Exhibit 10.36

 

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U.S. $575,000,000

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

HOST MARRIOTT, L.P.,

as the U.S. Borrower

 

CERTAIN CANADIAN SUBSIDIARIES OF HOST MARRIOTT, L.P.,

as the Canadian Revolving Loan Borrowers,

 

VARIOUS LENDERS,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent,

 

BANK OF AMERICA, N.A.

as Syndication Agent

 

CITICORP NORTH AMERICA INC.

 

SOCIÉTÉ GÉNÉRALE

 

and

 

CALYON NEW YORK BRANCH

as Co-Documentation Agents

 

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Dated as of September 10, 2004

 

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DEUTSCHE BANK SECURITIES INC.

 

BANC OF AMERICA SECURITIES LLC.

 

and

 

CITIGROUP GLOBAL MARKETS

as Joint-Lead Arrangers and Joint Book Running Managers

 

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Table of Contents

 

          Page

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SECTION 1.

  

Definitions and Accounting Terms

   1

1.01.

  

Defined Terms

   1

SECTION 2.

  

Amount and Terms of Credit

   47

2.01.

  

The Commitments

   47

2.02.

  

Minimum Amount of Each Borrowing

   51

2.03.

  

Notice of Borrowing

   51

2.04.

  

Extension of Maturity Date

   52

2.05.

  

Disbursement of Funds

   52

2.06.

  

Revolving Notes

   53

2.07.

  

Conversions

   54

2.08.

  

Pro Rata Borrowings

   56

2.09.

  

Interest

   56

2.10.

  

Interest Periods

   58

2.11.

  

Increased Costs, Illegality, etc.

   59

2.12.

  

Compensation

   61

2.13.

  

Lending Offices; Changes Thereto

   61

2.14.

  

Replacement of Lenders

   62

2.15.

  

Bankers’ Acceptance Provisions

   63

2.16.

  

Additional Revolving Loan Commitments

   63

2.17.

  

Special Provisions Regarding RL Lenders and Canadian Revolving Loans

   65

2.18.

  

Voluntary Adjustment or Termination of Total Maximum Canadian Dollar Revolving
Loan Sub-Commitment and Total Canadian Dollar Revolving Loan Sub-Commitment

   68

SECTION 3.

  

Letters of Credit

   70

3.01.

  

Letters of Credit

   70

3.02.

  

Maximum Letter of Credit Outstandings; Final Maturities; etc.

   71

3.03.

  

Letter of Credit Requests; Notices of Issuance

   72

3.04.

  

Letter of Credit Participations

   72

3.05.

  

Agreement to Repay Letter of Credit Drawings

   75

3.06.

  

Increased Letter of Credit Costs

   76

SECTION 4.

  

Commitment Commission; Canadian Commitment Commission; Fees; Reductions of
Commitment

   76

4.01.

  

Fees

   76

4.02.

  

Voluntary Termination or Reduction of Total Unutilized Revolving Loan Commitment

   78

SECTION 5.

  

Prepayments; Payments; Taxes

   78

5.01.

  

Voluntary Prepayments

   78

 

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5.02.

  

Mandatory Repayments and Commitment Reductions

   79

5.03.

  

Method and Place of Payment

   84

5.04.

  

Net Payments

   85

SECTION 6.

  

Conditions Precedent to Initial Credit Events

   88

6.01.

  

Execution of Agreement; Revolving Notes

   88

6.02.

  

Opinions of Counsel

   88

6.03.

  

Corporate Documents; Proceedings; etc.

   88

6.04.

  

Fees, etc.

   89

6.05.

  

Pledge and Security Agreement

   89

6.06.

  

Subsidiaries Guaranty

   90

6.07.

  

Adverse Change, etc.

   90

6.08.

  

Litigation

   90

6.09.

  

Original Credit Agreement

   90

6.10.

  

Solvency Certificate; Insurance Certificates

   90

6.11.

  

Financial Statements; Projections

   91

6.12.

  

No Default; Representations and Warranties

   91

SECTION 7.

  

Conditions Precedent to All Credit Events

   91

7.01.

  

No Default; Representations and Warranties; Compliance with Applicable Financial
Covenants

   91

7.02.

  

Notice of Borrowing; Letter of Credit Request

   92

SECTION 8.

  

Representations, Warranties and Agreements

   92

8.01.

  

Status

   92

8.02.

  

Power and Authority

   93

8.03.

  

No Violation

   93

8.04.

  

Governmental Approvals

   93

8.05.

  

Financial Statements; Financial Condition; Undisclosed Liabilities; Projections;
etc.

   94

8.06.

  

Litigation

   95

8.07.

  

True and Complete Disclosure

   95

8.08.

  

Use of Proceeds; Margin Regulations

   95

8.09.

  

Tax Returns and Payments

   95

8.10.

  

Compliance with ERISA

   96

8.11.

  

The Pledge and Security Agreement; Equity Pledges

   97

8.12.

  

Properties

   97

8.13.

  

Subsidiaries

   98

8.14.

  

Compliance with Statutes, etc.

   98

8.15.

  

Investment Company Act

   98

8.16.

  

Public Utility Holding Company Act

   98

8.17.

  

Environmental Matters

   98

8.18.

  

Labor Relations

   99

8.19.

  

Intellectual Property

   99

8.20.

  

Indebtedness

   99

8.21.

  

Status as REIT

   99

 

ii

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SECTION 9.

  

Financial Covenants

   100

9.01.

  

Maximum Leverage Ratio

   100

9.02.

  

Minimum Unsecured Interest Coverage Ratio

   101

9.03.

  

Minimum Consolidated Fixed Charge Coverage Ratio

   101

9.04.

  

Additional Financial Covenants and Limitations on Incurrence of Indebtedness

   101

SECTION 10.

  

Affirmative Covenants

   102

10.01.

  

Compliance with Laws, Etc.

   102

10.02.

  

Conduct of Business

   102

10.03.

  

Payment of Taxes, Etc.

   103

10.04.

  

Maintenance of Insurance

   103

10.05.

  

Preservation of Existence, Etc.

   103

10.06.

  

Access; Annual Meetings with Lenders

   103

10.07.

  

Keeping of Books

   104

10.08.

  

Maintenance of Properties, Etc.

   104

10.09.

  

Management Agreements, Operating Leases and Certain Other Contracts

   104

10.10.

  

Application of Proceeds

   105

10.11.

  

Information Covenants

   105

10.12.

  

Intentionally Omitted

   109

10.13.

  

Certain Subsidiaries

   109

10.14.

  

Foreign Subsidiaries Security

   109

10.15.

  

Additional Guarantors; Release of Guarantors and Collateral

   110

10.16.

  

End of Fiscal Years; Fiscal Quarters

   113

10.17.

  

Environmental Matters

   113

SECTION 11.

  

Negative Covenants

   114

11.01.

  

Liens

   114

11.02.

  

Indebtedness

   114

11.03.

  

Limitation on Certain Restrictions on Subsidiaries

   115

11.04.

  

Limitation on Issuance of Capital Stock

   115

11.05.

  

Modification and Enforcement of Certain Agreements

   115

11.06.

  

Limitation on Creation of Subsidiaries

   116

11.07.

  

Transactions with Affiliates

   116

11.08.

  

Sales of Assets

   117

11.09.

  

Consolidation, Merger, etc.

   119

11.10.

  

Acquisitions; Investments

   119

11.11.

  

Dividends

   121

11.12.

  

Capital Expenditures

   123

11.13.

  

Limitation on Payments of Certain Indebtedness; Modifications of Certain
Indebtedness; Modifications of Organizational Documents; etc.

   124

11.14.

  

Business

   125

11.15.

  

Violation of Specified Indenture Covenants

   125

 

iii

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SECTION 12.

  

Events of Default

   125

12.01.

  

Payments

   125

12.02.

  

Representations, etc.

   125

12.03.

  

Covenants

   126

12.04.

  

Default Under Other Agreements

   126

12.05.

  

Bankruptcy, etc.

   126

12.06.

  

ERISA

   127

12.07.

  

Pledge and Security Agreement

   127

12.08.

  

Guaranty

   127

12.09.

  

Judgments

   128

12.10.

  

Change of Control

   128

12.11.

  

REIT Status; Cash Proceeds Retained by HMC

   128

12.12.

  

General Partner Status

   128

SECTION 13.

  

The Agents

   129

13.01.

  

Appointment

   129

13.02.

  

Nature of Duties

   129

13.03.

  

Lack of Reliance on the Agents

   130

13.04.

  

Certain Rights of the Agents

   130

13.05.

  

Reliance

   130

13.06.

  

Indemnification

   130

13.07.

  

Each Agent in its Individual Capacity

   131

13.08.

  

Holders

   131

13.09.

  

Removal of or Resignation by the Agents

   131

SECTION 14.

  

Miscellaneous

   132

14.01.

  

Payment of Expenses, etc.

   132

14.02.

  

Notices

   133

14.03.

  

Benefit of Agreement

   133

14.04.

  

No Waiver; Remedies Cumulative

   136

14.05.

  

Payments Pro Rata

   137

14.06.

  

Calculations; Computations

   137

14.07.

  

GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL

   138

14.08.

  

Counterparts

   139

14.09.

  

Effectiveness

   139

14.10.

  

Headings Descriptive

   139

14.11.

  

Amendment or Waiver; etc.

   139

14.12.

  

Survival

   141

14.13.

  

Domicile of Revolving Loans

   141

14.14.

  

Confidentiality

   141

14.15.

  

Register

   142

14.16.

  

Commercial Loan Transactions

   143

14.17.

  

Limitations on Recourse

   143

14.18.

  

Judgment Currency

   143

14.19.

  

Right of Setoff

   144

14.20.

  

Termination of Liens

   144

 

iv

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14.21.

  

Severability

   144

14.22.

  

USA Patriot Act Notice

   145

SECTION 15.

  

Nature of Borrowers’ Obligations

   145

15.01.

  

Nature of Obligations

   145

SECTION 16.

  

U.S. Borrower Guaranty

   145

16.01.

  

The Guaranty

   145

16.02.

  

Bankruptcy

   145

16.03.

  

Nature of Liability

   146

16.04.

  

Guaranty Absolute

   146

16.05.

  

Independent Obligation

   146

16.06.

  

Authorization

   147

16.07.

  

Reliance

   147

16.08.

  

Subordination

   147

16.09.

  

Waivers

   148

16.10.

  

Guaranty Continuing

   149

16.11.

  

Binding Nature of Guaranties

   149

16.12.

  

Judgments Binding

   149

 

SCHEDULE I-A

  

Commitments

SCHEDULE I-B

  

Canadian Dollar Revolving Loan Sub-Commitments

SCHEDULE II

  

Lender Addresses and Applicable Lending Offices

SCHEDULE III

  

Certain Provisions Relating to Bankers’ Acceptances

SCHEDULE IV

  

Subsidiaries

SCHEDULE C-1

  

Canadian Facility Valuation Dates

SCHEDULE 8.20

  

Indebtedness

 

EXHIBIT A

  

Notice of Borrowing

EXHIBIT B-1

  

Dollar Revolving Note

EXHIBIT B-2

  

Canadian Dollar Revolving Note

EXHIBIT C

  

Letter of Credit Request

EXHIBIT D

  

Section 5.04(b)(ii) Certificate

EXHIBIT E-1

  

Opinion of Elizabeth A. Abdoo, Esq., General Counsel to HMC, and counsel to the
U.S. Borrower

EXHIBIT E-2

  

Opinion of Hogan & Hartson L.L.P., special counsel to the Credit Parties

EXHIBIT E-3

  

Opinion of Blake, Cassels & Graydon, LLP, special Canadian counsel to the Credit
Parties

EXHIBIT E-4

  

Opinion of Cox, Hanson O’Reilly Matheson, special Canadian counsel to the Credit
Parties

EXHIBIT F

  

Secretaries’ Certificate

EXHIBIT G

  

Pledge and Security Agreement

 

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EXHIBIT H

  

Subsidiaries Guaranty

EXHIBIT I

  

Solvency Certificate

EXHIBIT J

  

Additional Revolving Loan Commitment Agreement

EXHIBIT K

  

Form of Corporate Forecast

EXHIBIT L

  

Assignment and Assumption Agreement

EXHIBIT M

  

Senior Note Indenture and the Twelfth Supplemental Indenture

 

vi

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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 10, 2004, among
HOST MARRIOTT, L.P., a Delaware limited partnership (the “U.S. Borrower”), each
CANADIAN REVOLVING LOAN BORROWER from time to time party hereto, the LENDERS
party hereto from time to time, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Administrative Agent (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the U.S. Borrower is party to the Original Credit Agreement (as defined
below) and desires to amend and restate the Original Credit Agreement in its
entirety with this Agreement as set forth below; and

 

WHEREAS, subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrowers the respective credit
facilities provided for herein;

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1. Definitions and Accounting Terms.

 

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

 

“Absolute Rate” shall mean an interest rate (rounded to the nearest .0001)
expressed as a decimal.

 

“Acceptance Fee” shall mean, in respect of a Bankers’ Acceptance, a fee
calculated on the Face Amount of such Bankers’ Acceptance at a rate per annum
equal to the Applicable Margin that would be payable with respect to a Revolving
Loan of the Tranche under which such Banker’s Acceptance is incurred that is
maintained as a Eurodollar Loan borrowed on the Drawing Date of such Bankers’
Acceptance. Acceptance Fees shall be calculated on the basis of the term to
maturity of the Bankers’ Acceptance and a year of 365 days.

 

“Acceptance Fee Rebate” shall have the meaning provided in clause (g) of
Schedule III hereto.

 

“Additional Acceptance Fee” shall have the meaning provided in clause (g) of
Schedule III hereto.

 

“Additional Revolving Loan Commitment” shall mean, for each Additional Revolving
Loan Lender, any commitment to make Revolving Loans by such Lender pursuant to
Section 2.16, in such amount as agreed to by such Lender in the respective
Additional Revolving Loan Commitment Agreement; provided that on the Additional
Revolving Loan Commitment Date upon which an Additional Revolving Loan
Commitment of any Additional Revolving Loan Lender becomes effective, such
Additional Revolving Loan Commitment of such Additional Revolving Loan Lender
shall be added to (and thereafter become a part of) the Revolving Loan

 

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Commitment of such Additional Revolving Loan Lender for all purposes of this
Agreement as contemplated by Section 2.16.

 

“Additional Revolving Loan Commitment Agreement” shall mean an Additional
Revolving Loan Commitment Agreement substantially in the form of Exhibit J
(appropriately completed).

 

“Additional Revolving Loan Commitment Date” shall mean each date upon which an
Additional Revolving Loan Commitment under an Additional Revolving Loan
Commitment Agreement becomes effective as provided in Section 2.16(b).

 

“Additional Revolving Loan Lender” shall have the meaning provided in Section
2.16(b).

 

“Adjusted Funds From Operations” shall mean, for any period, Consolidated Net
Income for such period plus (a) the sum of the following amounts for such period
(without duplication) to the extent deducted in the determination of
Consolidated Net Income for such period: (i) depreciation expense, (ii)
amortization expense and other non-cash charges of HMC and its Subsidiaries with
respect to their real estate assets for such period, (iii) losses from Asset
Sales, losses resulting from restructuring of Indebtedness, and extraordinary
losses, (iv) amortization of financing cost, (v) minority interest expense and
(vi) dividends paid on the QUIPS and dividends on Qualified Preferred Stock;
less (b) the sum of the following amounts to the extent included in the
determination of Consolidated Net Income for such period: (i) gains from Asset
Sales, gains resulting from restructuring of Indebtedness, and extraordinary
gains, (ii) the applicable share of Consolidated Net Income of HMC’s
Unconsolidated Entities, and (iii) minority partner adjusted funds from
operations; plus (without duplication of any amounts referred to in clause (a)
above in this definition) (c) HMC’s pro rata share of Adjusted Funds From
Operations of HMC’s Unconsolidated Entities based upon HMC’s percentage
ownership interest in such Unconsolidated Entities.

 

“Adjusted Total Assets” shall mean the sum of (i) Undepreciated Real Estate
Assets of the U.S. Borrower and its Subsidiaries (or, in the case of any
calculation pursuant to Section 5.02(b), of the U.S. Borower and its Restricted
Subsidiaries) and (ii) all other assets (excluding intangibles) of the U.S.
Borrower and its Subsidiaries (or, in the case of any calculation pursuant to
Section 5.02(b), of the U.S. Borower and its Restricted Subsidiaries) determined
on a consolidated basis (it being understood that the accounts of Subsidiaries
shall be consolidated with those of the U.S. Borrower only to the extent of the
U.S. Borrower’s proportionate interest therein) as of any transaction date, as
adjusted to reflect the application of the proceeds of the incurrence of
Indebtedness and the issuance of Disqualified Stock on such transaction date.
Adjusted Total Assets, as of any date of determination, shall mean the Adjusted
Total Assets as of the end of the most recent fiscal quarter ending on or prior
to the date of determination for which financial statements are required to have
been delivered pursuant to Section 10.11 or prior to the first date such
financial statements are required to be delivered, the fiscal quarter ending
June 18, 2004.

 

“Adjustment Date” shall have the meaning provided in Section 2.18(b).

 

2

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“Administrative Agent” shall mean DBTCA in its capacity as Administrative Agent
for the Lenders hereunder, and shall include any successor Administrative Agent
appointed pursuant to Section 13.09.

 

“Affected Eurodollar Loans” shall have the meaning provided in Section 5.02(d).

 

“Affiliate” shall mean, with respect to any Person, any other Person (i)
directly or indirectly controlling (including, but not limited to, all
directors, officers and general partners of such Person) controlled by, or under
direct or indirect common control with, such Person or (ii) that directly or
indirectly owns more than 10% of the total voting power normally entitled to
vote in the election of directors, managers or trustees, as applicable, in such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise, provided that the right to
designate a member of the board of directors or managers of a Person will not,
by itself, be deemed to constitute control. Notwithstanding the foregoing,
neither Marriott International nor any of its Subsidiaries shall be considered
to be Affiliates of HMC or any of its Subsidiaries.

 

“Affiliate Debt” shall mean any Indebtedness, whether now existing or hereafter
incurred, owed by any Credit Party or any of its Subsidiaries to any other
Credit Party or any of its Affiliates (including, without limitation, any
Intercompany Existing Indebtedness).

 

“Affiliate Transaction” shall have the meaning provided for in Section 11.07.

 

“Agent” shall mean each of the Administrative Agent, the Syndication Agent, the
Co-Documentation Agents and Collateral Agent.

 

“Aggregate Revolving A Credit Exposure” at any time shall mean the sum of (i)
the aggregate principal amount of all Revolving A Loans then outstanding (for
this purpose, (x) at all times prior to the occurrence of any Sharing Event and
the automatic conversion of Canadian Revolving A Loans to Dollar Revolving A
Loans pursuant to Section 2.17, using the Dollar Equivalent of the principal
amount or Face Amount, as the case may be, of each Canadian Revolving Loan then
outstanding and (y) at all times after any occurrence described in the preceding
clause (x), giving effect to the conversions to Dollar obligations required by
Section 2.17), plus (ii) the aggregate amount of all Letter of Credit A
Outstandings at such time.

 

“Aggregate Revolving B Credit Exposure” at any time shall mean the sum of (i)
the aggregate principal amount of all Revolving B Loans then outstanding (for
this purpose, (x) at all times prior to the occurrence of any Sharing Event and
the automatic conversion of Canadian Revolving B Loans to Dollar Revolving B
Loans pursuant to Section 2.17, using the Dollar Equivalent of the principal
amount or Face Amount, as the case may be, of each Canadian Revolving Loan then
outstanding and (y) at all times after any occurrence described in the preceding
clause (x), giving effect to the conversions to Dollar obligations required by
Section 2.17), plus (ii) the aggregate amount of all Letter of Credit B
Outstandings at such time.

 

“Aggregate Revolving Credit Exposure” at any time shall mean the sum of (i) the
aggregate principal amount of all Revolving Loans then outstanding (for this
purpose, (x) at all times prior to the occurrence of any Sharing Event and the
automatic conversion of Canadian

 

3

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Revolving Loans to Dollar Revolving Loans pursuant to Section 2.17, using the
Dollar Equivalent of the principal amount or Face Amount, as the case may be, of
each Canadian Revolving Loan then outstanding and (y) at all times after any
occurrence described in the preceding clause (x), giving effect to the
conversions to Dollar obligations required by Section 2.17), plus (ii) the
aggregate amount of all Letter of Credit Outstandings at such time.

 

“Aggregate U.S. Revolving Exposure” at any time shall mean the sum of (i) the
aggregate principal amount of all Dollar Revolving Loans then outstanding and
(ii) the aggregate amount of all Letter of Credit Outstandings at such time.

 

“Agreement” shall mean this Amended and Restated Credit Agreement, as modified,
supplemented or amended (including any amendment and restatement hereof) from
time to time.

 

“Amended Senior Note Indenture” shall mean the Senior Note Indenture as in
effect on the Effective Date, without giving effect to any covenant amendments
pursuant to supplemental indentures other than (i) the amendments set forth in
the Twelfth Supplemental Indenture or (ii) such amendments as may be approved or
otherwise become effective pursuant to the procedures described in the
definition of “Covenant Amendment Effective Date.”

 

“Applicable Commitment Commission Percentage” shall mean, with respect to any
quarterly period occurring between successive Quarterly Payment Dates (or, if
shorter, the period through the termination of the Total Revolving Loan
Commitment) during which the daily average Aggregate Revolving Credit Exposure
is (i) less than 33% of the Total Revolving Loan Commitment, .55% per annum,
(ii) greater than or equal to 33%, but less than 67%, of the Total Revolving
Loan Commitment, .45% per annum; and (iii) greater than or equal to 67% of the
Total Revolving Loan Commitment, .35% per annum; provided, however, that to the
extent any portion of the Total Revolving Loan Commitment is not available
pursuant to clause (vii) of Section 2.01(a) or clause (vi) of Section 2.01(b),
the Applicable Commitment Commission Percentage solely with respect to such
portion shall be 0.20% per annum rather than the higher percentages set forth
above in this definition.

 

“Applicable Covenants” shall mean, in connection with any determination required
to be made by the U.S. Borrower with respect to its ability to comply with the
covenants set forth in Section 9.01 through 9.03 inclusive, the Revolving
Facility A Financial Covenants (but only to the extent that there is any
Revolving A Credit Exposure on the date of determination after giving effect to
the event giving rise to the need for compliance) and, in any case, the
Revolving Facility B Financial Covenants.

 

“Applicable Currency” shall mean, with respect to any Obligations, Dollars or,
to the extent relating to Canadian Revolving Loans, the respective Canadian
Dollars, in which the respective Revolving Loans or related amounts are
denominated.

 

“Applicable Margin” shall mean, with respect to any:

 

(a) Revolving A Loan, from and after any Start Date to and including the
corresponding End Date, (i) the respective percentage per annum set forth below
under the respective Type of Revolving Loan and opposite the respective Level
(i.e., Level I, Level II,

 

4

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Level III, Level IV or Level V, as the case may be) indicated to have been
achieved on the Test Date immediately preceding such Start Date (as shown on the
respective officer’s certificate delivered pursuant to Section 10.11(d) or the
first proviso below) plus (ii) if any Excess Usage Amount exists as of the Test
Date immediately preceding such Start Date, the Excess Usage Premium; provided,
however, that the Excess Usage Premium shall be assessed only with respect to
such Excess Usage Amount for so long as such amount remains outstanding
following such Test Date and the Excess Usage Premium shall be adjusted between
Test Dates each time that the Borrowers make a prepayment or conversion that
reduces the Excess Usage Amount:

 

    

Leverage Ratio

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

   Base
Rate Loans

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

    Eurodollar
Rate Loans

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

 

Level I

   Less than 5:00:1.00    1.00 %   2.00 %

Level II

   Greater than or equal to 5.00:1.00 but less than 5.50:1.00    1.25 %   2.25 %

Level III

   Greater than or equal to 5.50:1.00 but less than 6.00:1.00    1.50 %   2.50 %

Level IV

   greater than or equal to 6.00:1.00 but less than 6.50:1.00    1.75 %   2.75 %

Level V

   greater than or equal to 6.50:1.00    2.00 %   3.00 %

 

5

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(b) Revolving B Loan, from and after any Start Date to and including the
corresponding End Date, the respective percentage per annum set forth below
under the respective Type of Revolving Loan and opposite the respective Level
(i.e., Level I, Level II, Level III, Level IV, Level V or Level VI, as the case
may be) indicated to have been achieved on the Test Date immediately preceding
such Start Date (as shown on the respective officer’s certificate delivered
pursuant to Section 10.11(d) or the first proviso below):

 

    

Leverage Ratio

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

   Base
Rate Loans

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

    Eurodollar
Rate Loans

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

 

Level I

   Less than 5:00:1.00    1.50 %   2.50 %

Level II

   Greater than or equal to 5.00:1.00 but less than 5.50:1.00    1.75 %   2.75 %

Level III

   Greater than or equal to 5.50:1.00 but less than 6.00:1.00    2.00 %   3.00 %

Level IV

   greater than or equal to 6.00:1.00 but less than 6.50:1.00    2.25 %   3.25 %

Level V

   greater than or equal to 6.50:1.00 but less than or equal to 7.00:1.00   
2.50 %   3.50 %

Level VI

   greater than 7.00:1.00    2.75 %   3.75 %

 

; provided, however, that if the U.S. Borrower fails to deliver the financial
statements required to be delivered pursuant to Section 10.11(a) or (b)
(accompanied by the officer’s certificate required to be delivered pursuant to
Section 10.11(d) showing the applicable Leverage Ratio on the relevant Test
Date) on or prior to the respective date required by such Sections, then Level V
pricing (with respect to Revolving A Loans) (and using the highest Excess Usage
Premium) and Level VI pricing (with respect to Revolving B Loans) shall apply
until such time, if any, as the financial statements required as set forth above
and the accompanying officer’s certificate have been delivered showing the
pricing for the respective Margin Reduction Period is at a level which is less
than Level V (with respect to Revolving A Loans) and Level VI (with respect to
Revolving B Loans) (it being understood that, in the case of any late delivery
of the financial statements and officer’s certificate as so required, any
reduction in the Applicable Margin shall apply only from and after the date of
the delivery of the complying financial statements and officer’s certificate);
provided, further, that Level V pricing (with respect to Revolving A Loans) and
Level VI pricing (with respect to Revolving B Loans) shall apply at any time
when any Specified Default or Event of Default is in existence. Notwithstanding
anything to the contrary contained in the immediately preceding sentence (other
than the second proviso thereof), Level III pricing shall apply for the period
from the Effective Date to but not including the date which is the first Start
Date after the Effective Date.

 

The Applicable Margin for Canadian Revolving A Loans which are Canadian Prime
Rate Loans is the Applicable Margin determined above for Base Rate Loans that
are Revolving A Loans. The Applicable Margin for Acceptance Fees for Canadian
Revolving A Loans which are Bankers’ Acceptances is the Applicable Margin
determined above for Eurodollar Rate Loans that are Revolving A Loans.

 

6

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The Applicable Margin for Canadian Revolving B Loans which are Canadian Prime
Rate Loans is the Applicable Margin determined above for Base Rate Loans that
are Revolving B Loans. The Applicable Margin for Acceptance Fees for Canadian
Revolving B Loans which are Bankers’ Acceptances is the Applicable Margin
determined above for Eurodollar Rate Loans that are Revolving B Loans.

 

“Approved Lessee” shall mean (i) a Taxable REIT Subsidiary of the U.S. Borrower
or (ii) another lessee under an Operating Lease, which lessee must be approved
by the Administrative Agent (such approval not to be unreasonably withheld)
unless either such Operating Lease relates to Hotel Properties accounting,
individually or with other leases of such lessee, for less than 10% of the
Consolidated EBITDA of the U.S. Borrower or such lessee is a Permitted Facility
Manager.

 

“Asset Sale” shall mean any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the U.S. Borrower or any of its
Subsidiaries to any Person other than the U.S. Borrower or any of its
Subsidiaries of (i) all or any of the Capital Stock of any Subsidiary (including
by issuance of such Capital Stock), (ii) all or substantially all of the
property and assets of an operating unit or business of the U.S. Borrower or any
of its Subsidiaries, or (iii) any other property and assets of the U.S. Borrower
or any of its Subsidiaries (other than Capital Stock of a Person which is not a
Subsidiary) outside the ordinary course of business of the U.S. Borrower or such
Subsidiary and, in each case, that is not governed by Section 11.09; provided
that “Asset Sale” shall not include (a) sales or other dispositions of
inventory, receivables and other current assets, (b) sales, transfers or other
dispositions of assets with a fair market value not in excess of $10 million in
any transaction or series of related transactions, (c) leases of real estate
assets, (d) Investments complying with Section 11.10 and (e) any transactions
that, pursuant to clause (b) of Section 11.08, are not deemed not to be an
“Asset Sale.”

 

“Asset Sale Period” shall have the meaning provided in Section 5.02(b).

 

“Assets” shall mean, with respect to any Person, all assets of such Person that
would, in accordance with GAAP, be classified as assets of a company conducting
a business the same as or similar to that of such Person, including without
limitation, all hotels, mortgage loans, management agreements, franchise
agreements, representation agreements, undeveloped land, joint ventures, hotel
construction and available cash balances.

 

“Assignee Canadian Lender” shall have the meaning provided in Section 14.03(d).

 

“Assignment and Assumption Agreement” shall mean the Assignment and Assumption
Agreement substantially in the form of Exhibit L (appropriately completed).

 

“Authorized Financial Officer” of any Credit Party shall mean any of the Chief
Financial Officer, the Treasurer or the Chief Accounting Officer of such Credit
Party or any other officer of such Credit Party designated in writing to the
Administrative Agent by any of the foregoing officers of such Credit Party as
being authorized to act in such capacity so long as such

 

7

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other officer is a financial person who works in such Credit Party’s
controller’s or accounting office.

 

“Authorized Officer” of any Credit Party shall mean any of the Chief Executive
Officer, the President, the Chief Operating Officer, any Authorized Financial
Officer or any Vice-President of such Credit Party or any other officer of such
Credit Party which is designated in writing to the Administrative Agent by any
of the foregoing officers of such Credit Party as being authorized to give
notices under this Agreement.

 

“BA Discount Proceeds” shall mean, in respect of any Bankers’ Acceptance to be
purchased by a Canadian Lender on any date pursuant to Section 2.01 and Schedule
III hereto, an amount rounded to the nearest whole Canadian cent, and with
one-half of one Canadian cent being rounded up, calculated on such day by
dividing:

 

(a) the Face Amount of such Banker’s Acceptance; by

 

(b) the sum of one plus the product of:

 

(i) the respective Canadian Lender’s Discount Rate (expressed as a decimal)
applicable to such Bankers’ Acceptance; and

 

(ii) a fraction, the numerator of which is the number of days in the term of
maturity of such Banker’s Acceptance and the denominator of which is 365;

 

with such product being rounded up or down to the fifth decimal place and
.000005 being rounded up.

 

“Bank of America” shall mean Bank of America, N.A., in its individual capacity.

 

“Bankers’ Acceptance” shall mean a Draft accepted by a Canadian Lender pursuant
to Section 2.01 and Schedule III hereto.

 

“Bankers’ Acceptance Loans” shall mean the creation and discount of Bankers’
Acceptances as contemplated in Section 2.01 and Schedule III hereto.

 

“Bankruptcy Code” shall have the meaning provided in Section 12.05.

 

“Base Rate” at any time shall mean the higher of (i) 1/2 of 1% plus the
overnight Federal Funds Rate and (ii) the Prime Lending Rate.

 

“Base Rate Loan” shall mean each Dollar Revolving Loan designated or deemed
designated as such by the respective Borrower at the time of the incurrence
thereof or conversion thereto.

 

“Borrowers” shall mean and include (i) the U.S. Borrower, and (ii) all Canadian
Revolving Loan Borrowers. Each reference in this Agreement or any other Credit
Document to any “Borrower” shall mean, if the respective reference relates to
the Obligations of a Borrower

 

8

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

or its liabilities to make payments of principal, interest, fees or other
amounts with respect to any outstanding Obligation, the respective Person which
is the Borrower of the respective Revolving Loans in the case of Canadian
Revolving Loans, or the Persons jointly and severally acting as the Borrower
with respect thereto, in the case of Dollar Revolving Loans or Letter of Credit
Outstandings. Each other reference in this Agreement or any other Credit
Document to a Borrower (including without limitation for purposes of the
representations and warranties, covenants and events of default) shall mean,
unless the context otherwise indicates, any Person which, either individually or
jointly and severally, is a Borrower hereunder (including the U.S. Borrower and
each Canadian Revolving Loan Borrower).

 

“Borrowing” shall mean the borrowing on a given date by a Borrower of one Type
and Tranche of Revolving Loan (or resulting from a conversion or conversions on
such date) and having in the case of Eurodollar Loans the same Interest Period,
provided that Base Rate Loans incurred pursuant to Section 2.11(b) shall be
considered part of the related Borrowing of Eurodollar Loans.

 

“Business Day” shall mean (i) for all purposes other than as covered by clause
(ii) or clause (iii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close, (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the London interbank market and which shall not be a legal holiday or a
day on which banking institutions are authorized or required by law or other
government action to close in the city where the applicable Payment Office of
the Administrative Agent is located in respect of Eurodollar Loans and (iii)
solely for purposes of Canadian Revolving Loans, any day except Saturday, Sunday
and any day which shall be in Toronto, Ontario, Canada a legal holiday or a day
on which banking institutions are authorized or required by law or other
government action to close.

 

“Calculation Period” shall mean the period of four consecutive fiscal quarters
last ended before the date of the respective event or incurrence which requires
calculations to be made on a Pro Forma Basis and for which financial information
of the kind referred to in Sections 10.11(a) and (b) is available.

 

“Canadian Commitment Commission” shall have the meaning provided in Section
4.01(a).

 

“Canadian Dollar Equivalent” shall mean, at any time for the determination
thereof, the amount of Canadian Dollars which could be purchased with the amount
of Dollars involved in such computation at the spot rate of exchange therefor as
quoted by the Person serving as the Administrative Agent as of 11:00 A.M. (New
York time) on the date two Business Days prior to the date of any determination
thereof for purchase on such date.

 

“Canadian Dollar Revolving Loan Sub-Commitment” shall mean, as to any Canadian
Lender, such Lender’s Canadian RL Percentage of the Total Canadian Dollar
Revolving Loan Sub-Commitment as determined pursuant to Sections 2.18(a), (b),
(c) and (e)

 

9

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

from time to time. The Canadian Dollar Revolving Loan Sub-Commitments of the
Canadian Lenders in no event may exceed the Maximum Canadian Dollar Revolving
Loan Sub-Commitments of the Canadian Lenders.

 

“Canadian Dollar Revolving Notes” shall have the meaning provided in Section
2.06(a).

 

“Canadian Dollars” and “Cdn $” shall mean freely and transferable lawful money
of Canada.

 

“Canadian Facility Valuation Date” shall mean each date set forth on Schedule
C-1 hereto (or, if such date is not a Business Day, the next Business Day
immediately following such date); provided, however if the U.S. Borrower elects
to change its fiscal quarters to end on March 31, June 30, September 30 and
December 31, each such date (or, if such date is not a Business Day, the next
Business Day immediately following such date) shall thereafter become the
Canadian Facility Valuation Dates in lieu of the dates set forth on Schedule
C-l.

 

“Canadian Lender” shall mean (i) each Lender listed on Schedule I-B, and (ii)
each additional Person that becomes a Canadian Lender party hereto as a lender
in Canada to any Canadian Revolving Loan Borrower under the Maximum Canadian
Dollar Revolving Loan Sub-Commitments in accordance with Section 2.14 or
14.03(b) (provided that a Canadian Lender must be (x) a person resident in
Canada for purposes of the Income Tax Act (Canada), (y) an authorized foreign
bank which at all times holds all of its interest in any Canadian Obligations in
the course of its Canadian banking business for purposes of subsection 212(13.3)
of the Income Tax Act (Canada) or (z) able to establish to the satisfaction of
the Canadian Revolving Loan Borrowers and the Administrative Agent based on
applicable law in effect on the Effective Date or on such later date on which it
becomes a Canadian Lender that such Lender is not subject to deduction or
withholding of Canadian Taxes with respect to any payments to such Lender of
interest, fees, commissions, or any other amount payable by any Canadian
Revolving Loan Borrower under the Credit Documents, on the Effective Date or
such other date on which it becomes a Canadian Lender), in each case, in their
capacities as lenders in Canada to the Canadian Revolving Loan Borrowers under
the Maximum Canadian Dollar Revolving Loan Sub-Commitments. A Canadian Lender
shall cease to be a “Canadian Lender” when it has assigned all of its Maximum
Canadian Dollar Revolving Loan Sub-Commitment in accordance with Section 2.14
and/or 14.03(b). For purposes of this Agreement, (x) unless the context
otherwise indicates, each reference to a Canadian Lender which has one or more
affiliates which act as a Canadian Lender shall include such affiliate or
affiliates and (y) the terms “Lender” and “RL Lender” include each Canadian
Lender unless the context otherwise requires.

 

“Canadian Obligations” shall have the meaning provided in Section 16.01.

 

“Canadian Prime Rate” shall mean, at any time, the greater of (i) the per annum
rate of interest quoted, published and commonly known as the “prime rate” of
Deutsche Bank AG, Canada Branch which Deutsche Bank AG, Canada Branch
establishes at its main office in Toronto, Ontario as the reference rate of
interest in order to determine interest rates for commercial loans in Canadian
Dollars to its Canadian borrowers, adjusted automatically with each quoted or
published change in such rate, all without necessity of any notice to any
Borrower

 

10

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or any other Person and (ii) the sum of (x) the average of the rates per annum
for Canadian Dollar bankers’ acceptances having a term of 30 days that appears
on the Reuters Screen CDOR Page as of 10:00 A.M. (Toronto time) on the date of
determination, as reported by Deutsche Bank AG, Canada Branch (and if such
screen is not available, any successor or similar services may be selected by
Deutsche Bank AG, Canada Branch), and (y) 0.75%.

 

“Canadian Prime Rate Loans” shall mean any Canadian Revolving Loan designated or
deemed designated as such by the respective Canadian Revolving Loan Borrower at
the time of the incurrence thereof or conversion thereof.

 

“Canadian Revolving A Loan” shall have the meaning provided in Section 2.01(a).

 

“Canadian Revolving B Loan” shall have the meaning provided in Section 2.01(b).

 

“Canadian Revolving Loan Borrowers” shall mean Calgary Charlotte Partnership,
HMC Toronto Air Company, HMC Toronto EC Company and HMC AP Canada Company.

 

“Canadian Revolving Loans” shall mean, collectively, all Canadian Revolving A
Loans and Canadian Revolving B Loans.

 

“Canadian RL Percentage” of any Canadian Lender at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Maximum
Canadian Dollar Revolving Loan Sub-Commitment of such Canadian Lender at such
time and the denominator of which is the Total Maximum Canadian Dollar Revolving
Loan Sub-Commitment at such time. Notwithstanding anything to the contrary
contained above, if the Canadian RL Percentage of any Canadian Lender is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Canadian RL Percentages of the Canadian Lenders shall be determined
immediately prior (and without giving effect) to such termination.

 

“Canadian Taxes” shall have the meaning provided in Section 5.04(e).

 

“Capital Expenditures” shall mean, with respect to any Person, without
duplication, all expenditures by such Person which should be capitalized in
accordance with GAAP, including all such expenditures with respect to fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with GAAP) and, without
duplication, the amount of Capitalized Lease Obligations of such Person.

 

“Capital Stock” of any Person shall mean any and all shares, interests, rights
to purchase, warrants, options, and participation or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.

 

“Capitalized Lease Obligations” of any Person shall mean all rental obligations
which are or will be required to be capitalized on the books of such Person, in
each case taken at the amount thereof accounted for as indebtedness in
accordance with GAAP.

 

11

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“Cash Available for Distribution” of any Person for any period shall mean
Consolidated EBITDA of such Person less the sum of (w) 5% of Gross Revenues
received during such period from all Hotel Properties, (x) Consolidated Interest
Expense for such period, (y) scheduled amortization (other than balloon
payments) for such period plus (z) cash Taxes for such period.

 

“Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Lender that
is a commercial bank or (y) any bank whose short-term commercial paper rating
from S&P is at least A-2 or the equivalent thereof or from Moody’s is at least
P-2 or the equivalent thereof (any such bank or Lender, an “Approved Bank”), in
each case with maturities of not more than one year from the date of
acquisition, (iii) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper rating of
at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody’s, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody’s, as the case may be, and in each case maturing within one
year after the date of acquisition, (iv) marketable direct obligations issued by
the District of Columbia or any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either S&P
or Moody’s and (v) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(i) through (iv) above.

 

“CDOR” shall mean, for any day and relative to Bankers’ Acceptances having any
specified term, the arithmetic average of the bid rates of interest (expressed
as an annual percentage rate) rounded to the nearest one-hundred-thousandth of
one percent (with 0.000005 being rounded up) for Canadian Dollar bankers’
acceptances having a term to maturity equal to such specified term (or a term as
closely as possible comparable to such specified term) of those of Bank of
Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Bank of
Nova Scotia and The Toronto-Dominion Bank that appears on the Reuters Screen
CDOR Page as of 10:00 A.M. (Toronto time) on such day (or, if such day is not a
Business Day, as of 10:00 A.M. on the next preceding Business Day), provided
that if fewer than two such bid rates appear on the Reuters Screen CDOR Page as
of such time on such day, CDOR for such day will be the arithmetic average of
the bid rates of interest (expressed as an annual percentage rate and rounded as
set forth above) for Canadian Dollar bankers’ acceptances, with a term to
maturity equal to such specified term (or a term as closely as possible
comparable to such specified term) for same day settlement as quoted by such of
the principal Toronto offices of Bank of Montreal, Canadian Imperial Bank of
Commerce, Royal Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion
Bank as may quote such a rate as of 10:00 A.M. (Toronto time) on such day as
determined by the Administrative Agent.

 

12

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“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. §
9601 et seq.

 

“Change of Control” shall mean (i) HMC shall at any time cease to own 100% of
the general partnership interests of the U.S. Borrower, (ii) any Person or group
(as such term is defined in Section 13(d)(3) of the Securities Exchange Act)
other than an Excluded Person is or becomes the “beneficial owner,” directly or
indirectly, of more than 50% of the total voting power in the aggregate of all
classes of Relevant Capital Stock of the U.S. Borrower (or HMC for so long as
HMC is a parent of the U.S. Borrower immediately prior to such transaction or
series of related transactions) then outstanding normally entitled to vote in
elections of directors, managers or trustees, as applicable, (iii) during any
period of 12 consecutive months after the Effective Date (for so long as HMC is
a parent of the U.S. Borrower immediately prior to such transaction or series of
related transactions), Persons who at the beginning of such 12-month period
constituted the board of HMC (together with any new Persons whose election was
approved by a vote of a majority of the Persons then still comprising the board
who were either members of the board at the beginning of such period or whose
election, designation or nomination for election was previously so approved)
cease for any reason to constitute a majority of the board of directors of HMC
then in office or (iv) any “change of control” or similar event shall occur
under any Qualified Preferred Stock, the Senior Notes or any other Indebtedness
(other than Non-Recourse Indebtedness) of HMC or the U.S. Borrower with an
aggregate principal amount of $50,000,000 or more which results in a default
under such Indebtedness beyond the period of grace (if any) or a declaration of
such Indebtedness to be due and payable prior to the scheduled maturity thereof.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.

 

“Collateral” shall mean all “Collateral” as defined in the Pledge and Security
Agreement or any other Security Document and all cash and Cash Equivalents
delivered as collateral pursuant to Section 3, 5.02 or 12.

 

“Collateral Agent” shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Pledge and Security Agreement.

 

“Collateral Release Date” shall have the meaning provided in Section 10.15(d).

 

“Commitment” shall mean any of the commitments of any Lender.

 

“Commitment Commission” shall have the meaning provided in Section 4.01(a).

 

“Consolidated” or “consolidated” shall mean, with respect to any Person, the
consolidation of the accounts of the Subsidiaries of such Person with those of
such Person; provided that “consolidation” will not include consolidation of the
accounts of any other Person other than a Subsidiary of such Person with such
Person (it being understood that the accounts of such Person’s Consolidated
Subsidiaries shall be consolidated only to the extent of such Person’s

 

13

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proportionate interest therein). The terms “consolidated” and “consolidating”
have correlative meanings to the foregoing.

 

“Consolidated EBITDA” shall mean, for any Person and for any period on a Pro
Forma Basis, the Consolidated Net Income of such Person for such period adjusted
to add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, (A) the sum of (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income (to the extent of
such Person’s proportionate interest therein), (iii) depreciation and
amortization expense (to the extent of such Person’s proportionate interest
therein), (iv) any other noncash items reducing the Consolidated Net Income of
such Person for such period (to the extent of such Person’s proportionate
interest therein), (v) any dividends or distributions during such period to such
Person or a Consolidated Subsidiary of such Person (to the extent of such
Person’s proportionate interest therein) from any other Person which is not a
Subsidiary of such Person or which is accounted for by such Person by the equity
method of accounting, to the extent that such dividends or distributions are not
included in the Consolidated Net Income of such Person for such period and (vi)
any cash receipts of such Person or a Consolidated Subsidiary of such Person (to
the extent of such Person’s proportionate interest therein) during such period
that represent items included in Consolidated Net Income of such Person for a
prior period which were excluded from Consolidated EBITDA of such Person for
such prior period by virtue of clause (B) of this definition, minus (B) the sum
of (i) all non-cash items increasing the Consolidated Net Income of such Person
(to the extent of such Person’s proportionate interest therein) for such period
and (ii) any cash expenditures of such Person (to the extent of such Person’s
proportionate interest therein) during such period to the extent such cash
expenditures (a) did not reduce the Consolidated Net Income of such Person for
such period and (b) were applied against reserves or accruals that constituted
noncash items reducing the Consolidated Net Income of such Person (to the extent
of such Person’s proportionate interest therein) when reserved or accrued; all
as determined on a consolidated basis for such Person and its Consolidated
Subsidiaries (it being understood that the accounts of such Person’s
Consolidated Subsidiaries shall be consolidated only to the extent of such
Person’s proportionate interest therein).

 

“Consolidated Fixed Charge Coverage Ratio” shall mean, for any period, the ratio
of (x) Consolidated EBITDA for such period, less the sum for such period of (a)
5% of Gross Revenues received from Hotel Properties and (b) 3% of Gross Revenues
received from all other real estate to (y) Consolidated Fixed Charges for such
period.

 

“Consolidated Fixed Charges” shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period, (ii) to the extent that same does
not otherwise constitute Consolidated Interest Expense, all interest expense on
the QUIPs Debt for such period on a Pro Forma Basis, (iii) preferred stock
dividends (or the equivalent thereof) accrued and/or paid in cash by the U.S.
Borrower during such period on a Pro Forma Basis, (iv) scheduled amortization
payments (other than balloon payments) during such period and (v) cash taxes on
ordinary income for such period.

 

“Consolidated Interest Coverage Ratio” shall mean, for any period, the ratio of
(x) Consolidated EBITDA for such period to (y) Consolidated Interest Expense.

 

14

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“Consolidated Interest Expense” of any Person shall mean, for any period on a
ProForma Basis, the aggregate amount (without duplication and determined in each
case on a consolidated basis) of (a) interest expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued (including, in accordance with the
following sentence, interest attributable to Capitalized Lease Obligations but
excluding (x) the amortization of fees or expenses incurred in order to
consummate the sale of the Senior Notes or to establish the credit facility
implemented under this Agreement, (y) any interest expense on the QUIPs Debt
unless the principal of the QUIPs Debt has become due and payable and has not
been paid, and (z) amounts attributable to the prepayment of Indebtedness
(including prepayment premiums) and acceleration of deferred financing costs),
of such Person and its Consolidated Subsidiaries during such period, including
(i) original issue discount and noncash interest payments or accruals on any
Indebtedness, (ii) the interest portion of all deferred payment obligations, and
(iii) all commissions, discounts and other fees and charges owed with respect to
bankers’ acceptances and letter of credit financings and Interest Rate
Protection Agreements and Other Hedging Agreements, in each case to the extent
attributable to such period, and (b) dividends accrued or payable by such Person
or any of its Consolidated Subsidiaries in respect of Disqualified Stock (other
than by Subsidiaries of such Person to such Person or, to the extent of such
Person’s proportionate interest therein, such Person’s Subsidiaries); provided,
however, that any such interest, dividends or other payments or accruals
(referenced in clauses (a) or (b)) of a Consolidated Subsidiary that is not a
Wholly-Owned Subsidiary shall be included only to the extent of the
proportionate interest of the referent Person in such Consolidated Subsidiary.
For purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by the U.S.
Borrower to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP, and (y) interest expense attributable to any
Indebtedness represented by the guaranty by such Person or a Subsidiary of such
Person of an obligation of another Person shall be deemed to be the interest
expense attributable to the Indebtedness guaranteed.

 

“Consolidated Net Income” shall mean, with respect to any Person for any period,
the net income (or loss) of such Person and its Consolidated Subsidiaries for
such period, determined on a consolidated basis (it being understood that the
net income of Consolidated Subsidiaries shall be consolidated with that of a
Person only to the extent of the proportionate interest of such Person in such
Consolidated Subsidiaries); provided that (i) net income (or loss) of any other
Person which is not a Subsidiary of the Person, or that is accounted for by such
specified Person by the equity method of accounting, shall be included only to
the extent of the amount of dividends or distributions paid to the specified
Person or a Subsidiary of such Person, (ii) the net income (or loss) of any
other Person acquired by such specified Person or a Subsidiary of such Person in
a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iii) all gains and losses which are (x)
extraordinary (as determined in accordance with GAAP), (y) unusual or
nonrecurring (including any gain from the sale or other disposition of assets or
from the issuance or sale of any Capital Stock) or (z) resulting from the
prepayment of Indebtedness (including prepayment premiums) and acceleration of
deferred financing costs shall be excluded, and (iv) the net income, if
positive, of any of such Person’s Consolidated Subsidiaries other than
Consolidated Subsidiaries that are not Guarantors to the extent that the
declaration or payment of dividends or similar distributions is not at the time
permitted by operation of the terms of its charter or bylaws or any other
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Consolidated Subsidiary shall be excluded;
provided, however, in the case of

 

15

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exclusions from Consolidated Net Income set forth in clauses (ii), (iii) and
(iv), such amounts shall be excluded only to the extent included in computing
such net income (or loss) on a consolidated basis and without duplication;
provided, further, that Consolidated Net Income for any period shall be
increased by the amount of any insurance proceeds in respect of any Hotel
Property or other Real Property received by the U.S. Borrower or any of its
Subsidiaries for business interruption or time element losses for such period to
the extent that such Insurance Proceeds have not already been included in the
computation of such Consolidated Net Income for such period.

 

“Consolidated Total Debt” shall mean, at any time, the difference, if positive,
of (x) the sum of (without duplication) (i) the amount of all Indebtedness of
the U.S. Borrower and its Subsidiaries (other than the QUIPs Debt unless the
principal thereof has become due and payable and has not been paid) as would be
required to be reflected on the liability side of a balance sheet prepared in
accordance with GAAP and determined on a consolidated basis at such time (it
being understood that the amounts of Indebtedness of Subsidiaries shall be
consolidated with that of the U.S. Borrower only to the extent of the U.S.
Borrower’s interest in such Subsidiaries) and (ii) guarantees of third party
debt, letters of credit issued to support third party debt and secured
obligations in favor of hotel managers in connection with jointly funded hotel
renovations, less (y) the sum of (i) unrestricted cash on hand (excluding any
amounts of cash on hand that have been designated by the U.S. Borrower for
application to prepay Indebtedness described in clause (y)(iii)) in excess of
$100,000,000 plus (ii) the Leisure Park Guarantee Exclusion Amount plus (iii)
any Indebtedness outstanding on the date of determination in respect of which an
irrevocable prepayment notice has been delivered that results in such
Indebtedness being due and payable not later than 30 days after such prepayment
notice, to the extent the U.S. Borrower either shall have unrestricted cash
reserves for such payment or shall have committed cash reserves for such payment
pursuant to a deposit arrangement or otherwise.

 

“Contingent Obligation” shall mean any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm’s-length
terms and are entered into in the ordinary course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term “Contingent Obligation” shall not
include endorsements for collection or deposit in the ordinary course of
business or, for all purposes of this Agreement other than determining
compliance with Section 11.02(ii) or computing the Applicable Margin with
respect to any Revolving Loan, the Leisure Park Guarantee Exclusion Amount;
provided, further, that if the U.S. Borrower or a Subsidiary has received a
letter of credit or other similar credit support from a bank or a Person with a
long term unsecured credit rating of at least “BBB-” or higher from S&P or “Baa”
from Moody’s (or, if not from a Person that has a rating, a Person that, in the
sole discretion of the Required Lenders, is capable of performing and will
perform its obligations under such credit support) or cash collateral in which
the U.S. Borrower or such Subsidiary has a first priority perfected security
interest and which is immediately

 

16

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available to the U.S. Borrower or such Subsidiary in the event of a payment by
it under the related Contingent Obligation (or cash collateral has been
deposited with the obligee (or a trustee for such obligee) under such Contingent
Obligation under similar circumstances, including a defeasance trust), the
amount of the Contingent Obligation shall be reduced by the amount payable under
such letter of credit or other similar credit support but only so long as such
letter of credit or other similar credit support or cash collateral remains in
effect and meets such requirements or such Person providing the credit support
satisfies such criteria.

 

“Contractual Obligation” of any Person means any obligation, agreement,
undertaking or similar provision of any security issued by such Person or of any
agreement (including. without limitation, any management or franchise
agreement), undertaking, contract, lease, indenture, mortgage, deed of trust or
other instrument (excluding a Credit Document) to which such Person is a party
or by which it or any of its property is bound or to which any of its properties
is subject.

 

“Covenant Amendment Effective Date” shall mean the date specified in a
certificate delivered by an Authorized Officer of the U.S. Borrower to the
Administrative Agent as the date on which (a) the amendments in the U.S.
Borrower’s Twelfth Supplemental Indenture became the most restrictive covenants
relating to Indebtedness issued under the Senior Note Indenture, and (b) as of
such specified date no Default or Event of Default has occurred and is
continuing (other than solely as a result of a breach of covenants to the extent
that such breach will no longer exist under this Agreement after giving effect
to the modification of any covenants hereunder (including any such covenants
incorporated by reference) resulting from the occurrence of the Covenant
Amendment Effective Date). In the event that the U.S. Borrower is not able to
make the certification set forth in clause (a) above as a result of the
existence of a supplemental indenture delivered subsequent to the date of the
Twelfth Supplemental Indenture that contains certain covenants that are more
restrictive than covenants included in the Twelfth Supplemental Indenture, (i)
the U.S. Borrower may, in lieu of making the certification set forth in clause
(a) above, deliver a certificate describing such more restrictive covenants in
reasonable detail and certifying that, except for such specified covenants, the
covenants contained in the Twelfth Supplemental Indenture constitute the most
restrictive covenants relating to indebtedness issued under the Senior Note
Indenture. In such event, the Required Lenders shall, within 30 days after
receipt of the certification, at their election, determine whether the covenants
set forth in the Twelfth Supplemental Indenture or in such later supplemental
indenture shall take effect as the Amended Senior Note Indenture. In the event
no election is made by the Required Lenders, the Amended Senior Note Indenture
shall be deemed to be the Senior Note Indenture giving effect to the amendments
set forth in such more restrictive supplemental indenture.

 

“Credit Documents” shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Revolving Note,
each Bankers’ Acceptance, the Subsidiaries Guaranty, the Pledge and Security
Agreement and any other guaranties, pledge agreements or additional security
documents executed and delivered in accordance with the requirements of Section
10.14 or 10.15.

 

“Credit Event” shall mean the making of any Revolving Loan or the issuance of
any Letter of Credit. For clarity, it does not include continuations of
Borrowings or conversions

 

17

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of outstanding Revolving Loans from (a) one Type to another or (b) one Tranche
to another, in each case except to the extent additional Borrowings are made.

 

“Credit Party” shall mean each Borrower and each Guarantor.

 

“Credit Party Subsidiary” shall mean each Person which is a Subsidiary of any
Credit Party.

 

“Customary Non-Recourse Exclusions” shall mean usual and customary exceptions
and non-recourse carve-outs in non-recourse debt financings of Real Property and
other carve-outs appropriate in the good faith determination of the U.S.
Borrower to the financing, including, without limitation, exceptions by reason
of (i) any fraudulent misrepresentation made by the U.S. Borrower or any of its
Subsidiaries in or pursuant to any document evidencing any Indebtedness, (ii)
any unlawful act on the part of the U.S. Borrower or any of its Subsidiaries in
respect of the Indebtedness or other liabilities of any Subsidiary of the U.S.
Borrower, (iii) any waste or misappropriation of funds by the U.S. Borrower or
any of its Subsidiaries in contravention of the provisions of the Indebtedness
or other liabilities of any Subsidiary, (iv) customary environmental indemnities
associated with the Real Property of any Subsidiary of the U.S. Borrower, (v)
voluntary bankruptcy, or (vi) failure of the U.S. Borrower or any of its
Subsidiaries to comply with applicable special purpose entity covenants but
excluding exceptions by reason of (a) non-payment of the debt incurred in such
non-recourse financing, (b) non-payment of such debt arising out of the
voluntary bankruptcy of the relevant Subsidiary of the U.S. Borrower or (c) the
failure of the relevant Subsidiary of the U.S. Borrower to comply with financial
covenants.

 

“DBTCA” shall mean Deutsche Bank Trust Company Americas in its individual
capacity.

 

“Default” shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

 

“Determination Date” shall have the meaning provided in the definition of “Pro
Forma Basis”.

 

“Discount Rate” shall mean, as at any Drawing Date, the discount rate, expressed
as a rate per annum, which the Administrative Agent determines (i) in the case
of a Canadian Lender which is named in Schedule I to the Bank Act (Canada), as
CDOR for such Drawing Date, and (ii) in the case of a Canadian Lender which is
named in Schedule II or III to the Bank Act ( Canada), as the discount rate
(expressed to two decimal places and rounded upward, if not an increment of
1/100th of 1%, the nearest 0.01%) quoted by such Canadian Lender as the
percentage discount rate at which such Canadian Lender would, in accordance with
its normal practice, at or about 10:00 A.M. (Toronto time) on such date, be
prepared to purchase bankers’ acceptances having a face amount and term
comparable to the Face Amount and term of such Bankers’ Acceptance, provided
however that no Discount Rate calculated pursuant to this clause

 

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(ii) shall exceed the Discount Rate calculated pursuant to clause (i) above in
respect of the same issue of Bankers’ Acceptances plus 0.10% per annum.

 

“Disqualified Stock” shall have the meaning provided in the Governing Senior
Note Indenture.

 

“Dividends” with respect to any Person shall mean that such Person has declared
or paid a dividend or returned any equity capital to its stockholders, partners
or members or authorized or made any other distribution, payment or delivery of
property (other than common stock or other common equity interests of such
Person or Qualified Preferred Stock of HMC or the U.S. Borrower) or cash to its
stockholders, partners or members in their capacity as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock or any other equity
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
interest), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock or any partnership
interests of such Person outstanding on or after the Effective Date (or any
options or warrants issued by such Person with respect to its capital stock or
other equity interest).

 

“Dollar Equivalent” of an amount denominated in Canadian Dollars shall mean, at
any time for the determination thereof, the amount of Dollars which could be
purchased with the amount of Canadian Dollars involved in such computation at
the spot exchange rate therefor as quoted by the Person serving as the
Administrative Agent as of 11:00 A.M. (New York time) on the date two Business
Days prior to the date of any determination thereof for purchase on such date;
provided that (1) for purposes of Section 2.17, the Dollar Equivalent of any
amount expressed in Canadian Dollars shall be the amount of Dollars that the
Administrative Agent determines, based upon the actual exchange rates which the
Administrative Agent believes can be obtained on the date of conversion pursuant
to Section 2.17, would be required to be paid in Dollars to purchase such amount
of Canadian Dollars and (2) for purposes of (x) determining compliance with
Sections 2.01, 3.02(a), 5.02(a)(i), 5.02(a)(ii) and 5.02(a)(iii) and (y)
calculating Fees pursuant to Section 4.01, the Dollar Equivalent of any amounts
expressed in Canadian Dollars shall be revalued on a quarterly basis on each
Canadian Facility Valuation Date using the spot exchange rate therefor quoted in
the Wall Street Journal on such date; provided that, at any time during a
calendar quarter, if the full principal amount of Canadian Revolving Loans
(including, without limitation, the Face Amount of Banker’s Acceptances)
permitted to be incurred pursuant to this Agreement (i.e., up to the full amount
of the respective Canadian Dollar Revolving Loan Sub-Commitments as then in
effect) were incurred, and if the Dollar Equivalent as recalculated based on the
exchange rate therefor quoted in the Wall Street Journal on the respective date
of determination pursuant to this exception would result in an increase in the
Dollar Equivalent as then in effect of such amounts of 10% or more, then at the
discretion of the Administrative Agent or at the request of the Required
Lenders, the Dollar Equivalent shall be reset based upon the exchange rates
quoted on such date in the Wall Street Journal, which rates shall remain in
effect until the last Business Day of such calendar quarter or such earlier
date, if any, as the rate is reset pursuant to this proviso. Notwithstanding
anything to the contrary contained in this definition, at any time that a
Specified Default or an Event of Default then exists, the Administrative Agent
may revalue the Dollar Equivalent of any amounts outstanding

 

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under the Credit Documents in Canadian Dollars at such times as it may determine
in its sole discretion.

 

“Dollar Percentage” of any Lender at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the U.S. Revolving Loan
Sub-Commitment of such Lender at such time and the denominator of which is the
Total U.S. Revolving Loan Sub-Commitment at such time. Notwithstanding anything
to the contrary contained above, if the Dollar Percentage of any Lender is to be
determined after the Total Revolving Loan Commitment has been terminated, then
the Dollar Percentages of the Lenders shall be determined immediately prior (and
without giving effect) to such termination.

 

“Dollar Revolving A Loan” shall have the meaning provided in Section 2.01(a).

 

“Dollar Revolving B Loan” shall have the meaning provided in Section 2.01(b).

 

“Dollar Revolving Loan” means a Dollar Revolving A Loan or a Dollar Revolving B
Loan, as applicable.

 

“Dollar Revolving Note” shall have the meaning provided in Section 2.06(a).

 

“Dollars” and the sign “$” shall each mean freely transferable lawful money of
the United States.

 

“Domestic Subsidiary” shall mean each Subsidiary of the U.S. Borrower
incorporated or organized in the United States or any State or territory
thereof.

 

“Draft” shall mean at any time either a depository bill within the meaning of
the Depository Bills and Notes Act (Canada) or a bill of exchange, within the
meaning of the Bills of Exchange Act (Canada), drawn by any Canadian Revolving
Loan Borrower on a Canadian Lender and bearing such distinguishing letters and
numbers as such Canadian Lender may determine, but which at such time has not
been completed or accepted by such Canadian Lender.

 

“Drawing” shall have the meaning provided in Section 3.05(c).

 

“Drawing Date” shall mean any Business Day fixed pursuant to Schedule III for
the creation and purchase of Bankers’ Acceptances by a Canadian Lender pursuant
to Schedule III.

 

“Effective Date” shall have the meaning provided in Section 14.09.

 

“Eligible Transferee” shall mean and include a commercial bank, a financial
institution, any fund that invests in bank loans and any other “accredited
investor” (as defined in Regulation D under the Securities Act).

 

“End Date” shall mean, for any Margin Reduction Period, the last day of such
Margin Reduction Period.

 

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“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings arising
under any Environmental Law or any permit issued under any Environmental Law
(hereafter, “Claims”), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief arising from alleged injury to human health, safety or the
environment due to the presence of Hazardous Materials.

 

“Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment or relating to
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et
seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. § 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. § 651 et seq. (to the extent it regulates occupational
exposure to Hazardous Materials); and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
which together with the U.S. Borrower or a Subsidiary of the U.S. Borrower would
be deemed to be a “single employer” within the meaning of Section 414(b) or (c)
or, for purposes of Section 412 of the Code, Section 414(m) or (o) of the Code.

 

“Eurodollar Business Day” shall mean a Business Day on which commercial banks in
London, England and Frankfurt, Germany are open for domestic and international
business.

 

“Eurodollar Loan” shall mean each Dollar Revolving Loan designated as such by
the U.S. Borrower at the time of the incurrence thereof or conversion thereto.

 

“Eurodollar Rate” shall mean, with respect to any Eurodollar Loan for the
Interest Period applicable to such Eurodollar Loan, the rate per annum that is
obtained by dividing (a) (i) the rate per annum for such Interest Period and for
an amount equal to the amount of such

 

21

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Eurodollar Loan shown on Dow Jones Telerate Page 3750 (or any equivalent
successor page) at approximately 11:00 A.M. (London time) two Eurodollar
Business Days prior to the first day of such Interest Period, (ii) in the event
the rate referenced in the preceding clause (i) is not quoted, the arithmetic
average as determined by the Administrative Agent of the rates at which deposits
in immediately available Dollars in an amount equal to the amount of such
Eurodollar Loan having a maturity approximately equal to such Interest Period
are offered to four reference banks to be selected by the Administrative Agent
in the London interbank market, at approximately 11:00 A.M. (London time) two
Eurodollar Business Days prior to the first day of such Interest Period, by (b)
a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).

 

“Event of Default” shall have the meaning provided in Section 12.

 

“Excess Proceeds” shall have the meaning provided in Section 5.02(b).

 

“Excess Usage Amount” means, as of any determination date, the amount by which
the Aggregate Revolving A Credit Exposure exceeds the availability limitation in
effect under Section 2.01(a)(vii) on such date.

 

“Excess Usage Premium” shall mean the respective percentage per annum set forth
below opposite the respective Excess Usage Amount.

 

Excess Usage Amount

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

   Excess Usage
Premium

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

 

Less than or equal to $100,000,000

   0.25 %

Greater than $100,000,000 but equal to or less than $200,000,000

   0.50 %

Greater than $200,000,000 but equal to or less than $300,000,000

   0.75 %

Greater than $300,000,000

   1.00 %

 

“Excluded Person” shall mean, in the case of the U.S. Borrower, HMC or any
Wholly-Owned Subsidiary of HMC.

 

“Exempted Affiliate Transactions” shall have the meaning provided in Section
11.07.

 

“Existing Indebtedness” shall have the meaning provided in Section 8.20.

 

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“Face Amount” shall mean, in respect of a Bankers’ Acceptance, the amount
payable to the holder thereof on its maturity. The Face Amount of any Bankers’
Acceptance Loan shall be equal to the Face Amounts of the underlying Bankers’
Acceptances.

 

“Facing Fee” shall have the meaning provided in Section 4.01(c).

 

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

 

“Fees” shall mean all amounts payable pursuant to or referred to in Section
4.01.

 

“FF&E” shall mean, with respect to any Hotel Property, any furniture, fixtures
and equipment, including any beds, lamps, bedding, tables, chairs, sofas,
curtains, carpeting, smoke detectors, mini bars, paintings, decorations,
televisions, telephones, radios, desks, dressers, towels, bathroom equipment,
heating, cooling, lighting, laundry, incinerating, loading, swimming pool,
landscaping, garage and power equipment, machinery, engines, vehicles, fire
prevention, refrigerating, ventilating and communications apparatus, carts,
dollies, elevators, escalators, kitchen appliances, restaurant equipment,
computers, reservation systems, software, cash registers, switchboards, cleaning
equipment or other items of furniture, fixtures and equipment typically used in
hotel properties (including furniture, fixtures and equipment used in guest
rooms, lobbies and common areas (other than those items of furniture, fixtures
and equipment owned by the occupant or tenant in any such room)).

 

“Final Proceeds Application Date” shall have the meaning set forth in Section
5.02(c).

 

“Financial Condition Test” shall mean, with respect to any acquisition,
Investment or issuance of capital stock, the requirement that at the time of
such acquisition, Investment or issuance of capital stock (a) no Specified
Default or Event of Default then exists or would result therefrom and, (b) based
on calculations made by the U.S. Borrower on a Pro Forma Basis after giving
effect to such acquisition, Investment or issuance of capital stock and as if
such acquisition, Investment or issuance of capital stock had occurred on the
first day of the respective Calculation Period, no Default or Event of Default
will exist in respect of, or would have existed during the Test Period last
reported (or required to be reported pursuant to Section 10.11(a) or 10.11(b),
as the case may be) prior to the date of the respective acquisition, Investment
or issuance of capital stock in respect of, the financial covenants contained in
Sections 9.01 through 9.03, inclusive.

 

“Foreign Pension Plan” shall mean any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States by any Borrower or any one or more of its Subsidiaries
primarily for the benefit of

 

23

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employees of such Borrower or such Subsidiaries residing outside the United
States of America, which plan, fund or other similar program provides, or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code and which Plan, fund or similar program
could result in liability or other obligation or lien to any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate.

 

“Foreign Subsidiary” shall mean each Subsidiary of the U.S. Borrower other than
a Domestic Subsidiary.

 

“Franchise Agreements” shall mean all franchise or similar agreements entered
into with respect to a Hotel Property.

 

“GAAP” shall mean (A) except as provided in clause (B), generally accepted
accounting principles in the United States of America as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are in effect on the Effective Date and consistent with those
used in the preparation of the audited consolidated financial statements of the
U.S. Borrower and its Subsidiaries referred to in Section 8.05(a), and (B) in
the case of any computations made under Section 5.02(b), 9.04, 11.10(b) (other
than the computation of the Leverage Ratio) and 11.11(b) (other than the
computation of the Leverage Ratio) means generally accepted accounting
principles in the United States of America as in effect as of August 5, 1998,
including, without limitation, those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession in the United
States of America.

 

“Governing Senior Note Indenture” shall mean (a) initially, the Senior Note
Indenture and (b) upon and after the occurrence of the Covenant Amendment
Effective Date, the Amended Senior Note Indenture.

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity duly exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

 

“Gross Revenues” shall mean all revenues and receipts of every kind derived by
U.S. Borrower and its Consolidated Subsidiaries from operating a Hotel Property
or other real estate and parts thereof (it being understood that the revenues
and receipts of Consolidated Subsidiaries shall be included in the Gross
Revenues of a Person only to the extent of the proportionate interest of such
Person in such Consolidated Subsidiaries), including, but not limited to: income
(from both cash and credit transactions), before commissions and discounts for
prompt or cash payments, from rentals or sales of rooms, stores, offices,
meeting space, exhibit space or sales space of every kind; license, lease and
concession fees and rentals (not including gross receipts of licensees, lessees
and concessionaires); net income from vending

 

24

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machines; health club membership fees; food and beverage sales; sales of
merchandise (other than proceeds from the sale of FF&E no longer necessary to
the operation of such Hotel Property or other real estate); service charges, to
the extent not distributed to the employees at such Hotel Property or other real
estate as, or in lieu of, gratuities; and proceeds, if any, from business
interruption or other loss of income insurance; provided, however, that Gross
Revenues shall not include the following: gratuities to employees of such Hotel
Property or other real estate, federal, state or municipal excise, sales, use or
similar taxes collected directly from tenants, patrons or guests or included as
part of the sales price of any goods or services; insurance proceeds (other than
proceeds from business interruption or other loss of income insurance);
condemnation proceeds; or any proceeds from any sale of such Hotel Property or
other real estate.

 

“Guarantor” shall mean and include (i) the U.S. Borrower and (ii) each
Subsidiary of the U.S. Borrower which executes and delivers the Subsidiaries
Guaranty, or a counterpart thereof, as required by Section 10.15 or any other
provision of this Agreement; provided that any such Subsidiary shall cease to be
a Guarantor at such time, if any, as it is released from the Subsidiaries
Guaranty in accordance with the express provisions hereof and thereof. As of the
Effective Date, the Guarantors are listed in Part I of Schedule IV.

 

“Guaranty” shall have the meaning provided in Section 16.04.

 

“Hazardous Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definitions of “hazardous substances,” “hazardous waste,” “hazardous
materials,” “extremely hazardous substances,” “restricted hazardous waste,”
“toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or
words of similar import, which are regulated under any applicable Environmental
Law.

 

“HMC” shall mean Host Marriott Corporation, a Maryland corporation.

 

“Hotel” shall mean any Real Property (including Improvements thereon and any
retail, golf, tennis, spa or other resort amenities appurtenant thereto)
comprising an operating facility offering hotel or lodging services.

 

“Hotel Business” shall mean the hotel, resort, extended stay lodging, other
hospitality business, and any and all businesses that in the good faith judgment
of the board of directors of HMC are materially related businesses.

 

“Hotel Property” shall mean each Hotel owned or leased by the U.S. Borrower or
any of its Subsidiaries (including the furniture, fixture and equipment
thereon).

 

“Improvements” shall mean all buildings, structures, fixtures, tenant
improvements and other improvements of every kind and description now or
hereafter located in or on or attached to any Real Property, including all
building materials, water, sanitary and storm sewers, drainage, electricity,
steam, gas, telephone and other utility facilities, parking areas,

 

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roads, driveways, walks and other site improvements; and all additions and
betterments thereto and all renewals, substitutions and replacements thereof.

 

“Indebtedness” shall mean, as to any Person, without duplication (i) all
liabilities and obligations, contingent or otherwise, of such Person, (a) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (b) evidenced
by bonds, notes, debentures or similar instruments, (c) representing the balance
deferred and unpaid of the purchase price of any property or services, except
those incurred in the ordinary course of its business that would constitute
ordinarily a trade payable to trade creditors, (d) evidenced by bankers’
acceptances, (e) for the payment of money relating to a Capitalized Lease
Obligation, or (f) evidenced by a letter of credit or a reimbursement obligation
of such Person with respect to any letter of credit; (ii) all net obligations of
such Person under any Interest Rate Protection Agreement or Other Hedging
Agreement or under any similar type of agreement or arrangement; and (iii) all
liabilities and obligations of others of the kind described in the preceding
clause (i) or (ii) that such Person has guaranteed or that is otherwise its
legal liability or which are secured by any assets or property of such Person.

 

“Interest Determination Date” shall mean, with respect to any Eurodollar Loan,
the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.

 

“Interest Period” shall have the meaning provided in Section 2.10.

 

“Interest Rate Protection Agreement” shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.

 

“Investment” shall mean, with respect to any Person, any direct or indirect
advance, loan or other extension of credit (including without limitation by way
of Contingent Obligation or similar arrangement, but excluding advances to
customers in the ordinary course of business that are, in conformity with GAAP,
recorded as accounts receivable on the consolidated balance sheet of the U.S.
Borrower and its Subsidiaries) or capital contribution to (by means of any
transfer of cash or other property (tangible or intangible) to others or any
payment for property or services solely for the account or use of others, or
otherwise), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person.

 

“IRS” means the Internal Revenue Service, or any successor thereto.

 

“Issuing Bank” shall mean DBTCA.

 

“Judgment Currency” shall have the meaning provided in Section 14.18.

 

“Judgment Currency Conversion Date” shall have the meaning provided in Section
14.18.

 

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“L/C Supportable Obligations” shall mean obligations of the U.S. Borrower or any
of its Subsidiaries incurred in the ordinary course of business and which do not
violate the applicable provisions, if any, of this Agreement.

 

“Leaseholds” of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

 

“Leisure Park Guarantee” shall mean the Guaranty Agreement dated as of December
1, 1997 by HMC in favor of Marine Midland Bank, as trustee, relating to the
$14,700,000 Revenue Bonds (Leisure Park Project), Series 1997A.

 

“Leisure Park Guarantee Exclusion Amount” shall mean up to $14,700,000 of
obligations constituting the Leisure Park Guarantee to the extent that such
obligations are the subject of an undisputed indemnity by Barceló Crestline
Corporation in favor of the U.S. Borrower that is backed by an indemnity from
Senior Housing Properties Trust (but only for such time as Senior Housing
Properties Trust has a long term unsecured non credit-enhanced rating of at
least “Ba2” or higher from Moody’s and “BB” or higher from S&P and the
beneficiary of the Leisure Park Guarantee is not entitled to demand payment
thereunder pursuant to the second paragraph of Section 1 thereof).

 

“Lender” shall mean each financial institution listed on Schedule I-A, as well
as any Person which becomes a “Lender” hereunder pursuant to Section 2.14, 2.16
or 14.03(b). Unless the context otherwise requires, each reference in this
Agreement to a Lender includes each Canadian Lender and, if the reference is to
a specific Lender which has a Revolving Loan Commitment hereunder, shall include
references to any Affiliate of any such Lender which is acting as a Canadian
Lender.

 

“Lender Default” shall mean (i) the wrongful refusal (which has not been
retracted) or the failure of a Lender to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
3.04(c) or to purchase participating interests in Revolving Loans under Section
2.17 or 2.18, or (ii) a Lender having notified in writing any Borrower and/or
the Administrative Agent that such Lender does not intend to comply with its
obligations under Section 2.01 or 3 in circumstances where such non-compliance
would constitute a breach of such Lender’s obligations under the respective
Section.

 

“Letter of Credit” shall have the meaning provided in Section 3.01.

 

“Letter of Credit A” shall have the meaning provided in Section 3.01.

 

“Letter of Credit A Outstandings” shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit A and (ii) the
amount of all Unpaid Drawings in respect of Letters of Credit A.

 

“Letter of Credit B” shall have the meaning provided in Section 3.01.

 

“Letter of Credit B Outstandings” shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit B and (ii) the
amount of all Unpaid Drawings in respect of Letters of Credit B.

 

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“Letter of Credit Fee” shall have the meaning provided in Section 4.01(b).

 

“Letter of Credit Outstandings” shall mean, at any time, the sum of (i) Letter
of Credit A Outstandings plus (ii) Letter of Credit B Outstandings.

 

“Letter of Credit Request” shall have the meaning provided in Section 3.03.

 

“Leverage Ratio” shall mean, at any time, the ratio of (x) Consolidated Total
Debt (excluding QUIPs Debt unless the principal thereof has become due and
payable and has not been paid) at such time to (y) Consolidated EBITDA for the
Test Period then last ended (computed as of the end of such Test Period but on a
Pro Forma Basis for events occurring after the end of such Test Period and on or
prior to the relevant Determination Date).

 

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien,
privilege, hypothecation, other encumbrance or charge of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof or any agreement to give any security interest) upon
or with respect to any property of any kind now owned or hereafter acquired.

 

“Limited Partner Note” shall mean an existing unsecured note of the U.S.
Borrower issued prior to the Effective Date to certain limited partners of a
previous public partnership in which HMC or a Subsidiary thereof was a general
partner.

 

“Look-Through Subsidiary” shall mean a Wholly-Owned Subsidiary of the U.S.
Borrower that is not recognized as existing and is treated as part of the U.S.
Borrower for federal income tax purposes (such as, but not limited to, a single
member limited liability company or a partnership in which the sole partners are
the U.S. Borrower and/or other Look-Through Subsidiaries).

 

“Maintenance Capital Expenditures” shall mean, with respect to any Person, any
Capital Expenditures made in the ordinary course of business for maintenance or
upkeep of the assets of such Person.

 

“Management Agreements” shall mean all agreements with respect to the management
of a Hotel Property or other Real Property owned or leased by the U.S. Borrower
or any of its Subsidiaries. With respect to each Hotel Property acquired after
the Effective Date, the terms and conditions of the Management Agreement with
respect thereto shall be generally consistent with those contained in Management
Agreements as in effect on the Effective Date, with any material inconsistencies
which could reasonably be expected to adversely affect the U.S. Borrower’s
ability to repay the Obligations, the rights and remedies of the Lenders under
the Credit Documents or, in the U.S. Borrower’s reasonable estimation, the
ability to comply with the financial covenants contained in Sections 9.01
through 9.03, inclusive, and Section 9.04(b) to be approved by the
Administrative Agent, and the manager thereunder shall be a Permitted Facility
Manager.

 

“Majority Canadian Lenders” at any time shall mean those Canadian Lenders which
at such time hold a majority of the then Maximum Canadian Dollar Revolving Loan
Sub-Commitments.

