10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

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.)
3 Bethesda Metro Center, Suite 1200 Bethesda, Maryland	20814
(Address of principal executive offices)	(Zip Code)

(301) 941-1500

(Registrant’s telephone number, including area code)

___________________________________

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  x    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  x    No  ¨

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	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	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  x

Indicate the number of shares outstanding of each of the issuer’s classes of common and preferred shares as of the latest practicable date.

Class	Outstanding at October 17, 2012
Common Shares of Beneficial Interest ($0.01 par value)	86,260,744
7 ¼% Series G Cumulative Redeemable Preferred Shares ($0.01 par value)	6,348,888
7 ½% Series H Cumulative Redeemable Preferred Shares ($0.01 par value)	2,750,000

LASALLE HOTEL PROPERTIES

INDEX

PART I.	Financial Information	1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	37
Item 4.	Controls and Procedures	37
PART II.	Other Information	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
	SIGNATURE	39

PART I. Financial Information

Item 1. Financial Statements

LASALLE HOTEL PROPERTIES

Consolidated Balance Sheets

(in thousands, except share data)

	September 30, 2012			December 31, 2011
	(unaudited)
Assets:
Investment in hotel properties, net (Note 3)	$	2,826,053		$	2,712,174
Note receivable (net of unamortized discount of $4,093) (Note 3)	67,907			0
Property under development	7,208			21,346
Cash and cash equivalents	5,683			20,225
Restricted cash reserves (Note 5)	16,716			16,969
Hotel receivables (net of allowance for doubtful accounts of $403 and $321, respectively)	40,360			23,760
Deferred financing costs, net	8,823			6,235
Deferred tax assets (Note 9)	1,469			5,250
Prepaid expenses and other assets	34,190			27,316
Total assets	$	3,008,409		$	2,833,275
Liabilities:
Borrowings under credit facilities (Note 4)	$	209,586		$	265,000
Term loans (Note 4)	377,500			0
Bonds payable (Note 4)	42,500			42,500
Mortgage loans (including unamortized premium of $138 and $195, respectively) (Note 4)	580,548			643,897
Accounts payable and accrued expenses	99,424			78,407
Advance deposits	15,903			12,085
Accrued interest	3,869			3,492
Distributions payable	21,478			16,651
Total liabilities	1,350,808			1,062,032
Commitments and contingencies (Note 5)
Equity:
Shareholders’ Equity:
Preferred shares, $0.01 par value (liquidation preference of $227,472 and $394,222, respectively), 40,000,000 shares authorized; 9,098,888 and 15,768,888 shares issued and outstanding, respectively (Note 6)	91			158
Common shares of beneficial interest, $0.01 par value, 200,000,000 shares authorized; 86,280,358 shares issued and 86,264,876 outstanding, and 85,176,506 shares issued and 83,786,932 shares outstanding, respectively (Note 6)	863			851
Treasury shares, at cost (Note 6)	(451		)	(24,543		)
Additional paid-in capital, net of offering costs of $62,707 and $66,146, respectively	1,908,755			2,029,145
Accumulated other comprehensive loss (Note 4)	(8,505		)	0
Distributions in excess of retained earnings	(248,857		)	(239,998		)
Total shareholders’ equity	1,651,896			1,765,613
Noncontrolling Interests:
Noncontrolling interests in consolidated entity	9			17
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	5,696			5,613
Total noncontrolling interests	5,705			5,630
Total equity	1,657,601			1,771,243
Total liabilities and equity	$	3,008,409		$	2,833,275

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

1

LASALLE HOTEL PROPERTIES

Consolidated Statements of Operations and Comprehensive Income

(in thousands, except share data)

(unaudited)

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Revenues:
Hotel operating revenues:
Room	$	167,437		$	133,152		$	449,315		$	356,070
Food and beverage	52,896			50,554			156,298			142,999
Other operating department	15,410			14,256			42,105			37,374
Total hotel operating revenues	235,743			197,962			647,718			536,443
Other income	1,254			1,166			3,693			3,585
Total revenues	236,997			199,128			651,411			540,028
Expenses:
Hotel operating expenses:
Room	39,662			30,920			112,203			86,893
Food and beverage	37,751			34,669			111,488			99,249
Other direct	5,659			5,895			15,843			15,737
Other indirect (Note 8)	54,532			48,411			157,725			136,465
Total hotel operating expenses	137,604			119,895			397,259			338,344
Depreciation and amortization	31,480			27,765			92,911			83,572
Real estate taxes, personal property taxes and insurance	11,254			9,199			32,930			26,470
Ground rent (Note 5)	2,627			2,485			6,613			5,861
General and administrative	5,172			4,185			14,635			12,919
Acquisition transaction costs (Note 3)	156			153			4,057			574
Other expenses	922			668			2,391			1,749
Total operating expenses	189,215			164,350			550,796			469,489
Operating income	47,782			34,778			100,615			70,539
Interest income	2,060			8			2,086			22
Interest expense	(14,110		)	(9,856		)	(38,391		)	(29,566		)
Income before income tax expense and discontinued operations	35,732			24,930			64,310			40,995
Income tax expense (Note 9)	(4,943		)	(3,125		)	(6,920		)	(5,670		)
Income from continuing operations	30,789			21,805			57,390			35,325
Discontinued operations (Note 3):
Income from operations of property disposed of	0			760			0			441
Income tax expense (Note 9)	0			(244		)	0			(112		)
Net income from discontinued operations	0			516			0			329
Net income	30,789			22,321			57,390			35,654
Noncontrolling interests:
Redeemable noncontrolling interest in loss of consolidated entity	0			0			0			2
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	(116		)	0			(224		)	0
Net (income) loss attributable to noncontrolling interests	(116		)	0			(224		)	2
Net income attributable to the Company	30,673			22,321			57,166			35,656
Distributions to preferred shareholders	(4,166		)	(7,402		)	(17,567		)	(22,550		)
Issuance costs of redeemed preferred shares (Note 6)	0			0			(4,417		)	(731		)
Net income attributable to common shareholders	$	26,507		$	14,919		$	35,182		$	12,375

2

LASALLE HOTEL PROPERTIES

Consolidated Statements of Operations and Comprehensive Income - Continued

(in thousands, except share data)

(unaudited)

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012			2011		2012			2011
Earnings per Common Share - Basic:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17	$	0.41		$	0.15
Discontinued operations	0.00			0.01		0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18	$	0.41		$	0.15
Earnings per Common Share - Diluted:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17	$	0.41		$	0.15
Discontinued operations	0.00			0.01		0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18	$	0.41		$	0.15
Weighted average number of common shares outstanding:
Basic	85,876,584			84,640,196		85,278,331			80,392,686
Diluted	86,056,957			84,752,112		85,449,543			80,559,299
Comprehensive Income:
Net income	$	30,789		$	22,321	$	57,390		$	35,654
Other comprehensive loss:
Unrealized loss on interest rate derivative instruments (Note 4)	(3,839		)	0		(8,534		)	0
Comprehensive income	26,950			22,321		48,856			35,654
Noncontrolling interests:
Redeemable noncontrolling interest in loss of consolidated entity	0			0		0			2
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	(103		)	0		(195		)	0
Comprehensive (income) loss attributable to noncontrolling interests	(103		)	0		(195		)	2
Comprehensive income attributable to the Company	$	26,847		$	22,321	$	48,661		$	35,656

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

3

LASALLE HOTEL PROPERTIES

Consolidated Statements of Equity

(in thousands, except per share/unit data)

(unaudited)

	Preferred Shares			Common Shares of Beneficial Interest		Treasury Shares			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Distributions in Excess of Retained Earnings			Total Shareholders' Equity			Noncontrolling Interest in Consolidated Entity			Noncontrolling Interests of Common Units in Operating Partnership			Total Noncontrolling Interests			Total Equity
Balance, December 31, 2010	$	141		$	731	$	(28	)	$	1,659,258		$	0		$	(216,635	)	$	1,443,467		$	33		$	0		$	33		$	1,443,500
Issuance of shares, net of offering costs	28			120		258			393,601			0			0			394,007			0			0			0			394,007
Redemption of preferred shares	(11		)	0		0			(26,758		)	0			(731		)	(27,500		)	0			0			0			(27,500		)
Repurchase of common shares into treasury	0			0		(21,588		)	0			0			0			(21,588		)	0			0			0			(21,588		)
Options exercised	0			0		0			83			0			0			83			0			0			0			83
Deferred compensation, net	0			0		2,828			291			0			0			3,119			0			0			0			3,119
Redeemable noncontrolling interest	0			0		0			0			0			2			2			0			0			0			2
Distributions on issued long-term performance-based share awards	0			0		0			0			0			(38		)	(38		)	0			0			0			(38		)
Distributions on common shares ($0.33 per share)	0			0		0			0			0			(27,000		)	(27,000		)	0			0			0			(27,000		)
Distributions on preferred shares	0			0		0			0			0			(22,550		)	(22,550		)	(8		)	0			(8		)	(22,558		)
Net income	0			0		0			0			0			35,654			35,654			0			0			0			35,654
Balance, September 30, 2011	$	158		$	851	$	(18,530	)	$	2,026,475		$	0		$	(231,298	)	$	1,777,656		$	25		$	0		$	25		$	1,777,681
Balance, December 31, 2011	$	158		$	851	$	(24,543	)	$	2,029,145		$	0		$	(239,998	)	$	1,765,613		$	17		$	5,613		$	5,630		$	1,771,243
Issuance of shares, net of offering costs	0			12		22,847			41,444			0			0			64,303			0			0			0			64,303
Redemption of preferred shares	(67		)	0		0			(162,266		)	0			(4,417		)	(166,750		)	0			0			0			(166,750		)
Repurchase of common shares into treasury	0			0		(1,210		)	0			0			0			(1,210		)	0			0			0			(1,210		)
Options exercised	0			0		0			74			0			0			74			0			0			0			74
Adjustments to issuance of units	0			0		0			0			0			0			0			0			(746		)	(746		)	(746		)
Deferred compensation, net	0			0		2,455			1,143			0			0			3,598			0			0			0			3,598
Adjustments to noncontrolling interests	0			0		0			(785		)	0			0			(785		)	0			785			785			0
Distributions on issued long-term performance-based share awards	0			0		0			0			0			(56		)	(56		)	0			0			0			(56		)
Distributions on common shares/units ($0.51 per share/unit)	0			0		0			0			0			(43,985		)	(43,985		)	0			(151		)	(151		)	(44,136		)
Distributions on preferred shares	0			0		0			0			0			(17,567		)	(17,567		)	(8		)	0			(8		)	(17,575		)
Net income	0			0		0			0			0			57,166			57,166			0			224			224			57,390
Other comprehensive loss:
Unrealized loss on interest rate derivative instruments	0			0		0			0			(8,505		)	0			(8,505		)	0			(29		)	(29		)	(8,534		)
Balance, September 30, 2012	$	91		$	863	$	(451	)	$	1,908,755		$	(8,505	)	$	(248,857	)	$	1,651,896		$	9		$	5,696		$	5,705		$	1,657,601

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

4

LASALLE HOTEL PROPERTIES

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended
	September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	57,390		$	35,654
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	92,911			83,572
Amortization of deferred financing costs, mortgage premium and note receivable discount	806			515
Gain on sale of property	0			(760		)
Deferred compensation	3,598			3,119
Allowance for doubtful accounts	82			(801		)
Changes in assets and liabilities:
Restricted cash reserves	(877		)	1,289
Hotel receivables	(16,418		)	(6,059		)
Deferred tax assets	3,781			4,335
Prepaid expenses and other assets	(6,938		)	(2,392		)
Accounts payable and accrued expenses	14,225			4,473
Advance deposits	3,608			4,928
Accrued interest	377			(147		)
Net cash provided by operating activities	152,545			127,726
Cash flows from investing activities:
Improvements and additions to properties	(51,425		)	(34,387		)
Acquisition of properties	(142,944		)	(102,335		)
Purchase of office furniture and equipment	(63		)	(86		)
Acquisition of note receivable	(67,416		)	0
Restricted cash reserves	1,130			(1,805		)
Proceeds from sale of property	0			19,727
Net cash used in investing activities	(260,718		)	(118,886		)
Cash flows from financing activities:
Borrowings under credit facilities	386,920			164,183
Repayments under credit facilities	(442,334		)	(284,376		)
Borrowings on term loans	377,500			0
Repayments of mortgage loans	(63,292		)	(1,191		)
Payment of deferred financing costs	(4,202		)	0
Purchase of treasury shares	(1,210		)	(21,588		)
Proceeds from exercise of stock options	74			83
Proceeds from issuance of preferred shares	0			68,750
Payment of preferred offering costs	0			(2,380		)
Proceeds from issuance of common shares	64,786			331,030
Payment of common offering costs	(977		)	(3,559		)
Distributions on issued long-term performance-based share awards	(56		)	(38		)
Redemption of preferred shares	(166,750		)	(27,500		)
Distributions on preferred shares	(20,811		)	(21,845		)
Distributions on common shares/units	(36,017		)	(25,746		)
Net cash provided by financing activities	93,631			175,823
Net change in cash and cash equivalents	(14,542		)	184,663
Cash and cash equivalents, beginning of period	20,225			13,000
Cash and cash equivalents, end of period	$	5,683		$	197,663

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

5

LASALLE HOTEL PROPERTIES

Notes to Consolidated Financial Statements

(in thousands, except share/unit data)

(unaudited)

1. Organization

LaSalle Hotel Properties (the “Company”), a Maryland real estate investment trust (“REIT”) 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 shareholders. The income of LaSalle Hotel Lessee, Inc. (“LHL”), the Company’s wholly owned taxable-REIT subsidiary, is subject to taxation at normal corporate rates.

As of September 30, 2012, the Company owned interests in 38 hotels with approximately 10,200 guest rooms located in nine states and the District of Columbia. Each hotel is leased to LHL (see Note 8) or a wholly owned subsidiary of 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 2012 and December 2015. Lease revenue from LHL and its wholly owned subsidiaries is eliminated in consolidation. A third-party or non-affiliated hotel operator manages each hotel, which is also subject to a hotel management agreement.

Substantially all of the Company’s assets are held 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, 99.7% of the common units in the Operating Partnership at September 30, 2012. The remaining 0.3% is held by limited partners who held 296,300 common units in the Operating Partnership at September 30, 2012. See Note 6 for additional disclosures on common units in the Operating Partnership.

2. Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. These unaudited consolidated financial statements, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of equity and consolidated statements of cash flows for the periods presented. Operating results for the three and nine months endedSeptember 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012 due to seasonal and other factors. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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 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. Actual results could differ from those estimates.

Substantially all of the Company’s revenues and expenses are generated by the operations of the individual hotels. The Company records revenues and expenses that are estimated by the hotel operators to produce quarterly financial statements because the management contracts do not require the hotel operators to submit actual results within a time frame that permits the Company to use actual results when preparing its Quarterly Reports on Form 10-Q for filing by the deadline prescribed by the SEC. Generally, the Company records actual revenue and expense amounts for the first two months of each quarter and revenue and expense estimates for the last month of each quarter. Each quarter, the Company reviews the estimated revenue and expense amounts provided by the hotel operators for reasonableness based upon historical results for prior periods and internal Company forecasts.

6

The Company records any differences between recorded estimated amounts and actual amounts in the following quarter; historically, these differences have not been material. The Company believes the quarterly revenues and expenses, recorded on the Company’s consolidated statements of operations and comprehensive income based on an aggregate estimate, are fairly stated.

Share-Based Compensation

From time to time, the Company awards nonvested shares under the 2009 Equity Incentive Plan (“2009 Plan”), which has approximately six years remaining, as compensation to officers, employees and non-employee trustees (see Note 7). The shares issued to officers and employees vest over three to nine years. The Company recognizes compensation expense for nonvested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures.

Noncontrolling Interests

Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Under this guidance, 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, 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. 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 securities 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 September 30, 2012, the consolidated results of the Company include the following ownership interests held by owners other than the Company: (i) the outside preferred ownership interests in a subsidiary and (ii) the common units in the Operating Partnership held by third parties.

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.

Level 2 – Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3 – Model-derived valuations with unobservable inputs.

As required by the guidance, the Company classifies assets and liabilities based on the lowest level of input that is significant to the fair value measurement.

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

7

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. The Company entered into derivative instruments during the second and third quarters of 2012 (see Note 4).

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. 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, it is probable that the Company will be unable to collect all principal and interest contractually due. 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. The Company has no notes receivable that are impaired or in non-accrual status. The Company acquired a note receivable during the third quarter of 2012 (see Note 3).

3. Investment in Hotel Properties

Investment in hotel properties is net of accumulated depreciation of $800,919 and $708,436 as of September 30, 2012 and December 31, 2011, respectively.

On March 8, 2012, the Company acquired a 100% fee simple interest in the Hotel Palomar, Washington, DC, a 335-room urban, full-service hotel located in Washington, DC, for $143,839. The sources of the funding for the acquisition were proceeds from prior issuances of common shares of beneficial interest under the 2011 Agreement (as defined below in Note 6) and borrowings under the Company’s senior unsecured credit facility. The property is leased to LHL and managed by Kimpton Hotel & Restaurant Group, L.L.C. The Company recorded the acquisition at fair value using model-derived valuations, with the purchase price allocated to investment in hotel properties and hotel working capital assets and liabilities. In connection with this acquisition, the Company incurred acquisition transaction costs of zero and $3,594 that were expensed as incurred during the three and nine months endedSeptember 30, 2012, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

During the first quarter of 2012, the Company finalized its allocation of the purchase price of Park Central Hotel, which was acquired on December 29, 2011, upon receiving certain valuation-related information. The final determination resulted in a decrease of $746 to investment in hotel properties and noncontrolling interests of common units in Operating Partnership. In connection with this acquisition, the Company incurred acquisition transaction costs of $65 and $304 that were expensed as incurred during the three and nine months endedSeptember 30, 2011, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

In connection with the acquisition of Viceroy Santa Monica on March 16, 2011, the Company incurred acquisition transaction costs of zero and $182 that were expensed as incurred during the three and nine months endedSeptember 30, 2011, respectively, and zero and $100 during the three and nine months endedSeptember 30, 2012, respectively, related to the finalization of acquisition accounting, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

In connection with the acquisition of Villa Florence on October 5, 2011, the Company incurred acquisition transaction costs of $88 that were expensed as incurred during the three and nine months ended September 30, 2011, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

Note Receivable

On July 13, 2012, the Company acquired a performing mezzanine loan secured by pledges of ownership interests of the entities that own the underlying hotel properties, Shutters on the Beach and Casa Del Mar, in Santa Monica, CA. The Company acquired the note at a discount of $4,584 for a total purchase price of $67,416 before closing costs. The loan bears interest at 9.76% with interest-only payments to be received monthly through the maturity date of May 11, 2014. The mezzanine loan is subordinate to a $310,000 first mortgage loan secured by the properties that also matures on May 11, 2014. In connection with the acquisition of the mezzanine loan, the Company incurred acquisition transaction costs of $156 and $363 during the three and nine months endedSeptember 30, 2012, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income. The carrying amount of the mezzanine loan approximates fair value.

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Condensed Pro Forma Financial Information

The results of operations of acquired properties are included in the consolidated statements of operations and comprehensive income beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information is presented as if the following 2011 acquisitions had been consummated prior to January 1, 2010, the beginning of the reporting period prior to acquisition. In addition, for purposes of the unaudited condensed pro forma financial information only, the January 21, 2011 through February 16, 2011 issuance of 2,619,811 common shares of beneficial interest, the March 24, 2011 through April 11, 2011 issuance of 1,436,881 common shares of beneficial interest, the April 29, 2011 issuance of 7,896,612 common shares of beneficial interest and the July 7, 2011 issuance of 8,016 common shares of beneficial interest are presented as if the issuances had occurred as of January 1, 2011. No adjustments have been made to the unaudited condensed pro forma financial information presented below for the March 8, 2012 acquisition of Hotel Palomar, Washington, DC, as the acquisition was not significant to the Company’s consolidated financial statements, or the 2011 preferred share issuance and redemption, the 2011 common share repurchases or the 2012 common share issuances, since those transactions have no relation to the 2011 acquisitions. The unaudited condensed pro forma financial information is for comparative purposes only and not necessarily indicative of what actual results of operations of the Company would have been had the acquisitions been consummated on January 1, 2010, nor does it purport to represent the results of operations for future periods. The unaudited condensed pro forma financial information has not been adjusted for property sales.

Adjustments have been made to the unaudited pro forma financial information for the following acquisitions:

Property	Acquisition Date
Viceroy Santa Monica	March 16, 2011
Villa Florence	October 5, 2011
Park Central Hotel	December 29, 2011

The unaudited condensed pro forma financial information for the three and nine months endedSeptember 30, 2011 is as follows:

	For the three months ended		For the nine months ended
	September 30, 2011		September 30, 2011
	(unaudited)		(unaudited)
Total revenues	$	223,790	$	610,703
Net income	$	23,737	$	37,521
Net income attributable to common shareholders	$	16,335	$	14,242
Earnings per common share - basic	$	0.19	$	0.17
Earnings per common share - diluted	$	0.19	$	0.17
Weighted average number of common shares outstanding:
Basic	84,652,730		84,687,289
Diluted	84,764,646		84,853,902

Discontinued Operations

On January 12, 2011, the Company sold the Sheraton Bloomington Hotel Minneapolis South for $20,000. Since the property was under contract for sale during the fourth quarter of 2010, it was considered held for sale as of December 31, 2010 and the related impairment loss of $3,223 was included in fourth quarter 2010 results. Accordingly, the operating results of the property from the Company’s period of ownership are included in discontinued operations for the nine months ended September 30, 2011.

On September 1, 2010, the Company sold the Seaview Resort, but retained responsibility for the repair of its roof and recorded a liability for related costs, the majority of which were covered by insurance proceeds. During the third quarter of 2011, the Company entered into a settlement agreement with the purchaser of the Seaview Resort, which released the Company of any future responsibility for the repair of the roof, and recognized a gain of $760 representing the unpaid liability balance after settlement.

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The following is a summary of the results of the properties classified in discontinued operations:

	For the three months ended			For the nine months ended
	September 30, 2011			September 30, 2011
Operating revenues	$	0		$	495
Operating expenses		0		814
Loss from operations before gain		0		(319		)
Gain on sale		760		760
Income from operations		760		441
Income tax expense		(244	)	(112		)
Net income from discontinued operations	$	516		$	329

4. Long-Term Debt

Debt Summary

Debt as of September 30, 2012 and December 31, 2011 consisted of the following:

			Balance Outstanding as of
Debt	Interest Rate	Maturity Date	September 30, 2012		December 31, 2011
Credit facilities
Senior unsecured credit facility	Floating (a)	January 2016 (a)	$	201,000	$	265,000
LHL unsecured credit facility	Floating (b)	January 2016 (b)	8,586		0
Total borrowings under credit facilities			209,586		265,000
Term loans
First Term Loan	Floating (c)	May 2019	177,500		0
Second Term Loan	Floating (c)	August 2017	200,000		0
Total term loans			377,500		0
Massport Bonds
Harborside Hyatt Conference
Center & Hotel (taxable)	Floating (d)	March 2018	5,400		5,400
Harborside Hyatt Conference
Center & Hotel (tax exempt)	Floating (d)	March 2018	37,100		37,100
Total bonds payable			42,500		42,500
Mortgage loans
Hilton San Diego Gaslamp Quarter	5.35%	July 2012 (e)	0		59,600
Hotel Solamar	5.49%	December 2013	60,334		60,900
Hotel Deca	6.28%	August 2014	9,183		9,392
Westin Copley Place	5.28%	September 2015	210,000		210,000
Westin Michigan Avenue	5.75%	April 2016	137,625		138,902
Indianapolis Marriott Downtown	5.99%	July 2016	100,452		101,319
Hotel Roger Williams	6.31%	August 2016	62,816		63,589
Mortgage loans at stated value			580,410		643,702
Unamortized loan premium (f)			138		195
Total mortgage loans			580,548		643,897
Total debt			$	1,210,134	$	951,397

^(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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000 was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

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^(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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

^(c)  Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into separate interest rate swap agreements for the full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements).

^(d)  The Massport Bonds are secured by letters of credit issued by the Royal Bank of Scotland that expire in February 2014, pursuant to an amendment to the agreement governing the letters of credit. The Royal Bank of Scotland letters of credit also have threeone-year extension options and are secured by the Harborside Hyatt Conference Center & Hotel. The bonds bear interest based on weekly floating rates. The interest rates as of September 30, 2012 were 0.61% and 0.20% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2011 were 0.75% and 0.12% for the $5,400 and $37,100 bonds, respectively. The Company also incurs an annual letter of credit fee, which effective February 14, 2012 changed from a flat 2.00% to a variable rate based on an applicable margin as defined in the Company's senior unsecured credit agreement.

^(e)  The Company repaid the mortgage loan on March 30, 2012 through borrowings on its senior unsecured credit facility.

^(f)  Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

A summary of the Company’s interest expense and weighted average interest rates for variable rate debt for the three and nine months endedSeptember 30, 2012 and 2011 is as follows:

		For the three months ended						For the nine months ended
		September 30,						September 30,
		2012			2011			2012			2011
Interest Expense:
Interest incurred	$	13,611		$	9,781		$	37,296		$	29,251
Amortization of deferred financing costs		526			170			1,354			570
Capitalized interest		(27)			(95)			(259)			(255)
Interest expense	$	14,110		$	9,856		$	38,391		$	29,566
Weighted Average Interest Rates for Variable Rate Debt:
Senior unsecured credit facility		2.3	%		N/A			2.2	%		1.1	%
LHL unsecured credit facility		2.2	%		N/A			2.1	%		1.1	%
Massport Bonds		0.2	%		0.2	%		0.3	%		0.2	%

The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy (see Note 2). Rates and credit spreads take into consideration general market conditions and maturity.

The carrying value and estimated fair value of the Company’s debt as of September 30, 2012 and December 31, 2011 were as follows:

	September 30,		December 31,
	2012		2011
Carrying value	$	1,210,134	$	951,397
Estimated fair value	$	1,228,640	$	954,299

See Note 3 for consideration of the fair value of the Company's note receivable. The carrying amounts of the Company’s other financial instruments approximate fair value because of the relatively short maturities of these instruments.

As of September 30, 2012, the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loan, bonds or mortgage loans. Depending on operating results and lender requirements, one of the mortgaged properties may be subject to a cash trap (see "Mortgage Loans" below) as a result of the impact

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of a recent renovation on hotel operations. This cash trap will not have a material impact on the cash flow or the operations of the Company.

Credit Facilities

On December 14, 2011, the Company entered into a new $750,000 senior unsecured credit facility with a syndicate of banks that replaced the Company's $450,000 credit facility that was scheduled to mature on April 13, 2012. The new credit facility matures on January 30, 2016, subject to a one-year extension that the Company may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. The new credit facility includes an accordion feature which, subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments up to $1,000,000. 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 plus an applicable margin. Additionally, the Company is required to pay a variable unused commitment fee of 0.30% or 0.40% of the unused portion of the credit facility, depending on the average daily unused portion of the credit facility.

LHL has a $25,000 unsecured revolving credit facility to be used for working capital and general lessee corporate purposes. On December 14, 2011, LHL refinanced its credit facility that was scheduled to mature on April 13, 2012, extending the maturity date to January 30, 2016, subject to a one-year extension 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 plus an applicable margin. Additionally, LHL is required to pay a variable unused commitment fee of 0.30% or 0.40% 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 covenants relating to net worth requirements, debt ratios and fixed charge coverage and other limitations that restrict the Company's ability to make distributions or other payments to its shareholders upon events of default.

Term Loans

On May 16, 2012, the Company entered into a new $177,500 unsecured loan with a seven-year term maturing on May 16, 2019 (the “First Term Loan”). The First Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full seven-year term (see “Derivative and Hedging Activities” below). The proceeds were used to redeem the Company's Series D Preferred Shares and Series E Preferred Shares on May 21, 2012 (see Note 6) and for general corporate purposes.

On August 2, 2012, the Company entered into a new $300,000 unsecured loan with a five-year term maturing on August 2, 2017, including a one-year extension subject to certain conditions (the "Second Term Loan"). At closing, $200,000 of the Second Term Loan proceeds were funded. The Company has the flexibility to draw the remaining $100,000 of proceeds anytime during the 95-day post closing period. The Second Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full five-year term (see "Derivative and Hedging Activities below"). The proceeds were used to reduce amounts outstanding under the Company's senior unsecured facility and for general corporate purposes.

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 the Company's ability to make distributions or other payments to its shareholders upon events of default.

Derivative and Hedging Activities

The Company enters into interest rate swap agreements to hedge against interest rate fluctuations. Unrealized gains and losses on the effective portion of hedging instruments are reported in other comprehensive income (loss) ("OCL"). 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) ("AOCL") 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 May 16, 2012, the Company entered into three interest rate swap agreements with an aggregate notional amount of $177,500 for the First Term Loan's full seven-year term, resulting in a fixed all-in interest rate of 3.87% at the Company's current leverage ratio (as defined in the agreement). Effective August 2, 2012, the Company entered into five interest rate swap agreements with an aggregate notional amount of $300,000, of which $200,000 was drawn as of September 30, 2012, for the Second Term Loan's full five-year term, including a one-year extension subject to certain conditions, resulting in a fixed all-in interest rate of 2.68% at the Company's current leverage ratio (as defined in the agreement). The Company has designated its pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges.

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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 three and nine months endedSeptember 30, 2012:

	Amount of Loss Recognized in OCL on Derivative Instruments				Location of Loss Reclassified from AOCL into Income	Amount of Loss Reclassified from AOCL into Income
	(Effective Portion)				(Effective Portion)	(Effective Portion)
	For the three months ended		For the nine months ended			For the three months ended		For the nine months ended
	September 30, 2012		September 30, 2012			September 30, 2012		September 30, 2012
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	3,839	$	8,534	Interest expense	$	780	$	1,082

During the three and nine months endedSeptember 30, 2012, the Company did not have any hedge ineffectiveness or amounts that were excluded from the assessment of hedge effectiveness recorded in earnings.

The Company records all derivative instruments at fair value in the consolidated balance sheets. The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows. 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 is classified within level 2 of the fair value hierarchy (see Note 2). As of September 30, 2012, there was $8,534 in cumulative unrealized loss, of which $8,505 was included in AOCL and $29 was attributable to noncontrolling interests. The Company expects that approximately $3,508 will be reclassified from AOCL and noncontrolling interests and recognized as a reduction to income in the next 12 months.

The following table presents the location and fair value of the Company's derivative financial instruments as reported in the consolidated balance sheets as of September 30, 2012:

		Fair Value
	Consolidated Balance Sheet Location	September 30, 2012
Derivatives designated as hedging instruments:
Liability derivatives:
Interest rate swaps	Accounts payable and accrued expenses	$	8,534

Mortgage Loans

On March 30, 2012, the Company repaid without fee or penalty the Hilton San Diego Gaslamp Quarter mortgage loan in the amount of $59,600 plus accrued interest through borrowings on its senior unsecured credit facility. The loan was due to mature in July 2012.

The mortgage loans contain debt service coverage ratio thresholds 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 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 the property again complies with the specified debt service coverage ratio or the mortgage is paid off.

5. Commitments and Contingencies

Ground, Land and Building, and Air Rights Leases

Six of the Company’s hotels, San Diego Paradise Point Resort and Spa, Harborside Hyatt Conference Center & Hotel, Indianapolis Marriott Downtown, The Hilton San Diego Resort and Spa, Hotel Solamar and Viceroy Santa Monica are subject to ground leases under non-cancelable operating leases expiring from March 2026 to December 2102. The ground lease at Harborside Hyatt Conference Center & Hotel expires in 2026, but the Company has options to extend for over 50 years to 2077. None of the remaining ground leases expire prior to 2045. The Westin Copley Place is subject to a long term air rights lease which expires on December 14, 2077 and requires no payments through maturity. The ground lease related to the Indianapolis Marriott Downtown requires future ground rent payments of one dollar per year. The ground lease at Viceroy Santa Monica is subject to minimum annual rent increases, resulting in noncash straight-line rent expense of $114 and $342 for the three and nine months ended

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September 30, 2012, respectively, and $116 and $232 for the three and nine months endedSeptember 30, 2011, respectively, which is included in total ground rent expense below.

Hotel Roger Williams, acquired on October 6, 2010, is subject to a lease of land and building which expires on December 31, 2044. The Company evaluated the terms of the lease agreement and determined the lease to be a capital lease pursuant to applicable GAAP guidance. At acquisition, the fair value of the remaining rent payments of $4,892 was recorded as a capital lease obligation. This obligation, net of amortization, is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Total ground rent expense for the three and nine months endedSeptember 30, 2012 was $2,627 and $6,613, respectively. Total ground rent expense for the three and nine months endedSeptember 30, 2011 was $2,485 and $5,871, respectively, of which zero and $10, respectively, is related to part of the parking lot at Sheraton Bloomington Hotel Minneapolis South, which is included in discontinued operations for all periods presented. 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. Future minimum rent payments (without reflecting future applicable Consumer Price Index increases) are as follows:

2012	$	1,416
2013	5,671
2014	5,684
2015	5,696
2016	5,738
Thereafter	224,683
	$	248,888

Reserve Funds for 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% to 5.0% 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’ furniture, fixtures and equipment. Certain of the agreements require that the Company reserve this cash in separate accounts. As of September 30, 2012, $10,455 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 required capital expenditures under the agreements that do not necessitate that the Company separately reserve cash.

Restricted Cash Reserves

At September 30, 2012, the Company held $16,716 in restricted cash reserves. Included in such amounts are (i) $10,455 of reserve funds relating to the hotels with leases or operating agreements requiring the Company to maintain restricted cash to fund future capital expenditures, (ii) $5,182 deposited in mortgage escrow accounts pursuant to mortgage obligations to pre-fund a portion of certain operating expenses and debt payments and (iii) $1,079 held by insurance 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

On January 1, 2012, the Company issued 8,928 common shares of beneficial interest and authorized an additional 8,928 deferred shares to the independent members of its Board of Trustees for their earned 2011 compensation pursuant to award arrangements existing on or before January 1, 2011. These common shares of beneficial interest were issued under the 2009 Plan.

