Exhibit 10.28

 

EXHIBIT A

 

NEW CANDLEWOOD GUARANTY

 

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (this “Agreement”) is made and given as of
                     , 20    , by INTERCONTINENTAL HOTELS GROUP PLC, a
corporation organized and existing under the laws of England and Wales (the
“Guarantor”), for the benefit of HPT TRS IHG-1, INC., a Maryland corporation
(together with its successors and assigns, the “Tenant”), and HOSPITALITY
PROPERTIES TRUST, a Maryland real estate investment trust (together with its
successors and assigns, “Trust”; and Trust together with the Tenant, “HPT”).

 

W I T N E S S E T H :

 

WHEREAS, on January     , 2006, the Guarantor delivered to HPT that certain
Second Amended and Restated Consolidated Guaranty Agreement (the “Consolidated
Guaranty”); and

 

WHEREAS, both the IHG4 Coverage Date and the IHG5 Coverage Date (as such terms
are defined in the Consolidated Guaranty) have occurred and the Guarantor wishes
to terminate its obligations under the Consolidated Guaranty in accordance with
Section 10 of the Consolidated Guaranty; and

 

WHEREAS, Section 10 of the Consolidated Guaranty requires, among other things,
that the Guarantor deliver this Guaranty Agreement to HPT in order to terminate
its obligations under the Consolidated Guaranty as aforesaid; and

 

WHEREAS, the termination of its obligations under the Consolidated Guaranty as
aforesaid constitute a direct material benefit to the Guarantor;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       CERTAIN TERMS. CAPITALIZED TERMS USED
AND NOT OTHERWISE DEFINED IN THIS AGREEMENT SHALL HAVE THE MEANINGS ASCRIBED TO
SUCH TERMS IN THE MANAGEMENT AGREEMENT (AS HEREINAFTER DEFINED). THE FOLLOWING
TERMS AS USED IN THIS AGREEMENT SHALL HAVE THE MEANINGS SET FORTH BELOW:

 

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“Accounting Principles” shall mean generally accepted accounting principles, as
adopted in the United States of America, consistently applied or, if the
Guarantor’s principal place of business is the United Kingdom, generally
accepted accounting principles, as adopted in the United Kingdom, consistently
applied.

 

“Collateral Agency Agreement” shall mean a written agreement, in form and
substance reasonably acceptable to HPT, among HPT, the Guarantor and the
Collateral Agent pursuant to which the Collateral Agent shall agree to hold any
cash delivered to such Collateral Agent pursuant to the terms of this Agreement
as collateral agent on behalf of HPT, as the same may be amended, restated,
supplemented or otherwise modified from time to time with the consent of the
parties thereto. Among other things, the Collateral Agency Agreement shall
provide that (a) the Collateral Agent shall look solely to the Guarantor for any
amounts owed to the Collateral Agent in connection with such agreement, (b) the
Collateral Agent shall not offset any amount owed to the Collateral Agent
against the cash delivered to it pursuant to the Collateral Agency Agreement and
this Agreement, (c) the Collateral Agent shall hold such cash as trust funds and
not commingle such cash with any assets of the Collateral Agent and (d) HPT
shall be entitled to apply any cash collateral held by the Collateral Agent to
the overdue obligations of the Guarantor hereunder in such order and at such
times as HPT may determine in its sole judgment.

 

“Collateral Agent” shall mean a bank or other financial institution reasonably
acceptable to HPT having a rating of not less than BBB-/Baa3 rating from the
Rating Agencies, which bank or other financial institution is the collateral
agent under the Collateral Agency Agreement as such collateral agent may be
replaced in accordance with the terms of the Collateral Agency Agreement.

 

“Coverage Date” shall mean the date which is the day after the second (2nd)
consecutive calendar year for which the Priority Coverage Ratio is equal to or
exceeds 1.3.

 

“Guaranteed Obligations” shall mean the payment to Tenant of (a) all of the
Owner’s First Priority as and when due under the Management Agreement determined
without respect to Gross Revenue or Operating Profits and (b) any and all
liquidated damages due to Tenant under the Management Agreement.

 

“Management Agreement” shall mean [that certain Amended and Restated Management
Agreement, dated as of January     , 2005, between TRS1 and Manager] with
respect to certain hotels being

 

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operated under the “Candlewood” brand] [that certain Management Agreement, dated
as of October 27, 2003, between TRS1 and Manager], as the same may be amended,
modified, supplemented, or otherwise altered from time to time.

 

“Manager” shall mean Intercontinental Hotels Group Resources, Inc.

 

“Outstanding Balance” shall mean, from time to time, Fifty Million Dollars
($50,000,000), less the excess of the aggregate amount paid by the Guarantor
under Section 3 hereof over the aggregate of any amounts reimbursed to the
Guarantor pursuant to the terms of the Management Agreement.

 

“Provide Collateral” or “Provided Collateral” shall mean:

 

(a)                                  delivery to HPT of (i) a Satisfactory
Letter of Credit or (ii) cash in an amount equal to the then Outstanding
Balance; or

 

(b)                                 the deposit of cash equal to the then
Outstanding Balance with the Collateral Agent to be held by the Collateral Agent
in accordance with the Collateral Agency Agreement provided:(i) the Collateral
Agency Agreement has been executed and delivered by the parties thereto; (ii)
HPT has a perfected first priority security interest in any cash delivered to
the Collateral Agent; (iii) HPT has received favorable opinions of counsel, in
form and substance reasonably satisfactory to HPT, with respect to such
perfected first priority interest, the valid existence and good standing of the
other parties to the Collateral Agency Agreement, the due execution and delivery
thereof by such other parties, the enforceability of the Collateral Agency
Agreement against such parties, and that any cash held by the Collateral Agent
pursuant to the Collateral Agency Agreement shall not be “property of the
estate” of Collateral Agent should any event described in Sections 17.1(a), (b)
or (c) of the Management Agreement shall occur with respect to the Collateral
Agent; or

 

(c)                                  delivery to HPT of other collateral
satisfactory to HPT in its good faith discretion to secure the Guaranteed
Obligations;

 

provided, however, the Guarantor shall not be deemed to have Provided Collateral
if at any time the Outstanding Balance exceeds the sum of (i) the then remaining
balance drawable under the Satisfactory Letter of Credit or the balance of the
cash deposited by the Guarantor hereunder, plus (ii) proceeds of any

 

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Satisfactory Letter of Credit or cash deposited hereunder, in either case,
applied to the Guaranteed Obligations.

 

“Rating Agencies” shall mean, collectively, Standard’s & Poor’s Rating Services
or its successor and Moody’s Investor Services, Inc. or its successors;
provided, however, if the Rating Agencies (i) cease operations without
successors or (ii) cease to issue credit ratings, “Rating Agencies” shall mean a
nationally recognized organization periodically issuing ratings of the financial
strength and/or credit of United States domestic and international banking
institutions reasonably agreed to by HPT and the Guarantor.

 

“Reorganization” shall mean any merger, consolidation, reorganization, change of
control or any transaction pursuant to which the Guarantor shall be or become a
Subsidiary of any other Person.

 

“Satisfactory Letter of Credit” shall mean a clean irrevocable letter of credit
in form and substance reasonably satisfactory to HPT in an amount equal to the
Outstanding Balance issued by a bank with a credit rating of not less than A2/A
(or, if after the date hereof the system of ratings used by the Rating Agencies
changes in a material way, their then equivalents of such credit rating in HPT’s
reasonable judgment) from the Rating Agencies, having an expiration date of not
earlier than one year after the date on which it was issued and which permits
for partial draws.

 

“Substitute Guarantor” shall mean a Person who assumes the Guarantor’s
obligations hereunder in accordance with the terms of Section 2.7 below and is
either (a) a Person who satisfies the Rating Agencies’ requirements for a single
purpose bankruptcy remote entity who has Provided Collateral or (b) a Person(s)
with (i) a tangible net worth determined in accordance with the Accounting
Principles not less than Seven Hundred Fifty Million Dollars ($750,000,000) and
(ii) unencumbered assets with a fair market value of not less than One Hundred
Million Dollars (exclusive of any note, instrument, security or claim issued by,
against or in any way dependent on the credit of, an Affiliate of Guarantor).

 

2.                                       REPRESENTATIONS AND COVENANTS. THE
GUARANTOR REPRESENTS, WARRANTS, COVENANTS AND AGREES THAT:

 

2.1                                 VALIDITY OF AGREEMENT. THE GUARANTOR HAS
DULY AND VALIDLY EXECUTED AND DELIVERED THIS AGREEMENT; THIS AGREEMENT
CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATION OF THE GUARANTOR,
ENFORCEABLE AGAINST THE GUARANTOR IN ACCORDANCE

 

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with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors; and the execution, delivery and
performance of this Agreement have been duly authorized by all requisite action
of the Guarantor and such execution, delivery and performance by the Guarantor
will not result in any breach of the terms, conditions or provisions of, or
conflict with or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any of the property or assets of the Guarantor
pursuant to the terms of, any indenture, mortgage, deed of trust, note, other
evidence of indebtedness, agreement or other instrument to which the Guarantor
is a party or by which the Guarantor or any property or assets of the Guarantor
is bound, or violate any provision of law applicable to the Guarantor, or any
order, writ, injunction, judgement or decree of any court applicable to the
Guarantor or any order or other public regulation of any governmental
commission, bureau or administrative agency applicable to the Guarantor.

 

2.2                                 PAYMENT OF EXPENSES. THE GUARANTOR AGREES,
AS PRINCIPAL OBLIGOR AND NOT AS GUARANTOR ONLY, TO PAY TO HPT FORTHWITH, UPON
DEMAND, IN IMMEDIATELY AVAILABLE FEDERAL FUNDS, ALL COSTS AND EXPENSES
(INCLUDING COURT COSTS AND REASONABLE LEGAL EXPENSES) INCURRED OR EXPENDED BY
HPT IN CONNECTION WITH THE ENFORCEMENT OF THIS AGREEMENT, TOGETHER WITH INTEREST
AT THE INTEREST RATE ON AMOUNTS RECOVERABLE UNDER THIS AGREEMENT FROM THE TIME
SUCH AMOUNTS BECOME DUE UNTIL PAYMENT.

 

2.3                                 REPORTS. THE GUARANTOR SHALL TIMELY DELIVER
TO HPT THE CONSOLIDATED FINANCIALS REQUIRED UNDER THE MANAGEMENT AGREEMENT AND
OTHERWISE COMPLY WITH THE TERMS OF THE MANAGEMENT AGREEMENT APPLICABLE TO IT.