 

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“Margin Reduction Period” shall mean each period which shall commence on the
date occurring after the Effective Date on which the respective officer’s
certificates are delivered pursuant to Section 10.11(d) (or, if not so
delivered, the latest date on which such officer’s certificates are required to
be delivered) together with the related financial statements pursuant to Section
10.11(a) or 10.11(b), as the case may be and which shall end on the earlier of
(i) the date of actual delivery of the next officer’s certificates pursuant to
Section 10.11(d) (together with the related financial statements) and (ii) the
latest date on which the next officer’s certificates are required to be
delivered pursuant to Section 10.11(d) (together with the related financial
statements).

 

“Margin Regulations” shall mean Regulations T, U and X, collectively.

 

“Margin Stock” shall have the meaning provided in Regulation U.

 

“Marriott Family Members” shall mean any of Alice Marriott (deceased), J.W.
Marriott, Jr., Richard E. Marriott, any brother or sister of J.W. Marriott, Sr.
(deceased), any children or grandchildren of any of the foregoing, any spouses
of any of the foregoing, or any trust or other entity established primarily for
the benefit of one or more of the foregoing.

 

“Marriott International” shall mean Marriott International, Inc., a Delaware
corporation.

 

“Material Adverse Change” shall mean a material adverse change in any of (i) the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of the U.S. Borrower and its Subsidiaries taken as a whole, (ii) the
legality, validity or enforceability of the Credit Documents taken as a whole,
(iii) the ability of the U.S. Borrower to repay the Obligations or (iv) the
rights and remedies of the Lenders or the Agents under the Credit Documents.

 

“Material Adverse Effect” shall mean an effect that results in or causes, or has
a reasonable likelihood of resulting in or causing, a Material Adverse Change.

 

“Maturity Date” shall mean September 10, 2008, as such date may be extended
pursuant to Section 2.04.

 

“Maximum Canadian Dollar Revolving Loan Sub-Commitment” shall mean, as to any
Canadian Lender, the amount, if any, set forth opposite such Canadian Lender’s
name in Schedule I-B directly below the column entitled “Maximum Canadian Dollar
Revolving Loan Sub-Commitment”, as same may be (x) permanently reduced from time
to time pursuant to Sections 2.17, 2.18(d), 4.02, 5.02 and/or 12 and (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 2.14 or 14.03(b). The Maximum Canadian Dollar Revolving Loan
Sub-Commitment of each Canadian Lender is a sub-limit of the Revolving Loan
Commitment of the respective Canadian Lender (or its respective affiliate which
is a Lender with the related Revolving Loan Commitment) and not an additional
commitment and, in no event, may exceed at any time the Revolving Loan
Commitment of such Canadian Lender (or its respective affiliate which is a
Lender with the related Revolving Loan Commitment).

 

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“Minimum Borrowing Amount” shall mean, for each Type and Tranche of Revolving
Loans hereunder, the respective amount specified below:

 

(i) in the case of a Borrowing of Eurodollar Loans of any Tranche, $5,000,000;

 

(ii) in the case of a Borrowing of Base Rate Loans of any Tranche, $5,000,000;

 

(iii) in the case of a Borrowing of Canadian Prime Rate Loans, Cdn $5,000,000;
and

 

(iv) in the case of Bankers’ Acceptance Loans, the amount specified in Schedule
III.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA subject to Title IV of ERISA.

 

“NAIC” shall mean the National Association of Insurance Commissioners.

 

“Net Cash Proceeds” shall mean (i) with respect to any Asset Sale other than the
sale of Capital Stock in a Subsidiary, the proceeds of such Asset Sale in the
form of cash or Cash Equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or Cash
Equivalents (except to the extent such obligations are financed or sold with
recourse to the U.S. Borrower or any of its Subsidiaries) and proceeds from the
conversion of other property received when converted to cash or Cash
Equivalents, net of (a) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (b) provisions for all Taxes (including Taxes of HMC) actually paid
or payable as a result of such Asset Sale by the U.S. Borrower and its
Subsidiaries, taken as a whole, (c) payments made to repay Indebtedness (other
than Indebtedness subordinated in right of payment to the Obligations or a
Subsidiaries Guaranty) or any other obligations (other than the Obligations )
outstanding at the time of such Asset Sale that either (I) is secured by a Lien
on the property or assets sold or (II) is required to be paid as a result of
such sale, (d) amounts reserved by the U.S. Borrower and its Subsidiaries
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined on a consolidated
basis in conformity with GAAP and (e) unless Taxes thereon are paid by HMC as
set forth in clause (b) above, amounts required to be distributed as a result of
the realization of gains from Asset Sales in order to maintain or preserve HMC’s
status as a REIT (provided, however, that with respect to an Asset Sale by any
Person other than the U.S. Borrower or a Wholly-Owned Subsidiary, Net Cash
Proceeds shall be the above amount multiplied by the U.S. Borrower’s direct or
indirect percentage ownership interest in such Person) and (ii) with respect to
any issuance or sale of any Capital Stock, the proceeds of such issuance or sale
in the form of cash or Cash Equivalents, including payments in respect of
deferred payment obligations (to the

 

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extent corresponding to the principal, but not interest, component thereof) when
received in the form of cash or Cash Equivalents (except to the extent such
obligations are financed or sold with recourse to the U.S. Borrower or any of
its Subsidiaries) and proceeds from the conversion of other property received
when converted to cash or Cash Equivalents, net of attorney’s fees, accountant’s
fees, underwriters’ or placement agents’ fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of tax paid or payable as a result thereof (provided, however,
that with respect to an issuance or sale by any Person other than the U.S.
Borrower or a Wholly-Owned Subsidiary, Net Cash Proceeds shall be the above
amount multiplied by the U.S. Borrower’s direct or indirect percentage ownership
interest in such Person). Notwithstanding the foregoing, Net Cash Proceeds in
respect of any Asset Sale shall be net of any proceeds from such Asset Sale that
are designated by the U.S. Borrower to be applied to the voluntary prepayment of
Revolving Loans as to which there is a permanent reduction in the Total
Revolving Loan Commitment.

 

“Non-Defaulting Lender” shall mean and include each Lender other than a
Defaulting Lender.

 

“Non-Recourse Indebtedness” shall mean Indebtedness with respect to which
recourse for payment is limited to specific assets encumbered by a Lien securing
such Indebtedness; provided, however, that personal recourse of a holder of
Indebtedness against any obligor with respect thereto for Customary Non-Recourse
Exclusions shall not, by itself, prevent any Indebtedness from being
characterized as Non-Recourse Indebtedness; provided, further, that if a
personal recourse claim is made in connection therewith, only the amount of such
claim shall not constitute Non-Recourse Indebtedness for the purpose of this
Agreement.

 

“Notice of Borrowing” shall have the meaning provided in Section 2.03.

 

“Notice of Conversion” shall have the meaning provided in Section 2.07.

 

“Notice Office” shall mean the office of the Administrative Agent located at 60
Wall Street, 10th Floor, New York, New York 10005, Attention: Linda Wang, Vice
President, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.

 

“Obligation Currency” shall have the meaning provided in Section 14.18.

 

“Obligations” shall mean all amounts owing to the Administrative Agent, the
Syndication Agent, the Collateral Agent or any Lender pursuant to the terms of
this Agreement or any other Credit Document, including obligations payable under
Section 16.

 

“Operating Agreements” shall mean the asset or property management agreements,
franchise agreements, lease agreements and other similar agreements between the
U.S. Borrower, any Guarantor or any of their respective Restricted Subsidiaries,
on the one hand, and Marriott International, SLC or another entity engaged in
and having pertinent experience with the operation of such similar properties,
on the other, relating to the operation of the real estate properties owned by
the U.S. Borrower, any Guarantor or any of their respective Restricted
Subsidiaries, provided that the management of the U.S. Borrower determines in
good faith that such arrangements are fair to the U.S. Borrower and to such
Restricted Subsidiary.

 

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“Operating Lease” shall mean a lease or sublease involving the U.S. Borrower or
any Subsidiary thereof, as lessor, which lease shall provide for rent payments
which in the aggregate with all other existing Operating Leases, provide an
economic return to the lessor thereunder generally comparable to the economic
returns provided to the lessors from the rent payments under the Operating
Leases in existence on the Effective Date. With respect to each Hotel Property
acquired after the Effective Date, the terms and conditions of the Operating
Lease with respect thereto shall be generally consistent with those contained in
Operating Leases as in effect on the Effective Date, with any material
inconsistencies which could reasonably be expected to adversely affect the U.S.
Borrower’s ability to repay the Obligations or the rights and remedies of the
Lenders under the Credit Documents or, in the U.S. Borrower’s reasonable
estimation, the ability to comply with the financial covenants contained in
Sections 9.01 through 9.03, inclusive, and Section 9.04(b) to be approved by the
Administrative Agent.

 

“OP Units” shall mean the partnership units of the U.S. Borrower.

 

“Original Credit Agreement” shall mean the Credit Agreement dated as of June 6,
2002, among, the U.S. Borrower, certain subsidiaries of the U.S. Borrower,
various banks and DBTCA, as Administrative Agent, as it may have been modified,
supplemented or amended through the Effective Date.

 

“Other Hedging Agreement” shall mean any foreign exchange contracts, currency
swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against fluctuations in currency values.

 

“Participant” shall have the meaning provided in Section 3.04.

 

“Payment Office” shall mean (i) in respect of Dollar Revolving Loans, Letters of
Credit, Fees and, except as provided in clause (ii) below, all other amounts
owing under this Agreement and the other Credit Documents, the office of the
Administrative Agent located at 90 Hudson Street, 5th Floor, Jersey City, New
Jersey 07302, ABA Number: 021-001-033, Credit to Commercial Loan Division,
Account Name: Host Marriott Corporation, Account Number: 99-401-268, Attention:
Wendy Williams, and (ii) in respect of Canadian Revolving Loans, Royal Bank of
Canada, Toronto, Ontario Canada ROYCCAT2, Account Number: 071720000109 Account
Name: Deutsche Bank AG, Canada Branch, Reference: Host Marriott Corporation or
in each case such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto provided the Payment
Office under clause (ii) shall be located in Canada.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

 

“Permit” shall mean any permit, approval, authorization, license, variance,
registration, permission or consent required from a Governmental Authority under
an applicable Requirement of Law.

 

“Permitted Facility Manager” shall mean, with respect to each Hotel Property,
Marriott International, a Subsidiary of Marriott International, Interstate
Hotels Corporation, a Subsidiary of Interstate Hotels Corporation, Hyatt
Corporation, a Subsidiary of Hyatt

 

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Corporation, Four Seasons Hotel Limited, a Subsidiary of Four Seasons Hotel
Limited, Swissôtel Management (U.S.) LLC, Crestline Capital Corporation, a
Subsidiary of Crestline Capital Corporation, Westin Hotels & Resorts, a
Subsidiary of Westin Hotels & Resorts, Hilton Hotels Corp., a Subsidiary of
Hilton Hotels Corp., Fairmont Hotels & Resorts, a Subsidiary of Fairmont Hotels
& Resorts, Barceló Crestline Corporation, a Subsidiary of Barceló Crestline
Corporation, Intercontinental Hotels Group, a Subsidiary of Intercontinental
Hotels Group (or, in the case of each of the foregoing, a successor thereto (so
long as such successor remains a first-class nationally recognized hotel
management company)), or another first-class hotel management company in good
standing, as determined in the sole discretion of the U.S. Borrower.

 

“Permitted Investments” shall mean any of the following: (a) Investments in Cash
Equivalents, (b) Interest Rate Protection Agreements and Other Hedging
Agreements, (c) securities received in connection with an Asset Sale so long as
such Asset Sale complied with this Agreement, including Section 11.08, (d)
Permitted Mortgage Investments and (e) securities received from or in connection
with the sale of FF&E at a Hotel Property to a Subsidiary of the U.S. Borrower
that is an Approved Lessee so long as the U.S. Borrower shall have reasonably
determined in good faith that such sale is necessary in order to avoid the
characterization for tax purposes of any portion of the rent payable under the
related Operating Lease as rent not attributable to real property (allowing
reasonable margins with respect to applicable limitations).

 

“Permitted Liens” shall mean any of the following: (i) Liens imposed by
governmental authorities for taxes, assessments or other charges where
nonpayment thereof is not subject to penalty or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the U.S. Borrower in accordance with
GAAP; (ii) statutory liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business, provided that (a) the underlying obligations are
not overdue for a period of more than 30 days, or (b) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of the U.S. Borrower in
accordance with GAAP; (iii) Liens securing the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business; (iv) Liens arising by operation of
law in connection with judgments, only to the extent, for an amount and for a
period not resulting in an Event of Default with respect thereto; and (v)
pledges or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security
legislation.

 

“Permitted Mortgage Investment” means an Investment in Indebtedness secured by
real estate assets or Capital Stock of Persons (other than the U.S. Borrower or
its Subsidiaries) owning such real estate assets; provided that (i) the U.S.
Borrower is able to consolidate the operations of the real estate assets in its
GAAP financial statements, (ii) such real estate assets are owned by a
partnership, limited liability company or other entity which is controlled by
the U.S. Borrower or a Subsidiary thereof as a general partner, managing member
or through similar means, or (iii) the aggregate amount of such Permitted
Mortgage Investments (excluding those referenced in clauses (i) and (ii) above),
determined at the time each such Investment was made, does not exceed 10% of
Adjusted Total Assets after giving effect to such Investment.

 

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“Permitted REIT Subsidiary” shall mean a Wholly-Owned Subsidiary of HMC which
engages in no significant business, has no material liabilities and otherwise
has no material assets other than (i) equity interests in other Permitted REIT
Subsidiaries, (ii) OP Units, (iii) de minimis interests in Subsidiaries of the
U.S. Borrower or (iv) de minimis equity interests in Persons other than
Subsidiaries of HMC provided that (A) in the case of this clause (iv),
Investments in such Persons shall only be made for the purpose of effecting an
acquisition by the U.S. Borrower or a Subsidiary thereof permitted under this
Agreement and immediately following the consummation of such acquisition the
applicable Permitted REIT Subsidiary shall not own any Investment other than
those described in clauses (i) through (iii) of this definition and (B) the
aggregate value of all Investments described in clauses (iii) and (iv) of this
definition at any time outstanding (measured by the book value thereof as of the
date each such Investment is made) shall not exceed $10,000,000.

 

“Permitted Sharing Arrangements” shall mean any contracts, agreements or other
arrangements between the U.S. Borrower and/or one or more of its Subsidiaries
and HMC and/or one or more other Subsidiaries of HMC, pursuant to which such
Persons share centralized services, establish joint payroll arrangements,
procure goods or services jointly or otherwise make payments with respect to
goods or services on a joint basis, or allocate corporate expenses (other than
taxes based on income) (provided that (i) such Permitted Sharing Arrangements
are, in the determination of management of the U.S. Borrower, the Guarantors or
their Subsidiaries in the best interests of the U.S. Borrower, the Guarantors or
their Subsidiaries and (ii) the liabilities of the U.S. Borrower, the Guarantors
and their Subsidiaries under such Permitted Sharing Arrangements are determined
in good faith and on a reasonable basis).

 

“Permitted Tax Payments” shall mean payment of any liability of HMC, the U.S.
Borrower or any of their respective Subsidiaries for all Federal, state,
provincial, local and foreign taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto, imposed by any domestic or
foreign governmental authority responsible for the administration of any such
taxes.

 

“Person” shall mean any individual, partnership, joint venture, limited
liability company, firm, corporation, association, trust or other enterprise or
any government or political subdivision or any agency, department or
instrumentality thereof.

 

“Personal Property” shall mean, for any Person, to the extent owned by such
Person, all machinery, equipment, fixtures (including but not limited to all
heating, air conditioning, plumbing, lighting, communications, elevator
fixtures, inventory and goods), inventory and articles of personal property and
accessions thereto and renewals and replacements thereof and substitutions
therefor (including, but not limited to, beds, bureaus, chiffonniers, chests,
chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes,
draperies, curtains, shades, venetian blinds, screens, paintings, hangings,
pictures, divans, couches, luggage carts, luggage racks, stools, sofas,
chinaware, linens, pillows, blankets, glassware, silverware, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, bars, bar fixtures, liquor and other drink dispensers, icemakers,
radios, television sets, intercom and paging equipment, electric and electronic
equipment, dictating equipment, private telephone systems, medical equipment,
potted plants, heating, lighting and plumbing fixtures, fire

 

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prevention and extinguishing apparatus, cooling and air-conditioning systems,
elevators, escalators, fittings, plants, apparatus, stoves, ranges,
refrigerators, laundry machines, tools, machinery, engines, dynamos, motors,
boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning
systems, floor cleaning, waxing and polishing equipment, call systems, brackets,
electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets, lockers,
shelving, spotlighting equipment, dishwashers, garbage disposals, washers and
dryers), other customary hotel equipment and other tangible property of every
kind and nature whatsoever, now or hereafter located upon the Hotels, or
appurtenances thereto, or usable in connection with the present or future
operation and occupancy of the Hotels and all building equipment, materials and
supplies of any nature whatsoever, now or hereafter located upon the Hotels.

 

“Plan” shall mean any pension plan as defined in Section 3(2) of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of) any Borrower or a Subsidiary of any Borrower or an ERISA
Affiliate and any pension plan as defined in Section 3(2) of ERISA with respect
to which any Borrower, or a Subsidiary of any Borrower or an ERISA Affiliate
could have any liability.

 

“Pledge and Security Agreement” shall have the meaning provided in Section 6.05.

 

“Pledge and Security Agreement Collateral” shall have the meaning provided in
the Pledge and Security Agreement.

 

“Pledged Limited Liability Company Interests” shall have the meaning provided in
the Pledge and Security Agreement.

 

“Pledged Partnership Interests” shall have the meaning provided in the Pledge
and Security Agreement.

 

“Pledged Securities” shall have the meaning provided in the Pledge and Security
Agreement.

 

“Pledged Stock” shall have the meaning provided in the Pledge and Security
Agreement.

 

“Pledgor” shall mean and include (i) the U.S. Borrower and (ii) each Subsidiary
of the U.S. Borrower which executes and delivers the Pledge and Security
Agreement, or a counterpart thereof, as required by Section 10.15 or any other
provision of this Agreement; provided that any such Subsidiary shall cease to be
a Pledgor at such time, if any, as it is released from the Pledge and Security
Agreement in accordance with the express provisions hereof and thereof. As of
the Effective Date, the Pledgors are listed in Part III of Schedule IV.

 

“Preferred Stock”, as applied to the Capital Stock of any Person, shall mean
Capital Stock of such Person (other than common stock of such Person) of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person,
to shares of Capital Stock of any other class of such Person.

 

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“Prime Lending Rate” shall mean the rate which the Person serving as the
Administrative Agent announces from time to time as its prime lending rate, the
Prime Lending Rate to change when and as such prime lending rate changes. The
Prime Lending Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Person serving as the
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.

 

“Pro Forma Basis” shall mean, with respect to (i) any incurrence, acquisition,
assumption or repayment of Indebtedness or (ii) any acquisition or sale of a
Hotel Property or other assets (or the equity interest of the Person or Persons
owning such Hotel Property or other assets), the calculation of the consolidated
results of the U.S. Borrower and its Subsidiaries otherwise determined in
accordance with this Agreement as if the respective Indebtedness, acquisition or
sale (and all other Indebtedness incurred, acquired, assumed or repaid or other
such acquisitions or sales effected during the respective Calculation Period or
thereafter and on or prior to the date of determination) (each such date, a
“Determination Date”) had been effected on the first day of the respective
Calculation Period; provided that all such calculations shall take into account
the following assumptions:

 

(i) pro forma effect shall be given to (1) any Indebtedness incurred subsequent
to the end of the Calculation Period and prior to the Determination Date, (2)
any Indebtedness incurred during such period to the extent such Indebtedness is
outstanding at the Determination Date and (3) any Indebtedness to be incurred on
the Determination Date, in each case as if such Indebtedness had been incurred
on the first day of such Calculation Period and after giving effect to the
application of the proceeds thereof (but excluding normal fluctuations in
revolving Indebtedness incurred for working capital purposes and not to finance
any acquisition or Investment);

 

(ii) the Consolidated Interest Expense of a Person attributable to interest on
any Indebtedness or dividends on any Disqualified Stock bearing a floating
interest (or dividend) rate (or, in the case that such Person or any of its
Subsidiaries is a party to an Interest Rate Protection Agreement or hedging
obligation (which Interest Rate Protection Agreement or hedging obligation is
scheduled to remain in effect for not less than the shorter of (x) a 12-month
period immediately following the Determination Date or (y) the remaining term of
the Indebtedness to which it relates) that has the effect of causing fixed
interest rate Indebtedness to be floating rate interest on the date of
computation) shall be computed (other than when computed for the purposes of
computing Consolidated EBITDA) on a pro forma basis as if the average rate in
effect from the beginning of the period to the end of the period had been the
applicable rate for the entire period, unless in the case of floating rate
Indebtedness, such Person or any of its Subsidiaries is a party to an Interest
Rate Protection Agreement or hedging obligation (which shall remain in effect
for the 12-month period immediately following the end of the period) that has
the effect of fixing the interest rate on the date of computation, in which case
such rate (whether higher or lower) shall be used;

 

(iii) there shall be excluded from interest expense any interest expense related
to any amount of Indebtedness that was outstanding during such Calculation
Period or

 

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thereafter but that is not outstanding or is to be permanently repaid on the
Determination Date;

 

(iv) pro forma effect shall be given to all acquisitions and sales of Hotel
Properties and other assets (by excluding or including, as the case may be, the
historical financial results for the respective Hotel Properties and/or such
other assets) that occur during such Calculation Period or thereafter and on or
prior to the Determination Date (including any Indebtedness assumed or acquired
in connection therewith) as if they had occurred on the first day of such
Calculation Period, provided that in connection with any such acquisitions, pro
forma effect (for periods prior to such acquisition) shall be given to the
management fees payable pursuant to the respective Management Agreement as if
such management fees had been payable throughout the Calculation Period;

 

(v) any Indebtedness in respect of which an irrevocable prepayment notice has
been delivered that results in such Indebtedness being due and payable not later
than 30 days after such prepayment notice, the amount of such Indebtedness (and
any interest attributable thereto) shall be excluded from the computation of
such covenants to the extent the U.S. Borrower shall have unrestricted cash
reserves for such payment or shall have committed cash reserves for such payment
by way of a deposit arrangement or otherwise; and

 

(vi) any Qualified Preferred Stock or QUIPs in respect of which an irrevocable
redemption or repurchase notice has been delivered that results in such
Qualified Preferred Stock or QUIPs being due and payable not later than 30 days
after such notice, the amount of such Qualified Preferred Stock or QUIPs (and
any interest attributable thereto) shall be excluded from the computation of
such covenants to the extent the U.S. Borrower shall have unrestricted cash
reserves for such payment or shall have committed cash reserves for such payment
by way of a deposit arrangement or otherwise.

 

In the case of any covenant, other than those set forth in Sections 9.01 through
9.04, which require compliance with the covenants of this Agreement on a Pro
Forma Basis, compliance with the Revolving Facility A Financial Covenants or
Revolving Facility B Financial Covenants shall be required only to the extent
that there is any Revolving A Credit Exposure or Revolving B Credit Exposure,
respectively, after giving effect to the event giving rise to the need for
compliance.

 

“Procurement Contracts” shall mean contracts for the procurement of goods and
services entered into in the ordinary course of business and consistent with
industry practices.

 

“Projections” shall have the meaning provided in Section 8.05(d).

 

“Qualified Preferred Stock” shall mean any preferred stock or other preference
shares of HMC or the U.S. Borrower, so long as the terms of such preferred stock
or other preference shares (i) do not provide any collateral security, (ii) do
not provide any guaranty or other support by HMC or any of its Subsidiaries,
(iii) do not require any cash dividends or cash distributions (other than
dividends or distributions payable when and if declared by the Board of
Directors of HMC or the general partner of the U.S. Borrower) or contain any
mandatory put,

 

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redemption, repayment, sinking fund or other similar provision in each case
occurring before September 10, 2009 (other than any such provision that can be
satisfied, at the election of HMC or the U.S. Borrower, by the issuance of OP
Units or common stock or Qualified Preferred Stock of HMC), (iv) do not contain
any covenants other than periodic reporting requirements, (v) do not grant the
holders thereof any voting rights except for (x) voting rights required to be
granted to such holders under applicable law or listing requirements and (y)
limited customary voting rights on fundamental matters such as mergers,
consolidations, sales of all or substantially all of the assets of HMC,
liquidations involving HMC or dividend arrearages, and (vi) do not provide for
the conversion into, or the exchange for (unless at the sole discretion of the
issuer thereof), debt securities.

 

“Qualifying Indebtedness” means Indebtedness of the U.S. Borrower under the
Governing Senior Note Indenture and any other Secured Indebtedness of the U.S.
Borrower or any of its Subsidiaries (other than Indebtedness under the Credit
Documents).

 

“Quarterly Payment Date” shall mean the last Business Day of each April, July,
October and January occurring after the Effective Date.

 

“QUIPs” shall mean the 63/4% Convertible Preferred Securities issued by Host
Marriott Financial Trust, a statutory business trust and a Subsidiary of HMC.

 

“QUIPs Debt” shall mean the $550,000,000 aggregate original principal amount of
63/4% convertible subordinated debentures due 2026 of HMC, held by Host Marriott
Financial Trust, a statutory business trust and a Subsidiary of HMC.

 

“RCRA” shall mean the Resource Conservation and Recovery Act, as the same may be
amended from time to time, 42 U.S.C. § 6901 et seq.

 

“Real Property” of any Person shall mean all the right, title and interest of
such Person in and to land, improvements and fixtures, including Leaseholds.

 

“Recourse Indebtedness” of any Person shall mean all Indebtedness of such Person
and its Subsidiaries for which recourse for payment may be made against such
Person for the obligations thereunder (and in any event shall include all
Indebtedness of such Person which is not Non-Recourse Indebtedness).

 

“Register” shall have the meaning provided in Section 14.15.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

 

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

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“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Related Businesses” shall mean the businesses conducted by the U.S. Borrower
and its Subsidiaries as of the Effective Date and any and all businesses that in
the good faith judgment of the Board of Directors of the general partner of the
U.S. Borrower are materially related businesses or real estate related
businesses. Without limiting the generality of the foregoing, Related Business
shall include the ownership and operation of lodging properties.

 

“Release” shall mean disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, pouring or migrating,
into or upon any land or water or air, or otherwise entering into the
environment.

 

“Relevant Capital Stock” shall mean, with respect to any Person, any and all
shares, interests, participations, or other equivalents (however designated,
whether voting or non-voting) including partnership interests, whether general
or limited, in the equity of such Person, whether outstanding on the Effective
Date or issued thereafter, including, without limitation, all capital stock,
preferred stock and limited partnership units of the U.S. Borrower.

 

“Replaced Lender” shall have the meaning provided in Section 2.14.

 

“Replacement” shall have the meaning provided in Section 2.14.

 

“Replacement Lender” shall have the meaning provided in Section 2.14.

 

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under subsection .22, .23,
.25, .27 or .28 of PBGC Regulation Section 4043.

 

“Required Lenders” shall mean Non-Defaulting Lenders the sum of whose Revolving
Loan Commitments (or after the termination thereof, outstanding Revolving Loans
and Participations in Letter of Credit Outstandings) represent an amount greater
than 50% of the Total Revolving Loan Commitment less the Revolving Loan
Commitments of Defaulting Lenders (or after the termination of the Total
Revolving Loan Commitment, the sum of the then total outstanding Revolving Loans
of Non-Defaulting Lenders, and the aggregate Participations of all
Non-Defaulting Lenders in Letter of Credit Outstandings at such time). For
purposes of determining Required Lenders, all outstanding Revolving Loans and
Commitments, as the case may be, that are denominated in Dollars will be
calculated in Dollars and all Revolving Loans and Commitments, as the case may
be, denominated in Canadian Dollars will be calculated according to the Dollar
Equivalent thereof.

 

“Requirements of Law” shall mean, as to any Person, the certificate of
incorporation, and by-laws or other organizational or governing documents of
such Person, and all foreign, federal, state and local laws, rules and
regulations, including, without limitation, Environmental Laws, ERISA, foreign,
federal, state or local securities, antitrust and licensing laws, all food,
health and safety laws, and all applicable trade laws and requirements,
including,

 

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without limitation, all disclosure requirements of Environmental Laws and ERISA
and all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, in each case, applicable to and binding upon such
Person, its business or any of its property.

 

“Restricted Payment” shall have the meaning given to it in the Governing Senior
Note Indenture as in effect on the Effective Date except the term “Subordinated
Indebtedness” used therein shall refer to Indebtedness of the Company or any
Guarantor that is expressly subordinated in right of payment to the Revolving
Loans (or other Indebtedness under the Credit Documents).

 

“Restricted Subsidiary” shall have the meaning given to it in the Governing
Senior Note Indenture.

 

“Returns” shall have the meaning provided in Section 8.09.

 

“Revolving A Credit Exposure” shall mean for any RL Lender at any time, the sum
of (i) the aggregate principal amount of all Revolving A Loans made by such
Lender (and its affiliates, if any, acting as Canadian Lenders) (for this
purpose, (x) at all times prior to the occurrence of any Sharing Event and the
automatic conversion of Canadian Revolving Loans to Dollar Revolving Loans
pursuant to Section 2.17, using the Dollar Equivalent of the principal amount or
Face Amount, as the case may be, of all Canadian Revolving A Loans then
outstanding from such RL Lender or any affiliate thereof acting as a Canadian
Lender and (y) at all times after the occurrence of any Sharing Event, giving
effect to the conversions required by Section 2.17 and to all participations
purchased by such RL Lender pursuant to Section 2.17), plus (ii) the product of
(A) such Lender’s Dollar Percentage (or, after the occurrence of a Sharing
Event, its RL Percentage) and (B) the aggregate amount of all Letter of Credit A
Outstandings at such time. For the purpose of determining whether the Revolving
Facility A Financial Covenants shall be applicable, the amount of any Letter of
Credit A Outstandings and Bankers’ Acceptance Loans utilizing the Total
Revolving A Loan Capacity that are fully cash collateralized in accordance with
the terms of this Agreement shall be deemed to be zero.

 

“Revolving A Loan” shall have the meaning provided in Section 2.01(a).

 

“Revolving B Credit Exposure” shall mean for any RL Lender at any time, the sum
of (i) the aggregate principal amount of all Revolving B Loans made by such
Lender (and its affiliates, if any, acting as Canadian Lenders) (for this
purpose, (x) at all times prior to the occurrence of any Sharing Event and the
automatic conversion of Canadian Revolving Loans to Dollar Revolving Loans
pursuant to Section 2.17, using the Dollar Equivalent of the principal amount or
Face Amount, as the case may be, of all Canadian Revolving B Loans then
outstanding from such RL Lender or any affiliate thereof acting as a Canadian
Lender and (y) at all times after the occurrence of any Sharing Event, giving
effect to the conversions required by Section 2.17 and to all participations
purchased by such RL Lender pursuant to Section 2.17), plus (ii) the product of
(A) such Lender’s Dollar Percentage (or, after the occurrence of a Sharing
Event, its RL Percentage) and (B) the aggregate amount of all Letter of Credit B
Outstandings at such time. For the purpose of determining whether the Revolving
Facility B Financial Covenants shall be applicable, the amount of any Letter of
Credit B Outstandings and Bankers’

 

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Acceptance Loans utilizing the Total Revolving B Loan Capacity that are fully
cash collateralized in accordance with the terms of this Agreement shall be
deemed to be zero.

 

“Revolving B Loan” shall have the meaning provided in Section 2.01(b).

 

“Revolving Credit Exposure” shall mean, for any RL Lender at any time, such
Lender’s Revolving A Credit Exposure plus its Revolving B Credit Exposure.

 

“Revolving Credit Period” shall mean the period from and including the Effective
Date to but not including the Maturity Date.

 

“Revolving Facility A Financial Covenants” shall mean the covenants set forth in
Sections 9.01(a), 9.02(a) and 9.03.

 

“Revolving Facility B Financial Covenants” shall mean the covenants set forth in
Sections 9.01(b) and 9.02(b).

 

“Revolving Loan” shall have the meaning provided in Section 2.01(b).

 

“Revolving Loan Commitment” shall mean, for each Lender, the amount of such
Lender’s Revolving Loan Commitment set forth opposite such Lender’s name in
Schedule I-A directly below the column entitled “Revolving Loan Commitment,” as
the same may be (x) reduced from time to time pursuant to Sections 4.02,
5.02(f), and/or 12 or (y) adjusted from time to time as a result of assignments
to or from such Lender pursuant to Sections 2.14 or 14.03(b) or (z) increased
from time to time pursuant to Section 2.16. For the avoidance of doubt, any
limitations in effect from time to time pursuant to Section 2.01(a)(vii) or
2.01(b)(vi) on amounts available for drawing shall not alter the Revolving Loan
Commitment of any Lender.

 

“Revolving Notes” shall mean each Dollar Revolving Note and each Canadian Dollar
Revolving Note.

 

“RL Lender” shall mean, at any time, each Lender with a Revolving Loan
Commitment or with outstanding Revolving Loans at such time.

 

“RL Percentage” of any Lender at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such
Lender at such time and the denominator of which is the Total Revolving Loan
Commitment at such time. Notwithstanding anything to the contrary contained
above, if the RL Percentage of any Lender is to be determined after the Total
Revolving Loan Commitment has been terminated, then the RL Percentages of the
Lenders shall be determined immediately prior (and without giving effect) to
such termination.

 

“Roll Forward Amount” shall mean, with respect to any covenant that permits an
action to be taken in a fiscal year with reference to Adjusted Total Assets, the
cumulative unused Dollar amount relating to such action referred to in such
covenant from all prior fiscal years commencing with and including the full
fiscal year ending nearest to December 31, 2004, it being understood that such
unused amounts shall be calculated independently for each covenant that
references a Roll Forward Amount, irrespective of any application of such Roll
Forward

 

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Amount for the purpose of another covenant. For purposes of computing the Roll
Forward Amount attributable to any fiscal year, the unused Dollar amount shall
be determined according to the Adjusted Total Assets measured as of the end of
such fiscal year. The unused amount for any period during which the limitations
in Section 11.10(a), 11.11(a) or 11.12(a) shall not be in effect shall be the
unused amount as if the Leverage Ratio had been equal to or greater than
6.00:1:00 at all times from and after the Effective Date. In no event shall the
Roll Forward Amount be negative.

 

“S&P” shall mean Standard & Poor’s Ratings Services.

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Section 5.04(b)(ii) Certificate” shall have the meaning provided in Section
5.04(b).

 

“Secured Creditors” shall have the meaning provided in the Pledge and Security
Agreement.

 

“Secured Indebtedness” shall mean any Indebtedness or Disqualified Stock secured
by a Lien (other than any Permitted Lien (as defined in the Governing Senior
Note Indenture)) upon the property of the U.S. Borrower or any of its
Subsidiaries.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

“Security Documents” shall mean the Pledge and Security Agreement and any other
pledge or similar agreement executed and delivered after the Effective Date
pursuant to Section 10.14, 10.15 or any other provision of this Agreement or the
Pledge and Security Agreement.

 

“Senior Note Documents” shall mean the Governing Senior Note Indenture, the
Senior Notes and each other document or agreement relating to the issuance of
the Senior Notes.

 

“Senior Note Indenture” shall mean the Indenture, dated as of August 5, 1998,
among the U.S. Borrower (successor to HMH Properties, Inc.), the subsidiary
guarantors named therein and Marine Midland Bank as Trustee, together with all
supplemental indentures relating to the Senior Notes but without giving effect
to any covenant amendments implemented pursuant to such supplemental indentures.

 

“Senior Note Indenture Default” shall mean a Default or Event of Default under
the Governing Senior Note Indenture, in each case as defined therein.

 

“Senior Notes” shall mean each of the U.S. Borrower’s (i) $305,063,000 7-7/8%
Series B Senior Notes due August 2008, (ii) $300,000,000 8-3/8% Series E Senior
Notes due

 

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February 2006, (iii) $242,000,000 8.45% Series G Senior Notes due October 2007,
(iv) $450,000,000 9-1/2% Series I Senior Notes due January 2007, (v)
$725,000,000 7-1/8% Series K Senior Notes due November 2013, (vi) $350,000,000
7% Series L Senior Notes due August 2012, (vii) $500,000,000 Exchangeable
Debentures due March 2024, (viii) other issues of senior notes issued pursuant
to the Senior Note Indenture, (ix) $5,922,000 93/8% Marriott Corporation
Debentures due June 2007, (x) $6,873,000 10% Marriott Corporation Series L
Senior Notes due May 2012.

 

“Sharing Event” shall mean (i) the occurrence of any Event of Default with
respect to any Borrower pursuant to Section 12.05, (ii) the declaration of the
Total Revolving Loan Commitment termination, or the acceleration of the maturity
of any Revolving Loans, in each case pursuant to the last paragraph of Section
12 or (iii) the failure of any Borrower to pay any principal of, Face Amount of,
or interest on, Revolving Loans or any Letter of Credit Obligations on the
Maturity Date.

 

“Significant Subsidiary” shall mean any Subsidiary which is a “significant
subsidiary” of the U.S. Borrower within the meaning of Rule 1-02 of Regulation
S-X promulgated by the SEC as in effect on August 5, 1998.

 

“Single Employer Plan” shall have the meaning provided in Section 8.10.

 

“Specified Default” shall mean any Default or Event of Default under Sections
12.01, 12.03 (solely as a result of a failure to comply with Section 10.11(a),
10.11(b), 10.11(d)), 12.05 or 12.08.

 

“Start Date” shall mean, with respect to any Margin Reduction Period, the first
day of such Margin Reduction Period.

 

“Stated Amount” of each Letter of Credit shall, at any time, mean the maximum
amount available to be drawn thereunder (in each case determined without regard
to whether any conditions to drawing could then be met, but after giving effect
to all previous drawings made thereunder).

 

“Stock Collateral” shall have the meaning provided in Section 10.15(d).

 

“Subsidiaries Guaranty” shall have the meaning provided in Section 6.06.

 

“Subsidiary” shall mean, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the ordinary
voting power of the outstanding Capital Stock is owned, directly or indirectly,
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, or the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
in accordance with GAAP, if such statements were prepared as of such date, (ii)
any partnership (a) in which such Person or one or more Subsidiaries of such
Person is, at the time, a general partner and owns alone or together with the
U.S. Borrower a majority of the partnership interests or (b) in which such
Person or one or more Subsidiaries of such Person is, at the time, a general
partner and which is controlled by such Person in a manner sufficient to permit
its financial statements to be consolidated with the financial statements of
such Person in

 

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conformance with GAAP and the financial statements of which are so consolidated,
and (iii) any Person, if so designated by the U.S. Borrower in writing to the
Administrative Agent (which designation shall be deemed made if a similar
designation is made under the Governing Senior Note Indenture), (x) in which the
U.S. Borrower owns (directly or indirectly) at least 50% of the aggregate
economic interests; (y) in which the U.S. Borrower or a Subsidiary participates
in control as a general partner, a managing member or through similar means, and
(z) which is not consolidated for financial reporting purposes with the U.S.
Borrower under GAAP.

 

“Subsidiary Indebtedness” shall mean, without duplication, all Unsecured
Indebtedness (including Contingent Obligations (other than Contingent
Obligations incurred by Subsidiaries in respect of Secured Indebtedness)) of
which a Subsidiary other than a Guarantor is the obligor. Obligations under this
Agreement shall not constitute Subsidiary Indebtedness. A release under the
Subsidiaries Guaranty of a Guarantor which remains a Subsidiary shall be deemed
to be an incurrence of Subsidiary Indebtedness in amount equal to the U.S.
Borrower’s proportionate interest in the Unsecured Indebtedness of such
Guarantor.

 

“Syndication Agent” shall mean Bank of America, N.A.

 

“Tax Affiliate” shall mean, as to any Person, (i) any Subsidiary of such Person
and (ii) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.

 

“Taxable Income” shall mean Real Estate Investment Trust Taxable Income as
defined in Section 857(b) of the Code.

 

“Taxable REIT Subsidiary” shall mean any Subsidiary of the U.S. Borrower that is
a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Code on
or after January 1, 2001, or a Subsidiary of such Taxable REIT Subsidiary.

 

“Taxes” shall have the meaning provided in Section 5.04.

 

“Test Date” shall mean the last day of each fiscal quarter ended after the
Effective Date.

 

“Test Period” shall mean each period of four consecutive fiscal quarters of the
U.S. Borrower then last ended (in each case taken as one accounting period).

 

“Total Canadian Dollar Revolving Loan Sub-Commitment” shall mean, at any time,
(x) the sum of the Canadian Dollar Revolving Loan Sub-Commitments of all
Canadian Lenders at such time or, if less, (y) the Total Canadian Dollar
Revolving Loan Sub-Commitment as then in effect pursuant to Section 2.18.

 

“Total Maximum Canadian Dollar Revolving Loan Sub-Commitment” shall mean, at any
time, the sum of the Maximum Canadian Dollar Revolving Loan Sub-Commitments of
all Canadian Lenders at such time.

 

“Total Revolving A Loan Capacity” shall mean $385,000,000, as the same may be
(x) reduced from time to time pursuant to Sections 4.02, 5.02(f), and/or 12 or
(y) increased

 

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from time to time pursuant to Section 2.16. For the avoidance of doubt, the sum
of the Total Revolving A Loan Capacity plus the Total Revolving B Loan Capacity
on any given date shall equal, and shall at no time exceed, the Total Revolving
Loan Commitment on such date.

 

“Total Revolving B Loan Capacity” shall mean $190,000,000, as the same may be
(x) reduced from time to time pursuant to Sections 4.02, 5.02(f), and/or 12 or
(y) increased from time to time pursuant to Section 2.16. For the avoidance of
doubt, the sum of the Total Revolving A Loan Capacity plus the Total Revolving B
Loan Capacity on any given date shall equal, and shall at no time exceed, the
Total Revolving Loan Commitment on such date.

 

“Total Revolving Loan Commitment” shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Lenders.

 

“Total Unencumbered Assets” as of any date shall mean the sum of (i)
Undepreciated Real Estate Assets not securing any portion of Secured
Indebtedness and (ii) all other assets (but excluding intangibles and minority
interests in Persons who are obligors with respect to outstanding secured debt)
of the U.S. Borrower and its Subsidiaries not securing any portion of Secured
Indebtedness, determined on a consolidated basis (it being understood that the
accounts of the Subsidiaries shall be consolidated with those of the U.S.
Borrower only to the extent of the U.S. Borrower’s proportionate interest
therein).

 

“Total Unutilized Revolving Loan Commitment” shall mean, at any time, an amount
equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect, less (y) the sum of (i) the aggregate principal amount of Revolving
Loans then outstanding (for this purpose, taking the Dollar Equivalent thereof
in the case of Canadian Revolving Loans then outstanding) plus (ii) the then
aggregate amount of Letter of Credit Outstandings.

 

“Total U.S. Revolving Loan Sub-Commitment” at any time shall mean the sum of the
U.S. Revolving Loan Sub-Commitments of all Lenders; provided that at no time
shall the Total U.S. Revolving Loan Sub-Commitment exceed the Total Revolving
Loan Commitment as then in effect.

 

“Tranche” shall mean the respective facility utilized in making Revolving Loans
hereunder, with there being two separate Tranches, i.e., Revolving A Loans
(which in the aggregate shall not exceed the Total Revolving A Loan Capacity)
and Revolving B Loans (which in the aggregate shall not exceed the Total
Revolving B Loan Capacity).

 

“Twelfth Supplemental Indenture” shall mean the Amended and Restated Twelfth
Supplemental Indenture dated July 28, 2004, as in effect on the Effective Date.

 

“Type” shall mean the type of Revolving Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar
Loan, a Canadian Prime Rate Loan or a Bankers’ Acceptance Loan.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.

 

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“Unconsolidated Entity” shall mean, with respect to any Person, at any date, any
other Person in whom such Person holds an Investment, and whose financial
results would not be consolidated under GAAP with the financial results of such
Person on the consolidated financial statements of such Person, if such
statements were prepared as of such date.

 

“Undepreciated Real Estate Assets” shall mean, as of any date, the cost (being
the original cost to the U.S. Borrower, the Guarantors or any of their
Subsidiaries plus capital improvements) of real estate assets of the U.S.
Borrower, the Guarantors or any of their Subsidiaries on such date, before
depreciation and amortization of such real estate assets, determined on a
consolidated basis (it being understood that the accounts of Subsidiaries shall
be consolidated with those of the U.S. Borrower only to the extent of the U.S.
Borrower’s proportionate interest therein).

 

“Unencumbered Consolidated EBITDA” shall mean, for any period, that portion of
Consolidated EBITDA for such period attributable to those assets which are (i)
not encumbered by Liens and (ii) not owned by Subsidiaries of the U.S. Borrower
that have Subsidiary Indebtedness.

 

“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the actuarial present value of the accumulated plan benefits under such Plan as
of the close of its most recent plan year, determined in accordance with
actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.

 

“United States” and “U.S.” shall each mean the United States of America.

 

“Unpaid Drawing” shall have the meaning provided in Section 3.05.

 

“Unsecured Consolidated Interest Expense” shall mean, for any period, that
portion of Consolidated Interest Expense (excluding the interest expense
attributable to QUIPs Debt) attributable to Indebtedness that is neither Secured
Indebtedness nor Subsidiary Indebtedness.

 

“Unsecured Indebtedness” shall mean any Indebtedness or Disqualified Stock of
the U.S. Borrower or any of its Subsidiaries that is not Secured Indebtedness.

 

“Unsecured Interest Coverage Ratio” shall mean, for any period, the ratio of (x)
Unencumbered Consolidated EBITDA for such period to (y) Unsecured Consolidated
Interest Expense for such period.

 

“Unutilized Canadian Dollar Revolving Loan Sub-Commitment” shall mean, as to any
Canadian Lender at any time, the Canadian Dollar Revolving Loan Sub-Commitment
of such Canadian Lender at such time minus the Dollar Equivalent of the
aggregate principal amount or Face Amount, as the case may be, of all Canadian
Revolving Loans of such Canadian Lender then outstanding.

 

“Unutilized Canadian RL Percentage” of any Lender at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Unutilized
Canadian Dollar

 

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Revolving Loan Sub-Commitment of such Lender (and its respective affiliates
which act as Canadian Lenders) at such time and the denominator of which is the
aggregate amount of Unutilized Canadian Dollar Revolving Loan Sub-Commitments of
all Canadian Lenders at such time.

 

“Unutilized Revolving Loan Commitment” of the Revolving Loan Commitment with
respect to any Lender, at any time, shall mean an amount equal to the remainder
of (i) such Lender’s Revolving Loan Commitment at such time less (ii) the sum of
(x) the aggregate principal amount of Revolving Loans of such Lender (including
any Affiliate of any such Lender acting as a Canadian Lender) then outstanding
(taking the Dollar Equivalent of the principal amount or Face Amount, as the
case may be, in the case of any Canadian Revolving Loans then outstanding) and
(y) such Lender’s Dollar Percentage (or, after a Sharing Event has occurred, its
RL Percentage) of the Letter of Credit Outstandings at such time.

 

“U.S. Borrower” shall mean Host Marriott, L.P., a Delaware limited partnership.

 

“U.S. Revolving Loan Sub-Commitment” shall mean, for any Lender at any time,
such Lender’s Revolving Loan Commitment minus, in the case of a Lender that is,
or whose Affiliate is, a Canadian Lender, the sum of such Lender’s and its
Affiliates’ Canadian Dollar Revolving Loan Sub-Commitments.

 

“Voting Stock” shall mean, as to any Person, any class or classes of outstanding
Capital Stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.

 

“Wholly-Owned Domestic Subsidiary” of any Person shall mean any Subsidiary of
such Person which is both a Domestic Subsidiary and a Wholly-Owned Subsidiary of
such Person.

 

“Wholly-Owned Foreign Subsidiary” of any Person shall mean any Subsidiary of
such Person which is both a Foreign Subsidiary and a Wholly-Owned Subsidiary of
such Person.

 

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any corporation 100%
of whose capital stock (other than director’s qualifying shares) is at the time
owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person
and (ii) any partnership, limited liability company, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.

 

SECTION 2. Amount and Terms of Credit.

 

2.01. The Commitments. (a) Revolving A Loans. Subject to and upon the terms and
conditions set forth herein, (x) each RL Lender severally agrees, at any time
and from time to time during the Revolving Credit Period, to make a revolving A
loan or revolving A loans, which revolving A loans shall be made and maintained
in Dollars (each a “Dollar Revolving A Loan” and, collectively, the “Dollar
Revolving A Loans”) to the U.S. Borrower, and (y) each Canadian Lender with a
Canadian Dollar Revolving Loan Sub-Commitment severally

 

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agrees, at any time and from time to time during the Revolving Credit Period, to
make a revolving A loan or revolving A loans, which revolving loans shall be
made and maintained in Canadian Dollars (each a “Canadian Revolving A Loan” and,
collectively, the “Canadian Revolving A Loans”) to one or more Canadian
Revolving Loan Borrowers (with the Dollar Revolving A Loans and Canadian
Revolving A Loans made to the various Borrowers pursuant to this Section 2.01
being herein called a “Revolving A Loan” and, collectively, the “Revolving A
Loans”). The Revolving A Loans:

 

(i) shall, in the case of Dollar Revolving Loans, at the option of the U.S.
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Eurodollar Loans of the same Tranche, provided that except as otherwise
specifically provided herein, all Dollar Revolving Loans comprising the same
Borrowing shall be of the same Type,

 

(ii) shall, in the case of Canadian Revolving Loans, be made and maintained in
Canadian Dollars, provided that all Canadian Revolving Loans shall, at the
option of the respective Canadian Revolving Loan Borrower, be made by each
Canadian Lender with a Canadian Dollar Revolving Loan Sub-Commitment either by
means of (x) Canadian Prime Rate Loans in Canadian Dollars or (y) the creation
and discount of Bankers’ Acceptances in Canadian Dollars on the terms and
conditions provided for herein and in Schedule III hereto (the terms and
conditions of which shall be deemed incorporated by reference into this
Agreement),

 

(iii) may be repaid and reborrowed in accordance with the provisions hereof,

 

(iv) shall not, in the case of Canadian Revolving A Loans, be made at any time
if, for any Canadian Lender, at the time of making any such Canadian Revolving
Loans and after giving effect thereto, the Dollar Equivalent of the aggregate
principal amount (or Face Amount, as the case may be) of such Canadian Revolving
A Loans, when added to the Dollar Equivalent of the aggregate principal amount
(or Face Amount, as the case may be) of all other Canadian Revolving Loans then
outstanding from such Canadian Lender, exceeds the related Maximum Canadian
Dollar Revolving Loan Sub-Commitment or the Canadian Dollar Revolving Loan
Sub-Commitment of such Canadian Lender at such time,

 

(v) shall not, in the case of all Revolving A Loans, be made at any time if,
after giving effect thereto, the Aggregate Revolving A Credit Exposure would
exceed the Total Revolving A Loan Capacity at such time,

 

(vi) shall not, in the case of Dollar Revolving Loans, be made at any time if,
at the time of making any such Dollar Revolving Loan and after giving effect
thereto, (A) the Aggregate U.S. Revolving Exposure exceeds the Total U.S.
Revolving Loan Sub-Commitment at such time or (B) for any Lender, such Lender’s
Dollar Percentage of the U.S. Revolving Exposure exceeds the U.S. Revolving Loan
Sub-Commitment of such Lender at such time, and

 

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(vii) shall not, in the case of all Revolving A Loans, be made at any time, if
after giving effect thereto, the Aggregate Revolving A Credit Exposure would
exceed (A) $0 so long as the Leverage Ratio is equal to or greater than
7.00:1:00, (B) $150,000,000 so long as such Leverage Ratio is equal to or
greater than 6.75:1:00 but less than 7.00:1:00, (C) $300,000,000, so long as
such Leverage Ratio is equal to or greater than 6.50:1:00 but less than
6.75:1.00 and (D) $385,000,000, so long as such Leverage Ratio is less than
6.50:1:00, plus, in each case, any amounts under Additional Revolving Loan
Commitments (as determined pursuant to Section 2.16(b)); provided, however,
that, except as set forth in Section 5.02(a)(iii), the limitations contained in
this clause (vii) shall apply only at the time of any Credit Event and in no
event shall such limitations require any Borrower to prepay any Revolving Loan
for which the conditions contained in this clause (vii) were satisfied at the
time such Revolving Loan was incurred; provided further, that for purposes of
calculating the Leverage Ratio pursuant to this clause (vii), the Leverage Ratio
shall be calculated as of the proposed date of Borrowing as described in Section
7.01(b).

 

Notwithstanding the foregoing, in the event a Lender Default exists, the
Canadian Lenders shall not be required to make Canadian Revolving A Loans unless
the Canadian Lenders have entered into arrangements satisfactory to them and the
U.S. Borrower to eliminate the Canadian Lenders’ risk with respect to the
participation arrangements set forth in Section 2.17 of the Defaulting Lender or
Lenders, which may include cash collateralizing such Defaulting Lender’s or
Lenders’ RL Percentage of the outstanding Canadian Revolving A Loans.

 

All Canadian Revolving A Loans shall constitute the several, and not joint or
joint and several, obligations of the Canadian Revolving Loan Borrowers.

 

(b) Revolving B Loans. Subject to and upon the terms and conditions set forth
herein, (x) each RL Lender severally agrees, at any time and from time to time
during the Revolving Credit Period, to make a revolving B loan or revolving B
loans, which revolving B loans shall be made and maintained in Dollars (each a
“Dollar Revolving B Loan” and, collectively, the “Dollar Revolving B Loans”) to
the U.S. Borrower, and (y) each Canadian Lender with a Canadian Dollar Revolving
Loan Sub-Commitment severally agrees, at any time and from time to time during
the Revolving Credit Period, to make a revolving B loan or revolving B loans,
which revolving loans shall be made and maintained in Canadian Dollars (each a
“Canadian Revolving B Loan” and, collectively, the “Canadian Revolving B Loans”)
to one or more Canadian Revolving Loan Borrowers (with the Dollar Revolving B
Loans and Canadian Revolving B Loans made to the various Borrowers pursuant to
this Section 2.01 being herein called a “Revolving B Loan” and, collectively,
the “Revolving B Loans” and with each Revolving A Loan and Revolving B Loan
being herein called “Revolving Loan” and, collectively, the “Revolving Loans”).
The Revolving B Loans:

 

(i) shall, in the case of Dollar Revolving Loans, at the option of the U.S.
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Eurodollar Loans of the same Tranche, provided that except as otherwise
specifically provided herein, all Dollar Revolving Loans comprising the same
Borrowing shall be of the same Type,

 

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(ii) shall, in the case of Canadian Revolving Loans, be made and maintained in
Canadian Dollars, provided that all Canadian Revolving Loans shall, at the
option of the respective Canadian Revolving Loan Borrower, be made by each
Canadian Lender with a Maximum Canadian Dollar Revolving Loan Sub-Commitment
either by means of (x) Canadian Prime Rate Loans in Canadian Dollars or (y) the
creation and discount of Bankers’ Acceptances in Canadian Dollars on the terms
and conditions provided for herein and in Schedule III hereto (the terms and
conditions of which shall be deemed incorporated by reference into this
Agreement),

 

(iii) may be repaid and reborrowed in accordance with the provisions hereof,

 

(iv) shall not, in the case of Canadian Revolving B Loans, be made at any time
if, for any Canadian Lender, at the time of making any such Canadian Revolving B
Loans and after giving effect thereto, the Dollar Equivalent of the aggregate
principal amount (or Face Amount, as the case may be) of such Canadian Revolving
B Loans, when added to the Dollar Equivalent of the aggregate principal amount
(or Face Amount, as the case may be) of all other Canadian Revolving Loans then
outstanding from such Canadian Lender, exceeds the related Maximum Canadian
Dollar Revolving Loan Sub-Commitment or the Canadian Dollar Revolving Loan
Sub-Commitment of such Canadian Lender at such time,

 

(v) shall not, in the case of all Revolving B Loans, be made at any time if,
after giving effect thereto, the Aggregate Revolving B Credit Exposure would
exceed the Total Revolving B Loan Capacity at such time,

 

(vi) shall not, in the case of all Revolving B Loans, be made at any time if (A)
after giving effect thereto, the Leverage Ratio is equal to or greater than the
then applicable Leverage Ratio set forth in Section 9.01(b), (B) the Unsecured
Interest Coverage Ratio is less than 1.50:1:00; or (C) in the event that at the
time of such Borrowing the Aggregate Revolving A Credit Exposure exceeds $0
(after giving effect to the application of the proceeds of such Borrowing),
there exists a Revolving Facility A Financial Covenant Default; provided that
for purposes of calculating the Leverage Ratio and Unsecured Interest Coverage
Ratio pursuant to this clause (vi), the Leverage Ratio and the Unsecured
Interest Coverage Ratio shall be calculated as of the proposed date of Borrowing
as described in Section 7.01(b).

 

Notwithstanding the foregoing, in the event a Lender Default exists, the
Canadian Lenders shall not be required to make Canadian Revolving B Loans unless
the Canadian Lenders have entered into arrangements satisfactory to them and the
U.S. Borrower to eliminate the Canadian Lenders’ risk with respect to the
participation arrangements set forth in Section 2.17 of the Defaulting Lender or
Lenders, which may include cash collateralizing such Defaulting Lender’s or
Lenders’ RL Percentage of the outstanding Canadian Revolving B Loans.

 

All Canadian Revolving B Loans shall constitute the several, and not joint or
joint and several, obligations of the Canadian Revolving Loan Borrowers.

 

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2.02. Minimum Amount of Each Borrowing. The aggregate principal amount of each
Borrowing of Revolving Loans shall not be less than the respective Minimum
Borrowing Amount for the respective Type and Tranche of Revolving Loans to be
made or maintained pursuant to the respective Borrowing. More than one Borrowing
may occur on the same date, but at no time shall there be outstanding more than
ten Borrowings of Revolving Loans maintained as Eurodollar Loans.

 

2.03. Notice of Borrowing. (a) Whenever a Borrower desires to incur Revolving
Loans hereunder (excluding Borrowings of Canadian Prime Rate Loans to the extent
resulting from automatic conversions of Bankers’ Acceptance Loans as provided in
clause (i) of Schedule III), it shall give the Administrative Agent at the
Notice Office at least one Business Day’s prior written notice (or telephonic
notice promptly confirmed in writing) of each Base Rate Loan or Canadian Prime
Rate Loan and at least three Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) of each Eurodollar Loan or Bankers’
Acceptance Loan to be incurred hereunder, provided that any such notice shall be
deemed to have been given on a certain day only if given before 12:00 Noon (New
York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a “Notice of Borrowing”), except as otherwise expressly
provided in Section 2.10, shall be irrevocable and shall be given by the
respective Borrower in the form of Exhibit A appropriately completed to specify
(i) the name of such Borrower or Borrowers, (ii) the aggregate principal amount
(or Face Amount, as the case may be) of the Revolving Loans to be incurred
pursuant to such Borrowing (stated in the applicable currency), (iii) the date
of such Borrowing (which shall be a Business Day), (iv) in the case of Dollar
Revolving Loans, whether the Revolving Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans,
(v) in the case of Canadian Revolving Loans, whether the Revolving Loans being
made pursuant to such Borrowing are to be initially maintained as Canadian Prime
Rate Loans or Bankers’ Acceptance Loans and, if Bankers’ Acceptance Loans, the
term thereof (which shall comply with the requirements of clause (a) of Schedule
III), (vi) in the case of Eurodollar Loans, the initial Interest Period to be
applicable thereto, and (vii) whether the Revolving Loans are Dollar Revolving A
Loans, Dollar Revolving B Loans, Canadian Revolving A Loans or Canadian
Revolving B Loans. The Administrative Agent shall promptly give each Lender
which is required to make Revolving Loans of the Tranche specified in the
respective Notice of Borrowing, notice of such proposed Borrowing, of such
Lender’s proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
Notwithstanding anything to the contrary contained in this Agreement, unless the
Administrative Agent otherwise agrees, no more than four Notices of Borrowing
may be given in any 30 consecutive day period.

 

(b) Without in any way limiting the obligation of any Borrower to confirm in
writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or the Issuing Bank (in the case of issuances of Letters of
Credit), as the case may be, may act without liability upon the basis of such
telephonic notice, believed by the Administrative Agent or the Issuing Bank, as
the case may be, in good faith to be from an Authorized Officer of such Borrower
prior to receipt of written confirmation. In each such case, each Borrower
hereby waives the right to dispute the Administrative Agent’s or Issuing Bank’s
record of the terms of such telephonic notice.

 

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2.04. Extension of Maturity Date. The U.S. Borrower may one time prior to the
initial Maturity Date extend the initial Maturity Date to September 10, 2009
subject to the following terms and conditions: (a) not later than 60 days prior
to the initial Maturity Date, the U.S. Borrower shall deliver a written notice
indicating its intention to extend the initial Maturity Date to the
Administrative Agent (which shall promptly notify each of the Lenders), (b) the
U.S. Borrower shall pay to each Lender on or before the initial Maturity Date an
extension fee equal to .25% of the Revolving Loan Commitment of such Lender
being extended, (c) no Default or Event of Default shall exist on the initial
Maturity Date, (d) all representations and warranties contained herein and in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on the initial Maturity Date (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date), (e) the Leverage Ratio (computed by taking into account
the portion of any Revolving Loans that will continue to remain outstanding
after the initial Maturity Date) may not exceed 6.00:1.00 as of the initial
Maturity Date (computed as of the end of the fiscal quarter ending closest to
June 30, 2008 but on a Pro Forma Basis for events occurring after such date
through the initial Maturity Date) and (f) the U.S. Borrower shall deliver to
the Administrative Agent on the initial Maturity Date a certificate of an
Authorized Officer of the U.S. Borrower certifying as to the compliance with the
foregoing provisions of this Section 2.04.

 

2.05. Disbursement of Funds. No later than 1:00 P.M. (New York time) on the date
specified in each Notice of Borrowing, each Lender with a Commitment will make
available its pro rata portion (determined in accordance with Section 2.08) of
each Borrowing requested to be made on such date in the manner provided below.
All such amounts will be made available in Dollars (in the case of Dollar
Revolving Loans) or Canadian Dollars (in the case of Canadian Revolving Loans),
as the case may be, and in immediately available funds at the appropriate
Payment Office of the Administrative Agent, and the Administrative Agent will
make available to the relevant Borrower or Borrowers by depositing to its, or
their, relevant account as directed by the respective Borrower or Borrowers, the
aggregate of the amounts so made available by the Lenders. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender’s portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the respective Borrower or Borrowers, and, to the
extent such corresponding amount has previously been disbursed to such Borrower
or Borrowers, such Borrower or Borrowers shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover on demand from such Lender or such Borrower or
Borrowers, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
the respective Borrower or Borrowers until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to

 

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(i) if recovered from such Lender, the overnight Federal Funds Rate as in effect
from time to time for the first three days and the interest rate applicable to
Dollar Revolving Loans maintained as Base Rate Loans for each day thereafter and
(ii) if recovered from the respective Borrower or Borrowers, the rate of
interest applicable to the respective Borrowing, as determined pursuant to
Section 2.09. Nothing in this Section 2.05 shall be deemed to relieve any Lender
from its obligation to make Revolving Loans hereunder or to prejudice any rights
which the relevant Borrower or Borrowers may have against any Lender as a result
of any failure by such Lender to make Revolving Loans required to be made by it
hereunder.

 

2.06. Revolving Notes. (a) Subject to the provisions of the following clause
(e), each Borrower’s obligation to pay the principal of (or the Face Amount of,
as the case may be), and interest on, the Revolving Loans made by each Lender to
such Borrower shall be evidenced (i) if Dollar Revolving Loans, by a promissory
note duly executed and delivered by the U.S. Borrower substantially in the form
of Exhibit B-1, with blanks appropriately completed in conformity herewith (each
a “Dollar Revolving Note” and, collectively, the “Dollar Revolving Notes”) and
(ii) if Canadian Revolving Loans, by a promissory note duly executed and
delivered by the respective Canadian Revolving Loan Borrower substantially in
the form of Exhibit B-2, with blanks appropriately completed in conformity
herewith (each a “Canadian Dollar Revolving Note” and, collectively, the
“Canadian Dollar Revolving Notes”).

 

(b) The Dollar Revolving Note issued by the U.S. Borrower to each Lender that
has a Revolving Loan Commitment or outstanding Dollar Revolving Loans shall (i)
be executed by the U.S. Borrower, (ii) be payable to the order of such Lender
and be dated the Effective Date (or, if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Lender (or, if issued after the termination thereof, be in a
stated principal amount equal to the outstanding Dollar Revolving Loans of such
Lender to the U.S. Borrower at such time) and be payable in Dollars in the
outstanding principal amount of Dollar Revolving Loans evidenced thereby, (iv)
mature on the Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 2.09 in respect of Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 5.01, and mandatory repayment as provided in Section 5.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.

 

(c) The Canadian Dollar Revolving Note issued by each Canadian Revolving Loan
Borrower shall (i) be executed by the respective Canadian Revolving Loan
Borrower, (ii) be payable to the order of the applicable Canadian Lender (or an
affiliate designated by such Lender) and be dated the Effective Date (or, if
issued thereafter, the date of issuance), (iii) be in a stated principal amount
(expressed in Canadian Dollars) which exceeds by 25% the Canadian Dollar
Equivalent (as of the date of issuance) of the respective Lender’s Maximum
Canadian Dollar Revolving Loan Sub-Commitment; provided that if, because of
fluctuations in exchange rates after the Effective Date, the amount of the
Canadian Dollar Revolving Note of any Canadian Revolving Loan Borrower held by
any Lender would not be at least as great as the outstanding principal amount
of, and the Face Amount of, as applicable, Canadian Revolving Loans made by such
Lender to such Canadian Revolving Loan Borrower and evidenced thereby, the
respective Lender may request (and in such case the respective Canadian
Revolving Loan Borrower shall promptly execute and deliver (provided that such
Lender shall return to the Canadian Revolving Loan Borrower any Revolving Note
or Revolving

 

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Notes theretofore delivered to such Lender pursuant to this Agreement marked
“cancelled”, or if such Lender has lost or cannot find any such Revolving Note
or Revolving Notes, such Lender will execute and deliver to such Borrower a lost
note and indemnity agreement in form and substance as is usual and customary)) a
new Canadian Dollar Revolving Note in an amount equal to the greater of (x) that
amount (expressed in Canadian Dollars) which at that time exceeds by 25% the
Canadian Dollar Equivalent of the respective Lender’s Maximum Canadian Dollar
Revolving Loan Sub-Commitment or (y) the then outstanding principal amount of,
and the Face Amount of, as applicable, all Canadian Revolving Loans made by such
Lender to such Canadian Revolving Loan Borrower, (iv) be payable in Canadian
Dollars in the outstanding principal amount of, and Face Amount of, as
applicable, the Canadian Revolving Loans made to the respective Canadian
Revolving Loan Borrower and evidenced thereby, (v) mature on the Maturity Date,
(vi) bear interest as provided in the appropriate clause of Section 2.09 in
respect of the Canadian Revolving Loans evidenced thereby, (vii) be subject to
voluntary prepayment as provided in Section 5.01, and mandatory repayment as
provided in Section 5.02 and (viii) be entitled to the benefits of this
Agreement and the other Credit Documents.

 

(d) Each Lender will note on its internal records the amount of each Revolving
Loan made by it to each Borrower and each payment in respect thereof and will
prior to any transfer of any of its Revolving Notes endorse on the reverse side
thereof the outstanding principal amount of Revolving Loans (including, without
limitation, the Face Amount of any Bankers’ Acceptances) evidenced thereby.
Failure to make any such notation, or any error in such notation, shall not
affect any Borrower’s obligations in respect of such Revolving Loans.

 

(e) Notwithstanding anything to the contrary contained above or elsewhere in
this Agreement, Revolving Notes shall only be delivered to Lenders with
Revolving Loans which at any time specifically request the delivery of such
Revolving Notes. No failure of any Lender to request or obtain a Revolving Note
evidencing its Revolving Loans or to any Borrower shall affect or in any manner
impair the obligations of the respective Borrower or Borrowers to pay the
Revolving Loans (and all related Obligations) which would otherwise be evidenced
thereby in accordance with the requirements of this Agreement, and shall not in
any way affect the security or guaranties therefor provided pursuant to the
various Credit Documents. Any Lender which does not have a Revolving Note
evidencing its outstanding Revolving Loans shall in no event be required to make
the notations on a Revolving Note otherwise required in preceding clause (d). At
any time when any Lender requests the delivery of a Revolving Note to evidence
its Revolving Loans, the respective Borrower or Borrowers shall promptly execute
and deliver to the respective Lender the requested Revolving Note or Revolving
Notes in the appropriate amount or amounts to evidence such Revolving Loans.

 

2.07. Conversions. (a) Each Borrower shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount
(for the Type of Revolving Loan into which the conversion is being made), of the
outstanding principal amount of Dollar Revolving Loans made to such Borrower
pursuant to one or more Borrowings of one or more Types of Revolving Loans into
a Borrowing of another Type of Revolving Loan, provided that, (i) Dollar
Revolving Loans shall not be permitted to be converted into Canadian Revolving
Revolving Loans, and Canadian Revolving Loans shall not be permitted to be
converted into Dollar Revolving Loans, (ii) except as provided in Section
2.07(d), Revolving Loans of one Tranche may not be converted into Revolving
Loans of another Tranche, (iii) if Eurodollar Loans

 

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are converted into Base Rate Loans on a date other than the last day of an
Interest Period applicable to the Revolving Loans being converted, the
respective Borrower shall compensate the applicable Lenders for any breakage
costs incurred in connection therewith as set forth in Section 2.12, (iv) no
such partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount for Eurodollar Loans of the respective
Tranche, (v) unless the Required Lenders otherwise agree, Base Rate Loans may
not be converted into Eurodollar Loans if any Default or Event of Default exists
on the date of conversion, and (vi) no conversion pursuant to this Section 2.07
shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 2.02. Each such conversion shall be effected by the
respective Borrower giving the Administrative Agent at the Notice Office, prior
to 12:00 Noon (New York time), at least three (3) Business Days’ prior notice
(each a “Notice of Conversion”) specifying the Revolving Loans to be so
converted, the Borrowing or Borrowings pursuant to which such Revolving Loans
were made and, if to be converted into Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Revolving
Loans.

 

(b) Each Canadian Revolving Loan Borrower shall be entitled: (i) to convert from
time to time any Canadian Prime Rate Loans then outstanding under a Tranche into
Bankers’ Acceptance Loans under such Tranche in an aggregate Face Amount equal
to the aggregate principal amount in Canadian Dollars of such outstanding
Canadian Prime Rate Loans; provided that the applicable Canadian Revolving Loan
Borrower shall pay the proceeds of such Bankers’ Acceptance Loans, together with
such additional funds as may be required, to the Administrative Agent for the
account of the Canadian Lenders to repay such outstanding Canadian Prime Rate
Loans, and provided further that such Canadian Prime Rate Loans are repaid and
such Bankers’ Acceptance Loans are obtained in accordance with Section 2 and any
other applicable provisions of this Agreement; and (ii) contemporaneously with
the maturity of any Bankers’ Acceptance Loans outstanding under the Canadian
Dollar Loan Sub-Commitments, to obtain Bankers’ Acceptance Loans or Canadian
Prime Rate Loans under a Tranche in an aggregate Face Amount or principal amount
as the case may be, equal to the aggregate Face Amount of such maturing Bankers’
Acceptance Loans of such Tranche, provided that the applicable Canadian
Revolving Loan Borrower shall pay the proceeds of such new Canadian Revolving
Loan together with such additional funds as may be required to the
Administrative Agent for the account of the Canadian Lenders to repay such
maturing Bankers’ Acceptance Loans, and provided further that such new Canadian
Revolving Loans are obtained in accordance with Section 2 and any other
applicable provisions of this Agreement.

 

(c) Mandatory conversions of Bankers’ Acceptance Loans into Canadian Prime Rate
Loans shall be made in the circumstances, and to the extent, provided in clause
(i) of Schedule III. Except as otherwise provided under Section 2.17, Bankers’
Acceptance Loans shall not be permitted to be converted into any other Type of
Revolving Loan prior to the maturity date of the respective Bankers’ Acceptance
Loan.

 

(d) Each Borrower shall have the option to convert, on any Business Day, (i) all
or a portion of any Revolving Loan of a Tranche into a Revolving Loan of the
other Tranche or (ii) any Letter of Credit utilizing one Tranche into a Letter
of Credit utilizing the other Tranche; provided that (1) in the case of any
conversion from a Revolving Loan or Letter

 

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of Credit utilizing the Total Revolving A Loan Capacity into a Revolving Loan or
Letter of Credit utilizing the Total Revolving B Loan Capacity, (x) the
conditions set forth in Section 2.01(b)(iv), (v) and (vi) (or, in the case of
Letter of Credit, Section 3.02(a)(ii)) shall be satisfied as if the conversion
constituted a new borrowing (or letter of credit issuance) thereunder and (y)
the Applicable Margin shall be increased or decreased, as the case may be,
effective on the date of conversion (or, in the case of a Banker’s Acceptance,
the Additional Acceptance Fee shall become payable as described in clause (y) of
Schedule III hereto); and (2) in the case of any conversion from a Revolving
Loan or Letter of Credit utilizing the Total Revolving B Loan Capacity into a
Revolving Loan or Letter of Credit utilizing the Total Revolving A Loan
Capacity, (x) the conditions set forth in Section 2.01(a)(iv), (v), (vi) and
(vii) (or, in the case of Letter of Credit, Section 3.02(a)(ii)) shall be
satisfied as if the conversion constituted a new borrowing (or letter of credit
issuance) thereunder and (y) the Applicable Margin shall be increased or
decreased, as the case may be, effective on the date of conversion (or, in the
case of a Banker’s Acceptance, the Acceptance Fee Rebate shall become payable as
described in clause (g) of Schedule III hereto). Each such conversion shall be
effected by the respective Borrower by delivering to the Administrative Agent at
the Notice Office, prior to 12:00 Noon (New York time), at least three (3)
Business Days’ prior to the effective date of the conversion, a Notice of
Conversion specifying the Revolving Loans and Letters of Credit to be so
converted and the Borrowing or Borrowings pursuant to which such Revolving Loans
were made. Without limiting any conversion rights pursuant to Section 2.07(a),
no conversion pursuant to this Section 2.07(d) shall alter the Interest Period
applicable to any Revolving Loans subject to such conversion. The Administrative
Agent shall give each Lender prompt notice of any such proposed conversion
affecting any of its Revolving Loans.

 

2.08. Pro Rata Borrowings. Subject to the provisions of Section 2.17(b), all
Borrowings of Dollar Revolving Loans of a Tranche under this Agreement shall be
incurred from the RL Lenders pro rata on the basis of their Dollar Percentages
and (ii) all Borrowings of Canadian Revolving Loans under this Agreement shall
be incurred from the Canadian Lenders pro rata on the basis of their Canadian RL
Percentage. No Lender shall be responsible for any default by any other Lender
of its obligation to make Revolving Loans hereunder and each Lender shall be
obligated to make the Revolving Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Revolving Loans
hereunder.

 

2.09. Interest. (a) Each Borrower hereby agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan made to it from the date of
Borrowing until the earlier of (x) the maturity thereof (whether by
acceleration, prepayment or otherwise) and (y) the conversion of such Base Rate
Loan to a Eurodollar Loan pursuant to Section 2.07, at a rate per annum which
shall be equal to the sum of the Applicable Margin plus the Base Rate, each as
in effect from time to time.

 

(b) Each Borrower hereby agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of Borrowing
until the earlier of (x) the maturity thereof (whether by acceleration,
prepayment or otherwise) and (y) the conversion of such Eurodollar Loan to a
Base Rate Loan pursuant to Section 2.07, 2.10, or 2.11, as applicable, at a rate
per annum which shall, during each Interest Period applicable thereto, be equal
to the sum of the Applicable Margin as in effect from time to time plus the
Eurodollar Rate for such Interest Period.

 

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(c) Each Canadian Revolving Loan Borrower hereby agrees to pay interest in
respect of the unpaid principal amount of each Canadian Prime Rate Loan made to
such Borrower from the date of Borrowing (which shall, in the case of a
conversion pursuant to clause (i) of Schedule III, be deemed to be the date upon
which a maturing Bankers’ Acceptance is converted into a Canadian Prime Rate
Loan pursuant to said clause (i), with the proceeds thereof to be equal to the
full Face Amount of the maturing Bankers’ Acceptances) until the maturity
thereof (whether by acceleration or otherwise) or earlier repayment thereof or
conversion thereof pursuant to Section 2.17 at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Canadian Prime Rate, each as
in effect from time to time.

 

(d) With respect to Bankers’ Acceptance Loans, Acceptance Fees shall be payable
in connection therewith as provided in clause (g) of Schedule III. Until
maturity of the respective Banker’s Acceptances, interest shall not otherwise be
payable with respect thereto.

 

(e) Overdue principal and, to the extent permitted by law, overdue interest in
respect of each Revolving Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum (1) in the case of
overdue principal of, and interest or other amounts owing with respect to,
Canadian Revolving Loans and any other amounts owing in Canadian Dollars, equal
to 2% per annum plus the Applicable Margin for Canadian Prime Rate Loans plus
the Canadian Prime Rate, each as in effect from time to time, and (2) in all
other cases, equal to the greater of (x) 2% per annum plus the rate otherwise
applicable to Base Rate Loans of the respective Tranche (or in the case of
amounts which do not relate to a given Tranche of outstanding Dollar Revolving
Loans, 2% per annum plus the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans) from time to time and (y) the rate which is 2%
plus the rate then borne by such Revolving Loans (without giving effect to any
increase in the rate borne by such Revolving Loans as a result of the operation
of this clause (e)).

 

(f) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of
each Base Rate Loan and each Canadian Prime Rate Loan, monthly in arrears on the
last Business Day of each calendar month after the Effective Date, (ii) in the
case of any Eurodollar Loan, on the date of any conversion to a Base Rate Loan
pursuant to Section 2.07, 2.10 or 2.11, as applicable (on the amount so
converted), (iii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto (and, in addition in the case of any Interest
Period with a duration of six months, at the date which occurs three calendar
months after the first day of such Interest Period), and (iv) in respect of each
Revolving Loan (other than Bankers’ Acceptances), on any repayment or prepayment
(on the amount repaid or prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand; provided that, in the case of
Base Rate Loans and Canadian Revolving Loans, interest shall not be payable
pursuant to preceding clause (iv) at the time of any repayment or prepayment
thereof unless the respective repayment or prepayment is made in conjunction
with a permanent reduction of the Total Revolving Loan Commitment.

 

(g) Upon each Interest Determination Date, the Administrative Agent shall
determine the respective Eurodollar Rate for the respective Interest Period or
Interest Periods to be applicable to Eurodollar Loans and shall promptly notify
the respective Borrower

 

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and the Lenders thereof. Each such determination shall, absent manifest error,
be final and conclusive and binding on all parties hereto.

 

2.10. Interest Periods. At the time it gives any Notice of Borrowing or Notice
of Conversion in respect of the making of, or conversion into, any Eurodollar
Loan (in the case of the initial Interest Period applicable thereto) or on the
third Business Day prior to the expiration of an Interest Period applicable to
such Eurodollar Loan (in the case of any subsequent Interest Period), the
respective Borrower or Borrowers shall have the right to elect, by giving the
Administrative Agent (and the Administrative Agent shall promptly give each
affected Lender notice) notice thereof, the interest period (each an “Interest
Period”) applicable to such Eurodollar Loan, which Interest Period shall, at the
option of such Borrower, be a one, two, three or six month period, provided
that:

 

(i) all Eurodollar Loans comprising a single Borrowing shall at all times have
the same Interest Period;

 

(ii) the initial Interest Period for any Borrowing of Eurodollar Loans shall
commence on the date of such Borrowing (including, in the case of Dollar
Revolving Loans, the date of any conversion thereto from a Dollar Revolving Loan
of a different Type) and each Interest Period occurring thereafter in respect of
such Borrowing of Eurodollar Loans shall commence on the day on which the next
preceding Interest Period applicable thereto expires;

 

(iii) if any Interest Period for a Eurodollar Loan begins on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;

 

(iv) if any Interest Period for a Eurodollar Loan would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for a
Eurodollar Loan would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

 

(v) unless the Required Lenders otherwise agree, no Interest Period may be
selected at any time when any Default or Event of Default is in existence;

 

(vi) no Interest Period in respect of any Borrowing of any Tranche of Revolving
Loans shall be selected which extends beyond the Maturity Date; and

 

(vii) no Interest Period in respect of any Borrowing of Revolving Loans shall be
selected if the U.S. Borrower then knows that such Interest Period extends
beyond the date upon which a mandatory repayment of such Tranche of Revolving
Loans will be required to be made under Section 5.02 if the aggregate principal
amount of Revolving Loans of such Tranche which have Interest Periods which will
expire after such date will be in excess of the aggregate principal amount of
Revolving Loans of such Tranche permitted to be outstanding after such mandatory
repayment.

