Exhibit 10.120

 

 

THIRD AMENDMENT TO CREDIT AGREEMENT

Dated February 25, 2009

By and Among

STRATEGIC HOTEL FUNDING, L.L.C.,

as Borrower,

VARIOUS FINANCIAL INSTITUTIONS,

as Lenders,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent

 

 

--------------------------------------------------------------------------------

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of February 25, 2009 (this
“Third Amendment”), by and among STRATEGIC HOTEL FUNDING, L.L.C., a Delaware
limited liability company (“Borrower”), DEUTSCHE BANK TRUST COMPANY AMERICAS
(“DBTCA”), as the administrative agent (in such capacity, “Administrative
Agent”), and the various financial institutions as are or may become parties
hereto (together with DBTCA, collectively “Lenders” and individually, a
“Lender”).

RECITALS

WHEREAS, Borrower, Administrative Agent and Lenders are parties to that certain
Credit Agreement, dated as of March 9, 2007, as amended by (i) that certain
First Amendment to Credit Agreement, dated as of March 27, 2007 and (ii) that
certain Second Amendment to Credit Agreement, dated as of April 18, 2007 (the
“Original Agreement”), pursuant to which Lenders made available to Borrower the
credit facility provided for therein in the amount of FIVE HUNDRED MILLION
DOLLARS ($500,000,000); and

WHEREAS, Borrower, Administrative Agent and Lenders have agreed to amend the
Original Agreement and the other Loan Documents (as defined in the Original
Agreement and amended herein) to, among other things, reduce the credit facility
provided thereunder to the amount of FOUR HUNDRED MILLION DOLLARS ($400,000,000)
and to grant to Administrative Agent on behalf of Lenders first lien mortgages
on the Initial Borrowing Base Properties, as hereinafter set forth, effective
from and after the date hereof.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby agree as follows:

 

  I. AMENDMENTS TO THE AGREEMENT

Section 1.1 Definitions Amended.

1.1.1 The definition of “Acceptable Appraisal” is hereby deleted and the
following is hereby inserted in lieu thereof:

““Acceptable Appraisal” means (i) in the case of a Borrowing Base Property, a
FIRREA compliant MAI appraisal, in compliance with the Uniform Standards of
Professional Appraisal Practice, acceptable to Administrative Agent as to form,
substance and appraisal date, prepared by a professional appraiser that is
engaged by Administrative Agent, and (ii) in the case of a non-Borrowing Base
Property, an MAI appraisal, in compliance with the Uniform Standards of
Professional Appraisal Practice, reasonably acceptable to Administrative Agent
as to form, substance and appraisal date, prepared by a professional appraiser
that is reasonably acceptable to Administrative Agent.

--------------------------------------------------------------------------------

“Account Control Agreement” means that certain Agreement Re: Pledged Accounts,
dated as of the Third Amendment Closing Date, by and between the applicable
Borrowing Base Entity, Administrative Agent and The PrivateBank and Trust
Company.

“Accounts” means the accounts described on Schedule XIX attached hereto.”.

1.1.2 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Administrative Agent” therein:

““Advance Rate” means fifty percent (50%), as such percentage may be adjusted
pursuant to the terms of Section 7.1.22(f) or Section 7.2.4(a) of this
Agreement.”.

1.1.3 The definition of “Aggregate Commitment” is hereby deleted and the
following is hereby inserted in lieu thereof:

““Aggregate Commitment” means, as of any date, the aggregate of the then-current
Commitments of all Lenders, which is, as of the Third Amendment Closing Date an
amount equal to FOUR HUNDRED MILLION DOLLARS ($400,000,000), and shall not
exceed such amount.”.

1.1.4 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Aggregate Outstanding Balance”
therein:

““Alteration” has the meaning set forth in Section 13.2 of this Agreement.”.

1.1.5 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Alternate Base Rate” therein:

““Alternative Capex/Investments Basket” has the meaning set forth in
Section 7.2.4(d) of this Agreement.

“Amended and Restated Note” means an Amended and Restated Revolving Note.

“Amended and Restated Revolving Note” means a promissory note, if any, executed
by the Borrower and payable to any Lender, in the form of Exhibit K hereto (as
such promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from outstanding Revolving Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.”.

1.1.6 The definition of “Applicable Margin” is hereby deleted and the following
is hereby inserted in lieu thereof:

““Applicable Margin” means 3.75% in the case of each LIBO Rate Loan and 2.75% in
the case of each Base Rate Loan.”.

 

-2-

--------------------------------------------------------------------------------

1.1.7 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Appraised Value” therein:

““Approved Bank” means Administrative Agent or any affiliate thereof or any
other financial institution reasonably approved by Administrative Agent.”.

1.1.8 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Approved Fund” therein:

““Approved Luxury Manager” means those certain managers classified as Approved
Luxury Managers as set forth on Schedule IV attached hereto.”.

1.1.9 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Approved Manager” therein:

““Appurtenances” has the meaning set forth in the First Lien Mortgages.”.

1.1.10 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Arrangers” therein:

““Assignment of Agreements” means that Assignment of Agreements, dated as of the
Third Amendment Closing Date, by and between each Borrowing Base Entity and
Administrative Agent on behalf of Lenders.

““Assignments of Leases and Rents” means each Assignment of Leases and Rents,
Hotel Revenues and Security Deposits, dated as of the Third Amendment Closing
Date, by each Borrowing Base Entity in favor of Administrative Agent on behalf
of Lenders.”.

1.1.11 The definition of “Available Commitment” is hereby deleted and the
following is hereby inserted in lieu thereof:

““Available Commitment” means, as of any date, the lesser of (i) the product of
(x) the Advance Rate times (y) the aggregate Appraised Value of all Borrowing
Base Properties, less the Deemed Net Termination Value as of such date, and
(ii) an amount which, if it were the Aggregate Outstanding Balance, would
produce a Pro Forma Borrowing Base Coverage Ratio of 1.30:1.0.”.

1.1.12 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Borrowing” therein:

““Borrowing Base Entities” means, collectively, each Property Owner and
Operating Lessee of a Borrowing Base Property.”.

1.1.13 The definition of “Borrowing Base Intercompany Indebtedness” is hereby
amended to insert the following at the end thereof:

“and any additional intercompany Indebtedness relating to a Borrowing Base
Property or Borrowing Base Property Owner incurred in accordance with
Section 7.1.11.”.

 

-3-

--------------------------------------------------------------------------------

1.1.14 The definition of “Borrowing Base Property” is hereby deleted and the
following is hereby inserted in lieu thereof:

““Borrowing Base Property” means, each of the Marriott Lincolnshire, the Ritz
Carlton Laguna Niguel, the Four Seasons Punta Mita, the Four Seasons Mexico City
and the Four Seasons Washington, D.C., including any other Property which
Borrower may add as a Borrowing Base Property pursuant to Section 7.1.22 of this
Agreement and excluding any Borrowing Base Release Property.”.

1.1.15 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Borrowing Base Property Owner”
therein:

““Borrowing Base Property Release” has the meaning set forth in
Section 7.1.22(e) of this Agreement.

“Borrowing Base Release Property” has the meaning set forth in Section 7.1.22(e)
of this Agreement.”.

1.1.16 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Borrowing Request” therein:

““Building Equipment” has the meaning set forth in the First Lien Mortgages.”.

1.1.17 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Business Day” therein:

““Capex/Investments Basket” has the meaning set forth in Section 7.2.4(d) of
this Agreement.”.

1.1.18 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Cash Equivalents” therein:

““Casualty Amount” means ten percent (10%) of the value of the applicable
Borrowing Base Property as set forth in the most recently completed Acceptable
Appraisal with respect to such Borrowing Base Property.

“Catch-Up Amounts” shall have the meaning set forth in Section 7.2.6(a) of this
Agreement.”.

1.1.19 The definition of “Collateral” is hereby deleted and the following is
hereby inserted in lieu thereof:

““Collateral” means, collectively, all Pledge Agreement Collateral, all
Guarantor Pledge Agreement Collateral and all First Lien Mortgage Collateral, as
required to be granted from time to time pursuant to the terms hereof and
subject to the provisions of release thereof as provided herein or in the other
Loan Documents.”.

 

-4-

--------------------------------------------------------------------------------

1.1.20 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “ Commitment Termination Event”
therein:

““Common Elements” means those portions of the Improvements and other rights
relating to the Condominium that are designated as “Common Elements” under the
Condominium Documents.”.

1.1.21 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Compliance Certificate” therein:

““Condominium” means the sub-condominium known as Sub-Condominium Unit RC-1 of
the Punta Mita Master Condominium Regime.

“Condominium Board” means the board of managers or like administrative body of
the Condominium established pursuant to the Condominium Documents.

“Condominium Documents” means collectively, the Declaration of Sub-Condominium
Unit RC-1 of the Punta Mita Master Condominium Regime, Unilateral Declaration of
Condominium Regime for RC-1, and any other similar written agreements among or
otherwise binding upon any unit owners of the Condominium in their capacity as
such and that govern or otherwise relate to the establishment, continuance,
maintenance or operation of the Condominium, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.”.

1.1.22 The definition of “Consolidated EBITDA” is hereby amended to delete the
words “(excluding Real Property) in the ordinary course of business” and the
following is hereby inserted in lieu thereof:

“(excluding real property) in the ordinary course of business and foreign
currency exchange gain or loss applicable to third party and intercompany
Indebtedness and certain balance sheet items held by foreign Subsidiaries of
Borrower.”.

1.1.23 The definition of “Consolidated Tangible Net Worth” is hereby deleted and
the following is hereby inserted in lieu thereof:

““Consolidated Tangible Net Worth” means, at any time, the tangible net worth of
the Consolidated Group determined in accordance with GAAP, calculated based on
(a) the shareholder book equity of Guarantor’s common Capital Stock, plus
(b) accumulated depreciation and amortization of the Consolidated Group, plus
(c) to the extent not included in clause (a), the amount properly attributable
to the minority interests, if any, shown on the Guarantor’s balance sheet, in
each case determined without duplication and in accordance with GAAP, and
excluding (d) any goodwill and any currency translation adjustment.”.

 

-5-

--------------------------------------------------------------------------------

1.1.24 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Credit Hedging Agreements”
therein:

““Cut-Off Date” shall have the meaning set forth in the definition of “Major
Casualty/Condemnation Event”.”.

1.1.25 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “DBTCA” therein:

““D.C. Loan Pledge” means that certain Pledge and Security Agreement, dated as
of March 9, 2007, by Borrower in favor of Administrative Agent.

“D.C. Loan Subordination” means that certain Subordination Agreement, dated as
of the Third Amendment Closing Date, by SHC Washington, L.L.C. and Borrower in
favor of Administrative Agent.”.

1.1.26 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Defaulting Lender” therein:

““Deficiency” shall have the meaning set forth in Section 12.4.2(b) of this
Agreement.”.

1.1.27 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Exchange Act” therein:

““Excusable Delay” means a delay solely due to acts of god, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire, casualty, strikes, work stoppages, shortages of labor or materials or
other causes beyond the reasonable control of Borrower or the applicable
Borrowing Base Entity, but Borrower’s or such Borrowing Base Entity’s lack of
funds in and of itself shall not be deemed a cause beyond the control of
Borrower or such Borrowing Base Entity.

“Exercise Period” shall have the meaning set forth in Section 14.3 of this
Agreement.”.

1.1.28 The definition of “Facility” is hereby deleted and the following is
hereby inserted in lieu thereof:

““Facility” means the $400,000,000 revolving credit facility evidenced by this
Agreement, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time and in effect on such date.”.

1.1.29 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Fee Letters” therein:

““Fee Owner” means the lessor under a Ground Lease including, but not limited
to, Indian Creek Investors, Inc.”.

 

-6-

--------------------------------------------------------------------------------

1.1.30 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “FF&E” therein:

““First American” means First American Title Insurance Company.

“First Lien Mortgage Collateral” means the Initial Borrowing Base Properties
pledged or mortgaged under those certain First Lien Mortgages and any other
Properties which may be pledged or mortgaged pursuant to Section 7.1.22(c).

“First Lien Mortgages” means (i) the first priority Deed of Trust, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents,
Hotel Revenue and Security Deposits, dated as of the Third Amendment Closing
Date, executed and delivered by the applicable Borrowing Base Entities to
Administrative Agent on behalf of Lenders and encumbering the Ritz Carlton
Laguna Niguel, (ii) the first priority Deed of Trust, Security Agreement,
Fixture Filing and Assignment of Leases, Rents, Hotel Revenue and Security
Deposits or Deed of Trust, Security Agreement, Financing Statement, Fixture
Filing and Assignment of Leases, Rents, Hotel Revenue and Security Deposits,
dated as of the Third Amendment Closing Date, executed and delivered by the
applicable Borrowing Base Entities to Administrative Agent on behalf of Lenders
and encumbering the Four Seasons Washington, D.C., (iii) the first priority
Mortgage, Security Agreement, Financing Statement, Fixture Filing and Assignment
of Leases, Rents, Hotel Revenue and Security Deposits or Deed of Trust, Security
Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents,
Hotel Revenue and Security Deposits, dated as of the Third Amendment Closing
Date, executed and delivered by the applicable Borrowing Base Entities to
Administrative Agent on behalf of Lenders and encumbering the Marriott
Lincolnshire, and (iv) the Irrevocable Administration and Security Trust
Agreement with Reversion Rights, dated the Third Amendment Closing Date,
executed and delivered by the applicable Borrowing Base Entities to the Trustee
and encumbering the Initial Borrowing Base Properties located in Mexico, as any
such instrument may be amended, restated, replaced, supplemented or otherwise
modified from time to time.”.

1.1.31 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Fiscal Year End” therein:

““Four Seasons Mexico City” means that certain Property currently referred to as
the Four Seasons Mexico City and located at Paseo de la Reforma #500, Colonia
Juarez, Mexico City, Mexico.

“Four Seasons Punta Mita” means that certain Property currently referred to as
the Four Seasons Punta Mita and located at Bahia de Banderas, Nayarit, Mexico.

 

-7-

--------------------------------------------------------------------------------

“Four Seasons Washington, D.C.” means that certain Property currently referred
to as the Four Seasons Washington, D.C. and located at 2800 Pennsylvania Avenue
NW, Washington, D.C.”.

1.1.32 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “F.R.S. Board” therein:

““FSHL” has the meaning set forth in the definition of Manager herein.

“FSHR” has the meaning set forth in the definition of Manager herein.”.

1.1.33 The definition of “Gross Asset Value” is hereby deleted and the following
is hereby inserted in lieu thereof:

““Gross Asset Value” means, (1) for any Borrowing Base Property and for any
Consolidated Group Property other than New Acquisitions and Development
Properties, its Appraised Value and (2) for any other Property:

(a) for each Consolidated Group Property that is a New Acquisition, an amount
equal to the Acquisition Cost with respect thereto;

(b) for each Consolidated Group Property that is a Development Property, an
amount equal to the Development Cost of such Property; and

(c) at any time and for any Property that is not a Consolidated Group Property,
an amount equal to Borrower’s share, based on its Share of the Unconsolidated
Subsidiary that is the Property Owner of such Property, of the Gross Asset Value
that would have been attributable to such Property pursuant to clause (1),
(2)(a) or (2)(b) of this definition if such Property were a Consolidated Group
Property; provided, however, that the Gross Asset Value of any Property that is
subjected to a condominium regime or similar structure for the purpose of
timeshare, condominium hotel, or fractional interest or similar development will
be (i) for the portion of the Property to be retained by Borrower (or its
Subsidiary) to be operated as a traditional hotel, as set forth in a new
Acceptable Appraisal satisfactory to the Administrative Agent for the first year
of operation and, thereafter, pursuant to clause (b) above, and (ii) for the
portion of the Property to be held for sale, the undepreciated “book value” of
such portion of the Property.”.

1.1.34 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Gross Hotel Revenue” therein:

““Ground Lease” means any long-term Lease of Land in which Borrower or any of
its Affiliates is the tenant of a Borrowing Base Property and is allowed to
improve the land and use it for the term of the Lease, including the
Lincolnshire Ground Lease.

 

-8-

--------------------------------------------------------------------------------

“Ground Lessee” means the Tenant under any Ground Lease, including, but not
limited to, the Lincolnshire Ground Lessee.”.

1.1.35 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “herein,” “hereof,” “hereto,”
“hereunder” therein:

““Hotel del Coronado” means that certain Property currently referred to as the
Hotel del Coronado and located at 1500 Orange Avenue, Coronado, California.

“Hotel Revenue” means all revenues, income, rents, issues, profits, termination
or surrender fees, penalties and other amounts arising from the use or enjoyment
of all or any portion of a Borrowing Base Property, including, without
limitation, the rental or surrender of any office space, retail space, parking
space, halls, stores, and offices of every kind, the rental or licensing of
signs, sign space or advertising space and all rentals, revenues, receipts,
income, accounts, accounts receivable, cancellation fees, penalties, credit card
receipts and other receivables relating to or arising from rentals, rent
equivalent income, income and profits from guest rooms, meeting rooms,
conference and banquet rooms, food and beverage facilities, health clubs,
vending machines, parking facilities, telephone and television systems, guest
laundry, the provision or sale of other goods and services, and any other items
of revenue, receipts or other income as identified in the Uniform System.”.

1.1.36 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Impermissible Qualification”
therein:

““Impositions” means all taxes (including all ad valorem, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added,
intangible transaction, privilege or license or similar taxes), governmental
assessments (including all assessments for public improvements or benefits,
whether or not commenced or completed prior to the Third Amendment Closing Date
and whether or not commenced or completed within the term of this Agreement),
water, sewer or other rents and charges, excises, levies, fees (including
license, permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Borrowing Base Properties and/or any Rents and Hotel Revenue (including all
interest and penalties thereon), which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in respect of or be
a Lien upon (a) Borrower (including all income, franchise, single business or
other taxes imposed on Borrower for the privilege of doing business in the
jurisdiction in which the applicable Borrowing Base Property is located), (b) a
Borrowing Base Property, or any other Collateral delivered or pledged to
Administrative Agent in connection with the Loan, or any part thereof, or any
Rents or Hotel Revenue therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of, or sales from,
or activity conducted on, or in connection with the Borrowing Base Properties or
the leasing or use of all or any

 

-9-

--------------------------------------------------------------------------------

part thereof. Nothing contained in this Agreement shall be construed to require
Borrower, any Borrowing Base Entity or any Subsidiary to pay any tax,
assessment, levy or charge imposed on (i) any tenant occupying any portion of a
Borrowing Base Property, (ii) any third party manager of the Borrowing Base
Properties, including any Manager, or (iii) Administrative Agent or any Lender
in the nature of a capital levy, estate, inheritance, succession, income or net
revenue tax.

“Improvements” has the meaning set forth in the First Lien Mortgages.”.

1.1.37 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Indebtedness” therein:

““Independent” means, when used with respect to any Person, a Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in Borrower or in any Affiliate of Borrower, (ii) is not
connected with any Borrower or any Affiliate of Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, manager, creditor,
director, supplier, customer or person performing similar functions and (iii) is
not a member of the immediate family of a Person defined in (i) or (ii) above.

“Independent Architect” means an architect, engineer or construction consultant
selected by Borrower which is Independent, licensed to practice in the
jurisdiction and has at least five (5) years of architectural experience and
which is reasonably acceptable to Administrative Agent.”.

1.1.38 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Initial Borrowing Base” therein:

““Initial Borrowing Base Properties” means, collectively, the Four Seasons Punta
Mita, the Four Seasons Mexico City, the Four Seasons Washington, D.C., the Ritz
Carlton Laguna Niguel and the Marriott Lincolnshire.”.

1.1.39 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Insurance Policies” therein:

““Insurance Requirements” means all of the terms of any insurance policy
required pursuant to this Agreement, including, without limitation, the terms
set forth on Schedule XVIII attached hereto.”.

1.1.40 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Joint Venture” therein:

““Land” has the meaning set forth in the First Lien Mortgages.

“Lease” means any lease, sublease or sub-sublease, letting, license, concession
or other agreement (whether written or oral and whether now or hereafter in
effect) pursuant to which any Tenant is granted by Borrower a possessory
interest in, or

 

-10-

--------------------------------------------------------------------------------

right to use or occupy all or any portion of any space in any Borrowing Base
Properties, and every modification, amendment or other agreement relating to
such lease, sublease, subsublease, or other agreement entered into in connection
with such lease, sublease, subsublease, or other agreement and every guarantee
of the performance and observance of the covenants, conditions and agreements to
be performed and observed by the other party thereto.

“Leasing Threshold” shall have the meaning set forth in Section 7.1.32 of this
Agreement.”.

1.1.41 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “LIBO Rate Loan” therein:

““Licenses” shall have the meaning set forth in Section 4.1.12 of the Third
Amendment.”.

1.1.42 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Lien” therein:

““Lincolnshire Fee Owner” means Indian Creek Investors, Inc. or the then
Landlord under the Lincolnshire Ground Lease.

“Lincolnshire Ground Lease” means those documents described on Schedule VII
attached to this Agreement.

“Lincolnshire Ground Lessee” means the Tenant under the Lincolnshire Ground
Lease.

“Lincolnshire Leasehold Estate” means the estate in the Marriott Lincolnshire
created by the Lincolnshire Ground Lease.

“Lincolnshire Zoning Documents” shall have the meaning set for in Section 4.1.12
of the Third Amendment.”.

1.1.43 The definition of “Loan Documents” is hereby amended to insert the
following after the words “Fee Letters”:

“First Lien Mortgages, Mexico Pledge Agreement, Reaffirmation of Guaranty,
Reaffirmation of Subsidiary Guaranty, Reaffirmation of Guarantor Pledge
Agreement, Reaffirmation of Subsidiary Pledge Agreement, Reaffirmation of D.C.
Loan Pledge, D.C. Loan Subordination, each Assignment of Leases and Rents, each
Assignment of Agreements and the Post Closing Letter”.

1.1.44 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Loans” therein:

““Low DSCR Fee” has the meaning set forth in Section 3.4.4 of this Agreement.