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On January 1, 2012, the Company issued 69,899 restricted common shares of beneficial interest to an executive related to long-term performance-based awards granted on April 28, 2009 (see Note 7 for additional details including vesting information). These common shares of beneficial interest were issued under the 2009 Plan.

On January 19, 2012, the Company issued 10,535 common shares of beneficial interest related to the resignation of Kelly Kuhn from its Board of Trustees for accumulated deferred shares issued as compensation for years 2007 through 2011. These common shares of beneficial interest were issued under the 2009 Plan.

On January 25 and 26, 2012, the Company issued 70,449 restricted common shares of beneficial interest to the Company’s executives and employees. On July 19, 2012, the Company issued 695 restricted common shares of beneficial interest to the Company’s employees. The restricted shares vest over three years, starting January 1, 2013, subject to continued employment. These common shares of beneficial interest were issued under the 2009 Plan.

From February 1, 2012 through February 14, 2012, the Company sold 1,714,939 common shares of beneficial interest, par value $0.01 per share, under the Company's equity distribution agreement dated March 4, 2011 (the “2011 Agreement”) with Raymond James & Associates, Inc. (the “Manager”). After deducting the Manager’s discounts and commissions of $589, the Company raised net proceeds of $46,566. The net proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility and for general corporate purposes.

On February 27, 2012, a member of the Board of Trustees exercised 5,000 options to purchase common shares of beneficial interest. These common shares of beneficial interest were issued under the 1998 Share Option and Incentive Plan, which was in place prior to the 2009 Plan.

From May 18, 2012 through May 30, 2012, the Company sold 641,069 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of $219, the Company raised net proceeds of $17,328. On August 8, 2012, the Company sold 3,100 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of $1, the Company raised net proceeds of $83. The net proceeds were used to pay down amounts outstanding under the Company's senior unsecured credit facility and under the LHL unsecured credit facility, and for general corporate purposes. During the nine months endedSeptember 30, 2012, the Company incurred additional offering costs of $168 related to maintaining the 2011 Agreement. As of September 30, 2012, the Company had availability under the 2011 Agreement to issue and sell common shares of beneficial interest having an aggregate offering price of up to $146,024.

Common Dividends

The Company paid the following dividends on common shares/units during the nine months endedSeptember 30, 2012:

Dividend per Share/Unit		For the Quarter Ended	Record Date	Payable Date
$	0.11	December 31, 2011	December 31, 2011	January 13, 2012
$	0.11	March 31, 2012	March 31, 2012	April 13, 2012
$	0.20	June 30, 2012	June 29, 2012	July 13, 2012

Treasury Shares

Treasury shares are accounted for under the cost method. During the nine months endedSeptember 30, 2012, the Company received 46,670 common shares of beneficial interest related to executives and employees surrendering shares to pay taxes at the time restricted shares vested.

On August 29, 2011, the Company’s Board of Trustees 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 September 30, 2012, the Company had availability under the Repurchase Program to acquire up to $75,498 of common shares of beneficial interest. However, the Company is not currently authorized by its Board of Trustees to repurchase or offer to repurchase any common shares. If authorized by its Board of Trustees, the Company may resume using the Repurchase Program on a future date.

During the nine months endedSeptember 30, 2012, the Company re-issued 8,928 treasury shares related to earned 2011 compensation for the Board of Trustees in January 2012, 10,535 treasury shares related to the issuance of common shares of beneficial interest to a member of the Board of Trustees for accumulated deferred shares issued as compensation for years 2007 through 2011 upon her resignation in January 2012, 141,043 treasury shares related to the grants of restricted common shares of

15

beneficial interest in January 2012 and July 2012 and 1,260,256 treasury shares related to the sale of common shares of beneficial interest under the 2011 Agreement in February 2012.

At September 30, 2012, there were 15,482 common shares of beneficial interest in treasury.

Preferred Shares

On March 14, 2011, the Company redeemed all 1,100,000 outstanding 8 ³/₈% Series B Cumulative Redeemable Preferred Shares ("Series B Preferred Shares") for $27,500 ($25.00 per share) plus accrued distributions through March 14, 2011 of $473. The redemption value of the Series B Preferred Shares exceeded the carrying value of the Series B Preferred Shares by $731, which is included in the determination of net income attributable to common shareholders for the nine months endedSeptember 30, 2011. The $731 represents the offering costs related to the Series B Preferred Shares.

On May 21, 2012, the Company redeemed all 3,170,000 outstanding 7 ½% Series D Cumulative Redeemable Preferred Shares ("Series D Preferred Shares") and all 3,500,000 outstanding 8% Series E Cumulative Redeemable Preferred Shares ("Series E Preferred Shares") for $79,250 and $87,500 ($25.00 per share), respectively, plus accrued distributions through May 21, 2012 of $842 and $992, respectively. The redemption values of the Series D Preferred Shares and Series E Preferred Shares exceeded their carrying values by $2,273 and $2,144, respectively, which are included in the determination of net income attributable to common shareholders for the nine months endedSeptember 30, 2012. The $2,273 and $2,144 represent the offering costs related to the Series D Preferred Shares and Series E Preferred Shares, respectively.

The 7 ¼% Series G Cumulative Redeemable Preferred Shares (“Series G Preferred Shares”) and 7½% Series H Cumulative Redeemable Preferred Shares ("Series H 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) the full cumulative distributions on the Preferred Shares for the current and 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. The Company currently has the option to redeem the Series G 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 to and including the date of redemption. The Company may not optionally redeem the Series H Preferred Shares prior to January 24, 2016, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below. After that date, the Company may, at its option, redeem the Series H 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 to and including the date of redemption. 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 Amex Equities or the NASDAQ Stock Market, or any successor exchanges, the Company may, at its option, redeem the Series H 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 to and including the date of redemption. If the Company does not exercise its right to redeem the Series H Preferred Shares upon a change of control, the holders of Series H 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.

The following Preferred Shares were outstanding as of September 30, 2012:

Security Type	Number of Shares
7 ¼% Series G Preferred Shares	6,348,888
7 ½% Series H Preferred Shares	2,750,000

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Preferred Dividends

The Company paid the following dividends on preferred shares during the nine months endedSeptember 30, 2012:

	Dividend per		For the
Security Type	Share (1)		Quarter Ended	Record Date	Payable Date
7 ½% Series D	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
8% Series E	$	0.50	December 31, 2011	January 1, 2012	January 13, 2012
7 ¼% Series G	$	0.45	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series H	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series D	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
8% Series E	$	0.50	March 31, 2012	April 1, 2012	April 13, 2012
7 ¼% Series G	$	0.45	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series H	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series D	$	0.27	June 30, 2012	May 21, 2012	May 21, 2012
8% Series E	$	0.28	June 30, 2012	May 21, 2012	May 21, 2012
7 ¼% Series G	$	0.45	June 30, 2012	July 1, 2012	July 13, 2012
7 ½% Series H	$	0.47	June 30, 2012	July 1, 2012	July 13, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

Noncontrolling Interests of Common Units in Operating Partnership

As of September 30, 2012, the Operating Partnership had 296,300 common units of limited partnership interest outstanding, representing a 0.3% partnership interest held by the limited partners. As of September 30, 2012, approximately $7,908 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 $7,908 is based on the Company's closing common share price of $26.69 on September 30, 2012, which is assumed to be equal to the value provided to the limited partners upon liquidation of the Operating Partnership. The outstanding common units of limited partnership interest are subject to a required hold period that ends on December 28, 2013, after which they are convertible into a like number of common shares of beneficial interest of the Company.

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 nine months ended
	September 30,
	2012			2011
Net income attributable to common shareholders	$	35,182		$	12,375
Decrease in additional paid-in capital from adjustments to noncontrolling interests of common units in Operating Partnership	(785		)	0
Change in the Company's ownership interest from net income and adjustments to noncontrolling interests	$	34,397		$	12,375

7. Equity Incentive Plan

At the 2009 Annual Meeting of Shareholders held on April 23, 2009, the common shareholders approved the 2009 Plan, under which the Company may 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 2009 Plan provides for a maximum of 1,800,000 common shares of beneficial interest to be issued in the form of share options, share appreciation rights, restricted share awards, performance shares, phantom shares and other equity-based awards. In addition, the maximum number of common shares subject to awards of any combination that may be granted under the 2009 Plan during any fiscal year to any one individual is limited to 500,000 shares. The 2009 Plan terminates on January 28, 2019. The 2009 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 market value of the common shares on the date of grant. Restricted share

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awards and options under the 2009 Plan vest over a period determined by the Compensation Committee of the Board of Trustees, generally a three to five year period, with certain awards vesting over periods of up to nine years. The duration of each option is also determined by the Compensation Committee, subject to applicable laws and regulations. There were no stock options outstanding as of September 30, 2012. At September 30, 2012, there were 1,428,969 common shares available for future grant under the 2009 Plan.

Service Condition Nonvested Share Awards

From time to time, the Company awards nonvested shares under the 2009 Plan to members of the Board of Trustees, executives, and employees. The nonvested shares vest over three to nine years based on continued service or employment. The Company measures compensation costs for the nonvested shares based upon the fair market value of its common shares at the date of grant. Compensation costs are recognized on a straight-line basis over the vesting period and are included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive income.

A summary of the Company’s service condition nonvested shares as of September 30, 2012 is as follows:

	Number of Shares		Weighted - Average Grant Date Fair Value
Nonvested at January 1, 2012	384,754		$	25.07
Granted	71,144		27.02
Vested	(118,421	)	16.45
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	337,477		$	28.50

⁽¹⁾  Amount excludes 49,406 long-term performance-based shares which were earned but nonvested due to a service condition as of September 30, 2012.

As of September 30, 2012 and December 31, 2011, there were $6,841 and $7,087, respectively, of total unrecognized compensation costs related to nonvested share awards. As of September 30, 2012 and December 31, 2011, these costs were expected to be recognized over a weighted–average period of 2.8 and 3.3 years, respectively. The total fair value of shares vested (calculated as number of shares multiplied by vesting date share price) during the three and nine months endedSeptember 30, 2012 was $1,483 and $3,118, respectively, and during the three and nine months endedSeptember 30, 2011 was zero and $7,089, respectively. The compensation costs (net of forfeitures) that have been included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $702 and $2,094 for the three and nine months endedSeptember 30, 2012, respectively, and $610 and $2,076 for the three and nine months endedSeptember 30, 2011, respectively.

Long-Term Performance-Based Share Awards

On April 28, 2009, the Company’s Board of Trustees granted a target of 70,344 performance-based awards of nonvested shares to executives. The actual amounts of the awards were to range from 0% to 200% of the target amounts, depending on performance. On January 20, 2011, the Company's former Chief Financial Officer, upon his termination, earned a net 107.6% of his 32,118 target number of shares, or 34,570 shares, based on the performance period of January 1, 2009 through January 20, 2011. All of his earned shares vested immediately on January 20, 2011. No additional shares were earned or vested related to the former Chief Financial Officer subsequent to this date. The actual amounts of the remaining 38,226 awards held by the Company's Chief Executive Officer were determined on January 1, 2012, based on the performance period of January 1, 2009 through December 31, 2011, in accordance with the terms of his agreement. On January 1, 2012, the executive earned 182.9% of his target number of shares, or 69,899 shares. One-third of the earned shares, or 23,300 shares, vested immediately on January 1, 2012 and the remaining two-thirds of the earned shares, or 46,599 shares, will vest in equal amounts on January 1, 2013 and January 1, 2014 based on continued employment. The executive received a cash payment of $56 on the earned shares equal to the value of all dividends paid on common shares from December 31, 2008 until the determination date, January 1, 2012. As of January 1, 2012, the executive is entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting.

On January 26, 2012, the Company’s Board of Trustees granted a target of 79,823 performance-based awards of nonvested shares to executives. The actual amounts of the awards will be determined on January 1, 2015, based on the performance period of January 1, 2012 through December 31, 2014, in accordance with the terms of the agreements. The actual amounts of the awards will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the performance shares are outstanding until issued in accordance with award agreements based on performance. After the actual

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amounts of the awards are determined (or earned) on January 1, 2015, the earned shares will be issued and outstanding with a portion subject to further vesting based on continued employment. The executives will receive cash payments on the earned shares, including those subject to further vesting, equal to the value of all dividends paid on common shares from December 31, 2011 until the determination date, January 1, 2015. Such amounts will be paid to the awardees on or about January 1, 2015. Thereafter, the executives will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting.

The fair values of the performance-based awards were determined by the Company using data under the Monte Carlo valuation method provided by a third-party consultant. The measurement of performance for the 2012 awards is substantially the same as the performance measurement for previously granted long-term performance-based share awards. 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 performance 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.

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
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	%

A summary of the Company’s long-term performance-based share awards as of September 30, 2012 is as follows:

	Number of Shares		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2012	179,338		$	31.94
Granted	111,496		30.08
Vested	(28,055	)	20.27
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	262,779		$	32.39

⁽¹⁾  Amount excludes 50,000 shares that have been committed for future performance share grants. Fair value will be estimated at the beginning of the performance measurement period on July 1, 2014.

As of September 30, 2012 and December 31, 2011, there were $5,384 and $4,047, respectively, of total unrecognized compensation costs related to long-term performance-based share awards. As of September 30, 2012 and December 31, 2011, these costs were expected to be recognized over a weighted–average period of 2.8 years. As of September 30, 2012 and December 31, 2011, there were 122,325 and 94,270 long-term performance-based share awards vested, respectively. Additionally, there were 49,406 and 7,562 long-term performance-based awards earned but nonvested due to a service condition as of September 30, 2012 and December 31, 2011, respectively. The compensation costs (net of forfeitures) related to long-term performance-based share awards that have been included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $501 and $1,504 for the three and nine months endedSeptember 30, 2012, respectively, and $382 and $1,043 for the three and nine months endedSeptember 30, 2011, 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.

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Other indirect hotel operating expenses, including amounts related to discontinued operations, consist of the following expenses incurred by the hotels:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
General and administrative	$	17,029	$	14,774	$	49,800	$	41,936
Sales and marketing	12,519		11,483		37,659		33,102
Repairs and maintenance	7,635		6,801		23,045		19,776
Utilities and insurance	6,837		6,322		19,501		17,432
Management and incentive fees	8,360		6,984		21,464		18,540
Franchise fees	1,737		1,617		5,077		4,676
Other expenses	415		430		1,179		1,291
Total other indirect expenses	54,532		48,411		157,725		136,753
Other indirect expenses from discontinued operations	0		0		0		(288		)
Other indirect expenses from continuing operations	$	54,532	$	48,411	$	157,725	$	136,465

As of September 30, 2012, LHL leased all 38 hotels owned by the Company as follows:

1.	Harborside Hyatt Conference Center & Hotel	20.	Le Parc Suite Hotel
2.	Hotel Viking	21.	Westin Michigan Avenue
3.	Topaz Hotel	22.	Hotel Sax Chicago
4.	Hotel Rouge	23.	Alexis Hotel
5.	Hotel Madera	24.	Hotel Solamar
6.	Hotel Helix	25.	Gild Hall
7.	The Liaison Capitol Hill	26.	Hotel Amarano Burbank
8.	Lansdowne Resort	27.	San Diego Paradise Point Resort and Spa
9.	Hotel George	28.	Le Montrose Suite Hotel
10.	Indianapolis Marriott Downtown	29.	Sofitel Washington, DC Lafayette Square
11.	Hilton Alexandria Old Town	30.	Hotel Monaco San Francisco
12.	Chaminade Resort and Conference Center	31.	Westin Philadelphia
13.	Hilton San Diego Gaslamp Quarter	32.	Embassy Suites Philadelphia - Center City
14.	The Grafton on Sunset	33.	Hotel Roger Williams
15.	Onyx Hotel	34.	Chamberlain West Hollywood
16.	Westin Copley Place	35.	Viceroy Santa Monica
17.	Hotel Deca	36.	Villa Florence
18.	The Hilton San Diego Resort and Spa	37.	Park Central Hotel
19.	Donovan House	38.	Hotel Palomar, Washington, DC

9. Income Taxes

Income tax expense was comprised of the following for the three and nine months endedSeptember 30, 2012 and 2011:

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012			2011
LHL’s income tax expense	$	4,669	$	2,988		$	6,936		$	4,931
Operating Partnership's income tax expense (benefit)	274		381			(16		)	851
Total income tax expense	4,943		3,369			6,920			5,782
Income tax expense from discontinued operations	0		(244		)	0			(112		)
Income tax expense from continuing operations	$	4,943	$	3,125		$	6,920		$	5,670

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The Company has estimated LHL’s income tax expense for the nine months endedSeptember 30, 2012 using an estimated combined federal and state effective tax rate of 39.5%. From time to time, the Company may be subject to federal, state or local tax audits in the normal course of business.

During the second quarter of 2012, the Company resolved a previously disclosed uncertain tax position as a result of a settlement with the applicable taxing authority.  Accordingly, the Company has no material unrecognized income tax benefits or related interest and penalties accrued as of September 30, 2012.

10. Earnings Per Common Share

The limited partners' outstanding common units in the Operating Partnership (which may be converted to common shares of beneficial interest after a required hold period) 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. In addition, any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards 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 utilized 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 three months ended						For the nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Numerator:
Net income attributable to common shareholders before discontinued operations	$	26,507		$	14,403		$	35,182		$	12,046
Discontinued operations	0			516			0			329
Net income attributable to common shareholders	26,507			14,919			35,182			12,375
Dividends paid on unvested restricted shares	(78		)	(43		)	(213		)	(126		)
Undistributed earnings attributable to unvested restricted shares	(41		)	(25		)	0			0
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	26,388		$	14,851		$	34,969		$	12,249
Denominator:
Weighted average number of common shares - basic	85,876,584			84,640,196			85,278,331			80,392,686
Effect of dilutive securities:
Stock options and compensation-related shares	180,373			111,916			171,212			166,613
Weighted average number of common shares - diluted	86,056,957			84,752,112			85,449,543			80,559,299
Earnings per Common Share - Basic:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15
Earnings per Common Share - Diluted:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15

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11. Supplemental Information to Statements of Cash Flows

	For the nine months ended
	September 30,
	2012			2011
Interest paid, net of capitalized interest	$	36,660		$	29,143
Interest capitalized		259		255
Income taxes paid, net		2,117		567
Distributions payable on common shares		17,312		9,253
Distributions payable on preferred shares		4,166		7,402
Write-off of fully amortized deferred financing costs		162		0
Accrued capital expenditures		754		2,761
Issuance of restricted shares to employees and executives, net		4,764		7,486
Issuance of common shares for Board of Trustees compensation		494		166
Repurchase of common shares into treasury		1,210		21,588
In conjunction with the sale of property, the Company disposed of the following assets and liabilities:
Investment in property, net of closing costs	$	0		$	19,628
Other assets		0		378
Liabilities		0		(279		)
Sale of property	$	0		$	19,727
In conjunction with the acquisition of properties, the Company assumed assets and liabilities as follows:
Investment in properties (after credits at closing)	$	(143,721	)	$	(80,017	)
Deposits on potential acquisitions		0		(22,500		)
Other assets		(565	)	(756		)
Liabilities		1,342		938
Acquisition of properties	$	(142,944	)	$	(102,335	)

12. Subsequent Events

The Company paid the following common and preferred dividends subsequent to September 30, 2012:

	Dividend per		For the Quarter	Record	Payable
Security Type	Share/Unit (1)		Ended	Date	Date
Common Shares/Units	$	0.20	September 30, 2012	September 28, 2012	October 15, 2012
7 ¼% Series G Preferred Shares	$	0.45	September 30, 2012	October 1, 2012	October 15, 2012
7 ½% Series H Preferred Shares	$	0.47	September 30, 2012	October 1, 2012	October 15, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following should be read in conjunction with the consolidated financial statements and notes thereto appearing in Part I - Item 1 of this report.

Forward-Looking Statements

This report, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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:

• risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs, potential unionization, actual or threatened terrorist attacks, any type of flu or disease-related pandemic and downturns in general and local economic conditions;

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

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

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

• interest rate increases;

• the possible failure of the Company to qualify as a real estate investment trust (“REIT”) and the risk of changes in laws affecting REITs;

• the possibility of uninsured losses;

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

• the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, as updated elsewhere in this report.

Accordingly, there is no assurance that the Company's expectations will be realized. Except as otherwise required by the federal securities laws, 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.

Overview

The Company measures hotel performance by evaluating financial metrics such as room revenue per available room (“RevPAR”), funds from operations (“FFO”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company evaluates the hotels in its portfolio and potential acquisitions using these metrics 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.

During the third quarter of 2012, the hotel industry continued its trend of positive RevPAR growth. The economic indicators that the Company tracks are generally positive. Consumer confidence is higher than it was at the same time last year.  Unemployment decreased to 7.8%, its lowest level since January 2009. However, airline enplanement results were mixed for the quarter and it is

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too early to see a trend from corporate profits. In this context, the U.S. lodging industry experienced increases in demand and improvements in average daily rate ("ADR") during the quarter. Industry-wide RevPAR increased during July and August 2012, while September has not yet been reported. The Company's hotel portfolio increased in ADR and experienced greater occupancy during the third quarter of 2012.

For the third quarter of 2012, the Company had net income attributable to common shareholders of $26.5 million, or $0.31 per diluted share. FFO was $58.1 million, or $0.67 per diluted share/unit (based on 86,353,257 weighted average shares and units outstanding during the three months ended September 30, 2012), and EBITDA was $81.3 million. RevPAR for the hotel portfolio was $178.43, which was an increase of 5.1% compared to the third quarter of 2011. ADR grew 3.3% and occupancy improved 1.7%.

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 or loss, a GAAP measurement.

Critical Accounting Estimates

Substantially all of the Company’s revenues and expenses are generated by the operations of the individual hotels. The Company records revenues and expenses that are estimated by the hotel operators to produce quarterly financial statements because the management contracts do not require the hotel operators to submit actual results within a time frame that permits the Company to use actual results when preparing its Quarterly Reports on Form 10-Q for filing by the deadline prescribed by the SEC. Generally, the Company records actual revenue and expense amounts for the first two months of each quarter and revenue and expense estimates for the last month of each quarter. Each quarter, the Company reviews the estimated revenue and expense amounts provided by the hotel operators for reasonableness based upon historical results for prior periods and internal Company forecasts. The Company records any differences between recorded estimated amounts and actual amounts in the following quarter; historically, these differences have not been material. The Company believes the quarterly revenues and expenses, recorded on the Company’s consolidated statements of operations and comprehensive income based on an aggregate estimate, are fairly stated.

The Company’s management has discussed the policy of using estimated hotel operating revenues and expenses with the Audit Committee of its Board of Trustees. The Audit Committee has reviewed the Company’s disclosure relating to the estimates in this Management’s Discussion and Analysis of Financial Conditions and Results of Operations section.

Comparison of the Three Months Ended September 30, 2012 to the Three Months Ended September 30, 2011

Lodging industry performance improved during July and August of 2012 compared to the prior year, while September results have not yet been reported. The U.S. lodging industry operated in an environment of low supply, which has a positive impact on industry occupancy.  Additionally, industry-wide ADR improved, as operators have gained more confidence in pricing and improved business mix within U.S. hotels. Within the Company's hotel portfolio, ADR increased 3.3% over the prior year, while occupancy improved 1.7%, resulting in RevPAR improvement of 5.1% compared to the third quarter of 2011.

Hotel Operating Revenues

Hotel operating revenues including room, food and beverage and other operating department revenues increased $37.7 million from $198.0 million in 2011 to $235.7 million in 2012. This increase is due primarily to the hotel operating revenues generated from the 2012 and 2011 hotel acquisitions, which consist of the 2012 acquisition of Hotel Palomar, Washington, DC and the 2011 acquisitions of Villa Florence and Park Central Hotel (collectively, the “2012/2011 Third Quarter Acquisition Properties”). The 2012/2011 Third Quarter Acquisition Properties, which are not comparable year-over-year, contributed $33.0 million to the increase in hotel operating revenues. Additionally, the effects of the improving economic environment, which resulted in a 5.1% increase in RevPAR across the portfolio, attributable to a 3.3% increase in ADR and a 1.7% increase in occupancy, contributed to the increase in hotel operating revenues.

Westin Michigan Avenue experienced an increase in total room, food and beverage and other operating department revenues of $1.4 million primarily as a result of the effects of the improving economy.

Hotel operating revenues increased a net $3.3 million across 34 additional hotels in the portfolio primarily as a result of the effects of the economic turnaround experienced throughout the portfolio.

Other Income

Other income increased $0.1 million from $1.2 million in 2011 to $1.3 million in 2012 primarily due to increased retail income.

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Hotel Operating Expenses

Hotel operating expenses increased $17.7 million from $119.9 million in 2011 to $137.6 million in 2012. This overall increase is primarily due to $18.5 million from the results of the 2012/2011 Third Quarter Acquisition Properties, which are not comparable year-over-year.  

Hotel operating expenses across the remainder of the portfolio remained relatively constant, decreasing a net $0.8 million across the 35 additional hotels in the portfolio.

Depreciation and Amortization

Depreciation and amortization expense increased $3.7 million from $27.8 million in 2011 to $31.5 million in 2012. The increase is primarily due to $3.5 million from the 2012/2011 Third Quarter Acquisition Properties, which are not comparable year-over-year, and a net increase of $0.2 million across the remaining hotels in the portfolio where the depreciation of new assets placed into service exceeded the portion of furniture, fixtures and equipment becoming fully depreciated during the period.

Real Estate Taxes, Personal Property Taxes and Insurance

Real estate taxes, personal property taxes and insurance expenses increased $2.1 million from $9.2 million in 2011 to $11.3 million in 2012. This increase is primarily due to $1.8 million from the 2012/2011 Third Quarter Acquisition Properties, which are not comparable year-over-year. Real estate taxes and personal property taxes increased a net $0.2 million across the remaining hotels in the portfolio primarily due to increased assessed property values or tax rates at certain properties. Insurance expense remained relatively flat across the periods for the remaining hotels in the portfolio, increasing by $0.1 million due to property insurance placed on the hotels securing the mezzanine loan.

Ground Rent

Ground rent increased $0.1 million from $2.5 million in 2011 to $2.6 million in 2012. Certain hotels are subject to ground rent under operating leases which call for either fixed or variable payments based on the hotel's performance. The increase is due to improved operating results at the applicable hotels.

General and Administrative

General and administrative expense increased $1.0 million from $4.2 million in 2011 to $5.2 million in 2012 due primarily to increased compensation expenses, including severance costs, and Board of Trustees costs.

Acquisition Transaction Costs

Acquisition transaction costs in 2012 of $0.2 million relate to the acquisition of a mezzanine loan, which closed in July 2012. Acquisition costs in 2011 of $0.1 million relate to the purchase of Park Central Hotel, which closed in December 2011, and $0.1 million relate to the purchase of Villa Florence, which closed in October 2011.

Other Expenses

Other expenses increased $0.2 million from $0.7 million in 2011 to $0.9 million in 2012 due to management transition costs of $0.3 million related to the operator changes at several hotels in the second and third quarters of 2012, partially offset by $0.1 million related to reduced hotel retail outlet expenses.

Interest Income

Interest income increased $2.1 million from an immaterial amount in 2011 to $2.1 million in 2012 as a result of the interest income earned on the mezzanine loan, which closed in July 2012.

Interest Expense

Interest expense increased $4.2 million from $9.9 million in 2011 to $14.1 million in 2012 due to an increase in the Company's weighted average debt outstanding, partly offset by a decrease in the weighted average interest rate. The Company's weighted average debt outstanding increased from $692.7 million in 2011 to $1.2 billion in 2012 due primarily to the following borrowings:

• additional borrowings to purchase the 2012/2011 Third Quarter Acquisition Properties;

• additional borrowings to redeem the Series D Preferred Shares and the Series E Preferred Shares in May 2012:

• additional borrowings to acquire a performing mezzanine loan in July 2012; and

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• additional borrowings to finance other capital improvements during 2011 and 2012.

The above borrowings are partially offset by paydowns with proceeds from the following:

• the issuance of common shares under the Company's equity distribution agreements during 2011 and 2012; and

• operating cash flows.

The Company's weighted average interest rate, including the impact of capitalized interest, decreased from 5.3% in 2011 to 4.2% in 2012. Interest capitalized on renovations decreased from $0.1 million in 2011 to an immaterial amount in 2012.

Income Tax Expense

Income tax expense from continuing operations and discontinued operations increased $1.5 million from $3.4 million in 2011 to $4.9 million in 2012. This increased income tax expense is primarily due to an increase in LHL's net income before income tax expense of $3.7 million from $7.3 million in 2011 to $11.0 million in 2012 due to improved hotel performance. For the quarter ended September 30, 2012, LHL's income tax expense was calculated using an estimated combined federal and state effective tax rate of 39.5%.

Discontinued Operations

Net income from discontinued operations decreased $0.5 million from $0.5 million in 2011 to zero in 2012. The 2011 period includes gain on finalization of the Seaview Resort roof project of $0.8 million.

Noncontrolling Interests of Common Units

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 September 30, 2012, third party limited partners held 0.3% of the common units in the Operating Partnership.

Distributions to Preferred Shareholders

Distributions to preferred shareholders decreased $3.2 million from $7.4 million in 2011 to $4.2 million in 2012 due to decreased distributions on the Series D Preferred Shares and Series E Preferred Shares, which were redeemed on May 21, 2012.

Comparison of the Nine Months Ended September 30, 2012 to the Nine Months Ended September 30, 2011

Industry travel was stronger during the nine months ended September 30, 2012 compared to the same period of the prior year. Demand improvements and limited supply growth led to occupancy growth, which has encouraged operators to increase pricing and resulted in ADR growth during the same period. With respect to the Company's hotels, ADR grew 4.2% during the nine months ended September 30, 2012, while occupancy improved 0.6%, which resulted in RevPAR improvement of 4.8% year-over-year.

Hotel Operating Revenues

Hotel operating revenues including room, food and beverage and other operating department revenues increased $111.3 million from $536.4 million in 2011 to $647.7 million in 2012. This increase is due primarily to the hotel operating revenues generated from the 2012 and 2011 hotel acquisitions, which consist of the 2012 acquisition of Hotel Palomar, Washington, DC and the 2011 acquisitions of Viceroy Santa Monica, Villa Florence and Park Central Hotel (collectively, the “2012/2011 Acquisition Properties”). The 2012/2011 Acquisition Properties, which are not comparable year-over-year, contributed $93.4 million to the increase in hotel operating revenues. Additionally, the effects of the improving economic environment, which resulted in a 4.8% increase in RevPAR across the portfolio, attributable to a 4.2% increase in ADR and a 0.6% increase 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 improving economy:

• $2.8 million increase from Westin Copley Place;

• $2.0 million increase from Westin Michigan Avenue;

• $1.8 million increase from The Hilton San Diego Resort and Spa;

• $1.5 million increase from Westin Philadelphia; and

• $1.5 million increase from San Diego Paradise Point Resort and Spa.

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Additionally, total room, food and beverage and other operating department revenues at Indianapolis Marriott Downtown increased $3.7 million primarily as a result of the positive effects of the Super Bowl being hosted by the City of Indianapolis in 2012.

These increases are partially offset by a decrease of $2.6 million from Hotel Roger Williams as a result of a room renovation project, which was completed in June 2012.

Hotel operating revenues increased a net $7.2 million across 27 additional hotels in the portfolio primarily as a result of the effects of the economic turnaround experienced throughout the portfolio.

Other Income

Other income increased $0.1 million from $3.6 million in 2011 to $3.7 million in 2012 primarily due to increased retail income.

Hotel Operating Expenses

Hotel operating expenses increased $59.0 million from $338.3 million in 2011 to $397.3 million in 2012. This overall increase is primarily due to $54.4 million from the results of the 2012/2011 Acquisition Properties, which are not comparable year-over-year. To a lesser extent, the increase is a result of the effects of increased operating costs associated with higher occupancies at certain properties in the portfolio attributable to the improving economic environment.

The following hotels experienced significant increases in total room, food and beverage, other direct and other indirect expenses primarily as a result of increased occupancies at the hotels:

• $1.2 million increase from Indianapolis Marriott Downtown (positive effects of the Super Bowl); and

• $1.2 million increase from The Hilton San Diego Resort and Spa.

Hotel operating expenses across the remainder of the portfolio remained relatively constant, increasing a net $2.2 million across the 32 additional hotels in the portfolio, including $0.5 million of management transition costs.

Depreciation and Amortization

Depreciation and amortization expense increased $9.3 million from $83.6 million in 2011 to $92.9 million in 2012. The increase is primarily due to $10.4 million from the 2012/2011 Acquisition Properties, which are not comparable year-over-year, partially offset by a net decrease of $1.1 million across the remaining hotels in the portfolio due to a portion of furniture, fixtures and equipment becoming fully depreciated which exceeded the depreciation of new assets placed into service.

Real Estate Taxes, Personal Property Taxes and Insurance

Real estate taxes, personal property taxes and insurance expenses increased $6.4 million from $26.5 million in 2011 to $32.9 million in 2012. This increase is primarily due to $5.5 million from the 2012/2011 Acquisition Properties, which are not comparable year-over-year. Real estate taxes and personal property taxes increased a net $0.8 million across the remaining hotels in the portfolio primarily due to increased assessed property values or tax rates at certain properties, particularly in Chicago. Insurance expense remained relatively flat across the periods for the remaining hotels in the portfolio increasing by $0.1 million due to property insurance placed on the hotels securing the mezzanine loan.

Ground Rent

Ground rent increased $0.7 million from $5.9 million in 2011 to $6.6 million in 2012. Certain hotels are subject to ground rent under operating leases which call for either fixed or variable payments based on the hotel's performance. Viceroy Santa Monica, which is not comparable year-over-year, contributed $0.4 million to the 2012 increase. The other hotels subject to ground leases contributed a net $0.3 million to the increase due to improved operating results.

