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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                      .
Commission file number 1-14045
LASALLE HOTEL PROPERTIES
(Exact name of registrant as specified in its charter)
Maryland
36-4219376
(State or other jurisdiction
of incorporation or organization)
(IRS Employer
Identification No.)
7550 Wisconsin Avenue, 10th Floor
Bethesda, Maryland
20814
(Address of principal executive offices)
(Zip Code)
(301) 941-1500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of each exchange on which registered                
Common Shares of Beneficial Interest ($0.01 par value)
 
New York Stock Exchange
7.5% Series H Cumulative Redeemable Preferred Shares ($0.01 par value)
 
New York Stock Exchange
6.375% Series I Cumulative Redeemable Preferred Shares ($0.01 par value)
 
New York Stock Exchange
6.3% Series J Cumulative Redeemable Preferred Shares ($0.01 par value)
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   ý  No   ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes   ¨  No   ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   ý No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   ý No   ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ý
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Check one:
Large accelerated filer   x
 
Accelerated filer   o
 
Non-accelerated filer   o
 
Smaller reporting company   o
 
 
 
 
(Do not check if a smaller reporting company)
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨   No   ý
The aggregate market value of the 113,063,912 common shares of beneficial interest held by non-affiliates of the registrant was approximately $2.7 billion based on the closing price on the New York Stock Exchange for such common shares of beneficial interest as of June 30, 2016 .
Number of the registrant’s common shares of beneficial interest outstanding as of February 15, 2017 : 113,077,441 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for its 2017 Annual Meeting of Shareholders to be held on or about May 4, 2017 are incorporated by reference in Part II and Part III of this report as noted therein.
 

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LASALLE HOTEL PROPERTIES
INDEX
Item
No.
 
Form  10-K
Report
Page
 
PART I
 
1.
1A.
1B.
2.
3.
4.
 
PART II
 
5.
6.
7.
7A.
8.
9.
9A.
9B.
 
PART III
 
10.
11.
12.
13.
14.
 
PART IV
 
15.
16.
Form 10-K Summary


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Forward-Looking Statements
This report, together with other statements and information publicly disseminated by LaSalle Hotel Properties (the “Company”), contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “may,” “plan,” “seek,” “should,” “will” or similar expressions. Forward-looking statements in this report include, among others, statements about the Company’s business strategy, including its acquisition and development strategies, industry trends, estimated revenues and expenses, ability to realize deferred tax assets and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to:

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risks associated with the hotel industry, including competition for guests and meetings from other hotels and alternative lodging companies, increases in wages, energy costs and other operating costs, potential unionization or union disruption, actual or threatened terrorist attacks, any type of flu or disease-related pandemic and downturns in general and local economic conditions;

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the availability and terms of financing and capital and the general volatility of securities markets;

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the Company’s dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly;

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risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act of 1990, as amended (the “ADA”), and similar laws;

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interest rate increases;

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the possible failure of the Company to maintain its qualification as a real estate investment trust (“REIT”) for federal income tax purposes and the risk of changes in laws affecting REITs;

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the possibility of uninsured losses;

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risks associated with redevelopment and repositioning projects, including delays and cost overruns;

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the risk of a material failure, inadequacy, interruption or security failure of the Company’s or the hotel managers’ information technology networks and systems; and

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the factors discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
Accordingly, there is no assurance that the Company’s expectations will be realized. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect the Company. Except as otherwise required by law, the Company disclaims any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Accordingly, investors should use caution in relying on past forward-looking statements, which were based on results and trends at the time they were made, to anticipate future events or trends.


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PART I

Item 1.
Business
The “Company,” “we,” “our” or “us” means LaSalle Hotel Properties and one or more of its subsidiaries (including LaSalle Hotel Operating Partnership, L.P. (the “Operating Partnership”) and LaSalle Hotel Lessee, Inc. (together with its wholly owned subsidiaries, “LHL”)), or, as the context may require, LaSalle Hotel Properties only, the Operating Partnership only or LHL only.
General
The Company, a Maryland real estate investment trust organized on January 15, 1998, primarily buys, owns, redevelops and leases upscale and luxury full-service hotels located in convention, resort and major urban business markets. The Company is a self-administered and self-managed REIT as defined in the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company is generally not subject to federal corporate income tax on that portion of its net income that is currently distributed to its shareholders. The income of LHL, the Company’s wholly owned taxable REIT subsidiary (“TRS”), is subject to taxation at normal corporate rates.
As of December 31, 2016 , the Company owned interests in 46 hotels with approximately 11,450 guest rooms located in nine states and the District of Columbia. Each hotel is leased to LHL under a participating lease that provides for rental payments equal to the greater of (i) a base rent or (ii) a participating rent based on hotel revenues. The LHL leases expire between December 2017 and December 2019 . Lease revenue from LHL is eliminated in consolidation. A third-party non-affiliated hotel operator manages each hotel pursuant to a hotel management agreement, the terms of which are discussed in more detail under “—Hotel Managers and Hotel Management Agreements.”
Substantially all of the Company’s assets are held directly or indirectly by, and all of its operations are conducted through, the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company owned, through a combination of direct and indirect interests, 99.9% of the common units of the Operating Partnership at December 31, 2016 . The remaining 0.1% is held by limited partners who held 145,223 common units of the Operating Partnership at December 31, 2016 . Subject to certain limitations, common units in the Operating Partnership are redeemable for cash, or at the Company’s option, for a like number of the Company’s common shares of beneficial interest, $0.01 par value per share.
The Company’s principal offices are located at 7550 Wisconsin Avenue, 10th Floor, Bethesda, Maryland 20814. The Company’s website is www.lasallehotels.com . The Company makes available on its website free of charge its filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports. Also posted on the Company’s website, and available in print upon request, are charters of each committee of the Board of Trustees, the Company’s code of business conduct and ethics, the Company’s corporate governance guidelines and the trustee independence standards. Within the time period required by the SEC, the Company will disclose on its website any amendment to the code of business conduct or ethics or any waiver applicable to any executive officer, trustee or senior financial officer of any provision of the code of business conduct and ethics that would otherwise be required to be disclosed under the rules of the SEC or New York Stock Exchange (“NYSE”). The information contained on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this report or any other report or document we file with or furnish to the SEC.
Strategies and Objectives
The Company’s primary objectives are to provide income to its shareholders through increases in distributable cash flow and to increase long-term total returns to shareholders through appreciation in the value of its common shares of beneficial interest. To achieve these objectives, the Company seeks to:

•
enhance the return from, and the value of, the hotels in which it owns interests and any additional hotels the Company may acquire or develop; and

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invest in or acquire additional hotel properties on favorable terms.
The Company seeks to achieve revenue growth principally through:

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renovations, repositionings and/or expansions at selected hotels;

•
acquisitions of full-service hotels located in convention, resort and major urban markets in the United States, especially upscale and luxury full-service hotels in such markets where the Company perceives strong demand growth or significant barriers to entry;

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•
selective development of hotel properties, particularly upscale and luxury full-service hotels in high barrier-to-entry and high demand markets where development economics are favorable; and

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revenue enhancing programs at the hotels.
The Company intends to acquire additional hotels in urban, convention and resort markets, consistent with the growth strategies outlined above and which may:

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possess unique competitive advantages in the form of location, physical facilities or other attributes;

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be available at significant discounts to replacement cost, including when such discounts result from reduced competition for hotels with long-term management and/or franchise agreements;

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benefit from brand or franchise conversion or removal, new management, renovations or redevelopment or other active and aggressive asset management strategies; or

•
have expansion opportunities.
The Company continues to focus on eight primary urban markets; however, it will acquire assets in other markets if the investment is consistent with the Company’s strategies and return criteria. The primary urban markets are:
•         Boston
•         San Diego
•         Chicago
•         San Francisco
•         Los Angeles
•         Seattle
•         New York
•         Washington, DC
Hotel Managers and Hotel Management Agreements
The Company seeks to grow through strategic relationships with premier, internationally recognized hotel operating companies, including Hilton Hotels Corporation, Marriott International, Outrigger Lodging Services, Noble House Hotels & Resorts, Hyatt Hotels Corporation, Benchmark Hospitality, Two Roads Hospitality, Davidson Hotel Company, Kimpton Hotel & Restaurant Group, LLC, Accor, HEI Hotels & Resorts, JRK Hotel Group, Inc., Viceroy Hotel Group, Highgate Hotels, Access Hotels & Resorts and Provenance Hotels. The Company believes that having multiple operators creates a network that will generate acquisition opportunities. In addition, the Company believes its acquisition capabilities are enhanced by its considerable experience, resources and relationships in the hotel industry specifically and the real estate industry generally.
As of December 31, 2016 , all of our 46 hotels are leased by LHL, and are managed and operated by third parties pursuant to management agreements entered into between LHL and the respective hotel management companies.
Our management agreements for the 46 hotels leased to LHL have the terms described below.
•
Base Management Fees.     Our management agreements generally provide for the payment of base management fees between 1.0% and 4.0% of the applicable hotel’s revenues or a fixed amount, as determined in the agreements.
•
Incentive Management and Other Fees.     Some of our management agreements provide for the payment of incentive management fees between 10.0% and 20.0% of gross operating profit or as a percentage of, or in excess of, certain thresholds of net operating income or cash flow of the applicable hotel, if certain criteria are met. Certain of the management agreements also provide for the payment by us of sales and marketing, accounting and other fees.
•
Terms.     The remaining terms of our management agreements range from less than one year to 15 years not including renewals, and less than one year to 45 years including renewals. Only one management agreement has a remaining non-cancelable term of 15 years, with the next longest non-cancelable term of 12 years.
•
Ability to Terminate.     We have 45 management agreements (Park Central Hotel New York and WestHouse Hotel New York operate under one agreement) of which 41 are terminable at will and one is terminable upon sale. The remaining three management agreements are terminable only with cause or after certain anniversary dates. Termination fees range from zero to up to eight times annual base management and incentive management fees, due upon early termination. Two management agreements have termination fees at eight times, one at seven times, one at six times and one at five times; with the next highest at two times annual base management and incentive management fees.

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•
Operational Services.     Each manager has exclusive authority to supervise, direct and control the day-to-day operation and management of the respective hotel including establishing all room rates, processing reservations, procuring inventories, supplies and services, and preparing public relations, publicity and marketing plans for the hotel.
•
Executive Supervision and Management Services.     Each manager supervises all managerial and other employees, reviews the operation and maintenance, prepares reports, budgets and projections, and provides other administrative and accounting support services to the respective hotel.
•
Chain Services.     Our management agreements with major brands require the managers to furnish chain services that are generally made available to other hotels managed by such managers. Such services may, for example, include: (1) the development and operation of computer systems and reservation services; (2) management and administrative services; (3) marketing and sales services; (4) human resources training services and (5) such additional services as may from time to time be more efficiently performed on a national, regional or group level.
•
Working Capital.     Our management agreements typically require us to maintain working capital for a hotel and to fund the cost of supplies such as linen and other similar items. We are also responsible for providing funds to meet the cash needs for the hotel operations if at any time the funds available from the hotel operations are insufficient to meet the financial requirements of the hotel.
•
Furniture, Fixtures and Equipment Replacements.     We are required to provide to the managers all the necessary furniture, fixtures and equipment for the operation of the hotels (including funding any required furniture, fixtures and equipment replacements). Our management agreements generally provide that once each year the managers will prepare a list of furniture, fixtures and equipment to be acquired and certain routine repairs to be performed in the next year and an estimate of funds that are necessary therefore, subject to our review and approval. For purposes of funding the furniture, fixtures and equipment replacements, a specified percentage of the gross revenues of each hotel (typically 4.0% ) is either deposited by the manager in an escrow account or held by the owner.
•
Building Alterations, Improvements and Renewals.     Our management agreements generally require the managers to prepare an annual estimate of the expenditures necessary for major repairs, alterations, improvements, renewals and replacements to the structural, mechanical, electrical, heating, ventilating, air conditioning, plumbing and vertical transportation elements of the hotels. In addition to the foregoing, the management agreements generally provide that the managers may propose such changes, alterations and improvements to the hotels as required by reason of laws or regulations or, in each manager’s reasonable judgment, to keep each respective hotel in a safe, competitive and efficient operating condition.
•
Sale of a Hotel.      Four of our management agreements limit our ability to sell, lease or otherwise transfer a hotel, unless the transferee assumes the related management agreement and meets specified other conditions and/or unless the transferee is not a competitor of the manager.
•
Service Marks.     During the term of our management agreements, the service mark, symbols and logos currently used by the managers may be used in the operation of the hotels. Any right to use the service marks, logo and symbols and related trademarks at a hotel will terminate with respect to that hotel upon termination of the management agreement with respect to such hotel.
Recent Developments
On January 10, 2017, the Company refinanced its senior unsecured credit facility and First Term Loan (as defined in the “Term Loans” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”). The $750.0 million senior unsecured credit facility has a revised accordion feature which, subject to certain terms and conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $1.25 billion . The new maturity date is January 8, 2021, subject to two six -month extension options, pursuant to certain terms and conditions, including payment of an extension fee. Borrowings bear interest at variable rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. The $300.0 million First Term Loan includes an accordion feature, which subject to certain terms and conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $500.0 million . The First Term Loan matures on January 10, 2022 and bears interest at variable rates, but was hedged to a fixed interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) through August 2, 2017.
On January 10, 2017, the Company amended and restated its $555.0 million Second Term Loan (as defined in the “Term Loans” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) to match

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the financial and other covenants in its refinanced First Term Loan and senior unsecured credit facility. There were no changes to the maturity date or the accordion feature. The Second Term Loan bears interest at variable rates, but was hedged to a fixed interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) through May 16, 2019 for $177.5 million of the Second Term Loan and through January 29, 2021 for the remaining $377.5 million of the Second Term Loan.
Additionally, LHL refinanced its unsecured revolving credit facility with no change in capacity of $25.0 million , on similar terms as the senior unsecured credit facility. The new maturity date is January 10, 2021, subject to two six -month extension options, pursuant to certain terms and conditions, including payment of an extension fee.
On January 19, 2017, the Company sold Hotel Deca for $55.0 million . The Company will recognize a gain in the first quarter of 2017 of approximately $30.5 million related to the sale of this property. The proceeds will be used for general corporate purposes.
In February 2017, the Company’s Board of Trustees authorized an expansion of the Repurchase Program (as defined in the “Equity Redemptions, Repurchases and Issuances” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) to acquire up to an additional $500.0 million of the Company’s common shares of beneficial interest. Including the previous authorization, the Company now has availability under the Repurchase Program to acquire up to $569.8 million of common shares of beneficial interest as of February 22, 2017.
Hotel Renovations
The Company believes that its regular program of capital improvements at the hotels, including replacement and refurbishment of furniture, fixtures and equipment, helps maintain and enhance its competitiveness and maximize revenue growth.
Joint Venture
The Company holds a 99.99% controlling interest in The Liberty Hotel. Since the Company holds a controlling interest, the accounts of the joint venture have been included in the consolidated financial statements. The 0.01% interest of the outside partner is included in noncontrolling interests in consolidated entities in the consolidated balance sheets.
Tax Status
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code. As a result, the Company generally is not subject to corporate income tax on that portion of its net income that is currently distributed to shareholders. A REIT is subject to a number of highly technical and complex organizational and operational requirements, including requirements with respect to the nature of its gross income and assets and a requirement that it currently distribute at least 90% of its taxable income. The Company may, however, be subject to certain state and local taxes on its income and property.
Effective January 1, 2001, the Company elected to operate its wholly owned subsidiary, LHL, as a TRS. Accordingly, LHL is required to pay corporate income taxes at the applicable rates.
Seasonality
The Company’s hotels’ operations historically have been seasonal. Taken together, the hotels maintain higher occupancy rates during the second and third quarters of each year. These seasonality patterns can be expected to cause fluctuations in the quarterly hotel operations.
Competition
The hotel industry is highly competitive. Each of the hotels is located in a developed area that includes other hotel properties as well as alternative lodging companies. The number of competitive hotel properties in a particular area could have a material adverse effect on occupancy, average daily rate (“ADR”) and room revenue per available room (“RevPAR”) at the Company’s current hotels or at hotels acquired in the future. In addition, the Company may be competing for investment opportunities with entities that have substantially greater financial resources than the Company. These entities may generally be able to accept more risk than the Company can prudently manage, including risks with respect to the amount of leverage utilized, creditworthiness of a hotel operator or the geographic proximity of its investments. Competition may generally reduce the number of suitable investment opportunities offered to the Company and increase the bargaining power of property owners seeking to sell.
Environmental Matters
In connection with the ownership of hotels, the Company is subject to various federal, state and local laws, ordinances and regulations relating to environmental protection. Under these laws, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under or in such property. Such laws

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often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic substances. In addition, the presence of contamination from hazardous or toxic substances, or the failure to remediate such contaminated property properly, may adversely affect the owner’s ability to borrow using such property as collateral. Furthermore, a person who arranges for the disposal or treatment of a hazardous or toxic substance at a property owned by another, or who transports such substance to or from such property, may be liable for the costs of removal or remediation of such substance released into the environment at the disposal or treatment facility. The costs of remediation or removal of such substances may be substantial, and the presence of such substances may adversely affect the owner’s ability to sell such real estate or to borrow using such real estate as collateral. In connection with the ownership of hotels, the Company may be potentially liable for such costs.
The Company believes that its hotels are in compliance, in all material respects, with all federal, state and local environmental ordinances and regulations regarding hazardous or toxic substances and other environmental matters, the violation of which could have a material adverse effect on the Company. The Company has not received verbal or written notice from any governmental authority of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of the properties currently under its ownership.
Employees
The Company had 35 employees as of February 15, 2017 . All persons employed in the day-to-day operations of the hotels are employees of the management companies engaged by the lessees to operate such hotels. None of the Company’s employees is a member of any union; however, some employees of the hotel managers at several of the Company’s hotels are currently represented by labor unions and are subject to collective bargaining agreements.
Additional Information
All reports filed with the SEC may also be read and copied at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Further information regarding the operation of the public reference room may be obtained by calling 1-800-SEC-0330. In addition, all of our filed reports can be obtained at the SEC’s website at www.sec.gov or through the Company’s website at www.lasallehotels.com . The information contained on, or otherwise accessible through, the Company’s website is not incorporated into, and does not form a part of, this report or any other report or document we file with or furnish to the SEC.
Item 1A.
Risk Factors
The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The risks and uncertainties described below are not the only ones the Company faces. Additional risks and uncertainties not currently known to the Company or that it may currently deem immaterial also may materially adversely affect the Company. The risks described could adversely affect the Company’s business, financial condition, liquidity, results of operations, cash flows, prospects or ability to make distributions to shareholders, any of which could adversely affect the trading price of the Company’s shares.
Risks Related to Our Business and the Lodging Industry
Economic conditions may reduce demand for hotel properties and adversely affect our profitability.
The performance of the lodging industry is highly cyclical and has traditionally been closely linked with the performance of the general economy and, specifically, growth in the U.S. gross domestic product (“GDP”), employment and investment and travel demand. We cannot predict the pace or duration of the global economic cycle or the cycles of the lodging industry. In the event conditions in the industry deteriorate or do not continue to see sustained improvement, or there is an extended period of economic weakness, our occupancy rates, revenues and profitability could be adversely affected. In addition, other macroeconomic factors, such as consumer confidence and conditions which negatively shape public perception of travel, may have a negative effect on the lodging industry and may adversely affect our business.
Furthermore, all of our hotels are classified as luxury, upper upscale or upscale. In an economic downturn, these types of hotels may be more susceptible to a decrease in revenue, as compared to hotels in other categories that have lower room rates. This characteristic may result from the fact that upper upscale hotels generally target business and high-end leisure travelers. In periods of economic difficulties, business and leisure travelers may seek to reduce travel costs by limiting travel or seeking to reduce costs on their trips. In addition, in periods of weak demand, as may occur during a general economic recession, profitability is negatively affected by the relatively high fixed costs of operating luxury, upper upscale and upscale hotels. Consequently, any uncertainty in the general economic environment could adversely affect our business.
In addition, on June 23, 2016, the United Kingdom held a referendum in which a majority of voters voted to exit the European Union (“Brexit”). Negotiations are expected to commence to determine the future terms of the United Kingdom’s relationship

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with the European Union, including, among other things, the terms of trade between the United Kingdom and the European Union. The effects of Brexit will depend on any agreements the United Kingdom makes to retain access to European Union markets either during a transitional period or more permanently. Brexit could adversely affect European and global economic or market conditions and could contribute to instability in global financial markets. Any of these effects of Brexit, and others we cannot anticipate, may have a negative effect on the lodging industry and may adversely affect our business.
We will be significantly influenced by the economies and other conditions in the specific markets in which we operate, particularly in the metropolitan areas where we have high concentrations of hotels.
We focus on primary urban markets, including Boston, MA, Chicago, IL, Los Angeles, CA, New York, NY, San Diego, CA, San Francisco, CA, Seattle, WA and Washington, DC. As of December 31, 2016 , our hotels were located in 13 markets in nine states and the District of Columbia, including nine hotels located in Washington, DC, seven hotels located in San Francisco, CA, six hotels located in Los Angeles, CA, five hotels located in San Diego, CA and four hotels located in both Boston, MA and New York, NY. As a result, we are particularly susceptible to adverse market conditions in these geographic areas, including industry downturns, relocation of businesses and any oversupply of hotel rooms or a reduction in lodging demand. Adverse economic developments in the markets in which we have a concentration of hotels, or in any of the other markets in which we operate, or any increase in hotel supply or decrease in lodging demand resulting from the local, regional or national business climate, could adversely affect us.
The return on our hotels depends upon the ability of the hotel operators to operate and manage the hotels.
To maintain our status as a REIT, we are not permitted to operate any of our hotels. As a result, we are unable to directly implement strategic business decisions with respect to the daily operation and marketing of our hotels, such as decisions with respect to the setting of room rates, repositioning of a hotel, food and beverage pricing and certain similar matters. Although LHL consults with the hotel operators with respect to strategic business plans, the hotel operators are under no obligation to implement any of our recommendations with respect to such matters. Thus, even if we believe our hotels are being operated inefficiently or in a manner that does not result in satisfactory occupancy rates, RevPAR, ADR or operating profits, we may not have sufficient rights under our hotel operating agreements to enable us to force the hotel operator to change its method of operation. We generally can only seek redress if a hotel operator violates the terms of the applicable operating agreement, and then only to the extent of the remedies provided for under the terms of the agreement. Some of the operating agreements have lengthy terms and may not be terminable by us before the agreement’s expiration. In the event that we are able to and do replace any of our hotel operators, we may experience significant disruptions at the affected hotels, which may adversely affect our ability to make distributions to our shareholders.
Our hotels are subject to significant competition.
The markets where our hotels are located and the luxury, upper upscale and upscale segments of the hotel business are highly competitive. Our hotels compete on the basis of location, room rates, quality, service levels, reputation, reservations systems and supply and availability of alternative lodging, among many factors. There are many competitors in the luxury, upper upscale and upscale segments in our markets, and many of these competitors may have substantially greater marketing and financial resources than we have. Furthermore, in addition to competing with traditional hotels and lodging facilities, we compete with alternative lodging companies, such as HomeAway and Airbnb, which operate websites that market available furnished, privately-owned residential properties, including homes and condominiums, that can be rented on a nightly, weekly or monthly basis. This competition could reduce occupancy levels and room revenue at our hotels, which would harm our operations. In addition, over-building in the hotel industry may increase the number of rooms available and may decrease occupancy and room rates, which can quickly destabilize a market and existing hotels can experience rapidly decreasing RevPAR and profitability. If such over-building occurs in one or more of our markets, our business, financial condition, results of operations and ability to make distributions to our shareholders could be materially adversely affected.
Our performance and our ability to make distributions to our shareholders are subject to risks associated with the hotel industry.
Competition for guests, increases in operating costs, dependence on travel and poor economic conditions could adversely affect our cash flow.     Our hotel properties have different economic characteristics than many other real estate assets. A typical office REIT, for example, has long-term leases with third-party tenants, which provide a relatively stable long-term stream of revenue. On the other hand, virtually all hotel guests stay at a hotel for only a few nights at a time, so the rate and occupancy at each of our hotels changes every day. As a result, we may have highly volatile earnings.
In addition, our hotels are subject to all operating risks common to the hotel industry, many of which are beyond our control. These risks include:


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adverse effects of weak national, regional and local economic conditions;

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tightening credit standards;

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competition for guests and meetings from other hotels and alternative lodging companies, including competition and pricing pressure from Internet wholesalers and distributors;

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an over-supply or over-building of hotels in the markets in which we own properties;

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increases in operating costs, including wages, benefits, insurance, property taxes and energy, due to inflation and other factors, which may not be offset in the future by increased room rates;

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labor strikes, disruptions or lockouts that may impact operating performance;

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dependence on demand from business and leisure travelers, which may fluctuate and be seasonal;

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increases in energy costs, airline fares and other expenses related to travel, which may negatively affect traveling;

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terrorism, terrorism alerts and warnings, military actions, pandemics or other medical events which may cause decreases in business and leisure travel; and

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changes in governmental laws and regulations, local policies and zoning ordinances and the related costs of compliance.
These factors could adversely affect the ability of the hotel operators to generate revenues which could adversely affect LHL’s ability to make rental payments to the Operating Partnership pursuant to the participating leases and ultimately impact our liquidity.
Unexpected capital expenditures could adversely affect our cash flow .    Hotels require ongoing renovations and other capital improvements, including periodic replacement or refurbishment of furniture, fixtures and equipment. Under the terms of our leases, we are obligated to pay the cost of certain capital expenditures at the hotels, including new brand standards, and to pay for periodic replacement or refurbishment of furniture, fixtures and equipment. If capital expenditures exceed expectations, there can be no assurance that sufficient sources of financing will be available to fund such expenditures.
In addition, we have acquired hotels that have undergone significant renovation and may acquire additional hotels in the future that require significant renovation. Renovations of hotels involve numerous risks, including the possibility of environmental problems, construction cost overruns and delays, the effect on current demand, uncertainties as to market demand or deterioration in market demand after commencement of renovation and the emergence of unanticipated competition from other hotels.
We may not be able to fund capital improvements solely from cash provided from our operating activities because we generally must distribute at least 90% of our REIT taxable income each year to maintain our REIT tax status. As a result, our ability to fund capital expenditures or investments through retained earnings, is very limited. Consequently, we may rely upon the availability of debt or equity capital to fund our investments and capital improvements. These sources of funds may not be available on reasonable terms or conditions.
The seasonality of the lodging industry may cause fluctuations in our quarterly revenues. The lodging industry is seasonal in nature. This seasonality can be expected to cause quarterly fluctuations in our revenues. Our quarterly earnings may be adversely affected by factors outside our control, including weather conditions and poor economic factors.
The increasing use of Internet travel intermediaries by consumers may reduce our revenues. Some of our hotel rooms are booked through Internet travel intermediaries, such as Travelocity.com, Expedia.com and Priceline.com. As bookings through these intermediaries increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from the management companies that operate the hotels we own and acquire. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”), at the expense of brand identification or quality of product or service. These intermediaries hope that consumers will eventually develop brand loyalties to their reservations system rather than to lodging brands or properties. If the amount of bookings made through Internet travel intermediaries proves to be more significant than we expect, profitability may be lower than expected.

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Terrorist attacks, natural disasters, significant military actions, outbreaks of contagious diseases, travel restrictions or other events could adversely affect travel and hotel demand.
We own hotels in metropolitan markets that have been, or may in the future be, targets of actual or threatened terrorist attacks, including Boston, MA, Chicago, IL, New York, NY and Washington, DC. Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries over the past several years, often disproportionately to the effect on the overall economy. In addition, we own 21 hotels located in areas of the West Coast that are seismically active and two hotels (Southernmost Beach Resort Key West and The Marker Waterfront Resort) in areas that have the potential to experience hurricanes. Even in the absence of direct physical damage to our hotels, the occurrence of terrorist attacks, natural disasters, significant military actions, outbreaks of diseases, such as Ebola virus, H1N1 flu, SARS or Zika virus, or other casualty events, or significant government restrictions or limitations on travel to the United States will likely have a material adverse effect on business and commercial travelers and tourists, the economy generally and the hotel and tourism industries in particular.
We may not have enough insurance.
We carry comprehensive liability, fire, flood, earthquake, extended coverage and business interruption policies that insure us against losses with policy specifications and insurance limits that we believe are reasonable. There are certain types of losses, such as losses from environmental problems or terrorism, that management may not be able to insure against or may decide not to insure against since the cost of insuring is not economical. We may suffer losses that exceed our insurance coverage. Further, market conditions, changes in building codes and ordinances or other factors such as environmental laws may make it too expensive to repair or replace a property that has been damaged or destroyed, even if covered by insurance.

Because real estate investments are illiquid, we may not be able to sell hotels when desired.
Real estate investments generally cannot be sold quickly. We may not be able to vary our portfolio promptly in response to economic or other conditions. In addition, provisions of the Code limit a REIT’s ability to sell properties in some situations when it may be economically advantageous to do so.
Liability for environmental matters could adversely affect our financial condition.    
As an owner of real property, we are subject to various federal, state and local laws and regulations relating to the protection of the environment that may require a current or previous owner of real estate to investigate and clean-up hazardous or toxic substances at a property. These laws often impose such liability without regard to whether the owner knew of or caused the presence of the contaminants, and liability is not limited under the enactments and could exceed the value of the property and/or the aggregate assets of the owner. Persons who arrange for the disposal or treatment facility, whether or not such facility is owned or operated by the person, may be liable for the costs of removal or remediation of such substance released into the environment at the disposal or treatment facility. Even if more than one person were responsible for the contamination, each person covered by the environmental laws may be held responsible for the entire amount of clean-up costs incurred.
Environmental laws also govern the presence, maintenance and removal of asbestos-containing materials. These laws impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials. In connection with ownership (direct or indirect) of our hotels, we may be considered an owner or operator of properties with asbestos-containing materials. Having arranged for the disposal or treatment of contaminants, we may be potentially liable for removal, remediation and other costs, including governmental fines and injuries to persons and property.
Our hotels may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic reactions. As a result, the presence of significant mold at any of our hotels could require us to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, the presence of significant mold could expose us to liability from hotel guests, hotel employees and others if property damage or adverse health concerns arise.

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The costs of compliance with the ADA and other government regulations could adversely affect our cash flow.    
Under the ADA, all public accommodations are required to meet certain federal requirements related to access and use by disabled persons. A determination that we are not in compliance with the ADA could result in imposition of fines or an award of damages to private litigants. If we are required to make substantial modifications to our hotels, whether to comply with ADA or other government regulation such as building codes or fire safety regulations, our financial condition, results of operations and ability to make distributions to our shareholders could be adversely affected.
Certain leases and management agreements may constrain us from acting in the best interest of shareholders or require us to make certain payments.    
The Hyatt Regency Boston Harbor, San Diego Paradise Point Resort and Spa, The Hilton San Diego Resort and Spa, The Roger, Viceroy Santa Monica, The Liberty Hotel, Harbor Court Hotel, Hotel Triton, Southernmost Beach Resort Key West (restaurant facility) and Hotel Vitale are each subject to a ground or land and building lease with a third-party lessor which requires us to obtain the consent of the relevant third party lessor in order to sell any of these hotels or to assign our leasehold interest in any of the ground or land and building leases. Accordingly, if we determine that the sale of any of these hotels or the assignment of our leasehold interest in any of these ground or land and building leases is in the best interest of our shareholders, we may be prevented from completing such a transaction if we are unable to obtain the required consent from the relevant lessor. Westin Copley Place is subject to an air rights lease and Hotel Solamar is subject to a ground lease, which do not require approval from the relevant third-party lessor. In addition, at any given time, potential investors may be disinterested in buying hotel properties subject to a ground lease and may pay a lower price for such properties than for a comparable property in fee simple, or they may not purchase such properties at any price whatsoever. For these reasons, we may have a difficult time selling a hotel property subject to a ground lease or may receive lower proceeds from a sale. Finally, as the lessee under our ground leases, we are exposed to the possibility of losing the hotel, or a portion of the hotel, upon termination, or an earlier breach by us, of the ground lease.
In some instances, we may be required to obtain the consent of the hotel operator or franchisor prior to selling the hotel. Typically, such consent is only required in connection with certain proposed sales, such as if the proposed purchaser is engaged in the operation of a competing hotel or does not meet certain minimum financial requirements.
Some of our hotels are subject to rights of first offer which may adversely affect our ability to sell those properties on favorable terms or at all.
We are subject to a franchisor’s or operator’s right of first offer, in some instances, with respect to the Embassy Suites Philadelphia - Center City, Hilton San Diego Gaslamp Quarter, Park Central Hotel New York and WestHouse Hotel New York, Park Central San Francisco, The Hilton San Diego Resort and Spa, Westin Copley Place and Westin Michigan Avenue. These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms, or at all.
We may be unable to consummate acquisitions on advantageous terms or acquisitions may not perform as anticipated.
In the ordinary course of our business and when our liquidity position permits, we consider acquisition opportunities. The acquisition of hotel properties involves risks, including the risk that the acquired hotel property will not perform as anticipated and the risk that any actual costs for rehabilitating, repositioning, renovating and improving identified in the pre-acquisition process will exceed estimates. Further, we face competition for attractive acquisition opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private institutional investment funds, and these competitors may have greater financial and other resources than we have.
We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.
We and our hotel managers rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. We and our hotel managers purchase some of such information technology from vendors, on whom our systems depend, and the hotel managers rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as individually identifiable information, including information relating to financial accounts. Although we and our hotel managers have taken steps to protect the security of its information systems and the data maintained in those systems, these safety and security measures may not be able to prevent the systems’ improper functioning or damage, or the improper access or disclosure of personally identifiable information, such as in the event of cyber attacks, which are rapidly evolving and becoming increasingly sophisticated. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure to maintain proper function, security and availability of our or the hotel managers’ information systems could interrupt our operations;

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damage our reputation; result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; require significant management attention and resources to remedy any damages that result; and subject us to liability claims or regulatory penalties.
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.
Our third-party hotel managers are responsible for hiring and maintaining the labor force at each of our hotels. Although we do not directly employ or manage employees at our hotels, we are subject to the risks associated with the employment of hotel personnel, particularly at those hotels with unionized labor. From time to time, strikes, lockouts, public demonstrations or other negative actions and publicity may disrupt hotel operations. We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events. The resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. Furthermore, labor agreements may limit the ability of the hotel managers to reduce the size of hotel workforces during an economic downturn because collective bargaining agreements are negotiated between the hotel managers and labor unions. We do not have the ability to control the outcome of these negotiations. In addition, we believe that unions are generally becoming more aggressive about organizing workers at hotels in certain locations. Potential labor activities at these hotels could significantly increase the administrative, labor and legal expenses of the third-party management companies operating these hotels and reduce the profits that we receive.
In addition, several local jurisdictions in the United States have enacted, or considered, legislation increasing the minimum wage for workers in the jurisdiction. Some of this legislation applies to hotels only. If a jurisdiction in which we own a hotel adopts such legislation, then the cost to operate the hotel may increase significantly.
Investments in hotel-related mortgage assets, including mezzanine loans, subject us to the risk of loss.
We may originate or acquire hotel-related mortgage assets, including mezzanine loans. Investments in real estate mortgages and subordinated real estate loans are subject to the risk that one or more borrowers may default and that the collateral securing mortgages may not be sufficient or, in the case of subordinated mezzanine loans, available to enable us to recover our full investment in these loans.
Property ownership through partnerships and joint ventures could limit our control of those investments.
Partnership or joint venture investments may involve risks not otherwise present for investments made solely by us, including among others, the possibility that our co-investors might become bankrupt, might at any time have goals or interests that are different from ours because of disparate tax consequences or otherwise, and may take action contrary to our instructions, requests, policies or objectives, including our policy with respect to maintaining our qualification as a REIT. Other risks of joint venture investments include an impasse on decisions, such as a sale, because neither our co-investors nor we would have full control over the partnership or joint venture. There is no limitation under our organizational documents as to the amount of funds that may be invested in partnerships or joint ventures.
Our cash and cash equivalents are maintained in a limited number of financial institutions and the funds in those institutions may not be fully or federally insured.
We maintain cash balances in a limited number of financial institutions. Our cash balances are generally in excess of federally insured limits. The failure or collapse of one or more of these financial institutions may materially adversely affect our ability to recover our cash balances.
Risks Related to Our Debt and Financing
If we cannot obtain financing, our growth will be limited.
To qualify for taxation as a REIT, we are required to distribute at least 90% percent of our REIT taxable income each year to our shareholders and we generally expect to make distributions in excess of such amount. As a result, our ability to retain earnings to fund acquisitions, redevelopment and development or other capital expenditures is and will continue to be limited. Although our business strategy contemplates future access to debt financing (in addition to our senior unsecured credit facility) to fund acquisitions, redevelopment, development, return on investment initiatives and working capital requirements, there can be no assurance that we will be able to obtain such financing on favorable terms or at all. Events in the financial markets have adversely impacted the credit markets, and they may do so in the future, and, as a result, credit can become significantly more expensive and difficult to obtain, if available at all. Tightening credit markets may have an adverse effect on our ability to obtain financing on favorable terms, if at all, thereby increasing financing costs and/or requiring us to accept financing with increased

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restrictions and/or significantly higher interest rates. If adverse conditions in the credit markets materially deteriorate, our business could be materially and adversely affected. Our long-term ability to grow through investments in hotel properties will be limited if we cannot obtain additional financing.
Our obligation to comply with financial covenants in our unsecured credit facilities, term loans and mortgages on some of our hotel properties could impact our operations, may require us to liquidate our properties and could adversely affect our ability to make distributions to our shareholders.
Unsecured credit facilities and term loans. We currently have (i) a $750.0 million senior unsecured credit facility (with an accordion feature that allows us to request an increase in the total commitments of up to $1.25 billion , subject to certain terms and conditions) that matures on January 8, 2021, subject to two six -month extension options to January 8, 2022 that we may exercise pursuant to certain terms and conditions, including the payment of an extension fee, (ii) a $300.0 million unsecured term loan (with an accordion feature that allows us to request an increase in the total commitments of up to $500.0 million , subject to certain terms and conditions) that matures on January 10, 2022, and (iii) a $555.0 million unsecured term loan (with an accordion feature that allows us to request an increase in the total commitments of up to $700.0 million , subject to certain terms and conditions) that matures on January 29, 2021. In addition, LHL has a $25.0 million unsecured revolving credit facility that matures on January 10, 2021, subject to two six -month extension options to January 10, 2022 that LHL may exercise pursuant to certain terms and conditions, including the payment of an extension fee.
The Company and certain of its subsidiaries guarantee the obligations under the Company’s senior unsecured credit facility and term loans. While the senior unsecured credit facility and term loans do not initially include any pledges of equity interests in the Company’s subsidiaries, such pledges and additional subsidiary guarantees would be required in the event that the Company’s leverage ratio later exceeds 6.50:1.00 for two consecutive fiscal quarters. In the event that such pledge and guarantee requirement is triggered, the pledges and additional guarantees would ratably benefit the Company’s senior unsecured credit facility and term loans. If at any time the Company’s leverage ratio falls below 6.50:1.00 for two consecutive fiscal quarters, such pledges and additional guarantees may be released.
Each of the senior unsecured credit facility, the term loans and the LHL unsecured revolving credit facility contain certain financial and other covenants, including covenants relating to net worth requirements, debt ratios and fixed charge coverage ratios. In addition, pursuant to the terms of the senior unsecured credit facility and term loans, if a default or event of default occurs and is continuing, we may be precluded from paying certain distributions or other payments to our shareholders. The senior unsecured credit facility and term loans also contain cross-default provisions that allow the lenders under the credit facility and term loans to stop future extensions of credit and/or accelerate the maturity of any outstanding principal balances under the credit facility or term loans if we are in default under certain other debt obligations, including our non-recourse secured mortgage indebtedness.
If we violate the financial covenants in our credit facilities or term loans, we could be required to repay all or a portion of our indebtedness with respect to such credit facility or term loan before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, or at all. Moreover, if we are unable to refinance our debt on acceptable terms, including at maturity of our credit facilities and term loans, we may be forced to dispose of hotel properties on disadvantageous terms, potentially resulting in losses that reduce cash flow from operating activities. Failure to comply with our financial covenants contained in our credit facilities and term loans, or our non-recourse secured mortgages described below, could result from, among other things, changes in our results of operations, the incurrence of additional debt or changes in general economic conditions.
Non-recourse secured mortgages.     In addition to our senior unsecured credit facility, our term loans and the LHL unsecured revolving credit facility, we have from time to time entered into non-recourse mortgages secured by specific hotel properties. Under the terms of these debt obligations, a lender’s only remedy in the event of default is against the real property securing the mortgage, except where a borrower has, among other customary exceptions, engaged in an action constituting fraud or an intentional misrepresentation. In those cases, a lender may seek a remedy for a breach directly against the borrower, including its other assets. Westin Copley Place is mortgaged to secure payment of indebtedness aggregating $225.0 million as of December 31, 2016 . The Hyatt Regency Boston Harbor is mortgaged to secure payment of principal and interest on bonds with an aggregate par value of $42.5 million. These mortgages contain debt service coverage tests related to the mortgaged properties. If the debt service coverage ratio for that specific property fails to exceed a threshold level specified in the mortgage, cash flows from that hotel will automatically be directed to the lender to (i) satisfy required payments, (ii) fund certain reserves required by the mortgage and (iii) fund additional cash reserves for future required payments, including final payment. Cash flows will be directed to the lender (“cash trap”) until such time as we again become compliant with the specified debt service coverage ratio or the mortgage is paid off.
If we are unable to meet mortgage payment obligations, including the payment obligation upon maturity of the mortgage borrowing, the mortgage securing the specific property could be foreclosed upon by, or the property could be otherwise transferred to, the mortgagee with a consequent loss of income and asset value to us. We may also elect to sell the property, if we are able to

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sell the property, for a loss in advance of a foreclosure or other transfer. An event of default under our non-recourse secured mortgage may also constitute an event of default under our senior unsecured credit facility or term loans.
As of December 31, 2016 , the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loans, bonds payable or mortgage.
Our liquidity may be reduced and our cost of debt financing may be increased because we may be unable to, or elect not to, remarket debt securities related to the Hyatt Regency Boston Harbor for which we may be liable.
We are the obligor with respect to a $37.1 million tax-exempt special project revenue bond and a $5.4 million taxable special project revenue bond, both issued by the Massachusetts Port Authority (collectively, the “Massport Bonds”). The Massport Bonds, which mature on March 1, 2018, bear interest based on weekly floating rates and have no principal reductions prior to their scheduled maturities. The Massport Bonds may be redeemed at any time, at our option, without penalty. U.S. Bank National Association (“U.S. Bank”) provides the supporting letters of credit on the Massport Bonds. The letters of credit expire on September 30, 2017. The letters of credit have a remaining one -year extension option that we may exercise at our option, subject to certain terms and conditions, and are secured by the Hyatt Regency Boston Harbor. The letters of credit cannot be extended beyond the Massport Bonds’ maturity date. If U.S. Bank fails to renew its letters of credit at expiration and an acceptable replacement provider cannot be found, we may be required to pay off the bonds. If we are unable to, or elect not to, issue or remarket the Massport Bonds, we would expect to rely primarily on our available cash and credit facilities to pay off the Massport Bonds. At certain times, we may hold some of the Massport Bonds that have not been successfully remarketed. Our borrowing costs under our senior unsecured credit facility may be higher than tax-exempt bond financing costs. Borrowings under the credit facilities to pay off the Massport Bonds would also reduce our liquidity to meet other obligations.
Increases in interest rates may increase our interest expense.
As of December 31, 2016 , $267.5 million of aggregate indebtedness ( 23.8% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under our term loans since we hedged their variable interest rates to fixed interest rates. In addition, the First Term Loan and $177.5 million of the Second Term Loan will bear interest at their contractual floating rates when the applicable interest rate swaps expire on August 2, 2017 and May 16, 2019, respectively. An increase in interest rates could increase our interest expense and reduce our cash flow and may affect our ability to make distributions to shareholders and to service our indebtedness.
There is refinancing risk associated with our debt.
Our typical debt contains limited principal amortization; therefore, the vast majority of the principal must be repaid at the maturity of the loan in a so-called “balloon payment.” In the event that we do not have sufficient funds to repay the debt at the maturity of these loans, we will need to refinance this debt. If the credit environment is constrained at the time of our debt maturities, we would have a very difficult time refinancing debt. In addition, we locked in our fixed-rate debt at a point in time when we were able to obtain favorable interest rates, principal amortization and other terms. When we refinance our debt, prevailing interest rates and other factors may result in paying a greater amount of debt service, which will adversely affect our cash flow, and, consequently, our cash available for distribution to our shareholders. If we are unable to refinance our debt on acceptable terms, we may be forced to choose from a number of unfavorable options. These options include agreeing to otherwise unfavorable financing terms on one or more of our unencumbered assets, selling one or more hotels on disadvantageous terms, including unattractive prices or defaulting on the mortgage and permitting the lender to foreclose.
Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our shareholders’ investment.
We use various derivative financial instruments to provide a level of protection against interest rate risks, but no hedging strategy can protect us completely. These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes and that a court could rule that such agreements are not legally enforceable. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income tests. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot provide assurance that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses that may reduce the overall return on our shareholders’ investment.

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Risks Related to Our Status as a REIT
Failure to qualify as a REIT would be costly.
We have operated, and intend to continue to operate, in a manner that we believe allows us to qualify as a REIT under the Code beginning with our taxable year ended December 31, 1998. No assurance can be given, however, that we will in fact qualify or remain qualified as a REIT. Qualification as a REIT involves the application of highly technical and complex provisions of the Code. Our qualification as a REIT depends on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. Moreover, new tax legislation, administrative guidance or court decisions, potentially applicable with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT or could increase our tax liability or reduce our operating flexibility.
For example, among other risks, we would fail to qualify as a REIT if
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our hotel managers do not qualify as “eligible independent contractors” under the Code,
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the leases of our hotel properties to LHL are not respected as true leases for federal income tax purposes, or
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the Operating Partnership failed to qualify as a partnership for federal income tax purposes (which would cause it to become subject to federal and state corporate income tax and would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us).
If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. Moreover, unless entitled to relief under certain statutory provisions, we also will be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would cause us to incur additional tax liabilities, significantly impair our ability to service indebtedness and reduce the amount of cash available to make new investments or to make distributions on our common or preferred shares.
The Operating Partnership owns 100% of the common shares of a subsidiary REIT that elected to be taxed as a REIT under the Code. If our subsidiary REIT were to fail to qualify as a REIT, then our subsidiary REIT would become subject to additional federal income tax and we could in turn fail to qualify as a REIT, unless we could avail ourselves of certain relief provisions.
Complying with REIT requirements may cause us to forego otherwise attractive business opportunities or liquidate otherwise attractive investments and may limit our ability to hedge our liabilities effectively and cause us to incur tax liabilities.
To meet the tests applicable to REITs, we may be required to forego or exit investments we might otherwise make or hold. The REIT provisions of the Code also limit our ability to hedge our liabilities. To the extent that we enter into hedging transactions (other than certain transactions to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets), the income from those transactions is likely to be treated as non-qualifying income for purposes of gross income tests applicable to REITs. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could expose us to greater risks associated with changes in interest rates than we would otherwise want to bear or increase the cost of our hedging activities because our TRS would be subject to tax on gains.
Our ownership of TRSs involves additional regulation and tax, and our transactions with TRSs will subject us to a 100% penalty tax on certain income or deductions if the transactions are not conducted on arm’s-length terms.
A REIT may own up to 100% of the stock of one or more TRSs, and a TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. TRSs involve additional regulation, including a rule that no more than 25% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. Another rule imposes a 100% excise tax on certain transactions between a TRS and its parent REIT not conducted on an arm’s-length basis. TRSs are also subject to applicable federal, foreign, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but is not required to be distributed to us.
We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability and reduce our operating flexibility.
At any time, the federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended. We cannot predict when or if any new federal income tax law, regulation or administrative and judicial interpretation, or any amendment to any existing federal income tax law, regulation or administrative or judicial interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. Any

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adverse laws, regulations or interpretations could increase our tax liability, reduce our operating flexibility, or negatively affect our ability to qualify as a REIT, or may reduce the relative attractiveness of an investment in a REIT compared to other entities and corporations not qualified as a REIT.
Risks Related to Our Organization and Structure
Our organizational documents and agreements with our executives and applicable Maryland law contain provisions that may delay, defer or prevent change of control transactions and may prevent shareholders from realizing a premium for their shares.
Our trustees may only be removed for cause and remaining trustees may fill board vacancies.     Our declaration of trust provides that our trustees may only be removed for cause by the affirmative vote of the holders of a majority of our outstanding common shares. Our declaration of trust and bylaws also provide that a majority of the remaining trustees may fill any vacancy on the Board of Trustees and that only the Board of Trustees may increase or decrease the number of persons serving on the Board of Trustees. These provisions effectively preclude shareholders from removing incumbent trustees, except for cause after a majority affirmative vote, and filling the vacancies created by such removal with their own nominees. Furthermore, we have not adopted trustee term limits or a mandatory retirement age for trustees, which may delay board rejuvenation and the rotation of trustees.
Our Board of Trustees may approve the issuance of shares with terms that may discourage a third party from acquiring the Company.     Subject to the rights of holders of outstanding preferred shares to approve the classification or issuance of any class or series of shares ranking senior to such preferred shares, our Board of Trustees has the power under the declaration of trust to classify any of our unissued preferred shares, and to reclassify any of our previously classified but unissued preferred shares from time to time, in one or more series of preferred shares, without shareholder approval. Subject to the rights of holders of outstanding preferred shares discussed above, our Board of Trustees may determine the relative rights, preferences and privileges of any class or series of preferred shares issued. The issuance of preferred shares could adversely affect the voting power, dividend and other rights of holders of common shares and could also have the effect of delaying or preventing a change of control transaction that might otherwise be in the best interests of our shareholders.
Our declaration of trust prohibits ownership of more than 9.8% of the common shares or 9.8% of any series of preferred shares.     To qualify as a REIT under the Code, no more than 50% of the value of our outstanding shares may be owned, directly or under applicable attribution rules, by five or fewer individuals (as defined to include certain entities) during the last half of each taxable year. To assist us in qualifying as a REIT, among other reasons, our declaration of trust generally prohibits direct or indirect ownership by any person of (i) more than 9.8% of the number or value (whichever is more restrictive) of the outstanding common shares or (ii) more than 9.8% of the number or value (whichever is more restrictive) of the outstanding shares of any class or series of preferred shares. Generally, shares owned by affiliated owners will be aggregated for purposes of the ownership limitation. Unless the ownership limit has been waived by our Board of Trustees, any transfer of shares that would violate the ownership limitation will result in the shares that would otherwise be held in violation of the ownership limit being designated as “shares-in-trust” and transferred automatically to a charitable trust effective on the day before the purported transfer or other event giving rise to such excess ownership. The intended transferee will acquire no rights in such shares. Our Board of Trustees, in its sole discretion, may exempt a proposed transferee from the ownership limits, subject to conditions and limitations and the receipt by our Board of Trustees of certain representations and undertakings. Our Board of Trustees has granted ownership limit waivers to certain shareholders. During the time that such waivers are effective, each excepted holder will be subject to an increased ownership limit. As a condition to granting such waivers, the excepted holders were required to make representations and warranties to us, which are intended to ensure that we will continue to meet the REIT ownership requirements. If any of these representations becomes untrue or is violated, such excepted holder will lose its exemption from the ownership limits.
The Maryland Business Combination Statute applies to us.     A Maryland “business combination” statute contains provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the shareholder becomes an interested stockholder, and thereafter impose special shareholder voting requirements on these combinations.
Our Board of Trustees may choose to subject us to the Maryland Control Share Act.     A Maryland law known as the “Maryland Control Share Act” provides that “control shares” of a company (defined as shares which, when aggregated with other shares controlled by the acquiring shareholder, entitle the shareholder to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the company’s shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares. Our bylaws currently provide that we are not subject to these provisions. However, the Board of Trustees, without shareholder approval, may repeal this bylaw and cause us to become subject to the Maryland Control Share Act.

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Other provisions of our organization documents may delay or prevent a change of control of the Company.     Among other provisions, our organizational documents provide that the number of trustees constituting the full Board of Trustees may be fixed only by the trustees and that a special meeting of shareholders may not be called by holders of common shares holding less than a majority of the outstanding common shares entitled to vote at such meeting.
Our executive officers have agreements that provide them with benefits in the event of a change in control of the Company.     We entered into agreements with our executive officers that provide them with severance benefits if their employment ends under certain circumstances within one year following a “change in control” of the Company (as defined in the agreements) or if the executive officer resigns for “good reason” (as defined in the agreements). These benefits could increase the cost to a potential acquirer of the Company and thereby prevent or deter a change in control of the Company that might involve a premium price for the common shares or otherwise be in our shareholders’ best interests.
We depend on the efforts and expertise of our key executive officers and would be adversely affected by the loss of their services.
We depend on the efforts and expertise of our President and Chief Executive Officer, as well as our other executive officers, to execute our business strategy. The loss of their services, and our inability to find suitable replacements, would have an adverse effect on our business.
We may change our operational policies, investment guidelines and investment and growth strategies without shareholder approval, which may subject us to different and more significant risks in the future.
Our Board of Trustees determines our operational policies, investment guidelines and investment and growth strategies. Our Board of Trustees may make changes to, or approve transactions that deviate from, those policies, guidelines and strategies without a vote of, or notice to, our shareholders. This could result in us conducting operational matters, making investments or pursuing different investment or growth strategies than those contemplated in this Annual Report on Form 10-K. Under any of these circumstances, we may expose ourselves to different and more significant risks in the future, which could materially and adversely affect us.
A large number of shares available for future sale could adversely affect the market price of our common shares and may be dilutive to current shareholders.
The sales of a substantial number of our common shares, or the perception that such sales could occur, could adversely affect prevailing market prices for our common shares. As of December 31, 2016 , there were 200,000,000 common shares authorized under our declaration of trust, as amended, of which 113,088,074 were outstanding. Our Board of Trustees may authorize the issuance of additional authorized but unissued common shares or other authorized but unissued securities at any time, including pursuant to our 2014 Equity Incentive Plan, as amended. We also have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity securities (including common or preferred shares) on an as-needed basis and subject to our ability to affect offerings on satisfactory terms based on prevailing conditions. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including issuances of common and preferred equity. No prediction can be made about the effect that future distributions or sales of our common shares will have on the market price of our common shares.
Holders of our outstanding preferred shares have dividend, liquidation and other rights that are senior to the rights of the holders of our common shares.
Our Board of Trustees has the authority to designate and issue preferred shares with liquidation, dividend and other rights that are senior to those of our common shares. As of December 31, 2016 , 2,750,000 shares of our 7.5% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”), 4,400,000 shares of our 6.375% Series I Cumulative Redeemable Preferred Shares (the “Series I Preferred Shares”) and 6,000,000 shares of our 6.3% Series J Cumulative Redeemable Preferred Shares (the “Series J Preferred Shares”) were issued and outstanding. The aggregate liquidation preference with respect to the outstanding preferred shares is approximately $328.8 million , and annual dividends on our outstanding preferred shares are approximately $21.6 million . Holders of our Series H Preferred Shares, Series I Preferred Shares and Series J Preferred Shares are entitled to cumulative dividends before any dividends may be declared or set aside on our common shares. Upon our voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of our common shares, holders of these preferred shares are entitled to receive a liquidation preference of $25.00 per share plus any accrued and unpaid distributions. This will reduce the remaining amount of our assets, if any, available to distribute to holders of our common shares. In addition, holders of these preferred shares have the right to elect two additional trustees to our Board of Trustees whenever dividends on the preferred shares are in arrears in an aggregate amount equivalent to six or more quarterly dividends, whether or not consecutive. Because our decision to issue securities will depend on market conditions and other factors beyond our control, we cannot predict

16
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or estimate the amount, timing or nature of our future preferred offerings. Thus, our shareholders bear the risk of our future securities issuances reducing the market price of our common shares and diluting their interest.
The market price and trading volume of our common shares may be volatile.
The market price of our common shares may be volatile. In addition, the trading volume in our common shares may fluctuate and cause significant price variations to occur. If the market price of our common shares declines significantly, shareholders may be unable to resell their shares at or above the price at which they traded when they acquired them. We cannot provide assurance that the market price of our common shares will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the market price of our common shares or result in fluctuations in the market price or trading volume of our common shares include:
•
actual or anticipated variations in our quarterly operating results;

•
changes in our operations or earnings estimates;

•
publication of research reports about us, the real estate industry or the lodging industry;

•
changes in our dividend policy;

•
increases in market interest rates that lead purchasers of our shares to demand a higher yield;

•
changes in market valuations of similar companies;

•
adverse market reaction to any additional equity or debt we may issue or incur in the future;

•
share repurchases under the Company’s share repurchase program;

•
additions or departures of key management personnel;

•
speculation in the press or investment community;

•
the realization of any of the other risk factors presented in this Annual Report on Form 10-K; and

•
general U.S. and worldwide market and economic conditions.
We cannot guarantee that we will repurchase shares pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value.
Our Board of Trustees has approved an expanded share repurchase program to acquire up to $600.0 million of our common shares. As of February 22, 2017, we had availability under the share repurchase program to acquire up to $569.8 million of our common shares. The share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares, and all open market repurchases will be made in accordance with applicable rules and regulations setting forth certain restrictions on the method, timing, price and volume of open market share repurchases. The timing, manner, price and actual number of shares repurchased, if any, will depend on a variety of factors, including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The share repurchase program may be suspended, modified or terminated at any time for any reason without prior notice. In addition, repurchases of shares pursuant to our share repurchase program could affect our share price and increase its volatility. The existence of a share repurchase program could cause our share price to be higher than it would be in the absence of such program and could potentially reduce the market liquidity for our shares. Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions. There can be no assurance that any share repurchases will enhance shareholder value because the market price of our common shares may decline below the levels at which we repurchase shares. Although our share repurchase program is intended to enhance long-term shareholder value, there is no assurance that it will do so and short-term share price fluctuations could reduce the effectiveness of the program.
Item 1B.
Unresolved Staff Comments
None.

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Item 2.
Properties
Hotel Properties
As of December 31, 2016 , the Company owned interests in the following 46 hotel properties:
Hotel Properties
 
Number of
Guest  Rooms
 
Location
1.
Hotel Amarano Burbank
 
132

 
Burbank, CA
2.
L’Auberge Del Mar
 
121

 
Del Mar, CA
3.
Hilton San Diego Gaslamp Quarter
 
286

 
San Diego, CA
4.
Hotel Solamar (1)
 
235

 
San Diego, CA
5.
San Diego Paradise Point Resort and Spa  (1)
 
462

 
San Diego, CA
6.
The Hilton San Diego Resort and Spa (1)
 
357

 
San Diego, CA
7.
Harbor Court Hotel (1)
 
131

 
San Francisco, CA
8.
Hotel Triton  (1)
 
140

 
San Francisco, CA
9.
Hotel Vitale  (1)
 
200

 
San Francisco, CA
10.
Park Central San Francisco
 
681

 
San Francisco, CA
11.
Serrano Hotel
 
236

 
San Francisco, CA
12.
The Marker San Francisco
 
208

 
San Francisco, CA
13.
Villa Florence
 
189

 
San Francisco, CA
14.
Chaminade Resort and Conference Center
 
156

 
Santa Cruz, CA
15.
Viceroy Santa Monica (1)
 
162

 
Santa Monica, CA
16.
Chamberlain West Hollywood
 
115

 
West Hollywood, CA
17.
Le Montrose Suite Hotel
 
133

 
West Hollywood, CA
18.
Le Parc Suite Hotel
 
154

 
West Hollywood, CA
19.
The Grafton on Sunset
 
108

 
West Hollywood, CA
20.
Hotel George
 
139

 
Washington, DC
21.
Hotel Madera
 
82

 
Washington, DC
22.
Hotel Palomar, Washington, DC
 
335

 
Washington, DC
23.
Hotel Rouge
 
137

 
Washington, DC
24.
Mason & Rook Hotel
 
178

 
Washington, DC
25.
Sofitel Washington, DC Lafayette Square
 
237

 
Washington, DC
26.
The Donovan
 
193

 
Washington, DC
27.
The Liaison Capitol Hill
 
343

 
Washington, DC
28.
Topaz Hotel
 
99

 
Washington, DC
29.
Southernmost Beach Resort Key West (4)
 
260

 
Key West, FL
30.
The Marker Waterfront Resort
 
96

 
Key West, FL
31.
Hotel Chicago
 
354

 
Chicago, IL
32.
Westin Michigan Avenue
 
752

 
Chicago, IL
33.
Hyatt Regency Boston Harbor (1)(2)  
 
270

 
Boston, MA
34.
Onyx Hotel
 
112

 
Boston, MA
35.
The Liberty Hotel (1)
 
298

 
Boston, MA
36.
Westin Copley Place (2)(3)  
 
803

 
Boston, MA
37.
Gild Hall
 
130

 
New York, NY
38.
The Roger (1)
 
194

 
New York, NY
39.
Park Central Hotel New York
 
761

 
New York, NY
40.
WestHouse Hotel New York
 
172

 
New York, NY
41.
The Heathman Hotel
 
150

 
Portland, OR
42.
Embassy Suites Philadelphia – Center City
 
288

 
Philadelphia, PA
43.
Westin Philadelphia
 
294

 
Philadelphia, PA
44.
Lansdowne Resort
 
296

 
Lansdowne,VA
45.
Alexis Hotel
 
121

 
Seattle, WA
46.
Hotel Deca (5)
 
158

 
Seattle, WA
 
Total number of guest rooms

11,458

 
 
(1)  
Property subject to a long-term ground or land and building lease.

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(2)  
Property subject to a mortgage/debt.
(3)  
Property subject to a long-term air rights lease.
(4)  
Property subject to a ground lease on a restaurant facility.
(5)  
Property sold on January 19, 2017.
Each of the Company’s hotels is full service, with 13 classified as “luxury,” 31 classified as “upper upscale” and two classified as “upscale,” as defined by Smith Travel Research, a provider of hotel industry data.
Item 3.
Legal Proceedings
The nature of hotel operations exposes the Company and its hotels to the risk of claims and litigation in the normal course of their business. The Company is not presently subject to any material litigation nor, to the Company’s knowledge, is any litigation threatened against the Company, other than routine actions for negligence or other claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.
Item 4.
Mine Safety Disclosures
Not applicable.
PART II

Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Information about the Company’s equity compensation plans is incorporated by reference to the material in the Company’s Proxy Statement for the 2017 Annual Meeting of Shareholders (the “Proxy Statement”).
Market Information
The common shares of the Company began trading on the NYSE on April 24, 1998 under the symbol “LHO.” The following table sets forth, for the periods indicated, the high and low sale prices per common share and the cash distributions declared per share:
 
Calendar Year 2016
 
Calendar Year 2015
 
High
 
Low
 
Distribution (1)
 
High
 
Low
 
Distribution (1)
First Quarter
$
26.85

 
$
19.01

 
$
0.45

 
$
43.56

 
$
36.54

 
$
0.38

Second Quarter
$
25.31

 
$
21.56

 
$
0.45

 
$
39.70

 
$
34.87

 
$
0.45

Third Quarter
$
29.10

 
$
23.02

 
$
0.45

 
$
38.46

 
$
27.70

 
$
0.45

Fourth Quarter
$
31.15

 
$
23.05

 
$
0.45

 
$
32.10

 
$
24.91

 
$
0.45

(1) Amounts are rounded to the nearest whole cent for presentation purposes.
The closing price for the Company’s common shares, as reported by the NYSE on December 31, 2016 , was $30.47 per share.

19
Table of Contents

SHARE PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return on the common shares from December 31, 2011 to the NYSE closing price per share on December 31, 2016 with the cumulative total return on the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500”) and the FTSE National Association of Real Estate Investment Trusts Equity REITs Index (“FTSE NAREIT Equity Index”). Total return values were calculated assuming a $100 investment on December 31, 2011 with reinvestment of all dividends in (i) the common shares, (ii) the S&P 500 and (iii) the FTSE NAREIT Equity Index.
SHAREPERFORMANCE.JPG
The actual returns on the graph above are as follows:
Name
Value  of
Initial
Investment at
December 31,
2011
 
Value  of
Initial
Investment at
December 31,
2012
 
Value  of
Initial
Investment at
December 31,
2013
 
Value  of
Initial
Investment at
December 31,
2014
 
Value  of
Initial
Investment at
December 31,
2015
 
Value  of
Initial
Investment at
December 31,
2016
LaSalle Hotel Properties
$
100.00

 
$
107.69

 
$
135.54

 
$
184.83

 
$
121.43

 
$
157.89

S&P 500 Index
$
100.00

 
$
116.00

 
$
153.57

 
$
174.60

 
$
177.01

 
$
198.18

FTSE NAREIT Equity Index
$
100.00

 
$
119.70

 
$
123.12

 
$
157.63

 
$
162.08

 
$
176.07

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by the Company under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

Shareholder Information
As of February 15, 2017 , there were 58 record holders of the Company’s common shares of beneficial interest, including shares held in “street name” by nominees who are record holders, and approximately 26,500 beneficial holders.

Distribution Information
For 2016, the Company paid $2.250 per common share/unit in distributions, of which $1.8680 (rounded) was recognized as 2016 distributions for tax purposes and $0.3820 (rounded) per common share/unit was recognized as 2015 distributions for tax purposes. Of the $1.8680 , 62.26% represented ordinary income, 24.36% represented capital gain and 13.38% represented unrecaptured Section 1250 gain. Distributions for 2016 were paid quarterly to the Company’s common shareholders and unitholders at a level of $0.450 per common share/unit.


20
Table of Contents

For 2015, the Company paid $1.725 per common share/unit in distributions, of which $1.6570 (rounded) was recognized as 2015 distributions for tax purposes and $0.0680 (rounded) was recognized as 2016 distributions for tax purposes. The entire $1.6570 represented ordinary income. Distributions for 2015 were paid quarterly to the Company’s common shareholders and unitholders at a level of $0.375 per common share/unit for the first quarter and $0.450 per common share/unit for the second, third and fourth quarters.
The Company’s federal and state tax returns for the year ended December 31, 2016 have not been filed. The taxability information presented for the Company’s dividends paid in 2016 is based upon management’s estimate.
The declaration of distributions by the Company is at the sole discretion of the Company’s Board of Trustees, and depends on the actual cash flow of the Company, its financial condition, capital expenditure requirements for the Company’s hotels, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Trustees deems relevant.
Operating Partnership Units and Recent Sales of Unregistered Securities
The Operating Partnership issued 3,181,723 common units of limited partnership interest to third parties on April 24, 1998 (inception), in conjunction with the Company’s initial public offering. The following is a summary of common unit activity since inception:
Common units issued at initial public offering
3,181,723

Common units issued:
 
2000-2006
86,667

2011
296,300

Common units redeemed:
 
1999-2015
(3,419,467
)
Common units outstanding at December 31, 2016
145,223

Holders of common units of limited partnership interest receive distributions per unit in the same manner as distributions on a per common share basis to the common shareholders of beneficial interest. Subject to certain limitations, common units of limited partnership interest are redeemable for cash or, at the Company’s option, for a like number of common shares of beneficial interest of the Company.
Common shares issued upon redemption of common units of limited partnership interest were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. The Company relied on the exemption based on factual representations given by the limited partners who received the common shares of beneficial interest.
On December 29, 2011, in connection with the Company’s acquisition of Park Central Hotel New York and as part of the consideration for the hotel acquisition, the Operating Partnership issued 296,300 common units of limited partnership interest. The issuance of the common units was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder. The Company relied on the exemption based on representations given by the holders of the common units. On May 13, 2015, the Company issued an aggregate of 151,077 common shares of beneficial interest in connection with the redemption of 151,077 of such common units of limited partnership interest.

21
Table of Contents

Item 6.
Selected Financial Data
The following tables set forth selected historical operating and financial data for the Company. The selected historical operating and financial data for the Company for the years ended December 31, 2016 , 2015 , 2014 , 2013 and 2012 have been derived from the historical financial statements of the Company. The following selected financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and all of the financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.
 
LASALLE HOTEL PROPERTIES
Selected Historical Operating and Financial Data
(Unaudited, in thousands, except share data)
 
For the year ended December 31,
 
2016
 
2015
 
2014
 
2013
 
2012
Operating Data:
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
Hotel operating revenues
$
1,220,612

 
$
1,208,591

 
$
1,101,457

 
$
969,356

 
$
862,146

Other income
7,007

 
7,993

 
8,321

 
7,937

 
4,929

Total revenues
1,227,619

 
1,216,584

 
1,109,778

 
977,293

 
867,075

Expenses:
 
 
 
 
 
 
 
 
 
Hotel operating expenses
728,229

 
724,531

 
668,790

 
596,241

 
533,237

Depreciation and amortization
192,322

 
180,855

 
155,035

 
143,991

 
124,363

Real estate taxes, personal property taxes and insurance
63,406

 
65,438

 
57,805

 
53,374

 
44,551

Ground rent
16,187

 
16,076

 
14,667

 
11,117

 
8,588

General and administrative
26,529

 
25,197

 
23,832

 
22,001

 
19,769

Acquisition transaction costs
0

 
499

 
2,379

 
2,646

 
4,498

Other expenses
6,283

 
17,225

 
7,369

 
9,361

 
3,017

Total operating expenses
1,032,956

 
1,029,821

 
929,877

 
838,731

 
738,023

Operating income
194,663

 
186,763

 
179,901

 
138,562

 
129,052

Interest income
3,553

 
2,938

 
1,812

 
9,679

 
4,483

Interest expense
(43,775
)
 
(54,333
)
 
(56,628
)
 
(57,516
)
 
(52,896
)
Loss from extinguishment of debt
0

 
(831
)
 
(2,487
)
 
0

 
0

Income before income tax (expense) benefit
154,441

 
134,537

 
122,598

 
90,725

 
80,639

Income tax (expense) benefit
(5,784
)
 
1,292

 
(2,306
)
 
(470
)
 
(9,062
)
Income before net gain on sale of properties and sale of note receivable
148,657

 
135,829

 
120,292

 
90,255

 
71,577

Net gain on sale of properties and sale of note receivable
104,478

 
0

 
93,205

 
0

 
0

Net income
253,135

 
135,829

 
213,497

 
90,255

 
71,577

Net income attributable to noncontrolling interests:
 
 
 
 
 
 
 
 
 
Noncontrolling interests in consolidated entities
(17
)
 
(16
)
 
(16
)
 
(17
)
 
0

Noncontrolling interests of common units in Operating Partnership
(337
)
 
(261
)
 
(636
)
 
(303
)
 
(281
)
Net income attributable to noncontrolling interests
(354
)
 
(277
)
 
(652
)
 
(320
)
 
(281
)
Net income attributable to the Company
252,781

 
135,552

 
212,845

 
89,935

 
71,296

Distributions to preferred shareholders
(18,206
)
 
(12,169
)
 
(14,333
)
 
(17,385
)
 
(21,733
)
Issuance costs of redeemed preferred shares
0

 
0

 
(951
)
 
(1,566
)
 
(4,417
)
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561

 
$
70,984

 
$
45,146

 

22
Table of Contents

LASALLE HOTEL PROPERTIES
Selected Historical Operating and Financial Data
(Unaudited, in thousands, except share data)
 
For the year ended December 31,
 
2016
 
2015
 
2014
 
2013
 
2012
Earnings per Common Share:
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
 
 
 
 
 
 
 
 
 
Basic
$
2.07

 
$
1.09

 
$
1.89

 
$
0.73

 
$
0.52

Diluted
$
2.07

 
$
1.09

 
$
1.88

 
$
0.73

 
$
0.52

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
112,791,839

 
112,685,235

 
104,188,785

 
97,041,484

 
85,757,969

Diluted
113,164,599

 
113,096,420

 
104,545,895

 
97,228,671

 
85,897,274

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Investment in hotel properties, net
$
3,672,209

 
$
3,817,676

 
$
3,428,556

 
$
3,383,188

 
$
3,053,044

Total assets (1)
3,944,079

 
4,069,346

 
3,698,779

 
3,577,757

 
3,252,447

Borrowings under credit facilities
0

 
21,000

 
0

 
220,606

 
153,000

Term loans, net of unamortized debt issuance costs (1)
852,758

 
852,203

 
476,428

 
474,675

 
474,008

Bonds payable, net of unamortized debt issuance costs (1)
42,455

 
42,316

 
42,144

 
42,267

 
42,216

Mortgage loans, including unamortized loan premiums, net of unamortized debt issuance costs (1)
223,494

 
508,804

 
500,963

 
514,233

 
578,873

Noncontrolling interests in consolidated entities
17

 
18

 
17

 
18

 
18

Noncontrolling interests of common units in Operating Partnership
3,277

 
3,198

 
6,660

 
6,054

 
5,786

Preferred shares, liquidation preference
328,750

 
178,750

 
178,750

 
237,472

 
227,472

Total shareholders’ equity
2,558,065

 
2,374,267

 
2,441,709

 
2,103,391

 
1,853,126

Other Data:
 
 
 
 
 
 
 
 
 
Funds from operations (FFO) (2) 
$
322,562

 
$
304,300

 
$
259,940

 
$
215,219

 
$
169,607

Earnings before interest, taxes, depreciation and amortization (EBITDA) (2)
495,016

 
370,556

 
429,002

 
290,666

 
253,481

Cash provided by operating activities
359,251

 
337,519

 
283,236

 
245,565

 
216,364

Cash provided by (used in) investing activities
154,154

 
(642,002
)
 
(78,001
)
 
(422,045
)
 
(524,154
)
Cash (used in) provided by financing activities
(384,453
)
 
196,052

 
(104,492
)
 
154,778

 
322,655

Cash dividends declared per common share (3)
$
1.80

 
$
1.73

 
$
1.41

 
$
0.96

 
$
0.71


(1)  
Amounts reclassified to conform with the 2016 presentation of debt issuance costs.
(2)  
See “Non-GAAP Financial Measures” below in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a detailed description and reconciliation of funds from operations (“FFO”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”) to net income attributable to common shareholders.
(3)  
Amounts are rounded to the nearest whole cent for presentation purposes.

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Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
During 2016, the Company’s hotels continued to operate within a generally positive environment. Some of the economic indicators the Company tracks were encouraging throughout the year, and other indicators became more positive during the second half of the year. On the more positive side, consumer confidence reached its highest level in nine years and unemployment remained stable below 5.0%. Enplanements have been steady and airline capacity increased during 2016. In contrast, corporate profits weakened during the first half of 2016, but are projected to grow for the second half of the year, as reported thus far for the fourth quarter. Similarly, U.S. GDP growth in the second half of the year outpaced growth during the first half. However, U.S. GDP growth for 2016 still ended below the estimates from the beginning of the year. The U.S. lodging industry benefited from a positive economic landscape overall, but there were signs of moderation, and the industry RevPAR grew at a rate of 3.2%, compared to RevPAR growth of 6.3% in 2015. During 2016, lodging industry demand grew by 1.7% and was mostly offset by a 1.6% supply increase. Industry-wide pricing was moderate, leading to ADR growth of 3.1%. The Company’s portfolio benefited from the operating environment, and RevPAR increased during 2016 by 2.5% .
For 2016, the Company had net income attributable to common shareholders of $234.6 million , or $2.07 per diluted share. FFO attributable to common shareholders and unitholders was $322.6 million , or $2.85 per diluted share/unit (based on 113,309,822 weighted average shares and units outstanding during the year ending December 31, 2016) and EBITDA was $495.0 million . RevPAR for the hotel portfolio was $204.08 , which was an increase of 2.5% compared to 2015. Occupancy grew by 2.7% and ADR decreased by 0.2% . The Company’s FFO per diluted share/unit and EBITDA increased year-over-year due to improvements in the performance of its hotel portfolio and from the gain on the sale of Indianapolis Marriott Downtown.
Hotel operations depend on the state of the overall economy which can significantly impact hotel operational performance and thus, impact the Company’s financial position. Should any of the hotels experience a significant decline in operational performance, it may affect the Company’s ability to make distributions to its shareholders, service debt or meet other financial obligations.
In addition to measuring the Company’s net income (loss), the Company also measures hotel performance by evaluating financial metrics such as RevPAR, FFO and EBITDA. The Company evaluates the hotels in its portfolio and potential acquisitions using these metrics discussed above to determine each portfolio hotel’s contribution or acquisition hotel’s potential contribution toward reaching the Company’s goals of providing income to its shareholders through increases in distributable cash flow and increasing long-term total returns to shareholders through appreciation in the value of its common shares. The Company invests in capital improvements throughout the portfolio to continue to increase the competitiveness of its hotels and improve their financial performance. The Company actively seeks to acquire hotel properties, but continues to face significant competition for acquisitions that meet its investment criteria.
Please refer to “Non-GAAP Financial Measures” for a detailed discussion of the Company’s use of FFO and EBITDA and a reconciliation of FFO and EBITDA to net income attributable to common shareholders, a measurement computed in accordance with U.S. generally accepted accounting principles (“GAAP”).
Critical Accounting Policies
The consolidated financial statements include the accounts of the Company, the Operating Partnership, LHL and their subsidiaries in which they have a controlling interest, including joint ventures. All significant intercompany balances and transactions have been eliminated.
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. In preparing these financial statements, management has used the information available including the Company’s past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the consolidated financial statements.
It is possible that the ultimate outcome as anticipated by management in formulating its estimates inherent in these financial statements might not materialize. However, application of the critical accounting policies below involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from those estimates. In addition, other companies may determine these estimates differently, which may impact comparability of the Company’s results of operations to those of companies in similar businesses.

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Investment in Hotel Properties
Upon acquisition, the Company determines the fair value of the acquired long-lived assets, assumed debt and any intangible assets or liabilities. The Company’s investments in hotel properties are carried at cost and depreciated using the straight-line method over an estimated useful life of 30 to 40 years for buildings, 15 years for building improvements, the shorter of the useful life of the improvement or the term of the related tenant lease for tenant improvements, 7 years for land improvements, 20 years for golf course land improvements, 20 years for swimming pool assets and 3 to 5 years for furniture, fixtures and equipment. For investments subject to land and building leases that qualify as capital leases, assets are recorded at the estimated fair value of the right to use the leased property at acquisition and depreciated over the shorter of the useful lives of the assets or the term of the respective lease. Renovations and/or replacements that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives.
The Company is required to make subjective assessments as to the useful lives and classification of its properties for purposes of determining the amount of depreciation expense to reflect each year with respect to those properties. These assessments have a direct impact on the Company’s net income. Should the Company change the expected useful life or classification of particular assets, it would result in a change in depreciation expense and annual net income.

The Company reviews each hotel for impairment at the end of each reporting period or as events and circumstances dictate throughout the year. A property is considered impaired when the sum of estimated future undiscounted cash flows over the estimated remaining holding period is less than the carrying amount of a property.
At the end of each reporting period, the Company assesses whether any quantitative or qualitative triggering events have occurred in relation to a property. Examples of situations considered to be triggering events include:

•
a substantial decline in operating cash flows during the period, including declines related to decreased occupancy, ADR or RevPAR;

•
a current or projected loss from operations;

•
a significant cost accumulation above the original acquisition/development estimate;

•
a change in plan to sell the property prior to the end of its useful life or holding period;

•
a significant decrease in market price not in line with general market trends; and

•
any other quantitative or qualitative events deemed significant by our management or our Board of Trustees.
If the presence of one or more triggering events as described above is identified at the end of a reporting period or throughout the year with respect to a hotel, the Company performs a recoverability test. In doing so, an estimate of undiscounted future cash flows over the estimated remaining holding period is compared to the carrying amount of the hotel.
Impairment is indicated if the results of a recoverability analysis indicate that the carrying amount of a hotel exceeds the estimated future undiscounted cash flows. An impairment charge is recorded equal to the excess of the carrying value of the hotel over the fair value. When determining the fair value of a property, the Company makes certain assumptions including, but not limited to, consideration of:

•
projected operating cash flows – considering factors such as booking pace, growth rates, occupancy, room rates, property-specific operating costs and future capital expenditures;

•
projected cash flows from the eventual disposition of the hotel based upon our estimation of a property-specific capitalization rate;

•
property-specific discount rates; and

•
comparable selling prices.
The Company considers a hotel as held for sale when a contract for sale is entered into, a substantial non-refundable deposit has been received from the purchaser and sale is expected to occur within one year.
Upon sale of a hotel, the Company determines its profit from the sale under the full accrual method provided the following applicable criteria are met: a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a

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commitment to pay for the property; the Company’s receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have a substantial continuing involvement with the property. If all of these conditions are met, the Company will recognize the full profit on the sale.
Comparison of the Year Ended December 31, 2016 to the Year Ended December 31, 2015
Industry travel was stronger during the year ended December 31, 2016 compared to the prior year. Industry demand grew at approximately the same rate as industry supply grew, which kept industry occupancy at a high level, leading to moderate pricing power and ADR growth during the year. With respect to the Company’s hotels, occupancy grew by 2.7% during the year ended December 31, 2016 and ADR decreased 0.2% , which resulted in RevPAR improvement of 2.5% year-over-year.
Hotel Operating Revenues
Hotel operating revenues, including room, food and beverage and other operating department revenues, increased $12.0 million from $1,208.6 million in 2015 to $1,220.6 million in 2016. This increase is due primarily to the hotel operating revenues generated from the 2015 hotel acquisitions, which consist of the acquisitions of Park Central San Francisco and The Marker Waterfront Resort (collectively, the “2015 Acquisition Properties”). The 2015 Acquisition Properties, which are not comparable year-over-year, contributed $8.7 million to the increase in hotel operating revenues. Additionally, the effects of the moderately improving, yet slowing, economic environment, which resulted in a 1.6% increase in RevPAR across the portfolio excluding the Park Central Hotel New York, WestHouse Hotel New York and Indianapolis Marriott Downtown, attributable to a 1.3% increase in occupancy, and a 0.3% increase in ADR, contributed to the increase in hotel operating revenues.
The following hotels experienced significant increases in total room, food and beverage and other operating department revenues primarily as a result of the effects of the moderately improving economy:
•
$2.5 million increase from The Grafton on Sunset;
•
$2.4 million increase from Sofitel Washington, DC Lafayette Square;
•
$2.3 million increase from Westin Copley Place;
•
$2.1 million increase from Hotel Chicago; and
•
$1.9 million increase from Hotel Amarano Burbank.
Park Central Hotel New York and WestHouse Hotel New York experienced an increase of $11.4 million over the prior year mainly due to the disruptive union activity in 2015. In addition, the completion of the renovation of the Mason & Rook Hotel in early 2016 resulted in a $2.6 million increase.
These increases are partially offset by a combined $23.6 million decrease in hotel operating revenues, $19.6 million of which is due to the July 2016 disposition of the Indianapolis Marriott Downtown. The remaining $4.0 million is primarily due to lower food and beverage revenue at The Marker San Francisco, as the restaurant was transitioned to a third-party lease.
Hotel operating revenues across the remainder of the portfolio remained relatively constant, increasing a net $1.7 million across 35 additional hotels in the portfolio.

Other Income
Other income decreased $1.0 million from $8.0 million in 2015 to $7.0 million in 2016 primarily due to decreased insurance gains from insurance proceeds related to minor property damage at various properties.

Hotel Operating Expenses
Hotel operating expenses increased a net $3.7 million from $724.5 million in 2015 to $728.2 million in 2016. This overall increase is primarily due to $4.0 million from the results of the 2015 Acquisition Properties, which are not comparable year-over-year. To a lesser extent, the increase is a result of increased operating costs associated with higher occupancies at certain properties in the portfolio attributable to the moderately improving, yet slowing, economic environment.
In addition to the above increase, Park Central Hotel New York and WestHouse Hotel New York had a total increase of $4.8 million, which corresponds to the significant revenue increase as a result of the disruptive union activity at the hotels in 2015. The completion of the renovation of the Mason & Rook Hotel in early 2016 also resulted in a $2.0 million increase in expenses.
These increases are partially offset by a $13.2 million decrease related to the July 2016 disposition of the Indianapolis Marriott Downtown, and a $2.3 million decrease due to lower food and beverage expenses at The Marker San Francisco, reflecting the change to a third-party lease.


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Hotel operating expenses across the remainder of the portfolio remained relatively constant, increasing $8.4 million or 1.5% across the 40 additional hotels in the portfolio.

Depreciation and Amortization
Depreciation and amortization expense increased $11.4 million from $180.9 million in 2015 to $192.3 million in 2016. Of the increase, $1.5 million is attributable to the 2015 Acquisition Properties, which are not comparable year-over-year. Depreciation and amortization expense increased a net $12.0 million across the remaining hotels in the portfolio due to the depreciation of new assets placed into service reflecting the Company’s recent renovation activity, particularly at the Westin Michigan Avenue, Hotel Palomar, Washington, DC and The Liberty Hotel. The increase is partially offset by the July 2016 disposition of the Indianapolis Marriott Downtown, which resulted in a $2.1 million decrease in depreciation and amortization expense.

Real Estate Taxes, Personal Property Taxes and Insurance
Real estate taxes, personal property taxes and insurance expenses decreased $2.0 million from $65.4 million in 2015 to $63.4 million in 2016. Of the decrease, $1.8 million is the result of the July 2016 disposition of the Indianapolis Marriott Downtown, as the Company received credits as part of the expense proration process. The decrease is partially offset by a $0.3 million increase from the 2015 Acquisition Properties, which are not comparable year-over-year. Real estate taxes and personal property taxes were flat for the remainder of the portfolio. Insurance expense decreased by $0.5 million reflecting slightly lower premiums throughout the portfolio.

Ground Rent
Ground rent increased $0.1 million from $16.1 million in 2015 to $16.2 million in 2016 due primarily to moderately improved operating results. Certain hotels are subject to ground rent under operating leases which call for either fixed or variable payments based on the hotel’s performance.

General and Administrative
General and administrative expense increased $1.3 million from $25.2 million in 2015 to $26.5 million in 2016 due to a $1.6 million charge in 2016 associated with the departure of the Company’s former Chief Financial Officer partially offset by a $0.3 million net decrease in other compensation costs, which offset slightly higher professional fees.

Acquisition Transaction Costs
Acquisition transaction costs of $0.5 million in 2015 relate to the purchase of the 2015 Acquisition Properties and the placing of the Company’s junior mezzanine loan (“Mezzanine Loan”).

Other Expenses
Other expenses decreased $10.9 million from $17.2 million in 2015 to $6.3 million in 2016. Of the decrease, $6.8 million is attributable to the 2015 disruptive union activities at two of the Company’s New York properties. In addition, management transition expenses, severance and pre-opening costs have decreased by $4.9 million as the Company was transitioning management at four San Francisco properties in 2015. This decrease was slightly offset by $1.4 million of transition and pre-opening expenses incurred in 2016 including the grand opening of the Mason & Rook Hotel. Miscellaneous and retail lease expenses also decreased by $0.6 million in 2016.

Interest Income
Interest income increased $0.6 million from $2.9 million in 2015 to $3.5 million in 2016 as a result of the interest income earned on the Company’s Mezzanine Loan secured by pledges of equity interests in the entities that own the hotel properties, Shutters on the Beach and Casa Del Mar, which was acquired in July 2015. The Company sold the Mezzanine Loan in July 2016.

Interest Expense
Interest expense decreased $10.5 million from $54.3 million in 2015 to $43.8 million in 2016 due to a decrease in the Company’s weighted average interest rate and a decrease in the weighted average debt outstanding. The Company’s weighted average debt outstanding decreased from $1.42 billion in 2015 to $1.34 billion in 2016 due to repayments of mortgage loans and paydowns on the unsecured credit facilities with proceeds from the following:
•
the issuance of the Series J Preferred Shares in May 2016;
•
the sale of Indianapolis Marriott Downtown in July 2016;
•
the sale of the Mezzanine Loan in July 2016; and
•
positive operating results from the hotel properties.

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The above paydowns were partially offset by borrowings for the following:
•
additional borrowings to purchase the 2015 Acquisition Properties and the Mezzanine Loan in July 2015;
•
additional borrowings on the Company’s unsecured credit facilities to repay the Westin Michigan Avenue, Indianapolis Marriott Downtown and The Roger mortgage loans; and
•
additional borrowings to finance other capital improvements during 2015 and 2016.
The Company’s weighted average interest rate, including the effect of capitalized interest, decreased from 3.54% in 2015 to 2.90% in 2016. This decrease is due in part to the repayment of the Westin Copley Place 5.28% fixed rate mortgage loan in June 2015 and replacing it with a variable rate mortgage loan on Westin Copley Place in July 2015, which has a rate of 2.46% as of December 31, 2016. This decrease is also attributable to the repayment of the Westin Michigan Avenue 5.75% fixed rate mortgage loan, the Indianapolis Marriott Downtown 5.99% fixed rate mortgage loan and The Roger 6.31% fixed rate mortgage loan in the first quarter of 2016 with borrowings on the Company’s senior unsecured credit facility, which has a weighted average rate of 2.14% for the year ending December 31, 2016. Interest capitalized on renovations decreased from $0.9 million in 2015 to $0.4 million in 2016.

Loss from Extinguishment of Debt
Loss from extinguishment of debt of $0.8 million in 2015 relates to the write-off of the unamortized deferred financing costs for the Company’s Repaid Term Loan (as defined below) due to its repayment prior to maturity on November 5, 2015.

Income Tax Expense
Income tax changed by $7.1 million from an income tax benefit of $1.3 million in 2015 to an income tax expense of $5.8 million in 2016. This change is primarily the result of an increase in LHL’s net income before income tax expense of $15.2 million from a net loss before income tax benefit of $4.9 million in 2015 to net income before income tax expense of $10.3 million in 2016 and a minimal impact of the finalization and related adjustments of the 2015 federal and state tax returns during the 2016 period. For the year ended December 31, 2016, LHL’s income tax expense was calculated using an estimated combined federal and state effective tax rate of 42.6%.

Net Gain on Sale of Property and Sale of Note Receivable
The net gain on sale of property and sale of note receivable is $104.5 million which consists of a $104.8 million gain relating to the sale of the Indianapolis Marriott Downtown on July 14, 2016, partially offset by $0.3 million of costs associated with the sale of the Company’s Mezzanine Loan on July 8, 2016.

Noncontrolling Interests in Consolidated Entities
Noncontrolling interests in consolidated entities represent the allocation of income or loss to the outside preferred ownership interests in a subsidiary and the outside ownership interest in a joint venture.

Noncontrolling Interests of Common Units in Operating Partnership
Noncontrolling interests of common units in Operating Partnership represents the allocation of income or loss of the Operating Partnership to the common units held by third parties based on their weighted average percentage ownership throughout the period. At December 31, 2016 , third-party limited partners held 0.1% of the common units in the Operating Partnership.

Distributions to Preferred Shareholders
Distributions to preferred shareholders increased $6.0 million from $12.2 million in 2015 to $18.2 million in 2016 due to distributions on the Series J Preferred Shares, which were issued on May 25, 2016.
Comparison of the Year Ended December 31, 2015 to the Year Ended December 31, 2014
Industry travel was stronger during the year ended December 31, 2015 compared to the prior year, although there were underlying signs of weakening trends. Moderate demand improvements and low supply growth led to an occupancy increase, which has encouraged operators to increase pricing. The year ended December 31, 2015 had solid RevPAR results for the industry, but the pace of RevPAR growth decelerated during each successive quarter of the year. With respect to the Company’s hotels, ADR grew 2.4% during the year ended December 31, 2015, while occupancy decreased 0.9%, which resulted in RevPAR improvement of 1.4% year-over-year. Excluding the impact at Park Central Hotel New York and WestHouse Hotel New York, ADR grew 2.7% during the year ended December 31, 2015, while occupancy decreased 0.1%, which resulted in RevPAR improvement of 2.6% year-over-year.

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Hotel Operating Revenues
Hotel operating revenues, including room, food and beverage and other operating department revenues, increased $107.1 million from $1,101.5 million in 2014 to $1,208.6 million in 2015. This increase is due primarily to the hotel operating revenues generated from the 2014 and 2015 hotel acquisitions, which consist of the acquisitions of Hotel Vitale, The Heathman Hotel, Park Central San Francisco and The Marker Waterfront Resort (collectively, the “2014 and 2015 Acquisition Properties”). The 2014 and 2015 Acquisition Properties, which are not comparable year-over-year, contributed $104.5 million to the increase in hotel operating revenues. Additionally, the effects of the moderately improving U.S. economy, which resulted in a 3.0% increase in RevPAR across the portfolio, excluding the Hilton Alexandria Old Town and Hotel Viking (collectively, the “2014 Disposition Properties”) and the Park Central Hotel New York and WestHouse Hotel New York, attributable to a 3.8% increase in ADR, partially offset by a 0.7% decrease in occupancy, contributed to the increase in hotel operating revenues.
The following hotels experienced significant increases in total room, food and beverage and other operating department revenues primarily as a result of the effects of the moderately improving economy:
•
$5.5 million increase from Westin Copley Place;
•
$3.5 million increase from Hotel Chicago;
•
$3.5 million increase from L’Auberge Del Mar;
•
$3.4 million increase from Indianapolis Marriott Downtown;
•
$3.2 million increase from The Hilton San Diego Resort and Spa;
•
$3.0 million increase from Southernmost Beach Resort Key West;
•
$2.5 million increase from Hyatt Regency Boston Harbor; and
•
$2.0 million increase from Hilton San Diego Gaslamp Quarter.
These increases are partially offset by a $19.0 million decrease related to the sale of the 2014 Disposition Properties. Additionally, total room, food and beverage and other operating department revenues significantly decreased by $9.0 million at the Park Central Hotel New York and WestHouse Hotel New York due to the disruptive union activity at the hotels. Hotel operating revenue from Westin Philadelphia decreased by $2.2 million due to the completion of the hotel renovation reflecting the significant number of rooms that were out of service during the renovation period.
Hotel operating revenues across the remainder of the portfolio remained relatively constant, increasing a net $6.2 million across 32 additional hotels in the portfolio.

Other Income
Other income decreased $0.3 million from $8.3 million in 2014 to $8.0 million in 2015 primarily due to lower non-operating miscellaneous income, partially offset by increased insurance gains from insurance proceeds related to minor property damage at various properties.

Hotel Operating Expenses
Hotel operating expenses increased $55.7 million from $668.8 million in 2014 to $724.5 million in 2015. This overall increase is primarily due to $64.2 million from the results of the 2014 and 2015 Acquisition Properties, which are not comparable year-over-year.
The overall increase is partially offset by a $11.4 million decrease related to the sale of the 2014 Disposition Properties. Additionally, total room, food and beverage and other direct and other indirect expenses decreased by $2.3 million at the Park Central Hotel New York and WestHouse Hotel New York reflecting the decreased revenue due to the disruptive union activity at the hotels.
Hotel operating expenses across the remainder of the portfolio remained relatively constant, increasing a net $5.2 million across the 41 additional hotels in the portfolio. Cost savings initiatives throughout the portfolio resulted in decreased operating expenses at selected properties which partially offset overall increases in hotel operating expenses.

Depreciation and Amortization
Depreciation and amortization expense increased $25.9 million from $155.0 million in 2014 to $180.9 million in 2015. Of the increase, $13.4 million is attributable to the 2014 and 2015 Acquisition Properties, which are not comparable year-over-year. Depreciation and amortization expense increased a net $15.1 million across the remaining hotels in the portfolio due to the depreciation of new assets placed into service reflecting the Company’s recent renovation activity. These increases are partially offset by $2.6 million from the 2014 Disposition Properties, which are not comparable year-over-year.

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Real Estate Taxes, Personal Property Taxes and Insurance
Real estate taxes, personal property taxes and insurance expenses increased $7.6 million from $57.8 million in 2014 to $65.4 million in 2015. This increase is primarily due to $6.0 million from the 2014 and 2015 Acquisition Properties, which are not comparable year-over-year. The increase is partially offset by a $1.0 million decrease in real estate taxes, personal property taxes and insurance expense attributable to the sale of the 2014 Disposition Properties, which are also not comparable year-over-year. Real estate taxes and personal property taxes increased by $3.1 million across the remaining hotels in the portfolio due primarily to increased property values or tax rates at certain properties, primarily the two Chicago properties, which were slightly offset by successful real estate tax appeals. Insurance expense decreased by $0.5 million reflecting slightly lower premiums throughout the portfolio.

Ground Rent
Ground rent increased $1.4 million from $14.7 million in 2014 to $16.1 million in 2015. Certain hotels are subject to ground rent under operating leases which call for either fixed or variable payments based on the hotel’s performance. Hotel Vitale, which is not comparable year-over-year, contributed $0.8 million to the 2015 increase. The other hotels subject to ground leases contributed a net $0.6 million to the increase due to improved operating results.

General and Administrative
General and administrative expense increased $1.4 million from $23.8 million in 2014 to $25.2 million in 2015 due primarily to increased compensation costs, partially due to additional staffing as a result of portfolio growth.

Acquisition Transaction Costs
Acquisition transaction costs of $2.4 million in 2014 and $0.5 million in 2015 relate to the purchase of the 2014 and 2015 Acquisition Properties and the placing of the Mezzanine Loan.

Other Expenses
Other expenses increased $9.8 million from $7.4 million in 2014 to $17.2 million in 2015 due primarily to an increase of $6.1 million in one-time expenses associated with the alleged health and safety claims by the union at the Park Central Hotel New York and WestHouse Hotel New York. These expenses include guest relocation expenses, clean up, legal and payroll. A net $3.3 million increase in management transition expenses, severance and pre-opening costs in 2015 was incurred at a number of properties across the portfolio. In addition, losses from property damage, retail lease expenses and other miscellaneous expenses increased by a net $0.4 million.

Interest Income
Interest income increased $1.1 million from $1.8 million in 2014 to $2.9 million in 2015 as a result of the February 10, 2014 repayment of the $72.0 million mezzanine loan which was acquired in July 2012, partially offset by the placing of the new $80.0 million Mezzanine Loan, which was acquired in July 2015.

Interest Expense
Interest expense decreased $2.3 million from $56.6 million in 2014 to $54.3 million in 2015 due to a decrease in the Company’s weighted average interest rate, partially offset by an increase in the weighted average debt outstanding. The Company’s weighted average debt outstanding increased from $1.30 billion in 2014 to $1.42 billion in 2015 due primarily to borrowings for the following:
•
additional borrowings to purchase the 2014 and 2015 Acquisition Properties and the July 2015 Mezzanine Loan;
•
additional borrowings to redeem the remainder of 7.25% Series G Cumulative Redeemable Preferred Shares (the “Series G Preferred Shares”) in July 2014; and
•
additional borrowings to finance other capital improvements during 2014 and 2015.

The above borrowings were partially offset by paydowns with proceeds from the following:
•
the repayment of the mezzanine loan in February 2014;
•
the sale of Hilton Alexandria Old Town in June 2014;
•
the sale of Hotel Viking in September 2014;
•
the December 2014 common share offering; and
•
positive operating results from the hotel properties.

The Company’s weighted average interest rate, including the effect of capitalized interest, decreased from 4.06% in 2014 to 3.54% in 2015. This decrease is due in part to the repayment of the Westin Copley Place 5.28% fixed rate mortgage loan in June

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2015 and replacing it with a variable rate mortgage loan on Westin Copley Place in July 2015, which had a rate of 2.09% as of December 31, 2015. Interest capitalized on renovations increased from $0.4 million in 2014 to $0.9 million in 2015 primarily due to various renovation projects throughout the portfolio.

Loss from Extinguishment of Debt
Loss from extinguishment of debt of $2.5 million in 2014 relates to the write-off of a portion of the unamortized deferred financing costs for the Company’s senior unsecured credit facility and First Term Loan. These costs were recorded in connection with the original agreements that were in effect prior to the Company refinancing its senior unsecured credit facility and First Term Loan on January 8, 2014. Loss from extinguishment of debt of $0.8 million in 2015 relates to the write-off of the unamortized deferred financing costs for the Company’s Repaid Term Loan (as defined below) due to its repayment prior to maturity on November 5, 2015.

Income Tax Benefit
Income tax changed by $3.6 million from an income tax expense of $2.3 million in 2014 to an income tax benefit of $1.3 million in 2015. This change is the result of a decrease in LHL’s net income before income tax expense of $8.5 million from a net income before income tax expense of $3.6 million in 2014 to a net loss before income tax benefit of $4.9 million in 2015. The 2015 income tax benefit also was impacted by the finalization and related adjustments of the 2014 federal and state tax returns during the 2015 period. For the year ended December 31, 2015, LHL’s income tax benefit was calculated using an estimated federal and state tax rate of 42.5%.

Gain on Sale of Properties
The gain on sale of properties of $93.2 million relates to the sale of Hilton Alexandria Old Town on June 17, 2014 for $43.5 million and the sale of Hotel Viking on September 10, 2014 for $49.7 million.

Noncontrolling Interests in Consolidated Entities
Noncontrolling interests in consolidated entities represent the allocation of income or loss to the outside preferred ownership interests in a subsidiary and the outside ownership interest in a joint venture.

Noncontrolling Interests of Common Units in Operating Partnership
Noncontrolling interests of common units in Operating Partnership represent the allocation of income or loss of the Operating Partnership to the common units held by third parties based on their weighted average percentage ownership throughout the period. At December 31, 2015, third-party limited partners held 0.1% of the common units in the Operating Partnership.

Distributions to Preferred Shareholders
Distributions to preferred shareholders decreased $2.1 million from $14.3 million in 2014 to $12.2 million in 2015 due to decreased distributions on the Series G Preferred Shares, which were fully redeemed on July 3, 2014.

Issuance Costs of Redeemed Preferred Shares
Issuance costs of redeemed preferred shares of $1.0 million in 2014 represent the offering costs related to the remaining Series G Preferred Shares, which were all redeemed on July 3, 2014. The excess of fair value over carrying value (i.e. offering costs) is included in the determination of net income attributable to common shareholders.
Non-GAAP Financial Measures
FFO and EBITDA
The Company considers the non-GAAP measures of FFO and EBITDA to be key supplemental measures of the Company’s performance and should be considered along with, but not as alternatives to, net income or loss as a measure of the Company’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO and EBITDA to be helpful in evaluating a real estate company’s operations.
The White Paper on FFO approved by the National Association of Real Estate Investment Trusts (“NAREIT”) in April 2002, as revised in 2011, defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of properties and items classified by GAAP as extraordinary, plus real estate-related depreciation and amortization and impairment writedowns, and after comparable adjustments for the Company’s portion of these items related to unconsolidated entities and joint ventures. The Company computes FFO consistent with standards established by NAREIT, which may not be comparable to

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Table of Contents

FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company.
With respect to FFO, the Company believes that excluding the effect of extraordinary items, real estate-related depreciation and amortization and impairments, and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance, can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common shareholders. However, FFO may not be helpful when comparing the Company to non-REITs.
With respect to EBITDA, the Company believes that excluding the effect of non-operating expenses and non-cash charges, and the portion of these items related to unconsolidated entities, all of which are also based on historical cost accounting and may be of limited significance in evaluating current performance, can help eliminate the accounting effects of depreciation and amortization, and financing decisions and facilitate comparisons of core operating profitability between periods and between REITs, even though EBITDA also does not represent an amount that accrues directly to common shareholders.
FFO and EBITDA do not represent cash generated from operating activities determined by GAAP and should not be considered as alternatives to net income, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO and EBITDA are not measures of the Company’s liquidity, nor are FFO and EBITDA indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. These measurements do not reflect cash expenditures for long-term assets and other items that have been and will be incurred. FFO and EBITDA may include funds that may not be available for management’s discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions and other commitments and uncertainties. To compensate for this, management considers the impact of these excluded items to the extent they are material to operating decisions or the evaluation of the Company’s operating performance.
The following is a reconciliation between net income attributable to common shareholders and FFO attributable to common shareholders and unitholders for the years ended December 31, 2016 , 2015 , 2014 , 2013 and 2012 (in thousands, except share and unit data):
 
For the year ended December 31,
 
2016
 
2015
 
2014
 
2013
 
2012
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561

 
$
70,984

 
$
45,146

Depreciation
191,791

 
180,346

 
154,585

 
143,560

 
123,809

Amortization of deferred lease costs
320

 
294

 
347

 
355

 
371

Noncontrolling interests:
 
 
 
 
 
 
 
 
 
Noncontrolling interests in consolidated entities
17

 
16

 
16

 
17

 
0

Noncontrolling interests of common units in Operating Partnership
337

 
261

 
636

 
303

 
281

Less: Gain on sale of properties less costs associated with sale of note receivable
(104,478
)
 
0

 
(93,205
)
 
0

 
0

FFO attributable to common shareholders and unitholders (1)
$
322,562

 
$
304,300

 
$
259,940

 
$
215,219

 
$
169,607

Weighted average number of common shares and units outstanding:
 
 
 
 
 
 
 
 
 
Basic
112,937,062

 
112,885,094

 
104,485,085

 
97,337,784

 
86,054,269

Diluted
113,309,822

 
113,296,279

 
104,842,195

 
97,524,971

 
86,193,574

(1)  
FFO attributable to common shareholders and unitholders includes the loss from extinguishment of debt of $0.8 million and $2.5 million for the years ended December 31, 2015 and 2014, respectively.

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The following is a reconciliation between net income attributable to common shareholders and EBITDA for the years ended December 31, 2016 , 2015 , 2014 , 2013 and 2012 (in thousands):
 
For the year ended December 31,
 
2016
 
2015
 
2014
 
2013
 
2012
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561

 
$
70,984

 
$
45,146

Interest expense
43,775

 
54,333

 
56,628

 
57,516

 
52,896

Loss from extinguishment of debt
0

 
831

 
2,487

 
0

 
0

Income tax expense (benefit)
5,784

 
(1,292
)
 
2,306

 
470

 
9,062

Depreciation and amortization
192,322

 
180,855

 
155,035

 
143,991

 
124,363

Noncontrolling interests:
 
 
 
 
 
 
 
 
 
Noncontrolling interests in consolidated entities
17

 
16

 
16

 
17

 
0

Noncontrolling interests of common units in Operating Partnership
337

 
261

 
636

 
303

 
281

Distributions to preferred shareholders
18,206

 
12,169

 
14,333

 
17,385

 
21,733

EBITDA (1)
$
495,016

 
$
370,556

 
$
429,002

 
$
290,666

 
$
253,481

(1)  
EBITDA includes the gain on sale of Indianapolis Marriott Downtown of $104.8 million , offset by $0.3 million related to costs associated with the sale of the Mezzanine Loan in 2016. EBITDA includes the gain on sale of Hilton Alexandria Old Town and Hotel Viking of $43.5 million and $49.7 million, respectively, in 2014.
The Hotels
The following table sets forth pro forma historical comparative information with respect to occupancy, ADR and RevPAR for the total hotel portfolio for the years ended December 31, 2016 and 2015 :
 
 
Year ended December 31,
 
 
2016
 
2015
 
Variance
Occupancy
 
83.9
%
 
81.7
%
 
2.7
%
ADR
 
$
243.12

 
$
243.69

 
(0.2
%)
RevPAR
 
$
204.08

 
$
199.18

 
2.5
%
For presentation of comparable information, the above hotel statistics reflect pro forma adjustments to include the results of operations of the Park Central San Francisco and The Marker Waterfront Resort under previous ownership for the comparable period in 2015, and exclude the Mason & Rook Hotel for the period the hotel was closed for renovation during the fourth quarter of 2015 through the first quarter of 2016 and the comparable periods in 2015 and 2016. The Indianapolis Marriott Downtown is excluded from all periods presented due to its sale on July 14, 2016. Results for the hotels for periods prior to the Company’s ownership, which would include January 1, 2015 through January 22, 2015 for Park Central San Francisco and January 1, 2015 through March 15, 2015 for The Marker Waterfront Resort, were provided by prior owners and have not been adjusted by the Company or audited by its auditors.
Off-Balance Sheet Arrangements
Reserve Funds for Future Capital Expenditures
Certain of the Company’s agreements with its hotel managers, franchisors and lenders have provisions for the Company to provide funds, generally 4.0% of hotel revenues, sufficient to cover the cost of (a) certain non-routine repairs and maintenance to the hotels and (b) replacements and renewals to the hotels’ capital assets. Certain of the agreements require that the Company reserve this cash in separate accounts. As of December 31, 2016 , the Company held a total of $15.0 million of restricted cash reserves, $13.1 million of which was available for future capital expenditures. The Company has sufficient cash on hand and availability on its credit facilities to cover capital expenditures under agreements that do not require that the Company separately reserve cash.
The Company has no other off-balance sheet arrangements.
Liquidity and Capital Resources
The Company’s principal source of cash to meet its cash requirements, including distributions to shareholders, is the operating cash flow from the Company’s hotels. Additional sources of cash are the Company’s senior unsecured credit facility, LHL’s

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Table of Contents

unsecured credit facility, additional unsecured financing, secured financing on one or all of the Company’s 44 unencumbered properties (subject to certain terms and conditions of the credit agreement) as of December 31, 2016 , the sale of one or more properties (subject to certain conditions of the management agreements at four of the Company’s properties), debt or equity issuances available under the Company’s shelf registration statement and issuances of common units in the Operating Partnership.
LHL is a wholly owned subsidiary of the Operating Partnership. Payments to the Operating Partnership are required pursuant to the terms of the lease agreements between LHL and the Operating Partnership relating to the properties owned by the Operating Partnership and leased by LHL. LHL’s ability to make rent payments to the Operating Partnership and the Company’s liquidity, including its ability to make distributions to shareholders, are dependent on the lessees’ ability to generate sufficient cash flow from the operation of the hotels.
In addition, cash flow from hotel operations is subject to all operating risks common to the hotel industry. These risks include:

•
adverse effects of weak national, regional and local economic conditions;

•
tightening credit standards;

•
competition for guests and meetings from other hotels and alternative lodging companies, including competition and pricing pressures from Internet wholesalers and distributors;

•
increases in operating costs, including wages, benefits, insurance, property taxes and energy, due to inflation and other factors, which may not be offset in the future by increases in room rates;

•
labor strikes, union disruptions or lockouts that may impact operating performance;

•
dependence on demand from business and leisure travelers, which may fluctuate and be seasonal;

•
increases in energy costs, airline fares and other expenses related to travel, which may negatively affect traveling; and

•
terrorism, terrorism alerts and warnings, military actions, pandemics or other medical events which may cause decreases in business and leisure travel.
These factors could adversely affect the ability of the hotel operators to generate revenues which could adversely affect LHL’s ability to make rental payments to the Company pursuant to the participating leases and ultimately impact the Company’s liquidity.
The Company’s senior unsecured credit facility, LHL’s unsecured credit facility and the Company’s term loans contain certain financial covenants relating to net worth requirements, debt ratios and fixed charge coverage and other limitations that restrict its ability to make distributions or other payments to its shareholders upon events of default. There are currently no other contractual or other arrangements limiting payment of distributions by the Operating Partnership.
Failure of the Company to comply with financial and other covenants contained in its credit facilities, term loans and non-recourse secured mortgage could result from, among other things, changes in our results of operations, the incurrence of additional debt or changes in general economic conditions.
If the Company violates financial and other covenants contained in any of its credit facilities or term loans, the Company may attempt to negotiate waivers of the violations or amend the terms of the applicable credit facilities or term loans with the lenders thereunder; however, the Company can make no assurance that it would be successful in any such negotiations or that, if successful in obtaining waivers or amendments, such amendments or waivers would be on terms attractive to the Company. If a default under the credit facilities or term loans were to occur, the Company would possibly have to refinance the debt through additional debt financing, private or public offerings of debt securities, or additional equity financings. If the Company is unable to refinance its debt on acceptable terms, including at maturity of the credit facilities and term loans, it may be forced to dispose of hotel properties on disadvantageous terms, potentially resulting in losses that reduce cash flow from operating activities. If, at the time of any refinancing, prevailing interest rates or other factors result in higher interest rates upon refinancing, increases in interest expense would lower the Company’s cash flow, and, consequently, cash available for distribution to its shareholders.
As of December 31, 2016 , the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loans, bonds payable or mortgage loan.


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Table of Contents

Properties Leased to LHL
Effective January 1, 2001, LHL became a wholly owned subsidiary of the Company as provided for under the TRS provisions of the Code. As of December 31, 2016 , LHL leased all 46 hotels owned by the Company as follows:

35

 
 
Hotel Properties
 
Location
1.
 
Hotel Amarano Burbank
 
Burbank, CA
2.
 
L’Auberge Del Mar
 
Del Mar, CA
3.
 
Hilton San Diego Gaslamp Quarter
 
San Diego, CA
4.
 
Hotel Solamar
 
San Diego, CA
5.
 
San Diego Paradise Point Resort and Spa
 
San Diego, CA
6.
 
The Hilton San Diego Resort and Spa
 
San Diego, CA
7.
 
Harbor Court Hotel
 
San Francisco, CA
8.
 
Hotel Triton
 
San Francisco, CA
9.
 
Hotel Vitale
 
San Francisco, CA
10.
 
Park Central San Francisco
 
San Francisco, CA
11.
 
Serrano Hotel
 
San Francisco, CA
12.
 
The Marker San Francisco
 
San Francisco, CA
13.
 
Villa Florence
 
San Francisco, CA
14.
 
Chaminade Resort and Conference Center
 
Santa Cruz, CA
15.
 
Viceroy Santa Monica
 
Santa Monica, CA
16.
 
Chamberlain West Hollywood
 
West Hollywood, CA
17.
 
Le Montrose Suite Hotel
 
West Hollywood, CA
18.
 
Le Parc Suite Hotel
 
West Hollywood, CA
19.
 
The Grafton on Sunset
 
West Hollywood, CA
20.
 
Hotel George
 
Washington, DC
21.
 
Hotel Madera
 
Washington, DC
22.
 
Hotel Palomar, Washington, DC
 
Washington, DC
23.
 
Hotel Rouge
 
Washington, DC
24.
 
Mason & Rook Hotel
 
Washington, DC
25.
 
Sofitel Washington, DC Lafayette Square
 
Washington, DC
26.
 
The Donovan
 
Washington, DC
27.
 
The Liaison Capitol Hill
 
Washington, DC
28.
 
Topaz Hotel
 
Washington, DC
29.
 
Southernmost Beach Resort Key West
 
Key West, FL
30.
 
The Marker Waterfront Resort
 
Key West, FL
31.
 
Hotel Chicago
 
Chicago, IL
32.
 
Westin Michigan Avenue
 
Chicago, IL
33.
 
Hyatt Regency Boston Harbor
 
Boston, MA
34.
 
Onyx Hotel
 
Boston, MA
35.
 
The Liberty Hotel
 
Boston, MA
36.
 
Westin Copley Place
 
Boston, MA
37.
 
Gild Hall
 
New York, NY
38.
 
The Roger
 
New York, NY
39.
 
Park Central Hotel New York (shared lease with WestHouse Hotel New York)
 
New York, NY
40.
 
WestHouse Hotel New York
 
New York, NY
41.
 
The Heathman Hotel
 
Portland, OR
42.
 
Embassy Suites Philadelphia - Center City
 
Philadelphia, PA
43.
 
Westin Philadelphia
 
Philadelphia, PA
44.
 
Lansdowne Resort
 
Lansdowne,VA
45.
 
Alexis Hotel
 
Seattle, WA
46.
 
Hotel Deca (1)
 
Seattle, WA
(1) Property sold on January 19, 2017.

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Table of Contents

Contractual Obligations
The following is a summary of the Company’s obligations and commitments as of December 31, 2016 (in thousands):
 
 
 
Total
Amounts
Committed
 
Amount of Commitment Expiration Per Period
Obligations and Commitments
 
 
Less than
1 year
 
1 to 3 years
 
4 to 5 years
 
Over 5 years
Mortgage loans
 
$
225,000

 
$
0

 
$
225,000

 
$
0

 
$
0

Mortgage loans interest (1)
 
9,548

 
5,612

 
3,936

 
0

 
0

Borrowings under credit facilities (2)
 
0

 
0

 
0

 
0

 
0

Credit facilities interest (2)
 
0

 
0

 
0

 
0

 
0

Ground rents  (3)
 
653,758

 
13,052

 
26,367

 
27,272

 
587,067

Massport Bonds (2)
 
42,500

 
0

 
42,500

 
0

 
0

Massport Bonds interest (2)
 
374

 
322

 
52

 
0

 
0

Term loans (4)
 
855,000

 
0

 
300,000

 
555,000

 
0

Term loans interest (4)
 
76,420

 
20,821

 
39,215

 
16,384

 
0

Purchase commitments (5)
 
 
 
 
 
 
 
 
 
 
Purchase orders and letters of commitment
 
16,231

 
16,231

 
0

 
0

 
0

Total obligations and commitments
 
$
1,878,831

 
$
56,038

 
$
637,070

 
$
598,656

 
$
587,067

(1)  
Interest expense is calculated based on the variable rate as of December 31, 2016 for Westin Copley Place.
(2)  
Interest expense, if applicable, is calculated based on the variable rate as of December 31, 2016 .
(3)  
Amounts calculated based on the annual minimum future lease payments that extend through the term of the lease. Ground rents may be subject to adjustments based on future interest rates and hotel performance.
(4)  
The term loans bear interest at floating rates equal to LIBOR plus applicable margins. The Company entered into separate interest rate swap agreements for the First Term Loan, resulting in a fixed all-in interest rate of 2.38% , at the Company’s current leverage ratio (as defined in the agreements) through August 2, 2017, the interest rate swaps’ maturity date. The Company entered into separate interest rate swap agreements for the Second Term Loan, resulting in a fixed all-in interest rate of 2.95% at the Company’s current leverage ratio (as defined in the agreements). The $377.5 million portion of the Second Term Loan is fixed through its maturity date of January 29, 2021 and the $177.5 million portion of the Second Term Loan is fixed through May 16, 2019, the interest rate swaps’ maturity date. It is assumed that the outstanding debt as of December 31, 2016 will be repaid upon maturity with fixed interest-only payments through the swapped periods and interest calculated based on the variable rate as of December 31, 2016 for the unswapped period of the term loans.
(5)  
As of December 31, 2016 , purchase orders and letters of commitment totaling approximately $16.2 million had been issued for renovations at the properties. The Company has committed to these projects and anticipates making similar arrangements in the future with the existing properties or any future properties that it may acquire.

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Table of Contents

Debt Summary
Debt as of December 31, 2016 and 2015 consisted of the following (in thousands):
 
 
 
 
 
 
Balance Outstanding as of
Debt                                                                                  
 
Interest
Rate
 
Maturity
Date
 
December 31,
2016
 
December 31,
2015
Credit facilities
 
 
 
 
 
 
 
 
Senior unsecured credit facility
 
Floating (a)
 
January 2018 (a)
 
$
0

 
$
21,000

LHL unsecured credit facility
 
Floating (b)
 
January 2018 (b)
 
0

 
0

Total borrowings under credit facilities
 
 
 
 
 
0

 
21,000

Term loans
 
 
 
 
 
 
 
 
First Term Loan
 
Floating/Fixed (c)
 
January 2019 (c)
 
300,000

 
300,000

Second Term Loan
 
Floating/Fixed (c)
 
January 2021 (c)
 
555,000

 
555,000

Debt issuance costs, net
 
 
 
 
 
(2,242
)
 
(2,797
)
Total term loans, net of unamortized debt issuance costs
 
 
 
852,758

 
852,203

Massport Bonds
 
 
 
 
 
 
 
 
Hyatt Regency Boston Harbor (taxable)
 
Floating (d)
 
March 2018
 
5,400

 
5,400

Hyatt Regency Boston Harbor (tax exempt)
 
Floating (d)
 
March 2018
 
37,100

 
37,100

Debt issuance costs, net
 
 
 
 
 
(45
)
 
(184
)
Total bonds payable, net of unamortized debt issuance costs
 
 
 
42,455

 
42,316

Mortgage loans
 
 
 
 
 
 
 
 
Westin Michigan Avenue
 
5.75%
 
- (e)
 
0

 
131,262

Indianapolis Marriott Downtown
 
5.99%
 
- (e)
 
0

 
96,097

The Roger
 
6.31%
 
- (f)
 
0

 
58,935

Westin Copley Place
 
Floating (g)
 
August 2018 (g)
 
225,000

 
225,000

Debt issuance costs, net
 
 
 
 
 
(1,506
)
 
(2,490
)
Total mortgage loans, net of unamortized debt issuance costs
 
 
 
223,494

 
508,804

Total debt
 
 
 
 
 
$
1,118,707

 
$
1,424,323


(a)  
Borrowings bear interest at floating rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. There were no borrowings outstanding at December 31, 2016 . As of December 31, 2015 , the rate, including the applicable margin, for the Company’s outstanding LIBOR borrowing of $21,000 was 2.13% . The Company has the option, pursuant to certain terms and conditions, to extend the maturity date for two six -month extensions. On January 10, 2017, the Company refinanced its senior unsecured credit facility resulting in a new maturity date of January 8, 2021, subject to two six -month extension options, pursuant to certain terms and conditions.
(b)  
Borrowings bear interest at floating rates equal to, at LHL’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. There were no borrowings outstanding at December 31, 2016 and December 31, 2015 . LHL has the option, pursuant to certain terms and conditions, to extend the maturity date for two six -month extensions. On January 10, 2017, LHL refinanced its unsecured credit facility resulting in a new maturity date of January 10, 2021, subject to two six -month extension options, pursuant to certain terms and conditions.
(c)  
Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into interest rate swaps to effectively fix the interest rates for the First Term Loan and the Second Term Loan. At December 31, 2016 and 2015 , the Company had interest rate swaps on the full amounts outstanding. See “Derivative and Hedging Activities” below. At December 31, 2016 and 2015 , the fixed all-in interest rates for the First Term Loan and Second Term Loan were 2.38% and 2.95% , respectively, at the Company’s current leverage ratio (as defined in the swap agreements). On January 10, 2017, the Company refinanced its First Term Loan resulting in a new maturity date of January 10, 2022. On January 10, 2017, the Company amended and restated its Second Term Loan to match the financial and other covenants in its refinanced First Term Loan and senior unsecured credit facility. There were no changes to the maturity date.
(d)  
The Massport Bonds are secured by letters of credit issued by U.S. Bank that were extended to September 2017. The letters of credit have two one -year extension options, one of which was exercised in July 2016, and are secured by the Hyatt Regency Boston Harbor. The letters of credit cannot be extended beyond the Massport Bonds’ maturity date. The bonds bear interest based on weekly floating rates. The interest rates as of December 31, 2016 were 0.75% and 0.76% for the $5,400 and $37,100

38

bonds, respectively. The interest rates as of December 31, 2015 were 0.39% and 0.02% for the $5,400 and $37,100 bonds, respectively. The Company incurs an annual letter of credit fee of 1.35% .
(e)  
The Company repaid the mortgage loans on January 4, 2016 through borrowings on its senior unsecured credit facility.
(f)  
The Company repaid the mortgage loan on February 11, 2016 through borrowings on its senior unsecured credit facility.
(g)  
The mortgage loan matures on August 14, 2018 with three options to extend the maturity date to January 5, 2021, pursuant to certain terms and conditions. The interest-only mortgage loan bears interest at a variable rate ranging from LIBOR plus 1.75% to LIBOR plus 2.00% , depending on Westin Copley Place’s net cash flow (as defined in the loan agreement). The interest rate as of December 31, 2016 was LIBOR plus 1.75% , which equaled 2.46% . The interest rate as of December 31, 2015 was LIBOR plus 1.75% , which equaled 2.09% . The mortgage loan allows for prepayments without penalty, subject to certain terms and conditions.
A summary of the Company’s interest expense and weighted average interest rates for unswapped borrowings for the years ended December 31, 2016 , 2015 and 2014 is as follows (in thousands):
 
For the year ended December 31,
 
2016
 
2015
 
2014
Interest Expense:
 
 
 
 
 
Interest incurred
$
40,814

 
$
52,604

 
$
54,859

Amortization of debt issuance costs
3,359

 
2,631

 
2,169

Capitalized interest
(398
)
 
(902
)
 
(400
)
Interest expense
$
43,775

 
$
54,333

 
$
56,628

 
 
 
 
 
 
Weighted Average Interest Rates for Unswapped Variable Rate Debt:
 
 
 
 
 
Senior unsecured credit facility
2.14
%
 
1.89
%
 
1.86
%
LHL unsecured credit facility
2.13
%
 
1.89
%
 
1.86
%
Massport Bonds
0.44
%
 
0.06
%
 
0.35
%
Mortgage loan (Westin Copley Place)
2.23
%
 
2.19
%
 
N/A

Credit Facilities
On January 10, 2017, the Company refinanced its $750.0 million senior unsecured credit facility with a syndicate of banks. As amended, the credit facility now matures on January 8, 2021, subject to two six -month extensions that the Company may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. The credit facility, with a current commitment of $750.0 million , includes an accordion feature which, subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $1.25 billion . Borrowings under the credit facility bear interest at floating rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. Additionally, the Company is required to pay a variable unused commitment fee of 0.20% or 0.30% of the unused portion of the credit facility, depending on the average daily unused portion of the credit facility.
On January 10, 2017, LHL also refinanced its $25.0 million unsecured revolving credit facility to be used for working capital and general lessee corporate purposes. As amended, the LHL credit facility matures on January 10, 2021, subject to two six -month extensions that LHL may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. Borrowings under the LHL credit facility bear interest at floating rates equal to, at LHL’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. Additionally, LHL is required to pay a variable unused commitment fee of 0.20% or 0.30% of the unused portion of the credit facility, depending on the average daily unused portion of the LHL credit facility.
The Company’s senior unsecured credit facility and LHL’s unsecured credit facility contain certain financial and other covenants, including covenants relating to net worth requirements, debt ratios and fixed charge coverage ratios. In addition, pursuant to the terms of the agreements, if a default or event of default occurs or is continuing, the Company may be precluded from paying certain distributions or other payments to its shareholders.
The Company and certain of its subsidiaries guarantee the obligations under the Company’s senior unsecured credit facility. While the senior unsecured credit facility does not initially include any pledges of equity interests in the Company’s subsidiaries, in connection with the January 10, 2017 refinancing, such pledges and additional subsidiary guarantees would be required in the event that the Company’s leverage ratio later exceeds 6.50 : 1.00 for two consecutive fiscal quarters. In the event that such pledge

39

and guarantee requirement is triggered, the pledges and additional guarantees would ratably benefit the Company’s senior unsecured credit facility, the First Term Loan and the Second Term Loan. If at any time the Company’s leverage ratio falls below 6.50 : 1.00 for two consecutive fiscal quarters, such pledges and additional guarantees may be released.
Term Loans
On May 16, 2012, the Company entered into a $177.5 million unsecured term loan (the “Repaid Term Loan”) with a seven -year term maturing on May 16, 2019. The Repaid Term Loan bore interest at variable rates. On November 5, 2015, the Company repaid the Repaid Term Loan.
On January 10, 2017, the Company refinanced its $300.0 million unsecured term loan (the “First Term Loan”) that matures on January 10, 2022. The First Term Loan includes an accordion feature, which subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $500.0 million . The First Term Loan bears interest at variable rates.
On January 10, 2017, the Company amended and restated its $555.0 million unsecured term loan (the “Second Term Loan”) that matures on January 29, 2021. The Second Term Loan includes an accordion feature, which subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $700.0 million . The Second Term Loan bears interest at variable rates.
The Company’s term loans contain certain financial and other covenants, including covenants relating to net worth requirements, debt ratios and fixed charge coverage ratios. In addition, pursuant to the terms of the agreements, if a default or event of default occurs or is continuing, the Company may be precluded from paying certain distributions or other payments to its shareholders. The Company has entered into interest rate swaps to effectively fix the LIBOR rates for all of its term loans (see “Derivative and Hedging Activities” below).
The Company and certain of its subsidiaries guarantee the obligations under the Company’s term loans. While the term loans do not initially include any pledges of equity interests in the Company’s subsidiaries, in connection with the January 10, 2017 refinancing, such pledges and additional subsidiary guarantees would be required in the event that the Company’s leverage ratio later exceeds 6.50 : 1.00 for two consecutive fiscal quarters. In the event that such pledge and guarantee requirement is triggered, the pledges and additional guarantees would ratably benefit the Company’s senior unsecured credit facility, the First Term Loan and the Second Term Loan. If at any time the Company’s leverage ratio falls below 6.50 : 1.00 for two consecutive fiscal quarters, such pledges and additional guarantees may be released.
Derivative and Hedging Activities
The Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Unrealized gains and losses on the effective portion of hedging instruments are reported in other comprehensive income (loss) (“OCI”). Ineffective portions of changes in the fair value of a cash flow hedge are recognized as interest expense. Amounts reported in accumulated other comprehensive income (loss) (“AOCI”) related to currently outstanding derivatives are recognized as an adjustment to income (loss) as interest payments are made on the Company’s variable rate debt. Effective August 2, 2012, the Company entered into five interest rate swap agreements with an aggregate notional amount of $300.0 million to hedge the variable interest rate on the First Term Loan through August 2, 2017, resulting in a fixed all-in interest rate based on the Company’s current leverage ratio (as defined in the swap agreements), which interest rate was 2.38% at December 31, 2016 . As of December 31, 2016 , the Company has interest rate swaps with an aggregate notional amount of $555.0 million to hedge the variable interest rate on the Second Term Loan and, as a result, the fixed all-in interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) is 2.95% through May 16, 2019. From May 16, 2019 through the term of the Second Term Loan, the Company has interest rate swaps with an aggregate notional amount of $377.5 million to hedge a portion of the variable interest rate debt on the Second Term Loan. The Company has designated its pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. The interest rate swaps were entered into with the intention of eliminating the variability of the terms loans, but can also limit the exposure to any amendments, supplements, replacements or refinancings of the Company’s debt.
The following table presents the effect of derivative instruments on the Company’s consolidated statements of operations and comprehensive income, including the location and amount of unrealized loss on outstanding derivative instruments in cash flow hedging relationships, for the years ended December 31, 2016 , 2015 and 2014 (in thousands):

40

 
 
Amount of Loss Recognized in OCI on Derivative Instruments
 
Location of Loss Reclassified from AOCI into Net Income
 
Amount of Loss Reclassified from AOCI into Net Income
 
 
 
 
 
 (Effective Portion)
 
 (Effective Portion)
 
 (Effective Portion)
 
 
For the year ended
 
 
 
 
For the year ended
 
 
December 31,
 
 
 
 
December 31,
 
 
2016
 
2015
 
2014
 
 
 
 
2016
 
2015
 
2014
Derivatives in cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
(4,160
)
 
$
(5,682
)
 
$
(8,276
)
 
Interest expense
 
$
6,625

 
$
4,835

 
$
4,410

During the years ended December 31, 2016 , 2015 and 2014 , the Company did not have any hedge ineffectiveness or amounts that were excluded from the assessment of hedge effectiveness recorded in earnings.
As of December 31, 2016 , there was $2.4 million in cumulative unrealized gain of which $2.4 million was included in AOCI and an immaterial amount was attributable to noncontrolling interests. As of December 31, 2015 , there was $0.1 million in cumulative unrealized loss of which $0.1 million was included in AOCI and zero was attributable to noncontrolling interests. The Company expects that approximately $4.9 million will be reclassified from AOCI and noncontrolling interests and recognized as a reduction to income in the next 12 months, calculated as estimated interest expense using the interest rates on the derivative instruments as of December 31, 2016 .
Extinguishment of Debt
On January 8, 2014, the Company refinanced its senior unsecured credit facility and First Term Loan and LHL refinanced its unsecured revolving credit facility. The refinancing arrangements for the senior unsecured credit facility and First Term Loan were considered substantial modifications. The Company recognized a loss from extinguishment of debt of $2.5 million , which is included in the consolidated statements of operations and comprehensive income for the year ended December 31, 2014. As discussed above, on November 5, 2015, the Company repaid the Repaid Term Loan prior to maturity and recognized a loss from extinguishment of debt of $0.8 million , which is included in the consolidated statements of operations and comprehensive income for the year ended December 31, 2015. The loss from extinguishment of debt represents the unamortized deferred financing costs incurred when the original agreements were executed.
Mortgage Loans
The Company’s mortgage loans are secured by the respective properties. The mortgages are non-recourse to the Company except for fraud or misapplication of funds.
On January 4, 2016, the Company repaid without fee or penalty the Westin Michigan Avenue mortgage loan in the amount of $131.3 million plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in April 2016.
On January 4, 2016, the Company repaid without fee or penalty the Indianapolis Marriott Downtown mortgage loan in the amount of $96.1 million plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in July 2016.
On February 11, 2016, the Company repaid without fee or penalty The Roger mortgage loan in the amount of $58.8 million plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in August 2016.
The Company’s mortgage loans contain debt service coverage ratio tests related to the mortgaged properties. If the debt service coverage ratio for a specific property fails to exceed a threshold level specified in the mortgage, cash flows from that hotel may automatically be directed to the lender to (i) satisfy required payments, (ii) fund certain reserves required by the mortgage and (iii) fund additional cash reserves for future required payments, including final payment. Cash flows may be directed to the lender (“cash trap”) until such time as the property again complies with the specified debt service coverage ratio or the mortgage is paid off.

41

Financial Covenants
Failure of the Company to comply with financial and other covenants contained in its credit facilities, term loans and non-recourse secured mortgages could result from, among other things, changes in its results of operations, the incurrence of additional debt or changes in general economic conditions.
If the Company violates financial and other covenants contained in any of its credit facilities or term loans described above, the Company may attempt to negotiate waivers of the violations or amend the terms of the applicable credit facilities or term loans with the lenders thereunder; however, the Company can make no assurance that it would be successful in any such negotiations or that, if successful in obtaining waivers or amendments, such amendments or waivers would be on terms attractive to the Company. If a default under the credit facilities or term loans were to occur, the Company would possibly have to refinance the debt through additional debt financing, private or public offerings of debt securities, or additional equity financings. If the Company is unable to refinance its debt on acceptable terms, including at maturity of the credit facilities and term loans, it may be forced to dispose of hotel properties on disadvantageous terms, potentially resulting in losses that reduce cash flow from operating activities. If, at the time of any refinancing, prevailing interest rates or other factors result in higher interest rates upon refinancing, increases in interest expense would lower the Company’s cash flow, and, consequently, cash available for distribution to its shareholders.
A cash trap associated with a mortgage loan may limit the overall liquidity for the Company as cash from the hotel securing such mortgage would not be available for the Company to use. If the Company is unable to meet mortgage payment obligations, including the payment obligation upon maturity of the mortgage borrowing, the mortgage securing the specific property could be foreclosed upon by, or the property could be otherwise transferred to, the mortgagee with a consequent loss of income and asset value to the Company.
As of December 31, 2016 , the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loans, bonds payable or mortgage loan.
Fair Value Measurements
In evaluating fair value, GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entity’s own assumptions about market data (unobservable inputs). The hierarchy ranks the quality and reliability of inputs used to determine fair value, which are then classified and disclosed in one of the three categories. The three levels are as follows:
Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.
Level 2—Observable inputs, other than quoted prices included in level 1, such as interest rates, yield curves, quoted prices in active markets for similar assets and liabilities, and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3—Unobservable inputs that are supported by limited market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques when observable inputs are not available.
The Company estimates the fair value of its financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and subjectivity are involved in developing these estimates and, accordingly, such estimates are not necessarily indicative of amounts that would be realized upon disposition.
Recurring Measurements
For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of their fair value is as follows (in thousands):
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2016
 
December 31, 2015
 
 
 
 
Using Significant Other Observable
 
 
 
 
Inputs (Level 2)
Description
 
Consolidated Balance Sheet Location
 
 
 
 
Derivative interest rate instruments
 
Prepaid expenses and other assets
 
$
3,295

 
$
1,605

Derivative interest rate instruments
 
Accounts payable and accrued expenses
 
$
927

 
$
1,702


42

The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows under each arrangement. This analysis reflects the contractual terms of the derivative instrument, including the period to maturity, and utilizes observable market-based inputs, including interest rate curves and implied volatilities, which are classified within level 2 of the fair value hierarchy. The Company also incorporates credit value adjustments to appropriately reflect each parties’ nonperformance risk in the fair value measurement, which utilizes level 3 inputs such as estimates of current credit spreads. However, the Company has assessed that the credit valuation adjustments are not significant to the overall valuation of the derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified within level 2 of the fair value hierarchy.
Financial Instruments Not Measured at Fair Value
The following table represents the fair value, derived using level 2 inputs, of financial instruments presented at carrying value in the Company’s consolidated financial statements as of December 31, 2016 and 2015 (in thousands):
 
December 31, 2016
 
December 31, 2015
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Note receivable
$
0

 
$
0

 
$
80,000

 
$
80,000

Borrowings under credit facilities
$
0

 
$
0

 
$
21,000

 
$
21,061

Term loans
$
855,000

 
$
857,224

 
$
855,000

 
$
856,038

Bonds payable
$
42,500

 
$
42,500

 
$
42,500

 
$
42,500

Mortgage loans
$
225,000

 
$
225,224

 
$
511,294

 
$
511,786

The Company estimated the fair value of its borrowings under credit facilities, term loans, bonds payable and mortgage loans using interest rates ranging from 1.5% to 1.8% as of December 31, 2016 and from 1.5% to 4.4% as of December 31, 2015 with a weighted average effective interest rate of 1.5% and 2.1% as of December 31, 2016 and 2015 , respectively. The assumptions reflect the terms currently available on similar borrowings to borrowers with credit profiles similar to the Company’s.
At December 31, 2016 and 2015 , the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and distributions payable were representative of their fair values due to the short-term nature of these instruments and the recent acquisition of these items.
Equity Redemptions, Repurchases and Issuances
On July 3, 2014, the Company redeemed the remaining 2,348,888 Series G Preferred Shares for $58.7 million ($25.00 per share), plus accrued and unpaid dividends through the redemption date, July 3, 2014, of $1.1 million. The redemption value of the Series G Preferred Shares exceeded their carrying value by $1.0 million, which is included in the determination of net income attributable to common shareholders for the year ended December 31, 2014. The $1.0 million represents the offering costs related to the redeemed Series G Preferred Shares.
The Company’s Board of Trustees previously authorized a share repurchase program (the “Repurchase Program”) to acquire up to $100.0 million of the Company’s common shares of beneficial interest, with repurchased shares recorded at cost in treasury. As of December 31, 2016, the Company had availability under the Repurchase Program to acquire up to $69.8 million of common shares of beneficial interest. In February 2017, the Company’s Board of Trustees authorized an expansion of the Repurchase Program to acquire up to an additional $500.0 million of the Company’s common shares of beneficial interest. Including the previous authorization, the Company now has availability under the Repurchase Program to acquire up to $569.8 million of common shares of beneficial interest as of February 22, 2017. The timing, manner, price and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The Repurchase Program may be suspended, modified or terminated at any time for any reason without prior notice. The Repurchase Program does not obligate the Company to acquire any specific number of shares, and all open market repurchases will be made in accordance with applicable rules and regulations setting forth certain restrictions on the method, timing, price and volume of open market share repurchases.
On May 25, 2016, the Company issued 6,000,000 Series J Preferred Shares, $0.01 par value per share (liquidation preference $25.00 per share), at a public offering price of $25.00 per share and received net proceeds, after deducting underwriting discounts and other offering costs, of $145.1 million . The net proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility and for general corporate purposes.

43

Sources and Uses of Cash
As of December 31, 2016 , the Company had $134.7 million of cash and cash equivalents and $15.0 million of restricted cash reserves, $13.1 million of which was available for future capital expenditures. Additionally, the Company had $747.5 million available under the Company’s senior unsecured credit facility, with $2.5 million reserved for outstanding letters of credit, and $25.0 million available under LHL’s unsecured credit facility.
Net cash provided by operating activities was $359.3 million for the year ended December 31, 2016 primarily due to the operations of the hotels, which were partially offset by payments for real estate taxes, personal property taxes, insurance and ground rent.
Net cash provided by investing activities was $154.2 million for the year ended December 31, 2016 primarily due to proceeds from the sale of the Mezzanine Loan and the sale of Indianapolis Marriott Downtown, partially offset by outflows for improvements and additions at the hotels.
Net cash used in financing activities was $384.5 million for the year ended December 31, 2016 primarily due to net repayments under the credit facilities, mortgage loan repayments, payment of distributions to the common shareholders and unitholders and payment of distributions to preferred shareholders, partially offset by net proceeds from the preferred share offering.
The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Company believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements, distributions on the preferred shares and the minimum distribution required to maintain the Company’s REIT qualification under the Code. The Company anticipates that these needs will be met with available cash on hand, cash flows provided by operating activities, borrowings under the Company’s senior unsecured credit facility or LHL’s unsecured credit facility, additional unsecured financing, secured financing on any of the Company’s 44 unencumbered properties (subject to certain terms and conditions of the credit agreement), potential property sales (subject to certain conditions of the management agreements at four of the Company’s properties), debt or equity issuances available under the Company’s shelf registration statement and issuances of common units in the Operating Partnership. The Company also considers capital improvements and property acquisitions as short-term needs that will be funded either with cash flows provided by operating activities, utilizing availability under the Company’s senior unsecured credit facility or LHL’s unsecured credit facility, additional unsecured financing, secured financing on any of the Company’s 44 unencumbered properties (subject to certain terms and conditions of the credit agreement), potential property sales (subject to certain conditions of the management agreements at four of the Company’s properties) or the issuance of additional debt or equity securities.
The Company expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements utilizing availability under the Company’s senior unsecured credit facility or LHL’s unsecured credit facility, additional unsecured financing, secured financing on any of the Company’s 44 unencumbered properties (subject to certain terms and conditions of the credit agreement), potential property sales (subject to certain conditions of the management agreements at four of the Company’s properties), estimated cash flows from operations, debt or equity issuances available under the Company’s shelf registration statement and issuances of common units in the Operating Partnership. The Company expects to acquire or develop additional hotel properties only as suitable opportunities arise, and the Company will not undertake acquisition or development of properties unless stringent acquisition or development criteria have been achieved.
Reserve Funds
The Company is obligated to maintain reserve funds for capital expenditures at the hotels (including the periodic replacement or refurbishment of furniture, fixtures and equipment) as determined pursuant to the operating agreements. Please refer to “Off-Balance Sheet Arrangements” for a discussion of the Company’s reserve funds.
Inflation
The Company relies entirely on the performance of the hotels and their ability to increase revenues to keep pace with inflation. The hotel operators can change room rates quickly, but competitive pressures may limit the hotel operators’ abilities to raise rates faster than inflation or even at the same rate.
The Company’s expenses (primarily real estate taxes, property and casualty insurance, administrative expenses and hotel operating expenses) are subject to inflation. These expenses are expected to grow at the general rate of inflation, except for energy costs, liability insurance, property taxes (due to increased rates and periodic reassessments), employee benefits and some wages, which are expected to increase at rates higher than inflation.

44

Derivatives and Hedging Activities
In the normal course of business, the Company is exposed to the effects of interest rate changes. The Company limits the risks associated with interest rate changes by following established risk management policies and procedures which may include the use of derivative instruments. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract and are recorded on the balance sheet at fair value, with offsetting changes recorded to other comprehensive income (loss). Ineffective portions of changes in the fair value of a cash flow hedge are recognized as interest expense. The Company incorporates credit valuation adjustments to reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging.
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Sensitivity
The table below provides information about financial instruments that are sensitive to changes in interest rates, including a mortgage obligation, bonds and lines of credit. For debt obligations, scheduled maturities and related weighted average interest rates by expected maturity dates are as follows (in thousands):  
 
2017
 
2018
 
2019
 
2020
 
2021
 
Total
Fixed rate debt
$
0

 
$
0

 
$
0

 
$
0

 
$
377,500

 
$
377,500

Weighted average interest
0.00
%
 
0.00
%
 
0.00
%
 
0.00
%
 
2.95
%
 
2.95
%
Variable rate debt (1)
$
0

 
$
267,500

 
$
300,000

 
$
0

 
$
177,500

 
$
745,000

Weighted average interest
0.00
%
 
2.19
%
 
2.23
%
 
0.00
%
 
2.16
%
 
2.20
%
Total
$
0

 
$
267,500

 
$
300,000

 
$
0

 
$
555,000

 
$
1,122,500

(1) For the First Term Loan maturing in January 2019 and for $177.5 million of the Second Term Loan maturing in January 2021, it is assumed that the outstanding debt as of December 31, 2016 will be repaid upon maturity which will be during the unhedged period of the loan and, therefore, subject to a variable interest rate.
The table above presents the principal amount of debt maturing each year through December 31, 2021 and weighted average interest rates for the debt maturing in each specified period. This table reflects indebtedness outstanding as of December 31, 2016 and does not reflect new indebtedness, or revisions to terms of existing indebtedness, incurred after that date. The Company’s ultimate exposure to interest rate fluctuations depends on the amount of indebtedness that bears interest at variable rates, the time at which the interest rate is adjusted, the amount of adjustment, the ability to prepay or refinance variable rate indebtedness and hedging strategies used to reduce the impact of any increases in rates. As of December 31, 2016 , the estimated fair value of the Company’s fixed rate debt was $857.2 million .
The Company is exposed to market risk from changes in interest rates. The Company seeks to limit the impact of interest rate changes on earnings and cash flows and to lower the overall borrowing costs by closely monitoring the Company’s variable rate debt and converting such debt to fixed rates when the Company deems such conversion advantageous. From time to time, the Company may enter into interest rate swap agreements or other interest rate hedging contracts. While these agreements are intended to lessen the impact of rising interest rates, they also expose the Company to the risks that the other parties to the agreements will not perform, the Company could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under GAAP guidance. As of December 31, 2016 , $267.5 million of the Company’s aggregate indebtedness ( 23.8% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the First Term Loan and Second Term Loan since the Company hedged its variable interest rate to fixed interest rates.
If market rates of interest on the Company’s variable rate long-term debt fluctuate by 0.25%, interest expense would increase or decrease, depending on rate movement, future earnings and cash flows by $0.7 million annually. This assumes that the amount outstanding under the Company’s variable rate debt remains at $267.5 million , the balance as of December 31, 2016 .
Item 8.
Consolidated Financial Statements and Supplementary Data
See Index to Financial Statements on page F-1.