 

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Prior to the termination of any Interest Period applicable to Eurodollar Loans,
the U.S. Borrower may, at its option, designate that the respective Borrowing
subject thereto be split into more than one Borrowing (for purposes of electing
multiple Interest Periods to be subsequently applicable thereto), so long as
each such Borrowing resulting from the action taken pursuant to this sentence
meets the Minimum Borrowing Amount for the respective Tranche. If upon the
expiration of any Interest Period applicable to a Borrowing of Eurodollar Loans,
the U.S. Borrower has failed to elect, or is not permitted to elect, a new
Interest Period to be applicable to such Eurodollar Loans as provided above, it
shall be deemed to have elected to convert such Eurodollar Loans into Base Rate
Loans, effective as of the expiration date of such current Interest Period.

 

2.11. Increased Costs, Illegality, etc. (a) In the event that any Lender shall
have determined in good faith (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):

 

(i) on any Interest Determination Date that, by reason of any changes arising
after the date of this Agreement affecting the applicable interbank market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate; or

 

(ii) at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder with respect to any Eurodollar Loan
because of (x) the adoption after the date hereof or any change arising after
the date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the force of law)
or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order, guideline
or request, such as, for example, but not limited to: (A) a change in the basis
of taxation of payment to any Lender of the principal of or interest on the
Revolving Notes or any other amounts payable hereunder (except for changes in
the rate of tax on, or determined by reference to, the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office or other permanent
establishment of such Lender is located or any subdivision thereof or therein)
or (B) a change in official reserve requirements (other than Eurodollar reserves
required under Regulation D to the extent included in the computation of the
Eurodollar Rate) or any special deposit, assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (or its applicable lending office) and/or (y) other circumstances
since the date of this Agreement affecting the applicable interbank market; or

 

(iii) at any time after the date of this Agreement, that the making or
continuance of any Eurodollar Loan has been made (x) unlawful by any law or
governmental rule, regulation or order, (y) impossible by compliance by any
Lender in good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency occurring after
the date of this Agreement which materially and adversely affects the applicable
interbank market.

 

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then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the respective Borrower or Borrowers and, except in the
case of clause (i) above, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Lenders). Thereafter (w) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies the U.S. Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by any Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the respective Borrower, (x) in the
case of clause (ii) above, the respective Borrower or Borrowers shall pay to
such Lender, upon its written request therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender shall determine) as shall be required to compensate
such Lender for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing in reasonable detail the basis for the calculation thereof,
submitted to the respective Borrower or Borrowers by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties hereto),
and (y) in the case of clause (iii) above, the respective Borrower or Borrowers
shall take one of the actions specified in Section 2.11(b) as promptly as
possible and, in any event, within the time period required by law.

 

(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.11(a)(ii) or (a)(iii), the respective Borrower or
Borrowers may (and in the case of a Eurodollar Loan affected by the
circumstances described in Section 2.11(a)(iii) shall) either (x) if the
affected Eurodollar Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that such Borrower was
notified by the affected Lender or the Administrative Agent or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days’
written notice to the Administrative Agent, request the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan (which conversion, in the
case of the circumstances described in Section 2.11(a)(iii)) shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date as shall be required by applicable law));
provided that, if more than one Lender is affected at any time as described
above in this clause (b), then all affected Lenders must be treated the same
pursuant to this Section 2.11(b).

 

(c) If at any time after the date of this Agreement any Lender determines that
the introduction of or any change (which introduction or change shall have
occurred after the date of this Agreement) in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender’s Commitments
hereunder or its obligations hereunder, then the U.S. Borrower and the Canadian
Revolving Loan Borrowers, as applicable, agree to pay to such Lender, upon its
written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such

 

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Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Lender’s reasonable good faith determination of compensation
owing under this Section 2.11(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.11(c),
will give prompt written notice thereof to the Borrowers, which notice shall
show in reasonable detail the basis for calculation of such additional amounts
and shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. In addition, each such Lender, upon determining that the
circumstances giving rise to the payment of additional amounts pursuant to this
Section 2.11(c) cease to exist, will give prompt written notice thereof to the
U.S. Borrower.

 

2.12. Compensation. The respective Borrower or Borrowers shall compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans, but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender) a Borrowing or continuation of, or conversion
from or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not rescinded or deemed
rescinded pursuant to Section 2.11(a); (ii) if any repayment (including any
repayment made pursuant to Sections 2.16, 5.01 or 5.02 or as a result of an
acceleration of the Revolving Loans pursuant to Section 12) or conversion of any
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any repayment (including any repayment
made pursuant to Sections 2.16, 5.01 or 5.02 or as a result of an acceleration
of the Revolving Loans pursuant to Section 12) of any Bankers’ Acceptance Loan
occurs on a date which is not the maturity date of the respective Bankers’
Acceptance; (iv) if any prepayment of any Eurodollar Loans or Bankers’
Acceptance Loans is not made on any date specified in a notice of prepayment
given by the respective Borrower or Borrowers; (v) as a consequence of (x) any
other default by the respective Borrower or Borrowers to repay its Revolving
Loans when required by the terms of this Agreement or any Revolving Note held by
such Lender or (y) any election made pursuant to Section 2.11(b) or (vi) as a
result of any repayment or purchase contemplated by Section 2.18(e). A written
notice as to the amount owed to a Lender pursuant to this Section 2.12 shall
show in reasonable detail the basis of calculation of such amount and shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto.

 

2.13. Lending Offices; Changes Thereto. (a) Each Lender may at any time or from
time to time designate, by written notice to the Administrative Agent to the
extent not already reflected on Schedule II, one or more lending offices (which,
for this purpose, may include Affiliates of the respective Lender) for the
various Revolving Loans made, and Letters of Credit participated in, by such
Lender (including by designating a separate lending office (or Affiliate) to act
as such with respect to Dollar Revolving Loans and Letter of Credit Outstandings
versus Canadian Revolving Loans); provided that, for designations made after the
Effective Date, to the extent such designation shall result in increased costs
or Taxes under Section 2.11, 3.06 or 5.04 in excess of those which would be
charged in the absence of the designation of a different

 

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lending office (including a different Affiliate of the respective Lender), then
the Borrowers shall not be obligated to pay such excess increased costs
(although the Borrowers, in accordance with and pursuant to the other provisions
of this Agreement, shall be obligated to pay the costs which would apply in the
absence of such designation and any subsequent increased costs of the type
described above resulting from changes after the date of the respective
designation). Each lending office and Affiliate of any Lender designated as
provided above shall, for all purposes of this Agreement, be treated in the same
manner as the respective Lender (and shall be entitled to all indemnities and
similar provisions in respect of its acting as such hereunder).

 

(b) Each Lender agrees that on the occurrence of any event giving rise to the
operation of Section 2.11(a)(ii) or (iii), Section 2.11(c), Section 3.06 or
Section 5.04 with respect to such Lender, it will, if requested by the
applicable Borrower or Borrowers, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Revolving Loans or Letters of Credit affected by such event, provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 2.13 shall affect or postpone any of the
obligations of any Borrower or the right of any Lender provided in Sections
2.11, 3.06 and 5.04.

 

2.14. Replacement of Lenders. (a) (x) If any Lender becomes a Defaulting Lender
or otherwise defaults in its obligations to make Revolving Loans or fund Unpaid
Drawings, (y) upon the occurrence of an event giving rise to the operation of
Section 2.11(a)(ii) or (iii), Section 2.11(c), Section 3.06 or Section 5.04 with
respect to any Lender which results in such Lender charging to any Borrower
increased costs in excess of those being generally charged by the other Lenders
or (z) in the case of the refusal by a Lender to consent to proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Required Lenders as (and to the extent) provided in Section
14.11, the U.S. Borrower shall have the right, if no Default or Event of Default
will exist immediately after giving effect to such replacement, to replace such
Lender (the “Replaced Lender”) with one or more other Eligible Transferees, none
of whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the “Replacement Lender”) and each of whom shall be required to
be reasonably acceptable to the Administrative Agent, the Issuing Bank and, if
the Person serving as the Administrative Agent is not a Canadian Lender, any
Canadian Lender whose Maximum Canadian Dollar Revolving Loan Sub-Commitment is
not exceeded by any other Canadian Lender; provided that:

 

(i) any Replacement Lender in a replacement pursuant to this Section 2.14(a)
(with each such replacement being herein called a “Replacement”) shall be
required to comply with the requirements of Section 14.03(b) and at the time of
any Replacement the Replacement Lender shall enter into one or more Assignment
and Assumption Agreements pursuant to Section 14.03(b) (and shall pay all fees
payable pursuant to said Section 14.03(b)) pursuant to which the Replacement
Lender shall acquire all of the Commitments (and related sub-commitments) and
outstanding Revolving Loans of, and in each case participations in Letters of
Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof amounts (in the respective currencies in
which such obligations are denominated)

 

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equal to the sum of (I) the principal of (including, without limitation, the
Face Amount of Bankers’ Acceptance Loans), and all accrued interest on, all
outstanding Revolving Loans of the Replaced Lender, (II) all Unpaid Drawings
that have been funded by (and not reimbursed to) such Replaced Lender, together
with all then unpaid interest with respect thereto at such time and (III) all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to
Section 4.01, and (y) the Issuing Bank an amount equal to such Replaced Lender’s
Dollar Percentage of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) to the extent such amount was not theretofore funded by such Replaced
Lender to such Issuing Bank and

 

(ii) all obligations of the Borrowers due and owing to the Replaced Lender at
such time (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently with
such replacement.

 

(b) Upon the execution of the respective Assignment and Assumption Agreements,
the payment of amounts referred to in clauses (i) and (ii) above, recordation of
the assignment on the Register by the Administrative Agent pursuant to Section
14.14 and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Revolving Note or Revolving Notes executed
by the respective Borrowers, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 2.11, 2.12, 2.16, 3.06, 5.04, 13.06 and
14.01), which shall survive as to such Replaced Lender. In connection with any
replacement of Lenders pursuant to, and as contemplated by, this Section 2.14,
each of the Borrowers hereby irrevocably authorizes the U.S. Borrower to take
all necessary action, in the name of the U.S. Borrower, as described above in
this Section 2.14 in order to effect the replacement of the respective Lender or
Lenders in accordance with the preceding provisions of this Section 2.14. Upon
the Replaced Lender ceasing to be a Lender hereunder, such Replaced Lender
agrees to promptly return to the U.S. Borrower any Revolving Note or Revolving
Notes theretofore delivered to such Replaced Lender pursuant to this Agreement
marked “cancelled”, or if such Replaced Lender has lost or cannot find any such
Revolving Note or Revolving Notes, such Replaced Lender will execute and deliver
to the U.S. Borrower a customary lost note and indemnity agreement in form and
substance reasonably satisfactory to the U.S. Borrower.

 

2.15. Bankers’ Acceptance Provisions. The parties hereto agree that the
provisions of Schedule III shall apply to all Bankers’ Acceptances and Bankers’
Acceptance Loans created hereunder, and that the provisions of Schedule III
shall be deemed incorporated by reference into this Agreement as if such
provisions were set forth in their entirety herein.

 

2.16. Additional Revolving Loan Commitments. (a) So long as no Default or Event
of Default then exists or would result therefrom, the U.S. Borrower shall have
the right at any time and from time to time after the Effective Date and on or
prior to 30 days prior to the Maturity Date, and upon at least 15 Business Days
prior written notice to the Administrative Agent (which shall promptly notify
each of the Lenders), to request on up to four occasions that one or more
Lenders (and/or one or more other Persons which will become Lenders as provided
in clause (vii) below (a “New Lender”)) provide Additional Revolving Loan
Commitments

 

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(which may in the case of Canadian Lenders (or, in the circumstances
contemplated by clause (vii) below, any other Person that becomes a Canadian
Lender (a “New Canadian Lender”)) include a Canadian Dollar Revolving Loan
Sub-Commitment) and, subject to the applicable terms and conditions contained in
this Agreement, make Dollar Revolving Loans or Canadian Revolving Loans, as the
case may be, pursuant thereto, it being understood and agreed, however, that (i)
no Lender shall be obligated to provide an Additional Revolving Loan Commitment
as a result of any such request by the U.S. Borrower, (ii) until such time, if
any, as such Lender has agreed in its sole discretion to provide an Additional
Revolving Loan Commitment and executed and delivered to the Administrative Agent
an Additional Revolving Loan Commitment Agreement in respect thereof as provided
in Section 2.16(b) and such Additional Revolving Loan Commitment Agreement has
become effective, such Lender shall not be obligated to fund any Revolving Loans
in excess of its Revolving Loan Commitment as in effect prior to giving effect
to such Additional Revolving Loan Commitments provided pursuant to this Section
2.16, (iii) any Lender or New Lender may so provide an Additional Revolving Loan
Commitment (and any Canadian Lender or any New Canadian Lender may so provide a
Canadian Revolving Loan Sub-Commitment) without the consent of any other Lender
but with the prior consent of the Administrative Agent (which consent shall not
be unreasonably withheld), (iv) each provision of Additional Revolving Loan
Commitments on a given date pursuant to this Section 2.16 shall be in a minimum
aggregate amount (for all Lenders (including, New Lenders)) of at least
$10,000,000 and in integral multiples of $1,000,000 in excess thereof, (v) the
aggregate amount of all Additional Revolving Loan Commitments permitted to be
provided pursuant to this Section 2.16 shall not exceed $100,000,000, (vi) the
fees payable to any Lender (including any New Lender) providing an Additional
Revolving Loan Commitment shall be as set forth in the relevant Additional
Revolving Loan Commitment Agreement, (vii) if, after the U.S. Borrower has
requested the then existing Lenders (other than Defaulting Lenders) to provide
Additional Revolving Loan Commitments pursuant to this Section 2.16, the U.S.
Borrower has not received Additional Revolving Loan Commitments in an aggregate
amount equal to that amount of the Additional Revolving Loan Commitments which
the U.S. Borrower desires to obtain pursuant to such request (as set forth in
the notice provided by the U.S. Borrower to the Administrative Agent as provided
above), then the U.S. Borrower may request Additional Revolving Loan Commitments
(including additional Canadian Dollar Revolving Loan Sub-Commitments) from
Persons which would qualify as Eligible Transferees hereunder (or from Persons
who qualify as a Canadian Lender in the case of the Canadian Dollar Revolving
Loan Sub-Commitment) in an aggregate amount equal to such deficiency on terms
which are no more favorable to such Eligible Transferee (or other Person
qualifying as a Canadian Lender) in any respect than the terms offered to the
Lenders, provided that any such Additional Revolving Loan Commitments provided
by any such Eligible Transferee (or other Person qualifying as a Canadian
Lender) which is not already a Lender shall be in a minimum amount (for such
Eligible Transferee) of at least $10,000,000, and (viii) all actions taken by
the U.S. Borrower pursuant to this Section 2.16 shall be done in coordination
with the Administrative Agent.

 

(b) At the time of any provision of Additional Revolving Loan Commitments
pursuant to this Section 2.16, (i) the U.S. Borrower, the Administrative Agent
and each Lender or other Eligible Transferee (each, an “Additional Revolving
Loan Lender”) which agrees to provide an Additional Revolving Loan Commitment
shall execute and deliver to the Administrative Agent an Additional Revolving
Loan Commitment Agreement substantially in the form of Exhibit J (appropriately
completed), subject to such modifications in form and

 

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substance reasonably satisfactory to the Administrative Agent as may be
necessary or appropriate (with the effectiveness of such Additional Revolving
Loan Lender’s Additional Revolving Loan Commitment to occur upon delivery of
such Additional Revolving Loan Commitment Agreement to the Administrative Agent,
the payment of any fees required in connection therewith and the satisfaction of
the other conditions in this Section 2.16(b) to the reasonable satisfaction of
the Administrative Agent), (ii) the U.S. Borrower shall, in coordination with
the Administrative Agent, repay outstanding Revolving Loans of certain of the
Lenders, and incur additional Revolving Loans from certain other Lenders, in
each case so that all of the Lenders participate in each outstanding Borrowing
of Revolving Loans pro rata on the basis of their respective Revolving Loan
Commitments (after giving effect to any increase in the Total Revolving Loan
Commitment pursuant to this Section 2.16) and with the U.S. Borrower being
obligated to pay to the respective Lenders the costs of the type referred to in
Section 2.12 in connection with any such repayment and (iii) if requested by the
Administrative Agent, the U.S. Borrower shall deliver to the Administrative
Agent an opinion, in form and substance reasonably satisfactory to the
Administrative Agent, from counsel to the U.S. Borrower and dated such date,
covering such matters similar to those set forth in the opinions of counsel
delivered to the Administrative Agent on the Effective Date pursuant to Section
6.02 and such other matters as the Administrative Agent may reasonably request.
The Administrative Agent shall promptly notify each Lender as to the occurrence
of each Additional Revolving Loan Commitment Date, and (v) on each such date,
the Total Revolving Loan Commitment under, and for all purposes of, this
Agreement shall be increased by the aggregate amount of such Additional
Revolving Loan Commitments, (w) on each such date, the Total Revolving A Loan
Capacity shall be increased by either (1) a fraction of the aggregate amount of
such Additional Revolving Loan Commitments, the numerator of which is the Total
Revolving A Loan Capacity as of such date and the denominator of which is the
Total Revolving Loan Commitments prior to giving effect to such Additional
Revolving Loan Commitments or (2) such greater amount as the U.S. Borrower shall
designate (provided that such designated increase in the Total Revolving A Loan
Capacity shall not exceed the aggregate amount of such Additional Revolving Loan
Commitments), and the Total Revolving B Loan Capacity shall be increased by the
aggregate amount of such Additional Revolving Loan Commitments minus the
increase in the Total Revolving A Loan Capacity on such date pursuant to this
clause (w), (x) on each such date Schedule I-A shall be deemed modified to
reflect the revised Revolving Loan Commitments of the affected Lenders, (y) on
each such date on which an additional Canadian Dollar Revolving Loan
Sub-Commitment is provided, Schedule I-B shall be deemed modified to reflect the
revised Canadian Dollar Revolving Loan Subcommitment of the affected Canadian
Lenders and (z) the availability amounts set forth in clauses (B), (C) and (D)
of Section 2.01(a)(vii) shall automatically be increased by the same percentage
as the percentage increase in the Total Revolving A Loan Capacity pursuant to
this Section 2.16.

 

2.17. Special Provisions Regarding RL Lenders and Canadian Revolving Loans.

 

(a) On the fifth Business Day after the occurrence of a Sharing Event,
automatically (and without the taking of any action) (x) all then outstanding
Canadian Revolving Loans of a Tranche shall be automatically converted into
Dollar Revolving Loans of such Tranche (in an amount equal to the Dollar
Equivalent of the aggregate principal amount or Face Amount, as the case may be,
of the respective Canadian Revolving Loans of such Tranche on the date such
Sharing Event first occurred, which Dollar Revolving Loans shall be owed by the

 

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respective Canadian Revolving Loan Borrower, shall thereafter be deemed to be
Base Rate Loans and shall be immediately due and payable on the date such
Sharing Event has occurred) and (y) all accrued and unpaid interest and other
amounts owing with respect to such Canadian Revolving Loans shall be immediately
due and payable in Dollars, taking the Dollar Equivalent of such accrued and
unpaid interest and other amounts. The occurrence of any conversion as provided
above in this Section 2.17(a) shall be deemed to constitute, for purposes of
Section 2.12, a prepayment of the respective Canadian Revolving Loans before the
last day of any Interest Period relating thereto.

 

(b) Upon the occurrence of a Sharing Event, each RL Lender shall (and hereby
unconditionally and irrevocably agrees to) purchase and sell (in each case in
Dollars) undivided participating interests in the Revolving Loans of outstanding
Tranches to, and any Unpaid Drawings of such Tranches owing by, each Borrower in
such amounts so that each RL Lender shall have a share of the outstanding
Revolving Loans of each Tranche and Unpaid Drawings of each Tranche then owing
by each Borrower equal to its RL Percentage thereof. Upon any such occurrence
the Administrative Agent shall notify each RL Lender and shall specify the
amount of Dollars required from such RL Lender in order to effect the purchases
and sales by the various RL Lenders of participating interests in the amounts
required above (together with accrued interest with respect to the period from
the last interest payment date through the date of the Sharing Event plus any
additional amounts payable by any respective Borrower pursuant to Section 5.04
in respect of such accrued but unpaid interest); provided that in the event that
a Sharing Event shall have occurred, each RL Lender shall be deemed to have
purchased, automatically and without request, such participating interests.
Promptly upon receipt of such request, each RL Lender shall deliver to the
Administrative Agent (in immediately available funds in Dollars) the net amounts
as specified by the Administrative Agent. If any RL Lender fails to so deliver
such net amounts to the Administrative Agent, distributions of amounts otherwise
payable under this Agreement to such RL Lender shall be distributed instead to
the Canadian Lenders (and applied to the purchase price owing to such Canadian
Lenders) until such payments are made by such defaulting RL Lender or the
Canadian Lenders have received the purchase price owing to them by the
Defaulting Lenders. The Administrative Agent shall promptly deliver the amounts
so received to the various RL Lenders in such amounts as are needed to effect
the purchases and sales of participations as provided above. Promptly following
receipt thereof, each RL Lender which has sold participations in any of its
Revolving Loans (through the Administrative Agent) will deliver to each RL
Lender (through the Administrative Agent) which has so purchased a participating
interest a participation certificate dated the date of receipt of such funds and
in such amount. It is understood that the amount of funds delivered by each RL
Lender shall be calculated on a net basis, giving effect to both the sales and
purchases of participations by the various RL Lenders as required above.

 

(c) Upon, and after, the occurrence of a Sharing Event (i) no further Canadian
Revolving Loans shall be made to any Borrower, (ii) all amounts from time to
time accruing with respect to, and all amounts from time to time payable on
account of, Canadian Revolving Loans (including, without limitation, any
interest and other amounts which were accrued but unpaid on the date of such
purchase) shall be payable in Dollars as if each such Canadian Revolving Loan
had originally been made in Dollars and shall be distributed by the relevant RL
Lenders (or their affiliates) to the Administrative Agent for the account of the
RL

 

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Lenders which are participating therein and (iii) the Maximum Canadian Dollar
Revolving Loan Sub-Commitments of the various Canadian Lenders shall be
automatically terminated (which shall result in a like increase to the U.S.
Revolving Loan Sub-Commitments of the respective Lenders, except to the extent
the Revolving Loan Commitments of the various Lenders are terminated as
otherwise provided in this Agreement). Notwithstanding anything to the contrary
contained above, the failure of any RL Lender to purchase its participating
interests in any Revolving Loans upon the occurrence of a Sharing Event shall
not relieve any other RL Lender of its obligation hereunder to purchase its
participating interests in a timely manner, but no RL Lender shall be
responsible for the failure of any other RL Lender to purchase the participating
interest to be purchased by such other RL Lender on any date.

 

(d) If any amount required to be paid by any RL Lender pursuant to Section
2.17(b) is paid to the Administrative Agent after the date such amount is
required to be paid by such RL Lender but within three Business Days following
the date upon which such RL Lender receives notice from the Administrative Agent
of the amount of its participations required to be purchased pursuant to Section
2.17(b), such RL Lender shall also pay to the Administrative Agent on demand an
amount equal to the product of (i) the amount so required to be paid by such RL
Lender for the purchase of its participations times (ii) the daily average
Federal Funds Rate, during the period from and including the date of request for
payment to the date on which such payment is immediately available to the
Administrative Agent times (iii) a fraction of the numerator of which is the
number of days that elapsed during such period and the denominator of which is
360. If any such amount required to be paid by any RL Lender pursuant to Section
2.17(b) is not in fact made available to the Administrative Agent within three
Business Days following the date upon which such RL Lender receives notice from
the Administrative Agent as to the amount of participations required to be
purchased by it, the Administrative Agent shall be entitled to recover from such
RL Lender on demand, such amount with interest thereon calculated from such
request date at the rate per annum applicable to Canadian Revolving Loans of the
Tranche required to be purchased maintained as Canadian Prime Rate Loans
hereunder. A certificate of the Administrative Agent submitted to any RL Lender
with respect to any amounts payable under this Section 2.17 shall be conclusive
in the absence of manifest error. Amounts payable by any RL Lender pursuant to
this Section 2.17 shall be paid to the Administrative Agent for the account of
the relevant RL Lenders; provided that, if the Administrative Agent (in its sole
discretion) has elected to fund on behalf of such RL Lender the amounts owing to
such RL Lenders, then the amounts shall be paid to the Administrative Agent for
its own account.

 

(e) Whenever, at any time after the relevant RL Lenders have received from any
RL Lenders purchases of participations in any Revolving Loans pursuant to this
Section 2.17, the various RL Lenders receive any payment on account thereof,
such RL Lenders will distribute to the Administrative Agent, for the account of
the various RL Lenders participating therein, such RL Lenders’ participating
interests in such amounts (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such participations were
outstanding but also taking into account the payment of any interest in
connection with the purchase of such participating interest pursuant to Section
2.18(b)) in like funds as received; provided, however, that in the event that
such payment received by any RL Lenders is required to be returned, the RL
Lenders who received previous distributions in respect of their participating
interests therein will return to the respective RL Lenders any portion thereof

 

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previously so distributed to them in like funds as such payment is required to
be returned by the respective RL Lenders.

 

(f) Each RL Lender’s obligation to purchase participating interests pursuant to
this Section 2.17 shall be absolute and unconditional and shall not be affected
by any circumstance including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such RL Lender may have against any
other RL Lender, the relevant Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of an Event of Default, (iii) any
adverse change in the condition (financial or otherwise) of any Borrower or any
other Person, (iv) any breach of this Agreement by any Borrower or any Lender or
any other Person, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

 

(g) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, upon any purchase of participations as required above, each RL Lender
which has purchased such participations shall be entitled to receive from the
relevant Borrowers any reasonable increased costs and indemnities (including,
without limitation, pursuant to Sections 2.11, 2.12, 2.16, 3.06 and 5.04)
directly from the Borrowers to the same extent as if it were the direct Lender
as opposed to a participant therein, which reasonable increased costs shall be
calculated without regard to Section 2.13, Section 14.03(a) or the last sentence
of Section 14.03(b). The Borrowers acknowledge and agree that, upon the
occurrence of a Sharing Event and after giving effect to the requirements of
this Section 2.17, increased Taxes may be owing by them pursuant to Section
5.04, which Taxes shall be paid (to the extent provided in Section 5.04) by the
respective Borrowers, without any claim that the increased Taxes are not payable
because same resulted from the participations effected as otherwise required by
this Section 2.17.

 

2.18. Voluntary Adjustment or Termination of Total Maximum Canadian Dollar
Revolving Loan Sub-Commitment and Total Canadian Dollar Revolving Loan
Sub-Commitment. (a) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto agree that (i) the Total Canadian Dollar Revolving
Loan Sub-Commitment shall be fixed by the U.S. Borrower from time to time in
accordance with Section 2.18(b); (ii) in no event shall the Total Canadian
Dollar Revolving Loan Sub-Commitment exceed the sum of the Canadian Dollar
Revolving Loan Sub Commitments of the various Canadian Lenders as then in
effect; (iii) in no event shall the Canadian Dollar Revolving Loan
Sub-Commitment of any Canadian Lender exceed the Maximum Canadian Dollar
Revolving Loan Sub-Commitment of such Lender; (iv) at no time shall the U.S.
Borrower be permitted to request an extension of credit pursuant to the Total
Revolving Loan Commitment (whether in the form of Revolving Loans or Letter of
Credit Outstandings) and no such credit shall be made available, if after giving
effect thereto, the sum of the aggregate principal amount of outstanding
Revolving Loans (excluding for this purpose Canadian Revolving Loans), and the
amount of the Letter of Credit Outstandings at such time would exceed an amount
equal to the Total U.S. Revolving Loan Sub-Commitment as then in effect; (v) at
no time shall any Canadian Revolving Loan Borrower be permitted to request an
extension of credit in the form of Canadian Revolving Loans if, after giving
effect thereto, the aggregate principal (and Face Amount, as applicable) of
outstanding Canadian Revolving Loans (for this purpose, using the Dollar
Equivalent of the principal and/or Face Amount, as appropriate, of Canadian
Revolving Loans) would exceed the Total Canadian Dollar Revolving Loan
Sub-Commitment; and (vi) the Canadian Dollar Revolving Loan Sub-Commitment of
any

 

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Canadian Lender at any time shall be an amount equal to its pro rata share of
the Total Canadian Dollar Revolving Loan Sub-Commitment at such time determined
on the basis of the Canadian RL Percentages of the various Lenders. At all times
from and after the date of this Agreement until an adjustment is made in
accordance with this Section 2.18, the Total Canadian Dollar Revolving Loan
Sub-Commitment shall be U.S. $0. The Total Canadian Dollar Revolving Loan
Sub-Commitment shall not exceed the total amount set forth (or, in the case of
an additional commitment as described in Section 2.16, deemed to be set forth)
on Schedule I-B.

 

(b) The U.S. Borrower may at any time (but not more than four (4) times in any
calendar year) give written notice, which notice shall be irrevocable, to the
Administrative Agent requesting an adjustment effective not earlier than the
fifth Business Day following such request (each such date an “Adjustment Date”)
to the amount of the Total Canadian Dollar Revolving Loan Sub-Commitment;
provided that no reduction to the amount of the Total Canadian Dollar Revolving
Loan Sub-Commitment may be made if, after giving effect to any such reduction,
the Total Canadian Dollar Revolving Loan Sub-Commitment would be less than the
sum of the aggregate Face Amount of all Bankers’ Acceptance Loans and the
principal amount of all Canadian Prime Rate Loans (for this purpose, using the
Dollar Equivalent of the Face Amounts or principal amounts thereof) then
outstanding (other than any such Canadian Revolving Loans which will be repaid
in full on or before the respective Adjustment Date). If any adjustment is made
on an Adjustment Date as described in this Section 2.18, then on the respective
Adjustment Date all repayments required by this Section 2.18 and Section 5.02
shall be made on such date to the extent required as a result of such
adjustments and in manner provided in Section 5.02. At any time the U.S.
Borrower may, but shall not be required, to request an estimate of adjustment
costs by written request to the Administrative Agent. Upon receipt of such
request, the Administrative Agent shall solicit from the Lenders estimates (and
the Lenders shall provide such estimates not later than 5 Business Days after
such solicitation, promptly after the receipt of which the Administrative Agent
shall provide a summary thereof to the U.S. Borrower) of costs payable under
Sections 2.12 and 2.18(e) as a result of the proposed adjustment. Such estimates
shall be based upon circumstances at the time and shall not be binding upon any
Lender or the Administrative Agent. Such request for an estimate by the U.S.
Borrower shall not be binding upon the U.S. Borrower and shall not constitute
the notice described in the first sentence of this Section 2.18(b).

 

(c) In connection with any adjustment to the Total Canadian Dollar Revolving
Loan Sub-Commitment requested pursuant to Section 2.18(b), (i) if any such
adjustment would result in an increase in the Total Canadian Dollar Revolving
Loan Sub-Commitment, commencing on the Adjustment Date additional Canadian
Revolving Loans shall be permitted to be incurred in accordance with the
requirements of Section 2.01 and (ii) if any such adjustment would result in a
decrease in the Total Canadian Dollar Revolving Loan Sub-Commitment, all
Canadian Revolving Loans required to be repaid pursuant to Section 5.02(a)(ii)
shall, to the extent required by Section 5.02(a)(ii), be repaid on the
Adjustment Date by the time required by Section 5.03. It is understood and
agreed that the Administrative Agent shall not have any liability to any Lenders
if the payments contemplated above in this Section 2.18 are not actually made on
the Adjustment Date, and that any failure to make the payments required to be
made on an Adjustment Date pursuant to this Section 2.18 or Section 5.02(a)(ii)
shall constitute an Event of Default in accordance with the terms of Section
12.01.

 

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(d) On any date the U.S. Borrower may, at its option, permanently reduce or
terminate the Maximum Canadian Dollar Revolving Loan Sub-Commitments (specifying
the aggregate amount of such reduction); provided that (i) no such reduction
shall be made in an amount which would cause the Dollar Equivalent of the then
outstanding aggregate principal amount or Face Amount, as the case may be, of
the Canadian Revolving Loans to exceed the Maximum Canadian Dollar Revolving
Loan Sub-Commitments of the Canadian Lenders or the Canadian Dollar Revolving
Loan Sub-Commitments of the Canadian Lenders after giving effect to the
respective reduction pursuant to this Section 2.18(d), and (ii) each reduction
pursuant to this Section 2.18(d) shall apply pro rata to reduce the Maximum
Canadian Dollar Revolving Loan Sub-Commitments of the Canadian Lenders (based
upon the relative amounts of such sub-commitments).

 

(e) In connection with any Adjustment Date for any adjustment to the Total
Canadian Dollar Revolving Loan Sub-Commitment pursuant to this Section 2.18, on
such Adjustment Date the U.S. Borrower shall, in coordination with the
Administrative Agent, repay outstanding Dollar Revolving Loans of certain of the
Lenders, and incur additional Dollar Revolving Loans from certain other Lenders,
in each case so that all of the Lenders participate in each outstanding
Borrowing of each Tranche of Dollar Revolving Loans pro rata on the basis of
their respective U.S. Revolving Loan Sub-Commitments (after giving effect to any
change to the U.S. Revolving Loan Sub-Commitments as a result of such adjustment
to the Total Canadian Dollar Revolving Loan Sub-Commitment pursuant to this
Section 2.18) (provided, that, if requested by the U.S. Borrower and consented
to by the Administrative Agent (such consent not to be unreasonably withheld),
the Lenders shall in lieu thereof be required to purchase and sell (in each case
in Dollars) undivided participating interests in the Dollar Revolving Loans
outstanding to, and any Unpaid Drawings owing by, the U.S. Borrower) and the
U.S. Borrower shall be obligated to pay to the respective Lenders the costs of
the type referred to in Section 2.12 in connection with any such repayment (or
purchases and sales).

 

SECTION 3. Letters of Credit.

 

3.01. Letters of Credit. (a) Subject to and upon the terms and conditions set
forth herein, the U.S. Borrower may request that the Issuing Bank issue, at any
time and from time to time on and after the Effective Date and prior to the
tenth Business Day prior to the Maturity Date, for the account of the U.S.
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the U.S. Borrower or any of its Subsidiaries, an irrevocable sight standby
letter of credit, in a form customarily used by the Issuing Bank or in such
other form as has been reasonably approved by the Issuing Bank (each such
standby letter of credit, a “Letter of Credit”) in support of such L/C
Supportable Obligations. The Issuing Bank shall not issue any commercial or
trade letters of credit. Letters of Credit may, at the option of the Issuing
Bank, provide that they are governed by the Uniform Customs and Practice for
Documentary Credits or the International Standby Practices or other commercially
standard conventions. A Letter of Credit may be either designated as a Letter of
Credit issued as utilization of the Total Revolving A Loan Capacity and included
in the Aggregate Revolving A Credit Exposure (a “Letter of Credit A”) or as
utilization of the Total Revolving B Loan Capacity and included in the Aggregate
Revolving B Credit Exposure (a “Letter of Credit B”), as specified in the Letter
of Credit Request.

 

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(b) The Issuing Bank hereby agrees that it will (subject to the terms and
conditions contained herein), at any time and from time to time on and after the
Effective Date and prior to the tenth Business Day prior to the Maturity Date,
following its receipt of the respective Letter of Credit Request, issue within
five (5) Business Days for the account of the U.S. Borrower, subject to the
terms and conditions of this Agreement, one or more Letters of Credit in support
of such L/C Supportable Obligations of the U.S. Borrower or any of its or their
Subsidiaries as are permitted to remain outstanding without giving rise to a
Default or an Event of Default, provided that the Issuing Bank shall not issue
any Letter of Credit if at the time of such issuance:

 

(i) any order, judgment or decree of any governmental authority or arbitrator
shall purport by its terms to enjoin or restrain the Issuing Bank from issuing
such Letter of Credit or any requirement of law applicable to the Issuing Bank
or any request or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall prohibit,
or request that the Issuing Bank refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which the Issuing Bank is not otherwise compensated)
not in effect on the date hereof, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to the Issuing Bank as of the date
hereof and which the Issuing Bank reasonably and in good faith deems material to
it; or

 

(ii) the Issuing Bank shall have received notice from the Administrative Agent
at the direction of the Required Lenders prior to the issuance of such Letter of
Credit of the type described in the second sentence of Section 3.03(b).

 

3.02. Maximum Letter of Credit Outstandings; Final Maturities; etc. (a)
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings at such time, would exceed $10,000,000, (ii) no
Letter of Credit shall be issued if, after giving effect thereto, (x) the
Revolving Credit Exposure of any Lender would exceed its Revolving Loan
Commitment as then in effect or (y) the Aggregate Revolving Credit Exposure of
such Tranche would exceed the Total Revolving A Loan Capacity or the Total
Revolving B Loan Capacity, as applicable, as then in effect, (iii) each Letter
of Credit shall by its terms terminate on or before the earlier of (x) the date
which occurs 12 months after the date of the issuance thereof (although any such
Letter of Credit may be extendible for successive periods of up to 12 months,
but not beyond the tenth Business Day prior to the Maturity Date (unless on or
before the date of issuance of such Letter of Credit the U.S. Borrower cash
collateralizes (it being understood such cash collateral will be held in an
interest bearing account under the sole dominion and control of the
Administrative Agent in which the Administrative Agent, for the benefit of the
Secured Parties, has a first priority security interest) the reimbursement
obligation with respect thereto with cash equal to 105% of the Stated Amount of
such Letter of Credit or delivers a back-to-back letter of credit in form
satisfactory to the Issuing Bank on terms acceptable to the Issuing Bank)) and
(y) the tenth Business Day prior to the Maturity Date (unless on or before the
Maturity Date the U.S. Borrower cash collateralizes the reimbursement obligation
with respect thereto with cash equal to 105% of the Stated Amount of such Letter
of Credit on terms acceptable to the Issuing Bank or delivers a back-to-back
letter of credit in form satisfactory to the Issuing Bank), (iv) each

 

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Letter of Credit shall be denominated in Dollars and (v) the Stated Amount of
each Letter of Credit shall be no less than $500,000, or such lesser amount as
is acceptable to the Issuing Bank.

 

(b) Notwithstanding the foregoing, in the event a Lender Default exists, the
Issuing Bank shall not be required to issue any Letters of Credit unless the
Issuing Bank has entered into arrangements satisfactory to it and the U.S.
Borrower to eliminate the Issuing Bank’s risk with respect to the participation
in Letters of Credit of the Defaulting Lender or Lenders, which may include cash
collateralizing such Defaulting Lender’s or Lenders’ RL Percentage of the Letter
of Credit Outstandings.

 

3.03. Letter of Credit Requests; Notices of Issuance. (a) Whenever it desires
that a Letter of Credit be issued for its account, the U.S. Borrower shall give
the Administrative Agent and the Issuing Bank written notice thereof prior to
1:00 P.M. (New York time) at least five Business Days’ (or such shorter period
as is acceptable to the Issuing Bank) prior to the proposed date of issuance
(which shall be a Business Day). Each notice shall be in the form of Exhibit C
(each a “Letter of Credit Request”), shall specify the Tranche under which such
Letter of Credit shall be issued, and may be delivered to the Administrative
Agent and the Issuing Bank by facsimile.

 

(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the U.S. Borrower that (i) the requested Letter
of Credit may be issued in accordance with, and will not violate the
requirements of, Section 3.02 and (ii) all of the applicable conditions set
forth in Sections 6 and 7 shall be met at the time of such issuance. Unless the
Issuing Bank has received notice from the Administrative Agent at the direction
of the Required Lenders before it issues a Letter of Credit that one or more of
the conditions specified in Section 6 are not satisfied on the Effective Date or
Section 7 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 3.02, then the Issuing Bank shall issue the requested
Letter of Credit for the account of the U.S. Borrower in accordance with the
Issuing Bank’s usual and customary practices. Promptly after the issuance of or
amendment to any Letter of Credit, the Issuing Bank shall notify the
Administrative Agent and the U.S. Borrower, in writing, of such issuance or
amendment and such notice shall be accompanied by a copy of such Letter of
Credit or amendment. Promptly after receipt of such notice, the Administrative
Agent shall notify each RL Lender in writing of such issuance or amendment and,
if so requested by any RL Lender, the Administrative Agent shall furnish such RL
Lender with a copy of the issued Letter of Credit or such amendment.

 

3.04. Letter of Credit Participations. (a) Immediately upon the issuance by the
Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to have
sold and transferred to each RL Lender (other than the Issuing Bank) (each such
Lender with respect to any Letter of Credit, in its capacity under this Section
3.04, a “Participant”), and each Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, in a percentage
equal to such Participant’s Dollar Percentage, in such Letter of Credit, each
drawing or payment made thereunder and the obligations of the U.S. Borrower
under this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto (although Letter of Credit Fees shall be paid directly to the
Administrative Agent for the ratable account of the RL Lenders based on their
Dollar Percentages as provided in Section 4.01(c) and the Participants shall
have no right to

 

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receive any portion of any Facing Fees); provided that, upon the occurrence of a
Sharing Event, the participations described above shall be automatically
adjusted so that each RL Lender shall have a participation in all then
outstanding Letters of Credit under a Tranche, and related obligations as
described above, in a percentage equal to its RL Percentage (which adjustments
shall occur concurrently with the adjustments described in Section 2.17). Upon
any change in the Revolving Loan Commitments or Dollar Percentages of the RL
Lenders pursuant to this Agreement (or in the circumstances provided in the
proviso to the immediately preceding sentence, the RL Percentages of the RL
Lenders pursuant to this Agreement), it is hereby agreed that, with respect to
all outstanding Letters of Credit and Unpaid Drawings of a Tranche, there shall
be an automatic adjustment to the participations pursuant to this Section 3.04
to reflect the new Dollar Percentages or, in the circumstances described in the
proviso to the immediately preceding sentence, the RL Percentages of the various
RL Lenders.

 

(b) In determining whether to pay under any Letter of Credit, the Issuing Bank
shall have no obligation relative to the Participants or any other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction),
shall not create for the Issuing Bank any resulting liability to the U.S.
Borrower, any other Credit Party, any Lender or any other Person.

 

(c) If the Issuing Bank makes any payment under any Letter of Credit and the
U.S. Borrower shall not have reimbursed such amount in full to the Issuing Bank
pursuant to Section 3.05(a), the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the benefit of the Issuing
Bank the amount of such Participant’s Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) of such unreimbursed payment
in Dollars and in same day funds. If the Administrative Agent so notifies, prior
to 11:00 A.M. (New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the Administrative Agent for the benefit of the Issuing Bank, in Dollars,
such Participant’s Dollar Percentage (or, after the occurrence of a Sharing
Event, its RL Percentage) of the amount of such payment on such Business Day in
same day funds; provided, however, that no Participant shall be obligated to pay
to the Administrative Agent for the benefit of the Issuing Bank its Dollar
Percentage (or, after the occurrence of a Sharing Event, its RL Percentage) of
such unreimbursed amount for (i) any wrongful payment made by the Issuing Bank
under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction) and (ii) with
respect to any Letter of Credit with an expiration date after the tenth Business
Day prior to the Maturity Date, any payment made by the Issuing Bank in excess
of the amount of cash collateral delivered by the U.S. Borrower pursuant to
Section 3.02(a)(iii)(y). If and to the extent such Participant shall not have so
made its Dollar Percentage (or, after the occurrence of a Sharing Event, its RL
Percentage) of the amount of such payment available to the Administrative Agent
for the benefit of the Issuing Bank, such Participant agrees to pay to the
Administrative Agent for the benefit of the Issuing Bank,

 

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forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent
for the benefit of the Issuing Bank at the overnight Federal Funds Rate for the
first three days and at the interest rate applicable to Dollar Revolving Loans
of the same Tranche under which the applicable Letter of Credit was issued
maintained as Base Rate Loans hereunder for each day thereafter. The failure of
any Participant to make available to the Issuing Bank its Dollar Percentage (or,
after the occurrence of a Sharing Event, its RL Percentage) of any payment under
any Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to the Issuing Bank its Dollar Percentage (or, after
the occurrence of a Sharing Event, its RL Percentage) of any unreimbursed
payment with respect to a Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Administrative Agent for the benefit of the
Issuing Bank such other Participant’s Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) of any such payment.

 

(d) Whenever the Issuing Bank receives a payment of a reimbursement obligation
as to which it has received any payments from the Participants pursuant to
clause (c) above, the Issuing Bank shall pay to the Administrative Agent for the
benefit of each Participant which has paid its Dollar Percentage (or, after the
occurrence of a Sharing Event, its RL Percentage) thereof, in Dollars and in
same day funds, an amount equal to such Participant’s share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.

 

(e) Upon the request of any Participant, the Issuing Bank shall furnish to such
Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.

 

(f) The obligations of the Participants to make payments to the Administrative
Agent for the benefit of the Issuing Bank with respect to Letters of Credit
issued by it shall be irrevocable and not subject to any qualification or
exception whatsoever (except as otherwise provided in the proviso to the second
sentence of Section 3.04(c)) and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:

 

(i) any lack of validity or enforceability of this Agreement or any of the other
Credit Documents;

 

(ii) the existence of any claim, setoff, defense or other right which any Credit
Party or any of its Subsidiaries or Affiliates may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), any Agent, the
Issuing Bank, any Participant, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between any
Credit Party or any Subsidiary or Affiliate of any Credit Party and the
beneficiary named in any such Letter of Credit);

 

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

 

(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents;

 

(v) the occurrence of any Default or Event of Default; or

 

(vi) subject to the provisions of Section 3.04(c), the fact that the expiration
date of any Letter of Credit is beyond the Maturity Date.

 

3.05. Agreement to Repay Letter of Credit Drawings. (a) Subject to Section
3.05(b), the U.S. Borrower hereby agrees to reimburse the Issuing Bank, by
making payment in Dollars and in immediately available funds directly to the
Administrative Agent at the Payment Office for the benefit of the Issuing Bank,
for any payment or disbursement made by the Issuing Bank under any Letter of
Credit issued by it (with each such amount so paid, until reimbursed, an “Unpaid
Drawing”), immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by the Issuing
Bank, to the extent not reimbursed prior to 2:00 P.M. (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Issuing Bank was reimbursed by the U.S.
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Dollar Revolving Loans under
the same Tranche as the applicable Letter of Credit maintained as Base Rate
Loans; provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (New York time) on the third Business Day following the receipt of
notice of such payment or disbursement or upon the occurrence of a Default or an
Event of Default under Section 12.05, interest shall thereafter accrue on the
amounts so paid or disbursed by the Issuing Bank (and until reimbursed by the
U.S. Borrower) at a rate per annum which shall be the Base Rate in effect from
time to time plus the Applicable Margin for Dollar Revolving Loans under the
same Tranche as the applicable Letter of Credit maintained as Base Rate Loans of
such Tranche plus 2%, in each such case, with interest to be payable on demand.
The Issuing Bank shall give the U.S. Borrower and the Administrative Agent
prompt written notice of each Drawing under any Letter of Credit, provided that
except as provided in the immediately preceding sentence, the failure to give
any such notice shall in no way affect, impair or diminish the U.S. Borrower’s
obligations hereunder.

 

(b) Notwithstanding the requirements of Section 3.05(a), unless otherwise
requested by the U.S. Borrower prior to 2:00 P.M. on the date of such payment or
disbursement made by the Issuing Bank under a Letter of Credit, any
reimbursement of an Unpaid Drawing in an amount equal to or exceeding $1,000,000
shall be effected by having such Unpaid Drawing amount treated as a Base Rate
Loan of the same Tranche as the applicable Letter of Credit (which Base Rate
Loan may be converted in accordance with the provisions of Section 2.07).

 

(c) The obligations of the U.S. Borrower under this Section 3.05 shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the U.S. Borrower may have
or have had against any

 

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Lender (including in its capacity as issuer of any Letter of Credit or as
Participant), including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit (each a “Drawing”) to conform to the
terms of such Letter of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing or any other matter or circumstance
referred to in clauses (i) through (v) of Section 3.04(f); provided that the
Issuing Bank shall be responsible for any damages (excluding consequential
damages) to the U.S. Borrower for its gross negligence or willful misconduct (as
finally determined by a court of competent jurisdiction) in connection with
drawings made under a Letter of Credit which did not comply or conform to the
terms of the respective Letter of Credit.

 

3.06. Increased Letter of Credit Costs. Subject to the provisions of Section
2.13(b), if at any time after the date of this Agreement, the introduction of or
any change in any applicable law, rule, regulation, order, guideline or request
or in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by the
Issuing Bank or any Participant with any request or directive by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by the Issuing Bank or participated
in by any Participant, or (ii) impose on the Issuing Bank or any Participant any
other conditions relating, directly or indirectly, to this Agreement; and the
result of any of the foregoing is to increase the cost to the Issuing Bank or
any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by the Issuing
Bank or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits or franchise taxes based
on net income of the Issuing Bank or such Participant pursuant to the laws of
the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon written demand to the U.S. Borrower by the Issuing Bank or such
Participant (a copy of which certificate shall be sent by the Issuing Bank or
such Participant to the Administrative Agent), the U.S. Borrower shall pay to
the Issuing Bank or such Participant such additional amount or amounts as will
compensate the Issuing Bank or such Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 3.06, will give
prompt written notice thereof to the U.S. Borrower which notice shall include a
certificate submitted to the U.S. Borrower by the Issuing Bank or such
Participant (a copy of which certificate shall be sent by the Issuing Bank or
such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate the Issuing Bank or such Participant. The certificate
required to be delivered pursuant to this Section 3.06 shall, absent manifest
error, be final and conclusive and binding on the U.S. Borrower.

 

SECTION 4. Commitment Commission; Canadian Commitment Commission; Fees;
Reductions of Commitment.

 

4.01. Fees. (a) The U.S. Borrower agrees to pay to the Administrative Agent in
Dollars for distribution to each Non-Defaulting Lender with a Revolving Loan
Commitment a commitment commission (the “Commitment Commission”) for the period
from and including the Effective Date to, but excluding, the Maturity Date (or
such earlier date as the Total Revolving

 

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Loan Commitment shall have been terminated), computed at a rate per annum equal
to the Applicable Commitment Commission Percentage (as in effect from time to
time) on the average daily Unutilized Revolving Loan Commitment of such Lender.
Accrued Commitment Commission shall be due and payable in arrears on each
Quarterly Payment Date and on the Maturity Date or such earlier date upon which
the Total Revolving Loan Commitment is terminated. In addition, the U.S.
Borrower agrees to pay to the Administrative Agent in Dollars for distribution
to each Canadian Lender (other than a Defaulting Lender) an additional
commitment commission (the “Canadian Commitment Commission”) for the period from
and including the Effective Date to, but excluding, the Maturity Date (or such
earlier date as the Total Maximum Canadian Dollar Revolving Loan Sub-Commitment
shall have been terminated), computed at a rate per annum equal to .10% on the
average daily Unutilized Canadian Dollar Revolving Loan Sub-Commitment of such
Lender. Accrued Canadian Commitment Commission shall be due and payable in
arrears on each Quarterly Payment Date and on the Maturity Date or such earlier
date upon which the Total Maximum Canadian Dollar Revolving Loan Sub-Commitment
is terminated. The fees referred to above shall be payable on a pro rata basis.

 

(b) The U.S. Borrower agrees to pay to the Administrative Agent for distribution
to each Non-Defaulting Lender with a Revolving Loan Commitment (based on their
respective Dollar Percentages or, for periods from and after the occurrence of a
Sharing Event, their respective RL Percentages) in Dollars, a fee in respect of
each Letter of Credit issued for the account of the U.S. Borrower hereunder (the
“Letter of Credit Fee”), in each case for the period from and including the date
of issuance of the respective Letter of Credit to and including the date of
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Revolving Loans of the Tranche under which such Letter of
Credit is issued that are maintained as Eurodollar Loans (as in effect from time
to time) on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable on each Quarterly Payment Date after the
Effective Date and on the Maturity Date or such earlier date upon which the
Total Revolving Loan Commitment is terminated.

 

(c) The U.S. Borrower agrees to pay to the Issuing Bank, for its own account, in
Dollars, a facing fee in respect of each Letter of Credit issued for the account
of the U.S. Borrower by the Issuing Bank (the “Facing Fee”), for the period from
and including the date of issuance of such Letter of Credit to and including the
date of the termination of such Letter of Credit, computed at a rate equal to
1/8 of 1% per annum of the daily Stated Amount of such Letter of Credit;
provided that in no event shall the annual Facing Fee with respect to any Letter
of Credit be less than $500. Accrued Facing Fees shall be due and payable in
arrears on each Quarterly Payment Date and on the Maturity Date or such earlier
date upon which the Total Revolving Loan Commitment is terminated.

 

(d) The U.S. Borrower shall pay, upon each payment under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge and the reasonable expenses which the Issuing
Bank is generally imposing for payment under, issuance of, or amendment to,
Letters of Credit issued by it, not to exceed $500 per issuance or amendment.

 

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(e) At the time of the incurrence of each Bankers’ Acceptance Loan, Acceptance
Fees shall be paid by the respective Canadian Revolving Loan Borrower as
required by, and in accordance with, clause (g) of Schedule III.

 

(f) The Borrowers shall pay to the Agents, for their own accounts, such other
fees as have been agreed to in writing by the Borrowers and the Agents.

 

4.02. Voluntary Termination or Reduction of Total Unutilized Revolving Loan
Commitment. Upon at least three Business Days’ prior notice to the
Administrative Agent at the Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the U.S. Borrower shall have
the right, at any time or from time to time, without premium or penalty, to
terminate or partially reduce the Total Unutilized Revolving Loan Commitment,
provided that (x) any partial reduction pursuant to this Section 4.02 shall be
in an amount of at least $1,000,000 or, if greater, in integral multiples of
$1,000,000 thereof. Each reduction to the Total Unutilized Revolving Loan
Commitment pursuant to this Section 4.02 shall apply (i) to reduce the Revolving
Loan Commitments of the various RL Lenders pro rata based on their respective RL
Percentages and (ii) to reduce the Total Revolving A Loan Capacity and/or the
Total Revolving B Loan Capacity, as specified by the U.S. Borrower, by an amount
which, in the aggregate, equals the reduction in the Total Revolving Loan
Commitment pursuant to the immediately preceding clause (i). The amount of any
reduction to the Revolving Loan Commitment of any Lender pursuant to this
Section 4.02 shall reduce the U.S. Revolving Loan Sub-Commitment and the Maximum
Canadian Dollar Revolving Loan Sub-Commitments of such Lender on a pro rata
basis.

 

SECTION 5. Prepayments; Payments; Taxes.

 

5.01. Voluntary Prepayments. Each Borrower shall have the right to prepay the
Revolving Loans made to such Borrower, without premium or penalty (other than
amounts payable pursuant to Section 2.12), in whole or in part, at any time and
from time to time on the following terms and conditions:

 

(i) such Borrower shall give the Administrative Agent at the Notice Office
written notice (or telephonic notice promptly confirmed in writing) of (1) its
intent to prepay such Revolving Loans, (2) whether Dollar Revolving Loans or
Canadian Revolving Loans shall be prepaid) (3) the amount of such prepayment and
the Types and Tranches of Revolving Loans to be prepaid and (4) in the case of
Eurodollar Loans, the specific Borrowing or Borrowings to be prepaid. Such
notice shall be given by such Borrower prior to 12:00 Noon (local time where the
respective Payment Office is located) at least one Business Day prior to the
date of such prepayment, which notice the Administrative Agent shall promptly
transmit to each of the Lenders with Revolving Loans of the respective Tranche
and Type;

 

(ii) each prepayment shall be in an aggregate principal amount at least equal to
$1,000,000 or, in the case of Canadian Revolving Loans, Canadian Revolving Loans
having a Dollar Equivalent of $1,000,000 for the applicable Tranche and Type of
Revolving Loans, provided that if any partial prepayment of Eurodollar Loans
made pursuant to any Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant

 

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to such Borrowing to an amount less than the respective Minimum Borrowing Amount
for such Tranche and Type of Revolving Loans, then such Borrowing may not be
continued as a Borrowing of Eurodollar Loans and shall be converted to Base Rate
Loans and any election of an Interest Period with respect thereto shall have no
force or effect;

 

(iii) prepayments of Bankers’ Acceptance Loans may not be made prior to the
maturity date of the respective Bankers’ Acceptances; and

 

(iv) each prepayment in respect of any Revolving Loans made pursuant to a
Borrowing of a Tranche shall be applied pro rata among such Revolving Loans,
provided that until the date on which the amount giving rise to a Lender Default
of the applicable Lender shall have been reduced to zero (whether by the funding
by such Defaulting Lender of any defaulted Revolving Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Revolving Loans in accordance with the terms of Section 5.01,
Section 5.02 or by a combination thereof), any prepayment in respect of
Revolving Loans shall not be applied to any Revolving Loan of a Defaulting
Lender.

 

5.02. Mandatory Repayments and Commitment Reductions.

 

(a) (i) On any day on which (1) the Aggregate Revolving Credit Exposure exceeds
the Total Revolving Loan Commitment as then in effect, (2) the Aggregate
Revolving A Credit Exposure exceeds the Total Revolving A Loan Capacity then in
effect or (3) the Aggregate Revolving B Credit Exposure exceeds the Total
Revolving B Loan Capacity then in effect, the Borrowers shall repay the
principal of outstanding Revolving Loans of such Tranche (other than Bankers’
Acceptance Loans where the underlying Bankers’ Acceptances have not yet matured)
(allocated between Tranches and between Dollar Revolving Loans and Canadian
Revolving Loans as the Borrowers may elect); provided, however, that in each
case, the repayment shall be allocated to the Tranche in respect of which excess
exposure exists (to the extent of such excess) in an amount (for this purpose,
taking the Dollar Equivalent of payments made with respect to the Canadian
Revolving Loans) equal to such excess but if any such repayment shall effect a
repayment of a Eurodollar Loan prior to the expiration of the applicable
Interest Period, such repayment may be delayed until the date of such expiration
subject to compliance with the provisions of Section 5.02(d); provided, that in
determining whether such excess exists, the Dollar Equivalent of Canadian
Revolving Loans shall be determined on a quarterly basis on each Canadian
Facility Valuation Date except as otherwise provided in the definition of the
term “Dollar Equivalent”. If, after giving effect to the prepayment of all
outstanding Revolving Loans required to be prepaid pursuant to this Section
5.02(a)(i) (other than Bankers’ Acceptance Loans as referenced in the
immediately preceding sentence), the sum of the outstanding Bankers’ Acceptance
Loans (for this purpose, using the Dollar Equivalent of the Face Amounts
thereof) and Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment then in effect, (x) an amount equal to the lesser of such excess and
the then outstanding Face Amount of all Bankers’ Acceptances shall be deposited
(and, so long as no Default or Event of Default has occurred and is continuing,
on any subsequent date on which any such excess is determined, any such cash
collateral shall be returned to the applicable Borrower to the extent it exceeds
the excess, if any, determined on such subsequent date) by the respective
Borrower with the Administrative Agent as cash collateral for the obligations of
the respective

 

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Canadian Revolving Loan Borrower or Borrowers to the Canadian Lenders (rounded
up to the nearest integral multiple of Cdn $100,000) in respect of an equivalent
Face Amount of outstanding Bankers’ Acceptances accepted by the Canadian Lenders
which shall be paid to and applied by the Canadian Lenders, in satisfaction of
the obligations to the Canadian Lenders of the respective Canadian Revolving
Loan Borrower or Borrowers in respect of such Banker’s Acceptances, on the
maturity date thereof, and (y) to the extent such excess exceeds the amount
applied pursuant to preceding clause (x), the respective Borrowers shall pay to
the Administrative Agent cash or Cash Equivalents in an amount equal to the
amount of such excess (less the amount applied pursuant to preceding clause (x))
(up to a maximum amount equal to the Letter of Credit Outstandings at such
time), such cash or Cash Equivalents to be held as security for all obligations
of the respective Borrowers hereunder and under the other Credit Documents in a
cash collateral account (and invested from time to time in Cash Equivalents
selected by the Administrative Agent) to be established by the Administrative
Agent.

 

(ii) If on any date the Dollar Equivalent of the aggregate outstanding principal
amount (or Face Amount, as the case may be) of Canadian Revolving Loans exceeds
the Canadian Dollar Revolving Loan Sub-Commitments of the Canadian Lenders as
then in effect, the respective Canadian Revolving Loan Borrowers shall prepay on
such day the principal of outstanding Canadian Revolving Loans (for this
purpose, taking the Dollar Equivalent of payments in any Canadian Dollars made
with respect to Canadian Revolving Loans) (other than Bankers’ Acceptance Loans
where the underlying Bankers’ Acceptances have not matured) equal to such
excess, provided, that in determining whether such excess exists, the Dollar
Equivalent of Canadian Revolving Loans shall be determined on a quarterly basis
on each Canadian Facility Valuation Date except as otherwise provided in the
definition of the term “Dollar Equivalent”. In the case of Canadian Revolving
Loans, if after giving effect to the prepayment of all outstanding Canadian
Revolving Loans (other than Bankers’ Acceptance Loans where the underlying
Bankers’ Acceptances have not yet matured), the sum of the aggregate Face Amount
of outstanding Bankers’ Acceptance Loans (for this purpose, using the Dollar
Equivalent of the Face Amounts thereof) exceeds the sum of the Canadian Dollar
Revolving Loan Sub-Commitments of the various Canadian Lenders as then in
effect, an amount equal to such excess shall be deposited (and, so long as no
Default or Event of Default has occurred and is continuing, on any subsequent
date on which any such excess is determined, any such cash collateral shall be
returned to the applicable Borrower to the extent it exceeds the excess, if any,
determined on such subsequent date) by the respective Canadian Revolving Loan
Borrower with the Administrative Agent as cash collateral for the obligations of
the respective Canadian Revolving Loan Borrower or Borrowers to the Canadian
Lenders (rounded up to the nearest integral multiple of Cdn $100,000) in respect
of an equivalent Face Amount of outstanding Bankers’ Acceptances accepted by the
Canadian Lenders which shall be paid to and applied by the Canadian Lenders, in
satisfaction of the obligations to the Canadian Lenders of the respective
Canadian Revolving Loan Borrower or Borrowers in respect of such Banker’s
Acceptances, on the maturity date thereof.

 

(iii) In the event that an Excess Usage Amount exists as of the last day of four
consecutive fiscal quarters, (determined in the case of any Canadian Revolving
Loans, by computing the Dollar Equivalent as of each such day), not later than 2

 

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Business Days after the date on which the compliance certificate in respect of
such fiscal quarter is required to be delivered pursuant to Section 10.11(d),
the U.S. Borrower shall either (as specified in a notice delivered to the
Administrative Agent not later than the date on which such compliance
certificate is delivered) (1) convert all or a portion of such Excess Usage
Amount into Revolving B Credit Exposure pursuant to Section 2.07(d) or (2) to
the extent that the Borrowers do not elect (or are not permitted) to convert
such Excess Usage Amount into Revolving B Credit Exposure pursuant to Section
2.07(d), repay the principal of outstanding Revolving A Loans (other than
Bankers’ Acceptance Loans where the underlying Bankers’ Acceptances have not yet
matured) (allocated between Dollar Revolving A Loans and Canadian Revolving A
Loans as the U.S. Borrower may elect) in an amount (for this purpose, taking the
Dollar Equivalent of payments made with respect to the Canadian Revolving Loans)
equal to such Excess Usage Amount. If, after giving effect to the conversions
and prepayments of all outstanding Revolving A Loans pursuant to clauses (1) and
(2) above (other than Bankers’ Acceptance Loans as referenced in the immediately
preceding sentence), any Excess Usage Amount still exists, then (x) an amount
equal to the lesser of such excess and the then outstanding Face Amount (as of
the date of such payment) of all such Bankers’ Acceptances for this purpose,
using the Dollar Equivalent of the Face Amount thereof shall be deposited (and,
so long as no Default or Event of Default has occurred and is continuing, on any
subsequent date on which any such excess is determined, any such cash collateral
shall be returned to the applicable Borrower to the extent it exceeds the
excess, if any, determined on such subsequent date) by the respective Borrower
with the Administrative Agent as cash collateral for the obligations of the
respective Canadian Revolving Loan Borrower or Borrowers to the Canadian Lenders
(rounded up to the nearest integral multiple of Cdn $100,000) in respect of an
equivalent Face Amount of outstanding Bankers’ Acceptances accepted by the
Canadian Lenders which shall be paid to and applied by the Canadian Lenders, in
satisfaction of the obligations to the Canadian Lenders of the respective
Canadian Revolving Loan Borrower or Borrowers in respect of such Banker’s
Acceptances, on the maturity date thereof, and (y) to the extent such excess
exceeds the amount applied pursuant to preceding clause (x), the respective
Borrowers shall pay to the Administrative Agent cash or Cash Equivalents in an
amount equal to the amount of such Excess Usage Amount (less the amount applied
pursuant to preceding clause (x)) (up to a maximum amount equal to the Letter of
Credit A Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the respective Borrowers hereunder and under the
other Credit Documents in a cash collateral account (and invested from time to
time in Cash Equivalents selected by the Administrative Agent) to be established
by the Administrative Agent.

 

(b) In the event that the aggregate Net Cash Proceeds received by the U.S.
Borrower or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Effective Date in any period of 12 consecutive months
(such 12 consecutive month period, an “Asset Sale Period”) exceed 1% of Adjusted
Total Assets (determined as of the date closest to the commencement of such
Asset Sale Period for which a consolidated balance sheet of the U.S. Borrower
and its Subsidiaries has been filed with the SEC or provided to the
Administrative Agent pursuant to Section 10.11), then during the period
commencing 180 days prior to the commencement of such Asset Sale Period and
running through the date that is 12 months after the date Net Cash Proceeds so
received exceeded 1% of Adjusted Total Assets, an

 

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amount equal to the Net Cash Proceeds received during such Asset Sale Period
must have been or must be invested in or committed to be invested in, pursuant
to a binding commitment subject only to reasonable, customary closing
conditions, and providing an amount equal to the Net Cash Proceeds are, in fact,
so invested, within an additional 180 days pursuant to a transaction otherwise
permitted hereunder, (x) fixed assets and property (other than notes, bonds,
obligations and securities) which in the good faith reasonable judgment of the
Board of Directors of the general partner of the U.S. Borrower will immediately
constitute or be part of a Related Business of the U.S. Borrower or such
Restricted Subsidiary (if it continues to be a Subsidiary of the U.S. Borrower)
immediately following such transaction, (y) Permitted Mortgage Investments, or
(z) a controlling interest in the Capital Stock of an entity engaged in a
Related Business; provided that concurrently with an Investment specified in
clause (z), such entity becomes a Restricted Subsidiary of the U.S. Borrower.
Pending the application of any such Net Cash Proceeds as described above, the
U.S. Borrower may invest such Net Cash Proceeds in any manner that is not
prohibited hereby. Any Net Cash Proceeds from Asset Sales that are not or were
not applied or invested as provided in the first sentence of this paragraph
(including any Net Cash Proceeds which were committed to be invested as provided
in such sentence but which are not in fact invested within the time period
provided) will be deemed to constitute “Excess Proceeds.” Within 30 days
following each date on which the aggregate amount of Excess Proceeds exceeds
$25,000,000 (or, if requested by the U.S. Borrower, at any time prior to the end
of such period), the U.S. Borrower shall apply an amount equal to such Excess
Proceeds as set forth in Section 5.02(c). Upon the application of such Excess
Proceeds in accordance with Section 5.02(c), the amount of Excess Proceeds shall
be reset at zero.

 

(c) Each amount required to be applied pursuant to this Section 5.02(c) as a
result of the requirements of Section 5.02(b) shall be applied (after any
conversion by the respective Borrower of any amounts received in a currency
other than Dollars in the case of the U.S. Borrower or Canadian Dollars in the
case of the Canadian Revolving Loan Borrowers into Dollars or Canadian Dollars,
respectively) at such time as is designated by the U.S. Borrower, but in no
event later than the latest date permitted pursuant to Section 5.02(b) (the
“Final Proceeds Application Date”):

 

(I) First, to permanently reduce the Total Revolving Loan Commitment (with a
corresponding aggregate decrease in Total Revolving A Loan Capacity and/or Total
Revolving B Loan Capacity as the U.S. Borrower shall designate) until the Total
Revolving Loan Commitment is reduced to $400,000,000 (whether or not any
Revolving Loans are outstanding) and to repay any outstanding Revolving Loans
other than Bankers’ Acceptance Loans. Any such repayment shall be allocated
between Dollar Revolving A Loans, Dollar Revolving B Loans, Canadian Revolving A
Loans and Canadian Revolving B Loans as the U.S. Borrower shall elect; and

 

(II) Second, to the extent of any remaining Excess Proceeds to be applied under
this Section 5.02(c) after application pursuant to clause (I), to (A)
permanently reduce the Total Revolving Loan Commitment by an amount, if any,
equal to the difference between (x) such remaining Excess Proceeds minus (y) the
amount of principal payments made by the U.S. Borrower and its Subsidiaries in
respect of Qualifying Indebtedness (excluding, however, any principal repayments
that constituted scheduled amortization payments or prepayments in respect of
Qualifying Indebtedness that was either (1) secured by a Lien on the

 

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property or assets sold in an Asset Sale or (2) required to be paid as a result
of an Asset Sale), and (B) repay any outstanding Revolving Loans other than
Bankers’ Acceptance Loans in the amount that the Total Revolving Loan Commitment
is reduced pursuant to Clause (A), with such Total Revolving Loan Commitment
reduction and repayment, if any, to be allocated between Tranches and between
Dollar Revolving Loans and Canadian Revolving Loans as the relevant Borrowers
may elect.

 

(d) With respect to each repayment of Revolving Loans required by this Section
5.02, the respective Borrower may designate the Types and Tranche of Revolving
Loans which are to be repaid and, in the case of Eurodollar Loans and Bankers’
Acceptance Loans, the specific Borrowing or Borrowings of the respective Tranche
pursuant to which made, provided that: (i) in the case of repayments of Dollar
Revolving Loans, repayments of Eurodollar Loans of the respective Tranche
pursuant to this Section 5.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all Base
Rate Loans of the respective Tranche have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Revolving Loans made pursuant to such Borrowing to an amount
less than the respective Minimum Borrowing Amount for the respective Tranche and
Type of Revolving Loan, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; (iii) no repayment
of Bankers’ Acceptance Loans may be made prior to the maturity date of the
related Bankers’ Acceptances; (iv) each repayment of any Revolving Loans made
pursuant to a Borrowing shall be applied pro rata among such Revolving Loans and
(v) any prepayment of Revolving A Loans pursuant to Section 5.02(a)(iii) may not
be made through Borrowings of additional Revolving A Loans. In the absence of a
designation by the respective Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the above, make such designation in
its sole discretion. Notwithstanding the foregoing provisions of this Section
5.02, if at any time the mandatory prepayment of Revolving Loans pursuant to
Section 5.02(a) or 5.02(c) would result, after giving effect to the procedures
set forth above, in any Borrower incurring breakage costs under Section 2.12 as
a result of Eurodollar Loans being prepaid other than on the last day of an
Interest Period applicable thereto (the “Affected Eurodollar Loans”), then the
U.S. Borrower may in its sole discretion initially deposit a portion (up to
100%) of the amounts that otherwise would have been paid in respect of the
Affected Eurodollar Loans with the Administrative Agent (which deposit must be
equal in amount to the amount of Affected Eurodollar Loans not immediately
prepaid) to be held as security for the obligations of the U.S. Borrower
hereunder pursuant to a cash collateral agreement (which shall permit
investments in Cash Equivalents satisfactory to the Administrative Agent) to be
entered into in form and substance reasonably satisfactory to the Administrative
Agent (which agreement shall provide for the payment of interest to U.S.
Borrower in respect of such deposit), with such cash collateral to be directly
applied upon the first occurrence (or occurrences) thereafter of the last day of
an Interest Period applicable to the relevant Revolving Loans that are
Eurodollar Loans (or such earlier date or dates as shall be requested by the
U.S. Borrower), to repay an aggregate principal amount of such Revolving Loans
equal to the Affected Eurodollar Loans not initially repaid pursuant to this
sentence. Notwithstanding anything to the contrary contained in the immediately
preceding sentence, all amounts deposited as cash collateral pursuant to the
immediately preceding sentence shall be held for the benefit of the Lenders
whose Revolving Loans would otherwise have been immediately repaid with the
amounts deposited and upon the taking of any

 

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action by the Administrative Agent or the Lenders pursuant to the remedial
provisions of Section 12, any amounts held as cash collateral pursuant to this
Section 5.02(d) shall, subject to the requirements of applicable law, be
immediately applied to the relevant Revolving Loans. Until actually applied to
the repayment of Eurodollar Loans, interest shall continue to accrue thereon.

 

(e) Notwithstanding anything to the contrary contained in this Agreement, the
Borrowers shall repay in full all outstanding Revolving Loans on the earlier of
(i) the Maturity Date and (ii) the date on which the Total Revolving Loan
Commitment is terminated.

 

(f) The Total Revolving Loan Commitment shall be reduced permanently on the date
and by the amount of any repayment of Revolving Loans made pursuant to Section
5.02(b), with a corresponding aggregate decrease in Total Revolving A Loan
Capacity and/or Total Revolving B Loan Capacity as the U.S. Borrower shall
designate. The Total Revolving Loan Commitment, the Total Revolving A Loan
Capacity and the Total Revolving B Loan Capacity shall not be reduced by any
repayment of Revolving Loans made pursuant to Section 5.02(a)(iii).

 

(g) Any reduction to the Total Revolving Loan Commitment pursuant to this
Section 5.02 shall reduce the Revolving Loan Commitment, the U.S. Revolving Loan
Sub-Commitment and the Maximum Canadian Dollar Revolving Loan Sub-Commitment of
such Lender on a pro rata basis, and Schedule I-A shall be deemed modified
accordingly.

 

(h) Until the date on which the amount giving rise to a Lender Default of the
applicable Lender shall have been reduced to zero (whether by the funding by
such Defaulting Lender of any defaulted Loans of such Defaulting Lender or by
the non-pro rata application of any voluntary or mandatory prepayments of the
Loans in accordance with the terms of Section 5.01, Section 5.02 or by a
combination thereof), any prepayment in respect of Loans shall not be applied to
any Loan of a Defaulting Lender.

 

5.03. Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or any Revolving Note shall be made to
the Administrative Agent for the account of the Lender or Lenders entitled
thereto not later than 1:00 P.M. (local time in the city in which the Payment
Office for the respective payments is located) on the date when due and shall be
made in (x) Dollars in immediately available funds at the appropriate Payment
Office of the Administrative Agent in respect of any obligation of the Borrowers
under this Agreement except as otherwise provided in the immediately following
clause (y) and (y) subject to the provisions of Section 2.17, Canadian Dollars
in immediately available funds at the appropriate Payment Office (which must be
located in Canada) of the Administrative Agent, if such payment is made in
respect of (i) principal of, the Face Amount of or interest on Canadian
Revolving Loans, or (ii) any increased costs, indemnities or other amounts owing
with respect to Canadian Revolving Loans (or Commitments relating thereto), in
the case of this clause (ii) to the extent the respective Lender which is
charging same denominates the amounts owing in Canadian Dollars. The
Administrative Agent will thereafter cause to be distributed on the same day (if
payment was actually received by the Administrative Agent prior to 12:00 Noon
(local time in the city in which such payments are to be made)) like funds
relating to the payment of principal, interest or Fees ratably to the Lenders
entitled thereto. Any

 

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payments under this Agreement which are made later than 12:00 Noon (local time
in the city in which such payments are to be made) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder or under any Revolving Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest and
fees shall be payable at the applicable rate during such extension.

 

5.04. Net Payments. (a) All payments made by any Borrower hereunder or under any
Revolving Note or other Credit Document will be made without setoff,
counterclaim or other defense. Except as provided in Sections 5.04(b) and (c),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
profits of a Lender pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which it is resident or the jurisdiction in
which the principal office or applicable lending office or other permanent
establishment of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect thereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as “Taxes”). If any Taxes are so levied
or imposed, subject to Section 5.04(b), the respective Borrower agrees to pay
the full amount of such Taxes, and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement or under any
Revolving Note or other Credit Document, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein or
in such Revolving Note or other Credit Document. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, subject to Section 5.04(b),
the respective Borrower agrees to reimburse each Lender, upon the written
request of such Lender, for the net additional amount of taxes imposed on or
measured by the net income or profits of such Lender pursuant to the laws of the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Lender is located and for any withholding of taxes as
such Lender shall determine are payable by, or withheld from, such Lender in
respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Lender pursuant to this sentence. The respective Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the respective Borrower. Each Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender and any
liability (including penalties, interest and expenses) arising from or with
respect to such Taxes whether or not they were correctly or legally asserted.

 

(b) Each Lender (other than any Canadian Lender with Maximum Canadian Dollar
Revolving Loan Sub-Commitments only) that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
U.S. Borrower and the Administrative Agent on or prior to the Effective Date, or
in the case of any such Lender (other than any Canadian Lender with Maximum
Canadian Dollar Revolving Sub-Commitments

 

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only) that is an assignee or transferee of an interest under this Agreement
pursuant to Section 2.14 or 14.03 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, (i) two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(or successor forms) certifying to such Lender’s entitlement as of such date to
a complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Revolving Note, or (ii) if such
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code
and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a “Section 5.04(b)(ii) Certificate”) and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8BEN (or successor form) certifying to such Lender’s entitlement as of
such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Revolving Note. In addition, each such Lender agrees that from time to time
after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the U.S. Borrower and the Administrative Agent two
new accurate and complete original signed copies of Internal Revenue Service
Form W-8ECI or Form W-8BEN, or Form W-8 and a Section 5.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Revolving Note, or it shall immediately notify the U.S.
Borrower and the Administrative Agent of its inability to deliver any such form
or certificate in which case such Lender shall not be required to deliver any
such form or certificate pursuant to this Section 5.04(b). Notwithstanding
anything to the contrary contained in Section 5.04(a), but subject to Section
14.03 and the immediately succeeding sentence, (x) each Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender (other than any Canadian
Lender with Maximum Canadian Dollar Revolving Loan Sub-Commitments only) which
is not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the U.S. Borrower U.S. Internal Revenue Service forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrowers shall not be obligated pursuant to Section 5.04(a) hereof to gross-up
payments to be made to a Lender (other than any Canadian Lender with Maximum
Canadian Dollar Revolving Loan Sub-Commitments only) in respect of income or
similar taxes imposed by the United States if (I) such Lender has not provided
to the U.S. Borrower the Internal Revenue Service Forms required to be provided
by it to the U.S. Borrower pursuant to this Section 5.04(b) or (II) in the case
of a payment, other than interest, to a Lender described in clause (ii) above,
to the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the immediately preceding sentence or elsewhere in this Section 5.04 (other than
clause (e) below) and except as set forth in Section 14.03, each Borrower agrees
to pay additional amounts and to indemnify each Lender in the manner set forth
in Section 5.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
that

 

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are effective after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.

 

(c) Each Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions and subject to overall policy considerations of such
Lender) to file any certificate or document or to furnish any information as
reasonably requested by the U.S. Borrower pursuant to any applicable treaty, law
or regulation if the making of such filing or the furnishing of such information
would avoid the need for or reduce the amount of any additional amounts payable
by the respective Borrower and would not, in the sole discretion of such Lender,
be disadvantageous to such Lender.