General and Administrative

General and administrative expense increased $1.7 million from $12.9 million in 2011 to $14.6 million in 2012 due primarily to increased compensation expenses, including severance costs, Board of Trustees costs and professional fees of $2.3 million, partially offset by charges associated with the departure of the Company's former Chief Financial Officer of $0.6 million in 2011 with no similar costs in 2012.

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Acquisition Transaction Costs

Acquisition transaction costs in 2012 of $3.6 million relate to the purchase of Hotel Palomar, Washington, DC, which closed in March 2012, $0.4 million relate to the acquisition of a mezzanine loan, which closed in July 2012, and $0.1 million relate to the finalization of acquisition accounting for Viceroy Santa Monica, which closed in March 2011. Acquisition costs in 2011 of $0.2 million relate to the purchase of Viceroy Santa Monica, $0.1 million relate to the purchase of Villa Florence, which closed in October 2011, and $0.3 million relate to the purchase of Park Central Hotel, which closed in December 2011.

Other Expenses

Other expenses increased $0.7 million from $1.7 million in 2011 to $2.4 million in 2012 due primarily to management transition costs of $0.8 million related to the operator changes at several hotels in the second and third quarters of 2012, partially offset by $0.1 million related to reduced hotel retail outlet expenses.

Interest Income

Interest income increased $2.1 million from an immaterial amount in 2011 to $2.1 million in 2012 as a result of the interest income earned on the mezzanine loan, which closed in July 2012.

Interest Expense

Interest expense increased $8.8 million from $29.6 million in 2011 to $38.4 million in 2012 due to an increase in the Company's weighted average debt outstanding, partly offset by a decrease in the weighted average interest rate. The Company's weighted average debt outstanding increased from $721.2 million in 2011 to $1.1 billion in 2012 due primarily to the following borrowings:

• additional borrowings to purchase the 2012/2011 Acquisition Properties;

• additional borrowings to redeem the Series D Preferred Shares and the Series E Preferred Shares in May 2012;

• additional borrowings to acquire a performing mezzanine loan in July 2012; and

• additional borrowings to finance other capital improvements during 2011 and 2012.

The above borrowings are partially offset by paydowns with proceeds from the following:

• the sale of the Sheraton Bloomington Hotel Minneapolis South in January 2011;

• the January and February 2011 issuance of the 7 ½% Series H Cumulative Redeemable Preferred Shares (the "Series H Preferred Shares"), net of the March 2011 redemption of the 8 ³/₈% Series B Cumulative Redeemable Preferred Shares (the “Series B Preferred Shares”);

• the April 2011 common share offering, net of the August through October 2011 repurchases of common shares under an authorized share repurchase program;

• the issuance of common shares under the Company's equity distribution agreements during 2011 and 2012; and

• operating cash flows.

The Company's weighted average interest rate, including the impact of capitalized interest, decreased from 5.2% in 2011 to 4.3% in 2012. Interest capitalized on renovations remained unchanged at $0.3 million in 2011 and 2012.

Income Tax Expense

Income tax expense from continuing operations and discontinued operations increased $1.1 million from $5.8 million in 2011 to $6.9 million in 2012. This increased income tax expense is primarily due to an increase in LHL's net income before income tax expense of $4.9 million from $11.7 million in 2011 to $16.6 million in 2012 due to improved hotel performance, partially offset by decreased taxes due to the reversal of accruals resulting from the resolution of a previously disclosed uncertain tax position. For the nine months ended September 30, 2012, LHL's income tax expense was calculated using an estimated combined federal and state effective tax rate of 39.5%.

Discontinued Operations

Net income from discontinued operations decreased $0.3 million from $0.3 million in 2011 to zero in 2012. The 2011 period includes the operating results of the Sheraton Bloomington Hotel Minneapolis South, which was sold in January 2011, and the gain on finalization of the Seaview Resort roof project of $0.8 million.

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Redeemable Noncontrolling Interest

Redeemable noncontrolling interest in loss of consolidated entity represents the outside equity interest in the Modern Magic Hotel, LLC joint venture, which is included in the consolidated financial statements of the Company since the Company held a controlling interest prior to dissolution on November 1, 2011.

Noncontrolling Interests of Common Units

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 September 30, 2012, third party limited partners held 0.3% of the common units in the Operating Partnership.

Distributions to Preferred Shareholders

Distributions to preferred shareholders decreased $5.0 million from $22.6 million in 2011 to $17.6 million in 2012 due to decreased distributions on the Series B Preferred Shares, which were redeemed on March 14, 2011, and the Series D Preferred Shares and Series E Preferred Shares, which were redeemed on May 21, 2012, partially offset by increased distributions on the Series H Preferred Shares, which were issued on January 19 and February 4, 2011.

Issuance Costs of Redeemed Preferred Shares

Issuance costs of redeemed preferred shares of $4.4 million in 2012 represent the offering costs related to the Series D Preferred Shares and Series E Preferred Shares, which were redeemed on May 21, 2012, and $0.7 million in 2011 represent the offering costs related to the Series B Preferred Shares, which were redeemed on March 14, 2011. 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 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 (excluding amortization of deferred finance costs) and after comparable adjustments for the Company's portion of these items related to unconsolidated entities and joint ventures. In October 2011 and November 2011, NAREIT issued guidance reaffirming its view that impairment write-downs of depreciable real estate should be excluded from the computation of FFO. The Company computes FFO consistent with standards established by NAREIT, which may not be comparable to 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 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 as 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

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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 for the three and nine months endedSeptember 30, 2012 and 2011 (in thousands, except share and unit data):

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012		2011
Net income attributable to common shareholders	$	26,507	$	14,919		$	35,182	$	12,375
Depreciation	31,336		27,644			92,483		83,194
Amortization of deferred lease costs	97		69			271		225
Noncontrolling interests:
Redeemable noncontrolling interest in consolidated entity	0		0			0		(2		)
Noncontrolling interests of common units in Operating Partnership	116		0			224		0
Less: Net gain on sale of property	0		(760		)	0		(760		)
FFO	$	58,056	$	41,872		$	128,160	$	95,032
Weighted Average number of common shares and units outstanding:
Basic	86,172,884		84,640,196			85,574,631		80,392,686
Diluted	86,353,257		84,752,112			85,745,843		80,559,299

The following is a reconciliation between net income attributable to common shareholders and EBITDA for the three and nine months endedSeptember 30, 2012 and 2011 (in thousands):

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
Net income attributable to common shareholders	$	26,507	$	14,919	$	35,182	$	12,375
Interest expense	14,110		9,856		38,391		29,566
Income tax expense (1)	4,943		3,369		6,920		5,782
Depreciation and amortization	31,480		27,765		92,911		83,572
Noncontrolling interests:
Redeemable noncontrolling interest in consolidated entity	0		0		0		(2		)
Noncontrolling interests of common units in Operating Partnership	116		0		224		0
Distributions to preferred shareholders	4,166		7,402		17,567		22,550
EBITDA	$	81,322	$	63,311	$	191,195	$	153,843

⁽¹⁾  Includes amounts from discontinued operations.

Off-Balance Sheet Arrangements

Reserve Funds for 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% to 5.0% 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' furniture, fixtures and equipment. Certain of the agreements require that the Company reserve this cash in separate accounts. As of September 30, 2012, the Company held a total of $16.7 million of restricted cash reserves, $10.5 million of which was available for future capital expenditures. The Company has sufficient cash on hand and availability on its credit facilities to cover required capital expenditures under the agreements that do not necessitate that the Company separately reserve cash.

The Company has no other off-balance sheet arrangements.

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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 unsecured credit facility, additional unsecured financing, secured financing on one or all of the Company's 31 unencumbered properties as of September 30, 2012, the sale of one or more properties, equity issuances available under the Company's shelf registration statement and the issuance of up to $146.0 million of common shares from time to time under the 2011 Agreement (see “Equity Issuances and Redemptions” below).

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.

Debt Summary

Debt as of September 30, 2012 and December 31, 2011 consisted of the following (in thousands):

			Balance Outstanding as of
Debt	Interest Rate	Maturity Date	September 30, 2012		December 31, 2011
Credit facilities
Senior unsecured credit facility	Floating (a)	January 2016 (a)	$	201,000	$	265,000
LHL unsecured credit facility	Floating (b)	January 2016 (b)	8,586		0
Total borrowings under credit facilities			209,586		265,000
Term loans
First Term Loan	Floating (c)	May 2019	177,500		0
Second Term Loan	Floating (c)	August 2017	200,000		0
Total term loans			377,500		0
Massport Bonds
Harborside Hyatt Conference
Center & Hotel (taxable)	Floating (d)	March 2018	5,400		5,400
Harborside Hyatt Conference
Center & Hotel (tax exempt)	Floating (d)	March 2018	37,100		37,100
Total bonds payable			42,500		42,500
Mortgage loans
Hilton San Diego Gaslamp Quarter	5.35%	July 2012 (e)	0		59,600
Hotel Solamar	5.49%	December 2013	60,334		60,900
Hotel Deca	6.28%	August 2014	9,183		9,392
Westin Copley Place	5.28%	September 2015	210,000		210,000
Westin Michigan Avenue	5.75%	April 2016	137,625		138,902
Indianapolis Marriott Downtown	5.99%	July 2016	100,452		101,319
Hotel Roger Williams	6.31%	August 2016	62,816		63,589
Mortgage loans at stated value			580,410		643,702
Unamortized loan premium (f)			138		195
Total mortgage loans			580,548		643,897
Total debt			$	1,210,134	$	951,397

^(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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000

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was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

^(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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

^(c)  Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into separate interest rate swap agreements for the full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements).

^(d)  The Massport Bonds are secured by letters of credit issued by the Royal Bank of Scotland that expire in February 2014, pursuant to an amendment to the agreement governing the letters of credit. The Royal Bank of Scotland letters of credit also have threeone-year extension options and are secured by the Harborside Hyatt Conference Center & Hotel. The bonds bear interest based on weekly floating rates. The interest rates as of September 30, 2012 were 0.61% and 0.20% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2011 were 0.75% and 0.12% for the $5,400 and $37,100 bonds, respectively. The Company also incurs an annual letter of credit fee, which effective February 14, 2012 changed from a flat 2.00% to a variable rate based on an applicable margin as defined in the Company's senior unsecured credit agreement.

^(e)  The Company repaid the mortgage loan on March 30, 2012 through borrowings on its senior unsecured credit facility.

^(f)  Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

A summary of the Company's interest expense and weighted average interest rates for variable rate debt for the three and nine months endedSeptember 30, 2012 and 2011 is as follows (in thousands):

		For the three months ended						For the nine months ended
		September 30,						September 30,
		2012			2011			2012			2011
Interest Expense:
Interest incurred	$	13,611		$	9,781		$	37,296		$	29,251
Amortization of deferred financing costs		526			170			1,354			570
Capitalized interest		(27)			(95)			(259)			(255)
Interest expense	$	14,110		$	9,856		$	38,391		$	29,566
Weighted Average Interest Rates for Variable Rate Debt:
Senior unsecured credit facility		2.3	%		N/A			2.2	%		1.1	%
LHL unsecured credit facility		2.2	%		N/A			2.1	%		1.1	%
Massport Bonds		0.2	%		0.2	%		0.3	%		0.2	%

The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy under GAAP. Rates and credit spreads take into consideration general market conditions and maturity.

The carrying value and estimated fair value of the Company's debt as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30,		December 31,
	2012		2011
Carrying value	$	1,210,134	$	951,397
Estimated fair value	$	1,228,640	$	954,299

The carrying amount of the Company's mezzanine loan receivable of $67.9 million (net of unamortized discount of $4.1 million) approximates fair value because the Company acquired it in a recent market transaction in July 2012. The carrying amounts of the Company's other financial instruments approximate fair value because of the relatively short maturities of these instruments.

As of September 30, 2012, the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loan, bonds or mortgage loans. Depending on operating results and lender

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requirements, one of the mortgaged properties may be subject to a cash trap (see "Mortgage Loans" below) as a result of the impact of a recent renovation on hotel operations. This cash trap will not have a material impact on the cash flow or the operations of the Company.

Credit Facilities

On December 14, 2011, the Company entered into a new $750.0 million senior unsecured credit facility with a syndicate of banks that replaced the Company's $450.0 million credit facility that was scheduled to mature on April 13, 2012. The new credit facility matures on January 30, 2016, subject to a one-year extension that the Company may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. The new credit facility includes an accordion feature which, subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments up to $1.0 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 plus an applicable margin. Additionally, the Company is required to pay a variable unused commitment fee of 0.30% or 0.40% of the unused portion of the credit facility, depending on the average daily unused portion of the credit facility.

LHL has a $25.0 million unsecured revolving credit facility to be used for working capital and general lessee corporate purposes. On December 14, 2011, LHL refinanced its credit facility that was scheduled to mature on April 13, 2012, extending the maturity date to January 30, 2016, subject to a one-year extension 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 plus an applicable margin. Additionally, LHL is required to pay a variable unused commitment fee of 0.30% or 0.40% 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 covenants relating to net worth requirements, debt ratios and fixed charge coverage and other limitations that restrict the Company's ability to make distributions or other payments to its shareholders upon events of default.

Term Loans

On May 16, 2012, the Company entered into a new $177.5 million unsecured loan with a seven-year term maturing on May 16, 2019 (the “First Term Loan”). The First Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full seven-year term (see “Derivative and Hedging Activities” below). The proceeds were used to redeem the Series D Preferred Shares and Series E Preferred Shares on May 21, 2012 and for general corporate purposes.

On August 2, 2012, the Company entered into a new $300.0 million unsecured loan with a five-year term maturing on August 2, 2017, including a one-year extension subject to certain conditions (the "Second Term Loan"). At closing, $200.0 million of the Second Term Loan proceeds were funded. The Company has the flexibility to draw the remaining $100.0 million of proceeds anytime during the 95-day post closing period. The Second Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full five-year term (see "Derivative and Hedging Activities below"). The proceeds were used to reduce amounts outstanding under the Company's senior unsecured facility and for general corporate purposes.

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 the Company's ability to make distributions or other payments to its shareholders upon events of default.

Derivative and Hedging Activities

The Company enters into interest rate swap agreements to hedge against interest rate fluctuations. Unrealized gains and losses on the effective portion of hedging instruments are reported in other comprehensive income (loss) ("OCL"). 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) ("AOCL") 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 May 16, 2012, the Company entered into three interest rate swap agreements with an aggregate notional amount of $177.5 million for the First Term Loan's full seven-year term, resulting in a fixed all-in interest rate of 3.87% at the Company's current leverage ratio (as defined in the agreement). Effective August 2, 2012, the Company entered into five interest rate swap agreements with an aggregate notional amount of $300.0 million, of which $200.0 million was drawn as of September 30, 2012, for the Second Term Loan's full five-year term, including a one-year extension subject to certain conditions, resulting in a fixed all-in interest rate of 2.68% at the Company's current leverage ratio (as defined in the agreement). The Company has designated its pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges.

33

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 three and nine months endedSeptember 30, 2012 (in thousands):

	Amount of Loss Recognized in OCL on Derivative Instruments				Location of Loss Reclassified from AOCL into Income	Amount of Loss Reclassified from AOCL into Income
	(Effective Portion)				(Effective Portion)	(Effective Portion)
	For the three months ended		For the nine months ended			For the three months ended		For the nine months ended
	September 30, 2012		September 30, 2012			September 30, 2012		September 30, 2012
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	3,839	$	8,534	Interest expense	$	780	$	1,082

During the three and nine months endedSeptember 30, 2012, the Company did not have any hedge ineffectiveness or amounts that were excluded from the assessment of hedge effectiveness recorded in earnings.

The Company records all derivative instruments at fair value in the consolidated balance sheets. The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows. 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 is classified within level 2 of the fair value hierarchy. As of September 30, 2012, there was $8.5 million in cumulative unrealized loss, of which $8.5 million was included in AOCL and an immaterial amount was attributable to noncontrolling interests. The Company expects that approximately $3.5 million will be reclassified from AOCL and noncontrolling interests and recognized as a reduction to income in the next 12 months.

The following table presents the location and fair value of the Company's derivative financial instruments as reported in the consolidated balance sheets as of September 30, 2012 (in thousands):

		Fair Value
	Consolidated Balance Sheet Location	September 30, 2012
Derivatives designated as hedging instruments:
Liability derivatives:
Interest rate swaps	Accounts payable and accrued expenses	$	8,534

Mortgage Loans

On March 30, 2012, the Company repaid without fee or penalty the Hilton San Diego Gaslamp Quarter mortgage loan in the amount of $59.6 million plus accrued interest through borrowings on its senior unsecured credit facility. The loan was due to mature in July 2012.

The mortgage loans contain debt service coverage ratio thresholds 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 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 the property again complies with the specified debt service coverage ratio or the mortgage is paid off.

Equity Issuances and Redemptions

From February 1, 2012 through February 14, 2012, the Company sold 1,714,939 common shares of beneficial interest, par value $0.01 per share, under the Company's equity distribution agreement dated March 4, 2011 (the “2011 Agreement”) with Raymond James & Associates, Inc. (the “Manager”). After deducting the Manager's discounts and commissions of $0.6 million, the Company raised net proceeds of $46.6 million. The net proceeds were used to pay down amounts outstanding under the Company's senior unsecured credit facility and for general corporate purposes.

From May 18, 2012 through May 30, 2012, the Company sold 641,069 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of $0.2 million, the Company raised net proceeds of $17.3 million. On August 8, 2012, the Company sold 3,100 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of an immaterial amount, the Company raised net proceeds of $0.1 million. The net proceeds were used to pay down amounts outstanding under the Company's

34

senior unsecured credit facility and under the LHL credit facility, and for general corporate purposes. During the nine months endedSeptember 30, 2012, the Company incurred additional offering costs of $0.2 million related to maintaining the 2011 Agreement. As of September 30, 2012, the Company had availability under the 2011 Agreement to issue and sell common shares of beneficial interest having an aggregate offering price of up to $146.0 million.

On May 21, 2012, the Company redeemed all 3,170,000 outstanding Series D Preferred Shares and all 3,500,000 outstanding Series E Preferred Shares for $79.3 million and $87.5 million ($25.00 per share), respectively, plus accrued distributions through May 21, 2012 of $0.8 million and $1.0 million, respectively. The fair values of the Series D Preferred Shares and Series E Preferred Shares exceeded their carrying values by $2.3 million and $2.1 million, respectively, which are included in the determination of net income attributable to common shareholders for the nine months endedSeptember 30, 2012. The $2.3 million and $2.1 million represent the offering costs related to the Series D Preferred Shares and Series E Preferred Shares, respectively.

Sources and Uses of Cash

As of September 30, 2012, the Company had $5.7 million of cash and cash equivalents and $16.7 million of restricted cash reserves, $10.5 million of which was available for future capital expenditures. Additionally, the Company had $546.7 million available under the Company's senior unsecured credit facility, with $2.3 million reserved for outstanding letters of credit, and $16.4 million available under LHL's unsecured credit facility.

Net cash provided by operating activities was $152.5 million for the nine months endedSeptember 30, 2012 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 used in investing activities was $260.7 million for the nine months endedSeptember 30, 2012 primarily due to the purchase of Hotel Palomar, Washington, DC, the acquisition of a performing mezzanine loan and outflows for improvements and additions at the hotels, partially offset by net proceeds from restricted cash reserves.

Net cash provided by financing activities was $93.6 million for the nine months endedSeptember 30, 2012 primarily due to proceeds from the term loans and net proceeds from the common share offerings, partially offset by payment for the redemption of preferred shares, mortgage loan repayments, net repayments under the credit facilities, payment of deferred financing costs, repurchase of common shares into treasury, payment of distributions to the common shareholders and unitholders and payment of distributions to preferred shareholders.

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, property acquisitions, 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 31 unencumbered properties, potential property sales, equity issuances available under the Company's shelf registration statement and the issuance of up to $146.0 million of common shares from time to time under the 2011 Agreement. 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 31 unencumbered properties, potential property sales or the issuance of additional equity securities.

The Company expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, scheduled debt maturities, major renovations, including the anticipated 2013 renovation of the Park Central Hotel in which the Company expects to invest between $60.0 million and $70.0 million, 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 31 unencumbered properties, potential property sales, estimated cash flows from operations, equity issuances available under the Company's shelf registration statement and the issuance of up to $146.0 million of common shares from time to time under the 2011 Agreement. 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.

35

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 Reserve Funds.

Contractual Obligations

The following is a summary of the Company's obligations and commitments as of September 30, 2012 (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 (1)	$	685,427	$	38,471	$	346,659	$	300,297	$	0
Borrowings under credit facilities (2)	225,315		4,721		9,443		211,151			0
Rents (3)	248,888		5,668		11,373		11,482			220,365
Massport Bonds (1)	43,080		107		214		214			42,545
Term loans (4)	449,963		12,401		24,801		223,957			188,804
Purchase commitments (5)
Purchase orders and letters of commitment	37,525		37,525		0		0			0
Total obligations and commitments	$	1,690,198	$	98,893	$	392,490	$	747,101	$	451,714

⁽¹⁾  Amounts include principal and interest.

⁽²⁾  Amounts include principal and interest. Interest expense is calculated based on the variable rate as of September 30, 2012. It is assumed that the outstanding debt as of September 30, 2012 will be repaid upon maturity with interest-only payments until then.

⁽³⁾  Amounts calculated based on the annual minimum future lease payments that extend through the term of the lease. Rents may be subject to adjustments based on future interest rates and hotel performance.

⁽⁴⁾  Amounts include principal and interest. 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 full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements). It is assumed that the outstanding debt as of September 30, 2012 will be repaid upon maturity with fixed interest-only payments until then.

⁽⁵⁾  As of September 30, 2012, purchase orders and letters of commitment totaling approximately $37.5 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.

The Hotels

The following table sets forth historical comparative information with respect to occupancy, ADR and RevPAR for the total hotel portfolio for the three and nine months endedSeptember 30, 2012 and 2011:

	For the three months ended								For the nine months ended
	September 30,								September 30,
	2012			2011			Variance		2012			2011			Variance
Occupancy	86.7		%	85.2		%	1.7	%	80.8		%	80.3		%	0.6	%
ADR	$	205.75		$	199.21		3.3	%	$	200.87		$	192.69		4.2	%
RevPAR	$	178.43		$	169.80		5.1	%	$	162.26		$	154.80		4.8	%

The above hotel statistics include adjustments made for presentation of comparable information.

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.

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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 with the general rate of inflation, except for energy costs, liability insurance, property tax rates, employee benefits and some wages, which are expected to increase at rates higher than inflation, and except for instances in which the properties are subject to periodic real estate tax reassessments.

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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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 guidance included in ASC 815 “Derivatives and Hedging." As of September 30, 2012, $252.1 million of the Company's aggregate indebtedness (20.8% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the Term Loans since the Company hedged their variable interest rates 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 $0.6 million annually. This assumes that the amount outstanding under the Company's variable rate debt remains at $252.1 million, the balance as of September 30, 2012.

Item 4. Controls and Procedures

Based on the most recent evaluation, the Company's Chief Executive Officer and Chief Financial Officer believe the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective as of September 30, 2012. There were no changes to the Company's internal control over financial reporting during the third quarter ended September 30, 2012 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. Other Information

Item 1. 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 1A. Risk Factors

There have been no material changes from the risk factors disclosed in the “Risk Factors” section of the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

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Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
10.1	Senior Unsecured Term Loan Agreement, dated August 2, 2012, among LaSalle Hotel Operating Partnership, L.P., LaSalle Hotel Properties, and Citibank, N.A., as Administrative Agent, BBVA Compass and U.S. Bank National Association, as Co-Syndication Agents, and the other lenders named therein
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. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002
101	The following financial statements from LaSalle Hotel Properties’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on October 17, 2012, 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

38

SIGNATURE

Pursuant to the requirements 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:	October 17, 2012	BY:	/s/ BRUCE A. RIGGINS
			Bruce A. Riggins
			Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

39

Exhibit Index

Exhibit Number	Description of Exhibit
10.1	Senior Unsecured Term Loan Agreement, dated August 2, 2012, among LaSalle Hotel Operating Partnership, L.P., LaSalle Hotel Properties, and Citibank, N.A., as Administrative Agent, BBVA Compass and U.S. Bank National Association, as Co-Syndication Agents, and the other lenders named therein
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. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002
101	The following financial statements from LaSalle Hotel Properties’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed on October 17, 2012, 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

40

EX-10.1

Exhibit 10.1

SENIOR UNSECURED TERM LOAN AGREEMENT

Dated as of August 2, 2012

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,

COMPASS BANK,
and
U.S. BANK NATIONAL ASSOCIATION,

as Co-Syndication Agents,

The Banks Party Hereto,

as the Banks,

PNC BANK, NATIONAL ASSOCIATION,
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co- Documentation Agents

and

CITIGROUP GLOBAL MARKETS INC.,

as Sole Lead Arranger and Sole Book Running Manager

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS		1
Section 1.01	Certain Defined Terms.	1
Section 1.02	Computation of Time Periods.	21
Section 1.03	Accounting Terms; Changes in GAAP.	21
Section 1.04	Types of Advances.	21
Section 1.05	Miscellaneous.	21
Section 1.06	Commitment Increases; New Term Loan Tranches.	21
ARTICLE II THE ADVANCES		22
Section 2.01	The Term Loan; Advances.	22
Section 2.02	Method of Borrowing.	23
Section 2.03	Fees.	25
Section 2.04	Reduction of the Commitments.	25
Section 2.05	Repayment of Advances.	25
Section 2.06	Interest.	25
Section 2.07	Prepayments.	26
Section 2.08	Breakage Costs.	27
Section 2.09	Increased Costs.	27
Section 2.10	Payments and Computations.	28
Section 2.11	Taxes.	29
Section 2.12	Illegality.	30
Section 2.13	[Reserved].	31
Section 2.14	Bank Replacement.	31
Section 2.15	Sharing of Payments, Etc.	32
Section 2.16	Defaulting Lenders.	32
ARTICLE III CONDITIONS OF LENDING		33
Section 3.01	Conditions Precedent to Initial Advance.	33
Section 3.02	Conditions Precedent for each Borrowing.	35
ARTICLE IV REPRESENTATIONS AND WARRANTIES		35
Section 4.01	Existence; Qualification; Partners; Subsidiaries.	35
Section 4.02	Partnership and Corporate Power.	36
Section 4.03	Authorization and Approvals.	36
Section 4.04	Enforceable Obligations.	37
Section 4.05	Parent Stock.	37
Section 4.06	Financial Statements.	37

i

Section 4.07	True and Complete Disclosure.	37
Section 4.08	Litigation.	37
Section 4.09	Use of Proceeds.	37
Section 4.10	Investment Company Act.	38
Section 4.11	Taxes.	38
Section 4.12	Pension Plans.	38
Section 4.13	Condition of Hotel Property; Casualties; Condemnation.	38
Section 4.14	Insurance.	39
Section 4.15	No Burdensome Restrictions; No Defaults.	39
Section 4.16	Environmental Condition.	39
Section 4.17	Legal Requirements, Zoning, Utilities, Access.	39
Section 4.18	Existing Indebtedness.	40
Section 4.19	Title; Encumbrances.	40
Section 4.20	Leasing Arrangements.	40
Section 4.21	Unencumbered Properties.	40
ARTICLE V AFFIRMATIVE COVENANTS		40
Section 5.01	Compliance with Laws, Etc.	40
Section 5.02	Preservation of Existence, Separateness, Etc.	40
Section 5.03	Payment of Taxes, Etc.	42
Section 5.04	Visitation Rights; Bank Meeting.	42
Section 5.05	Reporting Requirements.	42
Section 5.06	Maintenance of Property.	44
Section 5.07	Insurance.	44
Section 5.08	Use of Proceeds.	44
Section 5.09	New Guarantors.	45
ARTICLE VI NEGATIVE COVENANTS		45
Section 6.01	Liens, Etc.	45
Section 6.02	Indebtedness.	46
Section 6.03	Agreements Restricting Distributions From Subsidiaries.	47
Section 6.04	Restricted Payments.	47
Section 6.05	Fundamental Changes; Asset Dispositions.	47
Section 6.06	Participating Lessee Ownership.	48
Section 6.07	Investments, Loans, Future Properties.	48
Section 6.08	Affiliate Transactions.	49
Section 6.09	Sale and Leaseback.	49
Section 6.10	Sale or Discount of Receivables.	49
Section 6.11	Restriction on Negative Pledges.	49
Section 6.12	Material Documents.	49

ii

Section 6.13	Limitations on Development, Construction, Renovation and Purchase of Hotel Properties.	50
Section 6.14	New York Properties.	50
ARTICLE VII FINANCIAL COVENANTS		50
Section 7.01	Fixed Charge Coverage Ratio.	50
Section 7.02	Maintenance of Net Worth.	50
Section 7.03	Limitations on Total Liabilities.	50
Section 7.04	Limitations on Unsecured Indebtedness.	50
Section 7.05	Limitations on Secured Indebtedness.	50
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES		50
Section 8.01	Events of Default.	50
Section 8.02	Optional Acceleration of Maturity.	53
Section 8.03	Automatic Acceleration of Maturity.	53
Section 8.04	[Reserved].	53
Section 8.05	Non-exclusivity of Remedies.	53
Section 8.06	Right of Set-off.	53
ARTICLE IX [RESERVED]		54
Section 9.01	[Reserved].	54
ARTICLE X AGENCY PROVISIONS		54
Section 10.01	Authorization and Action.	54
Section 10.02	Administrative Agent's Reliance, Etc.	54
Section 10.03	Administrative Agent and Its Affiliates.	54
Section 10.04	Bank Credit Decision.	55
Section 10.05	Indemnification.	55
Section 10.06	Successor Administrative Agent.	55
Section 10.07	Co-Syndication Agents, Joint Lead Arrangers and Joint Book Running Managers, Co-Documentation Agents.	55
Section 10.08	Designation of Additional Agents.	56
ARTICLE XI MISCELLANEOUS		56
Section 11.01	Amendments, Etc.	56
Section 11.02	Notices, Etc.	57
Section 11.03	No Waiver; Remedies.	58
Section 11.04	Costs and Expenses.	59
Section 11.05	Binding Effect.	59

iii

Section 11.06	Bank Assignments and Participations.	59
Section 11.07	Indemnification.	61
Section 11.08	Execution in Counterparts.	62
Section 11.09	Survival of Representations, Indemnifications, etc.	62
Section 11.10	Severability.	62
Section 11.11	Entire Agreement.	62
Section 11.12	Usury Not Intended.	62
Section 11.13	Governing Law.	62
Section 11.14	Consent to Jurisdiction; Service of Process; Jury Trial.	63
Section 11.15	Knowledge of Borrower.	63
Section 11.16	Banks Not in Control.	63
Section 11.17	Headings Descriptive.	64
Section 11.18	Time is of the Essence.	64
Section 11.19	Scope of Indemnities.	64
Section 11.20	Confidentiality.	64
Section 11.21	USA Patriot Act Notice.	65
Section 11.22	No Fiduciary Duties.	65

iv

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 NOTICE OF BORROWING

EXHIBIT G    —    FORM OF NOTICE OF CONVERSION OR CONTINUATION

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

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SENIOR UNSECURED TERM LOAN AGREEMENT

This SENIOR UNSECURED TERM LOAN AGREEMENT, dated as of August 2, 2012, 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 and CITIGROUP GLOBAL MARKETS INC., as sole lead arranger and sole book running manager.

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:

WHEREAS, the Borrower has requested that the Banks extend credit to the Borrower, and the Banks, upon the occurrence of the Closing Date and subject to the terms hereof, have agreed to lend monies and/or make advances, extensions of credit or other financial accommodations to, on behalf of or for the benefit of the Borrower pursuant hereto.

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 the following:

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):

“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, (b) 2% per annum above the Federal Funds Rate and (c) the one-month LIBOR as offered on the applicable date of determination (or on the previous day if such day is not a Business Day), as the same may fluctuate from time to time, plus 1% per annum.

“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.

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“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; providedfurther 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.

“Agreement” means this Senior Unsecured Term Loan Agreement, as the same may be amended, modified, restated or supplemented from time to time.

“Allocation Percentage” means, for any Person, with respect to a Person's Joint Venture Subsidiary, the percentage ownership interest of such Person in such Joint Venture Subsidiary.

“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	0.65%	1.65%
Level II Status	> 4.00:1.00 but ≤ 4.75:1.00	0.9%	1.9%
Level III Status	> 4.75:1.00 but ≤ 5.00:1.00	1.15%	2.15%
Level IV Status	> 5.00:1.00	1.6%	2.6%

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“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 an existing, Borrowing, (ii) any notice pursuant to Section 2.07(b) 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 Guarantor 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 Guarantor is lessor), conveyance, exchange, transfer, or assignment of any Property by the Borrower or a Guarantor to a Person other than the Borrower or a Guarantor.

“AssetValue” 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 twelve (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.

“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.

“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.

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“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 8.25%.

“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.

“Capitalized Lease Obligations” means, as to any Person, the capitalized amount of all obligations of such Person or any of its Subsidiaries under Capitalized 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 the date of this Agreement or such other date as may be agreed upon by the Borrower and the Administrative Agent.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor statute.

“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.

“Commitment Letter” means that certain commitment letter dated as of May 16, 2012 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.

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

“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.

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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 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.

“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.

“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).

“Credit Documents” means this Agreement, the Notes, the Guaranties, the Environmental Indemnities, the Commitment Letter, the Fee Letter 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.

“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 an Advance 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 or the Borrower 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 three 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 ownership 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

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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 (v) 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 and the Banks.

“Delayed Draw Period” has the meaning specified in Section 2.01.

“Delayed Draw Tranche” has the meaning specified in Section 2.01.

“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.

“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.

“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 (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.

“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.

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“Environmental Indemnity” means that certain Environmental Indemnification Agreement effective the date hereof executed by the Borrower, the Parent and the Guarantors, any additional Environmental Indemnity Agreements in substantially the form of the attached Exhibit D and any future environmental indemnities 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.