45

Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures —The Company has established disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company’s financial reports and to the members of senior management and the Board of Trustees.
Based on management’s evaluation as of December 31, 2016 , the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms.
Management’s Report on Internal Control Over Financial Reporting —The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework (2013) , our management concluded that our internal control over financial reporting was effective as of December 31, 2016 .
Independent Registered Public Accounting Firm’s Report on Internal Control Over Financial Reporting —KPMG LLP, an independent registered public accounting firm, has audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K and, as part of its audit, has issued its report, included herein on page F-3, on the effectiveness of our internal control over financial reporting.
Changes in Internal Controls —There was no change to the Company’s internal control over financial reporting during the fourth quarter ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B.
Other Information
None.
PART III

Item 10.
Trustees, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the material in the Proxy Statement.
Item 11.
Executive Compensation
The information required by this item is incorporated by reference to the material in the Proxy Statement.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The information required by this item is incorporated by reference to the material in the Proxy Statement.
Item 13.
Certain Relationships and Related Transactions, and Trustee Independence
The information required by this item is incorporated by reference to the material in the Proxy Statement.
Item 14.
Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the material in the Proxy Statement.

46
Table of Contents

PART IV
Item 15.
Exhibits and Financial Statement Schedules

1.
Financial Statements
Included herein at pages F-1 through F-42.
2.
Financial Statement Schedules
The following financial statement schedule is included herein at pages F-43 through F-44.
Schedule III – Real Estate and Accumulated Depreciation
All other schedules for which provision is made in Regulation S-X are either not required to be included herein under the related instructions or are inapplicable or the related information is included in the footnotes to the applicable financial statement and, therefore, have been omitted.


47
Table of Contents

3.
Exhibits
The following exhibits are filed as part of this Annual Report on Form 10-K:
Exhibit
Number
 
Description of Exhibit
 
 
 
3.1
 
LaSalle Hotel Properties Articles of Amendment and Restatement of Declaration of Trust (including all articles of amendment and articles supplementary) (1)
 
 
 
3.2
 
LaSalle Hotel Properties Third Amended and Restated Bylaws (2)
 
 
 
4.1
 
Form of Common Share of Beneficial Interest (3)
 
 
 
10.1
 
Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of April 29, 1998 (4)
 
 
 
10.2
 
First Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of March 6, 2002 (5)
 
 
 
10.3
 
Second Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of September 30, 2003 (6)
 
 
 
10.4
 
Form of Third Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of August 31, 2005 (7)
 
 
 
10.5
 
Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of August 22, 2005 (8)
 
 
 
10.6
 
Fifth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of February 8, 2006 (9)
 
 
 
10.7
 
Form of Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of November 17, 2006 (10)
 
 
 
10.8
 
Seventh Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of November 17, 2006 (11)
 
 
 
10.9
 
Eighth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of April 15, 2009 (12)
 
 
 
10.10
 
Ninth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of January 24, 2011 (13)
 
 
 
10.11
 
Tenth Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of March 4, 2013 (14)
 
 
 
10.12
 
Eleventh Amendment to the Amended and Restated Agreement of Limited Partnership of LaSalle Hotel Operating Partnership, L.P., dated as of May 25, 2016 (23)
 
 
 
10.13
 
Form of Management Agreement (3)
 
 
 
10.14
 
Form of Lease with Affiliated Lessees (3)
 
 
 
10.15
 
Form of First Amendment to Lease with Affiliated Lessee (15)
 
 
 
10.16
 
Form of Second Amendment to Lease with Affiliate Lessee (15)
 
 
 
10.17
 
LaSalle Hotel Properties 1998 Share Option and Incentive Plan, as amended through April 21, 2005 (16) *
 
 
 
10.18
 
LaSalle Hotel Properties 2009 Equity Incentive Plan (17) *
 
 
 
10.19
 
LaSalle Hotel Properties 2014 Equity Incentive Plan (18) *
 
 
 
 
10.20
 
Amendment to the LaSalle Hotel Properties 2014 Equity Incentive Plan (19) *
 
 
 
10.21
 
LaSalle Hotel Properties Trustee Fee Deferral Program (20) *
 
 
 
10.22
 
Form of Restricted Share Agreement (21) *
 
 
 
10.23
 
Form of Performance-Based Share Award Agreement (21) *
 
 
 
10.24
 
Amended and Restated Change in Control Severance Agreement between Michael D. Barnello and LaSalle Hotel Properties effective October 19, 2009 (22) *
 
 
 

48
Table of Contents

Exhibit
Number
 
Description of Exhibit
10.25
 
Change in Control Severance Agreement between Alfred L. Young, Jr. and LaSalle Hotel Properties effective November 3, 2009 (22) *
 
 
 
10.26
 
Change in Control Severance Agreement between Kenneth G. Fuller and LaSalle Hotel Properties effective April 25, 2016 (1) *
 
 
 
10.27
 
Offer Letter to Michael D. Barnello, dated May 31, 2008 (24) *
 
 
 
10.28
 
Offer Letter to Alfred L. Young, Jr., dated September 29, 2009 (25) *
 
 
 
10.29
 
Offer Letter to Kenneth G. Fuller, dated March 23, 2016 (26) *
 
 
 
10.30
 
Form of LaSalle Hotel Properties Indemnification Agreement (27) *
 
 
 
10.31
 
Second Amended and Restated Senior Unsecured Credit Agreement, dated January 10, 2017, among LaSalle Hotel Operating Partnership, L.P., LaSalle Hotel Properties, and Citibank, N.A., as Administrative Agent, and the other lenders named therein
 
 
 
10.32
 
Senior Unsecured Term Loan Agreement, dated as of November 5, 2015, among LaSalle Hotel Operating Partnership, L.P., LaSalle Hotel Properties, and Citibank, N.A., as Administrative Agent, and the other lenders named therein (28)
 
 
 
10.33
 
Amended and Restated Senior Unsecured Term Loan Agreement, dated as of January 10, 2017, among LaSalle Hotel Operating Partnership, L.P., LaSalle Hotel Properties, and Citibank, N.A., as Administrative Agent, and the other lenders named therein
 
 
 
12.1
 
Computation of the Registrant’s Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Share Dividends
 
 
 
21.1
 
List of Subsidiaries
 
 
 
23.1
 
Consent of KPMG LLP
 
 
 
24.1
 
Power of Attorney (included in Part IV of this Annual Report on Form 10-K)
 
 
 
31.1
 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
31.2
 
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
32.1
 
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
 
 
 
101
 
The following financial statements from LaSalle Hotel Properties’ Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 22, 2017, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements

*
Represents management contract or compensatory plan or agreement.
(1)
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on July 20, 2016 and incorporated herein by reference.
(2)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 1, 2010 and incorporated herein by reference.
(3)
Previously filed as an exhibit to Amendment No. 1 to the Registrant’s Registration Statement on Form S-11 (No. 333-45647) filed with the SEC on April 2, 1998 and incorporated herein by reference.
(4)
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (No. 001-14045) filed with the SEC on August 14, 1998 and incorporated herein by reference.
(5)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on March 12, 2002 and incorporated herein by reference.
(6)
Previously filed as an exhibit to the Registrant’s Annual report on Form 10-K filed with the SEC on February 23, 2006 and incorporated herein by reference.
(7)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on August 16, 2005 and incorporated herein by reference.
(8)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on August 24, 2005 and incorporated herein by reference.

49
Table of Contents

(9)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on February 9, 2006 and incorporated herein by reference.
(10)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on September 28, 2006 and incorporated herein by reference.
(11)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on November 17, 2006 and incorporated herein by reference.
(12)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on April 17, 2009 and incorporated herein by reference.
(13)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on January 24, 2011 and incorporated herein by reference.
(14)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on March 4, 2013 and incorporated herein by reference.
(15)
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (No. 001-14045) filed with the SEC on May 12, 1999 and incorporated herein by reference.
(16)
Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (No. 333-125058) filed with the SEC on May 19, 2005 and incorporated herein by reference.
(17)
Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (No. 333-158873) filed with the SEC on April 28, 2009 and incorporated herein by reference.
(18)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 9, 2014 and incorporated herein by reference.
(19)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on January 28, 2015 and incorporated herein by reference.
(20)
Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (No. 333-196411) filed with the SEC on May 30, 2014 and incorporated herein by reference.
(21)
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on April 23, 2014 and incorporated herein by reference.
(22)
Previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K filed with the SEC on February 25, 2010 and incorporated herein by reference.
(23)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on May 25, 2016 and incorporated herein by reference.
(24)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on June 2, 2008 and incorporated herein by reference.
(25)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on October 6, 2009 and incorporated herein by reference.
(26)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on April 1, 2016 and incorporated herein by reference.
(27)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2008 and incorporated herein by reference.
(28)
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on November 9, 2015 and incorporated herein by reference.

Item 16.
Form 10-K Summary
None.

50
Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
LASALLE HOTEL PROPERTIES
Date:
February 22, 2017
 
BY:
 
/ S /    K ENNETH  G. F ULLER
 
 
 
 
 
Kenneth G. Fuller
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and trustees of LaSalle Hotel Properties, hereby severally constitute Michael D. Barnello, Kenneth G. Fuller and Alfred L. Young, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Form 10-K filed herewith and any and all amendments to said Form 10-K, and generally to do all such things in our names and in our capacities as officers and trustees to enable LaSalle Hotel Properties to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Form 10-K and any and all amendments thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Date
 
Signature
 
 
February 22, 2017
 
/s/    M ICHAEL  D. B ARNELLO
 
Trustee, President and Chief Executive Officer (Principal Executive Officer)
 
 
Michael D. Barnello
 
 
 
 
 
 
February 22, 2017
 
/s/    D ENISE  M. C OLL
 
Trustee
 
 
Denise M. Coll
 
 
 
 
 
 
 
February 22, 2017
 
/s/     J EFFREY  T. F OLAND
 
Trustee
 
 
Jeffrey T. Foland
 
 
 
 
 
 
 
February 22, 2017
 
/s/    D ARRYL  H ARTLEY -L EONARD
 
Trustee
 
 
Darryl Hartley-Leonard
 
 
 
 
 
 
 
February 22, 2017
 
/s/    J EFFREY  L. M ARTIN
 
Trustee
 
 
Jeffrey L. Martin
 
 
 
 
 
 
 
February 22, 2017
 
/s/    S TUART  L. S COTT
 
Chairman of the Board of Trustees
 
 
Stuart L. Scott
 
 
 
 
 
 
 
February 22, 2017
 
/s/    D ONALD  A. W ASHBURN
 
Trustee
 
 
Donald A. Washburn
 
 
 
 
 
 
 
February 22, 2017
 
/s/    K ENNETH  G. F ULLER
 
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
 
 
Kenneth G. Fuller
 


51
Table of Contents

LASALLE HOTEL PROPERTIES
Index to Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 

F-1
Table of Contents

Report of Independent Registered Public Accounting Firm
The Shareholders and Board of Trustees
LaSalle Hotel Properties:
We have audited the accompanying consolidated balance sheets of LaSalle Hotel Properties and subsidiaries (the Company) as of December 31, 2016 and 2015 , and the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2016 . In connection with our audits of the consolidated financial statements, we also have audited financial statement schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of LaSalle Hotel Properties and subsidiaries as of December 31, 2016 and 2015 , and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2016 , in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), LaSalle Hotel Properties’ internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 22, 2017 , expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
/s/ KPMG LLP
Chicago, Illinois
February 22, 2017


F-2
Table of Contents

Report of Independent Registered Public Accounting Firm
The Shareholders and Board of Trustees
LaSalle Hotel Properties:
We have audited LaSalle Hotel Properties’ (the Company) internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). LaSalle Hotel Properties’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, LaSalle Hotel Properties maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016 , based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of LaSalle Hotel Properties and subsidiaries as of December 31, 2016 and 2015 , and the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2016 , and our report dated February 22, 2017 , expressed an unqualified opinion on those consolidated financial statements.
/s/ KPMG LLP
Chicago, Illinois
February 22, 2017

F-3
Table of Contents

LASALLE HOTEL PROPERTIES
Consolidated Balance Sheets
(in thousands, except share data)
 
December 31,
2016
 
December 31,
2015
 
 
 
 
Assets:
 
 
 
Investment in hotel properties, net (Note 3)
$
3,672,209

 
$
3,817,676

Note receivable (Note 3)
0

 
80,000

Property under development (Note 3)
21,078

 
54,066

Assets held for sale (Note 13)
23,283

 
0

Cash and cash equivalents
134,652

 
5,700

Restricted cash reserves (Note 5)
15,035

 
26,443

Hotel receivables (net of allowance for doubtful accounts of $279 and $355, respectively)
35,403

 
39,038

Debt issuance costs for borrowings under credit facilities, net
1,699

 
3,347

Deferred tax assets (Note 9)
1,902

 
3,566

Prepaid expenses and other assets
38,818

 
39,510

Total assets
$
3,944,079

 
$
4,069,346

Liabilities:
 
 
 
Borrowings under credit facilities (Note 4)
$
0

 
$
21,000

Term loans, net of unamortized debt issuance costs (Note 4)
852,758

 
852,203

Bonds payable, net of unamortized debt issuance costs (Note 4)
42,455

 
42,316

Mortgage loans, net of unamortized debt issuance costs (Note 4)
223,494

 
508,804

Accounts payable and accrued expenses
171,965

 
181,854

Liabilities of assets held for sale (Note 13)
247

 
0

Advance deposits
33,232

 
28,471

Accrued interest
2,209

 
3,276

Distributions payable
56,360

 
53,939

Total liabilities
1,382,720

 
1,691,863

Commitments and contingencies (Note 5)

 

Equity:
 
 
 
Shareholders’ Equity:
 
 
 
Preferred shares of beneficial interest, $0.01 par value (liquidation preference of $328,750 and $178,750, respectively), 40,000,000 shares authorized; 13,150,000 and 7,150,000 shares issued and outstanding, respectively (Note 6)
132

 
72

Common shares of beneficial interest, $0.01 par value, 200,000,000 shares authorized; 113,115,442 shares issued and 113,088,074 shares outstanding, and 113,115,442 shares issued and 112,959,547 shares outstanding, respectively (Note 6)
1,131

 
1,131

Treasury shares, at cost (Note 6)
(739
)
 
(4,798
)
Additional paid-in capital, net of offering costs of $85,223 and $80,205, respectively
2,830,740

 
2,684,010

Accumulated other comprehensive income (loss) (Note 4)
2,365

 
(97
)
Distributions in excess of retained earnings
(275,564
)
 
(306,051
)
Total shareholders’ equity
2,558,065

 
2,374,267

Noncontrolling Interests:
 
 
 
Noncontrolling interests in consolidated entities
17

 
18

Noncontrolling interests of common units in Operating Partnership (Note 6)
3,277

 
3,198

Total noncontrolling interests
3,294

 
3,216

Total equity
2,561,359

 
2,377,483

Total liabilities and equity
$
3,944,079

 
$
4,069,346

The accompanying notes are an integral part of these consolidated financial statements.

F-4
Table of Contents

LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations and Comprehensive Income
(in thousands, except share data)
 
For the year ended
 
December 31,
 
2016
 
2015
 
2014
Revenues:
 
 
 
 
 
Hotel operating revenues:
 
 
 
 
 
Room
$
867,882

 
$
849,523

 
$
773,801

Food and beverage
259,658

 
274,286

 
253,656

Other operating department
93,072

 
84,782

 
74,000

Total hotel operating revenues
1,220,612

 
1,208,591

 
1,101,457

Other income
7,007

 
7,993

 
8,321

Total revenues
1,227,619

 
1,216,584

 
1,109,778

Expenses:
 
 
 
 
 
Hotel operating expenses:
 
 
 
 
 
Room
226,349

 
215,944

 
196,952

Food and beverage
179,637

 
190,069

 
183,530

Other direct
16,978

 
17,514

 
23,800

Other indirect (Note 8)
305,265

 
301,004

 
264,508

Total hotel operating expenses
728,229

 
724,531

 
668,790

Depreciation and amortization
192,322

 
180,855

 
155,035

Real estate taxes, personal property taxes and insurance
63,406

 
65,438

 
57,805

Ground rent (Note 5)
16,187

 
16,076

 
14,667

General and administrative
26,529

 
25,197

 
23,832

Acquisition transaction costs (Note 3)
0

 
499

 
2,379

Other expenses
6,283

 
17,225

 
7,369

Total operating expenses
1,032,956

 
1,029,821

 
929,877

Operating income
194,663

 
186,763

 
179,901

Interest income
3,553

 
2,938

 
1,812

Interest expense
(43,775
)
 
(54,333
)
 
(56,628
)
Loss from extinguishment of debt (Note 4)
0

 
(831
)
 
(2,487
)
Income before income tax (expense) benefit
154,441

 
134,537

 
122,598

Income tax (expense) benefit (Note 9)
(5,784
)
 
1,292

 
(2,306
)
Income before net gain on sale of properties and sale of note receivable
148,657

 
135,829

 
120,292

Net gain on sale of properties and sale of note receivable (Note 3)
104,478

 
0

 
93,205

Net income
253,135

 
135,829

 
213,497

Net income attributable to noncontrolling interests:
 
 
 
 
 
Noncontrolling interests in consolidated entities
(17
)
 
(16
)
 
(16
)
Noncontrolling interests of common units in Operating Partnership (Note 6)
(337
)
 
(261
)
 
(636
)
Net income attributable to noncontrolling interests
(354
)
 
(277
)
 
(652
)
Net income attributable to the Company
252,781

 
135,552

 
212,845

Distributions to preferred shareholders
(18,206
)
 
(12,169
)
 
(14,333
)
Issuance costs of redeemed preferred shares (Note 6)
0

 
0

 
(951
)
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561


F-5
Table of Contents

LASALLE HOTEL PROPERTIES
Consolidated Statements of Operations and Comprehensive Income - Continued
(in thousands, except share data)
 
For the year ended
 
December 31,
 
2016
 
2015
 
2014
Earnings per Common Share - Basic (Note 11):
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
2.07

 
$
1.09

 
$
1.89

Earnings per Common Share - Diluted (Note 11):
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
2.07

 
$
1.09

 
$
1.88

Weighted average number of common shares outstanding:
 
 
 
 
 
Basic
112,791,839

 
112,685,235

 
104,188,785

Diluted
113,164,599

 
113,096,420

 
104,545,895

 
 
 
 
 
 
Comprehensive Income:
 
 
 
 
 
Net income
$
253,135

 
$
135,829

 
$
213,497

Other comprehensive income:
 
 
 
 
 
Unrealized loss on interest rate derivative instruments (Note 4)
(4,160
)
 
(5,682
)
 
(8,276
)
Reclassification adjustment for amounts recognized in net income (Note 4)
6,625

 
4,835

 
4,410

 
255,600

 
134,982

 
209,631

Comprehensive income attributable to noncontrolling interests:
 
 
 
 
 
Noncontrolling interests in consolidated entities
(17
)
 
(16
)
 
(16
)
Noncontrolling interests of common units in Operating Partnership (Note 6)
(340
)
 
(259
)
 
(625
)
Comprehensive income attributable to noncontrolling interests
(357
)
 
(275
)
 
(641
)
Comprehensive income attributable to the Company
$
255,243

 
$
134,707

 
$
208,990

The accompanying notes are an integral part of these consolidated financial statements.



F-6
Table of Contents

LASALLE HOTEL PROPERTIES
Consolidated Statements of Equity
(in thousands, except per share/unit data)
 
Preferred
Shares of Beneficial Interest
 
Common
Shares of
Beneficial
Interest
 
Treasury
Shares
 
Additional
Paid-In
Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Distributions
in Excess of
Retained
Earnings
 
Total
Shareholders’
Equity
 
Noncontrolling
Interests in
Consolidated
Entities
 
Noncontrolling Interests of Common Units in Operating Partnership
 
Total Noncontrolling Interests
 
Total Equity
Balance, December 31, 2013
$
95

 
$
1,039

 
$
(14
)
 
$
2,379,246

 
$
4,603

 
$
(281,578
)
 
$
2,103,391

 
$
18

 
$
6,054

 
$
6,072

 
$
2,109,463

Issuance of shares, net of offering costs
0

 
88

 
0

 
348,987

 
0

 
0

 
349,075

 
0

 
0

 
0

 
349,075

Redemption of preferred shares
(23
)
 
0

 
0

 
(57,757
)
 
0

 
(951
)
 
(58,731
)
 
0

 
0

 
0

 
(58,731
)
Repurchase of common shares into treasury
0

 
0

 
(2,936
)
 
0

 
0

 
0

 
(2,936
)
 
0

 
0

 
0

 
(2,936
)
Deferred compensation, net
0

 
0

 
2,812

 
3,809

 
0

 
0

 
6,621

 
0

 
0

 
0

 
6,621

Adjustments to noncontrolling interests
0

 
0

 
0

 
(397
)
 
0

 
0

 
(397
)
 
0

 
397

 
397

 
0

Distributions on earned shares from share awards with market conditions
0

 
0

 
0

 
0

 
0

 
(314
)
 
(314
)
 
0

 
0

 
0

 
(314
)
Distributions on common shares/units ($1.41 per share/unit)
0

 
0

 
0

 
0

 
0

 
(149,657
)
 
(149,657
)
 
0

 
(416
)
 
(416
)
 
(150,073
)
Distributions on preferred shares
0

 
0

 
0

 
0

 
0

 
(14,333
)
 
(14,333
)
 
(17
)
 
0

 
(17
)
 
(14,350
)
Net income
0

 
0

 
0

 
0

 
0

 
212,845

 
212,845

 
16

 
636

 
652

 
213,497

Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss on interest rate derivative instruments
0

 
0

 
0

 
0

 
(8,252
)
 
0

 
(8,252
)
 
0

 
(24
)
 
(24
)
 
(8,276
)
Reclassification adjustment for amounts recognized in net income
0

 
0

 
0

 
0

 
4,397

 
0

 
4,397

 
0

 
13

 
13

 
4,410

Balance, December 31, 2014
$
72

 
$
1,127

 
$
(138
)
 
$
2,673,888

 
$
748

 
$
(233,988
)
 
$
2,441,709

 
$
17

 
$
6,660

 
$
6,677

 
$
2,448,386

Issuance of shares, net of offering costs
0

 
2

 
955

 
838

 
0

 
0

 
1,795

 
0

 
0

 
0

 
1,795

Repurchase of common shares into treasury
0

 
0

 
(7,424
)
 
0

 
0

 
0

 
(7,424
)
 
0

 
0

 
0

 
(7,424
)
Unit conversion
0

 
2

 
0

 
3,398

 
0

 
0

 
3,400

 
0

 
(3,400
)
 
(3,400
)
 
0

Deferred compensation, net
0

 
0

 
1,809

 
5,872

 
0

 
0

 
7,681

 
0

 
0

 
0

 
7,681

Adjustments to noncontrolling interests
0

 
0

 
0

 
14

 
0

 
0

 
14

 
0

 
(14
)
 
(14
)
 
0

Distributions on earned shares from share awards with market conditions
0

 
0

 
0

 
0

 
0

 
(334
)
 
(334
)
 
0

 
0

 
0

 
(334
)
Distributions on common shares/units ($1.73 per share/unit)
0

 
0

 
0

 
0

 
0

 
(195,112
)
 
(195,112
)
 
0

 
(307
)
 
(307
)
 
(195,419
)
Distributions on preferred shares
0

 
0

 
0

 
0

 
0

 
(12,169
)
 
(12,169
)
 
(15
)
 
0

 
(15
)
 
(12,184
)
Net income
0

 
0

 
0

 
0

 
0

 
135,552

 
135,552

 
16

 
261

 
277

 
135,829

Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss on interest rate derivative instruments
0

 
0

 
0

 
0

 
(5,668
)
 
0

 
(5,668
)
 
0

 
(14
)
 
(14
)
 
(5,682
)
Reclassification adjustment for amounts recognized in net income
0

 
0

 
0

 
0

 
4,823

 
0

 
4,823

 
0

 
12

 
12

 
4,835

Balance, December 31, 2015
$
72

 
$
1,131

 
$
(4,798
)
 
$
2,684,010

 
$
(97
)
 
$
(306,051
)
 
$
2,374,267

 
$
18

 
$
3,198

 
$
3,216

 
$
2,377,483



F-7
Table of Contents





LASALLE HOTEL PROPERTIES
Consolidated Statements of Equity - Continued
(in thousands, except per share/unit data)
 
Preferred
Shares of Beneficial Interest
 
Common
Shares of
Beneficial
Interest
 
Treasury
Shares
 
Additional
Paid-In
Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Distributions
in Excess of
Retained
Earnings
 
Total
Shareholders’
Equity
 
Noncontrolling
Interests in
Consolidated
Entities
 
Noncontrolling Interests of Common Units in Operating Partnership
 
Total Noncontrolling Interests
 
Total Equity
Issuance of shares, net of offering costs
60

 
0

 
3,196

 
142,206

 
0

 
0

 
145,462

 
0

 
0

 
0

 
145,462

Repurchase of common shares into treasury
0

 
0

 
(2,145
)
 
0

 
0

 
0

 
(2,145
)
 
0

 
0

 
0

 
(2,145
)
Deferred compensation, net
0

 
0

 
3,008

 
4,524

 
0

 
0

 
7,532

 
0

 
0

 
0

 
7,532

Distributions on earned shares from share awards with market conditions
0

 
0

 
0

 
0

 
0

 
(365
)
 
(365
)
 
0

 
0

 
0

 
(365
)
Distributions on common shares/units ($1.80 per share/unit)
0

 
0

 
0

 
0

 
0

 
(203,723
)
 
(203,723
)
 
0

 
(261
)
 
(261
)
 
(203,984
)
Distributions on preferred shares
0

 
0

 
0

 
0

 
0

 
(18,206
)
 
(18,206
)
 
(18
)
 
0

 
(18
)
 
(18,224
)
Net income
0

 
0

 
0

 
0

 
0

 
252,781

 
252,781

 
17

 
337

 
354

 
253,135

Other comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized loss on interest rate derivative instruments
0

 
0

 
0

 
0

 
(4,155
)
 
0

 
(4,155
)
 
0

 
(5
)
 
(5
)
 
(4,160
)
Reclassification adjustment for amounts recognized in net income
0

 
0

 
0

 
0

 
6,617

 
0

 
6,617

 
0

 
8

 
8

 
6,625

Balance, December 31, 2016
$
132

 
$
1,131

 
$
(739
)
 
$
2,830,740

 
$
2,365

 
$
(275,564
)
 
$
2,558,065

 
$
17

 
$
3,277

 
$
3,294

 
$
2,561,359

The accompanying notes are an integral part of these consolidated financial statements.


F-8
Table of Contents

LASALLE HOTEL PROPERTIES
Consolidated Statements of Cash Flows
(in thousands)
 
For the year ended
 
December 31,
 
2016
 
2015
 
2014
Cash flows from operating activities:
 
 
 
 
 
Net income
$
253,135

 
$
135,829

 
$
213,497

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
192,322

 
180,855

 
155,035

Amortization of debt issuance costs, mortgage premium and note receivable discount
3,359

 
2,631

 
1,142

Loss from extinguishment of debt
0

 
831

 
2,487

Net gain on sale of properties and sale of note receivable
(104,478
)
 
0

 
(93,205
)
Amortization of deferred compensation
7,532

 
7,681

 
6,621

Deferred income tax expense (benefit)
1,664

 
(1,734
)
 
(335
)
Allowance for doubtful accounts
(76
)
 
55

 
(44
)
Other
221

 
466

 
404

Changes in assets and liabilities:
 
 
 
 
 
Restricted cash reserves
3,079

 
2,332

 
(912
)
Hotel receivables
417

 
(7,384
)
 
(177
)
Prepaid expenses and other assets
(1,448
)
 
(4,965
)
 
(940
)
Accounts payable and accrued expenses
(174
)
 
14,416

 
(1,581
)
Advance deposits
4,765

 
6,959

 
1,343

Accrued interest
(1,067
)
 
(453
)
 
(99
)
Net cash provided by operating activities
359,251

 
337,519

 
283,236

Cash flows from investing activities:
 
 
 
 
 
Additions to properties
(88,437
)
 
(129,963
)
 
(97,526
)
Improvements to properties
(14,082
)
 
(12,965
)
 
(4,583
)
Acquisition of properties
0

 
(439,157
)
 
(191,111
)
Deposit on acquisition
0

 
25,000

 
(25,000
)
Purchase of office furniture and equipment
(37
)
 
(143
)
 
(799
)
Acquisition of note receivable
0

 
(80,000
)
 
0

Repayment of note receivable
0

 
0

 
72,000

Proceeds from sale of note receivable
79,712

 
0

 
0

Restricted cash reserves
8,329

 
(7,205
)
 
(934
)
Proceeds from sale of properties
166,665

 
0

 
167,838

Property insurance proceeds
2,004

 
2,431

 
2,114

Net cash provided by (used in) investing activities
154,154

 
(642,002
)
 
(78,001
)
Cash flows from financing activities:
 
 
 
 
 
Borrowings under credit facilities
431,496

 
830,807

 
537,828

Repayments under credit facilities
(452,496
)
 
(809,807
)
 
(758,434
)
Borrowings on term loan
0

 
555,000

 
0

Repayments of term loan
0

 
(177,500
)
 
0

Proceeds from mortgage loan
0

 
225,000

 
0

Repayments of mortgage loans
(286,294
)
 
(214,796
)
 
(13,325
)
Payment of debt issuance costs
(33
)
 
(5,716
)
 
(5,170
)
Purchase of treasury shares
(2,145
)
 
(7,424
)
 
(2,936
)
Proceeds from issuance of preferred shares
150,000

 
0

 
0

Payment of preferred offering costs
(4,922
)
 
0

 
0

Proceeds from issuance of common shares
0

 
0

 
352,222

Payment of common offering costs
(96
)
 
(251
)
 
(3,557
)
Distributions on earned shares from share awards with market conditions
(365
)
 
(334
)
 
(314
)
Redemption of preferred shares
0

 
0

 
(58,722
)
Distributions on preferred shares
(15,861
)
 
(12,184
)
 
(15,413
)
Distributions on common shares/units
(203,737
)
 
(186,743
)
 
(136,671
)
Net cash (used in) provided by financing activities
(384,453
)
 
196,052

 
(104,492
)
Net change in cash and cash equivalents
128,952

 
(108,431
)
 
100,743

Cash and cash equivalents, beginning of year
5,700

 
114,131

 
13,388

Cash and cash equivalents, end of year
$
134,652

 
$
5,700

 
$
114,131

The accompanying notes are an integral part of these consolidated financial statements.

F-9
Table of Contents

LASALLE HOTEL PROPERTIES
Notes to Consolidated Financial Statements
( in thousands, except share/unit data )
 
1.
Organization
LaSalle Hotel Properties (the “Company”), a Maryland real estate investment trust organized on January 15, 1998, primarily buys, owns, redevelops and leases upscale and luxury full-service hotels located in convention, resort and major urban business markets. The Company is a self-administered and self-managed real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company is generally not subject to federal corporate income tax on that portion of its net income that is currently distributed to its shareholders. The income of LaSalle Hotel Lessee, Inc. (together with its wholly owned subsidiaries, “LHL”), the Company’s wholly owned taxable REIT subsidiary (“TRS”), is subject to taxation at normal corporate rates.
As of December 31, 2016 , the Company owned interests in 46 hotels with approximately 11,450 guest rooms located in nine states and the District of Columbia. Each hotel is leased to LHL (see Note 8) under a participating lease that provides for rental payments equal to the greater of (i) a base rent or (ii) a participating rent based on hotel revenues. The LHL leases expire between December 2017 and December 2019 . Lease revenue from LHL is eliminated in consolidation. A third-party non-affiliated hotel operator manages each hotel pursuant to a hotel management agreement.
Substantially all of the Company’s assets are held directly or indirectly by, and all of its operations are conducted through, LaSalle Hotel Operating Partnership, L.P. (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. The Company owned, through a combination of direct and indirect interests, 99.9% of the common units of the Operating Partnership at December 31, 2016 . The remaining 0.1% is held by limited partners who held 145,223 common units of the Operating Partnership at December 31, 2016 . See Note 6 for additional disclosures related to common units of the Operating Partnership.
2.
Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of the Company, the Operating Partnership, LHL and their subsidiaries in which they have a controlling interest, including joint ventures. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Risks and Uncertainties
The state of the overall economy can significantly impact hotel operational performance and thus, impact the Company’s financial position. Should any of the hotels experience a significant decline in operational performance, it may affect the Company’s ability to make distributions to its shareholders, service debt or meet other financial obligations.
Investment in Hotel Properties
Upon acquisition, the Company determines the fair value of the acquired long-lived assets, assumed debt and intangible assets and liabilities. The Company’s investments in hotel properties are carried at cost and depreciated using the straight-line method over an estimated useful life of 30 to 40 years for buildings, 15 years for building improvements, the shorter of the useful life of the improvement or the term of the related tenant lease for tenant improvements, 7 years for land improvements, 20 years for golf course land improvements, 20 years for swimming pool assets and 3 to 5 years for furniture, fixtures and equipment. For investments subject to land and building leases that qualify as capital leases, assets are recorded at the estimated fair value of the right to use the leased property at acquisition and depreciated over the shorter of the useful lives of the assets or the term of the respective lease. Renovations and/or replacements that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives.
The Company is required to make subjective assessments as to the useful lives and classification of its properties for purposes of determining the amount of depreciation expense to reflect each year with respect to those properties. These assessments have

F-10
Table of Contents

a direct impact on the Company’s net income. Should the Company change the expected useful life or classification of particular assets, it would result in a change in depreciation expense and annual net income.
The Company reviews each hotel for impairment at the end of each reporting period or as events and circumstances dictate throughout the year. A property is considered impaired when the sum of estimated future undiscounted cash flows over the estimated remaining holding period is less than the carrying amount of a property.
At the end of each reporting period, the Company assesses whether any quantitative or qualitative triggering events have occurred in relation to a property. Examples of situations considered to be triggering events include:

•
a substantial decline in operating cash flows during the period, including declines related to decreased occupancy, average daily rate or revenue per available room;

•
a current or projected loss from operations;

•
a significant cost accumulation above the original acquisition/development estimate;

•
a change in plan to sell the property prior to the end of its useful life or holding period;

•
a significant decrease in market price not in line with general market trends; and

•
any other quantitative or qualitative events deemed significant by the Company’s management or the Company’s Board of Trustees.
If the presence of one or more triggering events as described above is identified at the end of a reporting period or throughout the year with respect to a hotel, the Company performs a recoverability test. In doing so, an estimate of undiscounted future cash flows over the estimated remaining holding period is compared to the carrying amount of the hotel.
Impairment is indicated if the results of a recoverability analysis indicate that the carrying amount of a hotel exceeds the estimated future undiscounted cash flows. An impairment charge is recorded equal to the excess of the carrying value of the hotel over the fair value. When determining the fair value of a property, the Company makes certain assumptions including, but not limited to, consideration of:

•
projected operating cash flows – considering factors such as booking pace, growth rates, occupancy, room rates, property-specific operating costs and future capital expenditures;

•
projected cash flows from the eventual disposition of the hotel based upon the Company’s estimation of a property-specific capitalization rate;

•
property-specific discount rates; and

•
comparable selling prices.
The Company considers a hotel as held for sale when a contract for sale is entered into, a substantial nonrefundable deposit has been received from the purchaser and sale is expected to occur within one year.
Upon sale of a hotel, the Company determines its profit from the sale under the full accrual method provided the following applicable criteria are met: a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the property; the Company’s receivable, if applicable, is not subject to future subordination; the Company has transferred to the buyer the usual risks and rewards of ownership; and the Company does not have a substantial continuing involvement with the property. If all of these conditions are met, the Company will recognize the full profit on the sale.
Intangible Assets
The Company does not amortize intangible assets with indefinite useful lives. Non-amortizable intangible assets are reviewed annually for impairment and more frequently if events or circumstances indicate that the assets may be impaired. If a non-amortizable intangible asset is subsequently determined to have a finite useful life, the intangible asset will be written down to the lower of its fair value or carrying amount and then amortized prospectively, based on the remaining useful life of the intangible asset. As of December 31, 2016 and 2015 , the Company did not have amortizable intangible assets or any value attributed to such non-amortizable intangible assets in the accompanying consolidated balance sheets.

F-11
Table of Contents

Derivatives and Hedging Activities
In the normal course of business, the Company is exposed to the effects of interest rate changes. The Company limits the risks associated with interest rate changes by following established risk management policies and procedures which may include the use of derivative instruments. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flows of the hedged items. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract and are recorded on the balance sheet at fair value, with offsetting changes recorded to other comprehensive income (loss). Ineffective portions of changes in the fair value of a cash flow hedge are recognized as interest expense. The Company incorporates credit valuation adjustments to reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedging instruments under the accounting requirements for derivatives and hedging.
Cash and Cash Equivalents
All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.
Restricted Cash Reserves
The Company classifies certain cash balances as restricted cash reserves, including (i) reserve funds relating to the hotels with leases or operating agreements requiring the Company to maintain restricted cash to fund future capital expenditures, (ii) cash deposited in mortgage escrow accounts pursuant to mortgage obligations to pre-fund a portion of certain operating expenses and debt payments and (iii) cash held by insurance and management companies on the Company’s behalf to be refunded or applied to future liabilities.
Debt Issuance Costs
Issuance costs related to long-term debt are recorded at cost and are amortized as interest expense over the life of the related debt instrument, unless there is a significant modification to the debt instrument. The debt issuance costs, net associated with the revolving credit facilities are included in assets and the other debt issuance costs, net are included with the applicable debt instrument. Accumulated amortization at December 31, 2016 and 2015 was $7,642 and $5,109 , respectively.
Revenue Recognition
The Company recognizes hotel operating revenues on an accrual basis consistent with hotel operations. For retail operations, revenue is recognized on a straight line basis over the lives of the retail leases. Revenue from retail operations is included in other income in the accompanying consolidated statements of operations and comprehensive income. Refer to “Recently Issued Accounting Pronouncements” below for further discussion of revenue recognition.
Participating Leases
The participating leases have non-cancelable terms of three years (from commencement), subject to earlier termination upon the occurrence of certain contingencies, as defined. Each participating lease requires LHL to pay the Operating Partnership or subsidiary the greater of (i) base rent in a fixed amount or (ii) participating rent based on certain percentages of room revenue, food and beverage revenue, telephone revenue and other revenue at the applicable hotel. Participating rent applicable to room and other hotel revenues varies by lease and is calculated by multiplying fixed percentages by the total amounts of such revenues over specified quarterly threshold amounts. Both the base rent and the participating rent thresholds used in computing percentage rents applicable to room and other hotel revenues, including food and beverage revenues, are subject to annual adjustments based on increases in the United States Consumer Price Index published by the Bureau of Labor Statistics of the United States of America Department of Labor, U.S. City Average, Urban Wage Earners and Clerical Workers. Lease revenue from LHL is eliminated in consolidation.
Share-Based Compensation
From time to time, the Company awards shares under the 2014 Equity Incentive Plan, as amended (“2014 Plan”), which has approximately seven years remaining, as compensation to executives, employees and members of the Board of Trustees (see Note 7). The shares issued to executives and employees generally vest over three years. The shares issued to members of the Board of Trustees vest immediately upon issuance. The Company recognizes compensation expense for nonvested shares with service conditions or service and market conditions on a straight-line basis over the vesting period based upon the fair value of the shares on the date of issuance, adjusted for forfeitures. Compensation expense for nonvested shares with service and performance

F-12
Table of Contents

conditions is recognized based on the fair value of the estimated number of shares expected to vest, as revised throughout the vesting period, adjusted for forfeitures. The 2014 Plan replaced the 2009 Equity Incentive Plan (“2009 Plan”) in May 2014.
Noncontrolling Interests
The Company’s consolidated financial statements include entities in which the Company has a controlling financial interest. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations and comprehensive income (loss), revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Company and noncontrolling interests. Income or loss is allocated to noncontrolling interests based on their weighted average ownership percentage for the applicable period. Consolidated statements of equity include beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity.
However, the Company’s noncontrolling interests that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, must be classified outside of permanent equity. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to noncontrolling interests for which the Company has a choice to settle the contract by delivery of its own shares, the Company evaluates whether the Company controls the actions or events necessary to issue the maximum number of shares that could be required to be delivered under share settlement of the contract.
As of December 31, 2016 , the consolidated results of the Company include the following ownership interests held by owners other than the Company: (i) the common units in the Operating Partnership held by third parties, (ii) the outside preferred ownership interests in a subsidiary and (iii) the outside ownership interest in a joint venture.
Variable Interest Entities
In 2016, the Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . The Company evaluated the application of ASU No. 2015-02 and concluded that no change was required to its accounting of its interests in less than wholly owned joint ventures, however, the Operating Partnership now meets the criteria as a variable interest entity. The Company’s significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Company’s debt is an obligation of the Operating Partnership.
Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 1998. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted taxable income to its shareholders. It is the Company’s current intention to adhere to these requirements and maintain the Company’s qualification for taxation as a REIT. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its net income that is currently distributed to shareholders. If the Company fails to qualify for taxation as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through a TRS is subject to federal, state and local income taxes. As a wholly owned TRS of the Company, LHL is required to pay income taxes at the applicable federal, state and local rates.
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. The Company’s deferred tax assets balance consists primarily of net operating loss carryforwards (see Note 9).

F-13
Table of Contents

Earnings per Common Share
Basic earnings per common share is based on the weighted average number of common shares of beneficial interest outstanding during the year excluding the weighted average number of unvested restricted shares (“participating securities” as defined in Note 11). The basic earnings per share calculation excludes the effect of such participating securities. Diluted earnings per common share is based on the basic weighted average number of common shares of beneficial interest outstanding plus the effect of in-the-money stock options and compensation-related shares. Any anti-dilutive shares are excluded from the diluted earnings per share calculation.
Comprehensive Income
The purpose of reporting comprehensive income is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners. Comprehensive income consists of all components of income, including other comprehensive income, which is excluded from net income. For the years ended December 31, 2016 , 2015 and 2014 , comprehensive income was $255,600 , $134,982 and $209,631 , respectively. As of December 31, 2016 , the Company’s accumulated other comprehensive income was $2,365 and, as of December 31, 2015 , the Company’s accumulated other comprehensive loss was $97 .
Notes Receivable
Notes receivable are carried at cost, net of any premiums or discounts which are recognized as an adjustment of yield over the remaining life of the note using the effective interest method. Any costs related to notes receivable are expensed as incurred. Interest income is recorded on the accrual basis consistent with the terms of the notes receivable. A note is deemed to be impaired when, based on current information and events, including a review of factors that would impact the fair value of the underlying collateral, it is probable that the Company will be unable to collect all principal and interest contractually due. The Company considers current and projected cash flow, historical payment patterns, general and industry specific economic factors and operating results in determining the probability of default. Interest previously accrued but not collected becomes part of the Company’s recorded investment in the note receivable for purposes of assessing impairment. The Company applies interest payments received on non-accrual notes receivable first to accrued interest and then as interest income. Notes receivable return to accrual status when contractually current and the collection of future payments is reasonably assured.
Recently Issued Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early adoption is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures by working with its hotel operators to analyze its revenue streams and to update its accounting policies. The Company continues to evaluate each of its revenue streams under the new model and because of the short-term, day-to-day nature of the Company’s hotel revenues the pattern of revenue recognition is not expected to change significantly. Additionally, the Company has historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations, and therefore, does not expect ASU No. 2014-09 to significantly impact the recognition of hotel sales. The Company does not believe ASU No. 2014-09 will have a material impact on its consolidated financial statements and related disclosures and will adopt the new standard on its effective date of January 1, 2018 under the cumulative effect transition method.
In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs to be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability. The Company adopted ASU No. 2015-03 effective January 1, 2016 and applied its provisions retrospectively. The adoption of this standard only affects the presentation of the Company’s consolidated balance sheets.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to record operating and financing leases as assets and liabilities on the balance sheet and lessors to expense costs that are not initial direct leasing costs. This standard will be effective for the first annual reporting period beginning after December 15, 2018. The Company is evaluating the effect that ASU No. 2016-02 will have on its consolidated financial statements and related disclosures. The Company is analyzing its current ground lease obligations and anticipates recording assets and liabilities on its consolidated balance sheets associated with the ground lease obligations under ASU No. 2016-02.

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Table of Contents

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Award Payment Accounting , which simplifies various aspects of how share-based payments are accounted for and presented in the financial statements. This standard requires companies to record all of the tax effects related to share-based payments through the income statement, allows companies to elect an accounting policy to either estimate the share based award forfeitures (and expense) or account for forfeitures (and expense) as they occur, and allows companies to withhold up to the maximum individual statutory tax rate the shares upon settlement of an award without causing the award to be classified as liability. The new standard is effective for the Company on January 1, 2017. Early adoption is permitted. The Company early adopted this standard on July 1, 2016 and it did not have an effect on the Company’s consolidated financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements , which requires companies to measure credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This standard will be effective for the first annual period beginning after December 15, 2019 , including interim periods within those periods . The Company is evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This standard will be effective for the first annual reporting period beginning after December 15, 2017. The Company is evaluating the effect that ASU No. 2016-15 will have on its consolidated financial statements and related disclosures.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard will be effective for the first annual period beginning after December 15, 2017 , including interim periods within those periods . Early adoption is permitted. The Company is evaluating the effect that ASU 2016-18 will have on its consolidated financial statements and related disclosures.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business and adds further guidance in evaluating whether a transaction should be accounted for as an acquisition of an asset or a business. This standard will be effective for the first annual period beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted. The Company is evaluating the effect that ASU No. 2017-01 will have on its consolidated financial statements and related disclosures. The Company does not anticipate a material impact and intends to adopt this standard on January 1, 2017.
Reclassification
Certain amounts in the 2014 and 2015 financial statements have been reclassified to conform with the 2016 presentation.
3.
Investment in Hotel Properties
Investment in hotel properties as of December 31, 2016 and 2015 consists of the following:
 
December 31, 2016
 
December 31, 2015
Land
$
727,176

 
$
731,796

Buildings and improvements
3,531,280

 
3,613,724

Furniture, fixtures and equipment
769,671

 
701,742

Investment in hotel properties, gross
5,028,127

 
5,047,262

Accumulated depreciation
(1,355,918
)
 
(1,229,586
)
Investment in hotel properties, net
$
3,672,209

 
$
3,817,676

The above table excludes Hotel Deca as the property qualified as held for sale as of December 31, 2016 and its net cost basis has been reclassified from investment in hotel properties, net to assets held for sale in the accompanying consolidated balance sheets. On January 19, 2017, the Company sold Hotel Deca for $55,000 (see Note 13).
As of December 31, 2016 and 2015 , buildings and improvements included capital lease assets of $183,503 and accumulated depreciation included amounts related to capital lease assets of $26,230 and $20,915 , respectively. Depreciation of the capital lease

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assets is included in depreciation and amortization expense in the accompanying consolidated statements of operations and comprehensive income for all periods presented.
Depreciation expense was $191,791 , $180,346 and $154,585 for the years ended December 31, 2016 , 2015 and 2014 , respectively.
The December 31, 2016 balance of investment in hotel properties excludes $21,078 classified as property under development primarily at Chamberlain West Hollywood, Embassy Suites Philadelphia - Center City, Harbor Court Hotel, Hilton San Diego Gaslamp Quarter, Hotel Chicago, San Diego Paradise Point Resort and Spa and Southernmost Beach Resort Key West. The December 31, 2015 balance of investment in hotel properties excludes $54,066 classified as property under development primarily at Chaminade Resort and Conference Center, Hotel Palomar, Washington, DC, Lansdowne Resort, Mason & Rook Hotel, The Liberty Hotel and Westin Michigan Avenue. Property under development consists of costs associated with rooms, lobby or outlets that are currently under renovation.
Interest, real estate taxes and insurance costs incurred during the renovation or development period are capitalized and depreciated over the lives of the renovated or developed assets. Capitalized interest for the years ended December 31, 2016 , 2015 and 2014 was $398 , $902 and $400 , respectively.
The hotels owned as of December 31, 2016 are located in California ( 19 ), the District of Columbia ( nine ), Florida ( two ), Illinois ( two ), Massachusetts ( four ), New York ( four ), Oregon ( one ), Pennsylvania ( two ), Virginia ( one ) and Washington state ( two ).
Investment in Joint Venture
The Company holds a 99.99% controlling interest in The Liberty Hotel. Since the Company holds a controlling interest, the accounts of the joint venture have been included in the accompanying consolidated financial statements. The 0.01% interest of the outside partner is included in noncontrolling interests in consolidated entities in the accompanying consolidated balance sheets.
Acquisitions
During 2014, the Company acquired 100% interests in two full-service hotels, each of which is leased to LHL. The Company recorded the acquisitions at fair value using model-derived valuations, with the estimated fair value recorded to investment in hotel properties and hotel working capital assets and liabilities. In connection with the acquisitions, the Company incurred acquisition transaction costs that were expensed as incurred. The following is a summary of the acquisitions:
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition
Transaction Costs
Hotel Name
 
Acquisition Date
 
Number of
Rooms
 
Location
 
Purchase
Price
 
Manager
 
For the year ended December 31, 2014
Hotel Vitale
 
April 2, 2014
 
200
 
San Francisco, CA
 
$
130,000

 
Two Roads Hospitality
 
$
1,864

The Heathman Hotel
 
December 18, 2014
 
150
 
Portland, OR
 
64,325

 
Provenance Hotels
 
328

Total for 2014 Acquisitions
 
 
 
 
 
$
194,325

 
 
 
$
2,192

Land purchase (adjacent to Onyx Hotel)
 
 
 
 
 
 
 
 
 
64

Park Central San Francisco (1)
 
 
 
 
 
 
 
 
 
123

Total
 
 
 
 
 
 
 
 
 
 
 
$
2,379

(1) On January 23, 2015, the Company acquired Park Central San Francisco.
The source of the funding for the April 2, 2014 acquisition was borrowings under the Company’s senior unsecured credit facility. The source of funding for the December 18, 2014 acquisition was cash on hand. Total revenues and net income from the hotels acquired during 2014 of $27,988 and $2,018 , respectively, are included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2014.
On April 30, 2014, the Company acquired a parcel of land located adjacent to the Company’s Onyx Hotel in Boston, MA for $2,500 . The land is available for future use.
During 2015, the Company acquired 100% interests in two full-service hotels, each of which is leased to LHL. The Company recorded the acquisitions at fair value using model-derived valuations, with the estimated fair value recorded to investment in hotel properties and hotel working capital assets and liabilities. In connection with the acquisitions, the Company incurred acquisition transaction costs that were expensed as incurred. The following is a summary of the acquisitions:

F-16
Table of Contents

 
 
 
 
 
 
 
 
 
 
 
 
Acquisition
Transaction Costs
Hotel Name
 
Acquisition Date
 
Number of
Rooms
 
Location
 
Purchase
Price
 
Manager
 
For the year ended December 31, 2015
Park Central San Francisco
 
January 23, 2015
 
681
 
San Francisco, CA
 
$
350,000

 
Highgate Hotels
 
$
230

The Marker Waterfront Resort
 
March 16, 2015
 
96
 
Key West, FL
 
96,250

 
Highgate Hotels
 
214

Total for 2015 Acquisitions
 
 
 
 
 
 
 
$
446,250

 
 
 
444

Mezzanine Loan (1)
 
 
 
 
 
 
 
 
 
 
 
55

Total
 
 
 
 
 
 
 
 
 
 
 
$
499

(1) See “Note Receivable” below.
The sources of the funding for the January 23, 2015 acquisition were cash on hand and borrowings under the Company’s senior unsecured credit facility. The source of funding for the March 16, 2015 acquisition was borrowings under the Company’s senior unsecured credit facility. Total revenues and net income from the hotels acquired during 2015 of $82,884 and $11,705 , respectively, are included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2015.
Dispositions
On June 17, 2014, the Company sold Hilton Alexandria Old Town for $93,380 . This sale does not represent a strategic shift in the Company’s business plan or primary markets, and therefore, does not qualify as discontinued operations. The Company recognized a gain of $43,548 related to the sale of this property, which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2014. The sale of the property was recorded on the full accrual method.
On September 10, 2014, the Company sold Hotel Viking for $77,000 . This sale does not represent a strategic shift in the Company’s business plan or primary markets, and therefore, does not qualify as discontinued operations. The Company recognized a gain of $49,657 related to the sale of this property, which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2014. The sale of the property was recorded on the full accrual method. In conjunction with the sale of Hotel Viking, the Company executed a reverse 1031 exchange with Hotel Vitale, which was purchased on April 2, 2014. The reverse 1031 exchange has no effect on the Company’s GAAP financial reporting and does not have a material impact on the Company’s tax positions and expected tax expense.
On July 14, 2016, the Company sold Indianapolis Marriott Downtown for  $165,000 . This sale does not represent a strategic shift in the Company’s business plan or primary markets, and therefore, does not qualify as discontinued operations. The Company recognized a gain of $104,766 related to the sale of this property, which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2016. The sale of the property was recorded on the full accrual method. The proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility and to fund the July 2016 common and preferred dividends.
On January 19, 2017, the Company sold Hotel Deca for $55,000 . Substantially all of the assets held for sale consist of investment in hotel properties, net and immaterial prepaid expenses and other assets and the liabilities of assets held for sale consist of accounts payable and accrued expenses. The Company will recognize a gain in the first quarter of 2017 of approximately $30,500 related to the sale of this property (see Note 13). This sale does not represent a strategic shift in the Company’s business plan or primary markets, and therefore, does not qualify as discontinued operations.
Note Receivable
On July 20, 2015, the Company provided a junior mezzanine loan (the “Mezzanine Loan”) secured by pledges of equity interests in the entities that own the hotel properties, Shutters on the Beach and Casa Del Mar, in Santa Monica, CA. The Company entered into the Mezzanine Loan for a total purchase price of $80,000 before closing costs. The Mezzanine Loan bears interest at a variable interest rate equal to LIBOR plus 7.75% .The Mezzanine Loan matures on August 9, 2017 and has five one -year extension options, subject to conditions. The Mezzanine Loan is subordinate to a $235,000 first mortgage loan and a $90,000 senior mezzanine loan secured by the properties that also mature on August 9, 2017. On July 8, 2016, the Company sold the Mezzanine Loan at face value for $80,000 less costs associated with the sale of $288 , which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2016. The proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility.

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4.
Long-Term Debt
Debt Summary
Debt as of December 31, 2016 and December 31, 2015 consisted of the following:
 
 
 
 
 
 
Balance Outstanding as of
Debt                                                                                  
 
Interest
Rate
 
Maturity
Date
 
December 31,
2016
 
December 31,
2015
Credit facilities
 
 
 
 
 
 
 
 
Senior unsecured credit facility
 
Floating (a)
 
January 2018 (a)
 
$
0

 
$
21,000

LHL unsecured credit facility
 
Floating (b)
 
January 2018 (b)
 
0

 
0

Total borrowings under credit facilities
 
 
 
 
 
0

 
21,000

Term loans
 
 
 
 
 
 
 
 
First Term Loan
 
Floating/Fixed (c)
 
January 2019 (c)
 
300,000

 
300,000

Second Term Loan
 
Floating/Fixed (c)
 
January 2021 (c)
 
555,000

 
555,000

Debt issuance costs, net
 
 
 
 
 
(2,242
)
 
(2,797
)
Total term loans, net of unamortized debt issuance costs
 
 
 
852,758

 
852,203

Massport Bonds
 
 
 
 
 
 
 
 
Hyatt Regency Boston Harbor (taxable)
 
Floating (d)
 
March 2018
 
5,400

 
5,400

Hyatt Regency Boston Harbor (tax exempt)
 
Floating (d)
 
March 2018
 
37,100

 
37,100

Debt issuance costs, net
 
 
 
 
 
(45
)
 
(184
)
Total bonds payable, net of unamortized debt issuance costs
 
 
 
42,455

 
42,316

Mortgage loans
 
 
 
 
 
 
 
 
Westin Michigan Avenue
 
5.75%
 
- (e)
 
0

 
131,262

Indianapolis Marriott Downtown
 
5.99%
 
- (e)
 
0

 
96,097

The Roger
 
6.31%
 
- (f)
 
0

 
58,935

Westin Copley Place
 
Floating (g)
 
August 2018 (g)
 
225,000

 
225,000

Debt issuance costs, net
 
 
 
 
 
(1,506
)
 
(2,490
)
Total mortgage loans, net of unamortized debt issuance costs
 
 
 
223,494

 
508,804

Total debt
 
 
 
 
 
$
1,118,707

 
$
1,424,323


(a)  
Borrowings bear interest at floating rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. There were no borrowings outstanding at December 31, 2016 . As of December 31, 2015 , the rate, including the applicable margin, for the Company’s outstanding LIBOR borrowing of $21,000 was 2.13% . The Company has the option, pursuant to certain terms and conditions, to extend the maturity date for two six -month extensions. On January 10, 2017, the Company refinanced its senior unsecured credit facility resulting in a new maturity date of January 8, 2021, subject to two six -month extension options, pursuant to certain terms and conditions.
(b)  
Borrowings bear interest at floating rates equal to, at LHL’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. There were no borrowings outstanding at December 31, 2016 and December 31, 2015 . LHL has the option, pursuant to certain terms and conditions, to extend the maturity date for two six -month extensions. On January 10, 2017, LHL refinanced its unsecured credit facility resulting in a new maturity date of January 10, 2021, subject to two six -month extension options, pursuant to certain terms and conditions.
(c)  
Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into interest rate swaps to effectively fix the interest rates for the First Term Loan (as defined below) and the Second Term Loan (as defined below). At December 31, 2016 and 2015 , the Company had interest rate swaps on the full amounts outstanding. See “Derivative and Hedging Activities” below. At December 31, 2016 and 2015 , the fixed all-in interest rates for the First Term Loan and Second Term Loan were 2.38% and 2.95% , respectively, at the Company’s current leverage ratio (as defined in the swap agreements). On January 10, 2017, the Company refinanced its First Term Loan resulting in a new maturity date of January 10, 2022. On January 10, 2017, the Company amended and restated its Second Term Loan to match the financial and other covenants in its refinanced First Term Loan and senior unsecured credit facility. There were no changes to the maturity date.
(d)  
The Massport Bonds are secured by letters of credit issued by U.S. Bank National Association (“U.S. Bank”) that were extended to September 2017. The letters of credit have two one -year extension options, one of which was exercised in July 2016, and are secured by the Hyatt Regency Boston Harbor. The letters of credit cannot be extended beyond the Massport Bonds’ maturity date. The bonds bear interest based on weekly floating rates. The interest rates as of December 31, 2016 were

F-18

0.75% and 0.76% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2015 were 0.39% and 0.02% for the $5,400 and $37,100 bonds, respectively. The Company incurs an annual letter of credit fee of 1.35% .
(e)  
The Company repaid the mortgage loans on January 4, 2016 through borrowings on its senior unsecured credit facility.
(f)  
The Company repaid the mortgage loan on February 11, 2016 through borrowings on its senior unsecured credit facility.
(g)  
The mortgage loan matures on August 14, 2018 with three options to extend the maturity date to January 5, 2021, pursuant to certain terms and conditions. The interest-only mortgage loan bears interest at a variable rate ranging from LIBOR plus 1.75% to LIBOR plus 2.00% , depending on Westin Copley Place’s net cash flow (as defined in the loan agreement). The interest rate as of December 31, 2016 was LIBOR plus 1.75% , which equaled 2.46% . The interest rate as of December 31, 2015 was LIBOR plus 1.75% , which equaled 2.09% . The mortgage loan allows for prepayments without penalty, subject to certain terms and conditions.
Future scheduled debt principal payments as of December 31, 2016 are as follows:
2017
$
0

2018
267,500

2019
300,000

2020
0

2021
555,000

Total debt
$
1,122,500

A summary of the Company’s interest expense and weighted average interest rates for unswapped variable rate debt for the years ended December 31, 2016 , 2015 and 2014 is as follows:
 
For the year ended December 31,
 
2016
 
2015
 
2014
Interest Expense:
 
 
 
 
 
Interest incurred
$
40,814

 
$
52,604

 
$
54,859

Amortization of debt issuance costs
3,359

 
2,631

 
2,169

Capitalized interest
(398
)
 
(902
)
 
(400
)
Interest expense
$
43,775

 
$
54,333

 
$
56,628

 
 
 
 
 
 
Weighted Average Interest Rates for Unswapped Variable Rate Debt:
 
 
 
 
 
Senior unsecured credit facility
2.14
%
 
1.89
%
 
1.86
%
LHL unsecured credit facility
2.13
%
 
1.89
%
 
1.86
%
Massport Bonds
0.44
%
 
0.06
%
 
0.35
%
Mortgage loan (Westin Copley Place)
2.23
%
 
2.19
%
 
N/A

Credit Facilities
On January 8, 2014, the Company refinanced its $750,000 senior unsecured credit facility with a syndicate of banks. The credit facility matures on January 8, 2018, subject to two six -month extensions that the Company may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. The credit facility, with a current commitment of $750,000 , includes an accordion feature which, subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $1,050,000 . Borrowings under the credit facility bear interest at floating rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. Additionally, the Company is required to pay a variable unused commitment fee of 0.25% or 0.30% of the unused portion of the credit facility, depending on the average daily unused portion of the credit facility. On January 10, 2017, the Company refinanced its senior unsecured credit facility (see Note 13).
On January 8, 2014, LHL also refinanced its $25,000 unsecured revolving credit facility to be used for working capital and general lessee corporate purposes. The LHL credit facility matures on January 8, 2018, subject to two six -month extensions that LHL may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. Borrowings under the LHL credit facility bear interest at floating rates equal to, at LHL’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. Additionally, LHL is required to pay a variable unused commitment fee of 0.25% or 0.30% of the unused portion of the credit facility, depending on the average daily

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unused portion of the LHL credit facility. On January 10, 2017, LHL refinanced its unsecured revolving credit facility (see Note 13).
The Company’s senior unsecured credit facility and LHL’s unsecured credit facility contain certain financial and other covenants, including covenants relating to net worth requirements, debt ratios and fixed charge coverage ratios. In addition, pursuant to the terms of the agreements, if a default or event of default occurs or is continuing, the Company may be precluded from paying certain distributions or other payments to its shareholders.
The Company and certain of its subsidiaries guarantee the obligations under the Company’s senior unsecured credit facility. While the senior unsecured credit facility does not initially include any pledges of equity interests in the Company’s subsidiaries, in connection with the January 10, 2017 refinancing, such pledges and additional subsidiary guarantees would be required in the event that the Company’s leverage ratio later exceeds 6.50 : 1.00 for two consecutive fiscal quarters. In the event that such pledge and guarantee requirement is triggered, the pledges and additional guarantees would ratably benefit the Company’s senior unsecured credit facility, the First Term Loan and the Second Term Loan. If at any time the Company’s leverage ratio falls below 6.50 : 1.00 for two consecutive fiscal quarters, such pledges and additional guarantees may be released.
Term Loans
On May 16, 2012, the Company entered into a $177,500 unsecured term loan (the “Repaid Term Loan”) with a seven -year term maturing on May 16, 2019. The Repaid Term Loan bore interest at variable rates. On November 5, 2015, the Company repaid the Repaid Term Loan.
On January 8, 2014, the Company refinanced its $300,000 unsecured term loan (the “First Term Loan”). The First Term Loan includes an accordion feature, which subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $500,000 . The First Term Loan has a five -year term maturing on January 8, 2019 and bears interest at variable rates. On January 10, 2017, the Company refinanced its First Term Loan (see Note 13).
On November 5, 2015, the Company entered into a $555,000 unsecured term loan (the “Second Term Loan”) with a five -year term maturing on January 29, 2021. The Second Term Loan includes an accordion feature, which subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $700,000 . The Second Term Loan bears interest at variable rates. On January 10, 2017, the Company amended its Second Term Loan (see Note 13).
The Company’s term loans contain certain financial and other covenants, including covenants relating to net worth requirements, debt ratios and fixed charge coverage ratios. In addition, pursuant to the terms of the agreements, if a default or event of default occurs or is continuing, the Company may be precluded from paying certain distributions or other payments to its shareholders. The Company has entered into interest rate swaps to effectively fix the LIBOR rates for all of its term loans (see “Derivative and Hedging Activities” below).
The Company and certain of its subsidiaries guarantee the obligations under the Company’s term loans. While the term loans do not initially include any pledges of equity interests in the Company’s subsidiaries, in connection with the January 10, 2017 refinancing, such pledges and additional subsidiary guarantees would be required in the event that the Company’s leverage ratio later exceeds 6.50 : 1.00 for two consecutive fiscal quarters. In the event that such pledge and guarantee requirement is triggered, the pledges and additional guarantees would ratably benefit the Company’s senior unsecured credit facility, the First Term Loan and the Second Term Loan. If at any time the Company’s leverage ratio falls below 6.50 : 1.00 for two consecutive fiscal quarters, such pledges and additional guarantees may be released.
Derivative and Hedging Activities
The Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Unrealized gains and losses on the effective portion of hedging instruments are reported in other comprehensive income (loss) (“OCI”). Ineffective portions of changes in the fair value of a cash flow hedge are recognized as interest expense. Amounts reported in accumulated other comprehensive income (loss) (“AOCI”) related to currently outstanding derivatives are recognized as an adjustment to income (loss) as interest payments are made on the Company’s variable rate debt. Effective August 2, 2012, the Company entered into five interest rate swap agreements with an aggregate notional amount of $300,000 to hedge the variable interest rate on the First Term Loan through August 2, 2017, resulting in a fixed all-in interest rate based on the Company’s current leverage ratio (as defined in the swap agreements), which interest rate was 2.38% at December 31, 2016 . As of December 31, 2016 , the Company has interest rate swaps with an aggregate notional amount of $555,000 to hedge the variable interest rate on the Second Term Loan and, as a result, the fixed all-in interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) is 2.95% through May 16, 2019. From May 16, 2019 through the term of the Second Term Loan, the Company has interest rate

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swaps with an aggregate notional amount of $377,500 to hedge a portion of the variable interest rate debt on the Second Term Loan. The Company has designated its pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges. The interest rate swaps were entered into with the intention of eliminating the variability of the terms loans, but can also limit the exposure to any amendments, supplements, replacements or refinancings of the Company’s debt.
The following table presents the effect of derivative instruments on the Company’s accompanying consolidated statements of operations and comprehensive income, including the location and amount of unrealized loss on outstanding derivative instruments in cash flow hedging relationships, for the years ended December 31, 2016 , 2015 and 2014 :
 
 
Amount of Loss Recognized in OCI on Derivative Instruments
 
Location of Loss Reclassified from AOCI into Net Income
 
Amount of Loss Reclassified from AOCI into Net Income
 
 
 
 
 
 (Effective Portion)
 
 (Effective Portion)
 
 (Effective Portion)
 
 
For the year ended
 
 
 
 
For the year ended
 
 
December 31,
 
 
 
 
December 31,
 
 
2016
 
2015
 
2014
 
 
 
 
2016
 
2015
 
2014
Derivatives in cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
$
(4,160
)
 
$
(5,682
)
 
$
(8,276
)
 
Interest expense
 
$
6,625

 
$
4,835

 
$
4,410

During the years ended December 31, 2016 , 2015 and 2014 , the Company did not have any hedge ineffectiveness or amounts that were excluded from the assessment of hedge effectiveness recorded in earnings.
As of December 31, 2016 , there was $2,368 in cumulative unrealized gain of which $2,365 was included in AOCI and $3 was attributable to noncontrolling interests. As of December 31, 2015 , there was $97 in cumulative unrealized loss of which $97 was included in AOCI and zero was attributable to noncontrolling interests. The Company expects that approximately $4,890 will be reclassified from AOCI and noncontrolling interests and recognized as a reduction to income in the next 12 months , calculated as estimated interest expense using the interest rates on the derivative instruments as of December 31, 2016 .
Bonds Payable
The Company is the obligor with respect to a $37,100 tax-exempt special project revenue bond and a $5,400 taxable special project revenue bond, both issued by the Massachusetts Port Authority (collectively, the “Massport Bonds”). The Massport Bonds, which mature on March 1, 2018, bear interest based on weekly floating rates and have no principal reductions prior to their scheduled maturities. The Massport Bonds may be redeemed at any time, at the Company’s option, without penalty. The Massport Bonds are secured by letters of credit issued by U.S. Bank that were extended to September 30, 2017. The letters of credit have two one -year extension options, one of which was exercised in July 2016, that the Company may exercise at its option, subject to certain terms and conditions. The letters of credit cannot be extended beyond the Massport Bonds’ maturity date. The Company incurs an annual letter of credit fee of 1.35% . The letters of credit are secured by the Hyatt Regency Boston Harbor. If U.S. Bank fails to renew its letters of credit at expiration and an acceptable replacement provider cannot be found, the Company may be required to pay off the bonds.
Extinguishment of Debt
As discussed above, on January 8, 2014, the Company refinanced its senior unsecured credit facility and First Term Loan and LHL refinanced its unsecured revolving credit facility. The refinancing arrangements for the senior unsecured credit facility and First Term Loan were considered substantial modifications. The Company recognized a loss from extinguishment of debt of $2,487 , which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2014. As discussed above, on November 5, 2015, the Company repaid the Repaid Term Loan prior to maturity and recognized a loss from extinguishment of debt of $831 , which is included in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2015. The loss from extinguishment of debt represents the unamortized deferred financing costs incurred when the original agreements were executed.
Mortgage Loans
The Company’s mortgage loans are secured by the respective properties. The mortgages are non-recourse to the Company except for fraud or misapplication of funds.

F-21

On January 4, 2016, the Company repaid without fee or penalty the Westin Michigan Avenue mortgage loan in the amount of $131,262 plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in April 2016.
On January 4, 2016, the Company repaid without fee or penalty the Indianapolis Marriott Downtown mortgage loan in the amount of $96,097 plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in July 2016.
On February 11, 2016, the Company repaid without fee or penalty The Roger mortgage loan in the amount of $58,831 plus accrued interest through borrowings under its senior unsecured credit facility. The loan was due to mature in August 2016.
The Company’s mortgage loans contain debt service coverage ratio tests related to the mortgaged properties. If the debt service coverage ratio for a specific property fails to exceed a threshold level specified in the mortgage, cash flows from that hotel may automatically be directed to the lender to (i) satisfy required payments, (ii) fund certain reserves required by the mortgage and (iii) fund additional cash reserves for future required payments, including final payment. Cash flows may be directed to the lender (“cash trap”) until such time as the property again complies with the specified debt service coverage ratio or the mortgage is paid off.
Financial Covenants
Failure of the Company to comply with financial and other covenants contained in its credit facilities, term loans and non-recourse secured mortgages could result from, among other things, changes in its results of operations, the incurrence of additional debt or changes in general economic conditions.
If the Company violates financial and other covenants contained in any of its credit facilities or term loans described above, the Company may attempt to negotiate waivers of the violations or amend the terms of the applicable credit facilities or term loans with the lenders thereunder; however, the Company can make no assurance that it would be successful in any such negotiations or that, if successful in obtaining waivers or amendments, such amendments or waivers would be on terms attractive to the Company. If a default under the credit facilities or term loans were to occur, the Company would possibly have to refinance the debt through additional debt financing, private or public offerings of debt securities, or additional equity financings. If the Company is unable to refinance its debt on acceptable terms, including at maturity of the credit facilities and term loans, it may be forced to dispose of hotel properties on disadvantageous terms, potentially resulting in losses that reduce cash flow from operating activities. If, at the time of any refinancing, prevailing interest rates or other factors result in higher interest rates upon refinancing, increases in interest expense would lower the Company’s cash flow, and, consequently, cash available for distribution to its shareholders.
A cash trap associated with a mortgage loan may limit the overall liquidity for the Company as cash from the hotel securing such mortgage would not be available for the Company to use. If the Company is unable to meet mortgage payment obligations, including the payment obligation upon maturity of the mortgage borrowing, the mortgage securing the specific property could be foreclosed upon by, or the property could be otherwise transferred to, the mortgagee with a consequent loss of income and asset value to the Company.
As of December 31, 2016 , the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loans, bonds payable or mortgage loan.

F-22

5.
Commitments and Contingencies
Ground, Land and Building, and Air Rights Leases
A summary of the Company’s hotels subject to non-cancelable operating leases as of December 31, 2016 is as follows:
Lease Properties
 
Lease Type
 
Lease Expiration Date
Southernmost Beach Resort Key West (Restaurant facility)
 
Ground lease
 
April 2019 (1)
Hyatt Regency Boston Harbor
 
Ground lease
 
March 2026 (2)
The Hilton San Diego Resort and Spa
 
Ground lease
 
December 2045
San Diego Paradise Point Resort and Spa
 
Ground lease
 
May 2050
Hotel Vitale
 
Ground lease
 
March 2056 (3)
Viceroy Santa Monica
 
Ground lease
 
September 2065
Westin Copley Place (4)
 
Air rights lease
 
December 2077
The Liberty Hotel
 
Ground lease
 
May 2080
Hotel Solamar
 
Ground lease
 
December 2102
(1) The Company can begin negotiating a renewal one year in advance of the lease expiration date.
(2) The Company has options, subject to certain terms and conditions, to extend the ground lease for 51 years to 2077.
(3) The Company has the option, subject to certain terms and conditions, to extend the ground lease for 14 years to 2070.
(4) No payments are required through maturity.
The ground leases at Viceroy Santa Monica, The Liberty Hotel and Hotel Vitale are subject to minimum annual rent increases, resulting in noncash straight-line rent expense of $1,890 , $1,943 and $1,820 for the years ended December 31, 2016 , 2015 and 2014 , respectively, which is included in total ground rent expense. Total ground rent expense for the years ended December 31, 2016 , 2015 and 2014 was $16,187 , $16,076 and $14,667 , respectively. Certain rent payments are based on the hotel’s performance. Actual payments of rent may exceed the minimum required rent due to meeting specified thresholds.
A summary of the Company’s hotels subject to capital leases of land and building as of December 31, 2016 is as follows:
Lease Properties
 
Estimated Present Value of Remaining Rent Payments (1)
 
Lease Expiration Date
The Roger
 
$4,892
 
December 2044
Harbor Court Hotel
 
$18,424
 
April 2048
Hotel Triton (2)
 
$25,625
 
December 2049
(1) At acquisition, the estimated present value of the remaining rent payments were recorded as capital lease obligations. These obligations, net of amortization, are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.
(2) In 2015, the hotel lease was amended, extending the lease expiration date from January 2048 to December 2049. At acquisition, the estimated present value of the remaining payments recorded as a capital lease obligation was $27,752 . Due to the lease amendment, the recalculated estimated present value of the remaining rent payments is $25,625 , which net of amortization, is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.
Future minimum rent payments, including capital lease payments, (without reflecting future applicable Consumer Price Index increases) are as follows:
2017
$
13,052

2018
13,195

2019
13,172

2020
13,559

2021
13,713

Thereafter
587,067

 
$
653,758


F-23

Reserve Funds for Future Capital Expenditures
Certain of the Company’s agreements with its hotel managers, franchisors and lenders have provisions for the Company to provide funds, generally 4.0% of hotel revenues, sufficient to cover the cost of (a) certain non-routine repairs and maintenance to the hotels and (b) replacements and renewals to the hotels’ capital assets. Certain of the agreements require that the Company reserve this cash in separate accounts. As of December 31, 2016 , $13,073 was available in restricted cash reserves for future capital expenditures. The Company has sufficient cash on hand and availability on its credit facilities to cover capital expenditures under agreements that do not require that the Company separately reserve cash.
Restricted Cash Reserves
At December 31, 2016 , the Company held $15,035 in restricted cash reserves. Included in such amounts are $13,073 of reserve funds for future capital expenditures and $1,962 held by insurance and management companies on the Company’s behalf to be refunded or applied to future liabilities.
Litigation
The nature of hotel operations exposes the Company and its hotels to the risk of claims and litigation in the normal course of their business. The Company is not presently subject to any material litigation nor, to the Company’s knowledge, is any litigation threatened against the Company, other than routine actions for negligence or other claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.
6.
Equity
Common Shares of Beneficial Interest
At December 31, 2016 and 2015 , there were 200,000,000 authorized common shares under the Company’s declaration of trust, as amended.
On January 1, 2015, the Company issued 11,682 common shares of beneficial interest and authorized an additional 4,183 deferred shares to the independent members of its Board of Trustees for their 2014 compensation. These common shares of beneficial interest were issued under the 2014 Plan. Additionally, the Company issued 9,757 common shares of beneficial interest under the 2009 Plan, related to the resignation of a former trustee, for the second of five payouts of his accumulated deferred shares granted as compensation for years 1999 through 2013. On November 9, 2015, the Company issued 30,388 common shares of beneficial interest for the trustee’s remaining deferred share balance. These common shares of beneficial interest were issued under the 2009 Plan and 2014 Plan.
On January 1, 2015, the Company issued 108,779 nonvested shares with service conditions to executives related to the nonvested share awards with market conditions granted on January 26, 2012 (see Note 7 for additional details including vesting information). These common shares of beneficial interest were issued under the 2009 Plan.
On March 19, 2015, the Company issued 62,742 nonvested shares with service conditions to the Company’s executives and employees. The nonvested shares will vest in three annual installments starting January 1, 2016, subject to continued employment. These common shares of beneficial interest were issued under the 2014 Plan.
On January 1, 2016, the Company issued 13,864 common shares of beneficial interest and authorized an additional 4,910 deferred shares to the independent members of its Board of Trustees for their 2015 compensation. These common shares of beneficial interest were issued under the 2014 Plan.
On March 1, 2016, the Company issued 36,926 common shares of beneficial interest to executives related to the nonvested share awards with market conditions granted on January 30, 2013 (see Note 7 for additional details including vesting information). These common shares of beneficial interest were issued under the 2009 Plan.
On March 18, 2016, the Company issued 98,787 nonvested shares with service conditions to the Company’s executives and employees. The nonvested shares will vest in three annual installments starting January 1, 2017, subject to continued employment. These common shares of beneficial interest were issued under the 2014 Plan.
On April 25, 2016, the Company issued 10,526 nonvested shares with service conditions to one of the Company’s executives. The nonvested shares will vest in three annual installments starting January 1, 2017, subject to continued employment. These common shares of beneficial interest were issued under the 2014 Plan.

F-24

On May 9, 2016, the Company issued 20,688 common shares of beneficial interest to its former Chief Financial Officer related to the nonvested share awards with market conditions, as a result of the previously announced termination of employment. Pursuant to the terms of the award agreements, a portion of his nonvested share awards with market conditions vested upon termination (see Note 7). Of the common shares of beneficial interest issued, 15,320 shares were issued under the 2009 Plan and 5,368 shares were issued under the 2014 Plan.
On August 11, 2016, the Company issued 42,824 common shares of beneficial interest to executives related to the nonvested share awards with market conditions granted on January 30, 2013 (see Note 7 for additional details including vesting information). These common shares of beneficial interest were issued under the 2009 Plan.
Common Dividends
The Company paid the following dividends on common shares/units during the year ended December 31, 2016 :
Dividend per
Share/Unit
 
For the Quarter Ended
 
Record Date
 
Date Paid
$
0.45

 
December 31, 2015
 
December 31, 2015
 
January 15, 2016
$
0.45

 
March 31, 2016
 
March 31, 2016
 
April 15, 2016
$
0.45

 
June 30, 2016
 
June 30, 2016
 
July 15, 2016
$
0.45

 
September 30, 2016
 
September 30, 2016
 
October 17, 2016
Treasury Shares
Treasury shares are accounted for under the cost method. During the year ended December 31, 2016 , the Company received 96,601 common shares of beneficial interest related to employees surrendering shares to pay minimum withholding taxes at the time nonvested shares vested and forfeiting nonvested shares upon resignation.
The Company’s Board of Trustees previously authorized a share repurchase program (the “Repurchase Program”) to acquire up to $100,000 of the Company’s common shares of beneficial interest, with repurchased shares recorded at cost in treasury. As of December 31, 2016 , the Company had availability under the Repurchase Program to acquire up to $69,807 of common shares of beneficial interest. In February 2017, the Company’s Board of Trustees authorized an expansion of the Repurchase Program to acquire up to an additional $500,000 of the Company’s common shares of beneficial interest (see Note 13). The timing, manner, price and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The Repurchase Program may be suspended, modified or terminated at any time for any reason without prior notice. The Repurchase Program does not obligate the Company to acquire any specific number of shares, and all open market repurchases will be made in accordance with applicable rules and regulations setting forth certain restrictions on the method, timing, price and volume of open market share repurchases.
During the year ended December 31, 2016 , the Company re-issued 13,864 treasury shares related to earned 2015 compensation for the Board of Trustees, 100,438 treasury shares related to the earned share awards with market conditions and 110,826 treasury shares related to the grants of nonvested shares with service conditions.
At December 31, 2016 , there were 27,368 common shares of beneficial interest in treasury.
Preferred Shares
At December 31, 2016 and 2015 , there were 40,000,000 authorized preferred shares under the Company’s declaration of trust, as amended.
On July 3, 2014, the Company redeemed the remaining 2,348,888 7.25% Series G Cumulative Redeemable Preferred Shares (the “Series G Preferred Shares”) for $58,722 ( $25.00 per share) plus accrued and unpaid dividends through the redemption date, July 3, 2014, of $1,100 . The redemption value of the Series G Preferred Shares exceeded their carrying value by $951 , which is included in the determination of net income attributable to common shareholders for the year ended December 31, 2014. The $951 represents the offering costs related to the redeemed Series G Preferred Shares.
On May 25, 2016, the Company issued 6,000,000 6.3% Series J Cumulative Redeemable Preferred Shares ( $0.01 par value) (the “Series J Preferred Shares”) at a price of $25.00 per share and received net proceeds, after deducting underwriting discounts and other offering costs, of $145,078 . The net proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility, and for general corporate purposes.

F-25

The following Preferred Shares were outstanding as of December 31, 2016 :
Security Type                                             
 
Number of
Shares
7.5% Series H Preferred Shares
 
2,750,000

6.375% Series I Preferred Shares
 
4,400,000

6.3% Series J Preferred Shares
 
6,000,000

The 7.5% Series H Cumulative Redeemable Preferred Shares (the “Series H Preferred Shares”), the 6.375% Series I Cumulative Redeemable Preferred Shares (the “Series I Preferred Shares”) and the Series J Preferred Shares (collectively, the “Preferred Shares”) rank senior to the common shares of beneficial interest and on parity with each other with respect to payment of distributions. The Company will not pay any distributions, or set aside any funds for the payment of distributions, on its common shares of beneficial interest unless it has also paid (or set aside for payment) (i) the full cumulative distributions on the Series H Preferred Shares for the current and all past dividend periods and (ii) the full cumulative distributions on the Series I Preferred Shares and the Series J Preferred Shares for all past dividend periods . The outstanding Preferred Shares do not have any maturity date, and are not subject to mandatory redemption. The difference between the carrying value and the redemption amount of the Preferred Shares are the offering costs. In addition, the Company is not required to set aside funds to redeem the Preferred Shares.
As of January 24, 2016, the Company may optionally redeem the Series H Preferred Shares. The Company may not optionally redeem the Series I Preferred Shares and the Series J Preferred Shares prior to March 4, 2018 and May 25, 2021, respectively, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below. After those dates, the Company may, at its option, redeem the Preferred Shares, in whole or from time to time in part, by payment of $25.00 per share, plus any accumulated, accrued and unpaid distributions. In addition, upon the occurrence of a change of control (as defined in the Company’s charter), the result of which the Company’s common shares of beneficial interest and the common securities of the acquiring or surviving entity are not listed on the New York Stock Exchange, the NYSE MKT LLC or the NASDAQ Stock Market, or any successor exchanges, the Company may, at its option, redeem the Preferred Shares in whole or in part within 120 days after the change of control occurred, by paying $25.00 per share, plus any accrued and unpaid distributions. If the Company does not exercise its right to redeem the Preferred Shares upon a change of control, the holders of Series H Preferred Shares, Series I Preferred Shares and Series J Preferred Shares have the right to convert some or all of their shares into a number of the Company’s common shares of beneficial interest based on a defined formula subject to a cap of 4,680,500 common shares, 8,835,200 commons shares and 12,842,400 common shares, respectively.
Preferred Dividends
The Company paid the following dividends on preferred shares during the year ended December 31, 2016 :
Security Type        
 
Dividend per Share (1)
 
For the Quarter Ended
 
Record Date
 
Date Paid
7.5% Series H
 
$
0.47

 
December 31, 2015
 
January 1, 2016
 
January 15, 2016
6.375% Series I
 
$
0.40

 
December 31, 2015
 
January 1, 2016
 
January 15, 2016
7.5% Series H
 
$
0.47

 
March 31, 2016
 
April 1, 2016
 
April 15, 2016
6.375% Series I
 
$
0.40

 
March 31, 2016
 
April 1, 2016
 
April 15, 2016
7.5% Series H
 
$
0.47

 
June 30, 2016
 
July 1, 2016
 
July 15, 2016
6.375% Series I
 
$
0.40

 
June 30, 2016
 
July 1, 2016
 
July 15, 2016
6.3% Series J (2)
 
$
0.22

 
June 30, 2016
 
July 1, 2016
 
July 15, 2016
7.5% Series H
 
$
0.47

 
September 30, 2016
 
September 30, 2016
 
October 17, 2016
6.375% Series I
 
$
0.40

 
September 30, 2016
 
September 30, 2016
 
October 17, 2016
6.3% Series J
 
$
0.39

 
September 30, 2016
 
September 30, 2016
 
October 17, 2016
(1) Amounts are rounded to the nearest whole cent for presentation purposes.
(2) Partial dividend for newly issued preferred shares.
Noncontrolling Interests of Common Units in Operating Partnership
On May 13, 2015, the Company issued an aggregate of 151,077 common shares of beneficial interest in connection with the redemption of 151,077 common units of limited partnership interest held by certain limited partners of the Operating Partnership. These common shares of beneficial interest were issued in reliance on an exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The Company relied on the exemption under Section 4(a)(2) based upon factual representations given by the limited partners who received the common shares of beneficial interest.

F-26

The following schedule presents the effects of changes in the Company’s ownership interest in the Operating Partnership on the Company’s equity:
 
For the year ended December 31,
 
2016
 
2015
 
2014
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561

Increase (decrease) in additional paid-in capital from adjustments to noncontrolling interests of common units in Operating Partnership
0

 
14

 
(397
)
Change from net income attributable to common shareholders and adjustments to noncontrolling interests
$
234,575

 
$
123,397

 
$
197,164

There were no redemptions of common units of limited partnership interest held by limited partners of the Operating Partnership in 2016.
As of December 31, 2016 , the Operating Partnership had 145,223 common units of limited partnership interest outstanding, representing a 0.1% partnership interest held by the limited partners. As of December 31, 2016 , approximately $4,425 of cash or the equivalent value in common shares, at the Company’s option, would be paid to the limited partners of the Operating Partnership if the partnership were terminated. The approximate value of $4,425 is based on the Company’s closing common share price of $30.47 on December 31, 2016 , which is assumed to be equal to the value provided to the limited partners upon liquidation of the Operating Partnership. Subject to certain limitations, the outstanding common units of limited partnership are redeemable for cash, or at the Company’s option, for a like number of common shares of beneficial interest of the Company.
7.
Equity Incentive Plan
The 2014 Plan permits the Company to issue equity-based awards to executives, employees, non-employee members of the Board of Trustees and any other persons providing services to or for the Company and its subsidiaries. The 2014 Plan provides for a maximum of 2,900,000 common shares of beneficial interest to be issued in the form of share options, share appreciation rights, restricted or unrestricted share awards, phantom shares, performance awards, incentive awards, other share-based awards, or any combination of the foregoing. In addition, the maximum number of common shares subject to awards of any combination that may be granted under the 2014 Plan during any fiscal year to any one individual is limited to 500,000 shares. The 2014 Plan terminates on February 17, 2024. The 2014 Plan authorized, among other things: (i) the grant of share options that qualify as incentive options under the Code, (ii) the grant of share options that do not so qualify, (iii) the grant of common shares in lieu of cash for trustees’ fees, (iv) grants of common shares in lieu of cash compensation and (v) the making of loans to acquire common shares in lieu of compensation (to the extent permitted by law and applicable provisions of the Sarbanes Oxley Act of 2002). The exercise price of share options is determined by the Compensation Committee of the Board of Trustees, but may not be less than 100% of the fair value of the common shares on the date of grant. Restricted share awards and options under the 2014 Plan vest over a period determined by the Compensation Committee of the Board of Trustees, generally a three year period. The duration of each option is also determined by the Compensation Committee, subject to applicable laws and regulations. At December 31, 2016 , there were 2,663,994 common shares available for future grant under the 2014 Plan. Upon the approval of the 2014 Plan by the common shareholders on May 7, 2014, the 2014 Plan replaced the 2009 Plan. The Company will no longer make any grants under the 2009 Plan (although awards previously made under the 2009 Plan that are outstanding will remain in effect in accordance with the terms of that plan and the applicable award agreements).
Nonvested Share Awards with Service Conditions
From time to time, the Company awards nonvested shares under the 2014 Plan to executives, employees and members of the Board of Trustees. The nonvested shares issued to executives and employees generally vest over three years based on continued employment. The shares issued to the members of the Board of Trustees vest immediately upon issuance. The Company determines the grant date fair value of the nonvested shares based upon the closing stock price of its common shares on the New York Stock Exchange on the date of grant and number of shares per the award agreements. Compensation costs are recognized on a straight-line basis over the requisite service period and are included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive income.

F-27

A summary of the Company’s nonvested shares with service conditions as of December 31, 2016 is as follows:
 
Number of
Shares
 
Weighted -
Average Grant
Date Fair Value
Nonvested at January 1, 2016
228,835

 
$
33.29

Granted
110,826

 
25.01

Vested (1)
(90,191
)
 
31.70

Forfeited
(12,711
)
 
27.41

Nonvested at December 31, 2016 (2)
236,759

 
$
30.78

(1)  
Amount includes accelerated vesting of the former Chief Financial Officer’s shares.
(2)  
Amount excludes 29,376 share awards with market conditions which were earned but nonvested due to a service condition as of December 31, 2016 .
As of December 31, 2016 and 2015 , there were $2,798 and $3,914 , respectively, of total unrecognized compensation costs related to nonvested share awards with service conditions. As of December 31, 2016 and 2015 , these costs were expected to be recognized over a weighted–average period of 1.2 and 1.4 years, respectively. The total intrinsic value of shares vested (calculated as number of shares multiplied by vesting date share price) during the years ended December 31, 2016 , 2015 and 2014 was $2,256 , $3,152 and $5,602 , respectively. Compensation costs (net of forfeitures) related to nonvested share awards with service conditions that have been included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $3,002 , $3,323 and $3,055 for the years ended December 31, 2016 , 2015 and 2014 , respectively.
On April 9, 2016, the Company finalized the former Chief Financial Officer’s severance package and the termination date was set to be no later than April 29, 2016. Pursuant to the terms of the award agreements, all of his nonvested share awards with service conditions would vest upon termination. Accordingly, the Company accelerated the recognition of previously unrecognized compensation costs related to his nonvested share awards with service conditions over the estimated remaining service period. On May 6, 2016, all of his nonvested share awards with service conditions vested with all remaining previously unrecognized compensation costs recognized. The compensation cost (net of forfeitures) that has been included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive income was $538 for the year ended December 31, 2016 .
Nonvested Share Awards with Market or Performance Conditions
On May 31, 2008, the Company’s Board of Trustees entered into three Performance-Based Share Agreements (the “Share Agreements”), awarding 125,000 nonvested share awards with market conditions, in 25,000 , 50,000 and 50,000 increments, of nonvested shares to an executive. The actual amounts of the shares awarded earned for each of the Share Agreements is based on the specified three -year performance measurement periods ending on July 1, 2011, 2014 and 2017, respectively. The actual amounts of the shares awarded are to range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the Share Agreements, and none of the shares are outstanding until issued in accordance with the Share Agreements.
On July 1, 2014, the Company issued 59,778 shares to an executive who earned 119.6% of the 50,000 target number of shares from the nonvested share awards with market conditions granted on May 31, 2008. All of the shares earned, or 59,778 shares, vested immediately on July 1, 2014. The executive received a cash payment of $239 on the earned shares equal to the value of all dividends paid on common shares from May 31, 2008 until the determination date, July 1, 2014. As of July 1, 2014, the executive is entitled to receive dividends as declared and paid on the earned shares and to vote the shares. These common shares of beneficial interest were issued under the 2009 Plan.
With respect to the remaining 50,000 shares with a performance measurement period ending on July 1, 2017, the fair value of these shares was estimated on July 1, 2014, the beginning of the performance measurement period.
On January 24 and January 26, 2011, the Company’s Board of Trustees granted a target of 8,925 and 35,920 nonvested share awards with market conditions to executives, respectively. On January 1, 2014, the executives earned 79.5% of the target number of shares, or 35,652 shares. The shares representing the difference between 79.5% and 100% of the target, or 9,193 shares, were forfeited on January 1, 2014. Of the earned shares, 11,885 shares vested immediately on January 1, 2014, 11,884 shares vested on January 1, 2015 and the remaining 11,883 shares vested on January 1, 2016. The executives received cash payments of $75 on the earned shares equal to the value of all dividends paid on common shares from December 31, 2010 until the determination date, January 1, 2014. As of January 1, 2014, the executives are entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting.

F-28

On January 26, 2012, the Company’s Board of Trustees granted a target of 79,823 nonvested share awards with market conditions to executives (the “January 26, 2012 Awards”). On January 1, 2015, the executives earned 136.3% of their 79,823 target number of shares, or 108,779 shares. Of the shares earned, 36,261 and 36,260 shares vested on January 1, 2015 and January 1, 2016, respectively. On May 6, 2016, upon his termination, all of the former Chief Financial Officer’s 6,882 earned shares vested immediately. The remaining 29,376 earned shares will vest January 1, 2017 based on continued employment. The executives received a cash payment of $334 on the earned shares equal to the value of all dividends paid on common shares from January 1, 2012 until the determination date, January 1, 2015. As of January 1, 2015, the executives are entitled to receive dividends as declared and paid on the earned shares and to vote the shares.
On January 30, 2013, the Company’s Board of Trustees granted a target of 80,559 nonvested share awards with either market or performance conditions to executives (the “January 30, 2013 Awards”). On March 1, 2016, the executives earned 91.7% of their 40,280 target number of shares, or 36,926 shares, and all of the earned shares vested immediately. The shares representing the difference between 91.7% and 100% of the target, or 3,354 shares, were forfeited on March 1, 2016. The executives also received a cash payment of $151 on the shares equal to the value of all dividends paid on common shares from January 1, 2013 until the determination date, February 29, 2016. As of March 1, 2016, the executives are entitled to receive dividends as declared and paid on the earned shares and to vote the shares. On August 11, 2016, the executives earned 133.2% of their 32,117 remaining target shares exclusive of the 8,162 shares granted to the former Chief Financial Officer, or 42,824 shares, and all of the earned shares vested immediately. The executives also received a cash payment of $214 on the shares equal to the value of all dividends paid on common shares from January 1, 2013 until the determination date, August 11, 2016. As of August 11, 2016, the executives are entitled to receive dividends as declared and paid on the earned shares and to vote the shares.
On March 20, 2014, the Company’s Board of Trustees granted a target of 57,385 nonvested share awards exclusive of the 14,582 shares granted to the former Chief Financial Officer, with either market or performance conditions to executives (the “March 20, 2014 Awards”). The actual amounts of the shares awarded with respect to 28,692 of the 57,385 shares will be determined on January 1, 2017, based on the performance measurement period of January 1, 2014 through December 31, 2016, in accordance with the terms of the agreements. The actual amounts of the shares awarded with respect to the remaining 28,693 of the 57,385 shares will be determined on July 1, 2017, based on the performance measurement period of July 1, 2014 through June 30, 2017, in accordance with the terms of the agreements. The actual amounts of the shares awarded will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the shares are outstanding until issued in accordance with award agreements based on performance. After the actual amounts of the awards are determined (or earned) at the end of the respective performance measurement period, all of the earned shares will be issued and outstanding on those dates. The executives will receive cash payments on the earned shares equal to the value of all dividends paid on common shares from the grant date through the respective determination date. Such amounts will be paid to the awardees on or about January 1, 2017 and July 1, 2017, respectively. Thereafter, the executives will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares. With respect to 28,692 shares, amortization commenced on March 20, 2014, the beginning of the requisite service period, and, with respect to 28,693 shares, amortization commenced on July 1, 2014, the beginning of the requisite service period.
On March 19, 2015, the Company’s Board of Trustees granted a target of 49,225 nonvested share awards exclusive of the 12,435 shares granted to the former Chief Financial Officer, with either market or performance conditions to executives (the “March 19, 2015 Awards”). The actual amounts of the shares awarded with respect to 24,612 of the 49,225 shares will be determined on January 1, 2018, based on the performance measurement period of January 1, 2015 through December 31, 2017, in accordance with the terms of the agreements. The actual amounts of the shares awarded with respect to the remaining 24,613 of the 49,225 shares will be determined on July 1, 2018, based on the performance measurement period of July 1, 2015 through June 30, 2018, in accordance with the terms of the agreements. The actual amounts of the shares awarded will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the shares are outstanding until issued in accordance with award agreements based on performance. After the actual amounts of the awards are determined (or earned) at the end of the respective performance measurement period, all of the earned shares will be issued and outstanding on those dates. The executives will receive cash payments on the earned shares equal to the value of all dividends paid on common shares from the grant date through the respective determination date. Such amounts will be paid to the awardees on or about January 1, 2018 and July 1, 2018, respectively. Thereafter, the executives will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares. With respect to 24,612 shares, amortization commenced on March 19, 2015, the beginning of the requisite service period, and, with respect to 24,613 shares, amortization commenced on July 1, 2015, the beginning of the requisite service period.
On March 18, 2016, the Company’s Board of Trustees granted a target of 77,565 nonvested share awards exclusive of the 19,610 shares granted to the former Chief Financial Officer, with either market or performance conditions to executives (the “March 18, 2016 Awards”). The actual amounts of the shares awarded with respect to 38,782 of the 77,565 shares will be determined on or about January 1, 2019, based on the performance measurement period of January 1, 2016 through December 31, 2018, in accordance with the terms of the agreements. The actual amounts of the shares awarded with respect to the remaining 38,783 of

F-29

the 77,565 shares will be determined on or about July 1, 2019, based on the performance measurement period of July 1, 2016 through June 30, 2019, in accordance with the terms of the agreements. The actual amounts of the shares awarded will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the shares are outstanding until issued in accordance with award agreements based on performance. After the actual amounts of the awards are determined (or earned) at the end of the respective performance measurement period, all of the earned shares will be issued and outstanding on those dates. The executives will receive cash payments on the earned shares equal to the value of all dividends paid on common shares from the grant date through the respective determination date. Such amounts will be paid to the awardees on or about January 1, 2019 and July 1, 2019, respectively. Thereafter, the executives will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares. With respect to 38,782 shares, amortization commenced on March 18, 2016, the beginning of the requisite service period, and, with respect to 38,783 shares, amortization commenced on July 1, 2016, the beginning of the requisite service period.
On April 25, 2016, the Company’s Board of Trustees granted a target of 12,632 nonvested share awards with either market or performance conditions to an executive (the “April 25, 2016 Awards”). The actual amounts of the shares awarded with respect to 6,316 of the 12,632 shares will be determined on or about January 1, 2019, based on the performance measurement period of January 1, 2016 through December 31, 2018, in accordance with the terms of the agreements. The actual amounts of the shares awarded with respect to the remaining 6,316 of the 12,632 shares will be determined on or about July 1, 2019, based on the performance measurement period of July 1, 2016 through June 30, 2019, in accordance with the terms of the agreements. The actual amounts of the shares awarded will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the shares are outstanding until issued in accordance with award agreements based on performance. After the actual amounts of the awards are determined (or earned) at the end of the respective performance measurement period, all of the earned shares will be issued and outstanding on those dates. The executive will receive cash payments on the earned shares equal to the value of all dividends paid on common shares from the grant date through the respective determination date. Such amounts will be paid to the awardee on or about January 1, 2019 and July 1, 2019, respectively. Thereafter, the executive will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares. With respect to 6,316 shares, amortization commenced on April 25, 2016, the beginning of the requisite service period, and with respect to 6,316 shares, amortization commenced on July 1, 2016, the beginning of the requisite service period.
The grant date fair values of the above described nonvested share awards with market conditions were determined by the Company using data under the Monte Carlo valuation method provided by a third-party consultant. The terms stipulated in the award agreements used to determine the total amount of the shares awarded for all awards granted prior to 2013 consist of the following three tranches: (1) a comparison of the Company’s “total return” (the increase in the market price of a Company’s common shares plus dividends declared thereon and assuming such dividends are reinvested as calculated by the FTSE NAREIT Equity Index) to the total return of the companies in the FTSE NAREIT Equity Index, (2) a comparison of the Company’s total return to the total returns of six companies in a designated peer group of the Company and (3) the Company’s actual performance as compared to a Board-established total return goal.
For the awards granted in 2013 and after, the nonvested awards consist of three tranches in each performance measurement period described above. Two of the tranches in the award agreements are nonvested share awards with market conditions, consistent with tranches described in (2) and (3) above, and were valued on the grant date via the methodology described above using a third-party consultant. The third tranche is based on “return on invested capital” discussed below, which is a performance condition. The grant date fair values of the tranches with performance conditions were calculated based on the targeted awards, and the valuation is adjusted on a periodic basis. As of December 31, 2016, a change in the Company’s estimate of probable outcome occurred for all the award tranches with performance conditions as the return on invested capital measurement assumptions (see below) was revised from 100% to 200% resulting in a cumulative adjustment to compensation cost.
The capital market assumptions used in the valuations consisted of the following:
•
Factors associated with the underlying performance of the Company’s share price and shareholder returns over the term of the awards including total share return volatility and risk-free interest.
•
Factors associated with the relative performance of the Company’s share price and shareholder returns when compared to those companies which compose the index including beta as a means to breakdown total volatility into market-related and company specific volatilities.
•
The valuation has been performed in a risk-neutral framework.
•
Return on invested capital is a performance condition award measurement. The estimated value was calculated based on the initial face value at the date of grant. The valuation will be adjusted on a periodic basis as the estimated number of awards expected to vest is revised.

F-30

The assumptions used were as follows for each performance measure:
 
Volatility
 
Interest
Rates
 
Dividend
Yield
 
Stock
Beta
 
Fair Value of
Components
of Award
 
Weighting
of Total
Awards
April 25, 2016 Awards (performance period starting January 1, 2016)
 
 
 
 
Target amounts
26.40
%
 
1.01
%
 
N/A
 
N/A

 
$
18.61

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
23.75

 
33.30
%
Peer companies
26.40
%
 
1.01
%
 
N/A
 
1.024

 
$
23.63

 
33.30
%
April 25, 2016 Awards (performance period starting July 1, 2016)
 
 
 
 
Target amounts
26.40
%
 
1.01
%
 
N/A
 
N/A

 
$
20.47

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
23.75

 
33.30
%
Peer companies
26.40
%
 
1.01
%
 
N/A
 
1.024

 
$
26.10

 
33.30
%
March 18, 2016 Awards (performance period starting January 1, 2016)
 
 
 
 
Target amounts
26.40
%
 
1.00
%
 
N/A
 
N/A

 
$
22.23

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
25.14

 
33.30
%
Peer companies
26.40
%
 
1.00
%
 
N/A
 
1.023

 
$
25.18

 
33.30
%
March 18, 2016 Awards (performance period starting July 1, 2016)
 
 
 
 
Target amounts
26.40
%
 
1.00
%
 
N/A
 
N/A

 
$
21.65

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
25.14

 
33.30
%
Peer companies
26.40
%
 
1.00
%
 
N/A
 
1.023

 
$
27.81

 
33.30
%
March 19, 2015 Awards (performance period starting January 1, 2015)
 
 
 
 
Target amounts
24.40
%
 
0.99
%
 
N/A
 
N/A

 
$
29.25

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
38.84

 
33.30
%
Peer companies
24.40
%
 
0.99
%
 
N/A
 
1.011

 
$
40.69

 
33.30
%
March 19, 2015 Awards (performance period starting July 1, 2015)
 
 
 
 
Target amounts
24.40
%
 
0.99
%
 
N/A
 
N/A

 
$
31.86

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
38.84

 
33.30
%
Peer companies
24.40
%
 
0.99
%
 
N/A
 
1.011

 
$
41.00

 
33.30
%
May 31, 2008 Awards (performance period starting July 1, 2014)
 
 
 
 
Target amounts
33.30
%
 
0.90
%
 
N/A
 
N/A

 
$
32.57

 
20.00
%
NAREIT index
33.30
%
 
0.90
%
 
N/A
 
1.356

 
$
39.26

 
40.00
%
Peer companies
33.30
%
 
0.90
%
 
N/A
 
0.908

 
$
38.15

 
40.00
%
March 20, 2014 Awards (performance period starting January 1, 2014)
 
 
 
 
 
 
Target amounts
33.70
%
 
0.90
%
 
N/A
 
N/A

 
$
31.94

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
31.82

 
33.30
%
Peer companies
33.70
%
 
0.90
%
 
N/A
 
0.938

 
$
31.02

 
33.30
%
March 20, 2014 Awards (performance period starting July 1, 2014)
 
 
 
 
 
 
Target amounts
33.70
%
 
0.90
%
 
N/A
 
N/A

 
$
31.23

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
31.82

 
33.30
%
Peer companies
33.70
%
 
0.90
%
 
N/A
 
0.938

 
$
34.53

 
33.30
%
January 30, 2013 Awards (performance period starting January 1, 2013)
 
 
 
 
 
 
Target amounts
38.70
%
 
0.42
%
 
N/A
 
N/A

 
$
29.38

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
27.20

 
33.30
%
Peer companies
38.70
%
 
0.42
%
 
N/A
 
0.864

 
$
30.51

 
33.30
%
January 30, 2013 Awards (performance period starting July 1, 2013)
 
 
 
 
 
 
Target amounts
38.70
%
 
0.42
%
 
N/A
 
N/A

 
$
27.70

 
33.40
%
Return on invested capital
N/A

 
N/A

 
N/A
 
N/A

 
$
27.20

 
33.30
%
Peer companies
38.70
%
 
0.42
%
 
N/A
 
0.864

 
$
31.34

 
33.30
%
January 26, 2012 Awards
 
 
 
 
 
 
 
 
 
 
 
Target amounts
65.30
%
 
0.31
%
 
N/A
 
N/A

 
$
36.22

 
33.40
%
NAREIT index
65.30
%
 
0.31
%
 
N/A
 
1.370

 
$
35.25

 
33.30
%
Peer companies
65.30
%
 
0.31
%
 
N/A
 
0.911

 
$
35.33

 
33.30
%

F-31

A summary of the Company’s restricted share awards with either market or performance conditions as of December 31, 2016 is as follows:
 
Number of
Shares
 
Weighted-
Average Grant
Date Fair Value
Nonvested at January 1, 2016
348,587

 
$
33.98

Granted (1)(2)
121,372

 
24.74

Vested (2)
(155,463
)
 
31.89

Forfeited (2)
(38,313
)
 
29.26

Nonvested at December 31, 2016
276,183

 
$
27.36

(1)  
Amount includes an additional 10,707 shares issued on August 11, 2016 from the January 30, 2013 grant, which were earned in excess of the target amount.
(2)  
Amounts include 27,570 shares vested, 858 shares earned in excess of target amount, and 34,959 shares forfeited, respectively, upon termination of the former Chief Financial Officer.
As of December 31, 2016 and 2015 , there were $3,757 and $5,342 , respectively, of total unrecognized compensation costs related to restricted share awards with market or performance conditions. As of December 31, 2016 and 2015 , these costs were expected to be recognized over a weighted–average period of 1.8 and 1.7 years, respectively. As of December 31, 2016 and 2015 , there were 463,532 and 308,069 share awards with market or performance conditions vested, respectively. Additionally, there were 29,376 and 84,401 nonvested share awards with market or performance conditions earned but nonvested due to a service condition as of December 31, 2016 and 2015 , respectively. Compensation costs (net of forfeitures) related to nonvested share awards with market or performance conditions are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $3,896 , $4,360 and $3,567 for the years ended December 31, 2016 , 2015 and 2014 , respectively.
On April 9, 2016, the Company finalized the former Chief Financial Officer’s severance package and the termination date was set to be no later than April 29, 2016. Pursuant to the terms of the award agreements, a portion of his nonvested share awards with market or performance conditions would vest upon termination. Accordingly, the Company accelerated the recognition of previously unrecognized compensation costs on his nonvested share awards with market or performance conditions over the estimated remaining service period. On May 6, 2016 and May 9, 2016, a portion of his nonvested share awards with market or performance conditions vested, a portion was forfeited and additional shares were earned for awards valued at over 100% of the target, with all remaining previously unrecognized compensation costs recognized. The compensation cost (net of forfeitures) related to his nonvested share awards with market or performance conditions that has been included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive income was $96 for the year ended December 31, 2016 .
For the year ended December 31, 2016 , severance expense related to the former Chief Financial Officer’s termination totaled $1,576 and included cash compensation and benefits, compensation for shares with service conditions and shares with market or performance conditions and cash payments related to dividends on restricted shares that vested.
Board of Trustees’ Compensation
The Company issues common shares of beneficial interest to the independent members of the Board of Trustees for at least half of their compensation in lieu of cash. The Trustees may elect to receive the remaining half in cash or additional common shares. All or a portion of the shares issued may be deferred. The Company issued an aggregate of 25,113 , 18,774 and 15,865 shares, including 9,103 , 4,910 and 4,183 deferred shares, related to the Trustees’ compensation for the years 2016 , 2015 and 2014 , respectively.
8.
LHL
Substantially all of the Company’s revenues are derived from operating revenues generated by the hotels, all of which are leased by LHL.

F-32

Other indirect hotel operating expenses consist of the following expenses incurred by the hotels:
 
For the year ended December 31,
 
2016
 
2015
 
2014
General and administrative
$
103,993

 
$
101,397

 
$
87,210

Sales and marketing
75,212

 
73,654

 
61,249

Repairs and maintenance
39,309

 
39,521

 
37,169

Management and incentive fees
40,064

 
39,686

 
36,463

Utilities and insurance
33,109

 
34,427

 
32,296

Franchise fees
10,396

 
9,836

 
8,346

Other expenses
3,182

 
2,483

 
1,775

Total other indirect expenses
$
305,265

 
$
301,004

 
$
264,508



F-33

As of December 31, 2016 , LHL leased all 46 hotels owned by the Company as follows:
 
 
Hotel Properties
 
Location
1.
 
Hotel Amarano Burbank
 
Burbank, CA
2.
 
L’Auberge Del Mar
 
Del Mar, CA
3.
 
Hilton San Diego Gaslamp Quarter
 
San Diego, CA
4.
 
Hotel Solamar
 
San Diego, CA
5.
 
San Diego Paradise Point Resort and Spa
 
San Diego, CA
6.
 
The Hilton San Diego Resort and Spa
 
San Diego, CA
7.
 
Harbor Court Hotel
 
San Francisco, CA
8.
 
Hotel Triton
 
San Francisco, CA
9.
 
Hotel Vitale
 
San Francisco, CA
10.
 
Park Central San Francisco
 
San Francisco, CA
11.
 
Serrano Hotel
 
San Francisco, CA
12.
 
The Marker San Francisco
 
San Francisco, CA
13.
 
Villa Florence
 
San Francisco, CA
14.
 
Chaminade Resort and Conference Center
 
Santa Cruz, CA
15.
 
Viceroy Santa Monica
 
Santa Monica, CA
16.
 
Chamberlain West Hollywood
 
West Hollywood, CA
17.
 
Le Montrose Suite Hotel
 
West Hollywood, CA
18.
 
Le Parc Suite Hotel
 
West Hollywood, CA
19.
 
The Grafton on Sunset
 
West Hollywood, CA
20.
 
Hotel George
 
Washington, DC
21.
 
Hotel Madera
 
Washington, DC
22.
 
Hotel Palomar, Washington, DC
 
Washington, DC
23.
 
Hotel Rouge
 
Washington, DC
24.
 
Mason & Rook Hotel
 
Washington, DC
25.
 
Sofitel Washington, DC Lafayette Square
 
Washington, DC
26.
 
The Donovan
 
Washington, DC
27.
 
The Liaison Capitol Hill
 
Washington, DC
28.
 
Topaz Hotel
 
Washington, DC
29.
 
Southernmost Beach Resort Key West
 
Key West, FL
30.
 
The Marker Waterfront Resort
 
Key West, FL
31.
 
Hotel Chicago
 
Chicago, IL
32.
 
Westin Michigan Avenue
 
Chicago, IL
33.
 
Hyatt Regency Boston Harbor
 
Boston, MA
34.
 
Onyx Hotel
 
Boston, MA
35.
 
The Liberty Hotel
 
Boston, MA
36.
 
Westin Copley Place
 
Boston, MA
37.
 
Gild Hall
 
New York, NY
38.
 
The Roger
 
New York, NY
39.
 
Park Central Hotel New York (shared lease with WestHouse Hotel New York)
 
New York, NY
40.
 
WestHouse Hotel New York
 
New York, NY
41.
 
The Heathman Hotel
 
Portland, OR
42.
 
Embassy Suites Philadelphia - Center City
 
Philadelphia, PA
43.
 
Westin Philadelphia
 
Philadelphia, PA
44.
 
Lansdowne Resort
 
Lansdowne,VA
45.
 
Alexis Hotel
 
Seattle, WA
46.
 
Hotel Deca (1)
 
Seattle, WA
(1) Property sold on January 19, 2017 (see Note 13).

F-34

9.
Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 1998. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted taxable income to its shareholders. It is the Company’s current intention to adhere to these requirements and maintain the Company’s qualification for taxation as a REIT. As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its net income that is currently distributed to shareholders. If the Company fails to qualify for taxation as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through a TRS is subject to federal, state and local income taxes. As a wholly owned TRS of the Company, LHL is required to pay income taxes at the applicable federal, state and local rates.
For federal income tax purposes, the cash distributions paid to the Company’s common shareholders of beneficial interest and preferred shareholders may be characterized as ordinary income, return of capital (generally non-taxable) or capital gains. Tax law permits certain characterization of distributions which could result in differences between cash basis and tax basis distribution amounts.

F-35

The following characterizes distributions paid per common share of beneficial interest and preferred share on a tax basis for the years ended December 31, 2016 , 2015 and 2014 :
 
2016
 
2015
 
2014
 
$
 
%
 
$
 
%
 
$
 
%
Common shares of beneficial interest
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
$
1.1631

 
62.26
%
 
$
1.6570

 
100.00
%
 
$
1.4556

 
100.00
%
Capital gain
0.4550

 
24.36
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
Unrecaptured Section 1250 gain
0.2499

 
13.38
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
$
1.8680

 
100.00
%
 
$
1.6570

 
100.00
%
 
$
1.4556

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
Preferred shares (Series G) (1)
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
$
0.0000

 
0.00
%
 
$
0.0000

 
0.00
%
 
$
1.3745

 
100.00
%
Capital gain
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
Unrecaptured Section 1250 gain
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
$
0.0000

 
0.00
%
 
$
0.0000

 
0.00
%
 
$
1.3745

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
Preferred shares (Series H)
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
$
1.4593

 
62.26
%
 
$
1.8750

 
100.00
%
 
$
1.8750

 
100.00
%
Capital gain
0.5709

 
24.36
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
Unrecaptured Section 1250 gain
0.3136

 
13.38
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
$
2.3438

 
100.00
%
 
$
1.8750

 
100.00
%
 
$
1.8750

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
Preferred shares (Series I)
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
$
1.2404

 
62.26
%
 
$
1.5938

 
100.00
%
 
$
1.5938

 
100.00
%
Capital gain
0.4853

 
24.36
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
Unrecaptured Section 1250 gain
0.2665

 
13.38
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
$
1.9922

 
100.00
%
 
$
1.5938

 
100.00
%
 
$
1.5938

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
Preferred shares (Series J) (2)
 
 
 
 
 
 
 
 
 
 
 
Ordinary income
$
0.6265

 
62.26
%
 
$
0.0000

 
0.00
%
 
$
0.0000

 
0.00
%
Capital gain
0.2451

 
24.36
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
Unrecaptured Section 1250 gain
0.1346

 
13.38
%
 
0.0000

 
0.00
%
 
0.0000

 
0.00
%
 
$
1.0062

 
100.00
%
 
$
0.0000

 
0.00
%
 
$
0.0000

 
0.00
%
(1) On July 3, 2014, the Company redeemed its remaining Series G Preferred Shares (see Note 6).
(2) On May 25, 2016, the Company issued the Series J Preferred Shares (see Note 6).
The Company’s federal and state tax returns for the year ended December 31, 2016 have not been filed. The taxability information presented for the Company’s dividends paid in 2016 is based upon management’s estimate.
Income tax expense (benefit) was comprised of the following for the years ended December 31, 2016 , 2015 and 2014 :
 
For the year ended December 31,
 
2016
 
2015
 
2014
LHL’s income tax expense (benefit)
$
4,491

 
$
(2,546
)
 
$
1,260

Operating Partnership’s income tax expense
1,293

 
1,254

 
1,046

Total income tax expense (benefit)
$
5,784

 
$
(1,292
)
 
$
2,306


F-36

The components of LHL’s income tax expense (benefit) and income (loss) before income tax expense (benefit) for the years ended December 31, 2016 , 2015 and 2014 were as follows:
 
For the year ended December 31,
 
2016
 
2015
 
2014
LHL’s income tax expense (benefit):
 
 
 
 
 
Federal
 
 
 
 
 
Current
$
1,490

 
$
(510
)
 
$
912

Deferred
1,901

 
(1,251
)
 
372

State & local
 
 
 
 
 
Current
516

 
83

 
297

Deferred
584

 
(868
)
 
(321
)
Total
$
4,491

 
$
(2,546
)
 
$
1,260

 
 
 
 
 
 
LHL’s income (loss) before income tax expense (benefit)
$
10,255

 
$
(4,876
)
 
$
3,559

LHL’s provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to LHL’s pretax income (loss) for the years ended December 31, 2016 , 2015 and 2014 as a result of the following differences:
 
For the year ended December 31,
 
2016
 
2015
 
2014
“Expected” federal tax expense (benefit) at statutory rate
$
3,487

 
$
(1,658
)
 
$
1,210

State income tax expense (benefit), net of federal income tax effect
776

 
(443
)
 
302

Other, net
228

 
(445
)
 
(252
)
Income tax expense (benefit)
$
4,491

 
$
(2,546
)
 
$
1,260

LHL’s deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:
 
December 31,
 
2016
 
2015
Net operating loss carryforwards
$
1,902

 
$
4,175

Bad debt reserves (1)
260

 
255

Golf membership deferred revenue (1)(2)
(347
)
 
(343
)
Straight-line rent (1)(2)
(734
)
 
(643
)
Other
0

 
122

Net deferred tax assets
$
1,081

 
$
3,566

(1)  
Amounts included in accounts payable and accrued expenses in the accompanying consolidated balance sheets for 2016.
(2)  
For 2015, amounts netted because of the existence of deferred tax assets in both federal and state jurisdictions.
As of December 31, 2016 , the Company had net deferred tax assets of $1,081 primarily due to temporary federal differences and current and past years’ state tax net operating losses. These loss carryforwards will generally expire in 2017 through 2035 if not utilized by then. The Company analyzes state loss carryforwards on a state by state basis and records a valuation allowance when management deems it more likely than not that future results will not generate sufficient taxable income in the respective state to realize the deferred tax asset prior to the expiration of the loss carryforwards. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets related to state loss carryforwards prior to the expiration of the loss carryforwards and has determined that no valuation allowance is necessary. From time to time, the Company may be subject to federal, state or local tax audits in the normal course of business.

F-37

Regarding accounting for uncertainty in income taxes, GAAP guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is “more-likely-than-not” that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the previously unrecognized benefit associated with the position is recognized in the financial statements. This guidance applies to all positions related to income taxes.
The Company has no material unrecognized income tax benefits as of December 31, 2016 and 2015 . As of December 31, 2016 , the tax years that remain subject to examination by major tax jurisdictions generally include 2012 through 2016 .
10.
Fair Value Measurements
In evaluating fair value, GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entity’s own assumptions about market data (unobservable inputs). The hierarchy ranks the quality and reliability of inputs used to determine fair value, which are then classified and disclosed in one of the three categories. The three levels are as follows:
Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.
Level 2—Observable inputs, other than quoted prices included in level 1, such as interest rates, yield curves, quoted prices in active markets for similar assets and liabilities, and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3—Unobservable inputs that are supported by limited market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques when observable inputs are not available.
The Company estimates the fair value of its financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and subjectivity are involved in developing these estimates and, accordingly, such estimates are not necessarily indicative of amounts that would be realized upon disposition.
Recurring Measurements
For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of their fair value is as follows:
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2016
 
December 31, 2015
 
 
 
 
Using Significant Other Observable
 
 
 
 
Inputs (Level 2)
Description
 
Consolidated Balance Sheet Location
 
 
 
 
Derivative interest rate instruments
 
Prepaid expenses and other assets
 
$
3,295

 
$
1,605

Derivative interest rate instruments
 
Accounts payable and accrued expenses
 
$
927

 
$
1,702

The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows under each arrangement. This analysis reflects the contractual terms of the derivative instrument, including the period to maturity, and utilizes observable market-based inputs, including interest rate curves and implied volatilities, which are classified within level 2 of the fair value hierarchy. The Company also incorporates credit value adjustments to appropriately reflect each parties’ nonperformance risk in the fair value measurement, which utilizes level 3 inputs such as estimates of current credit spreads. However, the Company has assessed that the credit valuation adjustments are not significant to the overall valuation of the derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified within level 2 of the fair value hierarchy.

F-38

Financial Instruments Not Measured at Fair Value
The following table represents the fair value, derived using level 2 inputs, of financial instruments presented at carrying value in the Company’s consolidated financial statements as of December 31, 2016 and 2015 :
 
December 31, 2016
 
December 31, 2015
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Note receivable
$
0

 
$
0

 
$
80,000

 
$
80,000

Borrowings under credit facilities
$
0

 
$
0

 
$
21,000

 
$
21,061

Term loans
$
855,000

 
$
857,224

 
$
855,000

 
$
856,038

Bonds payable
$
42,500

 
$
42,500

 
$
42,500

 
$
42,500

Mortgage loans
$
225,000

 
$
225,224

 
$
511,294

 
$
511,786

The Company estimated the fair value of its borrowings under credit facilities, term loans, bonds payable and mortgage loans using interest rates ranging from 1.5% to 1.8% as of December 31, 2016 and from 1.5% to 4.4% as of December 31, 2015 with a weighted average effective interest rate of 1.5% and 2.1% as of December 31, 2016 and 2015 , respectively. The assumptions reflect the terms currently available on similar borrowings to borrowers with credit profiles similar to the Company’s.
At December 31, 2016 and 2015 , the carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and distributions payable were representative of their fair values due to the short-term nature of these instruments and the recent acquisition of these items.
11.
Earnings per Common Share
The limited partners’ outstanding common partnership units in the Operating Partnership (which may be converted to common shares of beneficial interest) have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income or loss would also be added back to net income or loss. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards expected to vest that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested restricted shares (participating securities) have been excluded, as applicable, from net income or loss attributable to common shareholders used in the basic and diluted earnings per share calculations. Net income or loss figures are presented net of noncontrolling interests in the earnings per share calculations.
The computation of basic and diluted earnings per common share is as follows:
 
For the year ended December 31,
 
2016
 
2015
 
2014
Numerator:
 
 
 
 
 
Net income attributable to common shareholders
$
234,575

 
$
123,383

 
$
197,561

Dividends paid on unvested restricted shares
(491
)
 
(542
)
 
(411
)
Undistributed earnings attributable to unvested restricted shares
(70
)
 
0

 
(138
)
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
234,014

 
$
122,841

 
$
197,012

Denominator:
 
 
 
 
 
Weighted average number of common shares - basic
112,791,839

 
112,685,235

 
104,188,785

Effect of dilutive securities:
 
 
 
 
 
Compensation-related shares
372,760

 
411,185

 
357,110

Weighted average number of common shares - diluted
113,164,599

 
113,096,420

 
104,545,895

Earnings per Common Share - Basic:
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
2.07

 
$
1.09

 
$
1.89

Earnings per Common Share - Diluted:
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
2.07

 
$
1.09

 
$
1.88


F-39

12.
Supplemental Information to Statements of Cash Flows
 
For the year ended December 31,
 
2016
 
2015
 
2014
Interest paid, net of capitalized interest
$
41,483

 
$
52,155

 
$
54,558

Interest capitalized
398

 
902

 
400

Income taxes paid, net
5,111

 
3,112

 
815

Increase in distributions payable on common shares
58

 
8,477

 
13,227

Increase (decrease) in distributions payable on preferred shares
2,363

 
0

 
(1,064
)
Redemption of common units for common shares
0

 
3,400

 
0

Write-off of fully depreciated furniture, fixtures and equipment
0

 
16,000

 
582

Write-off of fully amortized debt issuance costs
826

 
131

 
273

(Decrease) increase in accrued capital expenditures
(6,149
)
 
2,334

 
(994
)
Grant of nonvested shares and awards to employees and executives, net
4,831

 
5,188

 
7,953

Issuance of common shares for Board of Trustees compensation (1)
480

 
1,874

 
602

In conjunction with the sale of properties, the Company disposed of the following assets and liabilities:
 
 
 
 
 
Sale proceeds, net of closing costs
$
164,094

 
$
0

 
$
167,921

Other assets
4,226

 
0

 
1,397

Liabilities
(1,655
)
 
0

 
(1,480
)
Proceeds from sale of properties
$
166,665

 
$
0

 
$
167,838

In conjunction with the acquisition of properties, the Company assumed the following assets and liabilities:
 
 
 
 
 
Investment in properties (after credits at closing)
$
0

 
$
(445,734
)
 
$
(194,198
)
Other assets
0

 
(1,897
)
 
(1,361
)
Liabilities
0

 
8,474

 
4,448

Acquisition of properties
$
0

 
$
(439,157
)
 
$
(191,111
)
(1) Refer to Note 6 for issuances of previously deferred shares.
13.
Subsequent Events
On January 1, 2017 , the Company issued 16,010 common shares of beneficial interest and authorized an additional 9,103 deferred shares to the independent members of its Board of Trustees for their 2016 compensation. These common shares of beneficial interest were issued under the 2014 Plan.
On January 4, 2017 , the Company received 54,410 common shares of beneficial interest related to executives and employees surrendering shares to pay taxes at the time restricted shares vested.
On January 31, 2017 the Company issued 27,767 common shares of beneficial interest, related to a former Board of Trustee member, for his accumulated deferred shares granted as compensation for years 2001 through 2016. Of the common shares of beneficial interest issued, 4,888 were issued under the 2014 Plan and the remaining 22,879 were issued under the 2009 Plan.
The Company paid the following common and preferred share dividends subsequent to December 31, 2016 :
Security Type                                
 
Dividend per Share/Unit (1)
 
For the Quarter Ended
 
Record Date
 
Date Paid
Common Shares/Units
 
$
0.45

 
December 31, 2016
 
December 30, 2016
 
January 17, 2017
7.5% Series H Preferred Shares
 
$
0.47

 
December 31, 2016
 
December 30, 2016
 
January 17, 2017
6.375% Series I Preferred Shares
 
$
0.40

 
December 31, 2016
 
December 30, 2016
 
January 17, 2017
6.3% Series J Preferred Shares
 
$
0.39

 
December 31, 2016
 
December 30, 2016
 
January 17, 2017
(1) Amounts are rounded to the nearest whole cent for presentation purposes.
On January 10, 2017, the Company refinanced its senior unsecured credit facility and First Term Loan. The $750,000 senior unsecured credit facility has a revised accordion feature which, subject to certain terms and conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $1,250,000 . The new maturity date is January 8, 2021, subject to two six -month extension options, pursuant to certain terms and conditions, including payment of an extension

F-40

fee. Borrowings bear interest at variable rates equal to, at the Company’s option, either (i) LIBOR plus an applicable margin, or (ii) an Adjusted Base Rate (as defined in the credit agreement) plus an applicable margin. The $300,000 First Term Loan includes an accordion feature, which subject to certain terms and conditions, entitles the Company to request additional lender commitments, allowing for total commitments of up to $500,000 . The First Term Loan matures on January 10, 2022 and bears interest at variable rates, but was hedged to a fixed interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) through August 2, 2017 (see Note 4).
On January 10, 2017, the Company amended and restated its $555,000 Second Term Loan to match the financial and other covenants in its refinanced First Term Loan and senior unsecured credit facility. There were no changes to the maturity date or the accordion feature. The Second Term Loan bears interest at variable rates, but was hedged to a fixed interest rate based on the Company’s current leverage ratio (as defined in the swap agreements) through May 16, 2019 for $177,500 of the Second Term Loan and through January 29, 2021 for the remaining $377,500 of the Second Term Loan (see Note 4).
Additionally, LHL refinanced its unsecured revolving credit facility with no change in capacity of $25,000 , on similar terms as the senior unsecured credit facility. The new maturity date is January 10, 2021, subject to two six -month extension options, pursuant to certain terms and conditions, including payment of an extension fee.
On January 19, 2017, the Company sold Hotel Deca for $55,000 . Substantially all of the assets held for sale consist of investment in hotel properties, net and immaterial prepaid expenses and other assets and the liabilities of assets held for sale consist of accounts payable and accrued expenses. The Company will recognize a gain in the first quarter of 2017 of approximately $30,500 related to the sale of this property. The proceeds will be used for general corporate purposes.
In February 2017, the Company’s Board of Trustees authorized an expansion of the Repurchase Program to acquire up to an additional $500,000 of the Company’s common shares of beneficial interest. Including the previous authorization, the Company now has availability under the Repurchase Program to acquire up to $569,807 of common shares of beneficial interest as of February 22, 2017.
14.
Quarterly Operating Results (Unaudited)
The Company’s unaudited consolidated quarterly operating data for the years ended December 31, 2016 and 2015 (in thousands, except per share data) follows. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of quarterly results have been reflected in the data. It is also management’s opinion, however, that quarterly operating data for hotel enterprises are not indicative of results to be achieved in succeeding quarters or years.
 
Year Ended December 31, 2016
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
Total revenues
$
261,758

 
$
352,763

 
$
431,652

 
$
289,477

Total expenses
252,684

 
293,143

 
273,974

 
262,714

Net income
9,074

 
59,620

 
157,678

 
26,763

Net income attributable to noncontrolling interests
(15
)
 
(89
)
 
(203
)
 
(47
)
Distributions to preferred shareholders
(3,042
)
 
(4,355
)
 
(5,405
)
 
(5,404
)
Net income attributable to common shareholders
$
6,017

 
$
55,176

 
$
152,070

 
$
21,312

Earnings per Common Share—Basic:
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
0.05

 
$
0.49

 
$
1.34

 
$
0.19

Earnings per Common Share—Diluted:
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
0.05

 
$
0.49

 
$
1.34

 
$
0.19

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
112,748,492

 
112,784,976

 
112,811,403

 
112,821,939

Diluted
113,108,158

 
113,113,253

 
113,159,844

 
113,185,883


F-41

 
Year Ended December 31, 2015
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
Total revenues
$
250,809

 
$
341,387

 
$
331,004

 
$
296,322

Total expenses
248,071

 
282,376

 
283,462

 
269,784

Net income
2,738

 
59,011

 
47,542

 
26,538

Net income attributable to noncontrolling interests
(15
)
 
(147
)
 
(75
)
 
(40
)
Distributions to preferred shareholders
(3,042
)
 
(3,042
)
 
(3,043
)
 
(3,042
)
Net (loss) income attributable to common shareholders
$
(319
)
 
$
55,822

 
$
44,424

 
$
23,456

Earnings per Common Share—Basic:
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
0.00

 
$
0.49

 
$
0.39

 
$
0.21

Earnings per Common Share—Diluted:
 
 
 
 
 
 
 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares
$
0.00

 
$
0.49

 
$
0.39

 
$
0.21

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
112,647,715

 
112,728,085

 
112,731,358

 
112,633,429

Diluted
112,647,715

 
113,141,908

 
113,137,284

 
113,028,661


F-42

LASALLE HOTEL PROPERTIES
Schedule III—Real Estate and Accumulated Depreciation
As of December 31, 2016
(in thousands)
 
 
 
 
Initial Cost
 
Cost Capitalized Subsequent
to Acquisition (1)
 
Gross Amount at End of Year
 
 
 
 
 
 
 
Life on
Which
Depreciation
in Statement
of Operations
is Computed
 
 
Encum-
brances
 
Land
 
Building
and
Improve-
ments
 
Furniture,
Fixtures
and
Equipment
 
Land
 
Building
and
Improve-
ments
 
Furniture,
Fixtures
and
Equipment
 
Land
 
Building
and
Improve-
ments
 
Furniture,
Fixtures
and
Equipment
 
Accumu-
lated
Depre-
ciation
 
Net Book
Value
 
Date of
Original
Construc-
tion
 
Date of
Acqui-
sition
 
1.
Le Montrose Suite Hotel
$
0

 
$
5,004

 
$
19,752

 
$
2,951

 
$
0

 
$
5,764

 
$
14,418

 
$
5,004

 
$
25,516

 
$
17,369

 
$
29,951

 
$
17,938

 
1976
 
4/29/1998
 
3-40 years
2.
San Diego Paradise Point Resort and Spa
0

 
0

 
69,639

 
3,665

 
154

 
43,196

 
35,711

 
154

 
112,835

 
39,376

 
95,926

 
56,439

 
1962
 
6/1/1998
 
3-40 years
3.
Hyatt Regency Boston Harbor
42,500

 
0

 
66,159

 
5,246

 
16

 
5,059

 
15,952

 
16

 
71,218

 
21,198

 
58,736

 
33,696

 
1993
 
6/24/1998
 
3-40 years
4.
Topaz Hotel
0

 
2,137

 
8,549

 
0

 
12

 
4,307

 
6,845

 
2,149

 
12,856

 
6,845

 
12,719

 
9,131

 
1963
 
3/8/2001
 
3-40 years
5.
Hotel Madera
0

 
1,682

 
6,726

 
0

 
15

 
5,559

 
6,643

 
1,697

 
12,285

 
6,643

 
11,685

 
8,940

 
1963
 
3/8/2001
 
3-40 years
6.
Hotel Rouge
0

 
2,162

 
8,647

 
0

 
17

 
5,071

 
8,233

 
2,179

 
13,718

 
8,233

 
14,764

 
9,366

 
1963
 
3/8/2001
 
3-40 years
7.
Mason & Rook Hotel
0

 
2,636

 
10,546

 
0

 
14

 
26,545

 
8,718

 
2,650

 
37,091

 
8,718

 
12,087

 
36,372

 
1962
 
3/8/2001
 
3-40 years
8.
The Liaison Capitol Hill
0

 
8,353

 
33,412

 
2,742

 
19

 
15,647

 
23,494

 
8,372

 
49,059

 
26,236

 
48,663

 
35,004

 
1968
 
6/1/2001
 
3-40 years
9.
Lansdowne Resort
0

 
27,421

 
74,835

 
3,114

 
33,333

 
28,210

 
37,225

 
60,754

 
103,045

 
40,339

 
83,776

 
120,362

 
1991
 
6/17/2003
 
3-40 years
10.
Hotel George
0

 
1,743

 
22,221

 
531

 
0

 
1,141

 
8,745

 
1,743

 
23,362

 
9,276

 
16,849

 
17,532

 
1928
 
9/18/2003
 
3-40 years
11.
Chaminade Resort and Conference Center
0

 
5,240

 
13,111

 
299

 
24

 
9,124

 
17,817

 
5,264

 
22,235

 
18,116

 
21,544

 
24,071

 
1985
 
11/18/2004
 
3-40 years
12.
Hilton San Diego Gaslamp Quarter
0

 
5,008

 
77,892

 
2,250

 
0

 
1,508

 
11,897

 
5,008

 
79,400

 
14,147

 
34,054

 
64,501

 
2000
 
1/6/2005
 
3-40 years
13.
The Grafton on Sunset
0

 
1,882

 
23,226

 
431

 
11

 
3,695

 
9,666

 
1,893

 
26,921

 
10,097

 
13,966

 
24,945

 
1954
 
1/10/2005
 
3-40 years
14.
Onyx Hotel
0

 
6,963

 
21,262

 
445

 
3,568

 
212

 
3,943

 
10,531

 
21,474

 
4,388

 
9,286

 
27,107

 
2004
 
5/18/2005
 
3-40 years
15.
Westin Copley Place
225,000

 
0

 
295,809

 
28,223

 
0

 
24,909

 
51,845

 
0

 
320,718

 
80,068

 
160,192

 
240,594

 
1983
 
8/31/2005
 
3-40 years
16.
Hotel Deca (2)
0

 
4,938

 
21,720

 
577

 
0

 
885

 
6,315

 
4,938

 
22,605

 
6,892

 
11,555

 
22,880

 
1931
 
12/8/2005
 
3-40 years
17.
The Hilton San Diego Resort and Spa
0

 
0

 
85,572

 
4,800

 
122

 
15,900

 
20,377

 
122

 
101,472

 
25,177

 
55,135

 
71,636

 
1962
 
12/15/2005
 
3-40 years
18.
The Donovan
0

 
11,384

 
34,573

 
0

 
0

 
36,539

 
15,751

 
11,384

 
71,112

 
15,751

 
42,445

 
55,802

 
1972
 
12/16/2005
 
3-40 years
19.
Le Parc Suite Hotel
0

 
13,971

 
31,742

 
2,741

 
3

 
2,550

 
10,684

 
13,974

 
34,292

 
13,425

 
21,131

 
40,560

 
1970
 
1/27/2006
 
3-40 years
20.
Westin Michigan Avenue
0

 
38,158

 
154,181

 
24,112

 
17

 
19,557

 
39,639

 
38,175

 
173,738

 
63,751

 
95,259

 
180,405

 
1963/1972
 
3/1/2006
 
3-40 years
21.
Hotel Chicago
0

 
9,403

 
104,148

 
889

 
155

 
32,177

 
29,433

 
9,558

 
136,325

 
30,322

 
65,165

 
111,040

 
1998
 
3/1/2006
 
3-40 years
22.
Alexis Hotel
0

 
6,581

 
31,062

 
578

 
13

 
10,716

 
8,562

 
6,594

 
41,778

 
9,140

 
21,434

 
36,078

 
1901/1982
 
6/15/2006
 
3-40 years
23.
Hotel Solamar
0

 
0

 
79,111

 
7,890

 
0

 
717

 
12,715

 
0

 
79,828

 
20,605

 
33,157

 
67,276

 
2005
 
8/1/2006
 
3-40 years
24.
Gild Hall
0

 
6,732

 
45,016

 
984

 
2

 
3,157

 
13,557

 
6,734

 
48,173

 
14,541

 
24,501

 
44,947

 
1999
 
11/17/2006
 
3-40 years
25.
Hotel Amarano Burbank
0

 
5,982

 
29,292

 
1,253

 
329

 
6,394

 
8,193

 
6,311

 
35,686

 
9,446

 
14,716

 
36,727

 
2002
 
12/19/2006
 
3-40 years
26.
Sofitel Washington, DC Lafayette Square
0

 
11,082

 
80,342

 
2,619

 
0

 
409

 
14,111

 
11,082

 
80,751

 
16,730

 
23,507

 
85,056

 
2002
 
3/1/2010
 
3-40 years
27.
The Marker San Francisco
0

 
11,435

 
53,186

 
3,736

 
0

 
1,930

 
9,832

 
11,435

 
55,116

 
13,568

 
17,806

 
62,313

 
1910/1995
 
9/1/2010
 
3-40 years
28.
Westin Philadelphia
0

 
35,100

 
106,100

 
3,776

 
0

 
817

 
9,974

 
35,100

 
106,917

 
13,750

 
25,205

 
130,562

 
1990
 
9/1/2010
 
3-40 years
29.
Embassy Suites Philadelphia - Center City
0

 
13,600

 
62,900

 
2,504

 
0

 
2,554

 
8,536

 
13,600

 
65,454

 
11,040

 
17,193

 
72,901

 
1963/1993
 
9/1/2010
 
3-40 years
30.
The Roger
0

 
0

 
95,079

 
3,509

 
0

 
122

 
12,310

 
0

 
95,201

 
15,819

 
31,446

 
79,574

 
1930/1998
 
10/6/2010
 
3-34 years
31.
Chamberlain West Hollywood
0

 
6,470

 
29,085

 
2,895

 
0

 
356

 
4,185

 
6,470

 
29,441

 
7,080

 
9,650

 
33,341

 
1970/2005
 
12/6/2010
 
3-40 years
32.
Viceroy Santa Monica
0

 
0

 
75,270

 
4,747

 
0

 
390

 
5,168

 
0

 
75,660

 
9,915

 
18,639

 
66,936

 
1967/2002
 
3/16/2011
 
3-40 years
33.
Villa Florence
0

 
12,413

 
50,997

 
3,202

 
0

 
0

 
9,912

 
12,413

 
50,997

 
13,114

 
14,041

 
62,483

 
1908
 
10/5/2011
 
3-40 years
34/35.
Park Central Hotel New York/WestHouse Hotel New York
0

 
135,306

 
250,262

 
9,004

 
0

 
41,840

 
50,830

 
135,306

 
292,102

 
59,834

 
77,758

 
409,484

 
1928
 
12/29/2011
 
3-40 years
36.
Hotel Palomar, Washington, DC
0

 
26,859

 
111,214

 
5,648

 
0

 
890

 
12,678

 
26,859

 
112,104

 
18,326

 
22,096

 
135,193

 
1962
 
3/8/2012
 
3-40 years
37.
L’Auberge Del Mar
0

 
13,475

 
59,481

 
3,628

 
125

 
19

 
4,476

 
13,600

 
59,500

 
8,104

 
9,940

 
71,264

 
1989
 
12/6/2012
 
3-40 years
38.
The Liberty Hotel
0

 
0

 
160,731

 
9,040

 
0

 
263

 
14,288

 
0

 
160,994

 
23,328

 
26,350

 
157,972

 
1851/2007
 
12/28/2012
 
3-40 years
39.
Harbor Court Hotel
0

 
0

 
54,563

 
714

 
0

 
701

 
455

 
0

 
55,264

 
1,169

 
5,953

 
50,480

 
1926/1991
 
8/1/2013
 
3-35 years
40.
Hotel Triton
0

 
0

 
37,253

 
1,379

 
0

 
(2,284
)
 
718

 
0

 
34,969

 
2,097

 
4,693

 
32,373

 
1912/1991
 
8/1/2013
 
3-34.5 years
41.
Serrano Hotel
0

 
20,475

 
48,501

 
2,500

 
0

 
219

 
1,055

 
20,475

 
48,720

 
3,555

 
6,864

 
65,886

 
1928/1999
 
8/21/2013
 
3-40 years
42.
Southernmost Beach Resort Key West
0

 
101,517

 
79,795

 
3,105

 
0

 
1,676

 
3,054

 
101,517

 
81,471

 
6,159

 
10,016

 
179,131

 
1958-2008
 
8/27/2013
 
3-40 years
43.
Hotel Vitale
0

 
0

 
125,150

 
4,766

 
0

 
(241
)
 
735

 
0

 
124,909

 
5,501

 
11,321

 
119,089

 
2005
 
4/2/2014
 
3-40 years
44.
The Heathman Hotel
0

 
10,280

 
50,001

 
4,002

 
0

 
1,268

 
352

 
10,280

 
51,269

 
4,354

 
4,142

 
61,761

 
1927
 
12/18/2014
 
3-40 years
45.
Pack Central San Francisco
0

 
80,640

 
255,105

 
14,057

 
0

 
56

 
1,586

 
80,640

 
255,161

 
15,643

 
18,008

 
333,436

 
1984
 
1/23/2015
 
3-40 years
46.
The Marker Waterfront Resort
0

 
48,133

 
41,143

 
6,656

 
0

 
0

 
722

 
48,133

 
41,143

 
7,378

 
4,149

 
92,505

 
2014
 
3/16/2015
 
3-40 years
 
Total
$
267,500

 
$
694,165


$
3,194,361


$
185,208


$
37,949


$
359,524


$
591,355


$
732,114


$
3,553,885


$
776,563


$
1,367,473


$
3,695,089

 
 
 
 
 
 

(1)     Costs of disposals, impairments and reclassifications to property under development are reflected as reductions to cost capitalized subsequent to acquisition. Reclassifications from property under development are reflected as increases to cost capitalized subsequent to acquisition.
(2)     As of December 31, 2016, Hotel Deca was classified as held for sale. The property was sold on January 19, 2017.


F-43

LASALLE HOTEL PROPERTIES
Schedule III—Real Estate and Accumulated Depreciation—Continued
As of December 31, 2016
 
Reconciliation of Real Estate and Accumulated Depreciation:

Reconciliation of Real Estate:
 
Balance at December 31, 2013
$
4,351,073

Acquisition of hotel properties
194,198

Improvements and additions to hotel properties
66,706

Reclassification from property under development
14,163

Disposal of hotels
(130,846
)
Disposal of assets
(1,220
)
Balance at December 31, 2014
$
4,494,074

Acquisition of hotel properties
445,734

Improvements and additions to hotel properties
93,599

Reclassification from property under development
30,343

Disposal of assets
(16,488
)
Balance at December 31, 2015
$
5,047,262

Improvements and additions to hotel properties
82,148

Reclassification from property under development
46,292

Disposal of hotel
(112,718
)
Disposal of assets
(422
)
Balance at December 31, 2016
$
5,062,562

 
 
Reconciliation of Accumulated Depreciation:
 
Balance at December 31, 2013
$
967,885

Depreciation
154,585

Disposal of hotels
(56,130
)
Disposal of assets
(822
)
Balance at December 31, 2014
$
1,065,518

Depreciation
180,346

Disposal of assets
(16,278
)
Balance at December 31, 2015
$
1,229,586

Depreciation
191,791

Disposal of hotel
(53,697
)
Disposal of assets
(207
)
Balance at December 31, 2016
$
1,367,473


F-44
Exhibit 10.31
SECOND AMENDED & RESTATED SENIOR UNSECURED CREDIT AGREEMENT
Dated as of January 10, 2017
among
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.,
as the Borrower,
LASALLE HOTEL PROPERTIES,
as the Parent,
THE GUARANTORS NAMED HEREIN,
as the Guarantors,
CITIBANK, N.A.,
as Administrative Agent,
The Banks Party Hereto,
as the Banks,
CITIBANK, N.A., BANK OF MONTREAL, and BANK OF AMERICA, N.A.,
as Issuing Banks,
BANK OF MONTREAL and BANK OF AMERICA, N.A.,
as Co-Syndication Agents (Revolving Facility),
PNC BANK, NATIONAL ASSOCIATION, TD BANK, N.A., U.S. BANK NATIONAL ASSOCIATION, SUMITOMO MITSUI BANKING CORPORATION, WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., ROYAL BANK OF CANADA, REGIONS BANK, and BRANCH BANKING AND TRUST COMPANY,
as Co-Documentation Agents (Revolving Facility),
CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, PNC CAPITAL MARKETS LLC, TD BANK, N.A., SUMITOMO MITSUI BANKING CORPORATION, and U.S. BANK NATIONAL ASSOCIATION,
as Joint Lead Arrangers (Revolving Facility and TL Facility),
CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Joint Bookrunners (Revolving Facility and TL Facility),
and
BANK OF MONTREAL, BANK OF AMERICA, N.A., PNC BANK, NATIONAL ASSOCIATION, TD BANK, N.A., SUMITOMO MITSUI BANKING CORPORATION, and U.S. BANK NATIONAL ASSOCIATION,
as Co-Syndication Agents (TL Facility),
and
WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., REGIONS BANK, BRANCH BANKING AND TRUST COMPANY, and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as Co-Documentation Agents (TL Facility)







TABLE OF CONTENTS

 
 
 
PAGE

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
 
2

Section 1.01
Certain Defined Terms
 
2

Section 1.02
Computation of Time Periods
 
29

Section 1.03
Accounting Terms; Changes in GAAP
 
30

Section 1.04
Types of Advances
 
30

Section 1.05
Miscellaneous
 
30

Section 1.06
Commitment Increases
 
30

Section 1.07
Revolving Facility Maturity Date Extension
 
31

ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
 
31

Section 2.01
The Advances
 
31

Section 2.02
Method of Borrowing
 
32

Section 2.03
Fees
 
34

Section 2.04
Reduction of the Commitments
 
35

Section 2.05
Repayment of Advances
 
35

Section 2.06
Interest
 
35

Section 2.07
Prepayments
 
36

Section 2.08
Breakage Costs
 
37

Section 2.09
Increased Costs
 
38

Section 2.10
Payments and Computations
 
39

Section 2.11
Taxes
 
41

Section 2.12
Illegality
 
44

Section 2.13
Letters of Credit
 
44

Section 2.14
Bank Replacement
 
47

Section 2.15
Sharing of Payments, Etc.
 