 

-11-

--------------------------------------------------------------------------------

“Low Fixed Charge Covenant Period” has the meaning set forth in Section 7.2.4(a)
of this Agreement.

“Major Casualty/Condemnation Event” means any casualty or Taking occurring with
respect to any Borrowing Base Property where any of the following shall be true:
(i) the Proceeds shall equal or exceed the Appraised Value of the applicable
Borrowing Base Property; (ii) an Event of Default shall have occurred and be
continuing; (iii) a Total Loss with respect to a Borrowing Base Property shall
have occurred; (iv) the Work is not capable of being completed before the
earlier to occur of (x) the date that is six (6) months prior to the Maturity
Date and (y) the date on which the business interruption insurance carried by
Borrower with respect to the applicable Borrowing Base Property shall expire
(the “Cut-Off Date”), unless on or prior to the Cut-Off Date Borrower shall
deliver to Administrative Agent and there shall remain in effect a binding
written offer, subject only to customary conditions, of an Approved Bank duly
authorized to originate loans secured by real property located in the
jurisdiction for a loan from such Approved Bank to Borrower or applicable
Borrowing Base Entity in a principal amount of not less than the Appraised Value
of the applicable Borrowing Base Property (net of any Proceeds available to the
applicable Borrowing Base Entity on account of the applicable casualty or
Taking) and which shall, in Administrative Agent’s reasonable judgment, enable
Borrower or the applicable Borrowing Base Entity to refinance such allocated
amount prior to the Maturity Date; (v) such Borrowing Base Property is not
capable of being restored substantially to its condition prior to such casualty
or Taking and such incapacity shall have a Material Adverse Effect; or
(vi) Administrative Agent determines that, upon the completion of the
restoration, the gross cash flow and the net cash flow of such Borrowing Base
Property will not be restored to a level sufficient to cover all carrying costs
and operating expenses of such Borrowing Base Property at a coverage ratio of at
least 2.0:1.0 (excluding any debt service), which coverage ratio shall be
determined by Administrative Agent in its sole and absolute discretion.”.

“Management Agreement” means the management agreements with respect to each
Borrowing Base Property as set forth on Schedule VIII attached to this Agreement
pursuant to which the Manager is to provide management and other services with
respect to the applicable Borrowing Base Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

“Manager” means (i) with respect to the Four Seasons Mexico City, collectively
the Four Seasons Hotel Limited, a corporation incorporated under the laws of the
Province of Ontario, Canada (“FSHL”), Four Seasons Hotels and Resorts B.V., a
corporation incorporated under the laws of the Netherlands (“FSHR”), and Four
Seasons Hotels (Mexico), S.A. DE C.V., a corporation incorporated under the laws
of the United Mexican States; (ii) with respect to the Four Seasons Punta Mita,
collectively FSHL, FSHR, and Four Seasons Punta Mita, S.A. DE C.V., a

 

-12-

--------------------------------------------------------------------------------

corporation incorporated under the laws of the United Mexican States; (iii) with
respect to Four Seasons Washington, D.C., FSHL; (iv) with respect to Marriott
Lincolnshire, Marriott Hotel Services, Inc., a Delaware corporation; and
(v) with respect to Ritz Carlton Laguna Niguel, The Ritz-Carlton Hotel Company,
L.L.C., a Delaware limited liability company, together with, in each instance,
any successor management company permitted hereunder or, subject to
Section 7.2.14, under the applicable Management Agreement.”.

1.1.45 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Mandatory Borrowing” therein:

““Marriott Lincolnshire” means that certain Property currently referred to as
Lincolnshire Marriott and located at Ten Marriott Drive, Lincolnshire,
Illinois.”.

1.1.46 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Material Agreements” therein:

““Material Alteration” means any Alteration which, when aggregated with all
related Alterations (other than decorative work such as painting, wall papering
and carpeting and the replacement of fixtures, furnishings and equipment to the
extent being of a routine and recurring nature and performed in the ordinary
course of business) constituting a single project, involves an estimated cost
exceeding five percent (5%) of the Appraised Value with respect to such
Alteration or related Alterations (including the Alteration in question) then
being undertaken at such Borrowing Base Property.”.

1.1.47 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Maturity Date” therein:

““Mexico Pledge Agreement” means that certain Non-Possessory Pledge Agreement,
dated as of the Third Amendment Closing Date, by Punta Mita Resort, S. de R.L.
de C.V., Inmobiliaria Nacional Mexicana, S. de R.L. de C.V. and Punta Mita TRS,
S. de R.L. de C.V.

“Mexico Taxes” shall have the meaning set forth in Section 4.6(a) of this
Agreement.”.

1.1.48 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “New Acquisitions” therein:

““New Lease” has the meaning set forth in Section 7.1.32 of this Agreement.”.

1.1.49 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “New Acquisitions” therein:

““Non-Borrowing Base Property Subsidiary” means a Subsidiary that does not,
directly or indirectly, own a Borrowing Base Property or any interest therein
and (x) that is a non-Domestic Subsidiary or (y) the only material assets of
which consist of the Capital Stock of a non-Domestic Subsidiary.”.

 

-13-

--------------------------------------------------------------------------------

1.1.50 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Non-Defaulting Lender” therein:

““Non-Disturbance Agreement” has the meaning set forth in Section 7.1.32 of this
Agreement.”.

1.1.51 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Organic Document” therein:

““Other Charges” means maintenance charges, impositions other than Impositions,
and any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining a Borrowing Base
Property, now or hereafter levied or assessed or imposed against such Borrowing
Base Property or any part thereof by any Governmental Authority, other than
those required to be paid by a tenant or Manager pursuant to its respective
Lease or Management Agreement.”.

1.1.52 The definition of “Permitted Borrowing Base Liens” is hereby amended to
insert the following after the final clause thereof:

“(i) Liens and security interests created or permitted by the Loan Documents;
and

(j) with respect to the Borrowing Base Properties, all Liens, encumbrances and
other matters disclosed in the applicable Title Policy.”.

1.1.53 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Pledge Agreement Collateral”
therein:

““Post Closing Letter” means that certain Letter from Borrower to Administrative
Agent, dated as of the Third Amendment Closing Date, setting forth certain
obligations of Borrower and Administrative Agent from and after the Post Closing
Date.”.

1.1.54 The definition of “Pro Forma Interest Expense” is hereby deleted and the
following is hereby inserted in lieu thereof:

““Pro Forma Interest Expense” means, as of any date of determination, the
interest expense that would be payable under the Facility for a twelve
(12) month period, assuming: (1) an interest rate equal to the greater of
(i) the lesser of (x) the sum of the Base Rate plus the Applicable Margin and
(y) the sum of the LIBO Rate plus the Applicable Margin, each as of such date of
determination and (ii) 8.0%; and (2) an outstanding principal balance equal to
the Aggregate Outstanding Balance as of such date of determination, after giving
effect to the requested Borrowing/Letter of Credit.”.

 

-14-

--------------------------------------------------------------------------------

1.1.55 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Pro Forma Interest Expense”
therein:

““Proceeds” has the meaning set forth in Section 12.2 of this Agreement.”.

1.1.56 The definition of “Property Owner” is hereby amended to insert the
following at the end thereof:

“and the Lincolnshire Ground Lessee.”

1.1.57 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Property Owner” therein:

““Property Release Notice” shall have the meaning set forth in Section 7.1.22(e)
of this Agreement.”.

1.1.58 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Quarterly Payment Date” therein:

““REAs” means, collectively, as the same may be amended, restated, supplemented
or otherwise modified from time to time, those certain agreements more
specifically described on Schedule XIV attached to this Agreement.

“Reaffirmation of D.C. Loan Pledge” means that certain Reaffirmation of D.C.
Loan Pledge, dated as of the Third Amendment Closing Date, by Borrower in favor
of Administrative Agent on behalf of the Lenders.

“Reaffirmation of Guarantor Pledge Agreement” means that certain Reaffirmation
of Guarantor Pledge Agreement, dated as of the Third Amendment Closing Date, by
Guarantor in favor of Administrative Agent on behalf of the Lenders.

“Reaffirmation of Guaranty” means that certain Reaffirmation of Guaranty, dated
as of the Third Amendment Closing Date, by Guarantor in favor of Administrative
Agent on behalf of the Lenders.

“Reaffirmation of Subsidiary Guaranty” means that certain Reaffirmation of
Subsidiary Guaranty, dated as of the Third Amendment Closing Date, by each
Subsidiary Guarantor in favor of Administrative Agent on behalf of the Lenders.

“Reaffirmation of Subsidiary Pledge Agreement” means that certain Reaffirmation
of Subsidiary Pledge Agreement, dated as of the Third Amendment Closing Date, by
each Subsidiary party to the Pledge Agreement in favor of Administrative Agent
on behalf of the Lenders.”.

1.1.59 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Real Estate” therein:

““Real Property” means, collectively, the Land, the Improvements and the
Appurtenances.”.

 

-15-

--------------------------------------------------------------------------------

1.1.60 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “REIT” therein:

““Release Date” has the meaning set forth in Section 7.1.22(e) of this
Agreement.

“Release Instruments” has the meaning set forth in Section 7.1.22(e) of this
Agreement.

“Released Matters” has the meaning set forth in Section 5.1 of the Third
Amendment.

“Released Parties” has the meaning set forth in Section 5.1 of the Third
Amendment.

“Releasing Parties” has the meaning set forth in Section 5.1 of the Third
Amendment.

“Rents” means all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil
and gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of a Borrowing Base Entity from any and all sources
arising from or attributable to a Borrowing Base Property and Proceeds, if any,
from business interruption or other loss of income insurance.”.

1.1.61 The definition of “Revolving Loan Commitment Amount” is hereby deleted
and the following is hereby inserted in lieu thereof:

““Revolving Loan Commitment Amount” means FOUR HUNDRED MILLION DOLLARS
($400,000,000), as such amount may be reduced from time to time pursuant to
Section 2.2.”.

1.1.62 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Revolving Note” therein:

““Ritz Carlton Laguna Niguel” means that certain Property currently referred to
as the Ritz Carlton Laguna Niguel and located at One Ritz-Carlton Drive, Dana
Point, California.”.

1.1.63 Clause (v) of the definition of “Security Documents” is hereby deleted
and the following is hereby inserted in lieu thereof:

“(v) the First Lien Mortgages;”.

 

-16-

--------------------------------------------------------------------------------

1.1.64 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Share Repurchase” therein:

““Specified Borrowing Base Properties” means the Borrowing Base Properties other
than the Marriott Lincolnshire.”.

1.1.65 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Stated Expiry Date” therein:

““Stewart-Mexico” means Stewart Title Guaranty de Mexico, S.A. de C.V.

“Stewart-U.S.” means Stewart Title Insurance Company.”.

1.1.66 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Subsidiary Guaranty” therein:

““Survey” means a survey of a Borrowing Base Property described on Schedule
XVI.”.

1.1.67 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Swingline Loan” therein:

““Taking” means a temporary or permanent taking by any Governmental Authority as
the result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain, of all or any part of a Borrowing Base Property,
or any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting such Borrowing Base Property or any
part thereof.”.

1.1.68 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Telerate Page 3750” therein:

““Tenant” means any Person leasing, subleasing or otherwise occupying any
portion of a Borrowing Base Property pursuant to a Lease, other than a Manager,
an Operating Lessee or their respective employees, agents and assigns.”.

1.1.69 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Test Period” therein:

““Third Amendment” means that certain Third Amendment to Credit Agreement, dated
as of February 25, 2009, by and among Borrower, Administrative Agent, and the
Lenders.

“Third Amendment Closing Date” means the date of the Third Amendment.

“Third Amendment Fee Letter” means that certain confidential letter, dated as of
the Third Amendment Closing Date between Borrower and Administrative Agent.

 

-17-

--------------------------------------------------------------------------------

“Third Amendment Transaction” means the entering into of the Third Amendment and
all other documents described in Sections 3.1.1 through 3.1.15 and Sections
3.1.21 through 3.1.23 of the Third Amendment.

“Threshold Amount” means an amount equal to 10% of the most recent Acceptable
Appraisal with respect to the applicable Property.

“Title Company” means First American, Stewart-Mexico and/or Stewart-U.S., as
applicable.

“Title Policies” means an ALTA mortgagee title insurance policy in form and
substance reasonably acceptable to Administrative Agent (or, if a Borrowing Base
Property is in a state or country which does not permit the issuance of such
ALTA policy, such form as shall be permitted in such state or country and
reasonably acceptable to Administrative Agent) issued by one or more of First
American, Stewart-Mexico and/or Stewart-U.S. as set forth in Section 3.1.24 of
the Third Amendment with respect to each Borrowing Base Property, and insuring
the lien of the First Lien Mortgages.”.

1.1.70 The definition of “Total Fixed Charge Coverage Ratio” is hereby deleted
and the following is hereby inserted in lieu thereof:

““Total Fixed Charge Coverage Ratio” means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately prior Fiscal Quarters, of (a) Consolidated EBITDA
for such period (computed without duplication to include the EBITDA from the pro
rata share of ownership in the Hotel del Coronado) to (b) the sum, on a
consolidated basis, of (i) Total Interest Expense for such period; plus (ii) the
scheduled principal amount of all amortization payments (but not final balloon
payments at maturity) for such period on all Indebtedness of the Consolidated
Group; plus (iii) distributions on preferred partnership units payable by
Borrower for the latest Fiscal Quarter and distributions made by the Borrower
for the latest Fiscal Quarter for the purpose of paying Dividends on preferred
shares in Guarantor multiplied by four (4) (notwithstanding anything herein to
the contrary, distributions for the purpose of paying Catch Up Amounts shall not
be included in such calculation); plus (iv) an amount equal to the aggregate
Deemed FF&E Reserves for the Consolidated Group Properties for such period; plus
(v) amounts paid by or on behalf of the Consolidated Group into cash reserves as
required pursuant to the terms of other Indebtedness; plus (vi) without
duplication, Borrower’s pro rata share of the amounts described in clauses (i) –
(v) above that relate to the Hotel del Coronado. Any Low DSCR Fees paid by
Borrower will not be included in the Total Fixed Charge Coverage Ratio.”.

1.1.71 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Total Leverage Ratio” therein:

““Total Loss” means (i) a casualty, damage or destruction of a Borrowing Base
Property which, in the reasonable judgment of Administrative Agent, involves an
actual or constructive loss of more than thirty percent (30%) of the value of
such Borrowing Base Property as set forth in the most recent Acceptable
Appraisal, (ii) a permanent Taking which, in the reasonable judgment of
Administrative Agent, involves an actual or constructive loss of more than
thirty percent (30%) of the value of such Borrowing Base Property as set forth
in the most recent Acceptable Appraisal, or (iii) a casualty, damage,
destruction or Taking that affects so much of such Borrowing Base Property such
that it would be impracticable, in Administrative Agent’s reasonable discretion,
even after restoration, to operate such Borrowing Base Property as an
economically viable whole.”.

 

-18-

--------------------------------------------------------------------------------

1.1.72 Section 1.1 of the Original Agreement is hereby amended to insert the
following definitions after the definition of “Transaction” therein:

““Transfer” means to, directly or indirectly, sell, assign, convey, mortgage,
transfer, pledge, hypothecate, encumber, grant a security interest in, exchange
or otherwise dispose of any beneficial interest or grant any option or warrant
with respect to, or where used as a noun, a direct or indirect sale, assignment,
conveyance, transfer, pledge or other disposition of any beneficial interest by
any means whatsoever whether voluntary, involuntary, by operation of law or
otherwise.”; and

““Trustee” means The Bank of New York Mellon, S.A., Institución de Banca
Múltiple.”.

1.1.73 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “Unfunded Pension Liability”
therein:

““Uniform System” means the Uniform System of Accounts for Hotels, 9th Edition,
International Association of Hospitality Accountants (1996), as from time to
time amended.”.

1.1.74 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “United States” therein:

““Units” shall have the meaning set forth in Section 11.2.3 of the Third
Amendment.”.

1.1.75 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “U.S. Lender” therein:

““Village Documents” shall have the meaning set forth in Section 4.1.12 of the
Third Amendment.”.

1.1.76 Section 1.1 of the Original Agreement is hereby amended to insert the
following definition after the definition of “wholly-owned” therein:

““Work” has the meaning set forth in Section 12.4.1 of this Agreement.”.

 

-19-

--------------------------------------------------------------------------------

Section 1.2 Article II Amendments. Clause (ii) of Section 2.9(a) of the Original
Agreement is hereby amended by deleting the word “Credit” therein.

Section 1.3 Article III Amendments.

1.3.1 Section 3.1(b) of the Original Agreement is hereby amended by inserting
the following as clause (iv) thereof:

“(iv) notwithstanding Borrower’s election of the Low Fixed Charge Covenant
Period, the Total Fixed Charge Coverage Ratio calculated as of December 31, 2010
shall be no less than 1.15:1.0.”.

1.3.2 The first (1st) sentence of Section 3.4.1 of the Original Agreement is
hereby deleted in its entirety and the following is hereby inserted in lieu
thereof:

“Borrower agrees to pay to Administrative Agent each Fiscal Quarter for the
account of each Lender, for the period (including any portion thereof when any
of its Commitments are suspended by reason of Borrower’s inability to satisfy
any condition of Article V of this Agreement) commencing on the Third Amendment
Closing Date and continuing through the Revolving Loan Commitment Termination
Date, an unused fee at a rate per annum equal to 0.50% multiplied by the average
daily unused portion of the Aggregate Commitment in each case on such Lender’s
Percentage (net of Letter of Credit Outstandings but without giving effect to
Swingline Loans made during such Fiscal Quarter).”.

1.3.3 The following Section 3.4.4 is hereby inserted:

“3.4.4 Low DSCR Fee. During the Low Fixed Charge Covenant Period, Borrower shall
pay Lenders a fee (the “Low DCSR Fee”) quarterly in arrears with respect to each
Fiscal Quarter occurring during the Low Fixed Charge Covenant Period in an
amount equal to 0.25% multiplied by the average amount of the Aggregate
Outstanding Balance during such Fiscal Quarter. Such Low DSCR Fee shall be
payable on the fifth (5th) Business Day following the end of such Fiscal
Quarter.”.

1.3.4 Section 4.6(a) of the Original Agreement is hereby amended to insert the
following after the last sentence thereof:

“Notwithstanding anything herein to the contrary, Borrower shall cause the
Borrowing Base Entities organized under the laws of Mexico to make all payments
required of such entities hereunder or under any Loan Document free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, or any liabilities with respect thereto,
including those arising after the Third Amendment Closing Date as a result of
the adoption of or any change in law, treaty, rule, regulation, guideline or
determination of a Mexican Governmental Authority or any change in the
interpretation or application thereof by a Mexican

 

-20-

--------------------------------------------------------------------------------

Governmental Authority (all such taxes, levies, imposts, deduction, charges,
withholdings and liabilities with respect thereto which a Administrative Agent
determines to be applicable to this Agreement and the other Loan Documents being
hereinafter referred to as “Mexico Taxes”). If, with respect to Mexico Taxes,
the Borrower Base Entities organized under the laws of Mexico shall be required
by law to deduct any Mexico Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to Administrative Agent or a Lender,
Borrower shall cause such Borrowing Base Entity to (A) increase the sum payable
as may be necessary so that after making all required deductions Administrative
Agent or such Lender, as applicable, receive an amount equal to the sum it would
have received had no such deductions been made, and (B) pay the full amount
deducted to the relevant Mexican Governmental Authority in accordance with
applicable law.”.

1.3.5 Section 5.2.1(a) of the Original Agreement is hereby deleted in its
entirety and the following is hereby inserted in lieu thereof:

“(a) the representations and warranties set forth in Article VI and in each
other Loan Document and in Article IV of the Third Amendment shall, in each
case, be true and correct in all material respects with the same effect as if
then made (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date);”.

Section 1.4 Article VII Amendments.

1.4.1 Section 7.1.1(d) of the Original Agreement is hereby amended by inserting
the following at the end of clause (ii) thereof:

“(provided, however, with respect to each Borrowing Base Property, Borrower
shall deliver such statement within twenty five (25) Business Days after the end
of each calendar month)”.

1.4.2 Section 7.1.6 of the Original Agreement is hereby amended by inserting the
following as the penultimate sentence thereof:

“Notwithstanding the foregoing, Borrower will, and will cause the Borrowing Base
Entities to, comply with all Insurance Requirements and not bring or keep or
permit to be brought or kept any article upon any of the Borrowing Base
Properties or cause or permit any condition to exist thereon that would be
prohibited by any Insurance Requirement, or would invalidate insurance coverage
required hereunder to be maintained by Borrower or the Borrowing Base Entities
on or with respect to any part of the Borrowing Base Properties pursuant to this
Section 7.1.6 or Schedule XVIII attached to this Agreement.”.

 

-21-

--------------------------------------------------------------------------------

1.4.3 Section 7.1.7 of the Original Agreement is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof:

“Section 7.1.7 Appraisals.

(a) Administrative Agent may obtain an updated or replacement Acceptable
Appraisal for each Borrowing Base Property and Borrower shall reimburse
Administrative Agent the costs thereof within thirty (30) days after receipt by
Borrower of an invoice therefor; provided, that, subject to Section 7.2.14,
Borrower shall only be obligated to reimburse Administrative Agent for the costs
of one Acceptable Appraisal per calendar year with respect to each Borrowing
Base Property. Borrower shall obtain, at its own expense, (at least once each
calendar year) an updated or replacement Acceptable Appraisal for each Property
that is not a Borrowing Base Property and shall deliver same to Administrative
Agent within five (5) Business Days after Borrower receives same. Such annual
appraisals will be completed by December 31 of each year beginning with calendar
year 2009, and shall be effective as of such date for determining whether (i) a
Property complies with Section 7.1.22(a) and (ii) Borrower has satisfied the
financial covenants set forth in Section 7.2.4. The Required Lenders may
instruct Administrative Agent to re-appraise any of the Borrowing Base
Properties at any time, provided that, subject to Section 7.2.14, Borrower will
only be required to pay such appraisal expense once per calendar year for each
Borrowing Base Property as provided above. Administrative Agent will provide
Borrower with a notice promptly after any appraisal is deemed an Acceptable
Appraisal.