 

(d) Nothing in this Section 5.04 shall require any Lender (or any Eligible
Transferee) or the Administrative Agent to make available any of its tax returns
(or any other information that it deems to be confidential or proprietary, in
its sole discretion).

 

(e) Subject to the last sentence of this Section 5.04, if any Canadian Lender
(a) is not resident in Canada for the purpose of Income Tax Act (Canada), or (b)
is not an authorized foreign bank which at all times holds all of its interest
in any Canadian Obligations in the course of its Canadian banking business for
purposes of subsection 212(13.3) of the Income Tax Act (Canada), or (c) is not
otherwise exempt from being subject to deduction or withholding of income or
similar Taxes imposed by Canada (or any political subdivision or taxing
authority thereof or therein) (“Canadian Taxes”) on the basis established to the
satisfaction of the Canadian Revolving Loan Borrowers and the Administrative
Agent based on Applicable Law in effect on the Effective Date (or such later
date on which it becomes a Canadian Lender) with respect to any payments to such
Lender of interest, fees, commissions, or any other amount payable by any
Canadian Revolving Loan Borrower under the Credit Documents: (i) the Canadian
Revolving Loan Borrowers shall be entitled, to the extent that they are required
to do so by Applicable Law, to deduct or withhold Canadian Taxes from interest,
fees, commissions or other amounts payable under this Agreement for the account
of such Canadian Lender; and (ii) the Canadian Revolving Loan Borrowers shall
not be obligated pursuant to Section 5.04(a) to gross-up payments to be made to
such Canadian Lender in respect of Canadian Taxes. Notwithstanding anything to
the contrary contained in this Section 5.04, the Canadian Revolving Loan
Borrowers agree to pay any additional amounts and to indemnify the applicable
Canadian Lender in the manner set forth in Section 5.04(a) (without regard to
the identity of the jurisdiction requiring the deduction or withholding) in
respect of any incremental Canadian Taxes deducted or withheld by it as
described in the immediately preceding sentence following (I) any changes after
the Effective Date (or after the date such Lender became a Canadian Lender, as
applicable) in any applicable law, or in the interpretation thereof, relating to
the deducting or withholding of such Canadian Taxes to the extent, and only to
the extent, that the obligation to pay such incremental Canadian Taxes arises as
a consequence of such change in applicable law or (II) any Sharing Event.

 

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SECTION 6. Conditions Precedent to Initial Credit Events. The obligation of each
Lender to make Revolving Loans, and the obligation of the Issuing Bank to issue
Letters of Credit, on the Effective Date, is subject to the satisfaction of the
following conditions:

 

6.01. Execution of Agreement; Revolving Notes. On or prior to the Effective
Date, there shall have been delivered to the Administrative Agent (i) for the
account of each of the Lenders (subject to Section 2.06(e)) the appropriate
Revolving Notes executed by the appropriate Borrower or Borrowers, in each case
in the amount, maturity and as otherwise provided herein and (ii) such Drafts
and powers of attorney executed by the Canadian Revolving Loan Borrowers as may
be requested by the Canadian Lenders pursuant to Schedule III.

 

6.02. Opinions of Counsel. On the Effective Date, the Administrative Agent shall
have received (i) from Elizabeth A. Abdoo, Esq., General Counsel to HMC, and
counsel to the Borrower, an opinion addressed to the Administrative Agent and
each of the Lenders and dated the Effective Date covering the matters set forth
in Exhibit E-1 and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request, (ii) from Hogan &
Hartson L.L.P., special counsel to the Credit Parties, an opinion addressed to
the Administrative Agent and each of the Lenders and dated the Effective Date
covering the matters set forth in Exhibit E-2 and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
request, and (iii) from each of Blake, Cassels & Graydon LLP, and Cox Hanson
O’Reilly Matheson, special Canadian counsel to the Credit Parties, an opinion
addressed to the Administrative Agent and each of the Lenders and dated the
Effective Date covering the matters set forth in Exhibits E-3 and E-4,
respectively, and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request.

 

6.03. Corporate Documents; Proceedings; etc. (a) On the Effective Date, the
Administrative Agent shall have received a certificate, dated the Effective
Date, signed by the Secretary or an Assistant Secretary of each Credit Party (or
from the Secretary or an Assistant Secretary of the general partner of each
Credit Party that is a limited partnership), in the form of Exhibit F with
appropriate insertions, together with copies of the declaration of trust,
certificate of incorporation and by-laws or other organizational documents
(including partnership agreements and certificates of partnership and limited
liability company agreements and certificates of limited liability company and
any shareholder agreements) of each such Credit Party and the resolutions of
each Credit Party referred to in such certificate, and the foregoing shall be
reasonably acceptable to the Administrative Agent.

 

(b) All trust, corporate, partnership, limited liability company and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other documents in effect on
the Effective Date shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Required Banks, and the Administrative Agent shall
have received all information and copies of all documents and papers, including
records of corporate and partnership proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Administrative
Agent may have reasonably requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate, partnership or
governmental authorities.

 

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(c) On the Effective Date, the Administrative Agent shall have received a
certificate, dated the Effective Date and signed by an Authorized Officer of the
U.S. Borrower, certifying that all of the applicable conditions set forth in
Sections 6.07, 6.08 and 6.12 have been satisfied as of the Effective Date
(except to the extent that any such conditions require a determination to be
made by the Administrative Agent and/or the Required Banks).

 

6.04. Fees, etc. On the Effective Date, all costs, fees and expenses, and all
other costs contemplated by this Agreement, due to the Agents and the Lenders
(including, without limitation, legal fees and expenses) shall have been paid to
the extent then due.

 

6.05. Pledge and Security Agreement. On the Effective Date, each Credit Party
shall have duly authorized, executed and delivered a Pledge and Security
Agreement in the form of Exhibit G (as modified, supplemented or amended from
time to time, the “Pledge and Security Agreement”) covering all of such Credit
Party’s present and future Pledge and Security Agreement Collateral, together
with (to the extent not theretofore delivered pursuant to the Original Credit
Agreement):

 

(a) all of the certificated Pledged Securities, if any, referred to therein and
then owned by such Credit Party, together with executed and undated stock powers
in blank or such other instruments of transfer as may be reasonably requested by
the Administrative Agent;

 

(b) proper financing statements (Form UCC-1) for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by the Pledge and Security Agreement;

 

(c) certified copies of requests for information or copies (Form UCC- 11), or
equivalent reports, listing all effective financing statements that name such
Credit Party as debtor and that are filed in the jurisdictions referred to in
clause (b) above, together with copies of such other financing statements that
name such Credit Party as debtor (none of which shall cover the Pledge and
Security Agreement Collateral except to the extent evidencing Permitted Liens or
in respect of which the Collateral Agent shall have received termination
statements (Form UCC-3 or such other termination statements as shall be required
by local law) for filing);

 

(d) evidence of the completion of (or the Administrative Agent shall be
reasonably satisfied that arrangements are in place to complete) all other
recordings and filings of, or with respect to, the Pledge and Security Agreement
(and delivery of control agreements among the pledgor, pledgee and issuer) as
may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by the Pledge
and Security Agreement; and

 

(e) evidence that all other actions necessary or, in the reasonable opinion of
the Collateral Agent, desirable to perfect and protect the security interests
purported to be created by the Pledge and Security Agreement have been taken (or
the Administrative

 

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Agent shall be reasonably satisfied that arrangements are in place to perfect
and protect such security interests).

 

6.06. Subsidiaries Guaranty. On the Effective Date, each Guarantor (as listed on
Part I of Schedule IV) shall have duly authorized, executed and delivered a
guaranty in the form of Exhibit H (as modified, amended or supplemented from
time to time, the “Subsidiaries Guaranty”).

 

6.07. Adverse Change, etc. (a) Since December 31, 2003, nothing shall have
occurred (and neither the Administrative Agent nor any of the Lenders shall have
become aware of any facts, conditions or other information not previously known)
which the Administrative Agent or the Required Lenders shall determine has had,
or believe could reasonably be expected to have, a Material Adverse Effect.

 

(b) On or prior to the Effective Date, all necessary governmental (domestic and
foreign) and material third party approvals and consents in connection with the
transactions contemplated by the Credit Documents to occur on or prior to the
Effective Date and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated by the Credit Documents. Additionally, there shall not
exist any judgment, order, injunction or other restraint issued or filed or a
hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the transactions
contemplated by the Credit Documents to occur on or prior to the Effective Date.

 

6.08. Litigation. On the Effective Date, no litigation by any entity (private or
governmental) shall be pending or threatened (i) with respect to any Credit
Document or the transactions contemplated thereby or (ii) which the
Administrative Agent or the Required Lenders shall determine could reasonably be
expected to have a Material Adverse Effect.

 

6.09. Original Credit Agreement. On the Effective Date, (i) all outstanding
loans under the Original Credit Agreement shall be prepaid in full, together
with interest thereon and all other amounts owing pursuant to the Original
Credit Agreement (whether or not any such amounts are due on the Effective Date
pursuant to the terms thereof) and (ii) all outstanding commitments under the
Original Credit Agreement shall be terminated.

 

6.10. Solvency Certificate; Insurance Certificates. On or prior to the Effective
Date, there shall have been delivered to the Administrative Agent:

 

(a) a solvency certificate in the form of Exhibit I, addressed to the
Administrative Agent and each of the Lenders and dated the Effective Date from
an Authorized Financial Officer of the U.S. Borrower providing the opinion of
such Authorized Financial Officer as to the solvency of the U.S. Borrower and
its Subsidiaries taken as a whole and the U.S. Borrower on a stand-alone basis;
and

 

(b) certificates of insurance or other information regarding the compliance by
the U.S. Borrower with the requirements of Section 10.04 for the business and

 

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properties of the U.S. Borrower and its Subsidiaries, in each case in scope,
form and substance reasonably satisfactory to the Administrative Agent.

 

6.11. Financial Statements; Projections. On or prior to the Effective Date, the
Administrative Agent shall have received the financial statements and the
Projections referred to in Section 8.05(d), all of which shall be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Lenders.

 

6.12. No Default; Representations and Warranties. On the Effective Date, (i)
there shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the Effective Date (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).

 

The occurrence of the Effective Date shall constitute a representation and
warranty by each of the Borrowers to the Administrative Agent and each of the
Lenders that all the conditions specified in this Section 6 exist as of the
Effective Date (except to the extent that any of the conditions specified in
this Section 6 are required to be satisfactory to or determined by any Lender,
the Required Lenders, the Collateral Agent and/or the Administrative Agent or
otherwise expressly calls for a subjective determination to be made by any
Lender, the Required Lenders, the Collateral Agent and/or the Administrative
Agent). All of the Revolving Notes, certificates, legal opinions and other
documents and papers referred to in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
benefit of each of the Lenders and shall be in form and substance reasonably
satisfactory to the Lenders.

 

SECTION 7. Conditions Precedent to All Credit Events. The obligation of each
Lender to make Revolving Loans (including Revolving Loans made on the Effective
Date), and the obligation of any Issuing Bank to issue any Letter of Credit, is
subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:

 

7.01. No Default; Representations and Warranties; Compliance with Applicable
Financial Covenants.

 

(a) At the time of such Credit Event and also after giving effect thereto (i)
there shall exist no Default or Event of Default (other than a Default of a
Revolving Facility A Financial Covenant that is cured by eliminating any and all
Revolving A Credit Exposure within the cure period specified in Section
12.03(i)(B), it being understood that only Revolving B Loans may, if otherwise
permitted, be borrowed under this exception during such cure period), (ii) there
shall exist no Senior Note Indenture Default and (iii) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).

 

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(b) Without limiting the requirements of Section 7.01(a), at the time of such
Credit Event after giving effect thereto, there shall exist no Default or Event
of Default with respect to (A) a Revolving Facility A Financial Covenant (if a
Revolving A Loan Borrowing is requested) as of and for the most recently ended
Test Period (calculated on a Pro Forma Basis as if the date of the Credit Event
were the Determination Date, and after giving effect to the application of
proceeds of such Credit Event (but only to the extent that such proceeds are
applied on the date of such Credit Event)) and assuming that the Revolving
Facility A Financial Covenants were then in effect or (B) a Revolving Facility B
Financial Covenant (if a Revolving B Loan Borrowing is requested) as of and for
the most recently ended Test Period (calculated on a Pro Forma Basis as if the
date of the Credit Event were the Determination Date, and after giving effect to
the application of proceeds of such Credit Event (but only to the extent that
such proceeds are applied on the date of such Credit Event)) and assuming that
the Revolving Facility B Financial Covenants were then in effect.

 

(c) For clarity, for the purposes of Sections 7.01(a)(i) and 7.01(b), compliance
with the Revolving Facility B Financial Covenants is, but compliance with the
Revolving Facility A Financial Covenants is not, a condition precedent to
Borrowings under the Revolving B Loans unless Revolving A Loans, after giving
effect to such borrowing, are outstanding.

 

7.02. Notice of Borrowing; Letter of Credit Request. (a) Prior to the making of
each Revolving Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 2.03(a).

 

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and
the Issuing Bank shall have received a Letter of Credit Request meeting the
requirements of Section 3.03.

 

The acceptance of the proceeds of each Revolving Loan or the making of each
Letter of Credit Request (occurring on the Effective Date and thereafter) shall
constitute a representation and warranty by each Credit Party to the
Administrative Agent and each of the Lenders that all the conditions specified
in Section 6 (with respect to Credit Events on the Effective Date) and in this
Section 7 (with respect to Credit Events on and after the Effective Date) and
applicable to such Credit Event exist as of that time. All of the Revolving
Notes, certificates, legal opinions and other documents and papers referred to
in this Section 7, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Revolving Notes, in sufficient counterparts or copies for
each of the Lenders and shall be in form and substance reasonably satisfactory
to the Administrative Agent and the Required Lenders.

 

SECTION 8. Representations, Warranties and Agreements. Each Borrower makes the
following representations, warranties and agreements:

 

8.01. Status. Each of the U.S. Borrower and each of its Subsidiaries (i) is a
duly organized and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing (if applicable) under
the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case

 

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may be, to own or lease its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualification except (in the
case of clauses (i), (ii) and (iii)) for failures which, either individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

8.02. Power and Authority. Each Credit Party has the corporate, partnership or
limited liability company power and authority, as the case may be, to execute,
deliver and perform the terms and provisions of each of the Credit Documents to
which it is a party and has taken all necessary corporate, partnership or
limited liability company action, as the case may be, to authorize the
execution, delivery and performance by it of each of such Credit Documents. Each
Credit Party has duly executed and delivered each of the Credit Documents to
which it is a party, and each of such Credit Documents constitutes the legal,
valid and binding obligation of such Credit Party enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance (but only with
respect to any guaranties or security interests given by a Guarantor),
reorganization or other similar laws generally affecting creditors’ rights and
by equitable principles (regardless of whether enforcement is sought in equity
or at law).

 

8.03. No Violation. Neither the execution, delivery or performance by any Credit
Party of the Credit Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Pledge and Security Agreement) upon any of the properties or assets of
the U.S. Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the U.S. Borrower or
any of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject, except for violations and
defaults that may arise under contracts of the U.S. Borrower or a Subsidiary
thereof otherwise permitted under this Agreement as a result of the sale of, or
foreclosure of a lien upon, the Securities (as defined in the Pledge and
Security Agreement) of Subsidiaries pledged under the Pledge and Security
Agreement to the extent that the prior consent of other parties to such
contracts has not been obtained or other actions specified in such contracts
have not been taken in connection with any such sale or foreclosure or (iii)
will violate any provision of the certificate of incorporation, partnership
agreement, certificate of partnership, limited liability company agreement or
by-laws, as the case may be, of the U.S. Borrower or any of its Subsidiaries.
The Obligations constitute indebtedness issued to replace the Credit Facility,
as such term is defined in the Governing Senior Note Indenture.

 

8.04. Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or (ii)
the legality, validity, binding effect or enforceability of any Credit Document.

 

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8.05. Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) The consolidated balance sheets of the U.S. Borrower and
its Subsidiaries for the fiscal year ended December 31, 2003 and the fiscal
quarter ended June 18, 2004, and the related consolidated statements of income,
cash flows and shareholders’ equity of such Persons for the fiscal year and
fiscal quarter ended on such dates, as the case may be, copies of which have
been furnished to the Lenders on or prior to the Effective Date, present fairly
in all material respects the consolidated financial position of the U.S.
Borrower and its Subsidiaries at the date of such balance sheets and the
consolidated results of the operations of such Persons for the periods covered
thereby. All of the foregoing financial statements have been prepared in
accordance with GAAP consistently applied. Except as, and to the extent,
disclosed in the U.S. Borrower’s Form 10-K for the fiscal year ended December
31, 2003, since December 31, 2003, nothing has occurred that has had, or could
reasonably be expected to have, a material adverse change in any of (i) the
legality, validity or enforceability of the Credit Documents taken as a whole,
(ii) the ability of the U.S. Borrower to repay the Obligations, or (iii) the
rights and remedies of the Lenders or the Agents under the Credit Documents.

 

(b) On and as of the Effective Date and on the date on which each Revolving Loan
is made or each Letter of Credit is issued, on a Pro Forma Basis after giving
effect to all Indebtedness (including the Revolving Loans and the Letters of
Credit) being incurred or assumed and Liens created by each Credit Party in
connection therewith, (x) the sum of the assets, at a fair valuation, of the
U.S. Borrower and its Subsidiaries (taken as a whole) and the U.S. Borrower (on
a stand-alone basis) will exceed their respective debts, (y) the U.S. Borrower
and its Subsidiaries (taken as a whole) and the U.S. Borrower (on a stand-alone
basis) have not incurred and do not intend to incur, and do not believe that
they will incur, debts beyond their ability to pay such debts as such debts
mature and (z) the U.S. Borrower and its Subsidiaries (taken as a whole) and the
U.S. Borrower (on a stand-alone basis) have sufficient capital with which to
conduct its business. For purposes of this Section 8.05(b) “debt” means any
liability on a claim, and “claim” means (i) the right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, secured or
unsecured, in each case, to the extent of the reasonably anticipated liability
thereof, as determined by the U.S. Borrower in good faith or (ii) the absolute
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.

 

(c) Except as fully disclosed in the financial statements (and footnotes
applicable thereto) referred to in Section 8.05(a) or in the Schedules to this
Agreement, there were as of the Effective Date no liabilities or obligations
with respect to the U.S. Borrower or any of its Subsidiaries (whether absolute,
accrued, contingent or otherwise and whether or not due) of a nature required to
be set forth in a balance sheet or footnote thereto prepared in accordance with
GAAP which, either individually or in the aggregate, would be material to the
U.S. Borrower or the U.S. Borrower and its Subsidiaries taken as a whole. As of
the Effective Date, the U.S. Borrower does not know of any liability or
obligation of itself or any of its Subsidiaries of any such nature that is not
fully disclosed in the financial statements referred to in Section 8.05(a) or in
the footnotes thereto which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

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(d) On and as of the Effective Date, the projections previously delivered to the
Administrative Agent and the Lenders (the “Projections”), contain no statements
or conclusions which are based upon or include information known to any Borrower
to be misleading in any material respect or which fail to take into account
known material information regarding the matters reported therein. On the
Effective Date, the U.S. Borrower believes that the Projections are reasonable
and attainable.

 

8.06. Litigation. There are no actions, suits or proceedings pending or, to the
best knowledge of any Borrower, threatened (i) which purports to affect the
legality, validity or enforceability of any Credit Document or (ii) that could
reasonably be expected to have a Material Adverse Effect.

 

8.07. True and Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of U.S. Borrower or any of its Subsidiaries in writing
to the Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with or pursuant to this Agreement, the other Credit Documents or any of the
other transactions contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of U.S.
Borrower or any of its Subsidiaries in writing to the Administrative Agent or
any Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and, to the best of each Borrower’s
knowledge, not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information is or was
provided.

 

8.08. Use of Proceeds; Margin Regulations. (a) The proceeds of all Revolving
Loans shall be used by the U.S. Borrower and its Subsidiaries, subject to the
other restrictions set forth in this Agreement, for their working capital and
general corporate, partnership or limited liability company purposes, including
without limitation for the consummation of acquisitions. The proceeds of
Revolving Loans under either Tranche may be used to repay Revolving Loans under
the other Tranche. Each Letter of Credit shall be used in support of any purpose
not prohibited by this Agreement or the other Credit Documents.

 

(b) No part of the proceeds of any Revolving Loan, and no Letter of Credit, will
be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Revolving Loan nor the use of the proceeds thereof nor the issuance of any
Letter of Credit will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

8.09. Tax Returns and Payments. Each of the U.S. Borrower and each of its
Subsidiaries has timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal, material state and other material returns, statements,
forms and reports for taxes (the “Returns”) required to be filed by or with
respect to the income, properties or operations of the U.S. Borrower and/or its
Subsidiaries. The Returns accurately reflect in all material respects all
material liability for taxes of the U.S. Borrower and its Subsidiaries for the
periods covered thereby except for amounts for which adequate reserves have been
established in accordance with GAAP. Each of the U.S.

 

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Borrower and each of its Subsidiaries has paid all material taxes payable by
them other than taxes which are not delinquent, and other than those that have
been or would be contested in good faith if asserted by the appropriate taxing
authority and for which adequate reserves have been established in accordance
with GAAP. There is no action, suit, proceeding, investigation, audit, or claim
now pending or, to the best knowledge of each Borrower, threatened by any
authority regarding any taxes relating to the U.S. Borrower or any of its
Subsidiaries which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. As of the Effective Date, the U.S.
Borrower and each of its Subsidiaries have properly accrued adequate reserves in
accordance with GAAP for any amount of taxes in dispute for a Return which is
the subject of any waiver extending the statute of limitations relating to the
payment or collection of taxes of the U.S. Borrower or any of its Subsidiaries.

 

8.10. Compliance with ERISA. (a) Each Plan that is a single employer plan as
defined in Section 4001(a)(15) of ERISA (a “Single Employer Plan”) is in
substantial compliance with ERISA and the Code; no Reportable Event has occurred
with respect to a Single Employer Plan; no Single Employer Plan is insolvent or
in reorganization; to the best knowledge of the Borrowers, no Multiemployer Plan
is insolvent or in reorganization; no Single Employer Plan has an Unfunded
Current Liability; no Single Employer Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such Sections of the Code or ERISA, or has applied for or
received an extension of any amortization period within the meaning of Section
412 of the Code or Section 303 or 304 of ERISA; all contributions required to be
made by the U.S. Borrower or any of its Subsidiaries or any ERISA Affiliate with
respect to a Plan and a Foreign Pension Plan have been timely made; neither the
U.S. Borrower nor any of its Subsidiaries nor any ERISA Affiliate has incurred
any material liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code or reasonably expects to
incur any material liability (including any indirect, contingent, or secondary
liability) under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Single Employer Plan; to the best knowledge of each Borrower, no proceedings
have been instituted to terminate or appoint a trustee to administer any
Multiemployer Plan; no condition exists which presents a substantial risk to the
U.S. Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring a
material liability to or on account of a Single Employer Plan pursuant to the
foregoing provisions of ERISA and the Code; to the best knowledge of each
Borrower, no condition exists which presents a substantial risk to the U.S.
Borrower or any of its Subsidiaries or any ERISA Affiliate of incurring any
material liability to or on account of a Multiemployer Plan pursuant to the
foregoing provisions of ERISA and the Code; the U.S. Borrower believes that the
aggregate liabilities of the U.S. Borrower and its Subsidiaries and its ERISA
Affiliates to all Multiemployer Plans in the event of a withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the incurrence of any Revolving Loan or the issuance of any Letter of
Credit, could not reasonably be expected to have a Material Adverse Effect; each
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) which covers or has covered employees or former employees of HMC or
any of its Subsidiaries or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of the U.S. Borrower or any of its Subsidiaries or any ERISA
Affiliate exists or, to the best knowledge of the U.S. Borrower, is likely to
arise on

 

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account of any Plan; and HMC and its Subsidiaries do not maintain or contribute
to (A) any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
which provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or (B) any Plan, the obligations with
respect to which could reasonably be expected to have a Material Adverse Effect.

 

(b) Each Foreign Pension Plan has been maintained in substantial compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities. Neither the U.S. Borrower nor
or any of its Subsidiaries has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The present value of
the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of the U.S. Borrower’s most recently
ended fiscal year on the basis of actuarial assumptions, each of which is
reasonable, does not exceed the current value of the assets of each Foreign
Pension Plan allocable to such benefit liabilities, in the aggregate, by a
material amount.

 

8.11. The Pledge and Security Agreement; Equity Pledges. (a) The Pledge and
Security Agreement creates (after all steps required under Articles 8 and 9 of
the New York UCC have been taken) in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of each Credit Party in the Pledge and
Security Agreement Collateral described therein and owned by such Credit Party
on any date on which this representation and warranty is made or deemed made to
the extent that a security interest therein can be created pursuant to the UCC,
which security interest shall, (i) upon delivery to the Collateral Agent of any
certificates evidencing any Pledged Securities, (ii) upon the filing of
appropriate financing statements under the UCC in respect of any uncertificated
Pledged Securities that constitute a “general intangible” under the New York UCC
or (iii) upon the completion of such other actions as may be required under the
applicable provisions of the UCC (which delivery, filings and/or other actions
have been done and remain in full force and effect as to the Pledge and Security
Agreement Collateral owned by any Credit Party on any date on which this
representation and warranty is made or deemed made), constitute a fully
perfected first lien on, and security interest in, all right, title and interest
of such Credit Party in all of the Pledge and Security Agreement Collateral
described therein, subject to no security interests of any other Person.

 

(b) Part III of Schedule IV sets forth, as of the Effective Date, whether the
capital stock or other equity interests in each Subsidiary listed on Part I and
Part II of Schedule IV is pledged (as of the Effective Date) pursuant to the
Pledge and Security Agreement, and to the extent any such interest is not so
pledged, Part III of Schedule IV indicates the reason therefor.

 

8.12. Properties. Each of the U.S. Borrower and its Subsidiaries has good and
marketable title to all material properties owned by them, including all
material property reflected in the balance sheets referred to in Section 8.05(a)
(except as sold or otherwise disposed of since the date of such balance sheets).

 

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8.13. Subsidiaries. (a) The U.S. Borrower has no Subsidiaries other than (i)
those Subsidiaries listed on Schedule IV and (ii) new Subsidiaries created or
acquired in compliance with Section 11.06. Schedule IV correctly sets forth, as
of the Effective Date, the percentage ownership (direct or indirect) of HMC and
the U.S. Borrower in each class of capital stock or other equity of each of the
U.S. Borrower’s Subsidiaries existing on the Effective Date and also identifies
the direct owner thereof. As of the Effective Date, all of the Subsidiaries of
the U.S. Borrower are Restricted Subsidiaries under the Governing Senior Note
Indenture.

 

(b) Part I of Schedule IV sets forth, as of the Effective Date, each Guarantor
as of such date. Part II of Schedule IV sets forth, as of the Effective Date,
each Subsidiary of the U.S. Borrower which is not a Guarantor on the Effective
Date, which Part II of Schedule IV also shall specify the reason the respective
Subsidiary is not required to be a Guarantor.

 

8.14. Compliance with Statutes, etc. Each of the U.S. Borrower and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including, without limitation, applicable statutes,
regulations, orders and restrictions relating to zoning compliance and
environmental standards and controls), except such noncompliances as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

8.15. Investment Company Act. Neither the U.S. Borrower nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

 

8.16. Public Utility Holding Company Act. Neither the U.S. Borrower nor any of
its Subsidiaries is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

8.17. Environmental Matters. (a) To the best knowledge of each Borrower, each of
the U.S. Borrower and its Subsidiaries has complied with all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws. To the best knowledge of each Borrower, there are no pending
or threatened Environmental Claims against the U.S. Borrower or any of its
Subsidiaries or any Real Property owned, leased or operated by the U.S. Borrower
or any of its Subsidiaries. To the best knowledge of each of the U.S. Borrower
and its Subsidiaries, there are no facts, circumstances, conditions or
occurrences on any Real Property owned, leased or operated by the U.S. Borrower
or any of its Subsidiaries or on any property adjoining any such Real Property
that could reasonably be expected (i) to form the basis of an Environmental
Claim against the U.S. Borrower or any of its Subsidiaries or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by the U.S. Borrower or any of its Subsidiaries under any applicable
Environmental Law.

 

(b) To the best knowledge of the U.S. Borrower, Hazardous Materials have not at
any time been generated, used, treated or stored on, or transported to or from,
or

 

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Released on or from, any Real Property owned, leased or operated by the U.S.
Borrower or any of its Subsidiaries except in compliance with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of any such Real Property by the U.S. Borrower or such
Subsidiary’s business.

 

(c) Notwithstanding anything to the contrary in this Section 8.17, the
representations made in this Section 8.17 shall only be untrue if the aggregate
effect of all failures and noncompliance of the types described above could
reasonably be expected to have a Material Adverse Effect.

 

8.18. Labor Relations. Neither the U.S. Borrower nor any of its Subsidiaries has
received written notice that it or any Facility Manager is engaged in any unfair
labor practice with respect to any Hotel Property or other Real Property owned
or leased by the U.S. Borrower or any of its Subsidiaries that could reasonably
be expected to have a Material Adverse Effect. To the best knowledge of each
Borrower, there is (i) no unfair labor practice complaint pending or reasonably
expected to arise against the U.S. Borrower or any of its Subsidiaries before
the National Labor Relations Board and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending or reasonably expected to arise against the U.S.
Borrower or any of its Subsidiaries, (ii) no strike, labor dispute, slowdown or
stoppage that is pending or reasonably expected to arise against the U.S.
Borrower or any of its Subsidiaries, and (iii) no union representation question
that exists with respect to the employees of the U.S. Borrower or any of its
Subsidiaries, in each case with respect to the Hotel Properties and/or other
Real Properties owned or leased by the U.S. Borrower or any of its Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.

 

8.19. Intellectual Property. Each of the U.S. Borrower and its Subsidiaries owns
or has the right to use all trademarks, permits, service marks, trade names,
licenses and franchises necessary for the conduct of its respective businesses,
except such as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

8.20. Indebtedness. Schedule 8.20 sets forth a true and complete list of all
Indebtedness of the U.S. Borrower and its Subsidiaries as of the Effective Date
and which is to remain outstanding after giving effect thereto (excluding the
Revolving Loans, the “Existing Indebtedness”), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt (it being
understood that Schedule 8.20 does not have to set forth immaterial items of
Indebtedness that do not otherwise constitute Indebtedness under clause (i) of
the definition of Consolidated Total Debt, although such items of immaterial
Indebtedness will still constitute Existing Indebtedness). A true and correct
copy of the Senior Note Indenture and the Twelfth Supplemental Indenture is
attached hereto as Exhibit M.

 

8.21. Status as REIT. HMC is qualified as a real estate investment trust under
the Code and its proposed methods of operation will enable it to continue to be
so qualified.

 

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SECTION 9. Financial Covenants. As long as any of the Obligations or the Total
Revolving Loan Commitment remains outstanding (except as otherwise set forth
below), the U.S. Borrower agrees with the Lenders and the Administrative Agent
that:

 

9.01. Maximum Leverage Ratio. (a) As long as there exists any Revolving A Credit
Exposure, the U.S. Borrower will not permit the Leverage Ratio at any time
during a period set forth below to be greater than the ratio set forth opposite
such period below:

 

Period

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

   Ratio

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

Effective Date through and including the day immediately before the last day of
the U.S. Borrower’s fiscal quarter ending closest to March 31, 2006    7.00:1.00
The last day of the U.S. Borrower’s fiscal quarter ending closest to March 31,
2006 through and including the day immediately before the last day of the U.S.
Borrower’s fiscal quarter ending closest to March 31, 2007    6.75:1.00 The last
day of the U.S. Borrower’s fiscal quarter ending closest to March 31, 2007
through and including the day immediately before the last day of the U.S.
Borrower’s fiscal quarter ending closest to March 31, 2008    6.50:1.00 The last
day of the U.S. Borrower’s fiscal quarter ending closest to March 31, 2008
through and including the day immediately before the last day of the U.S.
Borrower’s fiscal quarter ending closest to March 31, 2009    6.00:1.00
Thereafter    5.75:1.00

 

(b) As long as there exists any Revolving B Credit Exposure, the U.S. Borrower
will not permit the Leverage Ratio to exceed (i) 7.50:1.00 at all times prior to
the last day of the U.S. Borrower’s fiscal quarter ending closest to September
30, 2007, (ii) 7.25:1.00 at all times from the last day of the U.S. Borrower’s
fiscal quarter ending closest to September 30, 2007 through and including the
day immediately before the last day of the U.S. Borrower’s fiscal quarter ending
closest to September 30, 2008 and (iii) 7.00:1.00 thereafter.

 

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9.02. Minimum Unsecured Interest Coverage Ratio. (a) As long as there is any
Revolving A Credit Exposure, the U.S. Borrower will not permit the Unsecured
Interest Coverage Ratio for any Test Period ending on the last day of a fiscal
quarter of the U.S. Borrower set forth below to be less than the ratio set forth
opposite such fiscal quarter below:

 

Fiscal Quarter(s) Ending Closest To

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

   Ratio

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

All Fiscal Quarters through December 31, 2006

   1.50:1.00

March 31, 2007

June 30, 2007

September 30, 2007

December 31, 2007

   1.55:1.00

March 31, 2008

June 30, 2008

September 30, 2008

December 31, 2008

   1.65:1.00

Each Fiscal Quarter thereafter

   1.75:1.00

 

(b) As long as there is any Revolving B Credit Exposure, the U.S. Borrower will
not permit the Unsecured Interest Coverage Ratio for any Test Period ending on
the last day of a fiscal quarter of the U.S. Borrower to be less than 1.50:1.00.

 

9.03. Minimum Consolidated Fixed Charge Coverage Ratio. So long as there is any
Revolving A Credit Exposure, the U.S. Borrower will not permit the Consolidated
Fixed Charge Coverage Ratio for any Test Period ending on the last day of a
fiscal quarter of the U.S. Borrower set forth below to be less than the ratio
set forth opposite such fiscal quarter below:

 

Fiscal Quarter Ending Closest To

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

   Ratio

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

Each Fiscal Quarter through December 31, 2006

   1.00:1.00

March 31, 2007

June 30, 2007

September 30, 2007

December 31, 2007

   1.05:1.00

March 31, 2008

June 30, 2008

September 30, 2008

December 31, 2008

   1.10:1.00

Each Fiscal Quarter thereafter

   1.15:1.00

 

9.04. Additional Financial Covenants and Limitations on Incurrence of
Indebtedness.

 

(a) Incurrence of Indebtedness. The U.S. Borrower and its Subsidiaries will not
Incur any additional Indebtedness in violation of Section 4.7(a) or (b) (after

 

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giving effect to any exceptions contained in Section 4.7(d)) of the Governing
Senior Note Indenture.

 

(b) Unencumbered Assets. The U.S. Borrower will maintain at all times Total
Unencumbered Assets of not less than 125% of the aggregate outstanding amount of
the Unsecured Indebtedness (other than the QUIPs Debt unless the principal
thereof has become due and payable and has not been paid) (including amounts of
Refinancing Indebtedness outstanding pursuant to Section 4.7(d)(iii) of the
Governing Senior Note Indenture) determined on a consolidated basis (it being
understood that the Unsecured Indebtedness of the Restricted Subsidiaries shall
be consolidated with that of the U.S. Borrower only to the extent of the U.S.
Borrower’s proportionate interest in such Restricted Subsidiaries).

 

(c) Certain Definitions. For the purpose of this Section 9.04 only, all
capitalized terms used in this Section 9.04 that are defined in the Governing
Senior Note Indenture shall have the meanings given to them in the Governing
Senior Note Indenture, including, without limitation, by making all covenant
calculations under this Section 9.04 by taking into account the designation of
any Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary under
the Governing Senior Note Indenture.

 

SECTION 10. Affirmative Covenants. Each Borrower hereby covenants and agrees (as
to itself and each of its Subsidiaries) that from and after the Effective Date
and until the Total Revolving Loan Commitment has terminated and the Revolving
Loans and Revolving Notes, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:

 

10.01. Compliance with Laws, Etc. The U.S. Borrower shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
Requirements of Law, Contractual Obligations, commitments, instruments,
licenses, permits and franchises, including, without limitation, all Permits;
provided, however, that no Borrower shall be deemed in default of this Section
10.01 if all such non-compliances in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

 

10.02. Conduct of Business. The U.S. Borrower shall (a) conduct, and cause each
of its Subsidiaries to conduct, its business in the ordinary course and
consistent with past practice; (b) use, and cause each of its Subsidiaries to
use, its reasonable efforts, in the ordinary course and consistent with past
practice, to (i) preserve its business and the goodwill and business of the
customers, advertisers, suppliers and others having business relations with the
U.S. Borrower or any of its Subsidiaries, and (ii) keep available the services
and goodwill of its present employees; (c) preserve, and cause each of its
Subsidiaries to preserve, all registered patents, trademarks, trade names,
copyrights and service marks that are used in its business and owned by the U.S.
Borrower or its Subsidiaries; and (d) perform and observe, and cause each of its
Subsidiaries to perform and observe, all the terms, covenants and conditions
required to be performed and observed by it under its Contractual Obligations
(including, without limitation, to pay all rent and other charges payable under
any lease and all debts and other obligations as the same become due), and do,
and cause its Subsidiaries to do, all things necessary to preserve and to keep
unimpaired its rights under such Contractual Obligations; provided, however,
that, in the

 

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case of each of clauses (a) through (d), no Borrower shall be deemed in default
of this Section 10.02 if all such failures in the aggregate have no Material
Adverse Effect.

 

10.03. Payment of Taxes, Etc. The U.S. Borrower shall pay and discharge, and
shall cause each of its Subsidiaries, as appropriate, to pay and discharge,
before the same shall become delinquent, all lawful governmental claims,
material taxes, material assessments, material charges and material levies,
except where contested in good faith, by proper proceedings, if adequate
reserves therefor have been established on the books of the U.S. Borrower or the
appropriate Subsidiary in conformity with GAAP.

 

10.04. Maintenance of Insurance. (a) When the Leverage Ratio is equal to or in
excess of 6.00:1.00, the U.S. Borrower and each of its Subsidiaries shall
maintain, or shall cause to be maintained, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks (including, without limitation, fire, extended coverage, vandalism,
malicious mischief, flood, earthquake, public liability, product liability,
business interruption and terrorism) (in the case of terrorism, to the extent
commercially available) as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
U.S. Borrower or such Subsidiary engages in business or owns properties.

 

(b) When the Leverage Ratio is less than 6.00:1.00, the U.S. Borrower and the
Guarantors shall provide, or cause to be provided, for themselves and each of
their Restricted Subsidiaries, insurance (including appropriate self insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the U.S. Borrower is adequate and appropriate for the conduct of the business
of the U.S. Borrower, the Guarantors and such Restricted Subsidiaries.

 

(c) Each Borrower will furnish to the Lenders from time to time such information
as may be requested as to the insurance maintained pursuant to this Section
10.04.

 

10.05. Preservation of Existence, Etc. Subject to Section 11.09, the U.S.
Borrower and the Guarantors will do or cause to be done all things necessary to
preserve and keep in full force and effect their respective corporate existence
and the corporate (or other organizational) existence in accordance with their
respective organizational documents (as the same may be amended from time to
time) and the rights (charter and statutory), and corporate or other
organizational and franchises of the U.S. Borrower and the Guarantors; provided,
however, that nothing in this Section 10.05 will prohibit the U.S. Borrower or
any Guarantor from engaging in any transactions permitted under this Agreement,
including Section 11.09 hereof, and neither the U.S Borrower nor any Guarantor
shall be required to preserve any such right, franchise or existence if the
board of directors of the general partner of the U.S. Borrower shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the U.S. Borrower, the Guarantors and their Subsidiaries taken as a
whole and that the loss thereof is not adverse in any material respect to the
Lenders.

 

10.06. Access; Annual Meetings with Lenders. (a) Access. The U.S. Borrower
shall, at any reasonable time and from time to time upon reasonable advance
notice, permit the Administrative Agent or any of the Lenders, or any agents or
representatives thereof, at the

 

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expense of the Lenders (but such expense to be reimbursed by the U.S. Borrower
in the event that any of the following reveal a material Default or Event of
Default) to, under the guidance of officers of the U.S. Borrower or its
Subsidiaries (unless such officers are not made available for such purpose upon
reasonable advance notice), (i) examine and make copies of and abstracts from
the records and books of account of the U.S. Borrower and each of its
Subsidiaries, (ii) visit the properties of the U.S. Borrower and each of its
Subsidiaries, (iii) discuss the affairs, finances and accounts of the U.S.
Borrower and each of its Subsidiaries with any of their respective officers or
directors, and (iv) communicate directly with each Borrower’s independent
certified public accountants.

 

(b) Annual Meetings with Lenders. At the request of the Administrative Agent or
the Required Lenders, the U.S. Borrower shall, at least once during each fiscal
year (other than during the fiscal year in effect on the Effective Date) of the
U.S. Borrower, hold a meeting (at a mutually agreeable location and time) with
all of the Lenders at which meeting the financial results of the previous fiscal
year and the financial condition of the U.S. Borrower and its Subsidiaries and
the budgets presented for the current fiscal year of the U.S. Borrower and its
Subsidiaries shall be reviewed, with each Lender bearing its own travel,
lodging, food and other costs associated with attending any such meeting.

 

10.07. Keeping of Books. The U.S. Borrower shall keep, and shall cause each of
its Subsidiaries to keep, proper books of record and account, in which proper
entries shall be made of all financial transactions and the assets and business
of the U.S. Borrower and each such Subsidiary.

 

10.08. Maintenance of Properties, Etc. The U.S. Borrower shall maintain and
preserve, and shall cause each of its Subsidiaries to maintain and preserve, (i)
all of its properties which are used or useful or necessary in the conduct of
its business in good working order and condition (ordinary wear and tear and
damage by casualty excepted), and (ii) all rights, permits, licenses, approvals
and privileges (including, without limitation, all Permits) which are used or
useful or necessary in the conduct of its business; provided, however, that no
Borrower shall be deemed in default of this Section 10.08 if all such failures
in the aggregate are not reasonably likely to have a Material Adverse Effect.

 

10.09. Management Agreements, Operating Leases and Certain Other Contracts. (a)
Management of Hotel Properties. Subject to Section 10.09(c), unless the Required
Lenders otherwise agree in writing, the U.S. Borrower will take, and will cause
each of its Subsidiaries to take, all action necessary so that (i) each Hotel
Property is at all times managed by a Permitted Facility Manager pursuant to a
Management Agreement, and (ii) each Hotel Property that is leased by the U.S.
Borrower or any of its Subsidiaries as lessor is at all times leased to an
Approved Lessee pursuant to an Operating Lease; provided, however, that the U.S.
Borrower and its Subsidiaries shall not be deemed to be in breach of the
covenants set forth in this Section 10.09(a) by virtue of a failure to so
maintain a Management Agreement or Operating Lease, so long as (x) the U.S.
Borrower or its relevant Subsidiary is diligently pursuing engaging a
replacement Permitted Facility Manager or Approved Lessee pursuant to a
Management Agreement or Operating Lease, as applicable, and (y) the failure to
have maintained such Management Agreement or Operating Lease could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(b) Enforcement of Certain Contracts. Subject to Section 10.09(c), the U.S.
Borrower will, and will cause each of its Subsidiaries to, (i) enforce the
provisions of each Operating Lease, each Management Agreement, each Franchise
Agreement and each other material agreement, contract or instrument to which
such Approved Lessee is a party or by which such Approved Lessee is bound and
which affects the ownership, leasing, management or operation of any Real
Property owned or leased by the U.S. Borrower or any of its Subsidiaries, and
(ii) to the extent it has the power or right to do so (whether by contract or
otherwise) cause each Approved Lessee and Facility Manager to, (x) maintain in
good standing all material licenses, certifications, accreditations and other
approvals applicable to it or to any Hotel Property which it owns, leases,
manages or operates and (y) to comply, in all material respects with all
Requirements of Law, Permits, Contractual Obligations, commitments, instruments,
licenses, permits and franchises, except to the extent contested in good faith
and by proper proceedings, or as is appropriate and consistent with good
business practice; provided, however, that, in the case of each of clause (i)
and (ii) of this Section 10.09(b), the U.S. Borrower shall not be deemed in
default of such clause if all non-compliances with the requirements of such
clause, individually or in the aggregate, could not reasonably be expected to
have Material Adverse Effect.

 

(c) Limited Applicability of Section 10.09. The provisions of clauses (a) and
(b) of this Section 10.09 shall not apply at the time the Leverage Ratio is less
than 6.00:1.00.

 

10.10. Application of Proceeds. Each Borrower shall use the entire amount of the
proceeds of the Revolving Credit Loans as provided in Section 8.08.

 

10.11. Information Covenants. The U.S. Borrower will furnish to the
Administrative Agent and each of the Lenders:

 

(a) Quarterly Financial Statements and Reports. Within 60 days (but in no event
later than 15 days after the related filing deadline under SEC rules and
regulations) after the close of each of the first three quarterly accounting
periods in each fiscal year of the U.S. Borrower (commencing with the quarterly
accounting period ending closest to June 18, 2004), (i) a consolidated balance
sheet of the U.S. Borrower and its Subsidiaries as at the end of such quarterly
accounting period, (ii) the related consolidated statements of income for such
quarterly accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period and (iii) the related
consolidated statements of cash flows for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the corresponding dates and fiscal periods
in the prior fiscal year, all of which shall be in reasonable detail and
certified by an Authorized Financial Officer of the U.S. Borrower that, to the
best of such officer’s knowledge after due inquiry, they fairly present, in all
material respects, the financial condition of the U.S. Borrower and its
Subsidiaries as of the dates indicated and the results of their operations and
changes in their cash flows for the periods indicated, subject to normal
year-end audit adjustments.

 

(b) Annual Financial Statements. Within 105 days (but in no event later than 15
days after the related filing deadline under SEC rules and regulations) after
the close of each fiscal year of the U.S. Borrower, the consolidated balance
sheet of the U.S.

 

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Borrower and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of shareholders’ equity as of the end of such fiscal
year and of income and cash flows for such fiscal year setting forth comparative
figures as of the end of and for the preceding fiscal year and certified by
Ernst & Young, KPMG, PricewaterhouseCoopers or Deloitte & Touche or such other
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent, together with a report of
such accounting firm stating that in the course of its regular audit of the
financial statements of the U.S. Borrower and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of Default which
has occurred and is continuing in respect of Section 9, or, if in the opinion of
such accounting firm such a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof.

 

(c) Forecasts. No later than 60 days after the first day of each fiscal year of
the U.S. Borrower, a corporate forecast substantially in the form attached
hereto as Exhibit K for such fiscal year with respect to the U.S. Borrower and
its Subsidiaries, accompanied by a statement of an Authorized Financial Officer
of the U.S. Borrower to the effect that, to the best of such officer’s
knowledge, the forecast is a reasonable estimate of the period covered thereby.

 

(d) Officer’s Certificates. At the time of the delivery of the financial
statements provided for in Sections 10.11(a) and (b), a certificate of an
Authorized Financial Officer of the U.S. Borrower to the effect that, to the
best of such officer’s knowledge, no Default or Event of Default has occurred
and is continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth (in reasonable detail) the calculations required to establish
whether the U.S. Borrower and its Subsidiaries were in compliance with the
provisions of Sections 9.01, 9.02, 9.03 (including in the case of the Revolving
Facility A Financial Covenants and Revolving Facility B Financial Covenants,
computations showing whether the U.S. Borrower and its Subsidiaries would be in
compliance with such covenants were they to be in effect whether or not they are
actually in effect), 11.02, 11.08, 11.10, 11.11 and 11.12, at the end of such
fiscal quarter or year, as the case may be (calculated on a Pro Forma Basis for
the covenants required to be so calculated using the end of such fiscal quarter
or year, as the case may be, as the Determination Date) and (y) set forth (in
reasonable detail) the calculations and other determinations required to
establish whether the U.S. Borrower and its Subsidiaries were in compliance with
the provisions of Section 5.02(b)) during, and for the 12 month period ending on
the last day of, such quarterly accounting period or fiscal year, as the case
may be. The certificate shall also set forth the Applicable Margin (including,
if applicable, the Excess Usage Premium and the Excess Usage Amount to which
such premium relates) for the current Fiscal Quarter. In addition to the
certificates required pursuant to this Section 10.11(d), the U.S. Borrower shall
also deliver an annual compliance certificate relating to the Governing Senior
Note Indenture in the form and at the time such certificate is required to be
delivered under the Governing Senior Note Indenture.

 

(e) Notice of Default or Litigation. Promptly, and in any event within three
Business Days after the President, the Chief Executive Officer, any Vice
President or any Authorized Financial Officer of any Credit Party obtains
knowledge thereof, notice of (i) the

 

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occurrence of any event which constitutes a Default or an Event of Default and
(ii) any litigation or governmental investigation or proceeding pending or
threatened (x) against the U.S. Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, (y) with respect to
any material Indebtedness of the U.S. Borrower or any of its Subsidiaries or (z)
with respect to any Credit Document.

 

(f) Management Letters. Promptly after any Credit Party’s receipt thereof, a
copy of any “management letter” received by such Credit Party from its certified
public accountants and management’s responses, if any, thereto.

 

(g) Other Reports and Filings. Promptly, and without duplication of any
documents or information delivered pursuant to another clause of this Section
10.11, copies of all financial information, proxy materials and other
information and reports, if any, which the U.S. Borrower or any of its
Subsidiaries shall file with the SEC (it being understood, however, that with
respect to any preliminary filings made with the SEC, the U.S. Borrower need
only deliver a written notice describing such filing) and copies of all notices
and reports which the U.S. Borrower or any of its Subsidiaries shall deliver to
holders of the Senior Notes pursuant to the terms of the documentation governing
such Indebtedness (or any trustee, agent or other representative therefor).

 

(h) Environmental Matters. Promptly upon, and in any event within ten Business
Days after the President, the Chief Executive Officer, any Vice President or any
Authorized Financial Officer of any Credit Party obtaining knowledge thereof,
notice of one or more of the following environmental matters to the extent that
any such environmental matters, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect:

 

(i) any pending or threatened Environmental Claim against the U.S. Borrower or
any of its Subsidiaries or any Real Property owned, leased or operated by the
U.S. Borrower or any of its Subsidiaries;

 

(ii) any condition or occurrence on or arising from any Real Property owned,
leased or operated by the U.S. Borrower or any of its Subsidiaries that (a)
results in non-compliance by the U.S. Borrower or any of its Subsidiaries with
any applicable Environmental Law or (b) could reasonably be expected to form the
basis of an Environmental Claim against the U.S. Borrower or any of its
Subsidiaries or any such Real Property;

 

(iii) any condition or occurrence on any Real Property owned, leased or operated
by the U.S. Borrower or any of its Subsidiaries that could reasonably be
expected to cause such Real Property to be subject to any restrictions on the
ownership, lease, occupancy, use or transferability by the U.S. Borrower or any
of its Subsidiaries of such Real Property under any Environmental Law; and

 

(iv) the taking of any removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Property owned, leased

 

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or operated by the U.S. Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency.

 

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the U.S.
Borrower’s or such Subsidiary’s response or proposed response thereto.

 

(i) Other Information. From time to time, such other information or documents
(financial or otherwise) with respect to HMC, the U.S. Borrower and/or any of
its Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.

 

(j) ERISA. Within 15 Business Days after the U.S. Borrower, any Subsidiary of
the U.S. Borrower or any ERISA Affiliate knows or has reason to know of the
occurrence of any event relating to compliance by the U.S. Borrower or any
Subsidiary thereof or any ERISA Affiliate under ERISA has occurred to the extent
that such events, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, the U.S. Borrower will deliver to
the Administrative Agent a certificate of an Authorized Financial Officer of the
U.S. Borrower setting forth details as to such occurrence and the action, if
any, that the U.S. Borrower, such Subsidiary or such ERISA Affiliate is required
or proposes to take, together with any notices required or proposed to be given
to or filed with or by the U.S. Borrower, such Subsidiary, such ERISA Affiliate,
the PBGC, a Plan participant or the Plan administrator with respect thereto. The
U.S. Borrower will deliver to the Administrative Agent (with sufficient copies
for each Bank) (i) a complete copy of the annual report (Form 5500) of each
Single Employer Plan (including, to the extent required, the related financial
and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed by the U.S.
Borrower or any of its Subsidiaries with the Internal Revenue Service and (ii)
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In addition
to any certificates or notices delivered to the Administrative Agent pursuant to
the first sentence hereof, copies of annual reports and any material notices
received by the U.S. Borrower, any Subsidiary of the U.S. Borrower or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered to
the Administrative Agent (with sufficient copies for each Bank) no later than 15
Business Days after the date such report has been filed with the Internal
Revenue Service or such notice has been received by the U.S. Borrower, such
Subsidiary or such ERISA Affiliate, as applicable.

 

(k) Designation of Fifty Percent Ventures as Subsidiaries; Designation of
Unrestricted Subsidiary. Promptly after the designation of a Fifty Percent
Venture as a Restricted Subsidiary (as such terms are defined in the Governing
Senior Note Indenture) under the Governing Senior Note Indenture, notice thereof
to the Administrative Agent stating that as a result of such designation such
Fifty Percent Venture constitutes a “Subsidiary” pursuant to the definition of
such term. The U.S. Borrower shall also notify the Administrative Agent promptly
upon the designation of an Unrestricted Subsidiary under the Governing Senior
Note Indenture (or any change in any such designation).

 

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(l) Financial Information Regarding the U.S. Borrower and Guarantors. As soon as
practicable after request from the Administrative Agent (but not, unless an
Event of Default shall have occurred and be continuing, more than once for the
fiscal year ending December 31, 2004 and more than twice for each fiscal year
thereafter), information concerning the combined EBITDA of the Guarantors and
the combined revenues, assets and EBITDA of the issuers of pledged securities
included in the Collateral.

 

10.12. Intentionally Omitted.

 

10.13. Certain Subsidiaries. (a) The U.S. Borrower will ensure that at all times
either the U.S. Borrower or a Wholly-Owned Subsidiary of the U.S. Borrower that
is a Guarantor is (i) the sole general partner of any Guarantor that is a
partnership, or (ii) the sole managing member (or has the sole right to
designate members of the Board of Managers) of any Guarantor that is a limited
liability company.

 

(b) Except as set forth on Schedule IV or otherwise permitted pursuant to
Section 10.15, the U.S. Borrower will ensure that at all times (i) either the
U.S. Borrower or a Wholly-Owned Subsidiary of the U.S. Borrower that is a
Guarantor owns 100% of the equity interests in each Look-Through Subsidiary and
(ii) the equity interests owned by the U.S. Borrower (directly or indirectly) in
each Subsidiary of the U.S. Borrower that is not a Look-Through Subsidiary are
owned directly or indirectly by a Look-Through Subsidiary that is a Guarantor.

 

10.14. Foreign Subsidiaries Security. If following a change in the relevant
sections of the Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder, counsel for the U.S.
Borrower reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Lenders
deliver a legal opinion, in form and substance mutually satisfactory to the
Administrative Agent and the U.S. Borrower, with respect to any wholly-owned
Foreign Subsidiary that is not a Look-Through Subsidiary which has not already
had all of its stock pledged pursuant to the Pledge and Security Agreement, that
(i) a pledge of 66-2/3% or more of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote, and (ii)
the entering into by such Foreign Subsidiary of a guaranty in substantially the
form of the Subsidiaries Guaranty, in any such case could reasonably be expected
to cause (A) the undistributed earnings of such Foreign Subsidiary as determined
for Federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary’s United States parent for Federal income tax purposes or (B)
other material adverse Federal income tax consequences to the Credit Parties,
then (in each case, subject to any restrictions described in Section 10.15) in
the case of a failure to deliver the evidence described in clause (i) above,
that portion of such Foreign Subsidiary’s outstanding capital stock not
theretofore pledged pursuant to (and to the extent required by) the Pledge and
Security Agreement shall be pledged to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Pledge and Security Agreement (or another
pledge agreement in substantially similar form, if needed), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary (to the extent that same is a Wholly-Owned Subsidiary) shall execute
and deliver (x) the Subsidiaries Guaranty (or another guaranty in substantially
similar form, if needed), guaranteeing the Obligations of the U.S. Borrower
under the Credit Documents and (y) the Pledge and Security Agreement (or another

 

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pledge agreement in substantially similar form, if needed) securing such Foreign
Subsidiary’s obligations under the Subsidiaries Guaranty, in each case to the
extent that entering into such Pledge and Security Agreement or Subsidiaries
Guaranty is permitted by the laws of the respective foreign jurisdiction and
would be required pursuant to Section 10.15, and with all documents delivered
pursuant to this Section 10.14 to be in form and substance reasonably
satisfactory to the Administrative Agent.

 

10.15. Additional Guarantors; Release of Guarantors and Collateral. (a) (1) If,
at any time after the Effective Date, (x) the U.S. Borrower (directly or
indirectly) acquires, establishes or creates any Wholly-Owned Subsidiary that is
a Look-Through Subsidiary (or in the circumstances contemplated by Section
10.14, any other Wholly-Owned Foreign Subsidiary), or (y) any Subsidiary of the
U.S. Borrower guaranties the obligations of the U.S. Borrower under the Senior
Notes or under any other Indebtedness of the U.S. Borrower, such Subsidiary
shall be required in accordance with the requirements of Section 10.15(c) (I) to
become a Guarantor and (II) to the extent that such Subsidiary is a Wholly-Owned
Subsidiary and a Look-Through Subsidiary to become a Pledgor for the purpose of
pledging the capital stock or the equity interests of each Subsidiary of such
Pledgor that is a Wholly-Owned Subsidiary and Look-Through Subsidiary (subject
to the limitations set forth below and in the Pledge and Security Agreement);
provided, however, that the requirements of this clause (II) shall not apply to
any Subsidiary so long as such Subsidiary does not own equity interests in any
other Person that are required under the Credit Documents to be pledged.

 

(2) Notwithstanding anything to the contrary contained above in this Section
10.15(a) or anything else in this Agreement or in any other Credit Document, (I)
no Subsidiary of the U.S. Borrower shall be required to become a Guarantor or
Pledgor, (II) in the event that any Subsidiary of the U.S. Borrower is a
Guarantor or Pledgor, such Subsidiary may be released from its obligations under
the Subsidiaries Guaranty and the Pledge and Security Agreement, as applicable,
upon notice by the U.S. Borrower to the Administrative Agent (so long as, in the
case of a Subsidiaries Guaranty delivered pursuant to clause (y) of Section
10.15(a)(1), such Subsidiary is simultaneously released from all guaranties of
Indebtedness of the U.S. Borrower), and (III) no capital stock or other equity
of a Subsidiary of the U.S. Borrower shall be required to be pledged under the
Pledge and Security Agreement (or, in the case of clause (iv) below, be required
to be pledged until accepted by the Administrative Agent) and, to the extent
theretofore pledged, may be released from the Pledge and Security Agreement upon
notice by the U.S. Borrower to the Collateral Agent, in each case under one or
more of the following circumstances:

 

(i) with respect to clauses (I), (II) and (III) above, such Subsidiary’s only
assets consist of $5,000 or less in cash;

 

(ii) with respect to clauses (I) and (II) above only, such Subsidiary, or the
direct or indirect parent company or general partner of such Subsidiary whose
only significant asset (in each case) is the equity ownership of such Subsidiary
(or the direct or indirect parent company of such Subsidiary), enters into (or
is a party to) a material contract pursuant to a transaction otherwise permitted
under this Agreement and the terms of which prohibit or restrict such Subsidiary
from executing a counterpart of the Subsidiaries Guaranty and/or the Pledge and
Security Agreement (and from becoming a

 

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guarantor under the Senior Notes or other Indebtedness other than Indebtedness
incurred under such material contract);

 

(iii) with respect to clause (III) above only, such Subsidiary, the U.S.
Borrower or any other Subsidiary of the U.S. Borrower, enters into (or is a
party to) a material contract pursuant to a transaction otherwise permitted
under this Agreement and the terms of which prohibit or restrict the capital
stock or other equity of such Subsidiary from being pledged under the Pledge and
Security Agreement (as opposed to restricting or prohibiting the ability of the
Collateral Agent to exercise remedies with respect to such pledge); or

 

(iv) with respect to any pledge of any interest in a Foreign Subsidiary, the
Administrative Agent shall have determined in its sole discretion that the
pledge pursuant to the Pledge and Security Agreement may expose any Lender to
liability (but only for so long as the Administrative Agent shall have so
determined), in which case the U.S. Borrower shall, if requested by the
Administrative Agent at any time, promptly (and in any event within 20 Business
Days) cause the applicable Pledgor to pledge such interests pursuant to a pledge
and security agreement the terms of which (A) would not, in the Administrative
Agent’s sole discretion, result in any such liability and (B) are no less
favorable to the U.S. Borrower or any of its Subsidiaries as are the terms of
the Pledge and Security Agreement.

 

(b) (1) Each Wholly-Owned Subsidiary of the U.S. Borrower that is a Look-Through
Subsidiary that is not a party to the Subsidiaries Guaranty and the Pledge and
Security Agreement (or has been released from its obligations under the
Subsidiaries Guaranty and/or the Pledge and Security Agreement) because of the
restrictions described in Part III of Schedule IV or under the circumstances
described in Section 10.15(a), (2) shall be required in accordance with the
requirements of Section 10.15(c), following the termination of such restrictions
(unless new restrictions are imposed under a material contract entered into
pursuant to a transaction otherwise permitted under this Agreement) or acquiring
assets (including additional cash) in addition to at least $5,000 in cash (i) to
become a Guarantor and (ii) to the extent that such Subsidiary is a Look-Through
Subsidiary, to become a Pledgor; provided, however, that the requirements of
this clause (ii) shall not apply to any Subsidiary so long as such Subsidiary
does not own equity interests in any other Person that are required under this
Agreement to be pledged.

 

(2) The capital stock or other equity of each Subsidiary of the U.S. Borrower
that has not been pledged under the Pledge and Security Agreement (or has been
released from the Pledge and Security Agreement) because of the restrictions
described in Part III of Schedule IV or under the circumstances described in
Section10.15(a)(2) shall be required in accordance with the requirements of
Section 10.15(c), following the termination of such restrictions (unless new
restrictions are imposed under a material contract entered into pursuant to a
transaction otherwise permitted under this Agreement) or such Subsidiary
acquiring assets (including additional cash) in addition to at least $5,000 in
cash, to be pledged pursuant to (and to the extent required by) the Pledge and
Security Agreement.

 

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(c) Each Subsidiary required to become a Guarantor or Pledgor or to pledge
additional equity interests pursuant to the preceding Sections 10.15(a) and (b)
shall (i) promptly thereafter (but in no event later than 30 days after the
occurrence of any event specified in such Sections) execute and deliver
counterparts to the Subsidiaries Guaranty or Pledge and Security Agreement, as
applicable, (ii) promptly thereafter (or such other time as is specified in
Section 15(d) of the Pledge and Security Agreement with respect to delivery of
the Partnership/LLC Notice and Pledge Acknowledgment referred to therein) in the
case of the execution of any counterpart to the Pledge and Security Agreement or
the pledge of any additional equity interests pursuant to Section 10.15(b)(2),
cause to be executed and delivered all other relevant documentation necessary or
appropriate to perfect the security interest granted by such Pledgor pursuant to
the Pledge and Security Agreement, with all such actions to be taken to the
reasonable satisfaction of the Administrative Agent, and (iii) unless the
Administrative Agent otherwise agrees in writing, deliver, no later than the
time of required delivery of the compliance certificate pursuant to Section
10.11(d) relating to the subsequent fiscal quarter (or year end, as applicable)
opinions of counsel of the type described in Section 6 as if such Subsidiary
were a Credit Party on the Effective Date.

 

(d) Except as otherwise set forth in this Section 10.15(d), upon the written
request to the Administrative Agent, the Collateral consisting of Pledged
Securities pledged pursuant to the Pledge and Security Agreement (the “Stock
Collateral”) shall be released, and the requirements of Sections 10.14 and
10.15(a), (b) and (c) and the related provisions of the Pledge and Security
Agreement shall cease to be in effect to the extent they relate to pledges but
shall continue to be effective with respect to guarantees, if all of the
following conditions have been satisfied on or prior to the date of release (the
“Collateral Release Date”): (i) for the two most recent consecutive fiscal
quarters of the U.S. Borrower ending prior to the Collateral Release Date the
Leverage Ratio is less than 6:00:1.00, (ii) no Default or Event of Default shall
have occurred on or prior to and be continuing on the Collateral Release Date,
(iii) the U.S. Borrower shall have delivered to the Administrative Agent at
least 15 Business Days prior to the Collateral Release Date a request to release
Pledged Collateral, which request shall (x) specify the proposed Collateral
Release Date, (y) if not already provided, provide financial statements pursuant
to Section 10.11 for such fiscal quarters, and (z) contain a certification of an
Authorized Financial Officer that the conditions to release of Stock Collateral
have been satisfied (and providing a computation of the Leverage Ratio
demonstrating such compliance), and (iv) all Stock Collateral being released
shall also be released as collateral for the U.S. Borrower’s obligations under
the Governing Senior Note Indenture; provided, however, that in the event the
Leverage Ratio equals or exceeds 6:00 to 1:00 at any time after the Collateral
Release Date for a period of two consecutive fiscal quarters, the security
interest in all such released Pledged Collateral shall be recreated within 30
days, and the requirements of Sections 10.14 and 10.15(a), (b) and (c) shall
thereafter once again be in effect. The Collateral Agent shall promptly execute
such documents and take such other actions as the U.S. Borrower may reasonably
request to evidence any release of the Stock Collateral pursuant to this Section
10.15(d). Notwithstanding anything to the contrary in this Section 10.15(d), the
U.S. Borrower shall have the option to defer the release of the Stock Collateral
on the Collateral Release Date while causing the provisions of Sections 10.14
and 10.15(a), (b) and (c) and the related provisions of the Pledge and Security
Agreement that require pledges in respect of newly-formed or newly-acquired
Subsidiaries to cease to be effective on the Collateral Release Date.

 

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(e) Notwithstanding the last sentence of Sections 2.01(a) and 2.01(b) or Section
15.01, with respect to Canadian Borrowers that are not Look-Through
Subsidiaries, if after the date hereof such Canadian Borrower is no longer party
to a material contract that prohibits such Canadian Borrower from providing a
joint and several guarantee of the Obligations of each Canadian Borrower under
this Agreement, such Canadian Borrower shall enter into and deliver a joint and
several guarantee of each Canadian Borrower’s Obligations under this Agreement
(but excluding any Obligations arising under the Subsidiaries Guaranty or Pledge
and Security Agreement) pursuant to an agreement reasonably satisfactory to the
Administrative Agent within 30 days after the termination of such contractual
restrictions, together with such legal opinions and certificates as the
Administrative Agent may reasonably request.

 

10.16. End of Fiscal Years; Fiscal Quarters. The U.S. Borrower will cause (i)
each of its, and each of its Subsidiaries’, fiscal years to end on December 31
and (ii) each of its, and each of its Subsidiaries’, first three fiscal quarters
to end on the last day of the 12th, 24th and 36th week, respectively, of each
fiscal year and the fourth fiscal quarter to end on December 31, it being
understood that (x) if any Hotel Property owned or leased by a Subsidiary of HMC
is managed or leased by an Approved Lessee or a Facility Manager other than
Marriott International or any Wholly-Owned Subsidiary of Marriott International,
HMC and the U.S. Borrower shall cause such Subsidiary’s fiscal years and fiscal
quarters to end on dates as close as reasonably practicable to the dates set
forth above in this Section 10.16 and (y) HMC and the U.S. Borrower may elect to
change each of its and each of its Subsidiaries’ fiscal quarters to end on March
31, June 30, September 30 and December 31.

 

10.17. Environmental Matters. (a) The U.S. Borrower shall comply and shall cause
each of its Subsidiaries and each property owned or leased by such parties to
comply in all material respects with all applicable Environmental Laws currently
or hereafter in effect except for such non-compliance as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and will pay or cause to be paid all costs and expenses incurred
in connection with such compliance, and will keep or cause to be kept all such
Real Property free and clear of any Liens imposed pursuant to such Environmental
Laws.

 

(b) At the written request of the Administrative Agent or the Required Banks,
which request shall specify in reasonable detail the basis therefor, at any time
and from time to time after (i) the Administrative Agent receives notice under
Section 10.11(h) of any event for which notice is required to be delivered for
any Real Property or (ii) the U.S. Borrower or any of its Subsidiaries are not
in compliance with Section 10.17(a) with respect to any Real Property, the U.S.
Borrower will provide, at its sole cost and expense, an environmental site
assessment report concerning any such Real Property now or hereafter owned,
leased or operated by the U.S. Borrower or any of its Subsidiaries, prepared by
an environmental consulting firm reasonably approved by the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property. If the U.S. Borrower fails to provide
the same within 90 days after such request was made, the Administrative Agent
may order the same, and the U.S. Borrower shall grant and hereby grants, to the
Administrative Agent and the Banks and their agents access to such Real Property
and specifically grants the Administrative Agent and

 

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the Banks an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the U.S. Borrower’s expense.

 

SECTION 11. Negative Covenants. Each Borrower hereby covenants and agrees (as to
itself and each of its Subsidiaries) that from and after the Effective Date and
until the Total Revolving Loan Commitment has terminated and the Revolving Loans
and Revolving Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:

 

11.01. Liens. The U.S. Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist:

 

(i) any Lien (other than Permitted Liens, to the extent such Permitted Liens
secure Indebtedness) upon or with respect to any property or assets (real or
personal, tangible or intangible) of the U.S. Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, if such Lien secures any
Indebtedness of the U.S. Borrower or any of its Subsidiaries other than (x)
Secured Indebtedness otherwise permitted to be incurred or to exist hereunder,
(y) Indebtedness secured by a Lien under the Pledge and Security Agreement or
(z) Indebtedness owed to the U.S. Borrower or any of its Subsidiaries; provided,
that the foregoing shall not permit any Lien on the Collateral except pursuant
to the Pledge and Security Agreement, or

 

(ii) any Lien upon or with respect to Capital Stock in any Subsidiary of the
U.S. Borrower securing Indebtedness of the U.S. Borrower, in the event that the
Obligations are no longer secured by Liens under the Pledge and Security
Agreement; provided, however, that this Section 11.01(ii) shall not prohibit
Liens with respect to the Capital Stock of a Subsidiary that are imposed by a
material contract (other than the Senior Note Indenture) entered into by the
U.S. Borrower or any Subsidiary pursuant to a transaction otherwise permitted by
this Agreement.

 

11.02. Indebtedness. The U.S. Borrower will not, and will not permit any of its
Subsidiaries to, incur or assume:

 

(i) any Indebtedness if (a) either (I) immediately before giving effect to the
incurrence or assumption of such Indebtedness there exists a Default or Event of
Default or (II) immediately after giving effect to the incurrence or assumption
of such Indebtedness after giving effect to the application of the proceeds
thereof, there exists a Default or Event of Default or (b) based on calculations
made by the U.S. Borrower on a Pro Forma Basis after giving effect to such
incurrence or assumption and as if such incurrence or assumption had occurred on
the first day of the respective Calculation Period, a Default or Event of
Default will exist in respect of, or would have existed during the Test Period
last reported (or required to be reported pursuant to Section 10.11(a) or
Section 10.11(b), as the case may be) prior to the date of the respective
incurrence or assumption in respect of, the financial covenants contained in
Sections 9.01 through 9.03, inclusive; provided that the foregoing provisions of
this Section 11.02(i) shall not apply to (x) accrued expenses and current trade
accounts payable incurred in the ordinary course of business (to the extent that
any such amounts

 

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constitute Indebtedness); (y) Indebtedness under Interest Rate Protection
Agreements and Other Hedging Agreements entered into with respect to other
Indebtedness permitted under this Agreement; and (z) accrued and deferred
management fees under any Management Agreement (to the extent that any such
amounts constitute Indebtedness); or

 

(ii) any Contingent Obligations (excluding Contingent Obligations relating to
Customary Non-Recourse Exclusions except to the extent a personal recourse claim
is made in connection therewith) of the U.S. Borrower in respect of Non-Recourse
Indebtedness, if the aggregate amount of such Contingent Obligations that are
incurred by the U.S. Borrower in respect of Non-Recourse Indebtedness after the
Effective Date and remain outstanding exceeds 3% of the Adjusted Total Assets of
the U.S. Borrower.

 

11.03. Limitation on Certain Restrictions on Subsidiaries. The U.S. Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary of the U.S. Borrower
to (a) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the U.S. Borrower or any
of its Subsidiaries, or pay any Indebtedness owed to the U.S. Borrower or any
Subsidiary of the U.S. Borrower, (b) make loans or advances to the U.S. Borrower
or any Subsidiary of the U.S. Borrower or (c) transfer any of its properties or
assets to the U.S. Borrower or any Subsidiary of the U.S. Borrower, except in
each case for such encumbrances or restrictions:

 

(i) which do not materially adversely affect the U.S. Borrower’s ability to
repay the Obligations when due and, in the U.S. Borrower’s reasonable
estimation, the ability to comply with the Applicable Covenants set forth in
Sections 9.01 through 9.03, inclusive, and Section 9.04(b), or

 

(ii) existing under or by reason of (A) applicable law, (B) this Agreement and
the other Credit Documents, (C) the Senior Note Documents or (D) documents or
instruments relating to Secured Indebtedness otherwise permitted hereunder;
provided that in the case of this clause (D), such restrictions relate solely to
assets constituting collateral thereunder or cash proceeds from or generated by
such assets.

 

11.04. Limitation on Issuance of Capital Stock. The U.S. Borrower will not
permit any of its Subsidiaries to issue any capital stock (including by way of
sales of treasury stock) or other equity interests or any options or warrants to
purchase, or securities convertible into, capital stock or other equity
interests, unless (a) the same do not materially adversely affect the U.S.
Borrower’s ability to repay the Obligations when due or (b) at the time of such
issuance, the Financial Condition Test is satisfied.

 

11.05. Modification and Enforcement of Certain Agreements. (a) At any time that
the Leverage Ratio equals or exceeds 6.00:1.00, the U.S. Borrower shall not, and
shall not permit any of its Subsidiaries to, alter, amend, modify, rescind,
terminate, supplement or waive any of their respective rights under, or fail to
comply in all material respects with, any of its material Contractual
Obligations (other than the Governing Senior Note Indenture) except any of the
foregoing which do not materially adversely affect (i) the U.S. Borrower’s
ability to repay the

 

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Obligations when due or (ii) in the U.S. Borrower’s reasonable estimation, the
ability to comply with the Applicable Covenants set forth in Sections 9.01
through 9.03, inclusive, and Section 9.04(b).

 

(b) At any time that the Leverage Ratio equals or exceeds 6.00:1.00, the U.S.
Borrower shall not, and shall not permit any of its Subsidiaries to, amend or
modify, or permit the amendment or modification of, any provision of any
Management Agreement or Operating Lease, other than any amendment or
modification thereto which would not violate this Agreement and the other Credit
Documents and so long as the same do not materially adversely affect (i) the
U.S. Borrower’s ability to repay the Obligations when due or (ii) in the U.S.
Borrower’s reasonable estimation, the ability to comply with the Applicable
Covenants contained in Sections 9.01 through 9.03, inclusive, and Section
9.04(b).

 

11.06. Limitation on Creation of Subsidiaries. The U.S. Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary unless the same will not materially adversely
affect (a) the U.S. Borrower’s ability to repay the Obligations when due or (b)
in the U.S. Borrower’s reasonable estimation, the ability to comply with the
Applicable Covenants set forth in Sections 9.01 through 9.03, inclusive, and
Section 9.04(b); provided that the U.S. Borrower shall comply with its
obligations under Section 10.15 and the Pledge and Security Agreement with
respect to any such new Subsidiary within the time periods applicable thereto.

 

11.07. Transactions with Affiliates. Neither the U.S. Borrower nor any of its
Restricted Subsidiaries will, directly or indirectly, enter into, renew or
extend any transaction or series of transactions (including, without limitation,
the purchase, sale, lease or exchange of property or assets, or the rendering of
any service) with any Affiliate of the U.S. Borrower (“Affiliate Transactions”),
other than Exempted Affiliate Transactions, except upon fair and reasonable
terms no less favorable to the U.S. Borrower or such Restricted Subsidiary than
could be obtained, at the time of such transaction or, if such transaction is
pursuant to a written agreement, at the time of the execution of the agreement
providing therefor, in a comparable arm’s-length transaction with a Person that
is not an Affiliate.

 

The foregoing limitation does not limit, and shall not apply to:

 

(i) Except as otherwise required pursuant to the last paragraph of this Section
11.07, transactions approved by a majority of the Board of Directors of HMC;

 

(ii) Affiliate Transactions on terms and conditions which do not materially
adversely affect (a) the U.S. Borrower’s ability to repay the Obligations when
due or (b) in the U.S. Borrower’s reasonable estimation, the ability of the U.S.
Borrower to comply with the Applicable Covenants set forth in Sections 9.01
through 9.03, inclusive, and Section 9.04(b);

 

(iii) the payment of reasonable and customary fees and expenses to members of
the Board of Directors of the general partner of the U.S. Borrower who are not
employees of the U.S. Borrower;

 

(iv) any Dividends permitted to be paid under Section 11.11;

 

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(v) loans made and other transactions entered into by the U.S. Borrower and its
Restricted Subsidiaries (and not any other Affiliate) to the extent permitted by
Section 11; and

 

(vi) Permitted Sharing Arrangements and payments made pursuant thereto to the
extent that such transactions are not otherwise prohibited or restricted
pursuant to this Agreement.

 

Any Affiliate Transaction or series of related Affiliate Transactions, other
than Exempted Affiliate Transactions and other than any transaction or series of
related transactions specified in any of clauses (ii) through (vi) of this
Section 11.07, (a) with an aggregate value in excess of $10 million must first
be approved pursuant to a resolution approved by a majority of the Board of
Directors (or any authorized committee thereof) of the general partner of the
U.S. Borrower who are disinterested in the subject matter of the transaction,
and (b) with an aggregate value in excess of $25 million, will require the U.S.
Borrower to obtain a favorable written opinion from an independent financial
advisor of national reputation as to the fairness from a financial point of view
of such transaction to the U.S. Borrower or the applicable Restricted Subsidiary
of the U.S. Borrower, except that in the case of a real estate transaction or
related real estate transactions with an aggregate value in excess of $25
million but not in excess of $50 million, an opinion may instead be obtained
from an independent, qualified real estate appraiser that the consideration
received in connection with such transaction is fair to the U.S. Borrower or the
applicable Restricted Subsidiary of the U.S. Borrower.

 

As used herein, the term “Exempted Affiliate Transaction” means (i) employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the general partner of the
U.S. Borrower, (ii) payments of reasonable fees and expenses to the members of
the Board of Directors of HMC, the general partner of the U.S. Borrower or their
Subsidiaries, (iii) transactions solely between the U.S. Borrower and any of its
Subsidiaries or solely among Subsidiaries of the U.S. Borrower, (iv) Permitted
Tax Payments, (v) Procurement Contracts, (vi) Operating Agreements, and (vii)
Investments, Dividends and payments in respect of subordinated indebtedness
otherwise permitted under Sections 11.10 and 11.11, as applicable.