 

2.4                                 FINANCIAL CONDITION OF GUARANTOR; STATUS OF
GUARANTOR. SO LONG AS THE GUARANTOR’S OBLIGATIONS UNDER SECTION 3 BELOW ARE
OUTSTANDING, UNLESS THE GUARANTOR SHALL HAVE PROVIDED COLLATERAL TO SECURE ITS
OBLIGATIONS HEREUNDER:

 

(A)                                  THE GUARANTOR SHALL AT ALL TIMES MAINTAIN A
TANGIBLE NET WORTH DETERMINED IN ACCORDANCE WITH THE ACCOUNTING PRINCIPLES IN AN
AMOUNT NOT LESS THAN FIVE HUNDRED MILLION DOLLARS ($500,000,000) OR IF THERE HAS
BEEN A REORGANIZATION, OR IF THE GUARANTOR IS NOT THE ORIGINALLY NAMED
GUARANTOR, SEVEN HUNDRED FIFTY MILLION DOLLARS ($750,000,000); AND

 

(B)                                 THE GUARANTOR SHALL NOT ENGAGE IN ANY
REORGANIZATION UNLESS FOLLOWING SUCH REORGANIZATION IT HAS (I) A TANGIBLE NET
WORTH DETERMINED IN ACCORDANCE WITH THE ACCOUNTING PRINCIPLES IN

 

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an amount not less than Seven Hundred Fifty Million Dollars ($750,000,000) and
(ii) unencumbered assets with a fair market value of not less than One Hundred
Million Dollars ($100,000,000) (exclusive of any note, instrument, security or
claim issued by, against or in any way dependent on the credit of, an Affiliate
of Guarantor).

 

2.5                                 SECURITY. UPON THE TERMINATION OF THE
GUARANTOR’S OBLIGATIONS UNDER SECTION 3 OR IF THE EXCESS OF AGGREGATE AMOUNT
PAID BY THE GUARANTOR UNDER SECTION 3 OVER THE AGGREGATE OF ANY AMOUNTS
REIMBURSED TO IT PURSUANT TO THE TERMS OF THE MANAGEMENT AGREEMENT EQUALS NOT
LESS THAN FIFTY MILLION DOLLARS ($50,000,000), HPT WILL RETURN TO THE GUARANTOR
ANY SATISFACTORY LETTER OF CREDIT PREVIOUSLY DELIVERED TO HPT OR ANY UNAPPLIED
CASH COLLATERAL THEN BEING HELD BY HPT HEREUNDER AND SHALL DIRECT THE COLLATERAL
AGENT TO RETURN ANY CASH BEING HELD BY IT UNDER THE COLLATERAL AGENCY AGREEMENT
TO THE GUARANTOR. HPT SHALL BE ENTITLED TO DRAW UPON ANY SATISFACTORY LETTER OF
CREDIT DELIVERED TO IT (A) FOR THE FULL AMOUNT THEREOF IF AT ANY TIME THERE IS
LESS THAN THIRTY (30) DAYS UNTIL THE EXPIRY DATE OF SUCH SATISFACTORY LETTER OF
CREDIT; (B) FOR THE FULL AMOUNT THEREOF IF THE BANK THAT ISSUED SUCH
SATISFACTORY LETTER OF CREDIT SHALL NOT HAVE A CREDIT RATING OF AT LEAST A/A2
(OR, IF AFTER THE DATE HEREOF THE SYSTEM OF RATINGS USED BY THE RATING AGENCIES
CHANGES IN A MATERIAL WAY, THEIR THEN EQUIVALENTS IN HPT’S REASONABLE JUDGMENT)
FROM THE RATING AGENCIES AND SUCH SATISFACTORY LETTER OF CREDIT SHALL NOT HAVE
BEEN REPLACED WITHIN THIRTY (30) DAYS WITH A NEW SATISFACTORY LETTER OF CREDIT
DELIVERED TO HPT; OR (C) TO THE EXTENT AND IN THE AMOUNTS THEN DUE AND PAYABLE
HEREUNDER, IF THE GUARANTOR SHALL FAIL TO PAY OR PERFORM ANY OF ITS OBLIGATIONS
UNDER THIS GUARANTY IN ACCORDANCE WITH THE TERMS HEREOF. HPT SHALL BE ENTITLED
TO APPLY ANY CASH COLLATERAL HELD BY IT OR THE COLLATERAL AGENT TO THE OVERDUE
OBLIGATIONS OF THE GUARANTOR HEREUNDER IN SUCH ORDER AND AT SUCH TIMES AS HPT
MAY DETERMINE IN ITS SOLE JUDGMENT. ANY CASH COLLATERAL HELD BY HPT SHALL NOT BE
COMMINGLED WITH ITS OTHER FUNDS, AND SHALL BE INVESTED, AT THE GUARANTOR’S RISK,
IN INTEREST BEARING INVESTMENTS REASONABLY ACCEPTABLE TO THE GUARANTOR. ANY
INTEREST ON SUCH CASH COLLATERAL, AND ANY LOSSES IN SUCH INVESTMENTS, SHALL
BELONG TO IHG.

 

2.6                                 LEGAL EXISTENCE. THE GUARANTOR SHALL DO OR
CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL FORCE AND
EFFECT ITS CORPORATE EXISTENCE. THE GUARANTOR HAS APPOINTED ATTORNEYS ALSTON &
BIRD LLP, HAVING AN ADDRESS AT 1201 WEST PEACHTREE STREET, ATLANTA, GEORGIA
30309-3424, ATTN:  MANAGING PARTNER AS ITS AGENT FOR SERVICE OF PROCESS. THE
GUARANTOR ACKNOWLEDGES AND AGREES THAT SERVICE OF PROCESS ON

 

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such agent shall constitute service of process on Guarantor with respect to any
and all claims hereunder or under any other Transaction Document.

 

2.7                                 SUBSTITUTE GUARANTOR. THE THEN GUARANTOR
(THE “DEPARTING GUARANTOR”) SHALL BE RELEASED FROM OBLIGATIONS UNDER SECTION 3
HEREOF ON THE FOLLOWING TERMS AND CONDITIONS:

 

(A)                                  A SUBSTITUTE GUARANTOR SHALL ASSUME
PURSUANT TO A WRITTEN INSTRUMENT SATISFACTORY TO HPT ALL OF THE GUARANTOR’S
OBLIGATIONS HEREUNDER; AND

 

(B)                                 HPT SHALL RECEIVE AN OPINION OF COUNSEL
SATISFACTORY TO HPT WITH RESPECT TO, AMONG OTHER THINGS, THE EXISTENCE AND GOOD
STANDING OF THE SUBSTITUTE GUARANTOR AND THE DUE EXECUTION, DELIVERY AND
ENFORCEABILITY OF SUCH ASSUMPTION.

 

Upon the satisfaction of the foregoing conditions and the expiration of all
applicable preference or similar periods, HPT shall deliver a release to the
Departing Guarantor of its obligations hereunder and the Substitute Guarantor
shall be deemed the “Guarantor” hereunder. Further, if the Substitute Guarantor
has Provided Collateral or has (i) a tangible net worth determined in accordance
with the Accounting Principles of not less than Seven Hundred Fifty Million
Dollars ($750,000,000) and (ii) unencumbered assets with a fair market value of
not less than One Hundred Million Dollars (exclusive of any note, instrument,
security or claim issued by, against or in any way dependent on the credit of,
an Affiliate of Guarantor), HPT shall return to the Departing Guarantor any
letter of credit or cash delivered by the Departing Guarantor and held by HPT
hereunder and shall direct the Collateral Agent to return to the Departing
Guarantor any cash delivered by the Departing Guarantor and held by such
Collateral Agent pursuant to the terms of the Collateral Agency Agreement.

 

3.                                       GUARANTEE.

 

(A)                                  THE GUARANTOR HEREBY UNCONDITIONALLY
GUARANTEES THAT THE GUARANTEED OBLIGATIONS WHICH BECOME DUE AND PAYABLE DURING
THE TERM OF THE MANAGEMENT AGREEMENT SHALL BE PAID IN FULL WHEN DUE AND PAYABLE
SUBJECT TO ANY APPLICABLE CURE PERIODS, WHETHER UPON DEMAND, AT THE STATED OR
ACCELERATED MATURITY THEREOF OR UPON ANY MANDATORY OR VOLUNTARY PREPAYMENT
PURSUANT TO ANY TRANSACTION DOCUMENT, OR OTHERWISE.

 

(B)                                 THIS GUARANTEE IS A GUARANTEE OF PAYMENT AND
NOT OF COLLECTIBILITY AND IS ABSOLUTE AND IN NO WAY CONDITIONAL OR CONTINGENT.
IN CASE ANY PART OF THE GUARANTEED OBLIGATIONS

 

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shall not have been paid when due and payable or performed at the time
performance is required, subject to any applicable cure periods, the Guarantor
shall, pay or cause to be paid to HPT the amount thereof as is then due and
payable and unpaid (including interest and other charges, if any, due thereon
through the date of payment in accordance with the applicable provisions of the
Transaction Documents) or perform or cause to be performed such obligations in
accordance with the Transaction Documents. Simultaneously with the giving of any
notice of default to the Manager under the Management Agreement, Tenant shall
give a copy of such notice to the Guarantor. Tenant shall accept any cure of
such default by the Guarantor provided such cure is completed within the
applicable cure period under the Management Agreement.

 

4.                                       UNENFORCEABILITY OF GUARANTEED
OBLIGATIONS, ETC. IF THE MANAGER IS FOR ANY REASON UNDER NO LEGAL OBLIGATION TO
DISCHARGE ANY OF THE GUARANTEED OBLIGATIONS, OR IF ANY OTHER MONEYS INCLUDED IN
THE GUARANTEED OBLIGATIONS HAVE BECOME UNRECOVERABLE FROM THE MANAGER BY
OPERATION OF LAW OR FOR ANY OTHER REASON, INCLUDING, WITHOUT LIMITATION, THE
INVALIDITY OR IRREGULARITY IN WHOLE OR IN PART OF ANY GUARANTEED OBLIGATION OR
OF ANY TRANSACTION DOCUMENT OR ANY LIMITATION ON THE LIABILITY OF THE MANAGER
THEREUNDER OR ANY LIMITATION ON THE METHOD OR TERMS OF PAYMENT THEREUNDER WHICH
MAY NOW OR HEREAFTER BE CAUSED OR IMPOSED IN ANY MANNER WHATSOEVER, THE
GUARANTEES CONTAINED IN THIS AGREEMENT SHALL NEVERTHELESS REMAIN IN FULL FORCE
AND EFFECT IN ACCORDANCE WITH THE TERMS SET FORTH HEREIN AND SHALL BE BINDING
UPON THE GUARANTOR TO THE SAME EXTENT AS IF THE GUARANTOR AT ALL TIMES HAD BEEN
THE PRINCIPAL DEBTOR ON ALL SUCH GUARANTEED OBLIGATIONS.