(b) For purposes of determining the Available Commitment on any date, such
calculation shall be based upon the latest Acceptable Appraisals (for the
avoidance of doubt, if an appraisal is completed and becomes an Acceptable
Appraisal on any Available Commitment calculation date, then such calculation
shall incorporate such appraisal).

(c) For purposes of determining Gross Asset Value as of any date, such
calculation shall be based upon the Acceptable Appraisals in effect as of
(i) the Third Amendment Closing Date or (ii) thereafter, the last day of the
most recently completed Fiscal Quarter.”.

1.4.4 Section 7.1.10 of the Original Agreement is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof:

“Section 7.1.10 Intercompany Indebtedness. Provided no Event of Default has
occurred and is continuing, Borrower and its Subsidiaries shall be permitted to
amend, restate, cancel and otherwise modify the terms and conditions of
intercompany Indebtedness so long as the provisions of such amendments,
restatements and other modifications are consistent with Section 7.1.11 and, if
such Indebtedness is pledged to the Administrative Agent as Loan Pledge
Collateral pursuant to the Loan Pledge Agreement, the amended, restated or
modified instrument is delivered to Administrative Agent pursuant to the Loan
Pledge Agreement.”.

 

-22-

--------------------------------------------------------------------------------

1.4.5 Section 7.1.11 of the Original Agreement is hereby amended to insert the
following at the end thereof:

“Any amounts paid by Borrower, Guarantor or any Subsidiary that is not a
Non-Borrowing Base Property Subsidiary to reduce the interest rate under any
Indebtedness of a Non-Borrowing Base Property Subsidiary or to cure or prevent
an event of default from occurring under the loan documents evidencing such
Indebtedness of a Non-Borrowing Base Property Subsidiary, other than the payment
of any portion of the principal amount owed thereunder, shall not exceed Ten
Million Dollars ($10,000,000) in the aggregate.”.

1.4.6 Section 7.1.16 of the Original Agreement is hereby amended by (A) deleting
clause (ii) thereof in its entirety and inserting the following in lieu thereof:
“(ii) remain a publicly traded company with common stock listed on any major
national or regional stock exchange.”; and (B) inserting the following as the
last sentence thereof:

“Notwithstanding the provisions of Section 7.2.6, subject to the reasonable
approval of Administrative Agent, which shall be provided within five
(5) Business Days after Administrative Agent’s receipt of a written request
therefor from Borrower, Guarantor shall be permitted to issue a reverse stock
split with respect to its Capital Stock in order to comply with the covenant set
forth in clause (ii) of the previous sentence.”.

1.4.7 Section 7.1.22(a) of the Original Agreement is hereby renumbered as
Section 7.1.22(b), and Section 7.1.22(b) of the Original Agreement is hereby
deleted.

1.4.8 Section 7.1.22 of the Original Agreement is hereby amended by inserting
the following as clause (a) thereof:

“(a) Each Borrowing Base Property shall satisfy the following criteria:
(i) Borrower or a wholly-owned Subsidiary of the Borrower holds good title (by
fee or pursuant to a Qualified Ground Lease) to such Property, free and clear of
all Liens (except for the Liens permitted under Section 7.2.3); (ii) such
Property is leased to an Operating Lessee; (iii) such Property is designated a
full-service property (in accordance with industry standard, as reasonably
determined by Administrative Agent); (iv) the Specified Borrowing Base
Properties shall at all times be luxury or better quality hotels, and Marriott
Lincolnshire shall at all times be an upper-upscale, luxury or better quality
hotel, as designated by Smith Travel Research (or a similar successor company
designated by Administrative Agent); (v) such Property is operated under a
nationally recognized brand (A) in the case of Marriott Lincolnshire, by an
Approved Manager (as set forth on Schedule IV) and (B) in the case of the
Specified Borrowing Base Properties, by an Approved Luxury Manager; (vi) such
Property is either (x) fully operating, open to the public and not under
development or redevelopment (except for routine, ordinary course renovation,
maintenance and repair that does not result in the closure of more than fifteen
percent (15%) of the rooms at such hotel); provided, however, that temporary
closure due to force majeure

 

-23-

--------------------------------------------------------------------------------

events, not to exceed fifteen (15) Business Days, shall be permitted or
(y) being restored in compliance with the provisions of Article XII of this
Agreement with respect to any Taking or casualty or other damage or injury
suffered at such Property; (vii) such Property is not subject to or encumbered
by any Indebtedness other than Permitted Borrowing Base Debt; (viii) such
Property is free of material structural defects or material environmental
issues; (ix) neither such Property nor the Property Owner thereof is encumbered
with Permitted Borrowing Base Debt or any other Material Agreement that by its
terms precludes the grant of the Collateral or the exercise by or on behalf of
the Secured Creditors of remedies with respect to the Collateral; and (x) the
Property Owner of such Property is Borrower or a Subsidiary Guarantor.”.

1.4.9 Section 7.1.22(c) of the Original Agreement is hereby deleted in its
entirety and the following is hereby inserted in lieu thereof:

“(c) Borrower may propose to include additional Properties (whether New
Acquisitions or former Development Properties, or Properties that were once
Borrowing Base Properties and that no longer qualify as such by sending written
proposals for inclusion to Administrative Agent. Administrative Agent may
reasonably request any diligence materials and documentation it deems necessary
to evaluate such Property, including, without limitation, certifications,
appraisals and title documentation. Administrative Agent will make such request
and materials available to the Lenders, and the inclusion of any such Property
as a Borrowing Base Property shall be subject to the prior written consent of
the Required Lenders.”.

1.4.10 Section 7.1.22(d) of the Original Agreement is hereby amended by deleting
the second (2nd) and third (3rd) sentences thereof in their entirety.

1.4.11 Sections 7.1.22 of the Original Agreement is hereby amended by inserting
the following at the end thereof:

“(e) Subject to satisfaction of each of the conditions set forth below with
respect to any Borrowing Base Property, Borrower shall be entitled to release
and/or dispose of the Marriott Lincolnshire and, in Borrower’s discretion, not
more than one (1) Specified Borrowing Base Property (the “Borrowing Base Release
Property”) from the Lien of the applicable First Lien Mortgage and related Loan
Documents (each release under this Section 7.1.22(e), a “Borrowing Base Property
Release”):

(i) Borrower delivers a written notice (a “Property Release Notice”) to
Administrative Agent of its desire to effect such Borrowing Base Property
Release no later than thirty (30) days prior to the date of such desired
Borrowing Base Property Release, and setting forth the Business Day (the
“Release Date”) on which Borrower desires that Administrative Agent release its
interest in such Borrowing Base Release Property;

 

-24-

--------------------------------------------------------------------------------

(ii) Borrower shall submit to Administrative Agent not less than ten
(10) Business Days prior to the Release Date (which must be a Business Day) a
release of Liens (and related Loan Documents) for the applicable Borrowing Base
Release Property (for execution by Administrative Agent) in a form appropriate
in the applicable state and otherwise satisfactory to Administrative Agent in
its reasonable discretion and all other documentation Administrative Agent
reasonably requires to be delivered by Borrower in connection with such
Borrowing Base Property Release (collectively, “Release Instruments”) for each
applicable Borrowing Base Release Property together with an Officer’s
Certificate certifying that (A) the Release Instruments are in compliance with
all Legal Requirements, (B) the release to be effected will not violate the
terms of this Agreement, (C) the release to be effected will not impair or
otherwise adversely affect the Liens, security interests and other rights of
Lenders under the Loan Documents not being released (or as to the Borrowing Base
Properties subject to the Loan Documents not being released) and (D) the
condition described in paragraph (iii) below is satisfied in connection with
such Borrowing Base Property Release (together with calculations and supporting
documentation demonstrating the same in reasonable detail);

(iii) With respect to any Borrowing Base Property Release, after giving effect
to such Borrowing Base Property Release, (A) Borrower shall be in pro forma
compliance with the financial covenants set forth in Section 7.2.4 and (B) the
Aggregate Outstanding Balance shall not exceed the Available Commitment
calculated on a pro forma basis;

(iv) No Event of Default shall have occurred and then be continuing on the date
on which Borrower delivers the Property Release Notice and on the Release Date,
unless all outstanding Events of Default are cured as a result of the Borrowing
Base Property Release;

(v) After giving effect to such Borrowing Base Property Release, no Event of
Default shall occur as a result of the Borrowing Base Property Release; and

(vi) Borrower shall pay for any and all reasonable out-of-pocket costs and
expenses incurred in connection with any proposed Borrowing Base Property
Release, including, without limitation, Administrative Agent’s reasonable
attorneys’ fees and disbursements and all title insurance premiums for any
endorsements to any existing Title Policies reasonably required by
Administrative Agent in connection with such proposed release.

 

-25-

--------------------------------------------------------------------------------

(f) In the event that Borrower, pursuant to the terms of Section 7.1.22(e)
above, has released and/or disposed of any Specified Borrowing Base Property,
then (i) the Advance Rate shall be deemed to be reduced by five (5) percentage
points (or ten (10) percentage points if the released Specified Borrowing Base
Property is the Ritz Carlton Laguna Niguel) and (ii) Borrower shall not be
permitted to release and/or dispose of any other Specified Borrowing Base
Properties from the Lien of the applicable First Lien Mortgage and the related
Loan Documents without the prior written approval of the Required Lenders.”.

1.4.12 Section 7.1 of the Original Agreement is hereby amended by inserting the
following at the end thereof:

“Section 7.1.23 Access to Property. Borrower shall, and shall cause each
Borrowing Base Entity to, permit agents, representatives and employees of
Administrative Agent to inspect the Borrowing Base Properties or any part
thereof during normal business hours on Business Days upon reasonable advance
notice.”.

Section 7.1.24 Mortgage Taxes. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Liens created or secured by the Loan Documents, other than income, franchise and
doing business taxes imposed on Administrative Agent or Lenders.

Section 7.1.25 Operation. With respect to each Borrowing Base Property, Borrower
shall, and shall cause each Borrowing Base Entity and Manager to, (i) promptly
perform and/or observe in all material respects all of the covenants and
agreements required to be performed and observed by it under the applicable
Management Agreement and do all things necessary to preserve and to keep
unimpaired its material rights thereunder; (ii) promptly notify Administrative
Agent of any “event of default” under the applicable Management Agreement of
which it is aware and (iii) enforce in a commercially reasonable manner the
performance and observance of all of the covenants and agreements required to be
performed and/or observed by the Manager under the applicable Management
Agreement.

Section 7.1.26 Business and Operations. Borrower shall, and shall cause each
Borrowing Base Entity to, continue to engage in the businesses presently
conducted by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Borrowing Base Properties. Borrower
shall, and shall cause each Borrowing Base Entity to, qualify to do business and
shall remain in good standing under the laws of the jurisdiction in which the
applicable Borrowing Base Property is located, as and to the extent required for
the ownership, maintenance, management and operation of the applicable Borrowing
Base Property.

Section 7.1.27 Title to Property. Borrower shall, and shall cause each Borrowing
Base Entity to, warrant and defend (a) the title to the Borrowing Base
Properties and every part thereof, subject only to Liens and other encumbrances
permitted hereunder (including Permitted Borrowing Base Liens) and (b) the
validity and priority of the Liens of the First Lien Mortgages and the other
Loan Documents on the Borrowing Base Properties, subject

 

-26-

--------------------------------------------------------------------------------

only to Liens and other encumbrances permitted hereunder (including Permitted
Borrowing Base Liens), in each case against the claims of all Persons
whomsoever. Borrower shall reimburse Administrative Agent for any losses, costs,
damages or expenses (including reasonable attorneys’ fees and court costs)
incurred by Administrative Agent if an interest in a Borrowing Base Property is
claimed by another Person, other than as permitted hereunder.

Section 7.1.28 Title Insurance. Borrower shall, and shall cause each Borrowing
Base Entity to, maintain coverage under each Title Policy in an amount equal to
at least sixty percent (60%) of the Appraised Value for each Borrowing Base
Property as shown on the most recent Acceptable Appraisal with respect to such
Borrowing Base Property; provided, however, Borrower and the Borrowing Base
Entity shall not be required to increase the amount of coverage under any Title
Policy if such increase would cause the aggregate amount of coverage for all
Borrowing Base Properties to exceed an amount equal to Four Hundred Ninety Five
Million Dollars ($495,000,000); provided, further, that Borrower shall not be
required to increase the amount of coverage more than twice in any calendar
year. Within fifteen (15) Business Days after Borrower’s receipt of an
Acceptable Appraisal that requires an increase in coverage, Borrower shall, or
shall cause the applicable Borrowing Base Entity to, deliver to Administrative
Agent (i) a title continuation letter, showing all matters recorded on title
since the later of the issuance of the Title Policy and the most recent title
continuation letter and (ii) evidence of a fully-paid endorsement to the Title
Policy in an amount so increasing such coverage. Borrower shall not, and shall
not permit a Borrowing Base Entity to, reduce the coverage under each Title
Policy.

“Section 7.1.29 Costs of Enforcement. In the event (a) that this Agreement or
the First Lien Mortgages are foreclosed upon in whole or in part or that this
Agreement or the First Lien Mortgages are put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any security
agreement prior to or subsequent to this Agreement in which proceeding
Administrative Agent is made a party, or a mortgage prior to or subsequent to
the First Lien Mortgages in which proceeding Administrative Agent is made a
party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower, any Borrowing Base Entity or any of their
constituent Persons or an assignment by Borrower, any Borrowing Base Entity or
any of its constituent Persons for the benefit of its creditors, then Borrower,
its successors or assigns, shall, and shall cause such Borrowing Base Entity,
its successors and assigns, to be chargeable with and agrees to pay all costs of
collection and defense, including reasonable attorneys’ fees and costs, incurred
by Administrative Agent, the Lenders, Borrower or such Borrowing Base Entity in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.

Section 7.1.30 Notices; Leases and REAs. Borrower shall, and shall cause each
Borrowing Base Entity to, promptly after receipt thereof, deliver to
Administrative Agent a copy of any notice received with respect to the REAs and
the Leases claiming that Borrower or such Borrowing Base Entity is in default in
the performance or observance of any of the material terms, covenants or
conditions of any of the REAs or the Leases.

 

-27-

--------------------------------------------------------------------------------

Section 7.1.31 Taxes. Borrower shall, or shall cause the applicable Borrowing
Base Entity to, pay all Impositions now or hereafter levied or assessed or
imposed against a Borrowing Base Property or any part thereof prior to the
imposition of any interest, charges or expenses for the non-payment thereof and
shall pay all Other Charges on or before the date they are due. Nothing
contained herein shall be deemed to require Borrower to pay, or cause to be
paid, any Imposition or to satisfy any Lien, or to comply with any legal
requirement, so long as Borrower is in good faith, and by proper legal
proceedings, where appropriate, diligently contesting the validity, amount or
application thereof, provided that in each case, at the time of the commencement
of any such action or proceeding, and during the pendency of such action or
proceeding, (i) no monetary Event of Default shall exist and be continuing
hereunder, (ii) Borrower shall keep Administrative Agent informed of the status
of such contest at reasonable intervals, (iii) adequate reserves with respect
thereto are maintained on Borrower’s books in accordance with GAAP, (iv) either
such contest operates to suspend collection or enforcement as the case may be,
of the contested Imposition, Lien or legal requirement and such contest is
maintained and prosecuted continuously and with diligence or the Imposition or
Lien is bonded, and (v) in the case of any Insurance Requirement, the failure of
Borrower to comply therewith shall not impair the validity of any insurance
required to be maintained by Borrower under the Loan Documents or the right to
full payment of any claims thereunder. Notwithstanding the foregoing, the
creation of any such reserves or the furnishing of any bond, Borrower promptly
shall comply with any contested legal requirement or Insurance Requirement or
shall pay any contested Imposition or Lien, and compliance therewith or payment
thereof shall not be deferred, if, at any time the Property or any portion
thereof shall be, in Administrative Agent’s reasonable judgment, in imminent
danger of being forfeited or lost or Administrative Agent or Lenders are likely
to be subject to civil or criminal damages as a result thereof. If such action
or proceeding is terminated or discontinued adversely to Borrower, Borrower
shall deliver to Administrative Agent reasonable evidence of Borrower’s
compliance with such contested Imposition, Lien, legal requirements or Insurance
Requirements, as the case may be.

Section 7.1.32 Leases.

(a) Except as otherwise provided in this Section 7.1.32, Borrower shall not, and
shall cause the Borrowing Base Entities not to, enter into any Lease with a
Tenant (a “New Lease”) or, to the extent the same would cause a Material Adverse
Effect, consent to the assignment of, modify or terminate any Lease, without the
prior written consent of Administrative Agent which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing sentence,
provided no Event of Default shall have occurred, Borrower and a Borrowing Base
Entity may, in the ordinary course of business, enter into a New Lease, without
Administrative Agent’s prior written consent, that satisfies each of the
following conditions: (i) such New Lease contains material economic terms that
are at least equal to the then prevailing market rate for similar properties in
such location for the entire term of such New Lease and (ii) with respect to
each Borrowing Base Property, after giving effect to any New Lease, the amount
of aggregate leased square footage at such Borrowing Base Property shall not
exceed the

 

-28-

--------------------------------------------------------------------------------

amount of aggregate leased square footage at such Borrowing Base Property as of
the Third Amendment Closing Date, as such amount is set forth on Schedule XV
(such limitation for each Borrowing Base Property, the “Leasing Threshold”);
provided, however, with respect solely to the Four Seasons Washington, D.C.,
Borrower, or the Borrowing Base Entities of the Four Seasons Washington, D.C.
may exceed the Leasing Threshold applicable thereto by up to eleven thousand
(11,000) square feet by entering into a New Lease, but only with the prior
written consent of Administrative Agent, which consent shall not be unreasonably
withheld, delayed or conditioned, unless such New Lease (A) is on customary
terms as leases for similar tenancies demising space in similar hotel properties
located in the same neighborhood as such Borrowing Base Property and
(B) provides that the demised premises thereunder shall only be used for retail
purposes or services ancillary to the operation of the Four Seasons Washington,
D.C.

(b) Upon the execution of any New Lease Borrower shall deliver to Administrative
Agent an executed copy of the New Lease.

(c) Borrower shall, and shall cause each Borrowing Base Entity to, (i) promptly
perform and observe all of the material terms, covenants and conditions required
to be performed and observed by Borrower and such Borrowing Base Entities under
the Leases and the REAs, if the failure to perform or observe the same would
have a Material Adverse Effect and (ii) exercise, within ten (10) Business Days
after a written request by Administrative Agent, any right to request from the
Tenant under any Lease, or the party to any REAs a certificate with respect to
the status thereof.

(d) All New Leases entered into by Borrower and any Borrowing Base Entities
after the Third Amendment Closing Date shall by their express terms be subject
and subordinate to this Agreement and the First Lien Mortgages (through a
subordination provision contained in such Lease or otherwise) and shall provide
that if Administrative Agent agrees to a Non-Disturbance Agreement pursuant to
Section 7.1.32(f), the Person holding any rights thereunder shall attorn to
Administrative Agent or any other Person succeeding to the interests of
Administrative Agent upon the exercise of its remedies hereunder or any transfer
in lieu thereof on the terms set forth in this Section 7.1.32.

(e) Each New Lease entered into from and after the Third Amendment Closing Date
shall provide that in the event of the enforcement by Administrative Agent of
any remedy under this Agreement or the First Lien Mortgages, if Administrative
Agent agrees to a Non-Disturbance Agreement pursuant to Section 7.1.32(f), the
Tenant under such Lease shall, at the option of Administrative Agent or of any
other Person succeeding to the interest of Administrative Agent as a result of
such enforcement, attorn to Administrative Agent or to such Person and shall
recognize Administrative Agent or such successor in the interest as lessor under
such Lease without

 

-29-

--------------------------------------------------------------------------------

change in the provisions thereof; provided, however, Administrative Agent or
such successor in interest shall not be liable for or bound by (i) any payment
of an installment of rent or additional rent made more than thirty (30) days
before the due date of such installment, (ii) any act or omission of or default
by Borrower or the applicable Borrowing Base Entity under any such Lease (but
the Administrative Agent, or such successor, shall be subject to the continuing
obligations of the landlord to the extent arising from and after such succession
to the extent of Administrative Agent’s, or such successor’s, interest in the
Borrowing Base Property), (iii) any credits, claims, setoffs or defenses which
any Tenant may have against Borrower or the applicable Borrowing Base Entity,
(iv) any obligation under such Lease to maintain a fitness facility at the
Borrowing Base Property, (v) any obligation on Borrower’s or the applicable
Borrowing Base Entity’s part, pursuant to such Lease, to perform any tenant
improvement work or (vi) any obligation on Borrower’s or the applicable
Borrowing Base Entity’s part, pursuant to such Lease, to pay any sum of money to
any Tenant. Each such New Lease shall also provide that, upon the reasonable
request by Administrative Agent or such successor in interest, the Tenant shall
execute and deliver an instrument or instruments confirming such attornment.

(f) Administrative Agent on behalf of the Lenders shall enter into, and, if
required by applicable law to provide constructive notice or requested by a
Tenant, record in the county where the subject Property is located, a
subordination, attornment and non-disturbance agreement, substance substantially
similar to the form attached to this Agreement as Exhibit L (a “Non-Disturbance
Agreement”), with any Tenant (other than an Affiliate of Borrower or a Borrowing
Base Entity) entering into a Lease permitted hereunder or otherwise consented to
by Lender within ten (10) Business Days after written request therefor by
Borrower, provided that such request is accompanied by an officer’s certificate
stating that such Lease complies in all material respects with this
Section 7.1.32. All reasonable third party costs and expenses incurred by
Administrative Agent in connection with the negotiation, preparation, execution
and delivery of any Non-Disturbance Agreement, including, without limitation,
reasonable attorneys’ fees and disbursements, shall be paid by Borrower (in
advance, if requested by Lender).