47

Section 2.16
Defaulting Lenders
 
48

Section 2.17
Reallocation of Bank Pro Rata Shares
 
50

Section 2.18
No Novation
 
51

ARTICLE III
CONDITIONS OF LENDING
 
51

Section 3.01
Conditions Precedent to Initial Advance
 
51

Section 3.02
Conditions Precedent for each Borrowing or Letter of Credit
 
53

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
55

Section 4.01
Existence; Qualification; Partners; Subsidiaries
 
55

Section 4.02
Partnership and Corporate Power
 
55

Section 4.03
Authorization and Approvals
 
56

Section 4.04
Enforceable Obligations
 
56


i


Section 4.05
Parent Stock
 
56

Section 4.06
Financial Statements
 
56

Section 4.07
True and Complete Disclosure
 
56

Section 4.08
Litigation
 
56

Section 4.09
Use of Proceeds
 
57

Section 4.10
Investment Company Act
 
57

Section 4.11
Taxes
 
57

Section 4.12
Pension Plans
 
57

Section 4.13
Condition of Hotel Property; Casualties; Condemnation
 
58

Section 4.14
Insurance
 
58

Section 4.15
No Burdensome Restrictions; No Defaults
 
58

Section 4.16
Environmental Condition
 
58

Section 4.17
Legal Requirements, Zoning, Utilities, Access
 
58

Section 4.18
Existing Indebtedness
 
59

Section 4.19
Title; Encumbrances
 
59

Section 4.20
Leasing Arrangements
 
59

Section 4.21
Unencumbered Properties
 
59

Section 4.22
OFAC
 
59

Section 4.23
EEA Financial Institution
 
60

ARTICLE V
AFFIRMATIVE COVENANTS
 
60

Section 5.01
Compliance with Laws, Etc.
 
60

Section 5.02
Preservation of Existence, Separateness, Etc.
 
60

Section 5.03
Payment of Taxes, Etc.
 
61

Section 5.04
Visitation Rights; Bank Meeting
 
61

Section 5.05
Reporting Requirements
 
61

Section 5.06
Maintenance of Property
 
64

Section 5.07
Insurance
 
64

Section 5.08
Use of Proceeds
 
64

Section 5.09
New Guarantors
 
64

Section 5.10
Leverage Trigger Guarantors and Pledgors
 
65

ARTICLE VI
NEGATIVE COVENANTS
 
65

Section 6.01
Liens, Etc.
 
65

Section 6.02
Indebtedness
 
66

Section 6.03
Agreements Restricting Distributions From Subsidiaries
 
67

Section 6.04
Restricted Payments
 
67

Section 6.05
Fundamental Changes; Asset Dispositions
 
68

Section 6.06
Participating Lessee Ownership
 
68

Section 6.07
Investments, Loans, Future Properties
 
68

Section 6.08
Affiliate Transactions
 
69

Section 6.09
Sale and Leaseback
 
69


-ii-

Section 6.10
Sale or Discount of Receivables
 
69

Section 6.11
Restriction on Negative Pledges
 
69

Section 6.12
Material Documents
 
69

Section 6.13
Limitations on Development, Construction, Renovation and Purchase of Hotel Properties
 
70

Section 6.14
OFAC
 
70

Section 6.15
Voluntary Prepayments during a Leverage Trigger Period
 
70

ARTICLE VII
FINANCIAL COVENANTS
 
71

Section 7.01
Fixed Charge Coverage Ratio
 
71

Section 7.02
Maintenance of Net Worth
 
71

Section 7.03
Limitations on Total Liabilities
 
71

Section 7.04
Limitations on Unsecured Indebtedness
 
71

Section 7.05
Limitations on Secured Indebtedness
 
71

ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
 
71

Section 8.01
Events of Default
 
71

Section 8.02
Optional Acceleration of Maturity
 
74

Section 8.03
Automatic Acceleration of Maturity
 
74

Section 8.04
Cash Collateral Account
 
74

Section 8.05
Nonexclusivity of Remedies
 
75

Section 8.06
Right of Setoff
 
75

ARTICLE IX
NEW YORK PROPERTIES
 
75

Section 9.01
New York Term Notes
 
75

ARTICLE X
AGENCY AND ISSUING BANK PROVISIONS
 
79

Section 10.01
Authorization and Action
 
79

Section 10.02
Administrative Agent's Reliance, Etc.
 
79

Section 10.03
Administrative Agent and Its Affiliates
 
79

Section 10.04
Bank Credit Decision
 
79

Section 10.05
Indemnification
 
80

Section 10.06
Successor Administrative Agent and Issuing Banks
 
80

Section 10.07
Co-Syndication Agents, Joint Lead Arrangers and Joint Book Running Managers, Co-Documentation Agents
 
81

Section 10.08
Designation of Additional Agents
 
81

ARTICLE XI
MISCELLANEOUS
 
81

Section 11.01
Amendments, Etc.
 
81

Section 11.02
Notices, Etc.
 
83

Section 11.03
No Waiver; Remedies
 
84


-iii-

Section 11.04
Costs and Expenses
 
84

Section 11.05
Binding Effect
 
85

Section 11.06
Bank Assignments and Participations
 
85

Section 11.07
Indemnification
 
87

Section 11.08
Execution in Counterparts
 
88

Section 11.09
Survival of Representations, Indemnifications, etc.
 
88

Section 11.10
Severability
 
88

Section 11.11
Entire Agreement
 
88

Section 11.12
Usury Not Intended
 
88

Section 11.13
Governing Law
 
88

Section 11.14
Consent to Jurisdiction; Service of Process; Jury Trial
 
89

Section 11.15
Knowledge of Borrower
 
89

Section 11.16
Banks Not in Control
 
89

Section 11.17
Headings Descriptive
 
90

Section 11.18
Time is of the Essence
 
90

Section 11.19
Scope of Indemnities
 
90

Section 11.20
Confidentiality
 
90

Section 11.21
USA Patriot Act Notice
 
91

Section 11.22
No Fiduciary Duties
 
91

Section 11.23
Release of Eligible Subsidiary Guarantors
 
91

Section 11.24
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
 
92


-iv-

Exhibits:
 
 
Exhibit A-1
—
Form of Note (Revolving Facility)
Exhibit A-2
—
Form of Note (TL Facility)
Exhibit B
—
Form of Assignment and Acceptance
Exhibit C
—
Form of Compliance Certificate
Exhibit D
—
Form of Environmental Indemnity
Exhibit E
—
Form of Guaranty
Exhibit F
—
Form of Notice of Borrowing
Exhibit G
—
Form of Notice of Conversion or Continuation
Exhibit H
—
Form of New York Mortgage
Exhibit I
—
Form of New York Term Note
Exhibit J
—
Form of Pledge and Security Agreement
 
 
 
Schedules:
 
 
Schedule 1.01(A)
—
Commitments
Schedule 1.01(B)
—
Existing Properties
Schedule 1.01(C)
—
Guarantors
Schedule 1.01(D)
—
Qualified Ground Leases
Schedule 1.01(E)
—
Existing Letters of Credit
Schedule 4.01
—
Subsidiaries
Schedule 4.08
—
Litigation
Schedule 4.17
—
Legal Requirements; Zoning; Utilities; Access
Schedule 4.18
—
Existing Indebtedness
Schedule 5.07
—
Insurance







-v-


SECOND AMENDED & RESTATED SENIOR UNSECURED CREDIT AGREEMENT
This SECOND AMENDED & RESTATED SENIOR UNSECURED CREDIT AGREEMENT, dated as of January 10, 2017, is among LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, as the Borrower, LASALLE HOTEL PROPERTIES, a Maryland trust, as the Parent, the Guarantors from time to time party hereto, the Banks from time to time party hereto, CITIBANK, N.A., as Administrative Agent, CITIBANK, N.A., BANK OF MONTREAL and BANK OF AMERICA, N.A., as Issuing Banks, BANK OF MONTREAL, and BANK OF AMERICA, N.A., as Co‑Syndication Agents (Revolving Facility), PNC BANK, NATIONAL ASSOCIATION, TD BANK, N.A., U.S. BANK NATIONAL ASSOCIATION, SUMITOMO MITSUI BANKING CORPORATION, WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., ROYAL BANK OF CANADA, REGIONS BANK, and BRANCH BANKING AND TRUST COMPANY, as Co-Documentation Agents (Revolving Facility), CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, PNC CAPITAL MARKETS LLC, TD BANK, N.A., SUMITOMO MITSUI BANKING CORPORATION, and U.S. BANK NATIONAL ASSOCIATION, as Joint Lead Arrangers (Revolving Facility and TL Facility), CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Bookrunners (Revolving Facility and TL Facility), BANK OF MONTREAL, BANK OF AMERICA, N.A., PNC BANK, NATIONAL ASSOCIATION, TD BANK, N.A., SUMITOMO MITSUI BANKING CORPORATION, and U.S. BANK NATIONAL ASSOCIATION, as Co‑Syndication Agents (TL Facility), and WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., REGIONS BANK, BRANCH BANKING AND TRUST COMPANY, and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Co-Documentation Agents (TL Facility).
The Borrower has requested, and the Banks have agreed to extend, certain credit facilities on the terms and conditions of this Agreement. In consideration of the mutual agreements contained in this Agreement, the parties hereto do hereby agree as follows:
WITNESSETH THAT:
(1)    Pursuant to that certain Amended & Restated Senior Unsecured Credit Agreement dated as of January 8, 2014, as amended by that certain First Letter Amendment dated as of June 20, 2014 and that certain Second Amendment dated as of November 5, 2015 (as so amended, the “ Existing Revolving Facility Agreement ”), among the Borrower, the Parent, the guarantors party thereto, the banks described therein, Citibank, N.A., as administrative agent, and the other parties from time to time party thereto, such banks extended certain commitments to make certain credit facilities available to the Borrower.
(2)    Pursuant to that certain Senior Unsecured Term Loan Agreement dated as of January 8, 2014, as amended by that certain First Letter Amendment dated as of June 20, 2014, and as further amended by that certain Second Amendment dated as of November 5, 2015 (as so amended, the “ Existing TL Facility Agreement ” and collectively with the Existing Revolving Facility Agreement, the “ Existing Agreements ”), among the Borrower, the Parent, the guarantors party thereto, the banks described therein, Citibank, N.A., as administrative agent, and the other parties from time to time party thereto, such banks extended certain commitments to make certain credit facilities available to the Borrower.
(3)    The Borrower, the Guarantors, the Administrative Agent, and the banks party to the Existing Agreements desire to consolidate, amend and restate the Existing Agreements to make certain amendments to the Existing Agreements.
NOW, THEREFORE, in consideration of the recitals set forth above, which by this reference are incorporated into this Agreement set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and subject to the terms and conditions hereof and on the basis of the representations and warranties herein set forth, the parties hereto hereby agree to consolidate, amend and restate the Existing Agreements into a single credit agreement, which shall 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 (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“ 2021 Term Loan Agreement ” means that certain Amended & Restated Senior Unsecured Term Loan Agreement, dated as of the date hereof, among the Borrower, the Parent, the Subsidiary Guarantors, Citibank, as administrative agent, and the Banks (as such term is defined therein), as the same may be amended from time to time.
“2021 TL Facility ” means, at any time, the aggregate amount of the Commitments (as such term is defined in the 2021 Term Loan Agreement) (whether funded or unfunded) at such time under the 2021 Term Loan Agreement.
“ Accession Agreement ” means an Accession Agreement in the form attached respectively to the Guaranty and Environmental Indemnity as Annex 1 thereto, which agreement causes the Person executing and delivering the same to the Administrative Agent to become a party to the Guaranty and the Environmental Indemnity.
“ Adjusted 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 greatest of (a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (which in no circumstance shall be less than 0% per annum), (b) 2% per annum above the Federal Funds Rate and (c) one-month LIBOR as published on the applicable date of determination (or on the previous Business Day if such date of determination is not a Business Day), as the same may fluctuate from time to time, plus 1% per annum. Citibank’s base rate is a rate set by Citibank based upon various factors, including Citibank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such base rate announced by Citibank shall take effect at the opening of business on the day specified in the public announcement of such change.
“ Adjusted Corporate EBITDA ” means, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, the Corporate EBITDA for such period adjusted for (i) any Investments made or disposed of during such period to include or exclude, as appropriate, the Corporate EBITDA attributable to such Investments for such period, and (ii) any Hotel Property acquired or disposed of during such period to include or exclude, as appropriate, the Adjusted NOI of such Hotel Property for such period, plus the aggregate FF&E Reserves for such period for such Hotel Property; provided in each case that the addition or deduction of the Corporate EBITDA attributable to such Investments or such Hotel Property’s Adjusted NOI, as applicable, for such period is subject to verification by either an accounting firm reasonably acceptable to the Administrative Agent or written certification reasonably acceptable to the Administrative Agent from an officer of the Borrower that such Corporate EBITDA or Adjusted NOI, as the case may be, is true and accurate.

“ Adjusted Net Worth ” means, for the Parent as of any date, the sum of (a) the Parent’s Net Worth on such date plus (b) the minority interest reflected in the Parent’s balance sheet on such date determined in accordance with GAAP.
“ Adjusted NOI ” means, for any Hotel Property for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, an amount (if positive) equal to (a) the Net Income of such Hotel Property for such period after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets) other than in the ordinary course of business, (ii) any write‑up or write-down of assets, and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels; provided that to the extent that the Net Income for any Hotel Property does not include a reasonable allocation of administrative, accounting or other overhead of the Person or Persons who directly or indirectly own or lease such Hotel Property which directly pertains to the operation of Hotel Properties, then such allocation amount

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shall be deemed subtracted from such Net Income for purposes of the financial tests and other definitions contained in this Agreement which utilize Adjusted NOI, plus (b) to the extent deducted in determining Adjusted NOI, Interest Expense, income taxes, depreciation, amortization, and other non‑cash items for such period, as determined in accordance with GAAP, minus (c) the aggregate FF&E Reserves for such period for such Hotel Property; provided further that in no event shall the Adjusted NOI for any Hotel Property be less than zero.
“ Administrative Agent ” means Citibank, in its capacity as Administrative Agent for the Banks pursuant to Article X and any successor Administrative Agent appointed pursuant to Section 10.06.
“ Advance ” means a Revolving Facility Advance or a TL Facility Advance.
“ Affected Bank ” has the meaning set forth in Section 2.14(a).
“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of a Control Percentage, by contract or otherwise. For the avoidance of doubt, Persons employed by the Borrower or the Parent in a senior management role shall not be deemed Affiliates by reason of such employment.
“ Agreement ” means this Second Amended & Restated Senior Unsecured Credit Agreement, as the same may be amended, modified, restated or supplemented from time to time.
“ Anti-Corruption Laws ” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Borrower, the Parent or their Subsidiaries from time to time concerning or relating to bribery, corruption, terrorism or money laundering.
“ Applicable Lending Office ” means, with respect to each Bank, such Bank’s Domestic Lending Office in the case of a Base Rate Advance and such Bank’s LIBOR Lending Office in the case of a LIBOR Advance.
“ Applicable Margin ” means, (a) with respect to each Type of Advance at any date, the applicable percentage per annum set forth below based upon the Status then in effect under the column for such Type of Advance, and (b) with respect to the letter of credit fee payable under Section 2.03(b) at any date, the applicable percentage per annum set forth below under the column “Letters of Credit & LIBOR Advances,” based upon the Status then in effect.
 
Leverage Ratio
Revolving Facility Base Rate
Advances
Letters of Credit & Revolving Facility LIBOR Advances
Level I Status
< 4.00:1.00
0.50%
1.50%
Level II Status
>  4.00:1.00 but < 4.50:1.00
0.60%
1.60%
Level III Status
>  4.50:1.00 but < 5.00:1.00
0.65%
1.65%
Level IV Status
>  5.00:1.00 but < 5.50:1.00
0.80%
1.80%
Level V Status
>  5.50:1.00 but < 6.00:1.00
0.95%
1.95%
Level VI Status
>  6.00:1.00
1.25%
2.25%


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Leverage Ratio
TL Facility Base Rate
Advances
TL Facility LIBOR Advances
Level I Status
< 4.00:1.00
0.45%
1.45%
Level II Status
>  4.00:1.00 but < 4.50:1.00
0.55%
1.55%
Level III Status
>  4.50:1.00 but < 5.00:1.00
0.60%
1.60%
Level IV Status
>  5.00:1.00 but < 5.50:1.00
0.75%
1.75%
Level V Status
>  5.50:1.00 but < 6.00:1.00
0.85%
1.85%
Level VI Status
>  6.00:1.00
1.20%
2.20%

; provided , however , that in the event that the Parent achieves an Investment Grade Rating, the Parent may, upon written notice to the Administrative Agent, elect to convert to the ratings-based pricing grid set forth below (a “ Ratings Grid Election ”), in which case, commencing upon the effectiveness of such notice, the interest rate will be LIBOR plus the Applicable Margin determined by the Debt Rating of the Parent, as set forth below. Any Ratings Grid Election shall be irrevocable (subject to the provisions of the paragraph following the grid below).

Debt Rating
Revolving Facility Base Rate Advances
Revolving Facility LIBOR Advances
Revolving Facility Facility Fee
> A-/A3
0.00%
0.875%
0.125%
BBB+/Baa1
0.00%
0.90%
0.15%
BBB/Baa2
0.00%
1.00%
0.20%
BBB-/Baa3
0.25%
1.25%
0.25%

Debt Rating
TL Facility Base Rate Advances
TL Facility LIBOR Advances
 
> A-/A3
0.00%
0.90%
 
BBB+/Baa1
0.00%
0.95%
 
BBB/Baa2
0.10%
1.10%
 
< BBB-/Baa3
0.35%
1.35%
 

If Parent has made the Ratings Grid Election as provided above but thereafter fails to maintain an Investment Grade Rating by at least one of S&P or Moody’s, then the applicable interest rate margin shall be determined pursuant to clause (a) and (b) above, as applicable, during the period commencing on the date Parent no longer has an Investment Grade Rating by at least one of S&P or Moody’s and ending on the date Parent makes another Ratings Grid Election.

Notwithstanding the foregoing, if the last day of any Fiscal Quarter is during a Leverage Trigger Period, then the Applicable Margin (whether based on the Leverage Ratio or the applicable Debt Rating) shall be increased by 35 basis points (0.35%) until the next Leverage Release Date.

“ Approved Electronic Communications ” means each Communication that the Borrower or any Guarantor is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Credit 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 5.05(a) through (d), (h), and (k); provided , however , that solely with respect to delivery of any such Communication by the Borrower or any Guarantor 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

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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 2.07 and any other notice relating to the payment of any principal or other amount due under any Credit 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 11.02(c).
“ Approved Other Country ” means each of the following countries: Canada, Mexico, United Kingdom, France, Germany, Spain, Belgium, The Netherlands, Luxembourg, Italy, Portugal, Austria, Switzerland, Norway, Sweden, Denmark, U.S. Virgin Islands, Bahamas, and Puerto Rico.
“ Approved Third Party Operating Leases ” means all operating leases for which either the Borrower or a Material Subsidiary is the lessor thereunder, except any operating lease for which LaSalle Leasing or a Subsidiary of LaSalle Leasing is a lessee.
“ Asset Disposition ” means any sale, lease of substantially all of a Hotel Property (in which the Borrower or a Material Subsidiary is lessor), conveyance, exchange, transfer, or assignment of any Property by the Borrower or a Material Subsidiary to a Person other than the Borrower or a Material Subsidiary.
“ Asset Value ” means, with respect to any Hotel Property, as of any date, (a) the Calculated Value of such asset; provided , however , that the value of each Hotel Property during the first 12 months following acquisition shall be equal to the greater of (i) the acquisition price or (ii) the Calculated Value, (b) in the case of any Development Property, the undepreciated book value of such Hotel Property as determined in accordance with GAAP, or (c) in the case of any Hotel Property held by a Joint Venture Subsidiary, the pro rata share of such Hotel Property as determined in accordance with clause (a) or (b), as applicable.
“ Assigned Revolving Rights and Obligations ” has the meaning specified in Section 2.17(a).
“ Assigned TL Rights and Obligations ” has the meaning specified in Section 2.17(b).
“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of the attached Exhibit B.
“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ Banks ” means the lenders listed on the signature pages of this Agreement and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 11.06.
“ Base Rate Advance ” means an Advance which bears interest as provided in Section 2.06(a).
“ Borrower ” means LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership.
“ Borrowing ” means a borrowing consisting of simultaneous Advances of the same Type made by each Bank pursuant to Section 2.01 or Converted by each Bank to Advances of a different Type pursuant to Section 2.02(b).

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“ Business Day ” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any LIBOR Advances, on which dealings are carried on in the London interbank market.
“ Calculated Value ” means for any Hotel Property (a) if such Hotel Property is leased to a Subsidiary of the Borrower, the Adjusted NOI for such Hotel Property for the preceding Rolling Period and, if such Hotel Property is not leased to a Subsidiary of the Borrower, the lesser of (i) the Adjusted NOI for such Hotel Property for the preceding Rolling Period or (ii) the actual rental payments received by the Parent or its Subsidiary under the participating lease for such Hotel Property during such Rolling Period divided by (b) the Capitalization Rate.
“ Capital Expenditure ” means any payment made directly or indirectly for the purpose of acquiring or constructing fixed assets, Real Property or equipment which in accordance with GAAP would be capitalized in the fixed asset accounts of such Person making such expenditure, including, without limitation, amounts paid or payable for such purpose under any conditional sale or other title retention agreement or under any Capital Lease, but excluding repairs of Property in the normal and ordinary course of business.
“ Capitalization Event ” means any sale or issuance by the Parent or any of its Subsidiaries of equity securities except for the issuance of the Borrower’s operating partnership units in exchange for a direct or indirect ownership interest in a Hotel Property or a Person that owns a Hotel Property.
“ Capitalization Rate ” means 7.75%, provided that with respect to any Hotel Property located in the central business district of New York City, New York; Washington, D.C.; Chicago, Illinois; San Francisco, California; Boston, Massachusetts; Key West, Florida; San Diego, California; or urban properties in Los Angeles, California, the Capitalization Rate shall mean 7.25%.
“ Capital Lease ” means, for any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
“ Capital Lease Obligations ” means, as to any Person, the capitalized amount of all obligations of such Person or any of its Subsidiaries under Capital Leases, as determined on a Consolidated basis in conformity with GAAP.
“ Cash Collateral Account ” means a special cash collateral account containing cash deposited pursuant to the terms of this Agreement to be maintained at Citibank in accordance with Section 8.04.
“ Cash Collateralize ” means, in respect of an Obligation, to provide and pledge (as a first priority perfected security interest) cash collateral in Dollars, at a location and pursuant to documentation in form and substance satisfactory to the Administrative Agent and the applicable Issuing Bank (and “ Cash Collateralization ” has a corresponding meaning).
“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.
“ Citibank ” means Citibank, N.A.
“ Closing Date ” means January 10, 2017.
“ Code ” means the Internal Revenue Code of 1986, as amended, and any successor statute.
“ Collective Facilities ” means the Revolving Facility, the TL Facility and the 2021 TL Facility.
“ Commitment ” means a Revolving Facility Commitment, a TL Facility Commitment or a Letter of Credit Commitment.

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“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Credit Document or otherwise transmitted between the parties hereto relating to this Agreement, the other Credit Documents, the Borrower or any Guarantor or any of their respective Affiliates, or the transactions contemplated by this Agreement or the other Credit Documents including, without limitation, all Approved Electronic Communications.
“ Compliance Certificate ” means a certificate of the Borrower in substantially the form of the attached Exhibit C.
“ Consolidated ” refers to the consolidation of the accounts of the Borrower with the Borrower’s Subsidiaries and the Parent with the Parent’s Subsidiaries, as applicable, in accordance with GAAP.
“ Consolidated Total Book Value ” means, at any time the same is to be determined, the aggregate book value of all assets that would appear on the balance sheet of the Parent and the Parent’s Subsidiaries determined on a Consolidated basis in accordance with GAAP, plus the aggregate book value of the accumulated depreciation of such assets determined on a Consolidated basis in accordance with GAAP.
“ Control Percentage ” means, with respect to any Person, the percentage of the outstanding capital stock of such Person having ordinary voting power which gives the direct or indirect holder of such stock the power to elect a majority of the Board of Directors of such Person.
“ Controlled Group ” means all members of a controlled group of corporations and all trades (whether or not incorporated) under common control which, together with the Parent and the Borrower, are treated as a single employer under Section 414 of the Code.
“ Convert ”, “ Conversion ”, and “ Converted ” each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
“ Corporate EBITDA ” means, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, an amount equal to (a) the Net Income of the Parent (on a Consolidated basis) for such period after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, (ii) any write‑up or write-down of assets, and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels, plus (b) to the extent deducted in determining Corporate EBITDA, Interest Expense, income taxes, depreciation, amortization, and other non‑cash items for such period, as determined in accordance with GAAP.
“ Credit Documents ” means this Agreement, the Notes, the Guaranty, the Environmental Indemnity, the Fee Letter and, to the extent delivered, any New York Mortgage, any New York Term Note, the Pledge Agreement (if and to the extent delivered in accordance with this Agreement), and each other agreement, instrument or document executed by the Borrower, any of its Subsidiaries or the Parent at any time in connection with this Agreement.
“ Debt Rating ” means, as of any date of determination, the higher of the credit ratings then assigned to the Parent’s long-term senior unsecured debt by either of S&P or Moody’s. For purposes of the foregoing, a credit rating of BBB- from S&P is equivalent to a credit rating of Baa3 from Moody’s and vice versa. A credit rating of BBB from S&P is equivalent to a credit rating of Baa2 from Moody’s and vice versa. It is the intention of the parties that if the Parent shall only obtain a Debt Rating from one of S&P or Moody’s without seeking a credit rating from the other, the Borrower shall be entitled to the benefit of the pricing level for such credit rating. If the Parent obtains a Debt Rating from both of S&P and Moody’s, the higher of the two ratings shall control, provided that the lower rating is only one level below that of the higher rating. If, however, the lower rating is more than one level below that of the higher Debt

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Rating, the pricing level that is one level higher than the lower Debt Rating shall apply. If the Parent has only one Investment Grade Rating, then that Debt Rating shall apply. If the Parent obtains a Debt Rating from both of S&P and Moody’s and thereafter loses such rating from one of them, the Parent shall be deemed to not have a Debt Rating from such rating agency. At any time, if either of S&P or Moody’s shall no longer perform the functions of a securities rating agency, then the Borrower and the Administrative Agent shall promptly negotiate in good faith to agree upon a substitute rating agency or agencies (and to correlate the system of ratings of each substitute rating agency with that of the rating agency being replaced), and pending such amendment, the Debt Rating of the other of S&P and Moody’s, if one has been provided, shall continue to apply.
“ Default ” means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“ Defaulting Lender ” means at any time, subject to Section 2.16(f), (i) any Bank that has failed for two or more Business Days to comply with its obligations under this Agreement to make a Revolving Facility Advance, make a payment to any Issuing Bank in respect of a Letter of Credit or make any other payment due hereunder (each, a “ funding obligation ”), unless such Bank has notified the Administrative Agent and the Borrower in writing that such failure is the result of such Bank’s determination that one or more conditions precedent to funding has not been satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing), (ii) any Bank that has notified the Administrative Agent, the Borrower or any Issuing Bank in writing, or has stated publicly, that it does not intend to comply with its funding obligations hereunder, unless such writing or statement states that such position is based on such Bank’s determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing or public statement), (iii) any Bank that has, for 3 or more Business Days after written request of the Administrative Agent or the Borrower, failed to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder ( provided that such Bank will cease to be a Defaulting Lender pursuant to this clause (iii) upon the Administrative Agent’s and the Borrower’s receipt of such written confirmation), or (iv) any Bank with respect to which a Lender Insolvency Event has occurred and is continuing with respect to such Bank or its Parent Company, provided that a Bank shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Bank or any direct or indirect Parent Company thereof by a Governmental Authority so long as such Equity Interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank ( provided that in each case, neither the reallocation of funding obligations provided for in Section 2.16(b) as a result of a Bank’s being a Defaulting Lender nor the performance by Non‑Defaulting Lenders of such reallocated funding obligations will by themselves cause the relevant Defaulting Lender to become a Non‑Defaulting Lender). Any determination by the Administrative Agent that a Bank is a Defaulting Lender under any of clauses (i) through (iv) above will be conclusive and binding absent manifest error, and such Bank will be deemed to be a Defaulting Lender (subject to Section 2.16(f)) upon notification of such determination by the Administrative Agent to the Borrower, each Issuing Bank and the Banks.
“ Development Property ” means either (a) a new Hotel Property under construction including the conversion of a non‑Hotel Property into a Hotel Property or (b) an existing Hotel Property which is undergoing an expansion pursuant to which the total guest rooms for such Hotel Property will be increased by 50% or more. Each Development Property shall continue to be classified as a Development Property hereunder until the achievement of Substantial Completion with respect to such Development Property, following which such Development Property shall be classified as a Hotel Property hereunder.
“ Dollars ” and “ $ ” means lawful money of the United States of America.
“ Domestic Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “Operations Contact” in the questionnaire such Bank provided to the Administrative Agent, or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Administrative Agent.
“ ECP ” means an eligible contract participant as defined in the Commodity Exchange Act.

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“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ Effective Date ” means the first date on which the conditions set forth in Article III shall be satisfied.
“ Eligible Assignee ” means (a) a commercial bank (or other financial institution acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed) organized under the laws of the United States, or any state thereof, and having primary capital of not less than $250,000,000 and approved by the Administrative Agent, which approval will not be unreasonably withheld or delayed, (b) a commercial bank (or other financial institution acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed) organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development and having primary capital (or its equivalent) of not less than $250,000,000 and approved by the Administrative Agent, which approval will not be unreasonably withheld or delayed, (c) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed, 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 $250,000,000, (d) a Bank (without approval of the Administrative Agent or the Borrower), and (e) an Affiliate of the respective assigning Bank, without approval of any Person but otherwise meeting the eligibility requirements of clause (a) or (b) above; provided , however , that neither the Borrower nor any Affiliate of the Borrower shall qualify as an Eligible Assignee under this definition. For avoidance of doubt, the Borrower shall have no approval or consent rights with respect to an Eligible Assignee so long as a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06. If the Borrower shall not have responded to a request for consent under this definition within 10 Business Days of receipt of a proper written request, the Borrower’s consent shall be deemed granted.
“ Eligible Subsidiary Guarantor ” means (a) each Subsidiary of the Borrower which directly or indirectly owns an Unencumbered Property, (b) each Operating Lessee, and (c) each Material Subsidiary, in each case excluding Permitted Other Subsidiaries and any Joint Venture Subsidiary which is contractually prohibited from acting as a Guarantor by the terms of (i) any document evidencing or securing Indebtedness of the Borrower or its Subsidiaries permitted by the terms of this Agreement or (ii) the organizational documents of such Person.
“ Environment ” or “ Environmental ” shall have the meanings set forth in 42 U.S.C. § 9601(8), as amended.
“ Environmental Claim ” means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating to health or safety of employees) which seeks to impose liability under any Environmental Law.
“ Environmental Indemnity ” means that certain Environmental Indemnification Agreement effective the date hereof executed by the Borrower, the Parent and the Guarantors in substantially the form of the attached Exhibit D and

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any future environmental indemnity or Accession Agreement executed in connection with any Hotel Property, as any of such environmental indemnities may be amended hereafter in accordance with the terms of such agreements.
“ Environmental Law ” means all Legal Requirements arising from, relating to, or in connection with the Environment, health, or safety, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, medical, infectious, or toxic substances, materials or wastes; (d) the safety or health of employees; or (e) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous, medical, infectious, or toxic substances, materials or wastes.
“ Environmental Permit ” means any permit, license, order, approval or other authorization under Environmental Law.
“ Equity Interests ” means, with respect to any Person, all of the Stock in such Person, all of the Stock Equivalents in such Person, and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such Stock or Stock Equivalents are outstanding on any date of determination.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Federal Reserve Board (or any successor), as in effect from time to time.
“ Event of Default ” has the meaning set forth in Section 8.01.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal.
“ Excluded Taxes ” has the meaning set forth in Section 2.11(a).
“ Existing Agreements” has the meaning set forth in the recitals of this Agreement.
“ Existing Issuing Bank ” means Citibank, N.A.
“ Existing Letters of Credit ” means the letters of credit listed on Schedule 1.01(e) hereto.
“ Existing New York Mortgage ” means a mortgage creating a Lien on a New York Property.
“ Existing New York Note ” means the promissory note or notes evidencing the Indebtedness secured by an Existing New York Mortgage.

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“ Existing Park Central Mortgage ” means that certain Consolidated, Amended and Restated Mortgage made by and between PC Festivus, LLC and Citibank, N.A., in its capacity as Agent (as defined therein), dated December 29, 2011 and recorded in the Office of the City Register of the City of New York on January 27, 2012 as CRFN 2012000038149 with respect to the Hotel Property located at 870 Seventh Avenue, New York, New York and commonly known as the Park Central Hotel.
“ Existing Park Central Note ” means the promissory note or notes evidencing the Indebtedness secured by the Existing Park Central Mortgage.
“ Existing Properties ” means collectively the Hotel Properties listed on Schedule 1.01(b), and “ Existing Property ” means any of such Hotel Properties.
“ Existing Revolving Facility Agreement ” has the meaning set forth in the recitals of this Agreement.
“ Existing TL Facility Agreement ” has the meaning set forth in the recitals of this Agreement.
“ Extension Date ” has the meaning set forth in Section 1.07.
“ Extension Fee ” has the meaning set forth in Section 1.07.
“ Expiration Date ” means, with respect to any Letter of Credit, the date on which such Letter of Credit will expire or terminate in accordance with its terms.
“ Facility ” means the Revolving Facility or the TL Facility.
“ Facility Fee ” has the meaning set forth in Section 2.03(a).
“ FATCA ” has the meaning set forth in Section 2.11(a).
“ 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, 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, an analogous rate determined by the Administrative Agent with reference to another commercially available source or sources designated by the Administrative Agent; provided , however , that in no circumstance shall the Federal Funds Rate be less than 0% per annum for each Base Rate Advance that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Swap Contract.
“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System or any of its successors.
“ Fee Letter ” has the meaning set forth in Section 2.03(c).
“ FF&E ” means, with respect to any Hotel Property, all fixtures, furnishings, equipment, furniture, and other items of tangible personal property now or hereafter located on such Hotel Property or used in connection with the use, occupancy, operation and maintenance of all or any part of such Hotel Property, other than stocks of food and other supplies held for consumption in normal operation but including, without limitation, appliances, machinery, equipment, signs, artwork, office furnishings and equipment, guest room furnishings, and specialized equipment for kitchens, laundries, bars, restaurants, public rooms, health and recreational facilities, dishware, all partitions, screens, awnings, shades, blinds, floor coverings, hall and lobby equipment, heating, lighting, plumbing, ventilating, refrigerating, incinerating, elevators, escalators, air conditioning and communication plants or systems with appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials; reservation system computer and related equipment.

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“ FF&E Reserve ” means, for any Person or any Hotel Property at any time, a reserve equal to 4% of gross revenues from any Hotel Property owned by such Person or from such Hotel Property, as applicable, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder.
“ First Extension Maturity Date ” means July 9, 2021.
“ Fiscal Quarter ” means each of the three-month periods ending on March 31, June 30, September 30 and December 31.
“ Fiscal Year ” means the twelve-month period ending on December 31.
“ Fixed Charge Coverage Ratio ” means, as of the end of any Rolling Period, a ratio of (a) the Corporate EBITDA for such Rolling Period less the aggregate FF&E Reserves for such period in respect of each Hotel Property owned by the Parent or its Subsidiaries (whether located on land owned by or land leased to such owner of the Hotel Property) to (b) the Fixed Charges for such Rolling Period.
“ Fixed Charges ” means, for the Rolling Period of the Parent most recently ended for which financial statements are required to be delivered to the Banks hereunder, the sum of the following amounts for the Parent and the Parent’s Subsidiaries on a Consolidated basis: (a) the amount (without duplication) of all mandatory principal payments scheduled to be made (excluding optional prepayments and scheduled principal payments in respect of any such Indebtedness which is payable in a single installment at final maturity), (b) Parent’s Interest Expense, (c) all payments scheduled to be made in respect of Capital Leases, and (d) all preferred stock dividends.
“ Flood Hazard Property ” has the meaning set forth in Section 3.01(a)(xi).
“ Flood Insurance Requirements ” has the meaning set forth in Section 3.01(a)(xi).
“ Funding Date ” has the meaning set forth in Section 1.06(b).
“ Future Property ” means any Hotel Property except for the Existing Properties which the Borrower or any Subsidiary of the Borrower acquires.
“ GAAP ” means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.
“ Governmental Authority ” means any foreign governmental authority, the United States of America, any state of the United States of America and any subdivision of any of the foregoing, and any agency, department, commission, board, authority or instrumentality, bureau or court having jurisdiction over any Bank, the Parent, the Borrower, any Subsidiaries of the Borrower or the Parent, any participating lessee, a manager or any of their respective Properties (including any supra‑national bodies such as the European Union or the European Central Bank).
“ Guarantor ” means (a) the Parent, (b) each Subsidiary which owns an Unencumbered Property, (c) each Operating Lessee, and (d) each Material Subsidiary, in each case excluding Permitted Other Subsidiaries and any Joint Venture Subsidiary which is contractually prohibited from acting as a Guarantor by the terms of (i) any document evidencing or securing Indebtedness of the Borrower or its Subsidiaries permitted by the terms of this Agreement or (ii) the organizational documents of such Person. The Guarantors on the Closing Date are identified on Schedule 1.01(c).
“ Guaranty ” means that certain Guaranty and Contribution Agreement effective the date hereof executed by the Parent, the Borrower and the Guarantors, evidencing the joint and several guaranty by the signatories thereto of the Obligations of Borrower in respect of the Credit Documents in substantially the form of the attached Exhibit E executed to secure Advances and any future guaranty and contribution agreement or Accession Agreement executed to secure Advances, as any of such agreements may be amended hereafter in accordance with the terms of such agreements.

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“ Hazardous Substance ” means the substances identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radio nuclides, radioactive materials, and medical and infectious waste.
“ Hazardous Waste ” means the substances regulated as such pursuant to any Environmental Law.
“ Hotel Property ” for any hotel means the Real Property and the Personal Property for such hotel.
“ ICE LIBOR ” has the meaning specified in the definition of Screen Rate.
“ ICC ” has the meaning set forth in Section 2.13(g).
“ ICC Rule ” has the meaning set forth in Section 2.13(g).
“ Improvements ” for any hotel means all buildings, structures, fixtures, tenant improvements and other improvements of every kind and description now or hereafter located in or on or attached to the Land for such hotel; and all additions and betterments thereto and all renewals, substitutions and replacements thereof.
“ Indebtedness ” means (without duplication), at any time and with respect to any Person, (a) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase price of property or services purchased (other than amounts constituting trade payables, accruals or bank drafts arising in the ordinary course of business); (b) indebtedness of others in the amount which such Person has directly or indirectly assumed or guaranteed or otherwise provided credit support therefor or for which such Person is liable as a partner of such Person; (c) indebtedness of others in the amount secured by a Lien on assets of such Person, whether or not such Person shall have assumed such indebtedness; (d) obligations of such Person in respect of letters of credit, acceptance facilities, or drafts or similar instruments issued or accepted by banks and other financial institutions for the account of such Person (other than trade payables or bank drafts arising in the ordinary course); (e) obligations of such Person under Capital Leases; (f) obligations under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements or other similar agreements or arrangements designed to protect against fluctuations in interest rates; and (g) all preferred stock that is issued by such Person that is redeemable by the holder thereof in cash, a cash equivalent or some type of Indebtedness or convertible to some type of Indebtedness.
“ Indemnified Taxes ” has the meaning set forth in Section 2.11(a).
“ Indemnitee ” has the meaning set forth in Section 11.07(a).
“ Initial Interest Period ” has the meaning specified in the definition of “Interest Period”.
“ Interest Expense ” means, for any Person for any period for which such amount is being determined, the total interest expense (including that properly attributable to Capital Leases in accordance with GAAP) and all charges incurred with respect to letters of credit determined on a Consolidated basis in conformity with GAAP, plus capitalized interest of such Person and its Subsidiaries.
“ Interest Period ” means, for each LIBOR Advance comprising part of the same Borrowing, the period commencing on the date of such Advance or the date of the Conversion of any Base Rate Advance into such an Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.02 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 and Section 2.02. The duration of each such Interest Period shall be one, two, three or six months, or, if approved by all Banks, twelve months, in each case as the Borrower may select, upon notice received by the Administrative Agent not later than 1:00 P.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, provided , however , that the initial Interest Period shall be the period commencing on the Closing Date and ending on February 2, 2017 (the “ Initial Interest Period ”); and provided further that:

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(a)    Interest Periods for Advances of the same Borrowing shall be of the same duration;
(b)    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 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;
(c)    any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month in which it would have ended if there were a numerically corresponding day in such calendar month;
(d)    each successive Interest Period shall commence on the day on which the next preceding Interest Period expires; and
(e)    no Interest Period with respect to any portion of any Advance shall extend beyond the Revolving Facility Maturity Date or the TL Facility Maturity Date, as applicable.
“ Interest Rate Agreements ” means (i) any Swap Contract between the Borrower and any Swap Bank, or (ii) any other interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect the Borrower, the Parent or any of their respective Subsidiaries against fluctuations in interest rates.
“ Interpolated Rate ” means, for the relevant Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) which results from interpolating on a linear basis between:
(a)    the applicable Published Screen Rate for the longest period (for which that Published Screen Rate is available) which is less than the relevant Interest Period; and
(b)    the applicable Published Screen Rate for the shortest period (for which that Published Screen Rate is available) which exceeds the relevant Interest Period.
“ Investment ” means, with respect to any Person, (a) any loan or advance to any other Person, (b) the ownership, purchase or other acquisition of, any Stock, Stock Equivalents, other Equity Interest, obligations or other securities of, (i) any other Person, or (ii) all or substantially all of the assets of any other Person, or (iii) all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person, (c) any joint venture or partnership with, or any capital contribution to, or other investment in, any other Person or (d) any investment in any real property. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Credit Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“ Investment Amount ” means (a) for any Hotel Property the sum of (i) for any Existing Property, the amount set forth for such Existing Property on Schedule 1.01(b) attached hereto, and for any other Hotel Property, the aggregate purchase price paid by the Borrower or its Subsidiary for such other Hotel Property (giving effect to any securities used to purchase a Hotel Property at the fair market value of the securities at the time of purchase based upon the price at which such securities could be exchanged into Parent Common Stock assuming such exchange occurred on the date of acquiring the Hotel Property), and (ii) 95% of (A) the actual cost of any Capital Expenditures or FF&E expenditures for such Hotel Property made by the Borrower or its Subsidiaries during any period minus (B) the FF&E Reserve for such Hotel Property, and (b) for any other Investment the aggregate purchase price paid by the Borrower or its Subsidiary for such other Investment (giving effect to any securities used to purchase such Investment at the fair market value of the securities at the time of purchase based upon the price at which such securities could be exchanged into Parent Common Stock assuming such exchange occurred on the date of acquiring such Investment).

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“ Investment Grade Rating ” means a Debt Rating of BBB- or better from S&P or a Debt Rating of Baa3 or better from Moody’s.
“ Investment Grade Release Event ” has the meaning set forth in Section 11.23.
“ Issuing Bank ” means (a) the Existing Issuing Bank, (b) Bank of Montreal, (c) Bank of America, N.A., (d) any Bank approved by the Administrative Agent and the Borrower as an “Issuing Bank” so long as each such Bank 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, or (e) any Bank acting as a successor issuing bank pursuant to Section 10.06, and “Issuing Banks” means, collectively, all of such Banks.
“ Joint Venture Guarantor ” means a direct or indirect Wholly‑Owned Subsidiary of the Borrower that (a) has no assets other than its Equity Interests in Joint Venture Subsidiaries whose sole assets are Unencumbered Properties, (b) is not liable for any Indebtedness other than the Obligations, (c) complies in all material respects with all of the covenants and requirements of the Guarantors under the Credit Documents and (d) has delivered to the Administrative Agent either (A) an original Guaranty and Environmental Indemnity executed by it or (B) an Accession Agreement executed by it.
“ Joint Venture Subsidiary ” means any Subsidiary in which the Parent or any of its Subsidiaries (a) holds a majority of Equity Interests and (b) after giving effect to all buy/sell provisions contained in the applicable constituent documents of such Subsidiary, controls all material decisions of such Subsidiary, including without limitation the financing, refinancing and disposition of the assets of such Subsidiary.
“ Land ” for any hotel means the real property upon which the hotel is located, together with all rights, title and interests appurtenant to such real property, including without limitation all rights, title and interests to (a) all strips and gores within or adjoining such property, (b) the streets, roads, sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements, hereditaments, easements, reciprocal easement agreements, rights-of-way and other rights, privileges and appurtenances thereunto belonging or in any way pertaining thereto, (d) all reversions and remainders, (e) all air space rights, and all water, sewer and wastewater rights, (f) all mineral, oil, gas, hydrocarbon substances and other rights to produce or share in the production of anything related to such property, and (g) all other appurtenances appurtenant to such property, including without limitation, any now or hereafter belonging or in anywise appertaining thereto.
“ LaSalle Leasing ” means LaSalle Hotel Lessee, Inc.
“ Legal Requirement ” means any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority.
“ Lender Insolvency Event ” means that (i) the Bank or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, (ii) such Bank or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Bank or its Parent Company, or such Bank or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment, or (iii) such Bank or its Parent Company has become the subject of a Bail-In Action.
“ Letter of Credit ” means, individually, (a) any Existing Letter of Credit and (b) any letter of credit issued by an Issuing Bank in accordance with the provisions of Section 2.13 of this Agreement, and “ Letters of Credit ” means all such letters of credit collectively.

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“ Letter of Credit Commitment ” means, with respect to any Issuing Bank, the amount set forth opposite such Issuing Bank’s name on Schedule 1.01(a) as its Letter of Credit Commitment, or if such Issuing Bank has entered into any Assignment and Acceptance, the amount set forth for such Bank as its Letter of Credit Commitment in the Register maintained by the Administrative Agent pursuant to Section 11.06(c), as such amount may be reduced pursuant to Section 2.04(b).
“ Letter of Credit Documents ” means, with respect to any Letter of Credit, such Letter of Credit and any reimbursement or other agreements, documents, and instruments entered into in connection with or relating to such Letter of Credit.
“ Letter of Credit Exposure ” means, at any time, the sum of (a) the aggregate undrawn maximum face amount of each Letter of Credit and (b) the aggregate unpaid amount of all Letter of Credit Obligations at such time.
“ Letter of Credit Obligations ” means all obligations of the Borrower arising in respect of the Letter of Credit Documents, including without limitation the aggregate drawn amounts of Letters of Credit which have not been reimbursed by the Borrower or converted into a Base Rate Advance pursuant to the provisions of Section 2.13(c).
“ Leverage Ratio ” means the percentage obtained by dividing (a) the Parent’s Total Liabilities by (b) the Adjusted Corporate EBITDA.
“ Leverage Release Date ” has the meaning set forth in Section 5.10(c).
“ Leverage Trigger ” shall occur when the Leverage Ratio is greater than 6.50:1.00 for 2 consecutive Fiscal Quarters. For purposes only of determining whether a Leverage Trigger has occurred, the Leverage Ratio shall be calculated on a pro forma basis with respect to any Asset Dispositions and concurrent repayments of Indebtedness occurring between the end of the relevant Fiscal Quarter and the delivery of financial statements by the Borrower to the Administrative Agent with respect to such quarter.
“ Leverage Trigger Deadline ” means 10 Business Days following the first date following the occurrence of a Leverage Trigger on which the Borrower is obligated to deliver a Compliance Certificate pursuant to the terms of this Agreement.
“ Leverage Trigger Period ” means the period of time from and including the occurrence of a Leverage Trigger through the related Leverage Release Date, if any.
“ LHL Facility ” means that certain unsecured credit facility entered into by LaSalle Hotel Lessee, Inc., as borrower, and U.S. Bank National Association, as lender, pursuant to that certain Second Amended and Restated Revolving Credit Note, dated as of December 14, 2011, as amended to date, from LaSalle Hotel Lessee, Inc. to U.S. Bank National Association, in the maximum principal amount of $25,000,000, as may be amended simultaneously herewith and as the same may be extended or further amended to the extent permitted by Section 6.02.
“ LIBOR ” means, for the Interest Period for each LIBOR Advance comprising part of the same Borrowing, an interest rate per annum equal to (A) the Screen Rate determined as of approximately 11:00 A.M. (London time) 2 Business Days prior to the first day of such Interest Period, provided that, if such Screen Rate is not available for any reason at such time, the Screen Rate shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Advance being made, continued or converted by Citibank and with a term equivalent to such Interest Period would be offered by Citibank’s London branch (or other Citibank branch or Affiliate) to major banks in the London or other offshore interbank market for Dollars at their request at approximately 11:00 A.M. (London time) two Business Days prior to the commencement of such Interest Period divided by (B) one minus the LIBOR Reserve Requirement; provided , however , that LIBOR for the Initial Interest Period shall be 0.78% per annum. It is agreed that for purposes of this definition, LIBOR Advances made hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in Regulation D and to be subject to the reserve requirements of Regulation D; provided further that for the avoidance of doubt, in no circumstance shall LIBOR be less than 0% per annum for each LIBOR Advance

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that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Swap Contract.
“ LIBOR Advance ” means any Advance which bears interest as provided in Section 2.06(b).
“ LIBOR Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “Operations Contact” in the questionnaire such Bank provided to the Administrative Agent, or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Administrative Agent.
“ LIBOR Reserve Requirement ” shall mean, on any day, that percentage (expressed as a decimal fraction) which is in effect on such date, as provided 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” as currently defined as Regulation D (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate LIBOR Rate Advances is determined) having a term equal to such Interest Period. Each determination by the Administrative Agent of the LIBOR Reserve Requirement, shall, in the absence of manifest error, be conclusive and binding upon the Borrower.
“ Lien ” means any mortgage, lien, pledge, charge, deed of trust, security interest, encumbrance or other type of preferential arrangement to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement).
“ Liquid Investments ” means cash and the following:
(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States;
(b)    (i) negotiable or nonnegotiable certificates of deposit, time deposits, or other similar banking arrangements maturing within 180 days from the date of acquisition thereof (“bank debt securities”), issued by (A) any Bank or (B) any other bank or trust company which has a combined capital surplus and undivided profit of not less than $250,000,000, if at the time of deposit or purchase, such bank debt securities are rated not less than “A” (or the then equivalent) by the rating service of S&P or of Moody’s, and (ii) commercial paper issued by (A) any Bank or (B) any other Person if at the time of purchase such commercial paper is rated not less than “A-2” (or the then equivalent) by the rating service of S&P or not less than “P-2” (or the then equivalent) by the rating service of Moody’s, or upon the discontinuance of both of such services, such other nationally recognized rating service or services, as the case may be, as shall be selected by the Borrower with the consent of the Administrative Agent;
(c)    repurchase agreements relating to investments described in clauses (a) and (b) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital surplus and undivided profit of not less than $250,000,000, if at the time of entering into such agreement the debt securities of such Person are rated not less than “A” (or the then equivalent) by the rating service of S&P or of Moody’s; and
(d)    such other instruments (within the meaning of New York’s Uniform Commercial Code) as the Borrower may request and the Administrative Agent may approve in writing, which approval will not be unreasonably withheld.
“ Mandatory Commitment Reduction ” has the meaning set forth in Section 2.04(c).
“ Mandatory Prepayment Funds ” has the meaning set forth in Section 2.07(c).

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“ Mandatory Prepayments ” means all prepayments of the Advances required under Section 2.07(c).
“ Master Agreement ” has the meaning set forth in the definition of the term Swap Contract.
“ Material Acquisition ” means the acquisition by the Borrower or any of its Subsidiaries, in a single transaction or in a series of related transactions, of one or more Hotel Properties or Persons owning Hotel Properties in which the total Investment Amount is equal to or greater than 10% of Consolidated Total Book Value at such time.
“ Material Adverse Change ” shall mean (a) a material adverse change in the business, financial condition, or results of operations of the Borrower, the Parent or the Borrower, the Parent and the Material Subsidiaries taken as a whole, in each case since the date of the most recent financial statements of the Parent delivered to the Banks pursuant to Section 5.05(b), (b) a material adverse change affecting the validity or enforceability of this Agreement or any Credit Document as against the Borrower or any Guarantor or (c) a material adverse change affecting the ability of the Borrower, the Parent or the Guarantors taken as a whole to perform their obligations under this Agreement or any other Credit Document.
“ Material Asset Sale ” means any sale, lease (other than an Operating Lease) of substantially all of a Hotel Property (in which the Parent, the Borrower or one of their respective Subsidiaries is lessor), conveyance, exchange, transfer, or assignment of any Property by the Parent, the Borrower or one of their respective Subsidiaries to a Person other than the Parent, the Borrower or one of their respective Subsidiaries (together with any related assets included in such transaction).
“Material Subsidiary ” means any Subsidiary of the Borrower which owns (a) a direct fee or leasehold interest in an Unencumbered Property (including pursuant to an Operating Lease) or (b) assets that have an aggregate undepreciated book value greater than $10,000,000.
“ Maximum Rate ” means the maximum nonusurious interest rate under applicable law.
“ Minimum Tangible Net Worth ” means, with respect to the Parent, at any time, the sum of (a) $1,931,251,500 plus (b) 75% of the aggregate net proceeds received by the Parent or any of its Subsidiaries after September 30, 2016 in connection with any offering of Stock or Stock Equivalents of the Parent or its Subsidiaries; provided however , that any such net proceeds used solely for the purpose of redeeming the Parent’s preferred stock shall not be included in such sum.
“ Moody’s ” means Moody’s Investor Service Inc., and any successor thereto.
“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Parent, the Borrower or any member of a Controlled Group is making or accruing an obligation to make contributions.
“ Net Cash Proceeds ” means, with respect to any Material Asset Sale or Refinancing Debt occurring during a Leverage Trigger Period, the excess, if any, of (i) the cash and other Liquid Investments received (including cash proceeds or non-cash proceeds received by way of deferred payment, but only as and when received) by the Borrower or any Subsidiary of the Borrower in consideration of such Material Asset Sale or Refinancing Debt over (ii) the sum, without duplication, of (A) payments made to repay or retire any Indebtedness that is secured by an asset and repaid in connection with the sale thereof, (B) payments made in respect of any principal or interest in connection with any Indebtedness refinanced by such Refinancing Debt, (C) the reasonable expenses incurred by the Parent, the Borrower or any of their respective Subsidiaries in connection with such transaction (including, without limitation, brokerage commissions, transfer and recording taxes and fees, title insurance premiums, attorneys’ fees, financing fees, and reserves or escrows established for any post-closing liabilities), (D) income, capital gains or similar taxes reasonably estimated to be paid or payable with respect to the fiscal year in which such transaction occurs with respect to such transactions and (E) dividend distributions reasonably estimated to be required in respect of the realization of any gains in connection with such transaction in order to maintain the Parent’s status as a REIT.

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“ Net Income ” means, for any period for which such amount is being determined, the net income of the Parent (on a consolidated basis) after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, (ii) any write‑up or write-down of assets and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels.
“ Net Worth ” means, for any Person, stockholders equity of such Person determined in accordance with GAAP.
“ New Property ” means, as at any date, any Hotel Property that has been owned for less than 4 Fiscal Quarters, by the Parent or by a Person that has been a Subsidiary of the Parent during such entire period.
“ New York Mortgage ” means any consolidated, amended and restated mortgage by and from a Subsidiary that owns a New York Property to the Administrative Agent, in substantially the form of Exhibit H hereto.
“ New York Property ” has the meaning set forth in Section 9.01.
“ New York Term Note ” means any consolidated, amended and restated promissory note made by a Subsidiary of the Borrower that owns a New York Property and payable to the order of the Administrative Agent for the ratable benefit of the Banks and with respect to which the Borrower shall be deemed to be a co-obligor with such Subsidiary, in substantially the form of Exhibit I hereto.
“ Non-Core Hotel Property ” means a Hotel Property which is either (a) a full service hotel located in a secondary market or (b) a limited service hotel located in a non-urban market.
“ Non‑Defaulting Lender ” means, at any time, a Bank that is not a Defaulting Lender or a Potential Defaulting Lender.
“ Note ” means a promissory note of the Borrower payable to the order of any Bank, in substantially the form of the attached (a) Exhibit A-1, evidencing Indebtedness of the Borrower to such Bank resulting from Revolving Facility Advances owing to such Bank, or (b) Exhibit A-2, evidencing Indebtedness of the Borrower to such Bank resulting from TL Facility Advances owing to such Bank, and “ Notes ” means all of such promissory notes.
“ Notice of Borrowing ” means a notice of borrowing in the form of the attached Exhibit F signed by a Responsible Officer of the Borrower.
“ Notice of Conversion or Continuation ” means a notice of conversion or continuation in the form of the attached Exhibit G signed by a Responsible Officer of the Borrower.
“ Obligations ” means all Advances, Letter of Credit Obligations, and other amounts payable by the Borrower to the Administrative Agent or the Banks under the Credit Documents. The foregoing shall also include all obligations under any Swap Contract between Borrower or Parent and any Swap Bank that is permitted to be incurred pursuant to Section 6.02(c), provided that in no event shall the Obligations of the Borrower and the Guarantors under the Credit Documents include the Excluded Swap Obligations.
“ OFAC ” means the Office of Foreign Asset Control of the Department of the Treasury of the United States.
“ Operating Lease ” means any operating lease of an Unencumbered Property between the applicable Subsidiary that owns such Unencumbered Property (whether in fee simple or subject to a Qualified Ground Lease) and the applicable Operating Lessee that leases such Unencumbered Property, as each may be amended, restated, supplemented or otherwise modified from time to time.
“ Operating Lessee ” means a lessee of an Unencumbered Property pursuant to an Operating Lease.

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“ Other Taxes ” has the meaning set forth in Section 2.11(b).
“ Parent ” means LaSalle Hotel Properties, a Maryland trust.
“ Parent Common Stock ” means the common shares of beneficial interest of Parent, par value $.01 per share.
“ Parent Company ” means, with respect to a Bank, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Bank, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the Equity Interests in such Bank.
“ Parent’s Interest Expense ” means, for the period for which such amount is being determined, the Interest Expense for the Parent and the Parent’s Subsidiaries on a Consolidated basis.
“ Participant Register ” has the meaning set forth in Section 11.06(e).
“ Patriot Act ” has the meaning set forth in Section 3.01(a)(ix).
“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“ Permits ” has the meaning set forth in Section 4.17.
“ Permitted Encumbrances ” means the Liens permitted to exist pursuant to Section 6.01.
“ Permitted Hazardous Substances ” means (a) Hazardous Substances, petroleum and petroleum products which are (i) used in the ordinary course of business and in typical quantities for a hotel and (ii) generated, used and disposed of in accordance with all Legal Requirements and good hotel industry practice and (b) non‑friable asbestos to the extent (i) that no applicable Legal Requirements require removal of such asbestos from the Hotel Property and (ii) such asbestos is encapsulated in accordance with all applicable Legal Requirements and such reasonable operations and maintenance program as may be required by the Administrative Agent.
“ Permitted Hotel Sale ” means the Asset Disposition of all or a portion of (a) a Hotel Property or (b) the Equity Interests in a Subsidiary of the Borrower which owns a Hotel Property, in either case with respect to which no Default has occurred and is continuing or would occur upon the consummation of such Asset Disposition.
“ Permitted Non‑Unencumbered Property ” means any Hotel Property or other Property (a) which is not an Unencumbered Property; (b) which is owned by a Permitted Other Subsidiary; and (c) which neither is subject to any Environmental Claim, nor contains any Hazardous Substance which could reasonably be expected to cause a Material Adverse Change.
“ Permitted Other Subsidiary ” means a Wholly-Owned Subsidiary or a Joint Venture Subsidiary of the Borrower which (a) does not own any Unencumbered Property, and (b) is a bankruptcy remote, single purpose Person.
“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, limited liability company, joint venture or other entity, or a government or any political subdivision or agency thereof or any trustee, receiver, custodian or similar official.
“ Personal Property ” for any Hotel Property means all FF&E, inventory and other personal property of every kind, whether now existing or hereafter acquired, tangible and intangible, now or hereafter located on or about the Land, and used or to be used in the future in connection with the operation of such Hotel Property.
“ Plan ” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Parent, the Borrower or any member of a Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

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“ Pledge Agreement ” means, to the extent delivered in accordance with the terms of this Agreement, any Pledge and Security Agreement in substantially the form of the attached Exhibit J to be executed by the Pledgors to secure the Advances and the Guaranty and any future pledge and security agreement or Accession Agreement executed to secure the Advances and/or the Guaranty, as any of such agreements may be amended hereafter in accordance with the terms of such agreements.
“ Pledgor ” has the meaning set forth Section 5.10(b).
“ Potential Defaulting Lender ” means, at any time, (i) any Bank with respect to which an event of the kind referred to in the definition of “Lender Insolvency Event” has occurred and is continuing in respect of any Subsidiary of such Bank, or (ii) any Bank that has notified, or whose Parent Company or a Subsidiary thereof has notified, the Administrative Agent, the Borrower or the Issuing Banks in writing, or has stated publicly, that it does not intend to comply with its funding obligations under any other loan agreement or credit agreement or other similar agreement, unless such writing or statement states that such position is based on such Bank’s determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing or public statement). Any determination by the Administrative Agent that a Bank is a Potential Defaulting Lender under either of clauses (i) or (ii) above will be conclusive and binding absent manifest error, and such Bank will be deemed a Potential Defaulting Lender (subject to Section 2.16(f)) upon notification of such determination by the Administrative Agent to the Borrower, the Issuing Banks and the Banks.
“ Prescribed Forms ” means such duly executed form(s) or statement(s), and in such number of copies, which may, from time to time, be prescribed by law and which, pursuant to applicable provisions of (a) an income tax treaty between the United States and the country of residence of the Bank providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule or regulation under the Code, permit the Borrower to make payments hereunder for the account of such Bank free of deduction or withholding of income or similar taxes (except for any deduction or withholding of income or similar taxes as a result of any change in or in the interpretation of any such treaty, the Code or any such rule or regulation).
“ Property ” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.
“ Property Owner ” for any Existing Property or Future Property, means the Person who owns fee or leasehold title interest (as applicable) in and to such Property.
“ Pro Rata Share ” means, at any time with respect to any Bank, (a) with respect to the Revolving Facility, either (a) the ratio (expressed as a percentage) of such Bank’s Revolving Facility Commitment at such time to the aggregate Revolving Facility Commitments at such time or (b) if the Revolving Facility Commitments have been terminated, the ratio (expressed as a percentage) of such Bank’s aggregate outstanding Revolving Facility Advances and participation interest in the Letter of Credit Exposure at such time to the aggregate outstanding Revolving Facility Advances and Letter of Credit Exposure of all the Banks at such time, and (b) with respect to the TL Facility, the ratio (expressed as a percentage) of such Bank’s aggregate outstanding TL Facility Advances at such time to the aggregate outstanding TL Facility Advances of all the Banks at such time.
“ Published Screen Rate ” has the meaning specified in the definition of “Screen Rate”.
“ Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other Person as constitutes an ECP under the Commodity Exchange Act or any regulations promulgated thereunder.
“ Qualified Ground Lease ” means each of the ground leases or ground subleases set forth on Schedule 1.01(d) hereto and for a Future Property means any ground lease (a) which is a direct ground lease or ground sublease granted by the fee owner of real property or a master ground lessee from such fee owner, (b) which may be transferred and/or assigned without the consent of the lessor (or as to which the lease expressly provides that (i) such lease may be transferred and/or assigned with the consent of the lessor and (ii) such consent shall not be unreasonably withheld

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or delayed) or subject to certain reasonable pre‑defined requirements, (c) which has a remaining term (including any renewal terms exercisable at the sole option of the lessee) of at least 20 years, (d) under which no material default has occurred and is continuing, (e) with respect to which a Lien may be granted without the consent of the lessor (but subject to customary requirements regarding the nature of the holder of such Lien and prior notice to the lessor), (f) which contains customary and reasonable lender protection provisions, including, without limitation, provisions to the effect that (i) the lessor shall notify any holder of a Lien in such lease of the occurrence of any default by the lessee under such lease and shall afford such holder the option to cure such default, and (ii) in the event that such lease is terminated, such holder shall have the option to enter into a new lease having terms substantially identical to those contained in the terminated lease and (g) which otherwise contains no non-customary terms that are material and adverse to the lessee.
“ Qualified Intermediary ” shall have the meaning set forth in the definition of the term Unencumbered Property.
“ Qualified Unsecured Debt ” has the meaning specified in the definition of Qualified Unsecured Lender.
“ Qualified Unsecured Lender ” means (a) a trustee in respect of an issuance of Indebtedness by the Borrower or the Parent pursuant to Rule 144A of the Securities Act of 1933, as amended, or (b) an administrative agent or similar lead representative of a lender group (or, if no such administrative agent or similar lead representative exists, each lender thereunder) in respect of a term loan made (or to be made) to the Borrower or the Parent, in each case where such Indebtedness is not secured by any Lien and does not otherwise constitute Secured Indebtedness hereunder (“ Qualified Unsecured Debt ”), provided that to constitute Qualified Unsecured Debt hereunder (i) the Borrower shall have provided notice to the Administrative Agent of the aggregate maximum principal amount of such Indebtedness, the name of the Qualified Unsecured Lender thereunder, the address to which any notices to such Qualified Unsecured Lender should be sent and such other information regarding the terms of such Indebtedness as the Administrative Agent may reasonably request, (ii) the Borrower shall have delivered a certificate signed by a Responsible Officer of the Parent, dated the date of the incurrence of such Indebtedness, certifying that (x) no Default or Event of Default has occurred and is continuing or would result from the incurrence of such Indebtedness, and (y) the Parent, the Borrower and each Guarantor is in compliance with the covenants contained in Article VII immediately before and, on a pro forma basis, immediately after such date, together with a Compliance Certificate or other reasonable supporting information demonstrating such compliance, and (iii) such Qualified Unsecured Lender shall have provided to the Administrative Agent a written acknowledgement that such Person has reviewed and approved the provisions of Article IX of this Agreement and, if requested by such Person (provided that at the time of such request such Person shall satisfy the foregoing provisions of this definition), the Administrative Agent shall have provided to such Person a written acknowledgement that such Person is a “Qualified Unsecured Lender” and is entitled to the rights, benefits and protections accorded to a Qualified Unsecured Lender under Section 9.01(f) (it being understood that no such acknowledgment from the Administrative Agent shall be required in order for any such Qualified Unsecured Lender to obtain the rights, benefits or protections under Section 9.01(f)).

“ Ratings Grid Election ” has the meaning set forth in the definition of the term Applicable Margin.
“ Real Property ” for any hotel means the Land and the Improvements for such hotel, including without limitation, any retail or office space incorporated in the Improvements or located on the Land, parking rights and any and all real property rights to other ancillary functions necessary or desirable for the operation of such hotel.
“ Refinancing Debt ” has the meaning set forth in Section 6.02(e).
“ Register ” has the meaning set forth in Section 11.06(c).
“ Reinvestment ” means, during any Reinvestment Period, funds expended for (a) the acquisition by any Material Subsidiary of any Unencumbered Property and any related transaction costs, or (b) capital improvements in respect of any then existing Unencumbered Property.
“ Reinvestment Period ” has the meaning set forth in Section 2.07(c)(i).

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“ REIT ” means a real estate investment trust under Sections 856-860 of the Code.
“ Release ” shall have the meaning set forth in CERCLA or under any other Environmental Law.
“ Repayment Date ” has the meaning set forth in Section 2.07(c)(i).
“ Reportable Event ” means any of the events set forth in Section 4043(b) of ERISA.
“ Required Class Lenders ” means, (a) with respect to the Revolving Facility, at any time, Banks owed or holding at least 51% of the sum of (i) the aggregate principal amount of the Revolving Facility Advances outstanding at such time, (ii) the aggregate amount of all Letters of Credit outstanding at such time and (iii) the aggregate Unused Revolving Facility Commitments at such time, and (b) with respect to the TL Facility, at any time, Banks owed or holding at least 51% of the then aggregate outstanding TL Facility Advances at such time. For purposes of this definition, the aggregate principal amount of Letter of Credit Advances owing to any Issuing Bank and the amount of each Letter of Credit shall be considered to be owed to the Revolving Facility Banks ratably in accordance with their respective Revolving Facility Commitments.
“ Required Lenders ” means, at any time, Banks owed or holding at least 51% of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate amount of all Letters of Credit outstanding at such time and (c) the aggregate Unused Revolving Facility Commitments at such time. For purposes of this definition, the aggregate principal amount of Letter of Credit Advances owing to any Issuing Bank and the amount of each Letter of Credit shall be considered to be owed to the Revolving Facility Banks ratably in accordance with their respective Revolving Facility Commitments.
“ Response ” shall have the meaning set forth in CERCLA or under any other Environmental Law.
“ Responsible Officer ” means the Chief Executive Officer, President, Executive Vice President, Chief Operating Officer, Chief Financial Officer, Director of Finance or Treasurer of any Person.
“ Restricted Payment ” means (a) any direct or indirect payment, prepayment, redemption, purchase, or deposit of funds or Property for the payment (including any sinking fund or defeasance), prepayment, redemption or purchase of Indebtedness not permitted by this Agreement, and (b) the making by any Person of any dividends or other distributions (in cash, property, or otherwise) on, or payment for the purchase, redemption or other acquisition of, any Equity Interest in such Person, other than  dividends or distributions payable in such Person’s Equity Interests.
“Revolving Facility ” means, at any time, the aggregate amount of the Revolving Facility Commitments at such time.
“ Revolving Facility Advance ” means an advance by a Bank to the Borrower pursuant to Section 2.01(a), any such advance being either a Base Rate Advance or a LIBOR Advance.
“Revolving Facility Commitment ” means, with respect to any Bank, the amount set forth opposite such Bank’s name on Schedule 1.01(a) as its Revolving Facility Commitment, or if such Bank has entered into any Assignment and Acceptance, the amount set forth for such Bank as its Revolving Facility Commitment in the Register maintained by the Administrative Agent pursuant to Section 11.06(c), as such amount may be reduced pursuant to Section 2.04 or increased pursuant to Section 1.06.
“ Revolving Facility Maturity Date ” means January 8, 2021, as such date may be extended pursuant to the provisions of Section 1.07.
“ Revolver Selling Bank ” has the meaning specified in Section 2.17(a).
“ Revolver Purchasing Bank ” has the meaning specified in Section 2.17(a).

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“ Rolling Period ” means, as of any date, the four Fiscal Quarters ending on or immediately preceding such date.
“ Sanctions ” has the meaning set forth in Section 4.22.
“ Screen Rate ” means, for any Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be the ICE Benchmark Administration Limited LIBOR Rate (“ ICE LIBOR ”) for deposits in Dollars (for delivery on the first day of such Interest Period) for a term equivalent to such Interest Period as published by Reuters or another commercially available source providing quotations of ICE LIBOR as designated by the Administrative Agent from time to time in place of Reuters (the “ Published Screen Rate ”); provided , however , that if the Published Screen Rate is not available for a period corresponding to the relevant Interest Period but is available for other periods, then “Screen Rate” shall mean the Interpolated Rate.
“ S&P ” means Standard & Poor’s Financial Services LLC, a division of McGraw-Hill Financial, Inc., and any successor thereto.
“ Secured Indebtedness ” means all Secured Recourse Indebtedness plus all Secured Non‑Recourse Indebtedness of the Parent and the Parent’s subsidiaries determined on a Consolidated basis in accordance with GAAP; provided, however, that Secured Indebtedness shall exclude, to the extent provided in Section 9.01(b), the Indebtedness evidenced by any New York Term Note.
“ Secured Non‑Recourse Indebtedness ” of any Person means all Indebtedness of such Person with respect to which recourse for payment is limited to specific assets encumbered by a Lien securing such Indebtedness; provided , however , that personal recourse of a holder of Indebtedness against any obligor with respect thereto for fraud, misrepresentation, misapplication of cash, non‑payment of real estate taxes or ground lease rent, waste, non-permitted transfers or liens, bankruptcy, violation of special purpose covenants and other circumstances customarily excluded from non‑recourse provisions in non‑recourse financing of real estate shall not, by itself, prevent any Indebtedness from being characterized as Secured Non‑Recourse Indebtedness, provided further that if a personal recourse claim is made in connection therewith, such claim shall not constitute Secured Non‑Recourse Indebtedness for the purposes of this Agreement.
“ Secured Recourse Indebtedness ” of any Person means any Total Liabilities (excluding any Secured Non‑Recourse Indebtedness) of such Person for which the obligations thereunder are secured by a Lien on any assets of such Person or its Subsidiaries; provided , however , that the Indebtedness evidenced by a New York Term Note shall not comprise Secured Recourse Indebtedness and shall be treated for all purposes under this Credit Agreement as Unsecured Indebtedness.
“ Senior Financing Transaction ” means the incurrence of senior Unsecured Indebtedness by the Parent.
“ Status ” means the existence of Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status, as the case may be. As used in this definition:
“ Level I Status ” exists at any date if, at such date, the Leverage Ratio is less than 4.00 to 1.00;
“ Level II Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00;
“ Level III Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 4.50 to 1.00 but less than 5.00 to 1.00;
“ Level IV Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 5.00 to 1.00 but less than 5.50 to 1.00;

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“ Level V Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 5.50 to 1.00 but less than 6.00 to 1.00; and
“ Level VI Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 6.00 to 1.00.
Status shall be determined and changed as of the 45th day following any Fiscal Quarter, provided that until the 45th day following the Fiscal Quarter first ending after the Closing Date, the Status shall be determined with reference to the Compliance Certificate delivered in connection with the initial Borrowing hereunder. The Leverage Ratio shall be based upon the components of the calculation of the Leverage Ratio for the Rolling Period just ended or as of the end of such Rolling Period, as applicable.
“ Stock ” means shares of capital stock, beneficial or partnership interests, participations or other equivalents (regardless of how designated) of or in a corporation or equivalent entity, whether voting or non‑voting, and includes, without limitation, common stock and preferred stock.
“ Stock Equivalents ” means all securities (other than Stock) convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any stock, whether or not presently convertible, exchangeable or exercisable.
“ Subsidiary ” of a Person means any corporation, association, partnership or other business entity of which more than 50% of the outstanding shares of capital stock (or other equivalent Equity Interests) having by the terms thereof ordinary voting power under ordinary circumstances to elect a majority of the board of directors or Persons performing similar functions (or, if there are no such directors or Persons, having general voting power) of such entity (irrespective of whether at the time capital stock (or other equivalent Equity Interests) of any other class or classes of such entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person.
“ Substantial Completion ” means, with respect to any Development Property and as of any relevant date of determination, the substantial completion of all material construction, renovation and rehabilitation work then planned with respect to such Property.
“ Swap Bank ” means (a) any Person that is a Bank or an Affiliate of a Bank at the time that it becomes a party to a Swap Contract with the Borrower and (b) any Bank on the Closing Date or Affiliate of such Bank that is party to a Swap Contract with the Borrower in existence on the Closing Date, in each case to the extent permitted by Section 6.02(c).
“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.
“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

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“ Termination Event ” means (a) the occurrence of a Reportable Event with respect to a Plan, as described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30‑day notice to the PBGC under such regulations), (b) the withdrawal of the Parent, the Borrower or any of a Controlled Group from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“Term Loan ” means one or more term loans to the Borrower pursuant to Section 2.01(b) in the aggregate principal amount of $300,000,000, as such amount may be increased from time to time in accordance with Section 1.06.
“TL Facility ” means, at any time, the aggregate amount of the TL Facility Commitments (whether funded or unfunded) at such time.
“ TL Facility Advance ” means an advance by a Bank to the Borrower pursuant to Section 2.01(b), any such advance being either a Base Rate Advance or a LIBOR Advance.
“TL Facility Commitment ” means, with respect to any Bank, the amount set forth opposite such Bank’s name on Schedule 1.01(a) as its TL Facility Commitment, or if such Bank has entered into any Assignment and Acceptance, the amount set forth for such Bank as its TL Facility Commitment in the Register maintained by the Administrative Agent pursuant to Section 11.06(c), as such amount may be reduced pursuant to Section 2.04 or increased pursuant to Section 1.06.
“ TL Facility Maturity Date ” means January 10, 2022.
“ TL Selling Bank ” has the meaning specified in Section 2.17(b).
“ TL Purchasing Bank ” has the meaning specified in Section 2.17(b).
“ Total Commitments ” means the Total Revolving Facility Commitments and the Total TL Facility Commitments.
“ Total Liabilities ” of any Person means the sum of the following (without duplication): (a) all Indebtedness of such Person and its Subsidiaries determined on a Consolidated basis in conformity with GAAP, plus (b) such Person’s Unconsolidated Entity Percentage of Indebtedness (including Secured Non‑Recourse Indebtedness) of such Person’s Unconsolidated Entities, plus (c) to the extent not already included in the calculation of either of the preceding clauses (a) or (b), the aggregate amount of letters of credit for which such Person or any of its Subsidiaries would have a direct or contingent obligation to reimburse the issuers of such letters of credit upon a drawing under such letters of credit, minus (d) to the extent included in the calculation of any of the preceding clauses (a), (b) or (c), (i) trade payables and accruals incurred in the ordinary course of business, (ii) the amount of any minority interests and (iii) Capital Lease Obligations for a ground lease for any Hotel Property, minus (e), with respect to the Parent, the sum of (i) the Parent’s cash proceeds from (x) any sale or issuance of equity securities of the Parent or Indebtedness of the Parent, provided that such sale or issuance occurred within the 60 days preceding the date such Total Liabilities are determined and (y) any “like-kind exchange” under Section 1031 of the Code, provided that such “like-kind exchange” proceeds shall be held in escrow in accordance with the requirements of such Section 1031, (ii) Indebtedness that has been defeased in accordance with the loan documents for such Indebtedness and for which the Borrower certifies as to such defeasance in a manner reasonably satisfactory to the Administrative Agent and (iii) cash on hand of the Parent and its Subsidiaries in an amount not to exceed 0.50% of Consolidated Total Book Value, provided that such cash is not subject to any Lien or other encumbrance or restriction of any kind.
“ Total Revolving Facility Commitments ” means the aggregate amount of the Banks’ Revolving Facility Commitments, which shall initially be Seven Hundred Fifty Million Dollars ($750,000,000), as such amount may be

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increased pursuant to the provisions of Section 1.06 or decreased pursuant to the provisions of Section 2.04 or other applicable provisions of this Agreement.
“ Total TL Facility Commitments ” means the aggregate amount of the Banks’ TL Facility Commitments, which shall initially be Three Hundred Million Dollars ($300,000,000), as such amount may be increased pursuant to the provisions of Section 1.06 or decreased pursuant to the provisions of Section 2.04 or other applicable provisions of this Agreement.
“ Total Unencumbered Asset Value ” means, at any date of determination, an amount equal to the sum of (i) the Asset Values of all Unencumbered Properties (which shall include, to the extent provided in Section 9.01(a), any New York Property subject to a New York Mortgage) on such date plus (ii) Liquid Investments of the Parent on a Consolidated basis on such date that are not subject to any Liens of any kind (including any such Lien or restriction imposed by (A) any agreement governing Indebtedness and (B) the organizational documents of the Parent or any of its Subsidiaries) and, in each case, that (a) are not subject to any agreement (including (x) any agreement governing Indebtedness and (y) if applicable, the organizational documents of the Parent or any of its Subsidiaries) which prohibits or limits the ability of the Parent or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon such assets (excluding any agreement or organizational document which limits generally the amount of Indebtedness which may be incurred by the Parent or its Subsidiaries), and (b) are not subject to any agreement (including any agreement governing Indebtedness) which entitles any Person to the benefit of any Lien on such assets, or would entitle any Person to the benefit of any such Lien upon the occurrence of any contingency (including, without limitation, pursuant to an “equal and ratable” clause), but excluding any agreement that conditions the ability of the Parent or its Subsidiaries to encumber their assets upon the maintenance of one or more specified ratios that limit the ability of such Persons to encumber their assets but that do not generally prohibit the encumbrance of assets, or the encumbrance of specific assets); provided that, for purposes of calculating this amount, (1) Unencumbered Properties owned or leased by Joint Venture Subsidiaries may not exceed 25% of the Total Unencumbered Asset Value, and (2) Non-Core Hotel Properties may not comprise more than 10% of Total Unencumbered Asset Value.
“ Type ” has the meaning set forth in Section 1.04.
“ UCP ” has the meaning set forth in Section 2.13(g).
“ Unconsolidated Entity ” means, with respect to any Person, at any date, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting or as a loan or advance to the other Person, and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person, if such statements were prepared as of such date. Any Person that is an Unconsolidated Entity with respect to another Person shall not be deemed to be a Subsidiary of such Person.
“ Unconsolidated Entity Percentage ” means, for any Person, with respect to a Person’s Unconsolidated Entity, the percentage ownership interest of such Person in such Unconsolidated Entity, provided that, in the event that such Person is the general partner of such Unconsolidated Entity, such Person’s Unconsolidated Entity Percentage with respect to such Unconsolidated Entity shall be 100% with respect to any Indebtedness for which recourse may be made against any general partner of such Unconsolidated Entity ( provided that such Indebtedness shall not be deemed to be recourse to such general partner solely because of customary carveouts to non‑recourse Indebtedness as described in the definition of “Secured Non-Recourse Indebtedness”); provided further that when the Investment in an Unconsolidated Entity is in the form of preferred stock or a loan or advance, the Unconsolidated Entity Percentage shall be a percentage equal to (a) the amount of such Investment divided by (b) the aggregate amount of the Investments by all Persons in the Unconsolidated Entity.
“ Unencumbered ” means, with respect to any Hotel Property, at any date of determination, the circumstance that such Hotel Property on such date:
(a)    is not subject to any Liens (including restrictions on transferability or assignability) of any kind (including any such Lien or restriction imposed by (i) any agreement governing Indebtedness, and (ii) the

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organizational documents of the Borrower or any of its Subsidiaries, but excluding Permitted Encumbrances and, in the case of any Qualified Ground Lease (to the extent permitted by the definition thereof), restrictions on transferability or assignability in respect of such Qualified Ground Lease);
(b)    is not subject to any agreement (including (i) any agreement governing Indebtedness, and (ii) if applicable, the organizational documents of the Borrower or any of its Subsidiaries) which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon such Hotel Property, other than Permitted Encumbrances (excluding any agreement or organizational document which limits generally the amount of Indebtedness which may be incurred by the Borrower or its Subsidiaries); and
(c)    is not subject to any agreement (including any agreement governing Indebtedness) which entitles any Person to the benefit of any Lien (other than Permitted Encumbrances) on such Hotel Property, or would entitle any Person to the benefit of any such Lien upon the occurrence of any contingency (including, without limitation, pursuant to an “equal and ratable” clause).
For the purposes of this Agreement, any Hotel Property owned by a Subsidiary of the Borrower shall not be deemed to be Unencumbered unless both (i) such Hotel Property and (ii) all Stock owned directly or indirectly by the Borrower in such Subsidiary is Unencumbered.
“ Unencumbered Property ” means, as of any date it is to be determined, each Hotel Property that is owned or leased by the Borrower or any Material Subsidiary, and that satisfies each of the following conditions:
(a)    such Hotel Property (i) is Unencumbered, (ii) free of all material title defects, and (iii)  either (A) owned (together with the land on which it is located) in fee simple by the Borrower or its direct or indirect Wholly-Owned Subsidiary or Joint Venture Subsidiary, (B) owned by the Borrower or its direct or indirect Wholly-Owned Subsidiary or Joint Venture Subsidiary and located on land leased to the Borrower or such Subsidiary pursuant to a Qualified Ground Lease, or (C) owned (together with the land on which it is located ) in fee simple by a qualified intermediary within the meaning of Internal Revenue Service Regulation 1.1031(k)-1(g)(4) that is acting for the benefit of the Borrower or its direct or indirect Wholly‑Owned Subsidiary or Joint Venture Subsidiary (each such entity, a “ Qualified Intermediary ”), all as evidenced by a copy of the most recent ALTA Owner’s Policy of Title Insurance (or commitment to issue such a policy to the Borrower or its Subsidiary owning or to own such Hotel Property) relating to such Hotel Property showing the identity of the fee titleholder thereto and all matters of record as of its date and, if such Hotel Property is owned by a Qualified Intermediary, documents establishing that the Qualified Intermediary acts at the direction of the Borrower or its direct or indirect Wholly‑Owned Subsidiary or Joint Venture Subsidiary;
(b)    If the Property Owner for such Hotel Property is not the Borrower, the Property Owner shall be (i) either a Wholly-Owned Subsidiary or a Joint Venture Subsidiary of the Borrower whose sole assets are Unencumbered Properties, who is not liable for any Indebtedness other than the Obligations, who complies in all material respects with all of the covenants and requirements of Material Subsidiaries under the Credit Documents and who has delivered to the Administrative Agent an Accession Agreement executed by such Subsidiary ( provided , however , that no Accession Agreement shall be required if at such time a Guaranty is not required under this Agreement from any Person other than the Parent), (ii) a Qualified Intermediary, as defined in clause (a) above, whose sole assets are Unencumbered Properties, who is not liable for any Indebtedness, and whose sole beneficiary is either the Borrower or a Wholly‑Owned Subsidiary or Joint Venture Subsidiary of the Borrower that complies in all material respects with all of the covenants and requirements of Material Subsidiaries under the Credit Documents and has delivered to the Administrative Agent an Accession Agreement executed by such Subsidiary ( provided , however , that no Accession Agreement shall be required if at such time a Guaranty is not required under this Agreement from any Person other than the Parent), or (iii) a Joint Venture Subsidiary that has more than 50% of its outstanding Equity Interests owned by a Joint Venture Guarantor or the Borrower.

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(c)    if such Hotel Property is subject to a Qualified Ground Lease, no default by the lessee under the Qualified Ground Lease exists and the Qualified Ground Lease remains in full force and effect;
(d)    such Hotel Property is free of all material structural defects;
(e)    such Hotel Property is (i) in compliance, in all material respects, with all applicable Environmental Laws, and (ii) not subject to any material Environmental Claim;
(f)    neither all nor any material portion of such Hotel Property shall be the subject of any proceeding by a governmental authority for the condemnation, seizure or appropriation thereof, nor the subject of any negotiations for sale in lieu of condemnation, seizure or appropriation;
(g)    such Hotel Property is (i) located in either the United States of America or in an Approved Other Country and (ii) either (A) a full service hotel located in a resort, convention or urban market, (B) a limited service hotel located in an urban market, or (C) a Non-Core Hotel Property; and
(h)    the Borrower shall have executed and acknowledged (or caused to be executed and acknowledged) and delivered to the Administrative Agent, on behalf of the Banks, all documents, and taken all actions reasonably required by the Administrative Agent from time to time to confirm the rights created or now or hereafter intended to be created under the Credit Documents, or otherwise to carry out the purposes of the Credit Documents, and the transactions contemplated thereunder, the Administrative Agent shall have received all other evidence and information that it may reasonably require.
For the avoidance of doubt, the Hotel Properties listed on Schedule 1.01(b) attached hereto, which constituted Unencumbered Properties (as such term is defined in the Existing Agreements) under the Existing Agreements immediately prior to the execution of this Agreement, are deemed to be Unencumbered Properties as of the Closing Date.
“ Unsecured Indebtedness ” of any Person means the Total Liabilities of such Person, and, with respect to the Parent, to the extent deducted in determining Total Liabilities, those items included in clause (e) of the definition of Total Liabilities, but excluding in each case all Secured Indebtedness of such Person. For the avoidance of doubt and notwithstanding anything to the contrary herein, (a) all Obligations in respect of the Facility (whether or not any Pledge Agreement is in effect) and (b) any Unsecured Indebtedness secured solely by a lien permitted by Section 6.01(f) shall be deemed to be Unsecured Indebtedness for the purposes of Articles VI, VII and VIII.
“ Unused Revolving Facility Commitment ” means, with respect to any Bank at any time, such Bank’s Revolving Facility Commitment at such time minus such Bank’s Pro Rata Share of the total Letter of Credit Exposure minus the aggregate principal amount of all Revolving Facility Advances made by such Bank and outstanding at such time.
“ Unused Fee ” has the meaning specified in Section 2.03(a).
“ Wholly-Owned Subsidiary ” of a Person means any Subsidiary for which such Person’s ownership interest is 99% or more.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
Section 1.02      Computation of Time Periods . In this Agreement 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 means “to but excluding”.

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Section 1.03      Accounting Terms; Changes in GAAP . (a) All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP applied on a consistent basis.
(b)    Unless otherwise indicated, all financial statements of the Borrower and the Parent, all calculations for compliance with covenants in this Agreement, and all calculations of any amounts to be calculated under the definitions in Section 1.01 shall be based upon the Consolidated accounts of the Borrower, the Parent and their respective Subsidiaries (as applicable) in accordance with GAAP.
(c)    If any changes in accounting principles after the Closing Date required by GAAP or the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or similar agencies results in a change in the method of calculation of, or affects the results of such calculation of, any of the financial covenants, standards or terms found in this Agreement, then the parties shall enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition of the Borrower and its Subsidiaries (determined on a Consolidated basis) shall be the same after such change as if such change had not been made. Until covenants, standards, or terms of this Agreement are amended in accordance with this Section 1.3(c), such covenants, standards and terms shall be computed and determined in accordance with accounting principles in effect prior to such change in accounting principles.
(d)    Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein, and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
Section 1.04      Types of Advances . Advances are distinguished by “Type”. The “Type” of an Advance refers to the determination whether such Advance is a LIBOR Advance or Base Rate Advance, each of which constitutes a Type.
Section 1.05      Miscellaneous . Article, Section, Schedule and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified.
Section 1.06      Commitment Increases . (a) The Borrower shall be entitled to request that (1) the Total Revolving Facility Commitments be increased to an amount not exceeding One Billion Two Hundred Fifty Million Dollars ($1,250,000,000) in the aggregate, and (2) the Total TL Facility Commitments be increased to an amount not exceeding Five Hundred Million Dollars ($500,000,000) in the aggregate; provided that (i) no Default then exists, (ii) the Borrower gives the applicable Banks 30 days’ prior written notice of such election, (iii) no Bank shall be obligated to increase such Bank’s Commitment without such Bank’s written consent which may be withheld in such Bank’s sole discretion, (iv) the Borrower, not the Banks or the Administrative Agent, shall be responsible for arranging for Persons to provide the additional Commitment amounts; (v) any Person providing any additional Commitment amount must qualify as an Eligible Assignee and be reasonably acceptable to the Administrative Agent if such Person is not already a Bank; and (vi) the Borrower shall have delivered current documentation satisfactory to the Administrative Agent evidencing compliance with the Flood Insurance Requirements. In connection with any such increase in the Total Revolving Facility Commitments or the Total TL Facility Commitments, as the case may be, the parties shall execute any documents reasonably requested in connection with or to evidence such increase, including without limitation an amendment to this Agreement.
(b)    On the date (“ Funding Date ”) of any future increase in the Total Revolving Facility Commitments or the Total TL Facility Commitments, as the case may be, permitted by this Agreement, such date designated by the Administrative Agent, the Banks whose Commitments have increased in connection with such future

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increase in the Total Revolving Facility Commitments or the Total TL Facility Commitments, as the case may be, shall fund to the Administrative Agent such amounts as may be required to cause each of them to hold its Pro Rata Share of Revolving Facility Advances or TL Facility Advances, as applicable, based upon the Commitments to the applicable Facility as of such Funding Date, and the Administrative Agent shall distribute the funds so received to the other Banks in such amounts as may be required to cause each of them to hold its Pro Rata Share of Revolving Facility Advances or TL Facility Advances, as applicable, as of such Funding Date. The Banks receiving such amounts to be applied to LIBOR Advances may demand payment of the breakage costs under Section 2.08 as though the Borrower had elected to prepay such LIBOR Advances on such date and the Borrower shall pay the amount so demanded as provided in Section 2.08. The first payment of interest and letter of credit fees received by the Administrative Agent after such Funding Date shall be paid to the Banks in amounts adjusted to reflect the adjustments of their respective Pro Rata Shares of the Advances as of the Funding Date. On the Funding Date each Bank shall be deemed to have either sold or purchased, as applicable, participations in the Letter of Credit Exposure sold to the Banks pursuant to Section 2.13(b) so that upon consummation of all such sales and purchases each Bank with a Commitment to the Revolving Facility holds participations in the Letter of Credit Exposure equal to such Bank’s Pro Rata Share of the total Letter of Credit Exposure as of such Funding Date.
Section 1.07      Revolving Facility Maturity Date Extension . The Borrower shall be entitled to extend the Revolving Facility Maturity Date for up to two (2) six-month extensions; provided that (i) no Default then exists, (ii) the Borrower gives the Administrative Agent, at least 90 days but no more than 120 days prior to the initial Revolving Facility Maturity Date or the First Extension Maturity Date, as the case may be, written notice of such extension, (iii) on or prior to the initial Revolving Facility Maturity Date or the First Extension Maturity Date, as the case may be, the Borrower pays to the Administrative Agent for the ratable benefit of the Banks an extension fee equal to 0.075% of the Total Revolving Facility Commitments that will exist as of the first day of the first or second six-month extension, as the case may be (the “ Extension Fee ”), (iv) the Administrative Agent shall have received on or prior to the initial Revolving Facility Maturity Date or the First Extension Maturity Date, as the case may be, for the account of each Bank a certificate signed by a Responsible Officer of the Parent, dated as of the initial Revolving Facility Maturity Date or the First Extension Maturity Date, as the case may be (the “ Extension Date ”), stating that: (a) the representations and warranties contained in Article IV are true and correct on and as of the applicable Extension Date as such representations and warranties may have changed based upon events or activities not prohibited by this Agreement, (b) no Default or Event of Default has occurred and is continuing or would result from such extension, and (c) the Borrower, Parent and each Material Subsidiary is in compliance with the covenants contained in Article VII immediately before and, on a pro forma basis, immediately after the extension, together with a Compliance Certificate or other reasonable supporting information demonstrating such compliance, and (v) the Borrower shall have delivered at least 45 days prior to the initial Revolving Facility Maturity Date or the First Extension Maturity Date, as the case may be, current documentation satisfactory to the Administrative Agent and the Co-Syndication Agents evidencing compliance with the Flood Insurance Requirements. The Borrower’s delivery of written notice to extend shall be irrevocable, and the Administrative Agent shall promptly notify each Bank of any such notice. In connection with any such extension, the parties hereto shall execute any documents reasonably requested in connection with or to evidence such extension.
ARTICLE II

THE ADVANCES AND THE LETTERS OF CREDIT

Section 2.01      The Advances . (a) Revolving Facility Advances . Each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make Revolving Facility Advances in Dollars to the Borrower from time to time on any Business Day up to 30 days prior to the Revolving Facility Maturity Date in an aggregate amount not to exceed at any time outstanding an amount equal to such Bank’s Revolving Facility Commitment less such Bank’s Pro Rata Share of the Letter of Credit Exposure at such time. The aggregate amount of all outstanding Revolving Facility Advances and Letter of Credit Exposure at any time may not exceed the Total Revolving Facility Commitments at such time. Within the limits of each Bank’s Revolving Facility Commitment, the Borrower may from time to time prepay the Revolving Facility pursuant to Section 2.07 and reborrow under this Section 2.01(a). Notwithstanding the foregoing, during any Leverage Trigger Period, no Borrowing shall be permitted that would cause (a) the aggregate principal amount of Revolving Facility Advances plus the Letter of Credit Exposure to exceed (b)(i) the Total Revolving Facility Commitments (after taking into account any Mandatory Commitment Reductions) less (ii) the amount of any

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Mandatory Prepayments made during such Leverage Trigger Period in excess of the Mandatory Commitment Reductions as provided in Section 2.07(c).
(b)     TL Facility Advances . Each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make a single TL Facility Advance in Dollars to the Borrower on the Closing Date in an amount equal to such Bank’s TL Facility Commitment. The Borrower may from time to time prepay the TL Facility pursuant to Section 2.07. Amounts repaid on the TL Facility Advances may not be reborrowed.
Section 2.02      Method of Borrowing . (a) Notice . Each Borrowing shall be made by telephone (promptly confirmed in writing on the same day) pursuant to a Notice of Borrowing, given not later than 1:00 P.M. (New York City time) (i) on the third Business Day before the date of the proposed Borrowing, in the case of a Borrowing consisting of LIBOR Advances, or (ii) on the Business Day before 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 each Bank prompt notice on the day of receipt of such timely telephone call or Notice of Borrowing of such proposed Borrowing by telecopier. Each Notice of Borrowing shall be in writing or by telecopier specifying the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, (iv) whether such Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank, (v) if such Borrowing is to be comprised of LIBOR Advances, the Interest Period for each such Advance, and (vi) whether such Borrowing is to be comprised of TL Facility Advances or Revolving Facility Advances. In the case of a proposed Borrowing comprised of LIBOR Advances, the Administrative Agent shall promptly notify each Bank of the applicable interest rate under Section 2.06(b). Each Bank shall, before 1:00 P.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at its address referred to in Section 11.02, or such other location as the Administrative Agent may specify by written notice to the Banks, in same day funds, such Bank’s Pro Rata Share of such Borrowing. Upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower at its account with the Administrative Agent or to such other account as the Borrower shall specify to the Administrative Agent in writing.
(b)     Conversions and Continuations . In order to elect to Convert or continue Advances comprising part of the same Borrowing under this Section, the Borrower shall deliver an irrevocable Notice of Conversion or Continuation to the Administrative Agent at the Administrative Agent’s office no later than 1:00 P.M. (New York City time) (i) on the date which is at least 3 Business Days in advance of the proposed Conversion or continuation date in the case of a Conversion to or a continuation of a Borrowing comprised of LIBOR Advances and (ii) on the Business Day prior to the proposed conversion date in the case of a Conversion to a Borrowing comprised of Base Rate Advances. Each such Notice of Conversion or Continuation shall be in writing or by telecopier, specifying (i) the requested Conversion or continuation date (which shall be a Business Day), (ii) the Borrowing amount and Type of the Advances to be Converted or continued, (iii) whether a Conversion or continuation is requested, and if a Conversion, into what Type of Advances, and (iv) in the case of a Conversion to, or a continuation of, LIBOR Advances, the requested Interest Period. Promptly after receipt of a Notice of Conversion or Continuation under this paragraph, the Administrative Agent shall provide each Bank with a copy thereof and, in the case of a Conversion to or a continuation of LIBOR Advances, notify each Bank of the applicable interest rate under Section 2.06(b). For purposes other than the conditions set forth in Section 3.02, the portion of Advances comprising part of the same Borrowing that are Converted to Advances of another Type shall constitute a new Borrowing. If the Borrower shall fail to specify an Interest Period for a LIBOR Advance including the continuation of a LIBOR Advance, the Borrower shall be deemed to have selected a Base Rate Advance.
(c)     Certain Limitations . Notwithstanding anything in paragraphs (a) and (b) above:
(i)    in the case of LIBOR Advances, each Borrowing shall be in an aggregate amount of not less than $1,000,000 or such greater amount that is an integral multiple of $100,000;
(ii)    except for Borrowings for the acquisition by the Borrower or any Subsidiary of Investments permitted under Sections 6.07(c) and (d), the Borrower may not request Borrowings more than 3 times in any calendar month;

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(iii)    at no time shall there be more than eight (8) Interest Periods applicable to outstanding LIBOR Advances;
(iv)    the Borrower may not select LIBOR Advances for any Borrowing to be made, Converted or continued if a Default has occurred and is continuing;
(v)    if any Bank shall, at any time prior to the making of any requested Borrowing comprised of LIBOR Advances, notify the Administrative Agent that the introduction of or any change in or in the interpretation of any Legal Requirement after the date hereof makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Bank or its LIBOR Lending Office to perform its obligations under this Agreement to make LIBOR Advances or to fund or maintain LIBOR Advances, then such Bank’s Pro Rata Share of such Borrowing shall be made as a Base Rate Advance, provided that such Base Rate Advance shall be considered part of the same Borrowing and interest on such Base Rate Advance shall be due and payable at the same time that interest on the LIBOR Advances comprising the remainder of such Borrowing shall be due and payable; and such Bank agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Bank, be otherwise materially disadvantageous to such Bank;
(vi)    if the Administrative Agent is unable to determine the LIBOR for LIBOR Advances comprising any requested Borrowing, the right of the Borrower to select LIBOR Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance;
(vii)    if the applicable Required Class Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the LIBOR for LIBOR Advances comprising such Borrowing will not adequately reflect the cost to such Banks of making or funding their respective LIBOR Advances, as the case may be, for such Borrowing, the right of the Borrower to select LIBOR Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance; and
(viii)    if the Borrower shall fail to select the duration or continuation of any Interest Period for any LIBOR Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01 and paragraph (a) or (b) above, the Administrative Agent will forthwith so notify the Borrower and the Banks and such Advances will be made available to the Borrower on the date of such Borrowing as Base Rate Advances or, if an existing Advance, Converted into Base Rate Advances.
(d)     Notices Irrevocable . Each Notice of Borrowing and Notice of Conversion or Continuation shall be irrevocable and binding on the Borrower. In the case of any Borrowing which the related Notice of Borrowing specifies is to be comprised of LIBOR Advances, the Borrower shall indemnify each Bank against any loss, out-of-pocket cost or expense incurred by such Bank as a result of any condition precedent for Borrowing set forth in Article III not being satisfied for any reason, including, without limitation, any loss, cost or expense actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund the Advance to be made by such Bank as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.
(e)     Administrative Agent Reliance . Unless the Administrative Agent shall have received notice from a Bank before the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank’s Pro Rata Share of the Borrowing, the Administrative Agent may assume that such Bank has made its Pro Rata Share of such Borrowing available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (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 Bank shall not have so made its Pro Rata Share of such Borrowing available to the Administrative Agent, such Bank and the Borrower severally agree

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to immediately repay to the Administrative Agent on demand, and without duplication, such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable on each such day to Advances comprising such Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for each such day. If such Bank shall repay to the Administrative Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Bank’s Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing.
(f)     Bank Obligations Several . The failure of any Bank to make the Advance to be made by it as part of any Borrowing shall not relieve any other Bank of its obligation, if any, to make its Advance on the date of such Borrowing. No Bank shall be responsible for the failure of any other Bank to make the Advance to be made by such other Bank on the date of any Borrowing.
(g)     Notes . Upon the request of a Bank, the indebtedness of the Borrower to such Bank resulting from Advances owing to such Bank shall be evidenced by one or more Notes; provided, however, that to the extent no Note has been issued to a Bank, this Agreement shall be deemed to comprise conclusive evidence for all purposes of the indebtedness resulting from the Advances and extensions of credit made hereunder.
(h)     Bank Booking Vehicles . Each Bank may, at its option, make any Advance available to the Borrower by causing any foreign or domestic branch or Affiliate of such Bank to make such Advance; provided , however , that (i) any exercise of such option shall not affect the obligation of the Borrower or any Bank in accordance with the terms of this Agreement and (ii) nothing in this Section 2.02(h) shall be deemed to obligate any Bank to obtain the funds for any Advance in any particular place or manner or to constitute a representation or warranty by any Bank that it has obtained or will obtain the funds for any Advance in any particular place or manner.
Section 2.03      Fees . (a)     Unused Fee; Facility Fee . The Borrower shall pay to the Administrative Agent for the account of the Banks an unused commitment fee (the “ Unused Fee ”) with respect to the Revolving Facility, from the date hereof or upon the effectiveness of any Assignment and Acceptance pursuant to which it became a Bank until the Revolving Facility Maturity Date, payable in arrears quarterly on the last day of each March, June, September and December, commencing March 31, 2017, and on the Revolving Facility Maturity Date. The Unused Fee payable in Dollars for the account of each Bank shall be calculated for each period for which the Unused Fee is payable on the average daily Unused Revolving Facility Commitment of such Bank during such period at the rate per annum equal to, (a) for any period in which the average daily Unused Revolving Facility Commitment of such Bank for such period is less than 50% of such Bank’s aggregate Commitments, 0.20% per annum, and (b) for any period in which the average daily Unused Revolving Facility Commitment of such Bank for such period is greater than or equal to 50% of such Bank’s aggregate Commitments, 0.30% per annum; provided , however , that in the event that the Parent achieves an Investment Grade Rating and the Parent provides written notice to the Administrative Agent electing to convert to the ratings-based pricing grid set forth in the definition of “Applicable Margin”, the Borrower shall no longer pay Unused Fees immediately following the effectiveness of such notice. For each succeeding quarter, the Borrower shall pay a facility fee (the “ Facility Fee ”) at the applicable rate set forth in such pricing grid times the actual daily amount of each Bank’s Commitment, regardless of usage. Each Facility Fee will be payable quarterly in arrears on the last day of each March, June, September and December, and on the Revolving Facility Maturity Date. The Unused Fees and Facility Fees will be calculated on a 360-day basis. If the Parent has made the Ratings Grid Election as described above but thereafter fails to maintain an Investment Grade Rating by at least one of S&P or Moody’s, then (x) Unused Fees shall be payable during the period commencing on the date the Parent no longer has an Investment Grade Rating by at least one of S&P or Moody’s and ending on the date the Parent makes another Ratings Grid Election, and (y) no Facility Fees shall be payable during the period that Unused Fees are payable.
(b)     Letter of Credit Fees . The Borrower agrees to pay to the Administrative Agent for the benefit of the Banks, fees in respect of all Letters of Credit outstanding at a rate per annum equal to the Applicable Margin calculated based upon a 360-day year and in respect of the maximum amount available from time to time to be drawn under such outstanding Letters of Credit, payable quarterly in arrears for those quarters ending on the last day of each March, June, September and December, commencing March 31, 2017, (i) on the date which is 30 days following the last Business Day of each March, June, September and December and (ii) on the Revolving Facility Maturity Date. In

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addition, the Borrower agrees to pay to each Issuing Bank for its own account a fee on the average daily amount of the aggregate undrawn maximum face amount of each Letter of Credit issued by such Issuing Bank at a rate per annum equal to 0.125%, such fees due and payable quarterly in arrears (i) on the date which is 30 days following the last Business Day of each March, June, September and December and (ii) on the Revolving Facility Maturity Date.
(c)     Administrative Agent Fees . The Borrower agrees to pay to the Administrative Agent for the Administrative Agent’s account the fees set forth in any separate letter agreement executed and delivered by the Borrower and to which the Administrative Agent is a party, as the same may be amended from time to time (collectively, the “ Fee Letter ”) in accordance with the terms thereof, as and when the same are due and payable pursuant to the terms of such Fee Letter.
(d)     Extension Fee . The Borrower agrees to pay the Extension Fee at the time specified in, and to the extent required by, Section 1.07.
(e)     Defaulting Lender . Anything herein to the contrary notwithstanding, during such period as a Bank is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Section 2.03(a) and Section 2.03(b) (without prejudice to the rights of the Non‑Defaulting Lenders in respect of such fees), provided that (a) to the extent that all or a portion of the Letter of Credit Exposure of such Defaulting Lender is reallocated to the Non‑Defaulting Lenders pursuant to Section 2.16(b), such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non‑Defaulting Lenders, pro rata in accordance with their respective Revolving Facility Commitments, and (b) to the extent that all or any portion of such Letter of Credit Exposure cannot be so reallocated, such fees will instead accrue for the benefit of and be payable to the Issuing Banks (and the pro rata payment provisions of Section 2.10(e) will automatically be deemed adjusted to reflect the provisions of this Section).
Section 2.04      Reduction of the Commitments . (a) The Borrower may, upon at least 3 Business Days’ prior notice to the Administrative Agent, permanently terminate in whole or permanently reduce ratably in part the Revolving Facility Commitments of the Banks; provided , however , that (i) each partial reduction shall be in the aggregate amount of not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (ii) no such reduction shall result in the Total Revolving Facility Commitments being less than $100,000,000 unless all Revolving Facility Commitments have been permanently terminated.
(b)    The Borrower may, upon at least 3 Business Days’ prior notice to the Administrative Agent and with the prior written consent of the Issuing Banks, permanently terminate in whole or permanently reduce ratably in part the Letter of Credit Commitments of the Issuing Banks; provided , however , that Letter of Credit Commitments may not be reduced below the total Letter of Credit Exposure.
(c)    The Commitments in respect of each Facility shall be permanently reduced on a ratable basis upon receipt by the Administrative Agent of any Mandatory Prepayment in an amount (the “ Mandatory Commitment Reduction ”) equal to the lesser of (i) the amount of such Mandatory Prepayment, and (ii) the amount which upon application to the outstanding Advances would reduce the Leverage Ratio to 6.50:1.00 on a pro forma basis taking into account any other prepayments made by the Borrower on or before the date of determination.
Section 2.05      Repayment of Advances . The Borrower shall repay the outstanding principal amount of each Advance on the Revolving Facility Maturity Date or the TL Facility Maturity Date, as applicable.
Section 2.06      Interest . The Borrower shall pay interest on the unpaid principal amount of each Advance made by each Bank from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:
(a)     Base Rate Advances . If such Advance is a Base Rate Advance, a rate per annum (computed on the actual number of days elapsed, including the first day and excluding the last, based on (x) a 365 or 366, as the case may be, day year to the extent the interest rate is based upon Citibank’s base rate and (y) a 360 day year to the extent the interest rate is based upon either the Federal Funds Rate or LIBOR) equal at all times

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to the lesser of (i) the Adjusted Base Rate in effect from time to time plus the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the first day of each calendar month, provided that during the continuance of an Event of Default, Base Rate Advances shall bear interest at a rate per annum equal at all times to the lesser of (1) the rate required to be paid on such Advance immediately prior to the date on which such Event of Default commenced plus 2% and (2) the Maximum Rate.
(b)     LIBOR Advances . If such Advance is a LIBOR Advance, a rate per annum (computed on the actual number of days elapsed, including the first day and excluding the last, based on a 360 day year) equal at all times during the Interest Period for such Advance to the lesser of (i) the LIBOR for such Interest Period plus the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the last day of such Interest Period, and on the date such LIBOR Advance shall be paid in full, and, with respect to LIBOR Advances having an Interest Period in excess of one month, the numerically corresponding day to the initial day of such Interest Period in each calendar month during such Interest Period; provided , however , that if there is no numerically corresponding day in any such month or if the Interest Period begins on the last Business Day of a calendar month, interest shall be payable on the last Business Day of each calendar month during the Interest Period; provided further that during the continuance of an Event of Default, LIBOR Advances shall bear interest at a rate per annum equal at all times to the lesser of (i) the rate required to be paid on such Advance immediately prior to the date on which such Event of Default commenced plus 2% and (ii) the Maximum Rate.
(c)     Usury Recapture . In the event the rate of interest chargeable under this Agreement or the Notes at any time is greater than the Maximum Rate, the unpaid principal amount of the Notes shall bear interest at the Maximum Rate until the total amount of interest paid or accrued on the Notes equals the amount of interest which would have been paid or accrued on the Notes if the stated rates of interest set forth in this Agreement had at all times been in effect. In the event, upon payment in full of the Notes, the total amount of interest paid or accrued under the terms of this Agreement and the Notes is less than the total amount of interest which would have been paid or accrued if the rates of interest set forth in this Agreement had, at all times, been in effect, then the Borrower shall, to the extent permitted by applicable law, pay the Administrative Agent for the account of the Banks an amount equal to the difference between (i) the lesser of (A) the amount of interest which would have been charged on the Notes if the Maximum Rate had, at all times, been in effect and (B) the amount of interest which would have accrued on the Notes if the rates of interest set forth in this Agreement had at all times been in effect and (ii) the amount of interest actually paid or accrued under this Agreement on the Notes. In the event the Banks ever receive, collect or apply as interest any sum in excess of the Maximum Rate, such excess amount shall, to the extent permitted by law, be applied to the reduction of the principal balance of the Notes, and if no such principal is then outstanding, such excess or part thereof remaining shall be paid to the Borrower.
(d)     Other Amounts Overdue . If any amount payable under this Agreement or any Credit Documents other than the Advances is not paid when due and payable, including without limitation, accrued interest and fees, then such overdue amount shall accrue interest hereon due and payable on demand at a rate per annum equal to the Adjusted Base Rate plus 2%, from the date such amount became due until the date such amount is paid in full.
Section 2.07      Prepayments .
(a)     Right to Prepay . The Borrower shall have no right to prepay any principal amount of any Advance except as provided in this Section 2.07.
(b)     Optional Prepayments . The Borrower may elect to prepay any of the Advances, after giving by 1:00 P.M. (New York City time) (i) in the case of LIBOR Advances, at least 3 Business Days’ prior written notice or (ii) in case of Base Rate Advances, at least 1 Business Day’s prior written notice to the Administrative Agent stating the proposed date and aggregate principal amount of such prepayment, the Facility with respect to which such prepayment relates, and if applicable, the relevant Interest Period for the Advances to be prepaid. If any such notice is given, the Borrower shall prepay Advances comprising part of the same Borrowing in whole or ratably in part in an

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aggregate principal amount equal to the amount specified in such notice, and with respect to LIBOR Advances shall also pay accrued interest to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to Section 2.08 as a result of such prepayment being made on such date; provided , however , that each partial prepayment shall be in an aggregate principal amount not less than $1,000,000 and in integral multiples of $100,000.
(c)     Mandatory Prepayments . The Borrower shall prepay the Collective Facilities at the times and in the manner set forth below in the respective amounts set forth in the following clauses (i) and (ii) (the “ Mandatory Prepayment Funds ”):
(i)    In the case of any Material Asset Sale occurring during a Leverage Trigger Period, within 3 Business Days following the end of the applicable Reinvestment Period (the “ Repayment Date ”), the Borrower shall prepay the Collective Facilities in an aggregate amount equal to all Net Cash Proceeds resulting from such Material Asset Sale; provided , however , that the amount of the required prepayments under this clause (i) shall be reduced first by, for any Material Asset Sale individually, the amount of any Reinvestments up to the amount of such Net Cash Proceeds made during the 6-month period immediately following the closing of such Material Asset Sale (the “ Reinvestment Period ”) and second by, for all Material Asset Sales collectively, the first $100,000,000 of Net Cash Proceeds above any such Reinvestments resulting from such Material Asset Sales; provided , however , that (1) if the applicable Repayment Date is not during a Leverage Trigger Period, then no Mandatory Prepayments shall be required with respect to such Material Asset Sale pursuant to this Section 2.07(c)(i), and (2) if, on the applicable Repayment Date, a Subsidiary of the Borrower shall be a party to a binding contract for the purchase of an Unencumbered Property executed during the applicable Reinvestment Period, then the applicable Reinvestment Period shall be extended for a period of 60 days upon Borrower’s notice to the Administrative Agent, which notice shall be accompanied by a certified copy of the applicable purchase contract, but in no case shall a single Reinvestment Period be so extended more than once; and
(ii)    In the case of any Refinancing Debt incurred during a Leverage Trigger Period, within 3 Business Days following incurrence of such Refinancing Debt, the Borrower shall prepay the Collective Facilities in an aggregate amount equal to all Net Cash Proceeds resulting from such Refinancing Debt.
The Mandatory Prepayment Funds shall first be applied to the Collective Facilities on a pro rata basis based on the principal amount, as of the date of the applicable prepayment, of outstanding Advances (as such term is defined herein or in the 2021 Term Loan Agreement, as applicable) in an amount equal to the Mandatory Commitment Reduction. Any Mandatory Prepayment Funds remaining after applying an amount equal to the Mandatory Commitment Reduction as described in the immediately preceding sentence shall be applied to the outstanding Revolving Facility Advances. Any Mandatory Prepayment Funds remaining after payment of all outstanding Revolving Facility Advances shall be deposited into the Cash Collateral Account up to the outstanding Letter of Credit Exposure as security for the Obligations and such funds shall be disbursed in accordance with Section 8.04 mutatis mutandis .
(d)     Ratable Payments . Each payment of any Advance pursuant to this Section 2.07 or any other provision of this Agreement shall be made in a manner such that all Advances comprising part of the same Borrowing are paid in whole or ratably in part.
(e)     Effect of Notice . All notices given pursuant to this Section 2.07 shall be irrevocable and binding upon the Borrower.
Section 2.08      Breakage Costs . If (a) any payment of principal of any LIBOR Advance is made other than on the last day of the Interest Period for such Advance as a result of any payment pursuant to Section 2.07 or the acceleration of the maturity of the Notes pursuant to Article VIII or otherwise; (b) any Conversion of a LIBOR Advance is made other than on the last day of the Interest Period for such Advance pursuant to Section 2.12 or otherwise; (c) the Borrower fails to make a principal or interest payment with respect to any LIBOR Advance on the date such payment is due and payable; or (d) the Borrower exercises its right under Section 2.14(a), the Borrower shall, within 10 days of

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any written demand sent by any Bank to the Borrower through the Administrative Agent, pay to the Administrative Agent for the account of such Bank any amounts (without duplication of any other amounts payable in respect of breakage costs) required to compensate such Bank for any losses (other than lost profit), out‑of‑pocket costs or expenses which it reasonably incurs as a result of such payment, nonpayment or replacement, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Bank to fund or maintain such Advance.
Section 2.09      Increased Costs . (a)     LIBOR Advances . If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the calculation of the LIBOR) in or in the interpretation of any Legal Requirement enacted, issued or promulgated after the date of this Agreement or (ii) the compliance with any guideline, rule, directive or request from any central bank or other Governmental Authority (whether or not having the force of law) enacted, issued or promulgated after the date of this Agreement, there shall be any increase in the cost to any Bank of agreeing to make or making, funding, converting into, continuing or maintaining LIBOR Advances, then the Borrower shall from time to time, within 10 days of written demand by such Bank (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Bank additional amounts (without duplication of any other amounts payable in respect of increased costs) sufficient to compensate such Bank for such increased cost; provided , however , that, before making any such demand, each Bank agrees to use commercially 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 and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate as to the amount of such increased cost and detailing the calculation of such cost submitted to the Borrower and the Administrative Agent by such Bank at the time such Bank demands payment under this Section shall be conclusive and binding for all purposes, absent manifest error.
(b)     Capital Adequacy . If any Bank or Issuing Bank determines in good faith that compliance with any Legal Requirement or any guideline, rule, directive or request from any central bank or other Governmental Authority (whether or not having the force of law) enacted, issued or promulgated after the date of this Agreement affects or would affect the amount of capital or liquidity required or expected to be maintained by such Bank or Issuing Bank or any Person controlling such Bank or Issuing Bank and that the amount of such capital or liquidity is increased by or based upon the existence of such Bank’s commitment to lend or such Issuing Bank’s commitment to issue Letters of Credit or any Bank’s commitment to participate in Letters of Credit and other commitments of this type, then, upon 10 days’ prior written notice by such Bank or such Issuing Bank (with a copy of any such demand to the Administrative Agent), the Borrower shall immediately pay to the Administrative Agent for the account of such Bank or to such Issuing Bank, as the case may be, from time to time as specified by such Bank or such Issuing Bank, additional amounts (without duplication of any other amounts payable in respect of increased costs) sufficient to compensate such Bank or such Issuing Bank, in light of such circumstances, (i) with respect to such Bank, to the extent that such Bank reasonably determines such increase in capital or liquidity to be allocable to the existence of such Bank’s commitment to lend under this Agreement or its commitment to participate in Letters of Credit and (ii) with respect to such Issuing Bank, to the extent that such Issuing Bank reasonably determines such increase in capital to be allocable to the issuance or maintenance of the Letters of Credit. A certificate as to such amounts and detailing the calculation of such amounts submitted to the Borrower and the Administrative Agent by such Bank or such Issuing Bank shall be conclusive and binding for all purposes, absent manifest error.
(c)     Letters of Credit . If any change in any Legal Requirement or in the interpretation thereof by any central bank or other Governmental Authority (whether or not having the force of law) charged with the administration thereof enacted, issued or promulgated after the date of this Agreement shall either (i) impose, modify, or deem applicable any reserve, special deposit, or similar requirement against letters of credit issued by, or assets held by, or deposits in or for the account of, any Issuing Bank or any Bank or (ii) impose on any Issuing Bank or any Bank any other condition regarding the provisions of this Agreement relating to the Letters of Credit or any Letter of Credit Obligations, and the result of any event referred to in the preceding clause (i) or (ii) shall be to increase the cost to any Issuing Bank of issuing or maintaining any Letter of Credit, or increase the cost to such Bank of its risk participation in any Letter of Credit (which increase in cost shall be determined by such Issuing Bank’s or such Bank’s reasonable allocation of the aggregate of such cost increases resulting from such event), then, within 10 days of written demand by such Issuing Bank or such Bank (with a copy sent to the Administrative Agent), as the case may be, the Borrower

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shall pay to the Administrative Agent for the account of such Issuing Bank or Bank, as the case may be, from time to time as specified by such Issuing Bank or such Bank, additional amounts which shall be sufficient to compensate such Issuing Bank or such Bank for such increased cost. Each Issuing Bank and each Bank agrees to use commercially reasonable efforts (consistent with internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office for the booking of its Letters of Credit or risk participations if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Issuing Bank or such Bank, be otherwise disadvantageous to such Issuing Bank or such Bank, as the case may be. A certificate as to such increased cost incurred by such Issuing Bank or such Bank, as the case may be, as a result of any event mentioned in clause (i) or (ii) above, and detailing the calculation of such increased costs submitted by such Issuing Bank or such Bank to the Borrower and the Administrative Agent, shall be conclusive and binding for all purposes, absent manifest error.
(d)     Dodd Frank; Basel III . Notwithstanding anything to the contrary contained in this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign financial regulatory authorities, in each case pursuant to Basel III shall in each case be deemed an introduction or change of the type referred to in this Section 2.09, regardless of the date enacted, adopted or issued or implemented.
Section 2.10      Payments and Computations .
(a)     Payment Procedures . Except if otherwise set forth herein, the Borrower shall make each payment under this Agreement and under the Notes not later than 12:00 Noon (New York City time) on the day when due in Dollars to the Administrative Agent without setoff, deduction or counterclaim at the location referred to in the Notes (or such other location as the Administrative Agent shall designate in writing to the Borrower) in same day funds. The Administrative Agent will on the same day such payment is deemed received from the Borrower cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Administrative Agent, the Issuing Banks, or a specific Bank pursuant to Section 2.03(b), 2.03(c), 2.06(c), 2.08, 2.09, 2.11, 2.12, or 2.13(c) but after taking into account payments effected pursuant to Section 11.04) to the Banks in accordance with each Bank’s Pro Rata Share in respect of the applicable Facility for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Bank or any Issuing Bank for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. If and to the extent that the Administrative Agent shall not have so made payment to a Bank on the day required under this Agreement, the Administrative Agent agrees to immediately pay such Bank such payment, together with interest on such amount, for each day from the date such amount was deemed received by the Administrative Agent until the date such amount is paid to such Bank at the Federal Funds Rate for each such day.
(b)     Computations . All computations of interest based on Citibank’s base rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of fees and interest based on the LIBOR and the Federal Funds Rate shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Administrative Agent of an interest rate shall be conclusive and binding for all purposes, absent manifest error.
(c)     Non‑Business Day Payments . Whenever any payment shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided , however , that if such extension would cause payment of interest on or principal of LIBOR Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.
(d)     Administrative Agent Reliance . Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Banks that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be

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distributed to each Bank on such date an amount equal to the amount then due such Bank. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank, together with interest, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate for each such day.
(e)     Application of Payments . (i)    Unless otherwise specified in Section 2.07 hereof and so long as no Event of Default shall have occurred and be continuing at such time under any of the Collective Facilities (in which case, the provisions of Section 2.10(e)(ii) shall apply), whenever any payment received by the Administrative Agent under this Agreement is insufficient to pay in full all amounts then due and payable under this Agreement and the Notes, such payment shall be distributed and applied by the Administrative Agent and the Banks in the following order: first , to the payment of fees and expenses due and payable to the Administrative Agent under and in connection with this Agreement or any other Credit Document and the payment of fees and expenses due and payable to each Issuing Bank and each Bank under Section 11.04, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person; second , to the payment of all expenses due and payable under Section 2.11(c), ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; third , to the payment of fees due and payable to each Issuing Bank pursuant to Section 2.03(b), ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fourth , to the payment of all other fees due and payable under Section 2.03, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fifth , to the payment of the interest accrued on all of the Notes and the interest accrued on Letter of Credit Obligations, ratably among the Banks in accordance with their respective Pro Rata Shares; and sixth , ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person, (a) to the payment of the principal amount of outstanding Revolving Facility Advances and Letter of Credit Obligations, regardless of whether any such amount is then due and payable, and thereafter if there are funds remaining, then (b) to the payment of (1) the principal amount of outstanding TL Facility Advances, regardless of whether any such amount is then due and payable and (2) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder.
(ii)    For the purposes of this Section 2.10(e)(ii), each capitalized term shall have the meaning given thereto on a collective basis by the loan documentation for the Collective Facilities. Unless otherwise specified in Section 2.07 hereof, whenever any payment received by the Administrative Agent under the Collective Facilities, which does not specify to which of the Collective Facilities it should be applied, and which is not specifically allocated by any other provision of this Agreement, is insufficient to pay in full all amounts then due and payable with respect to the Collective Facilities or if any payment is received by the Administrative Agent when an Event of Default under any of the Collective Facilities shall have occurred and be continuing, such payment shall be distributed and applied by the Administrative Agent and the Banks in the following order: first , to the payment of fees and expenses due and payable to the Administrative Agent under and in connection with this Agreement, the 2021 Term Loan Agreement or any other Credit Document and the payment of fees and expenses due and payable to each Issuing Bank and each Bank, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person; second , to the payment of all expenses due and payable under Section 2.11(c) hereof and under Section 2.11(c) of the 2021 Term Loan Agreement, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; third , to the payment of fees due and payable to each Issuing Bank pursuant to Section 2.03(b), ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fourth , to the payment of all other fees due and payable under Section 2.03 hereof and under Section 2.03 of the 2021 Term Loan Agreement, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fifth , to the payment of the interest accrued on all of the Notes, and the interest accrued on Letter of Credit Obligations, ratably among the Banks in accordance with their respective Pro Rata Shares; sixth , if no Event of Default shall have occurred and be continuing at such time, then, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person, (a) to the payment of the principal amount of outstanding Revolving Facility Advances and Letter of Credit Obligations, regardless of whether any such amount is then due and payable, and thereafter if there are funds remaining, then (b) to the payment of (1) the principal amount of outstanding TL Facility Advances, regardless of whether any such amount is then due and payable, (2) the principal amount of

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outstanding Advances under the 2021 Term Loan Agreement, regardless of whether any such amount is then due and payable, and (3) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder; and seventh , if an Event of Default under any of the Collective Facilities shall have occurred and be continuing at such time, then, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person to the payment of (a) the principal amount of outstanding Revolving Facility Advances and Letter of Credit Obligations, regardless of whether any such amount is then due and payable, (b) the principal amount of outstanding TL Facility Advances, regardless of whether any such amount is then due and payable, (c) the principal amount of outstanding Advances under the 2021 TL Facility, regardless of whether any such amount is then due and payable, and (d) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder.
(iii)    Notwithstanding anything in this Agreement to the contrary, each of Sections 2.07(c), 2.10(e)(ii) and this Section 2.10(e)(iii) shall inure to the benefit of each Bank (as such term is defined in the 2021 Term Loan Agreement) as a third party beneficiary. Notwithstanding any provision herein or in any other Credit Document to the contrary, none of Sections 2.07(c), 2.10(e)(ii) or this Section 2.10(e)(iii), nor the applicable defined terms used in such Sections may be amended or waived without the written consent of the Required Lenders (as such term is defined in the 2021 Term Loan Agreement).
(f)     Register . The Administrative Agent shall record in the Register the Commitment and the Advances from time to time of each Bank and each repayment or prepayment in respect to the principal amount of such Advances of each Bank. Any such recordation shall be conclusive and binding on the Borrower and each Bank, absent manifest error; provided however , that failure to make any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations hereunder in respect of such Advances. The Register shall be available to all Issuing Banks.
Section 2.11      Taxes .
(a)     No Deduction for Certain Taxes . Any and all payments by or on account of any Obligations of the Borrower shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including all backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto (collectively, “ Taxes ”), except as required by applicable law, excluding, (i) in the case of each Bank, each Issuing Bank, and the Administrative Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank, such Issuing Bank, or the Administrative Agent (as the case may be) is organized or any political subdivision of such jurisdiction or by the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision of such jurisdiction and (ii) any U.S. federal withholding tax imposed pursuant to Sections 1471 through 1474 of the Code (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), including any current or future implementing Treasury Regulations and administrative pronouncements thereunder (collectively, “ FATCA ”), and (iii) any withholding tax imposed on amounts payable to or for the account of any Bank, Issuing Bank or the Administrative Agent with respect to an applicable interest in an Advance or Commitment pursuant to a law in effect on the date on which such Bank, Issuing Bank or the Administrative Agent acquires such interest in the Advance or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.14) or designates a new Applicable Lending Office, except in each case to the extent that, pursuant to this Section 2.11(a) or Section 2.11(c), amounts with respect to such Taxes were payable either to such Bank’s, Issuing Bank’s or the Administrative Agent’s assignor immediately before such Person became a party hereto or to such Bank or Issuing Bank immediately before it changed its Applicable Lending Office (all such excluded Taxes in respect of payments hereunder or under any Credit Document being referred to as “ Excluded Taxes ”, and all Taxes other than Other Taxes and Excluded Taxes being referred to as “ Indemnified Taxes ”). If the Borrower shall be required by law (as determined in the good faith discretion of the Borrower) to deduct any Taxes from or in respect of any sum payable to any Bank, any Issuing Bank, or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11), such Bank, such Issuing Bank, or the Administrative

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Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made; provided , however , that if the Borrower’s obligation to deduct or withhold Taxes is caused solely by such Bank’s, such Issuing Bank’s, or the Administrative Agent’s failure to provide the forms described in paragraph (g) of this Section 2.11 and such Bank, such Issuing Bank, or the Administrative Agent could have provided such forms, no such increase shall be required; (ii) the Borrower shall make such deductions; and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Legal Requirements. For purposes of determining withholding Taxes imposed under FATCA, from and after the effective date of this Agreement, the Borrower and the Administrative Agent shall treat (and the Banks hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).
(b)     Other Taxes . In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made under, or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Credit Documents (hereinafter referred to as “ Other Taxes ”).
(c)     Indemnification by Borrower . Subject to the proviso of Section 2.11(a), the Borrower indemnifies each Bank, each Issuing Bank, and the Administrative Agent for the full amount of Indemnified Taxes or Other Taxes imposed on or paid by such Bank, such Issuing Bank, or the Administrative Agent (as the case may be) and any liability (including interest and expenses) arising therefrom or with respect thereto, or required to be withheld or deducted from a payment to such Bank, such Issuing Bank or the Administrative Agent, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by any Bank or Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of any Bank or Issuing Bank, shall be conclusive absent manifest error. Each payment required to be made by the Borrower in respect of this indemnification shall be made to the Administrative Agent for the benefit of any party claiming such indemnification within 30 days from the date the Borrower receives written demand detailing the calculation of such amounts therefor from the Administrative Agent on behalf of itself as Administrative Agent, any Issuing Bank, or any such Bank. If any Bank, the Administrative Agent, or any Issuing Bank receives a refund in respect of any Indemnified Taxes or Other Taxes paid by the Borrower under this paragraph (c), such Bank, the Administrative Agent, or such Issuing Bank, as the case may be, shall promptly pay to the Borrower the Borrower’s share of such refund, net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , however , that the Borrower, upon the request of the Administrative Agent or such Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Bank in the event the Administrative Agent or such Bank is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary herein, in no event will the Administrative Agent or any Bank be required to pay any amount to the Borrower pursuant to this Section 2.11(c) the payment of which would place the Administrative Agent or any Bank in a less favorable net after-Tax position than such Person would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.11(c) shall not be construed to require the Administrative Agent or any Bank to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.
(d)     Indemnification by Banks.     Each Bank and Issuing Bank shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Bank or such Issuing Bank (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Bank’s or such Issuing Bank’s failure to comply with the provisions of Section 2.10(f) relating to the maintenance of a Register and (iii) any Excluded Taxes attributable to such Bank or such Issuing Bank, in each case that are payable or paid by the Administrative Agent in connection with any Credit Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Bank or Issuing Bank by the Administrative Agent shall be conclusive absent manifest error. Each Bank and Issuing Bank hereby

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authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Bank or such Issuing Bank under any Credit Document or otherwise payable by the Administrative Agent to such Bank or such Issuing Bank from any other source against any amount due to the Administrative Agent under this paragraph (d).
(e)     Evidence of Tax Payments . The Borrower will pay prior to delinquency all Taxes and Other Taxes payable in respect of any payment. Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its address referred to in Section 11.02, the original or a certified copy of a receipt evidencing payment of such Taxes or Other Taxes.
(f)     Withholding Tax Documentation . Any Bank or Issuing Bank that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Bank or Issuing Bank, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Bank or such Issuing Bank is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.11(g) below) shall not be required if in the applicable Bank’s or Issuing Bank’s reasonable judgment such completion, execution or submission would subject such Bank or such Issuing Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Bank or such Issuing Bank.
(g)     Foreign Bank Withholding Exemption . Each Bank and each Issuing Bank that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Borrower and the Administrative Agent on the date of this Agreement or upon the effectiveness of any Assignment and Acceptance two duly completed copies of the Prescribed Forms, certifying in each case that such Bank is entitled to receive payments under this Agreement and the Notes payable to it, without deduction or withholding of any United States federal income taxes. Each Bank which delivers to the Borrower and the Administrative Agent a Prescribed Form further undertakes to deliver to the Borrower and the Administrative Agent two further copies of a replacement Prescribed Form, on or before the date that any such Prescribed Form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower and the Administrative Agent, and such extensions or renewals thereof as may reasonably be requested by the Borrower and the Administrative Agent certifying that such Bank is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes. If an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any delivery required by the preceding sentence would otherwise be required which renders all such forms inapplicable or which would prevent any Bank from duly completing and delivering any such Prescribed Form with respect to it and such Bank advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax, such Bank shall not be required to deliver such forms. The Borrower shall withhold tax at the rate and in the manner required by the laws of the United States with respect to payments made to a Bank failing to timely provide the requisite Prescribed Forms. If a payment made to a Bank under any Credit Document would be subject to U.S. federal withholding tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for the purposes of this subsection (g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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(h)     Survival.     Without prejudice to the survival of any other agreement of any party hereunder or under any other Credit Document, the agreements and obligations under this Section 2.11 shall survive the resignation or replacement of the Administrative Agent, the assignment of rights by, or the replacement of, a Bank or an Issuing Bank, the termination of the Commitments and the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Credit Documents.
Section 2.12      Illegality . (a)  Notice .    If any Bank shall notify the Administrative Agent and the Borrower that the introduction of or any change in or in the interpretation of any Legal Requirement makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful for such Bank or its LIBOR Lending Office to perform its obligations under this Agreement to maintain any LIBOR Advances of such Bank then outstanding hereunder, then, notwithstanding anything herein to the contrary, the Borrower shall, if demanded by such Bank by notice to the Borrower and the Administrative Agent no later than 12:00 Noon (New York City time), (i) if not prohibited by Legal Requirement to maintain such LIBOR Advances for the duration of the Interest Period, on the last day of the Interest Period for each outstanding LIBOR Advance of such Bank or (ii) if prohibited by Legal Requirement to maintain such LIBOR Advances for the duration of the Interest Period, on the second Business Day following its receipt of such notice from such Bank, Convert all LIBOR Advances of such Bank then outstanding to Base Rate Advances, and pay accrued interest on the principal amount Converted to the date of such Conversion and amounts, if any, required to be paid pursuant to Section 2.08 as a result of such Conversion being made on such date. Each Bank agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
(b)     Dodd Frank; Basel III .    Notwithstanding anything to the contrary contained in this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States financial regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed an introduction or change of the type referred to in this Section 2.12, regardless of the date enacted, adopted or issued.
Section 2.13      Letters of Credit .
(a)     Issuance . From time to time from the date of this Agreement until 3 months before the Revolving Facility Maturity Date, at the request of the Borrower to an Issuing Bank given not later than 1:00 P.M. (New York City time) on the fifth Business Day prior the date of the proposed issuance of such Letter of Credit, the Issuing Bank shall, on the issuance date proposed in the Borrower’s notice (which shall be a Business Day) and on the terms and conditions hereinafter set forth, issue, increase, decrease, amend, or extend the Expiration Date of Letters of Credit, and the Existing Issuing Bank shall continue any Existing Letters of Credit, for the account of the Borrower (for its own benefit or for the benefit of any of its Subsidiaries). Each such notice of issuance of a Letter of Credit 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) face 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. No Letter of Credit will be issued, increased, or extended (i) if such issuance, increase, or extension would cause (A) the Letter of Credit Exposure attributable to the applicable Issuing Bank to exceed such Issuing Bank’s Letter of Credit Commitment, or (B) the aggregate Letter of Credit Exposure to exceed the lesser of (1) $100,000,000 or (2) an amount equal to (x) the Total Commitments less (y) the sum of (I) the aggregate outstanding Advances and Letter of Credit Exposure at such time plus (II) during any Leverage Trigger Period, the amount of any Mandatory Prepayments made during such Leverage Trigger Period in excess of the Mandatory Commitment Reductions; (ii) unless such Letter of Credit has an Expiration Date not later than the earlier of (A) one year after the date of issuance thereof (unless the Administrative Agent shall otherwise consent in writing to a later date) and (B) on or prior to the Revolving Facility Maturity Date; (iii) unless the face amount of such Letter of Credit is equal to or greater than $100,000 and such Letter of Credit is otherwise in form and substance acceptable to the respective Issuing Bank; (iv) unless such Letter of Credit

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is a standby letter of credit; (v) unless the Borrower has delivered to the respective Issuing Bank the completed and executed Letter of Credit Documents (other than the Letter of Credit) on such Issuing Bank’s standard form, which shall contain terms no more restrictive than the terms of this Agreement; (vi) unless such Letter of Credit is governed by the International Standby Practices (1998) (“ ISP ”) or any successor to the ISP; and (vii) unless no Default has occurred and is continuing or would result from the issuance of such Letter of Credit. If the terms of any of the Letter of Credit Documents referred to in the foregoing clause (v) conflicts with the terms of this Agreement, the terms of this Agreement shall control.
(b)     Participations . On the date of the issuance or increase of any Letter of Credit in accordance with provisions of the preceding Section 2.13(a), each Issuing Bank shall be deemed, and with respect to the Existing Letters of Credit, the Existing Issuing Bank shall be deemed upon the date hereof, to have sold to each other Bank holding a Revolving Facility Commitment and each such other Bank shall have been deemed to have purchased from such Issuing Bank a participation in the Letter of Credit Exposure related to the Letters of Credit issued by such Issuing Bank equal to such Bank’s Pro Rata Share at such date and such sale and purchase shall otherwise be in accordance with the terms of this Agreement. Each Issuing Bank shall promptly notify each such participant Bank by telex, telephone, or telecopy of each Letter of Credit of such Issuing Bank issued, increased or decreased, and the actual dollar amount of such Bank’s participation in such Letter of Credit. Each such Bank’s obligation to purchase participating interests pursuant to this Section and to reimburse the respective Issuing Bank for such Bank’s Pro Rata Share of any payment under a Letter of Credit by such Issuing Bank not reimbursed in full by the Borrower shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any of the circumstances described in paragraph (d) below, (ii) the occurrence and continuance of a Default, (iii) an adverse change in the financial condition of the Borrower or any Guarantor, or (iv) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing, except for any such circumstance, happening or event constituting or arising from gross negligence or willful misconduct on the part of such Issuing Bank.
(c)     Reimbursement . The Borrower shall pay promptly on demand to each Issuing Bank in respect of each Letter of Credit issued by such Issuing Bank an amount equal to any amount paid by such Issuing Bank under or in respect of such Letter of Credit. In the event any Issuing Bank makes a payment pursuant to a request for draw presented under a Letter of Credit and such payment is not promptly reimbursed by the Borrower upon demand, such Issuing Bank shall give notice of such payment to the Administrative Agent and the Banks holding a Revolving Facility Commitment, and each such Bank shall promptly reimburse such Issuing Bank for such Bank’s Pro Rata Share of such payment, and such reimbursement shall be deemed for all purposes of this Agreement to constitute a Base Rate Advance to the Borrower from such Bank. If such reimbursement is not made by any such Bank to any Issuing Bank on the same day on which such Issuing Bank shall have made payment on any such draw, such Bank shall pay interest thereon to such Issuing Bank for each such day from the date such payment should have been made until the date repaid at a rate per annum equal to the Federal Funds Rate for each such day. The Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the Administrative Agent and such Banks to record and otherwise treat each payment under a Letter of Credit not immediately reimbursed by the Borrower as a Borrowing comprised of Base Rate Advances to the Borrower.
(d)     Obligations Unconditional . Except to the extent provided in Section 2.13(e), the obligations of the Borrower under this Agreement in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, notwithstanding the following circumstances:
(i)    any lack of validity or enforceability of any Letter of Credit Documents;
(ii)    any amendment or waiver of or any consent to departure from any Letter of Credit Documents;
(iii)    the existence of any claim, set‑off, defense or other right which the Borrower or any Bank or any other Person may have at any time against any beneficiary or transferee of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the respective

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Issuing Bank or any other Person or entity, whether in connection with this Agreement, the transactions contemplated in this Agreement or in any Letter of Credit Documents or any unrelated transaction;
(iv)    any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect to the extent the respective Issuing Bank would not be liable therefor pursuant to the following paragraph (e);
(v)    payment by the respective Issuing Bank under such Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit; or
(vi)    any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
(e)     Liability of Issuing Banks . The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. No Issuing Bank, nor any other Bank, nor any of their respective officers or directors shall be liable or responsible for:
(i)    the use which may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith;
(ii)    the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged;
(iii)    payment by such Issuing Bank against presentation of documents which do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the relevant Letter of Credit; or
(iv)    any other circumstances whatsoever in making or failing to make payment under any Letter of Credit (including such Issuing Bank’s own negligence);
except that the Borrower shall have a claim against such Issuing Bank to the extent of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by (A) such Issuing Bank’s willful misconduct or gross negligence in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit or (B) such Issuing Bank’s gross negligence in failing to make lawful payment under any Letter of Credit after the presentation to it of a draft and certificate strictly complying with the terms and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, any Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation.
(f)     Cash Collateral . (i) In the event that any Letter of Credit remains outstanding on that date 3 Business Days prior to the Revolving Facility Maturity Date and (ii) when required pursuant to Section 8.03(b), then, in either such case, the Borrower shall deposit into the Cash Collateral Account on or prior to such date an amount of cash equal to the outstanding Letter of Credit Exposure as security for the Obligations to the extent all Letter of Credit Obligations are not otherwise paid at such time.
(g)     Governing Rules . The Borrower agrees that each Letter of Credit shall be governed by the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ ICC ”) Publication No. 600 (2007 Revision) or, at an Issuing Bank’s option, such later revision thereof in effect at the time of issuance of the Letter of Credit (as so chosen for the Credit, the “ UCP ”) or the International Standby Practices 1998, ICC Publication No. 590 or, at an Issuing Bank’s option, such later revision thereof in effect at the time of issuance of the Credit (as so chosen for the Letter of Credit, the “ISP”, and each of the UCP and the ISP, an “ ICC Rule ”). Each Issuing Bank’s privileges, rights and remedies under such ICC Rules shall be in addition to, and not in limitation of, its privileges, rights and remedies expressly provided for herein. The UCP and the ISP (or such later revision of either) shall serve,

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in the absence of proof to the contrary, as evidence of general banking usage with respect to the subject matter thereof. The Borrower agrees that for matters not addressed by the chosen ICC Rule, the Letter of Credit shall be subject to and governed by the laws of the State of New York and applicable United States Federal laws. If, at the Borrower’s request, the Letter of Credit expressly chooses a state or country law other than New York State law and United States Federal law or is silent with respect to the choice of an ICC Rule or a governing law, no Issuing Bank shall be liable for any payment, cost, expense or loss resulting from any action or inaction taken by such Issuing Bank if such action or inaction is or would be justified under an ICC Rule, New York law, applicable United States Federal law or the law governing the Letter of Credit.
Section 2.14      Bank Replacement .
(a)     Right to Replace . The Borrower shall have the right to replace any Defaulting Lender and each Bank affected by a condition under Section 2.02(c)(v), 2.09, 2.11, or 2.12 for more than 90 days (each such affected Bank, an “ Affected Bank ”) in accordance with the procedures in this Section 2.14 and provided that no reduction of the total Revolving Facility Commitments or total TL Facility Commitments occurs as a result thereof. Additionally, in the event that any Bank shall, for more than 30 days after solicitation in writing from the Administrative Agent, fail to consent to a waiver or amendment to, or a departure from, the provisions of this Agreement which requires the consent of all Banks and that has been consented to by the Administrative Agent and the Required Class Lenders under the applicable Facility or Facilities for more than 30 days from the date of which the Administrative Agent has solicited such Bank’s consent, such Bank shall be deemed to be an Affected Bank, and the Borrower shall have the right to replace such Affected Bank.
(b)     First Right of Refusal; Replacement . (i) Upon the occurrence of any condition permitting the replacement of a Bank, the Administrative Agent in its sole discretion shall have the right to reallocate the amount of the Commitments of the Affected Banks among the non-Affected Banks within the same Facility pro rata in accordance with their respective Revolving Facility Commitments or TL Facility Commitments, as applicable, including without limitation to Persons which are not already party to this Agreement but which qualify as Eligible Assignees, which election shall be made by written notice within 30 days after the date such condition occurs, provided that any reallocation to any non-Affected Bank shall not be made without the prior written consent of such non-Affected Bank.
(ii)    Without limiting the foregoing, the Borrower shall have the right to add additional Banks which are Eligible Assignees to this Agreement to replace the Commitments of any Affected Banks.
(c)     Procedure . Any assumptions of Commitments pursuant to this Section 2.14 shall be (i) made by the purchasing Bank or Eligible Assignee and the selling Bank entering into an Assignment and Acceptance and by following the procedures in Section 11.06 for adding a Bank. In connection with the reallocation of the Commitments of any Bank pursuant to the foregoing paragraph (b), each Bank with a reallocated Commitment shall purchase from the Affected Banks at par such Bank’s ratable share of the outstanding Advances of the Affected Banks and assume such Bank’s ratable share of the Affected Banks’ Letter of Credit Exposure.
(d)     Affected Bank’s Assignment and Acceptance . If an Affected Bank being replaced pursuant to this Section 2.14 does not execute and deliver to the Eligible Assignee a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement within a period of time deemed reasonable by the Administrative Agent after the date on which the Eligible Assignee executes and delivers such Assignment and Acceptance and/or such other related documentation contemplated by this Section 2.14, then such Affected Bank shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Affected Bank.
Section 2.15      Sharing of Payments, Etc . If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set‑off or otherwise) on account of its Advances or its share of Letter of Credit Obligations in excess of its applicable Pro Rata Share of payments on account of the Advances or Letter of Credit Obligations obtained by all the Banks within the applicable Facility, such Bank shall notify the Administrative Agent and forthwith purchase from the other Banks within the applicable Facility such participations in the Advances

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made by them or Letter of Credit Obligations held by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably in accordance with the requirements of this Agreement with each of them; provided , however , that if all or any portion of such excess payment is thereafter recovered from such purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the purchasing Bank the purchase price to the extent of such Bank’s ratable share (according to the proportion of (a) the amount of the participation sold by such Bank to the purchasing Bank as a result of such excess payment to (b) the total amount of such excess payment) of such recovery, together with an amount equal to such Bank’s ratable share (according to the proportion of (a) the amount of such Bank’s required repayment to the purchasing Bank to (b) the total amount of all such required repayments to the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.15 may, to the fullest extent permitted by Legal Requirement, unless and until rescinded as provided above, exercise all its rights of payment (including the right of set‑off) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such participation.
Section 2.16      Defaulting Lenders . (a) If a Bank holding a Revolving Facility Commitment becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, if any Letter of Credit is at the time outstanding, any Issuing Bank may (except, in the case of a Defaulting Lender, to the extent the Revolving Facility Commitments have been fully reallocated pursuant to Section 2.16(b)), by notice to the Borrower and such Defaulting Lender or Potential Defaulting Lender through the Administrative Agent, require the Borrower to Cash Collateralize the obligations of the Borrower to such Issuing Bank in respect of such Letter of Credit in amount at least equal to 100% of the aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting Lender or such Potential Defaulting Lender to be applied pro rata in respect thereof, or to make other arrangements satisfactory to the Administrative Agent and to such Issuing Bank, in their sole discretion, to protect them against the risk of non‑payment by such Defaulting Lender or Potential Defaulting Lender.
(b)    If a Bank holding a Revolving Facility Commitment becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply with respect to any outstanding Letter of Credit Exposure of such Defaulting Lender:
(i)    the Letter of Credit Exposure of such Defaulting Lender will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the day such Bank becomes a Defaulting Lender) among the Non‑Defaulting Lenders within the Revolving Facility pro rata in accordance with their respective Revolving Facility Commitments; provided that (a) the conditions set forth in Section 3.02 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), (b) the sum of each such Non‑Defaulting Lender’s aggregate amount of all outstanding Advances in respect of the Revolving Facility and total Letter of Credit Exposure may not in any event exceed the Revolving Facility Commitments of such Non‑Defaulting Lender as in effect at the time of such reallocation and (c) neither such reallocation nor any payment by any such Non‑Defaulting Lender pursuant thereto will constitute a waiver or release of any claim the Borrower, the Administrative Agent, any Issuing Bank or any other Bank may have against such Defaulting Lender or cause such Defaulting Lender to be a Non‑Defaulting Lender;
(ii)    to the extent that any portion (the “ unreallocated portion ”) of the Defaulting Lender’s Letter of Credit Exposure cannot be so reallocated, whether by reason of the first proviso in clause (i) above or otherwise, the Borrower will, not later than 3 Business Days after demand by the Administrative Agent (at the direction of any Issuing Bank), (a) Cash Collateralize the obligations of the Borrower to such Issuing Bank in respect of such Letter of Credit Exposure in an amount at least equal to the aggregate amount of the unreallocated portion of such Letter of Credit Exposure, or (b) make other arrangements satisfactory to the Administrative Agent, and to such Issuing Bank, as the case may be, in their sole discretion to protect them against the risk of non‑payment by such Defaulting Lender; and
(iii)    any amount paid by the Borrower or otherwise received by the Administrative Agent for the account of any such Defaulting Lender (whether on account of principal, interest, fees, indemnity

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payments or other amounts) will not be paid or distributed to such Defaulting Lender, but will instead be retained by the Administrative Agent in a segregated non‑interest bearing account until (subject to Section 2.16(f)) the termination of the Revolving Facility Commitments and payment in full of all Obligations of the Borrower and will be applied by the Administrative Agent, to the fullest extent permitted by law, to the making of payments from time to time in the following order of priority: first to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second to the payment of any amounts owing by such Defaulting Lender to the Issuing Banks ( pro rata as to the respective amounts owing to each of them) under this Agreement, third to the payment of post‑default interest and then current interest due and payable to the Banks under the Revolving Facility other than Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them, fourth to the payment of fees then due and payable to the Non‑Defaulting Lenders and Potential Defaulting Lenders under the Revolving Facility, ratably among them in accordance with the amounts of such fees then due and payable to them, fifth to pay principal and unreimbursed Letters of Credit then due and payable to the Non‑Defaulting Lenders and Potential Defaulting Lenders hereunder ratably in accordance with the amounts thereof then due and payable to them, sixth to the payment of any amounts owing to the Banks under the Revolving Facility in accordance with Section 2.10(e) until such time as the outstanding Letter of Credit Exposure is held ratably among the Banks under the Revolving Facility in accordance with their respective Pro Rata Shares, seventh as the Borrower may request, to the funding of any Advance in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, provided that no Default or Event of Default then exists, eighth if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Advances under this Agreement, ninth , so long as no Default or Event of Default then exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by such against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, and tenth after the termination of the Revolving Facility Commitments and payment in full of all Obligations of the Borrower hereunder, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.
(c)    In furtherance of the foregoing, if any Bank becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, each Issuing Bank is hereby authorized by the Borrower (which authorization is irrevocable and coupled with an interest) to give, in its discretion, through the Administrative Agent, Notices of Borrowing pursuant to Section 2.02 in such amounts and in such times as may be required to (i) reimburse an Advance under the Revolving Facility in respect of an outstanding Letter of Credit, and/or (ii) Cash Collateralize the obligations of the Borrower in respect of outstanding Letters of Credit in an amount at least equal to the aggregate amount of the obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Letter of Credit.
(d)    Anything herein to the contrary notwithstanding, if at any time the Required Lenders determine that the Person serving as Administrative Agent is (without taking into account any provision in the definition of “Defaulting Lender” requiring notice from the Administrative Agent or any other party) a Defaulting Lender pursuant to clause (iv) of the definition thereof, the Required Lenders (determined after giving effect to Section 11.01) may by notice to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a replacement Administrative Agent hereunder. Such removal will, to the fullest extent permitted by applicable law, be effective on the earlier of (i) the date a replacement Administrative Agent is appointed and (ii) the date 30 days after the giving of such notice by the Required Lenders (regardless of whether a replacement Administrative Agent has been appointed).
(e)    The Borrower may terminate the unused amount of the Revolving Facility Commitment of a Defaulting Lender upon not less than 10 Business Days’ prior notice to the Administrative Agent (which will promptly notify the Banks thereof), and in such event the provisions of Section 2.16(b) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts), provided that such termination will not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, any Issuing Bank or any Bank may have against such Defaulting Lender.