 

5.                                       ADDITIONAL GUARANTEES. THIS AGREEMENT
SHALL BE IN ADDITION TO ANY OTHER GUARANTEE OR OTHER SECURITY FOR THE GUARANTEED
OBLIGATIONS AND IT SHALL NOT BE PREJUDICED OR RENDERED UNENFORCEABLE BY THE
INVALIDITY OF ANY SUCH OTHER GUARANTEE OR SECURITY OR BY ANY WAIVER, AMENDMENT,
RELEASE OR MODIFICATION THEREOF.

 

6.                                       CONSENTS AND WAIVERS, ETC. THE
GUARANTOR HEREBY ACKNOWLEDGES RECEIPT OF CORRECT AND COMPLETE COPIES OF EACH OF
THE TRANSACTION DOCUMENTS AND CONSENTS TO ALL OF THE TERMS AND PROVISIONS
THEREOF, AS THE SAME MAY BE FROM TIME TO TIME HEREAFTER AMENDED OR CHANGED IN
ACCORDANCE THEREWITH, AND WAIVES, TO THE EXTENT THE GUARANTOR LAWFULLY MAY DO
SO, (A) PRESENTMENT, DEMAND FOR PAYMENT, AND PROTEST OF NONPAYMENT, OF ANY OF
THE GUARANTEED OBLIGATIONS, (B) NOTICE OF ACCEPTANCE OF THIS AGREEMENT AND OF
DILIGENCE, PRESENTMENT, DEMAND AND PROTEST, (C) NOTICE OF ANY DEFAULT HEREUNDER
AND ANY DEFAULT,

 

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breach or nonperformance or a Manager Event of Default under any of the
Guaranteed Obligations or the Transaction Documents, except as expressly
provided in Section 3, (d) notice of the terms, time and place of any private or
public sale of collateral held as security for the Guaranteed Obligations, (e)
demand for performance or observance of, and any enforcement of any provision
of, or any pursuit or exhaustion of rights or remedies against the Manager or
any other guarantor of the Guaranteed Obligations, under or pursuant to the
Transaction Documents, or any agreement directly or indirectly relating thereto
and any requirements of diligence or promptness on the part of the holders of
the Guaranteed Obligations in connection therewith, and (f) any and all demands
and notices of every kind and description with respect to the foregoing or which
may be required to be given by any statute or rule of law.

 

7.                                       NO IMPAIRMENT, ETC. THE OBLIGATIONS,
COVENANTS, AGREEMENTS AND DUTIES OF THE GUARANTOR UNDER THIS AGREEMENT SHALL NOT
BE AFFECTED OR IMPAIRED BY ANY ASSIGNMENT OR TRANSFER IN WHOLE OR IN PART OF ANY
OF THE GUARANTEED OBLIGATIONS WITHOUT NOTICE TO THE GUARANTOR, OR ANY WAIVER BY
HPT OR ANY HOLDER OF ANY OF THE GUARANTEED OBLIGATIONS OR BY THE HOLDERS OF ALL
OF THE GUARANTEED OBLIGATIONS OF THE PERFORMANCE OR OBSERVANCE BY THE MANAGER OR
ANY OTHER GUARANTOR OF ANY OF THE AGREEMENTS, COVENANTS, TERMS OR CONDITIONS
CONTAINED IN THE GUARANTEED OBLIGATIONS OR THE TRANSACTION DOCUMENTS OR ANY
INDULGENCE IN OR THE EXTENSION OF THE TIME FOR PAYMENT BY THE MANAGER OR ANY
OTHER GUARANTOR OF ANY AMOUNTS PAYABLE UNDER OR IN CONNECTION WITH THE
GUARANTEED OBLIGATIONS OR THE TRANSACTION DOCUMENTS OR ANY OTHER INSTRUMENT OR
AGREEMENT RELATING TO THE GUARANTEED OBLIGATIONS OR OF THE TIME FOR PERFORMANCE
BY THE MANAGER OR ANY OTHER GUARANTOR OF ANY OTHER OBLIGATIONS UNDER OR ARISING
OUT OF ANY OF THE FOREGOING OR THE EXTENSION OR RENEWAL THEREOF, OR THE
MODIFICATION OR AMENDMENT MADE WITH THE CONSENT OF THE GUARANTOR OF ANY DUTY,
AGREEMENT OR OBLIGATION OF THE MANAGER OR ANY OTHER GUARANTOR SET FORTH IN ANY
OF THE FOREGOING, OR THE VOLUNTARY OR INVOLUNTARY SALE OR OTHER DISPOSITION OF
ALL OR SUBSTANTIALLY ALL THE ASSETS OF THE MANAGER OR ANY OTHER GUARANTOR OR
INSOLVENCY, BANKRUPTCY, OR OTHER SIMILAR PROCEEDINGS AFFECTING THE MANAGER OR
ANY OTHER GUARANTOR OR ANY ASSETS OF THE MANAGER OR ANY SUCH OTHER GUARANTOR, OR
THE RELEASE OR DISCHARGE OF THE MANAGER OR ANY SUCH OTHER GUARANTOR FROM THE
PERFORMANCE OR OBSERVANCE OF ANY AGREEMENT, COVENANT, TERM OR CONDITION
CONTAINED IN ANY OF THE FOREGOING WITHOUT THE CONSENT OF THE HOLDERS OF THE
GUARANTEED OBLIGATIONS BY OPERATION OF LAW.

 

8.                                       REIMBURSEMENT, SUBROGATION, ETC. THE
GUARANTOR HEREBY COVENANTS AND AGREES THAT THE GUARANTOR WILL NOT ENFORCE OR

 

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otherwise exercise any rights of reimbursement, subrogation, contribution or
other similar rights against the Manager or any other person with respect to the
Guaranteed Obligations prior to the irrevocable payment in full of all amounts
then due and owing but unpaid under the Management Agreement, and until the
Guaranteed Obligations have been satisfied in full, the Guarantor shall not have
any right of subrogation, and the Guarantor waives any defense it may have based
upon any election of remedies by HPT which destroys the Guarantor’s subrogation
rights or the Guarantor’s rights to proceed against the Manager for
reimbursement, including, without limitation, any loss of rights the Guarantor
may suffer by reason of any rights, powers or remedies of the Manager in
connection with any anti-deficiency laws or any other laws limiting, qualifying
or discharging the indebtedness to HPT. Until all obligations of the Manager
pursuant to the Transaction Documents shall have been irrevocably paid and
satisfied in full, the Guarantor waives any right to enforce any remedy which
HPT now has or may in the future have against the Manager, any other guarantor
or any other person and any benefit of, or any right to participate in, any
security whatsoever now or in the future held by HPT. Nothing contained in this
Section 8 shall limit any of Guarantor’s rights under the Management Agreement.

 

9.                                       DEFEASANCE; GUARANTY LIMITATIONS. THE
GUARANTOR’S OBLIGATIONS UNDER SECTION 3 SHALL TERMINATE UPON THE FIRST TO OCCUR
OF (A) THE DATE ON WHICH THE GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED
IN FULL AND ALL OTHER OBLIGATIONS OF THE GUARANTOR TO HPT UNDER THIS AGREEMENT
HAVE BEEN IRREVOCABLY SATISFIED IN FULL AND (B) THE COVERAGE DATE; PROVIDED,
HOWEVER, IF AT ANY TIME, ALL OR ANY PART OF ANY PAYMENT APPLIED ON ACCOUNT OF
THE GUARANTEED OBLIGATIONS IS OR MUST BE RESCINDED OR RETURNED FOR ANY REASON
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE INSOLVENCY, BANKRUPTCY OR
REORGANIZATION OF THE MANAGER), THIS AGREEMENT, TO THE EXTENT SUCH PAYMENT IS OR
MUST BE RESCINDED OR RETURNED, SHALL BE DEEMED TO HAVE CONTINUED IN EXISTENCE
NOTWITHSTANDING ANY SUCH TERMINATION. NOTWITHSTANDING ANYTHING CONTAINED IN THIS
AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE GUARANTOR’S LIABILITY UNDER
SECTION 3 HEREOF EXCEED THE SUM OF FIFTY MILLION DOLLARS ($50,000,000) LESS (II)
THE AGGREGATE AMOUNT PAID BY THE GUARANTOR UNDER SECTION 3 IN EXCESS OF THE
AGGREGATE OF ANY AMOUNTS REIMBURSED TO IT PURSUANT TO THE TERMS OF THE
MANAGEMENT AGREEMENT.

 

10.                                 NOTICES. (A)  ANY AND ALL NOTICES, DEMANDS,
CONSENTS, APPROVALS, OFFERS, ELECTIONS AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED UNDER THIS AGREEMENT SHALL BE DEEMED ADEQUATELY GIVEN IF IN WRITING
AND THE SAME SHALL BE DELIVERED EITHER BY

 

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hand, by telecopier with written acknowledgment of receipt (provided a copy
thereof is sent by Federal Express or similar expedited commercial carrier for
delivery on the next business day), or Federal Express or similar expedited
commercial carrier, addressed to the recipient of the notice, postpaid and
registered or certified with return receipt requested (if by mail), or with all
freight charges prepaid (if by Federal Express or similar carrier).

 

(b)  All notices required or permitted to be sent hereunder shall be deemed to
have been given for all purposes of this Agreement upon the date of acknowledged
receipt, in the case of a notice by telecopier, and, in all other cases, upon
the date of receipt or refusal, except that whenever under this Agreement a
notice is either received on a day which is not a Business Day or is required to
be delivered on or before a specific day which is not a Business Day, the day of
receipt or required delivery shall automatically be extended to the next
Business Day.

 

(c)  All such notices shall be addressed,

 

if to HPT to:

 

c/o Hospitality Properties Trust

400 Centre Street

Newton, Massachusetts 02458

Attn:  Mr. John G. Murray

[Telecopier No. (617) 969-5730]

 

with a copy to:

 

Sullivan & Worcester LLP

One Post Office Square

Boston, Massachusetts 02109

Attn:  Warren M. Heilbronner, Esq.