Section 7.1.33 Account Pledges. On the Third Amendment Closing Date, Borrower
shall cause the Operating Lessees of each Borrowing Base Property to grant to
Administrative Agent a valid, first lien security interest in (i) the Accounts
and all cash, checks, drafts, securities entitlements, certificates, instruments
and other property, including, without limitation, all deposits and/or wire
transfers from time to time deposited or held in, credited to or made to
Accounts, (ii) all interest, dividends, cash, instruments, securities
entitlements and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the foregoing
or purchased with funds from the Accounts and (iii) to the extent not covered by
clauses (i) or (ii) above, all proceeds (it being agreed that solely with
respect to the Borrowing Base Properties

 

-30-

--------------------------------------------------------------------------------

located in the United States, the term “proceeds” shall have the meaning set
forth in the Uniform Commercial Code of the State in which the applicable
Borrowing Base Property is located) of any or all of the foregoing. Without
Administrative Agent’s written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, Borrower shall not, and shall not permit the
Borrowing Base Entities to, close any of the Accounts, nor take any action or
omit to take any action that would result in the monies payable to the Accounts
being deposited in accounts other than the Accounts.”.

Section 7.1.34 Certificate of Occupancy. Borrower has informed Administrative
Agent and the Lenders that (i) no certificate of occupancy has been obtained or
is required with respect to the Four Seasons Mexico City and (ii) that a
certificate of occupancy has been lost or misplaced, as set forth in
Section 4.1.12(a), with respect to the Marriott Lincolnshire. Borrower hereby
agrees that if at any time any applicable Governmental Authority requires such a
certificate of occupancy to be obtained, then Borrower shall cause such
certificate to be obtained as and to the extent so required and shall promptly
deliver a copy of same to Administrative Agent.

1.4.13 Section 7.2.2(b) of the Original Agreement is hereby deleted in its
entirety and the following is hereby inserted in lieu thereof:

“(b) Unsecured Indebtedness incurred in connection with Permitted Construction
Indebtedness, subject to compliance with the covenants set forth in
Section 7.2.9, not to exceed Fifty Million Dollars ($50,000,000) in aggregate
principal amount at any time; provided, however, that unless and until Borrower
elects the Alternative Capex/Investments Basket, Borrower will not, and will not
permit Guarantor or any of Borrower’s or Guarantor’s respective Subsidiaries to,
create, incur, assume or suffer to exist or otherwise become liable for any
additional Indebtedness under this Section 7.2.2(b);”.

1.4.14 Section 7.2.3 of the Original Agreement is hereby amended to insert the
following after the words “Borrowing Base Properties” in the last line of the
first paragraph thereof:

“, Permitted Borrowing Base Liens and”

1.4.15 Sections 7.2.4(a) through (c) of the Original Agreement are hereby
deleted in their entirety and the following is hereby inserted in lieu thereof:

“(a) Minimum Total Fixed Charge Coverage Ratio.

(i) Borrower will not permit the Total Fixed Charge Coverage Ratio, as of the
end of any Fiscal Quarter, to be less than 1.0:1.0; provided, however, that,
subject to clauses (ii) and (iii) below, for up to four (4) consecutive Fiscal
Quarters, Borrower may elect once and only once, upon not less than ten
(10) Business Days’ prior written notice to Administrative Agent, to reduce such
ratio to 0.90:1.0 (the “Low Fixed Charge Covenant Period”). From and after
Borrower’s election to implement a Low Fixed Charge Covenant

 

-31-

--------------------------------------------------------------------------------

Period, the Advance Rate will be permanently reduced by five (5) percentage
points from its then current percentage (subject to further reduction pursuant
to Section 7.1.22(f)). During the Low Fixed Charge Coverage Period, neither
Borrower nor Guarantor may authorize, declare, or pay any amount of preferred
Dividends in cash or in kind, except to the extent permitted pursuant to
Section 7.2.6(c). From and after the expiration of the Low Fixed Charge Covenant
Period, Borrower will not permit the Total Fixed Charge Coverage Ratio, as of
the end of any Fiscal Quarter, to be less than 1.0:1.0.

(ii) Notwithstanding anything to the contrary contained herein, from and after
the earliest of (A) the first (1st) day of the Extension Term, (B) the date on
which Borrower elects the Alternative Capex/Investments Basket, or (C) except to
the extent paid pursuant to Section 7.2.6(c), the date on which Borrower resumes
payment of any common Dividends in cash or in kind, (1) Borrower will not permit
the Total Fixed Charge Coverage Ratio, as of the end of any Fiscal Quarter, to
be less than 1.15:1.0 and (2) the Low Fixed Charge Covenant Period will no
longer be available.

(iii) Notwithstanding anything to the contrary contained herein, in the event
that the Initial Maturity Date occurs during the Low Fixed Charge Covenant
Period, the Low Fixed Charge Covenant Period shall be deemed to have expired as
of the Initial Maturity Date, regardless of whether the Initial Maturity Date
occurs prior to the end of the fourth (4th) Fiscal Quarter of the Low Fixed
Charge Covenant Period.

(iv) Notwithstanding anything to the contrary contained herein, from and after
payment of any Catch-Up Amounts, Borrower will not permit the Total Fixed Charge
Coverage Ratio, as of the end of any Fiscal Quarter, to be less than 1.10:1.00.

(b) Borrower will not permit the Total Leverage Ratio to be greater than .80 to
1.0.

(c) Borrower will not permit, as of any date, Consolidated Tangible Net Worth to
be less than an amount equal to Six Hundred Million Dollars ($600,000,000) plus
seventy-five percent (75%) of the net proceeds to Guarantor of any new issuances
of common Capital Stock but excluding therefrom (x) the proceeds of any common
Capital Stock of Guarantor or Borrower used in a transaction or a series of
transactions to redeem all or any portion of an outstanding issue of Capital
Stock (including payment in connection therewith of any accrued Dividends in
accordance herewith) or (y) Capital Stock of Guarantor or Borrower issued to
discharge Indebtedness.”.

 

-32-

--------------------------------------------------------------------------------

1.4.16 Section 7.2.4(d) of the Original Agreement is hereby amended by inserting
the following after the last sentence thereof:

“Notwithstanding anything to the contrary contained herein other than as set
forth in the immediately succeeding sentence, Borrower shall not incur, or
permit to be incurred after the Third Amendment Closing Date, any Construction
Costs of the Consolidated Group (other than Construction Costs relating to
projects in progress as set forth on Schedule XI, which for the avoidance of
doubt excludes any projects that are currently in design or pre-development
stage, such as the La Solana project) once such Construction Costs are equal to,
in the aggregate, Fifty Million Dollars ($50,000,000) (the “Capex/Investments
Basket”). Notwithstanding the foregoing, provided that (A) no Default has
occurred and is continuing and (B) the Total Fixed Charge Coverage Ratio is not
less than 1.15:1.0 calculated as of the previous Fiscal Quarter, Borrower may,
upon not less than ten (10) days’ prior written notice to Administrative Agent
(which notice shall contain an officer’s certificate certifying as to Borrower’s
compliance with clauses (A) and (B) above), incur Construction Costs after the
Third Amendment Closing Date that shall not exceed, as of any date, ten percent
(10%) of Gross Asset Value (the “Alternative Capex/Investments Basket”). The
election by Borrower to so utilize the Alternative Capex/Investments Basket
shall be deemed to be permanent, and the Capex/Investments Basket will then no
longer be available. Any payments made by Borrower, Guarantor or any Subsidiary
that is not a Non-Borrowing Base Subsidiary to reduce the principal amount of
any Indebtedness owed by any Non-Borrowing Base Property Subsidiary shall reduce
the Capex/Investments Basket or Alternative Capex/Investments Basket, as
applicable.”.

1.4.17 Section 7.2.6 of the Original Agreement is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof:

“Section 7.2.6 Restricted Payments, etc.

(a) Borrower will not, nor will Borrower permit Guarantor or any of Borrower’s
or Guarantor’s respective Subsidiaries to, authorize, declare or pay any
Dividends, except that:

(i) any Subsidiary of Borrower may authorize, declare and pay Dividends to
Borrower or to any Subsidiary of Borrower;

(ii) except as provided in clause (a)(i) above or clause (c) below, Guarantor
and Borrower may not authorize, declare or pay any amount of Dividends payable
to holders of common Capital Stock or operating partnership stock in cash or in
kind until the Total Fixed Charge Coverage Ratio exceeds 1.3:1.0. Once the Total
Fixed Charge Coverage Ratio exceeds 1.3:1.0, Guarantor, Borrower

 

-33-

--------------------------------------------------------------------------------

and any of their respective Subsidiaries may authorize, declare or pay Dividends
payable to holders of common Capital Stock or operating partnership stock from
time to time (in addition to those permitted pursuant to the preceding clause
(a)(i)), so long as (A) no Event of Default exists at the time of the respective
authorization, declaration or payment or would exist immediately after giving
effect thereto, and (B) calculations are made by Borrower establishing
compliance with the financial covenants contained in Section 7.2.4 for the Test
Period, on a pro forma basis (giving effect to the payment of the applicable
Dividend);

(iii) except as provided in clause (a)(i) above or clause (c) below, Guarantor
and Borrower may not authorize, declare or pay any amounts to holders of
preferred Capital Stock in excess of the amounts owed thereto which accrued with
respect to the most recent Fiscal Quarter (“Catch-Up Amounts”) for prior Fiscal
Quarters until the Total Fixed Charge Coverage Ratio exceeds 1.15:1.00 for the
prior two (2) consecutive Fiscal Quarters (such ratio shall be calculated for
both quarters using a dividend amount paid to holders of preferred Capital Stock
equal to the greater of (a) distributions on preferred partnership units payable
by Borrower for the latest Fiscal Quarter multiplied by four (4) and
(b) distributions on preferred partnership units payable by Borrower for the
latest Fiscal Quarter plus any Catch Up Amounts being paid at such time);
provided, however, that any transaction or series of transactions in which the
common or preferred Capital Stock of Guarantor or Borrower is exchanged for
additional common or preferred Capital Stock of Guarantor or Borrower shall not
be deemed the payment of a Catch-Up Amount for the purposes of this
Section 7.2.6(a)(iii) or Section 7.2.4(a)(iv);

(iv) provided no Event of Default exists at the time of the respective
authorization, declaration or payment or would exist immediately after giving
effect thereto and subject to clause (iii) above, Guarantor, Borrower and their
respective Subsidiaries may authorize, declare or pay any amount of preferred
Dividends;

(v) For the avoidance of doubt, nothing in this Agreement shall be interpreted
as prohibiting Dividends from Subsidiaries to holders of Capital Stock in Joint
Ventures; and

(vi) Guarantor and Borrower may purchase and exercise Capped Call Options.

(b) No redemption, retirement, purchase or other acquisition or similar
transaction, of any class of Borrower’s or Guarantor’s outstanding Capital Stock
(each, a “Share Repurchase”) shall be permitted without the

 

-34-

--------------------------------------------------------------------------------

consent of the Required Lenders, and (in any event) if any Event of Default
shall have occurred and be continuing. The foregoing restriction shall not be
deemed to apply to (i) the purchase or exercise of Capped Call Options by
Borrower or Guarantor, (ii) a reverse stock split pursuant to the terms of
Section 7.1.16 or (iii) a transaction or series of transactions in which an
outstanding issue of the Capital Stock of Guarantor or Borrower is replaced,
redeemed, or exchanged with a new issue of Capital Stock or the proceeds
thereof, as applicable (or in each case portions thereof).

(c) No Dividend in cash or in kind may be paid or made by Borrower or Guarantor
under this Section 7.2.6 at any time that an Event of Default shall have
occurred and be continuing or would result from any such Dividend or other
payment; provided, however, that notwithstanding the restrictions of
Section 7.2.6(a) or the first part of this sentence, for so long as Guarantor
qualifies, or has taken all other actions necessary to qualify, as a “real
estate investment trust” under the Code during any Fiscal Year of Guarantor,
Borrower may authorize, declare and pay quarterly cash Dividends (which may be
based on estimates) to Guarantor when and to the extent necessary for Guarantor
to distribute, and Guarantor may so distribute, cash Dividends to its
shareholders generally in an aggregate amount not to exceed the minimum amount
necessary for Guarantor to maintain its tax status as a real estate investment
trust, unless Borrower receives notice from Administrative Agent of any monetary
Event of Default or other material Event of Default.

(d) For avoidance of doubt, a Dividend paid or satisfied with the issuance of
Capital Stock shall not be deemed to be a Dividend “in kind”.”.

1.4.18 Section 7.2 of the Original Agreement is hereby amended by inserting the
following at the end thereof:

“Section 7.2.11 Borrowing Base Entity Organic Documents. Borrower shall not, and
shall not permit any Borrowing Base Entity to, amend or modify any of its
Organic Documents without Administrative Agent’s consent, other than to reflect
any change in capital accounts, contributions, distributions or allocations or
to make other changes that do not have a Material Adverse Effect.

Section 7.2.12 Partition. Borrower shall not, and shall not permit any Borrowing
Base Entity to, partition any Borrowing Base Property.

Section 7.2.13 Transfer Assets. Borrower shall not, and shall not permit any
Borrowing Base Entity to, Transfer any personal property unless (i) such
Transfer is in the ordinary course of business, (ii) such personal property is
replaced with property of reasonably equivalent value (iii) is required pursuant
to the terms of the applicable Management Agreement or (iv) such Transfer is
permitted by another provision of this Agreement.

 

-35-

--------------------------------------------------------------------------------

Section 7.2.14 Manager.

(a) With respect to each Borrowing Base Property, Borrower shall not, and shall
not permit any Borrowing Base Entity to, without the prior written consent of
Administrative Agent, which consent shall not be unreasonably withheld or
delayed, (i) materially modify, change, supplement, alter or amend any
Management Agreement or waive or release any of its right and remedies under a
Management Agreement that would have a Material Adverse Effect or would
otherwise modify, supplement or alter the provisions relating to casualty,
condemnation or the disposition of insurance proceeds or (ii) replace the
Manager with any Person other than an Approved Manager or Approved Luxury
Manager, as applicable. Administrative Agent shall be obligated to provide its
written consent to any proposed amendment, modification or supplement to a
Management Agreement, provided that (A) Administrative Agent is obligated to
provide such consent pursuant to the provisions of the applicable Manager’s
Consent to Assignment and Estoppel Certificate, dated as of the Third Amendment
Closing Date and (B) such amendment, modification or supplement is permitted to
be made by Borrower pursuant to the provisions of this Section 7.2.14(a).

(b) In the event that Borrower or any Borrowing Base Entity desires to retain a
new Manager, then (i) such new Manager shall be an Approved Manager or Approved
Luxury Manager, (ii) Borrower shall deliver to Administrative Agent an updated
or replacement Acceptable Appraisal for such Borrowing Base Property and,
notwithstanding the provisions of Section 7.1.7, Borrower shall reimburse
Administrative Agent the costs thereof within thirty (30) days after receipt by
Borrower of an invoice therefor and (iii) the Management Agreement with such
Approved Manager or Approved Luxury Manager shall either be (x) on terms that in
the aggregate (i.e., taken as a whole) are no less favorable to the Borrowing
Base Entity than customary market terms or (y) approved by the Required Lenders,
such approval not to be unreasonably withheld or delayed .”.

Section 7.2.15 Zoning Reclassification. Without the prior written consent of
Administrative Agent, Borrower shall not, and shall not permit a Borrowing Base
Entity to (a) initiate or consent to any zoning reclassification of any portion
of a Borrowing Base Property that could reasonably be expected to have a
material adverse effect on such Property, (b) seek any variance under any
existing zoning ordinance that could result in the use of a Borrowing Base
Property becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation, or (c) allow any portion of a
Borrowing Base Property to be used in any manner that could result in the use of
such Borrowing Base Property becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation.”.

Section 1.5 Article VIII Amendments.

1.5.1 Section 8.1.3 of the Original Agreement is hereby deleted in its entirety
and the following is inserted in lieu thereof:

“Section 8.1.3 Non-Performance of Certain Covenants and Obligations. Borrower or
any Borrowing Base Entity shall (a) default in the due performance and
observance of any of its obligations under Section 7.1.1(f), Section 7.1.2 (but
only to the extent arising from the failure of Guarantor or Borrower to preserve
and keep in full force and effect its existence), Section 7.1.16,
Section 7.1.22(b), or Section 7.2 hereof, (b) default in the due performance and
observance of any of its obligations under Section 7.1.1(g), (k) or (m),
Section 7.1.6, Section 7.1.14, or Section 7.1.22(c) hereof or (c) default in the
due performance and observance of any of its obligations under Section 3(d),
Section 4 or Section 8 of the First Lien Mortgages and such default shall
continue unremedied for a period of ten (10) days (provided, however, solely in
the case of a default under Section 7.1.6 hereof, Administrative Agent may, in
its sole discretion, extend such ten (10) day period, but in no event by more
than twenty (20) days).”.

 

-36-

--------------------------------------------------------------------------------

1.5.2 Section 8.1.4 of the Original Agreement is hereby amended to insert the
following after the words “The Borrower” at the beginning of the first sentence
thereof:

“or any Borrowing Base Entity”.

1.5.3 Section 8.1.5 of the Original Agreement is hereby amended to insert the
following after the words “Section 8.1.1” in the second parenthetical therein:

“or Indebtedness with respect to Non-Borrowing Base Property Subsidiaries”.

1.5.4 Section 8.1.6 of the Original Agreement is hereby amended to insert the
following after “respective Subsidiaries” in the first sentence therein:

“(excluding Non-Borrowing Base Property Subsidiaries)”.

1.5.5 Section 8.1.8 of the Original Agreement is hereby amended to insert the
following at the end thereof:

“(other than with respect to Non-Borrowing Base Property Subsidiaries).”.

1.5.6 Section 8.1.9 of the Original Agreement is hereby amended to insert the
following after the words “except for” in the first parenthetical thereof:

“Non-Borrowing Base Property Subsidiaries or”.

1.5.7 Section 8.1 of the Original Agreement is hereby amended by inserting the
following at the end thereof:

“Section 8.1.17 Enforceability. If any Lien granted by the First Lien Mortgages,
in whole or in part, shall terminate or shall cease to be effective or shall
cease to be a perfected first priority Lien, subject to the Permitted Borrowing
Base Liens (except in any of the foregoing cases in accordance with the terms
hereof or under any other Loan Document or by reason of any affirmative act of
Lender).

Section 8.1.18 Management Agreement. If the Management Agreement is terminated
and an Approved Manager or Approved Luxury Manager is not appointed as a
replacement manager pursuant to the provisions of Section 7.2.14 within sixty
(60) days after such termination.

 

-37-

--------------------------------------------------------------------------------

Section 8.1.19 Easements. Except as expressly permitted pursuant to the Loan
Documents, if Borrower or any other Person grants any easement, covenant or
restriction (other than the Permitted Borrowing Base Liens) over a Borrowing
Base Property or if Borrower or any Borrowing Base Entity shall default beyond
the expiration of any applicable cure period under any existing easement,
covenant or restriction which affects a Borrowing Base Property, the default of
which shall have a Material Adverse Effect.

Section 8.1.20 Ground Leases. If (A) a Property subject to a Ground Lease is a
Borrowing Base Property and (B) there shall occur any default by the applicable
Property Owner, as lessee under a Ground Lease, in the observance or performance
of any term, covenant or condition of a Ground Lease on the part of such
Property Owner to be observed or performed, and said default (i) would permit
the Fee Owner to terminate such Ground Lease and (ii) is not cured or such
Borrowing Base Property is not released pursuant to the provisions of
Section 7.1.22 prior to the expiration of any applicable grace or cure period
therein provided.”.

1.5.8 Section 8.3 of the Original Agreement is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof:

“Section 8.3 Action if Other Event of Default.

(a) If any Event of Default (other than any Event of Default described in
clauses (a) through (e) of Section 8.1.9 with respect to the Borrower) shall
occur for any reason, whether voluntary or involuntary, and be continuing,
Administrative Agent, upon the direction or with the consent of the Required
Lenders, shall take such action that Administrative Agent deems advisable to
protect and enforce the rights of the Lenders against Borrower and in the
Borrowing Base Properties, including, without limitation, (i) by written notice
to the Borrower declare all of the outstanding principal amount of the Loans and
other Obligations (including Reimbursement Obligations) to be due and payable
and/or the Revolving Loan Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of the Loans and other Obligations
shall be and become immediately due and payable, without further notice, demand
or presentment, and the Commitments shall terminate and Borrower shall
automatically and immediately be obligated to deposit with Administrative Agent
cash collateral in an amount equal to all Letter of Credit Outstandings and
(ii) enforcing or availing itself of any or all rights or remedies as set forth
in the Loan Documents against Borrower and the Borrowing Base Properties,
including, without limitation, all rights or remedies available at law or in
equity.

(b) Unless waived in writing by Administrative Agent, and subject in all events
to the express provisions of each Loan Document, upon the occurrence and during
the continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to

 

-38-

--------------------------------------------------------------------------------

Administrative Agent against Borrower under this Agreement or any of the other
Loan Documents executed and delivered by, or applicable to, Borrower or at law
or in equity may be exercised by Administrative Agent at any time and from time
to time, whether or not all or any of the Indebtedness shall be declared due and
payable, and whether or not Administrative Agent shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to the Borrowing Base
Properties. Any such actions taken by Administrative Agent shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Administrative Agent may
determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of
Administrative Agent permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing (i) neither
Administrative Agent nor the Lenders shall be subject to any one action or
election of remedies law or rule and (ii) all liens and other rights, remedies
or privileges provided to Administrative Agent and the Lenders shall remain in
full force and effect until Administrative Agent and the Lenders have exhausted
all of its remedies against the Borrowing Base Properties and the First Lien
Mortgages have been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Indebtedness or the Indebtedness has been paid in full.