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(f)    If the Borrower, the Administrative Agent and the Issuing Banks agree in writing, in their discretion, that a Bank is no longer a Defaulting Lender or a Potential Defaulting Lender, as the case may be, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any amounts then held in the segregated account referred to in Section 2.16(b)), such Bank will, to the extent applicable, purchase at par such portion of outstanding Revolving Facility Advances of the other Banks and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause the aggregate amount of all outstanding Advances under the Revolving Facility and the Letter of Credit Exposure of the Banks to be on a pro rata basis in accordance with their respective Revolving Facility Commitments, whereupon such Bank will cease to be a Defaulting Lender or Potential Defaulting Lender and will be a Non‑Defaulting Lender (and such exposure of each applicable Bank will automatically be adjusted on a prospective basis to reflect the foregoing); provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Bank was a Defaulting Lender; and provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender or Potential Defaulting Lender to Non‑Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Bank’s having been a Defaulting Lender or Potential Defaulting Lender.
(g)    So long as any Bank is a Defaulting Lender, such Bank or an Affiliate of such Bank shall not be a Swap Bank with respect to any Swap Contract entered into while such Bank was a Defaulting Lender.
(h)    So long as any Bank is a Defaulting Lender or a Potential Defaulting Lender, no Issuing Bank shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it is protected against the risk of non‑payment by such Defaulting Lender or Potential Defaulting Lender.
Section 2.17      Reallocation of Bank Pro Rata Shares. The Advances made under the Existing Agreements shall be deemed to be made under this Agreement on the date hereof, without executing any other documentation, and all such Advances currently outstanding shall be reallocated among the Banks as follows:
(a)    On the Effective Date, each Bank that will have a greater Pro Rata Share of the Revolving Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing Revolving Facility Agreement) of the Facility (under and as defined in the Existing Revolving Facility Agreement) immediately prior to the Effective Date (each, a “ Revolver Purchasing Bank ”), without executing an Assignment and Acceptance, shall be deemed to have purchased assignments pro rata from each Bank that will have a smaller Pro Rata Share of the Revolving Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing Revolving Facility Agreement) of the Facility (under and as defined in the Existing Revolving Facility Agreement) immediately prior to the Effective Date (each, a “ Revolver Selling Bank ”) in all such Revolver Selling Bank’s rights and obligations under this Agreement and the other Credit Documents as a Bank with respect to the Revolving Facility (collectively, the “ Assigned Revolving Rights and Obligations ”) so that, after giving effect to such assignments, each Bank shall have its respective Revolving Facility Commitment as set forth in Schedule 1.01(a) and a corresponding Pro Rata Share of all Revolving Facility Advances then outstanding under the Revolving Facility. Each such purchase hereunder shall be at par for a purchase price equal to the principal amount of the loans and without recourse, representation or warranty, except that each Revolver Selling Bank shall be deemed to represent and warrant to each Revolver Purchasing Bank that the Assigned Revolving Rights and Obligations of such Revolver Selling Bank are not subject to any Liens created by that Revolving Selling Bank.
(b)    On the Effective Date, each Bank that will have a greater Pro Rata Share of the TL Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing TL Facility Agreement) of the Facility (under and as defined in the Existing TL Facility Agreement) immediately prior to the Effective Date (each, a “ TL Purchasing Bank ”), without executing an Assignment and Acceptance, shall be deemed to have purchased assignments pro rata from each Bank that will have a smaller Pro Rata Share of the TL Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing TL Facility Agreement) of the Facility (under and as defined in the Existing TL Facility Agreement) immediately prior to the Effective Date (each, a “ TL Selling Bank ”) in all such TL Selling Bank’s rights and obligations under this Agreement and the other Credit Documents as a Bank with respect to the TL Facility (collectively, the “ Assigned TL Rights and Obligations ”) so that, after giving effect to

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such assignments, each Bank shall have its respective TL Facility Commitment as set forth in Schedule 1.01(a) and a corresponding Pro Rata Share of all TL Facility Advances then outstanding under the TL Facility. Each such purchase hereunder shall be at par for a purchase price equal to the principal amount of the loans and without recourse, representation or warranty, except that each TL Selling Bank shall be deemed to represent and warrant to each TL Purchasing Bank that the Assigned TL Rights and Obligations of such TL Selling Bank are not subject to any Liens created by that TL Selling Bank.
(c)    The Administrative Agent shall calculate the net amount to be paid or received by each Bank in connection with the assignments effected hereunder on the Effective Date. Each Bank required to make a payment pursuant to this Section shall make the net amount of its required payment available to the Administrative Agent, in same day funds, at the office of the Administrative Agent not later than 1:00 P.M. (Eastern Standard Time) on the Effective Date. The Administrative Agent shall distribute on the Effective Date the proceeds of such amounts to the Banks entitled to receive payments pursuant to this Section, pro rata in proportion to the amount each such Bank is entitled to receive at the primary address set forth in Schedule 1.01(a) or at such other address as such Bank may request in writing to the Administrative Agent.
Section 2.18      No Novation. All obligations of the Borrower under each of the Existing Agreements shall become obligations of the Borrower hereunder, and the provisions of each of the Existing Agreements shall be superseded by the provisions hereof. Each of the parties hereto confirms that the amendment and restatement of each of the Existing Agreements pursuant to this Agreement shall not constitute a novation of either of the Existing Agreements.
ARTICLE III

CONDITIONS OF LENDING
Section 3.01      Conditions Precedent to Initial Advance . The obligation of each Bank to make its initial Advance under this Agreement as part of the initial Borrowing under this Agreement and of the Existing Issuing Bank to continue the Existing Letters of Credit under this Agreement are subject to the following conditions precedent:
(a)     Documentation . The Administrative Agent shall have received counterparts of this Agreement executed by the Borrower, the Guarantors and the Banks, and the following duly executed by all the parties thereto, in form and substance satisfactory to the Administrative Agent, and, with respect to this Agreement, the Notes, the Guaranty and the Environmental Indemnity, in sufficient copies for each Bank (except for each Note, as to which one original of each shall be sufficient):
(i)    a Note or Notes (as applicable) duly executed by the Borrower and payable to the order of each Bank that has requested the same, the Guaranty, and the Environmental Indemnity;
(ii)    a certificate from the Chief Executive Officer, President or Chief Financial Officer of the Parent on behalf of the Borrower dated as of the Closing Date stating that as of the Closing Date (A) all representations and warranties of the Borrower set forth in this Agreement and the Credit Documents are true and correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects); (B) no Default has occurred and is continuing; (C) the conditions in this Section 3.01 have been met or waived in writing; and (D) to the best of the Borrower’s knowledge there are no claims, defenses, counterclaims or offsets by the Borrower, the Parent and any of their Subsidiaries against the Banks under the Credit Documents;
(iii)    a certificate of the Secretary or an Assistant Secretary of the Parent on behalf of the Borrower, each Guarantor, each Subsidiary of the Parent and each general partner or managing member (if any) of each of the foregoing, dated as of the Closing Date certifying as of the Closing Date to the extent applicable (A) the names and true signatures of officers or authorized representatives of the general partner of such Person authorized to sign the Credit Documents to which such Person is a party as general partner of such Person, (B) resolutions of the Board of Directors or the members of the general partner of such Person

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approving the transactions herein contemplated and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the transactions under the Credit Documents and each Credit Document to which it is or is to be a party, (C) a true and correct copy of the organizational documents of the general partner of such Person, (D) a true and correct copy of the bylaws, operating agreement, partnership agreement or other governing document of such Person, and (E) a true and correct copy of all partnership or other organizational authorizations necessary or desirable in connection with the transactions herein contemplated;
(iv)    a certificate of the Secretary or an Assistant Secretary of the Parent dated as of the Closing Date certifying as of the Closing Date (A) resolutions of the Board of Directors or the members of the general partner of such Person approving the transactions herein contemplated and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the transactions under the Credit Documents and each Credit Document to which it is or is to be a party, (B) the copies of the charter and bylaws of the Parent and any modification or amendment to the articles or certificate of incorporation or bylaws of the Parent made since such date, and (C) that the Parent owns 100% of the general partner Equity Interests and at least 70% of the limited partner Equity Interests in the Borrower;
(v)    a copy of a certificate of the Secretary of State (or equivalent authority) of the jurisdiction of incorporation, organization or formation of each of the Parent, the Borrower and each Guarantor, dated reasonably near (but prior to) the Closing Date, certifying, if and to the extent such certification is generally available for entities of the type of such Person, (A) as to a true and correct copy of the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Person, and each amendment thereto on file in such Secretary’s office, (B) that (1) such amendments are the only amendments to the charter, certificate of limited partnership, limited liability company agreement or other organizational document, as applicable, of such Person on file in such Secretary’s office, (2) such Person has paid all franchise taxes to the date of such certificate and (C) such Person is duly incorporated, organized or formed and in good standing or presently subsisting under the laws of the jurisdiction of its incorporation, organization or formation;
(vi)    a copy of a certificate of the Secretary of State (or equivalent authority) of each jurisdiction in which any of the Parent, the Borrower and each Guarantor owns or leases property or in which the conduct of its business requires it to qualify or be licensed as a foreign corporation except where the failure to so qualify or be licensed could not reasonably be expected to result in a Material Adverse Change, dated reasonably near (but prior to) the Closing Date, stating with respect to each such Person that such Person is duly qualified and in good standing as a foreign corporation, limited partnership or limited liability company in such state and has filed all annual reports required to be filed to the date of such certificate;
(vii)    (A) one or more favorable written opinions of DeCampo, Diamond & Ash LLP, Hagan & Vidovic LLP and DLA Piper LLP, each special counsel for the Borrower, the Parent, and their Subsidiaries, in a form reasonably acceptable to the Administrative Agent, in each case dated as of the Closing Date and with such changes as the Administrative Agent may approve, and (B) such other legal opinions as the Administrative Agent shall reasonably request, in each case dated as of the Closing Date and with such changes as the Administrative Agent may approve;
(viii)    in the event the initial Advance is a LIBOR Advance made on the Closing Date, a breakage indemnity letter agreement executed by the Borrower and dated as of the date of the related Notice of Borrowing in form and substance satisfactory to the Administrative Agent;
(ix)    any information or materials reasonably required by the Administrative Agent or any Bank in order to assist the Administrative Agent or such Bank in maintaining compliance with (i) the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”) and (ii) any applicable “know your customer” or similar rules and regulations;

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(x)    a Compliance Certificate duly executed by a Responsible Officer of the Parent, dated the Closing Date or, if later, the date of the initial Advance, in each case confirming that the Parent is in compliance with the covenants contained in Article VII on such date (including after giving effect to the initial Advance, if any, made on such date);
(xi)    (i) evidence as to whether each Hotel Property encumbered by a New York Mortgage is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “ Flood Hazard Property ”) pursuant to a standard flood hazard determination form ordered and received by the Administrative Agent and held by the Administrative Agent on behalf of the Banks, and (ii) if such property is a Flood Hazard Property, (A) evidence as to whether the community in which such property is located is participating in the National Flood Insurance Program, (B) the Borrower’s written acknowledgment of receipt of written notification from the Administrative Agent as to the fact that such property is a Flood Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of the Borrower’s application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to the Administrative Agent and naming the Administrative Agent as sole loss payee on behalf of the Banks (collectively, the “ Flood Insurance Requirements ”);
(xii)    evidence satisfactory to the Administrative Agent that the 2021 Term Loan Agreement has been made, or shall simultaneously with this Agreement be made, effective; and
(xiii)    such other documents, governmental certificates, agreements, and lien searches as the Administrative Agent may reasonably request.
(b)     Representations and Warranties . The representations and warranties contained in Article IV hereof, the Guaranty, and the Environmental Indemnity shall be true and correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects).
(c)     Certain Payments . The Borrower shall have paid the fees required to be paid as of the execution of this Credit Agreement pursuant to the Fee Letter.
(d)    [ Reserved ].
(e)     Other . The Administrative Agent shall have received such other approvals, opinions or documents deemed necessary or desirable by any Bank or the Administrative Agent as such party may reasonably request.
Section 3.02      Conditions Precedent for each Borrowing or Letter of Credit . The obligation of each Bank to fund an Advance on the occasion of each Borrowing (other than the Conversion or continuation of any existing Borrowing) and of any Issuing Bank to issue or increase or extend any Letter of Credit shall be subject to the further conditions precedent that on the date of such Borrowing or the issuance or increase or extension of such Letter of Credit:
(a)    the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing or the issuance or increase or extension of such Letter of Credit shall constitute a representation and warranty by the Borrower that on the date of such Borrowing or the issuance or increase or extension of such Letter of Credit such statements are true):
(i)    the representations and warranties contained in Article IV hereof, the Guaranty, and the Environmental Indemnity are correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects) as such representations and warranties may have changed based upon events or activities not prohibited by this Agreement on and as of the date of such Borrowing or the issuance or increase or extension of such Letter of Credit, before and after giving effect to such Borrowing or to the issuance or increase or extension of such Letter of Credit and to the

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application of the proceeds from such Borrowing, as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date; and
(ii)    no Default has occurred and is continuing or would result from such Borrowing or from the application of the proceeds therefrom;
(b)    the Borrower shall have executed and delivered to the Administrative Agent a Notice of Borrowing in accordance with Section 2.02; and
(c)    the Administrative Agent shall have received such other approvals, opinions or documents deemed necessary or desirable by any Bank or the Administrative Agent as such party may reasonably request in order to confirm (i) the accuracy of the Borrower’s and any Guarantor’s representations and warranties contained in the Credit Documents, (ii) the Borrower’s and any Guarantor’s timely compliance with the terms, covenants and agreements set forth in the Credit Documents, (iii) the absence of any Default and (iv) the rights and remedies of the Administrative Agent or any Bank or the ability of the Borrower to perform any of the Obligations.
In addition to the other conditions precedent herein set forth, if any Bank becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, no Issuing Bank will be required to issue any Letter of Credit or to amend any outstanding Letter of Credit to increase the face amount thereof, alter the drawing terms thereunder or extend the expiry date thereof, unless such Issuing Bank is satisfied that any exposure that would result therefrom is fully covered or eliminated by any combination satisfactory to such Issuing Bank of the following:
(x)    in the case of a Defaulting Lender, the Letter of Credit Exposure (if any) of such Defaulting Lender is reallocated, as to outstanding and future Letters of Credit, to the Non‑Defaulting Lenders as provided in clause (i) of Section 2.16(b);
(y)    in the case of a Defaulting Lender or a Potential Defaulting Lender, without limiting the provisions of Section 2.16(a), the Borrower Cash Collateralizes the obligations of the Borrower in respect of such Letter of Credit in an amount at least equal to the aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting Lender or Potential Defaulting Lender in respect of such Letter of Credit, or makes other arrangements satisfactory to the Administrative Agent and such Issuing Bank in their sole discretion to protect them against the risk of non‑payment by such Defaulting Lender or Potential Defaulting Lender; and
(z)    in the case of a Defaulting Lender or a Potential Defaulting Lender, then in the case of a proposed issuance of a Letter of Credit by an instrument or instruments in form and substance satisfactory to the Administrative Agent and to such Issuing Bank, the Borrower agrees that the face amount of such requested Letter of Credit will be reduced by an amount equal to the unreallocated, non‑Cash Collateralized portion thereof (if any) as to which such Defaulting Lender or Potential Defaulting Lender would otherwise be liable, in which case the obligations of the Non‑Defaulting Lenders which hold Commitments in respect of the Revolving Facility in respect of such Letter of Credit will, subject to the first proviso below, be on a pro rata basis in accordance with the Commitments to the Revolving Facility of such Non‑Defaulting Lenders, and the pro rata payment provisions of Section 2.10(e) will be deemed adjusted to reflect this provision;
provided that (1) the sum of each such Non‑Defaulting Lender’s aggregate amount of all outstanding Advances and total Letter of Credit Exposure may not in any event exceed the Commitment to the Revolving Facility of such Non‑Defaulting Lender, and (2) neither any such reallocation nor any payment by a Non‑Defaulting Lender pursuant thereto nor any such Cash Collateralization or reduction will constitute a waiver or release of any claim the Borrower, the Administrative Agent, any Issuing Bank or any other Bank may have against such Defaulting Lender, or cause such Defaulting Lender or Potential Defaulting Lender to be a Non‑Defaulting Lender.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01      Existence; Qualification; Partners; Subsidiaries . (a) The Borrower is a limited partnership duly organized, validly existing, and in good standing under the laws of Delaware and in good standing and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not cause a Material Adverse Change.
(b)    The Parent is a real estate investment trust duly organized, validly existing, and in good standing under the laws of Maryland and in good standing and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not cause a Material Adverse Change with respect to the Parent. The Parent has no first tier Subsidiaries except for (i) the Borrower, (ii) Subsidiaries the sole assets of which are direct or indirect Equity Interests in the Borrower, (iii) members of Permitted Other Subsidiaries, (iv) LHO Hollywood Financing, Inc. (QRS), a Delaware corporation, and (v) LHO New Orleans Financing, Inc., a Delaware corporation.
(c)    The Parent is the Borrower’s sole general partner with full power and authority to bind the Borrower to the Credit Documents.
(d)    The Parent owns a 1% general partner Equity Interest in and at least 70% of the limited partner Equity Interests in the Borrower.
(e)    Each Subsidiary of the Borrower is a limited partnership, general partnership, limited liability company or corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on such Subsidiary. The Borrower has no Subsidiaries on the date of this Agreement other than the Subsidiaries listed on the attached Schedule 4.01, and Schedule 4.01 lists the jurisdiction of formation and the address of the principal office of each such Subsidiary existing on the date of this Agreement. As of the date of this Agreement, the Borrower and/or the Parent owns, directly or indirectly, at least 99% of the Equity Interests in each such Subsidiary.
(f)    As of the date of this Agreement, neither the Borrower, nor the Parent, nor any of the Subsidiaries own directly or indirectly (i) such a percentage of the beneficial ownership interest in any participating lessee for a Hotel Property or (ii) such an Investment in the Personal Property for any Hotel Property as would, in each case, cause a potential Event of Default under Section 8.01(m).
Section 4.02      Partnership and Corporate Power . The execution, delivery, and performance by the Borrower, the Parent, and each Guarantor of the Credit Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) are within such Persons’ trust, partnership, limited liability company and corporate powers, as applicable, (b) have been duly authorized by all necessary trust, corporate, limited liability company and partnership action, as applicable, (c) do not contravene (i)  such Person’s declaration of trust, certificate or articles, as the case may be, of incorporation or by‑laws, operating agreement or partnership agreement, as applicable, or (ii) any law or any contractual restriction binding on or affecting any such Person, the contravention of which could reasonably be expected to cause a Material Adverse Change, and (d) will not result in or require the creation or imposition of any Lien prohibited by this Agreement. At the time of each Borrowing, such Borrowing and the use of the proceeds of such Borrowing will be within the Borrower’s partnership powers, will have been duly authorized by all necessary partnership action, (a) will not contravene (i) the Borrower’s partnership agreement or (ii) any law or any contractual restriction binding on or affecting the Borrower, the contravention of which could reasonably be expected to cause a Material Adverse Change, and (b) will not result in or require the creation or imposition of any Lien prohibited by this Agreement.

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Section 4.03      Authorization and Approvals . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Borrower, the Parent, or any Guarantor of the Credit Documents to which it is a party or the consummation of the transactions contemplated thereby. At the time of each Borrowing, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required for such Borrowing or the use of the proceeds of such Borrowing the absence of which could reasonably be expected to cause a Material Adverse Change.
Section 4.04      Enforceable Obligations . This Agreement, the Notes, and the other Credit Documents to which the Borrower is a party have been duly executed and delivered by the Borrower; this Agreement, each Guaranty and the other Credit Documents to which each Guarantor and the Parent is a party have been duly executed and delivered by such Guarantor and the Parent, and the Environmental Indemnity has been duly executed and delivered by the parties thereto. Each Credit Document is the legal, valid, and binding obligation of the Borrower, the Parent, and each Guarantor which is a party to it enforceable against the Borrower, the Parent, and each such Guarantor in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity (whether considered in proceeding at law or in equity).
Section 4.05      Parent Stock . As of December 1, 2016, the entire authorized capital stock of the Parent consists of (a) 200,000,000 shares of Parent Common Stock of which 113,088,074 shares of Parent Common Stock are duly and validly issued and outstanding, fully paid and nonassessable as of the Closing Date, and (b) 40,000,000 preferred shares of beneficial interest, $0.01 par value per share, of which 13,150,000 shares in the aggregate of Series H, Series I and Series J of such preferred shares of beneficial interest are duly and validly issued and outstanding, fully paid and nonassessable as of the Closing Date and such preferred shares of beneficial interest provide no rights to any holder thereof that may cause a violation of Section 6.04(f).  The issuance and sale of such Parent Common Stock and such preferred shares of beneficial interest of the Parent either (i) has been registered under applicable federal and state securities laws or (ii) was issued pursuant to an exemption therefrom.  The Parent meets the requirements for taxation as a REIT under the Code.
Section 4.06      Financial Statements . The Consolidated balance sheet of the Parent and its Subsidiaries, and the related Consolidated statements of operations, shareholders’ equity and cash flows, of the Parent and its Subsidiaries contained in the most recent financial statements delivered to the Banks, fairly present the financial condition in all material respects and reflects the Indebtedness of the Parent and its Subsidiaries as of the respective dates of such statements and the results of the operations of the Existing Properties for the periods indicated, and such balance sheet and statements were prepared in accordance with GAAP, subject to year-end adjustments. Since December 31, 2015, neither a Material Adverse Change, nor any material adverse change to the prospects or the Property of the Parent or the Borrower has occurred.
Section 4.07      True and Complete Disclosure . No representation, warranty, or other statement made by the Borrower (or on behalf of the Borrower) in this Agreement or any other Credit Document contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which they were made as of the date of this Agreement. There is no fact known to the Borrower or the Parent on the date of this Agreement that has not been disclosed to the Administrative Agent which could reasonably be expected to cause a Material Adverse Change. All projections, estimates, and pro forma financial information furnished by the Borrower and the Parent or on behalf of the Borrower or the Parent were prepared on the basis of assumptions, data, information, tests, or conditions believed to be reasonable at the time such projections, estimates, and pro forma financial information were furnished. No representation, warranty or other statement made in any filing required by the Exchange Act contains any untrue statement of material fact or omits to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which they were made as of the date same were made. Borrower and/or Parent have made all filings required by the Exchange Act.
Section 4.08      Litigation . Except as set forth in the attached Schedule 4.08 and except with respect to any other actions or proceedings that, individually or in the aggregate, could not reasonably be expected to cause a Material Adverse Change, as of the date of this Agreement there is no pending or, to the best knowledge of the Borrower,

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threatened action or proceeding affecting the Borrower, the Parent, any participating lessee for a Hotel Property or any of their respective Subsidiaries before any court, Governmental Authority or arbitrator.
Section 4.09      Use of Proceeds .
(a)     Advances . The Letters of Credit and the proceeds of the Advances will be used by the Borrower (i) to refinance and repay existing Indebtedness, (ii) to make investments permitted pursuant to the provisions of Section 6.07, (iii) to finance the renovation, repair, restoration and expansion of Hotel Properties, Capital Expenditures and expenditures for FF&E for any Hotel Properties in accordance with the provisions of Section 5.06 and as permitted pursuant to the provisions of Sections 6.07 and 6.13, (iv) for general corporate purposes of the Borrower and its Subsidiaries, and (v) for costs incurred in connection with this Agreement and any Capitalization Event done in compliance with this Agreement.
(b)     Regulations . No Letters of Credit and proceeds of Advances will be used to purchase or carry any margin stock in violation of Regulations T, U or X of the Federal Reserve Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board).
Section 4.10      Investment Company Act . Neither the Borrower, the Parent nor any of their respective Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 4.11      Taxes . All federal, state, local and foreign tax returns, reports and statements required to be filed (after giving effect to any extension granted in the time for filing) by the Parent, the Borrower, their respective Subsidiaries, or any member of a Controlled Group have been filed with the appropriate governmental agencies in all jurisdictions in which such returns, reports and statements are required to be filed, and where the failure to file could reasonably be expected to cause a Material Adverse Change, except where contested in good faith and by appropriate proceedings; and all taxes and other impositions due and payable (which are material in amount) have been timely paid prior to the date on which any fine, penalty, interest, late charge or loss (which are material in amount) may be added thereto for non‑payment thereof except where contested in good faith and by appropriate proceedings. As of the date of this Agreement, neither the Parent, the Borrower nor any member of a Controlled Group has given, or been requested to give, a waiver of the statute of limitations relating to the payment of any federal, state, local or foreign taxes or other impositions. None of the Property owned by the Parent, the Borrower or any other member of a Controlled Group is Property which the Parent, the Borrower or any member of a Controlled Group is required to be treated as being owned by any other Person pursuant to the provisions of Section 168(f)(8) of the Code. Proper and accurate amounts have been withheld by the Borrower and all members of each Controlled Group from their employees for all periods to comply in all material respects with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law. Timely payment of all material sales and use taxes required by applicable law have been made by the Parent, the Borrower and all other members of each Controlled Group, the failure to timely pay of which could reasonably be expected to cause a Material Adverse Change. The amounts shown on all tax returns to be due and payable have been paid in full or adequate provision therefor is included on the books of the appropriate member of the applicable Controlled Group.
Section 4.12      Pension Plans . All Plans are in compliance in all material respects with all applicable provisions of ERISA. No Termination Event has occurred with respect to any Plan, and each Plan has complied with and been administered in all material respects in accordance with applicable provisions of ERISA and the Code. No “accumulated funding deficiency” (as defined in Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of the Code. No Reportable Event has occurred with respect to any Multiemployer Plan, and each Multiemployer Plan has complied with and been administered in all material respects with applicable provisions of ERISA and the Code. Neither the Parent, the Borrower, nor any member of a Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan for which there is any material withdrawal liability. As of the most recent valuation date applicable thereto, neither the Parent, the Borrower nor any member of a Controlled Group has received notice that any Multiemployer Plan is insolvent or in reorganization.

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Section 4.13      Condition of Hotel Property; Casualties; Condemnation . Except as disclosed in writing to the Administrative Agent, and except for such items as the Borrower or a Subsidiary is or will be addressing consistent with sound business practices and has sufficient funds to address, each Existing Property and any Future Property (a) is and will continue to be in good repair, working order and condition, normal wear and tear excepted, (b) is free of structural defects, (c) is not subject to material deferred maintenance and (d) has and will have all building systems contained therein and all other FF&E in good repair, working order and condition, normal wear and tear excepted. None of the Properties of the Borrower or of any of its Subsidiaries has been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by a Governmental Authority, riot, activities of armed forces or acts of God or of any public enemy. No condemnation or other like proceedings that has had, or could reasonably be expected to result in, a Material Adverse Change, are pending and served nor, to the knowledge of the Borrower, threatened against any Property in any manner whatsoever. No casualty has occurred to any Property that could reasonably be expected to have a Material Adverse Change.
Section 4.14      Insurance . The Borrower and each of its Subsidiaries carry, or are the beneficiaries under, the insurance required pursuant to the provisions of Section 5.07.
Section 4.15      No Burdensome Restrictions; No Defaults . (a) Except in connection with Indebtedness which is (i) either permitted pursuant to the provisions of Section 6.02, or (ii) being repaid with the proceeds of the initial Borrowing, neither the Parent, the Borrower nor any of their respective Subsidiaries is a party to any indenture, loan or credit agreement. Neither the Borrower, the Parent nor any of their respective Subsidiaries is a party to any agreement or instrument or subject to any charter or corporate restriction or provision of applicable law or governmental regulation which could reasonably be expected to cause a Material Adverse Change. Neither the Borrower, the Parent nor any of their Subsidiaries is in default under or has received any notice of default with respect to (i) any contract, agreement, lease or other instrument or (ii) any Qualified Ground Lease, franchise agreement or management agreement which default could reasonably be expected to cause a Material Adverse Change.
(b)    No Default or Event of Default has occurred and is continuing.
Section 4.16      Environmental Condition . (a) Except as disclosed in writing to the Administrative Agent, to the knowledge of the Borrower, the Borrower and its Subsidiaries (i) have obtained all Environmental Permits material for the ownership and operation of their respective Properties and the conduct of their respective businesses; (ii) have been and are in material compliance with all terms and conditions of such Environmental Permits and with all other requirements of applicable Environmental Laws; (iii) have not received notice of any violation or alleged violation of any Environmental Law or Environmental Permit; and (iv) are not subject to any actual or contingent Environmental Claim.
(b)    Except as disclosed in writing to the Administrative Agent, to the knowledge of Borrower, none of the present or previously owned or operated Property of the Borrower or of any of its present or former Subsidiaries, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws which could reasonably be expected to cause a Material Adverse Change; (ii) is subject to a Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; (iii) has been the site of any Release, use or storage of Hazardous Substances or Hazardous Wastes from present or past operations except for Permitted Hazardous Substances, which Permitted Hazardous Substances have not caused at the site or at any third‑party site any condition that has resulted in or could reasonably be expected to result in the need for Response or (iv) none of the Improvements are constructed on land designated by any Governmental Authority having land use jurisdiction as wetlands.
Section 4.17      Legal Requirements, Zoning, Utilities, Access . Except as set forth on Schedule 4.17 attached hereto, the use and operation of each Hotel Property as a commercial hotel with related uses constitutes a legal use under applicable zoning regulations (as the same may be modified by special use permits or the granting of variances) and

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complies in all material respects with all Legal Requirements, and does not violate in any material respect any material approvals, material restrictions of record or any material agreement affecting any Hotel Property (or any portion thereof). The Borrower and its Subsidiaries possess all certificates of public convenience, authorizations, permits, licenses, patents, patent rights or licenses, trademarks, trademark rights, trade names rights and copyrights (collectively “ Permits ”) required by Governmental Authority to own and operate the Hotel Properties, except for those Permits if not obtained would not cause a Material Adverse Change. The Borrower and its Subsidiaries own and operate their business in material compliance with all applicable Legal Requirements. To the extent necessary for the full utilization of each Hotel Property in accordance with its current use, telephone services, gas, steam, electric power, storm sewers, sanitary sewers and water facilities and all other utility services are available to each Hotel Property, are adequate to serve each such Hotel Property, exist at the boundaries of the Land and are not subject to any conditions, other than normal charges to the utility supplier, which would limit the use of such utilities. All streets and easements necessary for the occupancy and operation of each Hotel Property are available to the boundaries of the Land.
Section 4.18      Existing Indebtedness . Except for the Obligations, the only Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries existing as of the Closing Date is the Secured Non‑Recourse Indebtedness, Secured Recourse Indebtedness and other Indebtedness set forth on Schedule 4.18 attached hereto and certain other Indebtedness incurred in the ordinary course of business not to exceed $50,000. No “default” or “event of default”, however defined, has occurred and is continuing under any such Indebtedness (or with respect to the giving of this representation after the date of this Agreement, as otherwise disclosed to the Administrative Agent in writing after the date of this Agreement and prior to the date such representation is deemed given).
Section 4.19      Title; Encumbrances . With respect to the Existing Properties, the Borrower or any Material Subsidiary, as the case may be, has (i) good and marketable fee simple title to the Real Property (other than for Real Property subject to a ground lease, as to which it has a valid leasehold interest) and (ii) good and marketable title to the Personal Property (other than Personal Property for any Hotel Property for which the Property Owner has a valid leasehold interest) free and clear of all Liens, and there exists no Liens or other charges against such Property or leasehold interest or any of the real or personal, tangible or intangible, Property of the Borrower or any Material Subsidiary (including without limitation statutory and other Liens of mechanics, workers, contractors, subcontractors, suppliers, taxing authorities and others; provided that certain Capital Expenditures have been made to the Hotel Properties prior to the Effective Date for which the payment is not past due), except (A) Permitted Encumbrances and (B) the Personal Property ( plus any replacements thereof) owned by the participating lessee for such Existing Property.
Section 4.20      Leasing Arrangements . Except for (i) those Operating Leases between a Property Owner and LaSalle Leasing or a wholly-owned Subsidiary of LaSalle Leasing and (ii) the Approved Third Party Operating Leases, the only material leases of Unencumbered Properties for which either the Borrower or a Material Subsidiary is a lessee are the Qualified Ground Leases. The Property Owner for a Real Property subject to a Qualified Ground Lease is the lessee under such Qualified Ground Lease and no consent is necessary to such Person being the lessee under such Qualified Ground Lease which has not already been obtained. The Qualified Ground Leases are in full force and effect and no defaults exist thereunder. As of the Closing Date, each ground lease or ground sublease listed on Schedule 1.01(d) meets the qualifications of a “Qualified Ground Lease” under the definition thereof.
Section 4.21      Unencumbered Properties . The Borrower represents to the Banks and the Administrative Agent that the Unencumbered Properties as of the date of this Agreement are identified as such on Schedule 1.01(b) attached hereto.
Section 4.22      OFAC . None of the Parent, the Borrower, any Guarantor, any Material Subsidiary, any of their respective Subsidiaries or, to their knowledge, any director, officer, employee, agent or Affiliate thereof, is, or is owned or controlled by Persons that are (A) currently subject to any sanctions administered or enforced by the United States government (including, without limitation, OFAC) (“ Sanctions ”) or (B) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions; and the Borrower will not directly or indirectly use the Letters of Credit and the proceeds of the Advances or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any Sanctions or in any manner that will result in a violation of Sanctions or any Anti-Corruption Laws applicable to any party hereto. Each of the Parent, the Borrower, the Guarantors, the Material Subsidiaries, their respective Subsidiaries and, to their knowledge, each of the

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directors, officers, employees, agents or Affiliates thereof, is in material compliance with all applicable Sanctions and Anti-Corruption Laws. In addition, the Borrower hereby agrees to provide to the Banks any additional information that a Bank deems reasonably necessary from time to time in order to ensure compliance with all applicable Sanctions and Anti-Corruption Laws.
Section 4.23      EEA Financial Institution . Neither the Borrower, the Parent nor any of their respective Subsidiaries nor any general partner or managing member of any of the foregoing, as applicable, is an EEA Financial Institution.
ARTICLE V

AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have any Commitment hereunder, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), the Borrower agrees to comply and, where applicable, cause the Parent to comply with the following covenants.
Section 5.01      Compliance with Laws, Etc. The Borrower will comply, and cause each of its Subsidiaries and the Parent to comply, in all material respects with all Legal Requirements.
Section 5.02      Preservation of Existence, Separateness, Etc. (a) The Borrower will (i) preserve and maintain, and cause each of its Subsidiaries and the Parent to preserve and maintain, its partnership, limited liability company, corporate or trust (as applicable) existence, rights, franchises and privileges in the jurisdiction of its formation, and (ii) qualify and remain qualified, and cause each such Subsidiary and the Parent to qualify and remain qualified, as a foreign partnership, limited liability company, corporation or trust, as applicable, in each jurisdiction in which qualification is necessary or desirable in view of its business and operations or the ownership of its properties, and, in each case, where failure to qualify or preserve and maintain its rights and franchises could reasonably be expected to cause a Material Adverse Change.
(b)    (i)  The Parent Common Stock shall at all times be duly listed on the New York Stock Exchange, Inc. or another nationally recognized stock exchange and (ii) the Parent shall timely file all reports required to be filed by it with the New York Stock Exchange, Inc. and the Securities and Exchange Commission or such other nationally recognized stock exchange, as applicable.
(c)    The Borrower shall cause the Permitted Other Subsidiaries which have Indebtedness and own a Hotel Property to, (i) maintain financial statements, payroll records, accounting records and other corporate records and other documents separate from each other and any other Person, (ii) maintain its own bank accounts in its own name, separate from each other and any other Person, (iii) pay its own expenses and other liabilities from its own assets and incur (or endeavor to incur) obligations to other Persons based solely upon its own assets and creditworthiness and not upon the creditworthiness of each other or any other Person, and (iv) file its own tax returns or, if part of a consolidated group, join in the consolidated tax return of such group as a separate member thereof. The Borrower shall use reasonable efforts to correct any known misunderstanding or misrepresentation regarding the independence of the Permitted Other Subsidiaries from the Borrower and the Borrower’s other Subsidiaries.
(d)    The Borrower shall, and shall cause the Permitted Other Subsidiaries which have Indebtedness and own a Hotel Property to, take all actions necessary to keep such Permitted Other Subsidiaries separate from the Borrower and the Borrower’s other Subsidiaries, including, without limitation, (i) the taking of action under the direction of the Board of Directors, members or partners, as applicable, of such Permitted Other Subsidiaries and, if so required by the Certificate of Incorporation or the bylaws, operating agreement or partnership agreement, as applicable, of such Permitted Other Subsidiaries or by any Legal Requirement, the approval or consent of the stockholders, members or partners, as applicable, of such Permitted Other Subsidiaries, (ii) the preparation of corporate, partnership or limited liability company minutes for or other appropriate evidence of each significant transaction engaged in by such Permitted Other Subsidiaries, (iii) the observance of separate approval procedures for the adoption of

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resolutions by the Board of Directors or consents by the partners, as applicable, of such Permitted Other Subsidiaries, on the one hand, and of the Borrower and the Borrower’s other Subsidiaries, on the other hand, (iv) the holding of the annual stockholders meeting, if applicable, of such Permitted Other Subsidiaries, which are corporations on a date other than the date of the annual stockholders’ meeting of the Parent, and (v) preventing the cash, cash equivalents, credit card receipts or other revenues of the Hotel Properties owned by such Permitted Other Subsidiaries or any other assets of such Permitted Other Subsidiaries from being commingled with the cash, cash equivalents, credit card receipts or other revenues collected by the Borrower or the Borrower’s other Subsidiaries, provided that the foregoing shall not prohibit a Permitted Other Subsidiary from making dividend payments or distributions to the Borrower.
(e)    The Borrower shall, and shall cause the Permitted Other Subsidiaries to, manage the business of and conduct the administrative activities of the Permitted Other Subsidiaries independently from the business of the Borrower, any of the Borrower’s other Subsidiaries and any other Person. Any moneys earned by the Permitted Other Subsidiaries on their assets or proceeds of the sale of any of their assets shall be deposited in bank accounts separate from any of the assets of the Borrower, any of the Borrower’s other Subsidiaries and any other Person, and no assets of the Permitted Other Subsidiaries shall become commingled with assets of such Persons.
(f)    The Borrower shall hold itself out, and shall continue to hold itself out, to the public and to its creditors as a legal entity, separate and distinct from all other entities, and shall continue to take all steps reasonably necessary to avoid (i) misleading any other Person as to the identity of the entity with which such Person is transacting business or (ii) implying that the Borrower is, directly or indirectly, absolutely or contingently, responsible for the Indebtedness or other obligations of the Permitted Other Subsidiaries or any other Person.
Section 5.03      Payment of Taxes, Etc. The Borrower will pay and discharge, and cause each of its Subsidiaries and the Parent to pay and discharge, before the same shall become delinquent (a) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or Property that are material in amount, prior to the date on which penalties attach thereto and (b) all lawful claims that are material in amount which, if unpaid, might by Legal Requirement become a Lien upon its Property; provided , however , that neither the Borrower nor any such Subsidiary or the Parent shall be required to pay or discharge any such tax, assessment, charge, levy, or claim (a) which is being contested in good faith and by appropriate proceedings, (b) with respect to which reserves in conformity with GAAP have been provided, (c) such charge or claim does not constitute and is not secured by any choate Lien on any portion of any Hotel Property and no portion of any Hotel Property is in jeopardy of being sold, forfeited or lost during or as a result of such contest, (d) neither the Administrative Agent nor any Bank could become subject to any civil fine or penalty or criminal fine or penalty, in each case as a result of non‑payment of such charge or claim and (e) such contest does not, and could not reasonably be expected to, result in a Material Adverse Change.
Section 5.04      Visitation Rights; Bank Meeting . At any reasonable time and from time to time and so long as any visit or inspection will not unreasonably interfere with the Borrower’s or any of its Subsidiaries’ or the Parent’s operations, upon reasonable notice and during normal business hours, the Borrower will, and will cause its Subsidiaries and the Parent and any participating lessees to, permit the Administrative Agent or any of its agents or representatives thereof (at the Parent’s or the Borrower’s expense) and any Bank or any of its agents or representatives thereof (at such Bank’s expense), to examine and make copies of and abstracts from the records and books of account of, and visit and inspect at its reasonable discretion the properties of, the Borrower and any such Subsidiary and the Parent, to discuss the affairs, finances and accounts of the Borrower and any such Subsidiary and the Parent with any of their respective officers or directors. Without in any way limiting the foregoing, the Borrower will, upon the request of the Administrative Agent, participate in a meeting with the Administrative Agent and the Banks once during each calendar year to be held at a location as may be agreed to by the Borrower and the Administrative Agent at such time as may be agreed to by the Borrower and the Administrative Agent; provided that, without limitation of the provisions of Section 11.04, the Borrower shall not be obligated to reimburse the Banks for such Persons’ travel expenses in connection with such meeting.
Section 5.05      Reporting Requirements . The Borrower will furnish to the Administrative Agent and the Banks in each case in accordance with Section 11.02(b):

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(a)     Quarterly Financials . As soon as available and in any event not later than 45 days after the end of each Fiscal Quarter of the Parent (except when such Fiscal Quarter ends on the same day as the end of a Fiscal Year of Parent), the unaudited Consolidated balance sheets of the Parent and its Subsidiaries as of the end of such quarter and the related unaudited statements of income, shareholders’ equity and cash flows of the Parent and its Subsidiaries for such Fiscal Quarter and the period commencing at the end of the previous year and ending with the end of such Fiscal Quarter, and the corresponding figures as at the end of, and for, the corresponding periods in the preceding Fiscal Year, all duly certified with respect to such statements (subject to year‑end audit adjustments) by a Responsible Officer of the Parent as having been prepared in accordance with GAAP, together with a Compliance Certificate duly executed by a Responsible Officer of the Parent.
(b)     Annual Financials . As soon as available and in any event not later than 90 days after the end of each Fiscal Year of the Parent, a copy of the annual audit report for such year for the Parent and its Subsidiaries, including therein the Consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year and the related Consolidated statements of income, shareholders’ equity and cash flows of the Parent and its Subsidiaries for such Fiscal Year, and the corresponding figures as at the end of, and for, the preceding Fiscal Year, and certified by KPMG L.L.P. or other independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent in an opinion, without qualification as to the scope, and including, if requested by the Administrative Agent, any management letters delivered by such accountants to the Parent in connection with such audit, together with a Compliance Certificate duly executed by a Responsible Officer of the Parent.
(c)     Notices of Material Variations and Supplemental Reports . As soon as available and in any event not later than 60 days after the end of each Fiscal Quarter of the Parent and 90 days after the end of each Fiscal Year of the Parent, (i) written notice of any anticipated material variation to the consolidated operating budget or a Capital Expenditure and FF&E expenditure budget prepared pursuant to Section 5.05(d), except for such changes resulting from the acquisition of a New Property or the acquisitions of New Properties, (ii) a report certified by a Responsible Officer of the Parent setting forth for each Unencumbered Property for the Fiscal Quarter just ended the average daily rate, the average occupancy, the RevPAR, the total gross revenues, the total expenses, the Adjusted NOI and the payments made under the participating leases for such Hotel Properties, and (iii) a report certified by a Responsible Officer of the Parent setting forth for all of the Hotel Properties owned or leased by the Parent or any of its Subsidiaries on a Consolidated basis for the Fiscal Quarter just ended the average daily rate, the average occupancy, the RevPAR, the total gross revenues, the total expenses, the Adjusted NOI and the payments made under the participating leases for such Hotel Properties.
(d)     Annual Budgets . No later than 60 days after the start of each Fiscal Year, the annual operating budget and Capital Expenditure and FF&E expenditure budget for such Fiscal Year for (i) the Unencumbered Properties on a Consolidated basis, (ii) all of the Hotel Properties owned or leased by the Parent or any of its Subsidiaries on a Consolidated basis, and (iii) on a Consolidated basis for the Parent and its Subsidiaries, in each case in reasonable detail and duly certified by a Responsible Officer of the Parent as the budgets presented or to be presented to the Parent’s Board of Directors for their review.
(e)     Securities Law Filings . Promptly and in any event within 10 Business Days after the sending or filing thereof, copies of all proxy material, reports and other information which the Borrower, the Parent or any of their respective Subsidiaries sends to or files with the United States Securities and Exchange Commission or sends to all shareholders of the Parent or partners of the Borrower.
(f)     Defaults . As soon as possible and in any event within five days after the occurrence of each Default known to a Responsible Officer of the Borrower, the Parent or any of their respective Subsidiaries, a statement of an authorized financial officer or Responsible Officer of the Borrower setting forth the details of such Default and the actions which the Borrower has taken and proposes to take with respect thereto.
(g)     ERISA Notices . As soon as possible and in any event (i) within 30 days after the Parent, the Borrower or any of a Controlled Group knows that any Termination Event described in clause (a) of the

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definition of Termination Event with respect to any Plan has occurred, (ii) within 10 days after the Parent, the Borrower or any of a Controlled Group knows that any other Termination Event with respect to any Plan has occurred, a statement of the Chief Financial Officer of the Parent describing such Termination Event and the action, if any, which the Parent, the Borrower or such member of such Controlled Group proposes to take with respect thereto; (iii) within 10 days after receipt thereof by the Parent, the Borrower or any of a Controlled Group from the PBGC, copies of each notice received by the Parent, the Borrower or any such member of such Controlled Group of the PBGC’s intention to terminate any Plan or to have a trustee appointed to administer any Plan; and (iv) within 10 days after receipt thereof by the Parent, the Borrower or any member of a Controlled Group from a Multiemployer Plan sponsor, a copy of each notice received by the Parent, the Borrower or any member of such Controlled Group concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA.
(h)     Environmental Notices . Promptly upon receipt thereof by the Parent, the Borrower or any of their Subsidiaries, a copy of any form of notice, summons or citation received from the United States Environmental Protection Agency, or any other Governmental Authority concerning (i) violations or alleged violations of Environmental Laws, which seeks to impose liability therefor, (ii) any action or omission on the part of the Parent or Borrower or any of their present or former Subsidiaries in connection with Hazardous Waste or Hazardous Substances which, based upon information reasonably available to the Borrower, could reasonably be expected to cause a Material Adverse Change or an Environmental Claim in excess of $1,000,000, (iii) any notice of potential responsibility under CERCLA, or (iv) concerning the filing of a Lien upon, against or in connection with the Parent, Borrower, their present or former Subsidiaries, or any of their leased or owned Property, wherever located.
(i)     Other Governmental Notices or Actions . Promptly and in any event within five Business Days after receipt thereof by the Borrower, the Parent or any of their respective Subsidiaries, (i) a copy of any notice, summons, citation, or proceeding seeking to adversely modify in any material respect, revoke, or suspend any license, permit, or other authorization from any Governmental Authority, which action could reasonably be expected to cause a Material Adverse Change, and (ii) any revocation or involuntary termination of any license, permit or other authorization from any Governmental Authority, which revocation or termination could reasonably be expected to cause a Material Adverse Change.
(j)     Other Notices. (i) Promptly, a copy of any notice of default or any other material notice (including without limitation property condition reviews) received by the Borrower or any Material Subsidiary from any franchisor, property manager, or any ground lessor under a Qualified Ground Lease, and
(ii)    Promptly following any merger or dissolution of any Subsidiary of the Borrower which is permitted hereunder or event which would make any of the representations in Sections 4.01-4.04 untrue, notice thereof.
(k)     Material Litigation . As soon as possible and in any event within five days of any of the Borrower, the Parent or any of their respective Subsidiaries having knowledge thereof, notice of any litigation, claim or any other event which could reasonably be expected to cause a Material Adverse Change.
(l)     Certificate in Support of Release . Not more than 30 days prior to a request to release a Subsidiary’s obligations under the Guaranty pursuant to Section 5.09(b), a Compliance Certificate duly executed by a Responsible Officer of the Parent.
(m)     Investment Grade Rating Notice. Promptly upon a Responsible Officer becoming aware of a change in the Investment Grade Rating (including the initial issuance of any Investment Grade Rating) or any other credit rating given by S&P, Moody’s or another nationally-recognized rating agency to the Parent’s long‑term senior unsecured debt or any announcement that any such rating is “under review” or that such rating has been placed on a watch list or that any similar action has been taken by S&P, Moody’s or another nationally-recognized rating agency, notice of such change, announcement or action.

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(n)     Other Information . Such other information respecting the business or Properties, or the condition or operations, financial or otherwise, of the Borrower, the Parent or any of their respective Subsidiaries, as the Administrative Agent may from time to time reasonably request.
Section 5.06      Maintenance of Property . The Borrower will, and will cause each of its Subsidiaries to, (a) maintain their owned, leased, or operated Property in a manner substantially consistent with hotel properties and related property of the same quality and character and shall keep or cause to be kept every part thereof and its other properties in good condition and repair, reasonable wear and tear excepted, and make all reasonably necessary repairs, renewals or replacements thereto as may be reasonably necessary to conduct the business of the Borrower and its Subsidiaries, (b) not renovate or expand any such Hotel Property except for the renovation or expansion of a Hotel Property which complies with the limitations set forth in this Agreement on the aggregate amount of renovations and expansions the Borrower, the Parent and their Subsidiaries are permitted at any one time, (c) not knowingly or willfully permit the commission of waste or other injury, or the occurrence of pollution, contamination or any other condition in, on or about any Hotel Property, and (d) substantially maintain and repair each Hotel Property as required by any franchise agreement, license agreement, management agreement or ground lease for such Hotel Property. Except as may be required to maintain the Parent’s status as a REIT under the Code, any Capital Expenditures or expenditures or leases for FF&E made for any Hotel Property shall be in the name or for the benefit of the Property Owner for such Hotel Property.
Section 5.07      Insurance . The Borrower will maintain and/or remain the beneficiary under, and cause each of its Subsidiaries to maintain and/or remain the beneficiary under, the insurance required pursuant to Schedule 5.07.
Section 5.08      Use of Proceeds . The Letters of Credit and the proceeds of the Advances have been, and will be used by the Borrower for the purposes set forth in Section 4.09(a) and in compliance with all applicable Sanctions and Anti-Corruption Laws.
Section 5.09      New Guarantors . (a) The Borrower will promptly notify the Administrative Agent of the creation of or Investment in a Person which may fall within the definition of a Guarantor and will provide any financial and other information with respect to such Person as the Administrative Agent may reasonably request. In the event the Administrative Agent (after consultation with the Borrower) determines that such Person is required to be designated a Guarantor hereunder, the Administrative Agent shall provide notice of the same to the Borrower, it being understood and agreed that any Person that owns an Unencumbered Property and any Person who leases an Unencumbered Property as an Operating Lessee shall be required to become a Guarantor promptly and in any event on or prior to the date any Hotel Property owned or leased by such Person is included as an Unencumbered Property hereunder. Within 60 days after the Borrower’s receipt of such notice from the Administrative Agent, the Borrower shall cause such Person to deliver to the Administrative Agent (i) either (a) an original Guaranty and Environmental Indemnity executed by such Person or (b) an Accession Agreement executed by such Person, and (ii) such other information or documents with respect to such Person as the Administrative Agent may reasonably request.
(b)    If no Default exists at such time, and any Hotel Property no longer qualifies as an Unencumbered Property, any Subsidiary of the Borrower which directly or indirectly owned or leased such Hotel Property, but not any other Unencumbered Property, shall be automatically released from such Subsidiary’s obligations under the Guaranty upon such time that the Borrower provides the Administrative Agent with (i) a written notice of such event and (ii) a Compliance Certificate evidencing pro forma compliance with Article VII. The Administrative Agent shall, upon request from the Borrower and at the Borrower’s sole cost and expense, promptly execute and deliver documentation in form reasonably satisfactory to the Administrative Agent confirming such release.
(c)    The provisions of Section 5.09(a) and (b) shall only apply prior to an Investment Grade Release Event and from and after an Investment Grade Release Event no Subsidiary of the Borrower shall be required to become a Guarantor under this Agreement (except as provided in Section 5.10 hereof) in each case only so long as such Subsidiary (i) is not required by the terms of any other Senior Financing Transaction to become a guarantor or borrower of any of the obligations under such other Senior Financing Transaction and (ii) is not a guarantor or borrower in respect of any other Senior Financing Transaction.

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Section 5.10      Leverage Trigger Guarantors and Pledgors . (a) Upon the occurrence of a Leverage Trigger and not later than the Leverage Trigger Deadline, the Borrower shall cause each Eligible Subsidiary Guarantor that is not then a party to the Guaranty and Environmental Indemnity to deliver to the Administrative Agent (i) either (a) an original Guaranty and Environmental Indemnity executed by such Eligible Subsidiary Guarantor or (b) an Accession Agreement executed by such Eligible Subsidiary Guarantor, and (ii) such other information or documents with respect to each Eligible Subsidiary Guarantor as the Administrative Agent may reasonably request.
(b)    Upon the occurrence of a Leverage Trigger and not later than the Leverage Trigger Deadline, the Borrower shall cause each direct owner of all or a portion of the Equity Interests in an Eligible Subsidiary Guarantor (each, a “ Pledgor ”) to deliver to the Administrative Agent (i) an original Pledge Agreement, (ii) to the extent any Equity Interest subject to the Pledge Agreement is certificated, an original certificate evidencing ownership of such Equity Interests with a power executed in blank, in each case executed by such Pledgor with respect to its Equity Interests in the applicable Eligible Subsidiary Guarantor and (iii) to the extent any Equity Interest subject to the Pledge Agreement is uncertificated, such other documents, instruments, statements and records as the Administrative Agent may reasonably require to perfect the security interest in the pledged Equity Interests. The Administrative Agent may file UCC financing statements in the jurisdictions it deems appropriate in connection with such pledges.
(c)    If, following a Leverage Trigger, (i) as of the end of the two (2) most recent consecutive Fiscal Quarters, the Leverage Ratio is equal to or less than 6.50:1.00, and (ii) no Default exists at such time, then, except to the extent any Eligible Subsidiary Guarantor is required to be a Guarantor under this Agreement irrespective of Section 5.10(a), all Eligible Subsidiary Guarantors and Pledgors shall be released from their obligations under each Guaranty, Environmental Indemnity and Pledge Agreement and all underlying Liens (and documentation evidencing same) shall be released promptly following the receipt by the Administrative Agent of a release request, which request shall (x) specify the proposed date for the release, which shall be not less than 15 Business Days after the date of receipt of the notice (the “ Leverage Release Date ”), (y) if not already provided, provide financial statements for such Fiscal Quarters, and (z) contain a certification from a Responsible Officer that the conditions to release of the Eligible Subsidiary Guarantors and Pledgors and related Liens under this Section 5.10(c) have been satisfied (and, if not already provided, a computation of the Leverage Ratio demonstrating that the Leverage Ratio is equal to or less than 6.50:1.00). In the event a Leverage Trigger occurs at any time after a Leverage Release Date, then the requirements of Section 5.10(a) and Section 5.10(b) with respect to new guaranties, environmental indemnities and pledges shall once again be in effect.
ARTICLE VI

NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have any Commitment, the Borrower agrees, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), to comply and, where applicable, cause the Parent to comply with the following covenants.
Section 6.01      Liens, Etc . The Borrower will not create, assume, incur or suffer to exist, or permit any of its Subsidiaries (except for Permitted Other Subsidiaries) to create, assume, incur, or suffer to exist, any Lien on or in respect of any of its Property whether now owned or hereafter acquired, or assign any right to receive income, except that the Borrower and its Subsidiaries may create, incur, assume or suffer to exist Liens:
(a)    securing the Obligations;
(b)    for taxes, assessments or governmental charges or levies on Property of the Borrower or any Material Subsidiary to the extent not required to be paid pursuant to Sections 5.03;
(c)    imposed by law (such as landlords’, carriers’, warehousemen’s and mechanics’ liens or otherwise arising from litigation) (a) which are being contested in good faith and by appropriate proceedings, (b) with respect to which reserves in conformity with GAAP have been provided, (c) which have not resulted in any Hotel Property being in jeopardy of being sold, forfeited or lost during or as a result of such contest,

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(d) neither the Administrative Agent nor any Bank could become subject to any civil fine or penalty or criminal fine or penalty, in each case as a result of non‑payment of such charge or claim and (e) such contest does not, and could not reasonably be expected to, result in a Material Adverse Change;
(d)    on leased personal property to secure solely the lease obligations associated with such property;
(e)    securing Secured Recourse Indebtedness and Secured Non‑Recourse Indebtedness permitted pursuant to the provisions of Section 6.02; and
(f)    on the collateral pledged pursuant to any Pledge Agreement then in effect to secure any Indebtedness permitted under Section 6.02(a) or (e) which is pari passu with the Obligations.
Section 6.02      Indebtedness . The Borrower, the Parent and their respective Subsidiaries will not incur or permit to exist any Indebtedness other than the Obligations and the following:
(a)    Unsecured Indebtedness; provided, however, that the maximum principal amount of the LHL Facility and any Refinancing Debt in respect thereof shall not exceed $25,000,000 at any time;
(b)    In each case to the extent the covenants contained in Article VII are complied with, (i) Secured Non-Recourse Indebtedness incurred by Permitted Other Subsidiaries and (ii) Secured Recourse Indebtedness incurred by the Parent, the Borrower and Permitted Other Subsidiaries;
(c)    The Swap Contracts with the Swap Banks in effect as of the Closing Date and any other Indebtedness in the form of Interest Rate Agreements; provided that (i) such agreements shall be unsecured, (ii) the dollar amount of indebtedness subject to such agreements and the indebtedness subject to Interest Rate Agreements in the aggregate shall not exceed the sum of the amount of the Commitments and other Indebtedness permitted pursuant to this Section 6.02 which bears interest at a variable rate, and (iii) the agreements shall be at such interest rates and otherwise in form and substance reasonably acceptable to the Administrative Agent;
(d)    Any of the following Indebtedness incurred by the Parent (to the extent the same constitutes Indebtedness):
(i)    guaranties in connection with the Indebtedness secured by a Hotel Property of (A) if the Hotel Property is subject to a ground lease, the payment of rent under such ground lease, (B) real estate taxes relating to such Hotel Property, and (C) capital reserves required under such Indebtedness;
(ii)    indemnities for certain acts of malfeasance, misappropriation and misconduct and an environmental indemnity for the lender under Indebtedness permitted under this Agreement;
(iii)    indemnities for certain acts of malfeasance, misappropriation and misconduct by the Permitted Other Subsidiaries, environmental indemnities, and other customary non-recourse carveouts as described in the definition of “Secured Non-Recourse Indebtedness”, all for the benefit of the lenders of other Permitted Other Subsidiary Indebtedness in connection with such Indebtedness; and
(iv)    guaranties of franchise agreements;
(e)    If and to the extent the same would not otherwise be permitted under paragraphs (a) through (d) above, extensions, renewals and refinancing of any of the Indebtedness specified in paragraphs (a) - (d) above (any such extension, renewal or refinancing, “ Refinancing Debt” ) so long as (A) the principal amount of such Indebtedness is not thereby increased and (B) the other material terms, taken as a whole, of any such

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Indebtedness are no less favorable in any material respect to the Borrower, the Parent or any of their respective Subsidiaries or the Banks than the terms governing the Indebtedness being extended, renewed or refinanced;
(f)    Indebtedness of a Material Subsidiary to the Borrower or another Material Subsidiary provided such Indebtedness is subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent; and
(g)    Capital Leases for personal property not to exceed in the aggregate $5,000,000 at any time outstanding; provided , however , that for purposes of this clause (g), no Qualified Ground Lease shall comprise a Capital Lease.
Section 6.03      Agreements Restricting Distributions From Subsidiaries . The Borrower will not, nor will it permit any of its Subsidiaries (other than Permitted Other Subsidiaries) to, enter into any agreement (other than a Credit Document) which limits distributions to or any advance by any of the Borrower’s Subsidiaries to the Borrower.
Section 6.04      Restricted Payments . Neither the Parent, the Borrower, nor any of their respective Subsidiaries, will make any Restricted Payment, except that:
(a)    the Parent may pay cash dividends to its shareholders with respect to Parent Common Stock, so long as no Default has occurred and is continuing or would result therefrom; provided, however , that during a Leverage Trigger Period, dividends with respect to Parent Common Stock shall not exceed the greatest of (i) the minimum amount necessary for the Parent to maintain is status as a REIT, and (ii) 95% of the Parent’s adjusted funds from operations, and (iii) 100% of the Parent’s taxable income;
(b)    provided no Default has occurred and is continuing or would result therefrom, the Borrower shall be entitled to make cash distributions to its partners, including the Parent;
(c)    a Subsidiary of the Borrower may make a Restricted Payment to the Borrower;
(d)    the limited partners of the Borrower shall be entitled to exchange limited partner Equity Interests in the Borrower for the Parent’s stock or redeem such Equity Interests for cash, as provided in the Borrower’s limited partnership agreement;
(e)    the Borrower shall be entitled to issue limited partner Equity Interests in the Borrower in exchange of Equity Interests in Subsidiaries and Unconsolidated Entities which own a Future Property to the extent such Investment is permitted pursuant to the provisions of Section 6.07;
(f)    provided no Default has occurred and is continuing or would result therefrom, the Parent may pay cash dividends to holders of the Parent’s preferred stock; provided , however , that during any Leverage Trigger Period, the Parent may not pay cash dividends to holders of the Parent’s preferred stock that are Affiliates of the Borrower or the Parent (to the extent the making of such distinction is not prohibited by applicable law), unless such Affiliate is also a Guarantor hereunder at such time; and
(g)    provided no Default has occurred and is continuing or would result therefrom, the Parent may repurchase Parent Common Stock and repurchase or redeem the Parent’s preferred stock.
Notwithstanding the foregoing, but subject to the following sentence, if a Default or Event of Default shall have occurred and be continuing, the Parent may only declare or make cash distributions to its shareholders during any Fiscal Quarter in an aggregate amount not to exceed the minimum amount necessary for the Parent to maintain its status as a REIT. If a Default or Event of Default specified in Section 8.01(a) or Section 8.01(f) of this Agreement shall have occurred and be continuing, or if as a result of the occurrence of any other Event of Default the Obligations have been accelerated pursuant to Section 8.02 of this Agreement, the Parent shall not, and shall not permit any of its Subsidiaries to, make any Restricted Payments to any Person whatsoever other than to the Borrower or any of its Subsidiaries.

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Section 6.05      Fundamental Changes; Asset Dispositions . Neither the Parent, the Borrower, nor any of their respective Subsidiaries (other than the Permitted Other Subsidiaries) will, (a) merge or consolidate with or into any other Person, unless (i) a Subsidiary other than a Permitted Other Subsidiary (or another Person, if such merger with another Person is to effect an Investment permitted hereunder) is merged into the Borrower or another Subsidiary other than a Permitted Other Subsidiary and the Borrower or such other Subsidiary other than a Permitted Other Subsidiary, as the case may be, is the surviving Person or a Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other than the Obligations) is merged into any Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other than the Obligations), and (ii) immediately after giving effect to any such proposed transaction no Default would exist; (b) sell, transfer, or otherwise dispose of all or any of such Person’s material property except for a Permitted Hotel Sale, dispositions or replacements of personal property in the ordinary course of business, or Hotel Properties which are not Unencumbered Properties; (c) sell or otherwise dispose of any material Equity Interests in any Subsidiary (except for a Permitted Other Subsidiary and except to effectuate a Permitted Hotel Sale); (d) except for sales of Equity Interests not prohibited by this Agreement and the issuance of limited partner Equity Interests in the Borrower in exchange for Equity Interests in Subsidiaries and Unconsolidated Entities to the extent permitted pursuant to the provisions of Section 6.04, materially alter the corporate, capital or legal structure of any such Person (except for a Permitted Other Subsidiary); (e) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)  provided that nothing herein shall prohibit the Borrower from dissolving any Subsidiary which has no assets on the date of dissolution or (f) materially alter the character of their respective businesses from that conducted as of the date of this Agreement; in each case provided that the Parent shall be permitted to issue (i) Parent Common Stock and (ii) preferred stock in the Parent which is not deemed Indebtedness under this Agreement.
Section 6.06      Participating Lessee Ownership . Neither the Parent nor the Borrower shall, nor shall permit any of their respective Subsidiaries to, own directly or indirectly such a percentage of the beneficial Equity Interests in any participating lessee as would cause a potential Event of Default under Section 8.01(m) of this Agreement.
Section 6.07      Investments, Loans, Future Properties . Neither the Parent nor the Borrower shall, nor shall permit any of their respective Subsidiaries to, acquire by purchase, or otherwise, all or substantially all of the business, property or fixed assets of any Person or any Hotel Property or other real estate, make or permit to exist any loans, advances or capital contributions to, or make any Investments in (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or purchase or commit to purchase any evidences of Indebtedness of, Equity Interests in any Person, except the following ( provided that after giving effect thereto there shall exist no Default):
(a)    Liquid Investments;
(b)    trade and customer accounts receivable which are for goods furnished or services rendered in the ordinary course of business and are payable in accordance with customary trade terms, and other assets owned in the ordinary course of owning the Hotel Properties and operating the business of the Borrower and its Subsidiaries;
(c)    a Future Property (or a Person that owns a Future Property) which qualifies as an Unencumbered Property or a Permitted Non‑Unencumbered Property; provided that no such individual Hotel Property shall exceed 30% of the Consolidated Total Book Value;
(d)    Investments in (i) unimproved land which do not in the aggregate have an Investment Amount which exceeds 5% of the Consolidated Total Book Value; (ii) Development Properties which do not in the aggregate have an Investment Amount which exceeds 15% of the Consolidated Total Book Value, (iii) Unconsolidated Entities which do not in the aggregate have an Investment Amount which exceeds 15% of the Consolidated Total Book Value, and (iv) mortgages, deeds of trust, deeds to secure debt or similar instruments that are a lien on real property or mezzanine loans that are secured by pledges of Equity Interests in entities that directly or indirectly own real property, in each case where such real property is improved by fully operational hotels and which instruments and pledges secure Indebtedness evidenced by a note or bond, which do not in the aggregate have an Investment Amount which exceeds 10% of the Consolidated Total Book Value; provided that the aggregate Investment Amount for all Investments made pursuant to this Section 6.07(d) shall not exceed 30% of the Consolidated Total Book Value;

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(e)    Investments in Subsidiaries that are used by such Subsidiaries to make Investments permitted under this Section 6.07;
(f)    Capital Expenditures in Hotel Properties; and
(g)    any other Investments not covered by the preceding paragraphs of this Section 6.07 and not otherwise prohibited by this Agreement, provided that the aggregate Investment Amount for all Investments made pursuant to this clause (g) shall not exceed 0.50% of Consolidated Total Book Value.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their respective Subsidiaries shall acquire a Future Property or otherwise make an Investment which would (a) cause a Default, (b) cause or result in the Borrower or the Parent failing to comply with any of the financial covenants contained herein, (c) cause the aggregate Investment Amount for (i) all Future Properties located outside the United States and (ii) all Investments made pursuant to Section 6.07(d) which are either located outside the United States or in an Unconsolidated Entity which has at least 50% of its assets located outside the United States to exceed 10% of the Consolidated Total Book Value or (e) cause the Parent’s or any Subsidiary’s Investment in the Personal Property for any Hotel Property to cause a potential Event of Default under Section 8.01(m) of this Agreement.
Section 6.08      Affiliate Transactions . Except as otherwise approved by a majority of the Board of Trustees of the Parent including a majority of the independent trustees, the Borrower will not, and will not permit any of its Subsidiaries to, make, directly or indirectly (a) any transfer, sale, lease, assignment or other disposal of any assets to any Affiliate of the Borrower which is not a Guarantor or any purchase or acquisition of assets from any such Affiliate; or (b) any arrangement or other transaction directly or indirectly with or for the benefit of any such Affiliate (including without limitation, guaranties and assumptions of obligations of an Affiliate), other than in the ordinary course of business and at market rates.
Section 6.09      Sale and Leaseback . The Borrower will not, and will not permit any of its Subsidiaries to, enter into any arrangement with any Person, whereby in contemporaneous transactions the Borrower or such Subsidiary sells essentially all of its right, title and interest in a material asset and the Borrower or such Subsidiary acquires or leases back the right to use such property.
Section 6.10      Sale or Discount of Receivables . The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, sell with recourse, or discount or otherwise sell for less than the face value thereof, any of its notes or accounts receivable, other than in the ordinary course of business and consistent with past and existing business practices.
Section 6.11      Restriction on Negative Pledges . The Borrower will not, and will not permit any of its Subsidiaries that directly or indirectly own an interest in any Unencumbered Property to, enter into or suffer to exist any agreement (other than (i) this Agreement and the Credit Documents, (ii) any agreement that conditions the ability of the Parent or its Subsidiaries to encumber their assets upon the maintenance of one or more specified ratios that limit the ability of such Persons to encumber their assets but that do not generally prohibit the encumbrance of assets or the encumbrance of specific assets, and (iii) a provision in any agreement governing Qualified Unsecured Debt generally prohibiting the encumbrance of assets (exclusive of any outright prohibition on the encumbrance of particular Unencumbered Properties) so long as such provision is generally consistent with a comparable provision of the Credit Documents) prohibiting the creation or assumption of any Lien upon the Unencumbered Properties, whether now owned or hereafter acquired; provided that, the Borrower and its Subsidiaries that are Material Subsidiaries may permit a Lien upon a Hotel Property that was an Unencumbered Property at the end of the immediately preceding Fiscal Quarter of the Parent, so long as no Default exists at such time or would be caused thereby and the Borrower has provided to the Administrative Agent a Compliance Certificate evidencing pro forma compliance with Article VII following the removal of such Hotel Property as an Unencumbered Property.
Section 6.12      Material Documents . The Borrower will not, nor will it permit any of its Subsidiaries (other than Permitted Other Subsidiaries) to, enter into any termination, modification or amendment of any of the following documents without the prior written consent of the Administrative Agent:

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(a)    Qualified Ground Lease; and
(b)    Any other material agreement, including without limitation any participating lease or management agreement.
provided , however , that so long as no Default or Event of Default has occurred and is continuing, such terminations, modifications or amendments shall be permitted so long as they could not reasonably be expected to (i) cause a Material Adverse Change or (ii) impair or otherwise adversely affect in any material respect the interests or rights of the Administrative Agent or any Bank, in each case after taking into account the effect of any agreements that supplement or serve to replace, in whole or in part, such Qualified Ground Leases or other material agreements. Any termination, modification or amendment prohibited under this Section 6.12 shall, to the extent permitted by applicable law, be void and of no force and effect.
Section 6.13      Limitations on Development, Construction, Renovation and Purchase of Hotel Properties . Neither the Parent nor the Borrower shall or shall permit any of their respective Subsidiaries to (a) engage in the development, construction or expansion of any Hotel Properties (except for Development Properties permitted by the provisions of Section 6.07) or (b) enter into any binding agreements to purchase Hotel Properties or other assets; provided that the Parent, the Borrower and their Subsidiaries may enter into binding agreements to purchase Hotel Properties or other assets if at all times such Person has available sources of capital equal to the portion of the purchase price of such Hotel Properties or other assets which constitutes a recourse obligation of the Parent, the Borrower or its Subsidiary, which available sources of capital may include Advances to the extent that the Borrower may borrow the same for the purposes required or other Indebtedness permitted by the terms of this Agreement.
Section 6.14      OFAC . The Parent will not, and will not permit any of its Subsidiaries to, knowingly engage in any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is, or whose government is, the subject of Sanctions.
Section 6.15      Voluntary Prepayments during a Leverage Trigger Period . Notwithstanding anything contained herein to the contrary, during any Leverage Trigger Period, the Parent will not, and will not permit any of its Subsidiaries to:
(a)    make (or give any notice in respect of) any voluntary or optional payment or prepayment on or voluntary or optional redemption or acquisition for value of, including, in each case without limitation, by way of depositing with the trustee with respect thereto money or securities before due for the purpose of paying when due any Indebtedness that is pari passu with the Revolving Facility and the TL Facility, any Secured Non-Recourse Indebtedness or any subordinated Indebtedness other than any payment, prepayment, redemption or acquisition for value of the LHL Facility or any Refinancing Debt (without limitation of the obligations of the Borrower and the Guarantors under Section 2.07(c)); or
(b)    amend or modify, or permit the amendment or modification of, any Secured Non-Recourse Indebtedness, any Indebtedness subordinated to the Revolving Facility and the TL Facility, or any other Indebtedness pari passu with the Revolving Facility and the TL Facility or any agreement (including, without limitation, any purchase agreement, indenture or loan agreement) related thereto, to the extent such amendment or modification would accelerate or advance the maturity or other date of required principal payments of any such Indebtedness or declare it to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or include an offer to prepay, redeem, purchase or defease such Indebtedness, in each case prior to the then existing stated maturity thereof, other than in respect of Refinancing Debt (without limitation of the obligations of the Borrower and the Guarantors under Section 2.07(c)).

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ARTICLE VII

FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have any Commitment hereunder, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), the Borrower agrees to comply and cause the Parent to comply with the following covenants.
Section 7.01      Fixed Charge Coverage Ratio . The Parent shall maintain at the end of each Rolling Period a Fixed Charge Coverage Ratio of not less than 1.50 to 1.00.
Section 7.02      Maintenance of Net Worth . The Parent shall at all times maintain an Adjusted Net Worth of not less than the Minimum Tangible Net Worth.
Section 7.03      Limitations on Total Liabilities . The Parent shall not at any time permit the Leverage Ratio to be greater than 7.25 to 1.00.
Section 7.04      Limitations on Unsecured Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Parent’s Unsecured Indebtedness to (b) the Total Unencumbered Asset Value to exceed 60%; provided , however , that such ratio may be increased to 65% one or more times for two consecutive Fiscal Quarters following a Material Acquisition.
Section 7.05      Limitations on Secured Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Parent’s Secured Indebtedness to (b) the Consolidated Total Book Value to exceed 45%.
Section 7.06      Limitations on Secured Recourse Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Secured Recourse Indebtedness of the Parent and its Subsidiaries to (b) the Consolidated Total Book Value to exceed 10%.
ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.01      Events of Default . The occurrence of any of the following events shall constitute an “Event of Default” under any Credit Document:
(a)     Principal or Letter of Credit Obligation Payment . The Borrower shall fail to pay any principal of any Note or any Letter of Credit Obligation when the same becomes due and payable as set forth in this Agreement;
(b)     Interest or Other Obligation Payment . The Borrower shall fail to pay any interest on any Note or any fee or other amount payable hereunder or under any other Credit Document when the same becomes due and payable as set forth in this Agreement, provided however that the Borrower will have a grace period of five days after the payments covered by this Section 8.01(b) becomes due and payable for the first two defaults under this Section 8.01(b) in every calendar year;
(c)     Representation and Warranties . Any representation or warranty made or deemed to be made (i) by the Borrower in this Agreement or in any other Credit Document, (ii) by the Borrower (or any of its officers) in connection with this Agreement or any other Credit Document, or (iii) by the Parent or any Subsidiary in any Credit Document shall prove to have been incorrect in any material respect when made or deemed to be made;

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(d)     Covenant Breaches . (i) The Borrower shall fail to perform or observe any covenant contained in Sections 5.02(a)(i), (b)(i) or (f), 5.08, Article VI or Article VII of this Agreement or the Borrower shall fail to perform or observe, or shall fail to cause any Subsidiary other than a Permitted Other Subsidiary to perform or observe any covenant in any Credit Document beyond any notice and/or cure period for such default expressly provided in such Credit Document or (ii) the Borrower, the Parent or any Subsidiary other than a Permitted Other Subsidiary shall fail to perform or observe any term or covenant set forth in any Credit Document which is not covered by clause (i) above or any other provision of this Section 8.01, in each case if such failure shall remain unremedied for 30 days after the earlier of the date written notice of such default shall have been given to the Borrower, the Parent or such Subsidiary other than a Permitted Other Subsidiary by the Administrative Agent or any Bank or the date a Responsible Officer of the Borrower or any Material Subsidiary has actual knowledge of such default, unless such default in this clause (ii) cannot be cured in such 30 day period and the Borrower is diligently proceeding to cure, or caused to be cured, such default, in which event the cure period shall be extended to 90 days;
(e)     Cross‑Defaults . with respect to (i) any Secured Non‑Recourse Indebtedness which is outstanding in a principal amount of at least $220,000,000 individually or when aggregated with all such Secured Non‑Recourse Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries or (ii) any other Indebtedness (but excluding Indebtedness evidenced by the Notes) which is outstanding in a principal amount of at least $75,000,000 individually or when aggregated with all such Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries, any of the following:
(A)    any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof,
(B)    the Borrower, the Parent or any of their respective Subsidiaries shall fail to pay any principal of or premium or interest of any of such Indebtedness (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or
(C)    any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to permit the holders of such Indebtedness to accelerate the maturity of such Indebtedness;
(f)     Insolvency . The Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries, either such proceeding shall remain undismissed for a period of 60 days or any of the actions sought in such proceeding shall occur; or the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this paragraph (f);
(g)     Judgments . Any judgment or order for the payment of money in excess of $75,000,000 (reduced for purposes of this paragraph for the amount in respect of such judgment or order that a reputable insurer has acknowledged being payable under any valid and enforceable insurance policy) or in the case of a judgment in respect of any Secured Non-Recourse Indebtedness, in excess of $220,000,000, individually or

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in the aggregate, shall be rendered against the Borrower, the Parent or any of their respective Subsidiaries which, within 60 days from the date such final judgment is entered, shall not have been discharged or execution thereof stayed pending appeal;
(h)     ERISA . (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA, unless such Reportable Event, proceedings or appointment are being contested by the Parent or the Borrower in good faith and by appropriate proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) the Parent, the Borrower or any member of a Controlled Group shall incur any liability in connection with a withdrawal from a Multiemployer Plan or the insolvency (within the meaning of Section 4245 of ERISA) or reorganization (within the meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless such liability is being contested by the Parent or the Borrower in good faith and by appropriate proceedings, or (vi) any other event or condition shall occur or exist, with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could subject the Borrower, the Parent or any Material Subsidiary to any tax, penalty or other liabilities in the aggregate exceeding $75,000,000 at the time of such event or upon occurrence of such condition;
(i)     Guaranty . Any Guaranty shall for any reason cease to be valid and binding on any Guarantor or any Guarantor shall so state in writing;
(j)     Environmental Indemnity . Any Environmental Indemnity shall for any reason cease to be valid and binding on any Person party thereto or any such Person shall so state in writing;
(k)     LaSalle Leasing . The Borrower shall for any reason cease to own, directly or indirectly, at least 99.9% of the Equity Interests in LaSalle Leasing;
(l)     Default Under Qualified Ground Lease . Qualified Ground Leases for Hotel Properties which comprise 25% or more of the Asset Value have in the aggregate either (i) been terminated because of a default by the lessee under such Qualified Ground Lease or (ii) are subject to a default by the lessee under such Qualified Ground Lease which has not been cured or waived 10 days prior to the date the ground lessors under such Qualified Ground Lease would have the right to terminate such Qualified Ground Leases;
(m)     Parent’s REIT Status . There shall be a determination from the applicable Governmental Authority from which no appeal can be taken that the Parent’s tax status as a REIT has been lost;
(n)     Parent Common Stock . The Parent at any time hereafter fails to cause the Parent Common Stock to be duly listed on the New York Stock Exchange, Inc. or another nationally recognized stock exchange; or
(o)     Changes in Ownership and Control . Any of the following occur without the written consent of the Required Lenders: (A) the Parent (i) amends the Borrower’s partnership agreement in any material and adverse respect (which shall not include any customary amendments to reflect transactions permitted by this Agreement so long as such amendments are not otherwise adverse to the Administrative Agent, any Issuing Bank or any of the Banks, (ii) admits a new general partner to the Borrower, (iii) own less than 70% of the Equity Interests in and beneficial ownership of the Borrower, or (iv) resigns as general partner of the Borrower, or (B) the failure of individuals who are members of the board of directors (or similar governing body) of the Parent on the Closing Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Parent.

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Section 8.02      Optional Acceleration of Maturity . If any Event of Default (other than an Event of Default pursuant to Section 8.01(f) with respect to the Borrower or the Parent) shall have occurred and be continuing, then, and in any such event,
(a)    the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Bank to make Advances and the obligation of each Issuing Bank to issue, increase, or extend Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Notes, all interest thereon, the Letter of Credit Obligations, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest, all such Letter of Credit Obligations and all such amounts shall become and be forthwith due and payable in full, without presentment, demand, protest or further notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by the Borrower,
(b)    the Borrower shall, on demand of the Administrative Agent at the request or with the consent of the Required Class Lenders under the Revolving Facility, deposit into the Cash Collateral Account an amount of cash equal to the Letter of Credit Exposure as security for the Obligations to the extent the Letter of Credit Obligations are not otherwise paid at such time, and
(c)    the Administrative Agent shall at the request of, or may with the consent of, the Required Lenders proceed to enforce its rights and remedies under the Credit Documents for the ratable benefit of the Banks by appropriate proceedings.
Section 8.03      Automatic Acceleration of Maturity . If any Event of Default pursuant to Section 8.01(f) with respect to the Borrower or the Parent shall occur,
(a)    the obligation of each Bank to make Advances and the obligation of each Issuing Bank to issue, increase, or extend Letters of Credit shall immediately and automatically be terminated and the Notes, all interest on the Notes, all Letter of Credit Obligations, and all other amounts payable under this Agreement shall immediately and automatically become and be due and payable in full, without presentment, demand, protest or any notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by the Borrower; and
(b)    to the extent permitted by law or court order, the Borrower shall deposit into the Cash Collateral Account an amount of cash equal to the outstanding Letter of Credit Exposure as security for the Obligations to the extent the Letter of Credit Obligations are not otherwise paid at such time.
Section 8.04      Cash Collateral Account . (a) Pledge . The Borrower hereby pledges, and grants to the Administrative Agent for the benefit of the Banks, a security interest in all funds held in the Cash Collateral Account from time to time, but under the control of the Administrative Agent, and all proceeds thereof, as security for the payment of the Obligations, including without limitation all Letter of Credit Obligations owing to any Issuing Bank or any other Bank due and to become due from the Borrower to any Issuing Bank or any other Bank under this Agreement in connection with the Letters of Credit and the Borrower agrees to execute all cash management or cash collateral agreements and UCC–1 financing statements requested by the Administrative Agent as needed or desirable for the Administrative Agent to have a perfected first lien security interest in the Cash Collateral Account. Promptly upon the expiration or replacement of any Letter of Credit, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the Borrower such documents as the Borrower may reasonably request to evidence the release of the funds held in the Cash Collateral Account in respect of such Letter of Credit from the foregoing security interest.
(b)     Application against Letter of Credit Obligations . The Administrative Agent may, at any time or from time to time apply funds then held in the Cash Collateral Account to the payment of any Letter of Credit Obligations owing to any Issuing Bank, in such order as the Administrative Agent may elect, as shall have become or shall become due and payable by the Borrower to any Issuing Bank under this Agreement in connection with the Letters of Credit.

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(c)     Duty of Care . The Administrative Agent shall cause Citibank to exercise reasonable care in the custody and preservation of any funds held in the Cash Collateral Account and Citibank shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which Citibank accords its own property, it being understood that neither Citibank nor the Administrative Agent shall have any responsibility for taking any necessary steps to preserve rights against any parties with respect to any such funds.
Section 8.05      Non‑exclusivity of Remedies . No remedy conferred upon the Administrative Agent or the Banks is intended to be exclusive of any other remedy, and each remedy shall be cumulative of all other remedies existing by contract, at law, in equity, by statute or otherwise.
Section 8.06      Right of Set‑off . Upon (a) the occurrence and during the continuance of any Event of Default and (b) the granting of the consent, if any, specified by Section 8.02 to authorize the Administrative Agent to declare the Notes and any other amount payable hereunder due and payable pursuant to the provisions of Section 8.02 or the automatic acceleration of the Notes and all amounts payable under this Agreement pursuant to Section 8.03, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement, the Note held by such Bank, and the other Credit Documents, irrespective of whether or not such Bank shall have made any demand under this Agreement, such Note, or such other Credit Documents, and although such obligations may be unmatured. Each Bank agrees to promptly notify the Borrower after any such set‑off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set‑off and application. The rights of each Bank under this Section are in addition to any other rights and remedies (including, without limitation, other rights of set‑off) which such Bank may have; provided , however , that in the event that any Defaulting Lender exercises such right of set-off hereunder, (x) all amounts so set off will be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16(b) and, pending such payment, will be segregated by such Defaulting Lender form its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks and the Banks and (y) the Defaulting Lender will provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of set-off.
ARTICLE IX

NEW YORK PROPERTIES
Section 9.01      New York Term Notes . In the event the Borrower elects to acquire (whether through any of its Subsidiaries or otherwise) any Hotel Property located in the State of New York (any such Hotel Property, a “ New York Property ”), subject to the obligations of the relevant borrower under the related Existing New York Note, the Borrower shall provide to the Administrative Agent not less than 30 days’ prior written notice of such intent. In such notice the Borrower shall request a Borrowing (a “ New York Advance ”) in an amount not more than the outstanding principal amount of the related Existing New York Note and shall cause the related Existing New York Note and the related Existing New York Mortgage to be assigned to the Administrative Agent for the ratable benefit of the Banks. The obligation of the Administrative Agent and each Bank to make Advances in connection with such Borrowing shall be subject to compliance with the following conditions precedent: (i) no Default or Event of Default shall then exist, (ii) the Borrower shall have executed and delivered to the Administrative Agent a Notice of Borrowing in the amount of the related New York Advance in accordance with Section 2.02, and (iii) the Borrower shall have satisfied the applicable conditions set forth in Article III (including, but not limited to, any documentation required under Section 3.01(a)(xi) at least 45 days prior to the assignment of such Existing New York Note and Existing New York Mortgage to the Administrative Agent) and any other applicable conditions precedent to a Borrowing hereunder in connection with such Borrowing. The Borrower hereby acknowledges that upon the consummation of such purchase, the related Existing New York Note and Existing New York Mortgage shall be amended and restated as a New York Term Note and a New York Mortgage, substantially in the forms attached hereto as Exhibits H and I. For the avoidance of doubt, the parties hereby acknowledge that the Existing Park Central Mortgage and the Existing Park Central Note shall continue to be a New York Mortgage and a New York Term Note, respectively, under this Agreement, which shall be deemed to be a New York Mortgage hereunder, and the related note evidencing such Indebtedness shall be deemed to

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be a New York Term Note hereunder, in each case mutatis mutandis . Such New York Term Note will be in the amount of, and shall evidence, the related New York Advance and be made payable to the Administrative Agent and such New York Term Note and New York Mortgage will be held by the Administrative Agent for the ratable benefit of the Banks. So long as such New York Term Note remains outstanding, the following provisions shall apply:
(a)     New York Property as Unencumbered Property . The New York Property shall not be disqualified as an Unencumbered Property by reason of the related New York Mortgage so long as such New York Mortgage is held by the Administrative Agent for the ratable benefit of the Banks. To the extent such New York Property otherwise qualifies as an Unencumbered Property, then such New York Property shall constitute an Unencumbered Property hereunder and the Asset Value of such New York Property shall be included in the calculation of Total Unencumbered Asset Value.
(b)     Other Notes . Each New York Term Note shall evidence a portion of the same payment Obligations under the Credit Documents as those evidenced by the Notes. So long as (but only so long as) any New York Mortgage is held by the Administrative Agent as the mortgagee thereunder, then for purposes of Article VII, the indebtedness evidenced by the related New York Term Note shall be deemed to constitute Unsecured Indebtedness hereunder and shall not constitute Secured Indebtedness.
(c)     Payments on the New York Term Notes .
(i)     Last Repaid . So long as the total outstanding principal amount of the payment Obligations under the Credit Documents equals or exceeds the then total outstanding principal amount of the New York Term Notes, the principal amount of the payment Obligations evidenced by the New York Term Notes and secured by the New York Mortgages shall at all times equal only the total principal amount of the New York Term Notes. The principal amount of the New York Term Notes shall be reduced only by the last and final sums that the Borrower repays with respect to the Obligations under the Credit Documents and shall not be reduced by any intervening repayments of such Obligations. So long as the balance of the payment Obligations under the Credit Documents exceeds the then total outstanding principal amount of the New York Term Notes, any payments and repayments of such Obligations shall not be deemed to be applied against, or to reduce, the portion of such principal payment Obligations evidenced by the New York Term Notes and secured by the New York Mortgages. Notwithstanding the foregoing, the Borrower may direct the Administrative Agent to apply payments and repayments of payment Obligations under the Credit Documents against the portion of such Obligations evidenced by any New York Term Note and secured by any New York Mortgage. No Advances made under this Agreement subsequent to any particular New York Advance shall be deemed to be an Advance under the related New York Term Note or secured by the related New York Mortgage.
(ii)     Other Notes . Any amounts applied to reduce the payment Obligations evidenced by any New York Term Note shall correspondingly reduce the Obligations of the Borrower evidenced by the other Notes on a dollar-for-dollar basis.
(iii)     Repayments and Transfers . The Borrower may transfer or cause the transfer of any New York Property to any Person in compliance with Section 6.05. In such event and upon the request of the Borrower, the Administrative Agent shall cooperate in all reasonable respects with the Borrower to assign the related New York Term Note and the related New York Mortgage without representation, recourse or warranty (other than (A) that the Administrative Agent is the holder of the Indebtedness evidenced and secured thereby and (B) the then outstanding principal amount thereof) to any lender to the transferee of such Hotel Property as requested by the Borrower, at the Borrower’s sole cost and expense. Such assignment shall not require the approval of any Bank or be subject to the satisfaction of any conditions precedent other than the preparation (at the Borrower’s sole cost and expense) of appropriate assignment documentation in customary form and otherwise satisfactory to the Administrative Agent. Further, if requested at any time by the Borrower, a Subsidiary that owns a New York Property, the Administrative Agent or the Required Class Lenders

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with respect to any of the Collective Facilities, the Administrative Agent shall cause a New York Mortgage to be released. Such release of such New York Mortgage shall not require the consent of any Bank or be subject to the satisfaction of any conditions precedent other than the preparation (at the Borrower’s sole cost and expense) of appropriate release documentation in customary form and otherwise satisfactory to the Administrative Agent. Notwithstanding anything to the contrary contained in this Section 9.01, (1) any sale or other disposition of any New York Property occurring in connection with any such assignment or release of a New York Mortgage must comply with the provisions of Section 6.05 hereof and (2) from and after the time of any release or assignment of any New York Mortgage, any Indebtedness of the Borrower or any of its Subsidiaries secured by the related New York Property must not result in any Default or Event of Default under Section 6.02.
(iv)     Costs, Expenses and Indemnification . The provisions regarding costs and expenses and indemnification Obligations contained in Sections 11.04 and 11.07 of this Agreement shall apply in all respects to any transactions involving any Existing New York Note, any Existing New York Mortgage, any New York Term Note or any New York Mortgage and all actions taken or omitted to be taken by the Administrative Agent and the Banks in connection therewith. Neither the Administrative Agent nor any of the Banks shall be responsible for any losses, costs or expenses incurred by the Borrower or any of its Subsidiaries in connection with the loss of any recording tax credits or savings pertaining to any Existing New York Mortgage or any New York Mortgage. Further, without limitation of any other indemnification obligations of the Borrower pursuant to the Credit Documents, the Borrower will expressly indemnify the Administrative Agent and the Banks from any and all losses, costs and expenses (including reasonable legal fees) they may incur as a result of failure by the Borrower or any of its Subsidiaries to pay any recording or other documentary taxes associated with any Existing New York Mortgage or any New York Mortgage.
(d)     Borrower as Co-Obligor . The Borrower hereby acknowledges that it shall be deemed to be a co-obligor in respect of each New York Term Note. The liability of the Borrower for the obligations evidenced by each New York Term Note shall be absolute and unconditional irrespective of:
(i)    any lack of validity or enforceability of such New York Term Note, the related New York Mortgage, any other Credit Document, any participating lease for a Hotel Property or any other agreement or instrument relating thereto;
(ii)    any change in the time, manner, or place of payment of, or in any other term of, such New York Term Note or New York Mortgage, or any other amendment or waiver of or any consent to departure from any other Credit Document or any participating lease for a Hotel Property;
(iii)    any exchange, release, or nonperfection of any collateral, if applicable, or any release or amendment or waiver of or consent to departure from any other agreement or guaranty, relating to such New York Term Note or any related New York Mortgage; or
(iv)    any other circumstances which might otherwise constitute a defense available to, or a discharge of the Borrower in respect thereof.
(e)     Certain Waivers. The Borrower makes the waivers set forth below in respect of each New York Term Note and each New York Mortgage.
(i)     Notice. The Borrower hereby waives promptness, diligence, notice of acceptance, notice of acceleration, notice of intent to accelerate and any other notice with respect to any of its obligations under any New York Term Note or any New York Mortgage.
(ii)     Other Remedies. The Borrower hereby waives any requirement that the Administrative Agent or any Bank protect, secure, perfect, or insure any Lien or any Property subject thereto

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or exhaust any right or take any action against the Borrower or any other Person or any collateral, if any, including any action required pursuant to a Legal Requirement.
(iii)     Waiver of Subrogation .
(A)    The Borrower hereby irrevocably waives, until satisfaction in full of all of its obligations under the New York Term Notes and the New York Mortgages and termination of all Commitments, any claim or other rights which it may acquire against any Subsidiary that arise from the Borrower’s obligations under any New York Term Note, New York Mortgage or any other Credit Document, including, without limitation, any right of subrogation (including, without limitation, any statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of the Administrative Agent or any Bank against such Subsidiary or any collateral which the Administrative Agent or any Bank now has or acquires. If any amount shall be paid to the Borrower in violation of the preceding sentence and the obligations under such New York Term Note or such New York Mortgage shall not have been paid in full and all of the Commitments terminated, such amount shall be held in trust by the Administrative Agent for the ratable benefit of the Banks and shall promptly be paid to the Administrative Agent for the ratable benefit of the Banks to be applied to the obligations under such New York Term Note or such New York Mortgage, whether matured or unmatured, as the Administrative Agent may elect. The Borrower acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Agreement and that the waiver set forth in this clause (A) is knowingly made in contemplation of such benefits.
(B)    The Borrower further agrees that it will not enter into any agreement providing, directly or indirectly, for any contribution, reimbursement, repayment, or indemnity by any Subsidiary or any other Person on account of any payment by the Borrower to the Administrative Agent or any Bank under any New York Term Note or any New York Mortgage.
(f)     Rights of Qualified Unsecured Lenders. Notwithstanding any provision herein to the contrary, the Administrative Agent (i) shall not foreclose or otherwise enforce the Lien of any New York Mortgage without the prior written consent of each Qualified Unsecured Lender, acting in its sole discretion, and (ii) shall release the Lien of any New York Mortgage in accordance with Section 9.01(c)(iii) promptly upon the Administrative Agent’s receipt of a written notice from any Qualified Unsecured Lender (x) stating that an event of default has occurred and is continuing in respect of the related Qualified Unsecured Debt and (y) requesting, in the sole discretion of such Qualified Unsecured Lender, that such New York Mortgage be released. This Section 9.01(f) shall inure to the benefit of each Qualified Unsecured Lender as a third party beneficiary, provided that by its acknowledgement of this Article IX and acceptance of the benefits of this Section 9.01(f), each Qualified Unsecured Lender shall be deemed to have acknowledged (A) that nothing in this Agreement shall be deemed to create an advisory, fiduciary or agency relationship, or fiduciary duty between the Administrative Agent and any Qualified Unsecured Lender or any other holder of Qualified Unsecured Debt, and (B) that the Administrative Agent shall have no duty whatsoever to protect, secure, perfect, or insure the Lien of any New York Mortgage or to enforce any New York Mortgage against any Person or collateral, and (C) that such Qualified Unsecured Lender shall have no claim or cause of action in connection with any release of any New York Mortgage contemplated by this Article IX, the nonperfection or lack of priority of any New York Mortgage, or any action taken or omitted to be taken by the Administrative Agent in respect of a New York Mortgage in accordance with this Article IX. Notwithstanding any provision herein (including in Section 11.01) or in any other Credit Document to the contrary, neither this Section 9.01(f) nor the defined terms “Qualified Unsecured Lender,” “Qualified Unsecured Debt” and “New York Mortgage” may be amended or waived (as applicable) without the written consent of each Qualified Unsecured Lender. For the avoidance of doubt, nothing in this Section 9.01(f) shall be deemed to limit the rights of Administrative Agent, the Banks or the Issuing Banks under Article VIII of this Agreement (except to the extent described in clause (i) of this Section 9.01(f) above), nor shall this Section 9.01(f) limit or restrict or affect in any manner whatsoever the rights of the Administrative Agent, the Banks or the Issuing Bank to

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enforce or otherwise protect their rights and benefits under any Credit Document other than a New York Mortgage or the right of the Borrower to cause any New York Mortgage to be released in accordance with Section 9.01(c)(iii).
ARTICLE X

AGENCY AND ISSUING BANK PROVISIONS
Section 10.01      Authorization and Action . Each Bank hereby appoints and authorizes the Administrative Agent to take such action as the Administrative Agent on its behalf and to exercise such powers under this Agreement and the other Credit Documents as are delegated to the Administrative Agent by the terms hereof and of the other Credit Documents, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement or any other Credit Document (including, without limitation, enforcement or collection of the Notes), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Banks and all holders of Notes; provided , however , that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, any other Credit Document, or applicable law. The functions of the Administrative Agent are administerial in nature and in no event shall the Administrative Agent have a fiduciary or trustee relation in respect of any Bank by reason of this Agreement or any other Credit Document. Within 5 Business Days of the Administrative Agent or a Bank receiving actual notice (without any duty to investigate) of a Default, the Administrative Agent or such Bank, as applicable, will provide written notice of such Default to the Banks.
Section 10.02      Administrative Agent’s Reliance, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken (including such Person’s own negligence) by it or them under or in connection with this Agreement or the other Credit Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Administrative Agent: (a) may treat the payee of any Note as the holder thereof until the Administrative Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Administrative Agent; (b) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations made in or in connection with this Agreement or the other Credit Documents; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Credit Document on the part of the Parent, the Borrower or their Subsidiaries or to inspect the property (including the books and records) of the Borrower or its Subsidiaries; (e) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Credit Document; and (f) shall incur no liability under or in respect of this Agreement or any other Credit Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.
Section 10.03      Administrative Agent and Its Affiliates . With respect to its Commitment, the Advances made by it and the Notes issued to it, the Administrative Agent shall have the same rights and powers under this Agreement as any other Bank and may exercise the same as though it were not the Administrative Agent. The term “Bank” or “Banks” shall, unless otherwise expressly indicated, include the Administrative Agent in its individual capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower or any of its Subsidiaries, and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if the Administrative Agent were not the Administrative Agent hereunder and without any duty to account therefor to the Banks.
Section 10.04      Bank Credit Decision . Each Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Bank and based on the Parent’s and the Borrower’s financial statements and the Parent’s filings under the Exchange Act and such other documents and information as it has deemed

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appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Nothing in this Agreement or any other Credit Document shall require the Administrative Agent or any of its directors, officers, agents or employees to carry out any “know your customer” or other checks in relation to any Person on behalf of any Bank and each Bank confirms to the Administrative Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Administrative Agent or any of its directors, officers, agents or employees.
Section 10.05      Indemnification . The Banks severally agree to indemnify the Administrative Agent and each Issuing Bank (to the extent not reimbursed by the Borrower), according to their respective Pro Rata Shares from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, litigation, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent (solely in its capacity as such) or such Issuing Bank (solely in its capacity as such) in any way relating to or arising out of this Agreement or any action taken or omitted by the Administrative Agent or such Issuing Bank under this Agreement or any other Credit Document (including the Administrative Agent’s or such Issuing Bank’s own negligence), provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, litigation, costs, expenses or disbursements resulting from the Administrative Agent’s or such Issuing Bank’s gross negligence or willful misconduct. Without limitation of the foregoing, each Bank agrees to reimburse the Administrative Agent promptly upon demand for its Pro Rata Share of any out‑of‑pocket expenses (including reasonable counsel fees) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Credit Document, to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrower. The terms “Administrative Agent” and “Issuing Bank” shall be deemed to include the employees, directors, officers and Affiliates of the Administrative Agent and each Issuing Bank for purposes of this Section 10.05.
Section 10.06      Successor Administrative Agent and Issuing Banks . (a) The Administrative Agent or any Issuing Bank may resign at any time by giving written notice thereof to the Banks and the Borrower and may be removed at any time with cause by the Required Lenders upon receipt of written notice from the Required Lenders to such effect. Upon receipt of notice of any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent or Issuing Bank which successor Administrative Agent or Issuing Bank shall be acceptable to the Borrower, unless an Event of Default then exists, in which event the Borrower shall have no such approval right. If no successor Administrative Agent or Issuing Bank shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s or Issuing Bank’s giving of notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent or Issuing Bank, then the retiring Administrative Agent or Issuing Bank may, on behalf of the Banks and the Borrower, appoint a successor Administrative Agent or Issuing Bank acceptable to the Borrower, which shall be a commercial bank meeting the financial requirements of an Eligible Assignee and, in the case of an Issuing Bank, a Bank. Upon the acceptance of any appointment as Administrative Agent or Issuing Bank by a successor Administrative Agent or Issuing Bank, such successor Administrative Agent or Issuing Bank shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent or Issuing Bank, and the retiring Administrative Agent or Issuing Bank shall be discharged from its duties and obligations under this Agreement and the other Credit Documents, except that the retiring Issuing Bank shall remain an Issuing Bank with respect to any Letters of Credit issued by such Issuing Bank and outstanding on the effective date of its resignation or removal and the provisions affecting such Issuing Bank with respect to such Letters of Credit shall inure to the benefit of the retiring Issuing Bank until the termination of all such Letters of Credit. After any retiring Administrative Agent’s or Issuing Bank’s resignation or removal hereunder as Administrative Agent or Issuing Bank, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such Administrative Agent or Issuing Bank under this Agreement and the other Credit Documents.
(b)    In addition to the foregoing, if a Bank becomes, and during the period it remains, a Defaulting Lender or a Potential Defaulting Lender, any Issuing Bank may, upon prior written notice to the Borrower and the Administrative Agent, resign as an Issuing Bank effective at the close of business New York time on a date specified

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in such notice (which date may not be less than 30 days after the date of such notice); provided that such resignation by such Issuing Bank will have no effect on the validity or enforceability of any Letter of Credit then outstanding or on the obligations of the Borrower or any Bank under this Agreement with respect to any such outstanding Letter of Credit or otherwise to the such Issuing Bank.
Section 10.07      Co-Syndication Agents, Joint Lead Arrangers, Joint Bookrunners, Co-Documentation Agents . Bank of Montreal and Bank of America, N.A. shall be named Co-Syndication Agents for the Revolving Facility and Bank of Montreal, Bank of America, N.A., PNC Bank, National Association, TD Bank, N.A., Sumitomo Mitsui Banking Corporation, and U.S. Bank National Association shall be named Co-Syndication Agents for the TL Facility, but such Co-Syndication Agents shall have no right or duty to act as agent on behalf of the Banks in such capacity. Citigroup Global Markets Inc., BMO Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Capital Markets LLC, TD Bank, N.A., Sumitomo Mitsui Banking Corporation, and U.S. Bank National Association shall be named Joint Lead Arrangers for the Revolving Facility and TL Facility, but such Joint Lead Arrangers shall have no right or duty to act as agent on behalf of the Banks in such capacities. Citigroup Global Markets Inc., BMO Capital Markets, and Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be named Joint Bookrunners for the Revolving Facility and TL Facility, but such Joint Bookrunners shall have no right or duty to act as agent on behalf of the Banks in such capacities. PNC Bank, National Association, TD Bank, N.A., U.S. Bank National Association, Sumitomo Mitsui Banking Corporation, and Wells Fargo Bank, National Association, Raymond James Bank, N.A., Royal Bank of Canada, Regions Bank, and Branch Banking and Trust Company shall be named Co-Documentation Agents for the Revolving Facility and Wells Fargo Bank, National Association, Raymond James Bank, N.A., Regions Bank, Branch Banking and Trust Company, and Crédit Agricole Corporate and Investment Bank shall be named Co-Documentation Agents for the TL Facility, but the Co-Documentation Agents shall have no right or duty to act as agent on behalf of the Banks in such capacity.
Section 10.08      Designation of Additional Agents . The Administrative Agent shall have the continuing right, for purposes hereof, at any time and from time to time to designate one or more of the Banks (and/or its or their Affiliates) as “arrangers” or other designations for purposes hereof, but no such designation shall have any substantive effect, and no such Banks or their Affiliates shall have any additional powers, duties or responsibilities as a result thereof.
ARTICLE XI

MISCELLANEOUS
Section 11.01      Amendments, Etc. No amendment or waiver of any provision of this Agreement, the Notes, or any other Credit Document, nor consent to any departure by the Borrower or any Guarantor therefrom, nor increase in the aggregate Commitments of the Banks, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no amendment shall increase the Commitment of any Bank without the written consent of such Bank, and no amendment, waiver or consent shall, unless in writing and signed by all the Banks, (or, in the event the waiver or consent affects only Banks under the Revolving Facility or the TL Facility, all of the Banks party to the applicable Facility), do any of the following: (a)(i) increase the Total Revolving Facility Commitments to an amount in excess of Seven Hundred Fifty Million Dollars ($750,000,000), except in accordance with the provisions of Section 1.06, which may permit an additional Five Hundred Million Dollar ($500,000,000) increase in the Total Revolving Facility Commitments to a maximum of One Billion Two Hundred Fifty Million Dollars ($1,250,000,000) in Total Revolving Facility Commitments, or (ii) increase the Total TL Facility Commitments to an amount in excess of Three Hundred Million Dollars ($300,000,000), except in accordance with the provisions of Section 1.06, which may permit an additional Two Hundred Million Dollar ($200,000,000) increase in the Total TL Facility Commitments to a maximum of Five Hundred Million Dollars ($500,000,000) in Total TL Facility Commitments, (b) reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder or under any other Credit Document or otherwise release the Borrower from any Obligations, (c) postpone any date fixed for any scheduled payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder or extend the termination date of such Bank’s Commitment beyond the Revolving Facility Maturity Date (except in accordance with the provisions of Section 1.07) or the TL Facility Maturity Date, as applicable, (d) change the percentage of the Commitments of the Banks which shall be required for the Banks or any of them to take any

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action hereunder or under any other Credit Document, (e) amend this Section 11.01, (f) amend the definitions of “Required Lenders” or “Required Class Lenders”, (g) amend the definition of “Asset Value”, but not the definitions that are used in such definition, (h) release any Guarantor from its obligations under the Guaranty or the Environmental Indemnity or any Pledgor from its obligations under the Pledge Agreement; provided that the Administrative Agent can, if no Default then exists, release any Eligible Subsidiary Guarantor and Pledgor in accordance with the provisions of Sections 5.09(b), 5.10(c) or 11.23, (i) modify any provisions requiring payment to be made for the ratable account of the Banks, (j) amend the definition of “Pro Rata Share” or (k) require the duration of an Interest Period to be more than six months if such period is not available to all Banks; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent or any Issuing Bank in addition to the Banks required above to take such action, affect the rights or duties of the Administrative Agent or such Issuing Bank, as the case may be, under this Agreement or any other Credit Document. In addition, none of the following decisions shall be made without the written consent of the Required Lenders, or, in the event the decision affects only the Banks under the Revolving Facility or the TL Facility, the applicable Required Class Lenders:
(a)    [Reserved];
(b)    any determination to make a Borrowing after the occurrence and during the continuance of an Event of Default;
(c)    [Reserved];
(d)    any waiver of or any amendment to the financial covenants contained in Article VII of this Agreement or any definitions used therein;
(e)    any waiver or modification of the covenants contained in Article V or Article VI;
(f)    any amendment, supplement or modification to, or waiver of, the provisions of Section 8.01 of this Agreement;
(g)    any determination to send notice to the Borrower of, or otherwise declare, an Event of Default pursuant to Section 8.01 of this Agreement;
(h)    any determination to accelerate the Obligations pursuant to Section 8.02 of this Agreement;
(i)    any exercise of remedies under any Credit Document;
(j)    any waiver for more than 45 days of, or any amendment to, the reporting requirements set forth in clauses (a)-(d) of Section 5.05 of this Agreement;
(k)    any material waiver of the conditions to a Hotel Property qualifying as either an Unencumbered Property or a Permitted Non‑Unencumbered Property; and
(l)    any other waiver or modification of the Credit Documents unless the applicable provision of this Agreement expressly permits such waiver or modification to be made by the Administrative Agent.
Any amendment to this Agreement which extends the expiration date of any Letter of Credit beyond the Revolving Facility Maturity Date shall require the written consent of any Bank affected by such amendment. Any amendment to this Agreement including a covenant of the Parent or any of its Subsidiaries or amendment to a definition shall require the Borrower’s written consent. Anything herein to the contrary notwithstanding, during such period as a Bank is a Defaulting Lender, to the fullest extent permitted by applicable law, such Bank will not be entitled to vote in respect of amendments and waivers hereunder and the Commitment and the outstanding Advances or other extensions of credit of such Bank hereunder will not be taken into account in determining whether the Required Lenders, Required Class Lenders or all of the Banks, as required, have approved any such amendment or waiver (and the definitions of “Required Lenders” and “Required Class Lenders” will automatically be deemed modified accordingly for the duration of such

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period; provided , that any such amendment or waiver that would increase or extend the term of the Commitment or Commitments of such Defaulting Lender, extend the date fixed for the payment of principal or interest owing to such Defaulting Lender hereunder, reduce the principal amount of any obligation owing to such Defaulting Lender, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Lender or of any fee payable to such Defaulting Lender hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Lender.
Section 11.02      Notices, Etc. (a) Except as specifically provided herein, all notices and other communications shall be in writing (including telecopy or telex) and mailed, telecopied, telexed, hand delivered or delivered by a nationally recognized overnight courier, (a) if to the Borrower, at its address at 7550 Wisconsin Avenue, 10th Floor, Bethesda, Maryland 20814, Attention: Mr. Kenneth G. Fuller, with a copy to William Diamond at DeCampo Diamond & Ash, 747 Third Avenue, New York, New York 10017 (telephone: (212) 758-1710; telecopy (212) 758-1728) and a copy to Robert K. Hagan at Hagan & Vidovic, LLP, Suite 611, 101 North Wacker Drive, Chicago, Illinois 60606 (telephone: (312) 525-8132; telecopy (312) 525-8149); (b) if to any Bank at its Domestic Lending Office; (c) if to the Administrative Agent, at its address at Citibank, N.A., 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, (telecopy: (646) 274-5080; telephone: (302) 894-6010; (d) if to Citibank as Issuing Bank, at its address at 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, (telecopy: (646) 274-5080; telephone: (302) 894-6010), (e) if to the Existing Issuing Bank, at its Domestic Lending Office, or, (f) as to each party, at such other address or telecopier number as shall be designated by such party in a written notice to the other parties. All such notices and communications shall (i) when mailed, telecopied, telexed or hand delivered or delivered by overnight courier, be effective 3 days after deposited in the mails, when telecopy transmission is completed, when confirmed by telex answer-back or when delivered, (ii) when delivered by posting to an Approved Electronic Platform, an Internet website or a similar telecommunication device requiring that a user have prior access to such Approved Electronic Platform, website or other device (to the extent permitted by Section 11.02(b) to be delivered thereunder), when such notice, demand, request, consent and other communication shall have been made generally available on such Approved Electronic Platform, Internet website or similar device to the class of Person being notified (regardless of whether any such Person must accomplish, and whether or not any such Person shall have accomplished, any action prior to obtaining access to such items, including registration, disclosure of contact information, compliance with a standard user agreement or undertaking a duty of confidentiality) and such Person has been notified in respect of such posting that a communication has been posted to the Approved Electronic Platform, provided that if requested by any Bank or any Issuing Bank, the Administrative Agent shall deliver a copy of the Communications to such Bank or Issuing Bank by e-mail or telecopier and (iii) when delivered by electronic mail or any other telecommunications device, upon receipt by the sender of a response from any one recipient, or from an employee or representative of the Person receiving notice on behalf of such Person, acknowledging receipt (which response may not be an automatic computer-generated response) and an identical notice is also sent simultaneously by mail, overnight courier or personal deliver as otherwise provided in this Section 11.02; provided , however , that notices and communications to the Administrative Agent pursuant to Article II or Article X shall not be effective until received by the Administrative Agent; provided further that any notice or communication which is delivered after the close of regular business hours of the recipient shall be deemed received on the next Business Day. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof. Each Bank and each Issuing Bank agrees (i) to notify the Administrative Agent in writing of such Bank or such Issuing Bank’s e-mail address to which a notice may be sent by electronic transmission (including by electronic communication) on or before the date such Bank and such Issuing Bank becomes a party to this Agreement (and from time to time thereafter to ensure that the Administrative Agent has on record an effective e-mail address for such Bank and such Issuing Bank) and (ii) that any notice may be sent to such e-mail address.
(b)    Notwithstanding clause (a) (unless the Administrative Agent requests that the provisions of clause (a) be followed) and any other provision in this Agreement or any other Credit Document providing for the delivery of any Approved Electronic Communication by any other means, the Borrower and the Guarantors shall deliver all Approved Electronic Communications to the Administrative Agent by properly transmitting such Approved Electronic Communications in an electronic/soft medium in a format acceptable to the Administrative Agent to global.loans.support@citigroup.com or such other electronic mail address (or similar means of electronic delivery) as the Administrative Agent may notify to the Borrower. Nothing in this clause (b) shall prejudice the right of the

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Administrative Agent or any Bank or any Issuing Bank to deliver any Approved Electronic Communication to the Borrower or any Guarantor in any manner authorized in this Agreement or to request that the Borrower effect delivery in such manner.
(c)    Each of the Banks and the Borrower and each Guarantor agrees that the Administrative Agent may, but shall not be obligated to, make the Approved Electronic Communications available to the Banks by posting such Approved Electronic Communications on IntraLinks™ or a substantially similar electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “ Approved Electronic Platform ”). Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Closing Date, a dual firewall and a User ID/Password Authorization System) and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Banks and the Borrower and each Guarantor acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the Banks and the Borrower and each Guarantor hereby approves distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.
(d)    THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.
(e)    Each of the Banks and the Borrower and each Guarantor agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Approved Electronic Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally-applicable document retention procedures and policies.
Section 11.03      No Waiver; Remedies . No failure on the part of any Bank, the Administrative Agent, or any Issuing Bank to exercise, and no delay in exercising, any right hereunder or under any other Credit Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement and the other Credit Documents are cumulative and not exclusive of any remedies provided by law.
Section 11.04      Costs and Expenses . The Borrower agrees to pay on demand all reasonable out‑of‑pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, due diligence, administration, modification and amendment of this Agreement, the Notes and the other Credit Documents and syndication of the Obligations including, without limitation, (a) the reasonable fees and out‑of‑pocket expenses of Shearman & Sterling LLP, counsel for the Administrative Agent (and no other Bank), and (b) to the extent not included in the foregoing, the costs of any local counsel, travel expenses of the Administrative Agent and its consultants and representatives, engineering reports, environmental reports, mortgage and intangible taxes (if any), and any title or Uniform Commercial Code search costs, any flood plain search costs, insurance consultant costs and other costs usual and customary in connection with a credit facility of this type. In addition, the Borrower agrees to pay on demand all reasonable out-of‑pocket costs and expenses, if any, of the Administrative Agent, each Issuing Bank, and each Bank

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(including, without limitation, reasonable counsel fees and expenses of the Administrative Agent, such Issuing Bank, and each Bank) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the other Credit Documents.
Section 11.05      Binding Effect . This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent, and when the Administrative Agent shall have, as to each Bank, either received a counterpart hereof executed by such Bank or been notified by such Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent, each Issuing Bank, each Bank and only to the extent specifically set forth in Section 9.01(f), each Qualified Unsecured Lender, and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights or delegate its duties under this Agreement or any interest in this Agreement without the prior written consent of each Bank.
Section 11.06      Bank Assignments and Participations . (a) Assignments . Any Bank may assign to one or more banks or other entities all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of any Commitment held by such Bank, the Advances owing to it, any Notes held by it, and the participation interest in the Letter of Credit Obligations held by it); provided , however , that (i) each such assignment shall be of a constant, and not a varying, percentage of all of such Bank’s rights and obligations in respect of such Facility and shall involve a ratable assignment of such Bank’s Commitment in respect of such Facility, such Bank’s Advances in respect of such Facility and, in the case of the Revolving Facility, such Bank’s participation in Letter of Credit Exposure, (ii) the amount of the resulting Commitment or Commitments and Advances of the assigning Bank (unless it is assigning all its Commitment or Commitments) and the assignee Bank pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 and shall be an integral multiple of $1,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with the Notes subject to such assignment, (v) except with respect to assignments to other Banks or an Affiliate of the assigning Bank, the consent of the Administrative Agent shall be required, which consent shall not be unreasonably withheld or delayed, (vi) no such assignments shall be made to any Defaulting Lender, Potential Defaulting Lender, the Borrower or its Affiliates or any of their respective subsidiaries, any natural Person, or any Person who, upon becoming a Bank hereunder, would constitute any of the foregoing Persons described in this clause, and (vii) each Eligible Assignee (other than an Eligible Assignee which is an Affiliate of the assigning Bank) shall pay to the Administrative Agent a $3,500 administrative fee; provided , however , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; provided further that the parties hereby agree that Merrill Lynch, Pierce, Fenner & Smith Incorporated may, without notice to the Borrower, assign its rights and obligations under this Agreement to any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least 3 Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto for all purposes and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Bank hereunder and (B) such Bank thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of such Bank’s rights and obligations under this Agreement, such Bank shall cease to be a party hereto). Notwithstanding anything herein to the contrary, any Bank may assign, as collateral or otherwise, any of its rights under the Credit Documents, including to any Federal Reserve Bank or other central bank, and this Section shall not apply to any such assignment. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment will be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Administrative Agent and, unless a Default has occurred and is continuing, the Borrower, which consent shall not be unreasonably withheld or delayed, the applicable pro rata share of Revolving Facility Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby

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irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Bank and each other Bank hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Revolving Facility Advances and participations in Letters of Credit. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder becomes effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest will be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(b)     Term of Assignments . By executing and delivering an Assignment and Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency of value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the Guarantors or the performance or observance by the Borrower or the Guarantors of any of their obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements and filings under the Exchange Act referred to in Sections 4.06 and 5.05, if applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative Agent, such Bank or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Bank.
(c)     The Register . The Administrative Agent shall maintain at its address referred to in Section 11.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Banks and the Commitments of, and principal amount of the Advances owing to, each Bank from time to time (the “ Register ”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent, the Issuing Banks, and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice.
(d)     Procedures . Upon its receipt of an Assignment and Acceptance executed by a Bank and an Eligible Assignee, together with the Note subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of the attached Exhibit B, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Borrower. Within 5 Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note, a new Note payable to the order of such Eligible Assignee in amount equal to, respectively, the Commitment and the outstanding Advances assumed by it pursuant to such Assignment and Acceptance, and if the assigning Bank has retained any Commitment hereunder, a new Note payable to the order of such Bank in an amount equal to, respectively, the Commitment and the outstanding Advances retained by it hereunder. Such new Note shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the attached Exhibit A-1 or Exhibit A-2, as applicable.
(e)     Participations . Each Bank may sell participations to one or more banks or other entities (excluding natural Persons) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Advances owing to it, its participation interest in the Letter of Credit Obligations, and the Notes held by it); provided , however , that (i) such Bank’s obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Bank

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shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent, and the Issuing Banks and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement, and (v) such Bank shall not require the participant’s consent to any matter under this Agreement, except for change in the principal amount of any Note in which the participant has an interest, reductions in fees or interest, or extending the Revolving Facility Maturity Date or the TL Facility Maturity Date, as applicable, in each case, except as permitted in this Agreement. The Borrower hereby agrees that participants shall have the same rights under Sections 2.08, 2.09, and 2.11(c) hereof as the Bank to the extent of their respective participations, provided that no participant shall be able to collect in excess of amounts payable to the Bank selling to such participant under such Sections in respect of the interest sold to such participant or to collect any such amounts from the Borrower. Each Bank that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Advances or other obligations under the Credit Documents (the “ Participant Register ”); provided that no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in any commitments, loans, letters of credit or its other obligations under any Credit Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(f)     Confidentiality . Each Bank may furnish any information concerning the Borrower and its Subsidiaries in the possession of such Bank from time to time to assignees and participants (including prospective assignees and participants); provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree in writing to preserve the confidentiality of any confidential information relating to the Borrower and its Subsidiaries received by it from or on behalf of such Bank in accordance with Section 11.20.
Section 11.07      Indemnification . (a) The Borrower shall indemnify the Administrative Agent, the Banks (in any capacity or title and including any lender which was a Bank hereunder prior to any full assignment of its Commitment), the Issuing Banks, and each affiliate thereof and their respective directors, officers, employees, partners and agents (each of the foregoing Persons, an “ Indemnitee ”) from, and discharge, release, and hold each of them harmless against, any and all losses, liabilities, claims or damages (including reasonable legal fees) to which any of them may become subject, insofar as such losses, liabilities, claims or damages (including reasonable legal fees) arise out of or result from (i) any actual or proposed use of the proceeds of any Advance, (ii) any breach by the Borrower or any Guarantor of any provision of this Agreement or any other Credit Document, (iii) any investigation, litigation or other proceeding (including any threatened investigation or proceeding) relating to the foregoing regardless of the identity of the party bringing such investigation, litigation or other proceeding, or (iv) any Environmental Claim or requirement of Environmental Laws concerning or relating to the present or previously‑owned or operated properties, or the operations or business, of the Borrower or any of its Subsidiaries, and the Borrower shall reimburse the Administrative Agent, each Issuing Bank, and each Bank, and each affiliate thereof and their respective directors, officers, employees and agents, upon demand for any reasonable out-of-pocket expenses (including legal fees) incurred in connection with any such investigation, litigation or other proceeding; and expressly including any such losses, liabilities, claims, damages, or expense incurred by reason of the Indemnitee’s own negligence, but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of such Indemnitee’s gross negligence or willful misconduct or willful breach in bad faith of a material provision of this Agreement as determined in a final non-appealable judgment by a court of competent jurisdiction.
(b)    To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against, any such Indemnitee on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or Letter of Credit, or the use of the proceeds thereof.

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(c)    No Indemnitee referred to in this Section 11.07 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby.
Section 11.08      Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Section 11.09      Survival of Representations, Indemnifications, etc. All representations, warranties contained in this Agreement or made in writing by or on behalf of the Borrower in connection herewith shall survive the execution and delivery of this Agreement and the Credit Documents, the making of the Advances and any investigation made by or on behalf of the Banks, none of which investigations shall diminish any Bank’s right to rely on such representations and warranties. All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c), 11.04 and 11.07 shall survive any termination of this Agreement and repayment in full of the Obligations.
Section 11.10      Severability . In case one or more provisions of this Agreement or the other Credit Documents shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not be affected or impaired thereby.
Section 11.11      Entire Agreement . This Agreement, the Notes and the other Credit Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto.
Section 11.12      Usury Not Intended . Without limitation of any rights under Section 2.06(c), it is the intent of the Borrower and each Bank in the execution and performance of this Agreement and the other Credit Documents to contract in strict compliance with applicable usury laws, including conflicts of law concepts, governing the Advances of each Bank including such applicable laws of the State of New York and the United States of America from time to time in effect. In furtherance thereof, the Banks and the Borrower stipulate and agree that none of the terms and provisions contained in this Agreement or the other Credit Documents shall ever be construed to create a contract to pay, as consideration for the use, forbearance or detention of money, interest at a rate in excess of the Maximum Rate and that for purposes hereof “interest” shall include the aggregate of all charges which constitute interest under such laws that are contracted for, charged or received under this Agreement; and in the event that, notwithstanding the foregoing, under any circumstances the aggregate amounts taken, reserved, charged, received or paid on the Advances, include amounts which by applicable law are deemed interest which would exceed the Maximum Rate, then such excess shall be deemed to be a mistake and each Bank receiving same shall credit the same on the principal of its Notes (or if such Notes shall have been paid in full, refund said excess to the Borrower). In the event that the maturity of the Notes is accelerated by reason of any election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest may never include more than the Maximum Rate and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited on the applicable Notes (or, if the applicable Notes shall have been paid in full, refunded to the Borrower). In determining whether or not the interest paid or payable under any specific contingencies exceeds the Maximum Rate, the Borrower and the Banks shall to the maximum extent permitted under applicable law amortize, prorate, allocate and spread in equal parts during the period of the full stated term of the Notes all amounts considered to be interest under applicable law at any time contracted for, charged, received or reserved in connection with the Obligations. The provisions of this Section shall control over all other provisions of this Agreement or the other Credit Documents which may be in apparent conflict herewith.
Section 11.13      Governing Law . ANY DISPUTE BETWEEN THE BORROWER, THE ADMINISTRATIVE AGENT, ANY ISSUING BANK, ANY BANK, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE VALIDITY, INTERPRETATION,

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CONSTRUCTION, BREACH, ENFORCEMENT OR TERMINATION HEREOF AND THEREOF, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
Section 11.14      Consent to Jurisdiction; Service of Process; Jury Trial . (a) Exclusive Jurisdiction . Except as provided in subsection (b), each of the parties hereto agrees that all disputes among them arising out of, connected with, related to, or incidental to the relationship established among them in connection with, this Agreement or any of the other Credit Documents whether arising in contract, tort, equity, or otherwise, shall be resolved exclusively by state or federal courts located in the city, county and state of New York, but the parties hereto acknowledge that any appeals from those courts may have to be heard by a court located outside of New York. Each of the parties hereto waives in all disputes brought pursuant to this subsection (a) any objection that it may have to the location of the court considering the dispute.
(b)     Other Jurisdictions . The Borrower agrees that the Administrative Agent, any Bank or any Indemnitee shall have the right to proceed against the Borrower or its Property in a court in any location to enable such person to (1) obtain personal jurisdiction over the Borrower or (2) enforce a judgment or other court order entered in favor of such Person. The Borrower agrees that it will not assert any permissive counterclaims in any proceeding brought by such Person to enforce a judgment or other court order in favor of such Person. The Borrower waives any objection that it may have to the location of the court in which such Person has commenced a proceeding described in this subsection (b).
(c)     Service of Process . The Borrower waives personal service of any process upon it and irrevocably consents to the service of process of any writs, process or summonses in any suit, action or proceeding by the mailing thereof by the Administrative Agent or the Banks by registered or certified mail, postage prepaid, to the Borrower addressed as provided herein. Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or the Banks to serve any such writs, process or summonses in any other manner permitted by applicable law. The Borrower irrevocably waives any objection (including, without limitation, any objection of the laying of venue or based on the grounds of forum non conveniens) which it may now or hereafter have to the bringing of any such action or proceeding with respect to this Agreement or any other instrument, document or agreement executed or delivered in connection herewith in any jurisdiction set forth above.
(d)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e)     Waiver of Bond . The Borrower waives the posting of any bond otherwise required of any party hereto in connection with any judicial process or proceeding to realize on the collateral enforce any judgment or other court order entered in favor of such party, or to enforce by specific performance, temporary restraining order, preliminary or permanent injunction, this Agreement or any other Credit Document.
Section 11.15      Knowledge of Borrower . For purposes of this Agreement, “knowledge of the Borrower” means the actual knowledge of any of the executive officers and all other Responsible Officers of the Parent.
Section 11.16      Banks Not in Control . None of the covenants or other provisions contained in the Credit Documents shall or shall be deemed to, give the Banks the rights or power to exercise control over the affairs and/or

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management of the Borrower, any of its Subsidiaries, any Material Subsidiary or any Guarantor, the power of the Banks being limited to the right to exercise the remedies provided in the Credit Documents.
Section 11.17      Headings Descriptive . The headings of the several Sections and paragraphs of the Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
Section 11.18      Time is of the Essence . Time is of the essence under the Credit Documents.
Section 11.19      Scope of Indemnities . The Borrower acknowledges and agrees that certain of its Obligations and indemnities under this Agreement include any claims resulting from the negligence or alleged negligence of the Administrative Agent, the Banks, or any other Indemnitee.
Section 11.20      Confidentiality . (a) The Administrative Agent, each Issuing Bank and each Bank severally agrees that it will use its commercially reasonable efforts not to disclose without the prior written consent of the Parent or the Borrower (other than to an Affiliate or such Person’s or their Affiliate’s directors, officers, employees, auditors, regulators or counsel) any Information (as defined below) with respect to the Parent or the Borrower which is furnished pursuant to this Agreement except that the Administrative Agent, each Issuing Bank and each Bank may disclose any such Information (i) which is or becomes generally available to the public other than by a breach of this Section 11.20, (ii) which is known by or becomes known by such Person from another Person, (iii) as may be required or appropriate in any report, statement or testimony submitted to any Governmental Authority, regulatory authority or self-regulatory authority (whether in the United States or elsewhere), (iv) as may be required or appropriate in response to any summons or subpoena or any law, order, regulation, ruling or similar legal process applicable to the Administrative Agent, such Issuing Bank or such Bank, (v) to any other party hereto, (vi) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (vii) subject to an agreement containing provisions substantially the same as those of this Section 11.20, to (A) any prospective participant or assignee in connection with any contemplated transfer pursuant to Section 11.06 in accordance with the provisions of Section 11.06(f) or (B) any actual or prospective party to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (viii) on a confidential basis to (A) any rating agency in connection with rating the Parent or its Subsidiaries or this Agreement or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to this Agreement, (ix) with the consent of the Borrower, or (x) to the extent such Information becomes available to the Administrative Agent, any Bank, any Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In addition, the Administrative Agent, any Bank, any Issuing Bank or any of their respective Affiliates may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Administrative Agent, any Bank, any Issuing Bank or any of their respective Affiliates in connection with the administration of this Agreement, the other Credit Documents, and the Commitments. For purposes of this Section, “ Information ” means all information received from the Parent or any of its Subsidiaries (including the Fee Letter and any information obtained based on a review of the books and records of the Parent or any of its Subsidiaries) relating to the Parent or any of its Subsidiaries or any of their respective businesses; provided that, in the case of information so received after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(b)    Notwithstanding anything to the contrary set forth herein or in any other written or oral understanding or agreement to which the parties hereto are parties or by which they are bound, the parties hereto acknowledge and agree that (i) any obligations of confidentiality contained herein and therein do not apply and have not applied from the commencement of discussions between the parties to the tax treatment and tax structure of the transactions contemplated by the Credit Documents (and any related transactions or arrangements), and (ii) each party (and each of its employees, representatives, or other agents) may disclose to any and all parties as required, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by the Credit Documents

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and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure, all within the meaning of Treasury Regulations Section 1.6011-4; provided , however , that each party recognizes that the privilege each has to maintain, in its sole discretion, the confidentiality of a communication relating to the transactions contemplated by the Credit Documents, including a confidential communication with its attorney or a confidential communication with a federally authorized tax practitioner under Section 7525 of the Internal Revenue Code, is not intended to be affected by the foregoing.
Section 11.21      USA Patriot Act Notice . The Patriot Act and federal regulations issued with respect thereto require all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, the Administrative Agent (for itself and/or as Administrative Agent for all Banks hereunder) may from time-to-time request, and the Borrower shall provide the Administrative Agent, the Borrower’s and each Guarantor’s and Material Subsidiary’s name, address, tax identification number and/or such other identification information as shall be necessary for each Bank to comply with federal law. An “account” for this purpose may include, without limitation, a deposit account, cash management service, a transaction or asset account, a credit account, a loan or other extension of credit, and/or other financial services product.
Section 11.22      No Fiduciary Duties . The Parent, the Borrower and each Guarantor agrees that nothing in the Credit Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Administrative Agent, any Arranger, any Issuing Bank, any Bank or any Affiliate thereof, on the one hand, and the Parent, the Borrower or such Guarantor, as applicable, its stockholders or its Affiliates, on the other. The Parent, the Borrower and each Guarantor agrees that the transactions contemplated by the Credit Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions. The Parent, the Borrower and each Guarantor agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Parent, the Borrower and each Guarantor acknowledges that the Administrative Agent, the Arrangers, the Issuing Banks, the Banks and their respective Affiliates may have interests in, or may be providing or may in the future provide financial or other services to other parties with interests which the Parent, the Borrower or such Guarantor may regard as conflicting with its interests and may possess information (whether or not material to the Parent, the Borrower or such Guarantor) other than as a result of (x) the Administrative Agent acting as administrative agent hereunder or (y) the Banks acting as lenders hereunder, that the Administrative Agent, any Arranger, any Issuing Bank or any Bank may not be entitled to share with the Parent, the Borrower or any Guarantor. Without prejudice to the foregoing, each of the Parent, the Borrower and each Guarantor agrees that the Administrative Agent, the Arrangers, the Issuing Banks, the Banks and their respective Affiliates may (a) deal (whether for its own or its customers’ account) in, or advise on, securities of any Person, and (b) accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with other Persons in each case, as if the Administrative Agent were not the Administrative Agent and as if the Issuing Banks and Banks were not lenders hereunder, and without any duty to account therefor to the Parent, the Borrower or any Guarantor. The Parent, the Borrower and each Guarantor hereby irrevocably waives, in favor of the Administrative Agent, the Issuing Banks and the Banks, any conflict of interest which may arise by virtue of the Administrative Agent, the Arrangers, the Issuing Banks and the Banks acting in various capacities under the Credit Documents or for other customers of the Administrative Agent, any Arranger, any Issuing Bank or any Bank as described in this Section 11.22.
Section 11.23      Release of Eligible Subsidiary Guarantors . Within 10 Business Days following the written request by a Responsible Officer of the Parent, the Administrative Agent, on behalf of the Banks and the Issuing Banks, shall release, at the Borrower’s sole cost and expense, any Eligible Subsidiary Guarantor from its obligations under this Agreement and each other Credit Document so long as: (i) there is no Default or Event of Default existing under this Agreement either at the time of such request or at the time such Eligible Subsidiary Guarantor is released; (ii) the Parent shall have received and have in effect at such time an Investment Grade Rating; (iii) a Responsible Officer of the Parent delivers to the Administrative Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent stating that such Eligible Subsidiary Guarantor requested to be released is either being released from its obligation under each Senior Financing Transaction or is not required to provide a guaranty with respect to any Senior Financing Transaction to which the Parent is a party or to which it is simultaneously (or substantially

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simultaneously) entering into; and (iv) no Leverage Trigger Period then exists (collectively, clauses (i), (ii), (iii) and (iv) shall be considered an “ Investment Grade Release Event ”).
Section 11.24      Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    the effects of any Bail-In Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or
(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

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EXECUTED as of the date first referenced above.
BORROWER :
 
 
 
 
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
 
 
 
 

PARENT :
 
 
 
 
LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



GUARANTORS :
 
 
 
 
LASALLE HOTEL LESSE, INC.,
an Illinois corporation
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 
GLASS HOUSES,
a Maryland real estate investment trust
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 
DA ENTITY, LLC,
a Delaware limited liability company
 
 
 
 
By:
LaSalle Hotel Properties,
its member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
and
 
 
 
 
 
 
 
By:
RDA Entity, Inc.,
its member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



RDA ENTITY, INC.
LHO GRAFTON HOTEL LESSEE, INC.
LHO LE PARC LESSEE, INC.
LHO SANTA CRUZ ONE LESSEE, INC.
LUCKY TOWN BURBANK LESSEE, INC.
RAMROD LESSEE, INC.
LHO MISSION BAY ROSIE LESSEE, INC.
PARADISE LESSEE, INC.
GEARY DARLING LESSEE, INC.
CHAMBER MAID LESSEE, INC.
SEASIDE HOTEL LESSEE, INC.
LET IT FLHO LESSEE, INC.
LASALLE WASHINGTON ONE LESSEE, INC.
LHO LEESBURG ONE LESSEE, INC.
LHO SAN DIEGO ONE LESSEE, INC.,
LHOBERGE LESSEE, INC.
DIM SUM LESSEE, INC.
FUN TO STAY LESSEE, INC.
SERENITY NOW LESSEE, INC.
SOULDRIVER LESSEE, INC.
SF TREAT LESSEE, INC.
VIVA SOMA LESSEE, INC.
each, a Delaware corporation
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
LHO WASHINGTON HOTEL ONE, L.L.C.
LHO WASHINGTON HOTEL TWO, L.L.C.
LHO WASHINGTON HOTEL THREE, LLC
LHO WASHINGTON HOTEL FOUR, L.L.C.
LHO WASHINGTON HOTEL SIX, L.L.C.
I&G CAPITOL, LLC
LHO TOM JOAD CIRCLE DC, L.L.C.
H STREET SHUFFLE, LLC
SILVER P, LLC,
each, a Delaware limited liability company
 
 
 
 
By:
Glass Houses,
its managing member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



DC ONE LESSEE, L.L.C.
DC TWO LESSEE, L.L.C.
DC THREE LESSEE, L.L.C.
DC FOUR LESSEE, L.L.C.
DC SIX LESSEE, L.L.C.
DC I&G CAPITAL LESSEE, L.L.C.
LHO TOM JOAD CIRCLE DC LESSEE, L.L.C.
H STREET SHUFFLE LESSEE, LLC
SILVER P LESSEE, LLC,
each, a Delaware limited liability company
 
 
 
 
By:
LaSalle Washington One Lessee, Inc.,
its managing member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
NYC SERENADE, L.L.C.
LHO CHICAGO RIVER, L.L.C.
LHO ALEXIS HOTEL, L.L.C.
LHO ONYX HOTEL ONE, L.L.C.
PC FESTIVUS, LLC,
LOOK FORWARD, LLC
SUNSET CITY, LLC
PDX PIONEER, LLC
HARBORSIDE, LLC
LHO BADLANDS, L.L.C.
RW NEW YORK, LLC
LHO MICHIGAN AVENUE FREEZEOUT, L.L.C.
each, a Delaware limited liability company
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
Name:
Kenneth G. Fuller
 
 
 
Title:
Chief Financial Officer


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SEASIDE HOTEL, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Seaside Hotel, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
GEARY DARLING, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Geary Darling, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
CHAMBER MAID, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Chamber Maid, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LET IT FLHO, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Let It FLHO, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P., its
managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO GRAFTON HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Grafton Hotel, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO LE PARC, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Le Parc, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LHO SANTA CRUZ HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Santa Cruz Hotel One, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LUCKY TOWN BURBANK, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
Lucky Town Burbank, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO MISSION BAY ROSIE HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Mission Bay Rosie Hotel, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LHO MISSION BAY HOTEL, L.P.,
a California limited partnership
 
 
 
 
 
 
By:
LHO San Diego Financing, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO SAN DIEGO FINANCING, L.L.C.,
a Delaware limited liability company
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P,
its member
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO HOLLYWOOD LM, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
 
By:
LHO Hollywood Financing, Inc.,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
 
By:
LHO New Orleans Financing, Inc.,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
WILD INNOCENT I, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Innocent I, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
CHIMES OF FREEDOM, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
OF Freedom I, LLC,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



WILD I, LLC
CHIMES I, LLC
OF FREEDOM I, LLC,  
each, a Delaware limited liability company
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO ONYX ONE LESSEE, L.L.C.
NYC SERENADE LESSEE, L.L.C.
LHO CHICAGO RIVER LESSEE, L.L.C.
LHO ALEXIS LESSEE, L.L.C.
CHIMES OF FREEDOM LESSEE,   LLC
WILD INNOCENT I LESSEE, LLC
PC FESTIVUS LESSEE, LLC,
SUNSET CITY LESSEE, LLC
LOOK FORWARD LESSEE, LLC
PDX PIONEER LESSEE, LLC
LHO BADLANDS LESSEE, L.L.C.
HARBORSIDE LESSEE, LLC
RW NEW YORK, LLC
LHO MICHIGAN AVENUE FREEZEOUT LESSEE, L.L.C.
each, a Delaware limited liability company
 
 
 
 
 
 
 
By:
LaSalle Hotel Lessee, Inc.,
its managing member
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LHO SAN DIEGO HOTEL ONE, L.P.,  
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO San Diego Hotel One, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHOBERGE, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHOberge, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
DON’T LOOK BACK, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
Look Forward, LLC,
its manager
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



DON’T LOOK BACK LESSEE, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
Look Forward Lessee, LLC,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Lessee, Inc.,
its managing member
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



DIM SUM, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Dim Sum, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
FUN TO STAY, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
FUN TO STAY, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
SERENITY NOW, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
SERENITY NOW, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SOULDRIVER, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
Souldriver, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
VIVA SOMA LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Viva Soma, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
SF TREAT, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
SF Treat, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ADMINISTRATIVE AGENT, ISSUING BANK AND BANK :

CITIBANK, N.A., as Administrative Agent, an Issuing Bank, and a Bank
By:     /s/ Christopher J. Albano            
    Name: Christopher J. Albano    
Title: Authorized Signatory

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




BANKS:

BANK OF MONTREAL,
as an Issuing Bank and a Bank

By:     /s/ Gwendolyn Gatz            
    Name: Gwendolyn Gatz    
Title: Vice President


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




BANK OF AMERICA, N.A.,
as an Issuing Bank and a Bank

By:     /s/ Will T. Bowers, Jr.        
    Name:     Will T. Bowers, Jr.    
Title: Senior Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT





PNC BANK, NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Katie Chowdhry        
    Name:     Katie Chowdhry    
Title: Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



U.S. BANK NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Lori Y. Jensen                
    Name:     Lori Y. Jensen    
Title: Senior Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SUMITOMO MITSUI BANKING CORPORATION, as a Bank

By:     /s/ William G. Karl            
    Name:     William G. Karl    
Title: Executive Officer


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



TD BANK, N.A.,
as a Bank

By:     /s/ John Howell                
    Name:     John Howell    
Title: Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



REGIONS BANK,
as a Bank

By:     /s/ T. Barrett Vawter            
    Name:     T. Barrett Vawter
Title: Vice President


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Mark F. Monahan            
    Name:     Mark F. Monahan    
Title: Senior Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



BRANCH BANKING AND TRUST COMPANY,
as a Bank

By:     /s/ Steve Whitcomb        
    Name: Steve Whitcomb    
Title: Senior Vice President



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



LAND BANK OF TAIWAN, NEW YORK BRANCH, as a Bank

By:     /s/ Arthur Chen                
    Name:     Arthur Chen    
Title: General Manager

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



RAYMOND JAMES BANK, N.A.,
as a Bank

By:     /s/ Alexander L. Rody        
    Name:     Alexander L. Rody    
Title: Senior Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ROYAL BANK OF CANADA,
as a Bank

By:     /s/ Brian Gross                
    Name:     Brian Gross    
Title: Authorized Signatory



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as a Bank

By:     /s/ Jason Chreln                     
    Name:     Jason Chreln        
Title: Managing Director

By:     /s/ Joseph A. Asciolla            
    Name:     Joseph A. Asciolla    
Title: Managing Director


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



DEUTSCHE BANK AG NEW YORK BRANCH,
as a Bank

By:     /s/ Joanna Soliman            
    Name: Joanna Soliman    
Title: Vice President

By:     /s/ Perry Forman            
    Name: Perry Forman
Title: Director


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



THE BANK OF NEW YORK MELLON,
as a Bank

By:     /s/ Carol Murray                
    Name:     Carol Murray    
Title: Managing Director

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



BARCLAYS BANK PLC,
as a Bank

By:     /s/ Christopher M. Aitkin        
    Name:     Christopher M. Aitkin    
Title: Assistant Vice President

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



TAIWAN COOPERATIVE BANK, LTD., acting through its Los Angeles branch,
as a Bank

By:     /s/ Ming-Chih Chen            
    Name: Ming-Chih Chen    
Title: VP & General Manager

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



MORGAN STANLEY BANK, N.A.,
as a Bank
By:     /s/ Michael King            
    Name:     Michael King    
Title: Authorized Signatory

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



FIRST COMMERCIAL BANK, LTD. NEW YORK BRANCH,
as a Bank

By:     /s/ Bill Wang                
    Name:     Bill Wang    
Title: SVP & General Manager

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



E.SUN COMMERCIAL BANK LTD., LOS ANGELES BRANCH,
as a Bank

By:     /s/ Edward Chen            
    Name:     Edward Chen    
Title: SVP & General Manager

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD., LOS ANGELES BRANCH,
as a Bank

By:     /s/ Yiming Ko            
    Name:     Yiming Ko    
Title: SVP & General Manager




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT A-1

FORM OF REVOLVING FACILITY NOTE

$     __________, 20__

For value received, the undersigned LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), hereby promises to pay to the order of ______________________ (the “Bank” ) the principal amount of _________________ and ____/100 Dollars ($ ) or, if less, the aggregate outstanding principal amount of each Revolving Facility Advance (as defined in the Credit Agreement referred to below) made by the Bank to the Borrower, together with interest on the unpaid principal amount of each such Revolving Facility Advance from the date of such Revolving Facility Advance until such principal amount is paid in full, at such interest rates, and at such times, as are specified in the Credit Agreement.