[Telecopier No. (617) 338-2880]

 

if to the Guarantor to:

 

Intercontinental Hotels Group PLC

67 Alma Road

Windsor

Berkshire SL4 3HD

ENGLAND

Attn: Company Secretary

Telecopier No. +44 1753 410101

 

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with a copy to:

 

Intercontinental Hotels Resources Group, Inc.

Three Ravinia Drive

Suite 100

Atlanta, Georgia 30346

Attn:  Vice President, Asset Management

[Telecopier No. 770-604-5340]

 

(d)  By notice given as herein provided, the parties hereto and their respective
successors and assigns shall have the right from time to time and at any time
during the term of this Agreement to change their respective addresses effective
upon receipt by the other parties of such notice and each shall have the right
to specify as its address any other address within the United States of America.

 

11.                                 SUCCESSORS AND ASSIGNS. WHENEVER IN THIS
AGREEMENT, ANY OF THE PARTIES HERETO IS REFERRED TO, SUCH REFERENCE SHALL BE
DEEMED TO INCLUDE THE SUCCESSORS AND ASSIGNS OF SUCH PARTY, INCLUDING WITHOUT
LIMITATION THE HOLDERS, FROM TIME TO TIME, OF THE GUARANTEED OBLIGATIONS; AND
ALL REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS BY OR ON BEHALF OF THE
GUARANTOR WHICH ARE CONTAINED IN THIS AGREEMENT SHALL INURE TO THE BENEFIT OF
HPT’S SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, SUCH HOLDERS,
WHETHER SO EXPRESSED OR NOT.

 

12.                                 APPLICABLE LAW. EXCEPT AS TO MATTERS
REGARDING THE INTERNAL AFFAIRS OF HPT AND ISSUES OF OR LIMITATIONS ON ANY
PERSONAL LIABILITY OF THE SHAREHOLDERS AND TRUSTEES OF HPT FOR OBLIGATIONS OF
HPT, AS TO WHICH THE LAWS OF THE STATE OF MARYLAND SHALL GOVERN, THIS AGREEMENT
AND ANY OTHER INSTRUMENTS EXECUTED AND DELIVERED TO EVIDENCE, COMPLETE OR
PERFECT THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE INTERPRETED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK APPLICABLE TO
CONTRACTS BETWEEN RESIDENTS OF NEW YORK WHICH ARE TO BE PERFORMED ENTIRELY
WITHIN NEW YORK, REGARDLESS OF (I) WHERE ANY SUCH INSTRUMENT IS EXECUTED OR
DELIVERED; OR (II) WHERE ANY PAYMENT OR OTHER PERFORMANCE REQUIRED BY ANY SUCH
INSTRUMENT IS MADE OR REQUIRED TO BE MADE; OR (III) WHERE ANY BREACH OF ANY
PROVISION OF ANY SUCH INSTRUMENT OCCURS, OR ANY CAUSE OF ACTION OTHERWISE
ACCRUES; OR (IV) WHERE ANY ACTION OR OTHER PROCEEDING IS INSTITUTED OR PENDING;
OR (V) THE NATIONALITY, CITIZENSHIP, DOMICILE, PRINCIPAL PLACE OF BUSINESS, OR
JURISDICTION OF ORGANIZATION OR DOMESTICATION OF ANY PARTY; OR (VI) WHETHER THE
LAWS OF THE FORUM JURISDICTION OTHERWISE WOULD APPLY THE LAWS OF A JURISDICTION
OTHER THAN MASSACHUSETTS; OR (VII) ANY COMBINATION OF THE FOREGOING.

 

A-12

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All actions and proceedings arising out of or in any way relating to this
Agreement shall be brought, heard, and determined exclusively in an otherwise
appropriate federal or state court located within the State of New York.
Guarantor hereby (i) submits to the exclusive jurisdiction of any New York
federal or state court of otherwise competent jurisdiction for the purpose of
any action or proceeding arising out of or relating to this Agreement and (ii)
voluntarily and irrevocably waives, and agrees not to assert by way of motion,
defense, or otherwise in any such action or proceeding, any claim or defense
that it is not personally subject to the jurisdiction of such a court, that such
a court lacks personal jurisdiction over Guarantor or the matter, that the
action or proceeding has been brought in an inconvenient or improper forum, that
the venue of the action or proceeding is improper, or that this Agreement may
not be enforced in or by such a court. To the maximum extent permitted by
applicable law, Guarantor consents to service of process by registered mail,
return receipt requested, or by any other manner provided by law.

 

To the maximum extent permitted by applicable law, each of the parties hereto
waives its rights to trial by jury with respect to this Agreement or any matter
arising in connection herewith.

 

13.                                 MODIFICATION OF AGREEMENT. NO MODIFICATION
OR WAIVER OF ANY PROVISION OF THIS AGREEMENT, NOR ANY CONSENT TO ANY DEPARTURE
BY THE GUARANTOR THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME
SHALL BE IN WRITING AND SIGNED BY HPT, AND SUCH MODIFICATION, WAIVER OR CONSENT
SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCES AND FOR THE PURPOSE FOR WHICH
GIVEN. NO NOTICE TO OR DEMAND ON THE GUARANTOR IN ANY CASE SHALL ENTITLE THE
GUARANTOR TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN THE SAME, SIMILAR OR OTHER
CIRCUMSTANCES.

 

14.                                 WAIVER OF RIGHTS BY HPT. NEITHER ANY FAILURE
NOR ANY DELAY ON HPT’S PART IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE UNDER
THIS AGREEMENT SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL A SINGLE OR PARTIAL
EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE, OR THE EXERCISE OF ANY
OTHER RIGHT, POWER OR PRIVILEGE.

 

15.                                 SEVERABILITY. IN CASE ANY ONE OR MORE OF THE
PROVISIONS CONTAINED IN THIS AGREEMENT SHOULD BE INVALID, ILLEGAL OR
UNENFORCEABLE IN ANY RESPECT, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE
REMAINING PROVISIONS CONTAINED HEREIN SHALL NOT IN ANY WAY BE AFFECTED OR
IMPAIRED THEREBY, BUT THIS AGREEMENT SHALL BE REFORMED AND CONSTRUED AND
ENFORCED TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

 

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16.                                 ENTIRE CONTRACT. THIS AGREEMENT CONSTITUTES
THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SHALL SUPERSEDE AND TAKE THE PLACE OF ANY OTHER INSTRUMENTS
PURPORTING TO BE AN AGREEMENT OF THE PARTIES HERETO RELATING TO THE SUBJECT
MATTER HEREOF.

 

17.                                 HEADINGS; COUNTERPARTS. HEADINGS IN THIS
AGREEMENT ARE FOR PURPOSES OF REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE
AFFECT THE MEANING HEREOF. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER
SHALL CONSTITUTE ONE INSTRUMENT, AND IN PLEADING OR PROVING ANY PROVISION OF
THIS AGREEMENT, IT SHALL NOT BE NECESSARY TO PRODUCE MORE THAN ONE OF SUCH
COUNTERPARTS.

 

18.                                 REMEDIES CUMULATIVE. NO REMEDY HEREIN
CONFERRED UPON HPT IS INTENDED TO BE EXCLUSIVE OF ANY OTHER REMEDY, AND SUBJECT
TO THE LIMITATIONS SET FORTH IN SECTION 9 ABOVE, EACH AND EVERY REMEDY SHALL BE
CUMULATIVE AND SHALL BE IN ADDITION TO EVERY OTHER REMEDY GIVEN HEREUNDER OR NOW
OR HEREAFTER EXISTING AT LAW OR IN EQUITY OR BY STATUTE OR OTHERWISE.

 

19.                                 NONLIABILITY OF TRUSTEES. THE DECLARATION OF
TRUST ESTABLISHING TRUST, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO
(THE “DECLARATION”), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT, AND THE GUARANTOR HEREBY
AGREES THAT, THE NAME “HOSPITALITY PROPERTIES TRUST” REFERS TO THE TRUSTEES
UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, TRUST. ALL PERSONS DEALING WITH TRUST, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF TRUST FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

 

20.                                 EFFECTIVE DATE. THIS AGREEMENT SHALL BE OF
NO FORCE OR EFFECT UNLESS AND UNTIL THE EFFECTIVE DATE OCCURS.

 

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WITNESS the execution hereof under seal as of the date above first written.

 

 

INTERCONTINENTAL HOTELS GROUP PLC

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

HPT TRS IHG-1, INC.

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

 

 

 

HOSPITALITY PROPERTIES TRUST

 

 

 

 

 

By:

 

 

 

Its:

 

 

 

 

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EXHIBIT B

 

NEW STAYBRIDGE GUARANTY

 

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (this “Agreement”) is made and given as of
                     , 20    , by INTERCONTINENTAL HOTELS GROUP PLC, a
corporation organized and existing under the laws of England and Wales (the
“Guarantor”), for the benefit of HPT TRS IHG-1, INC., a Maryland corporation
(together with its successors and assigns, the “Tenant”), and HOSPITALITY
PROPERTIES TRUST, a Maryland real estate investment trust (together with its
successors and assigns, “Trust”; and Trust together with the Tenant, “HPT”).

 

W I T N E S S E T H :

 

WHEREAS, on January     , 2006, the Guarantor delivered to HPT that certain
Amended and Restated Consolidated Guaranty Agreement (the “Consolidated
Guaranty”); and

 

WHEREAS, both the IHG4 Coverage Date and the IHG5 Coverage Date (as such terms
are defined in the Consolidated Guaranty) have occurred and the Guarantor wishes
to terminate its obligations under the Consolidated Guaranty in accordance with
Section 10 of the Consolidated Guaranty; and

 

WHEREAS, Section 10 of the Consolidated Guaranty requires, among other things,
that the Guarantor deliver this Guaranty Agreement to HPT in order to terminate
its obligations under the Consolidated Guaranty as aforesaid; and

 

WHEREAS, the termination of its obligations under the Consolidated Guaranty as
aforesaid constitutes a direct material benefit to the Guarantor;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       CERTAIN TERMS. CAPITALIZED TERMS USED
AND NOT OTHERWISE DEFINED IN THIS AGREEMENT SHALL HAVE THE MEANINGS ASCRIBED TO
SUCH TERMS IN THE MANAGEMENT AGREEMENT. THE

 

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following terms as used in this Agreement shall have the meanings set forth
below:

 

“Accounting Principles” shall mean generally accepted accounting principles, as
adopted in the United States of America, consistently applied or, if the
Guarantor’s principal place of business is the United Kingdom, generally
accepted accounting principles, as adopted in the United Kingdom, consistently
applied.