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

“Existing Properties” means collectively the Hotel Properties listed on Schedule 1.01(B), and “Existing Property” means any of such Hotel Properties.

“Existing Revolver” means that certain $750,000,000 unsecured revolving credit facility in favor of the Borrower and certain of its Affiliates pursuant to the Existing Revolving Credit Agreement.

“Existing Revolver Administrative Agent” means Citibank, N.A., in its capacity as administrative agent under the Existing Revolving Credit Agreement and with respect to the Existing Revolver, together with any of its successors or assigns in such capacity.

“Existing Revolving Closing Date” means December 14, 2011.

“Existing Revolving Credit Agreement” means that certain Senior Unsecured Credit Agreement dated as of the Existing Revolver Closing Date by and among the Borrower, the Parent, the guarantors named therein or party thereto from time to time, Citibank, as administrative agent thereunder, and the various lenders party thereto from time to time, as amended by that certain First Letter Amendment dated as of May 11, 2012 by and among the Borrower, the Parent, the guarantors party thereto, Citibank, as administrative agent, and the various lenders party thereto, and as the same may be extended or amended (other than any amendments that may be made in breach of Section 6.14).

“Extension Date” has the meaning set forth in Section 1.07.

“Extension Fee” has the meaning set forth in Section 1.07.

“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

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Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for any such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“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 furniture, fixtures and equipment.

“FF&E Reserve” means, for any Person or any Hotel Property at any time, a reserve equal to four percent (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.

“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.

“Governmental Proceedings” means any action or proceedings by or before any Governmental Authority, including, without limitation, the promulgation, enactment or entry of any Legal Requirement.

“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

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(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, any additional Guaranty and Contribution Agreements in substantially the form of the attached Exhibit E executed to secure Advances and any future guaranty and contribution 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.

“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.

“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, nine or 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:

(a)Interest Periods for Advances of the same Borrowing shall be of the same duration;

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(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.

“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, or (c) any joint venture or partnership with, or any capital contribution to, or other investment in, any other Person or any real property.

“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 the Parent's 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 the Parent's common stock assuming such exchange occurred on the date of acquiring such Investment).

“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 Agreement 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

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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, or (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.

“Leverage Ratio” means the percentage obtained by dividing (a) the Parent's Total Liabilities by (b) the Adjusted Corporate EBITDA.

“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, from LaSalle Hotel Lessee, Inc. to U.S. Bank National Association, in the maximum principal amount of $25,000,000, as the same may be extended or 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 rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be the offered rate that appears on the Reuters Screen LIBOR01 Page (or any successor thereto) as the British Bankers Association London interbank offered rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period, provided that, if such rate is not available for any reason, the rate for this clause (A) shall be the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in Dollars are offered by the Administrative Agent to leading banks and accepted by leading banks in the London interbank eurodollar market at approximately 11:00 A.M. (London time) two (2) Business Days before the first day of such Interest Period, in an amount substantially equal to the Administrative Agent's LIBOR Advance comprising part of such Borrowing and for a period equal to such Interest Period divided by (B) one minus the LIBOR Reserve Requirement. 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.

“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

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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.

“Material Adverse Change” shall mean 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 other Guarantors taken as a whole, in each case since the date of the most recent financial statements of the Borrower or the Parent delivered to the Banks.

“Material Subsidiary” means any Subsidiary which owns assets that have an aggregate undepreciated book value greater than $10,000,000.

“Maturity Date” means August 2, 2016; as such date may be extended pursuant to the provisions of Section 1.06.

“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) $1,333,261,000 plus (b) 75% of the aggregate net proceeds received by the Parent or any of its Subsidiaries after September 30, 2011 in connection with any offering of Stock or Stock Equivalents of the Parent or its Subsidiaries; providedhowever, that

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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.

“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 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 four (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 in favor of the Existing Revolver Administrative Agent.

“New York Property” means any Hotel Property located in the State of New York (including the Park Central Asset).

“New York Term Note” means any consolidated, amended and restated promissory note made by a Subsidiary that owns a New York Property and payable to the order of the Existing Revolver Administrative Agent, with respect to which the Borrower is 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.

“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 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).

“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 Qualifying 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.

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“Operating Lessee” means a lessee of an Unencumbered Property pursuant to an Operating Lease.

“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 shares of such Bank.

“Parent Hotel Properties” means all Hotel Properties owned or leased by the Parent or one of the Parent's Subsidiaries, including without limitation Unencumbered Properties.

“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.

“Park Central Asset” means the Hotel Property located at 870 Seventh Avenue, New York, New York and commonly known as the Park Central Hotel.

“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.

“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 ownership interest 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 Subsidiaries” 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.

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“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.

“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, (ii) any Bank that has notified, or whose Parent Company or a Subsidiary thereof has notified, the Administrative Agent or the Borrower 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), or (iii) any Bank that has, or whose Parent Company has, a non-investment grade rating from Moody's or S&P or another nationally recognized rating agency. Any determination by the Administrative Agent that a Bank is a Potential Defaulting Lender under any of clauses (i) through (iii) 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 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, either (a) the ratio (expressed as a percentage) of such Bank's Commitment at such time to the aggregate Commitments at such time or (b) if the Commitments have been terminated, 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.

“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 twenty (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.

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“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 paragraph (c) of Section 11.06.

“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.

“Reportable Event” means any of the events set forth in Section 4043(b) of ERISA.

“Required Lenders” means, at any time, Banks holding at least 51% of the Unused Commitments and the aggregate unpaid principal amount of the Advances at such time.

“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, 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 shares of any capital stock, any limited liability company interests or any partnership interests of such Person, other than dividends or distributions payable in such Person's stock, limited liability company interests or any partnership interests.

“Rolling Period” means, as of any date, the four Fiscal Quarters ending on or immediately preceding such date.

“S&P” means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereof.

“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.

“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, providedfurther 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 Mortgage shall not comprise Secured Indebtedness and shall be treated for all purposes as Unsecured Indebtedness, so long as (a) the

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Administrative Agent qualifies as a “Qualified Unsecured Lender” (as such term is defined and used in the Existing Revolving Credit Agreement), and (b) the New York Property to which such New York Note relates is not subject to any Liens other than the related New York Mortgage.

“Status” means the existence of Level I Status, Level II Status, Level III Status, or Level IV 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 or equal to 4.00 to 1.00;

“Level II Status” exists at any date if, at such date, the Leverage Ratio is greater than 4.00 to 1.00 but less than or equal to 4.75 to 1.00;

“Level III Status” exists at any date if, at such date, the Leverage Ratio is greater than 4.75 to 1.00 but less than or equal to 5.00 to 1.00; and

“Level IV Status” exists at any date if, at such date, the Leverage Ratio is greater than 5.00 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 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 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.

“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

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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.

“Term Loan” means the aggregate amount of the Banks' Commitments, which shall not exceed $300,000,000.

“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.

“Ticking Fee” has the meaning set forth in paragraph (a) of Section 2.03.

“Total Commitments” means the aggregate amount of the Banks' 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 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 proceeding 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) 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)

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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”); providedfurther 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).

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 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 Guarantor, 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

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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 Guarantors under the Credit Documents and who has delivered to the Administrative Agent either (A) an original Guaranty and Environmental Indemnity executed by such Subsidiary or (B) an Accession Agreement executed by such Subsidiary, (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 Guarantors under the Credit Documents and has delivered to the Administrative Agent either (A) an original Guaranty and Environmental Indemnity executed by such Subsidiary or (B) an Accession Agreement executed by such Subsidiary, 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 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.

“Unsecured Indebtedness” of any Person means the Total Liabilities of such Person, plus, 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, minus all Secured Indebtedness of such Person. Without limiting the foregoing and for purposes of clarification, Unsecured Indebtedness shall include any Indebtedness evidenced by a New York Term Note, so long as

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the New York Property to which such New York Note relates is not subject to any Liens other than the related New York Mortgage.

“Unused Commitment” means, with respect to any Bank at any time, such Bank's Commitment at such time minus the aggregate principal amount of all Advances made by such Bank and outstanding at such time.

“Wholly-Owned Subsidiary” of a Person means any Subsidiary for which such Person's ownership interest is 99% or more.

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 1.03Accounting 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 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 1.04Types 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 1.05Miscellaneous. 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) Subject to the restrictions set forth in the Commitment Letter, the Borrower shall be entitled to request that the Total Commitments be increased to an amount not exceeding Four Hundred Million Dollars ($400,000,000), provided that (i) no Default then exists, (ii) the Borrower gives the Banks thirty (30) days' prior written notice of such election, (iii) no Bank shall be obligated to increase such Bank's Commitment

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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.

Section 1.07    Maturity Date Extension.

(a)    The Borrower shall be entitled to extend the Maturity Date to August 2, 2017; provided that (i) no Default then exists, (ii) the Borrower gives the Administrative Agent, at least ninety (90) days but no more than one hundred twenty (120) days prior to the initial Maturity Date, written notice of such extension, (iii) on or prior to the initial Maturity Date, the Borrower pays to the Administrative Agent for the ratable benefit of the Banks an extension fee equal to 0.15% of the total Advances outstanding as of the first day of the one (1) year extension (the “Extension Fee”), and (iv) the Administrative Agent shall have received on or prior to the initial Maturity Date for the account of each Bank a certificate signed by a Responsible Officer of the Parent, dated as of the initial Maturity Date (the “Extension Date”), stating that: (a) the representations and warranties contained in Article IV are true and correct on and as of the 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 Guarantor 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. 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

Section 2.01The Term Loan; Advances. Each Bank severally agrees, on and subject to the terms and conditions of this Agreement, to make a single Advance to the Borrower on the Effective Date in an amount equal to such Bank's total Commitment; provided, however, that a portion of the Term Loan in an aggregate amount more particularly specified in Schedule 1.01(A) and not exceeding $100,000,000 (the “DelayedDraw Tranche”) may be advanced to the Borrower pursuant to one or more Advances made within 95 days after the Effective Date (the “Delayed Draw Period”); provided further that (A) the conditions in Section 3.02 shall have been satisfied and (B) the aggregate amounts advanced to the Borrower in the Delayed Draw Tranche shall not exceed the available Commitments therefor set forth in Schedule 1.01(A).  The Borrower may from time to time prepay the Term Loan pursuant to Section 2.07.  Amounts repaid on the Term Loan may not be reborrowed.

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Section 2.02Method 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, and (iv) 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 in Section 11.02, or such other location as the Administrative Agent may specify by 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 three 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)each Borrowing shall be in an aggregate amount of not less than $25,000,000 or such greater amount that is an integral multiple of $1,000,000;

(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 law or regulation 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

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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 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.

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(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 the Note of the Borrower payable to the order of such Bank in substantially the form of Exhibit A; 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.

Section 2.03Fees. (a) Ticking Fee. With respect to the Delayed Draw Tranche, the Borrower shall pay to the Administrative Agent for the account of the Banks with Commitments to the Delayed Draw Tranche a ticking fee (each, a “Ticking Fee”) in accordance with this Section 2.03(a). The Ticking Fee shall accrue from the date that is thirty days after the Closing Date until the earlier of (i) the last day of the Delayed Draw Period or (ii) the date on which the full amount of the Delayed Draw Tranche (the “Ticking Fee Accrual Date”) is advanced to the Borrower, in an amount equal to 0.20% per annum of the unused portion of the Commitments under the Delayed Draw Tranche and shall be payable in full to the Administrative Agent on the Ticking Fee Accrual Date for the account of the applicable Banks on a pro rata basis in accordance with their respective Commitments to the Delayed Draw Tranche.

(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.

(d)Extension Fee. The Borrower agrees to pay the Extension Fee at the time specified in, and to the extent required by, Section 1.06.

(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(c) (without prejudice to the rights of the Non-Defaulting Lenders in respect of such fees).

Section 2.04Reduction of the Commitments. The Borrower may, upon at least three Business Days' prior notice to the Administrative Agent, permanently terminate in whole or permanently reduce ratably in part the unused Commitments of the Banks with respect to the Delayed Draw Tranche; provided, however, that 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. Immediately upon expiration of the Delayed Draw Period, any unused Commitments shall automatically terminate without further action on the part of Administrative Agent, Banks or the Borrower.

Section 2.05Repayment of Advances. The Borrower shall repay the outstanding principal amount of each Advance on the Maturity Date.

Section 2.06Interest. 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

25

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 two percent (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; providedfurther 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 two percent (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 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 two percent (2%), from the date such amount became due until the date such amount is paid in full.

Section 2.07Prepayments.

(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 three Business Days' prior written notice or (ii) in case of Base Rate Advances, at least one 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

26

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)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.

(d)Effect of Notice. All notices given pursuant to this Section 2.07 shall be irrevocable and binding upon the Borrower.

Section 2.08Breakage 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; or (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, 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 or nonpayment, 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 2.09Increased 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 law or regulation 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 determines in good faith that compliance with any law or regulation 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 corporation controlling such Bank and that the amount of such capital is increased by or based upon the existence of such Bank's commitment to lend and other commitments of this type, then, upon 30 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 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

27

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)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, regardless of the date enacted, adopted or issued, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements or the Basel Committee on Banking Supervision (or any successor or similar authority) 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.

Section 2.10Payments 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.

(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

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the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate for each such day.

(e)Application of Payments. Unless otherwise specified in Section 2.07 hereof, 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 parties in accordance with the aggregate amount of such payments owed to each such party; 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; 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 (i) the principal amount of all of the Notes, regardless of whether any such amount is then due and payable and (ii) 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 the Banks in accordance with the aggregate amount of such payments owed to each such Bank.

(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; providedhowever, 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 2.11Taxes.

(a)No Deduction for Certain Taxes. Any and all payments by 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, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, (i) in the case of each Bank and the Administrative Agent, taxes imposed on its 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”) (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be required by law 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 (e) 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 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 or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Credit Documents (hereinafter referred to as “Other Taxes”).

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(c)Indemnification. Subject to the proviso of Section 2.11(a), the Borrower indemnifies each Bank and the Administrative Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any Governmental Authority on amounts payable under this Section 2.11) 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, whether or not such Taxes or Other Taxes were correctly or legally asserted. 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 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.

(d)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.

(e)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 (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Section 2.12Illegality. 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,

30

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), (a) 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 (b) 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. 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, referred to in Section 2.09 and this Section 2.12, regardless of the date enacted, adopted or issued, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements or the Basel Committee on Banking Supervision (or any successor or similar authority) 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 2.14Bank 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 Commitments occurs as a result thereof.

(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 any reallocation to any non-Affected Bank may not in any event exceed the Commitment of such non-Affected Bank as in effect at the time of such reallocation.

(ii)If the aggregate amount of the reallocated Commitments is less than the Commitments of the Affected Banks, (A) the respective Commitments of the Banks which have received such reallocated Commitments shall be increased by the respective amounts of their proposed reallocations, and (B) the Borrower shall have the right to add additional Banks which are Eligible Assignees to this Agreement to replace such Affected Banks, which additional Banks would have aggregate Commitments no greater than those of the Affected Banks minus the amounts of the Commitments already reallocated.

(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)Defaulting Lender's Assignment and Acceptance. If a Defaulting Lender being replaced pursuant to this Section 2.14 does not execute and deliver to the Eligible Assignee a duly completed Assignment and Assumption 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

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by this Section 2.14, then such Defaulting Lender 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 Defaulting Lender.

Section 2.15Sharing 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 2.16Defaulting Lenders. (a) [Reserved].

(b)[Reserved].

(c)[Reserved].

(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 (v) 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 thirty (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 Commitment of a Defaulting Lender upon not less than ten (10) Business Days' prior notice to the Administrative Agent (which will promptly notify the Banks thereof), provided that such termination will not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent or any Bank may have against such Defaulting Lender.

(f)If the Borrower and the Administrative Agent 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, such Bank will, to the extent applicable, purchase at par such portion of outstanding 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 of the Banks to be on a pro rata basis in accordance with their respective 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 Bank will automatically be adjusted on a prospective basis to reflect the foregoing); provided

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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 providedfurther 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 shall not be a Swap Bank with respect to any Swap Contract entered into while such Bank was a Defaulting Lender.

ARTICLE III

CONDITIONS OF LENDING

Section 3.01Conditions 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 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, all Guaranties 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 duly executed by the Borrower and payable to the order of each Bank that has requested the same, all Guaranties, 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 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

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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 interests and at least 70% of the limited partnership 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, 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 and Ash, Hagan & Vidovic, LLP and Hunton & Williams 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); and

(xi)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 Guaranties, 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).

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(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)Qualified Unsecured Lender. The Administrative Agent shall have received evidence reasonably satisfactory to it that the Administrative Agent is a “Qualified Unsecured Lender” and that the Obligations constitute “Qualified Unsecured Debt” (in each case as such term is defined and used in the Existing Revolving 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 Existing Revolving 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 Existing Revolving 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 3.02Conditions 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 Guaranties, 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 4.01Existence; 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

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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 partnership 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 interest in and at least 70% of the limited partnership interest 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 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 cause a potential Event of Default under Section 8.01(m).

Section 4.02Partnership 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 4.03Authorization 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.

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Section 4.04Enforceable 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 4.05Parent Stock. As of July 18, 2012, the entire authorized capital stock of the Parent consists of (a) 200,000,000 shares of Parent Common Stock of which 86,261,081 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, 9,098,888 shares in the aggregate of Series G and Series H 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 4.06Financial 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, 2011, 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 4.07True 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 4.08Litigation. 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 4.09Use 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,

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(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 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 4.10Investment 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 4.11Taxes. 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 4.12Pension 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 4.13Condition 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.

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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 4.14Insurance. 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 4.15No 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 4.16Environmental 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 4.17Legal 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

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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 4.18Existing 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 4.19Title; Encumbrances. With respect to the Existing Properties, the Borrower or any Guarantor, 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 Guarantor (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 4.20Leasing 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 Guarantor 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.

Section 4.21Unencumbered 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.

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 with the following covenants.

Section 5.01Compliance 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 5.02Preservation 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,

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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 business or (ii) implying that the Borrower is, directly or indirectly, absolutely or

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contingently, responsible for the Indebtedness or other obligations of the Permitted Other Subsidiaries or any other Person.

Section 5.03Payment 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 5.04Visitation 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 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 5.05Reporting 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

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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 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

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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 Guarantor 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)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 5.06Maintenance 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 5.07Insurance. 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 5.08Use 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).

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Section 5.09New 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 by such Person is included as an Unencumbered Property hereunder. Within sixty (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 owned or leased such Hotel Property, but not any other Unencumbered Property, shall be released by the Administrative Agent from such Subsidiary's obligations under the Guaranty upon such time that the Borrower provides the Administrative Agent with (i) a written request for such release and (ii) a Compliance Certificate evidencing pro forma compliance with Article VII hereof.

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 with the following covenants.

Section 6.01Liens, 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 Guarantor 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; and

(f)arising under the New York Mortgages; provided, no New York Mortgage shall be permitted hereunder unless the Administrative Agent is a “Qualified Unsecured Lender” (as such term is defined in the

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Existing Revolving Credit Agreement) with respect to such New York Mortgage for purposes of Section 9.01(f) of the Existing Revolving Credit Agreement.

Section 6.02Indebtedness. 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)Secured Recourse Indebtedness and Secured Non-Recourse Indebtedness incurred by Permitted Other Subsidiaries to the extent that the covenants contained in Article VII are complied with;

(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 nolessfavorable 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 Guarantor to the Borrower or another Guarantor provided such Indebtedness is subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent;

(g)Capital Leases for personal property not to exceed in the aggregate $5,000,000 at any time outstanding; provided, for purposes of this clause (g), no Qualified Ground Lease shall comprise a Capital Lease.

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Section 6.03Agreements 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 6.04Restricted Payments. Neither the Parent, the Borrower, nor any of their respective Subsidiaries, will make any Restricted Payment, except that:

(a)provided no Default has occurred and is continuing or would result therefrom, the Parent may make cash payments to its shareholders with respect to the Parent Common Stock (including in connection with the repurchase of Stock or Stock Equivalents);

(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 partnership interests in the Borrower for the Parent's stock or redeem such interests for cash, as provided in the Borrower's limited partnership agreement;

(e)the Borrower shall be entitled to issue limited partnership interests in the Borrower in exchange of ownership 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 the holders of the Parent preferred stock permitted by this Agreement; 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 Parent 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 8.1(a) or Section 8.1(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 8.2 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 6.05Fundamental 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 Guarantor (or another Person, if such merger with another Person is to effect an Investment permitted hereunder) is merged into the Borrower or another Guarantor and the Borrower or such other Guarantor, 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 shares of capital stock, membership interests or partnership interests of any Subsidiary (except for a Permitted Other Subsidiary and except to effectuate a Permitted Hotel Sale); (d) except for sales of ownership interests not prohibited by this Agreement and the issuance of limited partnership interests in the Borrower in exchange for ownership 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

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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) Common Stock and (ii) preferred stock in the Parent which is not deemed Indebtedness under this Agreement.

Section 6.06Participating 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 ownership interest in any participating lessee as would cause a potential Event of Default under Section 8.01(m) of this Agreement.

Section 6.07Investments, 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, stock or other securities, partnership interests, member interests or other 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; providedthat 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

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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 6.08Affiliate 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 6.09Sale 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 6.10Sale 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 6.11Restriction 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 such term is defined in the Existing Revolving Credit Agreement or, in the event that the Existing Revolving Credit Agreement is no longer then in effect, as such term was defined in the Existing Revolving Credit Agreement last in effect) 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 Guarantors 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 hereof following the removal of such Hotel Property as an Unencumbered Property.

Section 6.12Material 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.

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Section 6.13Limitations 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 6.14New York Properties. 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 Existing Revolving Credit Agreement (or any of the defined terms “Qualified Unsecured Lender,” “Qualified Unsecured Debt” or “New York Mortgage” under the Existing Revolving Credit Agreement) without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed.

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 7.01Fixed 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 1.0.

Section 7.02Maintenance of Net Worth. The Parent shall at all times maintain an Adjusted Net Worth of not less than the Minimum Tangible Net Worth.

Section 7.03Limitations on Total Liabilities. The Parent shall not at any time permit the Leverage Ratio to be greater than 6.0 to 1.0.

Section 7.04Limitations 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 sixty percent (60%).

Section 7.05Limitations 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 forty-five percent (45%).

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES

Section 8.01Events 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, providedhowever that the Borrower will have a

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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), Article VI or Article VII of this Agreement or the Borrower shall fail to perform or observe, or shall fail to cause any Guarantor 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 or any Guarantor 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 or such Guarantor by the Administrative Agent or any Bank or the date a Responsible Officer of the Borrower or any Guarantor 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. (i) with respect to (A) any Secured Non-Recourse Indebtedness which is outstanding in a principal amount of at least $75,000,000 individually or when aggregated with all such Secured Non-Recourse Indebtedness of the Borrower, the Parent or any of their respective Subsidiaries or (B) any other Indebtedness (but excluding Indebtedness evidenced by the Notes) which is outstanding in a principal amount of at least 0.5% of Consolidated Total Book Value 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

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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) 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 or any Guarantor 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 twenty-five percent (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

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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 partnership 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 8.02Optional Acceleration of Maturity. If any Event of Default (other than an Event of Default pursuant to paragraph (f) of Section 8.01 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 8.03Automatic Acceleration of Maturity. If any Event of Default pursuant to paragraph (f) of Section 8.01 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].

Section 8.05Non-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 8.06Right 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

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amounts so set off will be paid over immediately to the Administrative Agent for distribution in accordance with this Agreement 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 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

[RESERVED]

Section 9.01[Reserved].

ARTICLE X

AGENCY PROVISIONS

Section 10.01Authorization 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 10.02Administrative 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 10.03Administrative 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

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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 10.04Bank 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 10.05Indemnification. 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, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent 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, suits, 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.

Section 10.06Successor 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 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 10.07Sole Lead Arranger and Sole Book Running Manager. Citigroup Global Markets Inc. shall be named as sole lead arranger and sole book running manager under the Credit Documents, but such sole lead arranger and sole book running manager shall have no right or duty to act as agent on behalf of the Banks in such capacity.

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Section 10.08Designation 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 11.01Amendments, 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 aggregate Commitments of the Banks in excess of $400,000,000, (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, (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; 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, (i) modify any provisions requiring payment to be made for the ratable account of the Banks, or (j) amend the definition of “Pro Rata Share”; 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 Credit Document. In addition, none of the following decisions shall be made without the written consent of the Required Lenders:

(a)release any Person from its obligations under any of the Environmental Indemnities;

(b)any determination to make a Borrowing after the occurrence and during the continuance of an Event of Default;

(c)increases the maximum duration of Interest Periods permitted under this Agreement;

(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;

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(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 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. 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 or all of the Banks, as required, have approved any such amendment or waiver (and the definition of “Required Lenders” will automatically be deemed modified accordingly for the duration of such period; provided, that any such amendment or waiver that would increase or extend the term of the Commitment 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 11.02Notices, 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 3 Bethesda Metro Center, Suite 1200, 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 & Associates, Suite 4322, 200 East Randolph Drive, Chicago, Illinois 60601 (telephone: (312) 228-2050; telecopy (312) 228-0982); (b) if to any Bank at its Domestic Lending Office; (c) if to the Administrative Agent, at its address at Citibank, N.A. Agency Department, 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Global Loans Agency Department, (telecopy: (212) 994-0961; 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 three 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, 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, when receipt is confirmed by electronic mail as provided in this clause (a); 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.

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(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 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 11.03No 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 Note 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.

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Section 11.04Costs 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 11.05Binding 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 11.06Bank 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 its Commitment, the Advances owing to it, and the 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) the consent of the Administrative Agent shall be required, which consent shall not be unreasonably withheld or delayed, except with respect to assignments to other Banks or an Affiliate of the assigning Bank, (vi) no such assignments shall be made to any Defaulting Lender or Potential Defaulting Lender or any of their respective subsidiaries, 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. 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 three 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, 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 Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable

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assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Bank hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Advances. 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 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 five 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 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, and the Notes held by it); provided, however, that (i) such Bank's obligations under this Agreement (including, without limitation, its Commitment to the

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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 Loan 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. Such Bank shall promptly deliver a signed copy of any such confidentiality agreement to the Administrative Agent.

Section 11.07Indemnification. (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 and agents 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 by the Borrower or any Affiliate of the Borrower 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 Person being indemnified's own negligence, but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of such indemnified Person'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 indemnified party, on any theory of liability, for special, indirect,

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consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance, or the use of the proceeds thereof.

(c)No indemnified Person 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 11.08Execution 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 11.09Survival 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), 10.05 and 11.07 shall survive any termination of this Agreement and repayment in full of the Obligations.

Section 11.10Severability. 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 11.11Entire 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 11.12Usury Not Intended. 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 11.13Governing Law. ANY DISPUTE BETWEEN THE BORROWER, THE ADMINISTRATIVE AGENT, ANY BANK, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED

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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.

Section 11.14Consent to Jurisdiction; Service of Process; Jury Trial. (a) ExclusiveJurisdiction. 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 11.15Knowledge 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 11.16Banks 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 or any Guarantor, the power of the Banks being limited to the right to exercise the remedies provided in the Credit Documents.

Section 11.17Headings 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 11.18Time is of the Essence. Time is of the essence under the Credit Documents.

Section 11.19Scope 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 Person being indemnified.

Section 11.20Confidentiality. (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 (a) which is or becomes generally available to the public other than by a breach of this Section 11.20, (b) which is known by or becomes known by such Person from another Person, (c) 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), (d) 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, (e) to any other party hereto, (f) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (g) subject to an agreement containing provisions substantially the same as those of this Section 11.20, to (1) 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 (2) 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, (h) on a confidential basis to (1) any rating agency in connection with rating the Parent or its Subsidiaries or this Agreement or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to this Agreement, (i) with the consent of the Borrower, or (j) 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. 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 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

64

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 11.21USA 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 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 11.22No 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 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 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 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 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 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 and the Banks acting in various capacities under the Credit Documents or for other customers of the Administrative Agent or any Bank as described in this Section 11.22.

[Balance of page intentionally left blank]

65

EXECUTED as of the date first referenced above.

BORROWER:
LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.,
a Delaware limited partnership
By:	LaSalle Hotel Properties
	General Partner
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
PARENT:
LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
By:	/s/ Bruce A. Riggins
	Name: Bruce A. Riggins
	Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

GUARANTORS:
LASALLE HOTEL LESSEE, INC.,
an Illinois corporation
By:	/s/ Bruce A. Riggins
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
GLASS HOUSES,
a Maryland real estate investment trust
By:	/s/ Bruce A. Riggins
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
DA ENTITY, LLC,
a Delaware limited liability company
By:	LaSalle Hotel Properties
	Member
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
and
By:	RDA Entity, Inc.
	Member
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

[Signature Page to LHO 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.,
each, a Delaware corporation
By:	/s/ Bruce A. Riggins
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
LHO WASHINGTON HOTEL ONE, L.L.C.
LHO WASHINTON HOTEL TWO, L.L.C.
LHO WASHINGTON HOTEL THREE, LLC
LHO WASHINGTON HOTEL FOUR, L.L.C.
LHO WASHINTON 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
	Managing Member
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

[Signature Page to LHO 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.
	Managing Member
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO ALEXANDRIA ONE, L.L.C.
NYC SERENADE, L.L.C.
LHO VIKING HOTEL, 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,
MICASA SHUCASA, LLC
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:	/s/ Bruce A. Riggins
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

SEASIDE HOTEL, LP,
a Delaware limited partnership
By:	Seaside Hotel, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

GEARY DARLING, LP,
a Delaware limited partnership
By:	Geary Darling, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHAMBER MAID, LP,
a Delaware limited partnership
By:	Chamber Maid, LLC General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LET IT FLHO, LP,
a Delaware limited partnership
By:	Let It FLHO, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

LHO GRAFTON HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Grafton Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO LE PARC, L.P.,
a Delaware limited partnership
By:	LHO Le Parc, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO SANTA CRUZ HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO Santa Cruz Hotel One, L.L.C
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

LUCK TOWN BURBANK, L.P.,
a Delaware limited partnership
By:	Lucky Town Burbank, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY ROSIE HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Mission Bay Rosie Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY HOTEL, L.P.,
a Delaware limited partnership
By:	LHO San Diego Financing, L.L.C
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

LHO SAN DIEGO FINANCING, L.L.C.,
a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Member
	By:	LaSalle Hotel Properties
		General Partner
		By:	/s/ Bruce A. Riggins
			Name: Bruce A. Riggins
			Title: Chief Financial Officer
LHO HOLLYWOOD LM, L.P.,
a Delaware limited partnership
By:	LHO Hollywood Financing, Inc.
	General Partner
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
By:	LHO New Orleans Financing, Inc.
	General Partner
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

WILD INNOCENT I, LP,
a Delaware limited partnership
By:	Innocent I, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHIMES OF FREEDOM, LLC,
a Delaware limited liability company
By:	OF Freedom I, LLC
	Managing Member
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
WILD I, LLC
CHIMES I, LLC
OF FREEDOM I, LLC,
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:	/s/ Bruce A Riggins
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

LHO ALEXANDRIA ONE LESSEE, L.L.C.
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,
each, a Delaware limited liability company
By:	LaSalle Hotel Lessee, Inc.
	Managing Member
	By:	/s/ Bruce A. Riggins
		Name: Bruce A. Riggins
		Title: Executive Vice-President and Chief Financial Officer
LHO SAN DIEGO HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO San Diego Hotel One, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:	/s/ Bruce A. Riggins
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

[Signature Page to LHO Term Loan Agreement]

ADMINISTRATIVE AGENT AND BANK:
CITIBANK, N.A., as Administrative Agent and a Bank
By:	/s/ Michael Chlopak
	Name: Michael Chlopak
	Title: Vice President

[Signature Page to LHO Term Loan Agreement]

BANKS:
PNC BANK, NATIONAL ASSOCIATION,
as a Bank
By:	/s/ J. E. Spedden, Jr.
	Name: J. E. Spedden, Jr.
	Title: S.V.P.