(c) With respect to Borrower and the Collateral, nothing contained herein or in
any other Loan Document shall be construed as requiring Administrative Agent or
the Lenders to resort to the Borrowing Base Properties for the satisfaction of
any of the Indebtedness, and Administrative Agent may seek satisfaction out of
the Borrowing Base Properties or any part thereof, in its absolute discretion in
respect of the Indebtedness. In addition, Administrative Agent shall have the
right from time to time to partially foreclose this Agreement and the First Lien
Mortgages in any manner and for any amounts secured by this Agreement or the
First Lien Mortgages then due and payable as determined by Administrative Agent
in its sole discretion, including, without limitation, the following
circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal or
interest, Administrative Agent may foreclose this Agreement and the First Lien
Mortgages to recover such delinquent payments, or (ii) in the event
Administrative Agent elects to accelerate less than the entire outstanding
principal balance of the Loans, Administrative Agent may foreclose this
Agreement and the First Lien Mortgages to recover so much of the principal
balance of the Loans as Administrative Agent may accelerate and such other sums
secured by this Agreement or the First Lien Mortgages as Administrative Agent
may elect. Notwithstanding one or more partial foreclosures, the Borrowing Base
Properties shall remain subject to this Agreement and the First Lien Mortgages
to secure payment of sums secured by this Agreement and the First Lien Mortgages
and not previously recovered.”.

 

-39-

--------------------------------------------------------------------------------

Section 1.6 Article XI Amendment

1.6.1 The Original Agreement is hereby amended by inserting the following at the
end thereof:

“ARTICLE XI

CONDOMINIUM

Section 11.1 Covenants.

11.1.1 Borrower shall, and shall cause the Punta Mita Borrowing Base Entities
to, cause the Condominium Board to deliver to Administrative Agent within sixty
(60) days after written request, an estoppel certificate from the Condominium
Board in the form required under the Condominium Documents (or if no form is
required under the Condominium Documents, in a form reasonably acceptable to
Administrative Agent); provided, however, that for so long as Borrower or the
Borrowing Base Entities are diligently proceeding in good faith to obtain such
estoppel certificate, Borrower’s failure to obtain such estoppel certificate
shall not be deemed a Default.

11.1.2 Borrower shall, and shall cause the Punta Mita Borrowing Base Entities
to, observe and perform each and every material term to be observed or performed
by Punta Mita Borrowing Base Entities pursuant to the terms of the Condominium
Documents.

11.1.3 Borrower shall promptly deliver to Lender a true and full copy of all
notices of default received by Borrower or the Punta Mita Borrowing Base
Entities with respect to any obligation or duty of the Punta Mita Borrowing Base
Entities under the Condominium Documents. Without the prior written consent of
Administrative Agent (which approval shall not be unreasonably withheld,
conditioned or delayed), Borrower shall not, and shall not permit the Punta Mita
Borrowing Base Entities to, approve or otherwise agree or consent to (by
affirmative action or inaction on its part) any decisions that require the
concurrence or vote of the Punta Mita Borrowing Base Entities pursuant to the
Condominium Documents that could reasonably be expected to have a material
adverse effect on the Units or the Common Elements.

11.1.4 Without the prior written consent of Administrative Agent, Borrower shall
not, and shall not permit the Punta Mita Borrowing Base Entities to
(i) institute any action or proceeding for partition of the Units, under the
Condominium Documents that could reasonably be expected to have a material
adverse effect on the Units, (ii) vote for or consent to any modification of,
amendment to or relaxation in the enforcement of the

 

-40-

--------------------------------------------------------------------------------

Condominium Documents that could reasonably be expected to have a material
adverse effect on the Units or the Common Elements (taken as a whole) or
(iii) in the event of damage to or destruction of the Units, the Common
Elements, vote in opposition to a motion to repair, restore or rebuild the same
contrary to the provisions of Article XII hereof.

11.1.5 Without the prior written consent of Administrative Agent, Borrower shall
not, and shall not permit the Punta Mita Borrowing Base Entities to, vote for,
agree to or acquiesce in any termination of the Condominium Documents that could
reasonably be expected to have a material adverse effect on the Units or the
Common Elements (taken as a whole). Any agreement to which Borrower or the Punta
Mita Borrowing Base Entities is a party whereby any of the Condominium Documents
is terminated or the Units are withdrawn therefrom (and replacement Condominium
Documents reasonably approved by Administrative Agent are not simultaneously
recorded) shall constitute a Transfer prohibited under this Agreement.

Section 11.2 Representations. Borrower hereby represents and warrants as
follows:

11.2.1 To Borrower’s knowledge, the Condominium Documents are in full force and
effect and there is no default, breach or violation existing thereunder by any
party thereto and, to Borrower’s knowledge, no event has occurred, that, with
the passage of time or the giving of notice, or both, would constitute a
default, breach or violation by any party thereunder. The Punta Mita Borrowing
Base Entities are not party to any other agreements or understandings other than
the Condominium Documents with respect to the Units.

11.2.2 Neither the Third Amendment Transaction nor the exercise of any remedies
by Administrative Agent permitted thereunder, will adversely affect Borrower’s
or the Punta Mita Borrowing Base Entities’ rights under the Condominium
Documents.

11.2.3 A Punta Mita Borrowing Base Entity owns fee simple title to the
Sub-Condominium Unit RC-1/A of Sub-Condominium RC-1 of Punta Mita Condominium,
Sub-Condominium Unit RC-1/B of Sub-Condominium RC-1 of Punta Mita Condominium,
Sub-Condominium Unit RC-1/G of Sub-Condominium RC-1 of Punta Mita Condominium
(collectively, the “Units”).

11.2.4 There have been no common charges, common expenses, unit expenses nor
special levies assessed or levied against the Units by the Condominium Board
except for annual maintenance fees. The annual maintenance fee for calendar year
2008 was $3,514,691.26 MXP plus VAT for a total of $4,041,894.95 MXP. The 2009
annual fees have yet to be billed.

 

-41-

--------------------------------------------------------------------------------

11.2.5 To the extent required under the Condominium Documents, the Condominium
Board has received notice from the Punta Mita Borrowing Base Entities that the
Units have been encumbered with the applicable First Lien Mortgage.
Administrative Agent is permitted under the Condominium Documents as a mortgagee
of the Units, and the recordation of the applicable First Lien Mortgage is
permitted under the Condominium Documents.

11.2.6 All obligations required to be performed by the Punta Mita Borrowing Base
Entities prior to the date hereof in connection with the maintenance, repair and
replacement of any portion of the Units have been satisfied.

11.2.7 To Borrower’s knowledge, all obligations and conditions under the
Condominium Documents to be performed to date by either the Condominium Board or
the Punta Mita Borrowing Base Entities with respect to the Units have been
satisfied.

11.2.8 To Borrower’s knowledge, there is no proposed amendment of the
Condominium Documents.

11.2.9 To Borrower’s knowledge, there is no proposed termination of condominium
status or transfer of any part of the Common Elements.

11.2.10 To Borrower’s knowledge, (i) no portion of the Condominium has been the
subject of a Taking and (ii) there is no proposed Taking that affects any
portion of the Units or the Condominium.

ARTICLE XII

CONDEMNATION AND INSURANCE PROCEEDS

Section 12.1 Notification. Borrower shall promptly notify Administrative Agent
in writing upon obtaining knowledge (provided that knowledge of a Borrowing Base
Entity shall be deemed to be imputed to Borrower) of (i) the institution of any
proceedings relating to any Taking (whether material or immaterial) of, or
(ii) the occurrence of any casualty, damage or injury to, a Borrowing Base
Property or any portion thereof, the restoration of which is estimated by
Borrower in good faith to cost more than the Casualty Amount. In addition, each
such notice shall set forth such good faith estimate of the cost of repairing or
restoring such casualty, damage, injury or Taking in reasonable detail if the
same is then available and, if not, as soon thereafter as it can reasonably be
provided.

Section 12.2 Proceeds. In the event of any Taking of or any casualty or other
damage or injury to a Borrowing Base Property, (A) Borrower’s and any Borrowing
Base Entity’s right, title and interest in and to all compensation, awards,
proceeds, damages, claims, insurance recoveries, causes and rights of action
(whether accrued prior to or after the Third Amendment Closing Date), and
(B) payments which Borrower or a Borrowing Base Entity may receive or to which
Borrower may become entitled with respect to a

 

-42-

--------------------------------------------------------------------------------

Borrowing Base Property or any part thereof other than payments received in
connection with any liability or loss of rental value or business interruption
insurance (collectively, “Proceeds”), in connection with any such Taking of, or
casualty or other damage or injury to, a Borrowing Base Property or any part
thereof are hereby assigned by Borrower and, in the case of such Borrowing Base
Entity’s interest in the Proceeds, shall be caused by Borrower to be assigned to
Administrative Agent and, except as otherwise herein provided, shall be paid to
Administrative Agent. Borrower shall and shall cause the applicable Borrowing
Base Entity to, in good faith and in a commercially reasonable manner, file and
prosecute the adjustment, compromise or settlement of any claim for Proceeds
and, subject to Borrower’s, the applicable Manager’s or such Borrowing Base
Entity’s right to receive the direct payment of any Proceeds as herein provided,
will cause the same to be held and applied in accordance with the provisions of
this Agreement. Except upon the occurrence and during the continuance of an
Event of Default, Borrower or the applicable Borrowing Base Entity may settle
any insurance claim with respect to Proceeds which does not exceed the Casualty
Amount. Whether or not an Event of Default shall have occurred and be
continuing, Administrative Agent shall have the right to approve, such approval
not to be unreasonably withheld, any settlement which might result in any
Proceeds in excess of the Casualty Amount, and Borrower or the applicable
Borrowing Base Entity shall deliver or cause to be delivered to Administrative
Agent all instruments reasonably requested by Administrative Agent to permit
such approval. Borrower shall pay all reasonable out-of-pocket costs, fees and
expenses reasonably incurred by Administrative Agent (including all reasonable
attorneys’ fees and expenses, the reasonable fees of insurance experts and
adjusters and reasonable costs incurred in any litigation or arbitration), and
interest thereon at a rate equal to the Alternate Base Rate then in effect for
Base Rate Loans plus the Applicable Margin for Base Rate Loans plus two percent
(2%) to the extent not paid within ten (10) Business Days after delivery of a
request for reimbursement by Administrative Agent, in connection with the
settlement of any claim for Proceeds and seeking and obtaining of any payment on
account thereof in accordance with the foregoing provisions. If any Proceeds are
received by Borrower or the applicable Borrowing Base Entity and may be retained
by Borrower or such Borrowing Base Entity pursuant to this Section 12.2, such
Proceeds shall, until the completion of the related Work, be held in trust for
Administrative Agent (but shall not required to be segregated from other funds
of Borrower or such Borrowing Base Entity) to be used to pay for the cost of the
Work in accordance with the terms hereof, and in the event such Proceeds exceed
the Casualty Amount, such Proceeds shall be forthwith paid directly to and held
by Administrative Agent in a Proceeds reserve account in trust for Borrower, in
each case to be applied or disbursed in accordance with this Section 12.2. If an
Event of Default shall have occurred and be continuing, or if Borrower or the
applicable Borrowing Base Entity fails to file and/or prosecute any insurance
claim for a period of fifteen (15) Business Days following Borrower’s receipt of
written notice from Administrative Agent, Borrower hereby irrevocably empowers,
and shall cause the applicable Borrowing Base Entity to irrevocably empower,
Administrative Agent, in the name of Borrower or such Borrowing Base Entity, as
applicable, as its true and lawful attorney-in-fact, to file and prosecute such
claim (including settlement thereof) with counsel satisfactory to Administrative
Agent and to collect and to make receipt for any such payment, all at Borrower’s
expense (including payment of and interest thereon at a rate equal to the
Alternate Base Rate then in effect for Base Rate Loans plus the Applicable

 

-43-

--------------------------------------------------------------------------------

Margin for Base Rate Loans plus two percent (2%) for any amounts advanced by
Administrative Agent pursuant to this Section 12.2). Notwithstanding anything
contained in the Loan Documents, including this Article XII, to the contrary,
all rights, restrictions and provisions relating to Takings or casualties shall
be subject to the rights of Managers and the obligations of Properties Owners
and Operating Lessees under the applicable Management Agreements.

Section 12.3 Major Casualty/Condemnation Events. If a Major
Casualty/Condemnation Event occurs, then Borrower shall (A) promptly deliver to
Administrative Agent an updated or replacement Acceptable Appraisal reflecting
the casualty or Taking at such Borrowing Base Property and, notwithstanding the
provisions of Section 7.1.7, Borrower shall reimburse Administrative Agent the
costs thereof within thirty (30) days after receipt by Borrower of an invoice
therefor, (B) as soon as practicable after the occurrence of such Major
Casualty/Condemnation Event, but in no event later than thirty (30) days after
the occurrence of such Major Casualty/Condemnation Event, either (x) release
such Borrowing Base Property from the lien of the applicable First Lien Mortgage
pursuant to Section 7.1.22 (other than Section 7.1.22(f)(ii)) of this Agreement
if Borrower is entitled to release such Borrowing Base Property under
Section 7.1.22 (other than Section 7.1.22(f)(ii)) or (y) if such release is not
permitted hereunder pursuant to Section 7.1.22 (other than
Section 7.1.22(f)(ii)), restore the applicable Borrowing Base Property pursuant
to Section 12.4, provided that such restoration obligations set forth therein
shall be subject to the casualty and condemnation provisions set forth in the
applicable Management Agreement.

Section 12.4 Borrower or Borrowing Base Entity to Restore.

12.4.1 Provided Borrower has not released the applicable Borrowing Base Property
pursuant to Section 12.3, promptly after the occurrence of any damage or
destruction to all or any portion of a Borrowing Base Property or a Taking of a
portion of such Borrowing Base Property, Borrower shall commence and diligently
prosecute, or cause the applicable Borrowing Base Entity to commence and
diligently prosecute, to completion, subject to Excusable Delays, the repair,
restoration and rebuilding of such Borrowing Base Property (in the case of a
partial Taking, to the extent it is capable of being restored) so damaged,
destroyed or remaining after such Taking in full compliance with all material
Legal Requirements and free and clear of any and all Liens except Permitted
Borrowing Base Liens (such repair, restoration and rebuilding are sometimes
hereinafter collectively referred to as the “Work”). The plans and
specifications shall require that the Work be done in a first-class workmanlike
manner at least equivalent to the quality and character prior to the damage or
destruction (provided, however, that in the case of a partial Taking, the
applicable Borrowing Base Property restoration shall be done to the extent
reasonably practicable after taking into account the consequences of such
partial Taking), so that upon completion thereof, such Borrowing Base Property
shall be at least equal in general utility to the applicable Borrowing Base
Entities prior to the damage or destruction; it being

 

-44-

--------------------------------------------------------------------------------

understood, however, that Borrower and the applicable Borrowing Base Entity
shall not be obligated to restore such Borrowing Base Property to the precise
condition of such Borrowing Base Property prior to any partial Taking of, or
casualty or other damage or injury to, such Borrowing Base Property. Subject to
Borrower’s right to elect to release the applicable Borrowing Base Property
pursuant to Section 12.3.1, Borrower shall be obligated to restore the Borrowing
Base Property suffering a casualty or which has been subject to a partial Taking
in accordance with the provisions of this Article XII at Borrower’s sole cost
and expense whether or not the Proceeds shall be sufficient, provided that, if
applicable, the Proceeds shall be made available to Borrower by Administrative
Agent in accordance with this Agreement.

12.4.2 Administrative Agent shall make the Proceeds that it is holding pursuant
to the terms hereof (after payment of any reasonable out-of-pocket expenses
actually incurred by Administrative Agent in connection with the collection
thereof plus interest thereon at a rate equal to the Alternate Base Rate then in
effect for Base Rate Loans plus the Applicable Margin for Base Rate Loans plus
two percent (2%) (from the date advanced through the date of reimbursement) to
the extent the same are not paid within ten (10) Business Days after request for
reimbursement by Administrative Agent) available to Borrower for payment of or
reimbursement of Borrower’s expenses incurred with respect to the Work, upon the
terms and subject to the conditions set forth in paragraphs (a) through
(d) below and in Section 12.5:

(a) at the time of loss or damage or at any time thereafter while Borrower or
the applicable Borrowing Base Entity is holding any portion of the Proceeds,
there shall be no continuing Event of Default;

(b) if, at any time, the estimated cost of the Work (as estimated by Borrower or
the Independent Architect referred to in clause (c) below, if applicable) shall
exceed the Proceeds (a “Deficiency”) and for so long as a Deficiency shall
exist, Administrative Agent shall not be required to make any Proceeds
disbursement to Borrower unless Borrower (within a reasonable period of time
after receipt of such estimate), at its election, either deposits with or
delivers to Administrative Agent (A) cash and Cash Equivalents in an amount
equal to the estimated cost of the Work less the Proceeds, or (B) such other
evidence of Borrower’s ability to meet such excess costs and which is reasonably
satisfactory to Administrative Agent;

(c) Each of Administrative Agent and the Independent Architect shall have
reasonably approved the plans and specifications for the Work reasonably
estimated to exceed five percent (5%) of the Appraised Value of such Borrowing
Base Property immediately prior to such casualty or Taking and any change orders
in connection with such plans and specifications; and

 

-45-

--------------------------------------------------------------------------------

(d) Administrative Agent shall, within a reasonable period of time prior to
request for initial disbursement, be furnished with an estimate of the cost of
the Work accompanied, to the extent such estimate shall exceed five percent
(5%) of the Appraised Value of such Borrowing Base Property immediately prior to
such casualty or Taking, by an Independent Architect’s certification as to such
costs and appropriate plans and specifications for the Work. Borrower shall
restore, or shall cause to be restored, all Improvements such that when they are
fully restored and/or repaired, such Improvements and their contemplated use
fully comply with all applicable Legal Requirements including zoning,
environmental and building laws, codes, ordinances and regulations.

Section 12.5 Disbursement of Proceeds.

12.5.1 Disbursements of the Proceeds in cash and Cash Equivalents to Borrower
hereunder shall be made from time to time (but not more frequently than once in
any month) by Administrative Agent but only for so long as no Event of Default
shall have occurred and be continuing, as the Work progresses upon receipt by
Administrative Agent of (i) an Officer’s Certificate dated not more than ten
(10) Business Days prior to the application for such payment, requesting such
payment or reimbursement and describing the Work performed that is the subject
of such request, the parties that performed such Work and the actual cost
thereof, and also certifying that such Work and materials are or, upon
disbursement of the payment requested to the parties entitled thereto, will be
free and clear of Liens other than Permitted Borrowing Base Liens, (ii) evidence
reasonably satisfactory to Administrative Agent that (A) all materials installed
and work and labor performed in connection with such Work have been paid for in
full and (B) there exists no notices of pendency, stop orders, mechanic’s liens
or notices of intention to file same (unless the same is required by state law
as a condition to the payment of a contractor) or any liens or encumbrances of
any nature whatsoever on the applicable Borrowing Base Property arising out of
the Work which have not been either fully bonded to the satisfaction of
Administrative Agent or discharged of record or in the alternative, fully
insured to the satisfaction of Administrative Agent by the Title Company that
issued the Title Policy or otherwise contested in accordance with Section 7.1.31
and (iii) an Independent Architect’s certificate certifying performance of the
Work together with an estimate of the cost to complete the Work. No payment made
prior to the final completion of the Work, as certified by the Independent
Architect, except for payment made to contractors whose Work shall have been
fully completed and from which final lien waivers have been received, shall
exceed ninety percent (90%) of the value of the Work performed and materials
furnished and incorporated into the Improvements

 

-46-

--------------------------------------------------------------------------------

from time to time, and at all times the undisbursed balance of said Proceeds
together with all amounts deposited, bonded, guaranteed or otherwise provided
for pursuant to Section 12.4.2 above, shall be at least sufficient to pay for
the estimated cost of completion of the Work; final payment of all Proceeds
remaining with Administrative Agent shall be made upon receipt by Administrative
Agent of a certification by an Independent Architect, as to the completion of
the Work substantially in accordance with the submitted plans and
specifications, final lien releases, and the filing of a notice of completion
and the expiration of the period provided under the law of the state for the
filing of mechanics’ and materialmens’ liens which are entitled to priority as
to other creditors, encumbrances and purchasers, as certified pursuant to an
Officer’s Certificate, and delivery of a certificate of occupancy with respect
to the Work, or, if not applicable, an Officer’s Certificate to the effect that
a certificate of occupancy is not required.

12.5.2 If, after the Work is completed in accordance with the provisions hereof
and Administrative Agent receives evidence that all costs of completion have
been paid, there are any excess Proceeds, such excess Proceeds shall be paid
over to Borrower.

ARTICLE XIII

MAINTENANCE OF PROPERTY

Section 13.1 Maintenance of Property. Borrower shall keep and maintain, and
cause the applicable Borrowing Base Entities to keep and maintain, the Borrowing
Base Properties and every part thereof in good condition and repair, subject to
ordinary wear and tear, and, subject to Excusable Delays and the provisions of
this Agreement with respect to damage or destruction caused by casualty events
or Takings, shall not permit or commit any waste, impairment, or deterioration
of any portion of the Borrowing Base Properties in any material respect.
Borrower further covenants to do, and to cause the applicable Borrowing Base
Entities to do, all other acts which from the character or use of the Borrowing
Base Properties may be reasonably necessary to protect the security hereof, the
specific enumerations herein not excluding the general. Borrower shall not
remove or demolish, or permit the applicable Borrowing Base Entities to remove
or demolish, any Improvement on the Borrowing Base Properties except as the same
may be necessary in connection with an Alteration or a restoration in connection
with a Taking or casualty, or as otherwise permitted herein, in each case in
accordance with the terms and conditions hereof.