 

11.08. Sales of Assets. (a) The U.S. Borrower will not, and will not permit any
of its Restricted Subsidiaries to, consummate any Asset Sale, unless (i) the
consideration received by the U.S. Borrower or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of as
determined by the Board of Directors of the general partner U.S. Borrower in
good faith and (ii) at least 75% of the consideration received consists of cash,
Cash Equivalents and/or real estate assets; provided that, with respect to the
sale of one or more real estate properties, up to 75% of the consideration may
consist of Indebtedness of the purchaser of such real estate properties so long
as such Indebtedness is secured by a first priority Lien on the real estate
property or properties sold; and provided further that, for purposes of this
clause (ii) the amount of (A) any Indebtedness (other than Indebtedness
subordinated in right of payment to the Obligations) that is required to be
repaid or assumed (and is either repaid or assumed by the transferee of the
related assets) by virtue of such Asset Sale and which is secured by a Lien on
the property or assets sold and (B) any securities or other obligations received
by the U.S. Borrower, or any such Restricted Subsidiary from such transferee
that are immediately

 

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converted by the U.S. Borrower or such Restricted Subsidiary into cash (or as to
which the U.S. Borrower or such Restricted Subsidiary has received at or prior
to the consummation of the Asset Sale a commitment (which may be subject to
customary conditions) from a nationally recognized investment, merchant or
commercial bank to convert into cash within 90 days of the consummation of such
Asset Sale and which are thereafter actually converted into cash within such
90-day period) will be deemed to be cash. The U.S. Borrower shall cause the Net
Cash Proceeds from any Asset Sale to be applied in the manner required by
Section 5.02(b). All Indebtedness secured by the assets sold in the Asset Sale
shall be repaid (or irrevocably defeased) except to the extent such Indebtedness
is assumed by the transferee of the related assets or the U.S. Borrower and its
Restricted Subsidiaries are released from such Indebtedness. In addition, no
Asset Sale shall be permitted if a Default or Event of Default then exists or
would result therefrom or, based on calculations made by the U.S. Borrower on a
Pro Forma Basis after giving effect to such Asset Sale and as if such Asset Sale
had occurred on the first day of the respective Calculation Period, a Default or
Event of Default will exist in respect of, or would have existed during the Test
Period last reported (or required to be reported pursuant to Section 10.11(a) or
10.11(b), as the case may be) prior to the date of the respective Asset Sale in
respect of, the Applicable Covenants contained in Sections 9.01 through 9.03,
inclusive.

 

(b) Notwithstanding, and without complying with, any the provisions of the
foregoing paragraph (a) or Section 5.02(b):

 

(i) the U.S. Borrower and its Restricted Subsidiaries may, in the ordinary
course of business, convey, sell, lease, transfer, assign or otherwise dispose
of inventory acquired and held for resale in the ordinary course of business;

 

(ii) the U.S. Borrower and its Restricted Subsidiaries may convey, sell, lease,
transfer, assign or otherwise dispose of assets pursuant to and in accordance
with Section 11.09;

 

(iii) the U.S. Borrower and its Restricted Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of business
so long as such property is no longer necessary for the proper conduct of the
business of the U.S. Borrower or such Restricted Subsidiary, as applicable; and

 

(iv) the U.S. Borrower and its Restricted Subsidiaries may exchange assets held
by the U.S. Borrower or a Restricted Subsidiary of the U.S. Borrower for one or
more real estate properties and/or one or more Related Businesses of any Person
or entity owning one or more real estate properties and/or one or more Related
Businesses; provided that the Board of Directors of the general partner of the
U.S. Borrower has determined in good faith that the fair market value of the
assets received by the U.S. Borrower or any such Restricted Subsidiary are
approximately equal to the fair market value of the assets exchanged by the U.S.
Borrower or such Restricted Subsidiary.

 

(c) No transaction listed in clause (b) of this Section 11.08 shall be deemed to
be an Asset Sale under this Agreement.

 

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11.09. Consolidation, Merger, etc. The U.S. Borrower will not, and will not
permit any of its Subsidiaries which are Guarantors to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
and the U.S. Borrower will not sell, convey or transfer or otherwise dispose of
all or substantially all of its property and assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) except that:

 

(i) any Subsidiary of the U.S. Borrower which is a Guarantor may engage in a
merger constituting an asset sale or an asset acquisition otherwise permitted
under this Agreement;

 

(ii) any Subsidiary of the U.S. Borrower that is a Guarantor may be merged with
and into the U.S. Borrower or any other Subsidiary of the U.S. Borrower that is
a Guarantor so long as in the case of any merger involving the U.S. Borrower,
the U.S. Borrower is the surviving Person;

 

(iii) Subsidiaries of the U.S. Borrower which are Guarantors may consolidate or
merge with or into (whether or not such Guarantor is the surviving Person)
another Person (other than the U.S. Borrower or another Guarantor), so long as
(x) the Person formed by or surviving any such consolidation or merger (if other
than such Guarantor) assumes all the obligations of such Guarantor under the
Subsidiaries Guaranty and otherwise complies with the applicable requirements of
Section 10.15; provided, however, that for the purpose of this clause (x), the
requirements of Section 10.15(c)(i) and (ii) shall have been satisfied upon the
consummation of such consolidation or merger without regard to any additional
time otherwise permitted under Section 10.15(c); and (y) immediately before and
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred or be continuing; and

 

(iv) Subsidiaries of the U.S. Borrower which are not Guarantors, are otherwise
permitted to be dissolved pursuant to Section 10.05, or have no material assets
or material liabilities may be dissolved and liquidated.

 

11.10. Acquisitions; Investments. (a) At any time that the Leverage Ratio equals
or exceeds 6.00:1:00, the U.S. Borrower will not, and will not permit its
Subsidiaries to:

 

(i) acquire ownership of Hotel Properties or other real estate or other assets
constituting Related Businesses (or all or a portion of the Capital Stock of a
Person owning such real estate or Related Businesses (including (in either case)
by way of merger)) if, at the time of such acquisition, the Financial Condition
Test is not satisfied;

 

(ii) acquire ownership of non-real estate assets (other than Permitted
Investments or inventory, materials, equipment and other personal property used
in the ordinary course of business) (or all or a portion of the Capital Stock of
a Person owning primarily such non-real estate assets (including by way of
merger or Investment)) if (A) at the time of such acquisition, the Financial
Condition Test is not satisfied or (B) after giving effect to such acquisition,
the aggregate amount of all such non-real estate assets acquired in the then
current fiscal year of the U.S. Borrower pursuant to this Section 11.10(a)(ii)
would exceed 1% of the Adjusted Total Assets, determined at the time such

 

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acquisition is made (with any unused Roll Forward Amount from one fiscal year
increasing the amount available in subsequent fiscal years); provided that the
amount of acquisitions made pursuant to this Section 11.10(a)(ii) shall be
calculated net of reductions of such investments resulting from repayments,
dividends or other distributions to the U.S. Borrower or any Guarantor from such
investments;

 

(iii) in the case of the U.S. Borrower or any Guarantor, subject to the last
paragraph of this Section 11.10(a), make any Investment in a Person that, prior
to the consummation of such Investment, is a Subsidiary of the U.S. Borrower
that is not a Guarantor if (A), the aggregate amount of all Investments made in
the then current fiscal year of the U.S. Borrower pursuant to this Section
11.10(a)(iii) would exceed 2% of the Adjusted Total Assets, determined at the
time such Investment is made (with any unused Roll Forward Amount from one
fiscal year increasing the amount available in subsequent fiscal years) or (B)
at the time of such Investment, the Financial Condition Test is not satisfied;
provided that the amount of Investments made pursuant to this Section
11.10(a)(iii) shall be calculated net of (x) any payments by Subsidiaries (other
than Guarantors) of obligations owed to the U.S. Borrower or Guarantors, (y)
amounts invested in Subsidiaries (other than Guarantors) to provide minimum
capital to maintain the existence of Taxable REIT Subsidiaries and (z)
distributions from Subsidiaries (other than Guarantors) to the U.S. Borrower or
Guarantors); and provided, further that the foregoing shall not prevent the U.S.
Borrower or any Guarantor from making Investments, directly or indirectly, in
Subsidiaries that are Approved Lessees to the extent necessary, in the
reasonable judgment of the U.S. Borrower, to maintain HMC’s status as a real
estate investment trust under the Code; and

 

(iv) subject to the last paragraph of this Section 11.10(a), make any Investment
in a Person that, prior to the consummation of such Investment, is not a
Subsidiary if (A), the aggregate amount of all Investments made in the then
current fiscal year of the U.S. Borrower pursuant to this Section 11.10(a)(iv)
would exceed 2% of the Adjusted Total Assets, determined at the time such
Investment is made (with any unused Roll Forward Amount from one fiscal year
increasing the amount available in subsequent fiscal years) or (B) at the time
of such Investment, the Financial Condition Test is not satisfied, provided that
the amount of Investments made pursuant to this Section 11.10(a)(iv) shall be
calculated net of (x) any payments by any such non-Subsidiary of obligations
owed to the U.S. Borrower or Guarantors, and (y) distributions from any such
non-Subsidiary to the U.S. Borrower or Guarantors.

 

Notwithstanding anything to the contrary in this Section 11.10(a), for the
purposes of determining whether an Investment complies with the requirements of
this Section 11.10(a), (A) compliance shall be tested as of the date that the
U.S. Borrower or any Subsidiary of the U.S. Borrower enters into a binding
contractual commitment relating to such Investment, (B) an Investment that takes
place in a series of related transactions contemplated by definitive agreements
relating to such Investment (such as an Investment in a form similar to a
reverse like-kind exchange transaction as contemplated by Rev. Proc. 2000-37,
2000-2 C.B. 308) will be permitted pursuant to this Section 11.10(a) so long as
the completion of such series of related transactions (as opposed to the
completion of any individual component) would result in an Investment permitted
under this Section 11.10(a), and (C) an Investment otherwise permitted by

 

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Section 11.10(a)(i) or (a)(ii) shall not be subject to the requirements of
Sections 11.10(a)(iii) and (a)(iv) if:

 

(I) such Investment is in a Person that, following the consummation of such
Investment, (x) is a Guarantor or becomes a Guarantor in accordance with the
requirements of Section 10.15, or (y) is not a Guarantor or does not become a
Guarantor as described in the preceding clause (x) solely by virtue of the
provisions of Section 10.15(a);

 

(II) such Investment is a Permitted Investment; or

 

(III) such Investment is in a Person that is not a Subsidiary, but only to the
extent that the consideration paid to acquire such Investment consists of the
equity interests in another Person that is not a Subsidiary.

 

Acquisitions and Investments made during a period when the Leverage Ratio is
less than 6.00:1.00 shall, in the event that the Leverage Ratio subsequently
exceeds 6.00:1.00, be counted against the baskets provided for in this Section
11.10(a) (as applicable) for purposes of determining basket availability only.

 

(b) At any time that the Leverage Ratio is less than 6.00:1.00, the U.S.
Borrower and the Guarantors shall be permitted to make the Investments and
acquisitions described in Section 11.10(a) so long as (i) such Investments and
acquisitions do not, directly or indirectly, constitute a Restricted Payment
that is prohibited under the Governing Senior Note Indenture and (ii) at the
time of such Investments or acquisitions, the Financial Condition Test is
satisfied.

 

11.11. Dividends. (a) At any time that the Leverage Ratio equals or exceeds
6.00:1.00, the U.S. Borrower will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to the
U.S. Borrower or any of its Subsidiaries, except that:

 

(i) any Subsidiary of the U.S. Borrower may pay cash Dividends to the U.S.
Borrower or to a Wholly-Owned Subsidiary of the U.S. Borrower;

 

(ii) any non-Wholly-Owned Subsidiary of the U.S. Borrower may pay cash Dividends
to its shareholders, members or partners generally so long as the U.S. Borrower
or its respective Subsidiary which owns the equity interest or interests in the
Subsidiary paying such Dividends receives at least its proportionate share
thereof (based upon its relative holdings of equity interests in the Subsidiary
paying such Dividends and taking into account the relative preferences, if any,
of the various classes of equity interests in such Subsidiary);

 

(iii) so long as (x) no Specified Default or Event of Default then exists or
would exist immediately after giving effect thereto and (y) HMC qualifies, or
has taken all other actions necessary to qualify, as a “real estate investment
trust” under the Code during any fiscal year of HMC, the U.S. Borrower may pay
quarterly cash Dividends (which may be based on estimates) to HMC and all other
holders of OP Units

 

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generally when and to the extent necessary for HMC to distribute, and HMC may so
distribute, cash Dividends to its shareholders generally in an aggregate amount
not to exceed the greater of (I) the greatest of (A) 100% of Cash Available for
Distribution for such fiscal year, (B) 100% of Taxable Income and (C) the
minimum amount necessary for HMC to maintain its tax status as a real estate
investment trust and to satisfy the distributions required to be made by Notice
88-19 under the Code (or Treasury regulations issued pursuant thereto) by reason
of HMC making the election provided for therein and (II) at any time when, based
upon the financial statements delivered pursuant to Section 10.11(a) or (b) and
the U.S. Borrower’s estimation of the results of the current fiscal quarter, the
Consolidated Interest Coverage Ratio is greater than 2.00:1:00, 85% of the
Adjusted Funds From Operations for the current fiscal year;

 

(iv) so long as no Specified Default or Event of Default then exists or would
result therefrom, the U.S. Borrower may pay cash Dividends to HMC so long as the
proceeds therefrom are promptly used by HMC to pay (x) any Permitted Tax
Payments at the time and to the extent actually due and payable (but without
duplication of any tax payments permitted to be made pursuant to Section
11.11(a)(iii) above to satisfy the distribution required to be made by Notice
88-19 under the Code (or Treasury regulations issued pursuant thereto)) and (y)
any general corporate and other overhead expenses and liabilities incurred by it
to the extent not otherwise prohibited by this Agreement;

 

(v) so long as no Specified Default or Event of Default then exists or would
result therefrom, the U.S. Borrower may pay cash Dividends to HMC in an
aggregate amount not to exceed $10,000,000 for the Revolving Credit Period; and

 

(vi) the U.S. Borrower may pay cash Dividends to HMC so long as HMC promptly
thereafter uses the proceeds of such Dividends to repurchase shares of its
capital stock and/or the QUIPs and/or redeem the QUIPs Debt, and the Borrower
may repurchase OP Units, in each case so long as (i) no Specified Default or
Event of Default then exits or would result therefrom, (ii) the aggregate amount
of all repurchases and redemptions made pursuant to this Section 11.11(a)(vi) in
any fiscal year of HMC does not exceed an amount equal to 1% of Adjusted Total
Assets determined at the time of declaration of the Dividend (with any unused
Roll Forward Amount from one fiscal year increasing the amount available to be
paid as a Dividend under this Section 11.11(a)(vi) in subsequent fiscal years).

 

Dividends paid during a period when the Leverage Ratio is less than 6.00:1.00
shall, in the event that the Leverage Ratio subsequently exceeds 6.00:1.00, be
counted against the baskets provided for in this Section 11.11(a) (as
applicable) for purposes of determining basket availability only.

 

(b) At any time that the Leverage Ratio is less than 6.00:1.00, the U.S.
Borrower and the Guarantors will not, and will not permit any of their
Restricted Subsidiaries to, directly or indirectly, authorize, declare, or pay
any Dividends that would constitute a Restricted Payment that is prohibited
under the Governing Senior Note Indenture.

 

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11.12. Capital Expenditures. (a) At any time when the Leverage Ratio equals or
exceeds 6.00:1:00, the U.S. Borrower will not, and will not permit any of its
Subsidiaries to, make any Capital Expenditures except:

 

(i) the U.S. Borrower and its Subsidiaries may make acquisitions of Hotel
Properties and/or other assets in accordance with the requirements of Sections
11.09 and 11.10, in each case to the extent that same constitute Capital
Expenditures;

 

(ii) in addition to Capital Expenditures permitted by the other clauses of this
Section 11.12(a), the U.S. Borrower and its Subsidiaries may make Maintenance
Capital Expenditures with respect to their Hotel Properties and other real
estate so long as (x) the aggregate amount of all such Capital Expenditures in
any fiscal year of the U.S. Borrower does not exceed an amount equal to 8% of
the Gross Revenues (determined at the time such Capital Expenditure is made)
from all such Hotel Properties and other real estate for such fiscal year plus
any amounts then being held on deposit for such Capital Expenditures for Hotel
Properties or real estate, as the case may be, to the extent deposited in a
prior fiscal year, and (y) all such Capital Expenditures are made in accordance
with the terms of the respective Management Agreement for such Hotel Properties
or real estate, as the case may be;

 

(iii) in addition to Capital Expenditures permitted by the other clauses of this
Section 11.12(a), the U.S. Borrower and its Subsidiaries may make payments in
respect of Capitalized Lease Obligations to the extent such Capitalized Lease
Obligations are otherwise permitted under Section 11.02; and

 

(iv) in addition to the Capital Expenditures permitted by the other clauses of
this Section 11.12(a), the U.S. Borrower and its Subsidiaries may make
additional Capital Expenditures:

 

(1) for the purpose of expanding or constructing Improvements with respect to
Hotel Properties; provided that such Capital Expenditures in any fiscal year
shall not exceed 2.0% of Adjusted Total Assets determined at the time the
Capital Expenditure is made, with the unused Roll Forward Amount from one fiscal
year increasing the amount available in subsequent fiscal years (excluding any
Capital Expenditures made during or after the fiscal year in which the Effective
Date occurs for (A) the Newport Beach Marriott of up to $40 million in the
aggregate, (B) the Orlando World Center Marriott of up to $60 million in the
aggregate, (C) the Atlanta Marriott Marquis of up to $40 million in the
aggregate and (D) the Amelia Island Ritz-Carlton of up to $11 million in the
aggregate, each of which shall be permitted without being subject to the
limitations of this clause (1)), and

 

(2) for the purpose of constructing new Hotel Properties, provided that the
aggregate amount of such Capital Expenditures in any fiscal year shall not
exceed 2.0% of Adjusted Total Assets determined at the time the Capital
Expenditure is made, with the unused Roll Forward Amount from one fiscal year
increasing the amount available in subsequent fiscal years.

 

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Capital Expenditures made during a period when the Leverage Ratio is less than
6.00:1.00 shall, in the event that the Leverage Ratio subsequently exceeds
6.00:1.00, be counted against the baskets provided for in this Section 11.12(a)
(as applicable) for purposes of determining basket availability only.

 

(b) The restrictions set forth in Section 11.12(a) shall not apply when the
Leverage Ratio is less than 6.00:1.00.

 

11.13. Limitation on Payments of Certain Indebtedness; Modifications of Certain
Indebtedness; Modifications of Organizational Documents; etc. The U.S. Borrower
will not, and will not permit any of its Subsidiaries to:

 

(i) make (or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, including, in each case
without limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due, the Senior
Notes, any other pari passu debt, the QUIPs Debt, any Non-Recourse Indebtedness,
any subordinated debt or any Limited Partner Notes other than any payment,
prepayment, redemption or acquisition for value pursuant to this Section
11.13(i) which does not violate the provisions of Section 11.11(a)(vi) or
materially adversely affect (a) the U.S. Borrower’s ability to repay the
Obligations when due or (b) in the U.S. Borrower’s reasonable estimation, the
ability to comply with the Applicable Covenants contained in Sections 9.01
through 9.03, inclusive, and Section 9.04(b); provided, that the provisions of
this clause (i) shall not apply if at the time of taking the action otherwise
prohibited by this clause (i) the Leverage Ratio is less than 6.00:1:00,

 

(ii) amend or modify, or permit the amendment or modification of, the QUIPs
Debt, the Limited Partner Notes, any Non-Recourse Indebtedness, any subordinated
debt, the Senior Notes or any other pari passu debt or any agreement (including,
without limitation, any purchase agreement, indenture or loan agreement) related
thereto, other than any amendment or modification thereto which would not
violate this Agreement and so long as the same do not materially adversely
affect (a) the U.S. Borrower’s ability to repay the Obligations when due or (b)
in the U.S. Borrower’s reasonable estimation, the ability to comply with the
Applicable Covenants contained in Sections 9.01 through 9.03, inclusive, and
Section 9.04(b); provided, that the provisions of this clause (ii) shall not
apply if at the time of taking the action otherwise prohibited by this clause
(ii) the Leverage Ratio is less than 6.00:1:00, or

 

(iii) amend, modify or change its designation of trust, certificate of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation), by-laws, certificate of partnership,
partnership agreement or any equivalent organizational document, or any
agreement entered into by it, with respect to its capital stock or other equity
interests, or enter into any new agreement with respect to its capital stock or
other equity interests, other than any amendments, modifications or changes
pursuant to this Section 11.13(iii) or any such new agreements, in each case,
which do not materially adversely affect (a) the U.S. Borrower’s ability to
repay the Obligations when due or (b) in the U.S. Borrower’s reasonable
estimation, the ability to

 

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comply with the Applicable Covenants contained in Sections 9.01 through 9.03,
inclusive, and Section 9.04(b).

 

Notwithstanding the foregoing, (a) the U.S. Borrower may not take any of the
foregoing actions with respect to any subordinated debt if (I) a Default or
Event of Default of the type specified in Section 12.01 exists in the payment of
principal of or interest on the Revolving Loans or would result therefrom, (II)
such action with respect to subordinated debt would violate the subordination
provisions contained therein or (III) such action with respect to subordinated
debt would constitute a Restricted Payment that is prohibited under the
Governing Senior Note Indenture and (b) if a Specified Default or Event of
Default shall have occurred or would occur as a result thereof, the U.S.
Borrower may not prepay or repurchase or advance the maturity of the QUIPs Debt.

 

11.14. Business. The U.S. Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than (i)
the businesses in which the U.S. Borrower and its Subsidiaries are engaged on
the Effective Date including the acquisition, ownership, leasing, operation, and
sale of Hotel Properties and other real estate consistent with the quality of
the U.S. Borrower’s and its Subsidiaries’ existing portfolio of Hotel Properties
and the acquisition and conduct of Related Businesses, and (ii) non-real estate
related businesses that the U.S. Borrower and its Subsidiaries may acquire or in
which they may make Investments after the Effective Date to the extent permitted
pursuant to Section 11.10(a)(ii) or Section 11.10(b).

 

11.15. Violation of Specified Indenture Covenants. The U.S. Borrower will not,
and will not permit any of its Restricted Subsidiaries to, take any action that
would result in a violation of Section 4.11 or Section 4.13 of the Governing
Senior Note Indenture or Section 4.12 of the Amended Senior Note Indenture. At
any time that the Leverage Ratio is less than 6.00:1.00, the U.S. Borrower will
not, and will not permit any of its Subsidiaries to, take any action that would
result in a violation of Section 4.11, Section 4.13 or Section 4.15 of the
Governing Senior Note Indenture or Section 4.12 of the Amended Senior Note
Indenture.

 

SECTION 12. Events of Default. Upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

12.01. Payments. Any Borrower shall (i) default in the payment when due of any
principal of any Revolving Loan or any Revolving Note or the Face Amount of any
Bankers’ Acceptance, (ii) default in the payment when due of any Unpaid Drawing
and such default shall continue unremedied for two or more Business Days after
notice of such Unpaid Drawing to the U.S. Borrower has been given, or (iii)
default, and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on any Revolving Loan, Revolving
Note or Unpaid Drawing, or any Fees or any other amounts owing hereunder or
under any other Credit Document; or

 

12.02. Representations, etc. Any representation, warranty or statement made or
deemed made by any Credit Party herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made or delivered; or

 

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12.03. Covenants. Any Credit Party shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in Section 9,
10.11(e)(i), or 11 (it being agreed that (A) the Credit Parties are not required
to comply with the Revolving Facility A Financial Covenants when there is no
Revolving A Credit Exposure or the Revolving Facility B Financial Covenants when
there is no Revolving B Credit Exposure, and (B) in the event of a failure to
comply with any Revolving Facility A Financial Covenant while such covenants are
in effect, such default may be cured by eliminating the Revolving A Credit
Exposure within 2 Business Days following the date the U.S. Borrower has
knowledge thereof and, in any event, not later than the date on which a
compliance certificate in respect of the applicable period is required to be
delivered pursuant to Section 10.11(d)), or (ii) default in the due performance
or observance by it of any other term, covenant or agreement contained in this
Agreement (other than as provided in Section 12.01), the Subsidiaries Guaranty
or the Pledge and Security Agreement and such default shall continue unremedied
for a period of 30 days after written notice to the U.S. Borrower by the
Administrative Agent or the Required Lenders; or

 

12.04. Default Under Other Agreements. (i) HMC or any of its Subsidiaries shall
default in any payment of all or any portion of Indebtedness (other than the
Obligations) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created, (ii) any Indebtedness
(other than the Obligations) of HMC or any of its Subsidiaries shall be declared
to be due and payable, or required to be prepaid, as a result of a default or
other similar event that would customarily constitute a default prior to the
stated maturity thereof or (iii) an Event of Default under Section 6.1(d) of the
Senior Note Indenture, provided that it shall not be a Default or an Event of
Default under clause (i) or (ii) of this Section 12.04 unless the Indebtedness
described in such clauses (i) and (ii) is (1) Non-Recourse Indebtedness in an
aggregate principal amount in excess of 1% of the Adjusted Total Assets
(measured as of the date of determination) or (2) other Indebtedness in
aggregate principal amount in excess of $50,000,000 (or the Dollar Equivalent
thereof);

 

12.05. Bankruptcy, etc. HMC or any of its Subsidiaries shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto
(the “Bankruptcy Code”); or an involuntary case is commenced against HMC or any
of its Subsidiaries and the petition is consented to or acquiesced in by HMC or
any of its Subsidiaries, is not controverted within 10 days, or is not dismissed
within 30 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of HMC or any of its Subsidiaries or HMC or any of its
Subsidiaries commences any other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to HMC or any of its Subsidiaries, or there is
commenced against HMC or any of its Subsidiaries any such proceeding which
remains undismissed for a period of 30 days, or HMC or any of its Subsidiaries
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered and is not vacated or stayed
within 30 days; or HMC or any of its Subsidiaries suffers any appointment of any
custodian, receiver, receiver and manager, trustee, monitor or the like for it
or any substantial part of its property to continue undischarged or unstayed for
a period of 30 days; or HMC or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any partnership and/or corporate
action is taken by HMC or any of its Subsidiaries for the purpose of effecting
any of the

 

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foregoing (it being understood that the provisions of this Section 12.05 shall
not apply to any Subsidiary of the U.S. Borrower who is a borrower (a) under
Non-Recourse Indebtedness in aggregate principal amount of less than or equal to
1% of the Adjusted Total Assets or (b) under other Indebtedness equal to or less
than $50,000,000 (or the Dollar Equivalent thereof) but the provisions of this
Section 12.05 shall apply to each Significant Subsidiary and, at any time a
Canadian Revolving Loan Borrower has any outstanding Canadian Revolving Loans,
such Canadian Revolving Loan Borrower); or

 

12.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof under Section 412 of the Code or
Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in subsection .62, .63, .64., .65, .66, .67 or
.68 or PBGC Regulation Section 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, any Plan shall have had or is
likely to have a trustee appointed to administer such Plan, any Plan is, shall
have been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a
contribution required to be made by the U.S. Borrower, any Subsidiary of the
U.S. Borrower or any ERISA Affiliate to a Plan or a Foreign Pension Plan has not
been timely made, the U.S. Borrower or any of its Subsidiaries or ERISA
Affiliates has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the U.S. Borrower
or any of its Subsidiaries or ERISA Affiliates has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, either individually and/or in the aggregate, in the reasonable
opinion of the Required Banks, will have a Material Adverse Effect; or

 

12.07. Pledge and Security Agreement. At any time after the execution and
delivery thereof, the Pledge and Security Agreement shall, unless otherwise
permitted in this Agreement, cease to be in full force and effect, or shall
cease to give the Collateral Agent for the benefit of the Secured Creditors the
Liens, rights, powers and privileges purported to be created thereby (including,
without limitation, a perfected security interest in, and Lien on, all of the
Pledge and Security Agreement Collateral), in favor of the Collateral Agent for
the benefit of the Secured Creditors, superior to and prior to the rights of all
third Persons, and subject to no other Liens; or

 

12.08. Guaranty. The Subsidiaries Guaranty (or the Guaranty of the U.S. Borrower
contained in this Agreement) shall, unless otherwise permitted in this
Agreement, cease

 

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to be in full force or effect (other than in accordance with its terms) as to
any Guarantor, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor’s obligations under the
Guaranty; or

 

12.09. Judgments. One or more judgments or decrees shall be entered against HMC
or any of its Subsidiaries involving in the aggregate for HMC and its
Subsidiaries a liability (not paid or not fully covered by a reputable and
solvent insurance company) and such judgments and decrees either shall be final
and non-appealable or shall not be vacated, discharged or stayed or bonded
pending appeal for any period of 30 consecutive days, and the aggregate amount
of all such judgments equals or exceeds 0.5% of Adjusted Total Assets; or

 

12.10. Change of Control. A Change of Control shall occur; or

 

12.11. REIT Status; Cash Proceeds Retained by HMC. HMC shall for any reason
whether or not within the control of the U.S. Borrower (a) cease, for any
reason, to be a real estate investment trust under Sections 856 through 860 of
the Code, (b) following its receipt of any cash proceeds from any Asset Sale,
incurrence of Indebtedness, insurance claim or condemnation award, sale or
issuance of its equity, cash capital contributions or cash dividends received
from the U.S. Borrower or a Permitted REIT Subsidiary, fail to (i) apply such
cash proceeds to make a distribution to its shareholders, to pay its general
corporate overhead expenses and other liabilities or to make an Investment in a
Permitted REIT Subsidiary or (ii) to the extent not applied pursuant to the
immediately preceding clause (i), contribute such cash proceeds as an equity
contribution to the capital of the U.S. Borrower within 15 days thereafter; or
(c) directly or indirectly (other than through the U.S. Borrower or its
Subsidiaries) engage in any business activities, have significant assets or
liabilities or undertake any activities of the type governed by Sections 11.01,
11.02, 11.10 and 11.12 except to the extent consistent, in the good faith
judgment of the U.S. Borrower, with such activities on the Effective Date.

 

12.12. General Partner Status. HMC shall cease at any time to be the sole
general partner of the Borrower.

 

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the U.S. Borrower, take any or
all of the following actions (provided that, if an Event of Default specified in
Section 12.05 shall occur with respect to any Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i), (ii), (iv) and (vii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Revolving Loan Commitment
(including the Total Maximum Canadian Dollar Revolving Loan Sub-Commitment)
terminated, whereupon all Commitments of each Lender shall forthwith terminate
immediately, Total Revolving A Loan Capacity and Total Revolving B Loan Capacity
shall immediately be reduced to zero and any Commitment Commission and any
Canadian Commitment Commission shall forthwith become due and payable without
any other notice of any kind; (ii) declare the principal of, the Face Amount of
and any accrued interest in respect of all Revolving Loans and the Revolving
Notes and all Obligations owing hereunder (including Unpaid Drawings) and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter

 

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of Credit which may be terminated in accordance with its terms; (iv) direct the
relevant Borrowers to pay (and the relevant Borrowers agree that upon receipt of
such notice, or upon the occurrence of an Event of Default specified in Section
12.05 with respect to any Borrower, they will pay) to the Collateral Agent at
the appropriate Payment Office such additional amount of cash, to be held as
security by the Collateral Agent for the respective Borrower’s reimbursement
obligations in respect of Letters of Credit then outstanding, as is equal to the
aggregate Stated Amount of all Letters of Credit then outstanding for the
account of such Borrower and which may be applied by the Administrative Agent to
the repayment of Obligations in respect of Letters of Credit and which may not
be withdrawn by the U.S. Borrower or any of its Subsidiaries so long as the
Letter of Credit to which such cash collateral is attributable remains
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; (vi) apply any cash
collateral held pursuant to Section 5.02 to the repayment of the Obligations;
and (vii) direct the appropriate Canadian Revolving Loan Borrowers to pay (and
each Canadian Revolving Loan Borrower agrees that upon receipt of such notice,
or upon the occurrence of an Event of Default specified in Section 12.05 with
respect to any Borrower, it will pay) to the Administrative Agent (without
duplication) all amounts required to be paid pursuant to clause (j) of Schedule
III.

 

SECTION 13. The Agents.

 

13.01. Appointment. The Lenders hereby designate DBTCA as the Administrative
Agent and as Collateral Agent to act as specified herein and in the other Credit
Documents. The Lenders hereby designate (x) Bank of America, N.A. as Syndication
Agent and (z) each of Citicorp North America Inc., Société Générale and Calyon
New York Branch, as Co-Documentation Agents, in each case to act as specified
herein and in the other Credit Documents. Each Lender hereby irrevocably
authorizes, and each holder of any Revolving Note by the acceptance of such
Revolving Note shall be deemed irrevocably to authorize, any Agent to take such
action on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of such Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto. Each
Agent may perform any of its duties hereunder by or through its respective
officers, directors, agents, employees or affiliates.

 

13.02. Nature of Duties. No Agent shall have any duties or responsibilities
except those expressly set forth in this Agreement and in the other Credit
Documents. No Agent nor any of its respective officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agents shall be mechanical and administrative in nature; no
Agent shall have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Revolving
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose on any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.

 

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13.03. Lack of Reliance on the Agents. Independently and without reliance upon
any Agent (for purposes of this Section 13.03, the term “Agent” shall include
all officers, directors, agents, employees and affiliates of the respective
Agent), each Lender and the holder of each Revolving Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrowers and their
Subsidiaries in connection with the making and the continuance of the Revolving
Loans and the taking or not taking of any action in connection herewith and (ii)
its own appraisal of the creditworthiness of the Borrowers and their
Subsidiaries and, except as expressly provided in this Agreement, no Agent shall
have any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Revolving Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Revolving Loans or at any time or times thereafter. No Agent shall
be responsible to any Lender or the holder of any Revolving Note for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of any Borrower or any of its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of any
Borrower or any of its Subsidiaries or the existence or possible existence of
any Default or Event of Default.

 

13.04. Certain Rights of the Agents. If any Agent shall request instructions
from the Required Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any other Credit Document, such
Agent shall be entitled to refrain from such act or taking such action unless
and until such Agent shall have received instructions from the Required Lenders;
and such Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender and no holder of any
Revolving Note shall have any right of action whatsoever against any Agent as a
result of such Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders, or if required by Section 14.11, all of the Lenders.

 

13.05. Reliance. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
such Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by such Agent.

 

13.06. Indemnification. To the extent any Agent is not reimbursed and
indemnified by the Credit Parties, the Lenders will reimburse and indemnify such
Agent, its affiliates, and their respective officers, directors, agents and
employees, pro rata based on their respective voting rights determined in the
definition of “Required Lenders” (for this purpose, determined as if there were
no Defaulting Lenders at such time), for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agent in performing its respective duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document;

 

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provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from such Agent’s gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).

 

13.07. Each Agent in its Individual Capacity. With respect to its obligation to
make Revolving Loans, or issue or participate in Letters of Credit, under this
Agreement, each Person serving as an Agent shall have the rights and powers
specified herein for a “Lender” and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
“Lenders,” “Required Lenders,” “holders of Revolving Notes” or any similar terms
shall, unless the context clearly otherwise indicates, include each Person
serving as an Agent in its individual capacity. Each Person serving as an Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, investment banking, trust or other business with any Credit Party or
any Affiliate of any Credit Party as if it were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.

 

13.08. Holders. The Administrative Agent may deem and treat the payee of any
Revolving Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Revolving Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Revolving Note or of any Revolving Note or
Revolving Notes issued in exchange therefor.

 

13.09. Removal of or Resignation by the Agents. (a) Any Agent (including,
without limitation, the Administrative Agent and the Collateral Agent) may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 30 days’ prior written
notice to the Lenders and the Borrowers. Such resignation shall take effect upon
the appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below; provided that the resignation by the Collateral Agent
shall only be effective upon the appointment of a successor Collateral Agent.

 

(b) Upon any notice of resignation by, or the removal of, any Agent, the
Required Lenders shall appoint a successor Agent hereunder who shall be a
commercial bank or trust company reasonably acceptable to the U.S. Borrower.

 

(c) If a successor Agent shall not have been so appointed within such 30 day
period, the resigning Agent, with the consent of the U.S. Borrower (which
consent shall not be unreasonably withheld or delayed), shall then appoint a
successor Agent who shall serve as Agent hereunder or thereunder until such
time, if any, as the Required Lenders appoint a successor Agent as provided
above.

 

(d) If no successor Agent has been appointed pursuant to clause (b) or (c) above
by the 35th day after the date such notice of resignation was given by the
resigning

 

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Agent, the resigning Agent’s resignation shall become effective and the Required
Lenders shall thereafter perform all the duties of such Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Lenders
appoint a successor Agent as provided above.

 

(e) In addition, the Required Lenders shall have the right to remove the
Administrative Agent and appoint a successor Administrative Agent who shall be a
commercial bank or trust company reasonably acceptable to the U.S. Borrower in
the event that the Administrative Agent has been grossly negligent or has
willfully misconducted itself in performing its functions and duties under this
Agreement or any other Credit Document (as determined by a court of competent
jurisdiction in a final and non-appealable decision).

 

SECTION 14. Miscellaneous.

 

14.01. Payment of Expenses, etc. The U.S. Borrower agrees that it shall: (i)
whether or not the transactions contemplated herein are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of
insurance independent consultants and counsel retained by the Administrative
Agent, including Willkie Farr & Gallagher LLP, Stikeman Elliott and Stewart
McKelvey Stirling Scales) in connection with the preparation, execution,
delivery and performance of this Agreement and the other Credit Documents and
the documents and instruments referred to herein and therein, any amendment,
waiver or consent relating hereto or thereto, of the Administrative Agent in
connection with its syndication efforts with respect to this Agreement and, upon
the occurrence and during the continuance of an Event of Default, the reasonable
costs and expenses of each of the Lenders in connection with the enforcement of
this Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and, following an
Event of Default, for each of the Lenders) (it being understood that the
provisions of this clause (i) does not include the normal administrative charges
of the Administrative Agent in administering the Revolving Loans (which amounts
are included in a separate letter with the Administrative Agent)); (ii) pay and
hold each of the Lenders harmless from and against any and all present and
future stamp, excise and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify the Administrative Agent and each Lender, and each of their respective
officers, directors, employees, representatives, affiliates and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys’ and consultants’ fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Administrative Agent or any Lender is a
party thereto) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use or proposed use of the proceeds of any
Revolving Loans hereunder or the consummation of any transactions contemplated
herein or in any other Credit Document or the exercise of any of their rights or
remedies provided herein or in the other Credit Documents, or (b) the actual or
alleged presence of Hazardous Materials in the air, surface water or groundwater

 

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or on the surface or subsurface of any Real Property owned, leased or at any
time operated by the U.S. Borrower or any of its Subsidiaries, the Release,
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location, whether or not owned, leased or operated by the U.S. Borrower
or any of its Subsidiaries, the non-compliance of any Real Property with
foreign, federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the U.S. Borrower, any of its Subsidiaries
or any Real Property owned, leased or at any time operated by the U.S. Borrower
or any of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified (as determined by a court of competent jurisdiction in a final
and non-appealable decision)). To the extent that the undertaking to indemnify,
pay or hold harmless the Administrative Agent or any Lender set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the U.S. Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law. Notwithstanding any provision of this
Agreement to the contrary, no Lender shall have any liability to the Credit
Parties for any punitive damages.

 

14.02. Notices. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Borrower, at the U.S.
Borrower’s address specified opposite its signature below; if to any Lender, at
its address specified opposite its name on Schedule II; and if to the
Administrative Agent, at the Notice Office; or, as to any Borrower or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties hereto and, as to each Lender, at such
other address as shall be designated by such Lender in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrowers shall not be effective until received by
the Administrative Agent or the U.S. Borrower, as the case may be (or when the
addressee refuses to accept delivery).

 

14.03. Benefit of Agreement. (a) This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided, however, that no Borrower may assign or transfer
any of its rights, obligations or interest hereunder or under any other Credit
Document without the prior written consent of the Lenders (and any attempted
such assignment without such consent shall be null and void) and, provided
further, that, although any Lender may grant participations in its rights
hereunder, such Lender shall remain a “Lender” for all purposes hereunder and
the participant shall not constitute a “Lender” hereunder and no Lender may
transfer or assign any portion of its Commitments hereunder except as provided
in Section 14.03(b) and 14.03(d), provided further, that no Lender shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent

 

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such amendment or waiver would (i) extend the final scheduled maturity of any
Revolving Loan or Revolving Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest thereon or Fees
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof (it being
understood that any amendment or modification to the financial definitions in
this Agreement or to Section 14.06(a) shall not constitute a reduction in any
rate of interest or Fees for purposes of this clause (i), so long as the primary
purpose of the respective amendments or modifications to the financial
definitions or to Section 14.06(a) was not to reduce the interest or Fees
payable hereunder), or increase the amount of the participant’s participation
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Revolving
Loan Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Revolving Loan shall be
permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower or any other Credit Party of any of its
rights and obligations under this Agreement or any other Credit Document or
(iii) release all or substantially all of the Pledge and Security Agreement
Collateral under the Pledge and Security Agreement (except as expressly provided
in the Credit Documents) supporting the Revolving Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant’s rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.

 

(b) Notwithstanding the foregoing, any Lender (or any Lender together with one
or more other Lenders) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) to (i) its parent
company and/or any affiliate of such Lender which is at least 50% owned by such
Lender or its parent company or to one or more Lenders or (ii) in the case of
any Lender that is a fund that invests in loans, any other fund that invests in
loans and is managed or advised by the same investment advisor of such Lender or
by an Affiliate of such investment advisor, (y) assign all or a portion of the
assigning Lender’s Revolving Loan Commitment (and related outstanding
Obligations thereunder) to an Eligible Transferee, and, in the case of a partial
assignment of such Revolving Loan Commitment, such assignment shall be in a
minimum amount of $5,000,000 or such lesser amount as is acceptable to the
Administrative Agent (and the assignor shall maintain a minimum amount of
$5,000,000 for its own account unless the assignor shall assign its entire
interest), and all assignees shall become a party to this Agreement as a Lender
by execution of an Assignment and Assumption Agreement, or (z) if such Lender is
a Canadian Lender, assign all or a portion of the such Canadian Lender’s Maximum
Canadian Dollar Revolving Loan Sub-Commitment and related Canadian Dollar
Revolving Loan Sub-Commitment (and related outstanding Obligations thereunder)
to an Eligible Transferee, and, in the case of a partial assignment of such
Maximum Canadian Dollar Revolving Loan Sub-Commitment, such assignment shall be
in a minimum amount of $5,000,000 or such lesser amount as is acceptable to the
Administrative Agent (and the assignor shall maintain a minimum amount of
$5,000,000 for its own account unless the assignor shall assign its entire
interest), and all assignees shall become a party to this Agreement as a
Canadian Lender by execution of an Assignment and Assumption Agreement, provided
that (i) at such time Schedule I-A or Schedule I-B, as the case may be, shall be
deemed modified to

 

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reflect the Revolving Loan Commitments and the Maximum Canadian Dollar Revolving
Loan Sub-Commitments of such new Lender and of the existing Lenders, as
applicable, (ii) upon surrender of the old Revolving Notes, if any, new
Revolving Notes will be issued to such new Lender and to the assigning Lender
(to the extent requested by such Lenders), such new Revolving Notes to be in
conformity with the requirements of Section 2.06 (with appropriate
modifications) to the extent needed to reflect the revised Revolving Loan
Commitments and Maximum Canadian Dollar Revolving Loan Sub-Commitments, as
applicable, (iii) the consent of the Administrative Agent and, if the Person
serving as the Administrative Agent is not a Canadian Lender, any Canadian
Lender whose Maximum Canadian Dollar Revolving Loan Sub-Commitment is not
exceeded by any other Canadian Lender shall be required in connection with any
such assignment pursuant to clause (y) or clause (z) above (which consents shall
not be unreasonably withheld), (iv) the Administrative Agent shall receive at
the time of each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500, (v) with respect to clause
(z) only, such Eligible Transferee shall be a resident in Canada for the purpose
of the Income Tax Act (Canada) or an authorized foreign bank which at all times
holds all of its interest in any Canadian Obligations in the course of its
Canadian banking business for purposes of subsection 212(13.3) of the Income Tax
Act (Canada), or otherwise able to establish to the satisfaction of the Canadian
Revolving Loan Borrowers and the Administrative Agent based on applicable law in
effect at the time of such assignment that such Eligible Transferee is not
subject to deduction or withholding of Canadian Taxes with respect to any
payments to such Eligible Transferee of interest, fees, commissions, or any
other amount payable by any Canadian Revolving Loan Borrower under the Credit
Documents, and (vi) with respect to clause (z) only, no such assignment shall be
permitted unless, upon the effectiveness of such assignment, the Revolving Loan
Commitment of such Eligible Transferee or its Affiliate equals or exceeds the
Maximum Canadian Dollar Revolving Loan Sub-Commitment of such Eligible
Transferee, and, provided further, that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Register pursuant to
Section 14.15. The Administrative Agent will promptly give the Borrower notice
of any assignment to an Eligible Transferee although the failure to give any
such notice shall not affect such assignment or result in any liability by the
Administrative Agent. To the extent of any assignment pursuant to this Section
14.03(b), the assigning Lender shall be relieved of its obligations hereunder
with respect to its assigned Revolving Loan Commitment or Maximum Canadian
Dollar Revolving Loan Sub-Commitment and corresponding Canadian Dollar Revolving
Loan Sub-Commitment, as the case may be. At the time of each assignment pursuant
to this Section 14.03(b) to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall provide to the Borrower and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
5.04(b)(ii) Certificate) described in Section 5.04(b). To the extent that an
assignment of all or any portion of a Lender’s Revolving Loan Commitments and
related outstanding Obligations or this Section 14.03(b) would, at the time of
such assignment, result in increased costs or Taxes under Section 2.11, 2.12 or
5.04 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay or reimburse such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).

 

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(c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging
its Revolving Loans and Revolving Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Lender which is a fund may
pledge all or any portion of its Revolving Loans and Revolving Notes to its
trustee in support of its obligations to its trustee. No pledge pursuant to this
clause (c) shall release the transferor Lender from any of its obligations
hereunder.

 

(d) So long as no Event of Default has occurred and is continuing, no RL Lender
that at the applicable time has, or that has an Affiliate that has, a Maximum
Canadian Dollar Revolving Loan Sub-Commitment may assign all or any portion of
its Revolving Loan Commitment unless the assignment includes an assignment of
all or the applicable portion of both the Maximum Canadian Dollar Revolving Loan
Sub-Commitment and the Canadian Dollar Revolving Loan Sub-Commitment of such
Revolving Loan Commitment to the applicable Eligible Transferee or an Affiliate
of such Eligible Transferee (the “Assignee Canadian Lender”) and the Assignee
Canadian Lender is a resident in Canada for the purpose of the Income Tax Act
(Canada) or an authorized foreign bank which at all times holds all of its
interest in any Canadian Obligations in the course of its Canadian banking
business for purposes of subsection 212(13.3) of the Income Tax Act (Canada), or
is otherwise able to establish to the satisfaction of the Canadian Revolving
Loan Borrowers and the Administrative Agent based on applicable law in effect at
the time of such assignment that such Assignee Canadian Lender is not subject to
deduction or withholding of Canadian Taxes with respect to any payments to such
Assignee Canadian Lender of interest, fees, commissions, or any other amount
payable by any Canadian Revolving Loan Borrower under the Credit Documents.
Notwithstanding the foregoing provisions of this Section 14.03(d), an RL Lender
that at the applicable time has, or that has an Affiliate that has, a Maximum
Canadian Dollar Revolving Loan Sub-Commitment may assign such portion, if any,
of its Revolving Loan Commitment in excess of the Maximum Canadian Dollar
Revolving Loan Sub-Commitment, subject to the requirements of Section 14.03(b).

 

14.04. No Waiver; Remedies Cumulative. No failure or delay on the part of the
Administrative Agent or any Lender or any holder of any Revolving Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Administrative Agent or any Lender or the holder of any Revolving Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Lender or the holder of any Revolving Note would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent or any Lender or the holder of any Revolving Note to any other or further
action in any circumstances without notice or demand.

 

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14.05. Payments Pro Rata. (a) Except as otherwise provided in this Agreement,
the Administrative Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrower in respect of any Obligations hereunder, it
shall distribute such payment to the Lenders (other than any Lender that has
consented in writing to waive its pro rata share of any such payment) pro rata
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.

 

(b) Each of the Lenders agrees that, if it should receive any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise (except
pursuant to Section 2.14 or 14.03)), which is applicable to the payment of the
principal of, or interest on, the Revolving Loans or Commitment Commission or
Canadian Commitment Commission, of a sum which with respect to the related sum
or sums received by other Lenders is in a greater proportion than the total of
such Obligation then owed and due such Lender bears to the total of such
Obligation then owed and due all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in such amount;
provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

 

(c) Notwithstanding anything to the contrary contained herein, the provisions of
the preceding Sections 14.05(a) and (b) shall be subject to the express
provisions of this Agreement which require, or permit, differing payments to be
made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

 

14.06. Calculations; Computations. (a) The financial statements to be furnished
to the Lenders pursuant hereto shall be made and prepared in accordance with
GAAP, consistently applied throughout the periods involved (except as set forth
in the notes thereto or as otherwise disclosed in writing by the U.S. Borrower
to the Lenders).

 

(b) Except as otherwise specified in Section 11, for purposes of computations of
baskets included in Section 11 (including any Roll Forward Amount), actions
during the fiscal year ending December 31, 2004, including prior to the
Effective Date, shall be included.

 

(c) All computations of interest, Commitment Commission, Canadian Commitment
Commission and Fees hereunder shall be made on the basis of a year of 360 days
(or 365 or 366 days, as the case may be, in the case of interest on Base Rate
Loans and Canadian Prime Rate Loans or 365 days in the case of Acceptance Fees)
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest, Commitment Commission,
Canadian Commitment Commission or Fees are payable.

 

(d) For purposes of the Interest Act (Canada), (i) whenever any interest or fee
under this Agreement is calculated using a rate based on a year of 360 days or
365 days, as the case may be, the rate determined pursuant to such calculation,
when expressed as an

 

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annual rate, is equivalent to (x) the applicable rate based on a year of 360
days or 365 days, as the case may be, (y) multiplied by the actual number of
days in the calendar year in which the period for which such interest or fee is
payable (or compounded) ends, and (z) divided by 360 or 365, as the case may be;
(ii) the principle of deemed reinvestment of interest does not apply to any
interest calculation under this Agreement; and (iii) the rates of interest
stipulated in this Agreement are intended to be nominal rates and not effective
rates or yields.

 

14.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE CITY OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE
BORROWERS HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER SUCH CREDIT PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS
JURISDICTION OVER SUCH CREDIT PARTY. EACH OF THE BORROWERS FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE U.S. BORROWER (WHICH, IN THE CASE OF
EACH CANADIAN REVOLVING LOAN BORROWER IS HEREBY IRREVOCABLY APPOINTED AS ITS
AGENT TO ACCEPT SUCH SERVICE OF PROCESS) AT THE ADDRESS OF THE U.S. BORROWER SET
FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT,
ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE BORROWERS IN ANY OTHER JURISDICTION. THE SUBMISSION TO JURISDICTION
CONTAINED IN THIS SECTION 14.07(a) IS A SUBMISSION TO THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURTS.

 

(b) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE

 

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LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

14.08. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.

 

14.09. Effectiveness. This Agreement shall become effective on the date (the
“Effective Date”) on which the Borrowers, the Administrative Agent and each of
the Lenders set forth on Schedule I shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the same
to the Administrative Agent at the Notice Office or, in the case of the Lenders,
shall have given to the Administrative Agent telephonic (confirmed in writing)
or written notice at such office that the same has been signed and mailed to it.

 

14.10. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

 

14.11. Amendment or Waiver; etc. (a) Except as provided in clause (c) of this
Section 14.11, neither this Agreement nor any other Credit Document nor any
terms hereof or thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed by the
respective Credit Parties party thereto and the Required Lenders (except that
additional parties may be added to, and Subsidiaries of the Borrowers may be
released from, the Subsidiaries Guaranty and the Pledge and Security Agreement
in accordance with the provisions hereof and thereof, without the consent of the
other Credit Parties party thereto or the Required Lenders) provided that:

 

(1) no such change, waiver, discharge or termination shall, without the consent
of each Lender having Obligations being directly affected thereby (other than a
Defaulting Lender) (i) extend the expiration date of any Commitment beyond the
Maturity Date, the final scheduled maturity of any Revolving Loan or Revolving
Note or extend the stated expiration date of any Letter of Credit beyond the
Maturity Date, or reduce the rate or extend the time of payment of interest on
any Revolving Loan or any Fees, or reduce the principal amount thereof (except
to the extent

 

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repaid in cash) (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 14.06(a) shall not
constitute a reduction in any rate of interest or Fees for purposes of this
clause (i), so long as the primary purpose of the respective amendments or
modifications to the financial definitions or to Section 14.06(a) was not to
reduce the interest or Fees payable hereunder), (ii) release all or
substantially all of the Pledge and Security Agreement Collateral or the
Guarantors from the Subsidiaries Guaranty (except (in either case) as expressly
provided in the Credit Documents) or the U.S. Borrower from its guarantee
contained in Section 16, (iii) amend, modify or waive any provision of this
Section 14.11 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Revolving Loan
Commitments on the Effective Date), (iv) reduce the percentage specified in the
definition of Required Lenders (it being understood that, (x) the transactions
contemplated by the Additional Revolving Loan Commitment may be consummated as
expressly provided in this Agreement and (y) with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the extensions of Revolving Loan Commitments are included on the
Effective Date) or amend, modify or waive any provision of any Credit Document
that, by its terms, requires the consent, approval or satisfaction of all of the
Lenders or (v) consent to the assignment or transfer by the U.S. Borrower or any
other Credit Party of any of its rights and obligations under this Agreement or
any other Credit Document;

 

(2) no such change, waiver, discharge or termination shall (i) increase the
Commitments (or sub-commitments (other than in accordance with Section 2.18)) of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Revolving Loan Commitment shall not constitute an increase of the
Commitment (or sub-commitment) of any Lender, and that an increase in the
available portion of the Commitment of any Lender shall not constitute an
increase in the Commitment (or sub-commitment) of such Lender), (ii) without the
consent of the Issuing Bank, amend, modify or waive any provision of Section 3
or alter its rights or obligations with respect to Letters of Credit, (iii)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 13 as the same applies to the Administrative Agent or any
other provision as the same relates to the rights or obligations of the
Administrative Agent; (iv) without the consent of the Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent; or (v) modify Section 2.15, 2.17 or 2.18, Schedule III or any
other provision of this Agreement relating solely to Canadian Revolving Loans
without the consent of the Majority Canadian Lenders.

 

(b) If, in connection with any proposed change, waiver, discharge or termination
with respect to any of the provisions of this Agreement as contemplated by
clause (1) of Section 14.11(a), the consent of the Required Lenders is obtained
but the consent of one or more of such other Lenders whose consent is required
is not obtained, then the Borrower shall have the right, so long as no Default
or Event of Default has occurred and is continuing and

 

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all non-consenting Lenders whose individual consent is required are treated as
described in either clause (A) or (B) of this Section 14.11(b), to either (A)
replace each such non-consenting Lender or Lenders with one or more Replacement
Lenders pursuant to Section 2.14 so long as at the time of such replacement,
each such Replacement Lender consents to the proposed change, waiver, discharge
or termination or (B) terminate such non-consenting Lender’s Revolving Loan
Commitment and repay such non-consenting Lender’s outstanding Revolving Loans in
accordance with Sections 4.02 and/or 5.01, provided that, unless the Revolving
Loan Commitments are terminated, and Revolving Loans repaid, pursuant to the
preceding clause (B) are immediately replaced in full at such time through the
addition of new Lenders or the increase of the Revolving Loan Commitments and/or
outstanding Revolving Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to the
preceding clause (B) the Required Lenders (determined before giving effect to
the proposed action) shall specifically consent thereto, provided further, that
in any event the Borrower shall not have the right to replace a Lender,
terminate its Revolving Loan Commitment or repay its Revolving Loans solely as a
result of the exercise of such Lender’s rights (and the withholding of any
required consent by such Lender) pursuant to clause (2) of Section 14.11(a).

 

(c) Notwithstanding the foregoing, the Administrative Agent and the Borrowers
(without the consent of any other Lender) may enter into amendments of any
Credit Document solely with respect to corrections of formal defects not having
any economic impact.

 

14.12. Survival. All indemnities set forth herein including, without limitation,
in Sections 2.11, 2.12, 3.06, 5.04, 14.01, 14.05 and 14.18 shall survive the
execution, delivery and termination of this Agreement and the Revolving Notes
and the making and repayment of the Revolving Loans.

 

14.13. Domicile of Revolving Loans. Each Lender may transfer and carry its
Revolving Loans at, to or for the account of any office, Subsidiary or Affiliate
of such Lender. Notwithstanding anything to the contrary contained herein, to
the extent that a transfer of Revolving Loans pursuant to this Section 14.13
would, at the time of such transfer, result in increased costs under Section
2.11, 2.12 or 5.04 from those being charged by the respective Lender prior to
such transfer, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to pay any other increased costs
or Taxes of the type described above resulting from changes after the date of
the respective transfer).

 

14.14. Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 14.14, each Lender agrees that it will use its reasonable efforts not to
disclose without the prior consent of the U.S. Borrower (other than to its
employees, auditors, advisors or counsel or to another Lender if such Lender or
such Lender’s holding or parent company in its reasonable good faith discretion
determines that any such party should have access to such information, provided
such Persons shall be subject to the provisions of this Section 14.14 to the
same extent as such Lender) any information with respect to any Credit Party or
any of its Subsidiaries which has been, is now or is in the future furnished
pursuant to this Agreement or any other Credit Document and which is designated
by any Credit Party to the Lenders in writing as confidential, provided that any
Lender may disclose any such information (a) as has become generally available
to the public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have

 

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jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect of any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) to the Administrative Agent or the Collateral Agent, (f) to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty’s professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 14.14(a)), or to the NAIC or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender and (g) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
participation of any of the Revolving Notes, Commitments or Revolving Loans or
any interest therein by such Lender, provided that such prospective transferee
agrees to be subject to the provisions of this Section 14.14(a).

 

(b) The Borrowers hereby acknowledge and agree that each Lender may share with
any of its affiliates any information related to Credit Parties or any of their
respective Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Credit Parties and their
respective Subsidiaries, provided such Persons shall be subject to the
provisions of this Section 14.14 to the same extent as such Lender), it being
understood that for purposes of this Section 14.14(b), the term “affiliate”
shall mean any direct or indirect holding company of a Lender as well as any
direct or indirect Subsidiary of such holding company.

 

14.15. Register. Each Borrower hereby designates the Administrative Agent to
serve as the Borrower’s agent, solely for purposes of this Section 14.15, to
maintain a register (the “Register”) on which it will record the Commitments
from time to time of each of the Lenders, the Revolving Loans made by each of
the Lenders and each repayment in respect of the principal amount of the
Revolving Loans of each Lender. Failure to make any such recordation, or any
error in such recordation, shall not affect any Borrower’s obligations in
respect of such Revolving Loans. With respect to any Lender, the transfer of the
Commitments of such Lender and the rights to the principal of, and interest on,
any Revolving Loan made pursuant to such Commitments shall not be effective
until such transfer is recorded on the Register maintained by the Administrative
Agent with respect to ownership of such Commitments and Revolving Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitments and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Revolving Loans shall be recorded by the Administrative Agent on the Register
only upon the acceptance by the Administrative Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 14.03(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Administrative Agent for acceptance and registration of assignment or
transfer of all or part of a Revolving Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Revolving
Note evidencing such Revolving Loan, and thereupon one or more new Revolving
Notes in the same aggregate principal amount shall be issued to the assigning or
transferor Lender and/or the new Lender. The U.S. Borrower agrees to indemnify
the Administrative Agent from and against any and all losses, claims, damages
and liabilities of whatsoever nature which may be imposed on, asserted against
or incurred by the Administrative Agent in performing its duties under this
Section 14.15, provided that the U.S. Borrower shall

 

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have no obligation to indemnify the Administrative Agent for any loss, claim,
damage, liability or expense which resulted solely from the gross negligence or
willful misconduct of the Administrative Agent.

 

14.16. Commercial Loan Transactions. Each of the Lenders acknowledges that the
making of its Revolving Loans and the issuance by the Borrower of a Revolving
Note to such Lender are in the nature of a commercial loan transaction, and that
no such Lender shall assert that such actions are a securities transaction
regulated under the Securities Exchange Act, the Securities Act or any other
Federal or state securities laws, it being understood that nothing in this
Section 14.16 shall limit the rights of the Lenders pursuant to Section 14.01 or
14.03.

 

14.17. Limitations on Recourse.

 

(a) Notwithstanding anything to the contrary set forth in this Agreement or in
any of the other Credit Documents, but subject to the last sentence of this
Section 14.17(a) and clause (b) of this Section 14.17, the U.S. Borrower’s
Obligations hereunder and under the other Credit Documents shall be limited
recourse obligations of the U.S. Borrower, enforceable against the U.S. Borrower
(and its assets) only and not against any constituent partner in the U.S.
Borrower. The foregoing provisions of this Section 14.17 shall not impair the
liability of the Guarantors under the Subsidiaries Guaranty, the liability of
the U.S. Borrower under its guarantee contained in Section 16 or the liens and
security interests created by the Pledge and Security Agreement which were
granted as security for the Obligations of the Borrowers and the Guaranteed
Obligations (as defined in the Subsidiaries Guaranty) of the Guarantors.

 

(b) Notwithstanding the foregoing provisions of clause (a) of this Section
14.17, the Administrative Agent and the Lenders shall have recourse to HMC (in
its capacity as the general partner in the U.S. Borrower) to the extent (but
only to the extent) of any loss, cost, damage, expense or liability incurred by
the Administrative Agent or any of the Lenders by reason of (i) any unlawful act
on the part of HMC, or (ii) any misappropriation of funds by HMC in
contravention of the provisions of the Credit Documents.

 

14.18. Judgment Currency. (a) The Credit Parties’ obligations hereunder and
under the other Credit Documents to make payments in the respective Applicable
Currency (the “Obligation Currency”) shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent,
the Collateral Agent or the respective Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent, the
Collateral Agent or such Lender under this Agreement or the other Credit
Documents. If for the purpose of obtaining or enforcing judgment against any
Credit Party in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made, at the Canadian Dollar
Equivalent or the Dollar Equivalent thereof, as the case may be, the rate of
exchange determined, in each case, as of the day immediately preceding the day
on which the judgment is given (such Business Day being hereinafter referred to
as the “Judgment Currency Conversion Date”).

 

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(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Borrowers covenant and agree to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate or exchange
prevailing on the Judgment Currency Conversion Date.

 

(c) For purposes of determining the Canadian Dollar Equivalent or the Dollar
Equivalent, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

 

14.19. Right of Setoff. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence and during the continuance of an Event of Default, each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located or by any
Person controlling such Lender) to or for the credit or the account of any
Credit Party against and on account of the Obligations and liabilities of such
Credit Party to such Lender under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Lender pursuant to Section 14.05(b), and all other claims by
such Lender against such Credit Party of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.

 

14.20. Termination of Liens. Upon (i) the final repayment in full of the
Obligations (including the repayment of all Unpaid Drawings and the expiration
or termination or cancellation of all outstanding Letters of Credit, other than
Letters of Credit which have been cash collateralized pursuant to the terms of
this Agreement) and termination of all Commitments hereunder, or (ii) upon the
occurrence of the Collateral Release Date pursuant to Section 10.15(d) at the
request of the U.S. Borrower, the Administrative Agent shall (and the Lenders
hereby authorize the Administrative Agent to) execute and deliver (or authorize
the U.S. Borrower to file) upon the written request and at the expense of the
U.S. Borrower such releases (including Uniform Commercial Code termination
statements) of Collateral as may be requested by the U.S. Borrower. In the event
the Obligations shall have been repaid in full, the Commitments hereunder shall
have been terminated and the U.S. Borrower shall have provided cash collateral
as provided herein for all outstanding Letters of Credit, the U.S. Borrower
shall cease to be bound by the provisions of Sections 9, 10 and 11.

 

14.21. Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and

 

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enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

 

14.22. USA Patriot Act Notice. Each Lender and Agent (for itself and not on
behalf of any Lender) hereby notifies each Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies each Borrower, which information includes the name
and address of each Borrower and other information that will allow such Lender
or Agent, as applicable, to identify each Borrower in accordance with the Act.

 

SECTION 15. Nature of Borrowers’ Obligations.

 

15.01. Nature of Obligations. Notwithstanding anything to the contrary contained
elsewhere in this Agreement (other than as contemplated by Section 10.15(e)), it
is understood and agreed by the various parties to this Agreement that all
Obligations to repay principal of (including, without limitation, the Face
Amount of Bankers’ Acceptance Loans), interest on, and all other amounts with
respect to, outstanding Canadian Revolving Loans extended to a Canadian
Revolving Loan Borrower (including, without limitation, all fees, indemnities,
taxes and other Obligations in connection therewith or in connection with the
related Revolving Loan Commitments required to be paid hereunder) shall
constitute the obligations of such Canadian Revolving Loan Borrower and not any
other Canadian Revolving Loan Borrower and (ii) all Obligations to repay
principal of (including, without limitation the Face Amount of Bankers’
Acceptance Loans), interest on, and all other amounts with respect to, any
outstanding Canadian Revolving Loan (including, without limitation, all fees,
indemnities, taxes and other Obligations in connection therewith) shall
constitute the direct obligations of the respective Canadian Revolving Loan
Borrower. In addition to the direct obligations of the respective Borrowers with
respect to Obligations as described above, all such Obligations shall be
guaranteed pursuant to, and in accordance with the terms of, the Guaranty.

 

SECTION 16. U.S. Borrower Guaranty.

 

16.01. The Guaranty. In order to induce the Administrative Agent and the Lenders
to enter into this Agreement and to extend credit hereunder and in recognition
of the direct benefits to be received by the U.S. Borrower from the proceeds of
the Canadian Revolving Loans, the U.S. Borrower hereby agrees with the Lenders
as follows: the U.S. Borrower hereby unconditionally, irrevocably and absolutely
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all Obligations of the Canadian Revolving Loan Borrowers under this
Agreement and the other Credit Documents to which it is a party (collectively,
the “Canadian Obligations”). If any or all of the Canadian Obligations becomes
due and payable hereunder or under such other Credit Documents, the U.S.
Borrower unconditionally promises to pay such Canadian Obligations, on demand,
together with any and all reasonable out-of-pocket expenses which may be
incurred by the Administrative Agent or the Lenders in collecting any of the
Canadian Obligations.

 

16.02. Bankruptcy. Additionally, the U.S. Borrower unconditionally, irrevocably
and absolutely guarantees the payment of any and all Canadian Obligations,
including interest

 

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which would, but for a bankruptcy filing, have accrued after a bankruptcy
filing, whether or not due or payable by the Canadian Revolving Loan Borrowers
upon the occurrence of any of the events specified in Section 12.05, and
absolutely, unconditionally and irrevocably promises to pay such Canadian
Obligations to order, on demand, in the currency in which it is required to be
paid under this Agreement.

 

16.03. Nature of Liability. The liability of the U.S. Borrower hereunder is
exclusive and independent of any security for or other guaranty of the Canadian
Obligations whether executed by the U.S. Borrower, any other guarantor or any
other party, and the liability of the U.S. Borrower hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the
Canadian Revolving Loan Borrowers or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Canadian Obligations, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Canadian
Revolving Loan Borrowers, or (e) any payment made on the Canadian Obligations
which are repaid to any Canadian Revolving Loan Borrower pursuant to court order
in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and the U.S. Borrower waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

 

16.04. Guaranty Absolute. No invalidity, irregularity or unenforceability of all
or any part of the Canadian Obligations guaranteed hereby or of any security
therefor shall affect, impair or be a defense to the guaranty contained in this
Section 16 (the “Guaranty”), and this Guaranty shall be primary, absolute,
irrevocable and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Canadian
Obligations guaranteed herein. The U.S. Borrower waives, to the maximum extent
permitted by applicable law, any defense to payment under the guaranty contained
in this Section 16 for (i) any law, regulation, decree or order of any
jurisdiction or any event affecting any term of a guaranteed obligation or (ii)
claims or set-off rights that a guarantor may have. The guaranty under this
Section 16 is a guaranty of payment and not of collection.

 

16.05. Independent Obligation. The obligations of the U.S. Borrower hereunder
are independent of the obligations of any other guarantor or the Canadian
Revolving Loan Borrowers, and a separate action or actions may be brought and
prosecuted against the U.S. Borrower whether or not action is brought against
any other guarantor or the Canadian Revolving Loan Borrowers and whether or not
any other guarantor or the Canadian Revolving Loan Borrower be joined in any
such action or actions. The U.S. Borrower waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Canadian
Revolving Loan Borrowers or other circumstance which operates to toll any
statute of limitations as to the Canadian Revolving Loan Borrowers shall operate
to toll the statute of limitations as to the U.S. Borrower.

 

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16.06. Authorization. The U.S. Borrower authorizes the Canadian Lenders without
notice or demand, and without affecting or impairing its liability hereunder,
from time to time to:

 

(a) change the manner, place or terms of payment of, and/or change or extend the
time of payment of, renew, increase, accelerate or alter, any of the
indebtedness (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;

 

(b) take and hold security for the payment of the Canadian Obligations and sell,
exchange, release, surrender, realize upon or otherwise deal with in any manner
and in any order any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Canadian Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;

 

(c) exercise or refrain from exercising any rights against the Canadian
Revolving Loan Borrowers or others or otherwise act or refrain from acting;

 

(d) release or substitute any one or more endorsers, guarantors, the Canadian
Revolving Loan Borrowers or other obligors;

 

(e) settle or compromise any of the indebtedness, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment of any liability (whether due or not) of the Canadian
Revolving Loan Borrowers to their creditors other than the Canadian Lenders;

 

(f) apply any sums by whomsoever paid or howsoever realized to any liability or
liabilities of the Canadian Revolving Loan Borrowers to the Canadian Lenders
regardless of what liability or liabilities of the U.S. Borrower or the Canadian
Revolving Loan Borrowers remain unpaid;

 

(g) consent to or waive any breach of, or any act, omission or default under,
this Agreement or any of the instruments or agreements referred to herein, or
otherwise amend, modify or supplement this Agreement or any of such other
instruments or agreements; and/or

 

(h) take any other action which would, under otherwise applicable principles of
common law, give rise to a legal or equitable discharge of the U.S. Borrower
from its liabilities under this Section 16.

 

16.07. Reliance. It is not necessary for any Canadian Lender to inquire into the
capacity or powers of any Canadian Revolving Loan Borrower or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

 

16.08. Subordination. Any indebtedness of the Canadian Revolving Loan Borrowers
now or hereafter held by the U.S. Borrower is hereby subordinated to the
Canadian Obligations of the Canadian Revolving Loan Borrowers to the Canadian
Lenders; and such indebtedness of the Canadian Revolving Loan Borrowers to the
U.S. Borrower, if the

 

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Administrative Agent (at the direction of the Required Lenders), after an Event
of Default has occurred, so requests, shall be collected, enforced and received
by the U.S. Borrower as trustee for the Canadian Lenders and be paid over to the
Canadian Lenders on account of the Canadian Obligations of the Canadian
Revolving Loan Borrower to the Canadian Lenders, but without affecting or
impairing in any manner the liability of the U.S. Borrower under the other
provisions of this Guaranty. Prior to the transfer by the U.S. Borrower of any
note or negotiable instrument evidencing any indebtedness of the Canadian
Revolving Loan Borrowers to the U.S. Borrower, the U.S. Borrower shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination.

 

16.09. Waivers. (a) The U.S. Borrower waives any right to require any Canadian
Lender to (i) proceed against the Canadian Revolving Loan Borrowers, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the Canadian Revolving Loan Borrowers, any other guarantor or any other
party or (iii) pursue any other remedy in any Canadian Lender’s power
whatsoever. The U.S. Borrower waives any defense based on or arising out of any
defense of the Canadian Revolving Loan Borrowers, any other guarantor or any
other party other than payment in full in cash of the Canadian Obligations,
including, without limitation, any defense based on or arising out of the
disability of the Canadian Revolving Loan Borrowers, any other guarantor or any
other party, or the unenforceability of the Canadian Obligations or any part
thereof for any cause, or the cessation for any cause of the liability of the
Canadian Revolving Loan Borrowers other than to the extent of payment in full in
cash of the Canadian Obligations. The Canadian Lenders may, at their election,
foreclose on any security held by the Administrative Agent or any Canadian
Lenders by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Canadian
Lenders may have against the Canadian Revolving Loan Borrowers or any other
party, or any security, without affecting or impairing in any way the liability
of the U.S. Borrower hereunder except to the extent the Canadian Obligations
have been paid in cash. The U.S. Borrower waives any defense arising out of any
such election by the Canadian Lenders, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the U.S. Borrower against the Canadian Revolving Loan Borrower or any
other party or any security.

 

(b) The U.S. Borrower waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Canadian
Obligations. The U.S. Borrower assumes all responsibility for being and keeping
itself informed of the Canadian Revolving Loan Borrowers’ financial condition
and assets, and of all other circumstances bearing upon the risk of non-payment
of the Canadian Obligations and the nature, scope and extent of the risks which
the U.S. Borrower assumes and incurs hereunder, and agrees that the Canadian
Lenders shall have no duty to advise the U.S. Borrower of information known to
them regarding such circumstances or risks.

 

(c) All parties hereto agree that the U.S. Borrower shall have no right of
subrogation against any Canadian Revolving Loan Borrower or any Guarantor
regarding any

 

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payment of Canadian Obligations until all of the Obligations have been
irrevocably paid in full in cash.

 

The U.S. Borrower warrants and agrees that each of the waivers set forth above
in this Section 16.09 is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective only to the
maximum extent permitted by law.

 

16.10. Guaranty Continuing. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Canadian Lenders in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which any Canadian Lenders or any
subsequent holder of a Canadian Revolving Note, or issuer of, or participant in,
a Letter of Credit would otherwise have. No notice to or demand on the U.S.
Borrower in any case shall entitle the U.S. Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Canadian Lenders or any holder, creator or purchaser to any other
or further action in any circumstances without notice or demand.

 

16.11. Binding Nature of Guaranties. This Guaranty shall be binding upon the
U.S. Borrower and its successors and assigns and shall inure to the benefit of
the Canadian Lenders and their successors and assigns.

 

16.12. Judgments Binding. If claim is ever made upon any Canadian Lender for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Canadian Obligations and such Canadian Lender repays all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property,
or (b) any settlement or compromise of any such claim effected by such Canadian
Lender with any such claimant (including any Canadian Revolving Loan Borrower)
then and in such event the U.S. Borrower agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon the U.S. Borrower,
notwithstanding any revocation hereof or the cancellation of any Canadian
Revolving Credit Note, or other instrument evidencing any liability of the
Canadian Revolving Loan Borrowers, and the U.S. Borrower shall be and remain
liable to the Canadian Lenders hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.

 

Address:

    6903 Rockledge Drive, Suite 1500   HOST MARRIOTT, L.P.

Bethesda, Maryland 20817

 

By:

 

Host Marriott Corporation,

Telecopier No.: (240) 744-5154

     

its General Partner

Attention: General Counsel, Dept. 923

       

with a copy to:

 

By:

  /s/    JOHN A. CARNELLA            

Name:

  John A. Carnella    

Title:

  Senior Vice President

 

6903 Rockledge Drive, Suite 1500

       

Bethesda, Maryland 20817

       

Telecopier No.: (240) 744-5810

       

Attention: Treasurer, Dept. 916

       

(same as above)

 

CALGARY CHARLOTTE PARTNERSHIP

   

By: HMC Charlotte (Calgary) Company and HMC

   

Grace (Calgary) Company, its General Partners

   

HMC TORONTO AIR COMPANY

   

HMC TORONTO EC COMPANY

   

HMC AP CANADA COMPANY

 

By:   /s/    JOHN A. CARNELLA        

Name:

  John A. Carnella

Title:

  Vice President

 

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

DEUTSCHE BANK TRUST COMPANY

AMERICAS,

Individually and as Administrative Agent

By:   /s/    LINDA WANG        

Name:

  Linda Wang

Title:

  Vice President

 

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

BANK OF AMERICA, N.A.

Individually and as Syndication Agent

By:   /s/    LESA J. BUTLER        

Name:

  Lesa J. Butler

Title:

  Principal

 

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

CITICORP NORTH AMERICA, INC.

By:   /s/    BLAKE R. GRONICH        

Name:

  Blake R. Gronich

Title:

  Vice President

 

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

CALYON NEW YORK BRANCH

By:   /s/    JAN HAZELTON        

Name:

  Jan Hazelton

Title:

  Director

 

By:   /s/    JOSEPH A. ASCIOLLA        

Name:

  Joseph A. Asciolla

Title:

  Managing Director

 

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

SOCIÉTÉ GÉNÉRALE

By:   /s/    THOMAS K. DAY        

Name:

  Thomas K. Day

Title:

  Managing Director

 

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

THE BANK OF NEW YORK

By:   /s/    ANTHONY A. FILORIMO        

Name:

  Anthony A. Filorimo

Title:

  Vice President

 

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

GOLDMAN SACHS CREDIT PARTNERS L.P.

By:   /s/    WILLIAM ARCHER        

Name:

  William Archer

Title:

  Authorized Signatory

 

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

BEAR STEARNS CORPORATE LENDING INC.

By:   /s/    VICTOR BULZACCHELLI        

Name:

  Victor Bulzacchelli

Title:

  Vice President

 

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

WACHOVIA BANK, NATIONAL ASSOCIATION

By:   /s/    DAVID M. BLACKMAN         

Name:

  David M. Blackman

Title:

  Director

 

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

THE BANK OF NOVA SCOTIA

By:   /s/    K.M. PIGOTT        

Name:

  K.M. Pigott

Title:

  Managing Director

 

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

DEUTSCHE BANK AG CANADA BRANCH By:   /s/    ROBERT JOHNSTON        

Name:

  Robert Johnston

Title:

  Vice President

 

DEUTSCHE BANK AG CANADA BRANCH By:   /s/    MARCELLUS LEUNG        

Name:

  Marcellus Leung

Title:

  Assistant Vice President

 

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

BANK OF AMERICA, N.A. (CANADA BRANCH) By:   /s/    MEDINA SALES DE
ANDRADE        

Name:

  Medina Sales De Andrade

Title:

  Assistant Vice President

 

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

CITIBANK, N.A. CANADIAN BRANCH By:   /s/    ADEEL KHERAJ        

Name:

  Adeel Kheraj

Title:

  Authorized Signer

 

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

SOCIÉTÉ GÉNÉRALE (CANADA)

By:   /s/    FRANÇOIS LALIBERTÉ        

Name:

  François Laliberté

Title:

  Managing Director By:   /s/    DILETTA PRANDO        

Name:

  Diletta Prando

Title:

  Director, Legal Affairs Assistant Secretary

 

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

SCHEDULE I-A

 

COMMITMENTS

 

Lender

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

  

Revolving

Loan
Commitment

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

Deutsche Bank Trust Company Americas

   $ 100,000,000

Bank of America, N.A.

     100,000,000

Citicorp North America Inc.

     100,000,000

Société Générale

     65,000,000

Calyon New York Branch

     65,000,000

Goldman Sachs Credit Partners L.P.

     40,000,000

The Bank of New York

     40,000,000

Bear Stearns Corporate Lending Inc.

     25,000,000

Wachovia Bank, National Association

     25,000,000

The Bank of Nova Scotia

     15,000,000     

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

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

Total

   $ 575,000,000     

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

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

 

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

SCHEDULE I-B

 

MAXIMUM CANADIAN DOLLAR REVOLVING LOAN SUB-COMMITMENTS

 

Canadian Lenders

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

  

Maximum Canadian
Dollar Revolving

Loan Sub-Commitments

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

Deutsche Bank AG Canada Branch

   $ 40,000,000

Bank of America, N.A. (Canada Branch)

     40,000,000

Citibank, N.A. Canadian Branch

     40,000,000

The Bank of Nova Scotia

     15,000,000

Société Générale (Canada)

     15,000,000     

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

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

TOTAL:

   U.S. $ 150,000,000     

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

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

 

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

SCHEDULE II

 

LENDER ADDRESSES AND APPLICABLE LENDING OFFICES

 

Lender

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

 

Address

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

Deutsche Bank Trust Company Americas

 

60 Wall Street, 10th Floor

New York, New York 10005

Attention: Linda Wang

Telephone: (212) 250-2368

Facsimile: (212) 797-4496

Bank of America, N.A.

 

901 Main Street, 64th Floor

Dallas, Texas 75202-3714

Attention: Lesa Butler

Telephone: (214) 209-1506

Facsimile: (214) 209-0085

Citicorp North America Inc.