 

“Collateral Agency Agreement” shall mean a written agreement, in form and
substance reasonably acceptable to HPT, among HPT, the Guarantor and the
Collateral Agent pursuant to which the Collateral Agent shall agree to hold any
cash delivered to such Collateral Agent pursuant to the terms of this Agreement
as collateral agent on behalf of HPT, as the same may be amended, restated,
supplemented or otherwise modified from time to time with the consent of the
parties thereto. Among other things, the Collateral Agency Agreement shall
provide that (a) the Collateral Agent shall look solely to the Guarantor for any
amounts owed to the Collateral Agent in connection with such agreement, (b) the
Collateral Agent shall not offset any amount owed to the Collateral Agent
against the cash delivered to it pursuant to the Collateral Agency Agreement and
this Agreement, (c) the Collateral Agent shall hold such cash as trust funds and
not commingle such cash with any assets of the Collateral Agent and (d) HPT
shall be entitled to apply any cash collateral held by the Collateral Agent to
the overdue obligations of the Guarantor hereunder in such order and at such
times as HPT may determine in its sole judgment.

 

“Collateral Agent” shall mean a bank or other financial institution reasonably
acceptable to HPT having a rating of not less than BBB-/Baa3 rating from the
Rating Agencies, which bank or other financial institution is the collateral
agent under the Collateral Agency Agreement as such collateral agent may be
replaced in accordance with the terms of the Collateral Agency Agreement.

 

“Coverage Date” shall mean the date which is the day after the second (2nd)
consecutive calendar year for which the Priority Coverage Ratio is equal to or
exceeds 1.3.

 

“Guaranteed Obligations” shall mean the payment to Tenant of (a) all of the
Owner’s Priority as and when due under the Management Agreement determined
without respect to Gross Revenue or Operating Profits and (b) any and all
liquidated damages due to Tenant under the Management Agreement.

 

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“Management Agreement” shall mean [that certain Amended and Restated Management
Agreement, dated as of January     . 2005], between TRS1 and Manager, with
respect to certain hotels being operated under the “Staybridge” brand] [that
certain Management Agreement, dated as of July 1, 2003, between TRS1 and
Manager] as the same may be amended, modified, supplemented, or otherwise
altered from time to time.

 

“Manager” shall mean Intercontinental Hotels Group Resources, Inc.

 

“Outstanding Balance” shall mean, from time to time, the Seventy Million Dollars
($70,000,000) less the excess of the aggregate amount paid by the Guarantor
under Section 3 hereof over the aggregate amount reimbursed to the Guarantor
pursuant to Section 10.1(l) of the Management Agreement.

 

“Provide Collateral” or “Provided Collateral” shall mean:

 

(a)                                  delivery to HPT of (i) a Satisfactory
Letter of Credit or (ii) cash in an amount equal to the then Outstanding
Balance; or

 

(b)                                 the deposit of cash equal to the then
Outstanding Balance with the Collateral Agent to be held by the Collateral Agent
in accordance with the Collateral Agency Agreement provided:(i) the Collateral
Agency Agreement has been executed and delivered by the parties thereto; (ii)
HPT has a perfected first priority security interest in any cash delivered to
the Collateral Agent; (iii) HPT has received favorable opinions of counsel, in
form and substance reasonably satisfactory to HPT, with respect to such
perfected first priority interest, the valid existence and good standing of the
other parties to the Collateral Agency Agreement, the due execution and delivery
thereof by such other parties, the enforceability of the Collateral Agency
Agreement against such parties, and that any cash held by the Collateral Agent
pursuant to the Collateral Agency Agreement shall not be “property of the
estate” of Collateral Agent should any event described in Sections 17.1(a), (b)
or (c) of the Management Agreement shall occur with respect to the Collateral
Agent; or

 

(c)                                  delivery to HPT of other collateral
satisfactory to HPT in its good faith discretion to secure the Guaranteed
Obligations;

 

provided, however, the Guarantor shall not be deemed to have Provided Collateral
if at any time the Outstanding Balance exceeds the sum of (i) the then remaining
balance drawable under

 

B-3

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the Satisfactory Letter of Credit or the balance of the cash deposited by the
Guarantor hereunder, plus (ii) proceeds of any Satisfactory Letter of Credit or
cash deposited hereunder, in either case, applied to the Guaranteed Obligations.

 

“Priority Coverage Ratio” shall mean, for any period, the ratio of (a) the
excess of Gross Revenue for such period over the sum of the amounts distributed
or applied for such period pursuant to Sections 10.1(a), (b), (e), (g), (h),
(i), (k) and (l) of the Management Agreement, to (b) the sum for such period of
Owner’s Priority and Owner’s Percentage Priority.

 

“Rating Agencies” shall mean, collectively, Standard’s & Poor’s Rating Services
or its successor and Moody’s Investor Services, Inc. or its successors;
provided, however, if the Rating Agencies (i) cease operations without
successors or (ii) cease to issue credit ratings, “Rating Agencies” shall mean a
nationally recognized organization periodically issuing ratings of the financial
strength and/or credit of United States domestic and international banking
institutions reasonably agreed to by HPT and the Guarantor.

 

“Reorganization” shall mean any merger, consolidation, reorganization, change of
control or any transaction pursuant to which the Guarantor shall be or become a
Subsidiary of any other Person.

 

“Satisfactory Letter of Credit” shall mean a clean irrevocable letter of credit
in form and substance reasonably satisfactory to HPT in an amount equal to the
Outstanding Balance issued by a bank with a credit rating of not less than A2/A
(or, if after the date hereof the system of ratings used by the Rating Agencies
changes in a material way, their then equivalents of such credit rating in HPT’s
reasonable judgment) from the Rating Agencies, having an expiration date of not
earlier than one year after the date on which it was issued and which permits
for partial draws.

 

“Substitute Guarantor” shall mean a Person who assumes the Guarantor’s
obligations hereunder in accordance with the terms of Section 2.7 below and is
either (a) a Person who satisfies the Rating Agencies’ requirements for a single
purpose bankruptcy remote entity who has Provided Collateral or (b) a Person(s)
with (i) a tangible net worth determined in accordance with the Accounting
Principles not less than Seven Hundred Fifty Million Dollars ($750,000,000) and
(ii) unencumbered assets with a fair market value of not less than One Hundred
Million Dollars (exclusive of any note, instrument, security or claim issued by,

 

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against or in any way dependent on the credit of, an Affiliate of Guarantor).

 

2.                                       REPRESENTATIONS AND COVENANTS. THE
GUARANTOR REPRESENTS, WARRANTS, COVENANTS AND AGREES THAT:

 

2.1                                 VALIDITY OF AGREEMENT. THE GUARANTOR HAS
DULY AND VALIDLY EXECUTED AND DELIVERED THIS AGREEMENT; THIS AGREEMENT
CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATION OF THE GUARANTOR,
ENFORCEABLE AGAINST THE GUARANTOR IN ACCORDANCE WITH ITS TERMS, EXCEPT AS
ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM OR SIMILAR LAWS OF GENERAL APPLICATION AFFECTING THE RIGHTS AND
REMEDIES OF CREDITORS; AND THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE ACTION OF THE GUARANTOR AND
SUCH EXECUTION, DELIVERY AND PERFORMANCE BY THE GUARANTOR WILL NOT RESULT IN ANY
BREACH OF THE TERMS, CONDITIONS OR PROVISIONS OF, OR CONFLICT WITH OR CONSTITUTE
A DEFAULT UNDER, OR RESULT IN THE CREATION OF ANY LIEN, CHARGE OR ENCUMBRANCE
UPON ANY OF THE PROPERTY OR ASSETS OF THE GUARANTOR PURSUANT TO THE TERMS OF,
ANY INDENTURE, MORTGAGE, DEED OF TRUST, NOTE, OTHER EVIDENCE OF INDEBTEDNESS,
AGREEMENT OR OTHER INSTRUMENT TO WHICH THE GUARANTOR IS A PARTY OR BY WHICH THE
GUARANTOR OR ANY PROPERTY OR ASSETS OF THE GUARANTOR IS BOUND, OR VIOLATE ANY
PROVISION OF LAW APPLICABLE TO THE GUARANTOR, OR ANY ORDER, WRIT, INJUNCTION,
JUDGEMENT OR DECREE OF ANY COURT APPLICABLE TO THE GUARANTOR OR ANY ORDER OR
OTHER PUBLIC REGULATION OF ANY GOVERNMENTAL COMMISSION, BUREAU OR ADMINISTRATIVE
AGENCY APPLICABLE TO THE GUARANTOR.

 

2.2                                 PAYMENT OF EXPENSES. THE GUARANTOR AGREES,
AS PRINCIPAL OBLIGOR AND NOT AS GUARANTOR ONLY, TO PAY TO HPT FORTHWITH, UPON
DEMAND, IN IMMEDIATELY AVAILABLE FEDERAL FUNDS, ALL COSTS AND EXPENSES
(INCLUDING COURT COSTS AND REASONABLE LEGAL EXPENSES) INCURRED OR EXPENDED BY
HPT IN CONNECTION WITH THE ENFORCEMENT OF THIS AGREEMENT, TOGETHER WITH INTEREST
AT THE INTEREST RATE ON AMOUNTS RECOVERABLE UNDER THIS AGREEMENT FROM THE TIME
SUCH AMOUNTS BECOME DUE UNTIL PAYMENT.

 

2.3                                 REPORTS. THE GUARANTOR SHALL TIMELY DELIVER
TO HPT THE CONSOLIDATED FINANCIALS REQUIRED UNDER THE MANAGEMENT AGREEMENT AND
OTHERWISE COMPLY WITH THE TERMS OF THE MANAGEMENT AGREEMENT APPLICABLE TO IT.