Section 13.2 Conditions to Alterations. Provided that no Event of Default shall
have occurred and be continuing hereunder, Borrower shall have the right,
without Administrative Agent’s consent, to undertake any alteration,
improvement, demolition or removal of a Borrowing Base Property or any portion
thereof (any such alteration, improvement, demolition or removal, an
“Alteration”) so long as (i) Borrower provides Administrative Agent with prior
written notice of any Material Alteration, and (ii) such Alteration is
undertaken in accordance with the applicable provisions of this Agreement and

 

-47-

--------------------------------------------------------------------------------

the other Loan Documents, is not prohibited by any relevant REAs and the Leases
and shall not, upon completion (giving credit to rent and other charges
attributable to Leases executed upon such completion), have a Material Adverse
Effect on the value, use or operation of the applicable Borrowing Base Property
taken as a whole or otherwise. Borrower shall deliver to Administrative Agent,
for information purposes only and not for approval by Administrative Agent,
detailed plans and specifications and cost estimates therefor, for any Material
Alterations. Such plans and specifications may be revised at any time and from
time to time by Borrower; provided that material revisions of such plans and
specifications are filed with Administrative Agent, for information purposes
only. All work done in connection with any Alteration shall be performed with
due diligence in a good and workmanlike manner, all materials used in connection
with any Alteration shall not be less than the standard of quality of the
materials currently used at the applicable Borrowing Base Property and all
materials used shall be in accordance with all applicable material Legal
Requirements and Insurance Requirements. Notwithstanding anything in this
Article XIII to the contrary, the restrictions contained herein are subject to
the rights of a Manager under any applicable Management Agreement to undertake
Alterations or cause Borrower or any Subsidiary to undertake Alterations,
subject, in each case, to the provisions of Section 7.2.14 of this Agreement

Section 13.3 Costs of Alterations. Notwithstanding anything to the contrary
contained in this Article XIII, no Material Alteration or Alteration which when
aggregated with all other related Alterations (other than Material Alterations)
then being undertaken by Borrower or the applicable Borrowing Base Entities
exceeds the Threshold Amount, shall be performed by or on behalf of Borrower or
the applicable Borrowing Base Entities unless Borrower shall have delivered to
Administrative Agent cash and Cash Equivalents as security in an amount not less
than the estimated cost of the Material Alteration or the Alterations minus the
Threshold Amount. In addition to payment or reimbursement from time to time of
Borrower’s or the applicable Borrowing Base Entities’ expenses incurred in
connection with any Material Alteration or any such Alteration, the amount of
such security shall be reduced on any given date to the written estimate of the
cost to complete the Material Alteration or the Alterations (including any
retainages), free and clear of Liens, other than Permitted Borrowing Base Liens.
Costs which are subject to retainage (which in no event shall be less than five
percent (5%) in the aggregate) shall be treated as due and payable and unpaid
from the date they would be due and payable but for their characterization as
subject to retainage. In the event that any Material Alteration or Alteration
shall be made in conjunction with any restoration with respect to which Borrower
shall be entitled to withdraw Proceeds pursuant to Article XII, the amount of
the cash and Cash Equivalents to be furnished pursuant hereto need not exceed
the aggregate cost of such restoration and such Material Alteration or
Alteration, less the sum of the amount of any Proceeds which Borrower may be
entitled to withdraw pursuant to Article XII and which are held by
Administrative Agent in accordance with Article XII. Payment or reimbursement of
Borrower’s or the applicable Borrowing Base Entity’s expenses incurred with
respect to any Material Alteration or any such Alteration shall be accomplished
upon the terms and conditions specified in Article XII.

At any time after substantial completion of any Material Alteration or any such
Alteration in respect of which cash and Cash Equivalents is deposited pursuant
hereto,

 

-48-

--------------------------------------------------------------------------------

the whole balance of any cash and Cash Equivalents so deposited by Borrower with
Administrative Agent and then remaining on deposit (together with earnings
thereon), as well as all retainages, may be withdrawn by Borrower and shall be
paid by Administrative Agent to Borrower, and any other cash and Cash
Equivalents so deposited or delivered shall, to the extent it has not been
called upon, reduced or theretofore released, be released to Borrower, within
ten (10) days after receipt by Administrative Agent of an application for such
withdrawal and/or release together with an Officer’s Certificate, setting forth
in substance as follows:

13.3.1 that the Material Alteration or Alteration in respect of which such cash
and Cash Equivalents was deposited has been substantially completed in all
material respects substantially in accordance with any plans and specifications
therefor previously filed with Administrative Agent under Section 13.2 and that,
if applicable, a certificate of occupancy has been issued with respect to such
Material Alteration or Alteration by the relevant Governmental Authority(ies)
or, if not applicable, that a certificate of occupancy is not required; and

13.3.2 that to the knowledge of the certifying Person all amounts which Borrower
or the applicable Borrowing Base Entity is or may become liable to pay in
respect of such Material Alteration or Alteration through the date of the
certification have been paid in full or adequately provided for or are being
contested in good faith and that lien waivers have been obtained from the
general contractor and major subcontractors performing such Material Alterations
or Alterations (or such waivers are not customary and reasonably obtainable by
prudent managers in the area where the applicable Borrowing Base Property is
located).

Notwithstanding anything in the Loan Documents, including this Article XIII, to
the contrary, all rights, restrictions and provisions relating to maintenance
and Alterations shall be subject to the rights of the Manager and obligations of
the Property Owner and Operating Lessees under the applicable Management
Agreements.

ARTICLE XIV

GROUND LEASE

Section 14.1 Leasehold Representations, Warranties. Borrower hereby represents
and warrants as follows:

14.1.1 the Lincolnshire Ground Lease is in full force and effect, unmodified by
any writing or otherwise, and Borrower has not waived, canceled or surrendered
any of its rights thereunder;

14.1.2 all rent, additional rent and/or other charges reserved in or payable
under the Lincolnshire Ground Lease have been paid to the extent that they are
payable to the Third Amendment Closing Date;

 

-49-

--------------------------------------------------------------------------------

14.1.3 the Lincolnshire Ground Lessee enjoys the quiet and peaceful possession
of the Lincolnshire Leasehold Estate;

14.1.4 the Lincolnshire Ground Lessee has not delivered or received any notices
of default under the Lincolnshire Ground Lease and to the best of Borrower’s
knowledge the Lincolnshire Ground Lessee is not in default under any of the
terms of the Lincolnshire Ground Lease, and there are no circumstances which,
with the passage of time or the giving of notice, or both, would constitute a
default under the Lincolnshire Ground Lease;

14.1.5 To the best knowledge of Borrower, Lincolnshire Fee Owner is not in
default under any of the terms of the Lincolnshire Ground Lease on its part to
be observed and performed;

14.1.6 Borrower has delivered to Administrative Agent a true, accurate and
complete copy of the Lincolnshire Ground Lease; and

14.1.7 Borrower knows of no adverse claim to the title or possession of the
Lincolnshire Ground Lessee or the Lincolnshire Fee Owner.

Section 14.2 Cure by Administrative Agent. In the event of a default by a Ground
Lessee in the performance of any of its obligations under a Ground Lease,
(i) which default would permit the Fee Owner to terminate such Ground Lease and
(ii) Borrower or the applicable Borrowing Base Entities are not diligently
prosecuting the cure thereof, then, in each and every such case, Borrower shall
cause the Ground Lessee to (A) permit Administrative Agent to, at its option,
cause the default or defaults to be remedied and (B) otherwise exercise any and
all rights of the Ground Lessee thereunder in the name of and on behalf of the
Ground Lessee. Borrower shall cause the Ground Lessee to, on demand, reimburse
Administrative Agent for all advances made and expenses incurred by
Administrative Agent in curing any such default (including, without limitation,
reasonable attorneys’ fees and disbursements), together with interest thereon at
a rate equal to the Alternate Base Rate then in effect for Base Rate Loans plus
the Applicable Margin for Base Rate Loans plus two percent (2%) from the date
that such advance is made to and including the date the same is paid to
Administrative Agent.

Section 14.3 Option to Renew or Extend a Ground Lease. Borrower shall cause each
Ground Lessee to give Administrative Agent written notice of its intention to
exercise each and every option, if any, to renew or extend the term of a Ground
Lease, at least thirty (30) days prior to the expiration of the time to exercise
such option under the terms thereof (the “Exercise Period”). If required by
Administrative Agent, Borrower shall cause such Ground Lessee to duly exercise
during the Exercise Period any renewal or extension option with respect to such
Ground Lease if Administrative Agent reasonably determines that the exercise of
such option is necessary to protect the Collateral. If such Ground Lessee
intends to renew or extend the term of such Ground Lease, Borrower shall deliver
to Administrative Agent, with the notice of such decision, a copy of the notice
of renewal or extension delivered to the Fee Owner, together with the terms and
conditions of such renewal or

 

-50-

--------------------------------------------------------------------------------

extension. If such Ground Lessee does not renew or extend before or during the
Exercise Period the term of such Ground Lease, Administrative Agent may, at its
option (if Administrative Agent reasonably determines that the exercise of such
option is necessary to protect the Collateral), exercise during the Exercise
Period the option to renew or extend, subject to the terms thereof, in the name
of and on behalf of such Ground Lessee. Borrower shall cause (and with respect
to the Lincolnshire Ground Lessee does cause) each Ground Lessee to irrevocably
appoint Administrative Agent as its attorney-in-fact, coupled with an interest,
to execute and deliver, for and in the name of such Ground Lessee, all
instruments and agreements necessary under the Lincolnshire Ground Lease or
otherwise to cause (if Administrative Agent reasonably determines that the
exercise of such option is necessary to protect the Collateral) any renewal or
extension of the Ground Lease during the Exercise Period.

Section 14.4 Ground Lease Covenants.

14.4.1 Waiver of Interest in New Ground Lease. In the event a Ground Lease shall
be terminated by reason of a default thereunder by the Ground Lessee and
Administrative Agent shall require from Fee Owner a new ground lease, Borrower
hereby waives and shall cause such Ground Lessee to waive any right, title and
interest in and to such new Ground Lease or the leasehold estate created
thereby, waiving all rights of redemption now or hereafter operable under any
law.

14.4.2 No Election to Terminate. Borrower shall not permit a Ground Lessee to
elect to treat a Ground Lease as terminated, canceled or surrendered pursuant to
the applicable provisions of the Bankruptcy Code (including, without limitation,
Section 365(h)(1) thereof) without Administrative Agent’s prior written consent
in the event of Fee Owner’s bankruptcy. In addition, Borrower shall, in the
event of Fee Owner’s bankruptcy, cause the applicable Ground Lessee to reaffirm
and ratify the legality, validity, binding effect and enforceability of the
applicable Ground Lease and to remain in possession of the Leasehold Estate and
any Improvements, notwithstanding any rejection thereof by Fee Owner or any
trustee, custodian or receiver.

14.4.3 Notice Prior to Rejection. Borrower shall give Administrative Agent not
less than thirty (30) days prior written notice of the date on which a Ground
Lessee shall apply to any court or other governmental authority for authority
and permission to reject a Ground Lease in the event that there shall be filed
by or against the Borrower or Ground Lessee any petition, action or proceeding
under the Bankruptcy Code or under any other similar federal or state law now or
hereafter in effect and if a Ground Lessee determines to reject the applicable
Ground Lease. Administrative Agent shall have the right, but not the obligation,
to serve upon Borrower within such thirty (30) day period a notice stating that
(i) Administrative Agent demands that Borrower cause such Ground Lessee to
assume and assign such Ground Lease to Administrative Agent subject to

 

-51-

--------------------------------------------------------------------------------

and in accordance with the Bankruptcy Code, and (ii) Administrative Agent
covenants to cure or provide reasonably adequate assurance thereof with respect
to all defaults reasonably susceptible of being cured by Administrative Agent
and of future performance under such Ground Lease. If Administrative Agent
serves upon Borrower the notice described above, Borrower shall not permit such
Ground Lessee to seek to reject such Ground Lease and shall comply with the
demand provided for clause (i) above within fifteen (15) days after the notice
shall have been given by Administrative Agent.

14.4.4 Administrative Agent Right to Perform. During the continuance of an Event
of Default, Borrower shall cause each Ground Lessee to permit Administrative
Agent to have the right, but not the obligation, (i) to perform and comply with
all obligations of a Ground Lessee under the applicable Ground Lease without
relying on any grace period provided therein, (ii) to do and take, without any
obligation to do so, such actions as Administrative Agent deems necessary or
desirable to prevent or cure any default by a Ground Lessee under the applicable
Ground Lease, including, without limitation, any act, deed, matter or thing
whatsoever that a Ground Lessee may do in order to cure a default under the
applicable Ground Lease and (iii) to enter in and upon the subject Property or
any part thereof to such extent and as often as Administrative Agent deems
necessary or desirable in order to prevent or cure any default of a Ground
Lessee under the applicable Ground Lease. Borrower shall, within five
(5) Business Days after written request is made therefor by Administrative
Agent, execute and deliver, or cause the applicable Ground Lessee to execute and
deliver, to Administrative Agent or to any party designated by Administrative
Agent, such further instruments, agreements, powers, assignments, conveyances or
the like as may be reasonably necessary to complete or perfect the interest,
rights or powers of Administrative Agent pursuant to this Section 14.4.4 or as
may otherwise be required by Administrative Agent.

14.4.5 Administrative Agent Attorney in Fact. In the event of any arbitration
under or pursuant to a Ground Lease in which Administrative Agent elects to
participate, Borrower shall cause the applicable Ground Lessee to irrevocably
appoint Administrative Agent as its true and lawful attorney-in-fact (which
appointment shall be deemed coupled with an interest) to exercise, during the
continuance of an Event of Default, all right, title and interest of such Ground
Lessee in connection with such arbitration, including, without limitation, the
right to appoint arbitrators and to conduct arbitration proceedings on behalf of
Borrower, such Ground Lessee and Administrative Agent. All costs and expenses
incurred by Administrative Agent in connection with such arbitration and the
settlement thereof shall be borne solely by Borrower, including, without
limitation, attorneys’ fees and disbursements. Nothing contained in this
Section 14.4.5 shall obligate Administrative Agent to participate in any such
arbitration.

 

-52-

--------------------------------------------------------------------------------

14.4.6 Payment of Rent. Borrower shall cause each Ground Lessee to promptly pay
the rent and all other sums and charges mentioned in, and payable under, the
applicable Ground Lease.

14.4.7 Performance of Covenants. Borrower shall cause each Ground Lessee to
promptly perform and observe all of the terms, covenants and conditions required
to be performed and observed by the lessee under the applicable Ground Lease,
the breach of which could permit any party to such Ground Lease validly to
terminate such Ground Lease (including, without limitation, all payment
obligations), shall do all things necessary to preserve and to keep unimpaired
its rights under such Ground Lease, shall not waive, excuse or discharge any of
the material obligations of Fee Owner without Administrative Agent’s prior
written consent in each instance, and shall diligently and continuously enforce
the obligations of the Fee Owner.

14.4.8 No Defaults. Borrower shall cause each Ground Lessee not to do, permit or
suffer any event or omission as a result of which there could occur a default by
a Ground Lessee under a Ground Lease or any event which, with the giving of
notice or the passage of time, or both, would constitute a default by a Ground
Lessee under a Ground Lease which, in any of the foregoing events, could permit
any party to a Ground Lease validly to terminate the Ground Lease (including,
without limitation, a default in any payment obligation), and Borrower shall
cause each Ground Lessee to obtain the consent or approval of Fee Owner to the
extent required pursuant to the terms of a Ground Lease.

14.4.9 No Modification. Borrower shall not permit a Ground Lessee to cancel,
terminate, surrender, modify or amend or in any way alter, surrender all or any
portion of the subject Property, permit the alteration of any of the provisions
of a Ground Lease or agree to any termination, amendment, modification or
surrender of a Ground Lease without Administrative Agent’s prior written consent
in each instance, which consent shall not be unreasonably withheld, provided
such amendment or modification does not increase a Ground Lessee’s obligations
thereunder or shorten the term thereof.

14.4.10 Notices of Default. Borrower shall deliver and shall cause each Ground
Lessee to deliver to Administrative Agent copies of any notice of default by any
party under the applicable Ground Lease, or of any notice from Fee Owner of its
intention to terminate a Ground Lease or to re-enter and take possession of any
portion of the subject Property, immediately upon delivery or receipt of such
notice, as the case may be.

14.4.11 Delivery of Information. Borrower shall cause each Ground Lessee to
promptly furnish to Administrative Agent copies of such information and evidence
as Administrative Agent may reasonably request concerning such Ground Lessee’s
due observance, performance and compliance with the terms, covenants and
conditions of the applicable Ground Lease.

 

-53-

--------------------------------------------------------------------------------

14.4.12 No Subordination. Borrower shall not permit a Ground Lessee to consent
to the subordination of a Ground Lease to any mortgage or other lease of the fee
interest in any portion of the subject Property except as may be required by
such Ground Lease.

14.4.13 Further Assurances. Borrower, at its sole cost and expense, shall cause
each Ground Lessee to execute and deliver to Administrative Agent, within five
(5) Business Days after request, such documents, instruments or agreements as
may be reasonably required to permit Administrative Agent to cure any default
under the applicable Ground Lease.

14.4.14 Estoppel Certificates. Borrower shall cause each Ground Lessee to use
its reasonable efforts to obtain and deliver to Administrative Agent within
twenty (20) days after written demand by Administrative Agent, an estoppel
certificate from the applicable Fee Owner setting forth (i) the name of the
lessee and the lessor thereunder, (ii) that the applicable Ground Lease is in
full force and effect and has not been modified or, if it has been modified, the
date of each modification (together with copies of each such modification),
(iii) the date to which all rental charges have been paid by the lessee under
the applicable Ground Lease, (iv) whether there are any alleged defaults of the
lessee under the applicable Ground Lease and, if there are, setting forth the
nature thereof in reasonable detail, (v) if the lessee under the applicable
Ground Lease shall be in default, the default and (vi) such other matters as
Administrative Agent shall reasonably request.

14.4.15 Administrative Agent Right to Participate. Borrower acknowledges and
shall cause each Ground Lessee to acknowledge that Administrative Agent shall
have the right, but not the obligation, to proceed in respect of any claim,
suit, action or proceeding relating to the rejection of a Ground Lease by the
applicable Fee Owner as a result of such Fee Owner’s bankruptcy, including,
without limitation, the right to file and prosecute any and all proofs of
claims, complaints, notices and other documents in any case in respect of such
Fee Owner under and pursuant to the Bankruptcy Code.

14.4.16 No Liability. Administrative Agent shall have no liability or obligation
under any Ground Lease by reason of its acceptance of the First Lien Mortgages,
this Agreement and the other Loan Documents. Administrative Agent shall be
liable for the obligations of a Ground Lessee arising under a Ground Lease for
only that period of time during which Administrative Agent is in possession of
the portion of the subject Property covered by said lease or has acquired, by
foreclosure or otherwise, and is holding all of Borrower’s right, title and
interest therein.”.

 

-54-

--------------------------------------------------------------------------------

Section 1.7 Amendments to Schedules, Exhibits and References Thereto.

1.7.1 All Schedules to the Original Agreement are hereby deleted in their
entirety and replaced with Schedules I through XIX as set forth on Exhibit A to
this Third Amendment. From and after the Third Amendment Closing Date, any
representation made after such date as to the accuracy or completeness of any
Schedule as of the Closing Date shall be deemed to be amended so as to refer to
the amended and restated Schedules attached hereto as of the Third Amendment
Closing Date. The Original Agreement is hereby amended by inserting Exhibits K
and L (as set forth on Exhibit B to this Third Amendment) following Exhibit J of
the Original Agreement.

 

  II. AMENDMENTS TO OTHER LOAN DOCUMENTS

Section 2.1 Omnibus Amendment to All Loan Documents.

2.1.1 As of the date hereof, each reference to the defined terms that have been
modified pursuant to this Third Amendment shall be deemed to be a reference to
such defined term as so modified.

 

  III. CONDITIONS TO EFFECTIVENESS OF THIS THIRD AMENDMENT

Section 3.1 Conditions Precedent to this Third Amendment. The obligations of
Lenders to make any Loans and the obligations of the Issuer to issue any Letter
of Credit shall be subject to the prior or concurrent satisfaction or waiver
(which shall be waived if Administrative Agent executes and delivers this Third
Amendment without requiring satisfaction at such time, subject to any
post-closing conditions agreement) of each of the conditions precedent set forth
in this Section 3.1 and in Section 6.3 on or before the Third Amendment Closing
Date.

3.1.1 Execution of Third Amendment. On or prior to the Third Amendment Closing
Date, there shall have been delivered to Administrative Agent for the account of
each Lender duly executed copies of this Third Amendment.

3.1.2 Amended and Restated Revolving Notes. On or prior to the Third Amendment
Closing Date, there shall have been delivered to Administrative Agent for the
account of each Lender duly executed copies of the Amended and Restated
Revolving Notes.

3.1.3 Reaffirmation of Guaranty. The Guarantor shall have duly authorized,
executed and delivered to Administrative Agent the Reaffirmation of Guaranty.

3.1.4 Reaffirmation of Subsidiary Guaranty. The Subsidiary Guarantors shall have
duly authorized, executed and delivered to Administrative Agent the
Reaffirmation of Subsidiary Guaranty, and each Borrowing Base Entity of a
Borrowing Base Property that is not a party to the Subsidiary Guaranty shall
execute a signature page acknowledging its liability as a Subsidiary Guarantor.

3.1.5 Reaffirmation of Guarantor Pledge Agreement. The Guarantor shall have duly
authorized, executed and delivered to Administrative Agent the Reaffirmation of
Guarantor Pledge Agreement.

 

-55-

--------------------------------------------------------------------------------

3.1.6 Reaffirmation of Subsidiary Pledge Agreement. The Subsidiary Guarantors
shall have duly authorized, executed and delivered to Administrative Agent the
Reaffirmation of Subsidiary Pledge Agreement.

3.1.7 D.C. Loan Subordination. Borrower and SHC Washington, L.L.C shall have
duly authorized, executed and delivered to Administrative Agent the D.C. Loan
Subordination.

3.1.8 Reaffirmation of D.C. Loan Pledge. The pledgor under the D.C. Loan Pledge
shall have duly authorized, executed and delivered to Administrative Agent the
Reaffirmation of D.C. Loan Pledge.

