borrowings outstanding at any time.

(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(e) Unless the Administrative Agent shall have received notice from a Lender prior to (x) the date of any Borrowing consisting of Eurodollar Rate Advances or (y) 12:00 Noon (New York City time) on the date of any Borrowing consisting of Base Rate Advances that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount and to

 

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pay interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

(f) The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit . (a)  Request for Issuance . Each Letter of Credit shall be issued upon notice, given not later than 12:00 Noon (New York City time) on the second Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to any Issuing Bank, which shall give to the Administrative Agent and each Lender prompt notice thereof by telex, telecopier or e-mail or by means of the Platform. Each such notice of issuance of a Letter of Credit (a “ Notice of Issuance ”) shall be by telephone, confirmed immediately in writing, telex, telecopier or e-mail, in each case specifying therein the requested (i) date of such issuance (which shall be a Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name and address of the beneficiary of such Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit as such Issuing Bank may specify to the Borrower for use in connection with such requested Letter of Credit (a “ Letter of Credit Agreement ”). If (y) the requested form of such Letter of Credit is acceptable to such Issuing Bank in its sole discretion and (z) it has not received notice of objection to such issuance from the Required Lenders, such Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to the Borrower at its office referred to in Section 9.02 or as otherwise agreed with the Borrower in connection with such issuance. In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

(b) Letter of Credit Reports . Each Issuing Bank shall furnish (i) to each Lender on the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the preceding month and drawings during such month under all Letters of Credit issued by such Issuing Bank and (ii) to the Administrative Agent and each Lender on the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit issued by such Issuing Bank.

(c) Letter of Credit Participations; Drawing and Reimbursement . (i) Immediately upon the issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed, and with respect to the Existing Letters of Credit, the Issuing Bank shall be deemed upon the date hereof, to have sold and transferred to each Lender, and each Lender (in its capacity under this Section 2.03(c), a “ Participant ”) shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest and participation in such Letter of Credit, to the extent of such Participant’s Pro Rata Share of the Available Amount of such Letter of Credit, each drawing or payment made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Credit Commitments or the Lenders’ respective Pro Rata Shares pursuant to Section 9.07, it is hereby agreed that, with respect to all outstanding Letters of Credit and unpaid drawings relating thereto, there shall be an automatic adjustment to the participations pursuant to this

 

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Section 2.03(c) to reflect the new Pro Rata Shares of the assignor and assignee Lenders, as the case may be.

(ii) In determining whether to pay under any Letter of Credit, the Issuing Bank shall not have any obligation with respect to the other Revolving Credit Lenders other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of Credit issued by it shall not create for the Issuing Bank any resulting liability to the Borrower, any other Loan Party, any Revolving Credit Lender or any other Person unless such action is taken or omitted to be taken with gross negligence or willful misconduct on the part of the Issuing Bank (as determined by a court of competent jurisdiction in a final non-appealable judgment)

(iii) The payment by any Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by such Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft. In the event that the Issuing Bank makes any payment under any Letter of Credit issued by it and the Borrower shall not have reimbursed such amount in full to the Issuing Bank pursuant to Section 2.04(c), the Issuing Bank shall promptly notify the Administrative Agent, which shall promptly notify each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Administrative Agent for the account of the Issuing Bank the amount of such Participant’s Pro Rata Share of such unreimbursed payment in U.S. dollars and in same day funds. Upon such notification by the Administrative Agent to any Participant required to fund a payment under a Letter of Credit, such Participant shall make available to the Administrative Agent for the account of the Issuing Bank its Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business Day on which demand therefor is made by the Issuing Bank which made such Advance, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time. If such Lender shall pay to the Administrative Agent such amount for the account of such Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Letter of Credit Advance made by such Issuing Bank shall be reduced by such amount on such Business Day. If and to the extent that any Lender shall not have so made the amount of such Letter of Credit Advance available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Issuing Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its account or the account of such Issuing Bank, as applicable.

(iv) Whenever the Issuing Bank receives a payment of a reimbursement obligation as to which it has received any payments from the Participants pursuant to clause (iii) above, the Issuing Bank shall pay to the Administrative Agent for the account of each such Participant that has paid its Pro Rata Share thereof, in same day funds, an amount equal to such Participant’s share (based upon the proportionate aggregate amount originally funded by such Participant to the aggregate amount funded by all Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective participations.

(d) Failure to Make Letter of Credit Advances . The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

 

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SECTION 2.04. Repayment of Advances . (a)  Revolving Credit Advances . The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders on the Termination Date the aggregate outstanding principal amount of the Revolving Credit Advances then outstanding.

(b) Swing Line Advances . The Borrower shall repay to the Administrative Agent for the account of (i) the Swing Line Bank and (ii) each other Lender that has made a Swing Line Advance by purchase from the Swing Line Bank pursuant to Section 2.02(b), the outstanding principal amount of each Swing Line Advance made by each of them on the earlier of the maturity date specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Swing Line Borrowing) and the Termination Date.