 

2.4                                 FINANCIAL CONDITION OF GUARANTOR; STATUS OF
GUARANTOR. SO LONG AS THE GUARANTOR’S OBLIGATIONS UNDER SECTION 3 BELOW ARE
OUTSTANDING, UNLESS THE GUARANTOR SHALL HAVE PROVIDED COLLATERAL TO SECURE ITS
OBLIGATIONS HEREUNDER:

 

B-5

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(A)                                  THE GUARANTOR SHALL AT ALL TIMES MAINTAIN A
TANGIBLE NET WORTH DETERMINED IN ACCORDANCE WITH THE ACCOUNTING PRINCIPLES IN AN
AMOUNT NOT LESS THAN FIVE HUNDRED MILLION DOLLARS ($500,000,000) OR IF THERE HAS
BEEN A REORGANIZATION, OR IF THE GUARANTOR IS NOT THE ORIGINALLY NAMED
GUARANTOR, SEVEN HUNDRED FIFTY MILLION DOLLARS ($750,000,000); AND

 

(B)                                 THE GUARANTOR SHALL NOT ENGAGE IN ANY
REORGANIZATION UNLESS FOLLOWING SUCH REORGANIZATION IT HAS (I) A TANGIBLE NET
WORTH DETERMINED IN ACCORDANCE WITH THE ACCOUNTING PRINCIPLES IN AN AMOUNT NOT
LESS THAN SEVEN HUNDRED FIFTY MILLION DOLLARS ($750,000,000) AND (II)
UNENCUMBERED ASSETS WITH A FAIR MARKET VALUE OF NOT LESS THAN ONE HUNDRED
MILLION DOLLARS ($100,000,000) (EXCLUSIVE OF ANY NOTE, INSTRUMENT, SECURITY OR
CLAIM ISSUED BY, AGAINST OR IN ANY WAY DEPENDENT ON THE CREDIT OF, AN AFFILIATE
OF GUARANTOR).

 

2.5                                 SECURITY. UPON THE TERMINATION OF THE
GUARANTOR’S OBLIGATIONS UNDER SECTION 3 OR IF THE EXCESS OF AGGREGATE AMOUNT
PAID BY THE GUARANTOR UNDER SECTION 3 OVER THE AGGREGATE AMOUNT REIMBURSED TO IT
PURSUANT TO SECTION 10.1(L) OF THE MANAGEMENT AGREEMENT EQUALS NOT LESS THAN
FIFTY MILLION DOLLARS ($50,000,000), HPT WILL RETURN TO THE GUARANTOR ANY
SATISFACTORY LETTER OF CREDIT PREVIOUSLY DELIVERED TO HPT OR ANY UNAPPLIED CASH
COLLATERAL THEN BEING HELD BY HPT HEREUNDER AND SHALL DIRECT THE COLLATERAL
AGENT TO RETURN ANY CASH BEING HELD BY IT UNDER THE COLLATERAL AGENCY AGREEMENT
TO THE GUARANTOR. HPT SHALL BE ENTITLED TO DRAW UPON ANY SATISFACTORY LETTER OF
CREDIT DELIVERED TO IT (A) FOR THE FULL AMOUNT THEREOF IF AT ANY TIME THERE IS
LESS THAN THIRTY (30) DAYS UNTIL THE EXPIRY DATE OF SUCH SATISFACTORY LETTER OF
CREDIT; (B) FOR THE FULL AMOUNT THEREOF IF THE BANK THAT ISSUED SUCH
SATISFACTORY LETTER OF CREDIT SHALL NOT HAVE A CREDIT RATING OF AT LEAST A/A2
(OR, IF AFTER THE DATE HEREOF THE SYSTEM OF RATINGS USED BY THE RATING AGENCIES
CHANGES IN A MATERIAL WAY, THEIR THEN EQUIVALENTS IN HPT’S REASONABLE JUDGMENT)
FROM THE RATING AGENCIES AND SUCH SATISFACTORY LETTER OF CREDIT SHALL NOT HAVE
BEEN REPLACED WITHIN THIRTY (30) DAYS WITH A NEW SATISFACTORY LETTER OF CREDIT
DELIVERED TO HPT; OR (C) TO THE EXTENT AND IN THE AMOUNTS THEN DUE AND PAYABLE
HEREUNDER, IF THE GUARANTOR SHALL FAIL TO PAY OR PERFORM ANY OF ITS OBLIGATIONS
UNDER THIS GUARANTY IN ACCORDANCE WITH THE TERMS HEREOF. HPT SHALL BE ENTITLED
TO APPLY ANY CASH COLLATERAL HELD BY IT OR THE COLLATERAL AGENT TO THE OVERDUE
OBLIGATIONS OF THE GUARANTOR HEREUNDER IN SUCH ORDER AND AT SUCH TIMES AS HPT
MAY DETERMINE IN ITS SOLE JUDGMENT. ANY CASH COLLATERAL HELD BY HPT SHALL NOT BE
COMMINGLED WITH ITS OTHER FUNDS, AND SHALL BE INVESTED, AT THE GUARANTOR’S RISK,
IN INTEREST BEARING INVESTMENTS REASONABLY ACCEPTABLE TO THE

 

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Guarantor. Any interest on such cash collateral, and any losses in such
investments, shall belong to IHG.

 

2.6                                 LEGAL EXISTENCE. THE GUARANTOR SHALL DO OR
CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL FORCE AND
EFFECT ITS CORPORATE EXISTENCE. THE GUARANTOR HAS APPOINTED ATTORNEYS ALSTON &
BIRD LLP, HAVING AN ADDRESS AT 1201 WEST PEACHTREE STREET, ATLANTA, GEORGIA
30309-3424, ATTN:  MANAGING PARTNER AS ITS AGENT FOR SERVICE OF PROCESS.
MANAGING PARTNER AS ITS AGENT FOR SERVICE OF PROCESS. THE GUARANTOR ACKNOWLEDGES
AND AGREES THAT SERVICE OF PROCESS ON SUCH AGENT SHALL CONSTITUTE SERVICE OF
PROCESS ON GUARANTOR WITH RESPECT TO ANY AND ALL CLAIMS HEREUNDER OR UNDER ANY
OTHER TRANSACTION DOCUMENT.

 

2.7                                 SUBSTITUTE GUARANTOR. THE THEN GUARANTOR
(THE “DEPARTING GUARANTOR”) SHALL BE RELEASED FROM OBLIGATIONS UNDER SECTION 3
HEREOF ON THE FOLLOWING TERMS AND CONDITIONS:

 

(A)                                  A SUBSTITUTE GUARANTOR SHALL ASSUME
PURSUANT TO A WRITTEN INSTRUMENT SATISFACTORY TO HPT ALL OF THE GUARANTOR’S
OBLIGATIONS HEREUNDER; AND

 

(B)                                 HPT SHALL RECEIVE AN OPINION OF COUNSEL
SATISFACTORY TO HPT WITH RESPECT TO, AMONG OTHER THINGS, THE EXISTENCE AND GOOD
STANDING OF THE SUBSTITUTE GUARANTOR AND THE DUE EXECUTION, DELIVERY AND
ENFORCEABILITY OF SUCH ASSUMPTION.

 

Upon the satisfaction of the foregoing conditions and the expiration of all
applicable preference or similar periods, HPT shall deliver a release to the
Departing Guarantor of its obligations hereunder and the Substitute Guarantor
shall be deemed the “Guarantor” hereunder. Further, if the Substitute Guarantor
has Provided Collateral or has (i) a tangible net worth determined in accordance
with the Accounting Principles of not less than Seven Hundred Fifty Million
Dollars ($750,000,000) and (ii) unencumbered assets with a fair market value of
not less than One Hundred Million Dollars (exclusive of any note, instrument,
security or claim issued by, against or in any way dependent on the credit of,
an Affiliate of Guarantor), HPT shall return to the Departing Guarantor any
letter of credit or cash delivered by the Departing Guarantor and held by HPT
hereunder and shall direct the Collateral Agent to return to the Departing
Guarantor any cash delivered by the Departing Guarantor and held by such
Collateral Agent pursuant to the terms of the Collateral Agency Agreement.

 

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3.                                       GUARANTEE.

 

(A)                                  THE GUARANTOR HEREBY UNCONDITIONALLY
GUARANTEES THAT THE GUARANTEED OBLIGATIONS WHICH BECOME DUE AND PAYABLE DURING
THE TERM OF THE MANAGEMENT AGREEMENT SHALL BE PAID IN FULL WHEN DUE AND PAYABLE
SUBJECT TO ANY APPLICABLE CURE PERIODS, WHETHER UPON DEMAND, AT THE STATED OR
ACCELERATED MATURITY THEREOF OR UPON ANY MANDATORY OR VOLUNTARY PREPAYMENT
PURSUANT TO ANY TRANSACTION DOCUMENT, OR OTHERWISE.

 

(B)                                 THIS GUARANTEE IS A GUARANTEE OF PAYMENT AND
NOT OF COLLECTIBILITY AND IS ABSOLUTE AND IN NO WAY CONDITIONAL OR CONTINGENT.
IN CASE ANY PART OF THE GUARANTEED OBLIGATIONS SHALL NOT HAVE BEEN PAID WHEN DUE
AND PAYABLE OR PERFORMED AT THE TIME PERFORMANCE IS REQUIRED, SUBJECT TO ANY
APPLICABLE CURE PERIODS, THE GUARANTOR SHALL, PAY OR CAUSE TO BE PAID TO HPT THE
AMOUNT THEREOF AS IS THEN DUE AND PAYABLE AND UNPAID (INCLUDING INTEREST AND
OTHER CHARGES, IF ANY, DUE THEREON THROUGH THE DATE OF PAYMENT IN ACCORDANCE
WITH THE APPLICABLE PROVISIONS OF THE TRANSACTION DOCUMENTS) OR PERFORM OR CAUSE
TO BE PERFORMED SUCH OBLIGATIONS IN ACCORDANCE WITH THE TRANSACTION DOCUMENTS.
SIMULTANEOUSLY WITH THE GIVING OF ANY NOTICE OF DEFAULT TO THE MANAGER UNDER THE
MANAGEMENT AGREEMENT, TENANT SHALL GIVE A COPY OF SUCH NOTICE TO THE GUARANTOR.
TENANT SHALL ACCEPT ANY CURE OF SUCH DEFAULT BY THE GUARANTOR PROVIDED SUCH CURE
IS COMPLETED WITHIN THE APPLICABLE CURE PERIOD UNDER THE MANAGEMENT AGREEMENT.