[Signature Page to LHO Term Loan Agreement]

COMPASS BANK,
as a Bank
By:	/s/ Don Byerly
	Name: Don Byerly
	Title: Senior Vice President

[Signature Page to LHO Term Loan Agreement]

MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. LOS ANGELES BRANCH,
as a Bank
By:	/s/ Hsiao-Ho Huang
	Name: Hsiao-Ho Huang
	Title: SVP & GM

[Signature Page to LHO Term Loan Agreement]

DEUTSCHE BANK TRUST COMPANY AMERICAS,
as a Bank
By:	/s/ JT Coe
	Name: JT Coe
	Title: Managing Director
By:	/s/ George Reynolds
	Name: George Reynolds
	Title: Director

[Signature Page to LHO Term Loan Agreement]

U.S. BANK NATIONAL ASSOCIATION,
as a Bank
By:	/s/ Lori Y. Jensen
	Name: Lori Y. Jensen
	Title: Vice President

[Signature Page to LHO Term Loan Agreement]

WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association,
as a Bank
By:	/s/ Mark F. Monahan
	Name: Mark F. Monahan
	Title: Senior Vice President

[Signature Page to LHO Term Loan Agreement]

SUMITOMO MITSUI BANKING CORPORATION,
as a Bank
By:	/s/ William G. Karl
	Name: William G. Karl
	Title: General Manager

[Signature Page to LHO Term Loan Agreement]

SCHEDULE 1.01(A)

COMMITMENTS

Total Allocation (Initial Borrowing and Delayed Draw Tranche)

LENDER	ALLOCATION
Citibank, N.A.	$	50,000,000
Compass Bank	50,000,000
U.S. Bank National Association	50,000,000
PNC Bank, National Association	50,000,000
Wells Fargo Bank, National Association	50,000,000
Sumitomo Mitsui Banking Corporation	30,000,000
Mega International Commercial Bank Co., Ltd. Los Angeles Branch	10,000,000
Deutsche Bank Trust Company Americas	10,000,000
Total	$	300,000,000

Initial Borrowing Allocation

LENDER	ALLOCATION
Citibank, N.A.	$	33,333,333.34
Compass Bank	33,333,333.33
U.S. Bank National Association	33,333,333.33
PNC Bank, National Association	33,333,333.33
Wells Fargo Bank, National Association	33,333,333.33
Sumitomo Mitsui Banking Corporation	20,000,000
Mega International Commercial Bank Co., Ltd. Los Angeles Branch	6,666,666.67
Deutsche Bank Trust Company Americas	6,666,666.67
Total	$	200,000,000

Delayed Draw Tranche Allocation

LENDER	ALLOCATION
Citibank, N.A.	$	16,666,666.66
Compass Bank	16,666,666.67
U.S. Bank National Association	16,666,666.67
PNC Bank, National Association	16,666,666.67
Wells Fargo Bank, National Association	16,666,666.67
Sumitomo Mitsui Banking Corporation	10,000,000
Mega International Commercial Bank Co., Ltd. Los Angeles Branch	3,333,333.33
Deutsche Bank Trust Company Americas	3,333,333.33
Total	$	100,000,000

Sch. 1.01(A)

-1-

SCHEDULE 1.01(b)EXISTING PROPERTIES

($’s below denote Investment Amount as of June 30, 2012)

1. Hotel Roger Williams     131 Madison Avenue, New York, NY 10016 $108,180,319

2. Hotel Solamar     435 6^th Avenue, San Diego, CA 92101         $89,048,936

3. Hotel Deca     4507 Brooklyn Avenue, NE, Seattle, WA 98105     $30,963,196

4. Westin Copley Place     10 Huntington Avenue, Boston, MA 02116         $369,431,808

5. Indianapolis Marriott     350 W Maryland Street, Indianapolis, IN 46225     $118,174,738

6. Westin Michigan Avenue     909 North Michigan Avenue, Chicago, IL 60611     $244,195,117

7. Hyatt Harborside     101 Harborside Drive, Boston, MA 02128         $81,951,546

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

8. Le Montrose Suite Hotel     900 Hammond St, West Hollywood, CA 90069     $42,352,770

9. Hotel Viking     1 Bellevue Avenue, Newport, RI 02840         $56,435,212

10. Topaz Hotel     1733 N Street, NW, Washington, DC 20036         $20,594,830

11. Hotel Madera     1310 New Hampshire Ave, NW, Washington, DC 20036 $17,732,320

12. Hotel Rouge     1315 16^th Street, NW, Washington, DC 20036      $23,337,063

13. Hotel Helix     1430 Rhode Island Ave, NW, Washington, DC 20005 $29,632,989

14. The Liaison Capitol Hill     415 New Jersey Avenue, NW, Washington, DC 20001     $77,324,660

15. Hotel George     15 E Street, NW, Washington, DC 20001     $27,800,213

16. Lansdowne Resort     44050 Woodridge Parkway, Leesburg, VA 20176 $184,108,610

17. Chaminade     One Chaminade Lane, Santa Cruz, CA 95065 $35,417,776

18. Grafton on Sunset     8462 West Sunset Boulevard, West Hollywood, CA 90069 $29,039,620

19. Onyx Hotel     155 Portland Street, Boston, MA 02114 $29,289,999

20. Hilton San Diego Resort     1775 East Mission Bay Drive, San Diego, CA 92109 $120,405,725

21. Donovan House     1155 14^th Street, NW, Washington, DC 20005         $92,707,888

22. Sax Chicago     333 Norh Dearborn Street, Chicago, IL 60610         $151,934,145

23. Alexis Hotel     1007 Firt Avenue, Seattle, WA 98104         $52,760,360

24. Hotel Amarano     322 North Pass Avenue, Burbank, CA 91505     $45,982,533

25. Le Parc Suite Hotel     733 North West Knoll Drive, West Hollywood, CA 90069 $56,859,800

26. San Diego Paradise Point Resort     1404 West Vacation Road, San Diego, CA 92109 $132,094,927

27. Hilton Alexandria Old Town     1767 King Street, Alexandria, VA 22314 $66,566,002

28. Gild Hall     15 Gold Street, New York, NY 10038 $65,018,315

29. Sofitel Washington, DC Lafayette Square     806 15^th Street, NW, Washington, DC 20005 $96,542,686

30. Hotel Monaco     501 Geary Street, San Francisco, CA 94102             $69,601,908

31. Westin Philadelphia     99 South 17^th Street, Philadelphia, PA 19103         $145,545,901

32. Embassy Suites Philadelphia - Center City 1776 Benjamin Franklin Pkwy, Philadelphia, PA 19103 $83,913,584

33. Chamberlain West Hollywood     1000 Westmount Drive, West Hollywood, CA 90069 $39,291,144

34. Viceroy Santa Monica     1819 Ocean Avenue, Santa Monica, CA 90401         $80,603,029

35. Villa Florence     225 Powell Street, San Francisco, CA 94102 $66,618,745

36. Park Central    870 7^th Avenue, New York, NY 10019 $395,364,438

37. Hotel Palomar    2121 P Street, NW, Washington, DC 20037 $143,672,053

38. Hilton Gaslamp Quarter    401 K Street, San Diego, CA 92101         $90,773,455

SCHEDULE 1.01(C)
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
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
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 Viking Hotel, L.L.C., a Delaware limited liability company	36-4294378
LHO Alexandria One Lessee, L.L.C., a Delaware limited liability company	36-4220546
LHO Alexandria One, L.L.C., a Delaware limited liability company	36-4217399
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
Micasa Shucasa, LLC, a Delaware limited liability company	36-4735012

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.

Roger Williams (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.

Indianapolis Marriott (Indianapolis, IN)

Convention Center Hotel Sublease dated as of June 23, 1999 by and between Convention Hotel Partners, L.L.C. and the Metropolitan Development Commission of Marion County, Indiana, as assigned to LHO Indianapolis Hotel One, L.LC. by the Assignment of Project Agreements dated February 10, 2004.

Sch. 1.01(D)

-1-

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

DC Three Lessee, L.L.C., a Delaware limited liability company

DC Four Lessee, L.L.C., a Delaware limited liability company

Sch. 4.01

-1-

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 Viking Hotel, L.L.C., a Delaware limited liability company

LHO Alexandria One, L.L.C., a Delaware limited liability company

LHO Alexandria One Lessee, L.L.C., 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

Micasa Shucasa, 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

The address of the principal office of each subsidiary is 3 Metro Center, Suite 1200, Bethesda, Maryland 20814

Sch. 4.01

-2-

SCHEDULE 4.08LITIGATION

NONE

Sch. 4.08    

-1-

SCHEDULE 4.17LEGAL REQUIREMENTS; ZONING; UTILITIES; ACCESS

NONE

Sch. 4.17

-1-

SCHEDULE 4.18
EXISTING INDEBTEDNESS

1. Unsecured Recourse Indebtedness in the amount of $442.1 million outstanding on the $750.0 million Senior Unsecured Credit Facility, including outstanding letters of credit. Matures January 30, 2016 with a one year extension option to January, 2017, subject to certain conditions. The administrative agent is Citibank, N.A.;

2. Unsecured Recourse Indebtedness in the amount of $4.4 million outstanding on the $25.0 million LHL Facility. Matures January 30, 2016 with a one year extension option to January, 2017, subject to certain conditions. The lender is US Bank, National Association;

3. Unsecured Recourse Indebtedness in the amount of $177.5 million related to the Senior Unsecured Term Loan. Matures May 16, 2019. The administrative agent is Regions Bank.;

4. Hotel Solamar, San Diego, CA – Secured Non-Recourse Indebtedness in the amount of $60.5 million related to Souldriver, L.P. Matures December, 2013. The lender is Bank of America, N.A.;

5. Hotel Deca, Seattle, WA – Secured Non-Recourse Indebtedness in the amount of $9.3 million related to LHO Badlands, L.L.C. Matures August, 2014. The lender is Bridger Commercial Funding, L.L.C.;

6. Westin Copley Place, Boston, MA – Secured Non-Recourse Indebtedness in the amount of $210.0 million related to LHO Backstreets, L.L.C. Matures September, 2015. The lender is Wells Fargo Bank, National Association;

7. Westin Michigan Avenue, Chicago, IL – Secured Non-Recourse Indebtedness in the amount of $138.0 million related to LHO Michigan Avenue Freezeout, L.L.C. Matures April, 2016. The lender is Wells Fargo Bank, National Association;

8. Indianapolis Marriott, Indianapolis, IN – Secured Non-Recourse Indebtedness in the amount of $100.7 million related to LHO Indianapolis Hotel One, L.L.C. Matures July, 2016. The lender is Bank of America, N.A.;

9. Hotel Roger Williams, New York, NY – Secured Non-Recourse Indebtedness in the amount of $63.1 million related to RW New York, L.L.C. Matures August, 2016. The lender is Wells Fargo Bank, N.A., a national banking association, as Trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-C5; and

10. 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 The Royal Bank of Scotland, Plc.

Sch. 4.18

-1-

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, fire damage legal liability and alienated premises coverage) 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 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 Senior Unsecured Term Loan Agreement dated as of August 2, 2012 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. Agency Department, 1615 Brett Road OPS III, New Castle, Delaware 19720, Attention: Global Loans Agency 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
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

NOTE

EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE

Dated __________, 20__

Reference is made to the Senior Unsecured Term Loan Agreement dated as of August 2, 2012 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 ___%¹ 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 ____________, 2012 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

___________________

¹ Specify percentage in no more than 5 decimal points.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ASSIGNMENT AND ACCEPTANCE AGREEMENT

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 ofdetermining 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 treaty², and (vii) represents that it is an Eligible Assignee.

4.    The effective date for this Assignment and Acceptance shall be _______________ (the “Effective Date”)³ 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]

___________________

² If the Assignee is organized under the laws of a jurisdiction outside the United States.

³ See Section 11.06. Such a date shall be at least three Business Days after the execution of this Assignment and Acceptance.

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 Senior Unsecured Term Loan Agreement dated as of August 2, 2012, 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:    $____________

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) $1,333,261,000    $1,333,261,000

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(b) 75% of net proceeds from any offering of Stock or Stock Equivalents after September 30, 2011:    $____________

(c) The sum of (a) and (b) above:    $____________

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

Maximum Requirement – 6.0 to 1.0

(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:    $____________

2.6.    Limitations on Unsecured Indebtedness of Parent (Section 7.04 of the Agreement).

Maximum Requirement – 60%

(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):    _____________

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.    Status; Applicable Margin (Article I of the Agreement)

Pursuant to Article I of the Agreement, the Status applicable to the loan facility is ______________, based upon a Leverage Ratio of ____________ (as calculated above). Based on the foregoing, the Applicable Margin for each subsequent Advance is as follows:

Base Rate Advances:    __________%

LIBOR Advances:    __________%

Unused Commitment:    __________%

3.2.    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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EXECUTED as of the date first referenced above.

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

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COMPLIANCE CERTIFICATE

SCHEDULE 1 TO COMPLIANCE CERTIFICATE

LIST OF UNENCUMBERED PROPERTIES AND THEIR ASSET VALUES

Unencumbered PropertyAsset Value

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COMPLIANCE CERTIFICATE

EXHIBIT D
FORM OF ENVIRONMENTAL INDEMNIFICATION AGREEMENT

This Environmental Indemnification Agreement (this “Agreement”) is made and entered into effective for all purposes as of the 2^nd day of August 2012, 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 have entered into that certain Senior Unsecured Term Loan Agreement dated as of August 2, 2012 (such Senior Unsecured Term Loan Agreement, 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.

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.

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”).

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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 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

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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 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

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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. 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

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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 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

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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.

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

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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, 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

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

7

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.

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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

8

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
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

LASALLE HOTEL PROPERTIES,
a Maryland real estate investment trust
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

9

LASALLE HOTEL LESSEE, INC.,
an Illinois corporation
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
GLASS HOUSES,
a Maryland real estate investment trust
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
DA ENTITY, LLC,
a Delaware limited liability company
By:	LaSalle Hotel Properties
	Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
and
By:	RDA Entity, Inc.
	Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

NYDOCS03/949172

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.,
each, a Delaware corporation
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
LHO WASHINGTON HOTEL ONE, L.L.C.
LHO WASHINTON HOTEL TWO, L.L.C.
LHO WASHINGTON HOTEL THREE, LLC
LHO WASHINGTON HOTEL FOUR, L.L.C.
LHO WASHINTON 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
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION 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.
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO ALEXANDRIA ONE, L.L.C.
NYC SERENADE, L.L.C.
LHO VIKING HOTEL, 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,
MICASA SHUCASA, LLC
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

SEASIDE HOTEL, LP,
a Delaware limited partnership
By:	Seaside Hotel, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

GEARY DARLING, LP,
a Delaware limited partnership
By:	Geary Darling, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHAMBER MAID, LP,
a Delaware limited partnership
By:	Chamber Maid, LLC General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LET IT FLHO, LP,
a Delaware limited partnership
By:	Let It FLHO, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

LHO GRAFTON HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Grafton Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO LE PARC, L.P.,
a Delaware limited partnership
By:	LHO Le Parc, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO SANTA CRUZ HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO Santa Cruz Hotel One, L.L.C
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

LUCK TOWN BURBANK, L.P.,
a Delaware limited partnership
By:	Lucky Town Burbank, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY ROSIE HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Mission Bay Rosie Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY HOTEL, L.P.,
a Delaware limited partnership
By:	LHO San Diego Financing, L.L.C
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

LHO SAN DIEGO FINANCING, L.L.C.,
a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer
LHO HOLLYWOOD LM, L.P.,
a Delaware limited partnership
By:	LHO Hollywood Financing, Inc.
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
By:	LHO New Orleans Financing, Inc.
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

WILD INNOCENT I, LP,
a Delaware limited partnership
By:	Innocent I, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHIMES OF FREEDOM, LLC,
a Delaware limited liability company
By:	OF Freedom I, LLC
	Managing Member
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
WILD I, LLC
CHIMES I, LLC
OF FREEDOM I, LLC,
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

LHO ALEXANDRIA ONE LESSEE, L.L.C.
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,
each, a Delaware limited liability company
By:	LaSalle Hotel Lessee, Inc.
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Executive Vice-President and Chief Financial Officer
LHO SAN DIEGO HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO San Diego Hotel One, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

Address for the above Indemnitors:

3 Metro Center, Suite 1200

Bethesda, Maryland 20814

Attn: Mr. Bruce A. Riggins

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

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 Senior Unsecured Term Loan Agreement dated as of August 2, 2012 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 Environmental Indemnity and Agreement (the “Environmental Indemnity”) dated as of August 2, 2012 executed in connection with the Term Loan Agreement, (iii) the parties to the Guaranty and Contribution Agreement (the “Guaranty”) dated as of August 2, 2012 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 and the Guaranty 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 and the Guaranty as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity and the Guaranty, 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 and the Guaranty.

For purposes of notices under the Environmental Indemnity and the Guaranty 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.

ENVIRONMENTAL INDEMNIFICATION AGREEMENT

EXHIBIT E

FORM OF GUARANTY AND CONTRIBUTION AGREEMENT

This Guaranty and Contribution Agreement (this “Agreement”) is made and entered into effective for all purposes as of the 2^nd day of August, 2012, 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 have entered into that certain Senior Unsecured Term Loan Agreement dated as of August 2, 2012 (such Senior Unsecured Term Loan Agreement, as the same may be amended or modified from time to time, being referred to herein as the “Term Loan Agreement”);

WHEREAS, pursuant to the Term Loan 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 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.

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.

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 (such 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

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

1

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.

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.

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

2

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).

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

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

3

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 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

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

4

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 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.

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

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

5

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 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 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.

(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).

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

6

(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.

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LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

7

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: Bruce A. Riggins
	Title: Chief Financial Officer

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

GUARANTY AND CONTRIBUTION AGREEMENT

LASALLE HOTEL LESSEE, INC.,
an Illinois corporation
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
GLASS HOUSES,
a Maryland real estate investment trust
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
DA ENTITY, LLC,
a Delaware limited liability company
By:	LaSalle Hotel Properties
	Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
and
By:	RDA Entity, Inc.
	Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION 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.,
each, a Delaware corporation
By:
	Name: Bruce A. Riggins
	Title: Chief Financial Officer
LHO WASHINGTON HOTEL ONE, L.L.C.
LHO WASHINTON HOTEL TWO, L.L.C.
LHO WASHINGTON HOTEL THREE, LLC
LHO WASHINGTON HOTEL FOUR, L.L.C.
LHO WASHINTON 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
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION 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.
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO ALEXANDRIA ONE, L.L.C.
NYC SERENADE, L.L.C.
LHO VIKING HOTEL, 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,
MICASA SHUCASA, LLC
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

SEASIDE HOTEL, LP,
a Delaware limited partnership
By:	Seaside Hotel, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

GEARY DARLING, LP,
a Delaware limited partnership
By:	Geary Darling, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHAMBER MAID, LP,
a Delaware limited partnership
By:	Chamber Maid, LLC General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LET IT FLHO, LP,
a Delaware limited partnership
By:	Let It FLHO, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

LHO GRAFTON HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Grafton Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO LE PARC, L.P.,
a Delaware limited partnership
By:	LHO Le Parc, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO SANTA CRUZ HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO Santa Cruz Hotel One, L.L.C
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

LUCK TOWN BURBANK, L.P.,
a Delaware limited partnership
By:	Lucky Town Burbank, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY ROSIE HOTEL, L.P.,
a Delaware limited partnership
By:	LHO Mission Bay Rosie Hotel, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
LHO MISSION BAY HOTEL, L.P.,
a Delaware limited partnership
By:	LHO San Diego Financing, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

LHO SAN DIEGO FINANCING, L.L.C.,
a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer
LHO HOLLYWOOD LM, L.P.,
a Delaware limited partnership
By:	LHO Hollywood Financing, Inc.
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer
LHO NEW ORLEANS LM, L.P.,
a Delaware limited partnership
By:	LHO New Orleans Financing, Inc.
	General Partner
	By:
		Name: Bruce A. Riggins
		Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

WILD INNOCENT I, LP,
a Delaware limited partnership
By:	Innocent I, LLC
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
CHIMES OF FREEDOM, LLC,
a Delaware limited liability company
By:	OF Freedom I, LLC
	Managing Member
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer
WILD I, LLC
CHIMES I, LLC
OF FREEDOM I, LLC,
each, a Delaware limited liability company
By:	LaSalle Hotel Operating Partnership, L.P.
	Managing Member
	By:	LaSalle Hotel Properties
		General Partner
		By:
			Name: Bruce A. Riggins
			Title: Chief Financial Officer

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

LHO ALEXANDRIA ONE LESSEE, L.L.C.
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,
each, a Delaware limited liability company
By:	LaSalle Hotel Lessee, Inc.
	Managing Member
	By:
		Name: Bruce A. Riggins
		Title: Executive Vice-President and Chief Financial Officer
LHO SAN DIEGO HOTEL ONE, L.P.,
a Delaware limited partnership
By:	LHO San Diego Hotel One, L.L.C.
	General Partner
	By:	LaSalle Hotel Operating Partnership, L.P.
		Managing Member
		By:	LaSalle Hotel Properties
			General Partner
			By:
				Name: Bruce A. Riggins
				Title: Chief Financial Officer

Address for the above Guarantors:

3 Metro Center, Suite 1200

Bethesda, Maryland 20814

Attn: Mr. Bruce A. Riggins

.    LASALLE HOTEL OPERATING PARTNERSHIP, L.P    

GUARANTY AND CONTRIBUTION AGREEMENT

SCHEDULE 1

EXISTING GUARANTIES

[TBD]

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

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 Senior Unsecured Term Loan Agreement dated as of August 2, 2012 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 Environmental Indemnity and Agreement (the “Environmental Indemnity”) dated as of August 2, 2012 executed in connection with the Term Loan Agreement, (iii) the parties to the Guaranty and Contribution Agreement (the “Guaranty”) dated as of August 2, 2012 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 and the Guaranty 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 and the Guaranty as if it had been an original party to such agreements, (c) confirms that the representations and warranties set forth in the Environmental Indemnity and the Guaranty, 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 and the Guaranty.

For purposes of notices under the Environmental Indemnity and the Guaranty 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    

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. Agency Department
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Global Loans Agency Department

Ladies and Gentlemen:

The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower”), refers to the Senior Unsecured Term Loan Agreement dated as August 2, 2012 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 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.
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. Agency Department
1615 Brett Road OPS III
New Castle, Delaware 19720
Attention: Global Loans Agency Department

Ladies and Gentlemen:

The undersigned, LaSalle Hotel Operating Partnership, L.P., a Delaware limited partnership (the “Borrower”), refers to the Senior Unsecured Term Loan Agreement dated as August 2, 2012 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 Rate Advances].

(c)    The aggregate amount of the Borrowing to be Converted or continued is $_____________ and consists of [Base Rate Advances] [LIBOR Rate Advances].

(d)    The Proposed Borrowing consists of [a Conversion to [Base Rate Advances] [LIBOR Rate Advances]] [a continuation of [Base Rate Advances] [LIBOR Rate Advances]].

(e)    The Interest Period for each LIBOR Rate Advance made as part of the Proposed Borrowing is [____ month[s]].

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

NOTICE OF CONVERSION OR CONTINUATION

Very truly yours,
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
By:	LASALLE HOTEL PROPERTIES, its general partner
	By:
		Name:
		Title:

LASALLE HOTEL OPERATING PARTNERSHIP, L.P.

NOTICE OF CONVERSION OR CONTINUATION

EX-31.1

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 quarterly report on Form 10-Q 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: October 17, 2012

/s/ MICHAEL D. BARNELLO

Michael D. Barnello

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bruce A. Riggins, certify that:

1.		I have reviewed this quarterly report on Form 10-Q 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: October 17, 2012

/s/ BRUCE A. RIGGINS

Bruce A. Riggins

Executive Vice President

and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification 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 Quarterly Report of LaSalle Hotel Properties (“LHO”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael D. Barnello, President and Chief Executive Officer of LHO, and I, Bruce A. Riggins, Executive Vice President and Chief Financial Officer 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 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: October 17, 2012

/s/ MICHAEL D. BARNELLO

Michael D. Barnello

President and Chief Executive Officer

/s/ BRUCE A. RIGGINS

Bruce A. Riggins

Executive Vice President

and Chief Financial Officer

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Long-Term Debt (Summary Interest Expense And Weighted Average Interest Rates For Borrowings) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Debt Instrument [Line Items]
Interest incurred	$ 13,611	$ 9,781	$ 37,296	$ 29,251
Amortization of deferred financing costs	526	170	1,354	570
Capitalized interest	(27)	(95)	(259)	(255)
Interest expense	$ 14,110	$ 9,856	$ 38,391	$ 29,566
Senior Unsecured Credit Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	2.30%		2.20%	1.10%
LHL Unsecured Credit Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	2.20%		2.10%	1.10%
Massport Bonds [Member]
Debt Instrument [Line Items]
Weighted average interest rate	0.20%	0.20%	0.30%	0.20%

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Equity (Schedule Of Effects Of Changes In The Company's Ownership Interest In The Operating Partnership On The Company's Equity) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stockholders' Equity Note [Abstract]
Net income attributable to common shareholders	$ 26,507	$ 14,919	$ 35,182	$ 12,375
Decrease in additional paid-in capital from adjustments to noncontrolling interests of common units in Operating Partnership			(785)	0
Change in the Company's ownership interest from net income and adjustments to noncontrolling interests			$ 34,397	$ 12,375

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Equity (Common Dividends Paid) (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2011
Stockholders' Equity Note [Abstract]
Dividend per Share/Unit	$ 0.20	$ 0.11	$ 0.11	$ 0.51	$ 0.33
For the Quarter Ended	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011
Record Date	Jun. 29, 2012	Mar. 31, 2012	Dec. 31, 2011
Payable Date	Jul. 13, 2012	Apr. 13, 2012	Jan. 13, 2012

XML

Equity Incentive Plan (Equity Incentive) (Narrative) (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2012 Y	Dec. 31, 2011 Y
Equity Incentive Plan [Line Items]
Exercise price of share options as a percentage of fair market value, minimum	100.00%
Equity Incentive Plan 2009 [Member]
Equity Incentive Plan [Line Items]
Maximum common shares of beneficial interest to be issued	1,800,000
Common shares of beneficial interest to be issued per individual limit	500,000
Common shares available for grant	1,428,969
Vest period minimum (in years)	three
Vest period maximum (in years)	nine
Stock options outstanding	0
Equity Incentive Plan 2009 [Member] | Restricted Stock [Member]
Equity Incentive Plan [Line Items]
Vest period minimum (in years)	three
Vest period maximum (in years)	five
Long-Term Performance-Based Share Awards [Member]
Equity Incentive Plan [Line Items]
Weighted-average recognized period (in years)	2.8	2.8

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Commitments And Contingencies (Reserve Funds And Restricted Cash Reserves) (Narrative) (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Minimum [Member]	Sep. 30, 2012 Maximum [Member]	Sep. 30, 2012 Capital Expenditures [Member]	Sep. 30, 2012 Operating Expenses And Debt Payments [Member]	Sep. 30, 2012 Refund Future Liabilities [Member]
Commitments And Contingencies [Line Items]
Percentage of reserve funds provided by the company			4.00%	5.00%
Restricted cash reserves	$ 16,716	$ 16,969			$ 10,455	$ 5,182	$ 1,079

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Investment In Hotel Properties (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended			9 Months Ended							3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended	3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended
	Jan. 12, 2011	Sep. 30, 2012 Guest_Rooms	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2012 Guest_Rooms	Sep. 30, 2011	Dec. 31, 2011	Jul. 07, 2011	Apr. 29, 2011	Apr. 11, 2011	Feb. 16, 2011	Sep. 30, 2012 Viceroy Santa Monica [Member]	Sep. 30, 2011 Viceroy Santa Monica [Member]	Sep. 30, 2012 Viceroy Santa Monica [Member]	Sep. 30, 2011 Viceroy Santa Monica [Member]	Sep. 30, 2011 Villa Florence [Member]	Sep. 30, 2011 Villa Florence [Member]	Mar. 31, 2012 Park Central Hotel [Member]	Sep. 30, 2011 Park Central Hotel [Member]	Sep. 30, 2011 Park Central Hotel [Member]	Sep. 30, 2012 Hotel Palomar Washington, DC [Member]	Sep. 30, 2012 Hotel Palomar Washington, DC [Member]	Mar. 08, 2012 Hotel Palomar Washington, DC [Member] Guest_Rooms	Sep. 30, 2012 Mezzanine Loan [Member]	Sep. 30, 2012 Mezzanine Loan [Member]	Jul. 13, 2012 Mezzanine Loan [Member]
Investment In Hotel Properties [Line Items]
Real estate accumulated depreciation		$ 800,919			$ 800,919		$ 708,436
Acquired fee simple percentage																							100.00%
Number of guest rooms		10,200			10,200																		335
Acquisition of fee simple interest																							143,839
Business acquisition, transaction costs		156	153		4,057	574						0	0	100	182	88	88		65	304	0	3,594		156	363
Discount on note		4,093			4,093																					4,584
Purchase price of note																										67,416
Interest rate																										9.76%
First mortgage subordinate to																										310,000
Decrease in purchase price allocation																		746
Common shares of beneficial interest issued		86,280,358			86,280,358		85,176,506	8,016	7,896,612	1,436,881	2,619,811
Proceeds from sale of hotel properties	20,000
Impairment loss				3,223
Gain on sale			$ 760		$ 0	$ 760

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Equity Incentive Plan (Summary Of The Company's Service Condition Nonvested Shares) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Service Condition Nonvested Share Awards [Member]
Equity Incentive Plan [Line Items]
Nonvested at January 1, 2012, Number of Shares	384,754
Nonvested at January 1, 2012, Weighted - Average Grant Date Fair Value	$ 25.07
Granted, Number of Shares	71,144
Granted, Weighted - Average Grant Date Fair Value	$ 27.02
Vested, Number of Shares	(118,421)
Vested, Weighted - Average Grant Date Fair Value	$ 16.45
Forfeited, Number of Shares	0
Forfeited, Weighted - Average Grant Date Fair Value	$ 0.00
Nonvested at September 30, 2012, Number of Shares	337,477	[1]
Nonvested at September 30, 2012, Weighted - Average Grant Date Fair Value	$ 28.50	[1]
Long-Term Performance-Based Shares [Member]
Equity Incentive Plan [Line Items]
Shares earned but nonvested	49,406

[1] Amount excludes 49,406 long-term performance-based shares which were earned but nonvested due to a service condition as of September 30, 2012.

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Equity Incentive Plan (Tables)

9 Months Ended

Sep. 30, 2012

Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract]

Summary Of The Company's Service Condition Nonvested Shares

A summary of the Company’s service condition nonvested shares as of September 30, 2012 is as follows:

	Number of Shares		Weighted - Average Grant Date Fair Value
Nonvested at January 1, 2012	384,754		$	25.07
Granted	71,144		27.02
Vested	(118,421	)	16.45
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	337,477		$	28.50

⁽¹⁾  Amount excludes 49,406 long-term performance-based shares which were earned but nonvested due to a service condition as of September 30, 2012.

Assumptions Of Performance Measures For Valuation

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
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	%

Summary Of The Company's Long-Term Performance-Based Share Awards

A summary of the Company’s long-term performance-based share awards as of September 30, 2012 is as follows:

	Number of Shares		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2012	179,338		$	31.94
Granted	111,496		30.08
Vested	(28,055	)	20.27
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	262,779		$	32.39

⁽¹⁾  Amount excludes 50,000 shares that have been committed for future performance share grants. Fair value will be estimated at the beginning of the performance measurement period on July 1, 2014.

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Equity (Preferred Shares) (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended		0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 7 1/2% Series H Preferred Shares [Member] D	Sep. 30, 2012 7 1/2% Series H Preferred Shares [Member]	Mar. 14, 2011 8 3/8% Series B Preferred Shares [Member]	Sep. 30, 2012 8 3/8% Series B Preferred Shares [Member]	Sep. 30, 2011 8 3/8% Series B Preferred Shares [Member]	May 21, 2012 7 1/2% Series D Preferred Shares [Member]	Sep. 30, 2012 7 1/2% Series D Preferred Shares [Member]	May 21, 2012 8% Series E Preferred Shares [Member]	Sep. 30, 2012 8% Series E Preferred Shares [Member]	Sep. 30, 2012 7 1/4% Series G Preferred Shares [Member]	May 21, 2012 Series D and E Preferred Stock [Member]
Class of Stock [Line Items]
Cumulative Redeemable Preferred Shares, Stated Percentage							7.50%		8.375%			7.50%		8.00%	7.25%
Number of Shares Redeemed								1,100,000			3,170,000		3,500,000
Redemption value			$ 166,750	$ 27,500				$ 27,500			$ 79,250		$ 87,500
Redeemable preferred stock redemption price per share						$ 25.00	$ 25.00	$ 25.00							$ 25.00	$ 25.00
Preferred stock redeemable term (in days)						120
Shares issued upon conversion						4,680,500	4,680,500
Distributions payable	21,478		21,478		16,651			473			842		992
Stock issuance costs	$ 0	$ 0	$ (4,417)	$ (731)				$ 731		$ (731)	$ 2,273	$ (2,273)	$ 2,144	$ (2,144)

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Long-Term Debt Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance (Details) (Interest Rate Swap [Member], Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Amount expected to be reclassified from AOCI and noncontrolling interests and recognized as a reduction to income		$ 3,508
Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Recognized in AOCE on Derivative ( Effective Portion)	3,839	8,534
Interest Expense [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Reclassified from AOCE into Earnings (Effective Portion)	$ 780	$ 1,082

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Long-Term Debt (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended		9 Months Ended		9 Months Ended			9 Months Ended					0 Months Ended	9 Months Ended					0 Months Ended	9 Months Ended		0 Months Ended	9 Months Ended
	Aug. 02, 2012	May 16, 2012	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Senior Unsecured Credit Facility [Member] Y		Dec. 14, 2011 Senior Unsecured Credit Facility [Member]	Sep. 30, 2012 LHL Unsecured Credit Facility [Member] Y		Sep. 30, 2012 Term Loan	Sep. 30, 2012 Harborside Hyatt Conference Center & Hotel (Taxable) [Member]	Sep. 30, 2012 Letters Of Credit [Member] Y	Dec. 14, 2011 Previous Credit Facility [Member]	Sep. 30, 2012 Hilton San Diego Gaslamp Quarter [Member]	Sep. 30, 2012 Maximum [Member] Senior Unsecured Credit Facility [Member]	Sep. 30, 2012 Maximum [Member] LHL Unsecured Credit Facility [Member]	Sep. 30, 2012 Minimum [Member] Senior Unsecured Credit Facility [Member]	Sep. 30, 2012 Minimum [Member] LHL Unsecured Credit Facility [Member]	May 16, 2012 First Term Loan [Member] Term Loan	Sep. 30, 2012 First Term Loan [Member] Term Loan	Dec. 31, 2011 First Term Loan [Member] Term Loan	Aug. 02, 2012 Second Term Loan [Member] Term Loan	Sep. 30, 2012 Second Term Loan [Member] Term Loan	Dec. 31, 2011 Second Term Loan [Member] Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity under unsecured credit facility							$ 750,000	$ 25,000					$ 450,000
Credit facility maturity date											Mar. 01, 2018			Jul. 01, 2012						May 16, 2019			Aug. 02, 2017
Credit facility maturity date					January 30, 2016	[1]		January 30, 2016	[2]			February 2014	April 13, 2012
Extension option period					1			1				1
Variable unused commitment fee															0.40%	0.40%	0.30%	0.30%
Additional commitments			1,000,000
Mortgage loans at stated value			580,410	643,702
Term loans			377,500	0															177,500	177,500	0	300,000	200,000	0
Debt instrument term	5 years	7 years																	7 years			5 years
Term loan extension option period										1 year													1 year
Unsecured Debt, Proceeds Funded																						200,000
Unsecured Debt, Proceeds Remaining																						$ 100,000
Debt Instrument, Post Closing Period																							95 days

[1] 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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000 was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

[2] 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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

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Equity (Preferred Dividends Paid) (Details) (USD $)	3 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Mar. 31, 2012 7 1/2% Series D Preferred Shares [Member]		Mar. 31, 2012 8% Series E Preferred Shares [Member]		Dec. 31, 2012 7 1/4% Series G Preferred Shares [Member]		Sep. 30, 2012 7 1/4% Series G Preferred Shares [Member]	Mar. 31, 2012 7 1/4% Series G Preferred Shares [Member]		Dec. 31, 2012 7 1/2% Series H Preferred Shares [Member]		Sep. 30, 2012 7 1/2% Series H Preferred Shares [Member]	Mar. 31, 2012 7 1/2% Series H Preferred Shares [Member]		Jun. 30, 2012 April 2012 Payment [Member] 7 1/2% Series D Preferred Shares [Member]		Jun. 30, 2012 April 2012 Payment [Member] 8% Series E Preferred Shares [Member]		Jun. 30, 2012 April 2012 Payment [Member] 7 1/4% Series G Preferred Shares [Member]		Jun. 30, 2012 April 2012 Payment [Member] 7 1/2% Series H Preferred Shares [Member]		Jun. 30, 2012 May 2012 Payment [Member] 7 1/2% Series D Preferred Shares [Member]		Jun. 30, 2012 May 2012 Payment [Member] 8% Series E Preferred Shares [Member]
Class of Stock [Line Items]
Dividend per Share				$ 0.47	[1]	$ 0.50	[1]	$ 0.45	[1]	$ 0.45	$ 0.45	[1]	$ 0.47	[1]	$ 0.47	$ 0.47	[1]	$ 0.47	[1]	$ 0.50	[1]	$ 0.45	[1]	$ 0.47	[1]	$ 0.27	[1]	$ 0.28	[1]
For the Quarter Ended	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Dec. 31, 2011		Dec. 31, 2011		Sep. 30, 2012		Jun. 30, 2012	Dec. 31, 2011		Sep. 30, 2012		Jun. 30, 2012	Dec. 31, 2011		Mar. 31, 2012		Mar. 31, 2012		Mar. 31, 2012		Mar. 31, 2012		Jun. 30, 2012		Jun. 30, 2012
Record Date	Jun. 29, 2012	Mar. 31, 2012	Dec. 31, 2011	Jan. 01, 2012		Jan. 01, 2012		Oct. 01, 2012		Jul. 01, 2012	Jan. 01, 2012		Oct. 01, 2012		Jul. 01, 2012	Jan. 01, 2012		Apr. 01, 2012		Apr. 01, 2012		Apr. 01, 2012		Apr. 01, 2012		May 21, 2012		May 21, 2012
Payable Date	Jul. 13, 2012	Apr. 13, 2012	Jan. 13, 2012	Jan. 13, 2012		Jan. 13, 2012		Oct. 15, 2012		Jul. 13, 2012	Jan. 13, 2012		Oct. 15, 2012		Jul. 13, 2012	Jan. 13, 2012		Apr. 13, 2012		Apr. 13, 2012		Apr. 13, 2012		Apr. 13, 2012		May 21, 2012		May 21, 2012

[1] Amounts are rounded to the nearest whole cent for presentation purposes.