3.1.9 Third Amendment Fee Letter. Borrower shall have duly authorized, executed
and delivered to Administrative Agent the Third Amendment Fee Letter.

3.1.10 Closing Date Certificate. Administrative Agent shall have received, with
counterparts for each Lender, a closing date certificate in the form of Exhibit
N attached hereto, dated the Third Amendment Closing Date and duly executed and
delivered by an Authorized Officer of Borrower.

3.1.11 Projections; Solvency Certificate. On or prior to the Third Amendment
Closing Date, there shall have been delivered to Administrative Agent:

projected financial and cash flow statements for the Consolidated Group for the
period from the Closing Date to and including at least December 31, 2010 (the
“Projections”), which Projections shall reflect the forecasted financial
condition, income and expenses and cash flows of the Consolidated Group after
giving effect to the Transaction; and

a solvency certificate as to Borrower and its Subsidiaries, taken as a whole,
from an Authorized Financial Officer, substantially in the form of Exhibit M
attached hereto, addressed to Administrative Agent and the Lenders and dated the
Third Amendment Closing Date.

3.1.12 First Lien Mortgages and Assignment of Leases and Rents. Administrative
Agent shall have received evidence that original counterparts of the First Lien
Mortgages and Assignment of Leases and Rents, in proper form for recordation,
have been delivered to the Title Company for recording, so as effectively to
create, in the reasonable judgment of Administrative Agent, upon such recording
valid and enforceable first priority Liens upon the Borrowing Base Properties,
in favor of Administrative Agent (or such other trustee as may be required or
desired under local law), subject only to Permitted Borrowing Base Liens and
such other Liens as are permitted pursuant to the Loan Documents.

3.1.13 Mexico Pledge Agreement. The Operating Lessees and the Property Owners of
the Four Seasons Punta Mita and the Four Seasons Mexico City shall have duly
authorized, executed and delivered to Administrative Agent the Mexico Pledge
Agreement.

3.1.14 UCC Financing Statements. Administrative Agent shall have received
evidence that the UCC financing statements relating to the First Lien Mortgages
and the Agreement have been delivered to the Title Company for filing in the
applicable jurisdictions.

 

-56-

--------------------------------------------------------------------------------

3.1.15 Account Control Agreements. Each applicable Borrowing Base Entity that is
the holder of an Account and The PrivateBank and Trust Company shall have duly
authorized, executed and delivered to Administrative Agent an Account Control
Agreement in form and substance reasonably acceptable to Administrative Agent
with respect to such Account.

3.1.16 Lenders’ Fees. Borrower shall have paid to each Lender that executes this
Third Amendment on or before the Third Amendment Closing Date a fee in an amount
equal to the product of (x) 0.75 times (y) the sum of such approving Lender’s
Revolving Loan Commitment and Letter of Credit Commitment.

3.1.17 Survey. Administrative Agent shall have received copies of the Surveys
listed on Schedule XVI attached to the Agreement.

3.1.18 Zoning. Administrative Agent shall have received (i) letters or other
evidence with respect to each Borrowing Base Property from the appropriate
municipal authorities (or other Persons) concerning applicable zoning and
building laws reasonably acceptable to Administrative Agent or (ii) an ALTA 3.1
zoning endorsement for the Title Policy.

3.1.19 Tax Lot. Administrative Agent shall have received evidence that each
Borrowing Base Property constitutes one (1) or more separate tax lots, which
evidence shall be reasonably satisfactory in form and substance to
Administrative Agent.

3.1.20 Management Agreement. Administrative Agent shall have received a
certified copy of each Management Agreement.

3.1.21 Assignment of Agreements. Each Borrowing Base Entity shall have duly
authorized, executed and delivered to Administrative Agent the Assignment of
Agreements with respect to the applicable Borrowing Base Property.

3.1.22 Operating Lease Subordination Agreement. Each Operating Lessee of a
Borrowing Base Property located in the United States shall have duly authorized,
executed and delivered to Administrative Agent a Operating Lease Subordination
Agreement with respect to the applicable Borrowing Base Property.

3.1.23 Opinions of Counsel. Administrative Agent shall have received opinions,
each dated the Third Amendment Closing Date and addressed to Administrative
Agent, each Lender and the Issuer, (A) from Perkins Coie LLP, as special counsel
to Borrower and Guarantor, (B) from local counsel in the jurisdiction of the
Borrowing Base Properties and (C) from Maryland counsel as counsel to Guarantor.

3.1.24 Title Policies. Administrative Agent shall have received (i) a Title
Policy issued by First American (as to 50% of the coverage) and dated as of the
Third Amendment Closing Date, with co-insurance in the form of “Me-Too” and
other applicable co-insurance endorsements from Stewart-U.S. (and in
jurisdictions where available, tie-in endorsements from each Title Company with
respect to such coverage) as well as direct access agreements acceptable to
Administrative Agent with respect to the Borrowing Base Properties located in
the United States and (ii) a Title Policy issued by Stewart-Mexico and dated as
of the Third Amendment Closing Date, with re-insurance from First American (as
to 50% of the coverage) and Stewart-U.S. (as to 50% of the coverage), and in
jurisdictions where available, tie-in endorsements from each Title Company with
respect to such coverage as well as direct access agreements acceptable to
Administrative Agent with respect to the Borrowing Base Properties located in
Mexico. Each Title Policy, whether attributable to a Borrowing Base Property in
the

 

-57-

--------------------------------------------------------------------------------

United States or Mexico, shall (A) provide coverage with respect to each
Borrowing Base Property in the initial amounts set forth on Schedule IX attached
hereto, (B) insure Administrative Agent that the applicable First Lien Mortgage
creates a valid, first priority Lien on the applicable Borrowing Base Property,
free and clear of all exceptions from coverage other than Permitted Borrowing
Base Liens and standard exceptions and exclusions from coverage (as modified by
the terms of any endorsements), (C) contain the endorsements and affirmative
coverages set forth on Schedule X attached hereto and such additional
endorsements and affirmative coverages as Administrative Agent may reasonably
request, and (D) name Administrative Agent on behalf of the Lenders as the
insured. The Title Policy shall be assignable. Administrative Agent also shall
have received evidence that all premiums in respect of such Title Policy have
been paid.

3.1.25 Searches. Administrative Agent shall have received searches with respect
to (i) each of Borrower, Guarantor and each Borrowing Base Entity for liens,
federal tax liens, state tax liens, bankruptcies and judgments and (ii) each
Borrowing Base Property for judgment, tax liens, building violations, mechanics
liens and water and sewer charges, satisfactory to Administrative Agent.

3.1.26 Certificate of Occupancy; Licenses. To Borrower’s knowledge, all
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of each Borrowing Base Property as a hotel
(collectively, the “Licenses”), have been obtained and are in full force and
effect, other than the certificate of occupancy with respect to the Four Seasons
Mexico City and the Marriott Lincolnshire. Borrower shall keep and maintain or
shall cause the applicable Borrowing Base Entity to keep and maintain, all
Licenses necessary for the operation of each Borrowing Base Property as a hotel.
The use being made of each Borrowing Base Property is in conformity with the
certificate of occupancy, to the extent available, issued for such Borrowing
Base Property.

3.1.27 Insurance Certificates. Administrative Agent shall have received
certificates of insurance complying with the terms of the Agreement.

3.1.28 Environmental Reports. Administrative Agent shall have received Phase I
Environmental Reports with respect to each Borrowing Base Property in form and
substance reasonably satisfactory to Administrative Agent.

3.1.29 Appraisal. Administrative Agent shall have received Acceptable Appraisals
with respect to each Borrowing Base Property complying with the terms of the
Agreement.

3.1.30 Lincolnshire Ground Lease Estoppel. Fee Owner shall have duly authorized,
executed and delivered to Administrative Agent a Ground Lessor Estoppel with
respect to the Marriott Lincolnshire in form and substance reasonably
satisfactory to Administrative Agent.

3.1.31 Manager Estoppel. The Manager at each Borrowing Base Property shall have
duly authorized, executed and delivered to Administrative Agent a Manager’s
Consent to Assignment and Estoppel Certificate in form and substance reasonably
satisfactory to Administrative Agent.

 

-58-

--------------------------------------------------------------------------------

3.1.32 Manager SNDA. The Manager at each Borrowing Base Property shall have duly
authorized, executed and delivered to Administrative Agent a Property Manager
Subordination, Non-Disturbance and Attornment Agreement in form and substance
reasonably satisfactory to Administrative Agent.

3.1.33 Resolutions, etc. Administrative Agent shall have received from Borrower,
Guarantor and each Borrowing Base Entity, as applicable, (i) good standing
certificates for each such Person from the Secretary of State (or similar
applicable Governmental Authority) of such Person’s state of incorporation and
each state where Borrower or such other Person, as the case may be, is qualified
to do business as a foreign corporation as of a recent date, together with a
bring-down certificate by facsimile, dated a date reasonably close to the Third
Amendment Closing Date (provided, however, Borrower and Guarantor shall only be
required to provide such certificates with respect to Delaware, California,
Illinois, Washington, D.C. and Mexico, if qualified in such jurisdictions),
(ii) a chart depicting the ownership structure for Borrower, Guarantor, each
Subsidiary Guarantor and their Subsidiaries and (iii) a certificate, dated the
Third Amendment Closing Date and with counterparts for each Lender, duly
executed and delivered by such Person’s Secretary or Assistant Secretary, as to:

resolutions of each such Person’s Board of Directors then in full force and
effect authorizing, to the extent relevant, the execution, delivery and
performance of this Third Amendment, the Amended and Restated Notes, each other
Loan Document to be executed by such Person and the transactions contemplated
hereby and thereby;

the incumbency and signatures of those of its officers authorized to act with
respect to this Third Amendment, the Notes and each other Loan Document to be
executed by such Person; and

each Organic Document of such Person,

upon which certificates Administrative Agent and each Lender may conclusively
rely until it shall have received a further certificate of the Secretary or
Assistant Secretary of any such Person canceling or amending the prior
certificate of such Person.

Financial Information, etc. Administrative Agent shall have received evidence of
pro forma financial covenant compliance with the covenants set forth in
Section 7.2.4 in the form as set forth on Annex I to Exhibit N attached hereto.

3.1.34 Litigation. There shall exist no pending or threatened action, suit,
investigation, litigation or proceeding in any court or before any arbitrator or
governmental instrumentality which (x) purports to affect the consummation of
the Third Amendment Transaction or the legality or validity of this Third
Amendment or any other Loan Document or (y) could reasonably be expected to have
a Material Adverse Effect.

3.1.35 No Material Adverse Effect. On or prior to the Third Amendment Closing
Date, in the determination of Administrative Agent, no Material Adverse Effect
shall have occurred, and neither Administrative Agent nor Lenders shall have
become aware of any facts, conditions or other information not previously known
to it which could reasonably be expected to have a Material Adverse Effect.

 

-59-

--------------------------------------------------------------------------------

3.1.36 Approvals. All governmental and third-party approvals necessary in
connection with the Third Amendment Transaction and the continuing operations of
Borrower and its Subsidiaries shall have been obtained and shall be in full
force and effect except as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and all applicable
waiting periods, if any, shall have expired without any action being taken or
threatened by any competent authority which could restrain, prevent or otherwise
impose materially adverse conditions on the Third Amendment Transaction hereby.

Closing Fees, Expenses, etc. Administrative Agent shall have received evidence
of payment by Borrower of (or a draw request with respect to) all accrued and
unpaid fees, costs and expenses to the extent then due and payable under this
Third Amendment on the Third Amendment Closing Date, together with all
reasonable legal costs and expenses of Administrative Agent to the extent
invoiced prior to or on the Third Amendment Closing Date, including any such
fees, costs and expenses arising under this Third Amendment.

Diligence. Administrative Agent shall have received the due diligence materials
with respect to Borrower and Guarantor and their respective Subsidiaries and the
Borrowing Base Properties that it has reasonably requested.

 

  IV. REPRESENTATIONS AND WARRANTIES

Section 4.1 Borrower Representations and Warranties. As of the Third Amendment
Closing Date, Borrower represents and warrants unto Administrative Agent, the
Issuer and each Lender:

4.1.1 Original Agreement. Each of the representations and warranties made by
Borrower in the Original Agreement and in the other Loan Documents is true and
correct in all material respects as if made as of the Third Amendment Closing
Date (unless stated to relate to an earlier date in which case such
representations and warranties shall be true in all material respects as of such
earlier date).

4.1.2 Title. Each Property Owner of a Borrowing Base Property, other than the
Lincolnshire Ground Lessee, has good, marketable and insurable fee simple title
with respect to each Borrowing Base Property to the Land and the Improvements
(except in the case of the Lincolnshire Ground Lessee leasehold title to the
Land and the Improvements), free and clear of all Liens whatsoever except the
Permitted Borrowing Base Liens, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. Each Property
Owner of a Borrowing Base Property has good and marketable title to the
remainder of the applicable Borrowing Base Property, free and clear of all Liens
whatsoever except the Permitted Borrowing Base Liens. The First Lien Mortgages
and Assignments of Leases and Rents, when properly recorded in the appropriate
records, together with any Uniform Commercial Code financing statements required
to be filed in connection therewith, will create (a) a valid, perfected first
mortgage lien on the Land and the Improvements, subject only to Permitted
Borrowing Base Liens and (b) perfected security interests in and to, and
perfected collateral assignments of, all personalty (including the Leases), all
in accordance with the terms thereof, in each case subject only to any
applicable Permitted Borrowing Base Liens. There are no claims for payment for
work, labor or materials affecting a Borrowing Base Property which are or may
become a lien prior to, or of equal priority with, the Liens created by the Loan
Documents except as permitted by the Loan Documents. Each Property Owner of a
Borrowing

 

-60-

--------------------------------------------------------------------------------

Base Property represents and warrants that none of the Permitted Borrowing Base
Liens will materially and adversely affect (i) the ability of such Property
Owner to pay any of its obligations to any Person as and when due, (ii) the fair
market value of the applicable Borrowing Base Property, (iii) the marketability
of title to the applicable Borrowing Base Property, or (iv) the use or operation
of the applicable Borrowing Base Property as of the Third Amendment Closing Date
and thereafter. Each Property Owner of a Borrowing Base Property shall, subject
to the provisions of the Loan Documents, preserve its right, title and interest
in and to the applicable Borrowing Base Property for so long as the Facility
remains outstanding and will warrant and defend same and the validity and
priority of the Lien hereof from and against any and all claims whatsoever other
than the Permitted Borrowing Base Liens.

4.1.3 Compliance. Borrower, each Borrowing Base Entity, and the Borrowing Base
Properties and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes. To the best knowledge of Borrower, Borrower is not
in default or in violation of any order, writ, injunction, decree or demand of
any Governmental Authority. To the best knowledge of each Borrowing Base Entity,
such Borrowing Base Entity is not in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority. To the best
knowledge of Borrower and each Borrowing Base Entity, there has not been
committed by Borrower or such Borrowing Base Entity any act or omission
affording the federal government or any other Governmental Authority the right
of forfeiture as against the Borrowing Base Properties or any part thereof or
any monies paid in performance of Borrower’s or such Borrowing Base Entity’s
obligations under any of the Loan Documents.

4.1.4 Condemnation. No Condemnation has been commenced or, to Borrower’s
knowledge, is contemplated with respect to all or any portion of any Borrowing
Base Property or for the relocation of roadways providing access to any
Borrowing Base Property.

4.1.5 Utilities and Access. Each Borrowing Base Property has rights of access to
public ways and is served by water, sewer, sanitary sewer and storm drain
facilities adequate to service each Borrowing Base Property for its intended
uses. To Borrower’s knowledge, all utilities necessary to the existing use of
each Borrowing Base Property are located either in the public right-of-way
abutting the Borrowing Base Property (which are connected so as to serve the
Borrowing Base Property without passing over other property) or in recorded
easements serving the Borrowing Base Property and such easements are set forth
in and insured by the Title Policy. All roads necessary for the use of each
Borrowing Base Property for its current purposes have been completed and, if
necessary, dedicated to public use.

4.1.6 Separate Lots. Each Borrowing Base Property is comprised of one (1) or
more contiguous parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of such
Borrowing Base Property.

4.1.7 Assessments. To the best of Borrower’s knowledge, there are no pending or
proposed special or other assessments for public improvements or otherwise
affecting any Borrowing Base Property, nor are there any contemplated
improvements to any Borrowing Base Property that may result in such special or
other assessments.

4.1.8 Enforceability. The Loan Documents are not subject to any existing right
of rescission, set-off, counterclaim or defense by Borrower, including, without
limitation, the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the

 

-61-

--------------------------------------------------------------------------------

exercise of any right thereunder, render the Loan Documents unenforceable
(subject to applicable bankruptcy, insolvency and similar laws affecting rights
of creditors generally, and subject as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity
or at law)), and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.

4.1.9 No Prior Assignment. There are no prior sales, transfers or assignments of
the Leases or any portion of the Rents due and payable or to become due and
payable which are presently outstanding, other than those being terminated or
assigned to Administrative Agent concurrently herewith or permitted under the
Loan Documents.

4.1.10 Insurance. Borrower has obtained and has delivered to Adminsitrative
Agent certified copies or originals of all insurance policies required under the
Agreement, reflecting the insurance coverages, amounts and other requirements
set forth in the Agreement. Borrower has not, and to the best of Borrower’s
knowledge no Person has, done by act or omission anything which would impair the
coverage of any such policy. Borrower is in compliance as of the Third Amendment
Closing Date with the Insurance Requirements.

4.1.11 Use of Borrowing Base Properties. Each Borrowing Base Property is used
exclusively for hotel purposes and other appurtenant and related uses.

4.1.12 Certificate of Occupancy; Licenses. To Borrower’s knowledge, all
certifications, permits, licenses and approvals, including, without limitation,
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of each Borrowing Base Property as a hotel
(collectively, the “Licenses”), have been obtained and are in full force and
effect, other than the certificate of occupancy with respect to the Four Seasons
Mexico City and the Marriott Lincolnshire. Borrower shall keep and maintain or
shall cause the applicable Borrowing Base Entity to keep and maintain, all
Licenses necessary for the operation of each Borrowing Base Property as a hotel.
The use being made of each Borrowing Base Property is in conformity with the
certificate of occupancy, to the extent available, issued for such Borrowing
Base Property.

Borrower has informed Administrative Agent and the Lenders that with respect to
the Marriott Lincolnshire, based solely upon (i) the letter dated February 9,
2009 from the Village of Lincolnshire to Kathleen Mitchell (the “Village
Letter”), (ii) the letter from Michael Jesse, Building Inspector, to Kathleen
Mitchell as referenced in the Village Letter, and (iii) the email dated
February 6, 2009 from The Village of Lincolnshire Code Enforcement Inspector to
Kathleen Mitchell (such documents are herein collectively referred to as the
“Lincolnshire Zoning Documents”), the Village of Lincolnshire has been unable to
locate a certificate of occupancy for the Marriott Lincolnshire. Based solely
upon the Lincolnshire Zoning Documents (A) the Village of Lincolnshire has
evidence in their records that a certificate of occupancy was issued and
subsequently lost or misplaced (B) the absence of a certificate of occupancy for
the Marriott Lincolnshire will not give rise to any enforcement action affecting
the Marriott Lincolnshire, and (C) a certificate of occupancy for the Marriott
Lincolnshire will only be required to the extent of any construction activity,
restoring, renovating or expanding the Marriott Lincolnshire or any part
thereof.

 

-62-

--------------------------------------------------------------------------------

A certificate of occupancy is not required to use, occupy and operate The Four
Seasons Mexico City as it is currently being used, occupied and operated.

4.1.13 Flood Zone. None of the improvements or fixtures on any Borrowing Base
Property is located in an area as identified by the Federal Emergency Management
Agency as an area having special flood hazards except for those Borrowing Base
Properties for which Borrower has purchased, or has caused the applicable
Borrowing Base Entities to purchase, flood insurance in form and substance
reasonably acceptable to Administrative Agent, other than the outbuildings
relating to the golf course at Marriott Lincolnshire.

4.1.14 Physical Condition. To the best of Borrower’s knowledge and as except as
disclosed in reports delivered to Administrative Agent, each Borrowing Base
Property, including, without limitation, all buildings, Improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects; to
the best of Borrower’s knowledge and except as disclosed in reports delivered to
Administrative Agent, there exists no structural or other material defects or
damages in or to any Borrowing Base Property, whether latent or otherwise, and
Borrower has not received any written notice from any insurance company or
bonding company of any defects or inadequacies in any Borrowing Base Property,
or any part thereof, which would adversely affect the insurability of the same
or cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.

4.1.15 Boundaries. To the best of Borrower’s knowledge and except as disclosed
by the Surveys, all of the Improvements at each Borrowing Base Property lie
wholly within the boundaries and building restriction lines of the Real
Property, and no Improvements on adjoining properties encroach upon the Real
Property, and no easements or other encumbrances upon the Real Property encroach
upon any of the Improvements, so as to have a material adverse affect on the
value or marketability of the Real Property except those for which affirmative
insurance set forth in the Title Policy acceptable to Administrative Agent shall
have been obtained.

4.1.16 Leases. No Borrowing Base Property is subject to any Leases, other than
the Leases described in the certified rent roll delivered to Administrative
Agent and attached hereto as Schedule XV. Such certified rent roll is true,
complete and correct in all material respects as of the date set forth therein.
Such rent roll contains a true correct and complete list of all security
deposits and the amounts thereof, currently in Borrower’s or Borrowing Base
Entity’s possession. No Person other than Managers, Operating Lessees and
certain invitees in the ordinary course of business, has any possessory interest
in any Borrowing Base Property or right to occupy the same except under and
pursuant to the provisions of the Leases. The current Leases are in full force
and effect and to the best of Borrower’s knowledge, there are no material
defaults thereunder by either party (other than as expressly disclosed on the
certified rent roll delivered to Administrative Agent) and there are no
conditions that, with the passage of time or the giving of notice, or both,
would constitute material defaults thereunder. No rent has been paid more than
one (1) month in advance of its due date. There has been no prior sale, transfer
or assignment, hypothecation or pledge by Borrower of any Lease or of the rents
received therein, which will be outstanding following the funding of the
Facility, other than those being assigned to Administrative Agent concurrently
herewith. No tenant under any Lease has a right or option pursuant to such Lease
or otherwise to purchase all or any part of the property of which the leased
premises are a part.