This Note is one of the Notes referred to in, and is entitled to the benefits of, and is subject to the terms of, the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used in this Note and not otherwise defined in this Note have the meanings assigned to such terms in the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of Revolving Facility Advances by the Bank to the Borrower, from time to time, in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Facility Advance being evidenced by this Note and (b) contains provisions for acceleration of the maturity of this Note upon the happening of certain events stated in the Credit Agreement and for prepayments of principal prior to the maturity of this Note upon the terms and conditions specified in the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of America to the Administrative Agent at Citibank, N.A., 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department (or at such other location or address as may be specified by the Administrative Agent to the Borrower) in same day funds. The Bank shall record all Revolving Facility Advances and payments of principal made under this Note, but no failure of the Bank to make such recordings shall affect the Borrower’s repayment obligations under this Note.

Except as specifically provided in the Credit Agreement, the Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder of this Note shall operate as a waiver of such rights.

This Note shall be governed by, and construed and enforced in accordance with, the laws of the state of New York.


[ Balance of page intentionally left blank ]


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




BORROWER :
 
 
 
 
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT A-2

FORM OF TL FACILITY NOTE

$     __________, 20__

For value received, the undersigned LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), hereby promises to pay to the order of ______________________ (the “Bank” ) the principal amount of _________________ and ____/100 Dollars ($ ) or, if less, the aggregate outstanding principal amount of each TL Facility Advance (as defined in the Credit Agreement referred to below) made by the Bank to the Borrower, together with interest on the unpaid principal amount of each such TL Facility Advance from the date of such TL Facility Advance until such principal amount is paid in full, at such interest rates, and at such times, as are specified in the Credit Agreement.

This Note is one of the Notes referred to in, and is entitled to the benefits of, and is subject to the terms of, the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used in this Note and not otherwise defined in this Note have the meanings assigned to such terms in the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of TL Facility Advances by the Bank to the Borrower, from time to time, in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such TL Facility Advance being evidenced by this Note and (b) contains provisions for acceleration of the maturity of this Note upon the happening of certain events stated in the Credit Agreement and for prepayments of principal prior to the maturity of this Note upon the terms and conditions specified in the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of America to the Administrative Agent at Citibank, N.A., 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndication Department (or at such other location or address as may be specified by the Administrative Agent to the Borrower) in same day funds. The Bank shall record all TL Facility Advances and payments of principal made under this Note, but no failure of the Bank to make such recordings shall affect the Borrower’s repayment obligations under this Note.

Except as specifically provided in the Credit Agreement, the Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder of this Note shall operate as a waiver of such rights.

This Note shall be governed by, and construed and enforced in accordance with, the laws of the state of New York.


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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



BORROWER :
 
 
 
 
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT B

FORM OF ASSIGNMENT AND ACCEPTANCE

Dated __________, 20__

Reference is made to the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms not otherwise defined in this Assignment and Acceptance shall have the meanings assigned to them in the Credit Agreement.

Pursuant to the terms of the Credit Agreement, _______________ ( “Assignor” ) wishes to assign and delegate ___% of its rights and obligations under the [Revolving/TL] Facility under the Credit Agreement and _______________ ( “Assignee” ) desires to assume and accept such rights and obligations. Therefore, Assignor, Assignee, and the Administrative Agent agree as follows:
    
1.    As of the Effective Date (as defined below), Assignor hereby sells and assigns and delegates to Assignee, and Assignee hereby purchases and assumes from Assignor, without recourse to Assignor and without representation or warranty except for the representations and warranties specifically set forth in clauses (i) , (ii) , and (iii) of Section 2 hereof, a ____% interest in and to all of Assignor’s rights and obligations under the Credit Agreement in connection with its [Revolving /TL Facility] Commitment, including, without limitation, such percentage interest in Assignor’s [Revolving/TL Facility] Commitment and the Advances owing to Assignor and any Note held by Assignor.
    
2.    Assignor (i) represents and warrants that, prior to executing this Assignment and Acceptance, its [Revolving/TL Facility] Commitment is $_____________ and the aggregate outstanding principal amount of [Revolving/TL Facility] Advances owed to it by the Borrower is $_____________, [and its Pro Rata Share of the Letter of Credit Exposure is $_____________]; (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with the Credit Agreement or any other Credit Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Credit Agreement or any other Credit Document or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any Guarantor or the performance or observance by the Borrower or any Guarantor of any of its obligations under the Credit Agreement or any other Credit Document or any other instrument or document furnished pursuant thereto; and (v) attaches the Note referred to in Section 1 above and requests that the Administrative Agent exchange such Note for a new Note dated ____________, 20__ in the principal amount of $_____________, payable to the order of Assignee, [and a new Note dated ___________, 20__ in the principal amount of $_____________, payable to the order of Assignor].

3.    Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.06 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, Assignor, or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other Credit Document; (iii) appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers under the Credit Agreement and any other Credit Document as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement or any other Credit Document are required to be performed by it as a Bank; (v) specifies as its Domestic Lending Office (and address for notices) and LIBOR Lending Office the offices set forth beneath its name on the signature pages hereof; (vi) attaches the forms prescribed by the

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Internal Revenue Service of the United States certifying as to Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to Assignee under the Credit Agreement and its Note or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty, and (vii) represents that it is an Eligible Assignee.
    
4.    The effective date for this Assignment and Acceptance shall be _______________ (the “Effective Date” ) and following the execution of this Assignment and Acceptance, the Administrative Agent will record it in the Register.
    
5.    Upon such recording, and as of the Effective Date, (i) Assignee shall be a party to the Credit Agreement for all purposes, and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Bank thereunder and (ii) Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights (other than rights against the Borrower pursuant to Sections 2.09, 2.11(c) and 11.07 of the Credit Agreement, which shall survive this assignment) and be released from its obligations under the Credit Agreement.
    
6.    Upon such recording, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement and the Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, and commitment fees) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the Notes for periods prior to the Effective Date directly between themselves.
    
7.    This Assignment and Acceptance shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.
    
8.    This Assignment and Acceptance may be executed in multiple counterparts, each of which shall be an original, but all of which shall together constitute one Assignment and Acceptance.
                                                                                                                                      
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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



The parties hereto have caused this Assignment and Acceptance to be duly executed as of the date first above written.

[ASSIGNOR]
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 

CITIBANK, N.A., as Administrative Agent
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 

[ASSIGNEE]
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 

Domestic Lending Office:
 
 
 
Address:
Attention:
Telecopy:
Telephone:

LIBOR Lending Office:
 
 
 
Address:
Attention:
Telecopy:
Telephone:




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

This Compliance Certificate is executed this ___ day of _________, 20__, for the period ended _______ and is prepared pursuant to that certain Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017, as the same may be amended or modified from time to time (the “Agreement” ), among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used herein but not otherwise defined herein shall have the meanings specified by the Agreement.

1.    Representations, Covenants, Defaults : Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the date of execution of this Compliance Certificate, as follows:

1.1.     Covenants . All covenants of Borrower set forth in Articles V and VI of the Agreement required to be performed as of the date hereof have been performed and maintained in all material respects, and such Covenants continue to be performed and maintained as of the execution date of this certificate, except as follows:
_________________________________ [specify]

1.2.     Representations and Warranties . All representations and warranties of Borrower set forth in Article IV of the Agreement are true and correct in all material respects as of the execution date of this certificate, except as follows:
_________________________________ [specify]

1.3.     Event of Default . There exists no Event of Default except as follows:
_________________________________ [specify]

2.    Operating Covenants . Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the calendar quarter ending ____________, ___, that the amounts and calculations made hereunder pursuant to Article VII of the Agreement are true and correct.

2.1.     Fixed Charge Coverage Ratio (Section 7.01 of the Agreement).
Minimum Requirement – 1.50x

(a)
Corporate EBITDA:    $____________
(b)
Aggregate FF&E Reserves:    $____________
(c)
(a) minus (b) above:    $____________
(d)
Fixed Charges:    $____________
(e)
Ratio of (c) to (d) above:    _____________

2.2.     Maintenance of Net Worth (Section 7.02 of the Agreement).

(a)
Parent’s Net Worth (accordance with GAAP):    $____________
(b)
minority interest of Parent (in accordance with GAAP)    $____________
(c)
Sum of (a) and (b) above:    $____________

    
2.3.
The Minimum Tangible Net Worth for the Parent, as of the Rolling Period ending on __________, ____, is as set forth in (c) below, based upon the sum of (a) and (b):
        
(a)
$1,931,251,500     $1,931,251,500

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(b)
75% of net proceeds from any offering of Stock
or Stock Equivalents after September 30, 2016:    $____________
(c)
The sum of (a) and (b) above:    $____________


2.4.     Limitations on Total Liabilities of Parent (Section 7.03 of the Agreement).

Maximum Requirement – 7.25 to 1.00

(a)
the Parent’s Total Liabilities:    $____________

(b)
Adjusted Corporate EBITDA, which is equal to
(i) plus or minus (ii), as appropriate:
(i)
Corporate EBITDA:    $____________
(ii)
Adjustments for Hotel Properties acquired
or disposed of:    $____________
(iii)
Adjusted Corporate EBITDA:    $____________

(c)
Leverage Ratio: total of (a) divided by (b)(iii) above:    $____________

2.5.     Limitations on Unsecured Indebtedness of Parent
(Section 7.04 of the Agreement) .
Maximum Requirement – 60 %, provided such ratio may be increased
to 65%

(a)
Parent’s Unsecured Indebtedness:    $____________
(b)
Liquid Investments:    $____________
(c)
Sum of Asset Values of all Unencumbered Properties:    $____________
(d)
Sum of Lines (b) and (c) (Total Unencumbered Asset Value):    $____________
(e)
Ratio of (a) to (d):    _____________

2.6.     Limitations on Secured Indebtedness of Parent
(Section 7.05 of the Agreement) .
Maximum Requirement – 45 %

(a)
Parent’s Secured Indebtedness:    $____________
(b)
Consolidated Total Book Value:    $____________
(c)
Ratio of (a) to (b):    _____________




2.7.     Limitations on Secured Recourse Indebtedness of Parent and its Subsidiaries
(Section 7.06 of the Agreement).
Maximum Requirement – 10 %

(a)    Secured Recourse Indebtedness of Parent and Subsidiaries:     $________
(b)    Consolidated Total Book Value:                 $_______
(c)    Ratio of (a) to (b):                     ____________

3.    Other Covenants . Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the Rolling Period ending _________, 20___, that the following amounts and calculations made pursuant to the Agreement are true and correct:


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



3.1.      Revolving Facility Applicable Margin (Article I of the Agreement)

Pursuant to Article I of the Agreement, [the Status applicable to the Revolving Facility is ______________, based upon a Leverage Ratio of ____________ (as calculated above)][the Debt Rating of the Parent is __________]. Based on the foregoing, the Applicable Margin for each subsequent Revolving Facility Advance is as follows:

Base Rate Advances:    __________%
LIBOR Advances:    __________%
Unused Commitment Fee:    __________%

3.2.     TL Facility Applicable Margin (Article I of the Agreement)

Pursuant to Article I of the Agreement, [the Status applicable to the TL Facility is ______________, based upon a Leverage Ratio of ____________ (as calculated above)][the Debt Rating of the Parent is __________]. Based on the foregoing, the Applicable Margin for each subsequent TL Facility Advance is as follows:

Base Rate Advances:    __________%
LIBOR Advances:    __________%

3.3.     Leverage Trigger

As calculated above, the Leverage Ratio is ___________.  As reported in the Compliance Certificate previously delivered, the Leverage Ratio was ____________.

3.4.     Unencumbered Properties (Article I of the Agreement)

    A list of all Unencumbered Properties and the Asset Values therefor, is set forth on Schedule 1 to Compliance Certificate attached hereto.
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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXECUTED as of the date first referenced above.

BORROWER:
LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties, its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1
TO
COMPLIANCE CERTIFICATE
List of Unencumbered Properties and Their Asset Values

Unencumbered Property                          Asset Value







    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT D

FORM OF AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT

This Amended & Restated Environmental Indemnification Agreement (this “Agreement” ) is made and entered into effective for all purposes as of January 10, 2017, by the parties signatory hereto or to an Accession Agreement (as hereinafter defined) (collectively, “Indemnitor” , whether one or more), to and for the benefit of Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ), for the benefit of the banks and other lenders named in the Credit Agreement herein described (collectively, the “Banks” ).

INTRODUCTION

WHEREAS, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the administrative agent (in such capacity, the “ CA Administrative Agent ”), the Banks (as such term is defined therein) party thereto and the other parties from time to time party thereto entered into that certain Amended & Restated Senior Unsecured Credit Agreement dated as of January 8, 2014 (as amended, the “ Existing Credit Agreement ”);

WHEREAS, the Borrower, the Parent, the Guarantors party thereto, the administrative agent (in such capacity, the “ TL Administrative Agent ”), the Banks (as such term is defined therein) party thereto and the other parties from time to time party thereto entered into that certain Senior Unsecured Term Loan Agreement dated as of January 8, 2014 (as amended, the “ Existing Term Loan Agreement ” and collectively with the Existing Credit Agreement, the “ Existing Agreements ”);

WHEREAS, the parties have agreed to amend and restate the Existing Agreements pursuant to that certain Second Amended and Restated Senior Unsecured Credit Agreement, dated as of the date hereof, by and between the Borrower, the Parent, the Guarantors party thereto, the Administrative Agent, the Banks party thereto and the other parties from time to time party thereto (as the same may be amended or modified from time to time, being referred to herein as the “ Credit Agreement ”);

WHEREAS, the Borrower and Subsidiaries of the Borrower now or hereafter will own certain Hotel Properties which include without limitation the Existing Properties, the Future Properties, the Permitted Non-Unencumbered Properties and the properties owned by the Permitted Other Subsidiaries (said properties together with all property owned by any participating lessees in connection with such Hotel Properties, all rights and appurtenances to such Hotel Properties and all improvements presently located or hereafter constructed on such Hotel Properties are hereinafter collectively called the “Properties” , and each a “Property” );

WHEREAS, the Borrower is the principal financing entity for capital requirements of its Subsidiaries, and from time to time the Borrower has made and will continue to make capital contributions and advances to its Subsidiaries, including the Subsidiaries which are parties hereto. Other than the Parent, each Indemnitor is a direct or indirect subsidiary of the Borrower. Each Indemnitor will derive substantial direct and indirect benefit from the transactions contemplated by the Credit Agreement; and

WHEREAS, as a condition to extending credit to the Borrower under the Credit Agreement, the Banks have required, among other things, that the Indemnitor execute and deliver this Agreement, which Agreement shall amend, restate and replace, in its entirety, (i) that certain Environmental Indemnification Agreement, dated as of January 8, 2014, made by the Indemnitor (as defined therein) in favor of the CA Administrative Agent and (ii) that certain Environmental Indemnification Agreement, dated as of January 8, 2014, made by the Indemnitor (as defined therein) in favor of the TL Administrative Agent (as the same may have been amended restated or otherwise modified from time to time prior to the date hereof, collectively the “ Original Agreements ”).


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



AGREEMENT

NOW, THEREFORE, Indemnitor, as an inducement to the Banks to make the Advances, hereby covenants and agrees to and for the benefit of the Banks as follows:

1.     Defined Terms . All terms used in this Agreement, but not defined herein, shall have the meaning given such terms in the Credit Agreement.

2.     Hazardous Material . As used in this Agreement, the term “ Hazardous Materials ” shall mean any flammable explosives, radioactive materials, hazardous wastes, hazardous materials, hazardous or toxic substances, or related materials as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. 9601 et. seq. ), the Hazardous Materials Transportation Act, as amended (49 U.S.C. 1801 et seq. ), the Resource Conservation and Recovery Act, as amended (42 U.S.C. 6901 et seq. ), and in the regulations adopted and publications promulgated pursuant thereto, and all friable asbestos, petroleum derivatives, polychlorinated biphenyls, and materials defined as hazardous materials under any federal, state or local laws, ordinances, codes, rules, orders, regulations or policies governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal thereof (collectively, “Environmental Laws” ).

3.     Representation . Except as disclosed in writing to the Administrative Agent, to the knowledge of Borrower, none of the present or previously owned or operated Property of the Borrower or of any of its present or former Subsidiaries, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws which could reasonably be expected to cause a Material Adverse Change; (ii) is subject to a Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; (iii) has been the site of any Release, use or storage of Hazardous Substances or Hazardous Wastes from present or past operations except for Permitted Hazardous Substances, which Permitted Hazardous Substances have not caused at the site or at any third‑party site any condition that has resulted in or could reasonably be expected to result in the need for Response or (iv) none of the Improvements are constructed on land designated by any Governmental Authority having land use jurisdiction as wetlands.

4.     Covenant . Indemnitor covenants and agrees not to cause or permit the presence, use, generation, release, discharge, storage, disposal or transportation of any Hazardous Materials on, under, in, about, to or from any of the Properties except for Permitted Hazardous Substances.

5.     Indemnification . Indemnitor shall exonerate, indemnify, pay and protect, defend (with counsel approved pursuant to the Credit Agreement) and save the Administrative Agent, the Banks, and their respective directors, trustees, beneficiaries, officers, shareholders, employees and agents of the Banks (collectively, the “Indemnified Parties” ), harmless from and against any claims (including, without limitation, third party claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, damages, punitive damages, penalties, fines, costs, taxes, assessments, liabilities (including, without limitation, sums paid in settlements of claims), interest or losses, including reasonable attorneys’ fees and expenses (including, without limitation, any such reasonable fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), consultant fees, and expert fees, together with all other reasonable costs and expenses of any kind or nature (collectively, “Costs” ) that arise directly or indirectly in connection with the presence, suspected presence, release or suspected release of any Hazardous Materials in or into the air, soil, ground water, surface water or improvements at, on, about, under or within any of the Properties, or any portion thereof, or elsewhere in connection with the transportation of Hazardous Materials to or from any of the Properties (any such release being referred to herein as a “Release” ); provided, however, that Indemnitor shall not be so liable for any Costs arising because of the gross negligence or willful misconduct of an Indemnified Party or Costs arising because of a Release from or

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



on a Property after the Administrative Agent or the Administrative Agent’s nominee acquires title to such Property. INDEMNITOR’S OBLIGATION TO SO INDEMNIFY THE INDEMNIFIED PARTIES SHALL INCLUDE INDEMNIFICATION FOR ANY OF SUCH MATTERS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES. The indemnification provided in this Section 5 shall specifically apply to and include claims or actions brought by or on behalf of tenants or employees of Indemnitor; Indemnitor hereby expressly waives (with respect to any claims of the Indemnified Parties arising under this Agreement) any immunity to which Indemnitor may otherwise be entitled under any industrial or worker’s compensation laws. In the event any of the Indemnified Parties shall suffer or incur any such Costs, Indemnitor shall pay to the Administrative Agent for the benefit of the Indemnified Party the total of all such Costs suffered or incurred by such Indemnified Party within ten (10) days after demand therefor, such payment to be disbursed by the Administrative Agent in accordance with the Credit Agreement. Without limiting the generality of the foregoing, the indemnification provided by this Section 5 shall specifically cover Costs, including, without limitation, capital, operating and maintenance costs, incurred in connection with any investigation or monitoring of site conditions, any clean-up, containment, remedial, removal or restoration work required or performed by any federal, state or local governmental agency or political subdivision (“ Governmental Agency” ) or performed by any non-governmental entity or person as required or requested, by any Governmental Agency because of the presence, suspected presence, release or suspected release of any Hazardous Materials in or into the air, soil, groundwater, surface water or improvements at, on, under or within any of the Properties (or any portion thereof), or elsewhere in connection with the transportation of Hazardous Materials to or from any of the Properties, and any claims of third parties for loss or damage due to such Hazardous Materials.

6.     Remedial Work . In the event any investigation or monitoring of site conditions or any clean-up, containment, restoration, removal or other remedial work ( “Remedial Work” ) is required (a) under any Environmental Law, (b) by any judicial, arbitral or administrative order, (c) in order to comply with any agreements affecting any of the Properties, or (d) to maintain any of the Properties in a standard of environmental condition which prevents the release or generation of any Hazardous Materials except for Permitted Hazardous Substances, Indemnitor shall perform or cause to be performed such Remedial Work; provided , however , that Indemnitor may withhold commencement of such Remedial Work pending resolution of any good faith contest regarding the application, interpretation or validity of any law, regulation, order or agreement, subject to the requirements of Section 7 below. All Remedial Work shall be conducted (i) in a diligent and timely fashion by a licensed environmental engineer, (ii) pursuant to a detailed written plan for the Remedial Work approved by any Governmental Agency with a legal or contractual right to such approval, (iii) with such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then customarily maintained with respect to such activities and (iv) only following receipt of all required permits, licenses or approvals. In addition, Indemnitor shall submit to the Banks promptly upon receipt or preparation, copies of any and all reports, studies, analyses, correspondence, governmental comments or approvals, proposed removal or other Remedial Work contracts and similar information prepared or received by Indemnitor in connection with any Remedial Work or Hazardous Materials relating to any of the Properties. All costs and expenses of such Remedial Work shall be paid by Indemnitor, including, without limitation, the charges of the Remedial Work contractors and the consulting environmental engineer, any taxes or penalties assessed in connection with the Remedial Work and the Banks’ reasonable fees and costs incurred in connection with monitoring or review of such Remedial Work. In the event Indemnitor should fail to commence or cause to be commenced such Remedial Work, in a timely fashion, or fail diligently to prosecute to completion, such Remedial Work, the Administrative Agent following consent of the Required Lenders (following thirty (30) days written notice to Indemnitor) may, but shall not be required to, cause such Remedial Work to be performed, and all costs and expenses thereof, or incurred in connection therewith shall be Costs within the meaning of Section 5 above. All such Costs shall be due and payable to the Administrative Agent by Indemnitor upon thirty (30) days after demand therefor, such payments to be disbursed by the Administrative Agent in accordance with the Credit Agreement.

7.     Permitted Contests . Notwithstanding any provision of this Agreement to the contrary, Indemnitor may contest by appropriate action any Remedial Work requirement imposed by any Governmental Agency or similar agency provided that (a) Indemnitor has given the Banks written notice that Indemnitor is

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



contesting or shall contest and Indemnitor does in fact contest the application, interpretation or validity of the law, regulation, order or agreement pertaining to the Remedial Work by appropriate legal or administrative proceedings conducted in good faith and with due diligence and dispatch, (b) such contest shall not subject any of the Indemnified Parties nor any assignee of all or any portion of the Banks’ interest in the Advances nor any of the Properties to civil or criminal liability and does not jeopardize any such party’s lien upon or interest in any of the Properties and (c) if the estimated cost of the Remedial Work is greater than $1,000,000, Indemnitor shall give such security or assurances as may be reasonably required by the Banks as determined pursuant to the Credit Agreement to ensure ultimate compliance with all legal or contractual requirements pertaining to the Remedial Work (and payment of all costs, expenses, interest and penalties in connection therewith) and to prevent any sale, forfeiture or loss by reason of nonpayment or non-compliance.

8.     Reports and Claims . Indemnitor shall deliver to the Banks copies of any reports, analyses, correspondence, notices, licenses, approvals, orders or other written materials relating to the environmental condition of any of the Properties promptly upon receipt, completion or delivery thereof. Indemnitor shall give notice to the Banks of any claim, action, administrative proceeding (including, without limitation, informal proceedings) or other demand by any governmental agency or other third party involving Costs or Remedial Action at the time such claim or other demand first becomes known to Indemnitor. Receipt of any such notice shall not be deemed to create any obligation on the Banks to defend or otherwise respond to any claim or demand. All notices, approvals, consents, requests and demands upon the respective parties hereto shall be in writing, including telegraphic communication and delivered or teletransmitted to the Administrative Agent, as set forth in the Credit Agreement and to each Indemnitor, at the address set forth beneath such Indemnitor’s signature or in the Accession Agreement executed by such Indemnitor, or to such other address as shall be designated by any Indemnitor or the Administrative Agent in written notice to the other parties. All such notices and other communications shall be effective when delivered or teletransmitted to the above addresses.

9.     Banks as Owner . If for any reason, the Administrative Agent or any of the Banks (or any successor or assign of such parties) becomes the fee owner of any of the Properties and any claim, action, notice, administrative proceeding (including, without limitation, informal proceedings) or other demand is made by any governmental agency or other third party which implicate Costs or Remedial Work, Indemnitor shall cooperate with such party in any defense or other appropriate response to any such claim or other demand; provided, however, that Indemnitor shall not be so liable for any Costs arising because of the gross negligence or willful misconduct of an Indemnified Party. Indemnitor’s duty to cooperate and right to participate in the defense or response to any such claim or demand shall not be deemed to limit or otherwise modify Indemnitor’s obligations under this Agreement. Any party subject to a claim or other proceeding referenced in the first sentence of this Section 9 shall give notice to Indemnitor of any claim or demand governed by this Section 9 at the time such claim or other demand first becomes known to such party.

10.     Subrogation of Indemnity Rights . If Indemnitor fails to fully perform its obligations under Sections 5 and 6 above, the Indemnified Parties shall be subrogated to any rights or claims Indemnitor may have against any present, future or former owners, tenants or other occupants or users of any of the Properties, any portion thereof or any adjacent or proximate properties, relating to the recovery of Costs or the performance of Remedial Work.

11.     Assignment by Administrative Agent and Banks . No consent by Indemnitor shall be required for any assignment or reassignment of the rights of the Administrative Agent or the Banks under this Agreement to any successor of such party or a purchaser of the Advances or any interest in or portion of the Advances including participation interests in accordance with the terms of the Credit Agreement.

12.     Merger, Consolidation or Sale of Assets . In the event Indemnitor is dissolved, liquidated or terminated or all or substantially all the assets of Indemnitor are sold or otherwise transferred to one or more persons or other entities, the surviving entity or transferee of assets, as the case may be, (i) shall be formed and existing under the laws of a state, (ii) shall deliver to the Banks an acknowledged instrument in recordable form assuming all obligations, covenants and responsibilities of Indemnitor under this Agreement.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



13.     Independent Obligations; Survival . The obligations of Indemnitor under this Agreement shall survive the consummation of the credit transaction described above and the repayment of the Advances. The obligations of Indemnitor under this Agreement are separate and distinct from the obligations of Indemnitor under the Credit Documents. This Agreement may be enforced by the Administrative Agent and/or the Banks without regard to or affecting any rights and remedies the Administrative Agent and/or the Banks may have against Indemnitor under the Credit Documents and without regard to any limitations on the Administrative Agent’s or the Banks’ recourse for recovery of the Advances as may be provided in the Credit Documents. Enforcement of this Agreement is not and shall not be deemed to constitute an action for recovery of the indebtedness of the Advances.

14.     Default Interest . In addition to all other rights and remedies of the Administrative Agent and/or the Banks against Indemnitor as provided herein, or under applicable law, Indemnitor shall pay to the Administrative Agent, immediately upon demand therefor, Default Interest (as defined below) on any Costs and other payments required to be paid by Indemnitor to the Banks under this Agreement which are not paid within ten (10) days after demand therefor, such payments to be disbursed by the Administrative Agent in accordance with the Credit Agreement. Default Interest shall be paid by Indemnitor from the date such payment becomes delinquent through and including the date of payment of such delinquent sums. “Default Interest” shall mean a per annum interest rate equal to three percent (3%) above the Adjusted Base Rate or reference rate for the then current calendar month, as of the first day of such calendar month, which is publicly announced from time to time by the Administrative Agent.

15.     Contribution . As a result of the transactions contemplated by the Credit Agreement, each of the Indemnitors will benefit, directly and indirectly, from the Obligations and in consideration thereof desire to enter into a contribution agreement among themselves as set forth in this Section 15 to allocate such benefits among themselves and to provide a fair and equitable arrangement to make contributions in the event any payment is made by any Indemnitor hereunder to the Administrative Agent or the Banks (such payment being referred to herein as a “Contribution,” and for purposes of this Agreement, includes any exercise of recourse by the Administrative Agent against any Property of a Contributor and application of proceeds of the sale of such Property in satisfaction of such Indemnitor’s obligations under this Agreement). The Indemnitors hereby agree as follows:

15.1.     Calculation of Contribution . In order to provide for just and equitable contribution among the Indemnitors in the event any Contribution is made by an Indemnitor (a “Funding Indemnitor” ), such Funding Indemnitor shall be entitled to a contribution from certain other Indemnitors for all payments, damages and expenses incurred by that Funding Indemnitor in discharging any of the obligations under this Agreement (the “Obligations” ), in the manner and to the extent set forth in this Section 15 . The amount of any Contribution under this Agreement shall be equal to the payment made by the Funding Indemnitor to the Administrative Agent or any other beneficiary pursuant to this Agreement and shall be determined as of the date on which such payment is made.

15.2.     Benefit Amount Defined . For purposes of this Agreement, the “ Benefit Amount ” of any Indemnitor as of any date of determination shall be the net value of the benefits to such Indemnitor and all of its Subsidiaries (including any Subsidiaries which may be Indemnitors) from extensions of credit made by the Banks to the Borrower under the Credit Agreement; provided , however , that in determining the contribution liability of any Indemnitor which is a Subsidiary to its direct or indirect parent corporation or of any Indemnitor to its direct or indirect Subsidiary, the Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the Benefit Amount of the parent corporation. Such benefits shall include benefits of funds constituting proceeds of Advances made to the Borrower by the Banks which are in turn advanced or contributed by the Borrower to such Indemnitor or its Subsidiaries and benefits of Letters of Credit issued pursuant to the Credit Agreement on behalf of, or the proceeds of which are advanced or contributed or otherwise benefit, directly or indirectly, such Indemnitor and its Subsidiaries (collectively, the “Benefits” ). In the case of any proceeds of Advances or Benefits advanced or

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



contributed to a Person (an “Owned Entity” ) any of the equity interests of which are owned directly or indirectly by an Indemnitor, the Benefit Amount of an Indemnitor with respect thereto shall be that portion of the net value of the benefits attributable to Advances or Benefits equal to the direct or indirect percentage ownership of such Indemnitor in its Owned Entity.

15.3.     Contribution Obligation . Each Indemnitor shall be liable to a Funding Indemnitor in an amount equal to the greater of (A) the (i) ratio of the Benefit Amount of such Indemnitor to the total amount of Obligations, multiplied by (ii) the amount of Obligations paid by such Funding Indemnitor and (B) 95% of the excess of the fair saleable value of the property of such Indemnitor over the total liabilities of such Indemnitor (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Indemnitor is deemed made for purposes of this Agreement (giving effect to all payments made by other Funding Indemnitors as of such date in a manner to maximize the amount of such contributions).

15.4.     Allocation . In the event that at any time there exists more than one Funding Indemnitor with respect to any Contribution (in any such case, the “Applicable Contribution” ), then payment from other Indemnitors pursuant to this Agreement shall be allocated among such Funding Indemnitors in proportion to the total amount of the Contribution made for or on account of the Borrower by each such Funding Indemnitor pursuant to the Applicable Contribution. In the event that at any time any Indemnitor pays an amount under this Agreement in excess of the amount calculated pursuant to clause (A) of Subsection 15.3 above, that Indemnitor shall be deemed to be a Funding Indemnitor to the extent of such excess and shall be entitled to contribution from the other Indemnitors in accordance with the provisions of this Subsection 15.4 .

15.5.     Subsidiary Payment . The amount of contribution payable under this Section 15 by any Indemnitor shall be reduced by the amount of any contribution paid hereunder by a Subsidiary of such Indemnitor.

15.6.     Equitable Allocation . If as a result of any reorganization, recapitalization, or other corporate change in the Borrower or any of its Subsidiaries, or as a result of any amendment, waiver or modification of the terms and conditions of other Sections of this Agreement or the Obligations, or for any other reason, the contributions under this Section 15 become inequitable as among the Indemnitors, the Indemnitors shall promptly modify and amend this Section 15 to provide for an equitable allocation of contributions. Any of the foregoing modifications and amendments shall be in writing and signed by all Indemnitors.

15.7.     Asset of Party to Which Contribution is Owing . The Indemnitors acknowledge that the right to contribution hereunder shall constitute an asset in favor of the Indemnitor to which such contribution is owing.

15.8.     Subordination . No payments payable by an Indemnitor pursuant to the terms of this Section 15 shall be paid until all amounts then due and payable by the Borrower to the Administrative Agent or any Bank, pursuant to the terms of the Credit Documents, are paid in full in cash. Nothing contained in this Section 15 shall affect the obligations of any Indemnitor to the Administrative Agent or any Bank under the Credit Agreement or any other Credit Documents.
    
16.     Miscellaneous . If there shall be more than one Indemnitor hereunder, or pursuant to any other indemnification of Banks relating to Hazardous Materials arising out of or in connection with the Advances ( “Other Indemnitor” ), each Indemnitor and Other Indemnitor agrees that (a) the obligations of the Indemnitor hereunder, and each Other Indemnitor, are joint and several, (b) a release of any one or more Indemnitors or Other Indemnitors or any limitation of this Agreement in favor of or for the benefit of one or more Indemnitors or Other Indemnitors shall not in any way be deemed a release of or limitation in favor of or for the benefit of any other Indemnitor or Other Indemnitor and (c) a separate action hereunder may be

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



brought and prosecuted against any or all Indemnitors or Other Indemnitors. If any term of this Agreement or any application thereof shall be invalid, illegal or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. No delay or omission in exercising any right hereunder shall operate as a waiver of such right or any other right. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Indemnitor, the Administrative Agent and the Banks, and their respective successors and assigns, including (without limitation) any assignee or purchaser of all or any portion of any of the Banks’ interest in (i) the Advances, (ii) the Credit Documents, or (iii) any of the Properties.
    
17.     GOVERNING LAW . ANY DISPUTE BETWEEN THE INDEMNITOR OR ANY INDEMNIFIED PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
    
18.     CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL . (A)  EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION 18 , EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
    
(B)     OTHER JURISDICTIONS . THE INDEMNITOR AGREES THAT ANY INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO PROCEED AGAINST THE INDEMNITOR OR ANY OF THE PROPERTIES IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE INDEMNITOR OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE INDEMNITOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE INDEMNITOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B) .
    
(C)     SERVICE OF PROCESS . THE INDEMNITOR WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY ANY INDEMNIFIED PARTY BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE INDEMNITOR ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY INDEMNIFIED PARTY TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE INDEMNITOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



    
(D)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
    
(E)     ADVICE OF COUNSEL . EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 18 , WITH ITS COUNSEL.
    
19.     Amendments/Accession Agreement . No amendment or waiver of any provision of this Agreement nor consent to any departure by any Indemnitor therefrom shall be effective unless the same shall be in writing and signed by the Administrative Agent; provided , however , that any amendment or waiver releasing any Indemnitor from any liability hereunder shall be signed by the Required Lenders; and provided further that any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Notwithstanding the foregoing, in the event that any Subsidiary or Affiliate of the Borrower hereafter is required in accordance with the terms of the Credit Agreement or otherwise agrees to become an Indemnitor under this Agreement, then such Subsidiary or Affiliate may become a party to this Agreement by executing an Accession Agreement ( “Accession Agreement” ) in the form attached hereto as Annex 1 , and each Indemnitor and the Administrative Agent hereby agrees that upon such Subsidiary’s or Affiliate’s execution of such Accession Agreement, this Agreement shall be deemed to have been amended to make such Person an Indemnitor hereunder for all purposes and a party hereto and no signature is required on behalf of the other Indemnitors or the Administrative Agent to make such an amendment to this Agreement effective.

20.    This Agreement amends, restates and supersedes the Original Agreements in their entirety.

[Balance of page intentionally left blank]



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



IN WITNESS WHEREOF, Indemnitor has caused this Agreement to be executed as of the day and year first written above.

INDEMNITORS:
 
 
 
 
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 

LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
 
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 
 
[SIGNATURE BLOCKS TO BE INSERTED]


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX 1
TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT

ACCESSION AGREEMENT

_______________________ [Name of Entity], a [limited partnership/corporation] (the “Company” ), hereby agrees with (i) Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ) under the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks (as defined in the Credit Agreement), the Administrative Agent and the other parties from time to time party thereto; (ii) the parties to the Amended & Restated Environmental Indemnity and Agreement (the “Environmental Indemnity” ) dated as of January 10, 2017 executed in connection with the Credit Agreement, (iii) the parties to the Amended & Restated Guaranty and Contribution Agreement (the “Guaranty” ) dated as of January 10, 2017 executed in connection with the Credit Agreement, as follows:

The Company hereby agrees and confirms that, as of the date hereof, it (a) intends to be a party to the Environmental Indemnity, the Guaranty and the Credit Agreement and undertakes to perform all the obligations expressed therein, respectively, of an Indemnitor and a Guarantor (as defined in the Environmental Indemnity and the Guaranty, respectively), (b) agrees to be bound by all of the provisions of the Environmental Indemnity, the Guaranty and the Credit Agreement as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity, the Guaranty and the Credit Agreement, respectively, with respect to the Company, a party thereto, are true and correct in all material respects as of the date of this Accession Agreement and (d) has received and reviewed copies of each of the Environmental Indemnity, the Guaranty and the Credit Agreement.

For purposes of notices under the Environmental Indemnity, the Guaranty and the Credit Agreement the address for the Company is as follows:

Attention:_______________________________
Telephone:______________________________
Telecopy:_______________________________

This Accession Agreement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF this Accession Agreement was executed and delivered as of the ___ day of ___________________, 20___.

[Name of Entity]
By:    
Title:    


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT E

FORM OF AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT

This Amended & Restated Guaranty and Contribution Agreement (this “Agreement” ) is made and entered into effective for all purposes as of the January 10, 2017, by the parties signatory hereto or to an Accession Agreement (as hereinafter defined) (collectively, the “Guarantor” , whether one or more) to and for the benefit of Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ), and the banks and other lenders named in the Credit Agreement herein described (collectively, including the Swap Banks, the “Banks” ).

INTRODUCTION

WHEREAS, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the administrative agent (in such capacity, the “ CA Administrative Agent ”), the Banks (as such term is defined therein) party thereto and the other parties from time to time party thereto entered into that certain Amended and Restated Senior Unsecured Credit Agreement dated as of January 8, 2014 (as amended, the “ Existing Credit Agreement ”);

WHEREAS, the Borrower, the Parent, the Guarantors party thereto, the administrative agent (in such capacity, the “ TL Administrative Agent ”), the Banks (as such term is defined therein) party thereto and the other parties from time to time party thereto entered into that certain Senior Unsecured Term Loan Agreement dated as of January 8, 2014 (as amended, the “ Existing Term Loan Agreement ” and collectively with the Existing Credit Agreement, the “ Existing Agreements ”);

WHEREAS, the parties have agreed to amend and restate the Existing Agreements pursuant to that certain Second Amended and Restated Senior Unsecured Credit Agreement, dated as of the date hereof, by and between the Borrower, the Parent, the Guarantors party thereto, the Administrative Agent, the Banks party thereto and the other parties from time to time party thereto (as the same may be amended or modified from time to time, being referred to herein as the “ Credit Agreement ”);

WHEREAS, pursuant to the Credit Agreement, the Banks have agreed to extend credit to Borrower as more specifically described therein;

WHEREAS, certain Swap Banks have either entered into or may in the future enter into one or more Swap Contracts with the Borrower to swap floating rate of interest payable on the Advances to a fixed rate of interest, on terms and conditions set forth in such Swap Contracts (each such Swap Contract, a “ Subject Swap Contract ”);

WHEREAS, the Borrower is the principal financing entity for capital requirements of its Subsidiaries, and from time to time the Borrower has made and will continue to make capital contributions and advances to its Subsidiaries, including the Subsidiaries which are or will become parties hereto. Other than the Parent, each Guarantor is a direct or indirect subsidiary of the Borrower. Each Guarantor will derive substantial direct and indirect benefit from the transactions contemplated by the Credit Agreement and the Subject Swap Contracts; and

WHEREAS, as a condition to extending credit to the Borrower under the Credit Agreement and to providing the financial accommodations under the Subject Swap Contracts, the Banks (including the Swap Banks) have required, among other things, that the Guarantor execute and deliver this Agreement, which Agreement shall amend, restate and replace, in its entirety, (i) that certain Guaranty and Contribution Agreement, dated as of January 8, 2014, made by the Guarantor (as defined therein) in favor of the CA Administrative Agent and (ii) that certain Guaranty and Contribution Agreement, dated January 8, 2014, made by the Guarantor (as defined therein) in favor of the TL Administrative Agent (as the same may have been amended restated or otherwise modified from time to time prior to the date hereof, collectively the “ Original Agreements ”).


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



AGREEMENT

NOW, THEREFORE, in order to induce the Banks to make the Advances, the Issuing Banks to issue the Letters of Credit and the Swap Banks to enter into the Subject Swap Contracts, each Guarantor hereby agrees as follows:

SECTION 1.
DEFINED TERMS.

All terms used in this Agreement, but not defined herein, shall have the meaning given such terms in the Credit Agreement.

SECTION 2.
GUARANTY.

Each Guarantor hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Borrower now or hereafter existing under (i) the Credit Agreement, the Notes and any other Credit Document, whether for principal, interest, fees, expenses, or otherwise, or (ii) each Subject Swap Contract, whether for fees, premiums, scheduled periodic payments, breakage, termination payments, expenses, or otherwise, but excluding in each case of (i) and (ii) above all Excluded Swap Obligations (such non-excluded Obligations being the “Guaranteed Obligations” ) and any and all expenses (including reasonable counsel fees and expenses) incurred by the Administrative Agent or any Bank (including any Swap Bank) in enforcing any rights under this Agreement. Each Guarantor agrees that its guaranty obligation under this Agreement is a guarantee of payment, not of collection and that such Guarantor is primarily liable for the payment of the Guaranteed Obligations.

SECTION 3.
LIMIT OF LIABILITY.

Each Guarantor that is a Subsidiary of the Borrower shall be liable under this Agreement with respect to the Guaranteed Obligations only for amounts aggregating up to the largest amount that would not render its guaranty obligation hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any state law.

SECTION 4.
GUARANTY ABSOLUTE.

Each Guarantor guarantees that the Guaranteed Obligations will be paid and performed strictly in accordance with the terms of the Credit Agreement, the other Credit Documents, and each Subject Swap Contract, as applicable, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any Bank (including any Swap Bank). The liability of each Guarantor under this Agreement shall be absolute and unconditional irrespective of:

(a)    any lack of validity or enforceability of the Credit Agreement, any other Credit Document, any Subject Swap Contract or any other agreement or instrument relating thereto;

(b)    any change in the time, manner, or place of payment of, or in any other term of, any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement or any other Credit Document or any Subject Swap Contract;

(c)    any exchange, release, or nonperfection of any collateral, if applicable, or any release or amendment or waiver of or consent to departure from any other agreement or guaranty, for any of the Guaranteed Obligations; or

(d)    any other circumstances which might otherwise constitute a defense available to, or a discharge of the Borrower or a Guarantor.

SECTION 5.
CONTINUATION AND REINSTATEMENT, ETC.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Each Guarantor agrees that, to the extent that (i) the Borrower makes payments to the Administrative Agent or any Bank (including any Swap Bank) or (ii) the Administrative Agent or any Bank (including any Swap Bank) receives any proceeds of any property of Borrower or any Guarantor, and in either such case such payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, or otherwise required to be repaid, then to the extent of such repayment the Guaranteed Obligations shall be reinstated and continued in full force and effect as of the date such initial payment or collection of proceeds occurred. The Guarantor shall defend and indemnify the Administrative Agent and each Bank (including each Swap Bank) from and against any claim or loss under this Section 5 (including reasonable attorneys’ fees and expenses) in the defense of any such action or suit.

SECTION 6.
CERTAIN WAIVERS.

Section 6.01.    Notice. Each Guarantor hereby waives promptness, diligence, notice of acceptance, notice of acceleration, notice of intent to accelerate and any other notice with respect to any of the Guaranteed Obligations and this Agreement.

Section 6.02.    Other Remedies. Each Guarantor hereby waives any requirement that the Administrative Agent or any Bank (including any Swap Bank) protect, secure, perfect, or insure any Lien or any Property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any collateral, if any, including any action required pursuant to a Legal Requirement.

Section 6.03.    Waiver of Subrogation .

(a)    Each Guarantor hereby irrevocably waives, until payment in full of all Guaranteed Obligations and termination of all Commitments, any claim or other rights which it may acquire against the Borrower that arise from such Guarantor’s obligations under this Agreement or any other Credit Document or any Subject Swap Contract, including, without limitation, any right of subrogation (including, without limitation, any statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of the Administrative Agent or any Bank (including any Swap Bank) against the Borrower or any collateral which the Administrative Agent or any Bank (including any Swap Bank) now has or acquires. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Guaranteed Obligations shall not have been paid in full and all of the Commitments terminated, such amount shall be held in trust for the benefit of the Administrative Agent or any Bank (including any Swap Bank) and shall promptly be paid to the Administrative Agent for the benefit of the Administrative Agent or any Bank (including any Swap Bank) to be applied to the Guaranteed Obligations, whether matured or unmatured, as the Administrative Agent may elect. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Credit Agreement and the Subject Swap Contracts and that the waiver set forth in this Section 6.03(a) is knowingly made in contemplation of such benefits.

(b)    Each Guarantor further agrees that it will not enter into any agreement providing, directly or indirectly, for any contribution, reimbursement, repayment, or indemnity by the Borrower or any other Person on account of any payment by such Guarantor to the Administrative Agent or any Bank (including any Swap Bank) under this Agreement.

SECTION 7.
REPRESENTATIONS AND WARRANTIES.

Each Guarantor hereby represents and warrants as follows:
    
Section 7.01.     Corporate Authority. Such Guarantor is either a corporation, limited liability company, limited partnership or trust duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The execution, delivery and performance by such Guarantor of this Agreement are within such Guarantor’s organizational powers, have been duly authorized by all necessary organizational action and do not contravene (a) such Guarantor’s organizational authority or (b) any law or material contractual restriction affecting such Guarantor or its Property.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Section 7.02.    Government Approval . No authorization or approval or other action by and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by such Guarantor of this Agreement.

Section 7.03.    Binding Obligations . This Agreement is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights (whether considered in a proceeding at law or in equity).

SECTION 8.
COVENANTS.

Each Guarantor will comply with all covenant provisions of Article V and Article VI of the Credit Agreement to the extent such provisions are applicable.

SECTION 9.
CONTRIBUTION.

As a result of the transactions contemplated by the Credit Agreement and the Subject Swap Contracts, each of the Guarantors will benefit, directly and indirectly, from the Guaranteed Obligations and in consideration thereof desire to enter into a contribution agreement among themselves as set forth in this Section 9 to allocate such benefits among themselves and to provide a fair and equitable arrangement to make contributions in the event any payment is made by any Guarantor hereunder to the Administrative Agent or any Bank (including any Swap Bank) (such payment being referred to herein as a “ Contribution ,” and for purposes of this Agreement, includes any exercise of recourse by the Administrative Agent against any Property of a Guarantor and application of proceeds of such Property in satisfaction of such Guarantor’s obligations under this Agreement). The Guarantors hereby agree as follows:

Section 9.01.    Calculation of Contribution . In order to provide for just and equitable contribution among the Guarantors in the event any Contribution is made by a Guarantor (a “Funding Guarantor” ), such Funding Guarantor shall be entitled to a contribution from certain other Guarantors for all payments, damages and expenses incurred by that Funding Guarantor in discharging any of the Guaranteed Obligations, in the manner and to the extent set forth in this Section 9 . The amount of any Contribution under this Agreement shall be equal to the payment made by the Funding Guarantor to the Administrative Agent or any other beneficiary pursuant to this Agreement and shall be determined as of the date on which such payment is made.

Section 9.02.    Benefit Amount Defined . For purposes of this Agreement, the “ Benefit Amount ” of any Guarantor as of any date of determination shall be the net value of the benefits to such Guarantor and all of its Subsidiaries (including any Subsidiaries which may be Guarantors) from extensions of credit made by the Banks to the Borrower under the Credit Agreement or from the provision of financial accommodations to the Borrower under the Subject Swap Contracts, as the case may be; provided , however , that in determining the contribution liability of any Guarantor which is a Subsidiary to its direct or indirect parent corporation or of any Guarantor to its direct or indirect Subsidiary, the Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the Benefit Amount of the parent corporation. Such benefits shall include benefits of funds constituting proceeds of Advances made to the Borrower by the Banks which are in turn advanced or contributed by the Borrower to such Guarantor or its Subsidiaries and benefits of financial accommodations provided to the Borrower by the Swap Banks pursuant to the Subject Swap Contracts or Letters of Credit issued pursuant to the Credit Agreement on behalf of, or the proceeds of which are advanced or contributed or otherwise which benefit, directly or indirectly, such Guarantor and its Subsidiaries (collectively, the “Benefits” ). In the case of any proceeds of Advances or Benefits advanced or contributed to a Person (an “Owned Entity” ) any of the equity interests of which are owned directly or indirectly by a Guarantor, the Benefit Amount of a Guarantor with respect thereto shall be that portion of the net value of the benefits attributable to Advances or Benefits equal to the direct or indirect percentage ownership of such Guarantor in its Owned Entity.

Section 9.03.    Contribution Obligation . Each Guarantor shall be liable to a Funding Guarantor in an amount equal to the greater of (A) the (i) ratio of the Benefit Amount of such Guarantor to the total amount of Guaranteed Obligations, multiplied by (ii) the amount of Guaranteed Obligations paid by such Funding Guarantor and (B) 95% of the excess of the fair saleable value of the property of such Guarantor over the total liabilities of such Guarantor

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Guarantor is deemed made for purposes of this Agreement (giving effect to all payments made by other Funding Guarantors as of such date in a manner to maximize the amount of such contributions).

Section 9.04.    Allocation . In the event that at any time there exists more than one Funding Guarantor with respect to any Contribution (in any such case, the “Applicable Contribution” ), then payment from other Guarantors pursuant to this Agreement shall be allocated among such Funding Guarantors in proportion to the total amount of the Contribution made for or on account of the Borrower by each such Funding Guarantor pursuant to the Applicable Contribution. In the event that at any time any Guarantor pays an amount under this Agreement in excess of the amount calculated pursuant to clause (A) of Section 9.03 above, that Guarantor shall be deemed to be a Funding Guarantor to the extent of such excess and shall be entitled to contribution from the other Guarantors in accordance with the provisions of this Section 9.04 .

Section 9.05.    Subsidiary Payment . The amount of contribution payable under this Section 9 by any Guarantor shall be reduced by the amount of any contribution paid hereunder by a Subsidiary of such Guarantor.

Section 9.06.    Equitable Allocation . If as a result of any reorganization, recapitalization, or other corporate change in the Borrower or any of its Subsidiaries, or as a result of any amendment, waiver or modification of the terms and conditions of other Sections of this Agreement or the Guaranteed Obligations, or for any other reason, the contributions under this Section 9 become inequitable as among the Guarantors, the Guarantors shall promptly modify and amend this Section 9 to provide for an equitable allocation of contributions. Any of the foregoing modifications and amendments shall be in writing and signed by all Guarantors.

Section 9.07.    Asset of Party to Which Contribution is Owing . The Guarantors acknowledge that the right to contribution hereunder shall constitute an asset in favor of the Guarantor to which such contribution is owing.

Section 9.08.    Subordination . No payments payable by a Guarantor pursuant to the terms of this Section 9 shall be paid until all amounts then due and payable by the Borrower to any Bank (including any Swap Bank), pursuant to the terms of the Credit Documents or any Subject Swap Contract, are indefeasibly paid in full in cash. Nothing contained in this Section 9 shall affect the obligations of any Guarantor to any Bank (including any Swap Bank) under the Credit Agreement or any other Credit Documents or any Subject Swap Contract.

SECTION 10.
MISCELLANEOUS.

Section 10.01.    Addresses for Notices . All notices and other communications provided for hereunder shall be in writing, including telegraphic communication and delivered or teletransmitted to the Administrative Agent, as set forth in the Credit Agreement, to any Swap Bank, as set forth in the applicable Subject Swap Contract, and to each Guarantor, at the address set forth under such Guarantor’s signature hereto or in the Accession Agreement executed by such Guarantor, or to such other address as shall be designated by any Guarantor, any Swap Bank or the Administrative Agent in written notice to the other parties. All such notices and other communications shall be effective when delivered or teletransmitted to the above addresses.

Section 10.02.    Amendments, Etc. No amendment or waiver of any provision of this Agreement nor consent to any departure by any Guarantor therefrom shall be effective unless the same shall be in writing and signed by each Guarantor and the Administrative Agent; provided , however , that any amendment or waiver releasing any Guarantor from any liability hereunder shall be signed by all the Banks (including the Swap Banks) (provided that the Administrative Agent can, if no Default then exists, release any Subsidiary of the Borrower which no longer is a Property Owner of an Unencumbered Property); and provided further that any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Notwithstanding the foregoing, in the event that any Subsidiary or Affiliate of the Borrower hereafter is required in accordance with the terms of the Credit Agreement or otherwise agrees to become a guarantor of the Borrower’s obligations under the Credit Documents and the Subject Swap Contracts, then such Subsidiary or Affiliate may become a party to this Agreement by executing an Accession Agreement ( “Accession Agreement” ) in the form attached hereto as Annex 1 and each Guarantor and the Administrative

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Agent hereby agrees that upon such Subsidiary’s or Affiliate’s execution of such Accession Agreement, this Agreement shall be deemed to have been amended to make such Person a Guarantor hereunder for all purposes and a party hereto and no signature is required on behalf of the other Guarantors or the Administrative Agent to make such an amendment to this Agreement effective.

Section 10.03.    No Waiver; Remedies . No failure on the part of the Administrative Agent or any Bank (including any Swap Bank) to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 10.04.    Right of Set‑Off . Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent and the Banks (including the Swap Banks) are hereby authorized at any time, to the fullest extent permitted by law, to set off and apply any deposits (general or special, time or demand, provisional or final) and other indebtedness owing by the Administrative Agent or any Bank (including any Swap Bank) to the account of any Guarantor against any and all of the obligations of such Guarantor under this Agreement, irrespective of whether or not the Administrative Agent or any Bank (including any Swap Bank) shall have made any demand under this Agreement and although such obligations may be contingent and unmatured. The Administrative Agent and the Banks (including the Swap Banks) agree promptly to notify each Guarantor affected by any such set-off after any such set-off and application made by the Administrative Agent or any Bank (including any Swap Bank); provided , however , that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and any Bank (including any Swap Bank) under this Section 10.04 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or any Bank (including any Swap Bank) may otherwise have.

Section 10.05.    Continuing Guaranty; Transfer of Interest . This Agreement shall create a continuing guaranty and shall (a) remain in full force and effect until indefeasible payment in full and termination of the Guaranteed Obligations, (b) be binding upon each Guarantor, its successors and assigns, and (c) inure, together with the rights and remedies of the Administrative Agent hereunder, to the benefit of the Administrative Agent and the Banks (including the Swap Banks) and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause, when any Bank (including any Swap Bank) assigns or otherwise transfers any interest held by it under the Credit Agreement or other Credit Document or any Subject Swap Contract to any other Person pursuant to the terms of the Credit Agreement or other Credit Document or Subject Swap Contract, that other Person shall thereupon become vested with all the benefits held by such Bank (or Swap Bank) under this Agreement. Upon the indefeasible payment in full and termination of the Guaranteed Obligations, the guaranties granted hereby shall terminate and all rights hereunder shall revert to each Guarantor to the extent such rights have not been applied pursuant to the terms hereof. Upon any such termination, the Administrative Agent will, at each Guarantor’s expense, execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

Section 10.06.    GOVERNING LAW . ANY DISPUTE BETWEEN THE GUARANTOR, THE ADMINISTRATIVE AGENT, ANY BANK (INCLUDING ANY SWAP BANK), OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY SUBJECT SWAP CONTRACT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK .

SECTION 10.07.    CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

(A)     EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION 10.07 , EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY SUBJECT SWAP CONTRACT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

(B)     OTHER JURISDICTIONS . THE GUARANTOR AGREES THAT THE ADMINISTRATIVE AGENT, ANY BANK (INCLUDING ANY SWAP BANK) OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE GUARANTOR OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B) .

(C)     SERVICE OF PROCESS . THE GUARANTOR WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY ANY AGENT OR THE BANKS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GUARANTOR ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY AGENT OR THE BANKS (INCLUDING THE SWAP BANKS) TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY SUBJECT SWAP CONTRACT OR ANY AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

(D)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY SUBJECT SWAP CONTRACT OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(E)     ADVICE OF COUNSEL . EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 10.07 , WITH ITS COUNSEL.

Section 10.08.    Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its Guaranteed Obligations in respect of Swap Obligations ( provided, however , that each Qualified ECP Guarantor shall only be liable under this Section 10.08 for the maximum amount of such

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



liability that can be hereby incurred without rendering its obligations under this Section 10.08 , or otherwise in respect of the Guaranteed Obligations, as it relates to such other Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until a discharge of the Guaranteed Obligations. Each Qualified ECP Guarantor intends that this Section 10.08 constitute, and this Section 10.08 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Section 10.09     This Agreement amends, restates and supersedes the Original Agreements in their entirety.
[Balance of page intentionally left blank]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Each Guarantor has caused this Agreement to be duly executed as of the date first above written.

GUARANTORS :
LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
 
 
 
 
By:
 
 
Name:
 
 
Title:
 
 
 
 
 
[SIGNATURE BLOCKS TO BE INSERTED]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX 1
GUARANTY AND CONTRIBUTION AGREEMENT

ACCESSION AGREEMENT

_______________________ [Name of Entity], a [limited partnership/corporation] (the “Company” ), hereby agrees with (i) Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ) under the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks (as defined in the Credit Agreement), the Administrative Agent and the other parties from time to time party thereto; (ii) the parties to the Amended & Restated Environmental Indemnity and Agreement (the “Environmental Indemnity” ) dated as of January 10, 2017 executed in connection with the Credit Agreement, (iii) the parties to the Amended & Restated Guaranty and Contribution Agreement (the “Guaranty” ) dated as of January 10, 2017 executed in connection with the Credit Agreement, as follows:

The Company hereby agrees and confirms that, as of the date hereof, it (a) intends to be a party to the Environmental Indemnity, the Guaranty and the Credit Agreement and undertakes to perform all the obligations expressed therein, respectively, of an Indemnitor and a Guarantor (as defined in the Environmental Indemnity and the Guaranty, respectively), (b) agrees to be bound by all of the provisions of the Environmental Indemnity, the Guaranty and the Credit Agreement as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity, the Guaranty and the Credit Agreement, respectively, with respect to the Company, a party thereto, are true and correct in all material respects as of the date of this Accession Agreement and (d) has received and reviewed copies of each of the Environmental Indemnity, the Guaranty and the Credit Agreement.

For purposes of notices under the Environmental Indemnity, the Guaranty and the Credit Agreement the address for the Company is as follows:

Attention:     
Telephone:     
Telecopy:     

This Accession Agreement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF this Accession Agreement was executed and delivered as of the ___ day of ___________________, 20____.
[Name of Entity]

By:    
Title:    


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT F

FORM OF NOTICE OF BORROWING

______________, 20___
Citibank, N.A.
as Administrative Agent under the Credit Agreement herein described
c/o Citibank, N.A.
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:

The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), refers to the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement,” the defined terms of which are used in this Notice of Borrowing unless otherwise defined in this Notice of Borrowing) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto, and hereby gives you irrevocable notice pursuant to Section 2.02(a) of the Credit Agreement that the undersigned hereby requests a Borrowing, and in connection with that request sets forth below the information relating to such Borrowing (the “Proposed Borrowing” ) as required by Section 2.02(a) of the Credit Agreement:

(a)    Business Day of the Proposed Borrowing is _____________, 20_____.

(b)    The Facility under which the Proposed Borrowing is requested is the [Revolving]/[TL] Facility.    

(c)    The Proposed Borrowing will be a Borrowing composed of [Base Rate Advances][LIBOR Advances].

(d)    The aggregate amount of the Proposed Borrowing is $____________.

(e)    [The Proposed Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank.]

(f)    The Interest Period for each LIBOR Advance made as part of the Proposed Borrowing is [_____ month[s]].

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:

(a)    the representations and warranties contained in the Credit Agreement and the other Credit Documents are correct in all material respects, before and after giving effect to the Proposed Borrowing and the application of the proceeds therefrom, as though made on the date of the Proposed Borrowing; and

(b)    no Default has occurred and remains uncured, or would result from such Proposed Borrowing or from the application of the proceeds therefrom.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Very truly yours,
LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties, its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT G
FORM OF NOTICE OF CONVERSION OR CONTINUATION

_________, 20__
Citibank, N.A.
as Administrative Agent under the Credit Agreement herein described
c/o Citibank, N.A.
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), refers to the Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Credit Agreement,” the defined terms of which are used in this Notice of Conversion or Continuation unless otherwise defined in this Notice of Conversion or Continuation) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto, and hereby gives you irrevocable notice pursuant to Section 2.02(b) of the Credit Agreement that the undersigned hereby requests a Conversion or continuation of an outstanding Borrowing, and in connection with that request sets forth below the information relating to such Conversion or continuation (the “Proposed Borrowing” ) as required by Section 2.02(b) of the Credit Agreement:
(a)    The Business Day of the Proposed Borrowing is _____________, 20__.
(b)    The Proposed Borrowing will be composed of [Base Rate Advances][LIBOR Advances].
(c)    The aggregate amount of the Borrowing to be Converted or continued is $_____________ and consists of [Base Rate Advances][LIBOR Advances] under the [Revolving/TL Facility].
(d)    [The Proposed Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank.]
(e)    The Proposed Borrowing consists of [a Conversion to [Base Rate Advances] [LIBOR Advances]] [a continuation of [Base Rate Advances][LIBOR Advances]].
(f)    The Interest Period for each LIBOR Advance made as part of the Proposed Borrowing is [____ month[s]].

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




Very truly yours,
LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties, its general partner
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT H

FORM OF NEW YORK MORTGAGE

[ See attached pages. ]


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




CONSOLIDATED, AMENDED AND RESTATED MORTGAGE

by and from
[__________________], “ Mortgagor ”
to
CITIBANK, N.A., in its capacity as Agent, “ Mortgagee ”
Dated as of [__________, 20___]
Location:        [_____________]
    Municipality:    [_____________]
    County:        [_____________]
    State:        New York
THE MAXIMUM PRINCIPAL INDEBTEDNESS WHICH IS SECURED BY OR WHICH BY ANY CONTINGENCY MAY BE SECURED BY THIS MORTGAGE IS $_______________.
THIS MORTGAGE DOES NOT ENCUMBER REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING FACILITIES.

PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022-6069
Attention: Malcolm K. Montgomery, Esq.
File #31900/395



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



CONSOLIDATED, AMENDED AND RESTATED MORTGAGE

THIS CONSOLIDATED, AMENDED AND RESTATED MORTGAGE (this “ Mortgage ”) is dated as of [__________], 20[__] by and from [________________], a [______________] [_______________] (“ Mortgagor ”), whose address is [________________________] to CITIBANK, N.A. , a national association, as administrative Agent (in such capacity, “ Agent ”) for the Banks (as defined in the Credit Agreement (defined below)), having an address at [1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department] (Agent, together with its successors and assigns, “ Mortgagee ”).
W I T N E S S E T H :
WHEREAS, Mortgagee is the assignee, present owner and holder of the mortgages described on Exhibit B attached hereto (the “ Existing Mortgages ”) securing certain indebtedness evidenced by the promissory notes described on Exhibit C attached hereto (the “ Existing N otes ”). The Existing Mortgages are liens on, among other things, the interest of Mortgagor in the **[Land][Unit]** (defined below) described in Exhibit A attached hereto. Mortgagee is now the owner and holder of the Existing Notes evidencing the indebtedness secured by the Existing Mortgages;
WHEREAS, simultaneously herewith Mortgagee and Mortgagor have consolidated, amended and restated all the terms, covenants and conditions of the Existing Notes, with such amendment and restatement evidenced by the execution and delivery of the Term Note (defined below); and
WHEREAS, Mortgagor and Mortgagee have agreed to modify the terms, covenants and provisions of the Existing Mortgages so that such terms and provisions shall be as hereinafter set forth,
Mortgagor and Mortgagee by these presents do hereby agree as follows:
MODIFICATION OF EXISTING NOTES
The terms, covenants and conditions of the Existing Notes have been amended, modified and restated in their entirety so that (x) such terms, covenants and conditions are now as set forth in the Term Note executed and delivered by Mortgagor simultaneously herewith in substitution for the Existing Notes but not in payment, satisfaction or cancellation of the outstanding indebtedness evidenced by the Existing Notes, (y) the Term Note constitutes evidence of but one debt in the aggregate principal amount of $[_________________] and (z) the terms, covenants, agreements, rights, obligations and conditions contained in the Term Note supersede and control the terms, covenants, agreements, rights, obligations and conditions of the Existing Notes (it being agreed, however, that the consolidation of the Existing Notes does not impair the indebtedness evidenced by each of the Existing Notes).
CONSOLIDATION AND MODIFICATION OF EXISTING MORTGAGES
The Existing Mortgages and this instrument (collectively, the “ Consolidated Mortgage ”) are consolidated and coordinated hereby so that the Consolidated Mortgage shall hereafter constitute in law but one consolidated first mortgage, a single first lien securing the payment of the aggregate principal amount of [dollar amount] ($__________) (the “ Secured Amount ”), together with interest thereon at the rate or rates specified in the Term Note. The terms of the Existing Mortgages as consolidated are hereby amended and restated in their entity by the terms hereof.
ANYTHING CONTAINED HEREIN TO THE CONTRARY NOTWITHSTANDING, THE MAXIMUM AMOUNT OF PRINCIPAL DEBT OR PRINCIPAL OBLIGATION WHICH IS OR UNDER ANY

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



CONTINGENCY MAY BE SECURED BY THIS MORTGAGE AT THE DATE OF EXECUTION HEREOF OR AT ANY TIME THEREAFTER IS [dollar amount] ($__________).
ARTICLE 1
DEFINITIONS
Section 1.1     Definitions . All capitalized terms used herein without definition shall have the respective meanings ascribed to them in that certain Second Amended & Restated Senior Unsecured Credit Agreement dated as of [___________], 2017, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time (the “ Credit Agreement ”), among LaSalle Hotel Operating Partnership, L.P. (collectively, “ Borrower ”) LaSalle Hotel Properties, the Banks, Citibank, N.A., as Administrative Agent and the other parties from time to time party thereto. As used herein, the following terms shall have the following meanings:
(a)      “ Event of Default ”: The default by Mortgagor in the observance or performance of any covenant, condition or agreement expressly set forth in this Mortgage and the continuance of such default unremedied for a period of: (x) in the case of a default that is susceptible to cure by the payment of money, five (5) Business Days after receipt of written notice thereof from Mortgagee, or (y) in the case of all other such defaults, thirty (30) days after receipt of written notice thereof from Mortgagee.
(b)      “ Indebtedness ”: (1) All indebtedness of Mortgagor to Mortgagee under that certain Term Note from Borrower to Agent, as agent for the Banks, dated as of [_____________], 20[__] (the “ Term Note ”), including, without limitation, the sum of all (a) principal, interest and other amounts owing under or evidenced or secured by the Term Note. The Indebtedness secured hereby includes, without limitation, all interest and expenses accruing after the commencement by or against Mortgagor or any of its affiliates of a proceeding under the Bankruptcy Code (defined below) or any similar law for the relief of debtors.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THIS MORTGAGE SHALL SECURE ONLY PRINCIPAL OBLIGATIONS COMPRISED OF TERM BORROWINGS UNDER THE TERM NOTE. THIS MORTGAGE SHALL NOT SECURE REVOLVING CREDIT BORROWINGS OR SWING LINE BORROWINGS OR ANY NOTES EVIDENCING SUCH BORROWINGS OR ANY PAYMENT OF OBLIGATIONS IN RESPECT OF LETTERS OF CREDIT. FURTHER, NO ADVANCE MADE UNDER THE CREDIT AGREEMENT SUBSEQUENT TO ISSUANCE OF THE TERM NOTE SHALL BE SECURED BY THIS MORTGAGE.
(c)      “ Mortgaged Property ”: **[The fee interest in the real property described in Exhibit A attached hereto and incorporated herein by this reference, together with any greater estate in such real property as hereafter may be acquired by Mortgagor (the “ Land ”)][That certain condominium unit known as [_____________], together with the undivided interest in the common elements appurtenant to such unit (hereinafter referred to as the “ Unit ”) comprising part of the building (the “ Building ”) and premises known as [__________________] (the “ Condominium ”) and by the street address [__________________], and situate on the land (the “ Land ”) more particularly described in Exhibit A annexed hereto, said Unit being described in that certain declaration more particularly described in Exhibit E annexed hereto (which declaration, as it may from time to time be amended, being hereinafter referred to as the “ Declaration ”; the Declaration, together with the By-Laws of [______________] annexed as Exhibit [___] to the Declaration, as they may from time to time be amended (the “ By-Laws ”), collectively, the “ Condominium Documents ”) establishing a plan for condominium ownership of said premises under Article 9-B of the Real Property Law of the State of New York (the “ Condominium Act ”)]**, and all Mortgagor’s right, title and interest now or hereafter acquired in and all of Mortgagor’s right, title and interest now or hereafter acquired in and to (1) all improvements now owned or hereafter acquired by Mortgagor, now or at any time situated, placed or constructed upon the **[Land][Unit]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



** (the “ Improvements ”; the **[Land][Unit]** and Improvements are collectively referred to as the “ Premises ”), (2) all materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in or used in connection with any of the Improvements or the **[Land][Unit]**, and water, gas, electrical, telephone, storm and sanitary sewer facilities and all other utilities whether or not situated in easements, and all equipment, inventory and other goods in which Mortgagor now has or hereafter acquires any rights or any power to transfer rights and that are or are to become fixtures (as defined in the UCC, defined below) related to the **[Land][Unit]** (the “ Fixtures ”), (3) all leases, licenses, concessions, occupancy agreements or other agreements (written or oral, now or at any time in effect) which grant to any Person a possessory interest in, or the right to use, all or any part of the Mortgaged Property, together with all related security and other deposits (the “ Leases ”), (4) all of the rents, revenues, royalties, income, proceeds, profits, accounts receivable, security and other types of deposits, and other benefits paid or payable by parties to the Leases for using, leasing, licensing possessing, operating from, residing in, selling or otherwise enjoying the Mortgaged Property (the “ Rents ”), (5) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing, and (6) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof (the “ Proceeds ”). As used in this Mortgage, the term “Mortgaged Property” shall mean all or, where the context permits or requires, any portion of the above or any interest therein.
(d)      “ Obligations ”: All of the agreements, covenants, conditions, warranties, representations and other obligations of Mortgagor under the Term Note.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THIS MORTGAGE SHALL SECURE ONLY PRINCIPAL OBLIGATIONS COMPRISED OF TERM BORROWINGS UNDER THE TERM NOTE. THIS MORTGAGE SHALL NOT SECURE REVOLVING CREDIT BORROWINGS OR SWING LINE BORROWINGS OR ANY NOTES EVIDENCING SUCH BORROWINGS OR ANY PAYMENT OF OBLIGATIONS IN RESPECT OF LETTERS OF CREDIT. FURTHER, NO ADVANCE MADE UNDER THE CREDIT AGREEMENT SUBSEQUENT TO ISSUANCE OF THE TERM NOTE SHALL BE SECURED BY THIS MORTGAGE.
(e)    “ Permitted Liens ”: Liens described in Sections 6.01(a) through (f) of the Credit Agreement.
(f)      “ UCC ”: The Uniform Commercial Code of the State of New York or, if the creation, perfection and enforcement of any security interest herein granted is governed by the laws of a state other than the State of New York, then, as to the matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT; REDUCTION OF SECURED AMOUNT
Section 2.1     Grant . To secure the full and timely payment of the Indebtedness and the full and timely performance of the Obligations, Mortgagor MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Mortgagee the Mortgaged Property, subject, however, only to the matters that are set forth on Exhibit D attached hereto (the “ Permitted Encumbrances ”) and to Permitted Liens, TO HAVE AND TO HOLD the Mortgaged Property to Mortgagee, WITH POWER OF SALE (to the extent permitted by applicable law), and Mortgagor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the lien of this Mortgage unto Mortgagee.
Section 2.2     Reduction of Secured Amount . So long as the balance of the Indebtedness equals or exceeds the Secured Amount, the amount of the Indebtedness secured by this Mortgage shall at all times equal only

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



the Secured Amount. The Secured Amount shall be reduced only by the last and final sums that Borrower repays with respect to the Indebtedness and shall not be reduced by any intervening repayments of the Indebtedness. So long as the balance of the Indebtedness exceeds the Secured Amount, any payments and repayments of the Indebtedness shall not be deemed to be applied against, or to reduce, the portion of the Indebtedness secured by this Mortgage. Such payments shall instead be deemed to reduce only such portions of the Indebtedness as are either unsecured or secured by real property located outside of the State of New York.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
Mortgagor warrants, represents and covenants to Mortgagee as follows:
Section 3.1     Title to Mortgaged Property and Lien of this Instrument . Mortgagor owns the Mortgaged Property free and clear of any liens, claims or interests, except the Permitted Encumbrances and the Permitted Liens. This Mortgage creates valid, enforceable first priority liens and security interests against the Mortgaged Property.
Section 3.2     First Lien Status . Mortgagor shall preserve and protect the first lien and security interest status of this Mortgage.
Section 3.3     Payment and Performance . Mortgagor shall pay the Indebtedness when due under the Term Note and shall perform the Obligations in full when they are required to be performed.
ARTICLE 4
DEFAULT AND FORECLOSURE
Section 4.1     Remedies . Upon the occurrence and during the continuance of an Event of Default, Mortgagee may, at Mortgagee’s election, exercise any or all of the following rights, remedies and recourses:
(a)     Acceleration . Subject to the provisions of the Term Note providing for the automatic acceleration of the Indebtedness upon the occurrence of certain Events of Default, declare the Indebtedness to be immediately due and payable, without further notice, presentment, protest, notice of intent to accelerate, notice of acceleration, demand or action of any nature whatsoever (each of which hereby is expressly waived by Mortgagor), whereupon the same shall become immediately due and payable.
(b)     Foreclosure and Sale . Institute proceedings for the complete foreclosure of this Mortgage by judicial action or, to the extent permitted by applicable law, by power of sale, in which case the Mortgaged Property may be sold for cash or credit in one or more parcels as Mortgagee may determine. With respect to any notices required or permitted under the UCC, Mortgagor agrees that ten (10) days’ prior written notice shall be deemed commercially reasonable. At any such sale by virtue of any judicial proceedings, power of sale, or any other legal right, remedy or recourse, the title to and right of possession of any such property shall pass to the purchaser thereof, and to the fullest extent permitted by law, Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim, equity, equity of redemption, and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Mortgagor, and against all other Persons claiming or to claim the property sold or any part thereof, by, through or under Mortgagor. Mortgagee or any of the Banks may be a purchaser at such sale. If Mortgagee or a Bank is the highest bidder, Mortgagee or such Bank may credit the portion of the purchase price that would be distributed to Mortgagee or such Bank against the Indebtedness in lieu of paying cash. In the event this Mortgage is foreclosed by judicial action, appraisement of the Mortgaged Property is waived.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(c)     Receiver . Make application to a court of competent jurisdiction for, and obtain from such court as a matter of strict right and without notice to Mortgagor or regard to the adequacy of the Mortgaged Property for the repayment of the Indebtedness, the appointment of a receiver of the Mortgaged Property, and Mortgagor irrevocably consents to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain and otherwise operate the Mortgaged Property upon such terms as may be approved by the court, and shall apply such Rents in accordance with the provisions of Section 4.6 .
(d)     Other . Exercise all other rights, remedies and recourses granted under the Term Note or otherwise available at law or in equity.
Section 4.2     Separate Sales . The Mortgaged Property may be sold in one or more parcels and in such manner and order as Mortgagee in its sole discretion may elect. The right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.
Section 4.3     Remedies Cumulative, Concurrent and Nonexclusive . Mortgagee shall have all rights, remedies and recourses granted in the Term Note and available at law or equity (including the UCC), which rights (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Mortgagor, or against the Mortgaged Property, or against any one or more of them, at the sole discretion of Mortgagee, as the case may be, (c) may be exercised as often as occasion therefor shall arise, and the exercise or failure to exercise any of them shall not be construed as a waiver or release thereof or of any other right, remedy or recourse, and (d) are intended to be, and shall be, nonexclusive. No action by Mortgagee in the enforcement of any rights, remedies or recourses under the Term Note or otherwise at law or equity shall be deemed to cure any Event of Default.
Section 4.4     Release of and Resort to Collateral . Mortgagee may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Mortgaged Property, any part of the Mortgaged Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interest created in or evidenced by the Term Note or their status as a first and prior lien and security interest in and to the Mortgaged Property. For payment of the Indebtedness, Mortgagee may resort to any other security in such order and manner as Mortgagee may elect.
Section 4.5     Discontinuance of Proceedings . If Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted under the this Mortgage or the Term Note and shall thereafter elect to discontinue or abandon it for any reason, Mortgagee, as the case may be, shall have the unqualified right to do so and, in such an event, Mortgagor, Mortgagee shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Term Note, this Mortgage, the Mortgaged Property and otherwise, and the rights, remedies, recourses and powers of Mortgagee shall continue as if the right, remedy or recourse had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of Mortgagee thereafter to exercise any right, remedy or recourse under this Mortgage or the Term Note for such Event of Default.
Section 4.6     Application of Proceeds . The proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing, management, operation or other use of the Mortgaged Property, shall be applied by Mortgagee (or the receiver, if one is appointed) in the following order unless otherwise required by applicable law:
(a)    to the payment of the costs and expenses of taking possession of the Mortgaged Property and of holding, using, leasing, repairing, improving and selling the same, including, without limitation (1) receiver’s

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



fees and expenses, including the repayment of the amounts evidenced by any receiver’s certificates, (2) court costs, (3) attorneys’ and accountants’ fees and expenses, and (4) costs of advertisement;
(b)    to the payment of the Indebtedness and performance of the Obligations in such manner and order of preference as Mortgagee in its sole discretion may determine; and
(c)    the balance, if any, to the Persons legally entitled thereto.
Section 4.7     Occupancy After Foreclosure . Any sale of the Mortgaged Property or any part thereof in accordance with Section 4.1(b) will divest all right, title and interest of Mortgagor in and to the property sold. Subject to applicable law, any purchaser at a foreclosure sale will receive immediate possession of the property purchased. If Mortgagor retains possession of such property or any part thereof subsequent to such sale, Mortgagor will be considered a tenant at sufferance of the purchaser, and will, if Mortgagor remains in possession after demand to remove, be subject to eviction and removal, forcible or otherwise, with or without process of law.
Section 4.8     Costs of Enforcement . Mortgagor shall pay all expenses (including reasonable attorneys’ fees and expenses) of or incidental to the perfection and enforcement of this Mortgage or the Term Note, or the enforcement, compromise or settlement of the Indebtedness or any claim under this Mortgage, and for the curing thereof, or for defending or asserting the rights and claims of Mortgagee in respect thereof, by litigation or otherwise.
Section 4.9     No Mortgagee in Possession . Neither the enforcement of any of the remedies under this Article 4 , the security interests under Article 6 , nor any other remedies afforded to Mortgagee under the Term Note, at law or in equity shall cause Mortgagee to be deemed or construed to be a mortgagee in possession of the Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or attempt to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability whatsoever under any of the Leases or otherwise.
ARTICLE 5
MISCELLANEOUS
Section 5.1     Notices . Any notice required or permitted to be given under this Mortgage shall be given in accordance with Section 11.02 of the Credit Agreement.
Section 5.2     Covenants Running with the Land . All Obligations contained in this Mortgage are intended by Mortgagor and Mortgagee to be, and shall be construed as, covenants running with the Land. As used herein, “Mortgagor” shall refer to the party named in the first paragraph of this Mortgage and to any subsequent owner of all or any portion of the Mortgaged Property.
Section 5.3     Successors and Assigns . This Mortgage shall be binding upon and inure to the benefit of Mortgagee and Mortgagor and their respective successors and assigns. Mortgagor shall not, without the prior written consent of Mortgagee, assign any rights, duties or obligations hereunder.
Section 5.4     Release or Reconveyance . Upon payment in full of the Indebtedness and performance in full of the Obligations or upon a sale or other disposition of the Mortgaged Property permitted by the Credit Agreement, Mortgagee, at Mortgagor’s request and expense, shall release the liens and security interests created by this Mortgage or reconvey the Mortgaged Property to Mortgagor.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Section 5.5     Applicable Law . The provisions of this Mortgage regarding the creation, perfection and enforcement of the liens and security interests herein granted shall be governed by and construed under the laws of the state in which the Mortgaged Property is located. All other provisions of this Mortgage shall be governed by the laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York).
Section 5.6     Headings . The Article, Section and Subsection titles hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such Articles, Sections or Subsections.
Section 5.7     Severability . If any provision of this Mortgage shall be held by any court of competent jurisdiction to be unlawful, void or unenforceable for any reason, such provision shall be deemed severable from and shall in no way affect the enforceability and validity of the remaining provisions of this Mortgage.
Section 5.8     Entire Agreement . This Mortgage, the Credit Agreement and the Term Note embody the entire agreement and understanding between Mortgagee and Mortgagor relating to the subject matter hereof and thereof and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. There are no unwritten oral agreements between the parties.
Section 5.9     Mortgagee as Agent; Successor Agents .
(a)    Agent has been appointed to act as Agent hereunder by the Banks. Agent shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of the Mortgaged Property) in accordance with the terms of the Credit Agreement, any related agency agreement among Agent and the Banks (collectively, as amended, amended and restated, supplemented or otherwise modified or replaced from time to time, the “ Agency Documents ”) and this Mortgage. Mortgagor and all other Persons shall be entitled to rely on releases, waivers, consents, approvals, notifications and other acts of Agent, without inquiry into the existence of required consents or approvals of the Banks thereof.
(b)    Mortgagee shall at all times be the same Person that is Agent under the Agency Documents. Written notice of resignation by Agent pursuant to the Agency Documents shall also constitute notice of resignation as Agent under this Mortgage. Removal of Agent pursuant to any provision of the Agency Documents shall also constitute removal as Agent under this Mortgage. Appointment of a successor Agent pursuant to the Agency Documents shall also constitute appointment of a successor Agent under this Mortgage. Upon the acceptance of any appointment as Agent by a successor Agent under the Agency Documents, that successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent as the Mortgagee under this Mortgage, and the retiring or removed Agent shall promptly (i) assign and transfer to such successor Agent all of its right, title and interest in and to this Mortgage and the Mortgaged Property, and (ii) execute and deliver to such successor Agent such assignments and amendments and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Agent of the liens and security interests created hereunder, whereupon such retiring or removed Agent shall be discharged from its duties and obligations under this Mortgage. After any retiring or removed Agent’s resignation or removal hereunder as Agent, the provisions of this Mortgage and the Agency Documents shall inure to its benefit as to any actions taken or omitted to be taken by it under this Mortgage while it was Agent hereunder.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ARTICLE 6
LOCAL LAW PROVISIONS
Section 6.1 .      Inconsistencies . In the event of any inconsistencies between the terms and conditions of this Article 6 and the other provisions of this Mortgage, the terms and conditions of this Article 6 shall control and be binding.
Section 6.2 .      Trust Fund . Pursuant to Section 13 of the New York Lien Law, Mortgagor shall receive the advances secured hereby and shall hold the right to receive the advances as a trust fund to be applied first for the purpose of paying the cost of any improvement and shall apply the advances first to the payment of the cost of any such improvement on the Mortgaged Property before using any part of the total of the same for any other purpose.
Section 6.3 .      Commercial Property . Mortgagor represents that this Mortgage does not encumber real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each having its own separate cooking facilities.
Section 6.4 .      Insurance . The provisions of subsection 4 of Section 254 of the New York Real Property Law covering the insurance of buildings against loss by fire shall not apply to this Mortgage. In the event of any conflict, inconsistency or ambiguity between the provisions of the Credit Agreement and the provisions of subsection 4 of Section 254 of the New York Real Property Law covering the insurance of buildings against loss by fire, the provisions of the Credit Agreement shall control.
Section 6.5 .      Leases . Mortgagee shall have all of the rights against lessees of the Mortgaged Property set forth in Section 291-f of the Real Property Law of New York.
Section 6.6 .      Statutory Construction . The clauses and covenants contained in this Mortgage that are construed by Section 254 of the New York Real Property Law shall be construed as provided in those sections (except as provided in Section 6.4 ). The additional clauses and covenants contained in this Mortgage shall afford rights supplemental to and not exclusive of the rights conferred by the clauses and covenants construed by Section 254 and shall not impair, modify, alter or defeat such rights (except as provided in Section 6.4 ), notwithstanding that such additional clauses and covenants may relate to the same subject matter or provide for different or additional rights in the same or similar contingencies as the clauses and covenants construed by Section 254. The rights of Mortgagee arising under the clauses and covenants contained in this Mortgage shall be separate, distinct and cumulative and none of them shall be in exclusion of the others. No act of Mortgagee shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision, anything herein or otherwise to the contrary notwithstanding. In the event of any inconsistencies between the provisions of Section 254 and the provisions of this Mortgage, the provisions of this Mortgage shall prevail.
Section 6.7 .      Maximum Principal Amount Secured . Notwithstanding anything to the contrary contained in this Mortgage, the maximum amount of principal indebtedness secured by this Mortgage or which under any contingency may be secured by this Mortgage is the Secured Amount as set forth in the Recitals above.
Section 6.8 .      Power of Sale . Upon the occurrence of an Event of Default, Mortgagee shall have the right to sell the Mortgaged Property by exercise of any right of power of sale then available under applicable law.
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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
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IN WITNESS WHEREOF , Mortgagor has on the date set forth in the acknowledgement hereto, effective as of the date first above written, caused this instrument to be duly EXECUTED AND DELIVERED by authority duly given.
MORTGAGOR:     [______________________],
a [_________________] [____________]



By:     
Name:
Title:
STATE OF ___________________    )
                    ) SS.:
COUNTY OF _________________    )
ON THE ____ DAY OF __________ IN THE YEAR 20___ BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED _______________, PERSONALLY KNOWN TO ME OR PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE INDIVIDUAL(S) WHOSE NAME(S) IS (ARE) SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO ME THAT HE/SHE/THEY EXECUTED THE SAME IN HIS/HER/THEIR CAPACITY(IES), AND THAT BY HIS/HER/THEIR SIGNATURE(S) ON THE INSTRUMENT, THE INDIVIDUAL(S), OR THE PERSON UPON BEHALF OF WHICH THE INDIVIDUAL(S) ACTED, EXECUTED THE INSTRUMENT.
__________________________________________________
    (SIGNATURE AND OFFICE OF INDIVIDUAL TAKING ACKNOWLEDGEMENT)


















    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT A
LEGAL DESCRIPTION
Legal Description of premises located at [_______________________], New York, [__________]:

[To be inserted.]



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT B
EXISTING MORTGAGES

[To be inserted.]


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT C
EXISTING NOTES

[To be inserted.]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT D
PERMITTED ENCUMBRANCES
Those exceptions set forth in Schedule B of that certain title commitment number [_________] issued by [______________] on or about [_____________], 20[__].




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



[EXHIBIT E
(Description of the Declaration)]

[To be inserted.]





    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT I
FORM OF NEW YORK TERM NOTE
AMENDED AND RESTATED CONSOLIDATED PROMISSORY NOTE
$_______________    ___________, 20__

This AMENDED AND RESTATED CONSOLIDATED PROMISSORY NOTE (this “ Note ”) is made this ___ day of ____________, 20__ by and between [_____________________] , a [_________________] as maker, having its principal place of business at [___________________] (the “ Maker ”) and Citibank, N.A., a national association, having an address at Citibank, N.A. Agency Department, 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, as the Administrative Agent (together with its successors and/or assigns, “ Agent ”), for the benefit of the Banks named in the Credit Agreement herein described.
RECITALS
WHEREAS, the Maker is the mortgagor under certain mortgages as more particularly described in Exhibit A attached hereto (hereinafter referred to as the “ Existing Security Instruments ”) and the maker under certain notes, bonds or other obligations, as consolidated by [INSERT DESCRIPTION OF CONSOLIDATED NOTE], secured thereby (hereinafter referred to as the “ Existing Notes ”);
WHEREAS, there is now owing on the Existing Notes and the Existing Security Instruments the unpaid principal sum of [INSERT AMOUNT IN WORDS] ($[__________]), together with interest;
WHEREAS, in connection with the making of an Advance or Advances in the aggregate principal amount of [INSERT AMOUNT IN WORDS] ($[__________]) by the Banks under that certain Second Amended & Restated Senior Unsecured Credit Agreement dated as of [___________], 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “Parent” ), the Guarantors party thereto, the Banks party thereto, Agent and the other parties from time to time party thereto, to the Maker, the Maker has agreed to (i) continue its obligations under the Existing Notes and has requested that Agent consolidate the Existing Notes and amend and restate the terms and provisions of the Existing Notes into this Note, and (ii) continue its obligations under the Existing Security Instruments into that certain Amended and Restated Consolidated Mortgage of even date herewith (the “ Mortgage ”).
NOW, THEREFORE, in consideration of the premises, the agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows, effective as of the date first above written:
A. The Existing Notes are hereby combined and consolidated so that together they shall hereafter constitute in law but one indebtedness evidenced by this Note in the aggregate principal amount of [INSERT AMOUNT IN WORDS] ($[__________]) together with interest thereon as hereinafter provided.
B. The Existing Notes are hereby amended and restated in their entirety to read as follows:

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



PROMISSORY NOTE
$     __________, 20__
For value received, the undersigned [____________________] (the “Maker” ), hereby promises to pay to the order of Citibank, N.A., as the administrative agent (the “Administrative Agent” ) the principal amount of _________________ and ____/100 Dollars ($ ) advanced by the Administrative Agent to the Maker, together with interest on such unpaid principal amount, at such interest rates, and at such times, as are specified in the Credit Agreement.
This Note is a “New York Term Note” referred to in, and is entitled to the benefits of, and is subject to the terms of, Section 9.01 of the Second Amended & Restated Senior Unsecured Credit Agreement dated as of [___________], 2017 as the same may be amended or modified from time to time (the “Credit Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto (the “ Banks ”), the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used in this Note and not otherwise defined in this Note have the meanings assigned to such terms in the Credit Agreement.
Both principal and interest are payable in lawful money of the United States of America to the Administrative Agent at Citibank, N.A. Agency Department, 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department (or at such other location or address as may be specified by the Administrative Agent to the Borrower) in same day funds. The Administrative Agent shall record all payments of principal made under this Note, but no failure of the Administrative Agent to make such recordings shall affect the Maker’s repayment obligations under this Note.
The principal amount of this Note shall be reduced only by the last and final sums that the Borrower repays with respect to the Obligations under the Credit Documents and shall not be reduced by any intervening repayments of such Obligations. So long as the balance of the payment Obligations under the Credit Documents exceeds the then outstanding principal amount of this Note, any payments and repayments of such Obligations shall not be deemed to be applied against, or to reduce, the portion of such principal payment Obligations evidenced by this Note. Notwithstanding the foregoing, the Borrower may direct the Administrative Agent to apply payments and repayments of payment Obligations under the Credit Documents against the portion of such Obligations evidenced by this Note and secured by that certain Consolidated, Amended and Restated Mortgage, dated as of the date hereof, by and from [______], as mortgagor, to Agent, as mortgagee. Any amounts applied to reduce the payment Obligations evidenced by this Note shall correspondingly reduce the Obligations of the Borrower evidenced by the other Notes (as such term is defined in the Credit Agreement) on a dollar-for-dollar basis.
The Maker hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder of this Note shall operate as a waiver of such rights.
This Note shall be governed by, and construed and enforced in accordance with, the laws of the state of New York.
[ Balance of page intentionally left blank ]





    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



IN WITNESS WHEREOF, the Maker has duly executed this Note as of the day and year first above written.

MAKER:
[_________________________] ,
a [________________________]

By:________________________________
Name:
Title:




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT A
EXISTING SECURITY INSTRUMENTS
[To be inserted]


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



EXHIBIT J
FORM OF PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of ________, ____, as amended, modified or supplemented from time to time, this “ Agreement ”), made by each of the undersigned pledgors (each a “ Pledgor ”, and together with any entity that becomes a party hereto pursuant to Section 22 hereof, the “ Pledgors ”), in favor of CITIBANK, N.A., in its capacities as the CA Administrative Agent (as hereinafter defined), as the TL Administrative Agent (as hereinafter defined) and as the Pledgee pursuant to Annex G hereto for the benefit of the Secured Creditors (as hereinafter defined) (in such capacities collectively, the “ Pledgee ”). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as hereinafter defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, LASALLE HOTEL OPERATING PARTNERSHIP, L.P. (the “ Borrower ”), the Banks from time to time party thereto, and Citibank, N.A., as administrative agent thereunder (in such capacity, the “ CA Administrative Agent ”) and Issuing Bank (the Pledgee, the Banks, the CA Administrative Agent, the Issuing Banks and their respective successors and assigns being herein referred to as the “ CA Creditors ”), have entered into that certain Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “ Credit Agreement ”), providing for the making of certain loans and extensions of credit to the Borrower as contemplated therein;
WHEREAS, the Borrower, the Banks (as such term is defined in the Term Loan Agreement (as hereinafter defined)) from time to time party thereto, and Citibank, N.A., as administrative agent thereunder (in such capacity, the “ TL Administrative Agent ”) (the Pledgee, the Banks (as such term is defined in the Term Loan Agreement), the TL Administrative Agent and their respective successors and assigns being herein referred to as the “ TL Lender Creditors ” and collectively with the CA Creditors, the “ Lender Creditors ”), have entered into that certain Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “ Term Loan Agreement ” and collectively with the Credit Agreement, the “ Bank Facility Agreements ”), providing for the making of certain loans to the Borrower as contemplated therein;
WHEREAS, the Borrower may from time to time be party to (or guaranty the obligations of one or more of its Subsidiaries under) one or more Swap Contracts with a Person that at the time such Swap Contract is entered into is a CA Creditor or an affiliate of a CA Creditor (each such CA Creditor or affiliate, even if the respective CA Creditor subsequently ceases to be a Bank under the Credit Agreement for any reason, together with such CA Creditor’s or affiliate’s successors and assigns, the “ Other Creditors ”);
WHEREAS, pursuant to the Guaranty, each Guarantor that is a party thereto has jointly and severally guaranteed to the Lender Creditors and the Other Creditors the payment when due of all obligations and liabilities of the Borrower under or with respect to (x) the Credit Documents (the term “ Credit Documents ” shall include any documentation executed and delivered in connection with any replacement or refinancing of the either of the Bank Facility Agreements) and (y) each Swap Contract (each document referred to in this clause (y), an “ Other Secured Document ”) with one or more of the Other Creditors;
[Insert Recital(s) describing any Indebtedness permitted under Section 6.02(a) or (e) of the Bank Facility Agreements which is pari passu with the Obligations (as hereinafter defined) secured hereby and the obligees thereunder] (the “ Existing Pari Passu Creditors ”).
WHEREAS, pursuant to Section 5.10 of each of the Bank Facility Agreements, each Pledgor is required to execute and deliver this Agreement in favor of the Pledgee;

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby agrees as follows:
1. SECURITY FOR OBLIGATIONS. (a) This Agreement is made by each Pledgor in favor of the Pledgee for the benefit of the Lender Creditors, the Other Creditors, the Existing Pari Passu Creditors, and the Additional Pari Passu Creditors (as hereinafter defined), if any (collectively, together with the Pledgee, the “ Secured Creditors ”), to secure on an equal and ratable basis:
(i)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of such Pledgor (as obligor or guarantor, as the case may be) and each Borrower to the Lender Creditors, whether now existing or hereafter incurred under, arising out of or in connection with the Bank Facility Agreements and all other Credit Documents to which it or any Borrower is at any time a party (including, without limitation, all such obligations and liabilities of such Pledgor under the Bank Facility Agreements (if a party thereto) and under any guaranty by it of the obligations under the Bank Facility Agreements) and the due performance and compliance by such Pledgor and any Borrower with the terms of each such Credit Document (all such obligations and liabilities under this clause (i) being herein collectively called the “ Bank Facility Obligations ”);
(ii)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the Other Creditors, whether now existing or hereafter incurred under, arising out of or in connection with any Other Secured Document (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under any Other Secured Document) and the due performance and compliance by such Pledgor and the Borrower with the terms of each such Other Secured Document (all such obligations and liabilities under this clause (ii) being herein collectively called the “ Other Secured Obligations ”);
(iii)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the Existing Pari Passu Creditors, whether now existing or hereafter incurred under, arising out of or in connection with any documentation relating to the Existing Pari Passu Obligations (collectively, the “ Existing Pari Passu Documents ”) (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under the Existing Pari Passu Documents) and the due performance and compliance by such Pledgor and the Borrower with the terms of the Existing Pari Passu Documents (all such obligations and liabilities under this clause (iii) being herein collectively called the “ Existing Pari Passu Obligations ”);
(iv)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the obligees under the Additional Pari Passu Documents (as hereinafter defined) (the “ Additional Pari Passu Creditors ”), whether now existing or hereafter incurred under, arising out of or in connection with any documentation relating to the Additional Pari Passu Obligations (as hereinafter defined) (collectively, the “ Additional Pari Passu Documents ”) (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under the Additional Pari Passu Documents) and the due performance and compliance by such Pledgor and the Borrower with the terms of the Additional Pari Passu Documents (all such obligations and liabilities under this clause (iv) being herein collectively called the “ Additional Pari Passu Obligations ”);
(v)     any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(vi)     in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities referred to in clauses (a) through (c) above after an Event of Default (such term, as used in this Agreement, shall mean any “ Event of Default ” at any time under, and as defined in, any of the Bank Facility Agreements, the Existing Pari Passu Documents and the Additional Pari Passu Documents shall have occurred and be continuing, the reasonable and documented out-of-pocket expenses of the Pledgee in connection with the retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable and documented out-of-pocket attorneys’ fees and court costs of the Pledgee; and
(vii)     all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i) through (vii) of this Section 1(a), subject to the provisions of following clause (b), being herein collectively called the “ Obligations ,” it being acknowledged and agreed that the “ Obligations ” shall include extensions of credit of the type described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.
(b)     The Borrower will give written notice to the Pledgee (each, a “ Notice of Pledge Agreement Entitlement ”) prior to the incurrence of Additional Pari Passu Obligations incurred after the date hereof as follows:
Such written notice from the Borrower (i) shall state that it is a “ Notice of Pledge Agreement Entitlement ”, (ii) shall be delivered to the Pledgee, (iii) shall describe the Additional Pari Passu Obligations to be secured hereby, (iv) shall state that it is delivered pursuant to Section 1(b) of this Agreement, (v) shall reference the aggregate principal amount of such new Indebtedness, and (vi) shall state that such new Indebtedness and the incurrence thereof does not violate, and may be incurred and secured hereunder in accordance with, the applicable provisions of Section 6.02(a) or (e) of the Bank Facility Agreements or the corresponding provisions of the Existing Pari Passu Documents.
2.     DEFINITION OF STOCK, LIMITED LIABILITY COMPANY INTERESTS, PARTNERSHIP INTERESTS, SECURITIES, ETC. (a) As used herein: (i) the term “ Stock ” means all of the issued and outstanding shares of capital stock in any corporation to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such corporation, a “ Pledged Corporation ”); (ii) the term “ Limited Liability Company Interest ” shall mean the entire limited liability company interests or membership interests in any limited liability company to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such entity, a “ Pledged Limited Liability Company ”); (iii) the term “ Partnership Interest ” shall mean the entire partnership interests (whether general and/or limited partnership interests) in any partnership to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such entity, a “ Pledged Partnership ”, and together with each Pledged Corporation and each Pledged Limited Liability Company, each, a “ Pledged Entity ”); (iv) the term “ Securities ” shall mean all of the Stock, Limited Liability Company Interests and Partnership Interests, which, for the avoidance of doubt, shall not include any Equity Interests not required to be pledged hereunder by Section 5.10 of the Bank Facility Agreements; and (v) the term “ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York.
(b)     All Stock at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements is hereinafter called the “ Pledged Stock ,” all Limited Liability Company Interests at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements are hereinafter called the “ Pledged Limited Liability Company Interests ,” all Partnership Interests at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements are hereinafter called the “ Pledged Partnership Interests ,” and all of the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests together are hereinafter called the “ Pledged Securities ,” which together with the following (collectively, the “ Ancillary Collateral ”): (i) all proceeds thereof, including any securities and moneys received and at the time held by the Pledgee hereunder, (ii) the entries on the books of any securities intermediary pertaining to the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests, (iii) all dividends, cash,

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed or distributable in respect of or in exchange for any or all of the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests and (iv) all rights under Sections 3.1(a)(i) and (iii) hereof, are hereinafter called the “ Collateral ”.
3.     PLEDGE OF SECURITIES, ETC.
3.1 Pledge . (a) To secure all Obligations of such Pledgor and for the purposes set forth in Section 1 hereof, each Pledgor hereby: (i) grants to the Pledgee for the benefit of the Secured Creditors a first priority security interest in all of the Collateral owned by such Pledgor; (ii) collaterally assigns to the Pledgee for the benefit of the Secured Creditors all of such Pledgor’s Pledged Securities and all of such Pledgor’s right, title and interest in each Pledged Entity, whether now existing or hereafter acquired, including, without limitation:
(A)     all the capital thereof and all of the interest of such Pledgor in all profits, losses thereof, and all rights of such Pledgor to receive distributions whether of cash or Assets (as hereinafter defined) to which such Pledgor shall at any time be entitled in respect of such Pledged Securities;
(B)     all other payments due or to become due such Pledgor in respect of Pledged Securities, whether under any constitutive document or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C)     all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any constitutive document, or at law or otherwise in respect of such Pledged Securities (except any rights as managing member of a limited liability company or as general partner of a limited partnership, which in either case is not a Wholly-Owned Subsidiary of the Parent, to the extent the applicable constitutive document contains an enforceable prohibition against the creation of a security interest in such rights);
(D)     all present and future claims, if any, of such Pledgor against any Pledged Securities for moneys loaned or advanced, for services rendered or otherwise;
(E)     subject to Section 5 hereof, all of such Pledgor’s rights under any constitutive document or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to any Pledged Security (except any rights as managing member of a limited liability company or as general partner of a limited partnership, which in either case is not a Wholly-Owned Subsidiary of the Parent, to the extent the applicable constitutive document contains an enforceable prohibition against the creation of a security interest in such rights), including any power to terminate, cancel or modify any constitutive document, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Pledged Securities and any Pledged Entity, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Assets, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing;
(F)     all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates (if any) and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; and
(G)     to the extent not otherwise included, all proceeds of any or all of the foregoing.
(b)     As used herein, the term “ Corporation Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Corporation.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(c)     As used herein, the term “ Limited Liability Company Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Limited Liability Company.
(d)     As used herein, the term “ Partnership Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Partnership.
(e)     As used herein, the term “ Assets ” shall mean all Corporation Assets, Limited Liability Company Assets and Partnership Assets. Nothing contained in this Agreement shall be deemed to create a security interest in any Assets unless any applicable Pledgor shall receive, or become entitled to receive, distributions of such Asset.
3.2 Subsequently Acquired Securities . Subject to Section 2(c) hereof, if any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Pledged Securities at any time or from time to time after the date hereof, such Securities shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1(a) hereof.
4.     VOTING, ETC., WHILE NO EVENT OF DEFAULT. For greater certainty, unless and until an Event of Default shall have occurred and be continuing, each Pledgor shall be entitled to (i) exercise any and all voting and other consensual rights pertaining to the Pledged Stock and to give all consents, waivers or ratifications in respect thereof and (ii) exercise any and all voting, consent, administration, management and other rights and remedies under (x) any constitutive document or otherwise with respect to the Pledged Limited Liability Company Interests of such Pledgor and (y) any constitutive document or otherwise with respect to the Pledged Partnership Interests of such Pledgor, in each case together with all other rights assigned pursuant to Sections 3.1(a)(ii)(E) and 3.1(a)(iii)(E) hereof; provided that no vote shall be cast or any consent, waiver or ratification given or any other action taken which would violate or be inconsistent with any of the terms of this Agreement or any other Secured Debt Document (as defined in Section 6 hereof). All such rights of such Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default shall occur and be continuing, and Section 6 hereof shall become applicable.
5.     DIVIDENDS AND OTHER DISTRIBUTIONS. For greater certainty, unless an Event of Default shall have occurred and be continuing and subject to the terms of the Secured Debt Documents, all cash dividends and other cash distributions payable in respect of the Pledged Securities shall be paid to the respective Pledgor.
All dividends, distributions or other payments which are received by the Pledgor contrary to the provisions of this Section 5 and Section 6 below shall be received in trust for the benefit of the Pledgee for the benefit of the Secured Creditors, shall be segregated from other property or funds of the Pledgor and shall be promptly paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).
6.     REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default shall have occurred and be continuing, the Pledgee shall be entitled upon written notice to the Borrower to exercise all of its rights, powers and remedies (whether vested in it by this Agreement, by any other Credit Document, any Existing Pari Passu Document, any Additional Pari Passu Document or, to the extent then in effect and secured hereby, any Other Secured Document (with all of the documents listed above being herein collectively called the “ Secured Debt Documents ”) or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the UCC and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:
(i)     following written request by the Pledgee, to receive all amounts payable in respect of the Collateral otherwise payable to such Pledgor under Section 5 hereof;

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



(ii)     to transfer all or any part of the Pledged Securities into the Pledgee’s name or the name of its nominee or nominees;
(iii)     to vote all or any part of the Pledged Stock, Pledged Limited Liability Company Interests or Pledged Partnership Interests (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof; and
(iv)     at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption by any Secured Creditor of any credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine; provided , that at least 10 Business Days’ notice of the time and place of any such sale shall be given to such Pledgor. Every aspect of the disposition of the Collateral, including the method, manner, time, place and other terms must be commercially reasonable, it being agreed that to the extent such matters are addressed by provisions of this Agreement such provisions are commercially reasonable. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Pledgee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives any claims against the Pledgee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Pledgee accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Obligations, the Pledgors shall be liable for the deficiency and the fees of any attorneys employed by the Pledgee to collect such deficiency. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto.
7.     REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Document or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or in any other Secured Debt Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. The Secured Creditors agree that this Agreement may be enforced only by the Pledgee acting upon the instructions of the Required Secured Creditors (as defined in Section 4 of Annex G hereto) and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



8.     APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee upon any sale or other disposition of the Collateral of each Pledgor, together with all other moneys received by the Pledgee hereunder, shall be applied as follows:
(i)     first, to the payment of all Obligations owing to the Pledgee and the other Secured Creditors of the type provided in clauses (v) and (vi) of the definition of Obligations in Section 1 hereof;
(ii)     second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Primary Obligations (as defined in Section 9(b) below) shall be paid to the Secured Creditors as provided in Section 9(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Obligations of such Pledgor or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share (as hereinafter defined) of the amount remaining to be distributed;
(iii)     third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations (as defined in Section 9(b) below) shall be paid to the Secured Creditors as provided in Section 9(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations of such Pledgor or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and
(iv)     fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement pursuant to Section 18 hereof, to the relevant Pledgor or to whomever may be lawfully entitled to receive such surplus.
(b)      For purposes of this Agreement (x) “ Pro Rata Share ” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then aggregate outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be, (y) “ Primary Obligations ” shall mean (i) in the case of the Bank Facility Obligations, all Obligations arising out of or in connection with (including, without limitation, as obligor or guarantor, as the case may be) the principal of, and interest on, all Loans, all unreimbursed drawings or payments in respect of any letters of credit (together with all interest accrued thereon), and the aggregate stated amounts of all letters of credit issued under the Credit Agreement, and all regularly accruing fees, and (ii) in the case of the Other Secured Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) Other Secured Documents secured hereby (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), (iii) in the case of the Existing Pari Passu Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) the Existing Pari Passu Documents (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), and (iv) in the case of the Additional Pari Passu Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) the Additional Pari Passu Documents (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), and (z) “ Secondary Obligations ” shall mean all Obligations of such Pledgor secured hereby other than Primary Obligations.
(c)     When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be deemed to be applied (for purposes of making determinations under this Section 8 only) (i) first, to the Primary Obligations and (ii) second, to the Secondary Obligations.
(d)     If the CA Creditors are to receive a distribution in accordance with the procedures set forth above in this Section 8 on account of undrawn amounts with respect to letters of credit issued under the Credit Agreement, such amounts shall be paid to the CA Administrative Agent and held by it, for the equal and

    
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ratable benefit of the CA Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of any outstanding letter of credit, and after the application of all such cash security to the repayment of all Obligations owing to the CA Creditors after giving effect to the termination of such letter of credit, if there remains any excess cash, such excess cash shall be returned by the CA Administrative Agent to the Pledgee for distribution in accordance with Section 8(a) hereof.
(e)     Except as set forth in Section 8(d) hereof, all payments required to be made hereunder shall be made (i) if to the CA Creditors, to the CA Administrative Agent for the account of the CA Creditors, (ii) if to the TL Creditors, to the TL Administrative Agent for the account of the TL Creditors, and (iii) if to any other Secured Creditors (other than the Pledgee), to the trustee, paying agent or other similar representative (each a “ Representative ”) for such other Secured Creditors or, in the absence of such a Representative, directly to such other Secured Creditors.
(f)     For purposes of applying payments received in accordance with this Section 9, the Pledgee shall be entitled to rely upon (i) the CA Administrative Agent, (ii) the TL Administrative Agent, and (iii) the Representative for any other Secured Creditors or, in the absence of such a Representative, upon the respective Secured Creditors for a determination (which the CA Administrative Agent, the TL Administrative Agent, each Representative for any other Secured Creditors and the Secured Creditors each agree (or shall agree) to provide upon request of the Pledgee) of the outstanding Primary Obligations and Secondary Obligations owed to the Secured Creditors. Unless it has actual knowledge (including by way of written notice from a Representative for any Secured Creditor or directly from a Secured Creditor) to the contrary, the Pledgee, in acting hereunder, shall be entitled to assume that no Other Secured Agreements are in existence.
(g)     It is understood and agreed that each Pledgor shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of the Obligations of such Pledgor.
9.     PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.
10.     FURTHER ASSURANCES; POWER OF ATTORNEY; DELIVERY AND CONTROL. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the applicable UCC or such other law such financing statements, continuation statements and other similar documents in such offices as the Pledgee may reasonably deem necessary and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest hereunder in the Collateral and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where permitted by law (it being understood that the only perfection obligations of the Pledgors hereunder with respect to the Collateral shall be the filing of UCC financing statements as described in this Section 10(a)).
(b)     Each Pledgor hereby appoints the Pledgee such Pledgor’s attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, to act from time to time after the occurrence and during the continuance of an Event of Default in the Pledgee’s reasonable discretion to take any action and to execute any instrument which the Pledgee may deem necessary or advisable to accomplish the purposes of this Section 10. Such appointment is coupled with an interest and is irrevocable.
(c)     On the date hereof, all then-existing certificates or instruments representing or evidencing the Collateral shall be delivered to and held by or on behalf of the Pledgee and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Pledgee. Thereafter, all other certificates or instruments representing or evidencing the Collateral shall, no later than 10 Business Days after certificates or instruments representing or

    
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evidencing Security Collateral are acquired by any Pledgor (or such date that is no more than 30 days later as may be agreed by the Pledgee, in its discretion), be delivered to and held by or on behalf of the Pledgee and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Pledgee. In addition, upon the occurrence and during the continuance of an Event of Default and the exercise of remedies pursuant to Section 6 hereof, the Pledgee shall have the right at any time to exchange certificates or instruments representing or evidencing the Collateral for certificates or instruments of smaller or larger denominations.
(d)     With respect to any Collateral in which any Pledgor has any right, title or interest and that constitutes an uncertificated security, such Pledgor will either: (1) cause the issuer thereof to register the Pledgee as the registered owner of such security and provide evidence of same to the Pledgee that is satisfactory to the Pledgee in its reasonable discretion, or (2) (A) send to the issuer thereof an Authorization Statement substantially in the form of Annex D hereto and (B) cause the issuer thereof to deliver to the Pledgee (I) an Acknowledgement and Consent substantially in the form of Annex E hereto and (II) a Transaction Statement substantially in the form of Annex I hereto, confirming that such issuer will comply with instructions with respect to such security originated by the Pledgee without further consent or approval of such Pledgor.
11.     THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex G hereto, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety.
12.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGORS. (a) From and after the date determined under Section 5.10 of each of the Bank Facility Agreements that this Agreement is required to be delivered, each Pledgor represents, warrants as of the date hereof, and, from and after such date, covenants that:
(i)     it is the legal, record and beneficial owner of, and has good title to, all Pledged Securities purported to be owned by such Pledgor (including as shown on Annexes A , B and C hereto), subject to no Lien, except the Liens created by this Agreement or permitted under the Bank Facility Agreements;
(ii)     it has full power, authority and legal right to pledge all the Pledged Securities;
(iii)     this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes the legal, valid and binding obligation of such Pledgor enforceable in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv)     no consent of any other party (including, without limitation, any stockholder or creditor of such Pledgor or any of its Subsidiaries and any other partners or members of such Pledgor’s partnerships or limited liability companies) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (except any filings required under the UCC) or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with the execution, delivery or performance of this Agreement, in each case except (w) those which have been obtained or made, (x) as may be required by laws affecting the offer and sale of securities generally in connection with the exercise by the Pledgee of certain of its remedies hereunder, (y) as may be required to be obtained or made in order to comply with the terms of or avoid defaults under any contract of the Borrower or a Subsidiary of the Borrower otherwise permitted under the Bank Facility Agreements that imposes restrictions upon the sale of, or foreclosure of liens upon, any Securities of a Subsidiary pledged hereunder in connection with the exercise by the Pledgee of its remedies hereunder, and (z) where the failure to do so could not reasonably be expected to result in a Material Adverse Change;

    
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(v)     the execution, delivery and performance of this Agreement by such Pledgor does not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, or of the certificate of incorporation or by-laws (or analogous constitution or organizational documents) of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or imposition (or the obligation to create or impose) of any Lien on any of the assets of such Pledgor or any of its Subsidiaries; in each case except (x) as contemplated in this Agreement, (y) for violations and defaults that may arise under contracts of the Borrower or a Subsidiary thereof otherwise permitted under the Bank Facility Agreements as a result of the sale of, or foreclosure of a Lien upon, the Securities of Subsidiaries pledged hereunder to the extent that the prior consent of other parties to such contracts have not been obtained or other actions specified in such contracts have not been taken in connection with any such sale or foreclosure, and (z) for such violations, liens or encumbrances, the occurrence of which could not reasonably be expected to result in a Material Adverse Change; and
(vi)     this Agreement creates a valid security interest in favor of the Pledgee, for the benefit of the Secured Creditors, in the Collateral of such Pledgor and, when properly perfected by filing in the appropriate offices against such Pledgor, shall constitute a valid and perfected security interest in such Collateral, to the extent such security interest can be perfected by filing under the UCC.
Each Pledgor further represents and warrants that, on the date hereof, (i) the Pledged Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex A hereto; (ii) such Pledged Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex A hereto; (iii) the Pledged Limited Liability Company Interests held by such Pledgor constitute that percentage of the issued and outstanding equity interests of the respective issuing Pledged Limited Liability Company as is set forth in Annex B hereto; and (iv) the Pledged Partnership Interests held by such Pledgor constitute that percentage of the entire Partnership Interests of the respective Pledged Partnership as is set forth in Annex C hereto.
Each Pledgor covenants and agrees that it will defend the Pledgee’s and the other Secured Creditors’ right, title and security interest in and to the Collateral and the proceeds thereof against the claims and demands of all Persons whomsoever; and such Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors.
(b)     Each Pledgor hereby further represents and warrants as of the date hereof, and covenants from and after the date hereof, that the jurisdiction of formation of such Pledgor and its organizational ID number (as contemplated for use under Article 9 of the UCC) is as indicated on Annex F hereto for such Pledgor. Such Pledgor will not change its jurisdiction of organization (by merger or otherwise) except to such new location as such Pledgor may establish in accordance with the last sentence of this Section 12(b). No Pledgor shall change its jurisdiction of organization until with respect to such new location, it shall have taken all action necessary to maintain all security interests of the Pledgee in the Collateral intended to be granted hereby at all times fully perfected on a first priority basis and in full force and effect.
(c)     Without in any way limiting Section 3.2 hereof, at any time and from time to time that any Pledgor acquires any additional Securities which have not already been pledged hereunder and reflected on Annexes A through C , as appropriate, such Pledgor shall, no later than the time of required delivery of the Compliance Certificate pursuant to Section 5.05(a) of each of the Bank Facility Agreements relating to the fiscal quarter during which such acquisition occurred, deliver a supplement to this Agreement, substantially in the form of Annex H-1 hereto (each a “ New Collateral Supplement ”) adding such Securities to Annexes A through C hereto, as appropriate. The execution and delivery of any such supplement shall not require the consent of any Pledgor hereunder. It is understood and agreed that the pledge and security interests granted hereunder shall apply to all

    
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Collateral as provided in Section 3.1 hereof regardless of the failure of any Pledgor to deliver, or any inaccurate information stated in, any New Collateral Supplement as otherwise provided above.
13.     PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. Except as otherwise provided in Section 18 hereof, the obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Document or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument or this Agreement; (c) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (d) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; (e) any limitation on any other Pledgor’s liability or obligations under this Agreement or under any other Secured Debt Document or any invalidity or unenforceability, in whole or in part, of this Agreement or any other Secured Debt Document or any term thereof; or (f) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.
14.     REGISTRATION, ETC. If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Pledged Securities pursuant to Section 6 hereof, such Pledged Securities or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Pledged Securities or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration; provided that at least 10 Business Days’ notice of the time and place of any such sale shall be given to such Pledgor. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion: (a) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Securities or part thereof shall have been filed under such Securities Act; (b) may approach and negotiate with a single possible purchaser to effect such sale; and (c) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Pledged Securities or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Pledged Securities at a price which the Pledgee, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid so long as such disposition is otherwise commercially reasonable.
15.     TERMINATION, RELEASE. (a) On the Termination Date, this Agreement shall automatically terminate (provided that all indemnities set forth herein shall survive any such termination) and the Lien of the Pledgee granted hereunder shall automatically be released, and the Pledgee, at the request and expense of the respective Pledgor, will promptly execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee, if any. As used in this Agreement, “ Termination Date ” shall mean the earliest of (i) the date upon which the Total Commitments (as defined in the Credit Agreement) and the Commitments (as defined in the Term Loan Agreement) have been terminated, and all Obligations (excluding (x) normal continuing indemnity obligations which survive in accordance with their terms, so long as no amounts are then due and payable in respect thereof, and (y) Letters of Credit that have been Cash Collateralized) have been indefeasibly paid in full, and (ii) the Leverage Release Date as defined in Section 5.10(c) of the Bank Facility Agreements.
(b) In the event that any part of the Collateral (i) is sold in connection with a sale permitted by the Secured Debt Documents, (ii) is otherwise released in accordance with the terms of the Secured Debt Documents

    
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or at the direction of the Required Secured Creditors or (iii) ceases to be Pledged Securities (including, without limitation, as a result of the enactment of any law that has the effect of prohibiting or restricting such Collateral from being pledged, assigned, transferred or otherwise subject to a Lien in favor of another Person), such Collateral shall automatically be released from the Lien of the Pledgee granted hereunder, and the Pledgee, at the request and expense of such Pledgor will promptly execute and deliver to such Pledgor (or authorize such Pledgor to file, as applicable) a proper instrument or instruments acknowledging such release (including any UCC termination statements and any New Collateral Supplement that may be appropriate to evidence such release), and will duly assign, transfer and deliver to such Pledgor (without recourse to and without any representation or warranty by, any Secured Creditor) such of the Collateral as is then being (or has been) so sold, distributed or released and as may be in possession of the Pledgee, if any, and has not theretofore been released pursuant to this Agreement. Any proceeds of Collateral sold as contemplated by the immediately preceding sentence shall be applied in accordance with, and to the extent required by, the requirements of the applicable Secured Debt Documents.
(c)     At any time that a Pledgor desires that Collateral be released as provided in the foregoing Section 15(a) or (b), it shall deliver to the Pledgee a certificate signed by an authorized officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to Section 15(a) or (b) hereof and does not violate the terms of any Secured Debt Document then in effect, and the Pledgee shall be entitled (but not required) to conclusively rely thereon.
16.     NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when delivered to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement, addressed as follows:
(a)     if to any Pledgor c/o the Borrower at the address of the Borrower specified under Section 11.02 of each of the Bank Facility Agreements;
(b)     if to the Pledgee, at the address of the administrative agent determined under Section 11.02 of each of the Bank Facility Agreements;
(c)     if to any CA Creditor (other than the Pledgee), (x) to the CA Administrative Agent, at the address of the CA Administrative Agent specified in the Credit Agreement or (y) at such address as such CA Creditor shall have specified in the Credit Agreement;
(d)     if to any TL Creditor (other than the Pledgee), (x) to the TL Administrative Agent, at the address of the TL Administrative Agent specified in the Term Loan Agreement or (y) at such address as such TL Creditor shall have specified in the Term Loan Agreement;
(e)     if to any other Secured Creditor, (x) to the Representative for such Secured Creditor or (y) if there is no such Representative, at such address as such Secured Creditor shall have specified in writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
17.     WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Pledgor directly affected thereby (it being understood that additional Pledgors may be added as parties hereto from time to time in accordance with Section 19 hereof, the Collateral may be modified as contemplated by the Bank Facility Agreements and this Agreement, and Pledgors may be released as parties hereto in accordance with Sections 15 and 18 hereof and that no consent of any other Pledgor or of the Secured Creditors shall be required in connection therewith) and the Pledgee (with the written consent of the Required Lenders (or all the Banks if required by Section 11.01 of each of the Bank Facility Agreements) at all times prior to the Leverage Release Date; provided that the Borrower certifies that any such change, waiver, modification or variance is otherwise permitted by the terms of the respective Secured Debt Documents or, if not so permitted, that the requisite consents therefor have been obtained.

    
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Notwithstanding anything to the contrary contained above, it is understood and agreed that the Required Lenders may agree to modifications to this Agreement for the purpose, among other things, of securing additional extensions of credit (including, without limitation, pursuant to the Bank Facility Agreements or any refinancing or extension thereof) and that the Pledgors and the Pledgee may take any actions necessary to implement the recreation of this Agreement and the pledge hereunder without the consent of the Required Lenders or any other Secured Creditor under the circumstances contemplated by Section 5.10 of each of the Bank Facility Agreements, with such changes and recreation not being subject to the proviso to the immediately preceding sentence. Furthermore, the proviso to the first sentence of this Section 17 shall not apply to any release of Collateral effected in accordance with the requirements of Section 15 of this Agreement, or any other release of Collateral or termination of this Agreement so long as the Borrower certifies that such actions will not violate the terms of any Secured Debt Document then in effect.
18.     RELEASE OF PLEDGORS. In the event that at any time after a Person becomes a Pledgor hereunder (a) such Pledgor does not own any Pledged Securities (including, without limitation, as a result of the enactment of any law that has the effect of prohibiting or restricting such Collateral from being pledged, assigned, transferred or otherwise subject to a Lien in favor of another Person), (b) the Leverage Release Date described in Section 5.10(c) of each of the Bank Facility Agreements occurs, or (c) such Pledgor is otherwise permitted to be released pursuant to the Bank Facility Agreements, such Pledgor shall be automatically released from this Agreement and this Agreement shall, as to such Pledgor only, automatically have no further force or effect. At the request of the Borrower or such Pledgor, the Pledgee will promptly execute and deliver to such Pledgor a proper instrument or instruments acknowledging such release, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) the Collateral of such Pledgor that is in the Pledgee’s possession, if any.
19.     ADDITIONAL PLEDGORS. Certain Subsidiaries of the Borrower may after the date hereof be required to enter into this Agreement as a Pledgor. Upon execution and delivery, after the date hereof, by the Pledgee and such Subsidiary of a New Pledgor Supplement in the form of Annex H-2 hereto (a “ New Pledgor Supplement ”), such Subsidiary shall become a Pledgor hereunder with the same force and effect as if originally named as a Pledgor hereunder. Each Subsidiary which is required to become a party to this Agreement shall so execute and deliver a copy of the New Pledgor Supplement to the Pledgee and, at such time, shall execute a Supplement to the Pledge and Security Agreement in the form of Annex H-1 hereto with respect to all Collateral of such Pledgor required to be pledged hereunder. The execution and delivery of any such instrument shall not require the consent of any other Pledgor hereunder. Upon the execution and delivery by the Pledgee and such Subsidiary of a New Pledgor Supplement, it is understood and agreed that the pledge and security interests hereunder shall apply to all Collateral of such additional Pledgor as provided in Section 3.1 hereof regardless of any failure of any additional Pledgor to deliver, or any inaccurate information stated in, the New Collateral Supplement.
20.     RECOURSE. This Agreement is made with full recourse to the Pledgors and pursuant to and upon all representations, warranties, covenants and agreements on the part of the Pledgors contained herein and otherwise in writing in connection herewith.
21.     SECURED CREDITORS NOT BOUND. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or a partner of any partnership and the Pledgee or any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall not have any of the duties, obligations or liabilities of a member of any limited liability company or partner of any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of the respective Pledged Limited Liability Company Interest or Pledged Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b)     Except as provided in the last sentence of paragraph (a) of this Section 21, the Pledgee, by accepting this Agreement, and the other Secured Creditors did not intend to become a member of any limited liability company or partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor or any limited liability company or partnership either before or after an Event of Default shall have

    
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occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or partnership or any Pledgor.
(c)     The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the collateral assignment hereby effected.
(d)     The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability in respect of the Collateral.
22.     CONTINUING PLEDGORS. The rights and obligations of each Pledgor (other than the respective released Pledgor in the case of following clause (b)) hereunder shall remain in full force and effect notwithstanding (a) the addition of any new Pledgor as a party to this Agreement as contemplated by Section 19 hereof or otherwise and/or (b) the release of any Pledgor under this Agreement as contemplated by Section 18 hereof or otherwise.
23.     NO FRAUDULENT CONVEYANCE. Each Pledgor hereby confirms that it is its intention that this Agreement not constitute a fraudulent transfer or conveyance for purposes of any bankruptcy, insolvency or similar law, the Uniform Fraudulent Conveyance Act or any similar Federal, state or foreign law. To effectuate the foregoing intention, each Pledgor hereby irrevocably agrees that its obligations and liabilities hereunder shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Pledgor that are relevant under such laws, result in the obligations and liabilities of such Pledgor hereunder in respect of such maximum amount not constituting a fraudulent transfer or conveyance.
24.     MISCELLANEOUS. (a) This Agreement shall be binding upon the successors and assigns of each Pledgor and shall inure to the benefit of the Secured Creditors and their respective successors and assigns and be enforceable by the Pledgee and its successors and assigns; provided that no Pledgor may assign any of its rights or obligations hereunder without the prior written consent of the Pledgee (with the consent of the Required Lenders and, if required by Section 11.01 of either of the Bank Facility Agreements, all Banks) and any such assignment without such consent shall be null and void.
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. ANY DISPUTE BETWEEN THE BORROWER, ANY PLEDGOR, THE PLEDGEE, OR ANY SECURED PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
(c) Except as provided in subsection (d), each of the parties hereto agrees that all disputes among them arising out of, connected with, related to, or incidental to the relationship established among them in connection with, this Agreement whether arising in contract, tort, equity, or otherwise, shall be resolved exclusively by state or federal courts located in the city, county and state of New York, but the parties hereto acknowledge that any appeals from those courts may have to be heard by a court located outside of New York. Each of the parties hereto waives in all disputes brought pursuant to this subsection (a) any objection that it may have to the location of the court considering the dispute.
(d) Each of the Borrower and each Pledgor agrees that the Pledgee or any Secured Party shall have the right to proceed against the Borrower, any Pledgor or their respective Property in a court in any location to enable such person to (1) obtain personal jurisdiction over the Borrower or such Pledgor or (2) enforce a judgment

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



or other court order entered in favor of such Person. Each of the Borrower and each Pledgor agrees that it will not assert any permissive counterclaims in any proceeding brought by such Person to enforce a judgment or other court order in favor of such Person. Each of the Borrower and each Pledgor waives any objection that it may have to the location of the court in which such Person has commenced a proceeding described in this paragraph.
(e) The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument.
25.      WAIVER OF TRIAL BY JURY . EACH PLEDGOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH PLEDGOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
26.     SEVERABILITY. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
* * *




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly executed and delivered by its duly authorized officer on the date first above written.
THE PLEDGORS SET FORTH ON SCHEDULE 1 HERETO
    
By:
Title:
[Signature Page to Pledge and Security Agreement]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




Accepted and Agreed to:
CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent, and Pledgee

By:     
Name:
Title:
[Signature Page to Pledge and Security Agreement]

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




SCHEDULE 1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGORS :

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX A
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED STOCK OF CORPORATIONS
All of the following Pledged Stock constitutes Collateral under this Agreement.
Pledgor
 
Pledged Stock
 
Percentage Owned


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX B
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED LIMITED LIABILITY COMPANY INTERESTS
All of the following Pledged Limited Liability Company Interests constitute Collateral under this Agreement.
Pledgor
 
Pledged Limited Liability Company Interests
 
Percentage Owned


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX C
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED PARTNERSHIP INTERESTS
All of the following Pledged Partnership Interests constitute Collateral under this Agreement.
Pledged Partnership Interest
 
Pledgor
 
Pledged Partnership Percentage


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




Annex C
Page 2
Pledged Partnership Interest
 
Pledgor
 
Pledged Partnership Percentage


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX D
to
PLEDGE AND SECURITY AGREEMENT
FORM OF AUTHORIZATION STATEMENT

______________, 20[__]

To:    [Name and Address of Issuer]


Reference is made to the Pledge and Security Agreement, dated __________, ____ (the “ Pledge Agreement ”; capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Pledge Agreement), made by the undersigned and certain other parties to Citibank, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee, a copy of which is attached hereto. Pursuant to the Pledge Agreement, the undersigned hereby notifies [Name of Issuer] that the undersigned has granted to the Pledgee, for the ratable benefit of the Secured Parties, a security interest (the “ Security Interest ”) in all of the undersigned’s right, title and interest in and to all of the Collateral (including all of the interests of the undersigned in [Name of Issuer]), and hereby instructs [Name of Issuer] to register the Security Interest in favor of:
CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department

Very truly yours,
                            
[NAME OF PLEDGOR]


By: ___________________________________
Name:
Title:

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX E
to
PLEDGE AND SECURITY AGREEMENT
FORM OF ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Authorization Statement, dated as of ________________, ____ and the Pledge Agreement referred to therein.
[NAME OF PLEDGOR]


By: ___________________________________
Name:
Title:

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




ANNEX F
to
PLEDGE AND SECURITY AGREEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER
Entity
 
Jurisdiction of Organization (Organized in Delaware unless indicated)
 
ID Numbers






    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX G
to
PLEDGE AND SECURITY AGREEMENT
THE PLEDGEE
1. Appointment . The Secured Creditors, by their acceptance of the benefits of the Pledge and Security Agreement to which this Annex G is attached (the “ Pledge Agreement ”) hereby irrevocably designate CITIBANK, N.A., in its capacities as CA Administrative Agent and TL Administrative Agent (and any successor Pledgee), to act as specified therein and to be bound by the terms of this Annex G . Unless otherwise defined herein, all capitalized terms used herein (a) and defined in the Pledge Agreement, are used herein as therein defined and (b) not defined in the Pledge Agreement, are used herein as defined in the Credit Agreement referenced in the Pledge Agreement. Each Secured Creditor hereby irrevocably authorizes, and each holder of any Obligation by the acceptance of such Obligation and by the acceptance of the benefits of the Pledge Agreement shall be deemed irrevocably to authorize, the Pledgee to take such action on its behalf under the provisions of the Pledge Agreement and any instruments and agreements referred to therein and to exercise such powers and to perform such duties thereunder as are specifically delegated to or required of the Pledge Agreement by the terms thereof and such other powers as are reasonably incidental thereto. The Pledgee may perform any of its duties thereunder by or through its authorized agents, subagents or employees.
2. Nature of Duties . (a) The Pledgee shall have no duties or responsibilities except those expressly set forth herein or in the Pledge Agreement. The duties of the Pledgee shall be mechanical and administrative in nature; the Pledgee shall not have by reason of the Pledge Agreement or any other Secured Debt Document a fiduciary relationship in respect of any Secured Creditor; and nothing in the Pledge Agreement or any other Secured Debt Document, expressed or implied, is intended to or shall be so construed as to impose upon the Pledgee any obligations in respect of the Pledge Agreement except as expressly set forth herein and therein.
(b) The Pledgee shall not be responsible for insuring the Collateral or for the payment of taxes, charges or assessments or discharging of Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Pledgee shall not be required to ascertain or inquire as to the performance by any Pledgor of any of the covenants or agreements contained in the Pledge Agreement or any other Secured Debt Document.
(d) The Pledgee shall be under no obligation or duty to take any action under, or with respect to, the Pledge Agreement if taking such action (i) would subject the Pledgee to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the Pledgee to qualify to do business, or obtain any license, in any jurisdiction where it is not then so qualified or licensed or (iii) would subject the Pledgee to in personam jurisdiction in any locations where it is not then so subject.
(e) Notwithstanding any other provision of this Annex G, neither the Pledgee nor any of its officers, directors, employees, affiliates or agents shall, in its individual capacity, be personally liable for any action taken or omitted to be taken by it in accordance with, or pursuant to this Annex G or the Pledge Agreement except for its own gross negligence or willful misconduct.
3. Lack of Reliance on the Pledgee . Independently and without reliance upon the Pledgee, each Secured Creditor, to the extent it deems appropriate, has made and shall continue to make (a) its own independent investigation of the financial condition and affairs of each Pledgor and its Subsidiaries in connection with the making and the continuance of the Obligations and the taking or not taking of any action in connection therewith, and (b) its own appraisal of the creditworthiness of each Pledgor and its Subsidiaries, and the Pledgee shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured Creditor with any credit or other information with respect thereto, whether coming into its possession before the extension of any Obligations or the purchase of any notes or at any time or times thereafter. The Pledgee shall not be responsible in any manner whatsoever to any Secured Creditor for the correctness of any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of the

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Pledge Agreement or the security interests granted hereunder or the financial condition of any Pledgor or any Subsidiary of any Pledgor or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of the Pledge Agreement, or the financial condition of any Pledgor or any Subsidiary of any Pledgor, or the existence or possible existence of any Default or Event of Default. The Pledgee makes no representations as to the value or condition of the Collateral or any part thereof, or as to the title of any Pledgor thereto or as to the security afforded by the Pledge Agreement.
4. Certain Rights of the Pledgee . (a) No Secured Creditor shall have the right to cause the Pledgee to take any action with respect to the Collateral, with only the Required Secured Creditors (or all of the Secured Creditors in the case of the release of all or substantially all of the Collateral) having the right to direct the Pledgee to take any such action. If the Pledgee shall request instructions from the Required Secured Creditors, with respect to any act or action (including failure to act) in connection with the Pledge Agreement, the Pledgee shall be entitled to refrain from such act or taking such action unless and until it shall have received instructions from the Required Secured Creditors and to the extent requested, appropriate indemnification in respect of actions to be taken, and the Pledgee shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Secured Creditor shall have any right of action whatsoever against the Pledgee as a result of the Pledgee acting or refraining from acting hereunder in accordance with the instructions of the Required Secured Creditors. As used herein, the term “ Required Secured Creditors ” shall mean, the holders of at least a majority of the then outstanding Bank Facility Obligations.
(b) Notwithstanding anything to the contrary contained herein, the Pledgee is authorized, but not obligated, (i) to take any action reasonably required to perfect or continue the perfection of the liens on the Collateral for the benefit of the Secured Creditors and (ii) when instructions from the Required Secured Creditors have been requested by the Pledgee but have not yet been received, to take any action which the Pledgee, in good faith, believes to be reasonably required to promote and protect the interests of the Secured Creditors in the Collateral; provided that once instructions have been received, the actions of the Pledgee shall be governed thereby and the Pledgee shall not take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein or in the Pledge Agreement, the Pledgee shall not be required to take any action that exposes or, in the good faith judgment of the Pledgee may expose, the Pledgee or its officers, directors, agents or employees to personal liability, unless the Pledgee shall be adequately indemnified as provided herein, or that is, or in the good faith judgment of the Pledgee may be, contrary to the Pledge Agreement, any Secured Debt Document or applicable law.
5. Reliance . The Pledgee shall be entitled to rely, and shall be fully protected in relying, upon, any note, writing, resolution, notice, statement, certificate, telex, teletype or telescopes message, cablegram, radiogram, order or other document or telephone message signed, sent or made by the proper Person or entity, and, with respect to all legal matters pertaining hereto or to the Pledge Agreement and its duties thereunder and hereunder, upon advice of counsel selected by it.
6. Indemnification . To the extent the Pledgee is not reimbursed and indemnified by the Pledgors under the Pledge Agreement, the Secured Creditors will reimburse and indemnify the Pledgee, in proportion to their respective outstanding principal amounts (including, for this purpose, any unpaid Primary Obligations in respect of Other Secured Documents, as outstanding principal) of Obligations, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Pledgee in performing its duties hereunder, or in any way relating to or arising out of its actions as Pledgee in respect of the Pledge Agreement except for those resulting solely from the Pledgee’s own gross negligence or willful misconduct. The indemnities set forth in this Section 6 shall survive the repayment of all Obligations, with the respective indemnification at such time to be based upon the outstanding principal amounts (determined as described above) of Obligations at the time of the respective occurrence upon which the claim against the Pledgee is based or, if the same is not reasonably determinable, based upon the outstanding principal amounts (determined as described above) of Obligations as in effect immediately prior to the termination of the Pledge Agreement. The indemnities set forth in this Section 6 are in addition to any indemnities provided by the Lenders to the Pledgee pursuant to the Bank Facility Agreements, with the effect being that the Lenders shall be responsible for indemnifying the Pledgee to the extent the Pledgee

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



does not receive payments pursuant to this Section 6 from the Secured Creditors (although in such event, and upon the payment in full of all such amounts owing to the Pledgee by the Lenders, the Lenders shall be subrogated to the rights of the Pledgee to receive payment from the Secured Creditors).
7. The Pledgee in its Individual Capacity . With respect to its obligations as a lender under the Bank Facility Agreements and any other Credit Documents to which the Pledgee is a party, and to act as agent under one or more of such Credit Documents, the Person serving as Pledgee shall have the rights and powers specified therein and herein for a “Bank”, or the “Administrative Agent”, as the case may be, and may exercise the same rights and powers as though it were not performing the duties specified herein; and the terms “Banks,” “Required Lenders,” “holders of Notes,” or any similar terms shall, unless the context clearly otherwise indicates, include the Person serving as Pledgee in its individual capacity. The Person serving as Pledgee and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, any Pledgor or any Affiliate or Subsidiary of any Pledgor as if it were not performing the duties specified herein or in the other Credit Documents, and may accept fees and other consideration from the Pledgors for services in connection with the Bank Facility Agreements, the other Credit Documents and otherwise without having to account for the same to the Secured Creditors.
8. Holders . The Pledgee may deem and treat the payee of any note as the owner thereof for all purposes hereof unless and until written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Pledgee. Any request, authority or consent of any person or entity who, at the time of making such request or giving such authority or consent, is the holder of any note, shall be final and conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such note or of any note or notes issued in exchange therefor.
9. Resignation by the Pledgee . (a) The Pledgee may resign from the performance of all of its functions and duties hereunder and under the Pledge Agreement at any time by giving 30 days’ prior written notice to the Borrower, the Banks and the Representatives for the other Secured Creditors or, if there is no such Representative, directly to such Secured Creditors. Such resignation shall take effect upon the appointment of a successor Pledgee pursuant to clause (b) or (c) below.
(b) Upon any notice of resignation by the Pledgee, the Required Secured Creditors shall appoint a successor Pledgee in accordance with Section 10.06 of the Credit Agreement, with the consent of the Borrower, which consent shall not be unreasonably withheld or delayed. If a successor Pledgee shall not have been appointed within said 30 day period by the Required Secured Creditors, the Pledgee, with the consent of the Borrower, which consent shall not be unreasonably withheld or delayed, shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or thereunder until such time, if any, as the Required Secured Creditors appoint a successor Pledgee as provided above.
(c) If no successor Pledgee has been appointed pursuant to clause (b) above by the 45th day after the date of such notice of resignation was given by the Pledgee, as a result of a failure by the Borrower to consent to the appointment of such a successor Pledgee, the Required Secured Creditors shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or thereunder ( provided that all determinations to be made by such Pledgee shall instead be made by the Required Secured Creditors) until such time, if any, as the Required Secured Creditors appoint a successor Pledgee as provided in clause (b) above.