 

Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Attention: Blake R. Gronich

Telephone: (212) 723-6570

Facsimile: (212) 723-8380

Société Générale

 

2001 Ross Ave.

49th Floor

Dallas, Texas 75201

Attention: Tom Day

Telephone: (214) 979-2774

Facsimile: (214) 979-2727

Calyon New York Branch

 

1301 Avenue of the Americas

New York, NY 10019-6022

Attention: Jan Hazelton

Telephone: (212) 261-3723

Facsimile: (212) 261-7532

Goldman Sachs Credit Partners L.P.

 

85 Broad Street - 27th Floor

New York, New York 10004

Attention: Sandra Stulberger

Telephone: (212) 902-5977

Facsimile: (212) 357-4597

The Bank of New York

 

One Wall Street, 21st Floor

New York, New York 10286

Attention: Jamia Jasper

Telephone: (212) 635-8245

Facsimile: (212) 809-9526

 

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

Bear Stearns Corporate Lending Inc.

 

Bear, Stearns & Co. Inc.

383 Madison Avenue

8th Floor

New York, NY 10179

Attention: Victor F. Bulzacchelli

Telephone: (212) 272-3042

Facsimile: (212) 272-9184

Wachovia Bank, National Association

 

301 S. College Street

NC 0172

Charlotte, NC 28288-0172

Attention: David Blackman

Telephone: (704) 374-6272

Facsimile: (704) 383-6205

The Bank of Nova Scotia

 

One Liberty Plaza

25th Floor

New York, NY 10006

Attention: Kate Pigott

Telephone: (212) 225-5330

Facsimile: (212) 225-5166

Deutsche Bank AG Canada Branch

 

222 Bay Street, Suite 1100, P.O. Box 196

Toronto, Ontario M5K 1H6

Attention: Robert Johnston

Telephone: (416) 682-8151

Facsimile: (416) 682-8444

Bank of America, N.A. (Canada Branch)

 

200 Font Street West, Suite 2700

Toronto, Ontario M5V 3L2

Attention: Medina Sales de Andrade

Telephone: (416) 349-5433

Facsimile: (416) 349-4283

Citibank, N.A. Canadian Branch

 

Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Attention: Blake R. Gronich

Telephone: (212) 723-6570

Facsimile: (212) 723-8380

Société Générale (Canada)

 

1501 McGill College Avenue

Suite 1800

Montreal, Quebec H3A 3M8

Attention: Adrien Falcon

Telephone: (514) 841-6000 ext. 4522

Facsimile: (514) 841-6259

 

- ii -

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

SCHEDULE III

 

CERTAIN PROVISIONS RELATING TO BANKERS’ ACCEPTANCES

 

This Schedule III sets forth certain terms and conditions relating to the
obligation of the Canadian Lenders to make loans to any Canadian Revolving Loan
Borrower pursuant to Sections 2.01(a)(ii)(y) and 2.01(b)(ii)(y) of the Credit
Agreement by way of Bankers’ Acceptances. Capitalized terms used herein shall
have the meanings assigned to such terms in the Credit Agreement.

 

(a) Availability. All notices of borrowings, conversions or continuations of
Bankers’ Acceptances shall be in a minimum aggregate Face Amount of Cdn
$10,000,000 or a multiple of Cdn $100,000 in excess thereof, and a Canadian
Lender shall not be obliged to accept any Draft:

 

(i) which is drawn on or which matures on a day which is not a Business Day;

 

(ii) which matures on a day subsequent to the Maturity Date;

 

(iii) which has a term other than approximately 30, 60, 90 or 180 days;

 

(iv) which is denominated in any currency other than Canadian Dollars;

 

(v) which is not in a form satisfactory to such Canadian Lender and or the
Administrative Agent;

 

(vi) which has a Face Amount of less than Cdn $1,000,000 or such Face Amount is
not an integral multiple of Cdn $100,000;

 

(vii) in respect of which the respective Canadian Revolving Loan Borrower has
not then paid the applicable Acceptance Fee; or

 

(viii) if a Default or an Event of Default has occurred and is continuing.

 

(b) Grace. Each Canadian Revolving Loan Borrower hereby renounces, and shall not
claim or request or require any Canadian Lender to claim, any days of grace for
the payment of any Bankers’ Acceptance.

 

(c) Bankers’ Acceptances in Blank. To facilitate the acceptance by the Canadian
Lenders of Drafts as contemplated by the Credit Agreement and this Schedule III,
each Canadian Revolving Loan Borrower that wishes to incur Bankers’ Acceptance
Loans shall, on the Effective Date and from time to time as required, supply
each Canadian Lender with such numbers of Drafts as it may request, each
executed and endorsed in blank by such Canadian Revolving Loan Borrower. Each
Canadian Lender shall exercise such care in the custody and safekeeping of such
Drafts as they give to similar property owned by them. Each Canadian Lender is
hereby authorized to issue such Bankers’ Acceptances endorsed in blank in such
Face

 

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

Amounts as may be determined by such Canadian Lender, provided that the
aggregate amount thereof is equal to the aggregate amount of Bankers’
Acceptances required to be accepted by such Canadian Lender. No Canadian Lender
shall be responsible or liable for its failure to accept a Bankers’ Acceptance
if the cause of such failure is, in whole or in part, due to the failure of any
Canadian Revolving Loan Borrower to provide duly executed and endorsed Drafts to
such Canadian Lender on a timely basis, nor shall any Canadian Lender be liable
for any damage, loss or other claim arising by reason of any loss or improper
use of any such instrument except loss or improper use to the extent the same
has been finally judicially determined to have arisen by reason of the gross
negligence or willful misconduct of such Canadian Lender, its officers,
employees, agents or representatives.

 

(d) Execution of Bankers’ Acceptances. Drafts of any Canadian Revolving Loan
Borrower to be accepted as Bankers’ Acceptances hereunder shall be duly executed
on behalf of such Canadian Revolving Loan Borrower and upon the request of any
Canadian Lender, each Canadian Revolving Loan Borrower shall provide to such
Canadian Lender a power of attorney to complete, sign, endorse and issue
Bankers’ Acceptances on behalf of such Canadian Revolving Loan Borrower in form
and substance satisfactory to such Canadian Lender. Notwithstanding that any one
or more of the individuals whose manual or facsimile signature appears on any
Draft or Bankers’ Acceptance as a signatory on behalf of any Canadian Revolving
Loan Borrower may no longer hold office at the date of such Draft or Bankers’
Acceptance or at the date of its acceptance by any Canadian Lender hereunder, or
at any time thereafter, any Bankers’ Acceptance signed as aforesaid on behalf of
such Canadian Revolving Loan Borrower shall be valid and binding upon such
Canadian Revolving Loan Borrower. Alternatively, at the request of any Canadian
Lender, each Canadian Revolving Loan Borrower shall deliver to such Canadian
Lender a “depository note” or “depository bill” which complies with the
requirements of the Depository Bills and Notes Act (Canada), and hereby consents
to the deposit of any Bankers’ Acceptance in the form of a depository note or
depository bill in the book-based debt clearance system maintained by the
Canadian Depository of Securities Limited or other recognized clearing house. In
such circumstances, the delivery of Bankers’ Acceptances shall be governed by
the clearance procedures established thereunder.

 

(e) Issuance of Bankers’ Acceptances. Promptly following receipt of a notice of
borrowing, conversion or continuation by way of Bankers’ Acceptances, the
Administrative Agent shall so advise the Canadian Lenders and shall advise each
Canadian Lender of the Face Amount of each Bankers’ Acceptance to be accepted by
it and the term thereof. The aggregate Face Amount of Bankers’ Acceptances to be
accepted by a Canadian Lender shall be determined by the Administrative Agent by
reference to the respective Canadian RL Percentages of the Canadian Lenders,
except that, if the Face Amount of any Bankers’ Acceptance that would otherwise
be accepted by a Canadian Lender would not be Cdn $100,000 or a multiple
thereof, such Face Amount shall be increased or reduced by the Administrative
Agent in its sole discretion to the nearest multiple of Cdn $100,000.

 

Notwithstanding the foregoing, if by reason of any increase or reduction
described in the immediately preceding sentence, any Canadian Lender shall have
aggregate Canadian Revolving Loans in excess of its respective Canadian RL
Percentage of the total outstanding Canadian Revolving Loans for all the
Canadian Lenders (any such Lender being herein called an “Over-Allotted
Lender”), then at any time following the occurrence and during the continuance

 

- 2 -

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

of an Event of Default, each other Canadian Lender agrees, upon request of the
Over-Allotted Lender, to promptly purchase from such Over-Allotted Lender
participations in (or, if and to the extent specified by any such purchasing
Lender, direct interests in) the Bankers’ Acceptances Loans and Canadian Prime
Rate Loans owing to the Over-Allotted Lender (and in interest due thereon, as
the case may be) in such amounts, and to make such other adjustments from time
to time as shall be equitable, to the end that all the Canadian Lenders shall
hold the Bankers’ Acceptances Loans and Canadian Prime Rate Loans ratably
according to their respective Canadian RL Percentages.

 

(f) Purchase of Bankers’ Acceptances: Continuations as and Conversions into
Bankers’ Acceptance Loans. Subject to subsection (k) below, upon the acceptance
of a Bankers’ Acceptance by a Canadian Lender, such Canadian Lender shall
purchase, or arrange the purchase of, each Bankers’ Acceptance from the
respective Canadian Revolving Loan Borrower at a price equal to the BA Discount
Proceeds of such Bankers’ Acceptance and provide to the Administrative Agent at
the relevant Payment Office an amount in Canadian Dollars equal to such BA
Discount Proceeds for the account of the respective Canadian Revolving Loan
Borrower. The BA Discount Proceeds so received by the Administrative Agent from
the Canadian Lenders shall be retained by the Administrative Agent and applied
as follows: (i) remitted to the respective Canadian Revolving Loan Borrower (in
the case of the making of a Canadian Revolving Loan), (ii) to the prepayment of
Canadian Prime Rate Loans (in the case of a conversion of the Canadian Revolving
Loans from Canadian Prime Rate Loans to Bankers’ Acceptance Loans) or (iii) to
the payment of Bankers’ Acceptances maturing on such date (in the case of a
continuation of Bankers’ Acceptance Loans to new Bankers’ Acceptance Loans),
provided that in the case of any such conversion or continuation of Revolving
Loans, the respective Canadian Revolving Loan Borrower shall pay to the
Administrative Agent for account of the respective Canadian Lenders such
additional amounts, if any, as shall be necessary to effect the prepayment in
full of the respective Canadian Prime Rate Loans being prepaid, or the Bankers’
Acceptances maturing, on such date.

 

On any date on which a borrowing, conversion or continuation shall occur, the
Administrative Agent shall be entitled to net all amounts payable on such date
by the Administrative Agent to a Canadian Lender against all amounts payable on
such date by such Canadian Lender to the Administrative Agent. Similarly, on any
such date, each Canadian Revolving Loan Borrower hereby authorizes each Canadian
Lender to net all amounts payable on such date by such Canadian Lender to the
Administrative Agent for the account of such Canadian Revolving Loan Borrower,
against all amounts (including, without limitation, Acceptance Fees under
paragraph (g) below) payable on such date by such Canadian Revolving Loan
Borrower to such Canadian Lender in accordance with the Administrative Agent’s
calculations.

 

(g) Acceptance Fees. Each Canadian Revolving Loan Borrower shall pay to the
Administrative Agent, in advance, for distribution to each Canadian Lender which
accepts a Bankers’ Acceptance (based on their respective Canadian RL
Percentages), the applicable Acceptance Fee in respect of the Face Amount of
such Bankers’ Acceptance, which shall be payable on or before the date of
acceptance of such Bankers’ Acceptance. In connection with any conversion of an
outstanding Bankers’ Acceptance that is a Canadian Revolving A Loan to a
Bankers’ Acceptance that is a Canadian Revolving B Loan, or of an outstanding
Bankers’

 

- 3 -

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

Acceptance that is a Canadian Revolving B Loan to a Bankers’ Acceptance that is
a Canadian Revolving A Loan, as the case may be (the original Tranche under
which such Bankers’ Acceptance was outstanding before such conversion being the
“Existing Tranche” and the Tranche under which such Bankers’ Acceptance was
outstanding after such re-designation being the “Re-designated Tranche”), the
Administrative Agent will calculate as of the effective date of such conversion
(the “Calculation Date”) (a) that portion of the Acceptance Fee originally paid
by the applicable Canadian Revolving Loan Borrower with respect to such Bankers’
Acceptance on or about the Drawing Date of such Bankers’ Acceptance (having
regard to any adjustments to such amount as a result of the occurrence of prior
Tranche conversions and Calculation Dates (if any) with respect to such Bankers’
Acceptance) that is attributable to the remaining term of such Bankers’
Acceptance from and including such Calculation Date (calculated by multiplying
such Acceptance Fee by a fraction, the numerator of which is the number of days
in such remaining term of such Bankers’ Acceptance and the denominator of which
is the number of days in the original term of such Bankers’ Acceptance (with
appropriate adjustments in such calculations to reflect prior Tranche
re-designations and Calculation Dates (if any) with respect to such Bankers’
Acceptance)) (the “Paid Acceptance Fee for the Remaining Term”), and (b) the
Acceptance Fee that would have been payable by the applicable Canadian Revolving
Loan Borrower with respect to such Bankers’ Acceptance if such Banker’s
Acceptance had been issued under the Re-designated Tranche on the original
Drawing Date of such Bankers’ Acceptance for a term equal to the remaining term
of such Bankers’ Acceptance from and including the Calculation Date (the
“Required Acceptance Fee for the Remaining Term”). The Administrative Agent will
promptly advise the applicable Canadian Lender and the applicable Canadian
Revolving Loan Borrower of such calculations and on the next Business Day (a)
the applicable Canadian Revolving Loan Borrower will pay to the applicable
Canadian Lender the amount, if positive, by which the Required Acceptance Fee
for the Remaining Term exceeds the Paid Acceptance Fee for the Remaining Term
(the “Additional Acceptance Fee”), and (b) the applicable Canadian Lender will
pay to the applicable Canadian Revolving Loan Borrower the amount, if positive,
by which the Paid Acceptance Fee for the Remaining Term exceeds the Required
Acceptance Fee for the Remaining Term (the “Acceptance Fee Rebate”).

 

(h) Prepayments and Payments. Subject to paragraph (j) of this Schedule III, and
except as otherwise provided under Section 2.17, no prepayment of any Bankers’
Acceptances shall be made by any Canadian Revolving Loan Borrower prior to the
maturity date of such Bankers’ Acceptance. Each Canadian Revolving Loan Borrower
hereby unconditionally agrees to pay to the Administrative Agent for the account
of each Canadian Lender an amount in Canadian Dollars equal to the Face Amount
of each Bankers’ Acceptance created by such Canadian Lender for the account of
such Canadian Revolving Loan Borrower on the maturity date thereof (whether at
stated maturity, by acceleration or otherwise) (notwithstanding that such
Canadian Lender may be the holder of it at maturity).

 

(i) Conversion to Canadian Prime Rate Loans upon Maturity. Unless a Bankers’
Acceptance of a Tranche is paid in full at the maturity thereof, or continued as
another Canadian Revolving Loan by way of Bankers’ Acceptances, the obligation
of any Canadian Revolving Loan Borrower to any Canadian Lender in respect of a
maturing Bankers’ Acceptance of a Tranche accepted by such Canadian Lender shall
be deemed to be converted automatically on the maturity date thereof into a
Canadian Prime Rate Loan of that same Tranche under which the maturing Bankers’
Acceptance was incurred in an amount equal to the full Face Amount of

 

- 4 -

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

such maturing Bankers’ Acceptance. Such Canadian Prime Rate Loan shall be
subject to all of the provisions of the Credit Agreement applicable to a
Canadian Prime Rate Loan of that same Tranche under which the maturing Bankers’
Acceptance was incurred (or transferred in accordance with Section 2.07),
including in particular the obligation to pay interest, from and after the
maturity date of such Bankers’ Acceptance. Each Canadian Lender shall be
obligated to make the Canadian Prime Rate Loan contemplated under this paragraph
(i) regardless of whether the conditions precedent to borrowing set forth in the
Credit Agreement are then satisfied.

 

(j) Default. Upon the acceleration of the Canadian Revolving Loans pursuant to
Section 12 of the Credit Agreement (whether by action of the Administrative
Agent or the Required Lenders, or automatically by reason of the occurrence of
an Event of Default referred to in Section 12.05 with respect to any Borrower),
each Canadian Revolving Loan Borrower shall pay to the Administrative Agent in
satisfaction of the obligations of such Canadian Revolving Loan Borrower to the
Canadian Lenders in respect of then-outstanding Bankers’ Acceptances, and there
shall become immediately due and payable, an amount equal to (i) the aggregate
Face Amount of all outstanding Bankers’ Acceptances thereof; and (ii) all unpaid
Acceptance Fees, if any.

 

(k) Circumstances Making Bankers’ Acceptances Unavailable. If the Administrative
Agent shall have reasonably determined (which determination shall be conclusive
and binding upon all parties hereto) and notified the Canadian Revolving Loan
Borrowers and each of the Canadian Lenders that, by reason of circumstances
arising after the Effective Date and affecting the Canadian money market (i)
there is no market for Bankers’ Acceptances or (ii) the demand for Bankers’
Acceptances is insufficient to allow the sale or trading of the Bankers’
Acceptances created and purchased hereunder, then the right of any Canadian
Revolving Loan Borrower to request that any Canadian Lender accept a Bankers’
Acceptance shall be suspended until the Administrative Agent determines that the
circumstances giving rise to such suspension no longer exist and the
Administrative Agent so notifies the Canadian Revolving Loan Borrowers.

 

(l) Indemnification in Respect of Bankers’ Acceptances. In addition to any
liability of any Canadian Revolving Loan Borrower to any Lender or the
Administrative Agent under any other provision hereof, each Canadian Revolving
Loan Borrower shall indemnify each Lender and the Administrative Agent and hold
each of them harmless against any reasonable loss or expense incurred by such
Lender or the Administrative Agent as a result of (x) any failure by such
Canadian Revolving Loan Borrower to fulfill any of its obligations hereunder
including, without limitation, any cost or expense incurred by reason of the
liquidation or re-employment in whole or in part of deposits or other funds
required by any Lender to fund any Bankers’ Acceptance as a result of the
failure of such Canadian Revolving Loan Borrower to make any payment, repayment
or prepayment on the date required hereunder or specified by it in any notice
given hereunder or under the Credit Agreement; or (y) such Canadian Revolving
Loan Borrower’s failure to provide for the payment to the Administrative Agent,
for the account of each of the Canadian Lenders, of the full Face Amount of each
Bankers’ Acceptance on its maturity date except for any failure arising from a
conversion to Canadian Prime Rate Loans in accordance with Section 2.07(b) of
the Credit Agreement.

 

- 5 -

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

(m) Canadian Lenders as Holders. Bankers’ Acceptances purchased by a Canadian
Lender may be held by it for its own account until the maturity date or sold by
it at any time prior to that date in any relevant Canadian market in such
Canadian Lender’s sole discretion.

 

(n) Utilizations under Maximum Canadian Dollar Revolving Loan Sub-Commitment.
For the purposes of the Credit Agreement and this Schedule III, all Bankers’
Acceptances shall be considered a utilization of the Maximum Canadian Dollar
Revolving Loan Sub-Commitments and the Revolving Loan Commitments in an amount
equal to the aggregate Face Amount of such Bankers’ Acceptances.

 

- 6 -

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

Airport Hotels LLC    U.S. Borrower    100    0 Ameliatel    HMC Amelia I LLC
(99% GP), HMC Amelia II LLC (1% GP)    100    0 Calgary Charlotte Holdings
Company    HMC Charlotte (Calgary) Company    100    0 Chesapeake Financial
Services LLC    U.S. Borrower    100    0 Chesapeake Hotel Limited Partnership
   HMC PLP LLC (1% GP), U.S. Borrower 99% LP)    100    0 City Center Hotel
Limited Partnership    U.S. Borrower (97.2% LP), Host La Jolla LLC (1% GP, 1.8%
LP)    100    0 Durbin LLC    U.S. Borrower    100    0 Farrell’s Ice Cream
Parlour Restaurants LLC    U.S. Borrower    100    0 Fernwood Hotel LLC    U.S.
Borrower    100    0 HMC Amelia I LLC    U.S. Borrower    100    0 HMC Amelia II
LLC    U.S. Borrower    100    0 HMC AP Canada Company    HMC AP LP    100    0
HMC AP GP LLC    U.S. Borrower    100    0 HMC AP LP    U.S. Borrower (99.99%
LP), HMC AP GP LLC (.01% GP)    100    0 HMC Atlanta LLC    U.S. Borrower    100
   0 HMC BCR Holdings LLC    U.S. Borrower    100    0 HMC Burlingame LLC    HMC
BCR Holdings LLC    100    0

 

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMC Capital LLC    U.S. Borrower    100    0 HMC Capital Resources LLC    U.S.
Borrower (90% member), HMC Capital LLC (10% member)    100    0 HMC Charlotte
(Calgary) Company    HMC Charlotte LP    100    0 HMC Charlotte GP LLC    U.S.
Borrower (99% non managing; 1% managing)    100    0 HMC Charlotte LP    U.S.
Borrower (99.99% LP), HMC Charlotte GP LLC (.01% GP)    100    0 HMC Chicago LLC
   U.S. Borrower    100    0 HMC Copley LLC    U.S. Borrower    100    0 HMC
Desert LLC    U.S. Borrower    100    0 HMC Diversified American Hotels, L.P.   
HMC Diversified LLC (98% LP, 1% GP), HMC HPP LLC (.99% LP), U.S. Borrower (.1%
LP)    100    0 HMC Diversified LLC    U.S. Borrower    100    0 HMC East Side
II LLC    U.S. Borrower    100    0 HMC Gateway LLC    U.S. Borrower    100    0
HMC Georgia LLC    U.S. Borrower    100    0 HMC Grace (Calgary) Company    HMC
Charlotte (Calgary) Company    100    0 HMC Grand LLC    U.S. Borrower    100   
0 HMC Hanover LLC    U.S. Borrower    100    0 HMC Hartford LLC    U.S. Borrower
   100    0 HMC Headhouse Funding LLC    U.S. Borrower    100    0

 

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMC Host Restaurants LLC    U.S. Borrower    100    0 HMC Hotel Development LLC
   U.S. Borrower    100    0 HMC HPP LLC    U.S. Borrower    100    0 HMC HT LLC
   U.S. Borrower    100    0 HMC IHP Holdings LLC    U.S. Borrower    100    0
HMC JWDC GP LLC    U.S. Borrower    100    0 HMC JWDC LLC    U.S. Borrower   
100    0 HMC Lenox LLC    U.S. Borrower    100    0 HMC Manhattan Beach LLC   
U.S. Borrower    100    0 HMC Market Street LLC    U.S. Borrower    100    0 HMC
Maui LLC    U.S. Borrower    100    0 HMC Mexpark LLC    U.S. Borrower    100   
0 HMC NGL LLC    U.S. Borrower    100    0 HMC OLS I L.P.    HMC OLS I LLC (0.1%
GP), U.S. Borrower (99.9% LP)    100    0 HMC OLS I LLC    U.S. Borrower    100
   0 HMC OLS II L.P.    HMC OLS I L.P. (99.9% LP), HMC OLS I LLC (0.1% GP)   
100    0 HMC OP BN LLC    U.S. Borrower    100    0 HMC Pacific Gateway LLC   
U.S. Borrower    100    0 HMC Palm Desert LLC    U.S. Borrower    100    0

 

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMC Park Ridge LLC    HMC Capital Resources LLC    100    0 HMC PLP LLC    U.S.
Borrower    100    0 HMC Polanco LLC    HMC Mexpark LLC    100    0 HMC Potomac
LLC    U.S. Borrower    100    0 HMC Properties I LLC    U.S. Borrower    100   
0 HMC Properties II LLC    U.S. Borrower    100    0 HMC Property Leasing LLC   
U.S. Borrower    100    0 HMC Retirement Properties L.P.    Durbin LLC (1% GP),
U.S. Borrower (99% LP)    100    0 HMC SBM Two LLC    U.S. Borrower    100    0
HMC Seattle LLC    U.S. Borrower    100    0 HMC SFO LLC    U.S. Borrower    100
   0 HMC Suites Limited Partnership    HMC Suites LLC (1% GP), HMC Capital
Resources LLC (99% LP)    100    0 HMC Suites LLC    HMC Capital Resources LLC
   100    0 HMC Swiss Holdings LLC    U.S. Borrower    100    0 HMC Toronto
Airport GP LLC    U.S. Borrower    100    0 HMC Toronto Airport LP    U.S.
Borrower (99.99%), HMC Toronto Airport GP LLC (.01%)    100    0 HMC Toronto EC
GP LLC    U.S. Borrower    100    0 HMC Toronto EC LP    U.S. Borrower (99.99%),
HMC Toronto EC GP LLC    100    0

 

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMC/Interstate Manhattan Beach, L.P.    HMC Manhattan Beach LLC (1% GP, 74% LP)
U.S. Borrower (25% LP)    100    0 HMH General Partner Holdings LLC    U.S.
Borrower    100    0 HMH Marina LLC    HMC Retirement Properties L.P.    100   
0 HMH Norfolk LLC    U.S. Borrower    100    0 HMH Norfolk, L.P.    HMH Norfolk
LLC (1% GP), U.S. Borrower (99% LP)    100    0 HMH Pentagon LLC    U.S.
Borrower    100    0 HMH Restaurants LLC    U.S. Borrower    100    0 HMH Rivers
LLC    U.S. Borrower    100    0 HMH Rivers, L.P.    HMH Rivers LLC (1% GP),
U.S. Borrower (99% LP)    100    0 HMH WTC LLC    U.S. Borrower    100    0 HMT
Lessee Parent LLC    U.S. Borrower    100    0 Host La Jolla LLC    U.S.
Borrower    100    0 Host of Boston, Ltd.    Airport Hotels LLC (1% GP), U.S.
Borrower (99% LP)    100    0 Host of Houston 1979    Airport Hotels LLC (99%
GP), Host of Houston, Ltd. (1% GP)    100    0 Host of Houston, Ltd.    Airport
Hotels LLC (1% GP), U.S. Borrower (99% LP)    100    0 Host Park Ridge LLC   
HMC Capital Resources LLC    100    0 Ivy Street Hopewell LLC    U.S. Borrower
   100    0 Ivy Street LLC    U.S. Borrower    100    0

 

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

SCHEDULE IV

 

PART I: GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

Market Street Host LLC    U.S. Borrower    100    0 MDSM Finance LLC    HMC Palm
Desert LLC    100    0 New Market Street LP    U.S. Borrower (99.9% LP), HMC
Market Street LLC (0.1% GP)    100    0 Philadelphia Airport Hotel LLC    U.S.
Borrower    100    0 PM Financial LLC    U.S. Borrower    100    0 PM Financial
LP    PM Financial LLC (1% GP), U.S. Borrower (99% LP)    100    0 Potomac Hotel
Limited Partnership    HMC Potomac LLC (98% LP, 1% GP), HMC HPP LLC (.99% LP),
U.S. Borrower (.1% LP)    100    0 PRM LLC    HMC Capital Resources LLC    100
   0 Rockledge Hotel LLC    U.S. Borrower    100    0 S.D. Hotels LLC    U.S.
Borrower    100    0 Santa Clara HMC LLC    U.S. Borrower    100    0 Times
Square GP LLC    U.S. Borrower    100    0 Times Square LLC    Host La Jolla LLC
   100    0 Wellsford-Park Ridge HMC Hotel Limited Partnership    Host Park
Ridge LLC (1% GP, 98% LP), PRM LLC (1% LP)    100    0 YBG Associates LLC    HMC
Capital Resources LLC    100    0

 

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

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

Atlanta II Limited Partnership†

   HMC Atlanta LLC (98% LP, 1% GP), HMC Partnership Properties LLC (1% LP)   
99.99    .01

Beachfront Properties, Inc.**

   Sparky’s Virgin Island, Inc.    100    0

BRE/Swiss L.L.C.*

   HMC Swiss Holdings LLC    100    0

Calgary Charlotte Partnership*

   HMC Charlotte (Calgary) Company (80% GP), HMC Grace (Calgary) Company (20%
GP)    100    0

CB Realty Sales, Inc. **

   Rockledge Hotel Properties, Inc.    100    0

CBM One Holdings LLC**

   Rockledge Hotel Properties, Inc.    100    0

CCC CMBS Corporation**

   HMT Lessee LLC    100    0

CCES Chicago LLC**

   HMT Lessee Sub IV LLC    100    0

CCFH Maui LLC**

   HMT Lessee Sub IV LLC    100    0

CCFS Atlanta LLC**

   HMT Lessee Sub I LLC    100    0

CCFS Philadelphia LLC**

   HMT Lessee Sub IV LLC    100    0

CCHH Atlanta LLC**

   HMT Lessee Sub III LLC    100    0

CCHH Burlingame LLC**

   HMT Lessee Sub IV LLC    100    0

CCHH Cambridge LLC**

   HMT Lessee Sub IV LLC    100    0

CCHH Maui LLC**

   HMT Lessee Sub III LLC    100    0

CCHH Reston LLC**

   HMT Lessee Sub II LLC    100    0

CCHI Singer Island LLC**

   HMT Lessee Sub II LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCMH Atlanta Marquis LLC**

   HMT Lessee Sub (Atlanta) LLC    100    0

CCMH Atlanta NW LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Atlanta Suites LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Bethesda LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Charlotte LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Chicago CY LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Copley LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Coronado LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Costa Mesa Suites LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Dallas/FW LLC**

   HMT Lessee Sub II LLC    100    0

CCMH DC LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Deerfield Suites LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Denver SE LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Denver Tech LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Denver West LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Diversified LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Downer’s Grove Suites LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Dulles AP LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Dulles Suites LLC**

   HMT Lessee Sub III LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCMH Farmington LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Fin Center LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Fisherman’s Wharf LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Ft. Lauderdale LLC**

   HMT Lessee Sub Ii LLC    100    0

CCMH Gaithersburg LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Hanover LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Houston AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Houston Galleria LLC**

   HMT Lessee Sub I LLC    100    0

CCMH IHP LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Jacksonville LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Kansas City AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Key Bridge LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Lenox LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Manhattan Beach LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Marina LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH McDowell LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Memphis LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Metro Center LLC**

   HMT Lessee Sub II LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

  

% Owned by
U.S

Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCMH Miami AP LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Minneapolis LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Moscone LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Nashua LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Newark LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Newport Beach LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Newport Beach Suites LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Newton LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Norcross LC**

   HMT Lessee Sub I LLC    100    0

CCMH Norfolk LLC**

   HMT Lessee Sub II LLC    100    0

CCMH O’Hare AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH O’Hare Suites LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Oklahoma City LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Ontario AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Orlando LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Palm Beach LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Palm Desert LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Park Ridge LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Pentagon RI LLC**

   HMT Lessee Sub I LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

  

% Owned by
U.S.

Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCMH Perimeter LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Philadelphia AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Philadelphia Mkt LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Plaza San Antonio LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Portland LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Potomac LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Properties II LLC**

   HMT Lessee Sub (Properties II) LLC    100    0

CCMH Quorum LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Raleigh LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Riverwalk LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Rocky Hill LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Romulus LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Salt Lake LLC**

   HMT Lessee Sub I LLC    100    0

CCMH San Diego LLC**

   HMT Lessee Sub (SDM Hotel) LLC    100    0

CCMH San Fran AP LLC**

   HMT Lessee Sub III LLC    100    0

CCMH Santa Clara LLC**

   HMT Lessee Sub (Santa Clara) LLC    100    0

CCMH Scottsdale Suites LLC**

   HMT Lessee Sub III LLC    100    0

CCMH South Bend LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Tampa AP LLC**

   HMT Lessee Sub I LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCMH Tampa Waterside LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Tampa Westshore LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Times Square LLC**

   HMT Lessee Sub I LLC    100    0

CCMH Torrance LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Waterford LLC**

   HMT Lessee Sub II LLC    100    0

CCMH Westfields LLC**

   HMT Lessee Sub IV LLC    100    0

CCMH Williamsburg LLC**

   HMT Lessee Sub II LLC    100    0

CCMH World Trade Ctr LLC**

   HMT Lessee Sub II LLC    100    0

CCRC Amelia Island LLC**

   HMT Lessee Sub II LLC    100    0

CCRC Atlanta LLC**

   HMT Lessee Sub II LLC    100    0

CCRC Buckhead/Naples LLC**

   HMT Lessee Sub IV LLC    100    0

CCRC Dearborn LLC**

   HMT Lessee Sub II LLC    100    0

CCRC Marina LLC**

   HMT Lessee Sub III LLC    100    0

CCRC Naples Golf LLC**

   HMT Lessee Sub IV LLC    100    0

CCRC Phoenix LLC**

   HMT Lessee Sub III LLC    100    0

CCRC San Francisco LLC**

   HMT Lessee Sub III LLC    100    0

CCRC Tysons LLC**

   HMT Lessee Sub IV LLC    100    0

CCSH Atlanta LLC**

   HMT Lessee Sub IV LLC    100    0

CCSH Boston LLC**

   HMT Lessee Sub I LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

  % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

CCSH Chicago LLC**

   HMT Lessee Sub III LLC    100   0

CCSH New York LLC**

   HMT Lessee Sub III LLC    100   0

CHLP Finance LP†

   Chesapeake Financial Services LLC (1% GP, 94% LP), Crestline Capital
Corporation (unaffiliated) (5% LP)    95   0

CLDH Meadowvale Inc.**

   HMT Lessee Sub II LLC    100   0

CLMH Airport Inc. **

   HMT Lessee Sub I LLC    100   0

CLMH Calgary Inc. **

   HMT Lessee Sub I LLC    100   0

CLMH Eaton Centre Inc.**

   HMT Lessee Sub I LLC    100   0

DS Hotel LLC†

   HMC DSM LLC    99.99   .01

East Side Hotel Associates, L.P.†

   HMC East Side II LLC (99% LP), HMC East Side LLC (1% GP)    99.99   .01

Elcrisa S.A. De C.V. †

   Marriott Mexico City Partnership, G.P(65% Common), Hotelera del Polanco S.A.
De C.V. (unaffliliated) (35% Common), Aeropuerto Shareholder, Inc.
(unaffiliated) (45.1% Preferred), HMC Airport, Inc. (54.9% Preferred)    34.06%
Common,
54.9%
Preferred   0

Fernwood Hotel Assets, Inc. **

   Fernwood Hotel LLC    100   0

Fernwood Atlanta Corporation**

   Fernwood Hotel Assets, Inc.    100   0

Fernwood Holdings LLC**

   Fernwood Hotel Assets, Inc.    100   0

G.L. Insurance Corporation**

   Rockledge Hotel Properties, Inc.    100   0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMA Realty Limited Partnership†

   Ivy Street Hotel Limited Partnership (99%), HMA-GP LLC (1% GP)    99.982   
.018

HMA-GP LLC†

   Ivy Street Hotel Limited Partnership (99%), HMC Atlanta Marquis, Inc. (1%)   
98.992    1.008

HMC Airport, Inc. **

   Rockledge Hotel Properties, Inc.    100    0

HMC Burlingame Hotel LLC†

   HTKG Development Associates Limited Partnership    99.99    .01

HMC Burlingame II LLC†

   HMC Burlingame LLC (99% member), Holdings (1% member)    99    1

HMC Cambridge LLC*

   HMC BCR Holdings LLC    100    0

HMC DSM LLC†

   Host DMS Limited Partnership    99.99    .01

HMC Duna, Inc. **

   Rockledge Hotel Properties, Inc.    100    0

HMC East Side LLC†

   HMC East Side II LLC (99% member), Hanover Hotel Acquisition Corp. (1%
member)    99    1

HMC Hotel Properties II Limited Partnership†

   HMC Properties II LLC (99% LP), HMC MHP II LLC (1% GP)    99.99    .01

HMC Hotel Properties Limited Partnership†

   HMC Properties I LLC (98% LP, 1% GP), HMC Partnership Properties LLC (1% LP)
   99.99    .01

HMC McDowell LLC*

   HMC McDowell Mountains LLC    100    0

HMC McDowell Mountains LLC*

   U.S. Borrower    100    0

HMC MHP II LLC†

   HMC Properties II LLC (99%), HMC MHP II, Inc. (1%)    99    1

HMC Naples Golf, Inc.**

   Rockledge Hotel Properties, Inc.    100    0

HMC Park Ridge II LLC†

   HMC Park Ridge LLC (99% member), Holdings (1% member)    99    1

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMC Park Ridge LP†

   HMC Park Ridge LLC (98% LP, 1% GP), HMC Park Ridge II LLC (1% LP)    99.99   
.01

HMC Partnership Properties LLC†

   HMC HPP LLC (99% managing member), Holdings (1% non-managing member)    99   
1

HMC Reston LLC*

   HMC BCR Holdings LLC    100    0

HMC Swiss La Fayette LLC††

   BRE/Swiss L.L.C.    100    0

HMC Times Square Hotel LLC†

   Times Square HMC Hotel, L.P.    99.99939    .00061

HMC Times Square Partner LLC†

   U.S. Borrower (99%), MHP Acquisition Corp. (1%)    99    1

HMC Toronto Air Company*

   HMC Toronto Airport LP    100    0

HMC Toronto EC Company*

   HMC Toronto EC LP    99.99    .01

HMC Waterford LLC ††

   U.S. Borrower    100    0

HMC/Interstate Waterford LLC ††

   HMC Waterford LLC (1% GP, 74% LP), U.S. Borrower (25% LP)    100    0

HMC/RGI Hartford, L.P.*

   U.S. Borrower (99% LP), HMC Hartford LLC (1% GP)    100    0

HMH HPT CBM LLC*

   U.S. Borrower    100    0

HMH HPT RIBM LLC*

   U.S. Borrower    100    0

HMH Realty Company, Inc.**

   Rockledge Hotel Properties, Inc.    100    0

HMT Lessee LLC**

   HMT Lessee Parent LLC    100    0

HMT Lessee Sub (Atlanta) LLC**

   HMT Lessee Sub III LLC    100    0

 

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

 

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

  

% Owned by
U.S.
Borrower

(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly or
directly)
other than
through U.S.
Borrower

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

HMT Lessee Sub (Palm Desert) LLC**

   HMT Lessee Sub III LLC    100    0

HMT Lessee Sub (Properties) LLC**

   HMT Lessee Sub IV LLC    100    0

HMT Lessee Sub (Santa Clara) LLC**

   HMT Lessee Sub IV LLC    100    0

HMT Lessee Sub (SDM Hotel) LLC**

   HMT Lessee Sub I LLC    100    0

HMT Lessee Sub I LLC**

   HMT Lessee LLC    100    0

HMT Lessee Sub II LLC**

   HMT Lessee LLC    100    0

HMT Lessee Sub III LLC**

   HMT Lessee LLC    100    0

HMT Lessee Sub IV LLC**

   HMT Lessee LLC    100    0

HMT SPE (Atlanta) Corporation**

   HMT Lessee LLC    100    0

HMT SPE (Palm Desert) Corporation**

   HMT Lessee LLC    100    0

HMT SPE (Properties II) Corporation**

   HMT Lessee LLC    100    0

HMT SPE (Santa Clara) Corporation**

   HMT Lessee LLC    100    0

Hopewell Associates L.P. †

   U.S. Borrower (99.99% LP), HMC Partnership Properties LLC (0.01% GP)    99.99
   .0001

Host DSM Limited Partnership†

   HMC Desert LLC (98% LP, 1% GP), HMC Partnership Properties LLC (1% LP)   
99.99    .01

Host Hanover Limited Partnership†

   HMC Hanover LLC (98% LP, 1% GP), HMC Partnership Properties LLC (1% LP)   
99.99    .01

Hot Shoppes, Inc. **

   Rockledge Hotel Properties, Inc.    100    0

 

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

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned
by U.S.
Borrower
(indirectly
or
directly)

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

   % Owned by
Holdings
(indirectly
or directly)
other than
through U.S.
Borrower

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

HTKG Development Associates Limited Partnership†    HMC Burlingame LLC (1% GP),
HMC BCR Holdings LLC (98% LP), HMC Burlingame II LLC (1% LP)    99.99    .01 IHP
Holdings Partnership, L.P.†    HMH General Partner Holdings LLC (1.00544% GP),
HMC IHP Holding LLC (96.52308% LP), DS Glory USA Inc. (unaffiliated) (0.6704%
LP), Ungen Enterprise Co., Inc. (unaffiliated) (0.6704% LP), Konishi Realty Inc.
(unaffiliated) (0.44933% LP), Miki & Miho Associates USA, Inc. (unaffiliated)
(0.6704% LP),    47.7955    0 Ivy Street Hotel Limited Partnership†    Atlanta
II Limited Partnership (80% GP), Ivy Street LLC (14.9% LP), Hopewell, Ltd. (5.1%
LP)    99.992    .008 JWDC Limited Partnership†    HMC JWDC GP LLC (1.8324% GP),
HMC JWDC LLC (89.7875 % LP), Rockledge Square 254 LLC (not look through)
(8.3801% LP)    50    0 Lauderdale Beach Association†    HMC Hotel Properties
Limited Partnership (50.5% GP), RV/C Association (unaffiliated) (49.5% GP)   
50.495    .005 Marriott Mexico City Partnership    HMC Airport, Inc. (52.4% GP)
Aeropuerto Shareholder, Inc. (unaffiliated) (47.6%)    52.4    0 Mutual Benefit
Chicago Suite Hotel Partners, L.P.†    HMC Chicago LLC (98% LP, 1% GP), HMC
Partnership Properties LLC (1% LP)    99.99    .01 Pacific Gateway, Ltd.†    HMC
Pacific Gateway LLC (1.173% LP) HMC Gateway LLC (79.025 LP), S.D. Hotels LLC
(9.77% GP), Torrey Hotel Enterprises, Ltd. (unaffiliated) (2.931% LP),
Interhotel Company, Ltd. (unaffiliated) (7.1%), Douglas F. Manchester
(unaffiliated) (.001% LP)    51    0

 

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

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly or
directly)

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

   % Owned by
Holdings
(indirectly
or directly)
other than
through U.S.
Borrower

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

Philadelphia Airport Hotel Limited Partnership†    Philadelphia Airport Hotel
LLC (0.1% GP), U.S. Borrower (88.9% capital, 98.9% profits LP), Philadelphia
Airport Hotel Corporation (1% profit, 11% capital LP)    89    11 Philadelphia
Market Street HMC Hotel Limited Partnership†    New Market Street LP (0.1% GP,
62.9% capital, 72.9% profits Class B LP and 12.75% Class C LP), U.S. Borrower
(11% Class B LP), Philadelphia Market Street Hotel Corporation (1% profit, 11%
capital Class B LP), Synterra Partners, L.P. (unaffiliated) (2.25% Class A LP)
   86.75    11 Philadelphia Market Street Marriott Hotel II Limited Partnership†
   Market Street Host LLC (.5% GP), Marriott Market Street Hotel, Inc.
(unaffiliated) (99% LP), Philadelphia Market Street HMC Hotel Limited
Partnership (.5% LP)    1    0 RIBM One LLC**    Rockledge Hotel Properties,
Inc. (99% member), U.S. Borrower (1%)    100    0 RIBM Two LLC**    Rockledge
Hotel Properties, Inc. (98%), Rockledge RIBM Two Corporation (1%), U.S. Borrower
(1%)    100    0 Rockledge Bickford’s Family Fare, Inc. **    Rockledge Hotel
Properties, Inc.    100    0 Rockledge CBM Investor I, Inc. **    Rockledge
Hotel Properties, Inc.    100    0 Rockledge CBM Investor II LLC**    Rockledge
Hotel Properties, Inc.    100    0 Rockledge CBM One Corporation**    Rockledge
Hotel Properties, Inc.    100    0 Rockledge FIBM One Corporation**    Rockledge
Hotel Properties, Inc.    100    0 Rockledge Hanover LLC**    Rockledge Hotel
Properties, Inc.    100    0 Rockledge HMC BN LLC**    Rockledge Hotel
Properties, Inc.    100    0

 

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

PART II: NON-GUARANTOR SUBSIDIARIES

 

Entity

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

  

Direct Owner(s)

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

   % Owned by
U.S.
Borrower
(indirectly
or directly)

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

   % Owned by
Holdings
(indirectly
or directly)
other than
through U.S.
Borrower

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

Rockledge Hotel Properties, Inc**    Rockledge Hotel LLC    100    0 Rockledge
Insurance Company (Cayman) Ltd.**    U.S Borrower    100    0 Rockledge
Manhattan Beach LLC**    Rockledge Hotel Properties, Inc.    100    0 Rockledge
Minnesota LLC**    Rockledge Hotel Properties, Inc.    100    0 Rockledge NY
Times Square LLC**    Rockledge Hotel Properties, Inc.    100    0 Rockledge
Potomac LLC**    Rockledge Hotel Properties, Inc.    100    0 Rockledge RIBM Two
Corporation**    Rockledge Hotel Properties, Inc.    100    0 Rockledge
Riverwalk LLC**    Rockledge Hotel Properties, Inc.    100    0 Rockledge Square
254 LLC**    Rockledge Hotel Properties, Inc.    100    0 Santa Clara Host Hotel
Limited Partnership†    HMC MHP II LLC (1% GP), Marriott Hotel Properties II
Limited Partnership (50% LP), Santa Clara HMC LLC (49% LP)    99.985    .015
Sparky’s Virgin Island, Inc. **    HMH Realty Company, Inc.    100    0
Timeport, L.P.†    HMC Times Square Partner LLC (1% GP), Times Square LLC (99%
LP)    99.99    .01 Times Square HMC Hotel, L.P.†    Times Square LLC (91.8%
LP), Timeport, Ltd. (2.5% LP), Timewell Group, Ltd. (3.6% LP), Times Square GP
LLC (2.1% GP)    99.99939    .00061 Timewell Group, Ltd.†    HMC Times Square
Partner LLC (1% GP), Times Square LLC (99% LP)    99.99    .01

 

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

Notes:

 

* Entities indicated with an asterisk cannot be guarantors of the Credit
Facility due to contractual restrictions.

 

† Entities indicated with a single dagger cannot be guarantors of the Credit
Facility because they are not Wholly-Owned Subsidiaries that are Look-Through
Subsidiaries.

 

†† Entities indicated with a double dagger cannot be guarantors of the Credit
Facility because their only assets consist of $5,000 or less in cash.

 

** Entities indicated with a double asterisk cannot be guarantors of the Credit
Facility because they are a Taxable REIT Subsidiary or a subsidiary of a Taxable
REIT Subsidiary.

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

Airport Hotels LLC    U.S. Borrower    Pledged     

Ameliatel, a Florida GP

(Florida)

  

HMC Amelia I LLC

HMC Amelia II LLC

   Pledged      Atlanta II Limited Partnership    HMC Atlanta LLC (98% LP, 1%
GP), HMC Partnership Properties LLC(1% LP)    Not Pledged    Not look-through
Beachfront Properties, Inc.    Sparky’s Virgin Island, Inc.    Not Pledged   
Not look-through (TRS) BRE/Swiss L.L.C.    HMC Swiss Holdings LLC    Not Pledged
   Indebtedness

Calgary Charlotte Partnership

(Nova Scotia)

   HMC Charlotte (Calgary) Company (80% GP), HMC Grace (Calgary) Company (20%
GP)    Not Pledged    Contractual Restrictions CB Realty Sales, Inc.   
Rockledge Hotel Properties, Inc.    Not Pledged    Not look-through (TRS) CBM
One Holdings LLC    Rockledge Hotel Properties, Inc.    Not Pledged    Not
look-through (TRS) CCC CMBS Corporation    HMT Lessee LLC    Not Pledged    Not
look -through (TRS) CCES Chicago LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCFH Maui LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCFS Atlanta LLC    HMT Lessee Sub I LLC    Not Pledged
   Not look- through (TRS) CCFS Philadelphia LLC    HMT Lessee Sub IV LLC    Not
Pledged    Not look-through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

CCHH Atlanta LLC    HMT Lessee Sub III LLC    Not Pledged    Not look -through
(TRS) CCHH Burlingame LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCHH Cambridge LLC    HMT Lessee Sub IV LLC    Not
Pledged    Not look-through (TRS) CCHH Maui LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-through (TRS) CCHH Reston LLC    HMT Lessee Sub II LLC   
Not Pledged    Not look-through (TRS) CCHI Singer Island LLC    HMT Lessee Sub
II LLC    Not Pledged    Not look-through (TRS) CCMH Atlanta Marquis LLC    HMT
Lessee Sub (Atlanta) LLC    Not Pledged    Not look-through (TRS) CCMH Atlanta
NW LLC    HMT Lessee Sub IV LLC    Not Pledged    Not look-through (TRS) CCMH
Atlanta Suites LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through
(TRS) CCMH Bethesda LLC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Charlotte LLC    HMT Lessee Sub III LLC    Not Pledged
   Not look-through (TRS) CCMH Chicago CY LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-through (TRS) CCMH Copley LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-through (TRS) CCMH Coronado LLC    HMT Lessee Sub II LLC   
Not Pledged    Not look-through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason

Entity Not
Pledged

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

CCMH Costa Mesa Suites LLC    HMT Lessee Sub III LLC    Not Pledged    Not
look-through (TRS) CCMH Dallas/FW LLC    HMT Lessee Sub II LLC    Not Pledged   
Not look-through (TRS) CCMH DC LLC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Deerfield Suites LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-through (TRS) CCMH Denver SE LLC    HMT Lessee Sub III LLC
   Not Pledged    Not look-through (TRS) CCMH Denver Tech LLC    HMT Lessee Sub
IV LLC    Not Pledged    Not look-through (TRS) CCMH Denver West LLC    HMT
Lessee Sub II LLC    Not Pledged    Not look-through (TRS) CCMH Diversified LLC
   HMT Lessee Sub IV LLC    Not Pledged    Not look-through (TRS) CCMH Downer’s
Grove Suites LLC    HMT Lessee Sub IV LLC    Not Pledged    Not look-through
(TRS) CCMH Dulles AP LLC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Dulles Suites LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-through (TRS) CCMH Farmington LLC    HMT Lessee Sub III LLC
   Not Pledged    Not look-through (TRS) CCMH Fin Center LLC    HMT Lessee Sub I
LLC    Not Pledged    Not look-through (TRS) CCMH Fisherman’s Wharf LLC    HMT
Lessee Sub III LLC    Not Pledged    Not look-through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

CCMH Ft. Lauderdale LLC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Gaithersburg LLC    HMT Lessee Sub I LLC    Not Pledged
   Not look-through (TRS) CCMH Hanover LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-through (TRS) CCMH Houston AP LLC    HMT Lessee Sub III LLC
   Not Pledged    Not look-through (TRS) CCMH Houston Galleria LLC    HMT Lessee
Sub I LLC    Not Pledged    Not look-through (TRS) CCMH IHP LLC    HMT Lessee
Sub I LLC    Not Pledged    Not look-through (TRS) CCMH Jacksonville LLC    HMT
Lessee Sub I LLC    Not Pledged    Not look-through (TRS) CCMH Kansas City AP
LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through (TRS) CCMH Key
Bridge LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through (TRS)
CCMH Lenox LLC    HMT Lessee Sub II LLC    Not Pledged    Not look-through (TRS)
CCMH Manhattan Beach LLC    HMT Lessee Sub IV LLC    Not Pledged    Not
look-through (TRS) CCMH Marina LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCMH McDowell LLC    HMT Lessee Sub IV LLC    Not Pledged
   Not look-through (TRS) CCMH Memphis LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS
SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

CCMH Metro Center LLC    HMT Lessee Sub II LLC    Not Pledged    Not
look-through (TRS) CCMH Miami AP LLC    HMT Lessee Sub II LLC    Not Pledged   
Not look-through (TRS) CCMH Minneapolis LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-through (TRS) CCMH Moscone LLC    HMT Lessee Sub I LLC   
Not Pledged    Not look-through (TRS) CCMH Nashua LLC    HMT Lessee Sub II LLC
   Not Pledged    Not look-through (TRS) CCMH Newark LLC    HMT Lessee Sub II
LLC    Not Pledged    Not look-through (TRS) CCMH Newport Beach LLC    HMT
Lessee Sub III LLC    Not Pledged    Not look-through (TRS) CCMH Newport Beach
Suites LLC    HMT Lessee Sub II LLC    Not Pledged    Not look-through (TRS)
CCMH Newton LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through
(TRS) CCMH Norcross LC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Norfolk LLC    HMT Lessee Sub II LLC    Not Pledged   
Not look-through (TRS) CCMH O’Hare AP LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-through (TRS) CCMH O’Hare Suites LLC    HMT Lessee Sub I LLC
   Not Pledged    Not look-through (TRS) CCMH Oklahoma City LLC    HMT Lessee
Sub I LLC    Not Pledged    Not look-through (TRS)

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST LISTED ON PART I
AND PART II OF THIS
SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

   Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

CCMH Ontario AP LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through
(TRS) CCMH Orlando LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCMH Palm Beach LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-through (TRS) CCMH Palm Desert LLC    HMT Lessee Sub III LLC
   Not Pledged    Not look-through (TRS) CCMH Park Ridge LLC    HMT Lessee Sub I
LLC    Not Pledged    Not look-through (TRS) CCMH Pentagon RI LLC    HMT Lessee
Sub I LLC    Not Pledged    Not look-through (TRS) CCMH Perimeter LLC    HMT
Lessee Sub IV LLC    Not Pledged    Not look-through (TRS) CCMH Philadelphia AP
LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-through (TRS) CCMH
Philadelphia Mkt LLC    HMT Lessee Sub II LLC    Not Pledged    Not look-through
(TRS) CCMH Plaza San Antonio LLC    HMT Lessee Sub I LLC    Not Pledged    Not
look-through (TRS) CCMH Portland LLC    HMT Lessee Sub IV LLC    Not Pledged   
Not look-through (TRS) CCMH Potomac LLC    HMT Lessee Sub I LLC    Not Pledged
   Not look-through (TRS) CCMH Properties II LLC    HMT Lessee Sub (Properties
II) LLC    Not Pledged    Not look-through (TRS) CCMH Quorum LLC    HMT Lessee
Sub II LLC    Not Pledged    Not look-through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason Entity
Not Pledged

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

CCMH Raleigh LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH Riverwalk LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCMH Rocky Hill LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH Romulus LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCMH Salt Lake LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH San Diego LLC

  

HMT Lessee Sub (SDM Hotel) LLC

   Not Pledged    Not look-through (TRS)

CCMH San Fran AP LLC

  

HMT Lessee Sub III LLC

   Not Pledged    Not look-through (TRS)

CCMH Santa Clara LLC

  

HMT Lessee Sub (Santa Clara) LLC

   Not Pledged    Not look-through (TRS)

CCMH Scottsdale Suites LLC

  

HMT Lessee Sub III LLC

   Not Pledged    Not look-through (TRS)

CCMH South Bend LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCMH Tampa AP LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH Tampa Waterside LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH Tampa Westshore LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

CCMH Times Square LLC

  

HMT Lessee Sub I LLC

   Not Pledged    Not look-through (TRS)

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not
Pledged

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

CCMH Torrance LLC

  

HMT Lessee Sub IV LLC

   Not Pledged    Not look-through (TRS)

CCMH Waterford LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCMH Westfields LLC

  

HMT Lessee Sub IV LLC

   Not Pledged    Not look-through (TRS)

CCMH Williamsburg LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCMH World Trade Ctr LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCRC Amelia Island LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCRC Atlanta LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCRC Buckhead/Naples LLC

  

HMT Lessee Sub IV LLC

   Not Pledged    Not look-through (TRS)

CCRC Dearborn LLC

  

HMT Lessee Sub II LLC

   Not Pledged    Not look-through (TRS)

CCRC Marina LLC

  

HMT Lessee Sub III LLC

   Not Pledged    Not look-through (TRS)

CCRC Naples Golf LLC

  

HMT Lessee Sub IV LLC

   Not Pledged    Not look-through (TRS)

CCRC Phoenix LLC

  

HMT Lessee Sub III LLC

   Not Pledged    Not look-through (TRS)

CCRC San Francisco LLC

  

HMT Lessee Sub III LLC

   Not Pledged    Not look-through (TRS)

CCRC Tysons LLC

  

HMT Lessee Sub IV LLC

   Not Pledged    Not look-through (TRS)

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

CCSH Atlanta LLC

   HMT Lessee Sub IV LLC    Not Pledged    Not look-through (TRS)

CCSH Boston LLC

   HMT Lessee Sub I LLC    Not Pledged    Not look-through (TRS)

CCSH Chicago LLC

   HMT Lessee Sub III LLC    Not Pledged    Not look-through (TRS)

CCSH New York LLC

   HMT Lessee Sub III LLC    Not Pledged    Not look-through (TRS)

Chesapeake Financial Services LLC

   U.S. Borrower    Pledged     

Chesapeake Hotel Limited Partnership

  

HMC PLP LLC

 

U.S. Borrower

   Pledged     

CHLP Finance LP

   Chesapeake Financial Services LLC (1% GP, 94% LP), Crestline Capital
Corporation (unaffiliated) (5% LP)    Not Pledged    Not look-through

City Center Hotel Limited Partnership

(Minnesota)

  

U.S. Borrower

 

Host La Jolla LLC

   Pledged     

CLDH Meadowvale Inc.

   HMT Lessee Sub II LLC    Not Pledged    Not look-through (TRS)

CLMH Airport Inc.

   HMT Lessee Sub I LLC    Not Pledged    Not look-through (TRS)

CLMH Calgary Inc.

   HMT Lessee Sub I LLC    Not Pledged    Not look-through (TRS)

CLMH Eaton Centre Inc.

   HMT Lessee Sub I LLC    Not Pledged    Not look-through (TRS)

DS Hotel LLC

   HMC DSM LLC    Not Pledged    Not look-through

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

Durbin LLC

   U.S. Borrower    Pledged     

East Side Hotel Associates, L.P.

   HMC East Side II LLC (99% LP), HMC East Side LLC (1% GP)    Not Pledged   
Not look-through

Elcrisa S.A. De C.V.

   Marriott Mexico City Partnership, G.P(65% Common), Hotelera del Polanco S.A.
De C.V. (unaffliliated) (35% Common), Aeropuerto Shareholder, Inc.
(unaffiliated) (45.1% Preferred), HMC Airport, Inc. (54.9% Preferred)    Not
Pledged    Partnership with third party partners

Farrell’s Ice Cream Parlour

Restaurants LLC

  

U.S. Borrower

   Pledged     

Fernwood Hotel Assets, Inc.

  

Fernwood Hotel LLC

   Not Pledged    Not look-through (TRS)

Fernwood Atlanta Corporation

  

Fernwood Hotel Assets, Inc.

   Not Pledged    Not look-through (TRS)

Fernwood Holdings LLC

  

Fernwood Hotels Assets, Inc.

   Not Pledged    Not look-through (TRS)

Fernwood Hotel LLC

  

U.S. Borrower

   Pledged     

G.L. Insurance Corporation

  

Rockledge Hotel Properties, Inc.

   Not Pledged    Not look-through (TRS)

HMA Realty Limited Partnership

  

Ivy Street Hotel Limited Partnership

(99%), HMA-GP LLC (1% GP)

   Not Pledged    Not look-through

HMA-GP LLC

   Ivy Street Hotel Limited Partnership (99%), HMC Atlanta Marquis, Inc. (1%)   
Not Pledged    Not look-through

HMC Airport, Inc.

  

Rockledge Hotel Properties, Inc.

   Not Pledged    Not look-through (TRS)

HMC Amelia I LLC

  

U.S. Borrower

   Pledged     

HMC Amelia II LLC

  

U.S. Borrower

   Pledged     

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC AP Canada Company (Nova Scotia)

   HMC AP LP    Pledged     

HMC AP GP LLC

  

U.S. Borrower

   Pledged     

HMC AP LP

  

HMC AP GP LLC (.01% GP)

 

U.S. Borrower (99.99% LP)

   Pledged     

HMC Atlanta LLC

  

U.S. Borrower

   Pledged     

HMC BCR Holdings LLC

  

U.S. Borrower

   Not Pledged    Indebtedness

HMC Burlingame Hotel LLC

   HTKG Development Associates Limited Partnership    Not Pledged    Not
look-through

HMC Burlingame II LLC

  

HMC Burlingame LLC (99% member),

Holdings (1% member)

   Not Pledged    Not look-through

HMC Burlingame LLC

  

HMC BCR Holdings LLC

   Not Pledged    Indebtedness

HMC Cambridge LLC

  

HMC BCR Holdings LLC

   Not Pledged    Indebtedness

HMC Capital LLC

  

U.S. Borrower

   Pledged     

HMC Capital Resources LLC

  

U.S. Borrower

HMC Capital LLC

   Pledged     

HMC Charlotte (Calgary) Company

(Nova Scotia)

  

HMC Charlotte LP

   Not Pledged    Contractual Restrictions

HMC Charlotte LP

  

HMC Charlotte GP LLC

   Not Pledged    Contractual Restrictions

HMC Chicago LLC

  

U.S. Borrower

   Pledged     

HMC Copley LLC

  

U.S. Borrower

   Pledged     

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC Desert LLC

   U.S. Borrower    Pledged     

HMC Diversified American Hotels, L.P.

  

HMC Diversified LLC

 

HMC HPP LLC

 

U.S. Borrower

   Pledged     

HMC Diversified LLC

   U.S. Borrower    Pledged     

HMC DSM LLC

   Host DMS Limited Partnership    Not Pledged    Not look-through

HMC Duna, Inc.

   Rockledge Hotel Properties, Inc.    Not Pledged    Not look-through (TRS)

HMC East Side II LLC

   U.S. Borrower    Pledged     

HMC East Side LLC

  

HMC East Side II LLC (99% member),

Hanover Hotel Acquisition Corp. (1% member)

   Not Pledged    Not look-through

HMC Gateway LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Georgia LLC

   U.S. Borrower    Pledged     

HMC Grace (Calgary) Company

(Nova Scotia)

   HMC Charlotte Calgary Company    Not Pledged    Contractual Restrictions

HMC Grand LLC

   U.S. Borrower    Pledged     

HMC Hanover LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Hartford LLC

   U.S. Borrower    Pledged     

HMC Headhouse Funding LLC

   U.S. Borrower    Pledged     

HMC Host Restaurants LLC

   U.S. Borrower    Pledged     

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC Hotel Development LLC

   U.S. Borrower    Pledged     

HMC Hotel Properties II Limited Partnership

  

HMC Properties II LLC (99% LP), HMC

MHP II LLC (1% GP)

   Not Pledged    Not look-through

HMC Hotel Properties Limited Partnership

   HMC Properties I LLC (98% LP, 1% GP), HMC Partnership Properties LLC (1% LP)
   Not Pledged    Not look-through

HMC HPP LLC

   U.S. Borrower    Pledged     

HMC HT LLC

   U.S. Borrower    Pledged     

HMC IHP Holdings LLC

   U.S. Borrower    Pledged     

HMC JWDC GP LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC JWDC LLC

   U.S. Borrower    Pledged     

HMC Lenox LLC

   U.S. Borrower    Pledged     

HMC Manhattan Beach LLC

   U.S. Borrower    Pledged     

HMC Market Street LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Maui LLC

   U.S. Borrower    Pledged     

HMC McDowell LLC

   HMC McDowell Mountains LLC    Not Pledged    Indebtedness

HMC McDowell Mountains LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Mexpark LLC

   U.S. Borrower    Pledged     

HMC MHP II LLC

  

HMC Properties II LLC (99%), HMC

MHP II, Inc. (1%)

   Not Pledged    Not look-through

HMC Naples Golf, Inc.

   Rockledge Hotel Properties, Inc.    Not Pledged    Not look-through (TRS)

HMC NGL LLC

   U.S. Borrower    Pledged     

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC OLS I L.P.

  

HMC OLS I LLC

 

U.S. Borrower

   Pledged     

HMC OLS I LLC

   U.S. Borrower    Pledged     

HMC OLS II L.P.

  

HMC OLS I L.P.

 

HMC OLS I LLC

   Pledged     

HMC OP BN LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Pacific Gateway LLC

   U.S. Borrower    Not Pledged    Indebtedness

HMC Palm Desert LLC

   U.S. Borrower    Pledged     

HMC Park Ridge II LLC

  

HMC Park Ridge LLC (99% member),

Holdings (1% member)

   Not Pledged    Not look-through

HMC Park Ridge LLC

   HMC Capital Resources LLC    Pledged     

HMC Park Ridge LP

  

HMC Park Ridge LLC (98% LP, 1% GP),

HMC Park Ridge II LLC (1% LP)

   Not Pledged    Not look-through

HMC Partnership Properties LLC

   HMC HPP LLC (99% managing member), Holdings (1% non-managing member)    Not
Pledged    Not look-through

HMC PLP LLC

   U.S. Borrower    Pledged     

HMC Polanco LLC

   HMC Mexpark LLC    Pledged     

HMC Potomac LLC

   U.S. Borrower    Pledged     

HMC Properties I LLC

   U.S. Borrower    Pledged     

HMC Properties II LLC

   U.S. Borrower    Pledged     

HMC Property Leasing LLC

   U.S. Borrower    Pledged     

HMC Reston LLC

   HMC BCR Holdings LLC    Not Pledged    Indebtedness

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC Retirement Properties L.P.

  

U.S. Borrower

 

Durbin LLC

   Pledged     

HMC SBM Two LLC

   U.S. Borrower    Pledged     

HMC Seattle LLC

   U.S. Borrower    Pledged     

HMC SFO LLC

   U.S. Borrower    Pledged     

HMC Suites Limited Partnership

  

HMC Suites LLC

 

HMC Capital Resources LLC

   Pledged     

HMC Suites LLC

   HMC Capital Resources LLC    Pledged     

HMC Swiss Holdings LLC

   U.S. Borrower    Pledged     

HMC Swiss La Fayette LLC

   BRE/Swiss L.L.C.    Not Pledged    Parent cannot be Pledgor

HMC Times Square Hotel LLC

   Times Square HMC Hotel, L.P.    Not Pledged    Not look-through

HMC Times Square Partner LLC

  

U.S. Borrower (99%), MHP Acquisition

Corp. (1%)

   Not Pledged    Contractual Restrictions

HMC Toronto Air Company

(Nova Scotia)

   HMC Toronto Airport LP    Not Pledged    Contractual Restrictions

HMC Toronto Airport GP LLC

   HMC Toronto Airport LP    Not Pledged    Contractual Restrictions

HMC Toronto Airport LP

   HMC Toronto Airport GP LLC (.01% GP), U.S. Borrower. (99.99% LP)    Not
Pledged    Contractual Restrictions

HMC Toronto EC Company

 

(Nova Scotia)

   HMC Toronto EC LP    Not Pledged    Contractual Restrictions

HMC Waterford LLC

   U.S. Borrower    Pledged     

 

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

 

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge

Status of
Entity

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

  

Reason

Entity Not

Pledged

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

HMC/Interstate Manhattan Beach, L.P.

  

HMC Manhattan Beach LLC

U.S. Borrower

   Pledged     

HMC/Interstate Waterford, L.P.

  

HMC Waterford LLC

U.S. Borrower

   Not Pledged    Contractual Restrictions

HMC/RGI Hartford, L.P.

   U.S. Borrower (99% LP), HMC Hartford LLC (1% GP)    Not Pledged   
Contractual Restrictions

HMH General Partner Holdings LLC

   U.S. Borrower    Pledged     

HMH HPT CBM LLC

   U.S. Borrower    Not Pledged    Already pledged to HPT

HMH HPT RIBM LLC

   U.S. Borrower    Not Pledged    Already pledged to HPT

HMH Marina LLC

   HMC Retirement Properties L.P.    Pledged     

HMH Norfolk LLC

   U.S. Borrower    Pledged     

HMH Norfolk, L.P.

  

HMH Norfolk LLC

U.S. Borrower

   Not Pledged    Contractual Restrictions

HMH Pentagon LLC

   U.S. Borrower    Pledged     

HMH Realty Company, Inc.

   Rockledge Hotel Properties, Inc.    Not Pledged    Not look-through (TRS)

HMH Restaurants LLC

   U.S. Borrower    Pledged     

HMH Rivers LLC

   U.S. Borrower    Pledged     

HMH Rivers, L.P.

   HMH Rivers LLC (1% GP), U.S. Borrower (99%LP)    Pledged     

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge
Status of
Entity

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

  

Reason Entity
Not Pledged

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

HMH WTC LLC    U.S. Borrower    Pledged      HMT Lessee LLC    HMT Lessee Parent
LLC    Not Pledged    Not look-
through (TRS) HMT Lessee Parent LLC    U.S. Borrower    Pledged      HMT Lessee
Sub (Atlanta) LLC    HMT Lessee Sub III LLC    Not Pledged    Not look-
through (TRS) HMT Lessee Sub (Palm Desert) LLC    HMT Lessee Sub III LLC    Not
Pledged    Not look-
through (TRS) HMT Lessee Sub (Properties) LLC    HMT Lessee Sub IV LLC    Not
Pledged    Not look-
through (TRS) HMT Lessee Sub (Santa Clara) LLC    HMT Lessee Sub IV LLC    Not
Pledged    Not look-
through (TRS) HMT Lessee Sub (SDM Hotel) LLC    HMT Lessee Sub I LLC    Not
Pledged    Not look-
through (TRS) HMT Lessee Sub I LLC    HMT Lessee LLC    Not Pledged    Not look-
through (TRS) HMT Lessee Sub II LLC    HMT Lessee LLC    Not Pledged   
Not look-
through (TRS) HMT Lessee Sub III LLC    HMT Lessee LLC    Not Pledged   
Not look-
through (TRS) HMT Lessee Sub IV LLC    HMT Lessee LLC    Not Pledged    Not
look-
through (TRS) HMT SPE (Atlanta) Corporation    HMT Lessee LLC    Not Pledged   
Not look-
through (TRS) HMT SPE (Palm Desert) Corporation    HMT Lessee LLC    Not Pledged
   Not look-
through (TRS) HMT SPE (Properties II) Corporation    HMT Lessee LLC    Not
Pledged    Not look-
through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge
Status of
Entity

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

  

Reason Entity
Not Pledged

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

HMT SPE (Santa Clara) Corporation    HMT Lessee LLC    Not Pledged    Not look-
through (TRS) Hopewell Associates L.P.    U.S. Borrower (99.99% LP), HMC
Partnership Properties LLC (0.01% GP)    Not Pledged    Not look-
through Host DSM Limited Partnership    HMC Desert LLC (98% LP, 1% GP), HMC
Partnership Properties LLC (1% LP)    Not Pledged    Not look-
through Host Hanover Limited Partnership    HMC Hanover LLC (98% LP, 1% GP), HMC
Partnership Properties LLC (1% LP)    Not Pledged    Not look-
through Host La Jolla LLC    U.S. Borrower    Pledged     

Host of Boston, Ltd.

(Massachusetts)

  

Airport Hotels LLC

U.S. Borrower

   Pledged     

Host of Houston 1979

(Texas)

  

Airport Hotels LLC

Host of Houston, Ltd.

(Texas)

   Pledged     

Host of Houston, Ltd.

(Texas)

  

Airport Hotels LLC

U.S. Borrower

   Pledged      Host Park Ridge LLC    HMC Capital Resources LLC    Pledged     
Hot Shoppes, Inc.    Rockledge Hotel Properties, Inc.    Not Pledged   
Not look-
through (TRS) HTKG Development Associates Limited Partnership    HMC Burlingame
LLC (1% GP), HMC BCR Holdings LLC (98% LP), HMC Burlingame II LLC (1% LP)    Not
Pledged    Not look-
through

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge Status
of Entity

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

  

Reason Entity
Not Pledged

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

IHP Holdings Partnership, L.P.    HMH General Partner Holdings LLC (1.00544%
GP), HMC IHP Holding LLC (96.52308% LP, DS Glory USA Inc. (unaffiliated)
(0.6704% LP), Ungen Enterprise Co., Inc. (unaffiliated) (0.6704% LP), Konishi
Realty Inc. (unaffiliated) (0.933% LP), Miki & Miho Associates USA, Inc.
(unaffiliated) (0.6704% LP),    Not Pledged    Partnership
with third
party partners Ivy Street Hopewell LLC    U.S. Borrower    Pledged      Ivy
Street Hotel Limited Partnership    Atlanta II Limited Partnership (80% GP), Ivy
Street LLC (14.9% LP), Hopewell Associates, L.P. (5.1% LP)    Not Pledged    Not
look-
through Ivy Street LLC    U.S. Borrower    Pledged      JWDC Limited Partnership
   HMC JWDC GP LLC (1.8324% GP), HMC JWDC LLC (89.7875% LP), Rockledge Square
254 LLC (unaffiliated) (8.3801% LP)    Not Pledged    Not look-
through Lauderdale Beach Association    HMC Hotel Properties Limited Partnership
(50.5% GP), RV/C Association (unaffiliated) (49.5% GP)    Not Pledged    Not
look-
through Market Street Host LLC    U.S. Borrower (97.2%LP), Host La Jolla LLC
(1%GP, 1.8%LP)    Not Pledged    Indebtedness Marriott Mexico City Partnership
   HMC Airport, Inc. (52.4% GP) Aeropuerto Shareholder, Inc. (unaffiliated)
(47.6%)    Not Pledged    Partnership
with third
party partners MDSM Finance LLC    HMC Palm Desert LLC    Pledged      Mutual
Benefit Chicago Suite Hotel Partners, L.P.    HMC Chicago LLC (98% LP, 1% GP),
HMC Partnership Properties LLC (1% LP)    Not Pledged    Not look-
through New Market Street LP    U.S. Borrower (99.9%LP), HMC Market Street LLC
(0.1%GP)    Not Pledged    Indebtedness

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge
Status of
Entity

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

  

Reason

Entity Not

Pledged

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

Pacific Gateway, Ltd.    HMC Pacific Gateway LLC (1.173% LP) HMC Gateway LLC
(79.025 LP), S.D. Hotels LLC (9.77% GP), Torrey Hotel Enterprises, Ltd.
(unaffiliated) (2.931% LP), Interhotel Company, Ltd. (unaffiliated) (7.1%),
Douglas F. Manchester (unaffiliated) (.001% LP)    Not Pledged    Not look-
through Philadelphia Airport Hotel Limited Partnership    Philadelphia Airport
Hotel LLC (0.1% GP), U.S. Borrower (88.9% capital, 98.9% profits LP),
Philadelphia Airport Hotel Corporation (1% profit, 11% capital LP)    Not
Pledged    Not look-
through Philadelphia Airport Hotel LLC    U.S. Borrower    Pledged     
Philadelphia Market Street HMC Hotel Limited Partnership    New Market Street LP
(0.1% GP, 62.9% capital, 72.9% profits Class B LP and 12.75% Class C LP), U.S.
Borrower (11% Class B LP), Philadelphia Market Street Hotel Corporation (1%
profit, 11% capital Class B LP), Synterra Partners, L.P. (unaffiliated) (2.25%
Class A LP)    Not Pledged    Not look-
through Philadelphia Market Street Marriott Hotel II Limited Partnership   
Market Street Host LLC (.5% GP), Marriott Market Street Hotel, Inc.
(unaffiliated) (99% LP), Philadelphia Market Street HMC Hotel Limited
Partnership (.5% LP)    Not Pledged    Not look-through PM Financial LLC    U.S.
Borrower    Pledged      PM Financial LP   

PM Financial LLC

U.S. Borrower

   Pledged      Potomac Hotel Limited Partnership   

HMC Potomac LLC

HMC HPP LLC

U.S. Borrower

   Pledged      PRM LLC    HMC Capital Resources LLC    Pledged      RIBM One
LLC    Rockledge Hotel Properties, Inc. (99% member), U.S. Borrower (1%)    Not
Pledged    Not look-
through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge
Status of
Entity

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

  

Reason

Entity Not
Pledged

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

RIBM Two LLC    Rockledge Hotel Properties, Inc. (98%), Rockledge RIBM Two
Corporation (1%), U.S. Borrower (1%)    Not Pledged    Not look-
through (TRS) Rockledge Bickford’s Family Fare, Inc.    Rockledge Hotel
Properties, Inc.    Not Pledged    Not look-
through (TRS) Rockledge CBM Investor I, Inc.    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge CBM Investor II LLC    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge CBM One Corporation    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge FIBM One Corporation    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge Hanover LLC    Rockledge Hotel Properties, Inc.    Not
Pledged    Not look-
through (TRS) Rockledge HMC BN LLC    Rockledge Hotel Properties, Inc.    Not
Pledged    Not look-
through (TRS) Rockledge Hotel LLC    U.S. Borrower    Pledged      Rockledge
Hotel Properties, Inc    Rockledge Hotel LLC    Not Pledged    Not look-
through (TRS) Rockledge Insurance Company (Cayman) Ltd.    U.S. Borrower    Not
Pledged    Not look-
through (TRS) Rockledge Manhattan Beach LLC    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge Minnesota LLC    Rockledge Hotel Properties, Inc.    Not
Pledged    Not look-
through (TRS) Rockledge NY Times Square LLC    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS)

 

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

PART III: PLEDGED STATUS OF CAPITAL STOCK OR EQUITY INTEREST

LISTED ON PART I AND PART II OF THIS SCHEDULE IV

 

Entity

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

  

Direct Owner(s) (Pledgor Entities

Denoted in Italics: Non-italicized

Entities are Not Pledgors)

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

  

Pledge
Status of
Entity

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

  

Reason
Entity Not
Pledged

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

Rockledge Potomac LLC    Rockledge Hotel Properties, Inc.    Not Pledged    Not
look-
through (TRS) Rockledge RIBM Two Corporation    Rockledge Hotel Properties, Inc.
   Not Pledged    Not look-
through (TRS) Rockledge Riverwalk LLC    Rockledge Hotel Properties, Inc.    Not
Pledged    Not look-
through (TRS) Rockledge Square 254 LLC    Rockledge Hotel Properties, Inc.   
Not Pledged    Not look-
through (TRS) S.D. Hotels LLC    U.S. Borrower    Not Pledged    Partnership
Agreement;
Indebtedness Santa Clara HMC LLC    U.S. Borrower    Pledged      Santa Clara
Host Hotel Limited Partnership    HMC MHP II LLC (1% GP), Marriott Hotel
Properties II Limited Partnership (50% LP), Santa Clara HMC LLC (49% LP)    Not
Pledged    Not look-
through Sparky’s Virgin Island, Inc.    HMH Realty Company, Inc.    Not Pledged
   Not look-
through (TRS) Timeport, L.P.    HMC Times Square Partner LLC (1% GP), Times
Square LLC (99% LP)    Not Pledged    Not look
through Times Square GP LLC    U.S. Borrower    Not Pledged    Indebtedness
Times Square HMC Hotel, L.P.    Times Square LLC (91.8% LP), Timeport, Ltd.
(2.5% LP), Timewell Group, Ltd. (3.6% LP), Times Square GP LLC (2.1% GP)    Not
Pledged    Not look-
through Times Square LLC    Host La Jolla LLC    Pledged      Timewell Group,
Ltd.    HMC Times Square Partner LLC (1% GP), Times Square LLC (99% LP)    Not
Pledged    Not look
through Wellsford-Park Ridge HMC Hotel Limited Partnership   

Host Park Ridge LLC

PRM LLC

   Pledged      YBG Associates LLC    HMC Capital Resources LLC    Pledged     

 

Notes:

 

State of Organization is Delaware unless otherwise noted in parenthesis below
entity.

Principal Place of Business for all entities is 6903 Rockledge Drive, Bethesda,
MD 20817.