 

4.                                       UNENFORCEABILITY OF GUARANTEED
OBLIGATIONS, ETC. IF THE MANAGER IS FOR ANY REASON UNDER NO LEGAL OBLIGATION TO
DISCHARGE ANY OF THE GUARANTEED OBLIGATIONS, OR IF ANY OTHER MONEYS INCLUDED IN
THE GUARANTEED OBLIGATIONS HAVE BECOME UNRECOVERABLE FROM THE MANAGER BY
OPERATION OF LAW OR FOR ANY OTHER REASON, INCLUDING, WITHOUT LIMITATION, THE
INVALIDITY OR IRREGULARITY IN WHOLE OR IN PART OF ANY GUARANTEED OBLIGATION OR
OF ANY TRANSACTION DOCUMENT OR ANY LIMITATION ON THE LIABILITY OF THE MANAGER
THEREUNDER OR ANY LIMITATION ON THE METHOD OR TERMS OF PAYMENT THEREUNDER WHICH
MAY NOW OR HEREAFTER BE CAUSED OR IMPOSED IN ANY MANNER WHATSOEVER, THE
GUARANTEES CONTAINED IN THIS AGREEMENT SHALL NEVERTHELESS REMAIN IN FULL FORCE
AND EFFECT IN ACCORDANCE WITH THE TERMS SET FORTH HEREIN AND SHALL BE BINDING
UPON THE GUARANTOR TO THE SAME EXTENT AS IF THE GUARANTOR AT ALL TIMES HAD BEEN
THE PRINCIPAL DEBTOR ON ALL SUCH GUARANTEED OBLIGATIONS.

 

5.                                       ADDITIONAL GUARANTEES. THIS AGREEMENT
SHALL BE IN ADDITION TO ANY OTHER GUARANTEE OR OTHER SECURITY FOR THE GUARANTEED
OBLIGATIONS AND IT SHALL NOT BE PREJUDICED OR RENDERED UNENFORCEABLE BY THE
INVALIDITY OF ANY SUCH OTHER

 

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guarantee or security or by any waiver, amendment, release or modification
thereof.

 

6.                                       CONSENTS AND WAIVERS, ETC. THE
GUARANTOR HEREBY ACKNOWLEDGES RECEIPT OF CORRECT AND COMPLETE COPIES OF EACH OF
THE TRANSACTION DOCUMENTS AND CONSENTS TO ALL OF THE TERMS AND PROVISIONS
THEREOF, AS THE SAME MAY BE FROM TIME TO TIME HEREAFTER AMENDED OR CHANGED IN
ACCORDANCE THEREWITH, AND WAIVES, TO THE EXTENT THE GUARANTOR LAWFULLY MAY DO
SO, (A) PRESENTMENT, DEMAND FOR PAYMENT, AND PROTEST OF NONPAYMENT, OF ANY OF
THE GUARANTEED OBLIGATIONS, (B) NOTICE OF ACCEPTANCE OF THIS AGREEMENT AND OF
DILIGENCE, PRESENTMENT, DEMAND AND PROTEST, (C) NOTICE OF ANY DEFAULT HEREUNDER
AND ANY DEFAULT, BREACH OR NONPERFORMANCE OR A MANAGER EVENT OF DEFAULT UNDER
ANY OF THE GUARANTEED OBLIGATIONS OR THE TRANSACTION DOCUMENTS, EXCEPT AS
EXPRESSLY PROVIDED IN SECTION 3, (D) NOTICE OF THE TERMS, TIME AND PLACE OF ANY
PRIVATE OR PUBLIC SALE OF COLLATERAL HELD AS SECURITY FOR THE GUARANTEED
OBLIGATIONS, (E) DEMAND FOR PERFORMANCE OR OBSERVANCE OF, AND ANY ENFORCEMENT OF
ANY PROVISION OF, OR ANY PURSUIT OR EXHAUSTION OF RIGHTS OR REMEDIES AGAINST THE
MANAGER OR ANY OTHER GUARANTOR OF THE GUARANTEED OBLIGATIONS, UNDER OR PURSUANT
TO THE TRANSACTION DOCUMENTS, OR ANY AGREEMENT DIRECTLY OR INDIRECTLY RELATING
THERETO AND ANY REQUIREMENTS OF DILIGENCE OR PROMPTNESS ON THE PART OF THE
HOLDERS OF THE GUARANTEED OBLIGATIONS IN CONNECTION THEREWITH, AND (F) ANY AND
ALL DEMANDS AND NOTICES OF EVERY KIND AND DESCRIPTION WITH RESPECT TO THE
FOREGOING OR WHICH MAY BE REQUIRED TO BE GIVEN BY ANY STATUTE OR RULE OF LAW.

 

7.                                       NO IMPAIRMENT, ETC. THE OBLIGATIONS,
COVENANTS, AGREEMENTS AND DUTIES OF THE GUARANTOR UNDER THIS AGREEMENT SHALL NOT
BE AFFECTED OR IMPAIRED BY ANY ASSIGNMENT OR TRANSFER IN WHOLE OR IN PART OF ANY
OF THE GUARANTEED OBLIGATIONS WITHOUT NOTICE TO THE GUARANTOR, OR ANY WAIVER BY
HPT OR ANY HOLDER OF ANY OF THE GUARANTEED OBLIGATIONS OR BY THE HOLDERS OF ALL
OF THE GUARANTEED OBLIGATIONS OF THE PERFORMANCE OR OBSERVANCE BY THE MANAGER OR
ANY OTHER GUARANTOR OF ANY OF THE AGREEMENTS, COVENANTS, TERMS OR CONDITIONS
CONTAINED IN THE GUARANTEED OBLIGATIONS OR THE TRANSACTION DOCUMENTS OR ANY
INDULGENCE IN OR THE EXTENSION OF THE TIME FOR PAYMENT BY THE MANAGER OR ANY
OTHER GUARANTOR OF ANY AMOUNTS PAYABLE UNDER OR IN CONNECTION WITH THE
GUARANTEED OBLIGATIONS OR THE TRANSACTION DOCUMENTS OR ANY OTHER INSTRUMENT OR
AGREEMENT RELATING TO THE GUARANTEED OBLIGATIONS OR OF THE TIME FOR PERFORMANCE
BY THE MANAGER OR ANY OTHER GUARANTOR OF ANY OTHER OBLIGATIONS UNDER OR ARISING
OUT OF ANY OF THE FOREGOING OR THE EXTENSION OR RENEWAL THEREOF, OR THE
MODIFICATION OR AMENDMENT MADE WITH THE CONSENT OF THE GUARANTOR OF ANY DUTY,
AGREEMENT OR OBLIGATION OF THE MANAGER OR ANY OTHER

 

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guarantor set forth in any of the foregoing, or the voluntary or involuntary
sale or other disposition of all or substantially all the assets of the Manager
or any other guarantor or insolvency, bankruptcy, or other similar proceedings
affecting the Manager or any other guarantor or any assets of the Manager or any
such other guarantor, or the release or discharge of the Manager or any such
other guarantor from the performance or observance of any agreement, covenant,
term or condition contained in any of the foregoing without the consent of the
holders of the Guaranteed Obligations by operation of law.

 

8.                                       REIMBURSEMENT, SUBROGATION, ETC. THE
GUARANTOR HEREBY COVENANTS AND AGREES THAT THE GUARANTOR WILL NOT ENFORCE OR
OTHERWISE EXERCISE ANY RIGHTS OF REIMBURSEMENT, SUBROGATION, CONTRIBUTION OR
OTHER SIMILAR RIGHTS AGAINST THE MANAGER OR ANY OTHER PERSON WITH RESPECT TO THE
GUARANTEED OBLIGATIONS PRIOR TO THE IRREVOCABLE PAYMENT IN FULL OF ALL AMOUNTS
THEN DUE AND OWING BUT UNPAID UNDER THE MANAGEMENT AGREEMENT, AND UNTIL THE
GUARANTEED OBLIGATIONS HAVE BEEN SATISFIED IN FULL, THE GUARANTOR SHALL NOT HAVE
ANY RIGHT OF SUBROGATION, AND THE GUARANTOR WAIVES ANY DEFENSE IT MAY HAVE BASED
UPON ANY ELECTION OF REMEDIES BY HPT WHICH DESTROYS THE GUARANTOR’S SUBROGATION
RIGHTS OR THE GUARANTOR’S RIGHTS TO PROCEED AGAINST THE MANAGER FOR
REIMBURSEMENT, INCLUDING, WITHOUT LIMITATION, ANY LOSS OF RIGHTS THE GUARANTOR
MAY SUFFER BY REASON OF ANY RIGHTS, POWERS OR REMEDIES OF THE MANAGER IN
CONNECTION WITH ANY ANTI-DEFICIENCY LAWS OR ANY OTHER LAWS LIMITING, QUALIFYING
OR DISCHARGING THE INDEBTEDNESS TO HPT. UNTIL ALL OBLIGATIONS OF THE MANAGER
PURSUANT TO THE TRANSACTION DOCUMENTS SHALL HAVE BEEN IRREVOCABLY PAID AND
SATISFIED IN FULL, THE GUARANTOR WAIVES ANY RIGHT TO ENFORCE ANY REMEDY WHICH
HPT NOW HAS OR MAY IN THE FUTURE HAVE AGAINST THE MANAGER, ANY OTHER GUARANTOR
OR ANY OTHER PERSON AND ANY BENEFIT OF, OR ANY RIGHT TO PARTICIPATE IN, ANY
SECURITY WHATSOEVER NOW OR IN THE FUTURE HELD BY HPT. NOTHING CONTAINED IN THIS
SECTION 8 SHALL LIMIT THE GUARANTOR’S RIGHTS UNDER SECTION 10.1(L) OF THE
MANAGEMENT AGREEMENT.

 

9.                                       DEFEASANCE; GUARANTY LIMITATIONS. THE
GUARANTOR’S OBLIGATIONS UNDER SECTION 3 SHALL TERMINATE UPON THE FIRST TO OCCUR
OF (A) THE DATE ON WHICH THE GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED
IN FULL AND ALL OTHER OBLIGATIONS OF THE GUARANTOR TO HPT UNDER THIS AGREEMENT
HAVE BEEN IRREVOCABLY SATISFIED IN FULL AND (B) THE COVERAGE DATE; PROVIDED,
HOWEVER, IF AT ANY TIME, ALL OR ANY PART OF ANY PAYMENT APPLIED ON ACCOUNT OF
THE GUARANTEED OBLIGATIONS IS OR MUST

 

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be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of the Manager), this
Agreement, to the extent such payment is or must be rescinded or returned, shall
be deemed to have continued in existence notwithstanding any such termination.
Notwithstanding anything contained in this Agreement to the contrary, the
Guarantor’s liability under Section 3 hereof in the aggregate shall not exceed
(a) for the period ending on December 31, 2005, (i) Fifty Million Dollars
($50,000,000) with respect to the portion of Owner’s Priority attributable to
the Original Hotels and (ii) an additional Sixteen Million Dollars ($16,000,000)
with respect to the portion of Owner’s Priority attributable to the Expansion
Hotels, and (b) thereafter, Seventy Million Dollars ($70,000,000) with respect
to the entire amount of Owner’s Priority; provided, however, such liability
shall be reduced by any advances made by Manager under Section 10.3 of the
Management Agreement which Manager elects to be deemed advances hereunder
pursuant to said Section and such liability shall be increased by any
reimbursements made to the Guarantor pursuant to Section 10.1(l) of the
Management Agreement.