(c) Letter of Credit Advances . (i) The Borrower shall repay to the Administrative Agent for the account of each Issuing Bank and each other Lender that has made a Letter of Credit Advance on the same day on which such Advance was made the outstanding principal amount of each Letter of Credit Advance made by each of them.

(ii) The Obligations of the Borrower under this Agreement, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit (and the obligations of each Lender to reimburse the Issuing Bank with respect thereto) shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

(A) any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “ L/C Related Documents ”);

(B) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

(C) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

(D) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(E) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit;

(F) any exchange, release or non-perfection of any Collateral or other collateral, release or amendment or waiver of or consent to departure from the Guaranties or any other guarantee, for all or any of the Obligations of the Borrower in respect of the L/C Related Documents; or

 

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(G) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor,

provided that, notwithstanding the foregoing, an Issuing Bank shall not be relieved of any liability it may otherwise have as a result of its gross negligence or willful misconduct.

SECTION 2.05. Termination or Reduction of the Commitments . (a)  Optional . The Borrower may, upon at least three Business Days’ notice to the Administrative Agent, terminate in whole or reduce in part the unused portions of the Swing Line Facility, the Letter of Credit Facility and the Unused Revolving Credit Commitments; provided, however, that each partial reduction of a Facility (i) shall be in an aggregate amount of $1,000,000 (or in the case of the Swing Line Facility, $250,000) or an integral multiple of $250,000 in excess thereof and (ii) shall be made ratably among the Lenders in accordance with their Commitments with respect to such Facility.

(b) Mandatory . (i) The Letter of Credit Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

(ii) The Swing Line Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

SECTION 2.06. Prepayments . (a)  Optional . The Borrower may, upon same day notice in the case of Base Rate Advances and one Business Day’s notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided, however, that (i) each partial prepayment shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $250,000 in excess thereof or, if less, the amount of the Advances outstanding and (ii) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing pursuant to Section 9.04(c).

(b) Mandatory . (i) The Borrower shall, on each Business Day, prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Swing Line Advances and the Letter of Credit Advances and, to the extent all Advances have been prepaid, make a deposit, to the extent necessary, in the L/C Cash Collateral Account, in an amount equal to (A) the amount by which the Facility Exposure exceeds the Facility on such Business Day, (B) after taking into account any payments made pursuant to clauses (A) and (C), the amount of Total Debt which causes the Leverage Ratio to exceed the applicable maximum Leverage Ratio set forth in Section 5.04(a)(i) on such Business Day, and (C) after taking into account any payments made pursuant to clauses (A) and (B), the amount of the Facility which causes the Borrowing Base Leverage to exceed the applicable maximum Borrowing Base Leverage set forth in Section 5.04(b)(i) on such Business Day.

(ii) The Borrower shall, on each Business Day, pay to the Administrative Agent for deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate amount on deposit

 

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in the L/C Cash Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

(iii) Prepayments of the Revolving Credit Facility made pursuant to clauses (i) and (ii) above shall be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until such Advances are paid in full, third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full and fourth deposited in the L/C Cash Collateral Account to cash collateralize 100% of the Available Amount of the Letters of Credit then outstanding. Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied to reimburse the relevant Issuing Bank or Lenders, as applicable.

(iv) All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid.

SECTION 2.07. Interest . (a)  Scheduled Interest . The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i) Base Rate Advances . During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each December, March, June and September during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances . During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b) Default Interest . Upon the occurrence and during the continuance of any Event of Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable under the Loan Documents that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to clause (a)(i) above.

(c) Notice of Interest Period and Interest Rate . Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period”, the Administrative Agent shall give notice to the Borrower and each Lender of the applicable Interest Period and the applicable interest rate determined by the Administrative Agent for purposes of clause (a)(i) or

 

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(a)(ii) above, and the applicable rate, if any, furnished by the Reference Bank for the purpose of determining the applicable interest rate under clause (a)(ii) above.

(d) Interest Rate Determination . (i) The Administrative Agent shall obtain from the Reference Bank, to the extent available, timely information for the purpose of determining each Eurodollar Rate.

(ii) If Reuters Screen LIBOR01 Page is unavailable and the Reference Bank is unable to furnish timely information to the Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate Advances,

(A) the Administrative Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,

(B) each such Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and

(C) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.

SECTION 2.08. Fees . (a)  Unused Fee . The Borrower shall pay to the Administrative Agent for the account of the Lenders an unused commitment fee (the “ Unused Fee ”), from the date hereof in the case of each Initial Lender and from the effective date specified in the Assignment and Acceptance or the Assumption Agreement, as the case may be, pursuant to which it became a Lender in the case of each other Lender until the Termination Date, payable in arrears on the date of the initial Borrowing hereunder, and thereafter quarterly on the last day of each December, March, June and September, commencing June 30, 2009, and on the Termination Date. The Unused Fee payable for the account of each Lender shall be calculated for each period for which the Unused Fee is payable on the average daily Unused Revolving Credit Commitment of such Lender during such period at the rate of 0.50% per annum.