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX H-1
to
PLEDGE AND SECURITY AGREEMENT
FORM OF
NEW COLLATERAL SUPPLEMENT
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT No. ____ to PLEDGE AND SECURITY AGREEMENT, dated as of __________, ____ (this “ Supplement ”), made by _____________________ , a _____________________ _____________________ (the “ Pledgor ”), in favor of CITIBANK, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (in such capacities, the “ Pledgee ”) for the Secured Creditors (such term and each other capitalized term used but not defined having the meaning given in the Pledge Agreement (as hereinafter defined)).
1. Reference is hereby made to that certain Pledge and Security Agreement, dated as of ______, ____ (as amended, supplemented or otherwise modified as of the date hereof, the “ Pledge Agreement ”), made by the Pledgors party thereto in favor of the Pledgee for the benefit of the Secured Creditors described therein.
2. The Pledgor hereby confirms and reaffirms the security interest in the Collateral granted to the Pledgee for the benefit of the Secured Creditors under the Pledge Agreement, and, as additional collateral security for the prompt and complete payment when due (whether at stated maturity, by acceleration or otherwise) of the Obligations and in order to induce the Secured Creditors to make and continue or maintain loans and other extensions of credit constituting Obligations, the Pledgor hereby grants to the Pledgee, for the benefit of the Secured Creditors, a first priority security interest in [(a) all of the issued and outstanding shares of capital stock listed in Schedule I hereto, together with all stock certificates, options, or rights of any nature whatsoever which may be issued or granted in respect of such stock while the Pledge Agreement, as supplemented hereby, is in force (the “ Additional Pledged Stock ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Stock ” shall be deemed to include the Additional Pledged Stock)], [and][(b) all limited liability company interests listed on Schedule II hereto (the “ Additional Pledged Limited Liability Company Interests ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Limited Liability Company Interests ” shall be deemed to include the Additional Pledged Limited Liability Company Interests)], [and][(c) all partnership interests listed on Schedule III hereto (the “ Additional Pledged Partnership Interests ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Partnership Interests ” shall be deemed to include Additional Pledged Partnership Interests)], as the case may be, and all proceeds thereof.
3. The Pledgor hereby represents and warrants that the representations and warranties contained in Section 15 of the Pledge Agreement are true and correct on the date of this Supplement [with references therein to the “ Pledged Stock ” to include the Additional Pledged Stock,] [with references therein to the “ Pledged Partnership Interests ” to include the Additional Pledged Partnership Interests,] [with references therein to the “ Pledged Limited Liability Company Interests ” to include the Additional Pledged Limited Liability Company Interests,] and with references therein to the “ Pledge Agreement ” to mean the Pledge Agreement as supplemented by this Supplement.
4. The Pledgor hereby represents and warrants that, as of the date hereof, the jurisdiction of formation of the Pledgor is as indicated on Schedule IV hereto.
5. This Supplement is supplemental to the Pledge Agreement, forms a part thereof and is subject to the terms thereof and the Pledge Agreement is hereby supplemented as provided herein. Without limiting the foregoing, (a) Annex A to the Pledge Agreement shall hereby be deemed to include each item listed on Schedule I to this Supplement, (b) Annex B to the Pledge Agreement shall hereby be deemed to include each item listed on Schedule II to this Supplement, (c) Annex C to the Pledge Agreement shall hereby be deemed to include each term listed on Schedule III to this Supplement, and (d) Annex F to the Pledge Agreement shall be deemed to include the jurisdiction of formation listed on Schedule IV to this Supplement.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
*    *    *

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Supplement to be duly executed and delivered on the date first set forth above.
[PLEDGOR]

By:     
Name:
Title:


CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent and Pledgee

By:     
Name:
Title:





    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE I
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED STOCK
All of the following Pledged Stock constitutes Collateral under this Agreement.
Pledgor
 
Pledged Stock
 
Percentage Owned


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




SCHEDULE II
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED LIMITED LIABILITY COMPANY INTERESTS
All of the following Pledged Limited Liability Interests constitute Collateral under this Agreement.
Pledgor
 
Pledged Limited Liability Company Interests
 
Percentage Owned


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




SCHEDULE III
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED PARTNERSHIP INTERESTS
All of the following Pledged Partnership Interests constitute Collateral under this Agreement.
Pledged Partnership Interest
 
Pledgor
 
Percentage Owned


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




SCHEDULE IV
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER






    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX H-2
to
PLEDGE AND SECURITY AGREEMENT
FORM OF
NEW PLEDGOR SUPPLEMENT
SUPPLEMENT NO. ____ dated as of __________, ____ to the Pledge and Security Agreement dated as of __________, ____ (as amended, supplemented or otherwise modified as of the date hereof, the “ Pledge Agreement ”), among the Pledgors party thereto (immediately before giving effect to this Supplement) and CITIBANK, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (in such capacities, the “ Pledgee ”) for the Secured Creditors (such term and each other capitalized term used but not defined having the meaning given it in the Pledge Agreement or the Credit Agreement).
A. The Pledgors have entered into the Pledge Agreement in order to induce the Secured Creditors to make loans and other extensions of credit constituting Obligations as defined in the Pledge Agreement. Pursuant to Section 5.10 of each of the Bank Facility Agreements, certain Subsidiaries of the Borrower are, after the date of the Pledge Agreement, required to enter into the Pledge Agreement as a Pledgor. Section 19 of the Pledge Agreement provides that additional Subsidiaries may become Pledgors under the Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned (the “ New Pledgor ”) is a Subsidiary of the Borrower and is executing this Supplement in accordance with the requirements of the Bank Facility Agreements and/or the Pledge Agreement to become a Pledgor under the Pledge Agreement in order to induce the Secured Creditors to extend, or maintain, Obligations.
Accordingly, the Pledgee and the New Pledgor agree as follows:
SECTION 1. The New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby agrees to all the terms and provisions of the Pledge Agreement applicable to it as a Pledgor thereunder. Each reference to a “ Pledgor ” in the Pledge Agreement shall be deemed to include the New Pledgor. The Pledge Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the Secured Creditors that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and equitable principles of general applicability and that the representations and warranties in the Pledge Agreement applicable to each Pledgor are true and correct as to the New Pledgor on the date hereof.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument. This Supplement shall become effective when the Pledgee shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and the Pledgee.
SECTION 4. Except as expressly supplemented hereby, the Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Pledge Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SECTION 7. All communications and notices hereunder shall be in writing and given as provided in the Pledge Agreement. All communications and notices hereunder to the New Pledgor shall be given to it at the address set forth under its signature, with a copy to the Borrower.
*    *    *



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



IN WITNESS WHEREOF, the New Pledgor and the Pledgee have duly executed this Supplement to the Pledge Agreement as of the day and year first above written.
[NAME OF NEW PLEDGOR]

By:     
Name:
Title:
Address:

CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent and Pledgee

By:     
Name:
Title:



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



ANNEX I
to
PLEDGE AND SECURITY AGREEMENT
FORM OF TRANSACTION STATEMENT

___________________, ____

To:     [NAME OF PLEDGOR]
and
CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department


This Transaction Statement is to advise you that the pledge of [describe Collateral] (“ Pledged Equity ”) has been registered in favor of Citibank, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (the “ Lienholder ”), as follows:

CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department

Taxpayer identification number: 13-5266470.

The pledge was registered on [INSERT DATE OF REGISTRATION].

To the extent the Pledged Equity shall at any time be deemed “uncertificated securities” under Article 8 of the Uniform Commercial Code as in effect from time to time in the jurisdiction of the undersigned, the undersigned agrees that it will comply with instructions originated by the Lienholder with respect to the Pledged Equity without further consent by [Name of Pledgor].

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




This Transaction Statement is merely a record of the rights of the addressees as of the time of its issuance. Delivery of this Transaction Statement, of itself, confers no rights on the recipients. This Transaction Statement is neither a negotiable instrument nor a security.


Very truly yours,

[NAME OF ISSUER]

By:     
Name:
Title:




    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1.01(A)
COMMITMENTS
Revolving Facility Total Allocation

Name of Lender/Issuing Bank
Revolving Facility
Letter of Credit
Citibank, N.A.
$96,000,000
$33,333,333.34
Bank of Montreal
$60,000,000
$33,333,333.33
Bank of America, N.A.
$80,000,000
$33,333,333.33
U.S. Bank National Association
$52,000,000
 
PNC Bank, National Association
$45,000,000
 
Sumitomo Mitsui Banking Corporation
$52,500,000
 
TD Bank, N.A.
$50,000,000
 
Regions Bank
$35,000,000
 
Wells Fargo Bank, National Association
$44,250,000
 
Branch Banking and Trust Company
$27,000,000
 
Raymond James Bank, N.A.
$34,250,000
 
RBC Capital Markets
$75,000,000
 
Deutsche Bank AG New York Branch
$50,000,000
 
The Bank of New York Mellon
$15,000,000
 
Barclays Bank PLC
$17,000,000
 
Morgan Stanley Bank, N.A.
$17,000,000
 
Totals
$750,000,000
$100,000,000


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



TL Facility Total Allocation

Name of Lender
TL Facility
Citibank, N.A.
$250,000
Bank of Montreal
$2,250,000
Bank of America, N.A.
$30,000,000
U.S. Bank National Association
$22,000,000
PNC Bank, National Association
$20,000,000
Sumitomo Mitsui Banking Corporation
$22,500,000
TD Bank, N.A.
$20,000,000
Regions Bank
$10,000,000
Wells Fargo Bank, National Association
$17,750,000
Branch Banking and Trust Company
$13,000,000
Raymond James Bank, N.A.
$15,750,000
Credit Agricole Corporate and Investment Bank
$35,000,000
The Bank of New York Mellon
$35,000,000
Land Bank of Taiwan, New York Branch
$10,000,000
Taiwan Cooperative Bank, Los Angeles Branch
$10,000,000
First Commercial Bank, Ltd. New York Branch
$16,500,000
E.Sun Commercial Bank Limited, Los Angeles Branch
$10,000,000
Mega International Commercial Bank Co., Ltd. Los Angeles Branch
$10,000,000
Total
$300,000,000


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1.01(b)
EXISTING PROPERTIES
($’s below denote Investment Amount as of September 30, 2016)
1.
Westin Copley Place     10 Huntington Avenue, Boston, MA 02116        
$353,575,519
2.
Hyatt Boston Harbor     101 Harborside Drive, Boston, MA 02128        
$77,832,920
Unencumbered Properties – The following properties are Unencumbered, pursuant to the definition of “Unencumbered Properties” and are noted below pursuant to Section 4.21 of the Credit Agreement
3.
Le Montrose Suite Hotel     900 Hammond St, West Hollywood, CA 90069    
$23,058,248
4.
Topaz Hotel     1733 N Street, NW, Washington, DC 20036        
$17,277,507
5.
Hotel Madera     1310 New Hampshire Ave, NW, Washington, DC 20036
$15,379,197
6.
Hotel Rouge     1315 16 th Street, NW, Washington, DC 20036     
$18,701,867
7.
The Mason and Rook Hotel     1430 Rhode Island Ave, NW, Washington, DC 20005
$47,666,169
8.
The Liaison Capitol Hill     415 New Jersey Avenue, NW, Washington, DC 20001    
$65,948,178
9.
Hotel George     15 E Street, NW, Washington, DC 20001    
$28,373,421
10.
Lansdowne Resort     44050 Woodridge Parkway, Leesburg, VA 20176
$172,146,931
11.
Chaminade     One Chaminade Lane, Santa Cruz, CA 95065
$36,123,611
12.
Grafton on Sunset     8462 West Sunset Boulevard, West Hollywood, CA 90069
$35,281,542
13.
Onyx Hotel     155 Portland Street, Boston, MA 02114
$29,934,828
14.
Hilton San Diego Resort     1775 East Mission Bay Drive, San Diego, CA 92109
$115,230,891
15.
The Donovan    1155 14 th Street, NW, Washington, DC 20005        
$82,520,529
16.
Hotel Chicago     333 North Dearborn Street, Chicago, IL 60610        
$159,181,867

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



17.
Westin Michigan Avenue     909 North Michigan Avenue, Chicago, IL 60611    
$246,011,639
18.
Alexis Hotel     1007 First Avenue, Seattle, WA 98104        
$50,525,796
19.
Hotel Amarano     322 North Pass Avenue, Burbank, CA 91505    
$46,510,896
20.
Le Parc Suite Hotel     733 North West Knoll Drive, West Hollywood, CA 90069 $54,622,678
21.
San Diego Paradise Point Resort     1404 West Vacation Road, San Diego, CA 92109
$119,644,264
22.
Gild Hall     15 Gold Street, New York, NY 10038
$62,174,108
23.
Sofitel Washington, DC Lafayette Square     806 15 th Street, NW, Washington, DC 20005
$101,507,998
24.
The Marker Hotel San Francisco     501 Geary Street, San Francisco, CA 94102             $74,196,380
25.
Westin Philadelphia     99 South 17 th Street, Philadelphia, PA 19103        
$147,966,195
26.
Embassy Suites Philadelphia - Center City     1776 Benjamin Franklin Pkwy, Philadelphia, PA 19103
$85,232,416
27.
The Roger     131 Madison Avenue, New York, NY 10016
$96,960,147
28.
Chamberlain West Hollywood     1000 Westmount Drive, West Hollywood, CA 90069
$40,841,846
29.
Viceroy Santa Monica     1819 Ocean Avenue, Santa Monica, CA 90401         $79,752,087
30.
Villa Florence     225 Powell Street, San Francisco, CA 94102 $72,367,623
31.
Park Central NY & WestHouse NY        870 7 th Avenue, New York, NY 10019
$476,365,300
32.
Hotel Palomar    2121 P Street, NW, Washington, DC 20037 $143,345,233
33.
Hilton Gaslamp Quarter    401 K Street, San Diego, CA 92101        
$89,329,396
34.
Hotel Solamar     435 6 th Avenue, San Diego, CA 92101        
$92,471,396
35.
L’Auberge Del Mar    1540 Camino Del Mar, Del Mar, CA 92014
$75,390,747

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



36.
The Liberty Hotel    215 Charles Street, Boston, MA 02114
$175,452,787
37.
Hotel Triton    342 Grant Avenue, San Francisco, CA 94108
$11,630,928
38.
Harbor Court    165 Steuart Street, San Francisco, CA 94105
$37,174,440
39.
Serrano Hotel    405 Taylor Street, San Francisco, CA 94102
$70,442,202
40.
Southernmost Hotel Collection    1319 Duval Street, Key West, FL 33040
$183,131,594
41.
Hotel Deca     4507 Brooklyn Avenue, NE, Seattle, WA 98105    
$30,284,731
42.
Hotel Vitale    8 Mission Street, San Francisco, CA 94105
$126,740,804
43.
The Heathman Hotel    1001 SW Broadway, Portland, OR 97205
$64,575,379
44.
The Marker Waterfront Resort    200 William Street, Key West, FL 33040
$92,863,380
45.
Park Central San Francisco    50 Third Street, San Francisco, CA 94103
$348,732,334


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1.01(C)
GUARANTORS

GUARANTORS
Name
Federal Tax
Id Number
DA Entity, LLC, a Delaware limited liability company
27-1510334
RDA Entity, Inc., a Delaware corporation
27-1507213
I&G Capitol, LLC, a Delaware limited liability company
52-2363632
LaSalle Hotel Lessee, Inc., an Illinois corporation
36-4220546
LaSalle Hotel Properties, a Maryland real estate investment trust
36-4219376
LHO Grafton Hotel Lessee, Inc., a Delaware corporation
20-2140342
LHO Grafton Hotel, L.P., a Delaware limited partnership
20-2138667
LHO Hollywood LM, L.P., a Delaware limited partnership
52-2248273
LHO Le Parc Lessee, Inc., a Delaware corporation
20-3870017
LHO Le Parc, LP, a Delaware limited partnership
20-3868653
LHO Mission Bay Hotel, L.P., a California limited partnership
36-4232561
LHO Mission Bay Rosie Hotel, L.P., a Delaware limited partnership
20-3819466
LHO Mission Bay Rosie Lessee, Inc., a Delaware corporation
20-3819286
LHO San Diego Financing, L.L.C., a Delaware limited liability company
36-4217399
LHO Santa Cruz Hotel One, L.P. a Delaware limited partnership
20-2494600
LHO Santa Cruz One Lessee, Inc., a Delaware corporation
20-1812234
Lucky Town Burbank Lessee, Inc., a Delaware corporation
20-8668065
Lucky Town Burbank, L.P. a Delaware limited partnership
20-8669197
Ramrod Lessee, Inc., a Delaware corporation
26-2644161
Paradise Lessee, Inc., a Delaware corporation
26-2555404

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



GUARANTORS
Geary Darling Lessee, Inc., a Delaware corporation
27-3093379
Geary Darling, LP a Delaware limited partnership
27-3313990
Chamber Maid, LP a Delaware limited partnership
27-3602665
Chamber Maid Lessee, Inc., a Delaware corporation
27-3602695
Seaside Hotel, LP a Delaware limited partnership
27-4510347
Seaside Hotel Lessee, Inc., a Delaware corporation
27-4484507
Let IT FLHO, LP a Delaware limited partnership
45-3323336
Let It FLHO Lessee, Inc., a Delaware corporation
45-3180571
Glass Houses, a Maryland real estate investment trust
26-2526042
LaSalle Washington One Lessee, Inc., a Delaware corporation
36-4412231
LHO Washington Hotel Four, L.L.C., a Delaware limited liability company
52-2361130
LHO Washington Hotel One, L.L.C., a Delaware limited liability company
52-2361142
LHO Washington Hotel Six, L.L.C., a Delaware limited liability company
81-0622154
LHO Washington Hotel Three, LLC, a Delaware limited liability company
52-2361124
LHO Washington Hotel Two, L.L.C., a Delaware limited liability company
52-2361117
DC One Lessee, L.L.C., a Delaware limited liability company
26-2563826
DC Two Lessee, L.L.C., a Delaware limited liability company
26-2564209
DC Three Lessee, L.L.C., a Delaware limited liability company
26-2564466
DC Four Lessee, L.L.C., a Delaware limited liability company
26-2564627
DC Six Lessee, L.L.C., a Delaware limited liability company
26-2564789
DC I&G Capital Lessee, L.L.C., a Delaware limited liability company
26-2564700
LHO Tom Joad Circle DC Lessee, L.L.C., a Delaware limited liability company
36-4220546
LHO Tom Joad Circle DC, L.L.C., a Delaware limited liability company
20-3868735
H Street Shuffle, LLC, a Delaware limited liability company
27-1869414

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



GUARANTORS
H Street Shuffle Lessee, LLC, a Delaware limited liability company
27-1869550
LHO Chicago River Lessee, L.L.C., a Delaware limited liability company
36-4220546
LHO Chicago River, L.L.C., a Delaware limited liability company
36-4217399
LHO Onyx Hotel One, L.L.C., a Delaware limited liability company
36-4217399
LHO Onyx One Lessee, L.L.C., a Delaware limited liability company
36-4220546
NYC Serenade, L.L.C., a Delaware limited liability company
36-4217399
NYC Serenade Lessee, L.L.C., a Delaware limited liability company
27-0900157
Chimes of Freedom Lessee, LLC, a Delaware limited liability company
27-3168127
Chimes I, LLC, a Delaware limited liability company
27-3254069
Of Freedom I, LLC, a Delaware limited liability company
27-3254204
Chimes of Freedom, LLC, a Delaware limited liability company
27-3375998
Wild I, LLC, a Delaware limited liability company
27-3168357
Wild Innocent I, LP a Delaware limited partnership
20-5780150
Wild Innocent I Lessee, LLC, a Delaware limited liability company
30-0642182
LHO Leesburg One Lessee, Inc., a Delaware corporation
58-2671994
LHO New Orleans LM, L.P. a Delaware limited partnership
52-2248283
PC Festivus, LLC, a Delaware limited liability company
45-2474693
PC Festivus Lessee, LLC, a Delaware limited liability company
45-2474584
Silver P, LLC, a Delaware limited liability company
37-1664342
Silver P Lessee, LLC, a Delaware limited liability company
30-0719100
LHO San Diego Hotel One, LP a Delaware limited partnership
20-1852780
LHO San Diego One Lessee, Inc. a Delaware corporation
20-1812234
LHO Alexis Hotel, L.L.C., a Delaware limited liability company
36-4217399
LHO Alexis Lessee, L.L.C., a Delaware limited liability company
36-4220546

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



GUARANTORS
Souldriver, LP a Delaware limited partnership
20-5279665
Souldriver Lessee, Inc. a Delaware corporation
20-5851118
Serenity Now, LP a Delaware limited partnership
30-0790854
Serenity Now, Lessee, Inc. a Delaware corporation
30-0790438
LHOBerge, LP a Delaware limited partnership
36-4746317
LHOBerge Lessee, Inc. a Delaware corporation
38-3889858
Dim Sum, L.P. a Delaware limited partnership
30-0766573
Dim Sum Lessee, Inc. a Delaware corporation
61-1706154
Fun to Stay, L.P. a Delaware limited partnership
30-0766575
Fun to Stay Lessee, Inc. a Delaware corporation
35-2469547
Sunset City, LLC, a Delaware limited liability company
61-1719737
Sunset City Lessee, LLC, a Delaware limited liability company
90-1010467
Look Forward, LLC, a Delaware limited liability company
35-2463192
Don't Look Back, LLC, a Delaware limited liability company
37-1708831
Look Forward Lessee, LLC, a Delaware limited liability company
38-3893577
Don't Look Back Lessee, LLC, a Delaware limited liability company
30-0758106
Viva Soma LP, a Delaware limited partnership
36-4800761
Viva Soma Lessee, Inc., a Delaware corporation
61-1751660
PDX Pioneer, LLC, a Delaware limited liability company
35-2519649
PDX Pioneer Lessee, LLC, a Delaware limited liability company
32-0452377
SF Treat, LP, a Delaware limited partnership
35-2493956
SF Treat Lessee, Inc., a Delaware corporation
37-1748280
Harborside, LLC, a Florida limited liability company
46-0744417
Harborside Lessee, LLC, a Delaware limited liability company
32-0458399

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



GUARANTORS
LHO Badlands, Lessee, LLC, a Delaware limited liability company
36-4220546
LHO Badlands, LLC a Delaware limited liability company
36-4217399
RW New York, LLC, a Delaware limited liability company
27-3168738
RW New York Lessee, LLC, a Delaware limited liability company
27-3168663
LHO Michigan Avenue Freezeout, L.L.C., a Delaware limited liability company
36-4217399
LHO Michigan Avenue Freezeout Lessee, L.L.C., a Delaware limited liability company
36-4220546


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1.01(D)

QUALIFIED GROUND LEASES
San Diego Paradise Point (San Diego, California)
That certain Percentage Lease dated as of May 15, 2000, by and among the City of San Diego as Lessor and LHO Mission Bay Hotel, L.P., as Lessee.
Hyatt Harborside (Boston, Massachusetts)
Amended and Restated Ground Lease for Phase C of The Bird Island Flats Development by and between Massachusetts Port Authority and LHO Harborside Hotel, L.L.C., dated as of March 1, 2001.
Hilton San Diego Resort (San Diego, California)
Lease Agreement dated as of September 12, 2000, executed between the City of San Diego, and Hilton San Diego Corporation as assigned to LHO Mission Bay Rosie Hotel, L.P., by the Assignment and Assumption of Ground Lease dated December 1, 2005.
The Roger (New York, NY)
Lease dated December 29, 1995 between Madison Avenue Baptist Church and Roger Williams Associates, LLC as amended by a First Amendment of Lease, dated August 26, 1997 and a Second Amendment to Lease dated October 6, 2010 entered into by Madison Avenue Baptist Church as Lessor and RW New York, L.L.C. as Lessee.
Viceroy Santa Monica (Santa Monica, CA)
Ground Lease dated September 25, 2000, by and between the City of Santa Monica and Roscoe Real Estate Limited Partnership as assigned to Seaside Hotel, LP by the Assignment and Assumption of Ground Lease and Grant of Improvements dated March 16, 2011.
Hotel Solamar (San Diego, CA)
Ground Lease dated as of August 1, 2006 entered into by and between 6 th and J Street Landowner, L.L.C. as Lessor, and Souldriver, L.P., as Lessee.
The Liberty Hotel (Boston, MA)
Lease Agreement dated as of May 23, 2005, executed between the Massachusetts General Hospital, and CS Owner LLC, as amended and as assigned to Don’t Look Back, LLC, by the Assignment and Assumption of Ground Lease dated December 28, 2012

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Harbor Court (San Francisco, CA)
Hotel Lease by and between The Young Men’s Christian Association of San Francisco and Steuart Street Hotel Associates, dated as of August 1, 1989, as amended, and as assigned to Fun to Stay, LP by Assignment and Assumption Agreement dated as of August 1, 2013
Hotel Triton (San Francisco, CA)
Hotel Lease by and between Roy Chen, et. al. and Grant Street Ventures, L.P., dated November 22, 1989, as amended, and as assigned to Dim Sum, LP by Lease Assignment, Assumption and Consent, dated as of August 1, 2013
Westin Copley Place (Boston, MA)
Air Rights Lease dated December 22, 1978 by and among Massachusetts Turnpike Authority and Urban Investment and Development Co., as amended and assigned to LHO Backstreets, LLC on August 30, 2005.
Hotel Vitale (San Francisco, CA)
Ground Lease dated September 30, 2003 by and between the City and County of San Francisco and Mission & Steuart Hotel Partners, LLC, as amended and assigned to SF Treat, LP on April 2, 2014.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 1.01(E)
EXISTING LETTERS OF CREDIT

Beneficiary    Expiration Date    Amount    Instrument ID
1.
Comerica Bank    February 1, 2017    $592,226    63659990
2.
Chubb and Son    February 1, 2017    $50,000    63659823
3.
National Union Fire Insurance Company    January 30, 2017    $79,279    63659862
4.
Liberty Mutual Insurance Company    February 1, 2017    $642,000    63659570
5.
City of Key West    September 1, 2017    $150,000    63669015
6.
City and County of San Francisco    March 31, 2017    $1,000,000    69600426



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 4.01

SUBSIDIARIES

LaSalle Hotel Lessee, Inc., an Illinois corporation
LHO Grafton Hotel Lessee, Inc., a Delaware corporation
LHO Grafton Hotel, L.L.C., a Delaware limited liability company
LHO Grafton Hotel, L.P., a Delaware limited partnership
LHO Hollywood Financing, Inc., a Delaware corporation
LHO Hollywood LM, L.P. a Delaware limited partnership
LHO Le Parc Lessee, Inc., a Delaware corporation
LHO Le Parc, L.L.C., a Delaware limited liability company
LHO Le Parc, L.P., a Delaware limited partnership
LHO Mission Bay Hotel, L.P., a California limited partnership
LHO Mission Bay Rosie Hotel, L.P., a Delaware limited partnership
LHO Mission Bay Rosie Hotel, L.L.C., a Delaware limited liability company
LHO Mission Bay Rosie Lessee, Inc., a Delaware corporation
LHO San Diego Financing, L.L.C., a Delaware limited liability company
LHO San Diego One, L.P., a Delaware limited partnership
LHO San Diego Hotel One, L.L.C., a Delaware limited liability company
LHO San Diego One Lessee, Inc., a Delaware corporation
LHO Santa Cruz Hotel One, L.P., a Delaware limited partnership
LHO Santa Cruz Hotel One, L.L.C., a Delaware limited liability company
LHO Santa Cruz One Lessee, Inc., a Delaware corporation
Souldriver, L.L.C., a Delaware limited liability company
Souldriver, L.P., a Delaware limited partnership
Souldriver Lessee, Inc., a Delaware corporation
Lucky Town Burbank Lessee, Inc., a Delaware company
Lucky Town Burbank, L.L.C., a Delaware limited liability company
Lucky Town Burbank, L.P., a Delaware limited partnership
Ramrod Lessee, Inc., a Delaware corporation
Paradise Lessee, Inc., a Delaware corporation
Geary Darling Lessee, Inc., a Delaware corporation
Geary Darling, LP, a Delaware limited partnership
Geary Darling, LLC, a Delaware limited liability company
Chamber Maid, LLC, a Delaware limited liability company
Chamber Maid, LP, a Delaware limited partnership
Chamber Maid Lessee, Inc., a Delaware corporation
Seaside Hotel, LP, a Delaware limited partnership
Seaside Hotel Lessee, Inc., a Delaware corporation
Seaside Hotel, LLC, a Delaware limited liability company
Let It FLHO, LLC., a Delaware limited liability company
Let It FLHO, LP, a Delaware limited partnership
Let It FLHO Lessee, Inc., a Delaware corporation
LaSalle Washington One Lessee, Inc., a Delaware corporation
LHO Washington Hotel One, L.L.C., a Delaware limited liability company
LHO Washington Hotel Two, L.L.C., a Delaware limited liability company
LHO Washington Hotel Three, L.L.C., a Delaware limited liability company
LHO Washington Hotel Four, L.L.C., a Delaware limited liability company
LHO Washington Hotel Six, L.L.C., a Delaware limited liability company
DC One Lessee, L.L.C., a Delaware limited liability company
DC Two Lessee, L.L.C., a Delaware limited liability company

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



DC Three Lessee, L.L.C., a Delaware limited liability company
DC Four Lessee, L.L.C., a Delaware limited liability company
DC Six Lessee, L.L.C., a Delaware limited liability company
DC I&G Capital Lessee, L.L.C., a Delaware limited liability company
I&G Capitol, LLC, a Delaware limited liability company
LHO Tom Joad Circle DC Lessee, L.L.C., a Delaware limited liability company
LHO Tom Joad Circle DC, L.L.C., a Delaware limited liability company
H Street Shuffle, LLC, a Delaware limited liability company
H Street Shuffle Lessee, LLC, a Delaware limited liability company
LHO Chicago River Lessee, L.L.C., a Delaware limited liability company
LHO Chicago River L.L.C., a Delaware limited liability company
LHO Michigan Avenue Freezeout Lessee, L.L.C., a Delaware limited liability company
LHO Michigan Avenue Freezeout, L.L.C., a Delaware limited liability company
LHO Indianapolis One Lessee, L.L.C., an Indiana limited liability corporation
LHO Indianapolis Hotel One MM, L.L.C., a Delaware limited liability company
LHO Indianapolis Hotel One CMM, Inc., a Delaware corporation
LHO Indianapolis Hotel One L.L.C, a Delaware limited liability company
LHO Backstreets Lessee, L.L.C., a Delaware limited liability company
LHO Backstreets, L.L.C., a Delaware limited liability company
Westban Hotel Investors, L.L.C., a Delaware limited liability company
LHO Harborside Hotel, L.L.C., a Delaware limited liability company
LHO Onyx Hotel One, L.L.C., a Delaware limited liability company
LHO Onyx One Lessee, L.L.C., a Delaware limited liability company
NYC Serenade, L.L.C., a Delaware limited liability company
NYC Serenade Lessee, L.L.C., a Delaware limited liability company
RW New York, L.L.C., a Delaware limited liability company
RW New York Lessee, L.L.C., a Delaware limited liability company
PC Festivus, L.L.C., a Delaware limited liability company
PC Festivus Lessee, L.L.C., a Delaware limited liability company
Chimes of Freedom Lessee, LLC, a Delaware limited liability company
Chimes I, LLC, a Delaware limited liability company
Of Freedom I, LLC, a Delaware limited liability company
Chimes of Freedom, LLC, a Delaware limited liability company
Wild I, LLC, a Delaware limited liability company
Innocent I, LLC, a Delaware limited liability company
Wild Innocent I, LP, a Delaware limited partnership
Wild Innocent I Lessee, LLC, a Delaware limited liability company
LHO Leesburg One Lessee, Inc., a Delaware corporation
LHO New Orleans LM, L.P., a Delaware limited partnership
LHO New Orleans Financing, Inc., a Delaware corporation
LHO Alexis Hotel, L.L.C., a Delaware limited liability company
LHO Alexis Lessee, L.L.C., a Delaware limited liability company
LHO Badlands Lessee, L.L.C., a Delaware limited liability company
LHO Badlands, L.L.C., a Delaware limited liability company
Silver P, LLC, a Delaware limited liability company
Silver P Lessee, LLC, a Delaware limited liability company
Serenity Now, LP a Delaware limited partnership
Serenity Now, Lessee, Inc. a Delaware corporation
Serenity Now, LLC, a Delaware limited liability company
LHOBerge, LP a Delaware limited partnership
LHOBerge Lessee, Inc. a Delaware corporation
LHOBerge, LLC, a Delaware limited liability company
Dim Sum, L.P. a Delaware limited partnership
Dim Sum Lessee, Inc. a Delaware corporation

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



Dim Sum, LLC, a Delaware limited liability company
Fun to Stay, L.P. a Delaware limited partnership
Fun to Stay Lessee, Inc. a Delaware corporation
Fun to Stay, LLC, a Delaware limited liability company
Sunset City, LLC, a Delaware limited liability company
Sunset City Lessee, LLC, a Delaware limited liability company
Look Forward, LLC, a Delaware limited liability company
Don't Look Back, LLC, a Delaware limited liability company
Look Forward Lessee, LLC, a Delaware limited liability company
Don't Look Back Lessee, LLC, a Delaware limited liability company
DA Entity, LLC, a Delaware limited liability company
RDA Entity, Inc., a Delaware corporation
Glass Houses, a Maryland real estate investment trust
Viva Soma LP, a Delaware limited partnership
Viva Soma Lessee, Inc., a Delaware corporation
Viva Soma, LLC, a Delaware limited liability company
PDX Pioneer, LLC, a Delaware limited liability company
PDX Pioneer Lessee, LLC, a Delaware limited liability company
SF Treat, LP, a Delaware limited partnership
SF Treat Lessee, Inc., a Delaware corporation
SF Treat, LLC, a Delaware limited liability company
Beach Charm, LLC, a Delaware limited liability company
Harborside, LLC, a Florida limited liability company
Harborside Lessee, LLC, a Delaware limited liability company
The address of the principal office of each subsidiary is 7550 Wisconsin Avenue, 10 th Floor, Bethesda, Maryland 20814.


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 4.08

LITIGATION

None

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 4.17

LEGAL REQUIREMENTS; ZONING; UTILITIES; ACCESS

None


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 4.18

EXISTING INDEBTEDNESS*

1.
Unsecured Recourse Indebtedness in the amount of $0.0 million outstanding on the $25.0 million LHL Facility. Matures January 8, 2018, with two 6-month extension options subject to certain conditions. The lender is U.S. Bank, National Association;
2.
Unsecured Recourse Indebtedness in the amount of $555 million related to the Amended and Restated Senior Unsecured Term Loan. Matures January 29, 2021. The administrative agent is Citibank, N.A.;
3.
Westin Copley Place, Boston, MA – Secured Non-Recourse Indebtedness in the amount of $225.0 million related to LHO Backstreets, L.L.C. Matures August 14, 2018 with two 1-year extension options and a third extension option from August 15, 2020 through January 5, 2021. The administrative agent is Citibank, N.A.; and
4.
Hyatt Harborside, Boston, MA – Secured Non-Recourse Indebtedness in the amount of $42.5 million related to LHO Harborside Hotel, L.L.C. Matures March, 2018. Bonds are weekly floaters, secured by Letters of Credit issued by U.S. Bank, National Association.
*All outstanding amounts as of December 8, 2016


    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



SCHEDULE 5.07

INSURANCE
(a)      Insurance Policies Required . While any obligation of the Borrower or any Guarantor under any Credit Document remains outstanding, the Borrower shall procure and maintain or shall cause to be procured and maintained continuously in effect policies of insurance in form and amounts and issued by companies, associations or organizations licensed to do business in the states the Hotel Properties are located, with a Best’s Rating of no less than A-, VIII and otherwise satisfactory to the Administrative Agent covering such casualties, risks, perils, liabilities and other hazards, which insurance shall be in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Hotel Properties are located. All original policies (to the extent reasonably available to Borrower), or certificates thereof, and related endorsements and renewals thereof shall be delivered to and retained by the Administrative Agent unless the Administrative Agent waives this requirement in writing. Without limiting the generality of the foregoing, the Borrower shall provide or cause to be provided (whether by a manager of a Hotel Property or otherwise) the following types of insurance coverage:
i.    until repayment of the Notes and satisfaction of all obligations under the Credit Documents: (i) property insurance on an "all risks" full replacement cost basis without deduction for depreciation (or fire, extended coverage and difference in conditions basis), including flood, earthquake (for any Hotel Property located in the State of California, or in any other location that, according to determination by the appropriate agency of the United States Government, has an above average risk of seismic activity) and sinkhole coverages in an amount equal to the replacement cost of the Improvements (except for earthquake insurance which for each required Hotel Property shall, to the extent available, be in an amount which is equal to or greater than the maximum probable loss determined pursuant to a written report by a seismic engineer, which report and engineer are acceptable to the Administrative Agent); (ii) Comprehensive General Liability Insurance (including contractual liability, owners and contractors protective coverages, products and completed operations, personal and advertising injury liability and fire damage legal liability) and Comprehensive Auto Liability Insurance in a minimum amount of $50,000,000 each occurrence and in the aggregate; (iii) Statutory Workers' Compensation and Employer's Liability Insurance in the minimum amounts of $1,000,000 each accident, $1,000,000 each employee - disease, $1,000,000 policy limit - disease; and (iv) Rent loss insurance against loss of income by reason of any hazard covered under the insurance required under this subparagraph (a) in an amount sufficient to avoid any co-insurance penalty, but in any event for not less than twelve (12) months gross receipts from all sources of income from the Hotel Property. Each such policy of property insurance shall contain a replacement cost endorsement and such other endorsements as are sufficient to prevent the Borrower, the Administrative Agent and/or the Borrower’s Subsidiaries from becoming a co-insurer with respect to such buildings and improvements.
ii.    During the renovation or expansion of any Hotel Property the Borrower will additionally provide: (i) Builder's Risk Insurance on an "all risks" basis including flood, earthquake (if required pursuant to the provisions of and in the amount stated in clause (a)) and sinkhole coverages, and also including Stored Materials and materials while in transit, and (ii) Statutory Workers' Compensation and Employer's Liability Insurance in the minimum amounts of $1,000,000 each accident, $1,000,000 each employee - disease, $1,000,000 policy limit - disease, covering each contractor and all other contractors or subcontractors who may have occasion to be at the job site.
iii.    Such additional insurance as may be reasonably required by the Administrative Agent from time to time in the event that any Hotel Property is exposed to hazards and risks with respect to which the Administrative Agent deems the existing insurance inadequate to properly protect its interests.

    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT



All policies of liability insurance shall name the Administrative Agent, the Banks and their respective directors, officers, representatives, agents and employees (the " Banks’ Parties ") as additional insureds. The Borrower shall furnish the Administrative Agent with a certified copy of an original policy, to the extent reasonably available to the Borrower, and a certificate of insurance of all policies of insurance required. All policies or certificates, as the case may be, of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, the Best's Rating of the carrier and the period of coverage. In addition, all policies of property insurance required under the terms hereof shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of the Borrower, the Participating Lessee, the Manager or any party holding under any such Person which might otherwise result in a forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against the Borrower. At least 30 days prior to the expiration of each required policy, the Borrower shall deliver to the Administrative Agent evidence of the renewal or replacement of such policy, continuing such insurance in the form as required by this Agreement. All such policies shall contain a provision that notwithstanding any contrary agreement between the Borrower and the applicable insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or amended (which provision shall include any reduction in the scope or limits of coverage) without at least 30 days' prior written notice to the Administrative Agent.
In the event the Borrower intends to acquire any New York Property and enter into a New York Mortgage with respect to such New York Property, the Administrative Agent shall have received, prior to or concurrently with the execution of such New York Mortgage, (i) evidence as to whether such New York Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “ Flood Hazard Property ”) pursuant to a standard flood hazard determination form ordered and received by the Administrative Agent, and (ii) if such New York Property is a Flood Hazard Property, (A) evidence as to whether the community in which such New York Property is located is participating in the National Flood Insurance Program, (B) the written acknowledgment of the Borrower or the Subsidiary of the Borrower which will own such New York Property of receipt of written notification from the Administrative Agent as to the fact that such New York Property is a Flood Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of the application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to the Administrative Agent and naming the Administrative Agent as sole loss payee on behalf of the Banks.



    
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
SECOND AMENDED & RESTATED CREDIT AGREEMENT




Exhibit 10.33
AMENDED & RESTATED SENIOR UNSECURED TERM LOAN AGREEMENT
Dated as of January 10, 2017
among
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.,
as the Borrower,
LASALLE HOTEL PROPERTIES,
as the Parent,
THE GUARANTORS NAMED HEREIN,
as the Guarantors,
CITIBANK, N.A.,
as Administrative Agent,
The Banks Party Hereto,
as the Banks,
BANK OF MONTREAL and U.S. BANK NATIONAL ASSOCIATION,
as Co-Syndication Agents,
BANK OF AMERICA, N.A., PNC BANK, NATIONAL ASSOCIATION, SUMITOMO MITSUI BANKING CORPORATION, TD BANK, N.A., WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., REGIONS BANK, BRANCH BANKING AND TRUST COMPANY, and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as Co-Documentation Agents,
CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, U.S. BANK NATIONAL ASSOCIATION, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, PNC CAPITAL MARKETS LLC, SUMITOMO MITSUI BANKING CORPORATION, and TD BANK, N.A.,
as Joint Lead Arrangers,
and
CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, and U.S. BANK NATIONAL ASSOCIATION,
as Joint Bookrunners





TABLE OF CONTENTS
 
 
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1
Section 1.01
Certain Defined Terms
1
Section 1.02
Computation of Time Periods
24
Section 1.03
Accounting Terms; Changes in GAAP
24
Section 1.04
Types of Advances
25
Section 1.05
Miscellaneous
25
Section 1.06
Commitment Increases
25
ARTICLE II
THE ADVANCES
25
Section 2.01
The Advances
25
Section 2.02
Method of Borrowing
25
Section 2.03
Fees
28
Section 2.04
Reduction of the Commitments
28
Section 2.05
Repayment of Advances
28
Section 2.06
Interest
28
Section 2.07
Prepayments
29
Section 2.08
Breakage Costs
30
Section 2.09
Increased Costs
30
Section 2.10
Payments and Computations
31
Section 2.11
Taxes
33
Section 2.12
Illegality
35
Section 2.13
[Reserved]
36
Section 2.14
Bank Replacement
36
Section 2.15
Sharing of Payments, Etc.
37
Section 2.16
[Reserved]
37
Section 2.17
Reallocation of Bank Pro Rata Shares
37
Section 2.18
No Novation
38
ARTICLE III
CONDITIONS OF LENDING
38
Section 3.01
Conditions Precedent to Initial Advance
38
Section 3.02
Conditions Precedent for each Borrowing
40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
40
Section 4.01
Existence; Qualification; Partners; Subsidiaries
40
Section 4.02
Partnership and Corporate Power
41
Section 4.03
Authorization and Approvals
41

     -ii-


Section 4.04
Enforceable Obligations
41
Section 4.05
Parent Stock
42
Section 4.06
Financial Statements
42
Section 4.07
True and Complete Disclosure
42
Section 4.08
Litigation
42
Section 4.09
Use of Proceeds
42
Section 4.10
Investment Company Act
43
Section 4.11
Taxes
43
Section 4.12
Pension Plans
43
Section 4.13
Condition of Hotel Property; Casualties; Condemnation
43
Section 4.14
Insurance
44
Section 4.15
No Burdensome Restrictions; No Defaults
44
Section 4.16
Environmental Condition
44
Section 4.17
Legal Requirements, Zoning, Utilities, Access
44
Section 4.18
Existing Indebtedness
44
Section 4.19
Title; Encumbrances
45
Section 4.20
Leasing Arrangements
45
Section 4.21
Unencumbered Properties
45
Section 4.22
OFAC
45
Section 4.23
EEA Financial Institution
45
ARTICLE V
AFFIRMATIVE COVENANTS
45
Section 5.01
Compliance with Laws, Etc.
46
Section 5.02
Preservation of Existence, Separateness, Etc.
46
Section 5.03
Payment of Taxes, Etc.
47
Section 5.04
Visitation Rights; Bank Meeting
47
Section 5.05
Reporting Requirements
47
Section 5.06
Maintenance of Property
49
Section 5.07
Insurance
49
Section 5.08
Use of Proceeds
49
Section 5.09
New Guarantors
50
Section 5.10
Leverage Trigger Guarantors and Pledgors
50
ARTICLE VI
NEGATIVE COVENANTS
51
Section 6.01
Liens, Etc.
51
Section 6.02
Indebtedness
51
Section 6.03
Agreements Restricting Distributions From Subsidiaries
52
Section 6.04
Restricted Payments
52
Section 6.05
Fundamental Changes; Asset Dispositions
53
Section 6.06
Participating Lessee Ownership
53

     -iii-


Section 6.07
Investments, Loans, Future Properties
54
Section 6.08
Affiliate Transactions
54
Section 6.09
Sale and Leaseback
55
Section 6.10
Sale of Discount of Receivables
55
Section 6.11
Restriction on Negative Pledges
55
Section 6.12
Material Documents
55
Section 6.13
Limitations of Development, Construction, Renovation and Purchase of Hotel Properties
55
Section 6.14
New York Mortgages
55
Section 6.15
OFAC
56
Section 6.16
Voluntary Prepayments during a Leverage Trigger Period
56
ARTICLE VII
FINANCIAL COVENANTS
56
Section 7.01
Fixed Charge Coverage Ratio
56
Section 7.02
Maintenance of Net Worth
56
Section 7.03
Limitations on Total Liabilities
56
Section 7.04
Limitations on Unsecured Indebtedness
56
Section 7.05
Limitations on Secured Indebtedness
56
Section 7.06
Limitations on Secured Recourse Indebtedness
57
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
57
Section 8.01
Events of Default
57
Section 8.02
Optional Acceleration of Maturity
59
Section 8.03
Automatic Acceleration of Maturity
59
Section 8.04
[Reserved]
59
Section 8.05
Non-exclusivity of Remedies
60
Section 8.06
Right of Set-off
60
ARTICLE IX
[RESERVED]
60
ARTICLE X
AGENCY PROVISIONS
60
Section 10.01
Authorization and Action
60
Section 10.02
Administrative Agent’s Reliance, Etc.
60
Section 10.03
Administrative Agent and Its Affiliates
61
Section 10.04
Bank Credit Decision
61
Section 10.05
Indemnification
61
Section 10.06
Successor Administrative Agent
61
Section 10.07
Co-Syndication Agents, Joint Lead Arrangers, Joint Bookrunners, Co-Documentation Agents
62
Section 10.08
Designation of Additional Agents
62

     -iv-


ARTICLE XI
MISCELLANEOUS
62
Section 11.01
Amendments, Etc.
62
Section 11.02
Notices, Etc.
63
Section 11.03
No Waiver; Remedies
65
Section 11.04
Costs and Expenses
65
Section 11.05
Binding Effect
65
Section 11.06
Bank Assignments and Participations
65
Section 11.07
Indemnification
67
Section 11.08
Execution in Counterparts
68
Section 11.09
Survival of Representations, Indemnifications, etc.
68
Section 11.10
Severability
68
Section 11.11
Entire Agreement
68
Section 11.12
Usury Not Intended
68
Section 11.13
Governing Law
68
Section 11.14
Consent to Jurisdiction; Service of Process; Jury Trial
69
Section 11.15
Knowledge of Borrower
69
Section 11.16
Banks Not in Control
70
Section 11.17
Headings Descriptive
70
Section 11.18
Time is of the Essence
70
Section 11.19
Scope of Indemnities
70
Section 11.20
Confidentiality
70
Section 11.21
USA Patriot Act Notice
71
Section 11.22
No Fiduciary Duties
71
Section 11.23
Release of Eligible Subsidiary Guarantors
71
Section 11.24
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
72


     -v-



EXHIBITS:
 
 
EXHIBIT A
—
FORM OF NOTE
EXHIBIT B
—
FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT C
—
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT D
—
FORM OF ENVIRONMENTAL INDEMNITY
EXHIBIT E
—
FORM OF GUARANTY
EXHIBIT F
—
FORM OF NOTE OF BORROWING
EXHIBIT G
—
FORM OF NOTICE OF CONVERSION OR CONTINUATION
EXHIBIT H
—
RESERVED
EXHIBIT I
—
RESERVED
EXHIBIT J
—
FORM OF PLEDGE AND SECURITY AGREEMENT
 
 
 
SCHEDULES:
 
 
SCHEDULE 1.01(A)
—
COMMITMENTS
SCHEDULE 1.01(B)
—
EXISTING PROPERTIES
SCHEDULE 1.01(C)
—
GUARANTORS
SCHEDULE 1.01(D)
—
QUALIFIED GROUND LEASES
SCHEDULE 4.01
—
SUBSIDIARIES
SCHEDULE 4.08
—
LITIGATION
SCHEDULE 4.17
—
LEGAL REQUIREMENTS; ZONING; UTILITIES; ACCESS
SCHEDULE 4.18
—
EXISTING INDEBTEDNESS
SCHEDULE 5.07
—
INSURANCE





     -vi-



AMENDED & RESTATED SENIOR UNSECURED TERM LOAN AGREEMENT
This AMENDED & RESTATED TERM LOAN AGREEMENT, dated as of January 10, 2017, is among LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, as the Borrower, LASALLE HOTEL PROPERTIES, a Maryland trust, as the Parent, the Guarantors from time to time party hereto, the Banks from time to time party hereto, CITIBANK, N.A., as Administrative Agent, BANK OF MONTREAL and U.S. BANK NATIONAL ASSOCIATION, as Co‑Syndication Agents, BANK OF AMERICA, N.A., PNC BANK, NATIONAL ASSOCIATION, SUMITOMO MITSUI BANKING CORPORATION, TD BANK, N.A., WELLS FARGO BANK, NATIONAL ASSOCIATION, RAYMOND JAMES BANK, N.A., REGIONS BANK, BRANCH BANKING AND TRUST COMPANY, and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Co-Documentation Agents, CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, U.S. BANK NATIONAL ASSOCIATION, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, PNC CAPITAL MARKETS LLC, N.A., SUMITOMO MITSUI BANKING CORPORATION, and TD BANK, N.A., as Joint Lead Arrangers, CITIGROUP GLOBAL MARKETS INC., BMO CAPITAL MARKETS, and U.S. BANK NATIONAL ASSOCIATION, as Joint Bookrunners.
The Borrower has requested, and the Banks have agreed to extend, certain credit facilities on the terms and conditions of this Agreement. In consideration of the mutual agreements contained in this Agreement, the parties hereto do hereby agree as follows:
WITNESSETH THAT:
(1)    Pursuant to that certain Senior Unsecured Term Loan Agreement dated as of November 5, 2015 (“ Existing Agreement ”) among the Borrower, the Parent, the guarantors party thereto, the banks described therein, Citibank, N.A., as administrative agent, and the other parties from time to time party thereto, such banks made certain loans to the Borrower.
(2)    The Borrower, the Guarantors, the Administrative Agent, and the banks party to the Existing Agreement desire to amend and restate the Existing Agreement to make certain amendments to the Existing Agreement.
NOW, THEREFORE, in consideration of the recitals set forth above, which by this reference are incorporated into this Agreement set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and subject to the terms and conditions hereof and on the basis of the representations and warranties herein set forth, the parties hereto hereby agree to amend and restate the Existing Agreement, which shall 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 (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“2022 TL Facility ” means, at any time, the aggregate amount of the TL Facility Commitments (as defined in the Consolidated Credit Agreement) (whether funded or unfunded) at such time under the Consolidated Credit Agreement.
“ Accession Agreement ” means an Accession Agreement in the form attached respectively to the Guaranty and Environmental Indemnity as Annex 1 thereto, which agreement causes the Person executing and delivering the same to the Administrative Agent to become a party to the Guaranty and the Environmental Indemnity.
“ Adjusted 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 greatest of (a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (which in no circumstance shall be less than 0% per annum), (b) 2% per annum above the Federal Funds Rate and (c) one-month LIBOR as published on the applicable date of




determination (or on the previous Business Day if such date of determination is not a Business Day), as the same may fluctuate from time to time, plus 1% per annum. Citibank’s base rate is a rate set by Citibank based upon various factors, including Citibank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such base rate announced by Citibank shall take effect at the opening of business on the day specified in the public announcement of such change.
“ Adjusted Corporate EBITDA ” means, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, the Corporate EBITDA for such period adjusted for (i) any Investments made or disposed of during such period to include or exclude, as appropriate, the Corporate EBITDA attributable to such Investments for such period, and (ii) any Hotel Property acquired or disposed of during such period to include or exclude, as appropriate, the Adjusted NOI of such Hotel Property for such period, plus the aggregate FF&E Reserves for such period for such Hotel Property; provided in each case that the addition or deduction of the Corporate EBITDA attributable to such Investments or such Hotel Property’s Adjusted NOI, as applicable, for such period is subject to verification by either an accounting firm reasonably acceptable to the Administrative Agent or written certification reasonably acceptable to the Administrative Agent from an officer of the Borrower that such Corporate EBITDA or Adjusted NOI, as the case may be, is true and accurate.

“ Adjusted Net Worth ” means, for the Parent as of any date, the sum of (a) the Parent’s Net Worth on such date plus (b) the minority interest reflected in the Parent’s balance sheet on such date determined in accordance with GAAP.
“ Adjusted NOI ” means, for any Hotel Property for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, an amount (if positive) equal to (a) the Net Income of such Hotel Property for such period after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets) other than in the ordinary course of business, (ii) any write‑up or write-down of assets, and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels; provided that to the extent that the Net Income for any Hotel Property does not include a reasonable allocation of administrative, accounting or other overhead of the Person or Persons who directly or indirectly own or lease such Hotel Property which directly pertains to the operation of Hotel Properties, then such allocation amount shall be deemed subtracted from such Net Income for purposes of the financial tests and other definitions contained in this Agreement which utilize Adjusted NOI, plus (b) to the extent deducted in determining Adjusted NOI, Interest Expense, income taxes, depreciation, amortization, and other non‑cash items for such period, as determined in accordance with GAAP, minus (c) the aggregate FF&E Reserves for such period for such Hotel Property; provided further that in no event shall the Adjusted NOI for any Hotel Property be less than zero.
“ Administrative Agent ” means Citibank, in its capacity as Administrative Agent for the Banks pursuant to Article X and any successor Administrative Agent appointed pursuant to Section 10.06.
“ Advance ” means an Advance by a Bank to the Borrower, any such Advance being either a Base Rate Advance or a LIBOR Advance.
“ Affected Bank ” has the meaning set forth in Section 2.14(a).
“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of a Control Percentage, by contract or otherwise. For the avoidance of doubt, Persons employed by the Borrower or the Parent in a senior management role shall not be deemed Affiliates by reason of such employment.
“ Agreement ” means this Amended & Restated Senior Unsecured Term Loan Agreement, as the same may be amended, modified, restated or supplemented from time to time.


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“ Anti-Corruption Laws ” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Borrower, the Parent or their Subsidiaries from time to time concerning or relating to bribery, corruption, terrorism or money laundering.
“ Applicable Lending Office ” means, with respect to each Bank, such Bank’s Domestic Lending Office in the case of a Base Rate Advance and such Bank’s LIBOR Lending Office in the case of a LIBOR Advance.
“ Applicable Margin ” means, with respect to each Type of Advance at any date, the applicable percentage per annum set forth below based upon the Status then in effect under the column for such Type of Advance.
 
Leverage Ratio
Base Rate
Advances
LIBOR Advances
Level I Status
< 4.00:1.00
0.45%
1.45%
Level II Status
>  4.00:1.00 but < 4.50:1.00
0.55%
1.55%
Level III Status
>  4.50:1.00 but < 5.00:1.00
0.55%
1.55%
Level IV Status
>  5.00:1.00 but < 5.50:1.00
0.75%
1.75%
Level V Status
>  5.50:1.00 but < 6.00:1.00
0.85%
1.85%
Level VI Status
>  6.00:1.00
1.20%
2.20%

; provided , however , that in the event that the Parent achieves an Investment Grade Rating, the Parent may, upon written notice to the Administrative Agent, elect to convert to the ratings-based pricing grid set forth below (a “ Ratings Grid Election ”), in which case, commencing upon the effectiveness of such notice, the interest rate will be LIBOR plus the Applicable Margin determined by the Debt Rating of the Parent, as set forth below. Any Ratings Grid Election shall be irrevocable (subject to the provisions of the paragraph following the grid below).

Debt Rating
Base Rate Advances
LIBOR Advances
> A-/A3
0.000%
0.900%
BBB+/Baa1
0.000%
0.975%
BBB/Baa2
0.125%
1.125%
< BBB-/Baa3
0.400%
1.400%


If Parent has made the Ratings Grid Election as provided above but thereafter fails to maintain an Investment Grade Rating by at least one of S&P or Moody’s, then the applicable interest rate margin shall be determined as first indicated above, during the period commencing on the date Parent no longer has an Investment Grade Rating by at least one of S&P or Moody’s and ending on the date Parent makes another Ratings Grid Election.

Notwithstanding the foregoing, if the last day of any Fiscal Quarter is during a Leverage Trigger Period, then the Applicable Margin (whether based on the Leverage Ratio or the applicable Debt Rating) shall be increased by 35 basis points (0.35%) until the next Leverage Release Date.

“ Approved Electronic Communications ” means each Communication that the Borrower or any Guarantor is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Credit 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 5.05(a) through (d), (h), and (k); provided , however , that solely with respect to delivery of any such Communication by the Borrower or any Guarantor 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, 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


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an existing, Borrowing, (ii) any notice pursuant to Section 2.07 and any other notice relating to the payment of any principal or other amount due under any Credit 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 hereunder or any condition precedent to the effectiveness of this Agreement.
“ Approved Electronic Platform ” has the meaning specified in Section 11.02(c).
“ Approved Other Country ” means each of the following countries: Canada, Mexico, United Kingdom, France, Germany, Spain, Belgium, The Netherlands, Luxembourg, Italy, Portugal, Austria, Switzerland, Norway, Sweden, Denmark, U.S. Virgin Islands, Bahamas, and Puerto Rico.
“ Approved Third Party Operating Leases ” means all operating leases for which either the Borrower or a Material Subsidiary is the lessor thereunder, except any operating lease for which LaSalle Leasing or a Subsidiary of LaSalle Leasing is a lessee.
“ Asset Disposition ” means any sale, lease of substantially all of a Hotel Property (in which the Borrower or a Material Subsidiary is lessor), conveyance, exchange, transfer, or assignment of any Property by the Borrower or a Material Subsidiary to a Person other than the Borrower or a Material Subsidiary.
“ Asset Value ” means, with respect to any Hotel Property, as of any date, (a) the Calculated Value of such asset; provided , however , that the value of each Hotel Property during the first 12 months following acquisition shall be equal to the greater of (i) the acquisition price or (ii) the Calculated Value, (b) in the case of any Development Property, the undepreciated book value of such Hotel Property as determined in accordance with GAAP, or (c) in the case of any Hotel Property held by a Joint Venture Subsidiary, the pro rata share of such Hotel Property as determined in accordance with clause (a) or (b), as applicable.
“ Assigned TL Rights and Obligations ” has the meaning specified in Section 2.17(b).
“ Assignment and Acceptance ” means an assignment and acceptance entered into by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of the attached Exhibit B.
“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“ Banks ” means the lenders listed on the signature pages of this Agreement and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 11.06.
“ Base Rate Advance ” means an Advance which bears interest as provided in Section 2.06(a).
“ Borrower ” means LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership.
“ Borrowing ” means a borrowing consisting of simultaneous Advances of the same Type made by each Bank pursuant to Section 2.01 or Converted by each Bank to Advances of a different Type pursuant to Section 2.02(b).
“ Business Day ” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to any LIBOR Advances, on which dealings are carried on in the London interbank market.
“ Calculated Value ” means for any Hotel Property (a) if such Hotel Property is leased to a Subsidiary of the Borrower, the Adjusted NOI for such Hotel Property for the preceding Rolling Period and, if such Hotel Property is


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not leased to a Subsidiary of the Borrower, the lesser of (i) the Adjusted NOI for such Hotel Property for the preceding Rolling Period or (ii) the actual rental payments received by the Parent or its Subsidiary under the participating lease for such Hotel Property during such Rolling Period divided by (b) the Capitalization Rate.
“ Capital Expenditure ” means any payment made directly or indirectly for the purpose of acquiring or constructing fixed assets, Real Property or equipment which in accordance with GAAP would be capitalized in the fixed asset accounts of such Person making such expenditure, including, without limitation, amounts paid or payable for such purpose under any conditional sale or other title retention agreement or under any Capital Lease, but excluding repairs of Property in the normal and ordinary course of business.
“ Capitalization Event ” means any sale or issuance by the Parent or any of its Subsidiaries of equity securities except for the issuance of the Borrower’s operating partnership units in exchange for a direct or indirect ownership interest in a Hotel Property or a Person that owns a Hotel Property.
“ Capitalization Rate ” means 7.75%, provided that with respect to any Hotel Property located in the central business district of New York City, New York; Washington, D.C.; Chicago, Illinois; San Francisco, California; Boston, Massachusetts; Key West, Florida; San Diego, California; or urban properties in Los Angeles, California, the Capitalization Rate shall mean 7.25%.
“ Capital Lease ” means, for any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
“ Capital Lease Obligations ” means, as to any Person, the capitalized amount of all obligations of such Person or any of its Subsidiaries under Capital Leases, as determined on a Consolidated basis in conformity with GAAP.
“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.
“ Citibank ” means Citibank, N.A.
“ Closing Date ” means January 10, 2017.
“ Code ” means the Internal Revenue Code of 1986, as amended, and any successor statute.
“ Collective Facilities ” means the Revolving Facility, the 2022 TL Facility and the Facility.
“ Commitment ” means, with respect to any Bank, the amount set opposite such Bank’s name on Schedule 1.01(a) as its Commitment, or if such Bank has entered into any Assignment and Acceptance, the amount set forth for such Bank as its Commitment in the Register maintained by the Administrative Agent pursuant to Section 11.06(c), as such amount may be reduced pursuant to Section 2.04 or increased pursuant to Section 1.06.
“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Credit Document or otherwise transmitted between the parties hereto relating to this Agreement, the other Credit Documents, the Borrower or any Guarantor or any of their respective Affiliates, or the transactions contemplated by this Agreement or the other Credit Documents including, without limitation, all Approved Electronic Communications.
“ Compliance Certificate ” means a certificate of the Borrower in substantially the form of the attached Exhibit C.


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“ Consolidated ” refers to the consolidation of the accounts of the Borrower with the Borrower’s Subsidiaries and the Parent with the Parent’s Subsidiaries, as applicable, in accordance with GAAP.
“ Consolidated Credit Agreement ” means that certain Second Amended & Restated Senior Unsecured Credit Agreement, dated as of the date hereof, among the Borrower, the Parent, the Subsidiary Guarantors, Citibank, as administrative agent, and the Banks (as such term is defined therein), as the same may be amended from time to time.
“ Consolidated Total Book Value ” means, at any time the same is to be determined, the aggregate book value of all assets that would appear on the balance sheet of the Parent and the Parent’s Subsidiaries determined on a Consolidated basis in accordance with GAAP, plus the aggregate book value of the accumulated depreciation of such assets determined on a Consolidated basis in accordance with GAAP.
“ Control Percentage ” means, with respect to any Person, the percentage of the outstanding capital stock of such Person having ordinary voting power which gives the direct or indirect holder of such stock the power to elect a majority of the Board of Directors of such Person.
“ Controlled Group ” means all members of a controlled group of corporations and all trades (whether or not incorporated) under common control which, together with the Parent and the Borrower, are treated as a single employer under Section 414 of the Code.
“ Convert ”, “ Conversion ”, and “ Converted ” each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
“ Corporate EBITDA ” means, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder, an amount equal to (a) the Net Income of the Parent (on a Consolidated basis) for such period after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, (ii) any write‑up or write-down of assets, and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels, plus (b) to the extent deducted in determining Corporate EBITDA, Interest Expense, income taxes, depreciation, amortization, and other non‑cash items for such period, as determined in accordance with GAAP.
“ Credit Documents ” means this Agreement, the Notes, the Guaranty, the Environmental Indemnity, the Fee Letter and the Pledge Agreement (if and to the extent delivered in accordance with this Agreement), and each other agreement, instrument or document executed by the Borrower, any of its Subsidiaries or the Parent at any time in connection with this Agreement.
“ Debt Rating ” means, as of any date of determination, the higher of the credit ratings then assigned to the Parent’s long-term senior unsecured debt by either of S&P or Moody’s. For purposes of the foregoing, a credit rating of BBB- from S&P is equivalent to a credit rating of Baa3 from Moody’s and vice versa. A credit rating of BBB from S&P is equivalent to a credit rating of Baa2 from Moody’s and vice versa. It is the intention of the parties that if the Parent shall only obtain a Debt Rating from one of S&P or Moody’s without seeking a credit rating from the other, the Borrower shall be entitled to the benefit of the pricing level for such credit rating. If the Parent obtains a Debt Rating from both of S&P and Moody’s, the higher of the two ratings shall control, provided that the lower rating is only one level below that of the higher rating. If, however, the lower rating is more than one level below that of the higher Debt Rating, the pricing level that is one level higher than the lower Debt Rating shall apply. If the Parent has only one Investment Grade Rating, then that Debt Rating shall apply. If the Parent obtains a Debt Rating from both of S&P and Moody’s and thereafter loses such rating from one of them, the Parent shall be deemed to not have a Debt Rating from such rating agency. At any time, if either of S&P or Moody’s shall no longer perform the functions of a securities rating agency, then the Borrower and the Administrative Agent shall promptly negotiate in good faith to agree upon a substitute rating agency or agencies (and to correlate the system of ratings of each substitute rating agency with that of the rating agency being replaced), and pending such amendment, the Debt Rating of the other of S&P and Moody’s, if one has been provided, shall continue to apply.


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“ Default ” means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“ Development Property ” means either (a) a new Hotel Property under construction including the conversion of a non‑Hotel Property into a Hotel Property or (b) an existing Hotel Property which is undergoing an expansion pursuant to which the total guest rooms for such Hotel Property will be increased by 50% or more. Each Development Property shall continue to be classified as a Development Property hereunder until the achievement of Substantial Completion with respect to such Development Property, following which such Development Property shall be classified as a Hotel Property hereunder.
“ Dollars ” and “ $ ” means lawful money of the United States of America.
“ Domestic Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “Operations Contact” in the questionnaire such Bank provided to the Administrative Agent, or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Administrative Agent.
“ ECP ” means an eligible contract participant as defined in the Commodity Exchange Act.
“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“ Effective Date ” means the first date on which the conditions set forth in Article III shall be satisfied.
“ Eligible Assignee ” means (a) a commercial bank (or other financial institution acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed) organized under the laws of the United States, or any state thereof, and having primary capital of not less than $250,000,000 and approved by the Administrative Agent, which approval will not be unreasonably withheld or delayed, (b) a commercial bank (or other financial institution acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed) organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development and having primary capital (or its equivalent) of not less than $250,000,000 and approved by the Administrative Agent, which approval will not be unreasonably withheld or delayed, (c) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) acceptable to the Administrative Agent and, unless a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06, the Borrower, which approval shall not be unreasonably withheld or delayed, 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 $250,000,000, (d) a Bank (without approval of the Administrative Agent or the Borrower), and (e) an Affiliate of the respective assigning Bank, without approval of any Person but otherwise meeting the eligibility requirements of clause (a) or (b) above; provided , however , that neither the Borrower nor any Affiliate of the Borrower shall qualify as an Eligible Assignee under this definition. For avoidance of doubt, the Borrower shall have no approval or consent rights with respect to an Eligible Assignee so long as a Default has occurred and is continuing at the time any assignment is effected pursuant to Section 11.06. If the Borrower shall not have responded to a request for consent under this definition within 10 Business Days of receipt of a proper written request, the Borrower’s consent shall be deemed granted.


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“ Eligible Subsidiary Guarantor ” means (a) each Subsidiary of the Borrower which directly or indirectly owns an Unencumbered Property, (b) each Operating Lessee, and (c) each Material Subsidiary, in each case excluding Permitted Other Subsidiaries and any Joint Venture Subsidiary which is contractually prohibited from acting as a Guarantor by the terms of (i) any document evidencing or securing Indebtedness of the Borrower or its Subsidiaries permitted by the terms of this Agreement or (ii) the organizational documents of such Person.
“ Environment ” or “ Environmental ” shall have the meanings set forth in 42 U.S.C. § 9601(8), as amended.
“ Environmental Claim ” means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating to health or safety of employees) which seeks to impose liability under any Environmental Law.
“ Environmental Indemnity ” means that certain Environmental Indemnification Agreement effective the date hereof executed by the Borrower, the Parent and the Guarantors in substantially the form of the attached Exhibit D and any future environmental indemnity or Accession Agreement executed in connection with any Hotel Property, as any of such environmental indemnities may be amended hereafter in accordance with the terms of such agreements.
“ Environmental Law ” means all Legal Requirements arising from, relating to, or in connection with the Environment, health, or safety, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, medical, infectious, or toxic substances, materials or wastes; (d) the safety or health of employees; or (e) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous, medical, infectious, or toxic substances, materials or wastes.
“ Environmental Permit ” means any permit, license, order, approval or other authorization under Environmental Law.
“ Equity Interests ” means, with respect to any Person, all of the Stock in such Person, all of the Stock Equivalents in such Person, and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such Stock or Stock Equivalents are outstanding on any date of determination.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D of the Federal Reserve Board (or any successor), as in effect from time to time.
“ Event of Default ” has the meaning set forth in Section 8.01.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement


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governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal.
“ Excluded Taxes ” has the meaning set forth in Section 2.11(a).
“ Existing Agreement ” has the meaning set forth in the recitals of this Agreement.
“ Existing Properties ” means collectively the Hotel Properties listed on Schedule 1.01(b), and “ Existing Property ” means any of such Hotel Properties.
“ Facility ” means, at any time, the aggregate amount of the Commitments (whether funded or unfunded) at such time.
“ FATCA ” has the meaning set forth in Section 2.11(a).
“ 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, 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, an analogous rate determined by the Administrative Agent with reference to another commercially available source or sources designated by the Administrative Agent; provided , however , that in no circumstance shall the Federal Funds Rate be less than 0% per annum for each Base Rate Advance that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Swap Contract.
“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System or any of its successors.
“ Fee Letter ” has the meaning set forth in Section 2.03(c).
“ FF&E ” means, with respect to any Hotel Property, all fixtures, furnishings, equipment, furniture, and other items of tangible personal property now or hereafter located on such Hotel Property or used in connection with the use, occupancy, operation and maintenance of all or any part of such Hotel Property, other than stocks of food and other supplies held for consumption in normal operation but including, without limitation, appliances, machinery, equipment, signs, artwork, office furnishings and equipment, guest room furnishings, and specialized equipment for kitchens, laundries, bars, restaurants, public rooms, health and recreational facilities, dishware, all partitions, screens, awnings, shades, blinds, floor coverings, hall and lobby equipment, heating, lighting, plumbing, ventilating, refrigerating, incinerating, elevators, escalators, air conditioning and communication plants or systems with appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials; reservation system computer and related equipment.
“ FF&E Reserve ” means, for any Person or any Hotel Property at any time, a reserve equal to 4% of gross revenues from any Hotel Property owned by such Person or from such Hotel Property, as applicable, for the Rolling Period of the Parent most recently ended for which financial statements have been, or are required to be, delivered to the Banks hereunder.
“ Fiscal Quarter ” means each of the three-month periods ending on March 31, June 30, September 30 and December 31.
“ Fiscal Year ” means the twelve-month period ending on December 31.
“ Fixed Charge Coverage Ratio ” means, as of the end of any Rolling Period, a ratio of (a) the Corporate EBITDA for such Rolling Period less the aggregate FF&E Reserves for such period in respect of each Hotel Property owned by the Parent or its Subsidiaries (whether located on land owned by or land leased to such owner of the Hotel Property) to (b) the Fixed Charges for such Rolling Period.


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“ Fixed Charges ” means, for the Rolling Period of the Parent most recently ended for which financial statements are required to be delivered to the Banks hereunder, the sum of the following amounts for the Parent and the Parent’s Subsidiaries on a Consolidated basis: (a) the amount (without duplication) of all mandatory principal payments scheduled to be made (excluding optional prepayments and scheduled principal payments in respect of any such Indebtedness which is payable in a single installment at final maturity), (b) Parent’s Interest Expense, (c) all payments scheduled to be made in respect of Capital Leases, and (d) all preferred stock dividends.
“ Funding Date ” has the meaning set forth in Section 1.06(b).
“ Future Property ” means any Hotel Property except for the Existing Properties which the Borrower or any Subsidiary of the Borrower acquires.
“ GAAP ” means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.
“ Governmental Authority ” means any foreign governmental authority, the United States of America, any state of the United States of America and any subdivision of any of the foregoing, and any agency, department, commission, board, authority or instrumentality, bureau or court having jurisdiction over any Bank, the Parent, the Borrower, any Subsidiaries of the Borrower or the Parent, any participating lessee, a manager or any of their respective Properties (including any supra‑national bodies such as the European Union or the European Central Bank).
“ Guarantor ” means (a) the Parent, (b) each Subsidiary which owns an Unencumbered Property, (c) each Operating Lessee, and (d) each Material Subsidiary, in each case excluding Permitted Other Subsidiaries and any Joint Venture Subsidiary which is contractually prohibited from acting as a Guarantor by the terms of (i) any document evidencing or securing Indebtedness of the Borrower or its Subsidiaries permitted by the terms of this Agreement or (ii) the organizational documents of such Person. The Guarantors on the Closing Date are identified on Schedule 1.01(c).
“ Guaranty ” means that certain Guaranty and Contribution Agreement effective the date hereof executed by the Parent, the Borrower and the Guarantors, evidencing the joint and several guaranty by the signatories thereto of the Obligations of Borrower in respect of the Credit Documents in substantially the form of the attached Exhibit E executed to secure Advances and any future guaranty and contribution agreement or Accession Agreement executed to secure Advances, as any of such agreements may be amended hereafter in accordance with the terms of such agreements.
“ Hazardous Substance ” means the substances identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radio nuclides, radioactive materials, and medical and infectious waste.
“ Hazardous Waste ” means the substances regulated as such pursuant to any Environmental Law.
“ Hotel Property ” for any hotel means the Real Property and the Personal Property for such hotel.
“ ICE LIBOR ” has the meaning specified in the definition of Screen Rate.
“ Improvements ” for any hotel means all buildings, structures, fixtures, tenant improvements and other improvements of every kind and description now or hereafter located in or on or attached to the Land for such hotel; and all additions and betterments thereto and all renewals, substitutions and replacements thereof.
“ Indebtedness ” means (without duplication), at any time and with respect to any Person, (a) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase price of property or services purchased (other than amounts constituting trade payables, accruals or bank drafts arising in the ordinary course of business); (b) indebtedness of others in the amount which such Person has directly or indirectly assumed or guaranteed or otherwise provided credit support therefor or for which such Person is liable as a partner of such Person; (c) indebtedness of others in the amount secured by a Lien on assets of such Person, whether or not such Person shall have assumed such indebtedness; (d) obligations of such Person in respect of letters


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of credit, acceptance facilities, or drafts or similar instruments issued or accepted by banks and other financial institutions for the account of such Person (other than trade payables or bank drafts arising in the ordinary course); (e) obligations of such Person under Capital Leases; (f) obligations under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements or other similar agreements or arrangements designed to protect against fluctuations in interest rates; and (g) all preferred stock that is issued by such Person that is redeemable by the holder thereof in cash, a cash equivalent or some type of Indebtedness or convertible to some type of Indebtedness.
“ Indemnified Taxes ” has the meaning set forth in Section 2.11(a).
“ Indemnitee ” has the meaning set forth in Section 11.07(a).
“ Initial Interest Period ” has the meaning specified in the definition of “Interest Period”.
“ Interest Expense ” means, for any Person for any period for which such amount is being determined, the total interest expense (including that properly attributable to Capital Leases in accordance with GAAP) and all charges incurred with respect to letters of credit determined on a Consolidated basis in conformity with GAAP, plus capitalized interest of such Person and its Subsidiaries.
“ Interest Period ” means, for each LIBOR Advance comprising part of the same Borrowing, the period commencing on the date of such Advance or the date of the Conversion of any Base Rate Advance into such an Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.02 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 and Section 2.02. The duration of each such Interest Period shall be one, two, three or six months, or, if approved by all Banks, twelve months, in each case as the Borrower may select, upon notice received by the Administrative Agent not later than 1:00 P.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, provided , however , that the initial Interest Period shall be the period commencing on the Closing Date and ending on January 17, 2017 (the “ Initial Interest Period ”); and provided further that:
(a)    Interest Periods for Advances of the same Borrowing shall be of the same duration;
(b)    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 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;
(c)    any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month in which it would have ended if there were a numerically corresponding day in such calendar month;
(d)    each successive Interest Period shall commence on the day on which the next preceding Interest Period expires; and
(e)    no Interest Period with respect to any portion of any Advance shall extend beyond the Maturity Date.
“ Interest Rate Agreements ” means (i) any Swap Contract between the Borrower and any Swap Bank, or (ii) any other interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement designed to protect the Borrower, the Parent or any of their respective Subsidiaries against fluctuations in interest rates.
“ Interpolated Rate ” means, for the relevant Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) which results from interpolating on a linear basis between:


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(a)    the applicable Published Screen Rate for the longest period (for which that Published Screen Rate is available) which is less than the relevant Interest Period; and
(b)    the applicable Published Screen Rate for the shortest period (for which that Published Screen Rate is available) which exceeds the relevant Interest Period.
“ Investment ” means, with respect to any Person, (a) any loan or advance to any other Person, (b) the ownership, purchase or other acquisition of, any Stock, Stock Equivalents, other Equity Interest, obligations or other securities of, (i) any other Person, or (ii) all or substantially all of the assets of any other Person, or (iii) all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person, (c) any joint venture or partnership with, or any capital contribution to, or other investment in, any other Person or (d) any investment in any real property. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Credit Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“ Investment Amount ” means (a) for any Hotel Property the sum of (i) for any Existing Property, the amount set forth for such Existing Property on Schedule 1.01(b) attached hereto, and for any other Hotel Property, the aggregate purchase price paid by the Borrower or its Subsidiary for such other Hotel Property (giving effect to any securities used to purchase a Hotel Property at the fair market value of the securities at the time of purchase based upon the price at which such securities could be exchanged into Parent Common Stock assuming such exchange occurred on the date of acquiring the Hotel Property), and (ii) 95% of (A) the actual cost of any Capital Expenditures or FF&E expenditures for such Hotel Property made by the Borrower or its Subsidiaries during any period minus (B) the FF&E Reserve for such Hotel Property, and (b) for any other Investment the aggregate purchase price paid by the Borrower or its Subsidiary for such other Investment (giving effect to any securities used to purchase such Investment at the fair market value of the securities at the time of purchase based upon the price at which such securities could be exchanged into Parent Common Stock assuming such exchange occurred on the date of acquiring such Investment).
“ Investment Grade Rating ” means a Debt Rating of BBB- or better from S&P or a Debt Rating of Baa3 or better from Moody’s.
“ Investment Grade Release Event ” has the meaning set forth in Section 11.23.
“ Joint Venture Guarantor ” means a direct or indirect Wholly‑Owned Subsidiary of the Borrower that (a) has no assets other than its Equity Interests in Joint Venture Subsidiaries whose sole assets are Unencumbered Properties, (b) is not liable for any Indebtedness other than the Obligations, (c) complies in all material respects with all of the covenants and requirements of the Guarantors under the Credit Documents and (d) has delivered to the Administrative Agent either (A) an original Guaranty and Environmental Indemnity executed by it or (B) an Accession Agreement executed by it.
“ Joint Venture Subsidiary ” means any Subsidiary in which the Parent or any of its Subsidiaries (a) holds a majority of Equity Interests and (b) after giving effect to all buy/sell provisions contained in the applicable constituent documents of such Subsidiary, controls all material decisions of such Subsidiary, including without limitation the financing, refinancing and disposition of the assets of such Subsidiary.
“ Land ” for any hotel means the real property upon which the hotel is located, together with all rights, title and interests appurtenant to such real property, including without limitation all rights, title and interests to (a) all strips and gores within or adjoining such property, (b) the streets, roads, sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements, hereditaments, easements, reciprocal easement agreements, rights-of-way and other rights, privileges and appurtenances thereunto belonging or in any way pertaining thereto, (d) all reversions and remainders, (e) all air space rights, and all water, sewer and wastewater rights, (f) all mineral, oil, gas, hydrocarbon substances and other rights to produce or share in the production of anything related to such property, and (g) all other appurtenances appurtenant to such property, including without limitation, any now or hereafter belonging or in anywise appertaining thereto.
“ LaSalle Leasing ” means LaSalle Hotel Lessee, Inc.


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“ Legal Requirement ” means any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority.
“ Leverage Ratio ” means the percentage obtained by dividing (a) the Parent’s Total Liabilities by (b) the Adjusted Corporate EBITDA.
“ Leverage Release Date ” has the meaning set forth in Section 5.10(c).
“ Leverage Trigger ” shall occur when the Leverage Ratio is greater than 6.50:1.00 for 2 consecutive Fiscal Quarters. For purposes only of determining whether a Leverage Trigger has occurred, the Leverage Ratio shall be calculated on a pro forma basis with respect to any Asset Dispositions and concurrent repayments of Indebtedness occurring between the end of the relevant Fiscal Quarter and the delivery of financial statements by the Borrower to the Administrative Agent with respect to such quarter.
“ Leverage Trigger Deadline ” means 10 Business Days following the first date following the occurrence of a Leverage Trigger on which the Borrower is obligated to deliver a Compliance Certificate pursuant to the terms of this Agreement.
“ Leverage Trigger Period ” means the period of time from and including the occurrence of a Leverage Trigger through the related Leverage Release Date, if any.
“ LHL Facility ” means that certain unsecured credit facility entered into by LaSalle Hotel Lessee, Inc., as borrower, and U.S. Bank National Association, as lender, pursuant to that certain Second Amended and Restated Revolving Credit Note, dated as of December 14, 2011, as amended to date, from LaSalle Hotel Lessee, Inc. to U.S. Bank National Association, in the maximum principal amount of $25,000,000, as may be amended simultaneously herewith and as the same may be extended or further amended to the extent permitted by Section 6.02.
“ LIBOR ” means, for the Interest Period for each LIBOR Advance comprising part of the same Borrowing, an interest rate per annum equal to (A) the Screen Rate determined as of approximately 11:00 A.M. (London time) 2 Business Days prior to the first day of such Interest Period, provided that, if such Screen Rate is not available for any reason at such time, the Screen Rate shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Advance being made, continued or converted by Citibank and with a term equivalent to such Interest Period would be offered by Citibank’s London branch (or other Citibank branch or Affiliate) to major banks in the London or other offshore interbank market for Dollars at their request at approximately 11:00 A.M. (London time) two Business Days prior to the commencement of such Interest Period divided by (B) one minus the LIBOR Reserve Requirement; provided , however , that LIBOR for the Initial Interest Period shall be 0.71% per annum. It is agreed that for purposes of this definition, LIBOR Advances made hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in Regulation D and to be subject to the reserve requirements of Regulation D; provided further that for the avoidance of doubt, in no circumstance shall LIBOR be less than 0% per annum for each LIBOR Advance that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Swap Contract.
“ LIBOR Advance ” means any Advance which bears interest as provided in Section 2.06(b).
“ LIBOR Lending Office ” means, with respect to any Bank, the office of such Bank specified as its “Operations Contact” in the questionnaire such Bank provided to the Administrative Agent, or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Administrative Agent.
“ LIBOR Reserve Requirement ” shall mean, on any day, that percentage (expressed as a decimal fraction) which is in effect on such date, as provided 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” as currently defined as Regulation D (or with


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respect to any other category of liabilities that includes deposits by reference to which the interest rate LIBOR Rate Advances is determined) having a term equal to such Interest Period. Each determination by the Administrative Agent of the LIBOR Reserve Requirement, shall, in the absence of manifest error, be conclusive and binding upon the Borrower.
“ Lien ” means any mortgage, lien, pledge, charge, deed of trust, security interest, encumbrance or other type of preferential arrangement to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law or otherwise (including, without limitation, the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement).
“ Liquid Investments ” means cash and the following:
(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States;
(b)    (i) negotiable or nonnegotiable certificates of deposit, time deposits, or other similar banking arrangements maturing within 180 days from the date of acquisition thereof (“bank debt securities”), issued by (A) any Bank or (B) any other bank or trust company which has a combined capital surplus and undivided profit of not less than $250,000,000, if at the time of deposit or purchase, such bank debt securities are rated not less than “A” (or the then equivalent) by the rating service of S&P or of Moody’s, and (ii) commercial paper issued by (A) any Bank or (B) any other Person if at the time of purchase such commercial paper is rated not less than “A-2” (or the then equivalent) by the rating service of S&P or not less than “P-2” (or the then equivalent) by the rating service of Moody’s, or upon the discontinuance of both of such services, such other nationally recognized rating service or services, as the case may be, as shall be selected by the Borrower with the consent of the Administrative Agent;
(c)    repurchase agreements relating to investments described in clauses (a) and (b) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital surplus and undivided profit of not less than $250,000,000, if at the time of entering into such agreement the debt securities of such Person are rated not less than “A” (or the then equivalent) by the rating service of S&P or of Moody’s; and
(d)    such other instruments (within the meaning of New York’s Uniform Commercial Code) as the Borrower may request and the Administrative Agent may approve in writing, which approval will not be unreasonably withheld.
“ Mandatory Commitment Reduction ” has the meaning set forth in Section 2.04(c).
“ Mandatory Prepayment Funds ” has the meaning set forth in Section 2.07(c).
“ Mandatory Prepayments ” means all prepayments of the Advances required under Section 2.07(c).
“ Master Agreement ” has the meaning set forth in the definition of the term Swap Contract.
“ Material Acquisition ” means the acquisition by the Borrower or any of its Subsidiaries, in a single transaction or in a series of related transactions, of one or more Hotel Properties or Persons owning Hotel Properties in which the total Investment Amount is equal to or greater than 10% of Consolidated Total Book Value at such time.
“ Material Adverse Change ” shall mean (a) a material adverse change in the business, financial condition, or results of operations of the Borrower, the Parent or the Borrower, the Parent and the Material Subsidiaries taken as a whole, in each case since the date of the most recent financial statements of the Parent delivered to the Banks pursuant to Section 5.05(b), (b) a material adverse change affecting the validity or enforceability of this Agreement or any Credit Document as against the Borrower or any Guarantor or (c) a material adverse change affecting the ability of the Borrower, the Parent or the Guarantors taken as a whole to perform their obligations under this Agreement or any other Credit Document.


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“ Material Asset Sale ” means any sale, lease (other than an Operating Lease) of substantially all of a Hotel Property (in which the Parent, the Borrower or one of their respective Subsidiaries is lessor), conveyance, exchange, transfer, or assignment of any Property by the Parent, the Borrower or one of their respective Subsidiaries to a Person other than the Parent, the Borrower or one of their respective Subsidiaries (together with any related assets included in such transaction).
“Material Subsidiary ” means any Subsidiary of the Borrower which owns (a) a direct fee or leasehold interest in an Unencumbered Property (including pursuant to an Operating Lease) or (b) assets that have an aggregate undepreciated book value greater than $10,000,000.
“ Maturity Date ” means January 29, 2021.
“ Maximum Rate ” means the maximum nonusurious interest rate under applicable law.
“ Minimum Tangible Net Worth ” means, with respect to the Parent, at any time, the sum of (a) 1,931,251,500 plus (b) 75% of the aggregate net proceeds received by the Parent or any of its Subsidiaries after September 30, 2016 in connection with any offering of Stock or Stock Equivalents of the Parent or its Subsidiaries; provided however , that any such net proceeds used solely for the purpose of redeeming the Parent’s preferred stock shall not be included in such sum.
“ Moody’s ” means Moody’s Investor Service Inc., and any successor thereto.
“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Parent, the Borrower or any member of a Controlled Group is making or accruing an obligation to make contributions.
“ Net Cash Proceeds ” means, with respect to any Material Asset Sale or Refinancing Debt occurring during a Leverage Trigger Period, the excess, if any, of (i) the cash and other Liquid Investments received (including cash proceeds or non-cash proceeds received by way of deferred payment, but only as and when received) by the Borrower or any Subsidiary of the Borrower in consideration of such Material Asset Sale or Refinancing Debt over (ii) the sum, without duplication, of (A) payments made to repay or retire any Indebtedness that is secured by an asset and repaid in connection with the sale thereof, (B) payments made in respect of any principal or interest in connection with any Indebtedness refinanced by such Refinancing Debt, (C) the reasonable expenses incurred by the Parent, the Borrower or any of their respective Subsidiaries in connection with such transaction (including, without limitation, brokerage commissions, transfer and recording taxes and fees, title insurance premiums, attorneys’ fees, financing fees, and reserves or escrows established for any post-closing liabilities), (D) income, capital gains or similar taxes reasonably estimated to be paid or payable with respect to the fiscal year in which such transaction occurs with respect to such transactions and (E) dividend distributions reasonably estimated to be required in respect of the realization of any gains in connection with such transaction in order to maintain the Parent’s status as a REIT.
“ Net Income ” means, for any period for which such amount is being determined, the net income of the Parent (on a consolidated basis) after taxes, as determined in accordance with GAAP, excluding, however, those items that the Administrative Agent determines are extraordinary items, including but not limited to (i) any net gain or loss during such period arising from the sale, exchange, or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, (ii) any write‑up or write-down of assets and (iii) expenses incurred in connection with hotel conversions prior to the opening of any such converted hotels.
“ Net Worth ” means, for any Person, stockholders equity of such Person determined in accordance with GAAP.
“ New Property ” means, as at any date, any Hotel Property that has been owned for less than 4 Fiscal Quarters, by the Parent or by a Person that has been a Subsidiary of the Parent during such entire period.
“ New York Mortgage ” means any consolidated, amended and restated mortgage by and from a Subsidiary that owns a New York Property to the administrative agent under the Consolidated Credit Agreement.
“ New York Property ” means any Hotel Property located in the State of New York.


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“ New York Term Note ” means any consolidated, amended and restated promissory note made by a Subsidiary of the Borrower that owns a New York Property and payable to the order of the administrative agent under the Consolidated Credit Agreement for the ratable benefit of the Banks and with respect to which the Borrower shall be deemed to be a co-obligor with such Subsidiary.
“ Non-Core Hotel Property ” means a Hotel Property which is either (a) a full service hotel located in a secondary market or (b) a limited service hotel located in a non-urban market.
“ Note ” means a promissory note of the Borrower payable to the order of any Bank, in substantially the form of the attached Exhibit A evidencing Indebtedness of the Borrower to such Bank resulting from Advances owing to such Bank, and “ Notes ” means all of such promissory notes.
“ Notice of Borrowing ” means a notice of borrowing in the form of the attached Exhibit F signed by a Responsible Officer of the Borrower.
“ Notice of Conversion or Continuation ” means a notice of conversion or continuation in the form of the attached Exhibit G signed by a Responsible Officer of the Borrower.
“ Obligations ” means all Advances, and other amounts payable by the Borrower to the Administrative Agent or the Banks under the Credit Documents. The foregoing shall also include all obligations under any Swap Contract between Borrower or Parent and any Swap Bank that is permitted to be incurred pursuant to Section 6.02(c), provided that in no event shall the Obligations of the Borrower and the Guarantors under the Credit Documents include the Excluded Swap Obligations.
“ OFAC ” means the Office of Foreign Asset Control of the Department of the Treasury of the United States.
“ Operating Lease ” means any operating lease of an Unencumbered Property between the applicable Subsidiary that owns such Unencumbered Property (whether in fee simple or subject to a Qualified Ground Lease) and the applicable Operating Lessee that leases such Unencumbered Property, as each may be amended, restated, supplemented or otherwise modified from time to time.
“ Operating Lessee ” means a lessee of an Unencumbered Property pursuant to an Operating Lease.
“ Other Taxes ” has the meaning set forth in Section 2.11(b).
“ Parent ” means LaSalle Hotel Properties, a Maryland trust.
“ Parent Common Stock ” means the common shares of beneficial interest of Parent, par value $.01 per share.
“ Parent Company ” means, with respect to a Bank, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Bank, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the Equity Interests in such Bank.
“ Parent’s Interest Expense ” means, for the period for which such amount is being determined, the Interest Expense for the Parent and the Parent’s Subsidiaries on a Consolidated basis.
“ Participant Register ” has the meaning set forth in Section 11.06(e).
“ Patriot Act ” has the meaning set forth in Section 3.01(a)(ix).
“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“ Permits ” has the meaning set forth in Section 4.17.


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“ Permitted Encumbrances ” means the Liens permitted to exist pursuant to Section 6.01.
“ Permitted Hazardous Substances ” means (a) Hazardous Substances, petroleum and petroleum products which are (i) used in the ordinary course of business and in typical quantities for a hotel and (ii) generated, used and disposed of in accordance with all Legal Requirements and good hotel industry practice and (b) non‑friable asbestos to the extent (i) that no applicable Legal Requirements require removal of such asbestos from the Hotel Property and (ii) such asbestos is encapsulated in accordance with all applicable Legal Requirements and such reasonable operations and maintenance program as may be required by the Administrative Agent.
“ Permitted Hotel Sale ” means the Asset Disposition of all or a portion of (a) a Hotel Property or (b) the Equity Interests in a Subsidiary of the Borrower which owns a Hotel Property, in either case with respect to which no Default has occurred and is continuing or would occur upon the consummation of such Asset Disposition.
“ Permitted Non‑Unencumbered Property ” means any Hotel Property or other Property (a) which is not an Unencumbered Property; (b) which is owned by a Permitted Other Subsidiary; and (c) which neither is subject to any Environmental Claim, nor contains any Hazardous Substance which could reasonably be expected to cause a Material Adverse Change.
“ Permitted Other Subsidiary ” means a Wholly-Owned Subsidiary or a Joint Venture Subsidiary of the Borrower which (a) does not own any Unencumbered Property, and (b) is a bankruptcy remote, single purpose Person.
“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, limited liability company, joint venture or other entity, or a government or any political subdivision or agency thereof or any trustee, receiver, custodian or similar official.
“ Personal Property ” for any Hotel Property means all FF&E, inventory and other personal property of every kind, whether now existing or hereafter acquired, tangible and intangible, now or hereafter located on or about the Land, and used or to be used in the future in connection with the operation of such Hotel Property.
“ Plan ” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Parent, the Borrower or any member of a Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.
“ Pledge Agreement ” means, to the extent delivered in accordance with the terms of this Agreement, any Pledge and Security Agreement in substantially the form of the attached Exhibit J to be executed by the Pledgors to secure the Advances and the Guaranty and any future pledge and security agreement or Accession Agreement executed to secure the Advances and/or the Guaranty, as any of such agreements may be amended hereafter in accordance with the terms of such agreements.
“ Pledgor ” has the meaning set forth Section 5.10(b).
“ Prescribed Forms ” means such duly executed form(s) or statement(s), and in such number of copies, which may, from time to time, be prescribed by law and which, pursuant to applicable provisions of (a) an income tax treaty between the United States and the country of residence of the Bank providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule or regulation under the Code, permit the Borrower to make payments hereunder for the account of such Bank free of deduction or withholding of income or similar taxes (except for any deduction or withholding of income or similar taxes as a result of any change in or in the interpretation of any such treaty, the Code or any such rule or regulation).
“ Property ” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.
“ Property Owner ” for any Existing Property or Future Property, means the Person who owns fee or leasehold title interest (as applicable) in and to such Property.


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“ Pro Rata Share ” means, at any time with respect to any Bank, the ratio (expressed as a percentage) of such Bank’s aggregate outstanding Advances at such time to the aggregate outstanding Advances of all the Banks at such time.
“ Published Screen Rate ” has the meaning specified in the definition of “Screen Rate”.
“ Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other Person as constitutes an ECP under the Commodity Exchange Act or any regulations promulgated thereunder.
“ Qualified Ground Lease ” means each of the ground leases or ground subleases set forth on Schedule 1.01(d) hereto and for a Future Property means any ground lease (a) which is a direct ground lease or ground sublease granted by the fee owner of real property or a master ground lessee from such fee owner, (b) which may be transferred and/or assigned without the consent of the lessor (or as to which the lease expressly provides that (i) such lease may be transferred and/or assigned with the consent of the lessor and (ii) such consent shall not be unreasonably withheld or delayed) or subject to certain reasonable pre‑defined requirements, (c) which has a remaining term (including any renewal terms exercisable at the sole option of the lessee) of at least 20 years, (d) under which no material default has occurred and is continuing, (e) with respect to which a Lien may be granted without the consent of the lessor (but subject to customary requirements regarding the nature of the holder of such Lien and prior notice to the lessor), (f) which contains customary and reasonable lender protection provisions, including, without limitation, provisions to the effect that (i) the lessor shall notify any holder of a Lien in such lease of the occurrence of any default by the lessee under such lease and shall afford such holder the option to cure such default, and (ii) in the event that such lease is terminated, such holder shall have the option to enter into a new lease having terms substantially identical to those contained in the terminated lease and (g) which otherwise contains no non-customary terms that are material and adverse to the lessee.
“ Qualified Intermediary ” shall have the meaning set forth in the definition of the term Unencumbered Property.
“ Ratings Grid Election ” has the meaning set forth in the definition of the term Applicable Margin.
“ Real Property ” for any hotel means the Land and the Improvements for such hotel, including without limitation, any retail or office space incorporated in the Improvements or located on the Land, parking rights and any and all real property rights to other ancillary functions necessary or desirable for the operation of such hotel.
“ Refinancing Debt ” has the meaning set forth in Section 6.02(e).
“ Register ” has the meaning set forth in Section 11.06(c).
“ Reinvestment ” means, during any Reinvestment Period, funds expended for (a) the acquisition by any Material Subsidiary of any Unencumbered Property and any related transaction costs, or (b) capital improvements in respect of any then existing Unencumbered Property.
“ Reinvestment Period ” has the meaning set forth in Section 2.07(c)(i).
“ REIT ” means a real estate investment trust under Sections 856-860 of the Code.
“ Release ” shall have the meaning set forth in CERCLA or under any other Environmental Law.
“ Repayment Date ” has the meaning set forth in Section 2.07(c)(i).
“ Reportable Event ” means any of the events set forth in Section 4043(b) of ERISA.
“ Required Lenders ” means, at any time, Banks owed or holding at least 51% of the aggregate principal amount of the Advances outstanding at such time.


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“ Response ” shall have the meaning set forth in CERCLA or under any other Environmental Law.
“ Responsible Officer ” means the Chief Executive Officer, President, Executive Vice President, Chief Operating Officer, Chief Financial Officer, Director of Finance or Treasurer of any Person.
“ Restricted Payment ” means (a) any direct or indirect payment, prepayment, redemption, purchase, or deposit of funds or Property for the payment (including any sinking fund or defeasance), prepayment, redemption or purchase of Indebtedness not permitted by this Agreement, and (b) the making by any Person of any dividends or other distributions (in cash, property, or otherwise) on, or payment for the purchase, redemption or other acquisition of, any Equity Interest in such Person, other than  dividends or distributions payable in such Person’s Equity Interests.
“Revolving Facility ” means, at any time, the aggregate amount of the Revolving Facility Commitments (as defined in the Consolidated Credit Agreement) (whether funded or unfunded) at such time under the Consolidated Credit Agreement.
“ Rolling Period ” means, as of any date, the four Fiscal Quarters ending on or immediately preceding such date.
“ Sanctions ” has the meaning set forth in Section 4.22.
“ Screen Rate ” means, for any Interest Period, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be the ICE Benchmark Administration Limited LIBOR Rate (“ ICE LIBOR ”) for deposits in Dollars (for delivery on the first day of such Interest Period) for a term equivalent to such Interest Period as published by Reuters or another commercially available source providing quotations of ICE LIBOR as designated by the Administrative Agent from time to time in place of Reuters (the “ Published Screen Rate ”); provided , however , that if the Published Screen Rate is not available for a period corresponding to the relevant Interest Period but is available for other periods, then “Screen Rate” shall mean the Interpolated Rate.
“ S&P ” means Standard & Poor’s Financial Services LLC, a division of McGraw-Hill Financial, Inc., and any successor thereto.
“ Secured Indebtedness ” means all Secured Recourse Indebtedness plus all Secured Non‑Recourse Indebtedness of the Parent and the Parent’s subsidiaries determined on a Consolidated basis in accordance with GAAP; provided, however, that Secured Indebtedness shall exclude the Indebtedness evidenced by any New York Term Note so long as (a) the Administrative Agent qualifies as a Qualified Unsecured Lender (as such term is defined and used in the Consolidated Credit Agreement), and (b) the New York Property to which such New York Term Note relates is not subject to any Liens other than the related New York Mortgage.
“ Secured Non‑Recourse Indebtedness ” of any Person means all Indebtedness of such Person with respect to which recourse for payment is limited to specific assets encumbered by a Lien securing such Indebtedness; provided , however , that personal recourse of a holder of Indebtedness against any obligor with respect thereto for fraud, misrepresentation, misapplication of cash, non‑payment of real estate taxes or ground lease rent, waste, non-permitted transfers or liens, bankruptcy, violation of special purpose covenants and other circumstances customarily excluded from non‑recourse provisions in non‑recourse financing of real estate shall not, by itself, prevent any Indebtedness from being characterized as Secured Non‑Recourse Indebtedness, provided further that if a personal recourse claim is made in connection therewith, such claim shall not constitute Secured Non‑Recourse Indebtedness for the purposes of this Agreement.
“ Secured Recourse Indebtedness ” of any Person means any Total Liabilities (excluding any Secured Non‑Recourse Indebtedness) of such Person for which the obligations thereunder are secured by a Lien on any assets of such Person or its Subsidiaries; provided , however , that the Indebtedness evidenced by a New York Term Note shall not comprise Secured Recourse Indebtedness and shall be treated for all purposes under this Agreement as Unsecured Indebtedness, so long as (a) the Administrative Agent qualifies as a Qualified Unsecured Lender (as such term is defined and used in the Consolidated Credit Agreement), and (b) the New York Property to which such New York Term Note relates is not subject to any Liens other than the related New York Mortgage.


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“ Senior Financing Transaction ” means the incurrence of senior Unsecured Indebtedness by the Parent.
“ Status ” means the existence of Level I Status, Level II Status, Level III Status, Level IV Status, Level V Status or Level VI Status, as the case may be. As used in this definition:
“ Level I Status ” exists at any date if, at such date, the Leverage Ratio is less than 4.00 to 1.00;
“ Level II Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00;
“ Level III Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 4.50 to 1.00 but less than 5.00 to 1.00;
“ Level IV Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 5.00 to 1.00 but less than 5.50 to 1.00;
“ Level V Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 5.50 to 1.00 but less than 6.00 to 1.00; and
“ Level VI Status ” exists at any date if, at such date, the Leverage Ratio is greater than or equal to 6.00 to 1.00.
Status shall be determined and changed as of the 45th day following any Fiscal Quarter, provided that until the 45th day following the Fiscal Quarter first ending after the Closing Date, the Status shall be determined with reference to the Compliance Certificate delivered in connection with the initial Borrowing hereunder. The Leverage Ratio shall be based upon the components of the calculation of the Leverage Ratio for the Rolling Period just ended or as of the end of such Rolling Period, as applicable.
“ Stock ” means shares of capital stock, beneficial or partnership interests, participations or other equivalents (regardless of how designated) of or in a corporation or equivalent entity, whether voting or non‑voting, and includes, without limitation, common stock and preferred stock.
“ Stock Equivalents ” means all securities (other than Stock) convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any stock, whether or not presently convertible, exchangeable or exercisable.
“ Subsidiary ” of a Person means any corporation, association, partnership or other business entity of which more than 50% of the outstanding shares of capital stock (or other equivalent Equity Interests) having by the terms thereof ordinary voting power under ordinary circumstances to elect a majority of the board of directors or Persons performing similar functions (or, if there are no such directors or Persons, having general voting power) of such entity (irrespective of whether at the time capital stock (or other equivalent Equity Interests) of any other class or classes of such entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of such Person.
“ Substantial Completion ” means, with respect to any Development Property and as of any relevant date of determination, the substantial completion of all material construction, renovation and rehabilitation work then planned with respect to such Property.
“ Swap Bank ” means (a) any Person that is a Bank or an Affiliate of a Bank at the time that it becomes a party to a Swap Contract with the Borrower and (b) any Bank on the Closing Date or Affiliate of such Bank that is party to a Swap Contract with the Borrower in existence on the Closing Date, in each case to the extent permitted by Section 6.02(c).


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“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.
“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“ Termination Event ” means (a) the occurrence of a Reportable Event with respect to a Plan, as described in Section 4043 of ERISA and the regulations issued thereunder (other than a Reportable Event not subject to the provision for 30‑day notice to the PBGC under such regulations), (b) the withdrawal of the Parent, the Borrower or any of a Controlled Group from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“ TL Selling Bank ” has the meaning specified in Section 2.17(b).
“ TL Purchasing Bank ” has the meaning specified in Section 2.17(b).
“ Total Commitments ” means the aggregate amount of the Banks’ Commitments which shall initially be Five Hundred Fifty-Five Million Dollars ($555,000,000); as such amount may be increased pursuant to the provisions of Section 1.06 or decreased pursuant to the applicable provisions of this Agreement.
“ Total Liabilities ” of any Person means the sum of the following (without duplication): (a) all Indebtedness of such Person and its Subsidiaries determined on a Consolidated basis in conformity with GAAP, plus (b) such Person’s Unconsolidated Entity Percentage of Indebtedness (including Secured Non‑Recourse Indebtedness) of such Person’s Unconsolidated Entities, plus (c) to the extent not already included in the calculation of either of the preceding clauses (a) or (b), the aggregate amount of letters of credit for which such Person or any of its Subsidiaries would have a direct or contingent obligation to reimburse the issuers of such letters of credit upon a drawing under such letters of credit, minus (d) to the extent included in the calculation of any of the preceding clauses (a), (b) or (c), (i) trade payables and accruals incurred in the ordinary course of business, (ii) the amount of any minority interests and (iii) Capital Lease Obligations for a ground lease for any Hotel Property, minus (e), with respect to the Parent, the sum of (i) the Parent’s cash proceeds from (x) any sale or issuance of equity securities of the Parent or Indebtedness of the Parent, provided that such sale or issuance occurred within the 60 days preceding the date such Total Liabilities are determined and (y) any “like-kind exchange” under Section 1031 of the Code, provided that such “like-kind exchange” proceeds shall be held in escrow in accordance with the requirements of such Section 1031, (ii) Indebtedness that has been defeased in accordance with the loan documents for such Indebtedness and for which the Borrower certifies as to such defeasance in a manner reasonably satisfactory to the Administrative Agent and (iii) cash on hand of the Parent and its Subsidiaries in an amount not to exceed 0.50% of Consolidated Total Book Value, provided that such cash is not subject to any Lien or other encumbrance or restriction of any kind.
“ Total Unencumbered Asset Value ” means, at any date of determination, an amount equal to the sum of (i) the Asset Values of all Unencumbered Properties (which shall include any New York Property subject to a New York Mortgage) on such date plus (ii) Liquid Investments of the Parent on a Consolidated basis on such date that are not subject to any Liens of any kind (including any such Lien or restriction imposed by (A) any agreement governing Indebtedness and (B) the organizational documents of the Parent or any of its Subsidiaries) and, in each case, that (a) are


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not subject to any agreement (including (x) any agreement governing Indebtedness and (y) if applicable, the organizational documents of the Parent or any of its Subsidiaries) which prohibits or limits the ability of the Parent or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon such assets (excluding any agreement or organizational document which limits generally the amount of Indebtedness which may be incurred by the Parent or its Subsidiaries), and (b) are not subject to any agreement (including any agreement governing Indebtedness) which entitles any Person to the benefit of any Lien on such assets, or would entitle any Person to the benefit of any such Lien upon the occurrence of any contingency (including, without limitation, pursuant to an “equal and ratable” clause), but excluding any agreement that conditions the ability of the Parent or its Subsidiaries to encumber their assets upon the maintenance of one or more specified ratios that limit the ability of such Persons to encumber their assets but that do not generally prohibit the encumbrance of assets, or the encumbrance of specific assets); provided that, for purposes of calculating this amount, (1) Unencumbered Properties owned or leased by Joint Venture Subsidiaries may not exceed 25% of the Total Unencumbered Asset Value, and (2) Non-Core Hotel Properties may not comprise more than 10% of Total Unencumbered Asset Value.
“ Type ” has the meaning set forth in Section 1.04.
“ Unconsolidated Entity ” means, with respect to any Person, at any date, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting or as a loan or advance to the other Person, and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person, if such statements were prepared as of such date. Any Person that is an Unconsolidated Entity with respect to another Person shall not be deemed to be a Subsidiary of such Person.
“ Unconsolidated Entity Percentage ” means, for any Person, with respect to a Person’s Unconsolidated Entity, the percentage ownership interest of such Person in such Unconsolidated Entity, provided that, in the event that such Person is the general partner of such Unconsolidated Entity, such Person’s Unconsolidated Entity Percentage with respect to such Unconsolidated Entity shall be 100% with respect to any Indebtedness for which recourse may be made against any general partner of such Unconsolidated Entity ( provided that such Indebtedness shall not be deemed to be recourse to such general partner solely because of customary carveouts to non‑recourse Indebtedness as described in the definition of “Secured Non-Recourse Indebtedness”); provided further that when the Investment in an Unconsolidated Entity is in the form of preferred stock or a loan or advance, the Unconsolidated Entity Percentage shall be a percentage equal to (a) the amount of such Investment divided by (b) the aggregate amount of the Investments by all Persons in the Unconsolidated Entity.
“ Unencumbered ” means, with respect to any Hotel Property, at any date of determination, the circumstance that such Hotel Property on such date:
(a)    is not subject to any Liens (including restrictions on transferability or assignability) of any kind (including any such Lien or restriction imposed by (i) any agreement governing Indebtedness, and (ii) the organizational documents of the Borrower or any of its Subsidiaries, but excluding Permitted Encumbrances and, in the case of any Qualified Ground Lease (to the extent permitted by the definition thereof), restrictions on transferability or assignability in respect of such Qualified Ground Lease);
(b)    is not subject to any agreement (including (i) any agreement governing Indebtedness, and (ii) if applicable, the organizational documents of the Borrower or any of its Subsidiaries) which prohibits or limits the ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon such Hotel Property, other than Permitted Encumbrances (excluding any agreement or organizational document which limits generally the amount of Indebtedness which may be incurred by the Borrower or its Subsidiaries); and
(c)    is not subject to any agreement (including any agreement governing Indebtedness) which entitles any Person to the benefit of any Lien (other than Permitted Encumbrances) on such Hotel Property, or would entitle any Person to the benefit of any such Lien upon the occurrence of any contingency (including, without limitation, pursuant to an “equal and ratable” clause).


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For the purposes of this Agreement, any Hotel Property owned by a Subsidiary of the Borrower shall not be deemed to be Unencumbered unless both (i) such Hotel Property and (ii) all Stock owned directly or indirectly by the Borrower in such Subsidiary is Unencumbered.
“ Unencumbered Property ” means, as of any date it is to be determined, each Hotel Property that is owned or leased by the Borrower or any Material Subsidiary, and that satisfies each of the following conditions:
(a)    such Hotel Property (i) is Unencumbered, (ii) free of all material title defects, and (iii)  either (A) owned (together with the land on which it is located) in fee simple by the Borrower or its direct or indirect Wholly-Owned Subsidiary or Joint Venture Subsidiary, (B) owned by the Borrower or its direct or indirect Wholly-Owned Subsidiary or Joint Venture Subsidiary and located on land leased to the Borrower or such Subsidiary pursuant to a Qualified Ground Lease, or (C) owned (together with the land on which it is located ) in fee simple by a qualified intermediary within the meaning of Internal Revenue Service Regulation 1.1031(k)-1(g)(4) that is acting for the benefit of the Borrower or its direct or indirect Wholly‑Owned Subsidiary or Joint Venture Subsidiary (each such entity, a “ Qualified Intermediary ”), all as evidenced by a copy of the most recent ALTA Owner’s Policy of Title Insurance (or commitment to issue such a policy to the Borrower or its Subsidiary owning or to own such Hotel Property) relating to such Hotel Property showing the identity of the fee titleholder thereto and all matters of record as of its date and, if such Hotel Property is owned by a Qualified Intermediary, documents establishing that the Qualified Intermediary acts at the direction of the Borrower or its direct or indirect Wholly‑Owned Subsidiary or Joint Venture Subsidiary;
(b)    If the Property Owner for such Hotel Property is not the Borrower, the Property Owner shall be (i) either a Wholly-Owned Subsidiary or a Joint Venture Subsidiary of the Borrower whose sole assets are Unencumbered Properties, who is not liable for any Indebtedness other than the Obligations, who complies in all material respects with all of the covenants and requirements of Material Subsidiaries under the Credit Documents and who has delivered to the Administrative Agent an Accession Agreement executed by such Subsidiary ( provided , however , that no Accession Agreement shall be required if at such time a Guaranty is not required under this Agreement from any Person other than the Parent), (ii) a Qualified Intermediary, as defined in clause (a) above, whose sole assets are Unencumbered Properties, who is not liable for any Indebtedness, and whose sole beneficiary is either the Borrower or a Wholly‑Owned Subsidiary or Joint Venture Subsidiary of the Borrower that complies in all material respects with all of the covenants and requirements of Material Subsidiaries under the Credit Documents and has delivered to the Administrative Agent an Accession Agreement executed by such Subsidiary ( provided , however , that no Accession Agreement shall be required if at such time a Guaranty is not required under this Agreement from any Person other than the Parent), or (iii) a Joint Venture Subsidiary that has more than 50% of its outstanding Equity Interests owned by a Joint Venture Guarantor or the Borrower.
(c)    if such Hotel Property is subject to a Qualified Ground Lease, no default by the lessee under the Qualified Ground Lease exists and the Qualified Ground Lease remains in full force and effect;
(d)    such Hotel Property is free of all material structural defects;
(e)    such Hotel Property is (i) in compliance, in all material respects, with all applicable Environmental Laws, and (ii) not subject to any material Environmental Claim;
(f)    neither all nor any material portion of such Hotel Property shall be the subject of any proceeding by a governmental authority for the condemnation, seizure or appropriation thereof, nor the subject of any negotiations for sale in lieu of condemnation, seizure or appropriation;
(g)    such Hotel Property is (i) located in either the United States of America or in an Approved Other Country and (ii) either (A) a full service hotel located in a resort, convention or urban market, (B) a limited service hotel located in an urban market, or (C) a Non-Core Hotel Property; and
(h)    the Borrower shall have executed and acknowledged (or caused to be executed and acknowledged) and delivered to the Administrative Agent, on behalf of the Banks, all documents, and taken


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all actions reasonably required by the Administrative Agent from time to time to confirm the rights created or now or hereafter intended to be created under the Credit Documents, or otherwise to carry out the purposes of the Credit Documents, and the transactions contemplated thereunder, the Administrative Agent shall have received all other evidence and information that it may reasonably require.
For the avoidance of doubt, the Hotel Properties listed on Schedule 1.01(b) attached hereto, which constituted Unencumbered Properties (as such term is defined in the Existing Agreement) under the Existing Agreement immediately prior to the execution of this Agreement, are deemed to be Unencumbered Properties as of the Closing Date.
“ Unsecured Indebtedness ” of any Person means the Total Liabilities of such Person, and, with respect to the Parent, to the extent deducted in determining Total Liabilities, those items included in clause (e) of the definition of Total Liabilities, but excluding in each case all Secured Indebtedness of such Person. For the avoidance of doubt and notwithstanding anything to the contrary herein, (a) all Obligations in respect of the Facility (whether or not any Pledge Agreement is in effect) and (b) any Unsecured Indebtedness secured solely by a lien permitted by Section 6.01(f) shall be deemed to be Unsecured Indebtedness for the purposes of Articles VI, VII and VIII.
“ Wholly-Owned Subsidiary ” of a Person means any Subsidiary for which such Person’s ownership interest is 99% or more.
“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
Section 1.02      Computation of Time Periods . In this Agreement 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 means “to but excluding”.
Section 1.03      Accounting Terms; Changes in GAAP . (a) All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP applied on a consistent basis.
(b)    Unless otherwise indicated, all financial statements of the Borrower and the Parent, all calculations for compliance with covenants in this Agreement, and all calculations of any amounts to be calculated under the definitions in Section 1.01 shall be based upon the Consolidated accounts of the Borrower, the Parent and their respective Subsidiaries (as applicable) in accordance with GAAP.
(c)    If any changes in accounting principles after the Closing Date required by GAAP or the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or similar agencies results in a change in the method of calculation of, or affects the results of such calculation of, any of the financial covenants, standards or terms found in this Agreement, then the parties shall enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition of the Borrower and its Subsidiaries (determined on a Consolidated basis) shall be the same after such change as if such change had not been made. Until covenants, standards, or terms of this Agreement are amended in accordance with this Section 1.3(c), such covenants, standards and terms shall be computed and determined in accordance with accounting principles in effect prior to such change in accounting principles.
(d)    Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein, and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or


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effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
Section 1.04      Types of Advances . Advances are distinguished by “Type”. The “Type” of an Advance refers to the determination whether such Advance is a LIBOR Advance or Base Rate Advance, each of which constitutes a Type.
Section 1.05      Miscellaneous . Article, Section, Schedule and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified.
Section 1.06      Commitment Increases . (a) The Borrower shall be entitled to request that the Total Commitments be increased to an amount not exceeding Seven Hundred Million Dollars ($700,000,000) in the aggregate, and provided that (i) no Default then exists, (ii) the Borrower gives the applicable Banks 30 days’ prior written notice of such election, (iii) no Bank shall be obligated to increase such Bank’s Commitment without such Bank’s written consent which may be withheld in such Bank’s sole discretion, (iv) the Borrower, not the Banks or the Administrative Agent, shall be responsible for arranging for Persons to provide the additional Commitment amounts; and (v) any Person providing any additional Commitment amount must qualify as an Eligible Assignee and be reasonably acceptable to the Administrative Agent if such Person is not already a Bank. In connection with any such increase in the Total Commitments the parties shall execute any documents reasonably requested in connection with or to evidence such increase, including without limitation an amendment to this Agreement.
(b)    On the date (“ Funding Date ”) of any future increase in the Total Commitments permitted by this Agreement, such date designated by the Administrative Agent, the Banks whose Commitments have increased in connection with such future increase in the Total Commitments shall fund to the Administrative Agent such amounts as may be required to cause each of them to hold its Pro Rata Share of Advances, based upon the Commitments as of such Funding Date, and the Administrative Agent shall distribute the funds so received to the other Banks in such amounts as may be required to cause each of them to hold its Pro Rata Share of Advances, as of such Funding Date. The Banks receiving such amounts to be applied to LIBOR Advances may demand payment of the breakage costs under Section 2.08 as though the Borrower had elected to prepay such LIBOR Advances on such date and the Borrower shall pay the amount so demanded as provided in Section 2.08. The first payment of interest received by the Administrative Agent after such Funding Date shall be paid to the Banks in amounts adjusted to reflect the adjustments of their respective Pro Rata Shares of the Advances as of the Funding Date.
ARTICLE II

THE ADVANCES
Section 2.01      The Advances . Each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make a single Advance in Dollars to the Borrower on the Closing Date in an amount equal to such Bank’s Commitment. The Borrower may from time to time prepay the Advances or any portion thereof pursuant to Section 2.07. Amounts repaid on the Advances may not be reborrowed.
Section 2.02      Method of Borrowing . (a) Notice . Each Borrowing shall be made by telephone (promptly confirmed in writing on the same day) pursuant to a Notice of Borrowing, given not later than 1:00 P.M. (New York City time) (i) on the third Business Day before the date of the proposed Borrowing, in the case of a Borrowing consisting of LIBOR Advances, or (ii) on the Business Day before 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 each Bank prompt notice on the day of receipt of such timely telephone call or Notice of Borrowing of such proposed Borrowing by telecopier. Each Notice of Borrowing shall be in writing or by telecopier specifying the requested (i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, (iv) whether such Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank, and (v) if such Borrowing is to be comprised of LIBOR Advances, the Interest Period for each such Advance. In the case of a proposed Borrowing comprised of LIBOR Advances, the Administrative Agent shall promptly notify each Bank of the applicable interest rate under Section 2.06(b). Each Bank shall, before 1:00 P.M. (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at its address referred to


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in Section 11.02, or such other location as the Administrative Agent may specify by written notice to the Banks, in same day funds, such Bank’s Pro Rata Share of such Borrowing. Upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Borrower at its account with the Administrative Agent or to such other account as the Borrower shall specify to the Administrative Agent in writing.
(b)     Conversions and Continuations . In order to elect to Convert or continue Advances comprising part of the same Borrowing under this Section, the Borrower shall deliver an irrevocable Notice of Conversion or Continuation to the Administrative Agent at the Administrative Agent’s office no later than 1:00 P.M. (New York City time) (i) on the date which is at least 3 Business Days in advance of the proposed Conversion or continuation date in the case of a Conversion to or a continuation of a Borrowing comprised of LIBOR Advances and (ii) on the Business Day prior to the proposed conversion date in the case of a Conversion to a Borrowing comprised of Base Rate Advances. Each such Notice of Conversion or Continuation shall be in writing or by telecopier, specifying (i) the requested Conversion or continuation date (which shall be a Business Day), (ii) the Borrowing amount and Type of the Advances to be Converted or continued, (iii) whether a Conversion or continuation is requested, and if a Conversion, into what Type of Advances, and (iv) in the case of a Conversion to, or a continuation of, LIBOR Advances, the requested Interest Period. Promptly after receipt of a Notice of Conversion or Continuation under this paragraph, the Administrative Agent shall provide each Bank with a copy thereof and, in the case of a Conversion to or a continuation of LIBOR Advances, notify each Bank of the applicable interest rate under Section 2.06(b). For purposes other than the conditions set forth in Section 3.02, the portion of Advances comprising part of the same Borrowing that are Converted to Advances of another Type shall constitute a new Borrowing. If the Borrower shall fail to specify an Interest Period for a LIBOR Advance including the continuation of a LIBOR Advance, the Borrower shall be deemed to have selected a Base Rate Advance.
(c)     Certain Limitations . Notwithstanding anything in paragraphs (a) and (b) above:
(i)    [Reserved];
(ii)    [Reserved];
(iii)    at no time shall there be more than eight (8) Interest Periods applicable to outstanding LIBOR Advances;
(iv)    the Borrower may not select LIBOR Advances for any Borrowing to be made, Converted or continued if a Default has occurred and is continuing;
(v)    if any Bank shall, at any time prior to the making of any requested Borrowing comprised of LIBOR Advances, notify the Administrative Agent that the introduction of or any change in or in the interpretation of any Legal Requirement after the date hereof makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Bank or its LIBOR Lending Office to perform its obligations under this Agreement to make LIBOR Advances or to fund or maintain LIBOR Advances, then such Bank’s Pro Rata Share of such Borrowing shall be made as a Base Rate Advance, provided that such Base Rate Advance shall be considered part of the same Borrowing and interest on such Base Rate Advance shall be due and payable at the same time that interest on the LIBOR Advances comprising the remainder of such Borrowing shall be due and payable; and such Bank agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Bank, be otherwise materially disadvantageous to such Bank;
(vi)    if the Administrative Agent is unable to determine the LIBOR for LIBOR Advances comprising any requested Borrowing, the right of the Borrower to select LIBOR Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance;


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(vii)    if the Required Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the LIBOR for LIBOR Advances comprising such Borrowing will not adequately reflect the cost to such Banks of making or funding their respective LIBOR Advances, as the case may be, for such Borrowing, the right of the Borrower to select LIBOR Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Banks that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance; and
(viii)    if the Borrower shall fail to select the duration or continuation of any Interest Period for any LIBOR Advances in accordance with the provisions contained in the definition of “Interest Period” in Section 1.01 and paragraph (a) or (b) above, the Administrative Agent will forthwith so notify the Borrower and the Banks and such Advances will be made available to the Borrower on the date of such Borrowing as Base Rate Advances or, if an existing Advance, Converted into Base Rate Advances.
(d)     Notices Irrevocable . Each Notice of Borrowing and Notice of Conversion or Continuation shall be irrevocable and binding on the Borrower. In the case of any Borrowing which the related Notice of Borrowing specifies is to be comprised of LIBOR Advances, the Borrower shall indemnify each Bank against any loss, out-of-pocket cost or expense incurred by such Bank as a result of any condition precedent for Borrowing set forth in Article III not being satisfied for any reason, including, without limitation, any loss, cost or expense actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund the Advance to be made by such Bank as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.
(e)     Administrative Agent Reliance . Unless the Administrative Agent shall have received notice from a Bank before the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank’s Pro Rata Share of the Borrowing, the Administrative Agent may assume that such Bank has made its Pro Rata Share of such Borrowing available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (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 Bank shall not have so made its Pro Rata Share of such Borrowing available to the Administrative Agent, such Bank and the Borrower severally agree to immediately repay to the Administrative Agent on demand, and without duplication, such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable on each such day to Advances comprising such Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for each such day. If such Bank shall repay to the Administrative Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Bank’s Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing.
(f)     Bank Obligations Several . The failure of any Bank to make the Advance to be made by it as part of any Borrowing shall not relieve any other Bank of its obligation, if any, to make its Advance on the date of such Borrowing. No Bank shall be responsible for the failure of any other Bank to make the Advance to be made by such other Bank on the date of any Borrowing.
(g)     Notes . Upon the request of a Bank, the indebtedness of the Borrower to such Bank resulting from Advances owing to such Bank shall be evidenced by one or more Notes; provided, however, that to the extent no Note has been issued to a Bank, this Agreement shall be deemed to comprise conclusive evidence for all purposes of the indebtedness resulting from the Advances and extensions of credit made hereunder.
(h)     Bank Booking Vehicles . Each Bank may, at its option, make any Advance available to the Borrower by causing any foreign or domestic branch or Affiliate of such Bank to make such Advance; provided , however , that (i) any exercise of such option shall not affect the obligation of the Borrower or any Bank in accordance with the terms of this Agreement and (ii) nothing in this Section 2.02(h) shall be deemed to obligate any Bank to obtain the funds for any Advance in any particular place or manner or to constitute a representation or warranty by any Bank that it has obtained or will obtain the funds for any Advance in any particular place or manner.


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Section 2.03      Fees . (a)     [Reserved] .
(b)     [Reserved] .
(c)     Administrative Agent Fees . The Borrower agrees to pay to the Administrative Agent for the Administrative Agent’s account the fees set forth in any separate letter agreement executed and delivered by the Borrower and to which the Administrative Agent is a party, as the same may be amended from time to time (collectively, the “ Fee Letter ”) in accordance with the terms thereof, as and when the same are due and payable pursuant to the terms of such Fee Letter.
Section 2.04      Reduction of the Commitments . (a) [Reserved].
(b)    [Reserved].
(c)    The Commitments shall be permanently reduced on a ratable basis upon receipt by the Administrative Agent of any Mandatory Prepayment in an amount (the “ Mandatory Commitment Reduction ”) equal to the lesser of (i) the amount of such Mandatory Prepayment, and (ii) the amount which upon application to the outstanding Advances would reduce the Leverage Ratio to 6.50:1.00 on a pro forma basis taking into account any other prepayments made by the Borrower on or before the date of determination.
Section 2.05      Repayment of Advances . The Borrower shall repay the outstanding principal amount of each Advance on the Maturity Date.
Section 2.06      Interest . The Borrower shall pay interest on the unpaid principal amount of each Advance made by each Bank from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:
(a)     Base Rate Advances . If such Advance is a Base Rate Advance, a rate per annum (computed on the actual number of days elapsed, including the first day and excluding the last, based on (x) a 365 or 366, as the case may be, day year to the extent the interest rate is based upon Citibank’s base rate and (y) a 360 day year to the extent the interest rate is based upon either the Federal Funds Rate or LIBOR) equal at all times to the lesser of (i) the Adjusted Base Rate in effect from time to time plus the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the first day of each calendar month, provided that during the continuance of an Event of Default, Base Rate Advances shall bear interest at a rate per annum equal at all times to the lesser of (1) the rate required to be paid on such Advance immediately prior to the date on which such Event of Default commenced plus 2% and (2) the Maximum Rate.
(b)     LIBOR Advances . If such Advance is a LIBOR Advance, a rate per annum (computed on the actual number of days elapsed, including the first day and excluding the last, based on a 360 day year) equal at all times during the Interest Period for such Advance to the lesser of (i) the LIBOR for such Interest Period plus the Applicable Margin and (ii) the Maximum Rate, payable in arrears on the last day of such Interest Period, and on the date such LIBOR Advance shall be paid in full, and, with respect to LIBOR Advances having an Interest Period in excess of one month, the numerically corresponding day to the initial day of such Interest Period in each calendar month during such Interest Period; provided , however , that if there is no numerically corresponding day in any such month or if the Interest Period begins on the last Business Day of a calendar month, interest shall be payable on the last Business Day of each calendar month during the Interest Period; provided further that during the continuance of an Event of Default, LIBOR Advances shall bear interest at a rate per annum equal at all times to the lesser of (i) the rate required to be paid on such Advance immediately prior to the date on which such Event of Default commenced plus 2% and (ii) the Maximum Rate.
(c)     Usury Recapture . In the event the rate of interest chargeable under this Agreement or the Notes at any time is greater than the Maximum Rate, the unpaid principal amount of the Notes shall bear interest at the Maximum Rate until the total amount of interest paid or accrued on the Notes equals the amount of interest which would have been paid or accrued on the Notes if the stated rates of interest set forth in this


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Agreement had at all times been in effect. In the event, upon payment in full of the Notes, the total amount of interest paid or accrued under the terms of this Agreement and the Notes is less than the total amount of interest which would have been paid or accrued if the rates of interest set forth in this Agreement had, at all times, been in effect, then the Borrower shall, to the extent permitted by applicable law, pay the Administrative Agent for the account of the Banks an amount equal to the difference between (i) the lesser of (A) the amount of interest which would have been charged on the Notes if the Maximum Rate had, at all times, been in effect and (B) the amount of interest which would have accrued on the Notes if the rates of interest set forth in this Agreement had at all times been in effect and (ii) the amount of interest actually paid or accrued under this Agreement on the Notes. In the event the Banks ever receive, collect or apply as interest any sum in excess of the Maximum Rate, such excess amount shall, to the extent permitted by law, be applied to the reduction of the principal balance of the Notes, and if no such principal is then outstanding, such excess or part thereof remaining shall be paid to the Borrower.
(d)     Other Amounts Overdue . If any amount payable under this Agreement or any Credit Documents other than the Advances is not paid when due and payable, including without limitation, accrued interest and fees, then such overdue amount shall accrue interest hereon due and payable on demand at a rate per annum equal to the Adjusted Base Rate plus 2%, from the date such amount became due until the date such amount is paid in full.
Section 2.07      Prepayments .
(a)     Right to Prepay . The Borrower shall have no right to prepay any principal amount of any Advance except as provided in this Section 2.07.
(b)     Optional Prepayments . The Borrower may elect to prepay any of the Advances, after giving by 1:00 P.M. (New York City time) (i) in the case of LIBOR Advances, at least 3 Business Days’ prior written notice or (ii) in case of Base Rate Advances, at least 1 Business Day’s prior written notice to the Administrative Agent stating the proposed date and aggregate principal amount of such prepayment, and if applicable, the relevant Interest Period for the Advances to be prepaid. If any such notice is given, the Borrower shall prepay Advances comprising part of the same Borrowing in whole or ratably in part in an aggregate principal amount equal to the amount specified in such notice, and with respect to LIBOR Advances shall also pay accrued interest to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to Section 2.08 as a result of such prepayment being made on such date; provided , however , that each partial prepayment shall be in an aggregate principal amount not less than $1,000,000 and in integral multiples of $100,000.
(c)     Mandatory Prepayments . The Borrower shall prepay the Collective Facilities at the times and in the manner set forth below in the respective amounts set forth in the following clauses (i) and (ii) (the “ Mandatory Prepayment Funds ”):
(i)    In the case of any Material Asset Sale occurring during a Leverage Trigger Period, within 3 Business Days following the end of the applicable Reinvestment Period (the “ Repayment Date ”), the Borrower shall prepay the Collective Facilities in an aggregate amount equal to all Net Cash Proceeds resulting from such Material Asset Sale; provided , however , that the amount of the required prepayments under this clause (i) shall be reduced first by, for any Material Asset Sale individually, the amount of any Reinvestments up to the amount of such Net Cash Proceeds made during the 6-month period immediately following the closing of such Material Asset Sale (the “ Reinvestment Period ”) and second by, for all Material Asset Sales collectively, the first $100,000,000 of Net Cash Proceeds above any such Reinvestments resulting from such Material Asset Sales; provided , however , that (1) if the applicable Repayment Date is not during a Leverage Trigger Period, then no Mandatory Prepayments shall be required with respect to such Material Asset Sale pursuant to this Section 2.07(c)(i), and (2) if, on the applicable Repayment Date, a Subsidiary of the Borrower shall be a party to a binding contract for the purchase of an Unencumbered Property executed during the applicable Reinvestment Period, then the applicable Reinvestment Period shall be extended for a period of 60 days upon Borrower’s notice to the Administrative Agent, which notice shall be accompanied by a certified copy of the applicable purchase contract, but in no case shall a single Reinvestment Period be so extended more than once; and


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(ii)    In the case of any Refinancing Debt incurred during a Leverage Trigger Period, within 3 Business Days following incurrence of such Refinancing Debt, the Borrower shall prepay the Collective Facilities in an aggregate amount equal to all Net Cash Proceeds resulting from such Refinancing Debt.
The Mandatory Prepayment Funds shall first be applied to the Collective Facilities on a pro rata basis based on the principal amount, as of the date of the applicable prepayment, of outstanding Advances (as such term is defined herein or in the Consolidated Credit Agreement, as applicable) in an amount equal to the Mandatory Commitment Reduction. Any Mandatory Prepayment Funds remaining after applying an amount equal to the Mandatory Commitment Reduction as described in the immediately preceding sentence shall be applied to the outstanding Revolving Facility Advances (as such term is defined in the Consolidated Credit Agreement). Any Mandatory Prepayment Funds remaining after payment of all outstanding Revolving Facility Advances (as such term is defined in the Consolidated Credit Agreement) shall be deposited into the Cash Collateral Account (as such term is defined in the Consolidated Credit Agreement) up to the outstanding Letter of Credit Exposure (as such term is defined in the Consolidated Credit Agreement) as security for the Obligations (as such term is defined herein or in the Consolidated Credit Agreement) and such funds shall be disbursed in accordance with Section 8.04 of the Consolidated Credit Agreement mutatis mutandis .
(d)     Ratable Payments . Each payment of any Advance pursuant to this Section 2.07 or any other provision of this Agreement shall be made in a manner such that all Advances comprising part of the same Borrowing are paid in whole or ratably in part.
(e)     Effect of Notice . All notices given pursuant to this Section 2.07 shall be irrevocable and binding upon the Borrower.
Section 2.08      Breakage Costs . If (a) any payment of principal of any LIBOR Advance is made other than on the last day of the Interest Period for such Advance as a result of any payment pursuant to Section 2.07 or the acceleration of the maturity of the Notes pursuant to Article VIII or otherwise; (b) any Conversion of a LIBOR Advance is made other than on the last day of the Interest Period for such Advance pursuant to Section 2.12 or otherwise; (c) the Borrower fails to make a principal or interest payment with respect to any LIBOR Advance on the date such payment is due and payable; or (d) the Borrower exercises its right under Section 2.14(a), the Borrower shall, within 10 days of any written demand sent by any Bank to the Borrower through the Administrative Agent, pay to the Administrative Agent for the account of such Bank any amounts (without duplication of any other amounts payable in respect of breakage costs) required to compensate such Bank for any losses (other than lost profit), out‑of‑pocket costs or expenses which it reasonably incurs as a result of such payment, nonpayment or replacement, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Bank to fund or maintain such Advance.
Section 2.09      Increased Costs . (a)     LIBOR Advances . If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the calculation of the LIBOR) in or in the interpretation of any Legal Requirement enacted, issued or promulgated after the date of this Agreement or (ii) the compliance with any guideline, rule, directive or request from any central bank or other Governmental Authority (whether or not having the force of law) enacted, issued or promulgated after the date of this Agreement, there shall be any increase in the cost to any Bank of agreeing to make or making, funding, converting into, continuing or maintaining LIBOR Advances, then the Borrower shall from time to time, within 10 days of written demand by such Bank (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Bank additional amounts (without duplication of any other amounts payable in respect of increased costs) sufficient to compensate such Bank for such increased cost; provided , however , that, before making any such demand, each Bank agrees to use commercially 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 and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate as to the amount of such increased cost and detailing the calculation of such cost submitted to the Borrower and the Administrative Agent by such Bank at the time such Bank demands payment under this Section shall be conclusive and binding for all purposes, absent manifest error.


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(b)     Capital Adequacy . If any Bank determines in good faith that compliance with any Legal Requirement or any guideline, rule, directive or request from any central bank or other Governmental Authority (whether or not having the force of law) enacted, issued or promulgated after the date of this Agreement affects or would affect the amount of capital or liquidity required or expected to be maintained by such Bank or any Person controlling such Bank and that the amount of such capital or liquidity is increased by or based upon the existence of such Bank’s commitment to lend and other commitments of this type, then, upon 10 days’ prior written notice by such Bank (with a copy of any such demand to the Administrative Agent), the Borrower shall immediately pay to the Administrative Agent for the account of such Bank, as the case may be, from time to time as specified by such Bank, additional amounts (without duplication of any other amounts payable in respect of increased costs) sufficient to compensate such Bank, in light of such circumstances, to the extent that such Bank reasonably determines such increase in capital or liquidity to be allocable to the existence of such Bank’s commitment to lend under this Agreement. A certificate as to such amounts and detailing the calculation of such amounts submitted to the Borrower and the Administrative Agent by such Bank shall be conclusive and binding for all purposes, absent manifest error.
(c)     [Reserved] .
(d)     Dodd Frank; Basel III . Notwithstanding anything to the contrary contained in this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign financial regulatory authorities, in each case pursuant to Basel III shall in each case be deemed an introduction or change of the type referred to in this Section 2.09, regardless of the date enacted, adopted or issued or implemented.
Section 2.10      Payments and Computations .
(a)     Payment Procedures . Except if otherwise set forth herein, the Borrower shall make each payment under this Agreement and under the Notes not later than 12:00 Noon (New York City time) on the day when due in Dollars to the Administrative Agent without setoff, deduction or counterclaim at the location referred to in the Notes (or such other location as the Administrative Agent shall designate in writing to the Borrower) in same day funds. The Administrative Agent will on the same day such payment is deemed received from the Borrower cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Administrative Agent, or a specific Bank pursuant to Section 2.03(c), 2.06(c), 2.08, 2.09, 2.11 or 2.12 but after taking into account payments effected pursuant to Section 11.04) to the Banks in accordance with each Bank’s Pro Rata Share for the account of their respective Applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Bank for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. If and to the extent that the Administrative Agent shall not have so made payment to a Bank on the day required under this Agreement, the Administrative Agent agrees to immediately pay such Bank such payment, together with interest on such amount, for each day from the date such amount was deemed received by the Administrative Agent until the date such amount is paid to such Bank at the Federal Funds Rate for each such day.
(b)     Computations . All computations of interest based on Citibank’s base rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of fees and interest based on the LIBOR and the Federal Funds Rate shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Administrative Agent of an interest rate shall be conclusive and binding for all purposes, absent manifest error.
(c)     Non‑Business Day Payments . Whenever any payment shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided , however , that if such extension would cause payment of interest on or principal of LIBOR Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.