 

10.                                 NOTICES. (A)  ANY AND ALL NOTICES, DEMANDS,
CONSENTS, APPROVALS, OFFERS, ELECTIONS AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED UNDER THIS AGREEMENT SHALL BE DEEMED ADEQUATELY GIVEN IF IN WRITING
AND THE SAME SHALL BE DELIVERED EITHER BY HAND, BY TELECOPIER WITH WRITTEN
ACKNOWLEDGMENT OF RECEIPT (PROVIDED A COPY THEREOF IS SENT BY FEDERAL EXPRESS OR
SIMILAR EXPEDITED COMMERCIAL CARRIER FOR DELIVERY ON THE NEXT BUSINESS DAY), OR
FEDERAL EXPRESS OR SIMILAR EXPEDITED COMMERCIAL CARRIER, ADDRESSED TO THE
RECIPIENT OF THE NOTICE, POSTPAID AND REGISTERED OR CERTIFIED WITH RETURN
RECEIPT REQUESTED (IF BY MAIL), OR WITH ALL FREIGHT CHARGES PREPAID (IF BY
FEDERAL EXPRESS OR SIMILAR CARRIER).

 

(b)  All notices required or permitted to be sent hereunder shall be deemed to
have been given for all purposes of this Agreement upon the date of acknowledged
receipt, in the case of a notice by telecopier, and, in all other cases, upon
the date of receipt or refusal, except that whenever under this Agreement a
notice is either received on a day which is not a Business Day or is required to
be delivered on or before a specific day which is not a Business Day, the day of
receipt or required delivery shall automatically be extended to the next
Business Day.

 

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(c)  All such notices shall be addressed,

 

if to HPT to:

 

c/o Hospitality Properties Trust

400 Centre Street

Newton, Massachusetts  02458

Attn:  Mr. John G. Murray

[Telecopier No. (617) 969-5730]

 

with a copy to:

 

Sullivan & Worcester LLP

One Post Office Square

Boston, Massachusetts  02109

Attn:  Warren M. Heilbronner, Esq.

[Telecopier No. (617) 338-2880]

 

if to the Guarantor to:

 

Intercontinental Hotels Group PLC

67 Alma Road

Windsor

Berkshire SL4 3HD

ENGLAND

Attn: Company Secretary

Telecopier No. +44 1753 410101

 

with a copy to:

 

Intercontinental Hotels Group, Inc.

Three Ravinia Drive

Suite 100

Atlanta, Georgia 30346

Attn:  Vice President, Asset Management

[Telecopier No. 770-604-5340]

 

(d)  By notice given as herein provided, the parties hereto and their respective
successors and assigns shall have the right from time to time and at any time
during the term of this Agreement to change their respective addresses effective
upon receipt by the other parties of such notice and each shall have the right
to specify as its address any other address within the United States of America.

 

11.                                 SUCCESSORS AND ASSIGNS. WHENEVER IN THIS
AGREEMENT, ANY OF THE PARTIES HERETO IS REFERRED TO, SUCH REFERENCE SHALL BE
DEEMED TO INCLUDE THE SUCCESSORS AND ASSIGNS OF SUCH PARTY, INCLUDING WITHOUT
LIMITATION THE HOLDERS, FROM TIME TO TIME, OF

 

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the Guaranteed Obligations; and all representations, warranties, covenants and
agreements by or on behalf of the Guarantor which are contained in this
Agreement shall inure to the benefit of HPT’s successors and assigns, including,
without limitation, such holders, whether so expressed or not.

 

12.                                 APPLICABLE LAW. EXCEPT AS TO MATTERS
REGARDING THE INTERNAL AFFAIRS OF HPT AND ISSUES OF OR LIMITATIONS ON ANY
PERSONAL LIABILITY OF THE SHAREHOLDERS AND TRUSTEES OF HPT FOR OBLIGATIONS OF
HPT, AS TO WHICH THE LAWS OF THE STATE OF MARYLAND SHALL GOVERN, THIS AGREEMENT
AND ANY OTHER INSTRUMENTS EXECUTED AND DELIVERED TO EVIDENCE, COMPLETE OR
PERFECT THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE INTERPRETED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK APPLICABLE TO
CONTRACTS BETWEEN RESIDENTS OF NEW YORK WHICH ARE TO BE PERFORMED ENTIRELY
WITHIN NEW YORK, REGARDLESS OF (I) WHERE ANY SUCH INSTRUMENT IS EXECUTED OR
DELIVERED; OR (II) WHERE ANY PAYMENT OR OTHER PERFORMANCE REQUIRED BY ANY SUCH
INSTRUMENT IS MADE OR REQUIRED TO BE MADE; OR (III) WHERE ANY BREACH OF ANY
PROVISION OF ANY SUCH INSTRUMENT OCCURS, OR ANY CAUSE OF ACTION OTHERWISE
ACCRUES; OR (IV) WHERE ANY ACTION OR OTHER PROCEEDING IS INSTITUTED OR PENDING;
OR (V) THE NATIONALITY, CITIZENSHIP, DOMICILE, PRINCIPAL PLACE OF BUSINESS, OR
JURISDICTION OF ORGANIZATION OR DOMESTICATION OF ANY PARTY; OR (VI) WHETHER THE
LAWS OF THE FORUM JURISDICTION OTHERWISE WOULD APPLY THE LAWS OF A JURISDICTION
OTHER THAN MASSACHUSETTS; OR (VII) ANY COMBINATION OF THE FOREGOING.

 

All actions and proceedings arising out of or in any way relating to this
Agreement shall be brought, heard, and determined exclusively in an otherwise
appropriate federal or state court located within the State of New York.
Guarantor hereby (i) submits to the exclusive jurisdiction of any New York
federal or state court of otherwise competent jurisdiction for the purpose of
any action or proceeding arising out of or relating to this Agreement and (ii)
voluntarily and irrevocably waives, and agrees not to assert by way of motion,
defense, or otherwise in any such action or proceeding, any claim or defense
that it is not personally subject to the jurisdiction of such a court, that such
a court lacks personal jurisdiction over Guarantor or the matter, that the
action or proceeding has been brought in an inconvenient or improper forum, that
the venue of the action or proceeding is improper, or that this Agreement may
not be enforced in or by such a court. To the maximum extent permitted by
applicable law, Guarantor consents to service of process by registered mail,
return receipt requested, or by any other manner provided by law.

 

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To the maximum extent permitted by applicable law, each of the parties hereto
waives its rights to trial by jury with respect to this Agreement or any matter
arising in connection herewith.

 

13.                                 MODIFICATION OF AGREEMENT. NO MODIFICATION
OR WAIVER OF ANY PROVISION OF THIS AGREEMENT, NOR ANY CONSENT TO ANY DEPARTURE
BY THE GUARANTOR THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME
SHALL BE IN WRITING AND SIGNED BY HPT, AND SUCH MODIFICATION, WAIVER OR CONSENT
SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCES AND FOR THE PURPOSE FOR WHICH
GIVEN. NO NOTICE TO OR DEMAND ON THE GUARANTOR IN ANY CASE SHALL ENTITLE THE
GUARANTOR TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN THE SAME, SIMILAR OR OTHER
CIRCUMSTANCES.

 

14.                                 WAIVER OF RIGHTS BY HPT. NEITHER ANY FAILURE
NOR ANY DELAY ON HPT’S PART IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE UNDER
THIS AGREEMENT SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL A SINGLE OR PARTIAL
EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE, OR THE EXERCISE OF ANY
OTHER RIGHT, POWER OR PRIVILEGE.

 

15.                                 SEVERABILITY. IN CASE ANY ONE OR MORE OF THE
PROVISIONS CONTAINED IN THIS AGREEMENT SHOULD BE INVALID, ILLEGAL OR
UNENFORCEABLE IN ANY RESPECT, THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE
REMAINING PROVISIONS CONTAINED HEREIN SHALL NOT IN ANY WAY BE AFFECTED OR
IMPAIRED THEREBY, BUT THIS AGREEMENT SHALL BE REFORMED AND CONSTRUED AND
ENFORCED TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

 

16.                                 ENTIRE CONTRACT. THIS AGREEMENT CONSTITUTES
THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SHALL SUPERSEDE AND TAKE THE PLACE OF ANY OTHER INSTRUMENTS
PURPORTING TO BE AN AGREEMENT OF THE PARTIES HERETO RELATING TO THE SUBJECT
MATTER HEREOF.

 

17.                                 HEADINGS; COUNTERPARTS. HEADINGS IN THIS
AGREEMENT ARE FOR PURPOSES OF REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE
AFFECT THE MEANING HEREOF. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE AN ORIGINAL, BUT ALL OF WHICH TOGETHER
SHALL CONSTITUTE ONE INSTRUMENT, AND IN PLEADING OR PROVING ANY PROVISION OF
THIS AGREEMENT, IT SHALL NOT BE NECESSARY TO PRODUCE MORE THAN ONE OF SUCH
COUNTERPARTS.

 

18.                                 REMEDIES CUMULATIVE. NO REMEDY HEREIN
CONFERRED UPON HPT IS INTENDED TO BE EXCLUSIVE OF ANY OTHER REMEDY, AND SUBJECT
TO THE LIMITATIONS SET FORTH IN SECTION 9 ABOVE, EACH AND EVERY REMEDY SHALL BE
CUMULATIVE AND SHALL BE IN ADDITION TO EVERY

 

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other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise.

 

19.                                 NONLIABILITY OF TRUSTEES. THE DECLARATION OF
TRUST ESTABLISHING TRUST, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO
(THE “DECLARATION”), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT, AND THE GUARANTOR HEREBY
AGREES THAT, THE NAME “HOSPITALITY PROPERTIES TRUST” REFERS TO THE TRUSTEES
UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, TRUST. ALL PERSONS DEALING WITH TRUST, IN ANY
WAY, SHALL LOOK ONLY TO THE ASSETS OF TRUST FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

 

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WITNESS the execution hereof under seal as of the date above first written.

 

 

INTERCONTINENTAL HOTELS GROUP PLC

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

HPT TRS IHG-1, INC.

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

 

 

 

HOSPITALITY PROPERTIES TRUST

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

 

 

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