(b) Letter of Credit Fees, Etc . (i) The Borrower shall pay to the Administrative Agent for the account of each Lender a commission, payable in arrears, (a) quarterly on the last day of each December, March, June and September, commencing June 30, 2009, and (b) on the earliest to occur of the full drawing, expiration, termination or cancellation of any Letter of Credit, and (c) on the Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate Available Amount during such quarter of all Letters of Credit outstanding from time to time at the rate per annum equal to the Applicable Margin for Eurodollar Rate Advances in effect from time to time.

(ii) The Borrower shall pay to each Issuing Bank, for its own account, (A) a fronting fee for each Letter of Credit issued by such Issuing Bank in an amount equal to 0.125% of the Available Amount of such Letter of Credit on the date of issuance of such Letter of Credit, payable on such date and (B) such other commissions, issuance fees, transfer fees and other fees and charges in connection with the issuance or administration of each Letter of Credit as the Borrower and such Issuing Bank shall agree. For the avoidance of doubt, the extension or renewal of an issued Letter of Credit shall not require the payment of additional fees or charges.

 

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(c) Agents’ Fees . The Borrower shall pay to each Agent for its own account the fees, in the amounts and on the dates, set forth in the Fee Letter and such other fees as may from time to time be agreed between the Borrower and such Agent.

(d) Extension Fee . The Borrower shall pay to the Administrative Agent on the Extension Date, for the account of each Lender, a Facility extension fee, in an amount equal to 0.25% of each Lender’s Revolving Credit Commitment then outstanding.

(e) Consent Fee . On the Closing Date, the Borrower shall pay to the Administrative Agent, for the account and benefit of each consenting Lender, a consent fee equal to 0.50% of such Lender’s Commitment.

(f) Low DSCR Fee . During any Low Fixed Charge Coverage Period, the Borrower shall pay to the Administrative Agent for the account of each Lender a fee, payable in arrears, (i) quarterly on the last day of each December, March, June and September, and (ii) on the Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate Facility Exposure during such quarter at the rate per quarter equal to 0.25%.

SECTION 2.09. Conversion of Advances. (a)  Optional . The Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 12:00 Noon (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(c), no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made ratably among the Lenders in accordance with their Commitments under such Facility. Each such notice of Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances. Each notice of Conversion shall be irrevocable and binding on the Borrower.

(b) Mandatory . (i) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $1,000,000, such Advances shall automatically Convert into Base Rate Advances.

(ii) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance.

(iii) Upon the occurrence and during the continuance of any Event of Default, (y) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (z) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

SECTION 2.10. Increased Costs, Etc . (a) If, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or

 

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request from any central bank or other governmental authority (whether or not having the force of law) adopted or made after the date hereof, there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit or of agreeing to make or of making or maintaining Letter of Credit Advances (excluding, for purposes of this Section 2.10, any such increased costs resulting from (y) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (z) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender Party is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost;  provided, however, that a Lender Party claiming additional amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party. A certificate as to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error.

(b) If any Lender Party determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender Party or any corporation controlling such Lender Party and that the amount of such capital is increased by or based upon the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the issuance or maintenance of or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Administrative Agent), the Borrower shall pay to the Administrative Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit. A certificate as to such amounts submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error.

(c) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.

(d) Notwithstanding any other provision of this Agreement, if after the date of this Agreement the introduction of or any change in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each

 

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Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist; provided, however, that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

(e) If any Lender Party requests compensation under this Section 2.10, or if the Borrower is required to pay any additional amount to any Lender Party or any governmental authority for the account of any Lender Party pursuant to this Section 2.10, then the Borrower may, at its sole expense and effort, upon notice to such Lender Party and the Administrative Agent, require such Lender Party to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.07), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender Party, if a Lender Party accepts such assignment), provided that:

(i) such Lender Party shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under this Section 2.10 and any amounts of the type referred to in Section 9.04(c)) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(ii) in the case of any such assignment resulting from a claim for compensation or payments required to be made pursuant to this Section 2.10, such assignment will result in a reduction in such compensation or payments thereafter; and

(iii) such assignment does not conflict with applicable laws.

A Lender Party shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender Party or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.11. Payments and Computations . (a) The Borrower shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim or set-off (except as otherwise provided in Section 2.13), not later than 12:00 Noon (New York City time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day. The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative

 

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Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) The Borrower hereby authorizes each Lender Party, if and to the extent payment owed to such Lender Party is not made when due hereunder or, in the case of a Lender, under the Note held by such Lender, to charge from time to time, to the fullest extent permitted by law, against any or all of the Borrower’s accounts with such Lender Party any amount so due.

(c) All computations of interest ba