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LHL (Summary Of Other Indirect Hotel Operating Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012 Hotels	Sep. 30, 2011	Sep. 30, 2012 Hotels	Sep. 30, 2011
Number of hotels	38		38
General and administrative	$ 5,172	$ 4,185	$ 14,635	$ 12,919
Other expenses	922	668	2,391	1,749
Other indirect expenses from continuing operations	54,532	48,411	157,725	136,465
LHL [Member]
General and administrative	17,029	14,774	49,800	41,936
Sales and marketing	12,519	11,483	37,659	33,102
Repairs and maintenance	7,635	6,801	23,045	19,776
Utilities and insurance	6,837	6,322	19,501	17,432
Management and incentive fees	8,360	6,984	21,464	18,540
Franchise fees	1,737	1,617	5,077	4,676
Other expenses	415	430	1,179	1,291
Total other indirect expenses	54,532	48,411	157,725	136,753
Other indirect expenses from discontinued operations	0	0	0	(288)
Other indirect expenses from continuing operations	$ 54,532	$ 48,411	$ 157,725	$ 136,465

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Equity (Common Shares Of Beneficial Interest) (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		9 Months Ended							6 Months Ended	0 Months Ended				9 Months Ended	0 Months Ended					0 Months Ended
	Jan. 19, 2012	Jan. 02, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jul. 07, 2011	Apr. 29, 2011	Apr. 11, 2011	Feb. 16, 2011	Jul. 19, 2012 Restricted Stock [Member]	Feb. 27, 2012 1998 Share Option And Incentive Plan [Member]	Aug. 08, 2012 2011 Agreement [Member]	May 30, 2012 2011 Agreement [Member]	Feb. 14, 2012 2011 Agreement [Member]	Sep. 30, 2012 2011 Agreement [Member]	Jul. 19, 2012 2009 Plan [Member]	Jan. 26, 2012 2009 Plan [Member]	Jan. 02, 2012 2009 Plan [Member]	Jan. 19, 2012 2009 Plan [Member]	Sep. 30, 2012 Maximum [Member] 2011 Agreement [Member]	Jul. 19, 2012 July 19, 2012 [Member] 2009 Plan [Member]	Jan. 26, 2012 January 26, 2012 [Member] 2009 Plan [Member]
Equity [Line Items]
Issuance of shares of beneficial interest from treasury	10,535	8,928								141,043				1,260,256
Common shares of beneficial interest, shares issued			86,280,358		85,176,506	8,016	7,896,612	1,436,881	2,619,811			3,100	641,069	1,714,939				8,928	10,535
Deferred shares authorized																		8,928
Issuance of restricted common shares of beneficial interest																695	70,449	69,899
Vesting period (in years)																					three	three
Discounts and commissions												$ 1	$ 219	$ 589
Par value of common shares issued			$ 0.01		$ 0.01							$ 0.01	$ 0.01	$ 0.01
Net proceeds from issuance of stock			64,786	331,030								83	17,328	46,566
Number of options exercised to purchase common shares											5,000
Payments of Stock Issuance Costs			977	3,559											168
Potential aggregate offering price																				$ 146,024

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. These unaudited consolidated financial statements, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of equity and consolidated statements of cash flows for the periods presented. Operating results for the three and nine months endedSeptember 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012 due to seasonal and other factors. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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 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. Actual results could differ from those estimates.

Substantially all of the Company’s revenues and expenses are generated by the operations of the individual hotels. The Company records revenues and expenses that are estimated by the hotel operators to produce quarterly financial statements because the management contracts do not require the hotel operators to submit actual results within a time frame that permits the Company to use actual results when preparing its Quarterly Reports on Form 10-Q for filing by the deadline prescribed by the SEC. Generally, the Company records actual revenue and expense amounts for the first two months of each quarter and revenue and expense estimates for the last month of each quarter. Each quarter, the Company reviews the estimated revenue and expense amounts provided by the hotel operators for reasonableness based upon historical results for prior periods and internal Company forecasts. The Company records any differences between recorded estimated amounts and actual amounts in the following quarter; historically, these differences have not been material. The Company believes the quarterly revenues and expenses, recorded on the Company’s consolidated statements of operations and comprehensive income based on an aggregate estimate, are fairly stated.

Share-Based Compensation

From time to time, the Company awards nonvested shares under the 2009 Equity Incentive Plan (“2009 Plan”), which has approximately six years remaining, as compensation to officers, employees and non-employee trustees (see Note 7). The shares issued to officers and employees vest over three to nine years. The Company recognizes compensation expense for nonvested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures.

Noncontrolling Interests

Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Under this guidance, 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, 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. 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 securities 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 September 30, 2012, the consolidated results of the Company include the following ownership interests held by owners other than the Company: (i) the outside preferred ownership interests in a subsidiary and (ii) the common units in the Operating Partnership held by third parties.

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.

Level 2 – Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3 – Model-derived valuations with unobservable inputs.

As required by the guidance, the Company classifies assets and liabilities based on the lowest level of input that is significant to the fair value measurement.

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. The Company entered into derivative instruments during the second and third quarters of 2012 (see Note 4).

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. 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, it is probable that the Company will be unable to collect all principal and interest contractually due. 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. The Company has no notes receivable that are impaired or in non-accrual status. The Company acquired a note receivable during the third quarter of 2012 (see Note 3).

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Income Taxes (Narrative) (Details) (LHL [Member])	9 Months Ended
	Sep. 30, 2012
LHL [Member]
Income Taxes [Line Items]
Effective income tax rate, continuing operations	39.50%

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Long-Term Debt Schedule of Derivative Instruments in Statement of Financial Position (Details) (Designated as Hedging Instrument [Member], Other Liabilities [Member], Interest Rate Swap [Member], Fair Value, Inputs, Level 2 [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Derivatives, Fair Value [Line Items]
Derivatives included in accounts payable and accrued expenses	$ 8,534

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Supplemental Information To Statements Of Cash Flows (Tables)

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Information To Statements Of Cash Flows

	For the nine months ended
	September 30,
	2012			2011
Interest paid, net of capitalized interest	$	36,660		$	29,143
Interest capitalized		259		255
Income taxes paid, net		2,117		567
Distributions payable on common shares		17,312		9,253
Distributions payable on preferred shares		4,166		7,402
Write-off of fully amortized deferred financing costs		162		0
Accrued capital expenditures		754		2,761
Issuance of restricted shares to employees and executives, net		4,764		7,486
Issuance of common shares for Board of Trustees compensation		494		166
Repurchase of common shares into treasury		1,210		21,588
In conjunction with the sale of property, the Company disposed of the following assets and liabilities:
Investment in property, net of closing costs	$	0		$	19,628
Other assets		0		378
Liabilities		0		(279		)
Sale of property	$	0		$	19,727
In conjunction with the acquisition of properties, the Company assumed assets and liabilities as follows:
Investment in properties (after credits at closing)	$	(143,721	)	$	(80,017	)
Deposits on potential acquisitions		0		(22,500		)
Other assets		(565	)	(756		)
Liabilities		1,342		938
Acquisition of properties	$	(142,944	)	$	(102,335	)

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Common Share

The computation of basic and diluted earnings per common share is as follows:

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Numerator:
Net income attributable to common shareholders before discontinued operations	$	26,507		$	14,403		$	35,182		$	12,046
Discontinued operations	0			516			0			329
Net income attributable to common shareholders	26,507			14,919			35,182			12,375
Dividends paid on unvested restricted shares	(78		)	(43		)	(213		)	(126		)
Undistributed earnings attributable to unvested restricted shares	(41		)	(25		)	0			0
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	26,388		$	14,851		$	34,969		$	12,249
Denominator:
Weighted average number of common shares - basic	85,876,584			84,640,196			85,278,331			80,392,686
Effect of dilutive securities:
Stock options and compensation-related shares	180,373			111,916			171,212			166,613
Weighted average number of common shares - diluted	86,056,957			84,752,112			85,449,543			80,559,299
Earnings per Common Share - Basic:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15
Earnings per Common Share - Diluted:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15

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Equity Incentive Plan (Service Condition Nonvested Share Awards) (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Y	Sep. 30, 2011	Dec. 31, 2011 Y
Service Condition Nonvested Share Awards [Member]
Equity Incentive Plan [Line Items]
Unrecognized compensation costs	$ 6,841		$ 6,841		$ 7,087
Weighted-average recognized period (in years)			2.8		3.3
Total fair value of vested shares	1,483	0	3,118	7,089
Compensation costs (net of forfeitures)	$ 702	$ 610	$ 2,094	$ 2,076
Vest period minimum (in years)			three
Vest period maximum (in years)			nine
Equity Incentive Plan 2009 [Member]
Equity Incentive Plan [Line Items]
Vest period minimum (in years)			three
Vest period maximum (in years)			nine

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Commitments And Contingencies (Ground, Land And Building, And Air Rights Leases) (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Hotels	Sep. 30, 2011	Oct. 06, 2010
Commitments And Contingencies [Line Items]
Number of hotels subject to ground leases under non-cancelable operating leases			6
Lease expiration date			None of the remaining ground leases expire prior to 2045.
Noncash straight-line rent expense	$ 114	$ 116	$ 342	$ 232
Future ground rent payments per year			1
Present value of the remaining rent payments					4,892
Total rent expense	2,627	2,485	6,613	5,871
Minimum [Member]
Commitments And Contingencies [Line Items]
Lease expiration date			March 2026
Maximum [Member]
Commitments And Contingencies [Line Items]
Lease expiration date			December 2102
Sheraton Bloomington Hotel Minneapolis South [Member]
Commitments And Contingencies [Line Items]
Total rent expense		$ 0		$ 10
Westin Copley Place [Member]
Commitments And Contingencies [Line Items]
Lease expiration date			December 14, 2077
Harborside Hyatt Conference Center & Hotel [Member]
Commitments And Contingencies [Line Items]
Lease expiration date			2026
Lease extension period (in years)			50
Extended Lease Expiration Date			2077
Hotel Roger Williams [Member]
Commitments And Contingencies [Line Items]
Lease expiration date			December 31, 2044
Acquisition date			October 6, 2010

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Components Of Common And Preferred Share Dividends

The Company paid the following common and preferred dividends subsequent to September 30, 2012:

	Dividend per		For the Quarter	Record	Payable
Security Type	Share/Unit (1)		Ended	Date	Date
Common Shares/Units	$	0.20	September 30, 2012	September 28, 2012	October 15, 2012
7 ¼% Series G Preferred Shares	$	0.45	September 30, 2012	October 1, 2012	October 15, 2012
7 ½% Series H Preferred Shares	$	0.47	September 30, 2012	October 1, 2012	October 15, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

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Organization (Details)	9 Months Ended
	Sep. 30, 2012 States Hotels Guest_Rooms
Organization [Abstract]
Number of hotels	38
Number of guest rooms	10,200
Number of states in which hotels located	9
LHL leases expiration dates	between December 2012 and December 2015
Ownership percentage by the company	99.70%
Ownership percentage by limited partners	0.30%
Common units of Operating Partnership interest held by limited partners	296,300

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Organization

9 Months Ended

Sep. 30, 2012

Organization [Abstract]

Organization

Organization

LaSalle Hotel Properties (the “Company”), a Maryland real estate investment trust (“REIT”) 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 shareholders. The income of LaSalle Hotel Lessee, Inc. (“LHL”), the Company’s wholly owned taxable-REIT subsidiary, is subject to taxation at normal corporate rates.

As of September 30, 2012, the Company owned interests in 38 hotels with approximately 10,200 guest rooms located in nine states and the District of Columbia. Each hotel is leased to LHL (see Note 8) or a wholly owned subsidiary of 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 2012 and December 2015. Lease revenue from LHL and its wholly owned subsidiaries is eliminated in consolidation. A third-party or non-affiliated hotel operator manages each hotel, which is also subject to a hotel management agreement.

Substantially all of the Company’s assets are held 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, 99.7% of the common units in the Operating Partnership at September 30, 2012. The remaining 0.3% is held by limited partners who held 296,300 common units in the Operating Partnership at September 30, 2012. See Note 6 for additional disclosures on common units in the Operating Partnership.

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Summary Of Significant Accounting Policies (Narrative) (Details) (Equity Incentive Plan 2009 [Member])	9 Months Ended
	Sep. 30, 2012
Equity Incentive Plan 2009 [Member]
Significant Accounting Policies [Line Items]
Remaining years	six
Vest period minimum (in years)	three
Vest period maximum (in years)	nine

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Long-Term Debt (Carrying Value And Estimated Fair Value Of The Company's Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 property	Dec. 31, 2011
Long-term Debt, Other Disclosures [Abstract]
Carrying value	$ 1,210,134	$ 951,397
Estimated fair value	$ 1,228,640	$ 954,299
Number of properties	1

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Equity (Noncontrolling Interest Of Common Units In Operating Partnership) (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012
Stockholders' Equity Note [Abstract]
Common units of limited partnership	296,300
Common units of operating partnership interest for cash or common shares	$ 7,908
Closing common share price, per share	$ 26.69
Partnership interest held by limited partners	0.30%

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets:
Investment in hotel properties, net (Note 3)	$ 2,826,053	$ 2,712,174
Note receivable (net of discount of $4,093) (Note 3)	67,907	0
Property under development	7,208	21,346
Cash and cash equivalents	5,683	20,225
Restricted cash reserves (Note 5)	16,716	16,969
Hotel receivables (net of allowance for doubtful accounts of $403 and $321, respectively)	40,360	23,760
Deferred financing costs, net	8,823	6,235
Deferred tax assets (Note 9)	1,469	5,250
Prepaid expenses and other assets	34,190	27,316
Total assets	3,008,409	2,833,275
Liabilities:
Borrowings under credit facilities (Note 4)	209,586	265,000
Term loans (Note 4)	377,500	0
Bonds payable (Note 4)	42,500	42,500
Mortgage loans (including unamortized premium of $138 and $195, respectively) (Note 4)	580,548	643,897
Accounts payable and accrued expenses	99,424	78,407
Advance deposits	15,903	12,085
Accrued interest	3,869	3,492
Distributions payable	21,478	16,651
Total liabilities	1,350,808	1,062,032
Commitments and contingencies (Note 5)
Shareholders' Equity:
Preferred shares, $0.01 par value (liquidation preference of $227,472 and $394,222, respectively), 40,000,000 shares authorized; 9,098,888 and 15,768,888 shares issued and outstanding, respectively (Note 6)	91	158
Common shares of beneficial interest, $0.01 par value, 200,000,000 shares authorized; 86,280,358 shares issued and 86,264,876 outstanding, and 85,176,506 shares issued and 83,786,932 shares outstanding, respectively (Note 6)	863	851
Treasury shares, at cost (Note 6)	(451)	(24,543)
Additional paid-in capital, net of offering costs of $62,707 and $66,146, respectively	1,908,755	2,029,145
Accumulated other comprehensive loss (Note 4)	(8,505)	0
Distributions in excess of retained earnings	(248,857)	(239,998)
Total shareholders' equity	1,651,896	1,765,613
Noncontrolling interests:
Noncontrolling interests in consolidated entity	9	17
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	5,696	5,613
Total noncontrolling interests	5,705	5,630
Total equity	1,657,601	1,771,243
Total liabilities and equity	$ 3,008,409	$ 2,833,275

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Commitments And Contingencies (Future Minimum Rent Payments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Commitments And Contingencies [Abstract]
2012	$ 1,416
2013	5,671
2014	5,684
2015	5,696
2016	5,738
Thereafter	224,683
Operating leases, future minimum payments due, total	$ 248,888

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Consolidated Statements Of Equity (Parenthetical) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2011
Statement of Stockholders' Equity [Abstract]
Distributions on common shares (per share)	$ 0.20	$ 0.11	$ 0.11	$ 0.51	$ 0.33

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Equity Incentive Plan (Assumptions Of Performance Measures For Valuation) (Details) (January 26, 2012 Awards [Member])	9 Months Ended
	Sep. 30, 2012
Target Amounts [Member]
Equity Incentive Plan [Line Items]
Volatility	65.30%
Interest Rates	0.31%
Dividend Yield
Stock Beta
Fair Value of Components of Award	36.22
Weighting of Total Awards	33.40%
NAREIT Index [Member]
Equity Incentive Plan [Line Items]
Volatility	65.30%
Interest Rates	0.31%
Dividend Yield
Stock Beta	1.370
Fair Value of Components of Award	35.25
Weighting of Total Awards	33.30%
Peer Companies [Member]
Equity Incentive Plan [Line Items]
Volatility	65.30%
Interest Rates	0.31%
Dividend Yield
Stock Beta	0.911
Fair Value of Components of Award	35.33
Weighting of Total Awards	33.30%

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Investment In Hotel Properties (Condensed Pro Forma Financial Information) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011
Investments [Abstract]
Total revenues	$ 223,790	$ 610,703
Net income	23,737	37,521
Net income attributable to common shareholders	$ 16,335	$ 14,242
Earnings per common share - basic	$ 0.19	$ 0.17
Earnings per common share - diluted	$ 0.19	$ 0.17
Weighted average number of common shares outstanding, Basic	84,652,730	84,687,289
Weighted average number of common shares outstanding, Diluted	84,764,646	84,853,902

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Supplemental Information To Statements Of Cash Flows (Supplemental Information To Statements Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Supplemental Cash Flow Information [Abstract]
Interest paid, net of capitalized interest	$ 36,660	$ 29,143
Interest capitalized	259	255
Income taxes paid, net	2,117	567
Distributions payable on common shares	17,312	9,253
Distributions payable on preferred shares	4,166	7,402
Write-off of fully amortized deferred financing costs	162	0
Accrued capital expenditures	754	2,761
Issuance of restricted shares to employees and executives, net	4,764	7,486
Issuance of common shares for Board of Trustees compensation	494	166
Repurchase of common shares into treasury	1,210	21,588
Investment in property, net of closing costs	0	19,628
Other assets	0	378
Liabilities	0	(279)
Sale of property	0	19,727
Investment in properties (after credits at closing)	(143,721)	(80,017)
Deposits on potential acquisitions	0	(22,500)
Other assets	(565)	(756)
Liabilities	1,342	938
Acquisition of properties	$ (142,944)	$ (102,335)

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2012

Long-term Debt, Other Disclosures [Abstract]

Components Of Long-Term Debt

Debt as of September 30, 2012 and December 31, 2011 consisted of the following:

			Balance Outstanding as of
Debt	Interest Rate	Maturity Date	September 30, 2012		December 31, 2011
Credit facilities
Senior unsecured credit facility	Floating (a)	January 2016 (a)	$	201,000	$	265,000
LHL unsecured credit facility	Floating (b)	January 2016 (b)	8,586		0
Total borrowings under credit facilities			209,586		265,000
Term loans
First Term Loan	Floating (c)	May 2019	177,500		0
Second Term Loan	Floating (c)	August 2017	200,000		0
Total term loans			377,500		0
Massport Bonds
Harborside Hyatt Conference
Center & Hotel (taxable)	Floating (d)	March 2018	5,400		5,400
Harborside Hyatt Conference
Center & Hotel (tax exempt)	Floating (d)	March 2018	37,100		37,100
Total bonds payable			42,500		42,500
Mortgage loans
Hilton San Diego Gaslamp Quarter	5.35%	July 2012 (e)	0		59,600
Hotel Solamar	5.49%	December 2013	60,334		60,900
Hotel Deca	6.28%	August 2014	9,183		9,392
Westin Copley Place	5.28%	September 2015	210,000		210,000
Westin Michigan Avenue	5.75%	April 2016	137,625		138,902
Indianapolis Marriott Downtown	5.99%	July 2016	100,452		101,319
Hotel Roger Williams	6.31%	August 2016	62,816		63,589
Mortgage loans at stated value			580,410		643,702
Unamortized loan premium (f)			138		195
Total mortgage loans			580,548		643,897
Total debt			$	1,210,134	$	951,397

^(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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000 was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

^(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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

^(c)  Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into separate interest rate swap agreements for the full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements).

^(d)  The Massport Bonds are secured by letters of credit issued by the Royal Bank of Scotland that expire in February 2014, pursuant to an amendment to the agreement governing the letters of credit. The Royal Bank of Scotland letters of credit also have threeone-year extension options and are secured by the Harborside Hyatt Conference Center & Hotel. The bonds bear interest based on weekly floating rates. The interest rates as of September 30, 2012 were 0.61% and 0.20% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2011 were 0.75% and 0.12% for the $5,400 and $37,100 bonds, respectively. The Company also incurs an annual letter of credit fee, which effective February 14, 2012 changed from a flat 2.00% to a variable rate based on an applicable margin as defined in the Company's senior unsecured credit agreement.

^(e)  The Company repaid the mortgage loan on March 30, 2012 through borrowings on its senior unsecured credit facility.

^(f)  Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

Summary Interest Expense And Weighted Average Interest Rates For Borrowings

A summary of the Company’s interest expense and weighted average interest rates for variable rate debt for the three and nine months endedSeptember 30, 2012 and 2011 is as follows:

		For the three months ended						For the nine months ended
		September 30,						September 30,
		2012			2011			2012			2011
Interest Expense:
Interest incurred	$	13,611		$	9,781		$	37,296		$	29,251
Amortization of deferred financing costs		526			170			1,354			570
Capitalized interest		(27)			(95)			(259)			(255)
Interest expense	$	14,110		$	9,856		$	38,391		$	29,566
Weighted Average Interest Rates for Variable Rate Debt:
Senior unsecured credit facility		2.3	%		N/A			2.2	%		1.1	%
LHL unsecured credit facility		2.2	%		N/A			2.1	%		1.1	%
Massport Bonds		0.2	%		0.2	%		0.3	%		0.2	%

Carrying Value And Estimated Fair Value Of The Company's Debt

The carrying value and estimated fair value of the Company’s debt as of September 30, 2012 and December 31, 2011 were as follows:

	September 30,		December 31,
	2012		2011
Carrying value	$	1,210,134	$	951,397
Estimated fair value	$	1,228,640	$	954,299

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

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 three and nine months endedSeptember 30, 2012:

	Amount of Loss Recognized in OCL on Derivative Instruments				Location of Loss Reclassified from AOCL into Income	Amount of Loss Reclassified from AOCL into Income
	(Effective Portion)				(Effective Portion)	(Effective Portion)
	For the three months ended		For the nine months ended			For the three months ended		For the nine months ended
	September 30, 2012		September 30, 2012			September 30, 2012		September 30, 2012
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	3,839	$	8,534	Interest expense	$	780	$	1,082

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the location and fair value of the Company's derivative financial instruments as reported in the consolidated balance sheets as of September 30, 2012:

		Fair Value
	Consolidated Balance Sheet Location	September 30, 2012
Derivatives designated as hedging instruments:
Liability derivatives:
Interest rate swaps	Accounts payable and accrued expenses	$	8,534

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Investment In Hotel Properties (Summary Of The Results Of The Properties Classified In Discontinued Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Investments [Abstract]
Operating revenues		$ 0		$ 495
Operating expenses		0		814
Loss from operations before gain		0		(319)
Gain on sale		760	0	760
Income from operations	0	760	0	441
Income tax expense	0	(244)	0	(112)
Net income from discontinued operations	$ 0	$ 516	$ 0	$ 329

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Equity (Tables)

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Common Dividends Paid

The Company paid the following dividends on common shares/units during the nine months endedSeptember 30, 2012:

Dividend per Share/Unit		For the Quarter Ended	Record Date	Payable Date
$	0.11	December 31, 2011	December 31, 2011	January 13, 2012
$	0.11	March 31, 2012	March 31, 2012	April 13, 2012
$	0.20	June 30, 2012	June 29, 2012	July 13, 2012

Preferred Shares Outstanding

The following Preferred Shares were outstanding as of September 30, 2012:

Security Type	Number of Shares
7 ¼% Series G Preferred Shares	6,348,888
7 ½% Series H Preferred Shares	2,750,000

Preferred Dividends Paid

The Company paid the following dividends on preferred shares during the nine months endedSeptember 30, 2012:

	Dividend per		For the
Security Type	Share (1)		Quarter Ended	Record Date	Payable Date
7 ½% Series D	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
8% Series E	$	0.50	December 31, 2011	January 1, 2012	January 13, 2012
7 ¼% Series G	$	0.45	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series H	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series D	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
8% Series E	$	0.50	March 31, 2012	April 1, 2012	April 13, 2012
7 ¼% Series G	$	0.45	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series H	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series D	$	0.27	June 30, 2012	May 21, 2012	May 21, 2012
8% Series E	$	0.28	June 30, 2012	May 21, 2012	May 21, 2012
7 ¼% Series G	$	0.45	June 30, 2012	July 1, 2012	July 13, 2012
7 ½% Series H	$	0.47	June 30, 2012	July 1, 2012	July 13, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

Schedule Of Effects Of Changes In The Company's Ownership Interest In The Operating Partnership On The Company's Equity

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 nine months ended
	September 30,
	2012			2011
Net income attributable to common shareholders	$	35,182		$	12,375
Decrease in additional paid-in capital from adjustments to noncontrolling interests of common units in Operating Partnership	(785		)	0
Change in the Company's ownership interest from net income and adjustments to noncontrolling interests	$	34,397		$	12,375

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 57,390	$ 35,654
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	92,911	83,572
Amortization of deferred financing costs, mortgage premium and note receivable discount	806	515
Gain on sale of property	0	(760)
Deferred compensation	3,598	3,119
Allowance for doubtful accounts	82	(801)
Changes in assets and liabilities:
Restricted cash reserves	(877)	1,289
Hotel receivables	(16,418)	(6,059)
Deferred tax assets	3,781	4,335
Prepaid expenses and other assets	(6,938)	(2,392)
Accounts payable and accrued expenses	14,225	4,473
Advance deposits	3,608	4,928
Accrued interest	377	(147)
Net cash provided by operating activities	152,545	127,726
Cash flows from investing activities:
Improvements and additions to properties	(51,425)	(34,387)
Acquisition of properties	(142,944)	(102,335)
Purchase of office furniture and equipment	(63)	(86)
Acquisition of note receivable	(67,416)	0
Restricted cash reserves	1,130	(1,805)
Proceeds from sale of property	0	19,727
Net cash used in investing activities	(260,718)	(118,886)
Cash flows from financing activities:
Borrowings under credit facilities	386,920	164,183
Repayments under credit facilities	(442,334)	(284,376)
Borrowings on term loan	377,500	0
Repayments of mortgage loans	(63,292)	(1,191)
Payment of deferred financing costs	(4,202)	0
Purchase of treasury shares	(1,210)	(21,588)
Proceeds from exercise of stock options	74	83
Proceeds from issuance of preferred shares	0	68,750
Payment of preferred offering costs	0	(2,380)
Proceeds from issuance of common shares	64,786	331,030
Payment of common offering costs	(977)	(3,559)
Distributions on issued long-term performance-based share awards	(56)	(38)
Redemption of preferred shares	(166,750)	(27,500)
Distributions on preferred shares	(20,811)	(21,845)
Distributions on common shares/units	(36,017)	(25,746)
Net cash provided by financing activities	93,631	175,823
Net change in cash and cash equivalents	(14,542)	184,663
Cash and cash equivalents, beginning of period	20,225	13,000
Cash and cash equivalents, end of period	$ 5,683	$ 197,663

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
Statement of Financial Position [Abstract]
Hotel receivables, allowance for doubtful accounts	$ 403		$ 321
Discount on note receivable	4,093
Mortgage loans, unamortized premium	138	[1]	195	[1]
Preferred shares, par value	$ 0.01		$ 0.01
Preferred shares, liquidation preference	227,472		394,222
Preferred shares, shares authorized	40,000,000		40,000,000
Preferred shares, shares issued	9,098,888		15,768,888
Preferred shares, shares outstanding	9,098,888		15,768,888
Common shares of beneficial interest, par value	$ 0.01		$ 0.01
Common shares of beneficial interest, shares authorized	200,000,000		200,000,000
Common shares of beneficial interest, shares issued	86,280,358		85,176,506
Common shares of beneficial interest, shares outstanding	86,264,876		83,786,932
Additional paid-in capital, offering costs	$ 62,707		$ 66,146

[1] Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The limited partners' outstanding common units in the Operating Partnership (which may be converted to common shares of beneficial interest after a required hold period) 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. In addition, any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards 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 utilized 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 three months ended						For the nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Numerator:
Net income attributable to common shareholders before discontinued operations	$	26,507		$	14,403		$	35,182		$	12,046
Discontinued operations	0			516			0			329
Net income attributable to common shareholders	26,507			14,919			35,182			12,375
Dividends paid on unvested restricted shares	(78		)	(43		)	(213		)	(126		)
Undistributed earnings attributable to unvested restricted shares	(41		)	(25		)	0			0
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	26,388		$	14,851		$	34,969		$	12,249
Denominator:
Weighted average number of common shares - basic	85,876,584			84,640,196			85,278,331			80,392,686
Effect of dilutive securities:
Stock options and compensation-related shares	180,373			111,916			171,212			166,613
Weighted average number of common shares - diluted	86,056,957			84,752,112			85,449,543			80,559,299
Earnings per Common Share - Basic:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15
Earnings per Common Share - Diluted:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$	0.31		$	0.17		$	0.41		$	0.15
Discontinued operations	0.00			0.01			0.00			0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$	0.31		$	0.18		$	0.41		$	0.15

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 17, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Entity Registrant Name	LaSalle Hotel Properties
Entity Central Index Key	0001053532
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		86,260,744

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Supplemental Information To Statements Of Cash Flows

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Information To Statements Of Cash Flows

Supplemental Information to Statements of Cash Flows

	For the nine months ended
	September 30,
	2012			2011
Interest paid, net of capitalized interest	$	36,660		$	29,143
Interest capitalized		259		255
Income taxes paid, net		2,117		567
Distributions payable on common shares		17,312		9,253
Distributions payable on preferred shares		4,166		7,402
Write-off of fully amortized deferred financing costs		162		0
Accrued capital expenditures		754		2,761
Issuance of restricted shares to employees and executives, net		4,764		7,486
Issuance of common shares for Board of Trustees compensation		494		166
Repurchase of common shares into treasury		1,210		21,588
In conjunction with the sale of property, the Company disposed of the following assets and liabilities:
Investment in property, net of closing costs	$	0		$	19,628
Other assets		0		378
Liabilities		0		(279		)
Sale of property	$	0		$	19,727
In conjunction with the acquisition of properties, the Company assumed assets and liabilities as follows:
Investment in properties (after credits at closing)	$	(143,721	)	$	(80,017	)
Deposits on potential acquisitions		0		(22,500		)
Other assets		(565	)	(756		)
Liabilities		1,342		938
Acquisition of properties	$	(142,944	)	$	(102,335	)

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Consolidated Statements Of Operations and Comprehensive Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Hotel operating revenues:
Room	$ 167,437	$ 133,152	$ 449,315	$ 356,070
Food and beverage	52,896	50,554	156,298	142,999
Other operating department	15,410	14,256	42,105	37,374
Total hotel operating revenues	235,743	197,962	647,718	536,443
Other income	1,254	1,166	3,693	3,585
Total revenues	236,997	199,128	651,411	540,028
Hotel operating expenses:
Room	39,662	30,920	112,203	86,893
Food and beverage	37,751	34,669	111,488	99,249
Other direct	5,659	5,895	15,843	15,737
Other indirect (Note 8)	54,532	48,411	157,725	136,465
Total hotel operating expenses	137,604	119,895	397,259	338,344
Depreciation and amortization	31,480	27,765	92,911	83,572
Real estate taxes, personal property taxes and insurance	11,254	9,199	32,930	26,470
Ground rent (Note 5)	2,627	2,485	6,613	5,861
General and administrative	5,172	4,185	14,635	12,919
Acquisition transaction costs (Note 3)	156	153	4,057	574
Other expenses	922	668	2,391	1,749
Total operating expenses	189,215	164,350	550,796	469,489
Operating income	47,782	34,778	100,615	70,539
Interest income	2,060	8	2,086	22
Interest expense	(14,110)	(9,856)	(38,391)	(29,566)
Income before income tax expense and discontinued operations	35,732	24,930	64,310	40,995
Income tax expense (Note 9)	(4,943)	(3,125)	(6,920)	(5,670)
Income from continuing operations	30,789	21,805	57,390	35,325
Discontinued operations (Note 3):
Income from operations of property disposed of	0	760	0	441
Income tax expense (Note 9)	0	(244)	0	(112)
Net income from discontinued operations	0	516	0	329
Net income	30,789	22,321	57,390	35,654
Noncontrolling interests:
Redeemable noncontrolling interest in loss of consolidated entity	0	0	0	2
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	(116)	0	(224)	0
Net (income) loss attributable to noncontrolling interests	(116)	0	(224)	2
Net income attributable to the Company	30,673	22,321	57,166	35,656
Distributions to preferred shareholders	(4,166)	(7,402)	(17,567)	(22,550)
Issuance costs of redeemed preferred shares (Note 6)	0	0	(4,417)	(731)
Net income attributable to common shareholders	26,507	14,919	35,182	12,375
Earnings per Common Share - Basic:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.17	$ 0.41	$ 0.15
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.18	$ 0.41	$ 0.15
Earnings per Common Share - Diluted:
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.17	$ 0.41	$ 0.15
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.18	$ 0.41	$ 0.15
Weighted average number of common shares outstanding:
Basic	85,876,584	84,640,196	85,278,331	80,392,686
Diluted	86,056,957	84,752,112	85,449,543	80,559,299
Comprehensive Income:
Net income	30,789	22,321	57,390	35,654
Other comprehensive loss:
Unrealized loss on interest rate derivative instruments (Note 4)	(3,839)	0	(8,534)	0
Comprehensive income	26,950	22,321	48,856	35,654
Noncontrolling interests:
Redeemable noncontrolling interest in loss of consolidated entity	0	0	0	2
Noncontrolling interests of common units in Operating Partnership (Notes 2 and 6)	(103)	0	(195)	0
Comprehensive (income) loss attributable to noncontrolling interests	(103)	0	(195)	2
Comprehensive income attributable to the Company	$ 26,847	$ 22,321	$ 48,661	$ 35,656

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Ground, Land and Building, and Air Rights Leases

Six of the Company’s hotels, San Diego Paradise Point Resort and Spa, Harborside Hyatt Conference Center & Hotel, Indianapolis Marriott Downtown, The Hilton San Diego Resort and Spa, Hotel Solamar and Viceroy Santa Monica are subject to ground leases under non-cancelable operating leases expiring from March 2026 to December 2102. The ground lease at Harborside Hyatt Conference Center & Hotel expires in 2026, but the Company has options to extend for over 50 years to 2077. None of the remaining ground leases expire prior to 2045. The Westin Copley Place is subject to a long term air rights lease which expires on December 14, 2077 and requires no payments through maturity. The ground lease related to the Indianapolis Marriott Downtown requires future ground rent payments of one dollar per year. The ground lease at Viceroy Santa Monica is subject to minimum annual rent increases, resulting in noncash straight-line rent expense of $114 and $342 for the three and nine months endedSeptember 30, 2012, respectively, and $116 and $232 for the three and nine months endedSeptember 30, 2011, respectively, which is included in total ground rent expense below.