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(d)     Administrative Agent Reliance . Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Banks that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such date an amount equal to the amount then due such Bank. If and to the extent the Borrower shall not have so made such payment in full to the Administrative Agent, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank, together with interest, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate for each such day.
(e)     Application of Payments . (i)    Unless otherwise specified in Section 2.07 hereof and so long as no Event of Default shall have occurred and be continuing at such time under any of the Collective Facilities (in which case, the provisions of Section 2.10(e)(ii) shall apply), whenever any payment received by the Administrative Agent under this Agreement is insufficient to pay in full all amounts then due and payable under this Agreement and the Notes, such payment shall be distributed and applied by the Administrative Agent and the Banks in the following order: first , to the payment of fees and expenses due and payable to the Administrative Agent under and in connection with this Agreement or any other Credit Document and the payment of fees and expenses due and payable to each Bank under Section 11.04, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person; second , to the payment of all expenses due and payable under Section 2.11(c), ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; third , to the payment of all other fees due and payable under Section 2.03, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fourth , to the payment of the interest accrued on all of the Notes, ratably among the Banks in accordance with their respective Pro Rata Shares; and fifth , to the payment of (1) the principal amount of outstanding Advances, regardless of whether any such amount is then due and payable and (2) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person.
(ii)    For the purposes of this Section 2.10(e)(ii), each capitalized term shall have the meaning given thereto on a collective basis by the loan documentation for the Collective Facilities. Unless otherwise specified in Section 2.07 hereof, whenever any payment received by the Administrative Agent under the Collective Facilities, which does not specify to which of the Collective Facilities it should be applied, and which is not specifically allocated by any other provision of this Agreement, is insufficient to pay in full all amounts then due and payable with respect to the Collective Facilities or if any payment is received by the Administrative Agent when an Event of Default under any of the Collective Facilities shall have occurred and be continuing, such payment shall be distributed and applied by the Administrative Agent and the Banks in the following order: first , to the payment of fees and expenses due and payable to the Administrative Agent under and in connection with this Agreement, the Consolidated Credit Agreement or any other Credit Document and the payment of fees and expenses due and payable to each Issuing Bank and each Bank, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person; second , to the payment of all expenses due and payable under Section 2.11(c) hereof and under Section 2.11(c) of the Consolidated Credit Agreement, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; third , to the payment of fees due and payable to each Issuing Bank pursuant to Section 2.03(b) of the Consolidated Credit Agreement, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fourth , to the payment of all other fees due and payable under Section 2.03 hereof and under Section 2.03 of the Consolidated Credit Agreement, ratably among the Banks in accordance with the aggregate amount of such payments owed to each such Bank; fifth , to the payment of the interest accrued on all of the Notes, and the interest accrued on Letter of Credit Obligations, ratably among the Banks in accordance with their respective Pro Rata Shares; sixth , if no Event of Default shall have occurred and be continuing at such time, then, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person, (a) to the payment of the principal amount of outstanding Revolving Facility Advances and Letter of Credit Obligations, regardless of whether any such amount is then due and payable, and thereafter if there are funds remaining, then (b) to the payment of (1) the principal amount of outstanding TL Facility Advances, regardless of whether any such amount is then due and payable, (2) the principal amount of outstanding Advances under the Consolidated Credit Agreement,


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regardless of whether any such amount is then due and payable, and (3) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder; and seventh , if an Event of Default under any of the Collective Facilities shall have occurred and be continuing at such time, then, ratably among such Persons in accordance with the aggregate amount of such payments owed to each such Person to the payment of (a) the principal amount of outstanding Revolving Facility Advances and Letter of Credit Obligations, regardless of whether any such amount is then due and payable, (b) the principal amount of outstanding TL Facility Advances, regardless of whether any such amount is then due and payable, (c) the principal amount of outstanding Advances, regardless of whether any such amount is then due and payable, and (d) breakage, termination or other amounts owing in respect of any Swap Contract between the Borrower and any Swap Bank to the extent such Swap Contract is permitted hereunder.
(iii)    Notwithstanding anything in this Agreement to the contrary, each of Sections 2.07(c), 2.10(e)(ii) and this Section 2.10(e)(iii) shall inure to the benefit of each Bank (as such term is defined in the Consolidated Credit Agreement) as a third party beneficiary. Notwithstanding any provision herein or in any other Credit Document to the contrary, none of Sections 2.07(c), 2.10(e)(ii) or this Section 2.10(e)(iii), nor the applicable defined terms used in such Sections may be amended or waived without the written consent of the Required Lenders (as such term is defined in the Consolidated Credit Agreement).
(f)     Register . The Administrative Agent shall record in the Register the Commitment and the Advances from time to time of each Bank and each repayment or prepayment in respect to the principal amount of such Advances of each Bank. Any such recordation shall be conclusive and binding on the Borrower and each Bank, absent manifest error; provided however , that failure to make any such recordation, or any error in such recordation, shall not affect the Borrower’s obligations hereunder in respect of such Advances.
Section 2.11      Taxes .
(a)     No Deduction for Certain Taxes . Any and all payments by or on account of any Obligations of the Borrower shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including all backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto (collectively, “ Taxes ”), except as required by applicable law, excluding, (i) in the case of each Bank, and the Administrative Agent, taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank, or the Administrative Agent (as the case may be) is organized or any political subdivision of such jurisdiction or by the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision of such jurisdiction and (ii) any U.S. federal withholding tax imposed pursuant to Sections 1471 through 1474 of the Code (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), including any current or future implementing Treasury Regulations and administrative pronouncements thereunder (collectively, “ FATCA ”), and (iii) any withholding tax imposed on amounts payable to or for the account of any Bank or the Administrative Agent with respect to an applicable interest in an Advance or Commitment pursuant to a law in effect on the date on which such Bank or the Administrative Agent acquires such interest in the Advance or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.14) or designates a new Applicable Lending Office, except in each case to the extent that, pursuant to this Section 2.11(a) or Section 2.11(c), amounts with respect to such Taxes were payable either to such Bank’s or the Administrative Agent’s assignor immediately before such Person became a party hereto or to such Bank immediately before it changed its Applicable Lending Office (all such excluded Taxes in respect of payments hereunder or under any Credit Document being referred to as “ Excluded Taxes ”, and all Taxes other than Other Taxes and Excluded Taxes being referred to as “ Indemnified Taxes ”). If the Borrower shall be required by law (as determined in the good faith discretion of the Borrower) to deduct any Taxes from or in respect of any sum payable to any Bank or the Administrative Agent, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11), such Bank or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made; provided , however , that if the Borrower’s obligation to deduct or withhold Taxes is caused solely by such Bank’s or the Administrative Agent’s failure to provide the forms described in paragraph (g) of this Section 2.11 and such Bank or the Administrative Agent could have provided such forms, no such increase shall be required; (ii) the Borrower shall


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make such deductions; and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Legal Requirements.
(b)     Other Taxes . In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made under, or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Credit Documents (hereinafter referred to as “ Other Taxes ”).
(c)     Indemnification by Borrower . Subject to the proviso of Section 2.11(a), the Borrower indemnifies each Bank and the Administrative Agent for the full amount of Indemnified Taxes or Other Taxes imposed on or paid by such Bank or the Administrative Agent (as the case may be) and any liability (including interest and expenses) arising therefrom or with respect thereto, or required to be withheld or deducted from a payment to such Bank or the Administrative Agent, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by any Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of any Bank, shall be conclusive absent manifest error. Each payment required to be made by the Borrower in respect of this indemnification shall be made to the Administrative Agent for the benefit of any party claiming such indemnification within 30 days from the date the Borrower receives written demand detailing the calculation of such amounts therefor from the Administrative Agent on behalf of itself as Administrative Agent or any such Bank. If any Bank or the Administrative Agent receives a refund in respect of any Indemnified Taxes or Other Taxes paid by the Borrower under this paragraph (c), such Bank or the Administrative Agent, as the case may be, shall promptly pay to the Borrower the Borrower’s share of such refund, net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , however , that the Borrower, upon the request of the Administrative Agent or such Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Bank in the event the Administrative Agent or such Bank is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary herein, in no event will the Administrative Agent or any Bank be required to pay any amount to the Borrower pursuant to this Section 2.11(c) the payment of which would place the Administrative Agent or any Bank in a less favorable net after-Tax position than such Person would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.11(c) shall not be construed to require the Administrative Agent or any Bank to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.
(d)     Indemnification by Banks.     Each Bank shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Bank (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Bank’s failure to comply with the provisions of Section 2.10(f) relating to the maintenance of a Register and (iii) any Excluded Taxes attributable to such Bank, in each case that are payable or paid by the Administrative Agent in connection with any Credit Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Bank by the Administrative Agent shall be conclusive absent manifest error. Each Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Bank under any Credit Document or otherwise payable by the Administrative Agent to such Bank from any other source against any amount due to the Administrative Agent under this paragraph (d).
(e)     Evidence of Tax Payments . The Borrower will pay prior to delinquency all Taxes and Other Taxes payable in respect of any payment. Within 30 days after the date of any payment of Taxes, the Borrower will furnish to the Administrative Agent, at its address referred to in Section 11.02, the original or a certified copy of a receipt evidencing payment of such Taxes or Other Taxes.
(f)     Withholding Tax Documentation . Any Bank that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Credit Document shall deliver to the Borrower and the


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Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Bank, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Bank is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.11(g) below) shall not be required if in the applicable Bank’s reasonable judgment such completion, execution or submission would subject such Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Bank.
(g)     Foreign Bank Withholding Exemption . Each Bank that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Borrower and the Administrative Agent on the date of this Agreement or upon the effectiveness of any Assignment and Acceptance two duly completed copies of the Prescribed Forms, certifying in each case that such Bank is entitled to receive payments under this Agreement and the Notes payable to it, without deduction or withholding of any United States federal income taxes. Each Bank which delivers to the Borrower and the Administrative Agent a Prescribed Form further undertakes to deliver to the Borrower and the Administrative Agent two further copies of a replacement Prescribed Form, on or before the date that any such Prescribed Form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower and the Administrative Agent, and such extensions or renewals thereof as may reasonably be requested by the Borrower and the Administrative Agent certifying that such Bank is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes. If an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any delivery required by the preceding sentence would otherwise be required which renders all such forms inapplicable or which would prevent any Bank from duly completing and delivering any such Prescribed Form with respect to it and such Bank advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax, such Bank shall not be required to deliver such forms. The Borrower shall withhold tax at the rate and in the manner required by the laws of the United States with respect to payments made to a Bank failing to timely provide the requisite Prescribed Forms. If a payment made to a Bank under any Credit Document would be subject to U.S. federal withholding tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for the purposes of this subsection (g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(h)     Survival.     Without prejudice to the survival of any other agreement of any party hereunder or under any other Credit Document, the agreements and obligations under this Section 2.11 shall survive the resignation or replacement of the Administrative Agent, the assignment of rights by, or the replacement of, a Bank, the termination of the Commitments and the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Credit Documents.
Section 2.12      Illegality . (a)  Notice .    If any Bank shall notify the Administrative Agent and the Borrower that the introduction of or any change in or in the interpretation of any Legal Requirement makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful for such Bank or its LIBOR Lending Office to perform its obligations under this Agreement to maintain any LIBOR Advances of such Bank then outstanding hereunder, then, notwithstanding anything herein to the contrary, the Borrower shall, if demanded by such Bank by notice to the Borrower and the Administrative Agent no later than 12:00 Noon (New York City time), (i) if not prohibited by Legal Requirement to maintain such LIBOR Advances for the duration of the Interest Period, on the last day of the Interest Period for each outstanding LIBOR Advance of such Bank or (ii) if prohibited by Legal Requirement to maintain


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such LIBOR Advances for the duration of the Interest Period, on the second Business Day following its receipt of such notice from such Bank, Convert all LIBOR Advances of such Bank then outstanding to Base Rate Advances, and pay accrued interest on the principal amount Converted to the date of such Conversion and amounts, if any, required to be paid pursuant to Section 2.08 as a result of such Conversion being made on such date. Each Bank agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
(b)     Dodd Frank; Basel III .    Notwithstanding anything to the contrary contained in this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States financial regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed an introduction or change of the type referred to in this Section 2.12, regardless of the date enacted, adopted or issued.
Section 2.13      [Reserved] .
Section 2.14      Bank Replacement .
(a)     Right to Replace . The Borrower shall have the right to replace any Bank affected by a condition under Section 2.02(c)(v), 2.09, 2.11, or 2.12 for more than 90 days (each such affected Bank, an “ Affected Bank ”) in accordance with the procedures in this Section 2.14 and provided that no reduction of the Total Commitments occurs as a result thereof. Additionally, in the event that any Bank shall, for more than 30 days after solicitation in writing from the Administrative Agent, fail to consent to a waiver or amendment to, or a departure from, the provisions of this Agreement which requires the consent of all Banks and that has been consented to by the Administrative Agent and the Required Lenders for more than 30 days from the date of which the Administrative Agent has solicited such Bank’s consent, such Bank shall be deemed to be an Affected Bank, and the Borrower shall have the right to replace such Affected Bank.
(b)     First Right of Refusal; Replacement . (i) Upon the occurrence of any condition permitting the replacement of a Bank, the Administrative Agent in its sole discretion shall have the right to reallocate the amount of the Commitments of the Affected Banks among the non-Affected Banks pro rata in accordance with their respective Commitments, including without limitation to Persons which are not already party to this Agreement but which qualify as Eligible Assignees, which election shall be made by written notice within 30 days after the date such condition occurs, provided that any reallocation to any non-Affected Bank shall not be made without the prior written consent of such non-Affected Bank.
(ii)    Without limiting the foregoing, the Borrower shall have the right to add additional Banks which are Eligible Assignees to this Agreement to replace the Commitments of any Affected Banks.
(c)     Procedure . Any assumptions of Commitments pursuant to this Section 2.14 shall be (i) made by the purchasing Bank or Eligible Assignee and the selling Bank entering into an Assignment and Acceptance and by following the procedures in Section 11.06 for adding a Bank. In connection with the reallocation of the Commitments of any Bank pursuant to the foregoing paragraph (b), each Bank with a reallocated Commitment shall purchase from the Affected Banks at par such Bank’s ratable share of the outstanding Advances of the Affected Banks.
(d)     Affected Bank’s Assignment and Acceptance . If an Affected Bank being replaced pursuant to this Section 2.14 does not execute and deliver to the Eligible Assignee a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement within a period of time deemed reasonable by the Administrative Agent after the date on which the Eligible Assignee executes and delivers such Assignment and Acceptance and/or such other related documentation contemplated by this Section 2.14, then such Affected Bank shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Affected Bank.


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Section 2.15      Sharing of Payments, Etc . If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set‑off or otherwise) on account of its Advances in excess of its Pro Rata Share of payments on account of the Advances obtained by all the Banks, such Bank shall notify the Administrative Agent and forthwith purchase from the other Banks such participations in the Advances made by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably in accordance with the requirements of this Agreement with each of them; provided , however , that if all or any portion of such excess payment is thereafter recovered from such purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the purchasing Bank the purchase price to the extent of such Bank’s ratable share (according to the proportion of (a) the amount of the participation sold by such Bank to the purchasing Bank as a result of such excess payment to (b) the total amount of such excess payment) of such recovery, together with an amount equal to such Bank’s ratable share (according to the proportion of (a) the amount of such Bank’s required repayment to the purchasing Bank to (b) the total amount of all such required repayments to the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.15 may, to the fullest extent permitted by Legal Requirement, unless and until rescinded as provided above, exercise all its rights of payment (including the right of set‑off) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such participation.
Section 2.16      [Reserved] .
Section 2.17      Reallocation of Bank Pro Rata Shares. The Advances made under the Existing Agreement shall be deemed to be made under this Agreement on the date hereof, without executing any other documentation, and all such Advances currently outstanding shall be reallocated among the Banks as follows:
(a)    [Reserved].
(b)    On the Effective Date, each Bank that will have a greater Pro Rata Share of the Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing Agreement) of the Facility (under and as defined in the Existing Agreement) immediately prior to the Effective Date (each, a “ TL Purchasing Bank ”), without executing an Assignment and Acceptance, shall be deemed to have purchased assignments pro rata from each Bank that will have a smaller Pro Rata Share of the Facility upon the Effective Date than its Pro Rata Share (under and as defined in the Existing Agreement) of the Facility (under and as defined in the Existing Agreement) immediately prior to the Effective Date (each, a “ TL Selling Bank ”) in all such TL Selling Bank’s rights and obligations under this Agreement and the other Credit Documents as a Bank with respect to the Facility (collectively, the “ Assigned TL Rights and Obligations ”) so that, after giving effect to such assignments, each Bank shall have its respective Commitment as set forth in Schedule 1.01(a) and a corresponding Pro Rata Share of all Advances then outstanding under the Facility. Each such purchase hereunder shall be at par for a purchase price equal to the principal amount of the loans and without recourse, representation or warranty, except that each TL Selling Bank shall be deemed to represent and warrant to each TL Purchasing Bank that the Assigned TL Rights and Obligations of such TL Selling Bank are not subject to any Liens created by that TL Selling Bank.
(c)    The Administrative Agent shall calculate the net amount to be paid or received by each Bank in connection with the assignments effected hereunder on the Effective Date. Each Bank required to make a payment pursuant to this Section shall make the net amount of its required payment available to the Administrative Agent, in same day funds, at the office of the Administrative Agent not later than 1:00 P.M. (Eastern Standard Time) on the Effective Date. The Administrative Agent shall distribute on the Effective Date the proceeds of such amounts to the Banks entitled to receive payments pursuant to this Section, pro rata in proportion to the amount each such Bank is entitled to receive at the primary address set forth in Schedule 1.01(a) or at such other address as such Bank may request in writing to the Administrative Agent.


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Section 2.18      No Novation. All obligations of the Borrower under the Existing Agreement shall become obligations of the Borrower hereunder, and the provisions of the Existing Agreement shall be superseded by the provisions hereof. Each of the parties hereto confirms that the amendment and restatement of the Existing Agreement pursuant to this Agreement shall not constitute a novation of the Existing Agreement.
ARTICLE III

CONDITIONS OF LENDING
Section 3.01      Conditions Precedent to Initial Advance . The obligation of each Bank to make its initial Advance under this Agreement as part of the initial Borrowing under this Agreement is subject to the following conditions precedent:
(a)     Documentation . The Administrative Agent shall have received counterparts of this Agreement executed by the Borrower, the Guarantors and the Banks, and the following duly executed by all the parties thereto, in form and substance satisfactory to the Administrative Agent, and, with respect to this Agreement, the Notes, the Guaranty and the Environmental Indemnity, in sufficient copies for each Bank (except for each Note, as to which one original of each shall be sufficient):
(i)    a Note or Notes (as applicable) duly executed by the Borrower and payable to the order of each Bank that has requested the same, the Guaranty, and the Environmental Indemnity;
(ii)    a certificate from the Chief Executive Officer, President or Chief Financial Officer of the Parent on behalf of the Borrower dated as of the Closing Date stating that as of the Closing Date (A) all representations and warranties of the Borrower set forth in this Agreement and the Credit Documents are true and correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects); (B) no Default has occurred and is continuing; (C) the conditions in this Section 3.01 have been met or waived in writing; and (D) to the best of the Borrower’s knowledge there are no claims, defenses, counterclaims or offsets by the Borrower, the Parent and any of their Subsidiaries against the Banks under the Credit Documents;
(iii)    a certificate of the Secretary or an Assistant Secretary of the Parent on behalf of the Borrower, each Guarantor, each Subsidiary of the Parent and each general partner or managing member (if any) of each of the foregoing, dated as of the Closing Date certifying as of the Closing Date to the extent applicable (A) the names and true signatures of officers or authorized representatives of the general partner of such Person authorized to sign the Credit Documents to which such Person is a party as general partner of such Person, (B) resolutions of the Board of Directors or the members of the general partner of such Person approving the transactions herein contemplated and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the transactions under the Credit Documents and each Credit Document to which it is or is to be a party, (C) a true and correct copy of the organizational documents of the general partner of such Person, (D) a true and correct copy of the bylaws, operating agreement, partnership agreement or other governing document of such Person, and (E) a true and correct copy of all partnership or other organizational authorizations necessary or desirable in connection with the transactions herein contemplated;
(iv)    a certificate of the Secretary or an Assistant Secretary of the Parent dated as of the Closing Date certifying as of the Closing Date (A) resolutions of the Board of Directors or the members of the general partner of such Person approving the transactions herein contemplated and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the transactions under the Credit Documents and each Credit Document to which it is or is to be a party, (B) the copies of the charter and bylaws of the Parent and any modification or amendment to the articles or certificate of incorporation or bylaws of the Parent made since such date, and (C) that the Parent owns 100% of the general partner Equity Interests and at least 70% of the limited partner Equity Interests in the Borrower;


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(v)    a copy of a certificate of the Secretary of State (or equivalent authority) of the jurisdiction of incorporation, organization or formation of each of the Parent, the Borrower and each Guarantor, dated reasonably near (but prior to) the Closing Date, certifying, if and to the extent such certification is generally available for entities of the type of such Person, (A) as to a true and correct copy of the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Person, and each amendment thereto on file in such Secretary’s office, (B) that (1) such amendments are the only amendments to the charter, certificate of limited partnership, limited liability company agreement or other organizational document, as applicable, of such Person on file in such Secretary’s office, (2) such Person has paid all franchise taxes to the date of such certificate and (C) such Person is duly incorporated, organized or formed and in good standing or presently subsisting under the laws of the jurisdiction of its incorporation, organization or formation;
(vi)    a copy of a certificate of the Secretary of State (or equivalent authority) of each jurisdiction in which any of the Parent, the Borrower and each Guarantor owns or leases property or in which the conduct of its business requires it to qualify or be licensed as a foreign corporation except where the failure to so qualify or be licensed could not reasonably be expected to result in a Material Adverse Change, dated reasonably near (but prior to) the Closing Date, stating with respect to each such Person that such Person is duly qualified and in good standing as a foreign corporation, limited partnership or limited liability company in such state and has filed all annual reports required to be filed to the date of such certificate;
(vii)    (A) one or more favorable written opinions of DeCampo, Diamond & Ash LLP, Hagan & Vidovic LLP and DLA Piper LLP, each special counsel for the Borrower, the Parent, and their Subsidiaries, in a form reasonably acceptable to the Administrative Agent, in each case dated as of the Closing Date and with such changes as the Administrative Agent may approve, and (B) such other legal opinions as the Administrative Agent shall reasonably request, in each case dated as of the Closing Date and with such changes as the Administrative Agent may approve;
(viii)    in the event the initial Advance is a LIBOR Advance made on the Closing Date, a breakage indemnity letter agreement executed by the Borrower and dated as of the date of the related Notice of Borrowing in form and substance satisfactory to the Administrative Agent;
(ix)    any information or materials reasonably required by the Administrative Agent or any Bank in order to assist the Administrative Agent or such Bank in maintaining compliance with (i) the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”) and (ii) any applicable “know your customer” or similar rules and regulations;
(x)    a Compliance Certificate duly executed by a Responsible Officer of the Parent, dated the Closing Date or, if later, the date of the initial Advance, in each case confirming that the Parent is in compliance with the covenants contained in Article VII on such date (including after giving effect to the initial Advance, if any, made on such date);
(xi)    evidence satisfactory to the Administrative Agent that the Consolidated Credit Agreement has been made, or shall simultaneously with this Agreement be made, effective; and
(xii)    such other documents, governmental certificates, agreements, and lien searches as the Administrative Agent may reasonably request.
(b)     Representations and Warranties . The representations and warranties contained in Article IV hereof, the Guaranty, and the Environmental Indemnity shall be true and correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects).
(c)     Certain Payments . The Borrower shall have paid the fees required to be paid as of the execution of this Agreement pursuant to the Fee Letter.


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(d)     Qualified Unsecured Lender . The Administrative Agent shall have received evidence reasonably satisfactory to it that the Administrative Agent is a Qualified Unsecured Lender (as such term is defined in the Consolidated Credit Agreement) and that the Obligations constitute Qualified Unsecured Debt (as such term is defined in the Consolidated Credit Agreement) and, as such, the Administrative Agent is entitled to the rights, benefits and protections accorded to a Qualified Unsecured Lender under Section 9.01(f) of the Consolidated Credit Agreement (which evidence may, in the sole discretion of the Administrative Agent, include copies of each of the notices, documents, certificates and acknowledgements identified in the definition of Qualified Unsecured Lender set forth in the Consolidated Credit Agreement.
(e)     Other . The Administrative Agent shall have received such other approvals, opinions or documents deemed necessary or desirable by any Bank or the Administrative Agent as such party may reasonably request.
Section 3.02      Conditions Precedent for each Borrowing . The obligation of each Bank to fund an Advance on the occasion of each Borrowing (other than the Conversion or continuation of any existing Borrowing) shall be subject to the further conditions precedent that on the date of such Borrowing:
(a)    the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):
(i)    the representations and warranties contained in Article IV hereof, the Guaranty, and the Environmental Indemnity are correct in all material respects (except to the extent that any representation or warranty that is qualified by materiality shall be true and correct in all respects) as such representations and warranties may have changed based upon events or activities not prohibited by this Agreement on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds from such Borrowing, as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date; and
(ii)    no Default has occurred and is continuing or would result from such Borrowing or from the application of the proceeds therefrom;
(b)    the Borrower shall have executed and delivered to the Administrative Agent a Notice of Borrowing in accordance with Section 2.02; and
(c)    the Administrative Agent shall have received such other approvals, opinions or documents deemed necessary or desirable by any Bank or the Administrative Agent as such party may reasonably request in order to confirm (i) the accuracy of the Borrower’s and any Guarantor’s representations and warranties contained in the Credit Documents, (ii) the Borrower’s and any Guarantor’s timely compliance with the terms, covenants and agreements set forth in the Credit Documents, (iii) the absence of any Default and (iv) the rights and remedies of the Administrative Agent or any Bank or the ability of the Borrower to perform any of the Obligations.
ARTICLE IV     

REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01      Existence; Qualification; Partners; Subsidiaries . (a) The Borrower is a limited partnership duly organized, validly existing, and in good standing under the laws of Delaware and in good standing and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not cause a Material Adverse Change.
(b)    The Parent is a real estate investment trust duly organized, validly existing, and in good standing under the laws of Maryland and in good standing and qualified to do business in each jurisdiction where its


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ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not cause a Material Adverse Change with respect to the Parent. The Parent has no first tier Subsidiaries except for (i) the Borrower, (ii) Subsidiaries the sole assets of which are direct or indirect Equity Interests in the Borrower, (iii) members of Permitted Other Subsidiaries, (iv) LHO Hollywood Financing, Inc. (QRS), a Delaware corporation, and (v) LHO New Orleans Financing, Inc., a Delaware corporation.
(c)    The Parent is the Borrower’s sole general partner with full power and authority to bind the Borrower to the Credit Documents.
(d)    The Parent owns a 1% general partner Equity Interest in and at least 70% of the limited partner Equity Interests in the Borrower.
(e)    Each Subsidiary of the Borrower is a limited partnership, general partnership, limited liability company or corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and in good standing and qualified to do business in each jurisdiction where its ownership or lease of property or conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on such Subsidiary. The Borrower has no Subsidiaries on the date of this Agreement other than the Subsidiaries listed on the attached Schedule 4.01, and Schedule 4.01 lists the jurisdiction of formation and the address of the principal office of each such Subsidiary existing on the date of this Agreement. As of the date of this Agreement, the Borrower and/or the Parent owns, directly or indirectly, at least 99% of the Equity Interests in each such Subsidiary.
(f)    As of the date of this Agreement, neither the Borrower, nor the Parent, nor any of the Subsidiaries own directly or indirectly (i) such a percentage of the beneficial ownership interest in any participating lessee for a Hotel Property or (ii) such an Investment in the Personal Property for any Hotel Property as would, in each case, cause a potential Event of Default under Section 8.01(m).
Section 4.02      Partnership and Corporate Power . The execution, delivery, and performance by the Borrower, the Parent, and each Guarantor of the Credit Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby (a) are within such Persons’ trust, partnership, limited liability company and corporate powers, as applicable, (b) have been duly authorized by all necessary trust, corporate, limited liability company and partnership action, as applicable, (c) do not contravene (i)  such Person’s declaration of trust, certificate or articles, as the case may be, of incorporation or by‑laws, operating agreement or partnership agreement, as applicable, or (ii) any law or any contractual restriction binding on or affecting any such Person, the contravention of which could reasonably be expected to cause a Material Adverse Change, and (d) will not result in or require the creation or imposition of any Lien prohibited by this Agreement. At the time of each Borrowing, such Borrowing and the use of the proceeds of such Borrowing will be within the Borrower’s partnership powers, will have been duly authorized by all necessary partnership action, (a) will not contravene (i) the Borrower’s partnership agreement or (ii) any law or any contractual restriction binding on or affecting the Borrower, the contravention of which could reasonably be expected to cause a Material Adverse Change, and (b) will not result in or require the creation or imposition of any Lien prohibited by this Agreement.
Section 4.03      Authorization and Approvals . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Borrower, the Parent, or any Guarantor of the Credit Documents to which it is a party or the consummation of the transactions contemplated thereby. At the time of each Borrowing, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required for such Borrowing or the use of the proceeds of such Borrowing the absence of which could reasonably be expected to cause a Material Adverse Change.
Section 4.04      Enforceable Obligations . This Agreement, the Notes, and the other Credit Documents to which the Borrower is a party have been duly executed and delivered by the Borrower; this Agreement, each Guaranty and the other Credit Documents to which each Guarantor and the Parent is a party have been duly executed and delivered by such Guarantor and the Parent, and the Environmental Indemnity has been duly executed and delivered by the parties thereto. Each Credit Document is the legal, valid, and binding obligation of the Borrower, the Parent, and each Guarantor which is a party to it enforceable against the Borrower, the Parent, and each such Guarantor in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization,


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moratorium, or similar law affecting creditors’ rights generally and by general principles of equity (whether considered in proceeding at law or in equity).
Section 4.05      Parent Stock . As of December 1, 2016, the entire authorized capital stock of the Parent consists of (a) 200,000,000 shares of Parent Common Stock of which 113,088,074 shares of Parent Common Stock are duly and validly issued and outstanding, fully paid and nonassessable as of the Closing Date, and (b) 40,000,000 preferred shares of beneficial interest, $0.01 par value per share, of which 13,150,000 shares in the aggregate of Series H, Series I and Series J of such preferred shares of beneficial interest are duly and validly issued and outstanding, fully paid and nonassessable as of the Closing Date and such preferred shares of beneficial interest provide no rights to any holder thereof that may cause a violation of Section 6.04(f).  The issuance and sale of such Parent Common Stock and such preferred shares of beneficial interest of the Parent either (i) has been registered under applicable federal and state securities laws or (ii) was issued pursuant to an exemption therefrom.  The Parent meets the requirements for taxation as a REIT under the Code.
Section 4.06      Financial Statements . The Consolidated balance sheet of the Parent and its Subsidiaries, and the related Consolidated statements of operations, shareholders’ equity and cash flows, of the Parent and its Subsidiaries contained in the most recent financial statements delivered to the Banks, fairly present the financial condition in all material respects and reflects the Indebtedness of the Parent and its Subsidiaries as of the respective dates of such statements and the results of the operations of the Existing Properties for the periods indicated, and such balance sheet and statements were prepared in accordance with GAAP, subject to year-end adjustments. Since December 31, 2015, neither a Material Adverse Change, nor any material adverse change to the prospects or the Property of the Parent or the Borrower has occurred.
Section 4.07      True and Complete Disclosure . No representation, warranty, or other statement made by the Borrower (or on behalf of the Borrower) in this Agreement or any other Credit Document contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which they were made as of the date of this Agreement. There is no fact known to the Borrower or the Parent on the date of this Agreement that has not been disclosed to the Administrative Agent which could reasonably be expected to cause a Material Adverse Change. All projections, estimates, and pro forma financial information furnished by the Borrower and the Parent or on behalf of the Borrower or the Parent were prepared on the basis of assumptions, data, information, tests, or conditions believed to be reasonable at the time such projections, estimates, and pro forma financial information were furnished. No representation, warranty or other statement made in any filing required by the Exchange Act contains any untrue statement of material fact or omits to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which they were made as of the date same were made. Borrower and/or Parent have made all filings required by the Exchange Act.
Section 4.08      Litigation . Except as set forth in the attached Schedule 4.08 and except with respect to any other actions or proceedings that, individually or in the aggregate, could not reasonably be expected to cause a Material Adverse Change, as of the date of this Agreement there is no pending or, to the best knowledge of the Borrower, threatened action or proceeding affecting the Borrower, the Parent, any participating lessee for a Hotel Property or any of their respective Subsidiaries before any court, Governmental Authority or arbitrator.
Section 4.09      Use of Proceeds .
(a)     Advances . The proceeds of the Advances will be used by the Borrower (i) to refinance and repay existing Indebtedness, (ii) to make investments permitted pursuant to the provisions of Section 6.07, (iii) to finance the renovation, repair, restoration and expansion of Hotel Properties, Capital Expenditures and expenditures for FF&E for any Hotel Properties in accordance with the provisions of Section 5.06 and as permitted pursuant to the provisions of Sections 6.07 and 6.13, (iv) for general corporate purposes of the Borrower and its Subsidiaries, and (v) for costs incurred in connection with this Agreement and any Capitalization Event done in compliance with this Agreement.
(b)     Regulations . No proceeds of Advances will be used to purchase or carry any margin stock in violation of Regulations T, U or X of the Federal Reserve Board, as the same is from time to time in effect, and all


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official rulings and interpretations thereunder or thereof. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board).
Section 4.10      Investment Company Act . Neither the Borrower, the Parent nor any of their respective Subsidiaries is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 4.11      Taxes . All federal, state, local and foreign tax returns, reports and statements required to be filed (after giving effect to any extension granted in the time for filing) by the Parent, the Borrower, their respective Subsidiaries, or any member of a Controlled Group have been filed with the appropriate governmental agencies in all jurisdictions in which such returns, reports and statements are required to be filed, and where the failure to file could reasonably be expected to cause a Material Adverse Change, except where contested in good faith and by appropriate proceedings; and all taxes and other impositions due and payable (which are material in amount) have been timely paid prior to the date on which any fine, penalty, interest, late charge or loss (which are material in amount) may be added thereto for non‑payment thereof except where contested in good faith and by appropriate proceedings. As of the date of this Agreement, neither the Parent, the Borrower nor any member of a Controlled Group has given, or been requested to give, a waiver of the statute of limitations relating to the payment of any federal, state, local or foreign taxes or other impositions. None of the Property owned by the Parent, the Borrower or any other member of a Controlled Group is Property which the Parent, the Borrower or any member of a Controlled Group is required to be treated as being owned by any other Person pursuant to the provisions of Section 168(f)(8) of the Code. Proper and accurate amounts have been withheld by the Borrower and all members of each Controlled Group from their employees for all periods to comply in all material respects with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law. Timely payment of all material sales and use taxes required by applicable law have been made by the Parent, the Borrower and all other members of each Controlled Group, the failure to timely pay of which could reasonably be expected to cause a Material Adverse Change. The amounts shown on all tax returns to be due and payable have been paid in full or adequate provision therefor is included on the books of the appropriate member of the applicable Controlled Group.
Section 4.12      Pension Plans . All Plans are in compliance in all material respects with all applicable provisions of ERISA. No Termination Event has occurred with respect to any Plan, and each Plan has complied with and been administered in all material respects in accordance with applicable provisions of ERISA and the Code. No “accumulated funding deficiency” (as defined in Section 302 of ERISA) has occurred and there has been no excise tax imposed under Section 4971 of the Code. No Reportable Event has occurred with respect to any Multiemployer Plan, and each Multiemployer Plan has complied with and been administered in all material respects with applicable provisions of ERISA and the Code. Neither the Parent, the Borrower, nor any member of a Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan for which there is any material withdrawal liability. As of the most recent valuation date applicable thereto, neither the Parent, the Borrower nor any member of a Controlled Group has received notice that any Multiemployer Plan is insolvent or in reorganization.
Section 4.13      Condition of Hotel Property; Casualties; Condemnation . Except as disclosed in writing to the Administrative Agent, and except for such items as the Borrower or a Subsidiary is or will be addressing consistent with sound business practices and has sufficient funds to address, each Existing Property and any Future Property (a) is and will continue to be in good repair, working order and condition, normal wear and tear excepted, (b) is free of structural defects, (c) is not subject to material deferred maintenance and (d) has and will have all building systems contained therein and all other FF&E in good repair, working order and condition, normal wear and tear excepted. None of the Properties of the Borrower or of any of its Subsidiaries has been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by a Governmental Authority, riot, activities of armed forces or acts of God or of any public enemy. No condemnation or other like proceedings that has had, or could reasonably be expected to result in, a Material Adverse Change, are pending and served nor, to the knowledge of the Borrower, threatened against any Property in any manner whatsoever. No casualty has occurred to any Property that could reasonably be expected to have a Material Adverse Change.


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Section 4.14      Insurance . The Borrower and each of its Subsidiaries carry, or are the beneficiaries under, the insurance required pursuant to the provisions of Section 5.07.
Section 4.15      No Burdensome Restrictions; No Defaults . (a) Except in connection with Indebtedness which is (i) either permitted pursuant to the provisions of Section 6.02, or (ii) being repaid with the proceeds of the initial Borrowing, neither the Parent, the Borrower nor any of their respective Subsidiaries is a party to any indenture, loan or credit agreement. Neither the Borrower, the Parent nor any of their respective Subsidiaries is a party to any agreement or instrument or subject to any charter or corporate restriction or provision of applicable law or governmental regulation which could reasonably be expected to cause a Material Adverse Change. Neither the Borrower, the Parent nor any of their Subsidiaries is in default under or has received any notice of default with respect to (i) any contract, agreement, lease or other instrument or (ii) any Qualified Ground Lease, franchise agreement or management agreement which default could reasonably be expected to cause a Material Adverse Change.
(a)    No Default or Event of Default has occurred and is continuing.
Section 4.16      Environmental Condition . (a) Except as disclosed in writing to the Administrative Agent, to the knowledge of the Borrower, the Borrower and its Subsidiaries (i) have obtained all Environmental Permits material for the ownership and operation of their respective Properties and the conduct of their respective businesses; (ii) have been and are in material compliance with all terms and conditions of such Environmental Permits and with all other requirements of applicable Environmental Laws; (iii) have not received notice of any violation or alleged violation of any Environmental Law or Environmental Permit; and (iv) are not subject to any actual or contingent Environmental Claim.
(b)    Except as disclosed in writing to the Administrative Agent, to the knowledge of Borrower, none of the present or previously owned or operated Property of the Borrower or of any of its present or former Subsidiaries, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws which could reasonably be expected to cause a Material Adverse Change; (ii) is subject to a Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; (iii) has been the site of any Release, use or storage of Hazardous Substances or Hazardous Wastes from present or past operations except for Permitted Hazardous Substances, which Permitted Hazardous Substances have not caused at the site or at any third‑party site any condition that has resulted in or could reasonably be expected to result in the need for Response or (iv) none of the Improvements are constructed on land designated by any Governmental Authority having land use jurisdiction as wetlands.
Section 4.17      Legal Requirements, Zoning, Utilities, Access . Except as set forth on Schedule 4.17 attached hereto, the use and operation of each Hotel Property as a commercial hotel with related uses constitutes a legal use under applicable zoning regulations (as the same may be modified by special use permits or the granting of variances) and complies in all material respects with all Legal Requirements, and does not violate in any material respect any material approvals, material restrictions of record or any material agreement affecting any Hotel Property (or any portion thereof). The Borrower and its Subsidiaries possess all certificates of public convenience, authorizations, permits, licenses, patents, patent rights or licenses, trademarks, trademark rights, trade names rights and copyrights (collectively “ Permits ”) required by Governmental Authority to own and operate the Hotel Properties, except for those Permits if not obtained would not cause a Material Adverse Change. The Borrower and its Subsidiaries own and operate their business in material compliance with all applicable Legal Requirements. To the extent necessary for the full utilization of each Hotel Property in accordance with its current use, telephone services, gas, steam, electric power, storm sewers, sanitary sewers and water facilities and all other utility services are available to each Hotel Property, are adequate to serve each such Hotel Property, exist at the boundaries of the Land and are not subject to any conditions, other than normal charges to the utility supplier, which would limit the use of such utilities. All streets and easements necessary for the occupancy and operation of each Hotel Property are available to the boundaries of the Land.
Section 4.18      Existing Indebtedness . Except for the Obligations, the only Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries existing as of the Closing Date is the Secured Non‑Recourse


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Indebtedness, Secured Recourse Indebtedness and other Indebtedness set forth on Schedule 4.18 attached hereto and certain other Indebtedness incurred in the ordinary course of business not to exceed $50,000. No “default” or “event of default”, however defined, has occurred and is continuing under any such Indebtedness (or with respect to the giving of this representation after the date of this Agreement, as otherwise disclosed to the Administrative Agent in writing after the date of this Agreement and prior to the date such representation is deemed given).
Section 4.19      Title; Encumbrances . With respect to the Existing Properties, the Borrower or any Material Subsidiary, as the case may be, has (i) good and marketable fee simple title to the Real Property (other than for Real Property subject to a ground lease, as to which it has a valid leasehold interest) and (ii) good and marketable title to the Personal Property (other than Personal Property for any Hotel Property for which the Property Owner has a valid leasehold interest) free and clear of all Liens, and there exists no Liens or other charges against such Property or leasehold interest or any of the real or personal, tangible or intangible, Property of the Borrower or any Material Subsidiary (including without limitation statutory and other Liens of mechanics, workers, contractors, subcontractors, suppliers, taxing authorities and others; provided that certain Capital Expenditures have been made to the Hotel Properties prior to the Effective Date for which the payment is not past due), except (A) Permitted Encumbrances and (B) the Personal Property ( plus any replacements thereof) owned by the participating lessee for such Existing Property.
Section 4.20      Leasing Arrangements . Except for (i) those Operating Leases between a Property Owner and LaSalle Leasing or a wholly-owned Subsidiary of LaSalle Leasing and (ii) the Approved Third Party Operating Leases, the only material leases of Unencumbered Properties for which either the Borrower or a Material Subsidiary is a lessee are the Qualified Ground Leases. The Property Owner for a Real Property subject to a Qualified Ground Lease is the lessee under such Qualified Ground Lease and no consent is necessary to such Person being the lessee under such Qualified Ground Lease which has not already been obtained. The Qualified Ground Leases are in full force and effect and no defaults exist thereunder. As of the Closing Date, each ground lease or ground sublease listed on Schedule 1.01(d) meets the qualifications of a “Qualified Ground Lease” under the definition thereof.
Section 4.21      Unencumbered Properties . The Borrower represents to the Banks and the Administrative Agent that the Unencumbered Properties as of the date of this Agreement are identified as such on Schedule 1.01(b) attached hereto.
Section 4.22      OFAC . None of the Parent, the Borrower, any Guarantor, any Material Subsidiary, any of their respective Subsidiaries or, to their knowledge, any director, officer, employee, agent or Affiliate thereof, is, or is owned or controlled by Persons that are (A) currently subject to any sanctions administered or enforced by the United States government (including, without limitation, OFAC) (“ Sanctions ”) or (B) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions; and the Borrower will not directly or indirectly use the proceeds of the Advances or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any Sanctions or in any manner that will result in a violation of Sanctions or any Anti-Corruption Laws applicable to any party hereto. Each of the Parent, the Borrower, the Guarantors, the Material Subsidiaries, their respective Subsidiaries and, to their knowledge, each of the directors, officers, employees, agents or Affiliates thereof, is in material compliance with all applicable Sanctions and Anti-Corruption Laws. In addition, the Borrower agrees to provide to the Banks any additional information that a Bank deems reasonably necessary from time to time in order to ensure compliance with all applicable Sanctions and Anti-Corruption Laws.
Section 4.23      EEA Financial Institution . Neither the Borrower, the Parent nor any of their respective Subsidiaries nor any general partner or managing member of any of the foregoing, as applicable, is an EEA Financial Institution.
ARTICLE V

AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid or any Bank shall have any Commitment hereunder, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), the Borrower agrees to comply and, where applicable, cause the Parent to comply with the following covenants.


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Section 5.01      Compliance with Laws, Etc. The Borrower will comply, and cause each of its Subsidiaries and the Parent to comply, in all material respects with all Legal Requirements.
Section 5.02      Preservation of Existence, Separateness, Etc. (a) The Borrower will (i) preserve and maintain, and cause each of its Subsidiaries and the Parent to preserve and maintain, its partnership, limited liability company, corporate or trust (as applicable) existence, rights, franchises and privileges in the jurisdiction of its formation, and (ii) qualify and remain qualified, and cause each such Subsidiary and the Parent to qualify and remain qualified, as a foreign partnership, limited liability company, corporation or trust, as applicable, in each jurisdiction in which qualification is necessary or desirable in view of its business and operations or the ownership of its properties, and, in each case, where failure to qualify or preserve and maintain its rights and franchises could reasonably be expected to cause a Material Adverse Change.
(b)    (i)  The Parent Common Stock shall at all times be duly listed on the New York Stock Exchange, Inc. or another nationally recognized stock exchange and (ii) the Parent shall timely file all reports required to be filed by it with the New York Stock Exchange, Inc. and the Securities and Exchange Commission or such other nationally recognized stock exchange, as applicable.
(c)    The Borrower shall cause the Permitted Other Subsidiaries which have Indebtedness and own a Hotel Property to, (i) maintain financial statements, payroll records, accounting records and other corporate records and other documents separate from each other and any other Person, (ii) maintain its own bank accounts in its own name, separate from each other and any other Person, (iii) pay its own expenses and other liabilities from its own assets and incur (or endeavor to incur) obligations to other Persons based solely upon its own assets and creditworthiness and not upon the creditworthiness of each other or any other Person, and (iv) file its own tax returns or, if part of a consolidated group, join in the consolidated tax return of such group as a separate member thereof. The Borrower shall use reasonable efforts to correct any known misunderstanding or misrepresentation regarding the independence of the Permitted Other Subsidiaries from the Borrower and the Borrower’s other Subsidiaries.
(d)    The Borrower shall, and shall cause the Permitted Other Subsidiaries which have Indebtedness and own a Hotel Property to, take all actions necessary to keep such Permitted Other Subsidiaries separate from the Borrower and the Borrower’s other Subsidiaries, including, without limitation, (i) the taking of action under the direction of the Board of Directors, members or partners, as applicable, of such Permitted Other Subsidiaries and, if so required by the Certificate of Incorporation or the bylaws, operating agreement or partnership agreement, as applicable, of such Permitted Other Subsidiaries or by any Legal Requirement, the approval or consent of the stockholders, members or partners, as applicable, of such Permitted Other Subsidiaries, (ii) the preparation of corporate, partnership or limited liability company minutes for or other appropriate evidence of each significant transaction engaged in by such Permitted Other Subsidiaries, (iii) the observance of separate approval procedures for the adoption of resolutions by the Board of Directors or consents by the partners, as applicable, of such Permitted Other Subsidiaries, on the one hand, and of the Borrower and the Borrower’s other Subsidiaries, on the other hand, (iv) the holding of the annual stockholders meeting, if applicable, of such Permitted Other Subsidiaries, which are corporations on a date other than the date of the annual stockholders’ meeting of the Parent, and (v) preventing the cash, cash equivalents, credit card receipts or other revenues of the Hotel Properties owned by such Permitted Other Subsidiaries or any other assets of such Permitted Other Subsidiaries from being commingled with the cash, cash equivalents, credit card receipts or other revenues collected by the Borrower or the Borrower’s other Subsidiaries, provided that the foregoing shall not prohibit a Permitted Other Subsidiary from making dividend payments or distributions to the Borrower.
(e)    The Borrower shall, and shall cause the Permitted Other Subsidiaries to, manage the business of and conduct the administrative activities of the Permitted Other Subsidiaries independently from the business of the Borrower, any of the Borrower’s other Subsidiaries and any other Person. Any moneys earned by the Permitted Other Subsidiaries on their assets or proceeds of the sale of any of their assets shall be deposited in bank accounts separate from any of the assets of the Borrower, any of the Borrower’s other Subsidiaries and any other Person, and no assets of the Permitted Other Subsidiaries shall become commingled with assets of such Persons.
(f)    The Borrower shall hold itself out, and shall continue to hold itself out, to the public and to its creditors as a legal entity, separate and distinct from all other entities, and shall continue to take all steps reasonably necessary to avoid (i) misleading any other Person as to the identity of the entity with which such Person is transacting


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business or (ii) implying that the Borrower is, directly or indirectly, absolutely or contingently, responsible for the Indebtedness or other obligations of the Permitted Other Subsidiaries or any other Person.
Section 5.03      Payment of Taxes, Etc. The Borrower will pay and discharge, and cause each of its Subsidiaries and the Parent to pay and discharge, before the same shall become delinquent (a) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or Property that are material in amount, prior to the date on which penalties attach thereto and (b) all lawful claims that are material in amount which, if unpaid, might by Legal Requirement become a Lien upon its Property; provided , however , that neither the Borrower nor any such Subsidiary or the Parent shall be required to pay or discharge any such tax, assessment, charge, levy, or claim (a) which is being contested in good faith and by appropriate proceedings, (b) with respect to which reserves in conformity with GAAP have been provided, (c) such charge or claim does not constitute and is not secured by any choate Lien on any portion of any Hotel Property and no portion of any Hotel Property is in jeopardy of being sold, forfeited or lost during or as a result of such contest, (d) neither the Administrative Agent nor any Bank could become subject to any civil fine or penalty or criminal fine or penalty, in each case as a result of non‑payment of such charge or claim and (e) such contest does not, and could not reasonably be expected to, result in a Material Adverse Change.
Section 5.04      Visitation Rights; Bank Meeting . At any reasonable time and from time to time and so long as any visit or inspection will not unreasonably interfere with the Borrower’s or any of its Subsidiaries’ or the Parent’s operations, upon reasonable notice and during normal business hours, the Borrower will, and will cause its Subsidiaries and the Parent and any participating lessees to, permit the Administrative Agent or any of its agents or representatives thereof (at the Parent’s or the Borrower’s expense) and any Bank or any of its agents or representatives thereof (at such Bank’s expense), to examine and make copies of and abstracts from the records and books of account of, and visit and inspect at its reasonable discretion the properties of, the Borrower and any such Subsidiary and the Parent, to discuss the affairs, finances and accounts of the Borrower and any such Subsidiary and the Parent with any of their respective officers or directors. Without in any way limiting the foregoing, the Borrower will, upon the request of the Administrative Agent, participate in a meeting with the Administrative Agent and the Banks once during each calendar year to be held at a location as may be agreed to by the Borrower and the Administrative Agent at such time as may be agreed to by the Borrower and the Administrative Agent; provided that, without limitation of the provisions of Section 11.04, the Borrower shall not be obligated to reimburse the Banks for such Persons’ travel expenses in connection with such meeting.
Section 5.05      Reporting Requirements . The Borrower will furnish to the Administrative Agent and the Banks in each case in accordance with Section 11.02(b):
(a)     Quarterly Financials . As soon as available and in any event not later than 45 days after the end of each Fiscal Quarter of the Parent (except when such Fiscal Quarter ends on the same day as the end of a Fiscal Year of Parent), the unaudited Consolidated balance sheets of the Parent and its Subsidiaries as of the end of such quarter and the related unaudited statements of income, shareholders’ equity and cash flows of the Parent and its Subsidiaries for such Fiscal Quarter and the period commencing at the end of the previous year and ending with the end of such Fiscal Quarter, and the corresponding figures as at the end of, and for, the corresponding periods in the preceding Fiscal Year, all duly certified with respect to such statements (subject to year‑end audit adjustments) by a Responsible Officer of the Parent as having been prepared in accordance with GAAP, together with a Compliance Certificate duly executed by a Responsible Officer of the Parent.
(b)     Annual Financials . As soon as available and in any event not later than 90 days after the end of each Fiscal Year of the Parent, a copy of the annual audit report for such year for the Parent and its Subsidiaries, including therein the Consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year and the related Consolidated statements of income, shareholders’ equity and cash flows of the Parent and its Subsidiaries for such Fiscal Year, and the corresponding figures as at the end of, and for, the preceding Fiscal Year, and certified by KPMG L.L.P. or other independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent in an opinion, without qualification as to the scope, and including, if requested by the Administrative Agent, any management letters delivered by such accountants to the Parent in connection with such audit, together with a Compliance Certificate duly executed by a Responsible Officer of the Parent.


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(c)     Notices of Material Variations and Supplemental Reports . As soon as available and in any event not later than 60 days after the end of each Fiscal Quarter of the Parent and 90 days after the end of each Fiscal Year of the Parent, (i) written notice of any anticipated material variation to the consolidated operating budget or a Capital Expenditure and FF&E expenditure budget prepared pursuant to Section 5.05(d), except for such changes resulting from the acquisition of a New Property or the acquisitions of New Properties, (ii) a report certified by a Responsible Officer of the Parent setting forth for each Unencumbered Property for the Fiscal Quarter just ended the average daily rate, the average occupancy, the RevPAR, the total gross revenues, the total expenses, the Adjusted NOI and the payments made under the participating leases for such Hotel Properties, and (iii) a report certified by a Responsible Officer of the Parent setting forth for all of the Hotel Properties owned or leased by the Parent or any of its Subsidiaries on a Consolidated basis for the Fiscal Quarter just ended the average daily rate, the average occupancy, the RevPAR, the total gross revenues, the total expenses, the Adjusted NOI and the payments made under the participating leases for such Hotel Properties.
(d)     Annual Budgets . No later than 60 days after the start of each Fiscal Year, the annual operating budget and Capital Expenditure and FF&E expenditure budget for such Fiscal Year for (i) the Unencumbered Properties on a Consolidated basis, (ii) all of the Hotel Properties owned or leased by the Parent or any of its Subsidiaries on a Consolidated basis, and (iii) on a Consolidated basis for the Parent and its Subsidiaries, in each case in reasonable detail and duly certified by a Responsible Officer of the Parent as the budgets presented or to be presented to the Parent’s Board of Directors for their review.
(e)     Securities Law Filings . Promptly and in any event within 10 Business Days after the sending or filing thereof, copies of all proxy material, reports and other information which the Borrower, the Parent or any of their respective Subsidiaries sends to or files with the United States Securities and Exchange Commission or sends to all shareholders of the Parent or partners of the Borrower.
(f)     Defaults . As soon as possible and in any event within five days after the occurrence of each Default known to a Responsible Officer of the Borrower, the Parent or any of their respective Subsidiaries, a statement of an authorized financial officer or Responsible Officer of the Borrower setting forth the details of such Default and the actions which the Borrower has taken and proposes to take with respect thereto.
(g)     ERISA Notices . As soon as possible and in any event (i) within 30 days after the Parent, the Borrower or any of a Controlled Group knows that any Termination Event described in clause (a) of the definition of Termination Event with respect to any Plan has occurred, (ii) within 10 days after the Parent, the Borrower or any of a Controlled Group knows that any other Termination Event with respect to any Plan has occurred, a statement of the Chief Financial Officer of the Parent describing such Termination Event and the action, if any, which the Parent, the Borrower or such member of such Controlled Group proposes to take with respect thereto; (iii) within 10 days after receipt thereof by the Parent, the Borrower or any of a Controlled Group from the PBGC, copies of each notice received by the Parent, the Borrower or any such member of such Controlled Group of the PBGC’s intention to terminate any Plan or to have a trustee appointed to administer any Plan; and (iv) within 10 days after receipt thereof by the Parent, the Borrower or any member of a Controlled Group from a Multiemployer Plan sponsor, a copy of each notice received by the Parent, the Borrower or any member of such Controlled Group concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA.
(h)     Environmental Notices . Promptly upon receipt thereof by the Parent, the Borrower or any of their Subsidiaries, a copy of any form of notice, summons or citation received from the United States Environmental Protection Agency, or any other Governmental Authority concerning (i) violations or alleged violations of Environmental Laws, which seeks to impose liability therefor, (ii) any action or omission on the part of the Parent or Borrower or any of their present or former Subsidiaries in connection with Hazardous Waste or Hazardous Substances which, based upon information reasonably available to the Borrower, could reasonably be expected to cause a Material Adverse Change or an Environmental Claim in excess of $1,000,000, (iii) any notice of potential responsibility under CERCLA, or (iv) concerning the filing of a Lien upon, against or in connection with the Parent, Borrower, their present or former Subsidiaries, or any of their leased or owned Property, wherever located.


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(i)     Other Governmental Notices or Actions . Promptly and in any event within five Business Days after receipt thereof by the Borrower, the Parent or any of their respective Subsidiaries, (i) a copy of any notice, summons, citation, or proceeding seeking to adversely modify in any material respect, revoke, or suspend any license, permit, or other authorization from any Governmental Authority, which action could reasonably be expected to cause a Material Adverse Change, and (ii) any revocation or involuntary termination of any license, permit or other authorization from any Governmental Authority, which revocation or termination could reasonably be expected to cause a Material Adverse Change.
(j)     Other Notices. (i) Promptly, a copy of any notice of default or any other material notice (including without limitation property condition reviews) received by the Borrower or any Material Subsidiary from any franchisor, property manager, or any ground lessor under a Qualified Ground Lease, and
(ii)    Promptly following any merger or dissolution of any Subsidiary of the Borrower which is permitted hereunder or event which would make any of the representations in Sections 4.01-4.04 untrue, notice thereof.
(k)     Material Litigation . As soon as possible and in any event within five days of any of the Borrower, the Parent or any of their respective Subsidiaries having knowledge thereof, notice of any litigation, claim or any other event which could reasonably be expected to cause a Material Adverse Change.
(l)     Certificate in Support of Release . Not more than 30 days prior to a request to release a Subsidiary’s obligations under the Guaranty pursuant to Section 5.09(b), a Compliance Certificate duly executed by a Responsible Officer of the Parent.
(m)     Investment Grade Rating Notice. Promptly upon a Responsible Officer becoming aware of a change in the Investment Grade Rating (including the initial issuance of any Investment Grade Rating) or any other credit rating given by S&P, Moody’s or another nationally-recognized rating agency to the Parent’s long‑term senior unsecured debt or any announcement that any such rating is “under review” or that such rating has been placed on a watch list or that any similar action has been taken by S&P, Moody’s or another nationally-recognized rating agency, notice of such change, announcement or action.
(n)     Other Information . Such other information respecting the business or Properties, or the condition or operations, financial or otherwise, of the Borrower, the Parent or any of their respective Subsidiaries, as the Administrative Agent may from time to time reasonably request.
Section 5.06      Maintenance of Property . The Borrower will, and will cause each of its Subsidiaries to, (a) maintain their owned, leased, or operated Property in a manner substantially consistent with hotel properties and related property of the same quality and character and shall keep or cause to be kept every part thereof and its other properties in good condition and repair, reasonable wear and tear excepted, and make all reasonably necessary repairs, renewals or replacements thereto as may be reasonably necessary to conduct the business of the Borrower and its Subsidiaries, (b) not renovate or expand any such Hotel Property except for the renovation or expansion of a Hotel Property which complies with the limitations set forth in this Agreement on the aggregate amount of renovations and expansions the Borrower, the Parent and their Subsidiaries are permitted at any one time, (c) not knowingly or willfully permit the commission of waste or other injury, or the occurrence of pollution, contamination or any other condition in, on or about any Hotel Property, and (d) substantially maintain and repair each Hotel Property as required by any franchise agreement, license agreement, management agreement or ground lease for such Hotel Property. Except as may be required to maintain the Parent’s status as a REIT under the Code, any Capital Expenditures or expenditures or leases for FF&E made for any Hotel Property shall be in the name or for the benefit of the Property Owner for such Hotel Property.
Section 5.07      Insurance . The Borrower will maintain and/or remain the beneficiary under, and cause each of its Subsidiaries to maintain and/or remain the beneficiary under, the insurance required pursuant to Schedule 5.07.
Section 5.08      Use of Proceeds . The proceeds of the Advances have been, and will be used by the Borrower for the purposes set forth in Section 4.09(a) and in compliance with all applicable Sanctions and Anti-Corruption Laws.


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Section 5.09      New Guarantors . (a) The Borrower will promptly notify the Administrative Agent of the creation of or Investment in a Person which may fall within the definition of a Guarantor and will provide any financial and other information with respect to such Person as the Administrative Agent may reasonably request. In the event the Administrative Agent (after consultation with the Borrower) determines that such Person is required to be designated a Guarantor hereunder, the Administrative Agent shall provide notice of the same to the Borrower, it being understood and agreed that any Person that owns an Unencumbered Property and any Person who leases an Unencumbered Property as an Operating Lessee shall be required to become a Guarantor promptly and in any event on or prior to the date any Hotel Property owned or leased by such Person is included as an Unencumbered Property hereunder. Within 60 days after the Borrower’s receipt of such notice from the Administrative Agent, the Borrower shall cause such Person to deliver to the Administrative Agent (i) either (a) an original Guaranty and Environmental Indemnity executed by such Person or (b) an Accession Agreement executed by such Person, and (ii) such other information or documents with respect to such Person as the Administrative Agent may reasonably request.
(b)    If no Default exists at such time, and any Hotel Property no longer qualifies as an Unencumbered Property, any Subsidiary of the Borrower which directly or indirectly owned or leased such Hotel Property, but not any other Unencumbered Property, shall be automatically released from such Subsidiary’s obligations under the Guaranty upon such time that the Borrower provides the Administrative Agent with (i) a written notice of such event and (ii) a Compliance Certificate evidencing pro forma compliance with Article VII. The Administrative Agent shall, upon request from the Borrower and at the Borrower’s sole cost and expense, promptly execute and deliver documentation in form reasonably satisfactory to the Administrative Agent confirming such release.
(c)    The provisions of Section 5.09(a) and (b) shall only apply prior to an Investment Grade Release Event and from and after an Investment Grade Release Event no Subsidiary of the Borrower shall be required to become a Guarantor under this Agreement (except as provided in Section 5.10 hereof) in each case only so long as such Subsidiary (i) is not required by the terms of any other Senior Financing Transaction to become a guarantor or borrower of any of the obligations under such other Senior Financing Transaction and (ii) is not a guarantor or borrower in respect of any other Senior Financing Transaction.
Section 5.10      Leverage Trigger Guarantors and Pledgors . (a) Upon the occurrence of a Leverage Trigger and not later than the Leverage Trigger Deadline, the Borrower shall cause each Eligible Subsidiary Guarantor that is not then a party to the Guaranty and Environmental Indemnity to deliver to the Administrative Agent (i) either (a) an original Guaranty and Environmental Indemnity executed by such Eligible Subsidiary Guarantor or (b) an Accession Agreement executed by such Eligible Subsidiary Guarantor, and (ii) such other information or documents with respect to each Eligible Subsidiary Guarantor as the Administrative Agent may reasonably request.
(b)    Upon the occurrence of a Leverage Trigger and not later than the Leverage Trigger Deadline, the Borrower shall cause each direct owner of all or a portion of the Equity Interests in an Eligible Subsidiary Guarantor (each, a “ Pledgor ”) to deliver to the Administrative Agent (i) an original Pledge Agreement, (ii) to the extent any Equity Interest subject to the Pledge Agreement is certificated, an original certificate evidencing ownership of such Equity Interests with a power executed in blank, in each case executed by such Pledgor with respect to its Equity Interests in the applicable Eligible Subsidiary Guarantor (or same shall have been delivered to a custodian or other representative pursuant to arrangements satisfactory to the Administrative Agent) and (iii) to the extent any Equity Interest subject to the Pledge Agreement is uncertificated, such other documents, instruments, statements and records as the Administrative Agent may reasonably require to perfect the security interest in the pledged Equity Interests. The Administrative Agent may file UCC financing statements in the jurisdictions it deems appropriate in connection with such pledges.
(c)    If, following a Leverage Trigger, (i) as of the end of the two (2) most recent consecutive Fiscal Quarters, the Leverage Ratio is equal to or less than 6.50:1.00, and (ii) no Default exists at such time, then, except to the extent any Eligible Subsidiary Guarantor is required to be a Guarantor under this Agreement irrespective of Section 5.10(a), all Eligible Subsidiary Guarantors and Pledgors shall be released from their obligations under each Guaranty, Environmental Indemnity and Pledge Agreement and all underlying Liens (and documentation evidencing same) shall be released promptly following the receipt by the Administrative Agent of a release request, which request shall (x) specify the proposed date for the release, which shall be not less than 15 Business Days after the date of receipt of the notice (the “ Leverage Release Date ”), (y) if not already provided, provide financial statements for such Fiscal Quarters, and (z) contain a certification from a Responsible Officer that the conditions to release of the Eligible Subsidiary


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Guarantors and Pledgors and related Liens under this Section 5.10(c) have been satisfied (and, if not already provided, a computation of the Leverage Ratio demonstrating that the Leverage Ratio is equal to or less than 6.50:1.00). In the event a Leverage Trigger occurs at any time after a Leverage Release Date, then the requirements of Section 5.10(a) and Section 5.10(b) with respect to new guaranties, environmental indemnities and pledges shall once again be in effect.
ARTICLE VI

NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid, or any Bank shall have any Commitment, the Borrower agrees, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), to comply and, where applicable, cause the Parent to comply with the following covenants.
Section 6.01      Liens, Etc . The Borrower will not create, assume, incur or suffer to exist, or permit any of its Subsidiaries (except for Permitted Other Subsidiaries) to create, assume, incur, or suffer to exist, any Lien on or in respect of any of its Property whether now owned or hereafter acquired, or assign any right to receive income, except that the Borrower and its Subsidiaries may create, incur, assume or suffer to exist Liens:
(a)    securing the Obligations;
(b)    for taxes, assessments or governmental charges or levies on Property of the Borrower or any Material Subsidiary to the extent not required to be paid pursuant to Sections 5.03;
(c)    imposed by law (such as landlords’, carriers’, warehousemen’s and mechanics’ liens or otherwise arising from litigation) (a) which are being contested in good faith and by appropriate proceedings, (b) with respect to which reserves in conformity with GAAP have been provided, (c) which have not resulted in any Hotel Property being in jeopardy of being sold, forfeited or lost during or as a result of such contest, (d) neither the Administrative Agent nor any Bank could become subject to any civil fine or penalty or criminal fine or penalty, in each case as a result of non‑payment of such charge or claim and (e) such contest does not, and could not reasonably be expected to, result in a Material Adverse Change;
(d)    on leased personal property to secure solely the lease obligations associated with such property;
(e)    securing Secured Recourse Indebtedness and Secured Non‑Recourse Indebtedness permitted pursuant to the provisions of Section 6.02;
(f)    on the collateral pledged pursuant to any Pledge Agreement then in effect to secure any Indebtedness permitted under Section 6.02(a) or (e) which is pari passu with the Obligations; and
(g)    arising under the New York Mortgages; provided , that no New York Mortgage shall be permitted hereunder unless the Administrative Agent is a Qualified Unsecured Lender (as defined in the Consolidated Credit Agreement) with respect to such New York Mortgage for purposes of Section 9.01(f) of the Consolidated Credit Agreement.
Section 6.02      Indebtedness . The Borrower, the Parent and their respective Subsidiaries will not incur or permit to exist any Indebtedness other than the Obligations and the following:
(a)    Unsecured Indebtedness; provided, however, that the maximum principal amount of the LHL Facility and any Refinancing Debt in respect thereof shall not exceed $25,000,000 at any time;
(b)    In each case to the extent the covenants contained in Article VII are complied with, (i) Secured Non-Recourse Indebtedness incurred by Permitted Other Subsidiaries and (ii) Secured Recourse Indebtedness incurred by the Parent, the Borrower and Permitted Other Subsidiaries;


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(c)    The Swap Contracts with the Swap Banks in effect as of the Closing Date and any other Indebtedness in the form of Interest Rate Agreements; provided that (i) such agreements shall be unsecured, (ii) the dollar amount of indebtedness subject to such agreements and the indebtedness subject to Interest Rate Agreements in the aggregate shall not exceed the sum of the amount of the Commitments and other Indebtedness permitted pursuant to this Section 6.02 which bears interest at a variable rate, and (iii) the agreements shall be at such interest rates and otherwise in form and substance reasonably acceptable to the Administrative Agent;
(d)    Any of the following Indebtedness incurred by the Parent (to the extent the same constitutes Indebtedness):
(i)    guaranties in connection with the Indebtedness secured by a Hotel Property of (A) if the Hotel Property is subject to a ground lease, the payment of rent under such ground lease, (B) real estate taxes relating to such Hotel Property, and (C) capital reserves required under such Indebtedness;
(ii)    indemnities for certain acts of malfeasance, misappropriation and misconduct and an environmental indemnity for the lender under Indebtedness permitted under this Agreement;
(iii)    indemnities for certain acts of malfeasance, misappropriation and misconduct by the Permitted Other Subsidiaries, environmental indemnities, and other customary non-recourse carveouts as described in the definition of “Secured Non-Recourse Indebtedness”, all for the benefit of the lenders of other Permitted Other Subsidiary Indebtedness in connection with such Indebtedness; and
(iv)    guaranties of franchise agreements;
(e)    If and to the extent the same would not otherwise be permitted under paragraphs (a) through (d) above, extensions, renewals and refinancing of any of the Indebtedness specified in paragraphs (a) - (d) above (any such extension, renewal or refinancing, “ Refinancing Debt” ) so long as (A) the principal amount of such Indebtedness is not thereby increased and (B) the other material terms, taken as a whole, of any such Indebtedness are no less favorable in any material respect to the Borrower, the Parent or any of their respective Subsidiaries or the Banks than the terms governing the Indebtedness being extended, renewed or refinanced;
(f)    Indebtedness of a Material Subsidiary to the Borrower or another Material Subsidiary provided such Indebtedness is subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent; and
(g)    Capital Leases for personal property not to exceed in the aggregate $5,000,000 at any time outstanding; provided , however , that for purposes of this clause (g), no Qualified Ground Lease shall comprise a Capital Lease.
Section 6.03      Agreements Restricting Distributions From Subsidiaries . The Borrower will not, nor will it permit any of its Subsidiaries (other than Permitted Other Subsidiaries) to, enter into any agreement (other than a Credit Document) which limits distributions to or any advance by any of the Borrower’s Subsidiaries to the Borrower.
Section 6.04      Restricted Payments . Neither the Parent, the Borrower, nor any of their respective Subsidiaries, will make any Restricted Payment, except that:
(a)    the Parent may pay cash dividends to its shareholders with respect to Parent Common Stock, so long as no Default has occurred and is continuing or would result therefrom; provided, however , that during a Leverage Trigger Period, dividends with respect to Parent Common Stock shall not exceed the greatest of (i) the minimum amount necessary for the Parent to maintain is status as a REIT, and (ii) 95% of the Parent’s adjusted funds from operations, and (iii) 100% of the Parent’s taxable income;


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(b)    provided no Default has occurred and is continuing or would result therefrom, the Borrower shall be entitled to make cash distributions to its partners, including the Parent;
(c)    a Subsidiary of the Borrower may make a Restricted Payment to the Borrower;
(d)    the limited partners of the Borrower shall be entitled to exchange limited partner Equity Interests in the Borrower for the Parent’s stock or redeem such Equity Interests for cash, as provided in the Borrower’s limited partnership agreement;
(e)    the Borrower shall be entitled to issue limited partner Equity Interests in the Borrower in exchange of Equity Interests in Subsidiaries and Unconsolidated Entities which own a Future Property to the extent such Investment is permitted pursuant to the provisions of Section 6.07;
(f)    provided no Default has occurred and is continuing or would result therefrom, the Parent may pay cash dividends to holders of the Parent’s preferred stock; provided , however , that during any Leverage Trigger Period, the Parent may not pay cash dividends to holders of the Parent’s preferred stock that are Affiliates of the Borrower or the Parent (to the extent the making of such distinction is not prohibited by applicable law), unless such Affiliate is also a Guarantor hereunder at such time; and
(g)    provided no Default has occurred and is continuing or would result therefrom, the Parent may repurchase Parent Common Stock and repurchase or redeem the Parent’s preferred stock.
Notwithstanding the foregoing, but subject to the following sentence, if a Default or Event of Default shall have occurred and be continuing, the Parent may only declare or make cash distributions to its shareholders during any Fiscal Quarter in an aggregate amount not to exceed the minimum amount necessary for the Parent to maintain its status as a REIT. If a Default or Event of Default specified in Section 8.01(a) or Section 8.01(f) of this Agreement shall have occurred and be continuing, or if as a result of the occurrence of any other Event of Default the Obligations have been accelerated pursuant to Section 8.02 of this Agreement, the Parent shall not, and shall not permit any of its Subsidiaries to, make any Restricted Payments to any Person whatsoever other than to the Borrower or any of its Subsidiaries.
Section 6.05      Fundamental Changes; Asset Dispositions . Neither the Parent, the Borrower, nor any of their respective Subsidiaries (other than the Permitted Other Subsidiaries) will, (a) merge or consolidate with or into any other Person, unless (i) a Subsidiary other than a Permitted Other Subsidiary (or another Person, if such merger with another Person is to effect an Investment permitted hereunder) is merged into the Borrower or another Subsidiary other than a Permitted Other Subsidiary and the Borrower or such other Subsidiary other than a Permitted Other Subsidiary, as the case may be, is the surviving Person or a Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other than the Obligations) is merged into any Subsidiary (other than a Permitted Other Subsidiary which has Indebtedness other than the Obligations), and (ii) immediately after giving effect to any such proposed transaction no Default would exist; (b) sell, transfer, or otherwise dispose of all or any of such Person’s material property except for a Permitted Hotel Sale, dispositions or replacements of personal property in the ordinary course of business, or Hotel Properties which are not Unencumbered Properties; (c) sell or otherwise dispose of any material Equity Interests in any Subsidiary (except for a Permitted Other Subsidiary and except to effectuate a Permitted Hotel Sale); (d) except for sales of Equity Interests not prohibited by this Agreement and the issuance of limited partner Equity Interests in the Borrower in exchange for Equity Interests in Subsidiaries and Unconsolidated Entities to the extent permitted pursuant to the provisions of Section 6.04, materially alter the corporate, capital or legal structure of any such Person (except for a Permitted Other Subsidiary); (e) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)  provided that nothing herein shall prohibit the Borrower from dissolving any Subsidiary which has no assets on the date of dissolution or (f) materially alter the character of their respective businesses from that conducted as of the date of this Agreement; in each case provided that the Parent shall be permitted to issue (i) Parent Common Stock and (ii) preferred stock in the Parent which is not deemed Indebtedness under this Agreement.
Section 6.06      Participating Lessee Ownership . Neither the Parent nor the Borrower shall, nor shall permit any of their respective Subsidiaries to, own directly or indirectly such a percentage of the beneficial Equity Interests in any participating lessee as would cause a potential Event of Default under Section 8.01(m) of this Agreement.


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Section 6.07      Investments, Loans, Future Properties . Neither the Parent nor the Borrower shall, nor shall permit any of their respective Subsidiaries to, acquire by purchase, or otherwise, all or substantially all of the business, property or fixed assets of any Person or any Hotel Property or other real estate, make or permit to exist any loans, advances or capital contributions to, or make any Investments in (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or purchase or commit to purchase any evidences of Indebtedness of, Equity Interests in any Person, except the following ( provided that after giving effect thereto there shall exist no Default):
(a)    Liquid Investments;
(b)    trade and customer accounts receivable which are for goods furnished or services rendered in the ordinary course of business and are payable in accordance with customary trade terms, and other assets owned in the ordinary course of owning the Hotel Properties and operating the business of the Borrower and its Subsidiaries;
(c)    a Future Property (or a Person that owns a Future Property) which qualifies as an Unencumbered Property or a Permitted Non‑Unencumbered Property; provided that no such individual Hotel Property shall exceed 30% of the Consolidated Total Book Value;
(d)    Investments in (i) unimproved land which do not in the aggregate have an Investment Amount which exceeds 5% of the Consolidated Total Book Value; (ii) Development Properties which do not in the aggregate have an Investment Amount which exceeds 15% of the Consolidated Total Book Value, (iii) Unconsolidated Entities which do not in the aggregate have an Investment Amount which exceeds 15% of the Consolidated Total Book Value, and (iv) mortgages, deeds of trust, deeds to secure debt or similar instruments that are a lien on real property or mezzanine loans that are secured by pledges of Equity Interests in entities that directly or indirectly own real property, in each case where such real property is improved by fully operational hotels and which instruments and pledges secure Indebtedness evidenced by a note or bond, which do not in the aggregate have an Investment Amount which exceeds 10% of the Consolidated Total Book Value; provided that the aggregate Investment Amount for all Investments made pursuant to this Section 6.07(d) shall not exceed 30% of the Consolidated Total Book Value;
(e)    Investments in Subsidiaries that are used by such Subsidiaries to make Investments permitted under this Section 6.07;
(f)    Capital Expenditures in Hotel Properties; and
(g)    any other Investments not covered by the preceding paragraphs of this Section 6.07 and not otherwise prohibited by this Agreement, provided that the aggregate Investment Amount for all Investments made pursuant to this clause (g) shall not exceed 0.50% of Consolidated Total Book Value.
Notwithstanding the foregoing, neither the Borrower, nor the Parent, nor their respective Subsidiaries shall acquire a Future Property or otherwise make an Investment which would (a) cause a Default, (b) cause or result in the Borrower or the Parent failing to comply with any of the financial covenants contained herein, (c) cause the aggregate Investment Amount for (i) all Future Properties located outside the United States and (ii) all Investments made pursuant to Section 6.07(d) which are either located outside the United States or in an Unconsolidated Entity which has at least 50% of its assets located outside the United States to exceed 10% of the Consolidated Total Book Value or (e) cause the Parent’s or any Subsidiary’s Investment in the Personal Property for any Hotel Property to cause a potential Event of Default under Section 8.01(m) of this Agreement.
Section 6.08      Affiliate Transactions . Except as otherwise approved by a majority of the Board of Trustees of the Parent including a majority of the independent trustees, the Borrower will not, and will not permit any of its Subsidiaries to, make, directly or indirectly (a) any transfer, sale, lease, assignment or other disposal of any assets to any Affiliate of the Borrower which is not a Guarantor or any purchase or acquisition of assets from any such Affiliate; or (b) any arrangement or other transaction directly or indirectly with or for the benefit of any such Affiliate (including without limitation, guaranties and assumptions of obligations of an Affiliate), other than in the ordinary course of business and at market rates.


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Section 6.09      Sale and Leaseback . The Borrower will not, and will not permit any of its Subsidiaries to, enter into any arrangement with any Person, whereby in contemporaneous transactions the Borrower or such Subsidiary sells essentially all of its right, title and interest in a material asset and the Borrower or such Subsidiary acquires or leases back the right to use such property.
Section 6.10      Sale or Discount of Receivables . The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, sell with recourse, or discount or otherwise sell for less than the face value thereof, any of its notes or accounts receivable, other than in the ordinary course of business and consistent with past and existing business practices.
Section 6.11      Restriction on Negative Pledges . The Borrower will not, and will not permit any of its Subsidiaries that directly or indirectly own an interest in any Unencumbered Property to, enter into or suffer to exist any agreement (other than (i) this Agreement and the Credit Documents, (ii) any agreement that conditions the ability of the Parent or its Subsidiaries to encumber their assets upon the maintenance of one or more specified ratios that limit the ability of such Persons to encumber their assets but that do not generally prohibit the encumbrance of assets or the encumbrance of specific assets, and (iii) a provision in any agreement governing Qualified Unsecured Debt (as defined in the Consolidated Credit Agreement) generally prohibiting the encumbrance of assets (exclusive of any outright prohibition on the encumbrance of particular Unencumbered Properties) so long as such provision is generally consistent with a comparable provision of the Credit Documents) prohibiting the creation or assumption of any Lien upon the Unencumbered Properties, whether now owned or hereafter acquired; provided that, the Borrower and its Subsidiaries that are Material Subsidiaries may permit a Lien upon a Hotel Property that was an Unencumbered Property at the end of the immediately preceding Fiscal Quarter of the Parent, so long as no Default exists at such time or would be caused thereby and the Borrower has provided to the Administrative Agent a Compliance Certificate evidencing pro forma compliance with Article VII following the removal of such Hotel Property as an Unencumbered Property.
Section 6.12      Material Documents . The Borrower will not, nor will it permit any of its Subsidiaries (other than Permitted Other Subsidiaries) to, enter into any termination, modification or amendment of any of the following documents without the prior written consent of the Administrative Agent:
(a)    Qualified Ground Lease; and
(b)    Any other material agreement, including without limitation any participating lease or management agreement.
provided , however , that so long as no Default or Event of Default has occurred and is continuing, such terminations, modifications or amendments shall be permitted so long as they could not reasonably be expected to (i) cause a Material Adverse Change or (ii) impair or otherwise adversely affect in any material respect the interests or rights of the Administrative Agent or any Bank, in each case after taking into account the effect of any agreements that supplement or serve to replace, in whole or in part, such Qualified Ground Leases or other material agreements. Any termination, modification or amendment prohibited under this Section 6.12 shall, to the extent permitted by applicable law, be void and of no force and effect.
Section 6.13      Limitations on Development, Construction, Renovation and Purchase of Hotel Properties . Neither the Parent nor the Borrower shall or shall permit any of their respective Subsidiaries to (a) engage in the development, construction or expansion of any Hotel Properties (except for Development Properties permitted by the provisions of Section 6.07) or (b) enter into any binding agreements to purchase Hotel Properties or other assets; provided that the Parent, the Borrower and their Subsidiaries may enter into binding agreements to purchase Hotel Properties or other assets if at all times such Person has available sources of capital equal to the portion of the purchase price of such Hotel Properties or other assets which constitutes a recourse obligation of the Parent, the Borrower or its Subsidiary, which available sources of capital may include Advances to the extent that the Borrower may borrow the same for the purposes required or other Indebtedness permitted by the terms of this Agreement.
Section 6.14      New York Mortgages . So long as any New York Mortgage remains in effect, the Borrower will not, nor will it permit any of its Subsidiaries to, enter into any modification or amendment with respect to Section 9.01(f) of the Consolidated Credit Agreement (or any of the defined terms “Qualified Unsecured Lender,” “Qualified


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Unsecured Debt” or “New York Mortgage” under the Consolidated Credit Agreement) without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed.
Section 6.15      OFAC . The Parent will not, and will not permit any of its Subsidiaries to, knowingly engage in any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is, or whose government is, the subject of Sanctions.
Section 6.16      Voluntary Prepayments during a Leverage Trigger Period . Notwithstanding anything contained herein to the contrary, during any Leverage Trigger Period, the Parent will not, and will not permit any of its Subsidiaries to:
(a)    make (or give any notice in respect of) any voluntary or optional payment or prepayment on or voluntary or optional redemption or acquisition for value of, including, in each case without limitation, by way of depositing with the trustee with respect thereto money or securities before due for the purpose of paying when due any Indebtedness that is pari passu with the Facility, any Secured Non-Recourse Indebtedness or any subordinated Indebtedness other than any payment, prepayment, redemption or acquisition for value of the LHL Facility or any Refinancing Debt (without limitation of the obligations of the Borrower and the Guarantors under Section 2.07(c)); or
(b)    amend or modify, or permit the amendment or modification of, any Secured Non-Recourse Indebtedness, any Indebtedness subordinated to the Facility, or any other Indebtedness pari passu with the Facility or any agreement (including, without limitation, any purchase agreement, indenture or loan agreement) related thereto, to the extent such amendment or modification would accelerate or advance the maturity or other date of required principal payments of any such Indebtedness or declare it to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or include an offer to prepay, redeem, purchase or defease such Indebtedness, in each case prior to the then existing stated maturity thereof, other than in respect of Refinancing Debt (without limitation of the obligations of the Borrower and the Guarantors under Section 2.07(c)).
ARTICLE VII

FINANCIAL COVENANTS
So long as any Note or any amount under any Credit Document shall remain unpaid or any Bank shall have any Commitment hereunder, unless the Administrative Agent shall otherwise consent in writing (subject to the provisions of Section 11.01), the Borrower agrees to comply and cause the Parent to comply with the following covenants.
Section 7.01      Fixed Charge Coverage Ratio . The Parent shall maintain at the end of each Rolling Period a Fixed Charge Coverage Ratio of not less than 1.50 to 1.00.
Section 7.02      Maintenance of Net Worth . The Parent shall at all times maintain an Adjusted Net Worth of not less than the Minimum Tangible Net Worth.
Section 7.03      Limitations on Total Liabilities . The Parent shall not at any time permit the Leverage Ratio to be greater than 7.25 to 1.00.
Section 7.04      Limitations on Unsecured Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Parent’s Unsecured Indebtedness to (b) the Total Unencumbered Asset Value to exceed 60%; provided , however , that such ratio may be increased to 65% one or more times for two consecutive Fiscal Quarters following a Material Acquisition.
Section 7.05      Limitations on Secured Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Parent’s Secured Indebtedness to (b) the Consolidated Total Book Value to exceed 45%.


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Section 7.06      Limitations on Secured Recourse Indebtedness . The Parent shall not at any time on a Consolidated basis permit the ratio of (a) the Secured Recourse Indebtedness of the Parent and its Subsidiaries to (b) the Consolidated Total Book Value to exceed 10%.
ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.01      Events of Default . The occurrence of any of the following events shall constitute an “Event of Default” under any Credit Document:
(a)     Principal Payment . The Borrower shall fail to pay any principal of any Note when the same becomes due and payable as set forth in this Agreement;
(b)     Interest or Other Obligation Payment . The Borrower shall fail to pay any interest on any Note or any fee or other amount payable hereunder or under any other Credit Document when the same becomes due and payable as set forth in this Agreement, provided however that the Borrower will have a grace period of five days after the payments covered by this Section 8.01(b) becomes due and payable for the first two defaults under this Section 8.01(b) in every calendar year;
(c)     Representation and Warranties . Any representation or warranty made or deemed to be made (i) by the Borrower in this Agreement or in any other Credit Document, (ii) by the Borrower (or any of its officers) in connection with this Agreement or any other Credit Document, or (iii) by the Parent or any Subsidiary in any Credit Document shall prove to have been incorrect in any material respect when made or deemed to be made;
(d)     Covenant Breaches . (i) The Borrower shall fail to perform or observe any covenant contained in Sections 5.02(a)(i), (b)(i) or (f), 5.08, Article VI or Article VII of this Agreement or the Borrower shall fail to perform or observe, or shall fail to cause any Subsidiary other than a Permitted Other Subsidiary to perform or observe any covenant in any Credit Document beyond any notice and/or cure period for such default expressly provided in such Credit Document or (ii) the Borrower, the Parent or any Subsidiary other than a Permitted Other Subsidiary shall fail to perform or observe any term or covenant set forth in any Credit Document which is not covered by clause (i) above or any other provision of this Section 8.01, in each case if such failure shall remain unremedied for 30 days after the earlier of the date written notice of such default shall have been given to the Borrower, the Parent or such Subsidiary other than a Permitted Other Subsidiary by the Administrative Agent or any Bank or the date a Responsible Officer of the Borrower or any Material Subsidiary has actual knowledge of such default, unless such default in this clause (ii) cannot be cured in such 30 day period and the Borrower is diligently proceeding to cure, or caused to be cured, such default, in which event the cure period shall be extended to 90 days;
(e)     Cross‑Defaults . (with respect to (i) any Secured Non‑Recourse Indebtedness which is outstanding in a principal amount of at least $220,000,000 individually or when aggregated with all such Secured Non‑Recourse Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries or (ii) any other Indebtedness (but excluding Indebtedness evidenced by the Notes) which is outstanding in a principal amount of at least $75,000,000 individually or when aggregated with all such Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries, any of the following:
(A)    any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof,
(B)    the Borrower, the Parent or any of their respective Subsidiaries shall fail to pay any principal of or premium or interest of any of such Indebtedness (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue


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after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or
(C)    any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness, and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to permit the holders of such Indebtedness to accelerate the maturity of such Indebtedness;
(f)     Insolvency . The Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries, either such proceeding shall remain undismissed for a period of 60 days or any of the actions sought in such proceeding shall occur; or the Borrower, the Parent, any Guarantor, or any of their respective Material Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this paragraph (f);
(g)     Judgments . Any judgment or order for the payment of money in excess of $75,000,000 (reduced for purposes of this paragraph for the amount in respect of such judgment or order that a reputable insurer has acknowledged being payable under any valid and enforceable insurance policy) or in the case of a judgment in respect of any Secured Non-Recourse Indebtedness, in excess of $220,000,000, individually or in the aggregate, shall be rendered against the Borrower, the Parent or any of their respective Subsidiaries which, within 60 days from the date such final judgment is entered, shall not have been discharged or execution thereof stayed pending appeal;
(h)     ERISA . (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA, unless such Reportable Event, proceedings or appointment are being contested by the Parent or the Borrower in good faith and by appropriate proceedings, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) the Parent, the Borrower or any member of a Controlled Group shall incur any liability in connection with a withdrawal from a Multiemployer Plan or the insolvency (within the meaning of Section 4245 of ERISA) or reorganization (within the meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless such liability is being contested by the Parent or the Borrower in good faith and by appropriate proceedings, or (vi) any other event or condition shall occur or exist, with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could subject the Borrower, the Parent or any Material Subsidiary to any tax, penalty or other liabilities in the aggregate exceeding $75,000,000 at the time of such event or upon occurrence of such condition;
(i)     Guaranty . Any Guaranty shall for any reason cease to be valid and binding on any Guarantor or any Guarantor shall so state in writing;
(j)     Environmental Indemnity . Any Environmental Indemnity shall for any reason cease to be valid and binding on any Person party thereto or any such Person shall so state in writing;


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(k)     LaSalle Leasing . The Borrower shall for any reason cease to own, directly or indirectly, at least 99.9% of the Equity Interests in LaSalle Leasing;
(l)     Default Under Qualified Ground Lease . Qualified Ground Leases for Hotel Properties which comprise 25% or more of the Asset Value have in the aggregate either (i) been terminated because of a default by the lessee under such Qualified Ground Lease or (ii) are subject to a default by the lessee under such Qualified Ground Lease which has not been cured or waived 10 days prior to the date the ground lessors under such Qualified Ground Lease would have the right to terminate such Qualified Ground Leases;
(m)     Parent’s REIT Status . There shall be a determination from the applicable Governmental Authority from which no appeal can be taken that the Parent’s tax status as a REIT has been lost;
(n)     Parent Common Stock . The Parent at any time hereafter fails to cause the Parent Common Stock to be duly listed on the New York Stock Exchange, Inc. or another nationally recognized stock exchange; or
(o)     Changes in Ownership and Control . Any of the following occur without the written consent of the Required Lenders: (A) the Parent (i) amends the Borrower’s partnership agreement in any material and adverse respect (which shall not include any customary amendments to reflect transactions permitted by this Agreement so long as such amendments are not otherwise adverse to the Administrative Agent or any of the Banks, (ii) admits a new general partner to the Borrower, (iii) own less than 70% of the Equity Interests in and beneficial ownership of the Borrower, or (iv) resigns as general partner of the Borrower, or (B) the failure of individuals who are members of the board of directors (or similar governing body) of the Parent on the Closing Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Parent.
Section 8.02      Optional Acceleration of Maturity . If any Event of Default (other than an Event of Default pursuant to Section 8.01(f) with respect to the Borrower or the Parent) shall have occurred and be continuing, then, and in any such event,
(a)    the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Bank to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Notes, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable in full, without presentment, demand, protest or further notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by the Borrower,
(b)    [ Reserved ], and
(c)    the Administrative Agent shall at the request of, or may with the consent of, the Required Lenders proceed to enforce its rights and remedies under the Credit Documents for the ratable benefit of the Banks by appropriate proceedings.
Section 8.03      Automatic Acceleration of Maturity . If any Event of Default pursuant to Section 8.01(f) with respect to the Borrower or the Parent shall occur, the obligation of each Bank to make Advances shall immediately and automatically be terminated and the Notes, all interest on the Notes and all other amounts payable under this Agreement shall immediately and automatically become and be due and payable in full, without presentment, demand, protest or any notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by the Borrower.
Section 8.04     [ Reserved ].


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Section 8.05      Non‑exclusivity of Remedies . No remedy conferred upon the Administrative Agent or the Banks is intended to be exclusive of any other remedy, and each remedy shall be cumulative of all other remedies existing by contract, at law, in equity, by statute or otherwise.
Section 8.06      Right of Set‑off . Upon (a) the occurrence and during the continuance of any Event of Default and (b) the granting of the consent, if any, specified by Section 8.02 to authorize the Administrative Agent to declare the Notes and any other amount payable hereunder due and payable pursuant to the provisions of Section 8.02 or the automatic acceleration of the Notes and all amounts payable under this Agreement pursuant to Section 8.03, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement, the Note held by such Bank, and the other Credit Documents, irrespective of whether or not such Bank shall have made any demand under this Agreement, such Note, or such other Credit Documents, and although such obligations may be unmatured. Each Bank agrees to promptly notify the Borrower after any such set‑off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set‑off and application. The rights of each Bank under this Section are in addition to any other rights and remedies (including, without limitation, other rights of set‑off) which such Bank may have.
ARTICLE IX

[RESERVED]
ARTICLE X

AGENCY PROVISIONS
Section 10.01      Authorization and Action . Each Bank hereby appoints and authorizes the Administrative Agent to take such action as the Administrative Agent on its behalf and to exercise such powers under this Agreement and the other Credit Documents as are delegated to the Administrative Agent by the terms hereof and of the other Credit Documents, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement or any other Credit Document (including, without limitation, enforcement or collection of the Notes), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Banks and all holders of Notes; provided , however , that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, any other Credit Document, or applicable law. The functions of the Administrative Agent are administerial in nature and in no event shall the Administrative Agent have a fiduciary or trustee relation in respect of any Bank by reason of this Agreement or any other Credit Document. Within 5 Business Days of the Administrative Agent or a Bank receiving actual notice (without any duty to investigate) of a Default, the Administrative Agent or such Bank, as applicable, will provide written notice of such Default to the Banks.
Section 10.02      Administrative Agent’s Reliance, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken (including such Person’s own negligence) by it or them under or in connection with this Agreement or the other Credit Documents, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Administrative Agent: (a) may treat the payee of any Note as the holder thereof until the Administrative Agent receives written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Administrative Agent; (b) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations made in or in connection with this Agreement or the other Credit Documents; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Credit Document on the part of the Parent, the Borrower or their Subsidiaries or to inspect the property (including the books


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and records) of the Borrower or its Subsidiaries; (e) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Credit Document; and (f) shall incur no liability under or in respect of this Agreement or any other Credit Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.
Section 10.03      Administrative Agent and Its Affiliates . With respect to its Commitment, the Advances made by it and the Notes issued to it, the Administrative Agent shall have the same rights and powers under this Agreement as any other Bank and may exercise the same as though it were not the Administrative Agent. The term “Bank” or “Banks” shall, unless otherwise expressly indicated, include the Administrative Agent in its individual capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower or any of its Subsidiaries, and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if the Administrative Agent were not the Administrative Agent hereunder and without any duty to account therefor to the Banks.
Section 10.04      Bank Credit Decision . Each Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Bank and based on the Parent’s and the Borrower’s financial statements and the Parent’s filings under the Exchange Act and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Nothing in this Agreement or any other Credit Document shall require the Administrative Agent or any of its directors, officers, agents or employees to carry out any “know your customer” or other checks in relation to any Person on behalf of any Bank and each Bank confirms to the Administrative Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Administrative Agent or any of its directors, officers, agents or employees.
Section 10.05      Indemnification . The Banks severally agree to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower), according to their respective Pro Rata Shares from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, litigation, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent (solely in its capacity as such) in any way relating to or arising out of this Agreement or any action taken or omitted by the Administrative Agent under this Agreement or any other Credit Document (including the Administrative Agent’s own negligence), provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, litigation, costs, expenses or disbursements resulting from the Administrative Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Bank agrees to reimburse the Administrative Agent promptly upon demand for its Pro Rata Share of any out‑of‑pocket expenses (including reasonable counsel fees) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Credit Document, to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrower. The term “Administrative Agent” shall be deemed to include the employees, directors, officers and Affiliates of the Administrative Agent for purposes of this Section 10.05.
Section 10.06      Successor Administrative Agent . The Administrative Agent may resign at any time by giving written notice thereof to the Banks and the Borrower and may be removed at any time with cause by the Required Lenders upon receipt of written notice from the Required Lenders to such effect. Upon receipt of notice of any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent which successor Administrative Agent shall be acceptable to the Borrower, unless an Event of Default then exists, in which event the Borrower shall have no such approval right. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Banks and the Borrower, appoint a successor Administrative Agent acceptable to the Borrower, which shall be a commercial bank meeting the financial requirements of an Eligible Assignee. Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor


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Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Credit Documents. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such Administrative Agent under this Agreement and the other Credit Documents.
Section 10.07      Co-Syndication Agents, Joint Lead Arrangers, Joint Bookrunners, Co-Documentation Agents . Bank of Montreal and U.S. Bank National Association shall be named Co-Syndication Agents, but such Co-Syndication Agents shall have no right or duty to act as agent on behalf of the Banks in such capacity. Citigroup Global Markets Inc., BMO Capital Markets, U.S. Bank National Association, Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Capital Markets LLC, Sumitomo Mitsui Banking Corporation, and TD Bank, N.A. shall be named Joint Lead Arrangers, but such Joint Lead Arrangers shall have no right or duty to act as agent on behalf of the Banks in such capacities. Citigroup Global Markets Inc., BMO Capital Markets, and U.S. Bank National Association shall be named Joint Bookrunners, but such Joint Bookrunners shall have no right or duty to act as agent on behalf of the Banks in such capacities. Bank of America, N.A., PNC Bank, National Association, Sumitomo Mitsui Banking Corporation, TD Bank, N.A., Wells Fargo Bank, National Association, Raymond James Bank, N.A., Regions Bank, Branch Banking and Trust Company, and Crédit Agricole Corporate and Investment Bank shall be named Co-Documentation Agents, but the Co-Documentation Agents shall have no right or duty to act as agent on behalf of the Banks in such capacity.
Section 10.08      Designation of Additional Agents . The Administrative Agent shall have the continuing right, for purposes hereof, at any time and from time to time to designate one or more of the Banks (and/or its or their Affiliates) as “arrangers” or other designations for purposes hereof, but no such designation shall have any substantive effect, and no such Banks or their Affiliates shall have any additional powers, duties or responsibilities as a result thereof.
ARTICLE XI

MISCELLANEOUS
Section 11.01      Amendments, Etc. No amendment or waiver of any provision of this Agreement, the Notes, or any other Credit Document, nor consent to any departure by the Borrower or any Guarantor therefrom, nor increase in the aggregate Commitments of the Banks, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no amendment shall increase the Commitment of any Bank without the written consent of such Bank, and no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the following: (a) increase the Total Commitments to an amount in excess of Five Hundred Fifty-Five Million Dollars ($555,000,000), except in accordance with the provisions of Section 1.06, which may permit an additional One Hundred Forty-Five Million Dollar ($145,000,000) increase in the Total Commitments to a maximum of Seven Hundred Million Dollars ($700,000,000) in Total Commitments, (b) reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder or under any other Credit Document or otherwise release the Borrower from any Obligations, (c) postpone any date fixed for any scheduled payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder or extend the termination date of such Bank’s Commitment beyond the Maturity Date, (d) change the percentage of the Commitments of the Banks which shall be required for the Banks or any of them to take any action hereunder or under any other Credit Document, (e) amend this Section 11.01, (f) amend the definition of “Required Lenders”, (g) amend the definition of “Asset Value”, but not the definitions that are used in such definition, (h) release any Guarantor from its obligations under the Guaranty or the Environmental Indemnity or any Pledgor from its obligations under the Pledge Agreement; provided that the Administrative Agent can, if no Default then exists, release any Eligible Subsidiary Guarantor and Pledgor in accordance with the provisions of Sections 5.09(b), 5.10(c) or 11.23, (i) modify any provisions requiring payment to be made for the ratable account of the Banks, (j) amend the definition of “Pro Rata Share” or (k) require the duration of an Interest Period to be more than six months if such period is not available to all Banks; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Banks required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or any other


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Credit Document. In addition, none of the following decisions shall be made without the written consent of the Required Lenders:
(a)    [Reserved];
(b)    any determination to make a Borrowing after the occurrence and during the continuance of an Event of Default;
(c)    [Reserved];
(d)    any waiver of or any amendment to the financial covenants contained in Article VII of this Agreement or any definitions used therein;
(e)    any waiver or modification of the covenants contained in Article V or Article VI;
(f)    any amendment, supplement or modification to, or waiver of, the provisions of Section 8.01 of this Agreement;
(g)    any determination to send notice to the Borrower of, or otherwise declare, an Event of Default pursuant to Section 8.01 of this Agreement;
(h)    any determination to accelerate the Obligations pursuant to Section 8.02 of this Agreement;
(i)    any exercise of remedies under any Credit Document;
(j)    any waiver for more than 45 days of, or any amendment to, the reporting requirements set forth in clauses (a)-(d) of Section 5.05 of this Agreement;
(k)    any material waiver of the conditions to a Hotel Property qualifying as either an Unencumbered Property or a Permitted Non‑Unencumbered Property; and
(l)    any other waiver or modification of the Credit Documents unless the applicable provision of this Agreement expressly permits such waiver or modification to be made by the Administrative Agent.
Any amendment to this Agreement including a covenant of the Parent or any of its Subsidiaries or amendment to a definition shall require the Borrower’s written consent.
Section 11.02      Notices, Etc. (a) Except as specifically provided herein, all notices and other communications shall be in writing (including telecopy or telex) and mailed, telecopied, telexed, hand delivered or delivered by a nationally recognized overnight courier, (a) if to the Borrower, at its address at 7550 Wisconsin Avenue, 10th Floor, Bethesda, Maryland 20814, Attention: Mr. Bruce A. Riggins, with a copy to William Diamond at DeCampo Diamond & Ash, 747 Third Avenue, New York, New York 10017 (telephone: (212) 758-1710; telecopy (212) 758-1728) and a copy to Robert K. Hagan at Hagan & Vidovic, LLP, Suite 611, 101 North Wacker Drive, Chicago, Illinois 60606 (telephone: (312) 525-8132; telecopy (312) 525-8149); (b) if to any Bank at its Domestic Lending Office; (c) if to the Administrative Agent, at its address at Citibank, N.A., 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department, (telecopy: (646) 274-5080; telephone: (302) 894-6010; or (d) as to each party, at such other address or telecopier number as shall be designated by such party in a written notice to the other parties. All such notices and communications shall (i) when mailed, telecopied, telexed or hand delivered or delivered by overnight courier, be effective 3 days after deposited in the mails, when telecopy transmission is completed, when confirmed by telex answer-back or when delivered, (ii) when delivered by posting to an Approved Electronic Platform, an Internet website or a similar telecommunication device requiring that a user have prior access to such Approved Electronic Platform, website or other device (to the extent permitted by Section 11.02(b) to be delivered thereunder), when such notice, demand, request, consent and other communication shall have been made generally available on such Approved Electronic Platform, Internet website or similar device to the class of Person being notified (regardless of whether any such Person must accomplish, and whether or not any such Person shall have accomplished, any action


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prior to obtaining access to such items, including registration, disclosure of contact information, compliance with a standard user agreement or undertaking a duty of confidentiality) and such Person has been notified in respect of such posting that a communication has been posted to the Approved Electronic Platform, provided that if requested by any Bank, the Administrative Agent shall deliver a copy of the Communications to such Bank by e-mail or telecopier and (iii) when delivered by electronic mail or any other telecommunications device, upon receipt by the sender of a response from any one recipient, or from an employee or representative of the Person receiving notice on behalf of such Person, acknowledging receipt (which response may not be an automatic computer-generated response) and an identical notice is also sent simultaneously by mail, overnight courier or personal deliver as otherwise provided in this Section 11.02; provided , however , that notices and communications to the Administrative Agent pursuant to Article II or Article X shall not be effective until received by the Administrative Agent; provided further that any notice or communication which is delivered after the close of regular business hours of the recipient shall be deemed received on the next Business Day. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof. Each Bank agrees (i) to notify the Administrative Agent in writing of such Bank’s e-mail address to which a notice may be sent by electronic transmission (including by electronic communication) on or before the date such Bank becomes a party to this Agreement (and from time to time thereafter to ensure that the Administrative Agent has on record an effective e-mail address for such Bank) and (ii) that any notice may be sent to such e-mail address.
(b)    Notwithstanding clause (a) (unless the Administrative Agent requests that the provisions of clause (a) be followed) and any other provision in this Agreement or any other Credit Document providing for the delivery of any Approved Electronic Communication by any other means, the Borrower and the Guarantors shall deliver all Approved Electronic Communications to the Administrative Agent by properly transmitting such Approved Electronic Communications in an electronic/soft medium in a format acceptable to the Administrative Agent to global.loans.support@citigroup.com or such other electronic mail address (or similar means of electronic delivery) as the Administrative Agent may notify to the Borrower. Nothing in this clause (b) shall prejudice the right of the Administrative Agent or any Bank to deliver any Approved Electronic Communication to the Borrower or any Guarantor in any manner authorized in this Agreement or to request that the Borrower effect delivery in such manner.
(c)    Each of the Banks and the Borrower and each Guarantor agrees that the Administrative Agent may, but shall not be obligated to, make the Approved Electronic Communications available to the Banks by posting such Approved Electronic Communications on IntraLinks™ or a substantially similar electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “ Approved Electronic Platform ”). Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Closing Date, a dual firewall and a User ID/Password Authorization System) and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Banks and the Borrower and each Guarantor acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the Banks and the Borrower and each Guarantor hereby approves distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.
(d)    THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS DIRECTORS, OFFICERS, AGENTS OR


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EMPLOYEES IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.
(e)    Each of the Banks and the Borrower and each Guarantor agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Approved Electronic Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally-applicable document retention procedures and policies.
Section 11.03      No Waiver; Remedies . No failure on the part of any Bank or the Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any other Credit Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement and the other Credit Documents are cumulative and not exclusive of any remedies provided by law.
Section 11.04      Costs and Expenses . The Borrower agrees to pay on demand all reasonable out‑of‑pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, due diligence, administration, modification and amendment of this Agreement, the Notes and the other Credit Documents and syndication of the Obligations including, without limitation, (a) the reasonable fees and out‑of‑pocket expenses of Shearman & Sterling LLP, counsel for the Administrative Agent (and no other Bank), and (b) to the extent not included in the foregoing, the costs of any local counsel, travel expenses of the Administrative Agent and its consultants and representatives, engineering reports, environmental reports, mortgage and intangible taxes (if any), and any title or Uniform Commercial Code search costs, any flood plain search costs, insurance consultant costs and other costs usual and customary in connection with a credit facility of this type. In addition, the Borrower agrees to pay on demand all reasonable out-of‑pocket costs and expenses, if any, of the Administrative Agent and each Bank (including, without limitation, reasonable counsel fees and expenses of the Administrative Agent and each Bank) in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the other Credit Documents.
Section 11.05      Binding Effect . This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent, and when the Administrative Agent shall have, as to each Bank, either received a counterpart hereof executed by such Bank or been notified by such Bank that such Bank has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and each Bank and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights or delegate its duties under this Agreement or any interest in this Agreement without the prior written consent of each Bank.
Section 11.06      Bank Assignments and Participations . (a) Assignments . Any Bank may assign to one or more banks or other entities all or any portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of any Commitment held by such Bank, the Advances owing to it and any Notes held by it); provided , however , that (i) each such assignment shall be of a constant, and not a varying, percentage of all of such Bank’s rights and obligations under this Agreement and shall involve a ratable assignment of such Bank’s Commitment and such Bank’s Advances, (ii) the amount of the resulting Commitment and Advances of the assigning Bank (unless it is assigning all its Commitment) and the assignee Bank pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $10,000,000 and shall be an integral multiple of $1,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with the Notes subject to such assignment, (v) except with respect to assignments to other Banks or an Affiliate of the assigning Bank, the consent of the Administrative Agent shall be required, which consent shall not be unreasonably withheld or delayed, (vi) no such assignments shall be made to the Borrower or its Affiliates or any of their respective subsidiaries, any natural Person, or any Person who, upon becoming a Bank hereunder, would constitute any of the foregoing Persons described in this clause, and (vii) each Eligible Assignee (other than an Eligible Assignee which is an Affiliate of the assigning Bank) shall pay to the Administrative Agent a $3,500 administrative fee; provided , however , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; provided further that the parties hereby agree that Merrill Lynch, Pierce, Fenner & Smith Incorporated may, without notice to the Borrower, assign its rights and obligations under this Agreement to any other registered broker-dealer wholly-owned by Bank of America Corporation to which


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all or substantially all of Bank of America Corporation’s or any subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least 3 Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto for all purposes and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Bank hereunder and (B) such Bank thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of such Bank’s rights and obligations under this Agreement, such Bank shall cease to be a party hereto). Notwithstanding anything herein to the contrary, any Bank may assign, as collateral or otherwise, any of its rights under the Credit Documents, including to any Federal Reserve Bank or other central bank, and this Section shall not apply to any such assignment.
(b)     Term of Assignments . By executing and delivering an Assignment and Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency of value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the Guarantors or the performance or observance by the Borrower or the Guarantors of any of their obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements and filings under the Exchange Act referred to in Sections 4.06 and 5.05, if applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative Agent, such Bank or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Bank.
(c)     The Register . The Administrative Agent shall maintain at its address referred to in Section 11.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Banks and the Commitments of, and principal amount of the Advances owing to, each Bank from time to time (the “ Register ”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice.
(d)     Procedures . Upon its receipt of an Assignment and Acceptance executed by a Bank and an Eligible Assignee, together with the Note subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of the attached Exhibit B, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Borrower. Within 5 Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note, a new Note payable to the order of such Eligible Assignee in amount equal to, respectively, the Commitment and the outstanding Advances assumed by it pursuant to such Assignment and Acceptance, and if the assigning Bank has retained any Commitment hereunder, a new Note payable to the order of such Bank in an amount equal to, respectively, the Commitment and the outstanding Advances retained by it hereunder. Such new Note shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the attached Exhibit A.
(e)     Participations . Each Bank may sell participations to one or more banks or other entities (excluding natural Persons) in or to all or a portion of its rights and obligations under this Agreement (including, without


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limitation, all or a portion of its Commitment, the Advances owing to it and the Notes held by it); provided , however , that (i) such Bank’s obligations under this Agreement (including, without limitation, its Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement, and (v) such Bank shall not require the participant’s consent to any matter under this Agreement, except for change in the principal amount of any Note in which the participant has an interest, reductions in fees or interest, or extending the Maturity Date except as permitted in this Agreement. The Borrower hereby agrees that participants shall have the same rights under Sections 2.08, 2.09, and 2.11(c) hereof as the Bank to the extent of their respective participations, provided that no participant shall be able to collect in excess of amounts payable to the Bank selling to such participant under such Sections in respect of the interest sold to such participant or to collect any such amounts from the Borrower. Each Bank that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Advances or other obligations under the Credit Documents (the “ Participant Register ”); provided that no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in any commitments, loans or its other obligations under any Credit Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(f)     Confidentiality . Each Bank may furnish any information concerning the Borrower and its Subsidiaries in the possession of such Bank from time to time to assignees and participants (including prospective assignees and participants); provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree in writing to preserve the confidentiality of any confidential information relating to the Borrower and its Subsidiaries received by it from or on behalf of such Bank in accordance with Section 11.20.
Section 11.07      Indemnification . (a) The Borrower shall indemnify the Administrative Agent, the Banks (in any capacity or title and including any lender which was a Bank hereunder prior to any full assignment of its Commitment) and each affiliate thereof and their respective directors, officers, employees, partners and agents (each of the foregoing Persons, an “ Indemnitee ”) from, and discharge, release, and hold each of them harmless against, any and all losses, liabilities, claims or damages (including reasonable legal fees) to which any of them may become subject, insofar as such losses, liabilities, claims or damages (including reasonable legal fees) arise out of or result from (i) any actual or proposed use of the proceeds of any Advance, (ii) any breach by the Borrower or any Guarantor of any provision of this Agreement or any other Credit Document, (iii) any investigation, litigation or other proceeding (including any threatened investigation or proceeding) relating to the foregoing regardless of the identity of the party bringing such investigation, litigation or other proceeding, or (iv) any Environmental Claim or requirement of Environmental Laws concerning or relating to the present or previously‑owned or operated properties, or the operations or business, of the Borrower or any of its Subsidiaries, and the Borrower shall reimburse the Administrative Agent and each Bank, and each affiliate thereof and their respective directors, officers, employees and agents, upon demand for any reasonable out-of-pocket expenses (including legal fees) incurred in connection with any such investigation, litigation or other proceeding; and expressly including any such losses, liabilities, claims, damages, or expense incurred by reason of the Indemnitee’s own negligence, but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of such Indemnitee’s gross negligence or willful misconduct or willful breach in bad faith of a material provision of this Agreement as determined in a final non-appealable judgment by a court of competent jurisdiction.
(b)    To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against, any such Indemnitee on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement,


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any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or the use of the proceeds thereof.
(c)    No Indemnitee referred to in this Section 11.07 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby.
Section 11.08      Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Section 11.09      Survival of Representations, Indemnifications, etc. All representations, warranties contained in this Agreement or made in writing by or on behalf of the Borrower in connection herewith shall survive the execution and delivery of this Agreement and the Credit Documents, the making of the Advances and any investigation made by or on behalf of the Banks, none of which investigations shall diminish any Bank’s right to rely on such representations and warranties. All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c), 11.04 and 11.07 shall survive any termination of this Agreement and repayment in full of the Obligations.
Section 11.10      Severability . In case one or more provisions of this Agreement or the other Credit Documents shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not be affected or impaired thereby.
Section 11.11      Entire Agreement . This Agreement, the Notes and the other Credit Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto.
Section 11.12      Usury Not Intended . Without limitation of any rights under Section 2.06(c), it is the intent of the Borrower and each Bank in the execution and performance of this Agreement and the other Credit Documents to contract in strict compliance with applicable usury laws, including conflicts of law concepts, governing the Advances of each Bank including such applicable laws of the State of New York and the United States of America from time to time in effect. In furtherance thereof, the Banks and the Borrower stipulate and agree that none of the terms and provisions contained in this Agreement or the other Credit Documents shall ever be construed to create a contract to pay, as consideration for the use, forbearance or detention of money, interest at a rate in excess of the Maximum Rate and that for purposes hereof “interest” shall include the aggregate of all charges which constitute interest under such laws that are contracted for, charged or received under this Agreement; and in the event that, notwithstanding the foregoing, under any circumstances the aggregate amounts taken, reserved, charged, received or paid on the Advances, include amounts which by applicable law are deemed interest which would exceed the Maximum Rate, then such excess shall be deemed to be a mistake and each Bank receiving same shall credit the same on the principal of its Notes (or if such Notes shall have been paid in full, refund said excess to the Borrower). In the event that the maturity of the Notes is accelerated by reason of any election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest may never include more than the Maximum Rate and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited on the applicable Notes (or, if the applicable Notes shall have been paid in full, refunded to the Borrower). In determining whether or not the interest paid or payable under any specific contingencies exceeds the Maximum Rate, the Borrower and the Banks shall to the maximum extent permitted under applicable law amortize, prorate, allocate and spread in equal parts during the period of the full stated term of the Notes all amounts considered to be interest under applicable law at any time contracted for, charged, received or reserved in connection with the Obligations. The provisions of this Section shall control over all other provisions of this Agreement or the other Credit Documents which may be in apparent conflict herewith.
Section 11.13      Governing Law . ANY DISPUTE BETWEEN THE BORROWER, THE ADMINISTRATIVE AGENT, ANY BANK, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN


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CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE VALIDITY, INTERPRETATION, CONSTRUCTION, BREACH, ENFORCEMENT OR TERMINATION HEREOF AND THEREOF, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
Section 11.14      Consent to Jurisdiction; Service of Process; Jury Trial . (a) Exclusive Jurisdiction . Except as provided in subsection (b), each of the parties hereto agrees that all disputes among them arising out of, connected with, related to, or incidental to the relationship established among them in connection with, this Agreement or any of the other Credit Documents whether arising in contract, tort, equity, or otherwise, shall be resolved exclusively by state or federal courts located in the city, county and state of New York, but the parties hereto acknowledge that any appeals from those courts may have to be heard by a court located outside of New York. Each of the parties hereto waives in all disputes brought pursuant to this subsection (a) any objection that it may have to the location of the court considering the dispute.
(b)     Other Jurisdictions . The Borrower agrees that the Administrative Agent, any Bank or any Indemnitee shall have the right to proceed against the Borrower or its Property in a court in any location to enable such person to (1) obtain personal jurisdiction over the Borrower or (2) enforce a judgment or other court order entered in favor of such Person. The Borrower agrees that it will not assert any permissive counterclaims in any proceeding brought by such Person to enforce a judgment or other court order in favor of such Person. The Borrower waives any objection that it may have to the location of the court in which such Person has commenced a proceeding described in this subsection (b).
(c)     Service of Process . The Borrower waives personal service of any process upon it and irrevocably consents to the service of process of any writs, process or summonses in any suit, action or proceeding by the mailing thereof by the Administrative Agent or the Banks by registered or certified mail, postage prepaid, to the Borrower addressed as provided herein. Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or the Banks to serve any such writs, process or summonses in any other manner permitted by applicable law. The Borrower irrevocably waives any objection (including, without limitation, any objection of the laying of venue or based on the grounds of forum non conveniens) which it may now or hereafter have to the bringing of any such action or proceeding with respect to this Agreement or any other instrument, document or agreement executed or delivered in connection herewith in any jurisdiction set forth above.
(d)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e)     Waiver of Bond . The Borrower waives the posting of any bond otherwise required of any party hereto in connection with any judicial process or proceeding to realize on the collateral enforce any judgment or other court order entered in favor of such party, or to enforce by specific performance, temporary restraining order, preliminary or permanent injunction, this Agreement or any other Credit Document.
Section 11.15      Knowledge of Borrower . For purposes of this Agreement, “knowledge of the Borrower” means the actual knowledge of any of the executive officers and all other Responsible Officers of the Parent.


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Section 11.16      Banks Not in Control . None of the covenants or other provisions contained in the Credit Documents shall or shall be deemed to, give the Banks the rights or power to exercise control over the affairs and/or management of the Borrower, any of its Subsidiaries, any Material Subsidiary or any Guarantor, the power of the Banks being limited to the right to exercise the remedies provided in the Credit Documents.
Section 11.17      Headings Descriptive . The headings of the several Sections and paragraphs of the Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
Section 11.18      Time is of the Essence . Time is of the essence under the Credit Documents.
Section 11.19      Scope of Indemnities . The Borrower acknowledges and agrees that certain of its Obligations and indemnities under this Agreement include any claims resulting from the negligence or alleged negligence of the Administrative Agent, the Banks, or any other Indemnitee.
Section 11.20      Confidentiality . (a) The Administrative Agent and each Bank severally agrees that it will use its commercially reasonable efforts not to disclose without the prior written consent of the Parent or the Borrower (other than to an Affiliate or such Person’s or their Affiliate’s directors, officers, employees, auditors, regulators or counsel) any Information (as defined below) with respect to the Parent or the Borrower which is furnished pursuant to this Agreement except that the Administrative Agent and each Bank may disclose any such Information (i) which is or becomes generally available to the public other than by a breach of this Section 11.20, (ii) which is known by or becomes known by such Person from another Person, (iii) as may be required or appropriate in any report, statement or testimony submitted to any Governmental Authority, regulatory authority or self-regulatory authority (whether in the United States or elsewhere), (iv) as may be required or appropriate in response to any summons or subpoena or any law, order, regulation, ruling or similar legal process applicable to the Administrative Agent or such Bank, (v) to any other party hereto, (vi) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (vii) subject to an agreement containing provisions substantially the same as those of this Section 11.20, to (A) any prospective participant or assignee in connection with any contemplated transfer pursuant to Section 11.06 in accordance with the provisions of Section 11.06(f) or (B) any actual or prospective party to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (viii) on a confidential basis to (A) any rating agency in connection with rating the Parent or its Subsidiaries or this Agreement or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to this Agreement, (ix) with the consent of the Borrower, or (x) to the extent such Information becomes available to the Administrative Agent, any Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. In addition, the Administrative Agent, any Bank or any of their respective Affiliates may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Administrative Agent, any Bank or any of their respective Affiliates in connection with the administration of this Agreement, the other Credit Documents, and the Commitments. For purposes of this Section, “ Information ” means all information received from the Parent or any of its Subsidiaries (including the Fee Letter and any information obtained based on a review of the books and records of the Parent or any of its Subsidiaries) relating to the Parent or any of its Subsidiaries or any of their respective businesses; provided that, in the case of information so received after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(b)    Notwithstanding anything to the contrary set forth herein or in any other written or oral understanding or agreement to which the parties hereto are parties or by which they are bound, the parties hereto acknowledge and agree that (i) any obligations of confidentiality contained herein and therein do not apply and have not applied from the commencement of discussions between the parties to the tax treatment and tax structure of the transactions contemplated by the Credit Documents (and any related transactions or arrangements), and (ii) each party (and each of its employees, representatives, or other agents) may disclose to any and all parties as required, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by the Credit Documents


-70-



and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure, all within the meaning of Treasury Regulations Section 1.6011-4; provided , however , that each party recognizes that the privilege each has to maintain, in its sole discretion, the confidentiality of a communication relating to the transactions contemplated by the Credit Documents, including a confidential communication with its attorney or a confidential communication with a federally authorized tax practitioner under Section 7525 of the Internal Revenue Code, is not intended to be affected by the foregoing.
Section 11.21      USA Patriot Act Notice . The Patriot Act and federal regulations issued with respect thereto require all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, the Administrative Agent (for itself and/or as Administrative Agent for all Banks hereunder) may from time-to-time request, and the Borrower shall provide the Administrative Agent, the Borrower’s and each Guarantor’s and Material Subsidiary’s name, address, tax identification number and/or such other identification information as shall be necessary for each Bank to comply with federal law. An “account” for this purpose may include, without limitation, a deposit account, cash management service, a transaction or asset account, a credit account, a loan or other extension of credit, and/or other financial services product.
Section 11.22      No Fiduciary Duties . The Parent, the Borrower and each Guarantor agrees that nothing in the Credit Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Administrative Agent, any Arranger, any Bank or any Affiliate thereof, on the one hand, and the Parent, the Borrower or such Guarantor, as applicable, its stockholders or its Affiliates, on the other. The Parent, the Borrower and each Guarantor agrees that the transactions contemplated by the Credit Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions. The Parent, the Borrower and each Guarantor agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Parent, the Borrower and each Guarantor acknowledges that the Administrative Agent, the Arrangers, the Banks and their respective Affiliates may have interests in, or may be providing or may in the future provide financial or other services to other parties with interests which the Parent, the Borrower or such Guarantor may regard as conflicting with its interests and may possess information (whether or not material to the Parent, the Borrower or such Guarantor) other than as a result of (x) the Administrative Agent acting as administrative agent hereunder or (y) the Banks acting as lenders hereunder, that the Administrative Agent, any Arranger or any Bank may not be entitled to share with the Parent, the Borrower or any Guarantor. Without prejudice to the foregoing, each of the Parent, the Borrower and each Guarantor agrees that the Administrative Agent, the Arrangers, the Banks and their respective Affiliates may (a) deal (whether for its own or its customers’ account) in, or advise on, securities of any Person, and (b) accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with other Persons in each case, as if the Administrative Agent were not the Administrative Agent and as if the Banks were not lenders hereunder, and without any duty to account therefor to the Parent, the Borrower or any Guarantor. The Parent, the Borrower and each Guarantor hereby irrevocably waives, in favor of the Administrative Agent and the Banks, any conflict of interest which may arise by virtue of the Administrative Agent, the Arrangers and the Banks acting in various capacities under the Credit Documents or for other customers of the Administrative Agent, any Arranger or any Bank as described in this Section 11.22.
Section 11.23      Release of Eligible Subsidiary Guarantors . Within 10 Business Days following the written request by a Responsible Officer of the Parent, the Administrative Agent, on behalf of the Banks, shall release, at the Borrower’s sole cost and expense, any Eligible Subsidiary Guarantor from its obligations under this Agreement and each other Credit Document so long as: (i) there is no Default or Event of Default existing under this Agreement either at the time of such request or at the time such Eligible Subsidiary Guarantor is released; (ii) the Parent shall have received and have in effect at such time an Investment Grade Rating; (iii) a Responsible Officer of the Parent delivers to the Administrative Agent a certificate in form and substance reasonably satisfactory to the Administrative Agent stating that such Eligible Subsidiary Guarantor requested to be released is either being released from its obligation under each Senior Financing Transaction or is not required to provide a guaranty with respect to any Senior Financing Transaction to which the Parent is a party or to which it is simultaneously (or substantially simultaneously) entering into; and (iv) no Leverage Trigger Period then exists (collectively, clauses (i), (ii), (iii) and (iv) shall be considered an “ Investment Grade Release Event ”).


-71-



Section 11.24      Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    the effects of any Bail-In Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or
(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[ Balance of page intentionally left blank ]





-72-



EXECUTED as of the date first referenced above.
BORROWER :
 
 
 
 
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
 
 
 
 

PARENT :
 
 
 
 
LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT




GUARANTORS :
 
 
 
 
LASALLE HOTEL LESSE, INC.,
an Illinois corporation
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 
GLASS HOUSES,
a Maryland real estate investment trust
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
 
 
 
 
DA ENTITY, LLC,
a Delaware limited liability company
 
 
 
 
By:
LaSalle Hotel Properties,
its member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
and
 
 
 
 
 
 
 
By:
RDA Entity, Inc.,
its member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
 
 
 
 


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



RDA ENTITY, INC.
LHO GRAFTON HOTEL LESSEE, INC.
LHO LE PARC LESSEE, INC.
LHO SANTA CRUZ ONE LESSEE, INC.
LUCKY TOWN BURBANK LESSEE, INC.
RAMROD LESSEE, INC.
LHO MISSION BAY ROSIE LESSEE, INC.
PARADISE LESSEE, INC.
GEARY DARLING LESSEE, INC.
CHAMBER MAID LESSEE, INC.
SEASIDE HOTEL LESSEE, INC.
LET IT FLHO LESSEE, INC.
LASALLE WASHINGTON ONE LESSEE, INC.
LHO LEESBURG ONE LESSEE, INC.
LHO SAN DIEGO ONE LESSEE, INC.,
LHOBERGE LESSEE, INC.
DIM SUM LESSEE, INC.
FUN TO STAY LESSEE, INC.
SERENITY NOW LESSEE, INC.
SOULDRIVER LESSEE, INC.
SF TREAT LESSEE, INC.
VIVA SOMA LESSEE, INC.
each, a Delaware corporation
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
Name:
Kenneth G. Fuller
 
Title:
Chief Financial Officer
LHO WASHINGTON HOTEL ONE, L.L.C.
LHO WASHINGTON HOTEL TWO, L.L.C.
LHO WASHINGTON HOTEL THREE, LLC
LHO WASHINGTON HOTEL FOUR, L.L.C.
LHO WASHINGTON HOTEL SIX, L.L.C.
I&G CAPITOL, LLC
LHO TOM JOAD CIRCLE DC, L.L.C.
H STREET SHUFFLE, LLC
SILVER P, LLC,
each, a Delaware limited liability company
 
 
 
 
By:
Glass Houses,
its managing member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



DC ONE LESSEE, L.L.C.
DC TWO LESSEE, L.L.C.
DC THREE LESSEE, L.L.C.
DC FOUR LESSEE, L.L.C.
DC SIX LESSEE, L.L.C.
DC I&G CAPITAL LESSEE, L.L.C.
LHO TOM JOAD CIRCLE DC LESSEE, L.L.C.
H STREET SHUFFLE LESSEE, LLC
SILVER P LESSEE, LLC,
each, a Delaware limited liability company
 
 
 
 
By:
LaSalle Washington One Lessee, Inc.,
its managing member
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
Name:
Kenneth G. Fuller
 
 
Title:
Chief Financial Officer
NYC SERENADE, L.L.C.
LHO CHICAGO RIVER, L.L.C.
LHO ALEXIS HOTEL, L.L.C.
LHO ONYX HOTEL ONE, L.L.C.
PC FESTIVUS, LLC,
LOOK FORWARD, LLC
SUNSET CITY, LLC
PDX PIONEER, LLC
HARBORSIDE, LLC
LHO BADLANDS, L.L.C.
RW NEW YORK, LLC
LHO MICHIGAN AVENUE FREEZEOUT, L.L.C.
each, a Delaware limited liability company
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
By:
LaSalle Hotel Properties
General Partner
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
Name:
Kenneth G. Fuller
 
 
 
Title:
Chief Financial Officer


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



SEASIDE HOTEL, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Seaside Hotel, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
GEARY DARLING, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Geary Darling, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
CHAMBER MAID, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Chamber Maid, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LET IT FLHO, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Let It FLHO, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P., its
managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO GRAFTON HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Grafton Hotel, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO LE PARC, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Le Parc, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LHO SANTA CRUZ HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Santa Cruz Hotel One, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LUCKY TOWN BURBANK, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
Lucky Town Burbank, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO MISSION BAY ROSIE HOTEL, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO Mission Bay Rosie Hotel, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LHO MISSION BAY HOTEL, L.P.,
a California limited partnership
 
 
 
 
 
 
By:
LHO San Diego Financing, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO SAN DIEGO FINANCING, L.L.C.,
a Delaware limited liability company
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P,
its member
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties, its
general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO HOLLYWOOD LM, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
 
By:
LHO Hollywood Financing, Inc.,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
 
 
 
 
 
 
 
By:
LHO New Orleans Financing, Inc.,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
WILD INNOCENT I, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Innocent I, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
CHIMES OF FREEDOM, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
OF Freedom I, LLC,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



WILD I, LLC
CHIMES I, LLC
OF FREEDOM I, LLC,  
each, a Delaware limited liability company
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHO ONYX ONE LESSEE, L.L.C.
NYC SERENADE LESSEE, L.L.C.
LHO CHICAGO RIVER LESSEE, L.L.C.
LHO ALEXIS LESSEE, L.L.C.
CHIMES OF FREEDOM LESSEE,   LLC
WILD INNOCENT I LESSEE, LLC
PC FESTIVUS LESSEE, LLC,
SUNSET CITY LESSEE, LLC
LOOK FORWARD LESSEE, LLC
PDX PIONEER LESSEE, LLC
LHO BADLANDS LESSEE, L.L.C.
HARBORSIDE LESSEE, LLC
RW NEW YORK, LLC
LHO MICHIGAN AVENUE FREEZEOUT LESSEE, L.L.C.
each, a Delaware limited liability company
 
 
 
 
 
 
 
By:
LaSalle Hotel Lessee, Inc.,
its managing member
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LHO SAN DIEGO HOTEL ONE, L.P.,  
a Delaware limited partnership
 
 
 
 
 
 
By:
LHO San Diego Hotel One, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
LHOBERGE, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
LHOberge, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
DON’T LOOK BACK, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
Look Forward, LLC,
its manager
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



DON’T LOOK BACK LESSEE, LLC,
a Delaware limited liability company
 
 
 
 
 
 
By:
Look Forward Lessee, LLC,
its managing member
 
 
 
 
 
 
 
By:
LaSalle Hotel Lessee, Inc.,
its managing member
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



DIM SUM, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Dim Sum, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
FUN TO STAY, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
FUN TO STAY, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
SERENITY NOW, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
SERENITY NOW, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



SOULDRIVER, L.P.
a Delaware limited partnership
 
 
 
 
 
 
By:
Souldriver, L.L.C.,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
VIVA SOMA LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
Viva Soma, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer
SF TREAT, LP,
a Delaware limited partnership
 
 
 
 
 
 
By:
SF Treat, LLC,
its general partner
 
 
 
 
 
 
 
By:
LaSalle Hotel Operating Partnership, L.P.,
its managing member
 
 
 
 
 
 
 
 
By:
LaSalle Hotel Properties,
its general partner
 
 
 
 
 
 
 
 
By:
/s/ Kenneth G. Fuller
 
 
 
 
Name:
Kenneth G. Fuller
 
 
 
 
Title:
Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



ADMINISTRATIVE AGENT AND BANK :

CITIBANK, N.A., as Administrative Agent and a Bank
By:     /s/ Christopher J. Albano            
    Name: Christopher J. Albano    
Title: Authorized Signatory

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT




BANKS:

BANK OF MONTREAL,
as a Bank

By:     /s/ Gwendolyn Gatz            
    Name: Gwendolyn Gatz    
Title: Vice President


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT




BANK OF AMERICA, N.A.,
as a Bank

By:     /s/ Will T. Bowers, Jr.        
    Name:     Will T. Bowers, Jr.    
Title: Senior Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT





PNC BANK, NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Katie Chowdhry        
    Name:     Katie Chowdhry    
Title: Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



U.S. BANK NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Lori Y. Jensen                
    Name:     Lori Y. Jensen    
Title: Senior Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



SUMITOMO MITSUI BANKING CORPORATION,
as a Bank

By:     /s/ William G. Karl            
    Name:     William G. Karl    
Title: Executive Officer


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



TD BANK, N.A.,
as a Bank

By:     /s/ John Howell                
    Name:     John Howell    
Title: Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



REGIONS BANK,
as a Bank

By:     /s/ T. Barrett Vawter            
    Name:     T. Barrett Vawter
Title: Vice President


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Bank

By:     /s/ Mark F. Monahan            
    Name:     Mark F. Monahan    
Title: Senior Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



BRANCH BANKING AND TRUST COMPANY,
as a Bank

By:     /s/ Steve Whitcomb        
    Name: Steve Whitcomb    
Title: Senior Vice President



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



LAND BANK OF TAIWAN, NEW YORK BRANCH, as a Bank

By:     /s/ Arthur Chen                
    Name:     Arthur Chen    
Title: General Manager

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



RAYMOND JAMES BANK, N.A.,
as an Issuing Bank and a Bank

By:     /s/ Alexander L. Rody        
    Name:     Alexander L. Rody    
Title: Senior Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as a Bank

By:     /s/ Jason Chreln                     
    Name:     Jason Chreln        
Title: Managing Director

By:     /s/ Joseph A. Asciolla            
    Name:     Joseph A. Asciolla    
Title: Managing Director

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



BARCLAYS BANK PLC,
as a Bank

By:     /s/ Christopher M. Aitkin        
    Name:     Christopher M. Aitkin    
Title: Assistant Vice President

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT



TAIWAN COOPERATIVE BANK, LTD., acting through its Los Angeles branch,
as a Bank

By:     /s/ Ming-Chih Chen            
    Name: Ming-Chih Chen    
Title: VP & General Manager




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED TERM LOAN AGREEMENT

        

EXHIBIT A

FORM OF NOTE

$     __________, 20__

For value received, the undersigned LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “ Borrower ”), hereby promises to pay to the order of ______________________ (the “Bank” ) the principal amount of _________________ and ____/100 Dollars ($ ) or, if less, the aggregate outstanding principal amount of each Advance (as defined in the Term Loan Agreement referred to below) made by the Bank to the Borrower, together with interest on the unpaid principal amount of each such Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and at such times, as are specified in the Term Loan Agreement.

This Note is one of the Notes referred to in, and is entitled to the benefits of, and is subject to the terms of, the Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “ Term Loan Agreement ”) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used in this Note and not otherwise defined in this Note have the meanings assigned to such terms in the Term Loan Agreement. The Term Loan Agreement, among other things, (a) provides for the making of Advances by the Bank to the Borrower, from time to time, in an aggregate amount not to exceed at any time outstanding the Dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Note and (b) contains provisions for acceleration of the maturity of this Note upon the happening of certain events stated in the Term Loan Agreement and for prepayments of principal prior to the maturity of this Note upon the terms and conditions specified in the Term Loan Agreement.

Both principal and interest are payable in lawful money of the United States of America to the Administrative Agent at Citibank, N.A., 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Bank Loan Syndication Department (or at such other location or address as may be specified by the Administrative Agent to the Borrower) in same day funds. The Bank shall record all Advances and payments of principal made under this Note, but no failure of the Bank to make such recordings shall affect the Borrower’s repayment obligations under this Note.

Except as specifically provided in the Term Loan Agreement, the Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and any other notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder of this Note shall operate as a waiver of such rights.

This Note shall be governed by, and construed and enforced in accordance with, the laws of the state of New York.


[ Balance of page intentionally left blank ]


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
        NOTE



BORROWER :
 
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership
 
By:
LaSalle Hotel Properties,
 
its general partner
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
        NOTE


EXHIBIT B

FORM OF ASSIGNMENT AND ACCEPTANCE

Dated __________, 20__

Reference is made to the Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Term Loan Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms not otherwise defined in this Assignment and Acceptance shall have the meanings assigned to them in the Term Loan Agreement.

Pursuant to the terms of the Term Loan Agreement, _______________ ( “Assignor” ) wishes to assign and delegate ___% of its rights and obligations under the Term Loan Agreement and _______________ ( “Assignee” ) desires to assume and accept such rights and obligations. Therefore, Assignor, Assignee, and the Administrative Agent agree as follows:
    
1.    As of the Effective Date (as defined below), Assignor hereby sells and assigns and delegates to Assignee, and Assignee hereby purchases and assumes from Assignor, without recourse to Assignor and without representation or warranty except for the representations and warranties specifically set forth in clauses (i) , (ii) , and (iii) of Section 2 hereof, a ____% interest in and to all of Assignor’s rights and obligations under the Term Loan Agreement in connection with its Commitment, including, without limitation, such percentage interest in Assignor’s Commitment and the Advances owing to Assignor and any Note held by Assignor.
    
2.    Assignor (i) represents and warrants that, prior to executing this Assignment and Acceptance, its Commitment is $_____________ and the aggregate outstanding principal amount of Advances owed to it by the Borrower is $_____________; (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with the Term Loan Agreement or any other Credit Document or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Term Loan Agreement or any other Credit Document or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any Guarantor or the performance or observance by the Borrower or any Guarantor of any of its obligations under the Term Loan Agreement or any other Credit Document or any other instrument or document furnished pursuant thereto; and (v) attaches the Note referred to in Section 1 above and requests that the Administrative Agent exchange such Note for a new Note dated ___________, 20__ in the principal amount of $_____________, payable to the order of Assignee, [and a new Note dated ___________, 20__ in the principal amount of $_____________, payable to the order of Assignor].

3.    Assignee (i) confirms that it has received a copy of the Term Loan Agreement, together with copies of the financial statements referred to in Section 4.06 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, Assignor, or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Term Loan Agreement or any other Credit Document; (iii) appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers under the Term Loan Agreement and any other Credit Document as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Term Loan Agreement or any other Credit Document are required to be performed by it as a Bank; (v) specifies as its Domestic Lending Office (and address for notices) and LIBOR Lending Office the offices set forth beneath its name on the signature pages hereof; (vi) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to Assignee’s status for purposes of

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
        ASSIGNMENT AND ACCEPTANCE AGREEMENT


determining exemption from United States withholding taxes with respect to all payments to be made to Assignee under the Term Loan Agreement and its Note or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty, and (vii) represents that it is an Eligible Assignee.
    
4.    The effective date for this Assignment and Acceptance shall be _______________ (the “Effective Date” ) and following the execution of this Assignment and Acceptance, the Administrative Agent will record it in the Register.
    
5.    Upon such recording, and as of the Effective Date, (i) Assignee shall be a party to the Term Loan Agreement for all purposes, and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Bank thereunder and (ii) Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights (other than rights against the Borrower pursuant to Sections 2.09, 2.11(c) and 11.07 of the Term Loan Agreement, which shall survive this assignment) and be released from its obligations under the Term Loan Agreement.
    
6.    Upon such recording, from and after the Effective Date, the Administrative Agent shall make all payments under the Term Loan Agreement and the Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, and commitment fees) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments under the Term Loan Agreement and the Notes for periods prior to the Effective Date directly between themselves.
    
7.    This Assignment and Acceptance shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.
    
8.    This Assignment and Acceptance may be executed in multiple counterparts, each of which shall be an original, but all of which shall together constitute one Assignment and Acceptance.

[ Balance of page intentionally left blank ]


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
        ASSIGNMENT AND ACCEPTANCE AGREEMENT



The parties hereto have caused this Assignment and Acceptance to be duly executed as of the date first above written.

[ASSIGNOR]
 
By:
 
 
Name:
 
Title:


CITIBANK, N.A., as Administrative Agent
 
 
By:
 
 
Name:
 
Title:


[ASSIGNEE]
 
By:
 
 
Name:
 
Title:

Domestic Lending Office:
 
Address:
 
 
 
Attention:
 
Telecopy:
 
Telephone:
 


LIBOR Lending Office:
 
Address:
 
 
 
Attention:
 
Telecopy:
 
Telephone:
 


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
        ASSIGNMENT AND ACCEPTANCE AGREEMENT


EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

This Compliance Certificate is executed this ___ day of _________, 20__, for the period ended _______ and is prepared pursuant to that certain Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017, as the same may be amended or modified from time to time (the “Agreement” ), among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto. Capitalized terms used herein but not otherwise defined herein shall have the meanings specified by the Agreement.

1.    Representations, Covenants, Defaults : Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the date of execution of this Compliance Certificate, as follows:

1.1.     Covenants . All covenants of Borrower set forth in Articles V and VI of the Agreement required to be performed as of the date hereof have been performed and maintained in all material respects, and such Covenants continue to be performed and maintained as of the execution date of this certificate, except as follows:
_________________________________ [specify]

1.2.     Representations and Warranties . All representations and warranties of Borrower set forth in Article IV of the Agreement are true and correct in all material respects as of the execution date of this certificate, except as follows:
_________________________________ [specify]

1.3.     Event of Default . There exists no Event of Default except as follows:
_________________________________ [specify]

2.    Operating Covenants . Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the calendar quarter ending ____________, ___, that the amounts and calculations made hereunder pursuant to Article VII of the Agreement are true and correct.

2.1.     Fixed Charge Coverage Ratio (Section 7.01 of the Agreement).
Minimum Requirement – 1.50x

(a)
Corporate EBITDA:    $____________
(b)
Aggregate FF&E Reserves:    $____________
(c)
(a) minus (b) above:    $____________
(d)
Fixed Charges:    $____________
(e)
Ratio of (c) to (d) above:    _____________

2.2.     Maintenance of Net Worth (Section 7.02 of the Agreement).

(a)
Parent’s Net Worth (accordance with GAAP):    $____________
(b)
minority interest of Parent (in accordance with GAAP)    $____________
(c)
Sum of (a) and (b) above:    $____________

    
2.3.
The Minimum Tangible Net Worth for the Parent, as of the Rolling Period ending on __________, ____, is as set forth in (c) below, based upon the sum of (a) and (b):
        
(a)
$1,931,251,500     $1,931,251,500

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
COMPLIANCE CERTIFICATE


(b)
75% of net proceeds from any offering of Stock
or Stock Equivalents after September 30, 2016:    $____________
(c)
The sum of (a) and (b) above:    $____________

2.4.     Limitations on Total Liabilities of Parent (Section 7.03 of the Agreement).

Maximum Requirement – 7.25 to 1.00

(a)
the Parent’s Total Liabilities:    $____________

(b)
Adjusted Corporate EBITDA, which is equal to
(i) plus or minus (ii), as appropriate:
(i)
Corporate EBITDA:    $____________
(ii)
Adjustments for Hotel Properties acquired
or disposed of:    $____________
(iii)
Adjusted Corporate EBITDA:    $____________

(c)
Leverage Ratio: total of (a) divided by (b)(iii) above:    $____________

2.5.     Limitations on Unsecured Indebtedness of Parent
(Section 7.04 of the Agreement) .
Maximum Requirement – 60%, provided such ratio may be increased
to 65%

(a)
Parent’s Unsecured Indebtedness:    $____________
(b)
Liquid Investments:    $____________
(c)
Sum of Asset Values of all Unencumbered Properties:    $____________
(d)
Sum of Lines (b) and (c) (Total Unencumbered Asset Value):    $____________
(e)
Ratio of (a) to (d):    _____________

2.6.     Limitations on Secured Indebtedness of Parent
(Section 7.05 of the Agreement) .
Maximum Requirement – 45%

(a)
Parent’s Secured Indebtedness:    $____________
(b)
Consolidated Total Book Value:    $____________
(c)
Ratio of (a) to (b):    _____________




2.7.     Limitations on Secured Recourse Indebtedness of Parent and its Subsidiaries
(Section 7.06 of the Agreement).
Maximum Requirement - 10%

(a)    Secured Recourse Indebtedness of Parent and Subsidiaries:     $________
(b)    Consolidated Total Book Value:                 $_______
(c)     Ratio of (a) to (b):                     ____________

3.    Other Covenants . Borrower hereby certifies to the Administrative Agent and the Banks, effective as of the Rolling Period ending _________, 20___, that the following amounts and calculations made pursuant to the Agreement are true and correct:

3.1.      Applicable Margin (Article I of the Agreement)

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
COMPLIANCE CERTIFICATE



Pursuant to Article I of the Agreement, [the Status applicable to the loan facility is ______________, based upon a Leverage Ratio of ____________ (as calculated above)][the Debt Rating of the Parent is __________]. Based on the foregoing, the Applicable Margin for each subsequent Advance is as follows:

Base Rate Advances:    __________%
LIBOR Advances:    __________%

3.2.     Leverage Trigger

As calculated above, the Leverage Ratio is ___________.  As reported in the Compliance Certificate previously delivered, the Leverage Ratio was ____________.

3.3         Unencumbered Properties (Article I of the Agreement)

    A list of all Unencumbered Properties and the Asset Values therefor, is set forth on Schedule 1 to Compliance Certificate attached hereto.

[ Balance of page intentionally left blank ]


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
COMPLIANCE CERTIFICATE



EXECUTED as of the date first referenced above.

Borrower:
 
LASALLE HOTEL OEPRATING PARTNERSHIP, L.P., a Delaware limited partnership
 
By:
LaSalle Hotel Properties, its general partner
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
COMPLIANCE CERTIFICATE



SCHEDULE 1 TO COMPLIANCE CERTIFICATE

LIST OF UNENCUMBERED PROPERTIES AND THEIR ASSET VALUES

Unencumbered Property                          Asset Value



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
COMPLIANCE CERTIFICATE



EXHIBIT D

FORM OF AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT

This Amended & Restated Environmental Indemnification Agreement (this “Agreement” ) is made and entered into effective for all purposes as of January 10, 2017, by the parties signatory hereto or to an Accession Agreement (as hereinafter defined) (collectively, “Indemnitor” , whether one or more), to and for the benefit of Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ), for the benefit of the banks and other lenders named in the Term Loan Agreement herein described (collectively, the “Banks” ).

INTRODUCTION


WHEREAS, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Administrative Agent, the Banks party thereto and the other parties from time to time party thereto entered into that certain Senior Unsecured Term Loan Agreement dated as of November 5, 2015 (as amended, the “ Existing Agreement ”);

WHEREAS, the parties have agreed to amend and restate the Existing Agreement pursuant to that certain Amended & Restated Senior Unsecured Term Loan Agreement, dated as of the date hereof, by and between the Borrower, the Parent, the Guarantors party thereto, the Administrative Agent, the Banks party thereto and the other parties from time to time party thereto (as the same may be amended or modified from time to time, being referred to herein as the “ Term Loan Agreement ”);

WHEREAS, the Borrower and Subsidiaries of the Borrower now or hereafter will own certain Hotel Properties which include without limitation the Existing Properties, the Future Properties, the Permitted Non-Unencumbered Properties and the properties owned by the Permitted Other Subsidiaries (said properties together with all property owned by any participating lessees in connection with such Hotel Properties, all rights and appurtenances to such Hotel Properties and all improvements presently located or hereafter constructed on such Hotel Properties are hereinafter collectively called the “Properties” , and each a “Property” );

WHEREAS, the Borrower is the principal financing entity for capital requirements of its Subsidiaries, and from time to time the Borrower has made and will continue to make capital contributions and advances to its Subsidiaries, including the Subsidiaries which are parties hereto. Other than the Parent, each Indemnitor is a direct or indirect subsidiary of the Borrower. Each Indemnitor will derive substantial direct and indirect benefit from the transactions contemplated by the Term Loan Agreement; and

WHEREAS, as a condition to extending credit to the Borrower under the Term Loan Agreement, the Banks have required, among other things, that the Indemnitor execute and deliver this Agreement, which Agreement shall amend, restate and replace, in its entirety, that certain Environmental Indemnification Agreement, dated as of November 5, 2015, made by the Indemnitor (as defined therein) in favor of the Administrative Agent (as defined therein) (as the same may have been amended restated or otherwise modified from time to time prior to the date hereof, the “ Original Agreement ”).

AGREEMENT

NOW, THEREFORE, Indemnitor, as an inducement to the Banks to make the Advances, hereby covenants and agrees to and for the benefit of the Banks as follows:

1.     Defined Terms . All terms used in this Agreement, but not defined herein, shall have the meaning given such terms in the Term Loan Agreement.


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


2.     Hazardous Material . As used in this Agreement, the term “ Hazardous Materials ” shall mean any flammable explosives, radioactive materials, hazardous wastes, hazardous materials, hazardous or toxic substances, or related materials as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. 9601 et. seq. ), the Hazardous Materials Transportation Act, as amended (49 U.S.C. 1801 et seq. ), the Resource Conservation and Recovery Act, as amended (42 U.S.C. 6901 et seq. ), and in the regulations adopted and publications promulgated pursuant thereto, and all friable asbestos, petroleum derivatives, polychlorinated biphenyls, and materials defined as hazardous materials under any federal, state or local laws, ordinances, codes, rules, orders, regulations or policies governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal thereof (collectively, “Environmental Laws” ).

3.     Representation . Except as disclosed in writing to the Administrative Agent, to the knowledge of Borrower, none of the present or previously owned or operated Property of the Borrower or of any of its present or former Subsidiaries, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state or local analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws which could reasonably be expected to cause a Material Adverse Change; (ii) is subject to a Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by the Borrower or any of its Subsidiaries, wherever located; (iii) has been the site of any Release, use or storage of Hazardous Substances or Hazardous Wastes from present or past operations except for Permitted Hazardous Substances, which Permitted Hazardous Substances have not caused at the site or at any third‑party site any condition that has resulted in or could reasonably be expected to result in the need for Response or (iv) none of the Improvements are constructed on land designated by any Governmental Authority having land use jurisdiction as wetlands.

4.     Covenant . Indemnitor covenants and agrees not to cause or permit the presence, use, generation, release, discharge, storage, disposal or transportation of any Hazardous Materials on, under, in, about, to or from any of the Properties except for Permitted Hazardous Substances.