 

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

SCHEDULE C-1

 

CANADIAN FACILITY VALUATION DATES

 

Period

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

 

Quarter

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

 

Fiscal Calendar

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

2004

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

Period 9

  Q3   Sep-10

Period 10

      Oct-8

Period 11

      Nov-5

Period 12

      Dec-3

Fiscal Year End

  Q4   Dec-31

2005

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

Period 1

      Jan-28

Period 2

      Feb-25

Period 3

  Q1   Mar-25

Period 4

      Apr-22

Period 5

      May-20

Period 6

  Q2   Jun-17

Period 7

      Jul-15

Period 8

      Aug-12

Period 9

  Q3   Sep-9

Period 10

      Oct-7

Period 11

      Nov-4

Period 12

      Dec-2

Fiscal Year End

  Q4   Dec-31

2006

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

Period 1

      Jan-27

Period 2

      Feb-24

Period 3

  Q1   Mar-24

Period 4

      Apr-21

Period 5

      May-19

Period 6

  Q2   Jun-16

Period 7

      Jul-14

Period 8

      Aug-11

Period 9

  Q3   Sep-8

Period 10

      Oct-6

Period 11

      Nov-3

Period 12

      Dec-1

Fiscal Year End

  Q4   Dec-31

 

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

2007

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

Period 1

      Jan-26

Period 2

      Feb-23

Period 3

  Q1   Mar-23

Period 4

      Apr-20

Period 5

      May-18

Period 6

  Q2   Jun-15

Period 7

      Jul-13

Period 8

      Aug-10

Period 9

  Q3   Sep-7

Period 10

      Oct-5

Period 11

      Nov-2

Period 12

      Nov-30

Fiscal Year End

  Q4   Dec-31

2008

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

Period 1

      Jan-25

Period 2

      Feb-22

Period 3

  Q1   Mar-21

Period 4

      Apr-18

Period 5

      May-16

Period 6

  Q2   Jun-13

Period 7

      Jul-11

Period 8

      Aug-8

Period 9

  Q3   Sep-5

Period 10

      Oct-3

Period 11

      Oct-31

Period 12

      Nov-28

Fiscal Year End

  Q4   Dec-31

2009

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

Period 1

      Jan-30

Period 2

      Feb-27

Period 3

  Q1   Mar-27

Period 4

      Apr-24

Period 5

      May-22

Period 6

  Q2   Jun-19

Period 7

      Jul-17

Period 8

      Aug-14

Period 9

  Q3   Sep-11

 

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

SCHEDULE 8.20

 

INDEBTEDNESS

 

As of September 10, 2004

 

(in thousands)

 

Borrower

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

  

Description

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

   Balance @
09/10/2004

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

     Senior Notes        Host Marriott, L.P.    Series B Senior Notes due 2008
   $ 305,063 Host Marriott, L.P.    Series E Senior Notes due 2006      300,000
Host Marriott, L.P.    Series G Senior Notes due 2007      242,000 Host
Marriott, L.P.    Series I Senior Notes due 2007      450,000 Host Marriott,
L.P.    Series K Senior Notes due 2013      725,000 Host Marriott, L.P.   
Series L Senior Notes due 2012      350,000 Host Marriott, L.P.    Exchangeable
Debt      500,000      Old Marriott Corporation Senior Notes        Host
Marriott, L.P.    Debentures      5,885 Host Marriott, L.P.    Series L     
6,848      Mortgage Debt        BRE/Swiss LLC    CMBS      185,326 HMC Cambridge
LLC    CMBS      46,765 HMC Reston LLC    CMBS      43,300 HMC Burlingame Hotel
LLC    CMBS      65,817 Times Square HMC Hotel Limited Partnership    CMBS     
234,689 HMC Hotel Properties II Limited Partnership    MHP II      183,922 HMC
OP BN LLC    Ritz Carlton Note A – Naples & Buckhead      145,460 Pacific
Gateway, Ltd.    San Diego      186,190 HMC Hotel Properties Limited Partnership
   MHP – Orlando Mortgage & Construction Loan      222,894 HMA Realty Limited
Partnership    Atlanta Marquis      146,113 Lauderdale Beach Association    MHP
– Harbor Beach Mortgage & Construction Loan      92,018 DS Hotel LLC    Desert
Springs Senior Loan      91,336 Copley One LLC    Boston Copley      89,644 JWDC
Limited Partnership    JWDC      88,000 Philadelphia Market Street HMC Hotel
Limited Partnership    Philadelphia Convention Center      81,091 Philadelphia
Market Street Marriott Hotel II Limited Partnership    Philadelphia Headhouse   
  21,339 HMC Grand LLC    Four Seasons Atlanta      35,163 HMC Grand LLC    Four
Seasons Atlanta Capital Loan      1,250 Santa Clara Host Hotel Limited
Partnership    Santa Clara      35,958

 

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

HMC Toronto EC Company    Toronto Eaton Center    26,515 HMC Toronto Air Company
   Toronto Airport    14,701 Calgary Charlotte Partnership    Calgary    13,225
HMC/RGI Hartford Limited Partnership    Hartford    19,895 HMC Polanco LLC &
Elcrisa, S.A. de C.V.    Mexico    7,506      Other Debt      Philadelphia
Airport Hotel Limited Partnership    Philadelphia Airport    40,000 Host
Marriott, L.P.    Newark Airport    32,300 Host Marriott, L.P.    Dulles Airport
   11,500 Host Marriott, L.P.    Partnership Buyout Note    3,066 Various   
Capital Leases - Corporate Real Estate    1,375 Philadelphia Market Street HMC
Hotel Limited Partnership    Philadelphia Convention Center Land Note    2,177  
   Other Debt – FF&E Loans      Lauderdale Beach Association    Harbor Beach   
2,000 Various    Capital Lease Obligations    8,711

 

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

EXHIBIT A

 

FORM OF NOTICE OF BORROWING

 

[Date]

 

Deutsche Bank Trust Company Americas, as Administrative Agent

  for the Lenders party to the Credit Agreement

  referred to below

90 Hudson Street, 5th Floor

Jersey City, New Jersey 07302

Fax: (201) 593-2308

 

Attention: Mary Rodwell

 

Ladies and Gentlemen:

 

The undersigned, [Name of Borrower or Borrowers] (the “Borrower(s)”), refers to
the Amended and Restated Credit Agreement, dated as of September 10, 2004 (as
amended from time to time, the “Credit Agreement”, the terms defined therein
being used herein as therein defined), among Host Marriott, L.P., each Canadian
Revolving Loan Borrower from time to time party thereto, various lenders from
time to time party thereto (the “Lenders”) and Deutsche Bank Trust Company
Americas, as Administrative Agent for such Lenders, and, subject to the terms of
Section 2.11(a) and (b) of the Credit Agreement, hereby gives you, as the
Administrative Agent, irrevocable notice, pursuant to Section 2.03(a) of the
Credit Agreement, that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required by Section
2.03(a) of the Credit Agreement:

 

  (i) The Business Day of the Proposed Borrowing is
                            , 20     .1

 

  (ii) The Proposed Borrowing shall consist of [Dollar Revolving A
Loans][Canadian Revolving A Loans][Dollar Revolving B Loans][Canadian Revolving
B Loans].

 

  (iii) The aggregate [principal amount] [Face Amount]2 of the Proposed
Borrowing is                         .3

 

  (iv) The purpose of the Proposed Borrowing is             .

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

1 Shall be a Business Day at least one Business Day in the case of Base Rate
Loans or Canadian Prime Rate Loans and three Business Days in the case of
Eurodollar Loans or Bankers' Acceptance Loans, in each case after the date
hereof.

 

2 The aggregate Face Amount of the Bankers’ Acceptances is to be included for a
Proposed Borrowing of Canadian Revolving Loans maintained as Bankers’ Acceptance
Loans.

 

3 Stated in the Applicable Currency.

 

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

  (v) [The Dollar [Revolving][A][B] Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].]4

 

  (vi) [The initial Interest Period for the Proposed Borrowing is             
month(s).]5

 

  (vii) [The Canadian Revolving [A][B] Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Canadian Prime Rate Loans] [Bankers’
Acceptance Loans].] 6

 

  (viii)[The term of the Proposed Borrowing is                      days.]7

 

The undersigned hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date of the
Proposed Borrowing:

 

  (A) the representations and warranties contained in the Credit Agreement and
in the other Credit Documents are and will be true and correct in all material
respects, both before and after giving effect to the Proposed Borrowing and to
the application of the proceeds thereof, as though made on such date (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date);

 

  (B) on the date of the Proposed Borrowing and also after giving effect
thereto, no Default or Event of Default has occurred and is continuing and no
Senior Note Indenture Default has occurred and is continuing; and

 

  (C) at the time of the Proposed Borrowing after giving effect thereto, there
exists no Default or Event of Default with respect to [(1) a Revolving Facility
A Financial Covenant as of and for the most recently ended Test Period
(calculated on a Pro Forma Basis as if the date of the Proposed Borrowing were
the Determination Date, and after giving effect to the application of proceeds
of such Proposed Borrowing (but only to the extent that such proceeds are
applied on the date of such Proposed Borrowing)) and assuming that the Revolving
Facility A Financial Covenants were then in effect] or [(2) a Revolving Facility
B Financial Covenant as of and for the most recently ended Test Period
(calculated on a Pro Forma Basis as if the date of the

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

4 To be included for a Proposed Borrowing of Dollar Revolving Loans.

 

5 To be included for a Proposed Borrowing of Eurodollar Loans.

 

6 To be included for a Proposed Borrowing of Canadian Revolving Loans.

 

7 To be included for a Proposed Borrowing of Canadian Revolving Loans maintained
as Bankers’ Acceptance Loans.

 

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

Proposed Borrowing were the Determination Date, and after giving effect to the
application of proceeds of such Proposed Borrowing (but only to the extent that
such proceeds are applied on the date of such Proposed Borrowing)) and assuming
that the Revolving Facility B Financial Covenants were then in effect.]8

 

  (D) at the time of the Proposed Borrowing after giving effect thereto, the
Leverage Ratio (computed on a Pro Forma Basis in accordance with Section
2.01(a)(vii) or 2.01(b)(vi), as applicable) will be
                            .

 

Very truly yours,

[NAME OF BORROWER(S)]

By         Title:

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

8 Include clause (1) only if a Revolving A Loan is requested and clause (2) only
if a Revolving B Loan is requested.

 

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

EXHIBIT B-1

 

FORM OF DOLLAR REVOLVING NOTE

 

$                            

   New York, New York                               , 20    

 

FOR VALUE RECEIVED, HOST MARRIOTT, L.P. (the “Borrower”), hereby promises to pay
to the order of                              or its registered assigns (the
“Lender”), in lawful money of the United States of America and in immediately
available funds, at the appropriate Payment Office (as defined in the Credit
Agreement referred to below) of Deutsche Bank Trust Company Americas (the
“Administrative Agent”) on the Maturity Date (as defined in the Credit
Agreement) the principal sum of                              DOLLARS
($                            ) or, if less, the then unpaid principal amount of
all Dollar Revolving Loans (as defined in the Credit Agreement) made by the
Lender pursuant to the Credit Agreement.

 

The Borrower also promises to pay interest on the unpaid principal amount hereof
in like money at said office from the date hereof until paid at the rates and at
the times provided in Section 2.09 of the Credit Agreement.

 

This Note is one of the Dollar Revolving Notes referred to in the Amended and
Restated Credit Agreement, dated as of September 10, 2004, among the Borrower,
each Canadian Revolving Loan Borrower from time to time party thereto, the
lenders from time to time party thereto (including the Lender) and Deutsche Bank
Trust Company Americas, as Administrative Agent (as amended, modified or
supplemented from time to time, the “Credit Agreement”), and is subject to the
terms and conditions of, and entitled to the benefits of, the Credit Agreement
and the other Credit Documents (as defined in the Credit Agreement). This Note
is secured by the Security Documents (as defined in the Credit Agreement) and is
entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit
Agreement). This Note is subject to voluntary prepayment and mandatory repayment
prior to the Maturity Date, in whole or in part, as provided in the Credit
Agreement.

 

In case an Event of Default (as defined in the Credit Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
declared to be or may become due and payable in the manner and with the effect
provided in the Credit Agreement.

 

The Borrower hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.

 

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

Page 2

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

 

HOST MARRIOTT, L.P. By:   Host Marriott Corporation, its General Partner By    
   

Name

   

Title:

 

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

EXHIBIT B-2

 

FORM OF CANADIAN DOLLAR REVOLVING NOTE

 

Cdn                            

   New York, New York                               , 20    

 

FOR VALUE RECEIVED, [NAME OF CANADIAN REVOLVING LOAN BORROWER], a
                             corporation (the “Borrower”), hereby promises to
pay to the order of                             or its registered assigns (the
“Lender”), in lawful money of Canada and in immediately available funds (except
as provided below), at the appropriate Payment Office (as defined in the Credit
Agreement referred to below) of Deutsche Bank Trust Company Americas (the
“Administrative Agent”) on the Maturity Date (as defined in the Credit
Agreement) the principal sum of                              CANADIAN DOLLARS
(Cdn             ) or, if less, the unpaid principal amount of all Canadian
Revolving Loans (as defined in the Credit Agreement) made by the Lender pursuant
to the Credit Agreement. Except as specifically provided in Section 2.17 of the
Credit Agreement (which, in the circumstances provided therein, shall require
payments to be made in U.S. Dollars as provided therein), all payments hereunder
shall be made in Canadian Dollars.

 

The Borrower also promises to pay interest on the unpaid principal amount hereof
in like money at said office from the date hereof until paid at the rates and at
the times provided in Section 2.09 of the Credit Agreement.

 

This Note is one of the Canadian Dollar Revolving Notes referred to in the
Amended and Restated Credit Agreement, dated as of September 10, 2004, among
Host Marriott, L.P., the Borrower, each other Canadian Revolving Loan Borrower
from time to time party thereto, the lenders from time to time party thereto
(including the Lender) and Deutsche Bank Trust Company Americas, as
Administrative Agent (as amended, modified or supplemented from time to time,
the “Credit Agreement”), and is subject to the terms and conditions of, and
entitled to the benefits of, the Credit Agreement and the other Credit Documents
(as defined in the Credit Agreement). This Note is secured by the Security
Documents (as defined in the Credit Agreement) and is entitled to the benefits
of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is
subject to voluntary prepayment and mandatory repayment prior to the Revolving
Loan Maturity Date, in whole or in part, as provided in the Credit Agreement.

 

In case an Event of Default (as defined in the Credit Agreement) shall occur and
be continuing, the principal of and accrued interest on this Note may be
declared to be or may become due and payable in the manner and with the effect
provided in the Credit Agreement.

 

The Borrower hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.

 

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

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

 

[NAME OF CANADIAN REVOLVING LOAN BORROWER] By        

Title:

 

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

EXHIBIT C

 

FORM OF LETTER OF CREDIT REQUEST

 

Dated    1            

 

Deutsche Bank Trust Company Americas

Global Loan Operations, Standby Letter of Credit Unit

60 Wall Street, 38th Floor

New York, New York 10005 - MS NYC60-2708

 

Dear Sirs:

 

This request is being delivered to Deutsche Bank Trust Company Americas,
individually and as Administrative Agent (in such capacity, the “Administrative
Agent”) under the Amended and Restated Credit Agreement, dated as of September
10, 2004, (as amended, modified or supplemented from time to time, the “Credit
Agreement”) among Host Marriott, L.P., each Canadian Revolving Loan Borrower
from time to time party thereto, the Lenders from time to time party thereto and
Deutsche Bank Trust Company Americas, as Administrative Agent. We hereby request
that Deutsche Bank Trust Company Americas, in its individual capacity, issue a
Letter of Credit for the account of the undersigned on     2     (the “Date of
Issuance”) in the aggregate stated amount of     3    .

 

For purposes of this Letter of Credit Request, unless otherwise defined herein,
all capitalized terms used herein which are defined in the Credit Agreement
shall have the respective meaning provided therein.

 

The beneficiary of the requested Letter of Credit will be     4    , and such
Letter of Credit will be in support of     5     and will have a stated
expiration date

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

1 Date of Letter of Credit Request.

 

2 Date of Issuance which shall be at least 5 Business Days from the date hereof
(or such shorter period as may be acceptable to the Issuing Bank).

 

3 Aggregate initial Stated Amount of Letter of Credit which shall not be less
than $500,000 (or such lesser amount as is acceptable to the Issuing Bank).

 

4 Insert name and address of beneficiary.

 

5 Insert description of L/C Supportable Obligations.

 

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

of     6    . The requested Letter of Credit is hereby designated as a Letter of
Credit     [A/B]    7.

 

We hereby certify that:

 

(1) The representations and warranties contained in the Credit Documents will be
true and correct in all material respects on the Date of Issuance, both before
and after giving effect to the issuance of the Letter of Credit requested hereby
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).

 

(2) No Default or Event of Default has occurred and is continuing nor, after
giving effect to the issuance of the Letter of Credit requested hereby, would
such a Default or an Event of Default occur.

 

(3) No Senior Note Indenture Default has occurred and is continuing nor, after
giving effect to the issuance of the Letter of Credit requested hereby, would
such a Senior Note Indenture Default occur.

 

(4) On the Date of Issuance after giving effect to the issuance of the Letter of
Credit, there will exist no Default or Event of Default with respect to [(a) a
Revolving Facility A Financial Covenant as of and for the most recently ended
Test Period (calculated on a Pro Forma Basis as if the Date of Issuance were the
Determination Date, and after giving effect to the application of proceeds of
such Credit Event (but only to the extent that such proceeds are applied on the
Date of Issuance)) and assuming that the Revolving Facility A Financial
Covenants were then in effect] or [(b) a Revolving Facility B Financial Covenant
as of and for the most recently ended Test Period (calculated on a Pro Forma
Basis as if the Date of Issuance were the Determination Date, and after giving
effect to the application of proceeds of such Credit Event (but only to the
extent that such proceeds are applied on the Date of Issuance)) and assuming
that the Revolving Facility B Financial Covenants were then in effect]. 8

 

(5) On the Date of Issuance after giving effect to the issuance of the Letter of
Credit, the Leverage Ratio (computed on a Pro Forma Basis in accordance with
Section 2.01(a)(vii) or 2.01(b)(vi), as applicable) will be
                            .

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

6 Insert last date upon which drafts may be presented which may not be later
than the date which occurs 12 months after the Date of Issuance or, if earlier,
the tenth Business Day prior to the Maturity Date (although any Letter of Credit
may be extendible for successive periods of up to 12 months, but not beyond the
tenth Business Day prior to the Maturity Date (unless such Letter of Credit is
cash collateralized on or before the Date of Issuance in accordance with Section
3.02(a) of the Credit Agreement), on terms acceptable to the Issuing Bank).

 

7 Indicate the Tranche under which the Letter of Credit will be issued.

 

8 Include clause (a) only if a Letter of Credit A is requested and clause (b)
only if a Letter of Credit B is requested.

 

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

Information as to any special drawing conditions is as follows:
                    .

 

HOST MARRIOTT, L.P. By: Host Marriott Corporation, its General Partner

By

       

Name:

   

Title:

 

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

EXHIBIT D

 

SECTION 5.04(b)(ii) CERTIFICATE

 

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of September 10, 2004, among Host Marriott, L.P., each Canadian Revolving Loan
Borrower from time to time party thereto, the Lenders from time to time party
thereto and Deutsche Bank Trust Company Americas, as Administrative Agent (as
amended, modified or supplemented from time to time, the “Credit Agreement”).
Pursuant to the provisions of Section 5.04(b)(ii) of the Credit Agreement, the
undersigned hereby certifies that it is not a “bank” as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.

 

[NAME OF LENDER]

By: 

       

Title:

 

Date:                     ,             

 

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

EXHIBIT E-1

 

September 10, 2004

 

To the Agent and

each of the Lenders

listed on Schedule I hereto

 

  Re: Amended and Restated Credit Agreement dated as of September 10, 2004

 

Ladies and Gentlemen:

 

I am Executive Vice President and General Counsel of Host Marriott, L.P., a
Delaware limited partnership (the “Company”), and in my capacity as such have
acted as counsel to the Company and each U.S. subsidiary of the Company that is
party to the Amended and Restated Subsidiaries Guaranty referred to below
(collectively, the “U.S. Guarantors”), and have acted as special counsel to
Calgary Charlotte Partnership, a Canadian partnership, HMC Toronto Air Company,
a Canadian company, HMC Toronto EC Company, a Canadian company, HMC AP Canada
Company, a Canadian company (collectively, the “Canadian Borrowers”) and each
Canadian subsidiary of the Company that is a party to the Amended and Restated
Subsidiaries Guaranty (collectively the “Canadian Guarantors”), all in
connection with the Amended and Restated Credit Agreement, dated as of September
10, 2004 (the “Amended and Restated Credit Agreement”), among the Company, the
Canadian Borrowers, Deutsche Bank Trust Company Americas, as Administrative
Agent (the “Agent”), Bank of America, N.A., as Syndication Agent, and the other
agents and lenders from time to time party thereto (the “Lenders”) and certain
other Loan Documents (as hereinafter defined). (The Company, the Canadian
Borrowers, the U.S. Guarantors and the Canadian Guarantors are sometimes
collectively referred to as the “Credit Parties”.) This opinion letter is
furnished to you pursuant to the requirements set forth in Section 6.02 of the
Amended and Restated Credit Agreement in connection with the closing thereunder
on the date hereof. Capitalized terms used herein which are defined in the
Amended and Restated Credit Agreement shall have the meanings set forth in the
Amended and Restated Credit Agreement, unless otherwise defined herein.

 

For purposes of this opinion letter, I have examined photocopies of the
following documents (the “Documents”):

 

1. Executed copy of the Amended and Restated Credit Agreement.

 

2. Executed copy of the Amended and Restated Pledge and Security Agreement.

 

3. Executed copy of the Amended and Restated Subsidiaries Guaranty.

 

4. The Certificate of Formation or the Certificate of Limited Partnership, as
the case may be, of each Delaware Credit Party (as hereinafter defined), with
amendments thereto.

 

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

5. The Limited Liability Company Agreement or the Agreement of Limited
Partnership, as the case may be, of each Delaware Credit Party.

 

6. A certificate of good standing of each Delaware Credit Party listed on
Schedule II hereto issued by the Secretary of State of the State of Delaware,
dated the date as indicated for such Credit Party on Schedule II hereto.

 

7. Certain resolutions of the Board of Directors of Host Marriott Corporation,
as general partner of the Company, adopted by unanimous written consent on
August 31, 2004.

 

8. Certain resolutions adopted by unanimous written consent of the Board of
Managers, or the Board of Managers of the general partner, as applicable, of
each Credit Party other than the Canadian Borrowers and the Canadian Guarantors,
dated September 1, 2004.

 

The documents referred to in Paragraphs 1 through 3 above are sometimes
hereinafter referred to collectively as the “Loan Documents.” The following U.S.
Guarantors are sometimes referred to collectively as the “Non-Delaware U.S.
Credit Parties”: (i) Ameliatel; (ii) Host of Boston, Ltd.; (iii) Host of
Houston, Ltd., (iv) Host of Houston 1979; and (v) City Center Hotel Limited
Partnership. The Company and the U.S. Guarantors, other than the Non-Delaware
U.S. Credit Parties, are sometimes referred to collectively as the “Delaware
Credit Parties”.

 

In my examination of the Loan Documents and the other Documents, I have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the accuracy and completeness of all of the Documents, the authenticity of all
originals of the Documents and the conformity to authentic originals of all of
the Documents submitted to me as copies (including telecopies). As to matters of
fact relevant to the opinions expressed herein, I have relied on the
representations and statements of fact made in the Documents, I have not
independently established the facts so relied on, and I have not made any
investigation or inquiry other than my examination of the Documents. This
opinion letter is given, and all statements herein are made, in the context of
the foregoing.

 

For purposes of this opinion letter, I have assumed that (i) each Loan Document
constitutes a valid and binding obligation of each party thereto enforceable
against each such party in accordance with their respective terms, (ii) there
has been no mutual mistake of fact or misunderstanding or fraud, duress or undue
influence in connection with the negotiation, execution or delivery of the Loan
Documents, and the conduct of all parties to the Loan Documents has complied
with any requirements of good faith, fair dealing and conscionability, (iii)
there are and have been no agreements or understandings among the parties,
written or oral, and there is and has been no usage of trade or course of prior
dealing among the parties that would, in either case, define, supplement or
qualify the terms of the Loan Documents, and (iv) there is nothing in the laws
of Canada or any other law not covered by this opinion letter that is relevant
to the opinions expressed below. I have also assumed the validity and
constitutionality of each relevant statute, rule, regulation and agency action
covered by this opinion letter.

 

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

For purposes of the opinions set forth in Paragraph (c) below, I have made the
following further assumptions: (i) that all orders, judgments, decrees,
agreements and contracts would be enforced as written; and (ii) that all parties
to the Loan Documents will act in accordance with, and will refrain from taking
any action that is forbidden by, the terms and conditions of the Loan Documents.

 

This opinion letter is based as to matters of law solely on applicable
provisions of the following, as currently in effect: (i) the Delaware Limited
Liability Company Act, as amended (the “Delaware LLC Act”), (ii) the Delaware
Uniform Limited Partnership Act, as amended (the “Delaware Limited Partnership
Act”), and (iii) as to the opinions given in Paragraph (d) below, except to the
extent excluded below, federal statutes and regulations; provided, however, that
I express no opinion as to United States federal securities, antitrust, unfair
competition, banking, or tax laws or regulations; and further provided that,
with respect to clause (iii) above, the opinions expressed herein are based on a
review of those laws, statutes and regulations that, in my experience, are
generally recognized as applicable to the transactions contemplated by the Loan
Documents. (The federal law identified in clause (iii) above, subject to the
exclusions and limitations set forth above, is referred to herein as “Applicable
Federal Law.”) I express no opinion as to any other laws, statutes, rules or
regulations not specifically identified above.

 

I am advised that, as to the matters relating to the Non-Delaware U.S. Credit
Parties referenced in Paragraphs (a), (b) and (c) below, you are obtaining the
opinion of Hogan & Hartson L.L.P. I am further advised that, as to the matters
relating to the Canadian Borrowers and Canadian Guarantors referenced in
Paragraphs (a), (b) and (c) below, you are obtaining the opinions of Blake,
Cassels & Graydon LLC and Cox Hanson O’Reilly Matheson.

 

Based upon, subject to and limited by the foregoing, I am of the opinion that:

 

(a) Each Delaware Credit Party is validly existing under the laws of the State
of Delaware as a limited partnership or limited liability company, as the case
may be, as of the date of the certificate listed for such Credit Party on
Schedule II hereto.

 

(b) Each Delaware Credit Party has the limited partnership or limited liability
company power, as the case may be, to execute, deliver and perform the Loan
Documents to which it is a party. The execution, delivery and performance by
each Delaware Credit Party of the Loan Documents to which it is a party have
been duly authorized by all necessary limited partnership or limited liability
company action, as the case may be, of such Delaware Credit Party. Each Delaware
Credit Party has duly executed and delivered each of the Loan Documents to which
it is a party.

 

(c) The execution, delivery and performance as of the date hereof by each
Delaware Credit Party of the Loan Documents to which it is party do not (i) in
the case of each such party that is a partnership, violate the certificate of
limited partnership of such party, the partnership agreement of such party or
the Delaware Limited Partnership Act, (ii) in the case of each such party that
is a limited liability company, violate the certificate of formation of such
party, the limited liability company agreement of such party, or the Delaware
LLC Act.

 

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

(d) No approval or consent of, or registration or filing with, any federal or
state government agency is required to be obtained or made by the Credit Parties
under Applicable Federal Law in connection with the execution, delivery and
performance as of the date hereof by the Credit Parties of the Loan Documents
other than filings to perfect the liens and security interests created by the
Loan Documents.

 

My opinions expressed in Paragraph (c) above are subject to the qualification
that certain organizational documents described in such Paragraph (c) may impose
restrictions or prescribe consequences applicable to an exercise by the Agent of
its rights to enforce the UCC security interests granted pursuant to the Amended
and Restated Pledge and Security Agreement, but that such restrictions and
consequences are not implicated by the execution, delivery or performance as of
the date hereof by any Delaware Credit Party of the Loan Documents to which it
is a party.

 

I hereby confirm to you that, to my knowledge, there are no actions, suits or
proceedings pending or overtly threatened in writing against any Credit Party,
or in which any Credit Party is a party, before any court or governmental
department, commission, board, bureau, agency or instrumentality that question
the validity of the Amended and Restated Credit Agreement or any action taken or
to be taken pursuant thereto, or that seek to enjoin or otherwise prevent the
consummation of the transactions contemplated by the Amended and Restated Credit
Agreement or to recover in damages or obtain other relief as a result thereof.

 

I assume no obligation to advise you of any changes in the foregoing subsequent
to the delivery of this opinion letter. This opinion letter has been prepared
solely for your use in connection with the closing under the Amended and
Restated Credit Agreement on the date hereof, and should not be quoted in whole
or in part or otherwise be referred to, and should not be filed with or
furnished to any governmental agency or other person or entity, without my prior
written consent, except that the entities that become Lenders pursuant to an
assignment of an interest in the Commitments and Loans pursuant to Section 14.03
of the Amended and Restated Credit Agreement may rely upon this opinion letter
(it being understood that this opinion letter speaks only as of the date hereof,
and that no reliance by such entities will have any effect on the scope,
phrasing or originally intended use of this opinion letter). Notwithstanding the
immediately preceding sentence, each Lender may furnish a copy of this opinion
letter (i) to any accountants, auditors and legal or other representatives of
such Lender, (ii) to any governmental entity that has regulatory or supervisory
authority over such Lender or pursuant to legal process or as otherwise required
by law or regulation, or (iii) in connection with any judicial proceeding
involving the transactions contemplated by the Loan Documents.

 

Very truly yours,

 

Elizabeth A. Abdoo

Executive Vice President and
General Counsel

 

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

SCHEDULE I

 

Lenders

 

Deutsche Bank Trust Company Americas

 

Bank of America, N.A.

 

Citicorp North America, Inc.

 

Société Générale

 

Calyon New York Branch

 

Goldman Sachs Credit Partners L.P.

 

The Bank of New York

 

Bear Stearns Corporate Lending Inc.

 

Wachovia Bank, National Association

 

The Bank of Nova Scotia

 

Canadian Lenders

 

Deutsche Bank AG Canada Branch

 

Bank of America, N.A. (Canada Branch)

 

Citibank, N.A. Canadian Branch

 

The Bank of Nova Scotia

 

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

SCHEDULE II

 

Certificates of Good Standing

 

U.S. Entity

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

 

Certificate of Good Standing

(Delaware)

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

   

1.      Airport Hotels LLC

  August 9, 2004    

2.      Chesapeake Financial Services LLC

  August 19, 2004    

3.      Durbin LLC

  August 9, 2004    

a.      HMC Retirement Properties, L.P.

  August 9, 2004    

i.       HMH Marina LLC

  August 19, 2004    

4.      Farrell’s Ice Cream Parlour Restaurants LLC

  August 19, 2004    

5.      Fernwood Hotel LLC

  August 19, 2004    

6.      HMC Amelia I LLC

  August 19, 2004    

7.      HMC Amelia II LLC

  August 19, 2004    

8.      HMC AP GP LLC

  August 9, 2004    

a.      HMC AP LP

  August 9, 2004    

9.      HMC Atlanta LLC

  August 19, 2004    

10.    HMC BCR Holdings LLC

  August 19, 2004    

a.      HMC Burlingame LLC

  August 19, 2004    

11.    HMC Capital LLC

  August 9, 2004    

a.      HMC Capital Resources LLC

  August 9, 2004    

i.       HMC Park Ridge LLC

  August 19, 2004    

 

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

U.S. Entity

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

 

Certificate of Good Standing

(Delaware)

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

   

ii.      Host Park Ridge LLC

  August 9, 2004    

(1)    Wellsford-Park Ridge HMC Hotel Limited Partnership

  August 19, 2004    

iii.    HMC Suites LLC

  August 9, 2004    

(1)    HMC Suites Limited Partnership

  August 19, 2004    

iv.     PRM LLC

  August 19, 2004    

v.      YBG Associates LLC

  August 19, 2004    

12.    HMC Charlotte GP LLC

  August 19, 2004    

a.      HMC Charlotte LP

  August 19, 2004    

13.    HMC Chicago LLC

  August 19, 2004    

14.    HMC Copley LLC

  August 19, 2004    

15.    HMC Desert LLC

  August 19, 2004    

16.    HMC Diversified LLC

  August 19, 2004    

a.      HMC Diversified American Hotels, L.P.

  August 19, 2004    

17.    HMC East Side II LLC

  August 19, 2004    

18.    HMC Gateway LLC

  August 19, 2004    

19.    HMC Georgia LLC

  August 19, 2004    

20.    HMC Grand LLC

  August 19, 2004    

21.    HMC Hanover LLC

  August 19, 2004    

22.    HMC Hartford LLC

  August 19, 2004    

23.    HMC Headhouse Funding LLC

  August 19, 2004    

24.    HMC Host Restaurants LLC

  August 19, 2004    

25.    HMC Hotel Development LLC

  August 19, 2004    

26.    HMC HPP LLC

  August 19, 2004    

27.    HMC HT LLC

  August 19, 2004    

 

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

U.S. Entity

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

 

Certificate of Good Standing

(Delaware)

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

   

28.    HMC IHP Holdings LLC

  August 19, 2004    

29.    HMC JWDC GP LLC

  August 19, 2004    

30.    HMC JWDC LLC

  August 19, 2004    

31.    HMC Lenox LLC

  August 19, 2004    

32.    HMC Manhattan Beach LLC

  August 9, 2004    

a.      HMC/Interstate Manhattan Beach, L.P.

  August 19, 2004    

33.    HMC Market Street LLC

  August 19, 2004    

a.      New Market Street LP

  August 19, 2004    

34.    HMC Maui LLC

  August 19, 2004    

35.    HMC Mexpark LLC

  August 9, 2004    

a.      HMC Polanco LLC

  August 19, 2004    

36.    HMC NGL LLC

  August 19, 2004    

37.    HMC OLS I LLC

  August 9, 2004    

a.      HMC OLS I L.P.

  August 19, 2004    

i.       HMC OLS II L.P.

  August 19, 2004    

38.    HMC OP BN LLC

  August 19, 2004    

39.    HMC Palm Desert LLC

  August 9, 2004    

a.      MDSM Finance LLC

  August 19, 2004    

40.    HMC Pacific Gateway LLC

  August 19, 2004    

41.    HMC PLP LLC

  August 9, 2004    

a.      Chesapeake Hotel Limited Partnership

  August 19, 2004    

42.    HMC Potomac LLC

  August 19, 2004    

a.      Potomac Hotel Limited Partnership

  August 19, 2004    

 

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

U.S. Entity

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

 

Certificate of Good Standing

(Delaware)

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

   

43.    HMC Properties I LLC

  August 19, 2004    

44.    HMC Properties II LLC

  August 19, 2004    

45.    HMC Property Leasing LLC

  August 19, 2004    

46.    HMC SBM Two LLC

  August 19, 2004    

47.    HMC Seattle LLC

  August 19, 2004    

48.    HMC SFO LLC

  August 19, 2004    

49.    HMC Swiss Holdings LLC

  August 19, 2004    

50.    HMC Toronto Airport GP LLC

  August 19, 2004    

a.      HMC Toronto Airport LP

  August 19, 2004    

51.    HMC Toronto EC GP LLC

  August 19, 2004    

a.      HMC Toronto EC LP

  August 19, 2004    

52.    HMH General Partner Holdings LLC

  August 19, 2004    

53.    HMH Norfolk LLC

  August 19, 2004    

a.      HMH Norfolk, L.P.

  August 19, 2004    

54.    HMH Pentagon LLC

  August 19, 2004    

55.    HMH Restaurants LLC

  August 19, 2004    

56.    HMH Rivers LLC

  August 19, 2004    

a.      HMH Rivers, L.P.

  August 19, 2004    

57.    HMH WTC LLC

  August 19, 2004    

58.    HMT Lessee Parent LLC

  August 19, 2004    

59.    Host La Jolla LLC

  August 19, 2004    

a.      Times Square LLC

  August 19, 2004    

60.    Ivy Street LLC

  August 19, 2004    

61.    Ivy Street Hopewell LLC

  August 19, 2004    

 

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

U.S. Entity

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

 

Certificate of Good Standing

(Delaware)

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

   

62.    Market Street Host LLC

  August 19, 2004    

63.    Philadelphia Airport Hotel LLC

  August 19, 2004    

64.    PM Financial LLC

  August 9, 2004    

a.      PM Financial LP

  August 19, 2004    

65.    Rockledge Hotel LLC

  August 19, 2004    

66.    Santa Clara HMC LLC

  August 19, 2004    

67.    S.D. Hotels LLC

  August 19, 2004    

68.    Times Square GP LLC

  August 19, 2004    

 

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

EXHIBIT E-2

 

September 10, 2004

 

To the Agent and each of

        the Lenders listed

        on Schedule I hereto

 

  Re: Amended and Restated Credit Agreement dated as of September 10, 2004

 

Ladies and Gentlemen:

 

This firm has acted as counsel to Host Marriott, L.P., a Delaware limited
partnership (the “Company”), Calgary Charlotte Partnership, a Canadian
partnership, HMC AP Canada Company, a Canadian company, HMC Toronto Air Company,
a Canadian company, HMC Toronto EC Company, a Canadian company (collectively,
the “Canadian Borrowers”), each U.S. subsidiary of the Company listed on
Schedule II hereto (collectively, the “U.S. Guarantors”), and each of Calgary
Charlotte Holdings Company, a Canadian company, HMC Charlotte (Calgary) Company,
a Canadian company, HMC Grace (Calgary) Company, a Canadian company (together
with HMC AP Canada Company, collectively the “Canadian Guarantors”, and together
with the U.S. Guarantors, the Company and the Canadian Borrowers, the “Credit
Parties”), in connection with the Amended and Restated Credit Agreement, dated
as of September 10, 2004 (the “Credit Agreement”), among the Company, the
Canadian Borrowers, Deutsche Bank Trust Company Americas, as Administrative
Agent (in such capacity and in its capacity as Collateral Agent, the “Agent”),
Bank of America, N.A., as Syndication Agent, and the other agents and lenders
from time to time party thereto (the “Lenders”) , which provides, among other
things, for loans to the Company and the Canadian Borrowers in an aggregate
principal amount of Five Hundred Seventy Five Million Dollars ($575,000,000) and
the execution and delivery pursuant thereto of certain other Loan Documents (as
hereinafter defined). This opinion letter is furnished to you pursuant to the
requirements set forth in Section 6.02 of the Credit Agreement in connection
with the closing thereunder on the date hereof. Capitalized terms used herein
which are defined in the Credit Agreement shall have the meanings set forth in
the Credit Agreement, unless otherwise defined herein. The term “UCC” as used
herein means Articles 1, 8 and 9 of the Uniform Commercial Code as in effect on
the date hereof in Delaware, New York and Texas, as applicable.

 

For purposes of this opinion letter, we have examined photocopies of the
following documents (the “Documents”):

 

9. Executed copy of the Credit Agreement.

 

10. Executed copy of the Amended and Restated Pledge and Security Agreement.

 

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

11. Executed copy of the Amended and Restated Subsidiaries Guaranty.

 

12. UCC-1 financing statement with respect to each Credit Party listed in the
column under the heading “Pledgor” on Schedule III hereto (each, a “Pledgor”),
which financing statement names such Pledgor as debtor and the Agent as secured
party, and has been prepared for filing in the UCC records of the filing office
specified on Schedule III hereto with respect to such Pledgor.

 

13. Forms of the Revolving Notes attached as Exhibits B-1 and B-2, to the Credit
Agreement.

 

14. Certain agreements and contracts to which one or more of the Credit Parties
are a party listed on Schedule IV hereto (collectively, the “Reviewed
Agreements”).

 

15. The Amended and Restated General Partnership Agreement of Ameliatel, a
Florida general partnership (“Ameliatel”), dated January 20, 1998, between
BRE/Amelia Partners L.P. and BRE/Amelia L.L.C., as amended by the First
Amendment to Amended and Restated Partnership Agreement, effective as of
December 31, 1998, between HMC Amelia I LLC and HMC Amelia II LLC, and as
further amended by the Second Amendment to Amended and Restated Partnership
Agreement, dated as of October 24, 2003, between HMC Amelia I LLC and HMC Amelia
II LLC, as certified on the date hereof by the Secretary of Amelia I LLC and the
Secretary of Amelia II LLC, the general partners of Ameliatel, as being
complete, accurate and in effect.

 

16. Assignment and Assumption of Partnership Interests, dated as of December 30,
1998, between BRE/Amelia L.L.C. and Amelia II LLC, as certified on the date
hereof by the Secretary of Amelia I LLC and the Secretary of Amelia II LLC, the
general partners of Ameliatel, as being complete, accurate and in effect.

 

17. Assignment and Assumption of Partnership Interests, dated as of December 30,
1998, by and between BRE/Amelia Partners L.P. and Amelia I LLC, as certified on
the date hereof by the Secretary of Amelia I LLC and the Secretary of Amelia II
LLC, the general partners of Ameliatel, as being complete, accurate and in
effect.

 

18. Certain resolutions of the Board of Managers of the general partners of
Ameliatel, in their capacities as general partners of Ameliatel, adopted by
unanimous consent dated September 1, 2004, as certified on the date hereof by
the Secretary of Amelia I LLC and the Secretary of Amelia II LLC, the general
partners of Ameliatel, as being complete, accurate and in effect.

 

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

19. The Certificate of Limited Partnership of Host of Boston, Ltd., a
Massachusetts limited partnership (“Host of Boston”), with amendments thereto,
as certified by the Secretary of the Commonwealth of the Commonwealth of
Massachusetts on August 23, 2004, as on file with the Secretary of the
Commonwealth of the Commonwealth of Massachusetts, and as certified by the
Secretary of Airport Hotels LLC (“Airport Hotels”), the sole general partner of
Host of Boston, as being complete, accurate and in effect on the date hereof.

 

20. The Agreement of Limited Partnership of Host of Boston, as amended by the
Amendment to Agreement of Limited Partnership of Host of Boston, effective as of
December 15, 1998, each as certified on the date hereof by the Secretary of
Airport Hotels, the sole general partner of Host of Boston, as being complete,
accurate and in effect.

 

21. Certain resolutions of the Board of Managers of Airport Hotels adopted by
unanimous consent dated September 1, 2004, as certified on the date hereof by
the Secretary of Airport Hotels, the sole general partner of Host of Boston, as
being complete, accurate and in effect.

 

22. Certificate of Existence of Host of Boston issued by the Secretary of the
Commonwealth of the Commonwealth of Massachusetts dated August 23, 2004.

 

23. The Certificate and Agreement of Limited Partnership of Host of Houston,
Ltd., a Texas limited partnership (“Host of Houston”), as amended by the
Amendment of Certificate and Agreement of Limited Partnership, each as certified
by the Secretary of State of the State of Texas on August 9, 2004 as on file
with the Office of the Secretary of State of the State of Texas, and each as
certified by the Secretary of Airport Hotels, the sole general partner of Host
of Houston, as being complete, accurate and in effect on the date hereof.

 

16. The Certificate and Agreement of Limited Partnership of Host of Houston, as
amended by the Amendment to Partnership Agreement, dated December 28, 1998, each
as certified by the Secretary of Airport Hotels, the sole general partner of
Host of Houston, as being complete, accurate and in effect on the date hereof.

 

17. Certain resolutions of the Board of Managers of Airport Hotels adopted by
unanimous consent dated September 1, 2004, as certified on the date hereof by
the Secretary of Airport Hotels, the sole general partner of Host of Houston, as
being complete, accurate and in effect.

 

18. Certificate of Existence of Host of Houston issued by the Office of the
Secretary of State of the State of Texas dated August 9, 2004.

 

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

19. The Agreement of General Partnership of Host of Houston 1979, a Texas
general partnership (“Houston 1979”), as amended by the Amendment to Partnership
Agreement, effective as of December 15, 1998, each as certified on the date
hereof by the Secretary of Airport Hotels, a general partner of Houston 1979 and
the sole general partner of Host of Houston, which is the other general partner
of Houston 1979, as being complete, accurate and in effect.

 

20. Certain resolutions of the Board of Managers of Airport Hotels adopted by
unanimous consent dated September 1, 2004, as certified on the date hereof by
the Secretary of Airport Hotels, a general partner of Houston 1979 and the sole
General Partner of Host of Houston, which is the other general partner of
Houston 1979, as being complete, accurate and in effect.

 

21. The Certificate of Limited Partnership of City Center Hotel Limited
Partnership, a Minnesota limited partnership (“City Center”), with amendments
thereto, as certified by the Secretary of State of the State of Minnesota on
August 20, 2004 as on file with the Secretary of State of the State of
Minnesota, and as certified by the Secretary of Host La Jolla LLC (“Host La
Jolla”), the sole general partner of City Center, as being complete, accurate
and in effect on the date hereof.

 

22. The Second Amended and Restated Limited Partnership Agreement of City
Center, as amended by the Amendment of Partnership Agreement and Transfer of
Limited Partnership Interest, dated as of December 29, 1995, among Host Marriott
Corporation (“HMC”), Host International, Inc. and Host La Jolla, as further
amended by Second Amendment to Second Amended and Restated Partnership
Agreement, dated as of December 23, 1998, between Host La Jolla and HMC, as
further amended by the Amendment to Agreement of Limited Partnership, dated as
of December 27, 1998, by Host La Jolla and HMC, and as further amended by the
Amendment to Agreement of Limited Partnership, dated as of December 28, 1998,
among Host La Jolla, HMC and the Company, as certified on the date hereof by the
Secretary of Host La Jolla, the sole general partner of City Center, as being
complete, accurate and in effect.

 

23. Certain resolutions of the Board of Managers of Host La Jolla adopted by
unanimous consent dated September 1, 2004, as certified on the date hereof by
the Secretary of Host La Jolla, the sole general partner of City Center, as
being complete, accurate and in effect.

 

24. Certificate of Good Standing of City Center issued by the Secretary of State
of the State of Minnesota dated August 20, 2004.

 

25. A certificate of the Secretary of each U.S. Guarantor, including a
certification as to the incumbency and signatures of certain officers of Amelia
I LLC, Amelia II LLC, Airport Hotels and Host La Jolla.

 

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

26. A certificate of an officer of each Credit Party or, in the case of any
Credit Party which is a partnership, of an officer of the general partner or the
general partners, as applicable, of such Credit Party, dated the date hereof as
to certain facts relating to such Credit Party.

 

The documents referred to in Paragraphs 1 through 3 above are sometimes
hereinafter referred to collectively as the “Loan Documents.” The financing
statements described in Paragraph 4 above are sometimes hereinafter referred to
collectively as the “Financing Statements,” and all filing offices described in
Schedule III hereto are sometimes hereinafter referred to collectively as the
“Filing Offices.” The following Credit Parties are sometimes hereinafter
referred to collectively as the “Non-Delaware U.S. Credit Parties”: (i)
Ameliatel; (ii) Host of Boston; (iii) Host of Houston; (iv) Houston 1979; and
(v) City Center.

 

In our examination of the Loan Documents and the other Documents, we have
assumed the genuineness of all signatures, the legal capacity of all natural
persons, the accuracy and completeness of all of the Documents, the authenticity
of all originals of the Documents and the conformity to authentic originals of
all of the Documents submitted to us as copies (including telecopies). As to
matters of fact relevant to the opinions expressed herein, we have relied on the
representations and statements of fact made in the Documents, we have not
independently established the facts so relied on and we have not made any
investigation or inquiry other than our examination of the Documents. This
opinion letter is given, and all statements herein are made, in the context of
the foregoing.

 

As used in this opinion letter, the phrase “to our knowledge” means the actual
knowledge (that is, the conscious awareness of facts or other information) of
lawyers currently in the firm who have given substantive legal attention to
representation of the Credit Parties in connection with the Loan Documents.

 

For purposes of this opinion letter, we have assumed that (i) each party to the
Loan Documents other than the Non-Delaware U.S. Credit Parties (including,
without limitation, all of the Credit Parties other than the Non-Delaware U.S.
Credit Parties) has all requisite power and authority under all applicable laws,
regulations and governing documents to execute, deliver and perform its
obligations under the Loan Documents to which it is a party and the Agent, each
of the Lenders and each such other party has complied with all legal
requirements pertaining to its status as such status relates to its rights to
enforce the Loan Documents against the other parties thereto, (ii) each party to
the Loan Documents other than the Non-Delaware U.S. Credit Parties (including,
without limitation, all of the Credit Parties other than the Non-Delaware U.S.
Credit Parties) has duly authorized, executed and delivered the Loan Documents
to which it is a party, (iii) except as set forth in Paragraph (a) below, each
party to the Loan Documents (including, without limitation, all of the Credit
Parties) is validly existing and in good standing in all necessary
jurisdictions, (iv) each Loan Document constitutes a valid and binding
obligation of each party thereto (except any Credit Party) enforceable against
each such party in accordance with its respective terms, (v) there has been no
mutual mistake of fact or misunderstanding or fraud, duress or undue influence
in connection with the negotiation, execution or delivery of the Loan Documents,
and the conduct of all parties to the Loan Documents has complied with any
requirements of good faith, fair dealing and conscionability, (vi) there are and
have been no agreements or understandings among the parties, written or oral,
and there is and has been no usage of trade or course of prior dealing among the
parties that would, in either case, define,

 

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

supplement or qualify the terms of the Loan Documents and (vii) there is nothing
in the laws of Canada or any other law not covered by this opinion letter that
is relevant to the opinions expressed below. We are advised that, as to the
matters referenced in clauses (i) through (iii) above, (1) with respect to the
Credit Parties (other than the Non-Delaware U.S. Credit Parties, the Canadian
Borrowers and the Canadian Guarantors), you are obtaining the opinion of the
general counsel of HMC and its subsidiaries and (2) with respect to the Canadian
Borrowers and the Canadian Guarantors, you are obtaining the opinions of Blake,
Cassels & Graydon LLC and Cox Hanson O’Reilly Matheson. We have also assumed the
validity of the determinations of the Board of Managers or other applicable
governing body of each U.S. Guarantor and Canadian Guarantor concerning the
necessity and convenience of the Subsidiaries Guaranty and the Pledge and
Security Agreement, and have further assumed the value of the consideration
received therefor. We have further assumed the validity and constitutionality of
each relevant statute, rule, regulation and agency action covered by this
opinion letter.

 

For the purposes of the opinion set forth in the second sentence of Paragraph
(c) below, we have assumed that, pending the execution and delivery of each
Revolving Note, all operative facts (and applicable law) will remain unchanged
from those in existence on the date hereof.

 

For purposes of the opinions set forth in Paragraph (d) below, we have made the
following further assumptions: (i) that all orders, judgments, decrees,
agreements and contracts would be enforced as written; and (ii) that the Agent
is not a restricted transferee as described on Schedule V hereto.

 

For purposes of the opinions set forth in Paragraph (e) below, we have made the
following further assumptions: (i) that each of the Pledgors is a “registered
organization,” as such term is defined in Section 9-102(a)(70) of the UCC,
organized under the law of the State indicated on Schedule II hereto; (ii) that
pending the completion of the filings of the Financing Statements as set forth
in Paragraph (e) below, all operative facts (and applicable law) will remain
unchanged from those in existence on the date hereof; and (iii) that each of the
Financing Statements will be duly filed in the applicable Filing Office as soon
as practicable after the date hereof with all appropriate fees and recordings
taxes (if any) paid.

 

For purposes of the opinion set forth in Paragraph (f) below, we have made the
following further assumption, without any independent verification or
investigation: that none of the Lenders is a broker or dealer under the Margin
Regulations, defined below.

 

This opinion letter is based as to matters of law solely on applicable
provisions of the following, as currently in effect: (i) as to the opinions
expressed in Paragraphs (a), (b) and (d) below, the Florida Revised Uniform
Partnership Act of 1995; the Massachusetts Uniform Limited Partnership Act; the
Texas Revised Limited Partnership Act; the Texas Revised Partnership Act; and
the Minnesota 1976 Uniform Limited Partnership Act; (ii) as to the opinions
expressed in Paragraphs (c) and (d) below, except to the extent excluded below,
internal laws of the State of New York (but not including any statutes,
ordinances, administrative decisions, rules or regulations of any political
subdivision of the State of New York); (iii) as to the opinions expressed in
Paragraph (d) below, except to the extent excluded below, federal statutes and
regulations; (iv) as to the opinions expressed in Paragraph (e) below, the UCC;
(v) as to the opinions expressed in Paragraph (f) below, the Securities Exchange
Act of 1934, as

 

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

amended (the “Exchange Act”), and Regulations T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224,
respectively (the “Margin Regulations”); and (vi) as to the opinions expressed
in Paragraph (g) below, the Investment Company Act of 1940, as amended, and the
Public Utility Holding Company Act of 1935, as amended; provided, however, that
the laws described above shall not include (and we express no opinion as to)
federal or state securities, antitrust, unfair competition, banking, or tax laws
or regulations except to the extent specifically identified in clauses (v) and
(vi) above for purposes referred to in clauses (v) and (vi), respectively, only,
and we express no opinion as to Canadian law or any other laws, statutes, rules
or regulations not specifically identified above; and further provided that,
with respect to clauses (ii) and (iii) above, the opinions expressed herein are
based upon a review of those laws, statutes and regulations that, in our
experience, are generally recognized as applicable to the transactions
contemplated in the Loan Documents. (The law identified in clause (ii) above,
subject to the exclusions and limitations set forth above, is referred to herein
as “Applicable State Law” and the law identified in clause (iii) above, subject
to the exclusions and limitations set forth above, is referred to as “Applicable
Federal Law.”)

 

Based upon, subject to and limited by the foregoing, we are of the opinion that:

 

(a) Host of Houston is validly existing as a limited partnership under the laws
of the State of Texas as of the date of the certificate specified in Paragraph
18 above. Host of Boston is validly existing as a limited partnership under the
laws of the Commonwealth of Massachusetts as of the date of the certificate
specified in Paragraph 14 above. City Center is validly existing as a limited
partnership under the laws of the State of Minnesota as of the date of the
certificate specified in Paragraph 24 above.

 

(b) Each of the Non-Delaware U.S. Credit Parties has the partnership power to
execute, deliver and perform the Loan Documents to which it is a party. The
execution, delivery and performance by each of the Non-Delaware U.S. Credit
Parties of the Loan Documents to which it is a party have been duly authorized
by all necessary partnership action of such Non-Delaware U.S. Credit Party. The
Loan Documents to which each of the Non-Delaware U.S. Credit Parties is a party
have been duly executed and delivered on behalf of such Non-Delaware U.S. Credit
Party.

 

(c) Each of the Loan Documents to which each Credit Party is a party constitutes
a valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its terms. Each Revolving Note, when duly
prepared and executed in accordance with the Credit Agreement and delivered to
the applicable Lender, will constitute a valid and binding obligation of the
applicable Borrower, enforceable against such Borrower in accordance with its
terms.

 

(d) The execution, delivery and performance on the date hereof by each Credit
Party of the Loan Documents to which it is party do not (i) violate any
applicable provision of any Applicable Federal Law or Applicable State Law; (ii)
to our knowledge, violate any court or administrative order, judgment or decree
that names any Credit Party and is specifically directed to it or any of its
property; (iii) breach or constitute a default, or result in the creation or
imposition of any lien as of the date hereof, under any Reviewed Agreement to
which such Credit Party is a party (except that we express no opinion as to
compliance with any financial covenants in any such Reviewed Agreement); (iv) in
the case of Ameliatel, violate the

 

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

partnership agreement of Ameliatel or the Florida Revised Uniform Partnership
Act of 1995; (v) in the case of Host of Boston, violate the partnership
agreement or the certificate of limited partnership of Host of Boston or the
Massachusetts Uniform Limited Partnership Act; (vi) in the case of Host of
Houston, violate the partnership agreement or the certificate of limited
partnership of Host of Houston or the Texas Revised Limited Partnership Act;
(vii) in the case of Houston 1979, violate the partnership agreement of Houston
1979 or the Texas Revised Partnership Act; or (viii) in the case of City Center,
violate the certificate of limited partnership or the partnership agreement of
City Center or the Minnesota 1976 Uniform Limited Partnership Act.

 

(e) The Pledge and Security Agreement creates in favor of the Agent a UCC
security interest in the right, title and interest of each Pledgor in and to the
membership interests or partnership interests in the entities specified on
Schedule III hereto as being owned by such Pledgor (the “Collateral”). To the
extent that such security interest in the right, title and interest of such
Pledgor in and to the applicable Collateral can be perfected currently under the
UCC by the filing of a financing statement, such security interest will be
perfected by the timely filing of the applicable Financing Statement in the
applicable Filing Office specified on Schedule III hereto.

 

(f) The Revolving Loans and the use of the proceeds of the Revolving Loans, each
in accordance with the terms of the Credit Agreement, do not violate Section 7
of the Exchange Act or the Margin Regulations.

 

(g) None of the Credit Parties is (i) an “investment company,” as such term is
defined in the Investment Company Act of 1940, as amended, or (ii) subject to
regulation as a “public utility company” or a “holding company,” as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended.

 

In addition to the qualifications, exceptions and limitations elsewhere set
forth in this opinion letter, the opinions expressed in Paragraph (c) above are
subject to the qualification that certain rights, remedies, waivers and other
provisions of the Loan Documents and Revolving Notes may not be enforceable in
accordance with their terms, but, subject to the exceptions, qualifications and
limitations set forth elsewhere in this opinion letter, such unenforceability
would not render the Loan Documents invalid as a whole or preclude (i) the
judicial enforcement of the obligations of the Company or the Canadian Borrowers
to pay the principal of the Revolving Loans and interest thereon at the rate or
rates (but not including any increase in rate after default) set forth therein
or the obligations of the Company to reimburse the Issuing Bank for any payments
made under a Letter of Credit, (ii) the acceleration by the Agent of the
Company’s or the Canadian Borrowers’ obligation to pay such principal, together
with such interest, after a default by the Company or the Canadian Borrowers (A)
in the payment of such principal or interest, or (B) in the performance of any
other obligation of the Company or the Canadian Borrowers in circumstances in
which a court will provide a remedy, (iii) with regard to such security
interests granted by the Company under the Pledge and Security Agreement as have
been created in accordance with Article 9 of the Uniform Commercial Code, and
assuming that the Agent will comply with all requirements of applicable
procedural and substantive law, the enforcement of such security interests as
provided in Article 9 of the Uniform Commercial Code after a default by the
Company in the payment of such principal or interest at maturity or following
acceleration pursuant to clause (ii) above, (iv) the judicial enforcement of the

 

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

obligations of the U.S. Guarantors under the Subsidiaries Guaranty to pay the
principal of the Revolving Loans and interest thereon at the rate or rates (but
not including any increase in rate after default) set forth in the Credit
Agreement or to reimburse the Issuing Bank for any payments made under a Letter
of Credit after a default by the Company or the Canadian Borrowers in the
payment of such principal, interest or reimbursement for payments made under a
Letter of Credit at maturity or following acceleration pursuant to clause (ii)
above, or (v) with regard to such security interests granted by each Pledgor
under the Pledge and Security Agreement as have been created in accordance with
Article 9 of the Uniform Commercial Code, and assuming that the Agent will
comply with all requirements of applicable procedural and substantive law, the
enforcement of such security interests as provided in Article 9 of the Uniform
Commercial Code after a default by the Company or the Canadian Borrowers in the
payment of such principal, interest or reimbursement for payments made under a
Letter of Credit at maturity or following acceleration pursuant to clause (ii)
above; provided, however, that we express no opinion regarding the
enforceability against the U.S. Guarantors and Canadian Guarantors of the
Subsidiaries Guaranty or the Pledge and Security Agreement in the event of or
with respect to (1) any modification to or amendment of the obligations of the
Company or any Canadian Borrower under the Loan Documents that increases such
obligations, or (2) any election of remedies, any act or omission by the Agent
or its agents with respect to collateral, or any other conduct of the Agent or
its agents, that in each case prejudices any U.S. Guarantor or Canadian
Guarantor or constitutes a full or partial release or discharge of such U.S.
Guarantor or Canadian Guarantor under applicable law.

 

Our opinions expressed in clauses (iii), (iv), (v), (vi), (vii) and (viii) of
Paragraph (d) above are subject to the qualification that certain Reviewed
Agreements and organizational documents described in such clauses may impose
restrictions or prescribe consequences applicable to an exercise by the Agent of
its rights to enforce the UCC security interests referred to in Paragraph (e)
above, but that such restrictions and consequences are not implicated by the
execution, delivery or performance as of the date hereof by any Credit Party of
the Loan Documents to which it is a party. Our opinion expressed in clause (iii)
of Paragraph (d) above is subject to the further qualification that certain of
the Reviewed Agreements impose requirements of notice and/or a right of first
refusal in favor of the non-Credit Party that is a party thereto prior to a
transfer of a controlling interest in any such Credit Party, and we express no
view as to the applicability of such provisions to the pledge of equity
interests in any such Credit Party pursuant to the Pledge and Security
Agreement.

 

In addition to the qualifications, exceptions and limitations elsewhere set
forth in this opinion letter, our opinions expressed above are also subject to
the effect of: (1) bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting creditors’ rights (including, without
limitation, the effect of statutory and other law regarding fraudulent
conveyances, fraudulent transfers and preferential transfers); (2) the exercise
of judicial discretion and the application of principles of equity, good faith,
fair dealing, reasonableness, conscionability and materiality (regardless of
whether the applicable agreements are considered in a proceeding in equity or at
law); and (3) generally applicable rules of law that limit or affect the
enforceability of provisions that purport to waive or to require waiver of (or
have the effect of waiving) procedural, judicial or substantive rights or
defenses.

 

We assume no obligation to advise you of any changes in the foregoing subsequent
to the delivery of this opinion letter. This opinion letter has been prepared
solely for

 

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

your use in connection with the closing under the Credit Agreement on the date
hereof, and should not be quoted in whole or in part or otherwise be referred
to, and should not be filed with or furnished to any governmental agency or
other person or entity, without the prior written consent of this firm, except
that entities that become Lenders pursuant to an assignment of an interest in
the Commitments and Revolving Loans pursuant to Section 14.03 of the Credit
Agreement may rely upon this opinion letter (it being understood that this
opinion letter speaks only as of the date hereof, and that no reliance by such
entities will have any effect on the scope, phrasing or originally intended use
of this opinion letter). Notwithstanding the immediately preceding sentence,
each Lender may furnish a copy of this opinion letter (i) to any accountants,
auditors and legal or other representatives of such Lender, (ii) to any
governmental entity that has regulatory or supervisory authority over such
Lender, or pursuant to legal process or as otherwise required by law or
regulation, or (iii) in connection with any judicial proceeding involving the
transactions contemplated by the Loan Documents.

 

Very truly yours,

 

HOGAN & HARTSON L.L.P.

 

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

SCHEDULE I

 

LENDERS

 

Deutsche Bank Trust Company Americas

 

Bank of America, N.A.

 

Citicorp North America Inc.

 

Société Générale

 

Calyon New York Branch

 

Goldman Sachs Credit Partners L.P.

 

The Bank of New York

 

Bear Stearns Corporate Lending Inc.

 

Wachovia Bank, National Association

 

The Bank of Nova Scotia

 

Deutsche Bank AG Canada Branch

 

Bank of America, N.A. (Canada Branch)

 

Citibank, N.A. Canadian Branch

 

Société Générale (Canada)

 

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

SCHEDULE II

 

U.S. GUARANTORS

 

U.S. Guarantor

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

  

Jurisdiction of Organization

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

  

Type of Entity

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

Airport Hotels LLC    Delaware    Limited liability company Ameliatel    Florida
   General partnership Chesapeake Financial Services LLC    Delaware    Limited
liability company Chesapeake Hotel Limited Partnership    Delaware    Limited
partnership City Center Hotel Limited Partnership    Minnesota    Limited
partnership Durbin LLC    Delaware    Limited liability company Farrell’s Ice
Cream Parlour Restaurants LLC    Delaware    Limited liability company Fernwood
Hotel LLC    Delaware    Limited liability company HMC Amelia I LLC    Delaware
   Limited liability company HMC Amelia II LLC    Delaware    Limited liability
company HMC AP GP LLC    Delaware    Limited liability company HMC AP LP   
Delaware    Limited partnership HMC Atlanta LLC    Delaware    Limited liability
company HMC BCR Holdings LLC    Delaware    Limited liability company HMC
Burlingame LLC    Delaware    Limited liability company HMC Capital LLC   
Delaware    Limited liability company HMC Capital Resources LLC    Delaware   
Limited liability company HMC Charlotte GP LLC    Delaware    Limited liability
company HMC Charlotte LP    Delaware    Limited partnership HMC Chicago LLC   
Delaware    Limited liability company HMC Copley LLC    Delaware    Limited
liability company

 

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

U.S. Guarantor

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

  

Jurisdiction of Organization

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

  

Type of Entity

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

HMC Desert LLC    Delaware    Limited liability company HMC Diversified American
Hotels, L.P.    Delaware    Limited partnership HMC Diversified LLC    Delaware
   Limited liability company HMC East Side II LLC    Delaware    Limited
liability company HMC Gateway LLC    Delaware    Limited liability company HMC
Georgia LLC    Delaware    Limited liability company HMC Grand LLC    Delaware
   Limited liability company HMC Hanover LLC    Delaware    Limited liability
company HMC Hartford LLC    Delaware    Limited liability company HMC Headhouse
Funding LLC    Delaware    Limited liability company HMC Host Restaurants LLC   
Delaware    Limited liability company HMC Hotel Development LLC    Delaware   
Limited liability company HMC HPP LLC    Delaware    Limited liability company
HMC HT LLC    Delaware    Limited liability company HMC IHP Holdings LLC   
Delaware    Limited liability company HMC JWDC GP LLC    Delaware    Limited
liability company HMC JWDC LLC    Delaware    Limited liability company HMC
Lenox LLC    Delaware    Limited liability company HMC Manhattan Beach LLC   
Delaware    Limited liability company HMC Market Street LLC    Delaware   
Limited liability company HMC Maui LLC    Delaware    Limited liability company
HMC Mexpark LLC    Delaware    Limited liability company HMC NGL LLC    Delaware
   Limited liability company HMC OLS I L.P.    Delaware    Limited partnership

 

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

U.S. Guarantor

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

  

Jurisdiction of Organization

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

  

Type of Entity

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

HMC OLS I LLC    Delaware    Limited liability company HMC OLS II L.P.   
Delaware    Limited partnership HMC OP BN LLC    Delaware    Limited liability
company HMC Pacific Gateway LLC    Delaware    Limited liability company HMC
Palm Desert LLC    Delaware    Limited liability company HMC Park Ridge LLC   
Delaware    Limited liability company HMC PLP LLC    Delaware    Limited
liability company HMC Polanco LLC    Delaware    Limited liability company HMC
Potomac LLC    Delaware    Limited liability company HMC Properties I LLC   
Delaware    Limited liability company HMC Properties II LLC    Delaware   
Limited liability company HMC Property Leasing LLC    Delaware    Limited
liability company HMC Retirement Properties L.P.    Delaware    Limited
partnership HMC SBM Two LLC    Delaware    Limited liability company HMC Seattle
LLC    Delaware    Limited liability company HMC SFO LLC    Delaware    Limited
liability company HMC Suites Limited Partnership    Delaware    Limited
partnership HMC Suites LLC    Delaware    Limited liability company HMC Swiss
Holdings LLC    Delaware    Limited liability company HMC Toronto Airport GP LLC
   Delaware    Limited liability company HMC Toronto Airport LP    Delaware   
Limited partnership HMC Toronto EC GP LLC    Delaware    Limited liability
company HMC Toronto EC LP    Delaware    Limited partnership HMC/Interstate
Manhattan Beach, L.P.    Delaware    Limited partnership

 

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

U.S. Guarantor

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

  

Jurisdiction of Organization

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

  

Type of Entity

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

HMH General Partner Holdings LLC    Delaware    Limited liability company HMH
Marina LLC    Delaware    Limited liability company HMH Norfolk LLC    Delaware
   Limited liability company HMH Norfolk, L.P.    Delaware    Limited
partnership HMH Pentagon LLC    Delaware    Limited liability company HMH
Restaurants LLC    Delaware    Limited liability company HMH Rivers LLC   
Delaware    Limited liability company HMH Rivers, L.P.    Delaware    Limited
partnership HMH WTC LLC    Delaware    Limited liability company HMT Lessee
Parent LLC    Delaware    Limited liability company Host La Jolla LLC   
Delaware    Limited liability company Host of Boston, Ltd.    Massachusetts   
Limited partnership Host of Houston 1979    Texas    General partnership Host of
Houston, Ltd.    Texas    Limited partnership Host Park Ridge LLC    Delaware   
Limited liability company Ivy Street Hopewell LLC    Delaware    Limited
liability company Ivy Street LLC    Delaware    Limited liability company Market
Street Host LLC    Delaware    Limited liability company MDSM Finance LLC   
Delaware    Limited liability company New Market Street LP    Delaware   
Limited partnership Philadelphia Airport Hotel LLC    Delaware    Limited
liability company PM Financial LLC    Delaware    Limited liability company PM
Financial LP    Delaware    Limited partnership Potomac Hotel Limited
Partnership    Delaware    Limited partnership PRM LLC    Delaware    Limited
liability company

 

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

U.S. Guarantor

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

  

Jurisdiction of Organization

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

  

Type of Entity

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

Rockledge Hotel LLC    Delaware    Limited liability company S.D. Hotels LLC   
Delaware    Limited liability company Santa Clara HMC LLC    Delaware    Limited
liability company Times Square GP LLC    Delaware    Limited liability company
Times Square LLC    Delaware    Limited liability company Wellsford-Park Ridge
HMC Hotel Limited Partnership    Delaware    Limited partnership YBG Associates
LLC    Delaware    Limited liability company

 

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

SCHEDULE III

 

PLEDGED MEMBERSHIP INTERESTS AND PARTNERSHIP INTERESTS

 

A. Pledged Limited Liability Companies

 

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

   Percentage
of
Outstanding
Membership
Interests

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

Airport Hotels LLC    Company    Delaware Secretary of State    100 Chesapeake
Financial Services LLC    Company    Delaware Secretary of State    100 Durbin
LLC    Company    Delaware Secretary of State    100 Farrell’s Ice Cream Parlour
Restaurants LLC    Company    Delaware Secretary of State    100 Fernwood Hotel
LLC    Company    Delaware Secretary of State    100 HMC Amelia I LLC    Company
   Delaware Secretary of State    100 HMC Amelia II LLC    Company    Delaware
Secretary of State    100 HMC AP GP LLC    Company    Delaware Secretary of
State    100 HMC Atlanta LLC    Company    Delaware Secretary of State    100
HMC Capital LLC    Company    Delaware Secretary of State    100 HMC Capital
Resources LLC    Company    Delaware Secretary of State    90      HMC Capital
LLC    Delaware Secretary of State    10

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

   Percentage
of
Outstanding
Membership
Interests

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

HMC Chicago LLC    Company    Delaware Secretary of State    100 HMC Copley LLC
   Company    Delaware Secretary of State    100 HMC Desert LLC    Company   
Delaware Secretary of State    100 HMC Diversified LLC    Company    Delaware
Secretary of State    100 HMC East Side II LLC    Company    Delaware Secretary
of State    100 HMC Georgia LLC    Company    Delaware Secretary of State    100
HMC Grand LLC    Company    Delaware Secretary of State    100 HMC Hartford LLC
   Company    Delaware Secretary of State    100 HMC Headhouse Funding LLC   
Company    Delaware Secretary of State    100 HMC Host Restaurants LLC   
Company    Delaware Secretary of State    100 HMC Hotel Development LLC   
Company    Delaware Secretary of State    100 HMC HPP LLC    Company    Delaware
Secretary of State    100 HMC HT LLC    Company    Delaware Secretary of State
   100 HMC IHP Holdings LLC    Company    Delaware Secretary of State    100 HMC
JWDC LLC    Company    Delaware Secretary of State    100 HMC Lenox LLC   
Company    Delaware Secretary of State    100

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

   Percentage
of
Outstanding
Membership
Interests

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

HMC Manhattan Beach LLC

   Company    Delaware Secretary of State    100

HMC Maui LLC

   Company    Delaware Secretary of State    100

HMC Mexpark LLC

   Company    Delaware Secretary of State    100

HMC NGL LLC

   Company    Delaware Secretary of State    100

HMC OLS I LLC

   Company    Delaware Secretary of State    100

HMC Palm Desert LLC

   Company    Delaware Secretary of State    100

HMC Park Ridge LLC

   HMC Capital Resources LLC    Delaware Secretary of State    100

HMC PLP LLC

   Company    Delaware Secretary of State    100

HMC Polanco LLC

   HMC Mexpark LLC    Delaware Secretary of State    100

HMC Potomac LLC

   Company    Delaware Secretary of State    100

HMC Properties I LLC

   Company    Delaware Secretary of State    100

HMC Properties II LLC

   Company    Delaware Secretary of State    100

HMC Property Leasing LLC

   Company    Delaware Secretary of State    100

HMC SBM Two LLC

   Company    Delaware Secretary of State    100

HMC Seattle LLC

   Company    Delaware Secretary of State    100

HMC SFO LLC

   Company    Delaware Secretary of State    100

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

   Percentage
of
Outstanding
Membership
Interests

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

HMC Suites LLC

   HMC Capital Resources LLC    Delaware Secretary of State    100

HMC Swiss Holdings LLC

   Company    Delaware Secretary of State    100

HMC Waterford LLC

   Company    Delaware Secretary of State    100

HMH General Partner Holdings LLC

   Company    Delaware Secretary of State    100

HMH Marina LLC

   HMC Retirement Properties L.P.    Delaware Secretary of State    100

HMH Norfolk LLC

   Company    Delaware Secretary of State    100

HMH Pentagon LLC

   Company    Delaware Secretary of State    100

HMH Restaurants LLC

   Company    Delaware Secretary of State    100

HMH Rivers LLC

   Company    Delaware Secretary of State    100

HMH WTC LLC

   Company    Delaware Secretary of State    100

HMT Lessee Parent LLC

   Company    Delaware Secretary of State    100

Host La Jolla LLC

   Company    Delaware Secretary of State    100

Host Park Ridge LLC

   HMC Capital Resources LLC    Delaware Secretary of State    100

Ivy Street LLC

   Company    Delaware Secretary of State    100

Ivy Street Hopewell LLC

   Company    Delaware Secretary of State    100

MDSM Finance LLC

   HMC Palm Desert LLC    Delaware Secretary of State    100

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

   Percentage
of
Outstanding
Membership
Interests

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

Philadelphia Airport Hotel LLC

   Company    Delaware Secretary of State    100

PM Financial LLC

   Company    Delaware Secretary of State    100

PRM LLC

   HMC Capital Resources LLC    Delaware Secretary of State    100

Rockledge Hotel LLC

   Company    Delaware Secretary of State    100

Santa Clara HMC LLC

   Company    Delaware Secretary of State    100

Times Square LLC

   Host La Jolla LLC    Delaware Secretary of State    100

YBG Associates LLC

   HMC Capital Resources LLC    Delaware Secretary of State    100

 

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

B. Pledged Partnerships

 

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

  

Pledgor’s
Partnership
Interest

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

Ameliatel, a Florida GP

   HMC Amelia I LLC    Delaware Secretary of State    99% GP    HMC Amelia II
LLC    Delaware Secretary of State    1% GP

Chesapeake Hotel Limited Partnership

   HMC PLP LLC    Delaware Secretary of State    1% GP    Company    Delaware
Secretary of State    99% LP

City Center Hotel Limited Partnership

   Company    Delaware Secretary of State    97.2% LP    Host La Jolla LLC   
Delaware Secretary of State   

1% GP,

1.8% LP

HMC AP LP

   HMC AP GP LLC    Delaware Secretary of State    .01% GP    Company   
Delaware Secretary of State    99.99% LP

HMC Diversified American

Hotels, L.P.

   HMC Diversified LLC    Delaware Secretary of State   

1% GP

98% LP

   HMC Partnership Properties LLC    Delaware Secretary of State    .99% LP   
Company    Delaware Secretary of State    .1% LP

HMC/Interstate Manhattan Beach, L.P.

   HMC Manhattan Beach LLC    Delaware Secretary of State   

1% GP

74% LP

   Company    Delaware Secretary of State    25% LP

HMC OLS I L.P.

   HMC OLS I LLC    Delaware Secretary of State    0.1% GP    Company   
Delaware Secretary of State    99.9% LP

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

  

Pledgor’s
Partnership
Interest

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

HMC OLS II LP

   HMC OLS I L.P.    Delaware Secretary of State    99.9% LP    HMC OLS I LLC   
Delaware Secretary of State    0.1% GP

HMC Retirement Properties L.P.

   Durbin LLC    Delaware Secretary of State    1% GP    Company    Delaware
Secretary of State    99% LP

HMC Suites Limited Partnership

   HMC Suites LLC    Delaware Secretary of State    1% GP    HMC Capital
Resources LLC    Delaware Secretary of State    99% LP

HMH Norfolk, L.P.

   HMH Norfolk LLC    Delaware Secretary of State    1% GP    Company   
Delaware Secretary of State    99% LP

HMH Rivers, L.P.

   HMH Rivers LLC    Delaware Secretary of State    1% GP    Company    Delaware
Secretary of State    99% LP

Host of Boston, Ltd.

   Airport Hotels LLC    Delaware Secretary of State    1% GP    Company   
Delaware Secretary of State    99% LP

Host of Houston 1979

   Airport Hotels LLC    Delaware Secretary of State    99% GP    Host of
Houston, Ltd.    Texas Secretary of State    1% GP

Host of Houston, Ltd.

   Airport Hotels LLC    Delaware Secretary of State    1% GP    Company   
Delaware Secretary of State    99% LP

 

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

Issuer

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

  

Pledgor

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

  

UCC Filing Office

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

  

Pledgor’s
Partnership
Interest

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

PM Financial LP

   PM Financial LLC    Delaware Secretary of State    1%GP   

Company

   Delaware Secretary of State    99% LP

Potomac Hotel Limited Partnership

   HMC Potomac LLC    Delaware Secretary of State   

1% GP

98% LP

  

HMC Partnership Properties LLC

   Delaware Secretary of State    .99% LP    Company    Delaware Secretary of
State    .1% LP Wellsford-Park Ridge HMC Hotel Limited Partnership    Host Park
Ridge LLC    Delaware Secretary of State   

1% GP,

98% LP

  

PRM LLC

   Delaware Secretary of State    1% LP

 

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

SCHEDULE IV

 

REVIEWED AGREEMENTS

 

A. Agreements listed on Host Marriott L.P.’s Annual Report for 2003, filed on
March 4, 2004

 

  1. Host Marriott L.P. Executive Deferred Compensation Plan as amended and
restated effective January 1, 1999 (formerly the Host Marriott Corporation
Executive Deferred Compensation Plan).

 

  2. Host Marriott Corporation 1997 Comprehensive Stock and Cash Incentive Plan,
as amended and restated December 29, 1998, as amended January 2004.

 

  3. Distribution Agreement dated as of September 15, 1993 between Host Marriott
Corporation and Marriott International, Inc.

 

  a. Amendment No. 1 to the Distribution Agreement dated December 29, 1995 by
and among Host Marriott Corporation, Host Marriott Services Corporation and
Marriott International, Inc.

 

  b. Amendment No. 2 to the Distribution Agreement dated June 21, 1997 by and
among Host Marriott Corporation, Host Marriott Services Corporation and Marriott
International, Inc.

 

  c. Amendment No. 3 to the Distribution Agreement dated March 3, 1998 by and
among Host Marriott Corporation, Host Marriott Services Corporation, Marriott
International, Inc. and Sodexho Marriott Services, Inc.

 

  d. Amendment No. 4 to the Distribution Agreement by and among Host Marriott
Corporation and Marriott International Inc.

 

  e. Amendment No. 5 to the Distribution Agreement, dated December 18, 1998, by
and among Host Marriott Corporation, Host Marriott Services Corporation and
Marriott International Inc.

 

  f. Amendment No. 6, dated as of January 10, 2001, to the Distribution
Agreement dated as of September 15, 1993 between Host Marriott Corporation and
Marriott International, Inc.

 

  g. Amendment No. 7, dated as of December 29, 2001, to the Distribution
Agreement dated as of December 15, 1993 between Host Marriott Corporation and
Marriott International, Inc.

 

  4. Distribution Agreement dated December 22, 1995 by and between Host Marriott
Corporation and Host Marriott Services Corporation.

 

  a. Amendment to Distribution Agreement dated December 22, 1995 by and between
Host Marriott Corporation and Host Marriott Services Corporation.

 

  5. Tax Sharing Agreement dated as of October 5, 1993 by and between Host
Marriott Corporation and Marriott International, Inc.