Hotel Roger Williams, acquired on October 6, 2010, is subject to a lease of land and building which expires on December 31, 2044. The Company evaluated the terms of the lease agreement and determined the lease to be a capital lease pursuant to applicable GAAP guidance. At acquisition, the fair value of the remaining rent payments of $4,892 was recorded as a capital lease obligation. This obligation, net of amortization, is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Total ground rent expense for the three and nine months endedSeptember 30, 2012 was $2,627 and $6,613, respectively. Total ground rent expense for the three and nine months endedSeptember 30, 2011 was $2,485 and $5,871, respectively, of which zero and $10, respectively, is related to part of the parking lot at Sheraton Bloomington Hotel Minneapolis South, which is included in discontinued operations for all periods presented. 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. Future minimum rent payments (without reflecting future applicable Consumer Price Index increases) are as follows:

2012	$	1,416
2013	5,671
2014	5,684
2015	5,696
2016	5,738
Thereafter	224,683
	$	248,888

Reserve Funds for 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% to 5.0% 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’ furniture, fixtures and equipment. Certain of the agreements require that the Company reserve this cash in separate accounts. As of September 30, 2012, $10,455 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 required capital expenditures under the agreements that do not necessitate that the Company separately reserve cash.

Restricted Cash Reserves

At September 30, 2012, the Company held $16,716 in restricted cash reserves. Included in such amounts are (i) $10,455 of reserve funds relating to the hotels with leases or operating agreements requiring the Company to maintain restricted cash to fund future capital expenditures, (ii) $5,182 deposited in mortgage escrow accounts pursuant to mortgage obligations to pre-fund a portion of certain operating expenses and debt payments and (iii) $1,079 held by insurance 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.

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Long-Term Debt

9 Months Ended

Sep. 30, 2012

Long-term Debt, Other Disclosures [Abstract]

Long-Term Debt

Long-Term Debt

Debt Summary

Debt as of September 30, 2012 and December 31, 2011 consisted of the following:

			Balance Outstanding as of
Debt	Interest Rate	Maturity Date	September 30, 2012		December 31, 2011
Credit facilities
Senior unsecured credit facility	Floating (a)	January 2016 (a)	$	201,000	$	265,000
LHL unsecured credit facility	Floating (b)	January 2016 (b)	8,586		0
Total borrowings under credit facilities			209,586		265,000
Term loans
First Term Loan	Floating (c)	May 2019	177,500		0
Second Term Loan	Floating (c)	August 2017	200,000		0
Total term loans			377,500		0
Massport Bonds
Harborside Hyatt Conference
Center & Hotel (taxable)	Floating (d)	March 2018	5,400		5,400
Harborside Hyatt Conference
Center & Hotel (tax exempt)	Floating (d)	March 2018	37,100		37,100
Total bonds payable			42,500		42,500
Mortgage loans
Hilton San Diego Gaslamp Quarter	5.35%	July 2012 (e)	0		59,600
Hotel Solamar	5.49%	December 2013	60,334		60,900
Hotel Deca	6.28%	August 2014	9,183		9,392
Westin Copley Place	5.28%	September 2015	210,000		210,000
Westin Michigan Avenue	5.75%	April 2016	137,625		138,902
Indianapolis Marriott Downtown	5.99%	July 2016	100,452		101,319
Hotel Roger Williams	6.31%	August 2016	62,816		63,589
Mortgage loans at stated value			580,410		643,702
Unamortized loan premium (f)			138		195
Total mortgage loans			580,548		643,897
Total debt			$	1,210,134	$	951,397

^(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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000 was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

^(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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

^(c)  Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into separate interest rate swap agreements for the full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements).

^(d)  The Massport Bonds are secured by letters of credit issued by the Royal Bank of Scotland that expire in February 2014, pursuant to an amendment to the agreement governing the letters of credit. The Royal Bank of Scotland letters of credit also have threeone-year extension options and are secured by the Harborside Hyatt Conference Center & Hotel. The bonds bear interest based on weekly floating rates. The interest rates as of September 30, 2012 were 0.61% and 0.20% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2011 were 0.75% and 0.12% for the $5,400 and $37,100 bonds, respectively. The Company also incurs an annual letter of credit fee, which effective February 14, 2012 changed from a flat 2.00% to a variable rate based on an applicable margin as defined in the Company's senior unsecured credit agreement.

^(e)  The Company repaid the mortgage loan on March 30, 2012 through borrowings on its senior unsecured credit facility.

^(f)  Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

A summary of the Company’s interest expense and weighted average interest rates for variable rate debt for the three and nine months endedSeptember 30, 2012 and 2011 is as follows:

		For the three months ended						For the nine months ended
		September 30,						September 30,
		2012			2011			2012			2011
Interest Expense:
Interest incurred	$	13,611		$	9,781		$	37,296		$	29,251
Amortization of deferred financing costs		526			170			1,354			570
Capitalized interest		(27)			(95)			(259)			(255)
Interest expense	$	14,110		$	9,856		$	38,391		$	29,566
Weighted Average Interest Rates for Variable Rate Debt:
Senior unsecured credit facility		2.3	%		N/A			2.2	%		1.1	%
LHL unsecured credit facility		2.2	%		N/A			2.1	%		1.1	%
Massport Bonds		0.2	%		0.2	%		0.3	%		0.2	%

The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies, which is classified within level 2 of the fair value hierarchy (see Note 2). Rates and credit spreads take into consideration general market conditions and maturity.

The carrying value and estimated fair value of the Company’s debt as of September 30, 2012 and December 31, 2011 were as follows:

	September 30,		December 31,
	2012		2011
Carrying value	$	1,210,134	$	951,397
Estimated fair value	$	1,228,640	$	954,299

See Note 3 for consideration of the fair value of the Company's note receivable. The carrying amounts of the Company’s other financial instruments approximate fair value because of the relatively short maturities of these instruments.

As of September 30, 2012, the Company is in compliance with all debt covenants, current on all loan payments and not otherwise in default under the credit facilities, term loan, bonds or mortgage loans. Depending on operating results and lender requirements, one of the mortgaged properties may be subject to a cash trap (see "Mortgage Loans" below) as a result of the impact of a recent renovation on hotel operations. This cash trap will not have a material impact on the cash flow or the operations of the Company.

Credit Facilities

On December 14, 2011, the Company entered into a new $750,000 senior unsecured credit facility with a syndicate of banks that replaced the Company's $450,000 credit facility that was scheduled to mature on April 13, 2012. The new credit facility matures on January 30, 2016, subject to a one-year extension that the Company may exercise at its option, pursuant to certain terms and conditions, including payment of an extension fee. The new credit facility includes an accordion feature which, subject to certain conditions, entitles the Company to request additional lender commitments, allowing for total commitments up to $1,000,000. 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 plus an applicable margin. Additionally, the Company is required to pay a variable unused commitment fee of 0.30% or 0.40% of the unused portion of the credit facility, depending on the average daily unused portion of the credit facility.

LHL has a $25,000 unsecured revolving credit facility to be used for working capital and general lessee corporate purposes. On December 14, 2011, LHL refinanced its credit facility that was scheduled to mature on April 13, 2012, extending the maturity date to January 30, 2016, subject to a one-year extension 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 plus an applicable margin. Additionally, LHL is required to pay a variable unused commitment fee of 0.30% or 0.40% 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 covenants relating to net worth requirements, debt ratios and fixed charge coverage and other limitations that restrict the Company's ability to make distributions or other payments to its shareholders upon events of default.

Term Loans

On May 16, 2012, the Company entered into a new $177,500 unsecured loan with a seven-year term maturing on May 16, 2019 (the “First Term Loan”). The First Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full seven-year term (see “Derivative and Hedging Activities” below). The proceeds were used to redeem the Company's Series D Preferred Shares and Series E Preferred Shares on May 21, 2012 (see Note 6) and for general corporate purposes.

On August 2, 2012, the Company entered into a new $300,000 unsecured loan with a five-year term maturing on August 2, 2017, including a one-year extension subject to certain conditions (the "Second Term Loan"). At closing, $200,000 of the Second Term Loan proceeds were funded. The Company has the flexibility to draw the remaining $100,000 of proceeds anytime during the 95-day post closing period. The Second Term Loan bears interest at a variable rate, but was hedged to a fixed interest rate for the full five-year term (see "Derivative and Hedging Activities below"). The proceeds were used to reduce amounts outstanding under the Company's senior unsecured facility and for general corporate purposes.

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 the Company's ability to make distributions or other payments to its shareholders upon events of default.

Derivative and Hedging Activities

The Company enters into interest rate swap agreements to hedge against interest rate fluctuations. Unrealized gains and losses on the effective portion of hedging instruments are reported in other comprehensive income (loss) ("OCL"). 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) ("AOCL") 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 May 16, 2012, the Company entered into three interest rate swap agreements with an aggregate notional amount of $177,500 for the First Term Loan's full seven-year term, resulting in a fixed all-in interest rate of 3.87% at the Company's current leverage ratio (as defined in the agreement). Effective August 2, 2012, the Company entered into five interest rate swap agreements with an aggregate notional amount of $300,000, of which $200,000 was drawn as of September 30, 2012, for the Second Term Loan's full five-year term, including a one-year extension subject to certain conditions, resulting in a fixed all-in interest rate of 2.68% at the Company's current leverage ratio (as defined in the agreement). The Company has designated its pay-fixed, receive-floating interest rate swap derivatives as cash flow hedges.

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 three and nine months endedSeptember 30, 2012:

	Amount of Loss Recognized in OCL on Derivative Instruments				Location of Loss Reclassified from AOCL into Income	Amount of Loss Reclassified from AOCL into Income
	(Effective Portion)				(Effective Portion)	(Effective Portion)
	For the three months ended		For the nine months ended			For the three months ended		For the nine months ended
	September 30, 2012		September 30, 2012			September 30, 2012		September 30, 2012
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	3,839	$	8,534	Interest expense	$	780	$	1,082

During the three and nine months endedSeptember 30, 2012, the Company did not have any hedge ineffectiveness or amounts that were excluded from the assessment of hedge effectiveness recorded in earnings.

The Company records all derivative instruments at fair value in the consolidated balance sheets. The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows. 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 is classified within level 2 of the fair value hierarchy (see Note 2). As of September 30, 2012, there was $8,534 in cumulative unrealized loss, of which $8,505 was included in AOCL and $29 was attributable to noncontrolling interests. The Company expects that approximately $3,508 will be reclassified from AOCL and noncontrolling interests and recognized as a reduction to income in the next 12 months.

The following table presents the location and fair value of the Company's derivative financial instruments as reported in the consolidated balance sheets as of September 30, 2012:

		Fair Value
	Consolidated Balance Sheet Location	September 30, 2012
Derivatives designated as hedging instruments:
Liability derivatives:
Interest rate swaps	Accounts payable and accrued expenses	$	8,534

Mortgage Loans

On March 30, 2012, the Company repaid without fee or penalty the Hilton San Diego Gaslamp Quarter mortgage loan in the amount of $59,600 plus accrued interest through borrowings on its senior unsecured credit facility. The loan was due to mature in July 2012.

The mortgage loans contain debt service coverage ratio thresholds 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 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 the property again complies with the specified debt service coverage ratio or the mortgage is paid off.

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Commitments And Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments And Contingencies [Abstract]

Future Minimum Rent Payments

Future minimum rent payments (without reflecting future applicable Consumer Price Index increases) are as follows:

2012	$	1,416
2013	5,671
2014	5,684
2015	5,696
2016	5,738
Thereafter	224,683
	$	248,888

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company paid the following common and preferred dividends subsequent to September 30, 2012:

	Dividend per		For the Quarter	Record	Payable
Security Type	Share/Unit (1)		Ended	Date	Date
Common Shares/Units	$	0.20	September 30, 2012	September 28, 2012	October 15, 2012
7 ¼% Series G Preferred Shares	$	0.45	September 30, 2012	October 1, 2012	October 15, 2012
7 ½% Series H Preferred Shares	$	0.47	September 30, 2012	October 1, 2012	October 15, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

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LHL

9 Months Ended

Sep. 30, 2012

Real Estate Investment Trust, Operating Support [Abstract]

LHL

LHL

Substantially all of the Company’s revenues are derived from operating revenues generated by the hotels, all of which are leased by LHL.

Other indirect hotel operating expenses, including amounts related to discontinued operations, consist of the following expenses incurred by the hotels:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
General and administrative	$	17,029	$	14,774	$	49,800	$	41,936
Sales and marketing	12,519		11,483		37,659		33,102
Repairs and maintenance	7,635		6,801		23,045		19,776
Utilities and insurance	6,837		6,322		19,501		17,432
Management and incentive fees	8,360		6,984		21,464		18,540
Franchise fees	1,737		1,617		5,077		4,676
Other expenses	415		430		1,179		1,291
Total other indirect expenses	54,532		48,411		157,725		136,753
Other indirect expenses from discontinued operations	0		0		0		(288		)
Other indirect expenses from continuing operations	$	54,532	$	48,411	$	157,725	$	136,465

As of September 30, 2012, LHL leased all 38 hotels owned by the Company as follows:

1.	Harborside Hyatt Conference Center & Hotel	20.	Le Parc Suite Hotel
2.	Hotel Viking	21.	Westin Michigan Avenue
3.	Topaz Hotel	22.	Hotel Sax Chicago
4.	Hotel Rouge	23.	Alexis Hotel
5.	Hotel Madera	24.	Hotel Solamar
6.	Hotel Helix	25.	Gild Hall
7.	The Liaison Capitol Hill	26.	Hotel Amarano Burbank
8.	Lansdowne Resort	27.	San Diego Paradise Point Resort and Spa
9.	Hotel George	28.	Le Montrose Suite Hotel
10.	Indianapolis Marriott Downtown	29.	Sofitel Washington, DC Lafayette Square
11.	Hilton Alexandria Old Town	30.	Hotel Monaco San Francisco
12.	Chaminade Resort and Conference Center	31.	Westin Philadelphia
13.	Hilton San Diego Gaslamp Quarter	32.	Embassy Suites Philadelphia - Center City
14.	The Grafton on Sunset	33.	Hotel Roger Williams
15.	Onyx Hotel	34.	Chamberlain West Hollywood
16.	Westin Copley Place	35.	Viceroy Santa Monica
17.	Hotel Deca	36.	Villa Florence
18.	The Hilton San Diego Resort and Spa	37.	Park Central Hotel
19.	Donovan House	38.	Hotel Palomar, Washington, DC

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Equity Incentive Plan (Summary Of The Company's Long-Term Performance-Based Share Awards) (Details) (Long-Term Performance-Based Share Awards [Member], USD $)	0 Months Ended			9 Months Ended
	Jan. 26, 2012	Jan. 02, 2012	Apr. 28, 2009	Sep. 30, 2012
Long-Term Performance-Based Share Awards [Member]
Equity Incentive Plan [Line Items]
Nonvested at January 1, 2012, Number of Shares		179,338		179,338
Nonvested at January 1, 2012, Weighted - Average Grant Date Fair Value		$ 31.94		$ 31.94
Granted, Number of Shares	79,823		70,344	111,496
Granted, Weighted - Average Grant Date Fair Value				$ 30.08
Vested, Number of Shares		(23,300)		(28,055)
Vested, Weighted - Average Grant Date Fair Value				$ 20.27
Forfeited, Number of Shares				0
Forfeited, Weighted - Average Grant Date Fair Value				$ 0.00
Nonvested at September 30, 2012, Number of Shares				262,779	[1]
Nonvested at September 30, 2012, Weighted - Average Grant Date Fair Value				$ 32.39	[1]
Future performance share grants				50,000

[1] Amount excludes 50,000 shares that have been committed for future performance share grants. Fair value will be estimated at the beginning of the performance measurement period on July 1, 2014.

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Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Equity

Equity

Common Shares of Beneficial Interest

On January 1, 2012, the Company issued 8,928 common shares of beneficial interest and authorized an additional 8,928 deferred shares to the independent members of its Board of Trustees for their earned 2011 compensation pursuant to award arrangements existing on or before January 1, 2011. These common shares of beneficial interest were issued under the 2009 Plan.

On January 1, 2012, the Company issued 69,899 restricted common shares of beneficial interest to an executive related to long-term performance-based awards granted on April 28, 2009 (see Note 7 for additional details including vesting information). These common shares of beneficial interest were issued under the 2009 Plan.

On January 19, 2012, the Company issued 10,535 common shares of beneficial interest related to the resignation of Kelly Kuhn from its Board of Trustees for accumulated deferred shares issued as compensation for years 2007 through 2011. These common shares of beneficial interest were issued under the 2009 Plan.

On January 25 and 26, 2012, the Company issued 70,449 restricted common shares of beneficial interest to the Company’s executives and employees. On July 19, 2012, the Company issued 695 restricted common shares of beneficial interest to the Company’s employees. The restricted shares vest over three years, starting January 1, 2013, subject to continued employment. These common shares of beneficial interest were issued under the 2009 Plan.

From February 1, 2012 through February 14, 2012, the Company sold 1,714,939 common shares of beneficial interest, par value $0.01 per share, under the Company's equity distribution agreement dated March 4, 2011 (the “2011 Agreement”) with Raymond James & Associates, Inc. (the “Manager”). After deducting the Manager’s discounts and commissions of $589, the Company raised net proceeds of $46,566. The net proceeds were used to pay down amounts outstanding under the Company’s senior unsecured credit facility and for general corporate purposes.

On February 27, 2012, a member of the Board of Trustees exercised 5,000 options to purchase common shares of beneficial interest. These common shares of beneficial interest were issued under the 1998 Share Option and Incentive Plan, which was in place prior to the 2009 Plan.

From May 18, 2012 through May 30, 2012, the Company sold 641,069 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of $219, the Company raised net proceeds of $17,328. On August 8, 2012, the Company sold 3,100 common shares of beneficial interest, par value $0.01 per share, under the 2011 Agreement. After deducting the Manager's discounts and commissions of $1, the Company raised net proceeds of $83. The net proceeds were used to pay down amounts outstanding under the Company's senior unsecured credit facility and under the LHL unsecured credit facility, and for general corporate purposes. During the nine months endedSeptember 30, 2012, the Company incurred additional offering costs of $168 related to maintaining the 2011 Agreement. As of September 30, 2012, the Company had availability under the 2011 Agreement to issue and sell common shares of beneficial interest having an aggregate offering price of up to $146,024.

Common Dividends

The Company paid the following dividends on common shares/units during the nine months endedSeptember 30, 2012:

Dividend per Share/Unit		For the Quarter Ended	Record Date	Payable Date
$	0.11	December 31, 2011	December 31, 2011	January 13, 2012
$	0.11	March 31, 2012	March 31, 2012	April 13, 2012
$	0.20	June 30, 2012	June 29, 2012	July 13, 2012

Treasury Shares

Treasury shares are accounted for under the cost method. During the nine months endedSeptember 30, 2012, the Company received 46,670 common shares of beneficial interest related to executives and employees surrendering shares to pay taxes at the time restricted shares vested.

On August 29, 2011, the Company’s Board of Trustees 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 September 30, 2012, the Company had availability under the Repurchase Program to acquire up to $75,498 of common shares of beneficial interest. However, the Company is not currently authorized by its Board of Trustees to repurchase or offer to repurchase any common shares. If authorized by its Board of Trustees, the Company may resume using the Repurchase Program on a future date.

During the nine months endedSeptember 30, 2012, the Company re-issued 8,928 treasury shares related to earned 2011 compensation for the Board of Trustees in January 2012, 10,535 treasury shares related to the issuance of common shares of beneficial interest to a member of the Board of Trustees for accumulated deferred shares issued as compensation for years 2007 through 2011 upon her resignation in January 2012, 141,043 treasury shares related to the grants of restricted common shares of beneficial interest in January 2012 and July 2012 and 1,260,256 treasury shares related to the sale of common shares of beneficial interest under the 2011 Agreement in February 2012.

At September 30, 2012, there were 15,482 common shares of beneficial interest in treasury.

Preferred Shares

On March 14, 2011, the Company redeemed all 1,100,000 outstanding 8 ³/₈% Series B Cumulative Redeemable Preferred Shares ("Series B Preferred Shares") for $27,500 ($25.00 per share) plus accrued distributions through March 14, 2011 of $473. The redemption value of the Series B Preferred Shares exceeded the carrying value of the Series B Preferred Shares by $731, which is included in the determination of net income attributable to common shareholders for the nine months endedSeptember 30, 2011. The $731 represents the offering costs related to the Series B Preferred Shares.

On May 21, 2012, the Company redeemed all 3,170,000 outstanding 7 ½% Series D Cumulative Redeemable Preferred Shares ("Series D Preferred Shares") and all 3,500,000 outstanding 8% Series E Cumulative Redeemable Preferred Shares ("Series E Preferred Shares") for $79,250 and $87,500 ($25.00 per share), respectively, plus accrued distributions through May 21, 2012 of $842 and $992, respectively. The redemption values of the Series D Preferred Shares and Series E Preferred Shares exceeded their carrying values by $2,273 and $2,144, respectively, which are included in the determination of net income attributable to common shareholders for the nine months endedSeptember 30, 2012. The $2,273 and $2,144 represent the offering costs related to the Series D Preferred Shares and Series E Preferred Shares, respectively.

The 7 ¼% Series G Cumulative Redeemable Preferred Shares (“Series G Preferred Shares”) and 7½% Series H Cumulative Redeemable Preferred Shares ("Series H 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) the full cumulative distributions on the Preferred Shares for the current and 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. The Company currently has the option to redeem the Series G 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 to and including the date of redemption. The Company may not optionally redeem the Series H Preferred Shares prior to January 24, 2016, except in limited circumstances relating to the Company’s continuing qualification as a REIT or as discussed below. After that date, the Company may, at its option, redeem the Series H 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 to and including the date of redemption. 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 Amex Equities or the NASDAQ Stock Market, or any successor exchanges, the Company may, at its option, redeem the Series H 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 to and including the date of redemption. If the Company does not exercise its right to redeem the Series H Preferred Shares upon a change of control, the holders of Series H 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.

The following Preferred Shares were outstanding as of September 30, 2012:

Security Type	Number of Shares
7 ¼% Series G Preferred Shares	6,348,888
7 ½% Series H Preferred Shares	2,750,000

Preferred Dividends

The Company paid the following dividends on preferred shares during the nine months endedSeptember 30, 2012:

	Dividend per		For the
Security Type	Share (1)		Quarter Ended	Record Date	Payable Date
7 ½% Series D	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
8% Series E	$	0.50	December 31, 2011	January 1, 2012	January 13, 2012
7 ¼% Series G	$	0.45	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series H	$	0.47	December 31, 2011	January 1, 2012	January 13, 2012
7 ½% Series D	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
8% Series E	$	0.50	March 31, 2012	April 1, 2012	April 13, 2012
7 ¼% Series G	$	0.45	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series H	$	0.47	March 31, 2012	April 1, 2012	April 13, 2012
7 ½% Series D	$	0.27	June 30, 2012	May 21, 2012	May 21, 2012
8% Series E	$	0.28	June 30, 2012	May 21, 2012	May 21, 2012
7 ¼% Series G	$	0.45	June 30, 2012	July 1, 2012	July 13, 2012
7 ½% Series H	$	0.47	June 30, 2012	July 1, 2012	July 13, 2012

⁽¹⁾  Amounts are rounded to the nearest whole cent for presentation purposes.

Noncontrolling Interests of Common Units in Operating Partnership

As of September 30, 2012, the Operating Partnership had 296,300 common units of limited partnership interest outstanding, representing a 0.3% partnership interest held by the limited partners. As of September 30, 2012, approximately $7,908 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 $7,908 is based on the Company's closing common share price of $26.69 on September 30, 2012, which is assumed to be equal to the value provided to the limited partners upon liquidation of the Operating Partnership. The outstanding common units of limited partnership interest are subject to a required hold period that ends on December 28, 2013, after which they are convertible into a like number of common shares of beneficial interest of the Company.

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 nine months ended
	September 30,
	2012			2011
Net income attributable to common shareholders	$	35,182		$	12,375
Decrease in additional paid-in capital from adjustments to noncontrolling interests of common units in Operating Partnership	(785		)	0
Change in the Company's ownership interest from net income and adjustments to noncontrolling interests	$	34,397		$	12,375

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Equity Incentive Plan

9 Months Ended

Sep. 30, 2012

Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract]

Equity Incentive Plan

Equity Incentive Plan

At the 2009 Annual Meeting of Shareholders held on April 23, 2009, the common shareholders approved the 2009 Plan, under which the Company may 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 2009 Plan provides for a maximum of 1,800,000 common shares of beneficial interest to be issued in the form of share options, share appreciation rights, restricted share awards, performance shares, phantom shares and other equity-based awards. In addition, the maximum number of common shares subject to awards of any combination that may be granted under the 2009 Plan during any fiscal year to any one individual is limited to 500,000 shares. The 2009 Plan terminates on January 28, 2019. The 2009 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 market value of the common shares on the date of grant. Restricted share awards and options under the 2009 Plan vest over a period determined by the Compensation Committee of the Board of Trustees, generally a three to five year period, with certain awards vesting over periods of up to nine years. The duration of each option is also determined by the Compensation Committee, subject to applicable laws and regulations. There were no stock options outstanding as of September 30, 2012. At September 30, 2012, there were 1,428,969 common shares available for future grant under the 2009 Plan.

Service Condition Nonvested Share Awards

From time to time, the Company awards nonvested shares under the 2009 Plan to members of the Board of Trustees, executives, and employees. The nonvested shares vest over three to nine years based on continued service or employment. The Company measures compensation costs for the nonvested shares based upon the fair market value of its common shares at the date of grant. Compensation costs are recognized on a straight-line basis over the vesting period and are included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive income.

A summary of the Company’s service condition nonvested shares as of September 30, 2012 is as follows:

	Number of Shares		Weighted - Average Grant Date Fair Value
Nonvested at January 1, 2012	384,754		$	25.07
Granted	71,144		27.02
Vested	(118,421	)	16.45
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	337,477		$	28.50

⁽¹⁾  Amount excludes 49,406 long-term performance-based shares which were earned but nonvested due to a service condition as of September 30, 2012.

As of September 30, 2012 and December 31, 2011, there were $6,841 and $7,087, respectively, of total unrecognized compensation costs related to nonvested share awards. As of September 30, 2012 and December 31, 2011, these costs were expected to be recognized over a weighted–average period of 2.8 and 3.3 years, respectively. The total fair value of shares vested (calculated as number of shares multiplied by vesting date share price) during the three and nine months endedSeptember 30, 2012 was $1,483 and $3,118, respectively, and during the three and nine months endedSeptember 30, 2011 was zero and $7,089, respectively. The compensation costs (net of forfeitures) that have been included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $702 and $2,094 for the three and nine months endedSeptember 30, 2012, respectively, and $610 and $2,076 for the three and nine months endedSeptember 30, 2011, respectively.

Long-Term Performance-Based Share Awards

On April 28, 2009, the Company’s Board of Trustees granted a target of 70,344 performance-based awards of nonvested shares to executives. The actual amounts of the awards were to range from 0% to 200% of the target amounts, depending on performance. On January 20, 2011, the Company's former Chief Financial Officer, upon his termination, earned a net 107.6% of his 32,118 target number of shares, or 34,570 shares, based on the performance period of January 1, 2009 through January 20, 2011. All of his earned shares vested immediately on January 20, 2011. No additional shares were earned or vested related to the former Chief Financial Officer subsequent to this date. The actual amounts of the remaining 38,226 awards held by the Company's Chief Executive Officer were determined on January 1, 2012, based on the performance period of January 1, 2009 through December 31, 2011, in accordance with the terms of his agreement. On January 1, 2012, the executive earned 182.9% of his target number of shares, or 69,899 shares. One-third of the earned shares, or 23,300 shares, vested immediately on January 1, 2012 and the remaining two-thirds of the earned shares, or 46,599 shares, will vest in equal amounts on January 1, 2013 and January 1, 2014 based on continued employment. The executive received a cash payment of $56 on the earned shares equal to the value of all dividends paid on common shares from December 31, 2008 until the determination date, January 1, 2012. As of January 1, 2012, the executive is entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting.

On January 26, 2012, the Company’s Board of Trustees granted a target of 79,823 performance-based awards of nonvested shares to executives. The actual amounts of the awards will be determined on January 1, 2015, based on the performance period of January 1, 2012 through December 31, 2014, in accordance with the terms of the agreements. The actual amounts of the awards will range from 0% to 200% of the target amounts, depending on the performance analysis stipulated in the agreements, and none of the performance shares are outstanding until issued in accordance with award agreements based on performance. After the actual amounts of the awards are determined (or earned) on January 1, 2015, the earned shares will be issued and outstanding with a portion subject to further vesting based on continued employment. The executives will receive cash payments on the earned shares, including those subject to further vesting, equal to the value of all dividends paid on common shares from December 31, 2011 until the determination date, January 1, 2015. Such amounts will be paid to the awardees on or about January 1, 2015. Thereafter, the executives will be entitled to receive dividends as declared and paid on the earned shares and to vote the shares, including those shares subject to further vesting.

The fair values of the performance-based awards were determined by the Company using data under the Monte Carlo valuation method provided by a third-party consultant. The measurement of performance for the 2012 awards is substantially the same as the performance measurement for previously granted long-term performance-based share awards. 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 performance 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.

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
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	%

A summary of the Company’s long-term performance-based share awards as of September 30, 2012 is as follows:

	Number of Shares		Weighted- Average Grant Date Fair Value
Nonvested at January 1, 2012	179,338		$	31.94
Granted	111,496		30.08
Vested	(28,055	)	20.27
Forfeited	0		0.00
Nonvested at September 30, 2012 (1)	262,779		$	32.39

⁽¹⁾  Amount excludes 50,000 shares that have been committed for future performance share grants. Fair value will be estimated at the beginning of the performance measurement period on July 1, 2014.