5.     Indemnification . Indemnitor shall exonerate, indemnify, pay and protect, defend (with counsel approved pursuant to the Term Loan Agreement) and save the Administrative Agent, the Banks, and their respective directors, trustees, beneficiaries, officers, shareholders, employees and agents of the Banks (collectively, the “Indemnified Parties” ), harmless from and against any claims (including, without limitation, third party claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, damages, punitive damages, penalties, fines, costs, taxes, assessments, liabilities (including, without limitation, sums paid in settlements of claims), interest or losses, including reasonable attorneys’ fees and expenses (including, without limitation, any such reasonable fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), consultant fees, and expert fees, together with all other reasonable costs and expenses of any kind or nature (collectively, “Costs” ) that arise directly or indirectly in connection with the presence, suspected presence, release or suspected release of any Hazardous Materials in or into the air, soil, ground water, surface water or improvements at, on, about, under or within any of the Properties, or any portion thereof, or elsewhere in connection with the transportation of Hazardous Materials to or from any of the Properties (any such release being referred to herein as a “Release” ); provided, however, that Indemnitor shall not be so liable for any Costs arising because of the gross negligence or willful misconduct of an Indemnified Party or Costs arising because of a Release from or on a Property after the Administrative Agent or the Administrative Agent’s nominee acquires title to such Property. INDEMNITOR’S OBLIGATION TO SO INDEMNIFY THE INDEMNIFIED PARTIES SHALL INCLUDE INDEMNIFICATION FOR ANY OF SUCH MATTERS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES. The indemnification provided in this Section 5 shall specifically apply to and include claims or actions brought by or on behalf of tenants or employees of Indemnitor; Indemnitor hereby expressly waives (with respect to any claims of the Indemnified Parties arising under this Agreement) any immunity to which Indemnitor may otherwise be entitled under any industrial or worker’s compensation laws. In the event any of the Indemnified Parties shall suffer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


or incur any such Costs, Indemnitor shall pay to the Administrative Agent for the benefit of the Indemnified Party the total of all such Costs suffered or incurred by such Indemnified Party within ten (10) days after demand therefor, such payment to be disbursed by the Administrative Agent in accordance with the Term Loan Agreement. Without limiting the generality of the foregoing, the indemnification provided by this Section 5 shall specifically cover Costs, including, without limitation, capital, operating and maintenance costs, incurred in connection with any investigation or monitoring of site conditions, any clean-up, containment, remedial, removal or restoration work required or performed by any federal, state or local governmental agency or political subdivision ( “Governmental Agency” ) or performed by any non-governmental entity or person as required or requested, by any Governmental Agency because of the presence, suspected presence, release or suspected release of any Hazardous Materials in or into the air, soil, groundwater, surface water or improvements at, on, under or within any of the Properties (or any portion thereof), or elsewhere in connection with the transportation of Hazardous Materials to or from any of the Properties, and any claims of third parties for loss or damage due to such Hazardous Materials.

6.     Remedial Work . In the event any investigation or monitoring of site conditions or any clean-up, containment, restoration, removal or other remedial work ( “Remedial Work” ) is required (a) under any Environmental Law, (b) by any judicial, arbitral or administrative order, (c) in order to comply with any agreements affecting any of the Properties, or (d) to maintain any of the Properties in a standard of environmental condition which prevents the release or generation of any Hazardous Materials except for Permitted Hazardous Substances, Indemnitor shall perform or cause to be performed such Remedial Work; provided , however , that Indemnitor may withhold commencement of such Remedial Work pending resolution of any good faith contest regarding the application, interpretation or validity of any law, regulation, order or agreement, subject to the requirements of Section 7 below. All Remedial Work shall be conducted (i) in a diligent and timely fashion by a licensed environmental engineer, (ii) pursuant to a detailed written plan for the Remedial Work approved by any Governmental Agency with a legal or contractual right to such approval, (iii) with such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then customarily maintained with respect to such activities and (iv) only following receipt of all required permits, licenses or approvals. In addition, Indemnitor shall submit to the Banks promptly upon receipt or preparation, copies of any and all reports, studies, analyses, correspondence, governmental comments or approvals, proposed removal or other Remedial Work contracts and similar information prepared or received by Indemnitor in connection with any Remedial Work or Hazardous Materials relating to any of the Properties. All costs and expenses of such Remedial Work shall be paid by Indemnitor, including, without limitation, the charges of the Remedial Work contractors and the consulting environmental engineer, any taxes or penalties assessed in connection with the Remedial Work and the Banks’ reasonable fees and costs incurred in connection with monitoring or review of such Remedial Work. In the event Indemnitor should fail to commence or cause to be commenced such Remedial Work, in a timely fashion, or fail diligently to prosecute to completion, such Remedial Work, the Administrative Agent following consent of the Required Lenders (following thirty (30) days written notice to Indemnitor) may, but shall not be required to, cause such Remedial Work to be performed, and all costs and expenses thereof, or incurred in connection therewith shall be Costs within the meaning of Section 5 above. All such Costs shall be due and payable to the Administrative Agent by Indemnitor upon thirty (30) days after demand therefor, such payments to be disbursed by the Administrative Agent in accordance with the Term Loan Agreement.

7.     Permitted Contests . Notwithstanding any provision of this Agreement to the contrary, Indemnitor may contest by appropriate action any Remedial Work requirement imposed by any Governmental Agency or similar agency provided that (a) Indemnitor has given the Banks written notice that Indemnitor is contesting or shall contest and Indemnitor does in fact contest the application, interpretation or validity of the law, regulation, order or agreement pertaining to the Remedial Work by appropriate legal or administrative proceedings conducted in good faith and with due diligence and dispatch, (b) such contest shall not subject any of the Indemnified Parties nor any assignee of all or any portion of the Banks’ interest in the Advances nor any of the Properties to civil or criminal liability and does not jeopardize any such party’s lien upon or interest in any of the Properties and (c) if the estimated cost of the Remedial Work is greater than $1,000,000, Indemnitor shall give such security or assurances as may be reasonably required by the Banks as determined pursuant to the Term Loan Agreement to ensure ultimate compliance with all legal or contractual requirements

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


pertaining to the Remedial Work (and payment of all costs, expenses, interest and penalties in connection therewith) and to prevent any sale, forfeiture or loss by reason of nonpayment or non-compliance.

8.     Reports and Claims . Indemnitor shall deliver to the Banks copies of any reports, analyses, correspondence, notices, licenses, approvals, orders or other written materials relating to the environmental condition of any of the Properties promptly upon receipt, completion or delivery thereof. Indemnitor shall give notice to the Banks of any claim, action, administrative proceeding (including, without limitation, informal proceedings) or other demand by any governmental agency or other third party involving Costs or Remedial Action at the time such claim or other demand first becomes known to Indemnitor. Receipt of any such notice shall not be deemed to create any obligation on the Banks to defend or otherwise respond to any claim or demand. All notices, approvals, consents, requests and demands upon the respective parties hereto shall be in writing, including telegraphic communication and delivered or teletransmitted to the Administrative Agent, as set forth in the Term Loan Agreement and to each Indemnitor, at the address set forth beneath such Indemnitor’s signature or in the Accession Agreement executed by such Indemnitor, or to such other address as shall be designated by any Indemnitor or the Administrative Agent in written notice to the other parties. All such notices and other communications shall be effective when delivered or teletransmitted to the above addresses.

9.     Banks as Owner . If for any reason, the Administrative Agent or any of the Banks (or any successor or assign of such parties) becomes the fee owner of any of the Properties and any claim, action, notice, administrative proceeding (including, without limitation, informal proceedings) or other demand is made by any governmental agency or other third party which implicate Costs or Remedial Work, Indemnitor shall cooperate with such party in any defense or other appropriate response to any such claim or other demand; provided, however, that Indemnitor shall not be so liable for any Costs arising because of the gross negligence or willful misconduct of an Indemnified Party. Indemnitor’s duty to cooperate and right to participate in the defense or response to any such claim or demand shall not be deemed to limit or otherwise modify Indemnitor’s obligations under this Agreement. Any party subject to a claim or other proceeding referenced in the first sentence of this Section 9 shall give notice to Indemnitor of any claim or demand governed by this Section 9 at the time such claim or other demand first becomes known to such party.

10.     Subrogation of Indemnity Rights . If Indemnitor fails to fully perform its obligations under Sections 5 and 6 above, the Indemnified Parties shall be subrogated to any rights or claims Indemnitor may have against any present, future or former owners, tenants or other occupants or users of any of the Properties, any portion thereof or any adjacent or proximate properties, relating to the recovery of Costs or the performance of Remedial Work.

11.     Assignment by Administrative Agent and Banks . No consent by Indemnitor shall be required for any assignment or reassignment of the rights of the Administrative Agent or the Banks under this Agreement to any successor of such party or a purchaser of the Advances or any interest in or portion of the Advances including participation interests in accordance with the terms of the Term Loan Agreement.

12.     Merger, Consolidation or Sale of Assets . In the event Indemnitor is dissolved, liquidated or terminated or all or substantially all the assets of Indemnitor are sold or otherwise transferred to one or more persons or other entities, the surviving entity or transferee of assets, as the case may be, (i) shall be formed and existing under the laws of a state, (ii) shall deliver to the Banks an acknowledged instrument in recordable form assuming all obligations, covenants and responsibilities of Indemnitor under this Agreement.

13.     Independent Obligations; Survival . The obligations of Indemnitor under this Agreement shall survive the consummation of the credit transaction described above and the repayment of the Advances. The obligations of Indemnitor under this Agreement are separate and distinct from the obligations of Indemnitor under the Credit Documents. This Agreement may be enforced by the Administrative Agent and/or the Banks without regard to or affecting any rights and remedies the Administrative Agent and/or the Banks may have against Indemnitor under the Credit Documents and without regard to any limitations on the Administrative Agent’s or the Banks’ recourse for recovery of the Advances as may be provided in the Credit Documents.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


Enforcement of this Agreement is not and shall not be deemed to constitute an action for recovery of the indebtedness of the Advances.

14.     Default Interest . In addition to all other rights and remedies of the Administrative Agent and/or the Banks against Indemnitor as provided herein, or under applicable law, Indemnitor shall pay to the Administrative Agent, immediately upon demand therefor, Default Interest (as defined below) on any Costs and other payments required to be paid by Indemnitor to the Banks under this Agreement which are not paid within ten (10) days after demand therefor, such payments to be disbursed by the Administrative Agent in accordance with the Term Loan Agreement. Default Interest shall be paid by Indemnitor from the date such payment becomes delinquent through and including the date of payment of such delinquent sums. “Default Interest” shall mean a per annum interest rate equal to three percent (3%) above the Adjusted Base Rate or reference rate for the then current calendar month, as of the first day of such calendar month, which is publicly announced from time to time by the Administrative Agent.

15.     Contribution . As a result of the transactions contemplated by the Term Loan Agreement, each of the Indemnitors will benefit, directly and indirectly, from the Obligations and in consideration thereof desire to enter into a contribution agreement among themselves as set forth in this Section 15 to allocate such benefits among themselves and to provide a fair and equitable arrangement to make contributions in the event any payment is made by any Indemnitor hereunder to the Administrative Agent or the Banks (such payment being referred to herein as a “Contribution,” and for purposes of this Agreement, includes any exercise of recourse by the Administrative Agent against any Property of a Contributor and application of proceeds of the sale of such Property in satisfaction of such Indemnitor’s obligations under this Agreement). The Indemnitors hereby agree as follows:

15.1.     Calculation of Contribution . In order to provide for just and equitable contribution among the Indemnitors in the event any Contribution is made by an Indemnitor (a “Funding Indemnitor” ), such Funding Indemnitor shall be entitled to a contribution from certain other Indemnitors for all payments, damages and expenses incurred by that Funding Indemnitor in discharging any of the obligations under this Agreement (the “Obligations” ), in the manner and to the extent set forth in this Section 15 . The amount of any Contribution under this Agreement shall be equal to the payment made by the Funding Indemnitor to the Administrative Agent or any other beneficiary pursuant to this Agreement and shall be determined as of the date on which such payment is made.

15.2.     Benefit Amount Defined . For purposes of this Agreement, the “ Benefit Amount ” of any Indemnitor as of any date of determination shall be the net value of the benefits to such Indemnitor and all of its Subsidiaries (including any Subsidiaries which may be Indemnitors) from extensions of credit made by the Banks to the Borrower under the Term Loan Agreement; provided , however , that in determining the contribution liability of any Indemnitor which is a Subsidiary to its direct or indirect parent corporation or of any Indemnitor to its direct or indirect Subsidiary, the Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the Benefit Amount of the parent corporation. Such benefits shall include benefits of funds constituting proceeds of Advances made to the Borrower by the Banks which are in turn advanced or contributed by the Borrower to such Indemnitor or its Subsidiaries (collectively, the “Benefits” ). In the case of any proceeds of Advances or Benefits advanced or contributed to a Person (an “Owned Entity” ) any of the equity interests of which are owned directly or indirectly by an Indemnitor, the Benefit Amount of an Indemnitor with respect thereto shall be that portion of the net value of the benefits attributable to Advances or Benefits equal to the direct or indirect percentage ownership of such Indemnitor in its Owned Entity.

15.3.     Contribution Obligation . Each Indemnitor shall be liable to a Funding Indemnitor in an amount equal to the greater of (A) the (i) ratio of the Benefit Amount of such Indemnitor to the total amount of Obligations, multiplied by (ii) the amount of Obligations paid by such Funding Indemnitor and (B) 95% of the excess of the fair saleable value of the property of such Indemnitor

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


over the total liabilities of such Indemnitor (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Indemnitor is deemed made for purposes of this Agreement (giving effect to all payments made by other Funding Indemnitors as of such date in a manner to maximize the amount of such contributions).

15.4.     Allocation . In the event that at any time there exists more than one Funding Indemnitor with respect to any Contribution (in any such case, the “Applicable Contribution” ), then payment from other Indemnitors pursuant to this Agreement shall be allocated among such Funding Indemnitors in proportion to the total amount of the Contribution made for or on account of the Borrower by each such Funding Indemnitor pursuant to the Applicable Contribution. In the event that at any time any Indemnitor pays an amount under this Agreement in excess of the amount calculated pursuant to clause (A) of Subsection 15.3 above, that Indemnitor shall be deemed to be a Funding Indemnitor to the extent of such excess and shall be entitled to contribution from the other Indemnitors in accordance with the provisions of this Subsection 15.4 .

15.5.     Subsidiary Payment . The amount of contribution payable under this Section 15 by any Indemnitor shall be reduced by the amount of any contribution paid hereunder by a Subsidiary of such Indemnitor.

15.6.     Equitable Allocation . If as a result of any reorganization, recapitalization, or other corporate change in the Borrower or any of its Subsidiaries, or as a result of any amendment, waiver or modification of the terms and conditions of other Sections of this Agreement or the Obligations, or for any other reason, the contributions under this Section 15 become inequitable as among the Indemnitors, the Indemnitors shall promptly modify and amend this Section 15 to provide for an equitable allocation of contributions. Any of the foregoing modifications and amendments shall be in writing and signed by all Indemnitors.

15.7.     Asset of Party to Which Contribution is Owing . The Indemnitors acknowledge that the right to contribution hereunder shall constitute an asset in favor of the Indemnitor to which such contribution is owing.

15.8.     Subordination . No payments payable by an Indemnitor pursuant to the terms of this Section 15 shall be paid until all amounts then due and payable by the Borrower to the Administrative Agent or any Bank, pursuant to the terms of the Credit Documents, are paid in full in cash. Nothing contained in this Section 15 shall affect the obligations of any Indemnitor to the Administrative Agent or any Bank under the Term Loan Agreement or any other Credit Documents.
    
16.     Miscellaneous . If there shall be more than one Indemnitor hereunder, or pursuant to any other indemnification of Banks relating to Hazardous Materials arising out of or in connection with the Advances ( “Other Indemnitor” ), each Indemnitor and Other Indemnitor agrees that (a) the obligations of the Indemnitor hereunder, and each Other Indemnitor, are joint and several, (b) a release of any one or more Indemnitors or Other Indemnitors or any limitation of this Agreement in favor of or for the benefit of one or more Indemnitors or Other Indemnitors shall not in any way be deemed a release of or limitation in favor of or for the benefit of any other Indemnitor or Other Indemnitor and (c) a separate action hereunder may be brought and prosecuted against any or all Indemnitors or Other Indemnitors. If any term of this Agreement or any application thereof shall be invalid, illegal or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. No delay or omission in exercising any right hereunder shall operate as a waiver of such right or any other right. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Indemnitor, the Administrative Agent and the Banks, and their respective successors and assigns, including (without limitation) any assignee or purchaser of all or any portion of any of the Banks’ interest in (i) the Advances, (ii) the Credit Documents, or (iii) any of the Properties.
    

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


17.     GOVERNING LAW . ANY DISPUTE BETWEEN THE INDEMNITOR OR ANY INDEMNIFIED PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
    
18.     CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL . (A)  EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION 18 , EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
    
(B)     OTHER JURISDICTIONS . THE INDEMNITOR AGREES THAT ANY INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO PROCEED AGAINST THE INDEMNITOR OR ANY OF THE PROPERTIES IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE INDEMNITOR OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE INDEMNITOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE INDEMNITOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B) .
    
(C)     SERVICE OF PROCESS . THE INDEMNITOR WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY ANY INDEMNIFIED PARTY BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE INDEMNITOR ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY INDEMNIFIED PARTY TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE INDEMNITOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
    
(D)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
    
(E)     ADVICE OF COUNSEL . EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 18 , WITH ITS COUNSEL.
    
19.     Amendments/Accession Agreement . No amendment or waiver of any provision of this Agreement nor consent to any departure by any Indemnitor therefrom shall be effective unless the same shall be in writing and signed by the Administrative Agent; provided , however , that any amendment or waiver releasing any Indemnitor from any liability hereunder shall be signed by the Required Lenders; and provided further that any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Notwithstanding the foregoing, in the event that any Subsidiary or Affiliate of the Borrower hereafter is required in accordance with the terms of the Term Loan Agreement or otherwise agrees to become an Indemnitor under this Agreement, then such Subsidiary or Affiliate may become a party to this Agreement by executing an Accession Agreement ( “Accession Agreement” ) in the form attached hereto as Annex 1 , and each Indemnitor and the Administrative Agent hereby agrees that upon such Subsidiary’s or Affiliate’s execution of such Accession Agreement, this Agreement shall be deemed to have been amended to make such Person an Indemnitor hereunder for all purposes and a party hereto and no signature is required on behalf of the other Indemnitors or the Administrative Agent to make such an amendment to this Agreement effective.

20.    This Agreement amends, restates and supersedes the Original Agreement in its entirety.

[Balance of page intentionally left blank]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


IN WITNESS WHEREOF, Indemnitor has caused this Agreement to be executed as of the day and year first written above.

INDEMNITORS :
 
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
 
By:
LaSalle Hotel Properties,
 
its general partner
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 



LASALLE HOTEL PROPERTIES
a Maryland real estate investment trust
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

[SIGNATURE BLOCKS TO BE INSERTED]




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT



ANNEX 1
TO ENVIRONMENTAL INDEMNIFICATION AGREEMENT

ACCESSION AGREEMENT

_______________________ [Name of Entity], a [limited partnership/corporation] (the “Company” ), hereby agrees with (i) Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ) under the Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Term Loan Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks (as defined in the Term Loan Agreement), the Administrative Agent and the other parties from time to time party thereto; (ii) the parties to the Amended & Restated Environmental Indemnity and Agreement (the “Environmental Indemnity” ) dated as of January 10, 2017 executed in connection with the Term Loan Agreement, (iii) the parties to the Amended & Restated Guaranty and Contribution Agreement (the “Guaranty” ) dated as of January 10, 2017 executed in connection with the Term Loan Agreement, as follows:

The Company hereby agrees and confirms that, as of the date hereof, it (a) intends to be a party to the Environmental Indemnity, the Guaranty and the Term Loan Agreement and undertakes to perform all the obligations expressed therein, respectively, of an Indemnitor and a Guarantor (as defined in the Environmental Indemnity and the Guaranty, respectively), (b) agrees to be bound by all of the provisions of the Environmental Indemnity, the Guaranty and the Term Loan Agreement as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity, the Guaranty and the Term Loan Agreement, respectively, with respect to the Company, a party thereto, are true and correct in all material respects as of the date of this Accession Agreement and (d) has received and reviewed copies of each of the Environmental Indemnity, the Guaranty and the Term Loan Agreement.

For purposes of notices under the Environmental Indemnity, the Guaranty and the Term Loan Agreement the address for the Company is as follows:

Attention:_______________________________
Telephone:______________________________
Telecopy:_______________________________

This Accession Agreement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF this Accession Agreement was executed and delivered as of the ___ day of ___________________, 20___.


[NAME OF ENTITY]


By:         
Title:         



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED ENVIRONMENTAL INDEMNIFICATION AGREEMENT


EXHIBIT E

FORM OF AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT

This Amended & Restated Guaranty and Contribution Agreement (this “Agreement” ) is made and entered into effective for all purposes as of January 10, 2017, by the parties signatory hereto or to an Accession Agreement (as hereinafter defined) (collectively, the “Guarantor” , whether one or more) to and for the benefit of Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ), and the banks and other lenders named in the Term Loan Agreement herein described (collectively, including the Swap Banks, the “Banks” ).

INTRODUCTION

WHEREAS, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Administrative Agent , the Banks party thereto and the other parties from time to time party thereto entered into that certain Senior Unsecured Term Loan Agreement dated as of November 5, 2015 (as amended, the “ Existing Agreement ”);

WHEREAS, the parties have agreed to amend and restate the Existing Agreement pursuant to that certain Amended & Restated Senior Unsecured Term Loan Agreement, dated as of the date hereof, by and between the Borrower, the Parent, the Guarantors party thereto, the Administrative Agent, the Banks party thereto and the other parties from time to time party thereto (as the same may be amended or modified from time to time, being referred to herein as the “ Term Loan Agreement ”);

WHEREAS, certain Swap Banks have either entered into or may in the future enter into one or more Swap Contracts with the Borrower to swap floating rate of interest payable on the Advances to a fixed rate of interest, on terms and conditions set forth in such Swap Contracts (each such Swap Contract, a “ Subject Swap Contract ”);

WHEREAS, the Borrower is the principal financing entity for capital requirements of its Subsidiaries, and from time to time the Borrower has made and will continue to make capital contributions and advances to its Subsidiaries, including the Subsidiaries which are or will become parties hereto. Other than the Parent, each Guarantor is a direct or indirect subsidiary of the Borrower. Each Guarantor will derive substantial direct and indirect benefit from the transactions contemplated by the Term Loan Agreement and the Subject Swap Contracts; and

WHEREAS, as a condition to extending credit to the Borrower under the Term Loan Agreement and to providing the financial accommodations under the Subject Swap Contracts, the Banks (including the Swap Banks) have required, among other things, that the Guarantor execute and deliver this Agreement, which Agreement shall amend, restate and replace, in its entirety, that certain Guaranty and Contribution Agreement, dated as of November 5, 2015, made by the Guarantor (as defined therein) in favor of the Administrative Agent (as defined therein) (as the same may have been amended restated or otherwise modified from time to time prior to the date hereof, the “ Original Agreement ”).

AGREEMENT

NOW, THEREFORE, in order to induce the Banks to make the Advances and the Swap Banks to enter into the Subject Swap Contracts, each Guarantor hereby agrees as follows:

SECTION 1.
DEFINED TERMS.

All terms used in this Agreement, but not defined herein, shall have the meaning given such terms in the Term Loan Agreement.


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


SECTION 2.
GUARANTY.

Each Guarantor hereby unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Borrower now or hereafter existing under (i) the Term Loan Agreement, the Notes and any other Credit Document, whether for principal, interest, fees, expenses, or otherwise, or (ii) each Subject Swap Contract, whether for fees, premiums, scheduled periodic payments, breakage, termination payments, expenses, or otherwise, but excluding in each case of (i) and (ii) above all Excluded Swap Obligations (such non-excluded Obligations being the “Guaranteed Obligations” ) and any and all expenses (including reasonable counsel fees and expenses) incurred by the Administrative Agent or any Bank (including any Swap Bank) in enforcing any rights under this Agreement. Each Guarantor agrees that its guaranty obligation under this Agreement is a guarantee of payment, not of collection and that such Guarantor is primarily liable for the payment of the Guaranteed Obligations.

SECTION 3.
LIMIT OF LIABILITY.

Each Guarantor that is a Subsidiary of the Borrower shall be liable under this Agreement with respect to the Guaranteed Obligations only for amounts aggregating up to the largest amount that would not render its guaranty obligation hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of any state law.

SECTION 4.
GUARANTY ABSOLUTE.

Each Guarantor guarantees that the Guaranteed Obligations will be paid and performed strictly in accordance with the terms of the Term Loan Agreement, the other Credit Documents, and each Subject Swap Contract, as applicable, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Administrative Agent or any Bank (including any Swap Bank). The liability of each Guarantor under this Agreement shall be absolute and unconditional irrespective of:

(a)    any lack of validity or enforceability of the Term Loan Agreement, any other Credit Document, any Subject Swap Contract or any other agreement or instrument relating thereto;

(b)    any change in the time, manner, or place of payment of, or in any other term of, any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Term Loan Agreement or any other Credit Document or any Subject Swap Contract;

(c)    any exchange, release, or nonperfection of any collateral, if applicable, or any release or amendment or waiver of or consent to departure from any other agreement or guaranty, for any of the Guaranteed Obligations; or

(d)    any other circumstances which might otherwise constitute a defense available to, or a discharge of the Borrower or a Guarantor.

SECTION 5.
CONTINUATION AND REINSTATEMENT, ETC.

Each Guarantor agrees that, to the extent that (i) the Borrower makes payments to the Administrative Agent or any Bank (including any Swap Bank) or (ii) the Administrative Agent or any Bank (including any Swap Bank) receives any proceeds of any property of Borrower or any Guarantor, and in either such case such payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, or otherwise required to be repaid, then to the extent of such repayment the Guaranteed Obligations shall be reinstated and continued in full force and effect as of the date such initial payment or collection of proceeds occurred. The Guarantor shall defend and indemnify the Administrative Agent and each Bank (including each Swap Bank) from and against any claim or loss under this Section 5 (including reasonable attorneys’ fees and expenses) in the defense of any such action or suit.


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


SECTION 6.
CERTAIN WAIVERS.

Section 6.01.    Notice. Each Guarantor hereby waives promptness, diligence, notice of acceptance, notice of acceleration, notice of intent to accelerate and any other notice with respect to any of the Guaranteed Obligations and this Agreement.

Section 6.02.    Other Remedies. Each Guarantor hereby waives any requirement that the Administrative Agent or any Bank (including any Swap Bank) protect, secure, perfect, or insure any Lien or any Property subject thereto or exhaust any right or take any action against the Borrower or any other Person or any collateral, if any, including any action required pursuant to a Legal Requirement.

Section 6.03.    Waiver of Subrogation .

(a)    Each Guarantor hereby irrevocably waives, until payment in full of all Guaranteed Obligations and termination of all Commitments, any claim or other rights which it may acquire against the Borrower that arise from such Guarantor’s obligations under this Agreement or any other Credit Document or any Subject Swap Contract, including, without limitation, any right of subrogation (including, without limitation, any statutory rights of subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. §509, or otherwise), reimbursement, exoneration, contribution, indemnification, or any right to participate in any claim or remedy of the Administrative Agent or any Bank (including any Swap Bank) against the Borrower or any collateral which the Administrative Agent or any Bank (including any Swap Bank) now has or acquires. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Guaranteed Obligations shall not have been paid in full and all of the Commitments terminated, such amount shall be held in trust for the benefit of the Administrative Agent or any Bank (including any Swap Bank) and shall promptly be paid to the Administrative Agent for the benefit of the Administrative Agent or any Bank (including any Swap Bank) to be applied to the Guaranteed Obligations, whether matured or unmatured, as the Administrative Agent may elect. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Term Loan Agreement and the Subject Swap Contracts and that the waiver set forth in this Section 6.03(a) is knowingly made in contemplation of such benefits.

(b)    Each Guarantor further agrees that it will not enter into any agreement providing, directly or indirectly, for any contribution, reimbursement, repayment, or indemnity by the Borrower or any other Person on account of any payment by such Guarantor to the Administrative Agent or any Bank (including any Swap Bank) under this Agreement.

SECTION 7.
REPRESENTATIONS AND WARRANTIES.

Each Guarantor hereby represents and warrants as follows:
    
Section 7.01.     Corporate Authority. Such Guarantor is either a corporation, limited liability company, limited partnership or trust duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The execution, delivery and performance by such Guarantor of this Agreement are within such Guarantor’s organizational powers, have been duly authorized by all necessary organizational action and do not contravene (a) such Guarantor’s organizational authority or (b) any law or material contractual restriction affecting such Guarantor or its Property.

Section 7.02.    Government Approval . No authorization or approval or other action by and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by such Guarantor of this Agreement.

Section 7.03.    Binding Obligations . This Agreement is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights (whether considered in a proceeding at law or in equity).


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


SECTION 8.
COVENANTS.

Each Guarantor will comply with all covenant provisions of Article V and Article VI of the Term Loan Agreement to the extent such provisions are applicable.

SECTION 9.
CONTRIBUTION.

As a result of the transactions contemplated by the Term Loan Agreement and the Subject Swap Contracts, each of the Guarantors will benefit, directly and indirectly, from the Guaranteed Obligations and in consideration thereof desire to enter into a contribution agreement among themselves as set forth in this Section 9 to allocate such benefits among themselves and to provide a fair and equitable arrangement to make contributions in the event any payment is made by any Guarantor hereunder to the Administrative Agent or any Bank (including any Swap Bank) (such payment being referred to herein as a “ Contribution ,” and for purposes of this Agreement, includes any exercise of recourse by the Administrative Agent against any Property of a Guarantor and application of proceeds of such Property in satisfaction of such Guarantor’s obligations under this Agreement). The Guarantors hereby agree as follows:

Section 9.01.    Calculation of Contribution . In order to provide for just and equitable contribution among the Guarantors in the event any Contribution is made by a Guarantor (a “Funding Guarantor” ), such Funding Guarantor shall be entitled to a contribution from certain other Guarantors for all payments, damages and expenses incurred by that Funding Guarantor in discharging any of the Guaranteed Obligations, in the manner and to the extent set forth in this Section 9 . The amount of any Contribution under this Agreement shall be equal to the payment made by the Funding Guarantor to the Administrative Agent or any other beneficiary pursuant to this Agreement and shall be determined as of the date on which such payment is made.

Section 9.02.    Benefit Amount Defined . For purposes of this Agreement, the “ Benefit Amount ” of any Guarantor as of any date of determination shall be the net value of the benefits to such Guarantor and all of its Subsidiaries (including any Subsidiaries which may be Guarantors) from extensions of credit made by the Banks to the Borrower under the Term Loan Agreement or from the provision of financial accommodations to the Borrower under the Subject Swap Contracts, as the case may be; provided , however , that in determining the contribution liability of any Guarantor which is a Subsidiary to its direct or indirect parent corporation or of any Guarantor to its direct or indirect Subsidiary, the Benefit Amount of such Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the Benefit Amount of the parent corporation. Such benefits shall include benefits of funds constituting proceeds of Advances made to the Borrower by the Banks which are in turn advanced or contributed by the Borrower to such Guarantor or its Subsidiaries and benefits of financial accommodations provided to the Borrower by the Swap Banks pursuant to the Subject Swap Contracts which benefit, directly or indirectly, such Guarantor and its Subsidiaries (collectively, the “Benefits” ). In the case of any proceeds of Advances or Benefits advanced or contributed to a Person (an “Owned Entity” ) any of the equity interests of which are owned directly or indirectly by a Guarantor, the Benefit Amount of a Guarantor with respect thereto shall be that portion of the net value of the benefits attributable to Advances or Benefits equal to the direct or indirect percentage ownership of such Guarantor in its Owned Entity.

Section 9.03.    Contribution Obligation . Each Guarantor shall be liable to a Funding Guarantor in an amount equal to the greater of (A) the (i) ratio of the Benefit Amount of such Guarantor to the total amount of Guaranteed Obligations, multiplied by (ii) the amount of Guaranteed Obligations paid by such Funding Guarantor and (B) 95% of the excess of the fair saleable value of the property of such Guarantor over the total liabilities of such Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Guarantor is deemed made for purposes of this Agreement (giving effect to all payments made by other Funding Guarantors as of such date in a manner to maximize the amount of such contributions).

Section 9.04.    Allocation . In the event that at any time there exists more than one Funding Guarantor with respect to any Contribution (in any such case, the “Applicable Contribution” ), then payment from other Guarantors pursuant to this Agreement shall be allocated among such Funding Guarantors in proportion to the total amount of the Contribution made for or on account of the Borrower by each such Funding Guarantor pursuant to the Applicable Contribution. In the event that at any time any Guarantor pays an amount under this Agreement in excess of the amount

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


calculated pursuant to clause (A) of Section 9.03 above, that Guarantor shall be deemed to be a Funding Guarantor to the extent of such excess and shall be entitled to contribution from the other Guarantors in accordance with the provisions of this Section 9.04 .

Section 9.05.    Subsidiary Payment . The amount of contribution payable under this Section 9 by any Guarantor shall be reduced by the amount of any contribution paid hereunder by a Subsidiary of such Guarantor.

Section 9.06.    Equitable Allocation . If as a result of any reorganization, recapitalization, or other corporate change in the Borrower or any of its Subsidiaries, or as a result of any amendment, waiver or modification of the terms and conditions of other Sections of this Agreement or the Guaranteed Obligations, or for any other reason, the contributions under this Section 9 become inequitable as among the Guarantors, the Guarantors shall promptly modify and amend this Section 9 to provide for an equitable allocation of contributions. Any of the foregoing modifications and amendments shall be in writing and signed by all Guarantors.

Section 9.07.    Asset of Party to Which Contribution is Owing . The Guarantors acknowledge that the right to contribution hereunder shall constitute an asset in favor of the Guarantor to which such contribution is owing.

Section 9.08.    Subordination . No payments payable by a Guarantor pursuant to the terms of this Section 9 shall be paid until all amounts then due and payable by the Borrower to any Bank (including any Swap Bank), pursuant to the terms of the Credit Documents or any Subject Swap Contract, are indefeasibly paid in full in cash. Nothing contained in this Section 9 shall affect the obligations of any Guarantor to any Bank (including any Swap Bank) under the Term Loan Agreement or any other Credit Documents or any Subject Swap Contract.

SECTION 10.
MISCELLANEOUS.

Section 10.01.    Addresses for Notices . All notices and other communications provided for hereunder shall be in writing, including telegraphic communication and delivered or teletransmitted to the Administrative Agent, as set forth in the Term Loan Agreement, to any Swap Bank, as set forth in the applicable Subject Swap Contract, and to each Guarantor, at the address set forth under such Guarantor’s signature hereto or in the Accession Agreement executed by such Guarantor, or to such other address as shall be designated by any Guarantor, any Swap Bank or the Administrative Agent in written notice to the other parties. All such notices and other communications shall be effective when delivered or teletransmitted to the above addresses.

Section 10.02.    Amendments, Etc. No amendment or waiver of any provision of this Agreement nor consent to any departure by any Guarantor therefrom shall be effective unless the same shall be in writing and signed by each Guarantor and the Administrative Agent; provided , however , that any amendment or waiver releasing any Guarantor from any liability hereunder shall be signed by all the Banks (including the Swap Banks) (provided that the Administrative Agent can, if no Default then exists, release any Subsidiary of the Borrower which no longer is a Property Owner of an Unencumbered Property); and provided further that any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Notwithstanding the foregoing, in the event that any Subsidiary or Affiliate of the Borrower hereafter is required in accordance with the terms of the Term Loan Agreement or otherwise agrees to become a guarantor of the Borrower’s obligations under the Credit Documents and the Subject Swap Contracts, then such Subsidiary or Affiliate may become a party to this Agreement by executing an Accession Agreement ( “Accession Agreement” ) in the form attached hereto as Annex 1 and each Guarantor and the Administrative Agent hereby agrees that upon such Subsidiary’s or Affiliate’s execution of such Accession Agreement, this Agreement shall be deemed to have been amended to make such Person a Guarantor hereunder for all purposes and a party hereto and no signature is required on behalf of the other Guarantors or the Administrative Agent to make such an amendment to this Agreement effective.

Section 10.03.    No Waiver; Remedies . No failure on the part of the Administrative Agent or any Bank (including any Swap Bank) to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT



Section 10.04.    Right of Set‑Off . Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent and the Banks (including the Swap Banks) are hereby authorized at any time, to the fullest extent permitted by law, to set off and apply any deposits (general or special, time or demand, provisional or final) and other indebtedness owing by the Administrative Agent or any Bank (including any Swap Bank) to the account of any Guarantor against any and all of the obligations of such Guarantor under this Agreement, irrespective of whether or not the Administrative Agent or any Bank (including any Swap Bank) shall have made any demand under this Agreement and although such obligations may be contingent and unmatured. The Administrative Agent and the Banks (including the Swap Banks) agree promptly to notify each Guarantor affected by any such set-off after any such set-off and application made by the Administrative Agent or any Bank (including any Swap Bank); provided , however , that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and any Bank (including any Swap Bank) under this Section 10.04 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or any Bank (including any Swap Bank) may otherwise have.

Section 10.05.    Continuing Guaranty; Transfer of Interest . This Agreement shall create a continuing guaranty and shall (a) remain in full force and effect until indefeasible payment in full and termination of the Guaranteed Obligations, (b) be binding upon each Guarantor, its successors and assigns, and (c) inure, together with the rights and remedies of the Administrative Agent hereunder, to the benefit of the Administrative Agent and the Banks (including the Swap Banks) and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause, when any Bank (including any Swap Bank) assigns or otherwise transfers any interest held by it under the Term Loan Agreement or other Credit Document or any Subject Swap Contract to any other Person pursuant to the terms of the Term Loan Agreement or other Credit Document or Subject Swap Contract, that other Person shall thereupon become vested with all the benefits held by such Bank (or Swap Bank) under this Agreement. Upon the indefeasible payment in full and termination of the Guaranteed Obligations, the guaranties granted hereby shall terminate and all rights hereunder shall revert to each Guarantor to the extent such rights have not been applied pursuant to the terms hereof. Upon any such termination, the Administrative Agent will, at each Guarantor’s expense, execute and deliver to such Guarantor such documents as such Guarantor shall reasonably request and take any other actions reasonably requested to evidence or effect such termination.

Section 10.06.    GOVERNING LAW . ANY DISPUTE BETWEEN THE GUARANTOR, THE ADMINISTRATIVE AGENT, ANY BANK (INCLUDING ANY SWAP BANK), OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY SUBJECT SWAP CONTRACT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK .

SECTION 10.07.    CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

(A)     EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION 10.07 , EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY SUBJECT SWAP CONTRACT WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


(B)     OTHER JURISDICTIONS . THE GUARANTOR AGREES THAT THE ADMINISTRATIVE AGENT, ANY BANK (INCLUDING ANY SWAP BANK) OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE GUARANTOR OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B) .

(C)     SERVICE OF PROCESS . THE GUARANTOR WAIVES PERSONAL SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY ANY AGENT OR THE BANKS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GUARANTOR ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY AGENT OR THE BANKS (INCLUDING THE SWAP BANKS) TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. THE GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY SUBJECT SWAP CONTRACT OR ANY AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

(D)     WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY SUBJECT SWAP CONTRACT OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(E)     ADVICE OF COUNSEL . EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 10.07 , WITH ITS COUNSEL.

Section 10.08.    Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its Guaranteed Obligations in respect of Swap Obligations ( provided, however , that each Qualified ECP Guarantor shall only be liable under this Section 10.08 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.08 , or otherwise in respect of the Guaranteed Obligations, as it relates to such other Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until a discharge of the Guaranteed Obligations. Each Qualified ECP Guarantor intends that this Section 10.08 constitute, and this Section 10.08 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Section 10.09     This Agreement amends, restates and supersedes the Original Agreement in its entirety.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT



[Balance of page intentionally left blank]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT



Each Guarantor has caused this Agreement to be duly executed as of the date first above written.

GUARANTORS :
 
LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
 
 
By:
 
 
 
Name:
 
 
 
Title:
 





[SIGNATURE PAGES DISTRIBUTED SEPARATELY]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


ANNEX 1

GUARANTY AND CONTRIBUTION AGREEMENT

ACCESSION AGREEMENT

_______________________ [Name of Entity], a [limited partnership/corporation] (the “Company” ), hereby agrees with (i) Citibank, N.A., as the Administrative Agent (the “Administrative Agent” ) under the Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 as the same may be amended or modified from time to time (the “Term Loan Agreement” ) among LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks (as defined in the Term Loan Agreement), the Administrative Agent and the other parties from time to time party thereto; (ii) the parties to the Amended & Restated Environmental Indemnity and Agreement (the “Environmental Indemnity” ) dated as of January 10, 2017 executed in connection with the Term Loan Agreement, (iii) the parties to the Amended & Restated Guaranty and Contribution Agreement (the “Guaranty” ) dated as of January 10, 2017 executed in connection with the Term Loan Agreement, as follows:

The Company hereby agrees and confirms that, as of the date hereof, it (a) intends to be a party to the Environmental Indemnity, the Guaranty and the Term Loan Agreement and undertakes to perform all the obligations expressed therein, respectively, of an Indemnitor and a Guarantor (as defined in the Environmental Indemnity and the Guaranty, respectively), (b) agrees to be bound by all of the provisions of the Environmental Indemnity, the Guaranty and the Term Loan Agreement as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity, the Guaranty and the Term Loan Agreement, respectively, with respect to the Company, a party thereto, are true and correct in all material respects as of the date of this Accession Agreement and (d) has received and reviewed copies of each of the Environmental Indemnity, the Guaranty and the Term Loan Agreement.

For purposes of notices under the Environmental Indemnity, the Guaranty and the Term Loan Agreement the address for the Company is as follows:

Attention:     
Telephone:     
Telecopy:     

This Accession Agreement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF this Accession Agreement was executed and delivered as of the ___ day of ___________________, 20____.

[Name of Entity]
 
 
By:
 
 
 
Title:
 



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AMENDED & RESTATED GUARANTY AND CONTRIBUTION AGREEMENT


EXHIBIT F

FORM OF NOTICE OF BORROWING

______________, 20___

Citibank, N.A.
as Administrative Agent under the Term Loan Agreement herein described
c/o Citibank, N.A.
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndication Department

Ladies and Gentlemen:

The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), refers to the Amended & Restated Senior Unsecured Term Loan Agreement dated as January 10, 2017 as the same may be amended or modified from time to time (the “Term Loan Agreement,” the defined terms of which are used in this Notice of Borrowing unless otherwise defined in this Notice of Borrowing) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto, and hereby gives you irrevocable notice pursuant to Section 2.02(a) of the Term Loan Agreement that the undersigned hereby requests a Borrowing, and in connection with that request sets forth below the information relating to such Borrowing (the “Proposed Borrowing” ) as required by Section 2.02(a) of the Term Loan Agreement:

(a)    Business Day of the Proposed Borrowing is _____________, 20_____.

(b)    The Proposed Borrowing will be a Borrowing composed of [Base Rate Advances] [LIBOR Advances].

(c)    The aggregate amount of the Proposed Borrowing is $____________.

(d)    [The Proposed Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank.]

(e)    The Interest Period for each LIBOR Advance made as part of the Proposed Borrowing is [_____ month[s]].

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:

(a)    the representations and warranties contained in the Term Loan Agreement and the other Credit Documents are correct in all material respects, before and after giving effect to the Proposed Borrowing and the application of the proceeds therefrom, as though made on the date of the Proposed Borrowing; and

(b)    no Default has occurred and remains uncured, or would result from such Proposed Borrowing or from the application of the proceeds therefrom.


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
NOTICE OF BORROWING



Very truly yours,
 
LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
 
By:
LASALLE HOTEL PROPERTIES, its general partner
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
NOTICE OF BORROWING


EXHIBIT G

FORM OF NOTICE OF CONVERSION OR CONTINUATION

_________, 20__
Citibank, N.A.
as Administrative Agent under the Term Loan Agreement herein described
c/o Citibank, N.A.
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndication Department
Ladies and Gentlemen:
The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower” ), refers to the Amended & Restated Senior Unsecured Term Loan Agreement dated as January 10, 2017 as the same may be amended or modified from time to time (the “Term Loan Agreement,” the defined terms of which are used in this Notice of Conversion or Continuation unless otherwise defined in this Notice of Conversion or Continuation) among the Borrower, LaSalle Hotel Properties, a Maryland real estate investment trust (the “ Parent ”), the Guarantors party thereto, the Banks party thereto, Citibank, N.A., as the Administrative Agent and the other parties from time to time party thereto, and hereby gives you irrevocable notice pursuant to Section 2.02(b) of the Term Loan Agreement that the undersigned hereby requests a Conversion or continuation of an outstanding Borrowing, and in connection with that request sets forth below the information relating to such Conversion or continuation (the “Proposed Borrowing” ) as required by Section 2.02(b) of the Term Loan Agreement:
(a)    The Business Day of the Proposed Borrowing is _____________, 20__.
(b)    The Proposed Borrowing will be composed of [Base Rate Advances] [LIBOR Advances].
(c)    The aggregate amount of the Borrowing to be Converted or continued is $_____________ and consists of [Base Rate Advances] [LIBOR Advances].
(d)    [The Proposed Borrowing is subject to a Swap Contract between the Borrower and a Swap Bank.]
(e)    The Proposed Borrowing consists of [a Conversion to [Base Rate Advances] [LIBOR Advances]] [a continuation of [Base Rate Advances] [LIBOR Advances]].
(f)    The Interest Period for each LIBOR Advance made as part of the Proposed Borrowing is [____ month[s]].

8     Insert if appropriate.



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
NOTICE OF CONVERSION OR CONTINUATION


Very truly yours,
 
LASALLE HOTEL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
 
By:
LaSalle Hotel Properties, its general partner
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 






LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
NOTICE OF CONVERSION OR CONTINUATION


EXHIBIT J
FORM OF PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of ________, ____, as amended, modified or supplemented from time to time, this “ Agreement ”), made by each of the undersigned pledgors (each a “ Pledgor ”, and together with any entity that becomes a party hereto pursuant to Section 22 hereof, the “ Pledgors ”), in favor of CITIBANK, N.A., in its capacities as the CA Administrative Agent (as hereinafter defined), as the TL Administrative Agent (as hereinafter defined) and as the Pledgee pursuant to Annex G hereto for the benefit of the Secured Creditors (as hereinafter defined) (in such capacities collectively, the “ Pledgee ”). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as hereinafter defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, LASALLE HOTEL OPERATING PARTNERSHIP, L.P. (the “ Borrower ”), the Banks from time to time party thereto, and Citibank, N.A., as administrative agent thereunder (in such capacity, the “ CA Administrative Agent ”) and Issuing Bank (the Pledgee, the Banks, the CA Administrative Agent, the Issuing Banks and their respective successors and assigns being herein referred to as the “ CA Creditors ”), have entered into that certain Second Amended & Restated Senior Unsecured Credit Agreement dated as of January 10, 2017 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “ Credit Agreement ”), providing for the making of certain loans and extensions of credit to the Borrower as contemplated therein;
WHEREAS, the Borrower, the Banks (as such term is defined in the Term Loan Agreement (as hereinafter defined)) from time to time party thereto, and Citibank, N.A., as administrative agent thereunder (in such capacity, the “ TL Administrative Agent ”) (the Pledgee, the Banks (as such term is defined in the Term Loan Agreement), the TL Administrative Agent and their respective successors and assigns being herein referred to as the “ TL Lender Creditors ” and collectively with the CA Creditors, the “ Lender Creditors ”), have entered into that certain Amended & Restated Senior Unsecured Term Loan Agreement dated as of January 10, 2017 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “ Term Loan Agreement ” and collectively with the Credit Agreement, the “ Bank Facility Agreements ”), providing for the making of certain loans to the Borrower as contemplated therein;
WHEREAS, the Borrower may from time to time be party to (or guaranty the obligations of one or more of its Subsidiaries under) one or more Swap Contracts with a Person that at the time such Swap Contract is entered into is a CA Creditor or an affiliate of a CA Creditor (each such CA Creditor or affiliate, even if the respective CA Creditor subsequently ceases to be a Bank under the Credit Agreement for any reason, together with such CA Creditor’s or affiliate’s successors and assigns, the “ Other Creditors ”);
WHEREAS, pursuant to the Guaranty, each Guarantor that is a party thereto has jointly and severally guaranteed to the Lender Creditors and the Other Creditors the payment when due of all obligations and liabilities of the Borrower under or with respect to (x) the Credit Documents (the term “ Credit Documents ” shall include any documentation executed and delivered in connection with any replacement or refinancing of the either of the Bank Facility Agreements) and (y) each Swap Contract (each document referred to in this clause (y), an “ Other Secured Document ”) with one or more of the Other Creditors;
[Insert Recital(s) describing any Indebtedness permitted under Section 6.02(a) or (e) of the Bank Facility Agreements which is pari passu with the Obligations (as hereinafter defined) secured hereby and the obligees thereunder] (the “ Existing Pari Passu Creditors ”).
WHEREAS, pursuant to Section 5.10 of each of the Bank Facility Agreements, each Pledgor is required to execute and deliver this Agreement in favor of the Pledgee;

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby agrees as follows:
1. SECURITY FOR OBLIGATIONS. (a) This Agreement is made by each Pledgor in favor of the Pledgee for the benefit of the Lender Creditors, the Other Creditors, the Existing Pari Passu Creditors, and the Additional Pari Passu Creditors (as hereinafter defined), if any (collectively, together with the Pledgee, the “ Secured Creditors ”), to secure on an equal and ratable basis:
(i)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, indemnities, fees and interest thereon) of such Pledgor (as obligor or guarantor, as the case may be) and each Borrower to the Lender Creditors, whether now existing or hereafter incurred under, arising out of or in connection with the Bank Facility Agreements and all other Credit Documents to which it or any Borrower is at any time a party (including, without limitation, all such obligations and liabilities of such Pledgor under the Bank Facility Agreements (if a party thereto) and under any guaranty by it of the obligations under the Bank Facility Agreements) and the due performance and compliance by such Pledgor and any Borrower with the terms of each such Credit Document (all such obligations and liabilities under this clause (i) being herein collectively called the “ Bank Facility Obligations ”);
(ii)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the Other Creditors, whether now existing or hereafter incurred under, arising out of or in connection with any Other Secured Document (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under any Other Secured Document) and the due performance and compliance by such Pledgor and the Borrower with the terms of each such Other Secured Document (all such obligations and liabilities under this clause (ii) being herein collectively called the “ Other Secured Obligations ”);
(iii)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the Existing Pari Passu Creditors, whether now existing or hereafter incurred under, arising out of or in connection with any documentation relating to the Existing Pari Passu Obligations (collectively, the “ Existing Pari Passu Documents ”) (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under the Existing Pari Passu Documents) and the due performance and compliance by such Pledgor and the Borrower with the terms of the Existing Pari Passu Documents (all such obligations and liabilities under this clause (iii) being herein collectively called the “ Existing Pari Passu Obligations ”);
(iv)     the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of such Pledgor (as obligor or guarantor, as the case may be) and the Borrower to the obligees under the Additional Pari Passu Documents (as hereinafter defined) (the “ Additional Pari Passu Creditors ”), whether now existing or hereafter incurred under, arising out of or in connection with any documentation relating to the Additional Pari Passu Obligations (as hereinafter defined) (collectively, the “ Additional Pari Passu Documents ”) (including, without limitation, all such obligations and liabilities of such Pledgor under any guaranty by it of the obligations under the Additional Pari Passu Documents) and the due performance and compliance by such Pledgor and the Borrower with the terms of the Additional Pari Passu Documents (all such obligations and liabilities under this clause (iv) being herein collectively called the “ Additional Pari Passu Obligations ”);
(v)     any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


(vi)     in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities referred to in clauses (a) through (c) above after an Event of Default (such term, as used in this Agreement, shall mean any “ Event of Default ” at any time under, and as defined in, any of the Bank Facility Agreements, the Existing Pari Passu Documents and the Additional Pari Passu Documents shall have occurred and be continuing, the reasonable and documented out-of-pocket expenses of the Pledgee in connection with the retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable and documented out-of-pocket attorneys’ fees and court costs of the Pledgee; and
(vii)     all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i) through (vii) of this Section 1(a), subject to the provisions of following clause (b), being herein collectively called the “ Obligations ,” it being acknowledged and agreed that the “ Obligations ” shall include extensions of credit of the type described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.
(b)     The Borrower will give written notice to the Pledgee (each, a “ Notice of Pledge Agreement Entitlement ”) prior to the incurrence of Additional Pari Passu Obligations incurred after the date hereof as follows:
Such written notice from the Borrower (i) shall state that it is a “ Notice of Pledge Agreement Entitlement ”, (ii) shall be delivered to the Pledgee, (iii) shall describe the Additional Pari Passu Obligations to be secured hereby, (iv) shall state that it is delivered pursuant to Section 1(b) of this Agreement, (v) shall reference the aggregate principal amount of such new Indebtedness, and (vi) shall state that such new Indebtedness and the incurrence thereof does not violate, and may be incurred and secured hereunder in accordance with, the applicable provisions of Section 6.02(a) or (e) of the Bank Facility Agreements or the corresponding provisions of the Existing Pari Passu Documents.
2.     DEFINITION OF STOCK, LIMITED LIABILITY COMPANY INTERESTS, PARTNERSHIP INTERESTS, SECURITIES, ETC. (a) As used herein: (i) the term “ Stock ” means all of the issued and outstanding shares of capital stock in any corporation to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such corporation, a “ Pledged Corporation ”); (ii) the term “ Limited Liability Company Interest ” shall mean the entire limited liability company interests or membership interests in any limited liability company to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such entity, a “ Pledged Limited Liability Company ”); (iii) the term “ Partnership Interest ” shall mean the entire partnership interests (whether general and/or limited partnership interests) in any partnership to the extent an interest therein is required to be pledged pursuant to Section 5.10 of the Bank Facility Agreements (each such entity, a “ Pledged Partnership ”, and together with each Pledged Corporation and each Pledged Limited Liability Company, each, a “ Pledged Entity ”); (iv) the term “ Securities ” shall mean all of the Stock, Limited Liability Company Interests and Partnership Interests, which, for the avoidance of doubt, shall not include any Equity Interests not required to be pledged hereunder by Section 5.10 of the Bank Facility Agreements; and (v) the term “ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York.
(b)     All Stock at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements is hereinafter called the “ Pledged Stock ,” all Limited Liability Company Interests at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements are hereinafter called the “ Pledged Limited Liability Company Interests ,” all Partnership Interests at any time pledged or required to be pledged hereunder and under the Bank Facility Agreements are hereinafter called the “ Pledged Partnership Interests ,” and all of the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests together are hereinafter called the “ Pledged Securities ,” which together with the following (collectively, the “ Ancillary Collateral ”): (i) all proceeds thereof, including any securities and moneys received and at the time held by the Pledgee hereunder, (ii) the entries on the books of any securities intermediary pertaining to the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests, (iii) all dividends, cash,

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed or distributable in respect of or in exchange for any or all of the Pledged Stock, Pledged Limited Liability Company Interests and Pledged Partnership Interests and (iv) all rights under Sections 3.1(a)(i) and (iii) hereof, are hereinafter called the “ Collateral ”.
3.     PLEDGE OF SECURITIES, ETC.
3.1 Pledge . (a) To secure all Obligations of such Pledgor and for the purposes set forth in Section 1 hereof, each Pledgor hereby: (i) grants to the Pledgee for the benefit of the Secured Creditors a first priority security interest in all of the Collateral owned by such Pledgor; (ii) collaterally assigns to the Pledgee for the benefit of the Secured Creditors all of such Pledgor’s Pledged Securities and all of such Pledgor’s right, title and interest in each Pledged Entity, whether now existing or hereafter acquired, including, without limitation:
(A)     all the capital thereof and all of the interest of such Pledgor in all profits, losses thereof, and all rights of such Pledgor to receive distributions whether of cash or Assets (as hereinafter defined) to which such Pledgor shall at any time be entitled in respect of such Pledged Securities;
(B)     all other payments due or to become due such Pledgor in respect of Pledged Securities, whether under any constitutive document or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C)     all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any constitutive document, or at law or otherwise in respect of such Pledged Securities (except any rights as managing member of a limited liability company or as general partner of a limited partnership, which in either case is not a Wholly-Owned Subsidiary of the Parent, to the extent the applicable constitutive document contains an enforceable prohibition against the creation of a security interest in such rights);
(D)     all present and future claims, if any, of such Pledgor against any Pledged Securities for moneys loaned or advanced, for services rendered or otherwise;
(E)     subject to Section 5 hereof, all of such Pledgor’s rights under any constitutive document or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to any Pledged Security (except any rights as managing member of a limited liability company or as general partner of a limited partnership, which in either case is not a Wholly-Owned Subsidiary of the Parent, to the extent the applicable constitutive document contains an enforceable prohibition against the creation of a security interest in such rights), including any power to terminate, cancel or modify any constitutive document, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Pledged Securities and any Pledged Entity, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Assets, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing;
(F)     all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates (if any) and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; and
(G)     to the extent not otherwise included, all proceeds of any or all of the foregoing.
(b)     As used herein, the term “ Corporation Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Corporation.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


(c)     As used herein, the term “ Limited Liability Company Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Limited Liability Company.
(d)     As used herein, the term “ Partnership Assets ” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all Equity Interests in other Persons), at any time owned by any Pledged Partnership.
(e)     As used herein, the term “ Assets ” shall mean all Corporation Assets, Limited Liability Company Assets and Partnership Assets. Nothing contained in this Agreement shall be deemed to create a security interest in any Assets unless any applicable Pledgor shall receive, or become entitled to receive, distributions of such Asset.
3.2 Subsequently Acquired Securities . Subject to Section 2(c) hereof, if any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Pledged Securities at any time or from time to time after the date hereof, such Securities shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1(a) hereof.
4.     VOTING, ETC., WHILE NO EVENT OF DEFAULT. For greater certainty, unless and until an Event of Default shall have occurred and be continuing, each Pledgor shall be entitled to (i) exercise any and all voting and other consensual rights pertaining to the Pledged Stock and to give all consents, waivers or ratifications in respect thereof and (ii) exercise any and all voting, consent, administration, management and other rights and remedies under (x) any constitutive document or otherwise with respect to the Pledged Limited Liability Company Interests of such Pledgor and (y) any constitutive document or otherwise with respect to the Pledged Partnership Interests of such Pledgor, in each case together with all other rights assigned pursuant to Sections 3.1(a)(ii)(E) and 3.1(a)(iii)(E) hereof; provided that no vote shall be cast or any consent, waiver or ratification given or any other action taken which would violate or be inconsistent with any of the terms of this Agreement or any other Secured Debt Document (as defined in Section 6 hereof). All such rights of such Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default shall occur and be continuing, and Section 6 hereof shall become applicable.
5.     DIVIDENDS AND OTHER DISTRIBUTIONS. For greater certainty, unless an Event of Default shall have occurred and be continuing and subject to the terms of the Secured Debt Documents, all cash dividends and other cash distributions payable in respect of the Pledged Securities shall be paid to the respective Pledgor.
All dividends, distributions or other payments which are received by the Pledgor contrary to the provisions of this Section 5 and Section 6 below shall be received in trust for the benefit of the Pledgee for the benefit of the Secured Creditors, shall be segregated from other property or funds of the Pledgor and shall be promptly paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).
6.     REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default shall have occurred and be continuing, the Pledgee shall be entitled upon written notice to the Borrower to exercise all of its rights, powers and remedies (whether vested in it by this Agreement, by any other Credit Document, any Existing Pari Passu Document, any Additional Pari Passu Document or, to the extent then in effect and secured hereby, any Other Secured Document (with all of the documents listed above being herein collectively called the “ Secured Debt Documents ”) or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the UCC and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:
(i)     following written request by the Pledgee, to receive all amounts payable in respect of the Collateral otherwise payable to such Pledgor under Section 5 hereof;

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


(ii)     to transfer all or any part of the Pledged Securities into the Pledgee’s name or the name of its nominee or nominees;
(iii)     to vote all or any part of the Pledged Stock, Pledged Limited Liability Company Interests or Pledged Partnership Interests (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof; and
(iv)     at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption by any Secured Creditor of any credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine; provided , that at least 10 Business Days’ notice of the time and place of any such sale shall be given to such Pledgor. Every aspect of the disposition of the Collateral, including the method, manner, time, place and other terms must be commercially reasonable, it being agreed that to the extent such matters are addressed by provisions of this Agreement such provisions are commercially reasonable. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Pledgee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives any claims against the Pledgee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Pledgee accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Obligations, the Pledgors shall be liable for the deficiency and the fees of any attorneys employed by the Pledgee to collect such deficiency. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto.
7.     REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Document or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or in any other Secured Debt Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. The Secured Creditors agree that this Agreement may be enforced only by the Pledgee acting upon the instructions of the Required Secured Creditors (as defined in Section 4 of Annex G hereto) and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


8.     APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee upon any sale or other disposition of the Collateral of each Pledgor, together with all other moneys received by the Pledgee hereunder, shall be applied as follows:
(i)     first, to the payment of all Obligations owing to the Pledgee and the other Secured Creditors of the type provided in clauses (v) and (vi) of the definition of Obligations in Section 1 hereof;
(ii)     second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Primary Obligations (as defined in Section 9(b) below) shall be paid to the Secured Creditors as provided in Section 9(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Obligations of such Pledgor or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share (as hereinafter defined) of the amount remaining to be distributed;
(iii)     third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations (as defined in Section 9(b) below) shall be paid to the Secured Creditors as provided in Section 9(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations of such Pledgor or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and
(iv)     fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement pursuant to Section 18 hereof, to the relevant Pledgor or to whomever may be lawfully entitled to receive such surplus.
(b)      For purposes of this Agreement (x) “ Pro Rata Share ” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then aggregate outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be, (y) “ Primary Obligations ” shall mean (i) in the case of the Bank Facility Obligations, all Obligations arising out of or in connection with (including, without limitation, as obligor or guarantor, as the case may be) the principal of, and interest on, all Loans, all unreimbursed drawings or payments in respect of any letters of credit (together with all interest accrued thereon), and the aggregate stated amounts of all letters of credit issued under the Credit Agreement, and all regularly accruing fees, and (ii) in the case of the Other Secured Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) Other Secured Documents secured hereby (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), (iii) in the case of the Existing Pari Passu Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) the Existing Pari Passu Documents (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), and (iv) in the case of the Additional Pari Passu Obligations, all Obligations arising out of or in connection with (including, without limitation, as a direct obligor or a guarantor, as the case may be) the Additional Pari Passu Documents (in each case as set forth in clause (i) above, other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), and (z) “ Secondary Obligations ” shall mean all Obligations of such Pledgor secured hereby other than Primary Obligations.
(c)     When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be deemed to be applied (for purposes of making determinations under this Section 8 only) (i) first, to the Primary Obligations and (ii) second, to the Secondary Obligations.
(d)     If the CA Creditors are to receive a distribution in accordance with the procedures set forth above in this Section 8 on account of undrawn amounts with respect to letters of credit issued under the Credit Agreement, such amounts shall be paid to the CA Administrative Agent and held by it, for the equal and

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


ratable benefit of the CA Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of any outstanding letter of credit, and after the application of all such cash security to the repayment of all Obligations owing to the CA Creditors after giving effect to the termination of such letter of credit, if there remains any excess cash, such excess cash shall be returned by the CA Administrative Agent to the Pledgee for distribution in accordance with Section 8(a) hereof.
(e)     Except as set forth in Section 8(d) hereof, all payments required to be made hereunder shall be made (i) if to the CA Creditors, to the CA Administrative Agent for the account of the CA Creditors, (ii) if to the TL Creditors, to the TL Administrative Agent for the account of the TL Creditors, and (iii) if to any other Secured Creditors (other than the Pledgee), to the trustee, paying agent or other similar representative (each a “ Representative ”) for such other Secured Creditors or, in the absence of such a Representative, directly to such other Secured Creditors.
(f)     For purposes of applying payments received in accordance with this Section 9, the Pledgee shall be entitled to rely upon (i) the CA Administrative Agent, (ii) the TL Administrative Agent, and (iii) the Representative for any other Secured Creditors or, in the absence of such a Representative, upon the respective Secured Creditors for a determination (which the CA Administrative Agent, the TL Administrative Agent, each Representative for any other Secured Creditors and the Secured Creditors each agree (or shall agree) to provide upon request of the Pledgee) of the outstanding Primary Obligations and Secondary Obligations owed to the Secured Creditors. Unless it has actual knowledge (including by way of written notice from a Representative for any Secured Creditor or directly from a Secured Creditor) to the contrary, the Pledgee, in acting hereunder, shall be entitled to assume that no Other Secured Agreements are in existence.
(g)     It is understood and agreed that each Pledgor shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of the Obligations of such Pledgor.
9.     PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.
10.     FURTHER ASSURANCES; POWER OF ATTORNEY; DELIVERY AND CONTROL. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the applicable UCC or such other law such financing statements, continuation statements and other similar documents in such offices as the Pledgee may reasonably deem necessary and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest hereunder in the Collateral and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where permitted by law (it being understood that the only perfection obligations of the Pledgors hereunder with respect to the Collateral shall be the filing of UCC financing statements as described in this Section 10(a)).
(b)     Each Pledgor hereby appoints the Pledgee such Pledgor’s attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, to act from time to time after the occurrence and during the continuance of an Event of Default in the Pledgee’s reasonable discretion to take any action and to execute any instrument which the Pledgee may deem necessary or advisable to accomplish the purposes of this Section 10. Such appointment is coupled with an interest and is irrevocable.
(c)     On the date hereof, all then-existing certificates or instruments representing or evidencing the Collateral shall be delivered to and held by or on behalf of the Pledgee and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Pledgee. Thereafter, all other certificates or instruments representing or evidencing the Collateral shall, no later than 10 Business Days after certificates or instruments representing or

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evidencing Security Collateral are acquired by any Pledgor (or such date that is no more than 30 days later as may be agreed by the Pledgee, in its discretion), be delivered to and held by or on behalf of the Pledgee and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Pledgee. In addition, upon the occurrence and during the continuance of an Event of Default and the exercise of remedies pursuant to Section 6 hereof, the Pledgee shall have the right at any time to exchange certificates or instruments representing or evidencing the Collateral for certificates or instruments of smaller or larger denominations.
(d)     With respect to any Collateral in which any Pledgor has any right, title or interest and that constitutes an uncertificated security, such Pledgor will either: (1) cause the issuer thereof to register the Pledgee as the registered owner of such security and provide evidence of same to the Pledgee that is satisfactory to the Pledgee in its reasonable discretion, or (2) (A) send to the issuer thereof an Authorization Statement substantially in the form of Annex D hereto and (B) cause the issuer thereof to deliver to the Pledgee (I) an Acknowledgement and Consent substantially in the form of Annex E hereto and (II) a Transaction Statement substantially in the form of Annex I hereto, confirming that such issuer will comply with instructions with respect to such security originated by the Pledgee without further consent or approval of such Pledgor.
11.     THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex G hereto, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety.
12.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGORS. (a) From and after the date determined under Section 5.10 of each of the Bank Facility Agreements that this Agreement is required to be delivered, each Pledgor represents, warrants as of the date hereof, and, from and after such date, covenants that:
(i)     it is the legal, record and beneficial owner of, and has good title to, all Pledged Securities purported to be owned by such Pledgor (including as shown on Annexes A , B and C hereto), subject to no Lien, except the Liens created by this Agreement or permitted under the Bank Facility Agreements;
(ii)     it has full power, authority and legal right to pledge all the Pledged Securities;
(iii)     this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes the legal, valid and binding obligation of such Pledgor enforceable in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv)     no consent of any other party (including, without limitation, any stockholder or creditor of such Pledgor or any of its Subsidiaries and any other partners or members of such Pledgor’s partnerships or limited liability companies) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (except any filings required under the UCC) or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with the execution, delivery or performance of this Agreement, in each case except (w) those which have been obtained or made, (x) as may be required by laws affecting the offer and sale of securities generally in connection with the exercise by the Pledgee of certain of its remedies hereunder, (y) as may be required to be obtained or made in order to comply with the terms of or avoid defaults under any contract of the Borrower or a Subsidiary of the Borrower otherwise permitted under the Bank Facility Agreements that imposes restrictions upon the sale of, or foreclosure of liens upon, any Securities of a Subsidiary pledged hereunder in connection with the exercise by the Pledgee of its remedies hereunder, and (z) where the failure to do so could not reasonably be expected to result in a Material Adverse Change;

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(v)     the execution, delivery and performance of this Agreement by such Pledgor does not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, or of the certificate of incorporation or by-laws (or analogous constitution or organizational documents) of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or imposition (or the obligation to create or impose) of any Lien on any of the assets of such Pledgor or any of its Subsidiaries; in each case except (x) as contemplated in this Agreement, (y) for violations and defaults that may arise under contracts of the Borrower or a Subsidiary thereof otherwise permitted under the Bank Facility Agreements as a result of the sale of, or foreclosure of a Lien upon, the Securities of Subsidiaries pledged hereunder to the extent that the prior consent of other parties to such contracts have not been obtained or other actions specified in such contracts have not been taken in connection with any such sale or foreclosure, and (z) for such violations, liens or encumbrances, the occurrence of which could not reasonably be expected to result in a Material Adverse Change; and
(vi)     this Agreement creates a valid security interest in favor of the Pledgee, for the benefit of the Secured Creditors, in the Collateral of such Pledgor and, when properly perfected by filing in the appropriate offices against such Pledgor, shall constitute a valid and perfected security interest in such Collateral, to the extent such security interest can be perfected by filing under the UCC.
Each Pledgor further represents and warrants that, on the date hereof, (i) the Pledged Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex A hereto; (ii) such Pledged Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex A hereto; (iii) the Pledged Limited Liability Company Interests held by such Pledgor constitute that percentage of the issued and outstanding equity interests of the respective issuing Pledged Limited Liability Company as is set forth in Annex B hereto; and (iv) the Pledged Partnership Interests held by such Pledgor constitute that percentage of the entire Partnership Interests of the respective Pledged Partnership as is set forth in Annex C hereto.
Each Pledgor covenants and agrees that it will defend the Pledgee’s and the other Secured Creditors’ right, title and security interest in and to the Collateral and the proceeds thereof against the claims and demands of all Persons whomsoever; and such Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors.
(b)     Each Pledgor hereby further represents and warrants as of the date hereof, and covenants from and after the date hereof, that the jurisdiction of formation of such Pledgor and its organizational ID number (as contemplated for use under Article 9 of the UCC) is as indicated on Annex F hereto for such Pledgor. Such Pledgor will not change its jurisdiction of organization (by merger or otherwise) except to such new location as such Pledgor may establish in accordance with the last sentence of this Section 12(b). No Pledgor shall change its jurisdiction of organization until with respect to such new location, it shall have taken all action necessary to maintain all security interests of the Pledgee in the Collateral intended to be granted hereby at all times fully perfected on a first priority basis and in full force and effect.
(c)     Without in any way limiting Section 3.2 hereof, at any time and from time to time that any Pledgor acquires any additional Securities which have not already been pledged hereunder and reflected on Annexes A through C , as appropriate, such Pledgor shall, no later than the time of required delivery of the Compliance Certificate pursuant to Section 5.05(a) of each of the Bank Facility Agreements relating to the fiscal quarter during which such acquisition occurred, deliver a supplement to this Agreement, substantially in the form of Annex H-1 hereto (each a “ New Collateral Supplement ”) adding such Securities to Annexes A through C hereto, as appropriate. The execution and delivery of any such supplement shall not require the consent of any Pledgor hereunder. It is understood and agreed that the pledge and security interests granted hereunder shall apply to all

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Collateral as provided in Section 3.1 hereof regardless of the failure of any Pledgor to deliver, or any inaccurate information stated in, any New Collateral Supplement as otherwise provided above.
13.     PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. Except as otherwise provided in Section 18 hereof, the obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Document or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument or this Agreement; (c) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (d) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; (e) any limitation on any other Pledgor’s liability or obligations under this Agreement or under any other Secured Debt Document or any invalidity or unenforceability, in whole or in part, of this Agreement or any other Secured Debt Document or any term thereof; or (f) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.
14.     REGISTRATION, ETC. If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Pledged Securities pursuant to Section 6 hereof, such Pledged Securities or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Pledged Securities or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration; provided that at least 10 Business Days’ notice of the time and place of any such sale shall be given to such Pledgor. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion: (a) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Securities or part thereof shall have been filed under such Securities Act; (b) may approach and negotiate with a single possible purchaser to effect such sale; and (c) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Pledged Securities or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Pledged Securities at a price which the Pledgee, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid so long as such disposition is otherwise commercially reasonable.
15.     TERMINATION, RELEASE. (a) On the Termination Date, this Agreement shall automatically terminate (provided that all indemnities set forth herein shall survive any such termination) and the Lien of the Pledgee granted hereunder shall automatically be released, and the Pledgee, at the request and expense of the respective Pledgor, will promptly execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee, if any. As used in this Agreement, “ Termination Date ” shall mean the earliest of (i) the date upon which the Total Commitments (as defined in the Credit Agreement) and the Commitments (as defined in the Term Loan Agreement) have been terminated, and all Obligations (excluding (x) normal continuing indemnity obligations which survive in accordance with their terms, so long as no amounts are then due and payable in respect thereof, and (y) Letters of Credit that have been Cash Collateralized) have been indefeasibly paid in full, and (ii) the Leverage Release Date as defined in Section 5.10(c) of the Bank Facility Agreements.
(a) In the event that any part of the Collateral (i) is sold in connection with a sale permitted by the Secured Debt Documents, (ii) is otherwise released in accordance with the terms of the Secured Debt Documents

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or at the direction of the Required Secured Creditors or (iii) ceases to be Pledged Securities (including, without limitation, as a result of the enactment of any law that has the effect of prohibiting or restricting such Collateral from being pledged, assigned, transferred or otherwise subject to a Lien in favor of another Person), such Collateral shall automatically be released from the Lien of the Pledgee granted hereunder, and the Pledgee, at the request and expense of such Pledgor will promptly execute and deliver to such Pledgor (or authorize such Pledgor to file, as applicable) a proper instrument or instruments acknowledging such release (including any UCC termination statements and any New Collateral Supplement that may be appropriate to evidence such release), and will duly assign, transfer and deliver to such Pledgor (without recourse to and without any representation or warranty by, any Secured Creditor) such of the Collateral as is then being (or has been) so sold, distributed or released and as may be in possession of the Pledgee, if any, and has not theretofore been released pursuant to this Agreement. Any proceeds of Collateral sold as contemplated by the immediately preceding sentence shall be applied in accordance with, and to the extent required by, the requirements of the applicable Secured Debt Documents.
(b)     At any time that a Pledgor desires that Collateral be released as provided in the foregoing Section 15(a) or (b), it shall deliver to the Pledgee a certificate signed by an authorized officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to Section 15(a) or (b) hereof and does not violate the terms of any Secured Debt Document then in effect, and the Pledgee shall be entitled (but not required) to conclusively rely thereon.
16.     NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been given or made when delivered to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement, addressed as follows:
(a)     if to any Pledgor c/o the Borrower at the address of the Borrower specified under Section 11.02 of each of the Bank Facility Agreements;
(b)     if to the Pledgee, at the address of the administrative agent determined under Section 11.02 of each of the Bank Facility Agreements;
(c)     if to any CA Creditor (other than the Pledgee), (x) to the CA Administrative Agent, at the address of the CA Administrative Agent specified in the Credit Agreement or (y) at such address as such CA Creditor shall have specified in the Credit Agreement;
(d)     if to any TL Creditor (other than the Pledgee), (x) to the TL Administrative Agent, at the address of the TL Administrative Agent specified in the Term Loan Agreement or (y) at such address as such TL Creditor shall have specified in the Term Loan Agreement;
(e)     if to any other Secured Creditor, (x) to the Representative for such Secured Creditor or (y) if there is no such Representative, at such address as such Secured Creditor shall have specified in writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
17.     WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Pledgor directly affected thereby (it being understood that additional Pledgors may be added as parties hereto from time to time in accordance with Section 19 hereof, the Collateral may be modified as contemplated by the Bank Facility Agreements and this Agreement, and Pledgors may be released as parties hereto in accordance with Sections 15 and 18 hereof and that no consent of any other Pledgor or of the Secured Creditors shall be required in connection therewith) and the Pledgee (with the written consent of the Required Lenders (or all the Banks if required by Section 11.01 of each of the Bank Facility Agreements) at all times prior to the Leverage Release Date; provided that the Borrower certifies that any such change, waiver, modification or variance is otherwise permitted by the terms of the respective Secured Debt Documents or, if not so permitted, that the requisite consents therefor have been obtained.

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Notwithstanding anything to the contrary contained above, it is understood and agreed that the Required Lenders may agree to modifications to this Agreement for the purpose, among other things, of securing additional extensions of credit (including, without limitation, pursuant to the Bank Facility Agreements or any refinancing or extension thereof) and that the Pledgors and the Pledgee may take any actions necessary to implement the recreation of this Agreement and the pledge hereunder without the consent of the Required Lenders or any other Secured Creditor under the circumstances contemplated by Section 5.10 of each of the Bank Facility Agreements, with such changes and recreation not being subject to the proviso to the immediately preceding sentence. Furthermore, the proviso to the first sentence of this Section 17 shall not apply to any release of Collateral effected in accordance with the requirements of Section 15 of this Agreement, or any other release of Collateral or termination of this Agreement so long as the Borrower certifies that such actions will not violate the terms of any Secured Debt Document then in effect.
18.     RELEASE OF PLEDGORS. In the event that at any time after a Person becomes a Pledgor hereunder (a) such Pledgor does not own any Pledged Securities (including, without limitation, as a result of the enactment of any law that has the effect of prohibiting or restricting such Collateral from being pledged, assigned, transferred or otherwise subject to a Lien in favor of another Person), (b) the Leverage Release Date described in Section 5.10(c) of each of the Bank Facility Agreements occurs, or (c) such Pledgor is otherwise permitted to be released pursuant to the Bank Facility Agreements, such Pledgor shall be automatically released from this Agreement and this Agreement shall, as to such Pledgor only, automatically have no further force or effect. At the request of the Borrower or such Pledgor, the Pledgee will promptly execute and deliver to such Pledgor a proper instrument or instruments acknowledging such release, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) the Collateral of such Pledgor that is in the Pledgee’s possession, if any.
19.     ADDITIONAL PLEDGORS. Certain Subsidiaries of the Borrower may after the date hereof be required to enter into this Agreement as a Pledgor. Upon execution and delivery, after the date hereof, by the Pledgee and such Subsidiary of a New Pledgor Supplement in the form of Annex H-2 hereto (a “ New Pledgor Supplement ”), such Subsidiary shall become a Pledgor hereunder with the same force and effect as if originally named as a Pledgor hereunder. Each Subsidiary which is required to become a party to this Agreement shall so execute and deliver a copy of the New Pledgor Supplement to the Pledgee and, at such time, shall execute a Supplement to the Pledge and Security Agreement in the form of Annex H-1 hereto with respect to all Collateral of such Pledgor required to be pledged hereunder. The execution and delivery of any such instrument shall not require the consent of any other Pledgor hereunder. Upon the execution and delivery by the Pledgee and such Subsidiary of a New Pledgor Supplement, it is understood and agreed that the pledge and security interests hereunder shall apply to all Collateral of such additional Pledgor as provided in Section 3.1 hereof regardless of any failure of any additional Pledgor to deliver, or any inaccurate information stated in, the New Collateral Supplement.
20.     RECOURSE. This Agreement is made with full recourse to the Pledgors and pursuant to and upon all representations, warranties, covenants and agreements on the part of the Pledgors contained herein and otherwise in writing in connection herewith.
21.     SECURED CREDITORS NOT BOUND. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or a partner of any partnership and the Pledgee or any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall not have any of the duties, obligations or liabilities of a member of any limited liability company or partner of any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of the respective Pledged Limited Liability Company Interest or Pledged Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor and/or any Pledgor.
(b)     Except as provided in the last sentence of paragraph (a) of this Section 21, the Pledgee, by accepting this Agreement, and the other Secured Creditors did not intend to become a member of any limited liability company or partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor or any limited liability company or partnership either before or after an Event of Default shall have

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occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or partnership or any Pledgor.
(c)     The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the collateral assignment hereby effected.
(d)     The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability in respect of the Collateral.
22.     CONTINUING PLEDGORS. The rights and obligations of each Pledgor (other than the respective released Pledgor in the case of following clause (b)) hereunder shall remain in full force and effect notwithstanding (a) the addition of any new Pledgor as a party to this Agreement as contemplated by Section 19 hereof or otherwise and/or (b) the release of any Pledgor under this Agreement as contemplated by Section 18 hereof or otherwise.
23.     NO FRAUDULENT CONVEYANCE. Each Pledgor hereby confirms that it is its intention that this Agreement not constitute a fraudulent transfer or conveyance for purposes of any bankruptcy, insolvency or similar law, the Uniform Fraudulent Conveyance Act or any similar Federal, state or foreign law. To effectuate the foregoing intention, each Pledgor hereby irrevocably agrees that its obligations and liabilities hereunder shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Pledgor that are relevant under such laws, result in the obligations and liabilities of such Pledgor hereunder in respect of such maximum amount not constituting a fraudulent transfer or conveyance.
24.     MISCELLANEOUS. (a) This Agreement shall be binding upon the successors and assigns of each Pledgor and shall inure to the benefit of the Secured Creditors and their respective successors and assigns and be enforceable by the Pledgee and its successors and assigns; provided that no Pledgor may assign any of its rights or obligations hereunder without the prior written consent of the Pledgee (with the consent of the Required Lenders and, if required by Section 11.01 of either of the Bank Facility Agreements, all Banks) and any such assignment without such consent shall be null and void.
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. ANY DISPUTE BETWEEN THE BORROWER, ANY PLEDGOR, THE PLEDGEE, OR ANY SECURED PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
(c) Except as provided in subsection (d), each of the parties hereto agrees that all disputes among them arising out of, connected with, related to, or incidental to the relationship established among them in connection with, this Agreement whether arising in contract, tort, equity, or otherwise, shall be resolved exclusively by state or federal courts located in the city, county and state of New York, but the parties hereto acknowledge that any appeals from those courts may have to be heard by a court located outside of New York. Each of the parties hereto waives in all disputes brought pursuant to this subsection (a) any objection that it may have to the location of the court considering the dispute.
(d) Each of the Borrower and each Pledgor agrees that the Pledgee or any Secured Party shall have the right to proceed against the Borrower, any Pledgor or their respective Property in a court in any location to enable such person to (1) obtain personal jurisdiction over the Borrower or such Pledgor or (2) enforce a judgment

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or other court order entered in favor of such Person. Each of the Borrower and each Pledgor agrees that it will not assert any permissive counterclaims in any proceeding brought by such Person to enforce a judgment or other court order in favor of such Person. Each of the Borrower and each Pledgor waives any objection that it may have to the location of the court in which such Person has commenced a proceeding described in this paragraph.
(e) The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument.
25.      WAIVER OF TRIAL BY JURY . EACH PLEDGOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH PLEDGOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
26.     SEVERABILITY. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
* * *




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly executed and delivered by its duly authorized officer on the date first above written.
THE PLEDGORS SET FORTH ON SCHEDULE 1 HERETO
    
By:
Title:
[Signature Page to Pledge and Security Agreement]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



Accepted and Agreed to:
CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent, and Pledgee

By:     
Name:
Title:
[Signature Page to Pledge and Security Agreement]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



SCHEDULE 1
TO
PLEDGE AND SECURITY AGREEMENT
PLEDGORS :

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX A
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED STOCK OF CORPORATIONS
All of the following Pledged Stock constitutes Collateral under this Agreement.
Pledgor
 
Pledged Stock
 
Percentage Owned


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX B
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED LIMITED LIABILITY COMPANY INTERESTS
All of the following Pledged Limited Liability Company Interests constitute Collateral under this Agreement.
Pledgor
 
Pledged Limited Liability Company Interests
 
Percentage Owned


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX C
to
PLEDGE AND SECURITY AGREEMENT
LIST OF PLEDGED PARTNERSHIP INTERESTS
All of the following Pledged Partnership Interests constitute Collateral under this Agreement.
Pledged Partnership Interest
 
Pledgor
 
Pledged Partnership Percentage


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



Annex C
Page 2
Pledged Partnership Interest
 
Pledgor
 
Pledged Partnership Percentage


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX D
to
PLEDGE AND SECURITY AGREEMENT
FORM OF AUTHORIZATION STATEMENT

______________, 20[__]

To:    [Name and Address of Issuer]


Reference is made to the Pledge and Security Agreement, dated __________, ____ (the “ Pledge Agreement ”; capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Pledge Agreement), made by the undersigned and certain other parties to Citibank, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee, a copy of which is attached hereto. Pursuant to the Pledge Agreement, the undersigned hereby notifies [Name of Issuer] that the undersigned has granted to the Pledgee, for the ratable benefit of the Secured Parties, a security interest (the “ Security Interest ”) in all of the undersigned’s right, title and interest in and to all of the Collateral (including all of the interests of the undersigned in [Name of Issuer]), and hereby instructs [Name of Issuer] to register the Security Interest in favor of:
CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department

Very truly yours,
                            
[NAME OF PLEDGOR]


By: ___________________________________
Name:
Title:

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX E
to
PLEDGE AND SECURITY AGREEMENT
FORM OF ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Authorization Statement, dated as of ________________, ____ and the Pledge Agreement referred to therein.
[NAME OF PLEDGOR]


By: ___________________________________
Name:
Title:

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



ANNEX F
to
PLEDGE AND SECURITY AGREEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER
Entity
 
Jurisdiction of Organization (Organized in Delaware unless indicated)
 
ID Numbers






LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


ANNEX G
to
PLEDGE AND SECURITY AGREEMENT
THE PLEDGEE
1. Appointment . The Secured Creditors, by their acceptance of the benefits of the Pledge and Security Agreement to which this Annex G is attached (the “ Pledge Agreement ”) hereby irrevocably designate CITIBANK, N.A., in its capacities as CA Administrative Agent and TL Administrative Agent (and any successor Pledgee), to act as specified therein and to be bound by the terms of this Annex G . Unless otherwise defined herein, all capitalized terms used herein (a) and defined in the Pledge Agreement, are used herein as therein defined and (b) not defined in the Pledge Agreement, are used herein as defined in the Credit Agreement referenced in the Pledge Agreement. Each Secured Creditor hereby irrevocably authorizes, and each holder of any Obligation by the acceptance of such Obligation and by the acceptance of the benefits of the Pledge Agreement shall be deemed irrevocably to authorize, the Pledgee to take such action on its behalf under the provisions of the Pledge Agreement and any instruments and agreements referred to therein and to exercise such powers and to perform such duties thereunder as are specifically delegated to or required of the Pledge Agreement by the terms thereof and such other powers as are reasonably incidental thereto. The Pledgee may perform any of its duties thereunder by or through its authorized agents, subagents or employees.
2. Nature of Duties . (a) The Pledgee shall have no duties or responsibilities except those expressly set forth herein or in the Pledge Agreement. The duties of the Pledgee shall be mechanical and administrative in nature; the Pledgee shall not have by reason of the Pledge Agreement or any other Secured Debt Document a fiduciary relationship in respect of any Secured Creditor; and nothing in the Pledge Agreement or any other Secured Debt Document, expressed or implied, is intended to or shall be so construed as to impose upon the Pledgee any obligations in respect of the Pledge Agreement except as expressly set forth herein and therein.
(b) The Pledgee shall not be responsible for insuring the Collateral or for the payment of taxes, charges or assessments or discharging of Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
(c) The Pledgee shall not be required to ascertain or inquire as to the performance by any Pledgor of any of the covenants or agreements contained in the Pledge Agreement or any other Secured Debt Document.
(d) The Pledgee shall be under no obligation or duty to take any action under, or with respect to, the Pledge Agreement if taking such action (i) would subject the Pledgee to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the Pledgee to qualify to do business, or obtain any license, in any jurisdiction where it is not then so qualified or licensed or (iii) would subject the Pledgee to in personam jurisdiction in any locations where it is not then so subject.
(e) Notwithstanding any other provision of this Annex G, neither the Pledgee nor any of its officers, directors, employees, affiliates or agents shall, in its individual capacity, be personally liable for any action taken or omitted to be taken by it in accordance with, or pursuant to this Annex G or the Pledge Agreement except for its own gross negligence or willful misconduct.
3. Lack of Reliance on the Pledgee . Independently and without reliance upon the Pledgee, each Secured Creditor, to the extent it deems appropriate, has made and shall continue to make (a) its own independent investigation of the financial condition and affairs of each Pledgor and its Subsidiaries in connection with the making and the continuance of the Obligations and the taking or not taking of any action in connection therewith, and (b) its own appraisal of the creditworthiness of each Pledgor and its Subsidiaries, and the Pledgee shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured Creditor with any credit or other information with respect thereto, whether coming into its possession before the extension of any Obligations or the purchase of any notes or at any time or times thereafter. The Pledgee shall not be responsible in any manner whatsoever to any Secured Creditor for the correctness of any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of the

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


Pledge Agreement or the security interests granted hereunder or the financial condition of any Pledgor or any Subsidiary of any Pledgor or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of the Pledge Agreement, or the financial condition of any Pledgor or any Subsidiary of any Pledgor, or the existence or possible existence of any Default or Event of Default. The Pledgee makes no representations as to the value or condition of the Collateral or any part thereof, or as to the title of any Pledgor thereto or as to the security afforded by the Pledge Agreement.
4. Certain Rights of the Pledgee . (a) No Secured Creditor shall have the right to cause the Pledgee to take any action with respect to the Collateral, with only the Required Secured Creditors (or all of the Secured Creditors in the case of the release of all or substantially all of the Collateral) having the right to direct the Pledgee to take any such action. If the Pledgee shall request instructions from the Required Secured Creditors, with respect to any act or action (including failure to act) in connection with the Pledge Agreement, the Pledgee shall be entitled to refrain from such act or taking such action unless and until it shall have received instructions from the Required Secured Creditors and to the extent requested, appropriate indemnification in respect of actions to be taken, and the Pledgee shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Secured Creditor shall have any right of action whatsoever against the Pledgee as a result of the Pledgee acting or refraining from acting hereunder in accordance with the instructions of the Required Secured Creditors. As used herein, the term “ Required Secured Creditors ” shall mean, the holders of at least a majority of the then outstanding Bank Facility Obligations.
(b) Notwithstanding anything to the contrary contained herein, the Pledgee is authorized, but not obligated, (i) to take any action reasonably required to perfect or continue the perfection of the liens on the Collateral for the benefit of the Secured Creditors and (ii) when instructions from the Required Secured Creditors have been requested by the Pledgee but have not yet been received, to take any action which the Pledgee, in good faith, believes to be reasonably required to promote and protect the interests of the Secured Creditors in the Collateral; provided that once instructions have been received, the actions of the Pledgee shall be governed thereby and the Pledgee shall not take any further action which would be contrary thereto.
(c) Notwithstanding anything to the contrary contained herein or in the Pledge Agreement, the Pledgee shall not be required to take any action that exposes or, in the good faith judgment of the Pledgee may expose, the Pledgee or its officers, directors, agents or employees to personal liability, unless the Pledgee shall be adequately indemnified as provided herein, or that is, or in the good faith judgment of the Pledgee may be, contrary to the Pledge Agreement, any Secured Debt Document or applicable law.
5. Reliance . The Pledgee shall be entitled to rely, and shall be fully protected in relying, upon, any note, writing, resolution, notice, statement, certificate, telex, teletype or telescopes message, cablegram, radiogram, order or other document or telephone message signed, sent or made by the proper Person or entity, and, with respect to all legal matters pertaining hereto or to the Pledge Agreement and its duties thereunder and hereunder, upon advice of counsel selected by it.
6. Indemnification . To the extent the Pledgee is not reimbursed and indemnified by the Pledgors under the Pledge Agreement, the Secured Creditors will reimburse and indemnify the Pledgee, in proportion to their respective outstanding principal amounts (including, for this purpose, any unpaid Primary Obligations in respect of Other Secured Documents, as outstanding principal) of Obligations, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Pledgee in performing its duties hereunder, or in any way relating to or arising out of its actions as Pledgee in respect of the Pledge Agreement except for those resulting solely from the Pledgee’s own gross negligence or willful misconduct. The indemnities set forth in this Section 6 shall survive the repayment of all Obligations, with the respective indemnification at such time to be based upon the outstanding principal amounts (determined as described above) of Obligations at the time of the respective occurrence upon which the claim against the Pledgee is based or, if the same is not reasonably determinable, based upon the outstanding principal amounts (determined as described above) of Obligations as in effect immediately prior to the termination of the Pledge Agreement. The indemnities set forth in this Section 6 are in addition to any indemnities provided by the Lenders to the Pledgee pursuant to the Bank Facility Agreements, with the effect being that the Lenders shall be responsible for indemnifying the Pledgee to the extent the Pledgee

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


does not receive payments pursuant to this Section 6 from the Secured Creditors (although in such event, and upon the payment in full of all such amounts owing to the Pledgee by the Lenders, the Lenders shall be subrogated to the rights of the Pledgee to receive payment from the Secured Creditors).
7. The Pledgee in its Individual Capacity . With respect to its obligations as a lender under the Bank Facility Agreements and any other Credit Documents to which the Pledgee is a party, and to act as agent under one or more of such Credit Documents, the Person serving as Pledgee shall have the rights and powers specified therein and herein for a “Bank”, or the “Administrative Agent”, as the case may be, and may exercise the same rights and powers as though it were not performing the duties specified herein; and the terms “Banks,” “Required Lenders,” “holders of Notes,” or any similar terms shall, unless the context clearly otherwise indicates, include the Person serving as Pledgee in its individual capacity. The Person serving as Pledgee and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, any Pledgor or any Affiliate or Subsidiary of any Pledgor as if it were not performing the duties specified herein or in the other Credit Documents, and may accept fees and other consideration from the Pledgors for services in connection with the Bank Facility Agreements, the other Credit Documents and otherwise without having to account for the same to the Secured Creditors.
8. Holders . The Pledgee may deem and treat the payee of any note as the owner thereof for all purposes hereof unless and until written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Pledgee. Any request, authority or consent of any person or entity who, at the time of making such request or giving such authority or consent, is the holder of any note, shall be final and conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such note or of any note or notes issued in exchange therefor.
9. Resignation by the Pledgee . (a) The Pledgee may resign from the performance of all of its functions and duties hereunder and under the Pledge Agreement at any time by giving 30 days’ prior written notice to the Borrower, the Banks and the Representatives for the other Secured Creditors or, if there is no such Representative, directly to such Secured Creditors. Such resignation shall take effect upon the appointment of a successor Pledgee pursuant to clause (b) or (c) below.
(b) Upon any notice of resignation by the Pledgee, the Required Secured Creditors shall appoint a successor Pledgee in accordance with Section 10.06 of the Credit Agreement, with the consent of the Borrower, which consent shall not be unreasonably withheld or delayed. If a successor Pledgee shall not have been appointed within said 30 day period by the Required Secured Creditors, the Pledgee, with the consent of the Borrower, which consent shall not be unreasonably withheld or delayed, shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or thereunder until such time, if any, as the Required Secured Creditors appoint a successor Pledgee as provided above.
(c) If no successor Pledgee has been appointed pursuant to clause (b) above by the 45th day after the date of such notice of resignation was given by the Pledgee, as a result of a failure by the Borrower to consent to the appointment of such a successor Pledgee, the Required Secured Creditors shall then appoint a successor Pledgee who shall serve as Pledgee hereunder or thereunder ( provided that all determinations to be made by such Pledgee shall instead be made by the Required Secured Creditors) until such time, if any, as the Required Secured Creditors appoint a successor Pledgee as provided in clause (b) above.




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


ANNEX H-1
to
PLEDGE AND SECURITY AGREEMENT
FORM OF
NEW COLLATERAL SUPPLEMENT
to
PLEDGE AND SECURITY AGREEMENT
SUPPLEMENT No. ____ to PLEDGE AND SECURITY AGREEMENT, dated as of __________, ____ (this “ Supplement ”), made by _____________________ , a _____________________ _____________________ (the “ Pledgor ”), in favor of CITIBANK, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (in such capacities, the “ Pledgee ”) for the Secured Creditors (such term and each other capitalized term used but not defined having the meaning given in the Pledge Agreement (as hereinafter defined)).
1. Reference is hereby made to that certain Pledge and Security Agreement, dated as of ______, ____ (as amended, supplemented or otherwise modified as of the date hereof, the “ Pledge Agreement ”), made by the Pledgors party thereto in favor of the Pledgee for the benefit of the Secured Creditors described therein.
2. The Pledgor hereby confirms and reaffirms the security interest in the Collateral granted to the Pledgee for the benefit of the Secured Creditors under the Pledge Agreement, and, as additional collateral security for the prompt and complete payment when due (whether at stated maturity, by acceleration or otherwise) of the Obligations and in order to induce the Secured Creditors to make and continue or maintain loans and other extensions of credit constituting Obligations, the Pledgor hereby grants to the Pledgee, for the benefit of the Secured Creditors, a first priority security interest in [(a) all of the issued and outstanding shares of capital stock listed in Schedule I hereto, together with all stock certificates, options, or rights of any nature whatsoever which may be issued or granted in respect of such stock while the Pledge Agreement, as supplemented hereby, is in force (the “ Additional Pledged Stock ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Stock ” shall be deemed to include the Additional Pledged Stock)], [and][(b) all limited liability company interests listed on Schedule II hereto (the “ Additional Pledged Limited Liability Company Interests ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Limited Liability Company Interests ” shall be deemed to include the Additional Pledged Limited Liability Company Interests)], [and][(c) all partnership interests listed on Schedule III hereto (the “ Additional Pledged Partnership Interests ”; as used in the Pledge Agreement as supplemented by this Supplement, “ Pledged Partnership Interests ” shall be deemed to include Additional Pledged Partnership Interests)], as the case may be, and all proceeds thereof.
3. The Pledgor hereby represents and warrants that the representations and warranties contained in Section 15 of the Pledge Agreement are true and correct on the date of this Supplement [with references therein to the “ Pledged Stock ” to include the Additional Pledged Stock,] [with references therein to the “ Pledged Partnership Interests ” to include the Additional Pledged Partnership Interests,] [with references therein to the “ Pledged Limited Liability Company Interests ” to include the Additional Pledged Limited Liability Company Interests,] and with references therein to the “ Pledge Agreement ” to mean the Pledge Agreement as supplemented by this Supplement.
4. The Pledgor hereby represents and warrants that, as of the date hereof, the jurisdiction of formation of the Pledgor is as indicated on Schedule IV hereto.
5. This Supplement is supplemental to the Pledge Agreement, forms a part thereof and is subject to the terms thereof and the Pledge Agreement is hereby supplemented as provided herein. Without limiting the foregoing, (a) Annex A to the Pledge Agreement shall hereby be deemed to include each item listed on Schedule I to this Supplement, (b) Annex B to the Pledge Agreement shall hereby be deemed to include each item listed on Schedule II to this Supplement, (c) Annex C to the Pledge Agreement shall hereby be deemed to include each term listed on Schedule III to this Supplement, and (d) Annex F to the Pledge Agreement shall be deemed to include the jurisdiction of formation listed on Schedule IV to this Supplement.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
*    *    *

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Supplement to be duly executed and delivered on the date first set forth above.
[PLEDGOR]

By:     
Name:
Title:


CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent and Pledgee

By:     
Name:
Title:





LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


SCHEDULE I
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED STOCK
All of the following Pledged Stock constitutes Collateral under this Agreement.
Pledgor
 
Pledged Stock
 
Percentage Owned


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



SCHEDULE II
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED LIMITED LIABILITY COMPANY INTERESTS
All of the following Pledged Limited Liability Interests constitute Collateral under this Agreement.
Pledgor
 
Pledged Limited Liability Company Interests
 
Percentage Owned


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



SCHEDULE III
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
PLEDGED PARTNERSHIP INTERESTS
All of the following Pledged Partnership Interests constitute Collateral under this Agreement.
Pledged Partnership Interest
 
Pledgor
 
Percentage Owned


LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



SCHEDULE IV
to
SUPPLEMENT to PLEDGE AND SECURITY AGREEMENT
JURISDICTION OF FORMATION AND ORGANIZATIONAL ID NUMBER






LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


ANNEX H-2
to
PLEDGE AND SECURITY AGREEMENT
FORM OF
NEW PLEDGOR SUPPLEMENT
SUPPLEMENT NO. ____ dated as of __________, ____ to the Pledge and Security Agreement dated as of __________, ____ (as amended, supplemented or otherwise modified as of the date hereof, the “ Pledge Agreement ”), among the Pledgors party thereto (immediately before giving effect to this Supplement) and CITIBANK, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (in such capacities, the “ Pledgee ”) for the Secured Creditors (such term and each other capitalized term used but not defined having the meaning given it in the Pledge Agreement or the Credit Agreement).
A. The Pledgors have entered into the Pledge Agreement in order to induce the Secured Creditors to make loans and other extensions of credit constituting Obligations as defined in the Pledge Agreement. Pursuant to Section 5.10 of each of the Bank Facility Agreements, certain Subsidiaries of the Borrower are, after the date of the Pledge Agreement, required to enter into the Pledge Agreement as a Pledgor. Section 19 of the Pledge Agreement provides that additional Subsidiaries may become Pledgors under the Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned (the “ New Pledgor ”) is a Subsidiary of the Borrower and is executing this Supplement in accordance with the requirements of the Bank Facility Agreements and/or the Pledge Agreement to become a Pledgor under the Pledge Agreement in order to induce the Secured Creditors to extend, or maintain, Obligations.
Accordingly, the Pledgee and the New Pledgor agree as follows:
SECTION 1. The New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby agrees to all the terms and provisions of the Pledge Agreement applicable to it as a Pledgor thereunder. Each reference to a “ Pledgor ” in the Pledge Agreement shall be deemed to include the New Pledgor. The Pledge Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the Secured Creditors that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to the effects of applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and equitable principles of general applicability and that the representations and warranties in the Pledge Agreement applicable to each Pledgor are true and correct as to the New Pledgor on the date hereof.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument. This Supplement shall become effective when the Pledgee shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and the Pledgee.
SECTION 4. Except as expressly supplemented hereby, the Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Pledge Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


SECTION 7. All communications and notices hereunder shall be in writing and given as provided in the Pledge Agreement. All communications and notices hereunder to the New Pledgor shall be given to it at the address set forth under its signature, with a copy to the Borrower.
*    *    *



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


IN WITNESS WHEREOF, the New Pledgor and the Pledgee have duly executed this Supplement to the Pledge Agreement as of the day and year first above written.
[NAME OF NEW PLEDGOR]

By:     
Name:
Title:
Address:

CITIBANK, N.A.,
as CA Administrative Agent, TL Administrative Agent and Pledgee

By:     
Name:
Title:



LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


ANNEX I
to
PLEDGE AND SECURITY AGREEMENT
FORM OF TRANSACTION STATEMENT

___________________, ____

To:     [NAME OF PLEDGOR]
and
CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department


This Transaction Statement is to advise you that the pledge of [describe Collateral] (“ Pledged Equity ”) has been registered in favor of Citibank, N.A., as CA Administrative Agent, TL Administrative Agent and Pledgee (the “ Lienholder ”), as follows:

CITIBANK, N.A.,
    as CA Administrative Agent, TL Administrative Agent and Pledgee
    1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Bank Loan Syndications Department

Taxpayer identification number: 13-5266470.

The pledge was registered on [INSERT DATE OF REGISTRATION].

To the extent the Pledged Equity shall at any time be deemed “uncertificated securities” under Article 8 of the Uniform Commercial Code as in effect from time to time in the jurisdiction of the undersigned, the undersigned agrees that it will comply with instructions originated by the Lienholder with respect to the Pledged Equity without further consent by [Name of Pledgor].

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT



This Transaction Statement is merely a record of the rights of the addressees as of the time of its issuance. Delivery of this Transaction Statement, of itself, confers no rights on the recipients. This Transaction Statement is neither a negotiable instrument nor a security.


Very truly yours,

[NAME OF ISSUER]

By:     
Name:
Title:




LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
PLEDGE AND SECURITY AGREEMENT


SCHEDULE 1.01(A)
COMMITMENTS
Total Allocation

Name of Lender
Term Loan
Citibank, N.A.
$38,750,000
Bank of Montreal
$72,750,000
Bank of America, N.A.
$25,000,000
U.S. Bank National Association
$61,000,000
PNC Bank, National Association
$55,000,000
Sumitomo Mitsui Banking Corporation
$45,000,000
TD Bank, N.A.
$50,000,000
Regions Bank
$50,000,000
Wells Fargo Bank, National Association
$23,000,000
Branch Banking and Trust Company
$35,000,000
Raymond James Bank, N.A.
$25,000,000
Crédit Agricole Corporate and Investment Bank
$25,000,000
Barclays Bank PLC
$29,500,000
Land Bank of Taiwan, New York Branch
$10,000,000
Taiwan Cooperative Bank, Los Angeles Branch
$10,000,000
Total
$555,000,000


Sch. 1.01(A)



SCHEDULE 1.01(B)

EXISTING PROPERTIES
($’s below denote Investment Amount as of September 30, 2016)
1.
Westin Copley Place     10 Huntington Avenue, Boston, MA 02116    
$353,575,519
2.
Hyatt Boston Harbor     101 Harborside Drive, Boston, MA 02128    
$77,832,920

Unencumbered Properties – The following properties are Unencumbered, pursuant to the definition of “Unencumbered Properties” and are noted below pursuant to Section 4.21 of the Credit Agreement
3.
Le Montrose Suite Hotel         900 Hammond St, West Hollywood, CA 90069    
$23,058,248
4.
Topaz Hotel     1733 N Street, NW, Washington, DC     20036    
$17,277,507
5.
Hotel Madera     1310 New Hampshire Ave, NW, Washington, DC 20036
$15,379,197
6.
Hotel Rouge     1315 16 th Street, NW, Washington, DC 20036     
$18,701,867
7.
The Mason and Rook Hotel         1430 Rhode Island Ave, NW, Washington, DC 20005
$47,666,169
8.
The Liaison Capitol Hill         415 New Jersey Avenue, NW, Washington, DC 20001    
$65,948,178
9.
Hotel George     15 E Street, NW, Washington, DC 20001    
$28,373,421
10.
Lansdowne Resort     44050 Woodridge Parkway, Leesburg, VA 20176
$172,146,931
11.
Chaminade     One Chaminade Lane, Santa Cruz, CA 95065
$36,123,611
12.
Grafton on Sunset     8462 West Sunset Boulevard, West Hollywood, CA 90069
$35,281,542

Sch. 1.01(B)



13.
Onyx Hotel     155 Portland Street, Boston, MA 02114
$29,934,828
14.
Hilton San Diego Resort     1775 East Mission Bay Drive, San Diego, CA 92109
$115,230,891
15.
The Donovan    1155 14 th Street, NW, Washington, DC 20005    
$82,520,529
16.
Hotel Chicago     333 North Dearborn Street, Chicago, IL 60610    
$159,181,867
17.
Westin Michigan Avenue     909 North Michigan Avenue, Chicago, IL 60611    
$246,011,639
18.
Alexis Hotel     1007 First Avenue, Seattle, WA 98104        
$50,525,796
19.
Hotel Amarano     322 North Pass Avenue, Burbank, CA 91505    
$46,510,896
20.
Le Parc Suite Hotel     733 North West Knoll Drive, West Hollywood, CA 90069 $54,622,678
21.
San Diego Paradise Point Resort     1404 West Vacation Road, San Diego, CA 92109
$119,644,264
22.
Gild Hall     15 Gold Street, New York, NY 10038
$62,174,108
23.
Sofitel Washington, DC Lafayette Square     806 15 th Street, NW, Washington, DC 20005
$101,507,998
24.
The Marker Hotel San Francisco     501 Geary Street, San Francisco, CA 94102     $74,196,380
25.
Westin Philadelphia     99 South 17 th Street, Philadelphia, PA 19103    
$147,966,195
26.
Embassy Suites Philadelphia - Center City     1776 Benjamin Franklin Pkwy, Philadelphia, PA 19103
$85,232,416
27.
The Roger     131 Madison Avenue, New York, NY 10016
$96,960,147

Sch. 1.01(B)



28.
Chamberlain West Hollywood     1000 Westmount Drive, West Hollywood, CA 90069
$40,841,846
29.
Viceroy Santa Monica     1819 Ocean Avenue, Santa Monica, CA 90401     $79,752,087
30.
Villa Florence     225 Powell Street, San Francisco, CA 94102 $72,367,623
31.
Park Central NY & WestHouse NY    870 7 th Avenue, New York, NY 10019
$476,365,300
32.
Hotel Palomar    2121 P Street, NW, Washington, DC 20037 $143,345,233
33.
Hilton Gaslamp Quarter    401 K Street, San Diego, CA 92101        
$89,329,396
34.
Hotel Solamar     435 6 th Avenue, San Diego, CA 92101        
$92,471,396
35.
L’Auberge Del Mar    1540 Camino Del Mar, Del Mar, CA 92014
$75,390,747
36.
The Liberty Hotel    215 Charles Street, Boston, MA 02114
$175,452,787
37.
Hotel Triton    342 Grant Avenue, San Francisco, CA 94108
$11,630,928
38.
Harbor Court    165 Steuart Street, San Francisco, CA 94105
$37,174,440
39.
Serrano Hotel    405 Taylor Street, San Francisco, CA 94102
$70,442,202
40.
Southernmost Hotel Collection    1319 Duval Street, Key West, FL 33040
$183,131,594
41.
Hotel Deca     4507 Brooklyn Avenue, NE, Seattle, WA 98105    
$30,284,731
42.
Hotel Vitale    8 Mission Street, San Francisco, CA 94105
$126,740,804

Sch. 1.01(B)



43.
The Heathman Hotel    1001 SW Broadway, Portland, OR 97205
$64,575,379
44.
The Marker Waterfront Resort    200 William Street, Key West, FL 33040
$92,863,380
45.
Park Central San Francisco    50 Third Street, San Francisco, CA 94103
$348,732,334




Sch. 1.01(B)



SCHEDULE 1.01(C)
GUARANTORS

GUARANTORS
Name
Federal Tax
Id Number
DA Entity, LLC, a Delaware limited liability company
27-1510334
RDA Entity, Inc., a Delaware corporation
27-1507213
I&G Capitol, LLC, a Delaware limited liability company
52-2363632
LaSalle Hotel Lessee, Inc., an Illinois corporation
36-4220546
LaSalle Hotel Properties, a Maryland real estate investment trust
36-4219376
LHO Grafton Hotel Lessee, Inc., a Delaware corporation
20-2140342
LHO Grafton Hotel, L.P., a Delaware limited partnership
20-2138667
LHO Hollywood LM, L.P., a Delaware limited partnership
52-2248273
LHO Le Parc Lessee, Inc., a Delaware corporation
20-3870017
LHO Le Parc, LP, a Delaware limited partnership
20-3868653
LHO Mission Bay Hotel, L.P., a California limited partnership
36-4232561
LHO Mission Bay Rosie Hotel, L.P., a Delaware limited partnership
20-3819466
LHO Mission Bay Rosie Lessee, Inc., a Delaware corporation
20-3819286
LHO San Diego Financing, L.L.C., a Delaware limited liability company
36-4217399
LHO Santa Cruz Hotel One, L.P. a Delaware limited partnership
20-2494600
LHO Santa Cruz One Lessee, Inc., a Delaware corporation
20-1812234
Lucky Town Burbank Lessee, Inc., a Delaware corporation
20-8668065
Lucky Town Burbank, L.P. a Delaware limited partnership
20-8669197
Ramrod Lessee, Inc., a Delaware corporation
26-2644161
Paradise Lessee, Inc., a Delaware corporation
26-2555404

Sch. 1.01(C)




GUARANTORS
Geary Darling Lessee, Inc., a Delaware corporation
27-3093379
Geary Darling, LP a Delaware limited partnership
27-3313990
Chamber Maid, LP a Delaware limited partnership
27-3602665
Chamber Maid Lessee, Inc., a Delaware corporation
27-3602695
Seaside Hotel, LP a Delaware limited partnership
27-4510347
Seaside Hotel Lessee, Inc., a Delaware corporation
27-4484507
Let IT FLHO, LP a Delaware limited partnership
45-3323336
Let It FLHO Lessee, Inc., a Delaware corporation
45-3180571
Glass Houses, a Maryland real estate investment trust
26-2526042
LaSalle Washington One Lessee, Inc., a Delaware corporation
36-4412231
LHO Washington Hotel Four, L.L.C., a Delaware limited liability company
52-2361130
LHO Washington Hotel One, L.L.C., a Delaware limited liability company
52-2361142
LHO Washington Hotel Six, L.L.C., a Delaware limited liability company
81-0622154
LHO Washington Hotel Three, LLC, a Delaware limited liability company
52-2361124
LHO Washington Hotel Two, L.L.C., a Delaware limited liability company
52-2361117
DC One Lessee, L.L.C., a Delaware limited liability company
26-2563826
DC Two Lessee, L.L.C., a Delaware limited liability company
26-2564209
DC Three Lessee, L.L.C., a Delaware limited liability company
26-2564466
DC Four Lessee, L.L.C., a Delaware limited liability company
26-2564627
DC Six Lessee, L.L.C., a Delaware limited liability company
26-2564789
DC I&G Capital Lessee, L.L.C., a Delaware limited liability company
26-2564700
LHO Tom Joad Circle DC Lessee, L.L.C., a Delaware limited liability company
36-4220546
LHO Tom Joad Circle DC, L.L.C., a Delaware limited liability company
20-3868735
H Street Shuffle, LLC, a Delaware limited liability company
27-1869414

Sch. 1.01(C)
2


GUARANTORS
H Street Shuffle Lessee, LLC, a Delaware limited liability company
27-1869550
LHO Chicago River Lessee, L.L.C., a Delaware limited liability company
36-4220546
LHO Chicago River, L.L.C., a Delaware limited liability company
36-4217399
LHO Onyx Hotel One, L.L.C., a Delaware limited liability company
36-4217399
LHO Onyx One Lessee, L.L.C., a Delaware limited liability company
36-4220546
NYC Serenade, L.L.C., a Delaware limited liability company
36-4217399
NYC Serenade Lessee, L.L.C., a Delaware limited liability company
27-0900157
Chimes of Freedom Lessee, LLC, a Delaware limited liability company
27-3168127
Chimes I, LLC, a Delaware limited liability company
27-3254069
Of Freedom I, LLC, a Delaware limited liability company
27-3254204
Chimes of Freedom, LLC, a Delaware limited liability company
27-3375998
Wild I, LLC, a Delaware limited liability company
27-3168357
Wild Innocent I, LP a Delaware limited partnership
20-5780150
Wild Innocent I Lessee, LLC, a Delaware limited liability company
30-0642182
LHO Leesburg One Lessee, Inc., a Delaware corporation
58-2671994
LHO New Orleans LM, L.P. a Delaware limited partnership
52-2248283
PC Festivus, LLC, a Delaware limited liability company
45-2474693
PC Festivus Lessee, LLC, a Delaware limited liability company
45-2474584
Silver P, LLC, a Delaware limited liability company
37-1664342
Silver P Lessee, LLC, a Delaware limited liability company
30-0719100
LHO San Diego Hotel One, LP a Delaware limited partnership
20-1852780
LHO San Diego One Lessee, Inc. a Delaware corporation
20-1812234
LHO Alexis Hotel, L.L.C., a Delaware limited liability company
36-4217399
LHO Alexis Lessee, L.L.C., a Delaware limited liability company
36-4220546

Sch. 1.01(C)
3


GUARANTORS
Souldriver, LP a Delaware limited partnership
20-5279665
Souldriver Lessee, Inc. a Delaware corporation
20-5851118
Serenity Now, LP a Delaware limited partnership
30-0790854
Serenity Now, Lessee, Inc. a Delaware corporation
30-0790438
LHOBerge, LP a Delaware limited partnership
36-4746317
LHOBerge Lessee, Inc. a Delaware corporation
38-3889858
Dim Sum, L.P. a Delaware limited partnership
30-0766573
Dim Sum Lessee, Inc. a Delaware corporation
61-1706154
Fun to Stay, L.P. a Delaware limited partnership
30-0766575
Fun to Stay Lessee, Inc. a Delaware corporation
35-2469547
Sunset City, LLC, a Delaware limited liability company
61-1719737
Sunset City Lessee, LLC, a Delaware limited liability company
90-1010467
Look Forward, LLC, a Delaware limited liability company
35-2463192
Don't Look Back, LLC, a Delaware limited liability company
37-1708831
Look Forward Lessee, LLC, a Delaware limited liability company
38-3893577
Don't Look Back Lessee, LLC, a Delaware limited liability company
30-0758106
Viva Soma LP, a Delaware limited partnership
36-4800761
Viva Soma Lessee, Inc., a Delaware corporation
61-1751660
PDX Pioneer, LLC, a Delaware limited liability company
35-2519649
PDX Pioneer Lessee, LLC, a Delaware limited liability company
32-0452377
SF Treat, LP, a Delaware limited partnership
35-2493956
SF Treat Lessee, Inc., a Delaware corporation
37-1748280
Harborside, LLC, a Florida limited liability company
46-0744417
Harborside Lessee, LLC, a Delaware limited liability company
32-0458399

Sch. 1.01(C)
4


GUARANTORS
LHO Badlands, Lessee, LLC, a Delaware limited liability company
36-4220546
LHO Badlands, LLC a Delaware limited liability company
36-4217399
RW New York, LLC, a Delaware limited liability company
27-3168738
RW New York Lessee, LLC, a Delaware limited liability company
27-3168663
LHO Michigan Avenue Freezeout, L.L.C., a Delaware limited liability company
36-4217399
LHO Michigan Avenue Freezeout Lessee, L.L.C., a Delaware limited liability company
36-4220546



Sch. 1.01(C)
5


SCHEDULE 1.01(D)

QUALIFIED GROUND LEASES
San Diego Paradise Point (San Diego, California)
That certain Percentage Lease dated as of May 15, 2000, by and among the City of San Diego as Lessor and LHO Mission Bay Hotel, L.P., as Lessee.
Hyatt Harborside (Boston, Massachusetts)
Amended and Restated Ground Lease for Phase C of The Bird Island Flats Development by and between Massachusetts Port Authority and LHO Harborside Hotel, L.L.C., dated as of March 1, 2001.
Hilton San Diego Resort (San Diego, California)
Lease Agreement dated as of September 12, 2000, executed between the City of San Diego, and Hilton San Diego Corporation as assigned to LHO Mission Bay Rosie Hotel, L.P., by the Assignment and Assumption of Ground Lease dated December 1, 2005.
The Roger (New York, NY)
Lease dated December 29, 1995 between Madison Avenue Baptist Church and Roger Williams Associates, LLC as amended by a First Amendment of Lease, dated August 26, 1997 and a Second Amendment to Lease dated October 6, 2010 entered into by Madison Avenue Baptist Church as Lessor and RW New York, L.L.C. as Lessee.
Viceroy Santa Monica (Santa Monica, CA)
Ground Lease dated September 25, 2000, by and between the City of Santa Monica and Roscoe Real Estate Limited Partnership as assigned to Seaside Hotel, LP by the Assignment and Assumption of Ground Lease and Grant of Improvements dated March 16, 2011.
Hotel Solamar (San Diego, CA)
Ground Lease dated as of August 1, 2006 entered into by and between 6 th and J Street Landowner, L.L.C. as Lessor, and Souldriver, L.P., as Lessee.
The Liberty Hotel (Boston, MA)
Lease Agreement dated as of May 23, 2005, executed between the Massachusetts General Hospital, and CS Owner LLC, as amended and as assigned to Don’t Look Back, LLC, by the Assignment and Assumption of Ground Lease dated December 28, 2012

Sch. 1.01(D)
- 1 -




Harbor Court (San Francisco, CA)
Hotel Lease by and between The Young Men’s Christian Association of San Francisco and Steuart Street Hotel Associates, dated as of August 1, 1989, as amended, and as assigned to Fun to Stay, LP by Assignment and Assumption Agreement dated as of August 1, 2013
Hotel Triton (San Francisco, CA)
Hotel Lease by and between Roy Chen, et. al. and Grant Street Ventures, L.P., dated November 22, 1989, as amended, and as assigned to Dim Sum, LP by Lease Assignment, Assumption and Consent, dated as of August 1, 2013
Westin Copley Place (Boston, MA)
Air Rights Lease dated December 22, 1978 by and among Massachusetts Turnpike Authority and Urban Investment and Development Co., as amended and assigned to LHO Backstreets, LLC on August 30, 2005.
Hotel Vitale (San Francisco, CA)
Ground Lease dated September 30, 2003 by and between the City and County of San Francisco and Mission & Steuart Hotel Partners, LLC, as amended and assigned to SF Treat, LP on April 2, 2014.









    


Sch. 1.01(D)
- 2 -




SCHEDULE 4.01

SUBSIDIARIES

LaSalle Hotel Lessee, Inc., an Illinois corporation
LHO Grafton Hotel Lessee, Inc., a Delaware corporation
LHO Grafton Hotel, L.L.C., a Delaware limited liability company
LHO Grafton Hotel, L.P., a Delaware limited partnership
LHO Hollywood Financing, Inc., a Delaware corporation
LHO Hollywood LM, L.P. a Delaware limited partnership
LHO Le Parc Lessee, Inc., a Delaware corporation
LHO Le Parc, L.L.C., a Delaware limited liability company
LHO Le Parc, L.P., a Delaware limited partnership
LHO Mission Bay Hotel, L.P., a California limited partnership
LHO Mission Bay Rosie Hotel, L.P., a Delaware limited partnership
LHO Mission Bay Rosie Hotel, L.L.C., a Delaware limited liability company
LHO Mission Bay Rosie Lessee, Inc., a Delaware corporation
LHO San Diego Financing, L.L.C., a Delaware limited liability company
LHO San Diego One, L.P., a Delaware limited partnership
LHO San Diego Hotel One, L.L.C., a Delaware limited liability company
LHO San Diego One Lessee, Inc., a Delaware corporation
LHO Santa Cruz Hotel One, L.P., a Delaware limited partnership
LHO Santa Cruz Hotel One, L.L.C., a Delaware limited liability company
LHO Santa Cruz One Lessee, Inc., a Delaware corporation
Souldriver, L.L.C., a Delaware limited liability company
Souldriver, L.P., a Delaware limited partnership
Souldriver Lessee, Inc., a Delaware corporation
Lucky Town Burbank Lessee, Inc., a Delaware company
Lucky Town Burbank, L.L.C., a Delaware limited liability company
Lucky Town Burbank, L.P., a Delaware limited partnership
Ramrod Lessee, Inc., a Delaware corporation
Paradise Lessee, Inc., a Delaware corporation
Geary Darling Lessee, Inc., a Delaware corporation
Geary Darling, LP, a Delaware limited partnership
Geary Darling, LLC, a Delaware limited liability company
Chamber Maid, LLC, a Delaware limited liability company
Chamber Maid, LP, a Delaware limited partnership
Chamber Maid Lessee, Inc., a Delaware corporation
Seaside Hotel, LP, a Delaware limited partnership
Seaside Hotel Lessee, Inc., a Delaware corporation
Seaside Hotel, LLC, a Delaware limited liability company
Let It FLHO, LLC., a Delaware limited liability company
Let It FLHO, LP, a Delaware limited partnership
Let It FLHO Lessee, Inc., a Delaware corporation
LaSalle Washington One Lessee, Inc., a Delaware corporation
LHO Washington Hotel One, L.L.C., a Delaware limited liability company
LHO Washington Hotel Two, L.L.C., a Delaware limited liability company
LHO Washington Hotel Three, L.L.C., a Delaware limited liability company
LHO Washington Hotel Four, L.L.C., a Delaware limited liability company
LHO Washington Hotel Six, L.L.C., a Delaware limited liability company
DC One Lessee, L.L.C., a Delaware limited liability company
DC Two Lessee, L.L.C., a Delaware limited liability company

Sch. 4.01
- 1 -


DC Three Lessee, L.L.C., a Delaware limited liability company
DC Four Lessee, L.L.C., a Delaware limited liability company
DC Six Lessee, L.L.C., a Delaware limited liability company
DC I&G Capital Lessee, L.L.C., a Delaware limited liability company
I&G Capitol, LLC, a Delaware limited liability company
LHO Tom Joad Circle DC Lessee, L.L.C., a Delaware limited liability company
LHO Tom Joad Circle DC, L.L.C., a Delaware limited liability company
H Street Shuffle, LLC, a Delaware limited liability company
H Street Shuffle Lessee, LLC, a Delaware limited liability company
LHO Chicago River Lessee, L.L.C., a Delaware limited liability company
LHO Chicago River L.L.C., a Delaware limited liability company
LHO Michigan Avenue Freezeout Lessee, L.L.C., a Delaware limited liability company
LHO Michigan Avenue Freezeout, L.L.C., a Delaware limited liability company
LHO Indianapolis One Lessee, L.L.C., an Indiana limited liability corporation
LHO Indianapolis Hotel One MM, L.L.C., a Delaware limited liability company
LHO Indianapolis Hotel One CMM, Inc., a Delaware corporation
LHO Indianapolis Hotel One L.L.C, a Delaware limited liability company
LHO Backstreets Lessee, L.L.C., a Delaware limited liability company
LHO Backstreets, L.L.C., a Delaware limited liability company
Westban Hotel Investors, L.L.C., a Delaware limited liability company
LHO Harborside Hotel, L.L.C., a Delaware limited liability company
LHO Onyx Hotel One, L.L.C., a Delaware limited liability company
LHO Onyx One Lessee, L.L.C., a Delaware limited liability company
NYC Serenade, L.L.C., a Delaware limited liability company
NYC Serenade Lessee, L.L.C., a Delaware limited liability company
RW New York, L.L.C., a Delaware limited liability company
RW New York Lessee, L.L.C., a Delaware limited liability company
PC Festivus, L.L.C., a Delaware limited liability company
PC Festivus Lessee, L.L.C., a Delaware limited liability company
Chimes of Freedom Lessee, LLC, a Delaware limited liability company
Chimes I, LLC, a Delaware limited liability company
Of Freedom I, LLC, a Delaware limited liability company
Chimes of Freedom, LLC, a Delaware limited liability company
Wild I, LLC, a Delaware limited liability company
Innocent I, LLC, a Delaware limited liability company
Wild Innocent I, LP, a Delaware limited partnership
Wild Innocent I Lessee, LLC, a Delaware limited liability company
LHO Leesburg One Lessee, Inc., a Delaware corporation
LHO New Orleans LM, L.P., a Delaware limited partnership
LHO New Orleans Financing, Inc., a Delaware corporation
LHO Alexis Hotel, L.L.C., a Delaware limited liability company
LHO Alexis Lessee, L.L.C., a Delaware limited liability company
LHO Badlands Lessee, L.L.C., a Delaware limited liability company
LHO Badlands, L.L.C., a Delaware limited liability company
Silver P, LLC, a Delaware limited liability company
Silver P Lessee, LLC, a Delaware limited liability company
Serenity Now, LP a Delaware limited partnership
Serenity Now, Lessee, Inc. a Delaware corporation
Serenity Now, LLC, a Delaware limited liability company
LHOBerge, LP a Delaware limited partnership
LHOBerge Lessee, Inc. a Delaware corporation
LHOBerge, LLC, a Delaware limited liability company
Dim Sum, L.P. a Delaware limited partnership
Dim Sum Lessee, Inc. a Delaware corporation

Sch. 4.01
- 2 -


Dim Sum, LLC, a Delaware limited liability company
Fun to Stay, L.P. a Delaware limited partnership
Fun to Stay Lessee, Inc. a Delaware corporation
Fun to Stay, LLC, a Delaware limited liability company
Sunset City, LLC, a Delaware limited liability company
Sunset City Lessee, LLC, a Delaware limited liability company
Look Forward, LLC, a Delaware limited liability company
Don't Look Back, LLC, a Delaware limited liability company
Look Forward Lessee, LLC, a Delaware limited liability company
Don't Look Back Lessee, LLC, a Delaware limited liability company
DA Entity, LLC, a Delaware limited liability company
RDA Entity, Inc., a Delaware corporation
Glass Houses, a Maryland real estate investment trust
Viva Soma LP, a Delaware limited partnership
Viva Soma Lessee, Inc., a Delaware corporation
Viva Soma, LLC, a Delaware limited liability company
PDX Pioneer, LLC, a Delaware limited liability company
PDX Pioneer Lessee, LLC, a Delaware limited liability company
SF Treat, LP, a Delaware limited partnership
SF Treat Lessee, Inc., a Delaware corporation
SF Treat, LLC, a Delaware limited liability company
Beach Charm, LLC, a Delaware limited liability company
Harborside, LLC, a Florida limited liability company
Harborside Lessee, LLC, a Delaware limited liability company
The address of the principal office of each subsidiary is 7550 Wisconsin Avenue, 10 th Floor, Bethesda, Maryland 20814.



Sch. 4.01
- 3 -


SCHEDULE 4.08

Litigation


None


Sch. 4.08



SCHEDULE 4.17

Legal Requirements; Zoning; Utilities; Access


None


Sch. 4.17



SCHEDULE 4.18

EXISTING INDEBTEDNESS*

1.
Unsecured Recourse Indebtedness in the amount of $0.0 million outstanding on the $25.0 million LHL Facility. Matures January 8, 2018, with two 6-month extension options subject to certain conditions. The lender is U.S. Bank, National Association;
2.
Unsecured Recourse Indebtedness in the amount of $[___] million related to the Second Amended and Restated Senior Unsecured Credit Agreement.  The Revolving Facility (as defined therein) matures January [___], 2021, with two 6 month extension options subject to certain conditions.  The TL Facility (as defined therein) matures January [__], 2022.  The administrative agent is Citibank, N.A. The amount outstanding hereunder is as of the date hereof;
3.
Westin Copley Place, Boston, MA – Secured Non-Recourse Indebtedness in the amount of $225.0 million related to LHO Backstreets, L.L.C. Matures August 14, 2018 with two 1-year extension options and a third extension option from August 15, 2020 through January 5, 2021. The administrative agent is Citibank, N.A.; and
4.
Hyatt Harborside, Boston, MA – Secured Non-Recourse Indebtedness in the amount of $42.5 million related to LHO Harborside Hotel, L.L.C. Matures March, 2018. Bonds are weekly floaters, secured by Letters of Credit issued by U.S. Bank, National Association.
*All outstanding amounts as of December 8, 2016, unless otherwise noted above


Sch. 4.18





SCHEDULE 5.07

INSURANCE
(a)      Insurance Policies Required . While any obligation of the Borrower or any Guarantor under any Credit Document remains outstanding, the Borrower shall procure and maintain or shall cause to be procured and maintained continuously in effect policies of insurance in form and amounts and issued by companies, associations or organizations licensed to do business in the states the Hotel Properties are located, with a Best’s Rating of no less than A-, VIII and otherwise satisfactory to the Administrative Agent covering such casualties, risks, perils, liabilities and other hazards, which insurance shall be in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Hotel Properties are located. All original policies (to the extent reasonably available to Borrower), or certificates thereof, and related endorsements and renewals thereof shall be delivered to and retained by the Administrative Agent unless the Administrative Agent waives this requirement in writing. Without limiting the generality of the foregoing, the Borrower shall provide or cause to be provided (whether by a manager of a Hotel Property or otherwise) the following types of insurance coverage:
i.    until repayment of the Notes and satisfaction of all obligations under the Credit Documents: (i) property insurance on an "all risks" full replacement cost basis without deduction for depreciation (or fire, extended coverage and difference in conditions basis), including flood, earthquake (for any Hotel Property located in the State of California, or in any other location that, according to determination by the appropriate agency of the United States Government, has an above average risk of seismic activity) and sinkhole coverages in an amount equal to the replacement cost of the Improvements (except for earthquake insurance which for each required Hotel Property shall, to the extent available, be in an amount which is equal to or greater than the maximum probable loss determined pursuant to a written report by a seismic engineer, which report and engineer are acceptable to the Administrative Agent); (ii) Comprehensive General Liability Insurance (including contractual liability, owners and contractors protective coverages, products and completed operations, personal and advertising injury liability and fire damage legal liability) and Comprehensive Auto Liability Insurance in a minimum amount of $50,000,000 each occurrence and in the aggregate; (iii) Statutory Workers' Compensation and Employer's Liability Insurance in the minimum amounts of $1,000,000 each accident, $1,000,000 each employee - disease, $1,000,000 policy limit - disease; and (iv) Rent loss insurance against loss of income by reason of any hazard covered under the insurance required under this subparagraph (a) in an amount sufficient to avoid any co-insurance penalty, but in any event for not less than twelve (12) months gross receipts from all sources of income from the Hotel Property. Each such policy of property insurance shall contain a replacement cost endorsement and such other endorsements as are sufficient to prevent the Borrower, the Administrative Agent and/or the Borrower’s Subsidiaries from becoming a co-insurer with respect to such buildings and improvements.
ii.    During the renovation or expansion of any Hotel Property the Borrower will additionally provide: (i) Builder's Risk Insurance on an "all risks" basis including flood, earthquake (if required pursuant to the provisions of and in the amount stated in clause (a)) and sinkhole coverages, and also including Stored Materials and materials while in transit, and (ii) Statutory Workers' Compensation and Employer's Liability Insurance in the minimum amounts of $1,000,000 each accident, $1,000,000 each employee - disease, $1,000,000 policy limit - disease, covering each contractor and all other contractors or subcontractors who may have occasion to be at the job site.
iii.    Such additional insurance as may be reasonably required by the Administrative Agent from time to time in the event that any Hotel Property is exposed to hazards and risks with respect to which the Administrative Agent deems the existing insurance inadequate to properly protect its interests.

Sch. 5.07
- 1 -



All policies of liability insurance shall name the Administrative Agent, the Banks and their respective directors, officers, representatives, agents and employees (the " Banks’ Parties ") as additional insureds. The Borrower shall furnish the Administrative Agent with a certified copy of an original policy, to the extent reasonably available to the Borrower, and a certificate of insurance of all policies of insurance required. All policies or certificates, as the case may be, of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, the Best's Rating of the carrier and the period of coverage. In addition, all policies of property insurance required under the terms hereof shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of the Borrower, the Participating Lessee, the Manager or any party holding under any such Person which might otherwise result in a forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against the Borrower. At least 30 days prior to the expiration of each required policy, the Borrower shall deliver to the Administrative Agent evidence of the renewal or replacement of such policy, continuing such insurance in the form as required by this Agreement. All such policies shall contain a provision that notwithstanding any contrary agreement between the Borrower and the applicable insurance company, such policies will not be canceled, allowed to lapse without renewal, surrendered or amended (which provision shall include any reduction in the scope or limits of coverage) without at least 30 days' prior written notice to the Administrative Agent.
In the event the Borrower intends to acquire any New York Property and enter into a New York Mortgage with respect to such New York Property, the Administrative Agent shall have received, prior to or concurrently with the execution of such New York Mortgage, (i) evidence as to whether such New York Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “ Flood Hazard Property ”) pursuant to a standard flood hazard determination form ordered and received by the Administrative Agent, and (ii) if such New York Property is a Flood Hazard Property, (A) evidence as to whether the community in which such New York Property is located is participating in the National Flood Insurance Program, (B) the written acknowledgment of the Borrower or the Subsidiary of the Borrower which will own such New York Property of receipt of written notification from the Administrative Agent as to the fact that such New York Property is a Flood Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of the application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to the Administrative Agent and naming the Administrative Agent as sole loss payee on behalf of the Banks.


Sch. 5.07
- 2 -



Exhibit 12.1
LaSalle Hotel Properties
Computation of Ratios of Earnings to Fixed Charges
(in thousands, except ratio data)
(unaudited)
 
 
For the year ended December 31,
 
 
2016
 
2015
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders
 
$
234,575

 
$
123,383

 
$
197,561

 
$
70,984

 
$
45,146

Income tax expense (benefit)
 
5,784

 
(1,292
)
 
2,306

 
470

 
9,062

Noncontrolling interests
 
354

 
277

 
652

 
320

 
281

Fixed charges
 
49,569

 
61,425

 
64,404

 
61,871

 
56,129

Amortization of capitalized interest
 
850

 
755

 
690

 
683

 
840

Capitalized interest
 
(398
)
 
(902
)
 
(400
)
 
(649
)
 
(370
)
Earnings
 
$
290,734

 
$
183,646

 
$
265,213

 
$
133,679

 
$
111,088

Fixed Charges
 
 
 
 
 
 
 
 
 
 
Interest
 
$
40,416

 
$
51,702

 
$
54,459

 
$
55,263

 
$
50,981

Loss on extinguishment of debt
 
0

 
831

 
2,487

 
0

 
0

Capitalized interest
 
398

 
902

 
400

 
649

 
370

Amort. of discounts and capitalized cost related to indebtedness
 
3,359

 
2,631

 
2,169

 
2,253

 
1,915

Estimate of interest within rental expense
 
5,396

 
5,359

 
4,889

 
3,706

 
2,863

Total fixed charges
 
$
49,569

 
$
61,425

 
$
64,404

 
$
61,871

 
$
56,129

Ratio of earnings to fixed charges
 
5.87

 
2.99

 
4.12

 
2.16

 
1.98





















LaSalle Hotel Properties
Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Share Dividends
(in thousands, except ratio data)
(unaudited)
 
 
 
For the year ended December 31,
 
 
2016
 
2015
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders
 
$
234,575

 
$
123,383

 
$
197,561

 
$
70,984

 
$
45,146

Income tax expense (benefit)
 
5,784

 
(1,292
)
 
2,306

 
470

 
9,062

Noncontrolling interests
 
354

 
277

 
652

 
320

 
281

Fixed charges
 
67,775

 
73,594

 
78,737

 
79,256

 
77,862

Amortization of capitalized interest
 
850

 
755

 
690

 
683

 
840

Capitalized interest
 
(398
)
 
(902
)
 
(400
)
 
(649
)
 
(370
)
Earnings
 
$
308,940

 
$
195,815

 
$
279,546

 
$
151,064

 
$
132,821

Fixed Charges
 
 
 
 
 
 
 
 
 
 
Interest
 
$
40,416

 
$
51,702

 
$
54,459

 
$
55,263

 
$
50,981

Loss on extinguishment of debt
 
0

 
831

 
2,487

 
0

 
0

Capitalized interest
 
398

 
902

 
400

 
649

 
370

Amort. of discounts and capitalized cost related to indebtedness
 
3,359

 
2,631

 
2,169

 
2,253

 
1,915

Estimate of interest within rental expense
 
5,396

 
5,359

 
4,889

 
3,706

 
2,863

Preference security dividends
 
18,206

 
12,169

 
14,333

 
17,385

 
21,733

Total fixed charges and preference security dividends
 
$
67,775

 
$
73,594

 
$
78,737

 
$
79,256

 
$
77,862

Ratio of earnings to combined fixed charges and preferred share dividends
 
4.56

 
2.66

 
3.55

 
1.91

 
1.71

 






Exhibit 21.1
List of Subsidiaries
 
1.
 
LaSalle Hotel Operating Partnership, L.P.
 
46.
 
LHO Chicago River Lessee, LLC
2.
 
LHO Hollywood Financing, Inc. (QRS)
 
47.
 
LHO Michigan Avenue Freezeout Lessee, LLC
3.
 
LHO New Orleans Financing, Inc.
 
48.
 
LHO Michigan Avenue Freezeout, LLC
4.
 
LHO Hollywood LM, LP
 
49.
 
Lucky Town Burbank, LP
5.
 
LHO New Orleans LM, LP
 
50.
 
Lucky Town Burbank Lessee, Inc.
6.
 
LHO Harborside Hotel, LLC
 
51.
 
Lucky Town Burbank, LLC
7.
 
LHO Mission Bay Hotel, LP
 
52.
 
NYC Serenade Lessee, LLC
8.
 
LHO San Diego Financing, LLC
 
53.
 
NYC Serenade, LLC
9.
 
LaSalle Washington One Lessee, Inc.
 
54.
 
Souldriver Lessee, Inc.
10.
 
LHO Washington Hotel One, LLC
 
55.
 
Souldriver, LLC
11.
 
LHO Washington Hotel Two, LLC
 
56.
 
Souldriver, LP
12.
 
LHO Washington Hotel Three, LLC
 
57.
 
Ramrod Lessee, Inc.
13.
 
LHO Washington Hotel Four, LLC
 
58.
 
Paradise Lessee, Inc.
14.
 
I&G Capital, LLC
 
59.
 
Glass Houses
15.
 
LaSalle Hotel Lessee, Inc.
 
60.
 
DC One Lessee, LLC
16.
 
LHO Leesburg One Lessee, Inc.
 
61.
 
DC Two Lessee, LLC
17.
 
LHO Washington Hotel Six, LLC
 
62.
 
DC Three Lessee, LLC
18.
 
LHO Santa Cruz Hotel One, LLC
 
63.
 
DC Four Lessee, LLC
19.
 
LHO San Diego Hotel One, LLC
 
64.
 
DC Six Lessee, LLC
20.
 
LHO San Diego One, LP
 
65.
 
DC I&G Capital Lessee, LLC
21.
 
LHO Santa Cruz Hotel One, LP
 
66.
 
DA Entity, LLC
22.
 
LHO San Diego One Lessee, Inc.
 
67.
 
RDA Entity, Inc.
23.
 
LHO Santa Cruz One Lessee, Inc.
 
68.
 
H Street Shuffle, LLC
24.
 
LHO Grafton Hotel, LP
 
69.
 
H Street Shuffle Lessee, LLC
25.
 
LHO Grafton Hotel Lessee, Inc.
 
70.
 
Wild Innocent I, LP
26.
 
LHO Grafton Hotel, LLC
 
71.
 
Wild I, LLC
27.
 
Park Sunset, LLC
 
72.
 
Innocent I, LLC
28.
 
LHO Onyx One Lessee, LLC
 
73.
 
Wild Innocent I Lessee, LLC
29.
 
LHO Onyx Hotel One, LLC
 
74.
 
Chimes of Freedom, LLC
30.
 
LHO Badlands, LLC
 
75.
 
Chimes I, LLC
31.
 
LHO Badlands Lessee, LLC
 
76.
 
Of Freedom I, LLC
32.
 
LHO Le Parc, LLC
 
77.
 
Chimes of Freedom Lessee, LLC
33.
 
LHO Le Parc, LP
 
78.
 
Geary Darling, LP
34.
 
LHO Le Parc Lessee, Inc.
 
79.
 
Geary Darling, LLC
35.
 
Westban Hotel Investors, LLC
 
80.
 
Geary Darling Lessee, Inc.
36.
 
LHO Backstreets, LLC
 
81.
 
RW New York, LLC
37.
 
LHO Backstreets Lessee, LLC
 
82.
 
RW New York Lessee, LLC
38.
 
LHO Tom Joad Circle DC Lessee, LLC
 
83.
 
Chamber Maid, LP
39.
 
LHO Tom Joad Circle DC, LLC
 
84.
 
Chamber Maid, LLC
40.
 
LHO Mission Bay Rosie Hotel, LLC
 
85.
 
Chamber Maid Lessee, Inc.
41.
 
LHO Mission Bay Rosie Hotel, LP
 
86.
 
Seaside Hotel, LP
42.
 
LHO Mission Bay Rosie Lessee, Inc.
 
87.
 
Seaside Hotel, LLC
43.
 
LHO Alexis Hotel, LLC
 
88.
 
Seaside Hotel Lessee, Inc.
44.
 
LHO Alexis Lessee, LLC
 
89.
 
Let It FLHO, LP
45.
 
LHO Chicago River, LLC
 
90.
 
Let It FLHO, LLC
 
 
 
 
 
 
 




91.
 
Let It FLHO Lessee, Inc.
 
 
 
 
92.
 
PC Festivus, LLC
 
 
 
 
93.
 
PC Festivus Lessee, LLC
 
 
 
 
94.
 
Silver P, LLC
 
 
 
 
95.
 
Silver P Lessee, LLC
 
 
 
 
96.
 
LHOberge, LP
 
 
 
 
97.
 
LHOberge, LLC
 
 
 
 
98.
 
LHOberge Lessee, Inc.
 
 
 
 
99.
 
Don’t Look Back, LLC
 
 
 
 
100.
 
Look Forward, LLC
 
 
 
 
101.
 
Don’t Look Back Lessee, LLC
 
 
 
 
102.
 
Look Forward Lessee, LLC
 
 
 
 
103.
 
Dim Sum, LP
 
 
 
 
104.
 
Dim Sum, LLC
 
 
 
 
105.
 
Dim Sum Lessee, Inc.
 
 
 
 
106.
 
Fun to Stay, LP
 
 
 
 
107.
 
Fun to Stay, LLC
 
 
 
 
108.
 
Fun to Stay Lessee, Inc.
 
 
 
 
109.
 
Serenity Now, LP
 
 
 
 
110.
 
Serenity Now, LLC
 
 
 
 
111.
 
Serenity Now, Lessee, Inc.
 
 
 
 
112.
 
Sunset City, LLC
 
 
 
 
113.
 
Sunset City Lessee, LLC
 
 
 
 
114.
 
SF Treat, LP
 
 
 
 
115.
 
SF Treat, LLC
 
 
 
 
116.
 
SF Treat Lessee, Inc.
 
 
 
 
117.
 
PDX Pioneer, LLC
 
 
 
 
118.
 
PDX Pioneer Lessee, LLC
 
 
 
 
119.
 
Bonanza, LP
 
 
 
 
120.
 
Bonanza, LLC
 
 
 
 
121.
 
Bonanza Lessee, Inc.
 
 
 
 
122.
 
Viva Soma, LP
 
 
 
 
123.
 
Viva Soma, LLC
 
 
 
 
124.
 
Viva Soma Lessee, Inc.
 
 
 
 
125.
 
Harborside, LLC
 
 
 
 
126.
 
Harborside Lessee, LLC
 
 
 
 
127.
 
Beach Charm, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Trustees
LaSalle Hotel Properties:
We consent to the incorporation by reference in the registration statements on Forms S-3 (No. 333-208015) and on Forms S-8 (Nos. 333-196411, 333-158873, 333-125058, 333-104056, 333-86911, and 333-72265) of LaSalle Hotel Properties of our reports dated February 22, 2017 , with respect to the consolidated balance sheets of LaSalle Hotel Properties as of December 31, 2016 and 2015 , and the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2016 , and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2016 , which reports appear in the December 31, 2016 annual report on Form 10-K of LaSalle Hotel Properties.
/s/ KPMG LLP
Chicago, Illinois
February 22, 2017




Exhibit 31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael D. Barnello, certify that:
1. I have reviewed this Annual Report on Form 10-K of LaSalle Hotel Properties;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 22, 2017
 
/s/    M ICHAEL  D. B ARNELLO        
Michael D. Barnello
President
and Chief Executive Officer




Exhibit 31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kenneth G. Fuller, certify that:
1. I have reviewed this Annual Report on Form 10-K of LaSalle Hotel Properties;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 22, 2017
 
/s/    K ENNETH  G. F ULLER
Kenneth G. Fuller
Executive Vice President
and Chief Financial Officer




Exhibit 32.1
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant To 18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of The Sarbanes-Oxley Act of 2002
In connection with the Annual Report of LaSalle Hotel Properties (“LHO”) on Form 10-K for the period ending December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Officers of LHO, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report, containing the financial statements, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of LHO.
Date: February 22, 2017
 
/s/    M ICHAEL  D. B ARNELLO        
Michael D. Barnello
President
and Chief Executive Officer
/s/    K ENNETH  G. F ULLER    
Kenneth G. Fuller
Executive Vice President
and Chief Financial Officer