 

-63-

--------------------------------------------------------------------------------

4.1.17 Filing and Recording Taxes. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
First Lien Mortgages, have been paid, and, under current Legal Requirements,
each First Lien Mortgage is enforceable against the applicable Borrowing Base
Entity in accordance with its terms by Administrative Agent (or any subsequent
holder thereof) subject only to applicable bankruptcy, insolvency and similar
laws affecting rights of creditors generally, and subject as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).

4.1.18 Labor. No organized work stoppage or labor strike is pending or to
Borrower’s knowledge threatened by employees and other laborers at any Borrowing
Base Property. To Borrower’s knowledge, neither a Borrowing Base Entity nor the
Manager of such Borrowing Base Property (i) is involved in or threatened with
any material labor dispute, grievance or litigation relating to material labor
matters involving any employees and other laborers at the Borrowing Base
Property, including, without limitation, violation of any federal, state or
local labor, safety or employment laws (domestic or foreign) and/or charges of
unfair labor practices or discrimination complaints, (ii) has engaged in any
unfair labor practices within the meaning of the National Labor Relations Act or
the Railway Labor Act or (iii) is a party to, or bound by, any collective
bargaining agreement or union contract with respect to employees and other
laborers at any Borrowing Base Property and no such agreement or contract is
currently being negotiated by Borrower, Manager or any Borrowing Base Entity.

4.1.19 Brokers. Borrower has not dealt with any broker or finder with respect to
the transactions contemplated by the Loan Documents has not done any acts, had
any negotiations or conversations, or made any agreements or promises which will
in any way create or give rise to any obligation or liability for the payment of
any brokerage fee, charge, commission or other compensation to any Person with
respect to the transactions contemplated by this Third Amendment. Administrative
Agent has not dealt with any broker or finder with respect to the transactions
contemplated by the Loan Documents has not done any acts, had any negotiations
or conversations, or made any agreements or promises which will in any way
create or give rise to any obligation or liability for the payment of any
brokerage fee, charge, commission or other compensation to any Person with
respect to the transactions contemplated by this Third Amendment. Borrower and
Administrative Agent shall each indemnify and hold harmless the other from and
against any loss, liability, cost or expense, including any judgments,
attorneys’ fees, or costs of appeal, incurred by the other party and arising out
of or relating to any breach or default by the indemnifying party of its
representations, warranties and/or agreements set forth in this Section 4.1.19.
The provisions of this Section 4.1.19 shall survive the expiration and
termination of the Agreement and the payment of the Indebtedness.

4.1.20 Taxpayer Identification Number. Borrower’s Federal taxpayer
identification number is 36-4200430. The Federal taxpayer number for each
Property Owner of a Borrowing Base Property located in the United States of
America is 36-4312527 (with respect to SHC Laguna Niguel I LLC), 36-4312523
(with respect to SHC Lincolnshire LLC) and 20-4135050 (with respect to SHC
Washington, L.L.C.). The Federal taxpayer number for each

 

-64-

--------------------------------------------------------------------------------

Operating Lessee of a Borrowing Base Property located in the United States of
America is 20-4707064 (with respect to DTRS Laguna, L.L.C.), 20-1232041 (with
respect to DTRS Lincolnshire, L.L.C.) and 20-4135120 (with respect to DTRS
Washington, L.L.C.).

4.1.21 Solvency/Fraudulent Conveyance. Borrower and the Borrowing Base Entities
(a) have not entered into the transaction contemplated by the Agreement or any
Loan Document with the actual intent to hinder, delay, or defraud any creditor
and (b) have received reasonably equivalent value in exchange for their
obligations under the Loan Documents. After giving effect to the Facility and
the provisions of the Loan Documents, the fair saleable value of Borrower’s
assets exceeds and will, immediately following the making of the Facility,
exceed Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. After giving
effect to the Facility and the provisions of the Loan Documents, the fair
saleable value of the assets of each Borrowing Base Entity exceeds and will,
immediately following the execution and delivery of this Third Amendment, exceed
the total liabilities of such Borrowing Base Entity, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrower’s assets is and will, immediately following the
execution and delivery of this Third Amendment, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its Indebtedness as such Indebtedness become absolute and matured. The fair
saleable value of the assets of each Borrowing Base Entity is and will,
immediately following the execution and delivery of this Third Amendment, be
greater than the probable liabilities of such Borrowing Base Entity, including
the maximum amount of its contingent liabilities on its Indebtedness as such
Indebtedness becomes absolute and matured. The assets of Borrower and each
Borrowing Base Entity do not and, immediately following the execution and
delivery of this Third Amendment will not, constitute unreasonably small capital
to carry out each party’s business as conducted or as proposed to be conducted.
Each of Borrower and each Borrowing Base Entity does not intend to, and does not
believe that it will, incur Indebtedness and liabilities (including contingent
liabilities and other commitments) beyond their ability to pay such Indebtedness
and liabilities as they mature (taking into account the timing and amounts of
cash to be received by Borrower or such Borrowing Base Entity and the amounts to
be payable on or in respect of obligations of Borrower or such Borrowing Base
Entity).

4.1.22 Leases and REAs. Borrower represents that it has heretofore delivered, or
caused the applicable Borrowing Base Entity to deliver, to Administrative Agent
true and complete copies of all Leases and REAs and any and all amendments or
modifications thereof. To Borrower’s knowledge, no events or circumstances exist
which with or without the giving of notice, the passage of time or both, may
constitute a material default on the part of Borrower or such Borrowing Base
Entity under any Leases or REAs except as disclosed on Schedule XVII. To
Borrower’s knowledge, Borrower or its predecessors and each Borrowing Base
Entity of a Borrowing Base Property or its predecessors have complied with and
performed all of its or their material construction, improvement and alteration
obligations with respect to each Borrowing Base Property required as of the date
hereof and any other obligations under the other REAs or the Leases that are
required as of the date hereof have either been complied with or the failure to
comply with the same does not and could not reasonably be expected to have a
Material Adverse Effect.

4.1.23 Borrowing Base Property. Each Borrowing Base Property satisfies the
following criteria: (i) such Borrowing Base Property is leased to an Operating
Lessee; (ii) such

 

-65-

--------------------------------------------------------------------------------

Borrowing Base Property is designated a full-service property (in accordance
with industry standard, as reasonably determined by Administrative Agent);
(iii) the Specified Borrowing Base Properties shall at all times be luxury or
better quality hotels, and Marriott Lincolnshire shall at all times be an
upper-upscale, luxury or better quality hotel, as designated by Smith Travel
Research (or a similar successor company designated by Administrative Agent);
(iv) such Property is operated under a nationally recognized brand (a) in the
case of Marriott Lincolnshire, by an Approved Manager (as set forth on Schedule
IV of the Original Agreement) and (b) in the case of the Specified Borrowing
Base Properties, by an Approved Luxury Manager; (v) such Borrowing Base Property
is fully operating, open to the public and not under development or
redevelopment (except for routine, ordinary course renovation, maintenance and
repair that does not result in the closure of more than fifteen percent (15%) of
the rooms at such hotel); provided, however, that temporary closure due to force
majeure events, not to exceed five (5) Business Days, shall be permitted;
(vi) such Borrowing Base Property is not subject to or encumbered by any
Indebtedness other than Permitted Borrowing Base Debt; (vii) such Borrowing Base
Property is free of material structural defects or material environmental
issues; (viii) neither such Borrowing Base Property nor the Property Owner
thereof is encumbered with Permitted Borrowing Base Debt or any other Material
Agreement that by its terms precludes the grant of the Collateral or the
exercise by or on behalf of the Secured Creditors of remedies with respect to
the Collateral; and (ix) the Property Owner of such Borrowing Base Property is
Borrower or a Subsidiary Guarantor.

4.1.24 Mexico Insurance. The insurance policies listed and described on Annex A
to the Irrevocable Administration and Security Trust Agreement with Reversion
Rights, dated the Third Amendment Closing Date, with respect to the real estate
and the equipment used to operate the Four Seasons Mexico City and the Four
Seasons Punta Mita which are the Company’s responsibility, are valid and
effective as of the date hereof.

 

  V. RELEASE OF ADMINISTRATIVE AGENT AND THE LENDERS

Section 5.1 Borrower, on its own behalf and on behalf of Guarantor and all
Subsidiaries (the “Releasing Parties”), hereby releases, remises, acquits and
forever discharges each of Administrative Agent and the Lenders, and their
respective employees, agents, representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, partners, predecessors, successors
and assigns, subsidiaries, parents and affiliates (all of the foregoing
hereinafter called the “Released Parties”), from any and all actions and causes
of action, judgments, executions, suits, debts, claims, demands, liabilities,
obligations, damages and expenses of any and every character, including legal
fees, known or unknown, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter arising, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the date of this Third Amendment
that, in any way directly or indirectly, arise out of or in any way are
connected to or related to the Original Agreement, the Facility or the Loan
Documents, including but not limited to, claims relating to any settlement
negotiations (all of the foregoing hereinafter called the “Released Matters”).
Each of the Released Parties acknowledges that the agreements in this Article V
are intended to be in full satisfaction of all or any alleged injuries or
damages arising in connection with the Released Matters. Each of the Releasing
Parties hereby represents and warrants to Released Parties that it has not
purported to transfer, assign or otherwise convey any of its right, title or
interest in any Released Matter to any other Person and that the foregoing
constitutes a full and complete release of all Released Matters.”.

 

-66-

--------------------------------------------------------------------------------

  VI. MISCELLANEOUS PROVISIONS

Section 6.1 Defined Terms. Except with respect to terms that are defined in this
Third Amendment or terms used in the Original Agreement that are redefined in
this Third Amendment, capitalized terms used in this Third Amendment shall have
the meaning given such terms in the Original Agreement.

Section 6.2 Use of Defined Terms. All references in this Third Amendment or in
the Loan Documents to the Loan Documents or the Original Agreement shall mean
the Loan Documents and the Original Agreement as hereby modified.

Section 6.3 Counterparts. This Third Amendment may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall constitute
one instrument, but in making proof hereof it shall only be necessary to produce
one such counterpart. This Third Amendment shall become effective when
counterparts hereof executed on behalf of the Borrower, the Administrative Agent
and each of the Lenders (or notice thereof satisfactory to the Administrative
Agent) shall have been received by the Administrative Agent and notice thereof
shall have been given by the Administrative Agent to the Borrower and each
Lender.

Section 6.4 Successors and Assigns Bound. This Third Amendment shall be binding
upon and inure to the benefit of the parties and their respective legal
representatives, permitted successors and permitted assigns.

Section 6.5 Governing Law.

6.5.1 THIS AMENDMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE
BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AMENDMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AMENDMENT AND THE NOTE, AND THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

-67-

--------------------------------------------------------------------------------

6.5.2 ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AMENDMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CORPORATION SERVICE COMPANY

80 STATE STREET

ALBANY, NEW YORK 12207-2543

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

6.5.3 THE FIRST LIEN MORTGAGES SHALL BE GOVERNED BY THE LAWS OF THE APPLICABLE
JURISDICTION IN WHICH THE BORROWING BASE PROPERTIES ARE LOCATED.

6.5.4 Further Modifications. No modification, amendment, extension, discharge,
termination or waiver of any provision of this Third Amendment or of any other
Loan Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such modification, amendment,
extension, discharge, termination, waiver or consent shall be effective only in
the specific instance, and for the purpose, for which given.

6.5.5 Ratification. As amended by this Third Amendment, all terms, covenants and
provisions of the Original Agreement, the Pledge Agreement, the Guarantor Pledge
Agreement, the Guaranty and the Subsidiary Guaranty, and each of the other Loan
Documents, are ratified and confirmed and shall be and remain in full force and
effect as first written.

6.5.6 No Implied Extension of Loan. No term or provision in any of the Loan
Documents, as amended hereby, shall constitute the express or implied consent of
Administrative

 

-68-

--------------------------------------------------------------------------------

Agent or any Lender to, or the express or implied satisfaction of any conditions
or terms with respect to, any exercise by Borrower of any Extension Option or
any other request for the extension of the Loan, and each such request shall be
subject to each term and condition applicable thereto under the Loan Documents.

6.5.7 Severability. In case any provision of this Third Amendment shall be
invalid, illegal, or unenforceable, such provision shall be deemed to have been
modified to the extent necessary to make it valid, legal, and enforceable. The
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

6.5.8 Entire Agreement. The Agreement and the other Loan Documents contain the
entire agreement of the parties hereto in respect of the transactions
contemplated hereby, and all prior communications or agreements among or between
such parties, whether oral or written, with respect to the subject matter
hereof, are superseded by the terms of the Agreement and the other Loan
Documents.

[Remainder of Page Intentionally Left Blank]

 

-69-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.

 

BORROWER:

STRATEGIC HOTEL FUNDING, L.L.C.

a Delaware limited liability company

By:  

/S/ RYAN M. BOWIE

Name:   Ryan Bowie Title:   Vice President and Treasurer

Address:   200 West Madison Street   Suite 1700   Chicago, Illinois 60606

Telephone No.: (312) 658-5000 Facsimile No.: (312) 658-5799 Attention: General
Counsel With a copy to: Strategic Hotel Funding, L.L.C. 200 West Madison Street
Suite 1700 Chicago, Illinois 60606 Telephone No.: (312) 658-5000 Facsimile
No.: (312) 658-5799 Attention:   Treasurer

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

DEUTSCHE BANK TRUST COMPANY

AMERICAS, a New York banking corporation

By:  

/s/ GEORGE R. REYNOLDS

Name:   George R. Reynolds Title:   Director By:  

/s/ JAMES ROLISON

Name:   James Rolison Title:   Managing Director

Address:   60 Wall Street   New York, New York 10005 Telephone No.: (212)
250-3352 Facsimile No.: (212) 797-4496 Attention: James Rolison With a copy to:
Deutsche Bank Securities Inc. Crescent Court Suite 550 Dallas, Texas 75201
Telephone No.: (214) 740-7900 Facsimile No.: (214) 740-7910 Attention: Linda
Davis

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

CITICORP NORTH AMERICA, INC. By:  

/s/ David Bouton

Name:  

David Bouton

Title:   Vice President

Address:   2 Penns Way, 1st Floor   New Castle, Delaware 19720 Telephone No.:
302-894-6052 Facsimile No.: 212-994-0849 Attention: Jessica Zimmers, Loan
Specialist

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A.

By:  

/s/ STEVEN P. RENWICK

Name:   Steven P. Renwick Title:   Senior Vice President

Address:   901 Main Street, 64th Floor   Dallas, Texas 75202 Telephone No.:
214-209-1867 Facsimile No.: 214-209-0085 Attention: Steven Renwick

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A. By:  

/s/ MARC E. CONSTANTINO

Name:   Marc E. Costantino Title:   Executive Director

Address:   383 Madison Avenue   40th Floor   New York, New York 10179 Telephone
No.: 212-622-8167 Facsimile No.: 646-328-3037 Attention: Marc E. Costantino

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

WACHOVIA BANK, NATIONAL ASSOCIATION By:  

/s/ AMIT V. KHIMJI

Name:   Amit V. Khimji Title:   Vice President Address:   301 S. College Street
  NC 0172   Charlotte, NC 28288-0172

Telephone No.: (704) 715-1347 Facsimile No.: (704) 383-6205 Attention: Amit V.
Khimji

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

CREDIT SUISSE, Cayman Islands Branch

By:  

/s/ MIKHAIL FAYBUSOVICH

Name:   Mikhail Faybusovich Title:   Vice President By:  

/s/ KARIM BLASETTI

Name:   Karim Blasetti Title:   Vice President

Address:   Eleven Madison Avenue   New York, New York 10005 Facsimile No.:
(646) 935-8518 Telephone No.: (212) 325-5714 Attention: Mikhail Faybusovich

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

BARCLAYS CAPITAL REAL ESTATE INC. By:  

/s/ LORI ANN RUNG

Name:   Lori Ann Rung Title:   Vice President Address:   200 Park Avenue, 5th
Floor   New York, NY 10166 Facsimile No.: (212) 412-1664 Telephone No.:
(212) 412-3026 Attention: David Proctor

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

RAYMOND JAMES BANK, FSB By:  

/s/ THOMAS G. SCOTT

Name:   Thomas G. Scott Title:   Senior Vice President

Address:   710 Carillon Parkway   PO Box 11628   St. Petersburg, FL 33733
Telephone No.: (727) 567-4196 Facsimile No.: (727) 567-8830 Attention: Thomas
Scott

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

E. SUN COMMERCIAL BANK LTD., LOS ANGELES BRANCH By:  

/s/ BENJAMIN LIN

Name:   Benjamin Lin Title:   EVP & General Manager

Address:   17700 Castleton St., Suite 500   City of Industry, CA 91748 Telephone
No.: 626-839-5531 Facsimile No.: 626-810-2400 Attention: Edward Chen

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

AAREAL CAPITAL CORPORATION By:  

 

Name:   Title:   By:  

 

Name:   Title:  

Address:   250 Park Avenue   Suite 820   New York, New York 10017 Telephone No.:
646-205-4503 Facsimile No.: 917-322-0290 Attention: Juan Vives

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

HUA NAN COMMERCIAL BANK, LOS ANGELES BRANCH By:  

/s/ OLIVER C.H. HSU

Name:   Oliver C.H. Hsu Title:   VP & General Manager

Address:   707 Wilshire Blvd., #3100   Los Angeles, CA 90017 Telephone No.:
(213) 362-6666 ext.233 Facsimile No.: (213) 362-6617 Attention: Howard Hung/
Senior Manager

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

SUMITOMO MITSUI BANKING CORPORATION By:  

/s/ DAVID A. BUCK

Name:   David A. Buck Title:   Senior Vice President

Address:   277 Park Avenue   New York, NY 10172 Telephone No.: 212-224-4147
Facsimile No.: 212-224-4391 Attention: David Wasserman

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

METLIFE INSURANCE COMPANY OF CONNECTICUT, a Connecticut corporation By:  

/s/ LOUIS KRUK

Name:   Louis Kruk Title:   Director

Address:   10 Park Avenue   Morristown, NJ 07960 Telephone No.: 973-355-4474
Facsimile No.: 973-355-4420 Attention: Louis Kruk

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

EUROHYPO AG, NEW YORK BRANCH By:  

/s/ MARK A. FISHER

Name:   Mark A. Fisher Title:   Executive Director By:  

/s/ JOHN HAYES

Name:   John Hayes Title:   Vice President

Address:   Eurohypo AG, New York Branch   1114 Avenue of the Americas   29th
Floor   New York, New York 10036 Telephone No.: Facsimile No.: 866-267-7680
Attention: Legal Director With a copy to: Eurohypo AG, New York Branch 1114
Avenue of the Americas, 29th Floor New York, New York 10036 Telephone No.:
Facsimile No.: 866-267-7680 Attention: Head of Portfolio Operations

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

    EUROPE ARAB BANK PLC By:   /s/ SJ Kemp     By:   /s/ Rowan Austin   SJ Kemp
    Name:   Rowan Austin   Director Structured Trade Finance     Title:   Head
of Commodities & Trade Finance

Address:   13-15 Moorgate,   London   EC2R 6AD Telephone No.: 0207 315 8500
Facsimile No.: 0207 796 3994 Telephone No.: 07703 751546 Attention: Rod Taylor

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

ROYAL BANK OF CANADA By:  

 

Name:   Dan LePage Title:   Attorney-in-Fact

Address:     One Liberty Plaza, 4th Floor   165 Broadway   New York, NY
10006-1404 Telephone No.: (212)428-6459 Facsimile No.: (212) 428-6605 Attention:
Dan LePage

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. NEW YORK BRANCH By:  

/s/ TSANG-PEI HSU

Name:   Tsang-Pei Hsu Title:   VP & Deputy General Manager

Address:   65 Liberty Street   New York, NY 10005 Telephone No.: (212) 815-9135
Facsimile No.: (212) 608-4888 Attention: Mabel Chiang

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

TAIPEI FUBON COMMERCIAL BANK CO., LTD., Los Angeles Branch By:  

/s/ SOPHIA JING

Name:   Sophia Jing Title:   First Vice President/General Manager

Address:   700 S. Flower Street, Suite 3300   Los Angeles, CA 90017 Telephone
No.: (213) 236-9151 Facsimile No.: (213) 236-9155 Attention: Loan Department

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By:  

/s/ JOSEPH BASSIL

Name:   Joseph Bassil Title:   Managing Director By:  

/s/ DIRK ZIEMER

Name:   Dirk Ziemer Title:   Director – Head Underwriter Lending Office and
Address for Notices: c/o Norddeutsche Landesbank Girozentrale, New York Branch
1114 Avenue of the Americas New York, New York 10036 Facsimile No.:
(212) 812-6860 Telephone No.: (212) 812-6809 Attention: Arcadio Diaz

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

FIRST COMMERCIAL BANK NEW YORK AGENCY By:  

/s/ MAY HSIAO

Name:   May Hsiao Title:   Assistant General Manager

Address:     750 Third Avenue, 34th Floor   New York, New York 10017 Telephone
No.: (212) 599-6868 Facsimile No.: (212) 599-6133 Attention: May Hsiao

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement

--------------------------------------------------------------------------------

THE BANK OF EAST ASIA, LIMITED, NEW YORK BRANCH By:  

/s/ KENNETH PETTIS

Name:   Kenneth Pettis Title:   Senior Vice President By:  

/s/ KITTY SIN

Name:   Kitty Sin Title:   Senior Vice President

Address:   202 Canal Street   New York, New York 10013 Telephone No.:
212-238-8393 Facsimile No.: 212-219-3211 Attention: Ken Pettis

 

Signature Page to Strategic Hotel Funding, L.L.C. Agreement