As of September 30, 2012 and December 31, 2011, there were $5,384 and $4,047, respectively, of total unrecognized compensation costs related to long-term performance-based share awards. As of September 30, 2012 and December 31, 2011, these costs were expected to be recognized over a weighted–average period of 2.8 years. As of September 30, 2012 and December 31, 2011, there were 122,325 and 94,270 long-term performance-based share awards vested, respectively. Additionally, there were 49,406 and 7,562 long-term performance-based awards earned but nonvested due to a service condition as of September 30, 2012 and December 31, 2011, respectively. The compensation costs (net of forfeitures) related to long-term performance-based share awards that have been included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income were $501 and $1,504 for the three and nine months endedSeptember 30, 2012, respectively, and $382 and $1,043 for the three and nine months endedSeptember 30, 2011, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Expense (Benefit) [Abstract]

Income Taxes

Income Taxes

Income tax expense was comprised of the following for the three and nine months endedSeptember 30, 2012 and 2011:

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012			2011
LHL’s income tax expense	$	4,669	$	2,988		$	6,936		$	4,931
Operating Partnership's income tax expense (benefit)	274		381			(16		)	851
Total income tax expense	4,943		3,369			6,920			5,782
Income tax expense from discontinued operations	0		(244		)	0			(112		)
Income tax expense from continuing operations	$	4,943	$	3,125		$	6,920		$	5,670

The Company has estimated LHL’s income tax expense for the nine months endedSeptember 30, 2012 using an estimated combined federal and state effective tax rate of 39.5%. From time to time, the Company may be subject to federal, state or local tax audits in the normal course of business.

During the second quarter of 2012, the Company resolved a previously disclosed uncertain tax position as a result of a settlement with the applicable taxing authority.  Accordingly, the Company has no material unrecognized income tax benefits or related interest and penalties accrued as of September 30, 2012.

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Earnings Per Common Share (Computation Of Basic And Diluted Earnings Per Common Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share [Abstract]
Net income attributable to common shareholders before discontinued operations	$ 26,507	$ 14,403	$ 35,182	$ 12,046
Discontinued operations	0	516	0	329
Net income attributable to common shareholders	26,507	14,919	35,182	12,375
Dividends paid on unvested restricted shares	(78)	(43)	(213)	(126)
Undistributed earnings attributable to unvested restricted shares	(41)	(25)	0	0
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$ 26,388	$ 14,851	$ 34,969	$ 12,249
Weighted average number of common shares - basic	85,876,584	84,640,196	85,278,331	80,392,686
Stock options and compensation-related shares	180,373	111,916	171,212	166,613
Weighted average number of common shares - diluted	86,056,957	84,752,112	85,449,543	80,559,299
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.17	$ 0.41	$ 0.15
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.18	$ 0.41	$ 0.15
Net income attributable to common shareholders before discontinued operations and excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.17	$ 0.41	$ 0.15
Discontinued operations	$ 0.00	$ 0.01	$ 0.00	$ 0.00
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares	$ 0.31	$ 0.18	$ 0.41	$ 0.15

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Subsequent Events Dividends (Details) (USD $)	3 Months Ended			9 Months Ended		3 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2012 Common Shares Of Beneficial Interest [Member]		Dec. 31, 2012 7 1/4% Series G Preferred Shares [Member]		Sep. 30, 2012 7 1/4% Series G Preferred Shares [Member]	Mar. 31, 2012 7 1/4% Series G Preferred Shares [Member]		Dec. 31, 2012 7 1/2% Series H Preferred Shares [Member]		Sep. 30, 2012 7 1/2% Series H Preferred Shares [Member]	Mar. 31, 2012 7 1/2% Series H Preferred Shares [Member]
Subsequent Event [Line Items]
Common Dividend per Share/Unit	$ 0.20	$ 0.11	$ 0.11	$ 0.51	$ 0.33	$ 0.20	[1]
Preferred Dividend per Share/Unit								$ 0.45	[1]	$ 0.45	$ 0.45	[1]	$ 0.47	[1]	$ 0.47	$ 0.47	[1]
For the Quarter Ended	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011			Sep. 30, 2012		Sep. 30, 2012		Jun. 30, 2012	Dec. 31, 2011		Sep. 30, 2012		Jun. 30, 2012	Dec. 31, 2011
Record Date	Jun. 29, 2012	Mar. 31, 2012	Dec. 31, 2011			Sep. 28, 2012		Oct. 01, 2012		Jul. 01, 2012	Jan. 01, 2012		Oct. 01, 2012		Jul. 01, 2012	Jan. 01, 2012
Payable Date	Jul. 13, 2012	Apr. 13, 2012	Jan. 13, 2012			Oct. 15, 2012		Oct. 15, 2012		Jul. 13, 2012	Jan. 13, 2012		Oct. 15, 2012		Jul. 13, 2012	Jan. 13, 2012

[1] Amounts are rounded to the nearest whole cent for presentation purposes.

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Income Taxes (Summary Of Income Tax Benefit) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Total income tax expense (benefit)	$ 4,943	$ 3,369	$ 6,920	$ 5,782
Income tax expense from discontinued operations	0	(244)	0	(112)
Income tax expense from continuing operations	4,943	3,125	6,920	5,670
LHL [Member]
Total income tax expense (benefit)	4,669	2,988	6,936	4,931
Operating Partnership [Member]
Total income tax expense (benefit)	$ 274	$ 381	$ (16)	$ 851

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Investment In Hotel Properties (Summary Of Acquisitions) (Details)	9 Months Ended
	Sep. 30, 2012
Viceroy Santa Monica [Member]
Investment In Hotel Properties [Line Items]
Acquisition Date	March 16, 2011
Villa Florence [Member]
Investment In Hotel Properties [Line Items]
Acquisition Date	October 5, 2011
Park Central Hotel [Member]
Investment In Hotel Properties [Line Items]
Acquisition Date	December 29, 2011

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Equity (Preferred Shares Outstanding) (Details)	Sep. 30, 2012	Dec. 31, 2011
Class of Stock [Line Items]
Number of shares	9,098,888	15,768,888
7 1/4% Series G Preferred Shares [Member]
Class of Stock [Line Items]
Number of shares	6,348,888
7 1/2% Series H Preferred Shares [Member]
Class of Stock [Line Items]
Number of shares	2,750,000

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Investment In Hotel Properties (Tables)

9 Months Ended

Sep. 30, 2012

Investments [Abstract]

Summary Of Acquisitions

Property	Acquisition Date
Viceroy Santa Monica	March 16, 2011
Villa Florence	October 5, 2011
Park Central Hotel	December 29, 2011

Condensed Pro Forma Financial Information

The unaudited condensed pro forma financial information for the three and nine months endedSeptember 30, 2011 is as follows:

	For the three months ended		For the nine months ended
	September 30, 2011		September 30, 2011
	(unaudited)		(unaudited)
Total revenues	$	223,790	$	610,703
Net income	$	23,737	$	37,521
Net income attributable to common shareholders	$	16,335	$	14,242
Earnings per common share - basic	$	0.19	$	0.17
Earnings per common share - diluted	$	0.19	$	0.17
Weighted average number of common shares outstanding:
Basic	84,652,730		84,687,289
Diluted	84,764,646		84,853,902

Summary Of The Results Of The Properties Classified In Discontinued Operations

The following is a summary of the results of the properties classified in discontinued operations:

	For the three months ended			For the nine months ended
	September 30, 2011			September 30, 2011
Operating revenues	$	0		$	495
Operating expenses		0		814
Loss from operations before gain		0		(319		)
Gain on sale		760		760
Income from operations		760		441
Income tax expense		(244	)	(112		)
Net income from discontinued operations	$	516		$	329

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LHL (Tables)

9 Months Ended

Sep. 30, 2012

Real Estate Investment Trust, Operating Support [Abstract]

Summary Of Other Indirect Hotel Operating Expenses

Other indirect hotel operating expenses, including amounts related to discontinued operations, consist of the following expenses incurred by the hotels:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2012		2011		2012		2011
General and administrative	$	17,029	$	14,774	$	49,800	$	41,936
Sales and marketing	12,519		11,483		37,659		33,102
Repairs and maintenance	7,635		6,801		23,045		19,776
Utilities and insurance	6,837		6,322		19,501		17,432
Management and incentive fees	8,360		6,984		21,464		18,540
Franchise fees	1,737		1,617		5,077		4,676
Other expenses	415		430		1,179		1,291
Total other indirect expenses	54,532		48,411		157,725		136,753
Other indirect expenses from discontinued operations	0		0		0		(288		)
Other indirect expenses from continuing operations	$	54,532	$	48,411	$	157,725	$	136,465

Schedule of Hotels Owned [Table Text Block]

As of September 30, 2012, LHL leased all 38 hotels owned by the Company as follows:

1.	Harborside Hyatt Conference Center & Hotel	20.	Le Parc Suite Hotel
2.	Hotel Viking	21.	Westin Michigan Avenue
3.	Topaz Hotel	22.	Hotel Sax Chicago
4.	Hotel Rouge	23.	Alexis Hotel
5.	Hotel Madera	24.	Hotel Solamar
6.	Hotel Helix	25.	Gild Hall
7.	The Liaison Capitol Hill	26.	Hotel Amarano Burbank
8.	Lansdowne Resort	27.	San Diego Paradise Point Resort and Spa
9.	Hotel George	28.	Le Montrose Suite Hotel
10.	Indianapolis Marriott Downtown	29.	Sofitel Washington, DC Lafayette Square
11.	Hilton Alexandria Old Town	30.	Hotel Monaco San Francisco
12.	Chaminade Resort and Conference Center	31.	Westin Philadelphia
13.	Hilton San Diego Gaslamp Quarter	32.	Embassy Suites Philadelphia - Center City
14.	The Grafton on Sunset	33.	Hotel Roger Williams
15.	Onyx Hotel	34.	Chamberlain West Hollywood
16.	Westin Copley Place	35.	Viceroy Santa Monica
17.	Hotel Deca	36.	Villa Florence
18.	The Hilton San Diego Resort and Spa	37.	Park Central Hotel
19.	Donovan House	38.	Hotel Palomar, Washington, DC

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Equity (Treasury Shares) (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended			9 Months Ended	0 Months Ended	6 Months Ended
	Jan. 19, 2012	Jan. 02, 2012	Aug. 29, 2011	Sep. 30, 2012	Feb. 14, 2012 2011 Agreement [Member]	Jul. 19, 2012 Restricted Stock [Member]
Equity [Line Items]
Common shares surrendered and forfeited by executives and employees				46,670
Stock repurchase program, authorized			$ 100,000
Issuance of shares of beneficial interest from treasury	10,535	8,928			1,260,256	141,043
Common shares held in treasury				15,482
Stock repurchase program, remaining authorized				$ 75,498

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Long-Term Debt Term Loan, Derivative and Hedging Activities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended		9 Months Ended
	Aug. 02, 2012	May 16, 2012	Sep. 30, 2012 Term Loan	Aug. 02, 2012 Term Loan	May 16, 2012 Term Loan	Sep. 30, 2012 Designated as Hedging Instrument [Member] Interest Rate Swap [Member]	Aug. 02, 2012 Designated as Hedging Instrument [Member] Interest Rate Swap [Member] Agreements	May 16, 2012 Designated as Hedging Instrument [Member] Interest Rate Swap [Member] Agreements
Debt Instrument [Line Items]
Debt instrument term	5 years	7 years
Term loan extension option period			1 year
Notional amount drawn						$ 200,000
Number of interest rate swap agreements							5	3
Interest rate swap aggregate notional amount							300,000	177,500
Fixed interest rate				2.68%	3.87%
Derivative change in fair value recorded in other comprehensive loss						8,534
Derivative change in fair value recorded in other comprehensive loss attributable to noncontrolling interests						29
Unrealized loss included in accumulated other comprehensive loss						$ 8,505

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Consolidated Statements Of Equity (USD $) In Thousands, unless otherwise specified	Total	Preferred Shares [Member]	Common Shares Of Beneficial Interest [Member]	Treasury Shares [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Distributions In Excess Of Retained Earnings [Member]	Total Shareholders' Equity [Member]	Total Noncontrolling Interests [Member]	Noncontrolling Interest In Consolidated Entity [Member]	Noncontrolling Interests Of Common Units In Operating Partnership [Member]
Balance at Dec. 31, 2010	$ 1,443,500	$ 141	$ 731	$ (28)	$ 1,659,258	$ 0	$ (216,635)	$ 1,443,467	$ 33	$ 33	$ 0
Issuance of shares, net of offering costs	394,007	28	120	258	393,601	0	0	394,007	0	0	0
Redemption of preferred shares	(27,500)	(11)	0	0	(26,758)	0	(731)	(27,500)	0	0	0
Repurchase of common shares into treasury	(21,588)	0	0	(21,588)	0	0	0	(21,588)	0	0	0
Options exercised	83	0	0	0	83	0	0	83	0	0	0
Deferred compensation, net	3,119	0	0	2,828	291	0	0	3,119	0	0	0
Redeemable noncontrolling interest	2	0	0	0	0	0	2	2	0	0	0
Distributions on issued long-term performance-based share awards	(38)	0	0	0	0	0	(38)	(38)	0	0	0
Distributions on common shares ($0.33 and $0.51 per share/unit, respectively)	(27,000)	0	0	0	0	0	(27,000)	(27,000)	0	0	0
Distributions on preferred shares	(22,558)	0	0	0	0	0	(22,550)	(22,550)	(8)	(8)	0
Net income	35,654	0	0	0	0	0	35,654	35,654	0	0	0
Other comprehensive loss:
Unrealized loss on interest rate derivative instruments	0
Balance at Sep. 30, 2011	1,777,681	158	851	(18,530)	2,026,475	0	(231,298)	1,777,656	25	25	0
Balance at Dec. 31, 2011	1,771,243	158	851	(24,543)	2,029,145	0	(239,998)	1,765,613	5,630	17	5,613
Issuance of shares, net of offering costs	64,303	0	12	22,847	41,444	0	0	64,303	0	0	0
Redemption of preferred shares	(166,750)	(67)	0	0	(162,266)	0	(4,417)	(166,750)	0	0	0
Repurchase of common shares into treasury	(1,210)	0	0	(1,210)	0	0	0	(1,210)	0	0	0
Options exercised	74	0	0	0	74	0	0	74	0	0	0
Adjustments to issuance of units	(746)	0	0	0	0	0	0	0	(746)	0	(746)
Deferred compensation, net	3,598	0	0	2,455	1,143	0	0	3,598	0	0	0
Redeemable noncontrolling interest	0	0	0	0	(785)	0	0	(785)	785	0	785
Distributions on issued long-term performance-based share awards	(56)	0	0	0	0	0	(56)	(56)	0	0	0
Distributions on common shares ($0.33 and $0.51 per share/unit, respectively)	(44,136)	0	0	0	0	0	(43,985)	(43,985)	(151)	0	(151)
Distributions on preferred shares	(17,575)	0	0	0	0	0	(17,567)	(17,567)	(8)	(8)	0
Net income	57,390	0	0	0	0	0	57,166	57,166	224	0	224
Other comprehensive loss:
Unrealized loss on interest rate derivative instruments	(8,534)	0	0	0	0	(8,505)	0	(8,505)	(29)	0	(29)
Balance at Sep. 30, 2012	$ 1,657,601	$ 91	$ 863	$ (451)	$ 1,908,755	$ (8,505)	$ (248,857)	$ 1,651,896	$ 5,705	$ 9	$ 5,696

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Investment In Hotel Properties

9 Months Ended

Sep. 30, 2012

Investments [Abstract]

Investment In Hotel Properties

Investment in Hotel Properties

Investment in hotel properties is net of accumulated depreciation of $800,919 and $708,436 as of September 30, 2012 and December 31, 2011, respectively.

On March 8, 2012, the Company acquired a 100% fee simple interest in the Hotel Palomar, Washington, DC, a 335-room urban, full-service hotel located in Washington, DC, for $143,839. The sources of the funding for the acquisition were proceeds from prior issuances of common shares of beneficial interest under the 2011 Agreement (as defined below in Note 6) and borrowings under the Company’s senior unsecured credit facility. The property is leased to LHL and managed by Kimpton Hotel & Restaurant Group, L.L.C. The Company recorded the acquisition at fair value using model-derived valuations, with the purchase price allocated to investment in hotel properties and hotel working capital assets and liabilities. In connection with this acquisition, the Company incurred acquisition transaction costs of zero and $3,594 that were expensed as incurred during the three and nine months endedSeptember 30, 2012, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

During the first quarter of 2012, the Company finalized its allocation of the purchase price of Park Central Hotel, which was acquired on December 29, 2011, upon receiving certain valuation-related information. The final determination resulted in a decrease of $746 to investment in hotel properties and noncontrolling interests of common units in Operating Partnership. In connection with this acquisition, the Company incurred acquisition transaction costs of $65 and $304 that were expensed as incurred during the three and nine months endedSeptember 30, 2011, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

In connection with the acquisition of Viceroy Santa Monica on March 16, 2011, the Company incurred acquisition transaction costs of zero and $182 that were expensed as incurred during the three and nine months endedSeptember 30, 2011, respectively, and zero and $100 during the three and nine months endedSeptember 30, 2012, respectively, related to the finalization of acquisition accounting, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

In connection with the acquisition of Villa Florence on October 5, 2011, the Company incurred acquisition transaction costs of $88 that were expensed as incurred during the three and nine months ended September 30, 2011, which expenses are included in the accompanying consolidated statements of operations and comprehensive income.

Note Receivable

On July 13, 2012, the Company acquired a performing mezzanine loan secured by pledges of ownership interests of the entities that own the underlying hotel properties, Shutters on the Beach and Casa Del Mar, in Santa Monica, CA. The Company acquired the note at a discount of $4,584 for a total purchase price of $67,416 before closing costs. The loan bears interest at 9.76% with interest-only payments to be received monthly through the maturity date of May 11, 2014. The mezzanine loan is subordinate to a $310,000 first mortgage loan secured by the properties that also matures on May 11, 2014. In connection with the acquisition of the mezzanine loan, the Company incurred acquisition transaction costs of $156 and $363 during the three and nine months endedSeptember 30, 2012, respectively, which expenses are included in the accompanying consolidated statements of operations and comprehensive income. The carrying amount of the mezzanine loan approximates fair value.

Condensed Pro Forma Financial Information

The results of operations of acquired properties are included in the consolidated statements of operations and comprehensive income beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information is presented as if the following 2011 acquisitions had been consummated prior to January 1, 2010, the beginning of the reporting period prior to acquisition. In addition, for purposes of the unaudited condensed pro forma financial information only, the January 21, 2011 through February 16, 2011 issuance of 2,619,811 common shares of beneficial interest, the March 24, 2011 through April 11, 2011 issuance of 1,436,881 common shares of beneficial interest, the April 29, 2011 issuance of 7,896,612 common shares of beneficial interest and the July 7, 2011 issuance of 8,016 common shares of beneficial interest are presented as if the issuances had occurred as of January 1, 2011. No adjustments have been made to the unaudited condensed pro forma financial information presented below for the March 8, 2012 acquisition of Hotel Palomar, Washington, DC, as the acquisition was not significant to the Company’s consolidated financial statements, or the 2011 preferred share issuance and redemption, the 2011 common share repurchases or the 2012 common share issuances, since those transactions have no relation to the 2011 acquisitions. The unaudited condensed pro forma financial information is for comparative purposes only and not necessarily indicative of what actual results of operations of the Company would have been had the acquisitions been consummated on January 1, 2010, nor does it purport to represent the results of operations for future periods. The unaudited condensed pro forma financial information has not been adjusted for property sales.

Adjustments have been made to the unaudited pro forma financial information for the following acquisitions:

Property	Acquisition Date
Viceroy Santa Monica	March 16, 2011
Villa Florence	October 5, 2011
Park Central Hotel	December 29, 2011

The unaudited condensed pro forma financial information for the three and nine months endedSeptember 30, 2011 is as follows:

	For the three months ended		For the nine months ended
	September 30, 2011		September 30, 2011
	(unaudited)		(unaudited)
Total revenues	$	223,790	$	610,703
Net income	$	23,737	$	37,521
Net income attributable to common shareholders	$	16,335	$	14,242
Earnings per common share - basic	$	0.19	$	0.17
Earnings per common share - diluted	$	0.19	$	0.17
Weighted average number of common shares outstanding:
Basic	84,652,730		84,687,289
Diluted	84,764,646		84,853,902

Discontinued Operations

On January 12, 2011, the Company sold the Sheraton Bloomington Hotel Minneapolis South for $20,000. Since the property was under contract for sale during the fourth quarter of 2010, it was considered held for sale as of December 31, 2010 and the related impairment loss of $3,223 was included in fourth quarter 2010 results. Accordingly, the operating results of the property from the Company’s period of ownership are included in discontinued operations for the nine months ended September 30, 2011.

On September 1, 2010, the Company sold the Seaview Resort, but retained responsibility for the repair of its roof and recorded a liability for related costs, the majority of which were covered by insurance proceeds. During the third quarter of 2011, the Company entered into a settlement agreement with the purchaser of the Seaview Resort, which released the Company of any future responsibility for the repair of the roof, and recognized a gain of $760 representing the unpaid liability balance after settlement.

The following is a summary of the results of the properties classified in discontinued operations:

	For the three months ended			For the nine months ended
	September 30, 2011			September 30, 2011
Operating revenues	$	0		$	495
Operating expenses		0		814
Loss from operations before gain		0		(319		)
Gain on sale		760		760
Income from operations		760		441
Income tax expense		(244	)	(112		)
Net income from discontinued operations	$	516		$	329

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Equity Incentive Plan (Long-Term Performance Based Share Awards) (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		0 Months Ended				3 Months Ended			9 Months Ended			12 Months Ended		0 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jan. 26, 2012 Long-Term Performance-Based Share Awards [Member]	Jan. 26, 2012 Long-Term Performance-Based Share Awards [Member]	Jan. 02, 2012 Long-Term Performance-Based Share Awards [Member]	Apr. 28, 2009 Long-Term Performance-Based Share Awards [Member]	Sep. 30, 2012 Long-Term Performance-Based Share Awards [Member]		Sep. 30, 2011 Long-Term Performance-Based Share Awards [Member]	Sep. 30, 2012 Long-Term Performance-Based Share Awards [Member] Y		Sep. 30, 2011 Long-Term Performance-Based Share Awards [Member]	Dec. 31, 2011 Long-Term Performance-Based Share Awards [Member] Y	Sep. 30, 2012 January 1, 2013 and January 1, 2014 [Member] Long-Term Performance-Based Share Awards [Member]	Jan. 20, 2011 January 1, 2009 Through January 20, 2011 [Member] Chief Financial Officer [Member] Long-Term Performance-Based Share Awards [Member]	Jan. 02, 2012 January 1, 2009 through December 31, 2011 [Member] Long-Term Performance-Based Share Awards [Member]	Sep. 30, 2012 January 1, 2009 through December 31, 2011 [Member] Long-Term Performance-Based Share Awards [Member]	Dec. 31, 2011 January 1, 2009 through December 31, 2011 [Member] Long-Term Performance-Based Share Awards [Member]
Equity Incentive Plan [Line Items]
Performance-based awards of nonvested shares to executives			79,823			70,344				111,496
Number of shares earned as percentage of target shares															107.60%	182.90%
Target number of shares															32,118	38,226
Number Of Shares Earned															34,570	69,899
Number of shares, Vested					23,300					28,055					34,570
Number of shares vested							122,325			122,325			94,270
Number of shares earned as percentage of target shares, minimum				0.00%		0.00%
Number of shares earned as percentage of target shares, maximum				200.00%		200.00%
Weighted-average recognized period (in years)										2.8			2.8
Restricted shares expected to vest							262,779	[1]		262,779	[1]		179,338	46,599			49,406	7,562
Distributions on issued long-term performance-based share awards	$ (56)	$ (38)														$ 56
Unrecognized compensation costs							5,384			5,384			4,047
Compensation costs (net of forfeitures)							$ 501		$ 382	$ 1,504		$ 1,043

[1] Amount excludes 50,000 shares that have been committed for future performance share grants. Fair value will be estimated at the beginning of the performance measurement period on July 1, 2014.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2012

Income Tax Expense (Benefit) [Abstract]

Summary Of Income Tax Benefit

Income tax expense was comprised of the following for the three and nine months endedSeptember 30, 2012 and 2011:

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012			2011
LHL’s income tax expense	$	4,669	$	2,988		$	6,936		$	4,931
Operating Partnership's income tax expense (benefit)	274		381			(16		)	851
Total income tax expense	4,943		3,369			6,920			5,782
Income tax expense from discontinued operations	0		(244		)	0			(112		)
Income tax expense from continuing operations	$	4,943	$	3,125		$	6,920		$	5,670

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Long-Term Debt (Components Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	9 Months Ended				9 Months Ended			9 Months Ended					9 Months Ended			9 Months Ended			9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended				9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended
	Feb. 14, 2012	Sep. 30, 2012		Dec. 31, 2011		Sep. 30, 2012 Senior Unsecured Credit Facility [Member] Y		Dec. 31, 2011 Senior Unsecured Credit Facility [Member]	Sep. 30, 2012 LHL Unsecured Credit Facility [Member] Y		Dec. 31, 2011 LHL Unsecured Credit Facility [Member]	Aug. 02, 2012 Term Loan	May 16, 2012 Term Loan	Sep. 30, 2012 Harborside Hyatt Conference Center & Hotel (Taxable) [Member]		Dec. 31, 2011 Harborside Hyatt Conference Center & Hotel (Taxable) [Member]	Sep. 30, 2012 Harborside Hyatt Conference Center & Hotel (Tax Exempt) [Member]		Dec. 31, 2011 Harborside Hyatt Conference Center & Hotel (Tax Exempt) [Member]	Sep. 30, 2012 Letters Of Credit [Member] Y	Sep. 30, 2012 Hilton San Diego Gaslamp Quarter [Member]	Sep. 30, 2012 Hotel Deca [Member]	Dec. 31, 2011 Hotel Deca [Member]	Sep. 30, 2012 First Term Loan [Member] Term Loan		May 16, 2012 First Term Loan [Member] Term Loan	Dec. 31, 2011 First Term Loan [Member] Term Loan	Sep. 30, 2012 Second Term Loan [Member] Term Loan Y		Aug. 02, 2012 Second Term Loan [Member] Term Loan	Dec. 31, 2011 Second Term Loan [Member] Term Loan	Sep. 30, 2012 Mortgages [Member] Hilton San Diego Gaslamp Quarter [Member]		Mar. 30, 2012 Mortgages [Member] Hilton San Diego Gaslamp Quarter [Member]	Dec. 31, 2011 Mortgages [Member] Hilton San Diego Gaslamp Quarter [Member]	Sep. 30, 2012 Mortgages [Member] Hotel Solamar [Member]	Dec. 31, 2011 Mortgages [Member] Hotel Solamar [Member]	Sep. 30, 2012 Mortgages [Member] Hotel Deca [Member]	Dec. 31, 2011 Mortgages [Member] Hotel Deca [Member]	Sep. 30, 2012 Mortgages [Member] Westin Copley Place [Member]	Dec. 31, 2011 Mortgages [Member] Westin Copley Place [Member]	Sep. 30, 2012 Mortgages [Member] Westin Michigan Avenue [Member]	Dec. 31, 2011 Mortgages [Member] Westin Michigan Avenue [Member]	Sep. 30, 2012 Mortgages [Member] Indianapolis Marriott Downtown [Member]	Dec. 31, 2011 Mortgages [Member] Indianapolis Marriott Downtown [Member]	Sep. 30, 2012 Mortgages [Member] Hotel Roger Williams [Member]	Dec. 31, 2011 Mortgages [Member] Hotel Roger Williams [Member]	Sep. 30, 2012 Applicable Margin 1 [Member]	Sep. 30, 2012 Applicable Margin 1 [Member] Senior Unsecured Credit Facility [Member]	Sep. 30, 2012 Applicable Margin 2 [Member]	Sep. 30, 2012 Applicable Margin 2 [Member] Senior Unsecured Credit Facility [Member]
Debt Instrument [Line Items]
Borrowings		$ 1,000,000																																														$ 157,000		$ 44,000
Credit facilities		209,586		265,000		201,000		265,000	8,586		0
Term loans		377,500		0																				177,500		177,500	0	200,000		300,000	0
Massport Bonds		42,500		42,500										5,400		5,400	37,100		37,100
Mortgage loans at stated value		580,410		643,702																												0		59,600	59,600	60,334	60,900	9,183	9,392	210,000	210,000	137,625	138,902	100,452	101,319	62,816	63,589
Unamortized loan premium		138	[1]	195	[1]																	138	195
Secured Debt, Total		580,548		643,897
Long-term Debt, Total		$ 1,210,134		$ 951,397
Credit facility maturity date						January 30, 2016	[2]		January 30, 2016	[3]										February 2014
Credit facility potential maturity date under option to extend						January 2017			January 2017
Term loan, Duration																								7 years				5 years
Debt instrument extension option period																												1
Debt maturity date														Mar. 01, 2018			Mar. 01, 2018				Jul. 01, 2012			May 16, 2019				Aug. 02, 2017				Jul. 01, 2012	[4]			Dec. 01, 2013		Aug. 01, 2014		Sep. 01, 2015		Apr. 01, 2016		Jul. 01, 2016		Aug. 01, 2016
Credit facility interest rate						Floating	[2]		Floating	[3]														Floating	[5]			Floating	[5]
Mortgage bond interest rate														Floating	[6]		Floating	[6]
Fixed interest rate												2.68%	3.87%											3.87%				2.68%				5.35%				5.49%		6.28%		5.28%		5.75%		5.99%		6.31%
Annual letter of credit fee	2.00%
Interest rate on variable rate debt								2.30%	2.21%					0.61%		0.75%	0.20%		0.12%																														2.22%		2.23%
Number of extension options																				3
Extension option period						1			1											1

[1] Mortgage debt includes an unamortized loan premium on the mortgage loan on Hotel Deca of $138 as of September 30, 2012 and $195 as of December 31, 2011.

[2] 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 plus an applicable margin. As of September 30, 2012, the rates, including the applicable margin, for the Company’s outstanding LIBOR borrowings of $157,000 and $44,000 were 2.22% and 2.23%, respectively. As of December 31, 2011, the rate, including the applicable margin, for the Company's outstanding LIBOR borrowing of $265,000 was 2.30%. The Company has the option, pursuant to certain terms and conditions, to extend the maturity date to January 2017.

[3] 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 plus an applicable margin. As of September 30, 2012, the rate, including the applicable margin, for LHL's outstanding LIBOR borrowings of $8,586 was 2.21%. There were no borrowings outstanding at December 31, 2011. LHL has the option, subject to certain terms and conditions, to extend the maturity date to January 2017.

[4] The Company repaid the mortgage loan on March 30, 2012 through borrowings on its senior unsecured credit facility.

[5] Term loans bear interest at floating rates equal to LIBOR plus an applicable margin. The Company entered into separate interest rate swap agreements for the full seven-year term of the First Term Loan and the full five-year term, including a one-year extension subject to certain conditions, of the Second Term Loan, resulting in fixed all-in interest rates of 3.87% and 2.68%, respectively, at the Company's current leverage ratio (as defined in the agreements).

[6] The Massport Bonds are secured by letters of credit issued by the Royal Bank of Scotland that expire in February 2014, pursuant to an amendment to the agreement governing the letters of credit. The Royal Bank of Scotland letters of credit also have three one-year extension options and are secured by the Harborside Hyatt Conference Center & Hotel. The bonds bear interest based on weekly floating rates. The interest rates as of September 30, 2012 were 0.61% and 0.20% for the $5,400 and $37,100 bonds, respectively. The interest rates as of December 31, 2011 were 0.75% and 0.12% for the $5,400 and $37,100 bonds, respectively. The Company also incurs an annual letter of credit fee, which effective February 14, 2012 changed from a flat 2.00% to a variable rate based on an applicable margin as defined in our senior unsecured credit agreement.

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Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis Of Presentation

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

Use of Estimates

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. Actual results could differ from those estimates.

Substantially all of the Company’s revenues and expenses are generated by the operations of the individual hotels. The Company records revenues and expenses that are estimated by the hotel operators to produce quarterly financial statements because the management contracts do not require the hotel operators to submit actual results within a time frame that permits the Company to use actual results when preparing its Quarterly Reports on Form 10-Q for filing by the deadline prescribed by the SEC. Generally, the Company records actual revenue and expense amounts for the first two months of each quarter and revenue and expense estimates for the last month of each quarter. Each quarter, the Company reviews the estimated revenue and expense amounts provided by the hotel operators for reasonableness based upon historical results for prior periods and internal Company forecasts. The Company records any differences between recorded estimated amounts and actual amounts in the following quarter; historically, these differences have not been material. The Company believes the quarterly revenues and expenses, recorded on the Company’s consolidated statements of operations and comprehensive income based on an aggregate estimate, are fairly stated.

Share-Based Compensation

Share-Based Compensation

From time to time, the Company awards nonvested shares under the 2009 Equity Incentive Plan (“2009 Plan”), which has approximately six years remaining, as compensation to officers, employees and non-employee trustees (see Note 7). The shares issued to officers and employees vest over three to nine years. The Company recognizes compensation expense for nonvested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures.

Noncontrolling Interests

Noncontrolling Interests

Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Under this guidance, 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, 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. 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 securities 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 September 30, 2012, the consolidated results of the Company include the following ownership interests held by owners other than the Company: (i) the outside preferred ownership interests in a subsidiary and (ii) the common units in the Operating Partnership held by third parties.

Fair Value Measurements

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.

Level 2 – Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3 – Model-derived valuations with unobservable inputs.

As required by the guidance, the Company classifies assets and liabilities based on the lowest level of input that is significant to the fair value measurement.

Derivatives and Hedging Activities

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. The Company entered into derivative instruments during the second and third quarters of 2012 (see Note 4).

Notes Receivable

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. 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, it is probable that the Company will be unable to collect all principal and interest contractually due. 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. The Company has no notes receivable that are impaired or in non-accrual status. The Company acquired a note receivable during the third quarter of 2012 (see Note 3).