 

  6. License Agreement dated as of December 29, 1998 by and among Host Marriott
Corporation, Host Marriott, L.P., Marriott International, Inc. and Marriott
Worldwide Corporation.

 

  7. Tax Administration Agreement dated as of October 8, 1993 by and between
Host Marriott Corporation and Marriott International, Inc.

 

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

  8. Restated Noncompetition Agreement by and among Host Marriott Corporation,
Marriott International, Inc. and Sodexho Marriott Services, Inc.

 

  a. First Amendment to Restated Noncompetition Agreement by and among Host
Marriott Corporation, Marriott International, Inc. and Sodexho Marriott
Services, Inc.

 

  9. Employee Benefits and Other Employment Matters Allocation Agreement dated
as of December 29, 1995 by and between Host Marriott Corporation and Host
Marriott Services Corporation.

 

  10. Tax Sharing Agreement dated as of December 29, 1995 by and between Host
Marriott Corporation and Host Marriott Services Corporation.

 

  11. Host Marriott, L.P. Retirement and Savings Plan, as amended and effective
January 1, 2004.

 

  12. Contribution Agreement dated as of April 16, 1998 among Host Marriott
Corporation, Host Marriott, L.P. and the contributors named therein, together
with Exhibit B.

 

  a. Amendment No. 1 to Contribution Agreement dated May 8, 1998 among Marriott
Corporation, Host Marriott, L.P. and the contributors named therein.

 

  b. Amendment No. 2 to Contribution Agreement dated May 18, 1998 among Host
Marriott Corporation, Host Marriott, L.P. and the contributors named therein.

 

  13. Employee Benefits and Other Employment Matters Allocation Agreement
between Host Marriott Corporation, Host Marriott, L.P. and Crestline Capital
Corporation.

 

  a. Amendment to the Employee Benefits and Other Employment Matters Allocation
Agreement effective as of December 29, 1998 by and between Host Marriott
Corporation, Marriott International, Inc., Sodexho Marriott Services, Inc.,
Crestline Capital Corporation and Host Marriott, L.P.

 

  14. Amended and Restated Noncompetition Agreement among Host Marriott
Corporation, Host Marriott, L.P. and Crestline Capital Corporation, dated
December 28, 1998.

 

  a. First Amendment, dated as of December 28, 1998, to the Restated
Noncompetition Agreement dated March 3, 1998 by and among Host Marriott
Corporation, Marriott International, Inc. and Crestline Capital Corporation.

 

  15. Acquisition and Exchange Agreement dated November 13, 2000 by Host
Marriott, L.P. and Crestline Capital Corporation.

 

  16. Host Marriott Corporation’s Non-Employee Director’s Deferred Stock
Compensation Plan.

 

  17. Separation and Retirement Agreement dated as of May 30, 2003.

 

  18. Host Marriott Severance Plan for members of senior management adopted as
of March 6, 2003.

 

B. Management Agreements and Agreements Relating to Management Agreements

 

  1. Corporate-Level Amendment of Host Management Agreements, dated as of
December 29, 2001, by and among Host Marriott, L.P., HMT Lessee LLC and Marriott
International, Inc. (the “MHRS CLA”).

 

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

  a. Form of Standard 2002 Agreement (as defined in the MHRS CLA) attached as
Exhibit 2 to the MHRS CLA.

 

  b. Form of Standard Owner’s Agreement (as defined in the MHRS CLA) attached as
Exhibit 2-A to the MHRS CLA.

 

  c. First Amendment to Corporate-Level Amendment of Host Management Agreements
(MHRS), dated August 25, 2004, by and among Host Marriott, L.P., HMT Lessee LLC
and Marriott International, Inc.

 

  2. Amended and Restated Management Agreement for the Atlanta JW Lenox Marriott
hotel, dated as of December 29, 2001, between Host Marriott, L.P. (“Owner”) and
Marriott International, Inc.

 

  3. Third Amended and Restated Management Agreement for the New York Marriott
Marquis hotel, dated as of December 29, 2001, between HMC Times Square Hotel LLC
(“Owner”) and Marriott International, Inc.

 

  4. Amended and Restated Management Agreement for the San Francisco Moscone
Marriott, dated as of December 29, 2001, between YBG Associates LLC (“Owner”)
and Marriott Hotels Services, Inc.

 

  5. Corporate-Level Amendment of Host Management Agreements dated as of
December 29, 2001, by and among Host Marriott, L.P., HMT Lessee LLC and The
Ritz-Carlton Hotel Company, L.L.C. (the “RC CLA”).

 

  a. Form of Standard 2002 RC Agreement (as defined in the RC CLA) attached as
Exhibit 2 to the RC CLA.

 

  b. Form of Standard RC Owner’s Agreement (as defined in the RC CLA) attached
as Exhibit 2-A to the RC CLA.

 

  6. Amended and Restated Management Agreement for the Ritz-Carlton San
Francisco, dated as of January 1, 2002, between Host Marriott, L.P. (“Owner”)
and The Ritz-Carlton Hotel Company, L.L.C.

 

  7. Amended and Restated Management Agreement for the Ritz-Carlton Buckhead,
dated as of January 1, 2002, between HMC OP BN LLC (“Owner”) and The
Ritz-Carlton Hotel Company, L.L.C.

 

  8. Amended and Restated Management Agreement for the Ritz-Carlton Naples,
dated as of January 1, 2002, between HMC OP BN LLC (“Owner”) and The
Ritz-Carlton Hotel Company, L.L.C.

 

  9. Operation Agreement dated as of January 5, 1995, by and between HMC
Acquisition Properties, Inc. and Interstate Hotels Corporation #19.

 

  a. Consent, Assignment and Assumption and Amendment of Operation Agreement,
dated as of December 31, 1998, by and among Host Marriott Host Marriott, L.P.,
CCMH Charlotte LLC and Interstate Hotels, LLC.

 

  10. Operation Agreement, dated as of December 15, 1994, by and between HMC
Acquisition Properties, Inc. and CDS Hotel Corporation.

 

  a. First Amendment to Operation Agreement, dated as of November 1, 1996, by
and between HMC Acquisition Properties, Inc. and Interstate Hotels Corporation.

 

  b. Second Amendment to Operation Agreement, dated as of January 31, 1997, by
and between HMC Acquisition Properties, Inc. and Interstate Hotels Corporation.

 

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

  c. Consent, Assignment and Assumption and Amendment of Operation Agreement,
dated as of December 31, 1998, by and among Host Marriott, L.P., CCMH
Fisherman’s Wharf LLC and Interstate Hotels, LLC.

 

  11. Hotel Management Agreement, dated July 15, 2004, between Delta Hotels
Limited and HMC AP Canada Co.

 

  12. Hotel Management Agreement, dated March 27, 1997, between BRE/Grand L.L.C.
and Four Seasons Hotels Limited.

 

  a. Consent, Assignment and Assumption and Amendment of Management Agreement,
dated December 31, 1998, among HMC Grand LLC, CCFS Atlanta LLC and Four Seasons
Hotels Limited.

 

  13. Management Agreement, dated February 28, 1997, between BRE/HT, L.L.C. and
Hyatt Corporation.

 

  a. Consent, Assignment and Assumption and Amendment of Management Agreement,
dated December 30, 1998, among HMC HT LLC, CCMH Atlanta LLC and Hyatt
Corporation.

 

  b. Amendment to Management Agreement, dated July 26, 2000, between CCHH
Atlanta LLC and Hyatt Corporation.

 

C. Franchise Agreements

 

  1. First Amended and Restated Corporate-Level Amendment of Host Franchise
Agreements, dated as of December 29, 2001, by and between Host Marriott, L.P.
and Marriott International, Inc.

 

  2. Franchise Agreement, dated January 5, 1995, by and between Host Marriott,
L.P. and Marriott International, Inc., as amended.

 

  a. Consent, Assignment and Assumption and Amendment of License Agreement,
dated as of December 31, 1998, by and among Host Marriott, L.P., CCMH Charlotte
LLC and Marriott International, Inc.

 

  b. Assignment of Franchise Agreement and Termination of Owner Agreement and
Consent, dated as of January 10, 2001, by and among CCMH Charlotte LLC, Host
Marriott, L.P. and Marriott International, Inc.

 

  c. Amendment to Franchise Agreement, dated as of January 10, 2001, by and
between Host Marriott, L.P. and Marriott International, Inc.

 

  3. Franchise Agreement, dated December 15, 1994, by and between Host Marriott,
L.P. and Marriott International, Inc., as amended.

 

  a. Consent, Assignment and Assumption and Amendment of License Agreement,
dated as of December 31, 1998, by and among Host Marriott, L.P., CCMH
Fisherman’s Wharf LLC and Marriott International, Inc.

 

  b. Assignment of Franchise Agreement and Termination of Owner Agreement and
Consent, dated as of January 10, 2001, by and among CCMH Fisherman’s Wharf LLC,
Host Marriott, L.P. and Marriott International, Inc.

 

  c. Amendment to Franchise Agreement, dated as of January 10, 2001, by and
between Host Marriott, L.P. and Marriott International, Inc.

 

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

SCHEDULE V

 

RESTRICTED TRANSFEREES

 

A “restricted transferee” of a controlling interest in a Credit Party shall mean
an entity which:

 

  (i) does not have sufficient financial resources and liquidity to fulfill a
Credit Party’s obligations under its respective hotel management or franchise
agreement;

 

  (ii) is in control of or controlled by persons who have been convicted of
felonies involving moral turpitude in any state or federal court;

 

  (iii) is an operator (or a person or entity that controls an operator) of a
branded full service hotel chain with more than ten thousand (10,000) rooms, or
a branded select service or extended stay hotel chain with more than twenty-five
thousand (25,000) rooms; provided, however, that a person or entity shall not be
deemed to be an operator of a branded hotel chain solely by reason of such
person or entity being (w) a franchisee, but not an operator (or a person or
entity that controls an operator), of a branded hotel chain, (x) a passive,
institutional investor that has no more than a two (2)-seat representation on
the board or directors or corresponding governing body (but in no event more
than thirty percent (30%) of the seats on the board of directors or
corresponding governing body) of an operator of a branded full-service or
extended stay hotel chain and is not involved in the day to day property-level
management decisions or executive oversight (except in a board or corresponding
governing body capacity) of such operator, (y) engaged in the ownership of such
hotels, either directly or indirectly through subsidiaries, or (z) engaged in
the financing of such hotels through the holding of a mortgage or mortgages
secured by one or more hotels;

 

  (iv) is a non-profit or governmental organization;

 

  (v) as its primary business, owns, leases, or operates any casino or gambling
facility or is an affiliate of any such entity; or

 

  (vi) owns or operates a distillery, winery, or brewery or a distributorship of
alcoholic beverages.

 

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EXHIBIT E-3

 

 

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     25, Commerce Court West
199 Bay Street
Toronto, Ontario, Canada
M5L 1A9

September 10, 2004

   Deliveries: 28th Floor      Telephone: 416.863.2400     
Facsimile: 416.863.2653      www.blakes.com      Reference: 52070/19

 

To the Persons listed on Schedule A to this Opinion

 

Dear Sirs/Madames:

 

Re: Amended and Restated Credit Agreement dated as of September 10, 2004,
between Host Marriott L.P., as the U.S. Borrower, certain subsidiaries of Host
Marriott L.P., HMC Toronto EC Company, HMC Toronto Air Company, HMC AP Canada
Company and Calgary Charlotte Partnership, as the Canadian Borrowers, the
lenders as may become party thereto from time to time, Deutsche Bank Trust
Company Americas, as Administrative Agent, Bank of America, N.A., as Syndication
Agent, and Citicorp North America, Inc., Societe Generale and Calyon New York
Branch, as Co-Documentation Agents (the “Amended and Restated Credit Agreement”)

 

1. SCOPE OF OPINION

 

1.1 Introduction

 

1.1.1 We have acted as Canadian counsel for:

 

  (a) HMC Toronto EC Company, HMC Toronto Air Company, HMC AP Canada Company,
HMC Charlotte (Calgary) Company (“HMC Charlotte”), HMC Grace (Calgary) Company
(“HMC Grace”) and Calgary Charlotte Holdings Company (“Calgary Holdings”)
(collectively, the “Nova Scotia Companies”); and

 

  (b) HMC Charlotte and HMC Grace in their capacities as general partners (the
“Partners”) of Calgary Charlotte Partnership (the “Calgary Partnership”, the
Calgary Partnership collectively with HMC Toronto EC Company, HMC Toronto Air
Company and HMC AP Canada Company the “Canadian Borrowers”);

 

in connection with the Amended and Restated Credit Agreement, the September 10,
2004 Canadian Dollar Revolving Notes executed and delivered under the Amended
and Restated Credit Agreement by each of the Canadian Borrowers in favour of
each of Deutsche Bank AG,

 

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Canada Branch, Bank of America, N.A. (Canadian Branch), Citibank, N.A. (Canadian
Branch), Societe Generale (Canada) and The Bank of Nova Scotia (the “Existing
Canadian Dollar Revolving Notes”) and the amended and restated subsidiaries
guaranty (the “Amended and Restated Subsidiaries Guaranty”) dated September 10,
2004 whereby HMC AP Canada Company, HMC Charlotte, HMC Grace and Calgary
Holdings, in each case in their personal capacities and not in the case of HMC
Charlotte, HMC Grace in their capacity as Partners of the Calgary Partnership,
(collectively, the “Canadian Guarantors” and together with the Canadian
Borrowers, the “Canadian Credit Parties”) guarantee the Credit Agreement
Obligations and Other Obligations (as defined in the Amended and Restated
Subsidiaries Guaranty).

 

1.1.2 This opinion is given to you pursuant to Section 6.02 of the Amended and
Restated Credit Agreement. Capitalized terms used but not defined in this
opinion have the respective meanings attributed to those terms in the Amended
and Restated Credit Agreement. The Amended and Restated Credit Agreement, the
Existing Canadian Dollar Revolving Notes and the Amended and Restated
Subsidiaries Guaranty are referred to collectively as the “Documents” and
individually as a “Document”.

 

1.2 Examination of Documents

 

1.2.1 We examined an electronically transmitted copy of the each of the executed
Documents.

 

1.2.2 We have also made such investigations and examined originals or copies,
certified or otherwise identified to our satisfaction, of such certificates of
public officials and of such other certificates, documents and records as we
considered necessary or relevant for purposes of the opinions expressed below,
including, without limitation:

 

  (a) the general partnership agreement dated December 9, 1996 between HMC
Charlotte and HMC Grace (as successor) (the “Partnership Agreement”);

 

  (b) a resolution of the general partners of the Calgary Partnership
authorizing, among other things, the execution, delivery and performance of by
the Calgary Partnership of the Documents to which it is a party;

 

  (c) a certificate of the Secretary of the Nova Scotia Companies (the
“Secretary’s Certificate”) with respect to certain factual matters, a copy of
which has been delivered to you;

 

  (d) certificates of status (the “Alberta Certificates of Status”) dated
September 9, 2004 issued in respect of each of HMC Charlotte and HMC Grace by
the Registrar of Corporations for the Province of Alberta; and

 

  (e)

corporate profile reports (the “Ontario Corporate Profile Reports”) dated
September 9, 2004 issued in respect of each of HMC Toronto EC Company, HMC

 

Page 2

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Toronto Air Company and HMC AP Canada Company by the Ministry of Consumer and
Commercial Relations for the Province of Ontario.

 

1.3 Assumptions

 

We have made the following assumptions:

 

1.3.1 With respect to all documents examined by us, we have assumed the
genuineness of all signatures, the legal capacity of individuals signing any
documents, the authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents submitted to us
as certified, conformed, telecopied, photocopied or electronically transmitted
copies.

 

1.3.2 We have, with your permission, relied upon the Secretary’s Certificate
with respect to the accuracy of the factual matters contained therein, which
factual matters have not been independently investigated or verified by us.

 

1.3.3 We have assumed that the Partners have duly executed on behalf of the
Calgary Partnership each of the Documents to which the Calgary Partnership is a
party.

 

1.4 Laws Addressed

 

1.4.1 The opinions expressed herein relate only to the laws of the Provinces of
Ontario and Alberta (the “Provinces”) on the date of this opinion, and the
federal laws of Canada applicable in the Provinces, as at the date of this
opinion, and no opinion is expressed with respect to the laws of any other
jurisdiction.

 

2. OPINIONS

 

Based upon and subject to the foregoing, and to the qualifications expressed
below, we are of the opinion that:

 

2.1.1 The Calgary Partnership has been formed and is existing as a general
partnership under the Partnership Act (Alberta).

 

2.1.2 Relying solely on the Alberta Certificates of Status, each of HMC
Charlotte and HMC Grace is a valid and subsisting extra-provincial corporation
in the Province of Alberta.

 

2.1.3 No extra-provincial license is required to be obtained in Ontario in order
for HMC Toronto EC Company, HMC Toronto Air Company or HMC AP Canada Company to
carry on business in Ontario. It should be noted, however, that each of HMC
Toronto EC Company, HMC Toronto Air Company and HMC AP Canada Company is
required to file certain prescribed corporate information pursuant to the
Corporation Information Act (Ontario). The Ontario Profile Reports indicate that
each of HMC Toronto EC Company, HMC Toronto Air

 

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Company and HMC AP Canada Company has filed initial notices under the
Corporation Information Act (Ontario) as of the dates specified in such Ontario
Profile Reports.

 

2.1.4 The Calgary Partnership has the partnership power and capacity to execute,
deliver and perform its obligations under each of the Documents to which it is a
party.

 

2.1.5 The Calgary Partnership has taken all necessary partnership action to
authorize the execution, delivery and performance by the Partners on behalf of
the Calgary Partnership of each of the Documents to which it is a party, and the
other Canadian Dollar Revolving Notes in accordance with the provisions of the
Amended and Restated Credit Agreement to each Canadian Lender which did not
receive such a note today and the Calgary Partnership has duly executed each of
the Documents to which it is a party.

 

2.1.6 Assuming that a Document has been unconditionally delivered in the State
of New York (which we have been advised by counsel for the Lenders is the State
where the Documents have actually been executed and delivered) by a Canadian
Credit Party to the other parties to such Document in order to create a binding
agreement between them, then, to the extent that the laws of a Province were to
apply to the question of the delivery of such Document1, such Document has been
duly delivered.

 

2.1.7 The execution, delivery and performance by each of the Canadian Credit
Parties of each of the Documents to which it is a party (including the
execution, delivery and performance by the Partners on behalf of the Calgary
Partnership of the Documents to which the Calgary Partnership is a party) do not
breach or result in a default under:

 

  (a) in the case of the Partners and the Calgary Partnership, the Partnership
Agreement;

 

  (b) in the case of any of the Canadian Credit Parties, any law, statute, rule
or regulation of the Provinces or any of the laws of Canada applicable therein
to which any of the Canadian Credit Parties are subject; and

 

  (c) to our current actual knowledge, any judgement, order or decree of any
court, agency, tribunal, arbitrator or other authority in either of the
Provinces to which any Canadian Credit Parties are subject.

 

2.1.8 No authorization, consent, permit or approval of, or other action by, or
filing or qualification with or notice to, any governmental agency or authority,
regulatory body, court,

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

1 Please note that under conflict of laws rules applicable in the Province, as a
matter of contract law, delivery of a Document must be effected in accordance
with the law of the place of performance (which in this case would be the laws
of the State of New York (being the laws applicable to such Document as chosen
by the parties and the laws of the State where, we have been advised by counsel
for the Lendors, such Document has actually been executed and delivered)).

 

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tribunal or other similar entity having jurisdiction in either of the Provinces
under the laws of either of the Provinces or the federal laws of Canada
applicable therein is required in connection with the execution, delivery and
performance by any of the Canadian Credit Parties of any of the Documents to
which it is a party (including the execution, delivery and performance by the
Partners on behalf of the Calgary Partnership of the Documents to which the
Calgary Partnership is a party).

 

2.1.9 If a Document is sought to be enforced in any action or proceeding in
either of the Provinces in accordance with the laws applicable to such Document
as chosen by the parties, namely the laws of the State of New York, the courts
of such Province would recognize such choice of laws provided that such choice
of laws is bona fide (in the sense that it was not made with a view to avoiding
the consequences of the laws of the jurisdiction with which the transaction has
a real and substantial connection) and provided that such choice of laws is not
contrary to public policy, public order or good morals as such terms are
understood under the laws of such Provinces (“Public Policy”). To our current
actual knowledge, the choice of the laws of the State of New York as the laws
applicable to the Documents was not made by any Canadian Credit Party for the
purpose of evading another system of law and would not offend Public Policy in
either of the Provinces.

 

2.1.10 If a Document is sought to be enforced in any action or proceeding in
either Province in accordance with the laws applicable to such Document as
chosen by the parties, namely the laws of the State of New York, the courts of
such Province would, subject to paragraph 2.1.9 hereof, apply the laws of the
State of New York, to the extent specifically pleaded and proved, to all issues
which under conflict of laws rules in effect in such Province are characterized
to be contract issues, except such New York laws found by the relevant court (i)
to be procedural in nature; (ii) to be of a revenue, expropriatory or penal
nature; (iii) to be inconsistent with Public Policy; or (iv) to conflict with
laws of such Province (the “Overriding Local Laws”) determined by such court to
be of overriding effect. A court in either Province has, however, an inherent
power to decline to hear such action or proceeding if it is contrary to Public
Policy for it to do so, or if it is not the proper forum to hear such action, or
if concurrent proceedings are being brought elsewhere. Based solely on our
review of the Documents, and subject to the assumptions and qualifications
provided for in this opinion, the Overriding Local Laws would not impair the
enforceability of the Documents against a Canadian Credit Party.

 

2.1.11 The laws of each of the Provinces permit an action to be brought before a
court of competent jurisdiction in such Province to enforce a final and
conclusive judgement in personam against the applicable Canadian Credit Party in
respect of a Document by a court in the State of New York, which is not
impeachable as void or voidable under the internal laws of the State of New
York, for a sum certain if (i) the court rendering such judgement properly and
appropriately exercised jurisdiction over the applicable Canadian Credit Party
pursuant to the laws of such Province and of the laws of the State of New York;
(ii) the applicable Canadian Credit Party was duly served with the process of
the New York court or appeared to such process, (iii) such

 

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judgement was not obtained by fraud or in a manner contrary to natural justice
and the enforcement of such judgement would not be inconsistent with Public
Policy or contrary to any order made by the Attorney-General of Canada under the
Foreign Extraterritorial Measures Act (Canada) or the Competition Tribunal under
the Competition Act (Canada) in respect of certain judgements (as therein
defined); (iv) the cause of action giving rise to such judgement is recognized
in such Province, (v) the enforcement of such judgement does not constitute,
directly or indirectly, the enforcement of foreign revenue, expropriatory or
penal laws; (vi) no new admissible evidence relevant to the action is discovered
prior to the rendering of judgement by the court of such Province; and (vii)
there has been compliance with the Limitations Act (Ontario) or the Limitations
Act (Alberta), as the case may be, which requires that an action to enforce a
foreign judgement must be commenced within a period of six years of the date of
the foreign judgement.

 

2.1.12 The submission by the Canadian Borrowers to the non-exclusive
jurisdiction of the courts of New York and the federal courts of the United
States of America sitting in the Southern District of New York contained in
Section 14.07 of the Amended and Restated Credit Agreement would be recognized
and given effect by the courts in the Provinces as a valid submission to the
jurisdiction of such courts, provided that the provisions of the Amended and
Restated Credit Agreement respecting service of process on the Canadian
Borrowers are complied with. The submission by the Canadian Guarantors to the
non-exclusive jurisdiction of the courts of New York and the federal courts of
the United States of America sitting in the Southern District of New York
contained in Section 20 of the Amended and Restated Subsidiaries Guaranty would
be recognized and given effect by the courts in the Provinces as a valid
submission to the jurisdiction of such courts, provided that the provisions of
the Amended and Restated Subsidiaries Guaranty respecting service of process on
the Canadian Guarantors are complied with.

 

2.1.13 To our current actual knowledge, we have not been retained to represent
any of the Canadian Credit Parties in respect of any:

 

  (a) court, administrative, regulatory or similar proceeding (whether civil,
quasi-criminal or criminal);

 

  (b) arbitration or other dispute settlement procedure; or

 

  (c) investigation or inquiry by any governmental, administrative, regulatory
or other similar body;

 

that, if determined adversely to any of the Canadian Parties, would prohibit any
of the Canadian Credit Parties from executing, delivering or performing any of
their respective obligations under the Documents.

 

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3. QUALIFICATIONS

 

The foregoing opinions are subject to the following qualifications:

 

3.1.1 Where we express opinions based upon the state of our current actual
knowledge, such opinions are qualified in that, except for (i) a review of the
Secretary’s Certificate and the Documents, and (ii) inquiries of solicitors
presently with this firm who were directly involved in the preparation and
negotiation of the Documents, the transactions contemplated thereby and this
opinion regarding their current actual conscious recollections, we have not made
any special or additional investigations, searches or inquiries.

 

3.1.2 The enforceability of each of the Documents is subject to bankruptcy,
insolvency, reorganization, arrangement, winding-up, moratorium and other
similar laws of general application affecting the enforcement of creditors’
rights generally.

 

3.1.3 The enforceability of any Document may be limited by general principles of
equity and the obligation to exercise discretionary powers in a reasonable
manner, and no opinion is expressed regarding the availability of any equitable
remedy (including those of specific performance and injunction) which remedies
are only available in the discretion of a court of competent jurisdiction.

 

3.1.4 The enforcement of any Document is subject to the discretion of a court of
competent jurisdiction to impose restrictions on the rights of creditors to
enforce immediate payment of amounts stated to be payable on demand.

 

3.1.5 The awarding of costs is in the discretion of a court of competent
jurisdiction.

 

3.1.6 Pursuant to the Currency Act (Canada), a judgment by a court in any
province in Canada may be awarded in Canadian currency only and such judgment
may be based on a rate of exchange in existence on a day other than the day of
payment of such judgment.

 

3.1.7 Any requirement in any of the Documents that interest be paid at a higher
rate after than before default, or providing for an additional penalty, charge
or other similar payment after default, may not be enforceable on the basis that
it may be seen to constitute a penalty rather than a genuine pre-estimate of
damages.

 

3.1.8 No opinion is expressed regarding the enforceability of any provision of
any Document which purports to provide that any portion thereof which is
unenforceable may be severed without affecting the enforceability of the
remaining provisions.

 

3.1.9 The enforceability of a waiver of the right to a jury trial in a civil
action is subject to the discretion of a judge not to strike a jury notice.

 

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3.1.10 A provision in any Document which purports to waive any statutory rights
may not be enforceable.

 

3.1.11 The effectiveness of provisions which purport to relieve a Person from a
liability or duty otherwise owed may be limited by law, and provisions requiring
indemnification or reimbursement may not be enforced by a court, to the extent
that they relate to the failure of such Person to have performed such liability
or duty.

 

3.1.12 No opinion is expressed regarding the enforceability of any provisions in
any of the Documents to the effect that modifications, amendments or waivers of
or with respect to any of the Documents that are not in writing will be
ineffective.

 

3.1.13 No opinion is expressed as to the enforceability of any provisions in any
of the Documents which:

 

  (a) purport to establish evidentiary standards, such as provisions stating
that certain determinations, calculations, requests or certificates will be
conclusive or binding; or

 

  (b) purport to waive or effect any rights to notices of enforcement of rights
or remedies.

 

3.1.14 No opinion is expressed as to any taxes, levies, duties, imposts or
charges which may be imposed upon, or exigible in respect of, any of the
transactions contemplated by the Documents.

 

3.1.15 Any requirement that interest (as defined in the Criminal Code (Canada))
be paid, or which results in receipt by the Lender of such interest, at a rate
in excess of 60% per annum may contravene Section 347 of the Criminal Code
(Canada) and may not be enforceable.

 

4. RELIANCE

 

This opinion may be relied upon only by the Administrative Agent and the
Lenders, their permitted assigns and successors and counsel to such parties for
the purposes of the matters contemplated by this opinion. It may not be relied
upon by any other person or for any other purpose without our prior written
consent.

 

Yours truly,

 

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SCHEDULE A

 

Deutsche Bank Trust Company Americas

 

Bank of America, N.A.

 

Citicorp North America Inc.

 

Société Générale

 

Calyon New York Branch

 

Goldman Sachs Credit Partners L.P.

 

The Bank of New York

 

Bear Stearns Corporate Lending Inc.

 

Wachovia Bank, National Association

 

The Bank of Nova Scotia

 

Deutsche Bank AG Canada Branch

 

Bank of America, N.A. (Canada Branch)

 

Citibank, N.A. Canadian Branch

 

Societe Generale (Canada)

 

Such other persons which become Lenders from time to time under the Amended and
Restated Credit Agreement.

 

Willkie Farr & Gallagher LLP

 

Stikeman Elliott LLP

 

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EXHIBIT E-4

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1100 Purdy’s Wharf Tower One

1959 Upper Water Street

Halifax, Nova Scotia, Canada

 

Correspondence

PO Box 2380 Central

Halifax NS B3J 3E5

    

 

September 10, 2004

 

To the Persons listed on Schedule “A” to this Opinion

 

Dear Sirs/Madames:

 

  Re: Amended and Restated Credit Agreement dated as of September 10, 2004,
among Host Marriott L.P., as the U.S. Borrower, certain subsidiaries of Host
Marriott L.P., HMC Toronto EC Company, HMC Toronto Air Company, HMC AP Canada
Company and Calgary Charlotte Partnership, as the Canadian Borrowers, the
lenders as may become party thereto from time to time, Deutsche Bank Trust
Company Americas, as Administrative Agent, Bank of America, N.A., as Syndication
Agent, and Citicorp North America, Inc., Societe Generale and Caylon, as
Co-Documentation Agents (the “Amended and Restated Credit Agreement”)

 

1. SCOPE OF OPINION

 

1.1 Introduction

 

1.1.1 We have acted as Nova Scotia counsel for:

 

  (a) HMC Charlotte (Calgary) Company (“Charlotte”) and HMC Grace (Calgary)
Company (“Grace”) in their capacities as general partners (the “Partners”) of
Calgary Charlotte Partnership (the “Partnership”), HMC Toronto EC Company, HMC
Toronto Air Company and HMC AP Canada Company (“HMC AP”) (collectively, the
Partners and these companies are referred to as the “Borrowers”) in connection
with the Amended and Restated Credit Agreement and the Canadian Dollar Revolving
Notes executed and delivered today under the Amended and Restated Credit
Agreement by each of the Borrowers in favour of each of Deutsche Bank AG, Canada
Branch, The Bank of Nova Scotia, Bank of America, N.A. (Canada Branch), Citibank
N.A. Canadian Branch and Societe Generale (Canada) (the “Existing Canadian
Dollar Revolving Notes”),

 

NOVA SCOTIA ! NEW BRUNSWICK ! PRINCE EDWARD ISLAND ! NEWFOUNDLAND & LABRADOR

 

www.coxhanson.ca

 

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

  (b) for HMC AP, Calgary Charlotte Holdings Company, Charlotte and Grace in
their personal capacities and not as general partners of the Partnership (each
of HMC AP, Calgary Charlotte Holdings Company, Charlotte and Grace in such
capacity a “Guarantor” and collectively, the “Guarantors” and together with the
Borrowers, the “Companies” and each a “Company”) in connection with the
execution and delivery by the Guarantors of an Amended and Restated Subsidiaries
Guaranty (the “Amended and Restated Subsidiaries Guaranty”) dated September 10,
2004 whereby each Guarantor guarantees the Credit Agreement Obligations and
Other Obligations (as defined in the Amended and Restated Subsidiaries
Guaranty); and

 

  (c) for HMC AP LP in connection with an amended and restated pledge and
security agreement dated September 10, 2004 (the “Pledge and Security
Agreement”) whereby, inter alia, certain shares of HMC AP are pledged by HMC AP
LP to the Pledgee (as defined therein) (the “Pledgee”).

 

1.1.2  This opinion is given to you pursuant to Section 6.02 of the Amended and
Restated Credit Agreement. Capitalized terms used but not defined in this
opinion have the respective meanings attributed to those terms in the Amended
and Restated Credit Agreement. The Amended and Restated Credit Agreement, the
Existing Canadian Dollar Revolving Notes, the Amended and Restated Subsidiaries
Guaranty and the Pledge and Security Agreement are referred to collectively as
the “Documents” and individually as a “Document”. The Amended and Restated
Subsidiaries Guaranty and the Pledge and Security Agreement are referred to
collectively as the “Foreign Law Documents” and individually as a “Foreign Law
Document”.

 

1.2 Examination of Documents

 

1.2.1  We have been provided with and have examined an electronically
transmitted copy of each of the executed Documents.

 

1.2.2 

We have also made such investigations and examined originals or copies,
certified or otherwise identified to our satisfaction, of such certificates of
public officials and of such other certificates, documents and records as

 

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we considered necessary or relevant for purposes of the opinions expressed
below, including, without limitation:

 

  (a) all corporate records of the Companies contained in their respective
minute books including, without limitation, the Memorandum of Association and
Articles of Association of each of the Companies;

 

  (b) certified resolutions of the boards of directors of each of the Companies
authorizing, among other things, the execution, delivery and performance by such
Company of each of the Documents to which it is a party;

 

  (c) certificates of status each dated September 8, 2004 (the “Certificates of
Status”) issued in respect of each of the Companies by the Nova Scotia Registrar
of Joint Stock Companies; and

 

  (d) a certificate of the Secretary of each Company (the “Secretary’s
Certificate”) with respect to certain factual matters, a copy of which has been
delivered to you.

 

1.2.3  We have also conducted or caused to be conducted only the searches and
inquiries for registrations affecting personal property made against the
Companies and HMC AP LP described in Schedule “B”, current to the dates shown in
Schedule “B”. Such searches disclose no outstanding filings or registrations
except as set out in Schedule “B”.

 

1.3 Assumptions

 

We have made the following assumptions:

 

1.3.1  With respect to all documents examined by us, we have assumed the
genuineness of all signatures, the legal capacity of individuals signing any
documents, the authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents submitted to us
as certified, conformed, telecopied or photocopied copies.

 

1.3.2 

We have, with your permission, relied upon the Secretary’s Certificate with
respect to the accuracy of the factual matters contained therein, which

 

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factual matters have not been independently investigated or verified by us.

 

1.3.3  With respect to the opinions set out in paragraph 2.1, we have relied on
the Certificate of Status relative to each of the Companies and have, with your
permission, assumed that such Certificates of Status continue to be accurate as
of the date of this opinion.

 

1.3.4  The accuracy, currency and completeness of the indices and filing systems
maintained by the public office and registries where we have searched or
inquired or have caused searches or inquiries to be made and of the information
and advice provided to us and prepared by government, regulatory or other like
officials with respect to those matters referred to herein.

 

1.3.5  That each of the parties which is a corporate entity (other than the
Companies) to each of the Documents has all requisite corporate power and
capacity to execute and deliver each of the Documents to which is a party and to
exercise its rights and perform its obligations thereunder, and has taken all
necessary corporate action to authorize the execution and delivery of each of
the Documents to which it is a party and the exercise of its rights and the
performance of its obligations thereunder.

 

1.3.6  That each of Charlotte and Grace are general partners of Calgary
Charlotte Partnership (the “Partnership”), an Alberta partnership and that the
Partnership is a validly existing Partnership under the laws of the Province of
Alberta, the Partnership has all requisite power and capacity to execute and
deliver and perform its obligations under the Pledge and Security Agreement, and
has taken all necessary action to authorize the execution, delivery and
performance by the Partners of the Pledge and Security Agreement.

 

1.3.7  That the Partnership has been formed and is existing as a general
partnership under the Partnership Act (Alberta).

 

1.3.8  That HMC AP LP has all requisite power and capacity to execute and
deliver the Pledge and Security Agreement and to exercise its rights and perform
its obligations thereunder, and has taken all necessary action to authorize the
execution and delivery of the Pledge and Security Agreement and the exercise of
its rights and the performance of its obligations thereunder and that HMC AP GP
LLC is the general partner of HMC AP LP.

 

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1.3.9  That the execution by Charlotte and Grace on behalf of the Partnership of
those Documents to which the Partnership is a party constitutes due execution by
the Partnership of such Documents.

 

1.3.10  For the purpose of the opinions expressed in paragraph 2.7 below, we
have assumed that the Pledge and Security Agreement is a legal, valid and
binding obligation of each of the parties thereto under the laws of the State of
New York enforceable under such laws against each party thereto by each other
party thereto in accordance with its terms.

 

1.3.11  That the terms of the Pledge and Security Agreement will be interpreted
under the laws of the State of New York to have the same meaning and context as
they would under the laws of the Province.

 

1.3.12  For the purposes of the opinion expressed in paragraph 2.7 below, we
have assumed (i) the currency and accuracy of any printed search result from the
Personal Property Registry (“PPR”) maintained under the Personal Property
Security Act (Nova Scotia) (the “PPSA”); (ii) that value has been given by the
Pledgee to HMC AP LP; and (iii) that neither of HMC AP LP or the Pledgee have
agreed to postpone the time for the attachment of the security interest
contemplated by the Pledge and Security Agreement.

 

1.4 Laws Addressed

 

1.4.1 

The opinions expressed herein relate only to the laws of the Province of Nova
Scotia (the “Province”) on the date of this opinion, and the federal laws of
Canada applicable in the Province, as at the date of this opinion, and no
opinion is expressed with respect to the laws of any other jurisdiction. Without
limiting the generality of the immediately preceding sentence, we express no
opinion with respect to the laws of any other jurisdiction, to the extent that
those laws may govern the validity, perfection, effect of perfection or
non-perfection, or enforcement of the security interests created by the Pledge
and Security Agreement as a result of the application of Nova Scotia conflict of
law rules, including, without limitation, Sections 6 through 9 inclusive of the
PPSA. In addition, we express no opinion whether, pursuant to those conflicts of
law rules, Nova Scotia laws would govern the validity, perfection and effect of

 

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perfection or non-perfection or enforcement of the security interests
contemplated by the Pledge and Security Agreement.

 

2. OPINIONS

 

Based upon and subject to the foregoing, and to the qualifications expressed
below, we are of the opinion that:

 

2.1 Each of the Companies is a company amalgamated and existing under the laws
of the Province and has not been dissolved.

 

2.2 Each of the Companies has the corporate power and capacity to execute,
deliver and perform its obligations under each of the Documents to which it is a
party and the other Canadian Dollar Revolving Notes in accordance with the
provisions of the Amended and Restated Credit Agreement to each Canadian Lender
which did not receive such a note today.

 

2.3 Each of the Companies has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of the Documents to which
it is a party, and the other Canadian Dollar Revolving Notes in accordance with
the provisions of the Amended and Restated Credit Agreement to each Canadian
Lender which did not receive such a note today, and each of the Companies has
duly executed each of the Documents to which it is a party.

 

2.4 Charlotte and Grace have the corporate power and capacity to execute,
deliver and perform the obligations of the Partnership under each of the
Documents to which the Partnership is a party and the other Canadian Dollar
Revolving Notes in accordance with the provisions of the Amended and Restated
Credit Agreement to each Canadian Lender which did not receive such a note
today.

 

2.5 Each of Grace and Charlotte have taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of the Documents
to which the Partnership is a party, and the other Canadian Dollar Revolving
Notes in connection with the provisions of the Amended and Restated Credit
Agreement to each Canadian Lender which did not receive such a note today.

 

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2.6 Each of Grace and Charlotte have duly executed on behalf of the Partnership
each of the Documents to which the Partnership is a party.

 

2.7 The Pledge and Security Agreement creates a valid security interest in
favour of the Pledgee for the benefit of the Secured Creditors (as defined in
the Pledge and Security Agreement) in the collateral described therein in which
HMC AP LP now has rights and is sufficient to create a security interest in
favour of the Pledgee for the benefit of such secured creditors in the
collateral in which HMC AP LP hereafter acquires rights when those rights are
acquired by HMC AP LP, as security for the obligations secured thereby, and such
security interest has, to the extent that it may be perfected by way of the
registration of a financing statement in the PPR maintained under the PPSA, been
perfected by registration.

 

2.8 All registrations have been made in all public offices provided for under
the laws of the Province and the federal laws of Canada applicable therein where
such registration is necessary to preserve, protect and perfect the security
interest created by HMC AP LP in the share capital of HMC AP secured and pledged
under the Pledge and Security Agreement (the “ULC Shares”) and the particulars
of the registrations are set forth in Schedule “C” hereto.

 

2.9 Based solely on our review of the minute book records of HMC AP in our
possession, the authorized capital of HMC AP consists of 100,000,000 shares
without nominal or par value of which 30,594,666 such shares are issued and
outstanding in the name of HMC AP LP.

 

2.10 Assuming that none of the rights and remedies incorporated by reference in
the Pledge and Security Agreement create membership rights in the ULC Shares, we
are of the opinion that a Nova Scotia court, properly presented with the facts,
would not find that the Pledgee or the Secured Creditors, or any of them, was a
member of HMC AP, simply by virtue of the entering into of the Pledge and
Security Agreement and the possession by the Pledgee (or its or their agent) of
certificates representing the ULC Shares and prior to such exercise of rights
and assignment of shares, provided that the Pledgee did not:

 

  (a) deliver the ULC Shares with an executed stock power to HMC AP or apply to
have the ULC Shares registered in its name or in the name of the Pledgee or its
or their agent;

 

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  (b) hold itself out as a member of HMC AP;

 

  (c) receive dividends or property:

 

  (i) from the HMC AP by reason of the Pledgee’s holding of the ULC Shares; or

 

  (ii) that a Nova Scotia court might otherwise consider to be a distribution to
a member; or

 

  (d) act or purport to act as a member of HMC AP or exercise or attempt to
exercise any rights of a member including, without limitation, the right to
attend a meeting of HMC AP or to vote the ULC Shares.

 

If upon an Event of Default (as defined in the Pledge and Security Agreement)
and upon the exercise of rights and remedies under and pursuant to the Pledge
and Security Agreement, any of the ULC Shares were assigned to the Pledgee, the
Secured Creditors or their nominee such that the Pledgee, the Secured Creditors
or their nominee were to become a “member” (within the meaning of the Companies
Act (Nova Scotia)) of HMC AP, then such member would, together with other then
existing members of HMC AP and certain previous members thereof, be jointly and
severally liable for the obligations of HMC AP. Courts have, in certain
circumstances, found persons who were not entered on a company’s register of
members to be members of a company. These cases generally involve circumstances
in which a person has subscribed for shares from the company but, for some
reason, typically inadvertence, that person’s name was not entered on the
register of members, or in which persons have acted as would a member or have
held themselves out as a member, or have otherwise participated in the company
as a member.

 

We express no opinion on whether the Pledgee would be found to be a member of
HMC AP by a Nova Scotia court if such person were to take any steps to exercise
their rights to enforce their security pursuant to the Pledge and Security
Agreement.

 

2.11

Assuming that a Document has been unconditionally delivered in the State of New
York (which we have been advised by counsel for the

 

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Lenders is the State where the Documents have actually been executed and
delivered) by a Company to the other parties to such Document in order to create
a binding agreement between them, then, to the extent that the laws of the
Province were to apply to the question of the delivery of such Document1, such
Document has been duly delivered.

 

2.12 The execution, delivery and performance by each of the Companies of each of
the Documents to which it is a party do not breach or result in a default under:

 

  (a) the Memorandum of Association or Articles of Association of such Company;

 

  (b) any law, statute, rule or regulation of the Province or the laws of Canada
applicable therein to which any of the Companies is subject; or

 

  (c) to our knowledge, any judgement, order or decree of any court, agency,
tribunal, arbitrator or other authority in the Province to which any Company is
subject.

 

2.13 No authorization, consent, permit or approval of, or other action by, or
filing with or notice to, any governmental agency or authority, regulatory body,
court, tribunal or other similar entity having jurisdiction in the Province
under the laws of the Province is required in connection with the execution,
delivery and performance of by any of the Companies of any of the Documents to
which it is a party.

 

2.14 To our knowledge, we have not been retained to represent any of Companies
in respect of any:

 

  (a) court, administrative, regulatory or similar proceeding (whether civil,
quasi-criminal or criminal);

 

  (b) arbitration or other dispute settlement procedure; or

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

1 Please note that under conflict of laws rules applicable in the Province, as a
matter of contract law, delivery of a Document must be effected in accordance
with the law of the place of performance (which in this case would be the laws
of the State of New York (being the laws applicable to such Document as chosen
by the parties and the laws of the State where, we have been advised by counsel
for the Lendors, such Document has actually been executed and delivered).

 

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  (c) investigation or inquiry by any governmental, administrative, regulatory
or other similar body;

 

that, if determined adversely to any of the Companies, would prohibit any of the
Companies from executing, delivering or performing any of their respective
obligations under the Documents.

 

2.15 If a Foreign Law Document is sought to be enforced in any action or
proceeding in the Province in accordance with the laws applicable to the Foreign
Law Document as chosen by the parties, namely the laws of the State of New York,
the courts of the Province would recognize such choice of laws provided that
such choice of laws is bona fide (in the sense that it was not made with a view
to avoiding the consequences of the laws of the jurisdiction with which the
transaction has a real and substantial connection) and provided that such choice
of laws is not contrary to public policy, public order or good morals as such
terms are understood under the laws of the Province (“Public Policy”). To our
current actual knowledge, the choice of the laws of the State of New York as the
laws applicable to the Foreign Law Documents were not made by HMC AP LP for the
purpose of evading another system of law and would not offend Public Policy in
the Province.

 

2.16

If a Foreign Law Document is sought to be enforced in any action or proceeding
in the Province in accordance with the laws applicable to the Foreign Law
Document as chosen by the parties, namely the laws of the State of New York, the
courts of the Province would, subject to paragraph 2.15 hereof, apply the laws
of the State of New York, to the extent specifically pleaded and proved, to all
issues which under conflict of laws rules in effect in the Province are
characterized to be contract issues, except such New York laws found by the
relevant court (i) to be procedural in nature; (ii) to be of a revenue,
expropriatory or penal nature; (iii) to be inconsistent with Public Policy; or
(iv) to conflict with laws of the Province (the “Overriding Local Laws”)
determined by such court to be of overriding effect. A court in the Province
has, however, an inherent power to decline to hear such action or proceeding if
it is contrary to Public Policy for it to do so, or if it is not the proper
forum to hear such action, or if concurrent proceedings are being brought
elsewhere. Based solely on our review of the Foreign Law Document, and subject
to the assumptions and qualifications provided for in this opinion, the
Overriding

 

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Local Laws would not impair the enforceability of the Foreign Law Document
against HMC AP LP.

 

2.17 The laws of the Province permits an action to be brought before a court of
competent jurisdiction in the Province to enforce a final and conclusive
judgement in personam against HMC AP LP in respect of the Foreign Law Documents
by a court in the State of New York, which is not impeachable as void or
voidable under the internal laws of the State of New York, for a sum certain if
(i) the court rendering such judgement properly and appropriately exercised
jurisdiction over HMC AP LP pursuant to the laws of the Province and of the laws
of the State of New York; (ii) HMC AP LP was duly served with the process of the
New York court or appeared to such process, (iii) such judgement was not
obtained by fraud or in a manner contrary to natural justice and the enforcement
of such judgement would not be inconsistent with Public Policy or contrary to
any order made by the Attorney-General of Canada under the Foreign
Extraterritorial Measures Act (Canada) or the Competition Tribunal under the
Competition Act (Canada) in respect of certain judgements (as therein defined);
(iv) the cause of action giving rise to such judgement is recognized in the
Province, (v) the enforcement of such judgement does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriatory or penal laws;
(vi) no new admissible evidence relevant to the action is discovered prior to
the rendering of judgement by the court of the Province; and (vii) there has
been compliance with the Limitations Act (Nova Scotia) which requires that an
action to enforce a foreign judgement must be commenced within a period of six
years of the date of the foreign judgement.

 

2.18 The submission by the HMC AP LP to the non-exclusive jurisdiction of the
courts of New York and the federal courts of the United States of America
sitting in the Southern District of New York contained in Section 20 of the
Amended and Restated Subsidiaries Guaranty would be recognized and given effect
by the courts in the Province as a valid submission to the jurisdiction of such
courts provided that the provisions of the Amended and Restated Subsidiaries
Guaranty respecting service of process on HMC AP LP are complied with.

 

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3. QUALIFICATIONS

 

3.1 The foregoing opinions are subject to the following qualifications:

 

  (a) where we express opinions based upon the state of our knowledge, such
opinions are qualified in that, except for (i) a review of the Secretary’s
Certificate and the Documents, and (ii) inquiries of solicitors presently with
this firm who were directly involved in the preparation and negotiation of the
Documents, the transactions contemplated thereby and this opinion regarding
their current actual recollections, we have not made any special or additional
investigations, searches or inquiries and

 

  (b) the qualifications noted in Schedule “D” hereof.

 

4. RELIANCE

 

This opinion may be relied upon only by the Agent, the Lenders, their permitted
assigns and successors and counsel to such parties for the purposes of the
matters contemplated by this opinion. It may not be relied upon by any other
person or for any other purpose without our prior written consent.

 

Yours very truly,

 

COX HANSON O’REILLY MATHESON

 

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SCHEDULE “A”

 

Deutsche Bank Trust Company Americas

Bank of America, N.A.

Citicorp North America, Inc.

Société Générale

Calyon New York Branch

Goldman Sachs Credit Partners L.P.

The Bank of New York

Bear Stearns Corporate Lending Inc.

Wachovia Bank, National Association

The Bank of Nova Scotia

Deutsche Bank AG Canada Branch

Bank of America, N.A. (Canada Branch)

Citibank, N.A. Canadian Branch

Societe Generale (Canada)

Such other persons which become Lenders from time to time under the Amended and
Restated Credit Agreement.

Willkie Farr & Gallagher

Stikeman Elliott LLP

 

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SCHEDULE “B”

SEARCHES AND INQUIRIES

 

1. The PPSA to September 10, 2004 which revealed the following:

 

  (a) Registration No. 4432126 by Wells Fargo Bank, National Association,
against Calgary Charlotte Partnership, HMC Charlotte (Calgary) Company and HMC
Grace (Calgary) Company filed August 13, 2001 respecting all present and
after-acquired personal property of such debtors.

 

  (b) Registration No. 4432055 by Wells Fargo Bank, National Association against
HMC Toronto EC Company filed August 13, 2001 respecting all present and
after-acquired personal property of such debtor.

 

  (c) Registration No. 4432046 by Wells Fargo Bank, National Association against
HMC Toronto Air Company filed August 13, 2001 respecting all present and
after-acquired personal property of such debtor.

 

  (d) Registration No. 4432028 by Wells Fargo Bank, National Association against
HMC AP Canada Company filed August 13, 2001 respecting all present and
after-acquired personal property of such debtor.

 

  (e) Registration No. 4432091 by Wells Fargo Bank, National Association against
Calgary Charlotte Holdings Company filed August 13, 2001 respecting all present
and after-acquired personal property of such debtor.

 

  (f) Registration No. 8694692 by Deutsche Bank Trust Company Americas, as
Collateral Agent against HMC AP GP LLC and HMC AP LP filed September 8, 2004
respecting the Pledge and Security Agreement as amended by Registration No.
8703673 on September 10, 2004 to change reference to the date of September 9,
2004 in the General Collateral description to on or about September 10, 2004.

 

2. The Bank Act (Canada) to September 10, 2004 which revealed the following:

 

  (a) NIL

 

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SCHEDULE “C”

REGISTRATIONS

 

Registration Number:

   8694692

Registration Date:

   September 8, 2004

Expiry Date:

   September 8, 2011

Debtor No. 1:

  

HMC AP GP LLC

c/o Host Marriott, L.P.

6903 Rockledge Drive, Suite 1500, Bethesda, Maryland 20817

Attention: General Counsel

Debtor No. 2:

  

HMC AP LP

c/o Host Marriott, L.P.

6903 Rockledge Drive, Suite 1500, Bethesda, Maryland 20817

Attention: General Counsel

Secured Party:

  

Deutsche Bank Trust Company Americas, as Collateral Agent

60 Wall Street, 10th Floor, New York, NY 1005

Attention: Linda Wang

 

General Collateral:

 

(1) All shares of capital stock of HMC AP Canada Company or any successor
thereto and any other property of the Debtor delivered to the Secured Party from
time to time pursuant to an Amended and Restated Pledge and Security Agreement
dated as of September 9, 2004 among certain Pledgors, including the Debtor, and
the Secured Party, as the same may be amended, restated, supplemented or
replaced from time to time or any other Pledge Agreement;

 

(2) The issued and outstanding shares of capital stock of any corporation,
companies or other bodies corporate at any time owned by the Debtor;

 

(3) The limited liability company interests or membership interests at any time
owned by the Debtor in any limited liability company;

 

(4) The entries on the books of any securities intermediary pertaining to any of
the foregoing;

 

(5) All dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the foregoing;

 

(6) All of the Debtor’s right, title and interest in any aforedescribed limited
liability company or partnership;

 

(7) Any of the proceeds of any of the foregoing, in any form, including goods,
documents of title, chattel paper, securities, instruments, money and
intangibles including, without limitation, any proceeds arising out of any
consolidation, subdivision, reclassification, conversion, stock dividend or
similar increase or decrease in or alteration of capital or any other event and
any shares acquired pursuant to the exercise of a right or offer granted or made
by the Debtor to the extent that any such right or offer arises out of the
ownership of any shares held by the Debtor.

 

Amendment:

 

The above registration was amended by Registration No. 8703673 on September 10,
2004 to change reference to the date of “September 9, 2004” in paragraph 1 of
the General Collateral description above to “on or about September 10, 2004”.

 

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SCHEDULE “D”

QUALIFICATIONS

 

1. We express no opinion as to the title to any of the property charged by the
Pledge and Security Agreement nor any opinion as to enforceability.

 

2. The rights and privileges of the Crown including, without limitation, the
enforceability of the assignment of any account, security, instrument or chattel
paper under which the Crown or its agents are the obligor is subject to the
requirements of the Financial Administration Act (Canada) which provides that
the transfer shall not be effectual in law until notice in prescribed form has
been provided to the applicable obligor in the prescribed manner.

 

3. We have not conducted any inquiries or made any investigations with regard to
the consents or approvals which may be required in connection with the transfer
of any of the contractual interests made subject to a security interest under
the Pledge and Security Agreement.

 

4. To the extent that the security interest or interests created under the
Pledge and Security Agreement:

 

  (a) attaches to an intangible;

 

  (b) attaches to goods which are of a type that are normally used in more than
one jurisdiction, if such goods are classified as equipment or inventory which
are leased or held for lease to others; or

 

  (c) includes a non-possessory security interest in a security, chattel paper,
a negotiable document of title, an instrument or money;

 

the validity, perfection and effect of perfection or non-perfection of the
security interest is governed by the laws of the jurisdiction in which the
Company’s place of business is located or, in the event it has more than one
place of business, at its chief executive office at the time at which the
security interest attaches.

 

5. We have not effected any registrations against or perfected any security
interests in personal property collateral not covered by the PPSA (such as
intellectual property, railway rolling stock and Canada Shipping Act ships and
boats), nor have we effected any registrations or conducted any searches in
registries or offices of public record not located in the Province of Nova
Scotia.

 

6.

In certain circumstances, such as where the Pledgee or a Secured Creditor
becomes aware of a party to any of the Agreements changing

 

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its name or amalgamating, additional PPSA registrations may be required within a
prescribed period of time in order to continue or achieve perfection of the
personal property security interest.

 

7. We have not effected any registrations against or perfected any security
interest in real property collateral located in Nova Scotia.

 

8. An assignment of an intangible or chattel paper will not be binding upon the
account debtor to the extent that the intangible or chattel paper is paid or
otherwise discharged before notice of the assignment is, in fact, given to the
account debtor together with a direction to pay same to the Pledgee and is
further subject to the requirements of section 42 of the PPSA which include,
without limitation, the requirement to provide required information in certain
circumstances to the account debtor.

 

9. The PPSA filing in respect of the Pledge and Security Agreement expires as
previously noted. We have not diarized any renewal and the Pledgee should
instruct us further in a timely manner should it require us to effect any
renewal.

 

10. Enforcement of rights under the Foreign Law Documents through courts of
competent jurisdiction in Nova Scotia may require corporations to be registered
and in good standing under the Corporations Registration Act (Nova Scotia).

 

11. Enforcement by the Pledgee or the Lenders of its or their rights under the
Pledge and Security Agreement will require that the directors of HMC AP approve
the transfer of its pledged shares.

 

12. We express no opinion as to the enforceability of the Documents other than
in regard to the creation of the valid security interests as referred to in
paragraph 2.7 of our opinion. For greater certainty our opinions as to the
creations of a valid security interests are subject to our assumption above
concerning their enforceability under the laws by which they are stated to be
governed and:

 

  (a) applicable laws relating to bankruptcy, moratorium, reorganizations,
insolvency and other similar laws of general application affecting the
enforcement of creditors’ rights generally including the power of a court to
stay proceedings in the enforcement of remedies and to impose limitations on the
rights of creditors to require immediate payment of amounts stated to be payable
on demand prior to the expiration of a reasonable period of time after such
demand is made;

 

  (b) general principles of equity, whether applied by a court of law or equity,
which include principles:

 

  (i) governing the availability of specific performance, injunctive relief, the
power of grant relief from forfeiture, to stay proceedings before it, to stay
execution of judgments or other traditional equitable remedies, which generally
place the award of such remedies, subject to certain guidelines, in the
discretion of the courts to which the application for such relief is made;

 

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  (ii) requiring good faith, commercial reasonableness and fair dealing in the
exercise of discretionary powers; and

 

  (iii) limiting or affecting the enforceability of provisions governing
judicial discretion regarding the determination of damages and entitlement to
legal fees and other costs;

 

  (c) applicable laws regarding limitations of actions and limiting the rate of
interest on judgments.

 

13. The security interests created by the Pledge and Security Agreement may not
be enforceable in respect of proceeds that are not identifiable or traceable.

 

14. We express no opinion as to the rank or priority of any security interests
created by the Pledge and Security Agreement.

 

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EXHIBIT F

 

SECRETARY’S CERTIFICATE

 

I, the undersigned, the Secretary of Host Marriott Corporation, a corporation
organized and existing under the laws of the State of Maryland (the “Company”),
which is the sole general partner of Host Marriott, L.P., a limited partnership
organized and existing under the laws of the State of Delaware (the “Operating
Partnership”), DO HEREBY CERTIFY that:

 

1. This Certificate is furnished pursuant to the Amended and Restated Credit
Agreement, dated as of September 10, 2004, among the Operating Partnership,
certain Canadian subsidiaries of the Operating Partnership, Deutsche Bank Trust
Company Americas, as Administrative Agent, Bank of America, N.A., as Syndication
Agent, and the other agents and Lenders party thereto from time to time (the
“Credit Agreement”). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.

 

2. Attached hereto as Exhibit A is the true and correct copy of the certificate
of limited partnership of the Operating Partnership, as certified by the
Secretary of State of the State of Delaware, together with all amendments
thereto adopted through the date hereof (the “Certificate of Limited
Partnership”). On and as of the date hereof, the Certificate of Limited
Partnership is in full force and effect, has not been amended or modified,
except as set forth in Exhibit A, and no proceedings for the amendment,
modification or rescission of such document are pending or contemplated on the
date hereof.

 

3. Attached hereto as Exhibit B is the true and correct copy of the Second
Amended and Restated Agreement of Limited Partnership for the Operating
Partnership, together with all amendments thereto, which were duly adopted and
are in full force and effect on the date hereof (the “Limited Partnership
Agreement”). On and as of the date hereof, the Limited Partnership Agreement is
in full force and effect, has not been amended or modified, except as set forth
in Exhibit B, and no proceedings for the amendment, modification or rescission
of such document are pending or contemplated on the date hereof.

 

4. Attached hereto as Exhibit C is an accurate, complete and correct copy of
resolutions adopted by unanimous written consent by the Board of Directors of
the Company on its own behalf and in its capacity as sole general partner of the
Operating Partnership, authorizing, among other things, the execution of certain
agreements and documents more particularly described therein and certain related
actions. Such resolutions have not been rescinded or amended and are in full
force and effect on the date hereof.

 

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

5. Each of the persons listed below is, on and as of the date hereof, a duly
elected, qualified and acting officer of the Company holding the office or
offices set forth below his name and the signature appearing opposite the name
of each such person set forth is his genuine signature:

 

W. Edward Walter

    

Executive Vice President

    

and Chief Executive Officer

    

John A. Carnella

    

Senior Vice President

    

and Treasurer

    

William K. Kelso

    

Assistant Secretary

    

 

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

IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as Secretary of
the Company this              day of September 2004.

 

 

Elizabeth Abdoo

Secretary

 

I, William K. Kelso, Assistant Secretary of the Company, do hereby certify that
Elizabeth Abdoo, is as of the date hereof, the duly elected, qualified and
acting Secretary of the Company, and that the signature set forth above is her
genuine signature.

 

IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as Assistant
Secretary of the Company this              day of September, 2004.

 

 

William K. Kelso

Assistant Secretary

 

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

SECRETARY’S CERTIFICATE

 

I, the undersigned, the Secretary of each of the entities listed on Schedule 1
attached hereto, each a limited liability company organized and existing under
the laws of the State of Delaware (each, a “Company” and together the
“Companies”), certain of which Companies (i) are the sole general partners of
the limited partnerships set forth on Schedule 2, each organized and existing
under the laws of the State indicated on Schedule 2 (the “Related Limited
Partnerships”) or (ii) together with another Company or Related Limited
Partnership set forth on Schedule 2, constitute all the general partners of the
general partnerships set forth on Schedule 2, each organized and existing under
the laws of the State indicated on Schedule 2 (the “Related General
Partnerships” and together with the Related Limited Partnerships, the “Related
Partnerships”), DO HEREBY CERTIFY that:

 

1. This Certificate is furnished pursuant to the Amended and Restated Credit
Agreement, dated as of September 10, 2004, among Host Marriott, L.P., certain
Canadian subsidiaries of Host Marriott, L.P., Deutsche Bank Trust Company
Americas, as Administrative Agent, Bank of America, N.A., as Syndication Agent,
and the other agents and Lenders party thereto from time to time (the “Credit
Agreement”). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.

 

2. Attached hereto as Exhibit A are the true and correct copies of the
certificates of formation for each Company, each as certified by the Secretary
of State of the State of Delaware, together with all amendments thereto adopted
through the date hereof (each a “Certificate of Formation”). On and as of the
date hereof, each Certificate of Formation is in full force and effect, has not
been amended or modified, except as set forth in Exhibit A, and no proceedings
for the amendment, modification or rescission of such document are pending or
contemplated on the date hereof.

 

3. Attached hereto as Exhibit B are the true and correct copies of the limited
liability company agreements for each Company, together with all amendments
thereto, which were duly adopted and are in full force and effect on the date
hereof (each an “Operating Agreement”). On and as of the date hereof, each
Operating Agreement is in full force and effect, has not been amended or
modified, except as set forth in Exhibit B, and no proceedings for the
amendment, modification or rescission of such document are pending or
contemplated on the date hereof.

 

4. Attached hereto as Exhibit C are the true and correct copies of the
certificates of limited partnership for each Related Limited Partnership, each
as certified by the Office of the Secretary of State of the State of its
formation, together with all amendments thereto adopted through the date hereof
(each a “Certificate of Limited Partnership”). On and as of the date hereof,
each Certificate of Limited Partnership is in full force and effect, has not
been amended or modified, except as set forth in Exhibit C, and no proceedings
for the amendment, modification or rescission of such document are pending or
contemplated on the date hereof.

 

5. Attached hereto as Exhibit D are the true and correct copies of the
agreements of limited partnership for each Related Limited Partnership, together
with all

 

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

amendments thereto, which were duly adopted and are in full force and effect on
the date hereof (each a “Limited Partnership Agreement”). On and as of the date
hereof, each Limited Partnership Agreement is in full force and effect, has not
been amended or modified, except as set forth in Exhibit D, and no proceedings
for the amendment, modification or rescission of such document are pending or
contemplated on the date hereof.

 

6. Attached hereto as Exhibit E are the true and correct copies of the
agreements of general partnership for each of the Related General Partnerships,
together with all amendments thereto adopted through the date hereof, which were
duly adopted and are in full force and effect on the date hereof (each a
“General Partnership Agreement”). On and as of the date hereof, each General
Partnership Agreement is in full force and effect, has not been amended or
modified, except as set forth in Exhibit E, and no proceedings for the
amendment, modification or rescission of such document are pending or
contemplated on the date hereof.

 

7. Attached hereto as Exhibit F is an accurate, complete and correct copy of
resolutions adopted by unanimous written consent by the Board of Managers of
each Company on its own behalf and in its capacity as sole general partner of
each Related Limited Partnership or in its capacity as a general partner, or as
a general partner of a general partner, of each Related General Partnership,
authorizing, among other things, the execution of certain agreements and
documents more particularly described therein and certain related actions. Such
resolutions have not been rescinded or amended and are in full force and effect
on the date hereof.

 

8. Each of the persons listed below is, on and as of the date hereof, a duly
elected, qualified and acting officer of each Company holding the office or
offices set forth below his name and the signature appearing opposite the name
of each such person set forth is his genuine signature:

 

W. Edward Walter

    

President

    

John A. Carnella

    

Vice President

    

Susan E. Wallace

    

Assistant Secretary

    

 

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

IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as Secretary of
each Company this              day of September 2004.

 

 

William K. Kelso

Secretary

 

I, Susan E. Wallace, Assistant Secretary of each Company, do hereby certify that
William K. Kelso, is as of the date hereof, the duly elected, qualified and
acting Secretary of each Company, and that the signature set forth above is his
genuine signature.

 

IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as Assistant
Secretary of each Company this              day of September, 2004.

 

  

Susan E. Wallace

Assistant Secretary

 

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

Schedule 1

 

THE COMPANIES

 

Airport Hotels LLC

Chesapeake Financial Services LLC

Durbin LLC

Farrell’s Ice Cream Parlour Restaurants LLC

Fernwood Hotel LLC

HMC Amelia I LLC

HMC Amelia II LLC

HMC AP GP LLC

HMC Atlanta LLC

HMC BCR Holdings LLC

HMC Burlingame LLC

HMC Capital LLC

HMC Capital Resources LLC

HMC Charlotte GP LLC

HMC Chicago LLC

HMC Copley LLC

HMC Desert LLC

HMC Diversified LLC

HMC East Side II LLC

HMC Gateway LLC

HMC Georgia LLC

HMC Grand LLC

HMC Hanover LLC

HMC Hartford LLC

HMC Headhouse Funding LLC

HMC Host Restaurants LLC

  

HMC Hotel Development LLC

HMC HPP LLC

HMC HT LLC

HMC IHP Holdings LLC

HMC JWDC GP LLC

HMC JWDC LLC

HMC Lenox LLC

HMC Manhattan Beach LLC

HMC Market Street LLC

HMC Maui LLC

HMC Mexpark LLC

HMC NGL LLC

HMC OLS I LLC

HMC OP BN LLC

HMC Pacific Gateway LLC

HMC Palm Desert LLC

HMC Park Ridge LLC

HMC PLP LLC

HMC Polanco LLC

HMC Potomac LLC

HMC Properties I LLC

HMC Properties II LLC

HMC Property Leasing LLC

HMC SBM Two LLC

HMC Seattle LLC

HMC SFO LLC

HMC Suites LLC

  

HMC Swiss Holdings LLC

HMC Toronto Airport GP LLC

HMC Toronto EC GP LLC

HMH General Partner Holdings LLC

HMH Marina LLC

HMH Norfolk LLC

HMH Pentagon LLC

HMH Restaurants LLC

HMH Rivers LLC

HMH WTC LLC

HMT Lessee Parent LLC

Host La Jolla LLC

Host Park Ridge LLC

Ivy Street Hopewell LLC

Ivy Street LLC

Market Street Host LLC

MDSM Finance LLC

Philadelphia Airport Hotel LLC

PM Financial LLC

PRM LLC

Rockledge Hotel LLC

S.D. Hotels LLC

Santa Clara HMC LLC

Times Square GP LLC

Times Square LLC

YBG Associates LLC

 

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

Schedule 2

 

THE RELATED PARTNERSHIPS

 

Related Limited Partnership

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

  

Sole General Partner

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

  

Jurisdiction of Organization

of Limited Partnership

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

Chesapeake Hotel Limited Partnership

   HMC PLP LLC    Delaware

City Center Hotel Limited Partnership

   Host La Jolla LLC    Minnesota

HMC AP LP

   HMC AP GP LLC    Delaware

HMC Charlotte LP

   HMC Charlotte GP LLC    Delaware

HMC Diversified American Hotels, L.P.

   HMC Diversified LLC    Delaware

HMC OLS I L.P.

   HMC OLS I LLC    Delaware

HMC OLS II L.P

   HMC OLS I LLC    Delaware

HMC Retirement Properties L.P.

   Durbin LLC    Delaware

HMC Suites Limited Partnership

   HMC Suites LLC    Delaware

HMC Toronto Airport LP

   HMC Toronto Airport GP LLC    Delaware

HMC Toronto EC LP

   HMC Toronto EC GP LLC    Delaware

HMC/Interstate Manhattan Beach, L.P.

   HMC Manhattan Beach LLC    Delaware

HMH Norfolk, L.P.

   HMH Norfolk LLC    Delaware

HMH Rivers, L.P.

   HMH Rivers LLC    Delaware

Host of Boston, Ltd.

   Airport Hotels LLC    Massachusetts

Host of Houston, Ltd.

   Airport Hotels LLC    Texas

New Market Street LP

   HMC Market Street LLC    Delaware

PM Financial LP

   PM Financial LLC    Delaware

Potomac Hotel Limited Partnership

   HMC Potomac LLC    Delaware Wellsford-Park Ridge HMC Hotel Limited
Partnership    Host Park Ridge LLC    Delaware

 

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

Related General Partnership

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

  

General Partners

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

  

Jurisdiction of Organization

of General Partnership

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

Ameliatel

  

HMC Amelia I LLC (99% GP)

HMC Amelia II LLC (1% GP)

   Florida

Host of Houston 1979

  

Airport Hotels LLC (99% GP)

Host of Houston, Ltd. (1% GP)

   Texas

 

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

EXHIBIT G

 

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

Filed separately as an Exhibit to this Current Report on Form 8-K

 

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

EXHIBIT H

 

AMENDED AND RESTATED SUBSIDIARIES GUARANTY

 

Filed separately as an Exhibit to this Current Report on Form 8-K

 

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

EXHIBIT I

 

SOLVENCY CERTIFICATE

 

I, the undersigned, Senior Vice President of Host Marriott, L.P., a Delaware
limited partnership (the “U.S. Borrower”), DO HEREBY CERTIFY that:

 

1. This Certificate is furnished pursuant to the Amended and Restated Credit
Agreement, dated as of September 10, 2004, among the U.S. Borrower, each
Canadian Revolving Loan Borrower from time to time party thereto, the Lenders
from time to time party thereto and Deutsche Bank Trust Company Americas, as
Administrative Agent (as amended, modified or supplemented from time to time,
the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used
in this Certificate shall have the meanings set forth in the Credit Agreement.

 

2. On a Pro Forma Basis after giving effect to all Indebtedness (including the
Revolving Loans) being incurred or assumed and Liens created by each Credit
Party in connection therewith, (x) the sum of the assets, at a fair valuation,
of the U.S. Borrower and its Subsidiaries (taken as a whole) and the U.S.
Borrower (on a stand-alone basis) will exceed their respective debts, (y) the
U.S. Borrower and its Subsidiaries (taken as a whole) and the U.S. Borrower (on
a stand-alone basis) have not incurred and do not intend to incur, and do not
believe that they will incur, debts beyond their ability to pay such debts as
debts mature and (z) the U.S. Borrower and its Subsidiaries (taken as a whole)
and the U.S. Borrower (on a stand-alone basis) have sufficient capital with
which to conduct their respective businesses. For purposes of this Certificate,
“debt” means any liability on a claim, and “claim” means (i) the right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, secured or unsecured, in each case, to the extent of the reasonably
anticipated liability thereof, as determined by the U.S. Borrower in good faith
or (ii) the absolute right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.

 

IN WITNESS WHEREOF, I have hereunto set my hand this      day of September,
2004.

 

HOST MARRIOTT, L.P.

By: Host Marriott Corporation, its General Partner

     

Name:

  John A. Carnella

Title:

  Senior Vice President

 

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

EXHIBIT J

 

ADDITIONAL REVOLVING LOAN COMMITMENT AGREEMENT

 

[Name(s) of Lender(s)]

 

[Date]

 

Host Marriott, L.P.

6903 Rockledge Drive, Suite 1500

Bethesda, Maryland 2081

 

re Additional Revolving Loan Commitment

 

Ladies and Gentlemen:

 

Reference is hereby made to the Amended and Restated Credit Agreement, dated as
of September 10, 2004 (as amended, modified or supplemented from time to time,
the “Credit Agreement”), among Host Marriott, L.P. (the “U.S. Borrower” or
“you”), each Canadian Revolving Loan Borrower from time to time party thereto,
the lenders from time to time party thereto (the “Lenders”) and Deutsche Bank
Trust Company Americas, as Administrative Agent (the “Administrative Agent”).
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings set forth in the Credit Agreement.

 

Each Lender (each an “Additional Revolving Loan Lender”) party to this letter
agreement (this “Agreement”) hereby severally agrees to provide the Additional
Revolving Loan Commitment set forth opposite its name on Annex I attached hereto
(for each such Additional Revolving Loan Lender, its “Additional Revolving Loan
Commitment”). Each Additional Revolving Loan Commitment provided pursuant to
this Agreement shall be subject to the terms and conditions set forth in the
Credit Agreement, including Section 2.16 thereof.

 

Each Additional Revolving Loan Lender and the U.S. Borrower acknowledge and
agree that, with respect to the Additional Revolving Loan Commitment provided by
such Additional Revolving Loan Lender pursuant to this Agreement, such
Additional Revolving Loan Lender shall receive an upfront fee equal to that
amount set forth opposite its name on Annex I attached hereto, which upfront fee
shall be due and payable to such Additional Revolving Loan Lender on the
effective date of this Agreement.

 

Each Additional Revolving Loan Lender party to this Agreement, to the extent
that it is not already a Lender under the Credit Agreement, (i) confirms that it
has received a copy of the Credit Agreement and the other Credit Documents,
together with copies of the financial statements referred to therein and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement and to become a Lender
under the Credit Agreement, (ii) agrees that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, (iii) appoints and authorizes the Administrative Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent and the Collateral Agent, as the case may
be, by the terms

 

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

thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender, and (v) in the case of each such Additional
Revolving Loan Lender organized under the laws of a jurisdiction outside the
United States, attaches the applicable forms described in Section 5.04(b) of the
Credit Agreement certifying as to its entitlement to a complete exemption from
United States withholding taxes with respect to all payments to be made under
the Credit Agreement and the other Credit Documents.

 

The effective date of this Agreement shall be             ,              [insert
a date on or prior to the 10th Business Day after the date hereof].

 

You may accept this Agreement by signing the enclosed copies in the space
provided below, and returning one copy of same to us before the close of
business on                          ,         . If you do not so accept this
Agreement by such time, our Additional Revolving Loan Commitments set forth in
this Agreement shall be deemed cancelled.

 

After the execution and delivery to the Administrative Agent of a fully executed
copy of this Agreement (including by way of counterparts and by fax) by the
parties hereto, this Agreement may only be changed, modified or varied by
written instrument in accordance with the requirements for the modification of
Credit Documents pursuant to Section 14.11 of the Credit Agreement.

 

* * *

 

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

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

 

Very truly yours,

[NAME OF LENDER]

By         Name:     Title:

 

Agreed and Accepted

 

this      day of                     ,         :

 

HOST MARRIOTT, L.P.

By:

 

Host Marriott Corporation,
its General Partner

By:         Name:     Title:

DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent

By:         Name:     Title:

 

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

ANNEX I TO EXHIBIT J

 

Name of Lender

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

  

Amount of Additional
Revolving Loan Commitment

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

  

Upfront Fee

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

                                                                              
                            

Total

              

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

  

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

 

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

EXHIBIT K

 

FORM OF CORPORATE FORECAST

 

Summary Financial Model

 

Host Marriott Executive Summary

Case Name: Base Case

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

   2004
Forecast

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

Performance

      

Adjusted EBITDA

      

Cash Interest Expense (including prepayment premiums)

      

FFO - Diluted

           

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

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

Dividend/share

           

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

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

Balance Sheet Detail

     YE 2004

Debt

      

Mortgage Debt

      

Bond Debt

      

Line Debt

      

Other Debt

           

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

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

Total Debt

           

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

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

Cash & Short Term Receivables

      

QUIPS

      

Perpetual Preferred

      

Common Equity Market Cap

           

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

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

TEV

           

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

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

Credit Tests (pro forma)

      

Leverage Ratio (Net)

      

Unsecured Interest Coverage Ratio

      

Fixed Charge Coverage Ratio

           

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

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

HMT Corporate Model - CONFIDENTIAL

    
$ All Amounts
000s

 

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

Cash Flow Analysis

 

Cash Analysis

Case Name: Base Case

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

  

2004

Forecast

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

Beginning Cash Balance

      

Historical EBITDA

      

FF&E

      

Other Capex

      

Cash Interest

      

NY Marquis Ground Rent

      

QUIPS

      

Annual Tax Payments

      

Perpetual Pref Div

      

Amortization of Mortgage / Other Debt

      

Other (Rest Term Fees, chg in rent, other)

      

Common/OP Unit Dividend

      

Outside Unit Holder Distribution

           

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

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

Free Cash Flow

           

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

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

Sources of Cash

      

New Convertible Debt

      

New Senior Notes

      

New Mortgage / Other Debt

      

Equity Issuance

      

MFI Loan Repayment

      

Revolver Draws

      

Perpetual Preferred

      

Asset Sales, net

           

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

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

Total Sources

           

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

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

Uses of Cash

      

Financing and Acquisition Costs

      

Premiums on Sr. Note Repurchase

      

Other Liabilities (Q4, 04 - Eastside)

      

Contingencies & Extraordinary Charges

      

Repayment of Perpetual Preferred

      

Canadian FX Hedge

      

Repayment of Senior Notes Debt

      

Repayment of Mortgage / Other Debt

      

CMBS Cash Trap

      

Other Secured Debt Cash (Restriction)/Release

      

Acquisitions

      

Owner Funded/ROI

      

Capex/Acquisition Capex

      

Expansions (Memphis, Orlando, Newport)

           

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

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

Total Uses

           

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

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

Ending Cash Balance

      

HMT Corporate Model - CONFIDENTIAL

    
$ All Amounts
000s

 

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

EBITDA and FFO Summary

 

EBITDA and FFO Summary

Case Name: Base Case

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

  

2004

Forecast

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

Total Hotel Revenues

           

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

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

Total Hotel EBITDA

           

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

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

Distributions from Non-Consolidated Partnerships

      

Distributions to Minority Partners

      

Interest Income (includes Sage in 2004)

      

Corporate Expenses

      

Other Real Estate

      

Other Operating Expense

           

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

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

Historical EBITDA

           

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

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

Restricted Stock Award / Corp Depr Exp

      

Canadian Hedge Contract Loss

      

Other non-cash adjustments

           

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

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

Adjusted EBITDA

           

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

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

Adjustments

      

GAAP Interest Expense

      

GAAP Interest Exp - Premiums on Sr Notes

      

QUIPS Dividends

      

Current Income Tax Provision

      

FFO of Minority Owners

      

FFO of Non-Consolidated Subsidiaries

      

Distributions to Minority Owners

      

Write off of Series A Perpetual Preferred Costs

      

Distributions from Non-Consolidated Partnerships

      

Perpetual Preferred Dividend

      

Other (Non-Cash Adjustments)

           

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

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

Funds From Operations

      

Plus QUIPS Dividend (if Dilutive)

           

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

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

QUIPS Adjusted Funds From Operations

      

Plus Minority Owner Conversion Adjustment

           

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

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

Fully Diluted Funds From Operations

           

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

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

HMT Corporate Model - CONFIDENTIAL

    
$ All Amounts
000s

 

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

EXHIBIT L

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

Date                     , 20    

 

Reference is made to the Amended and Restated Credit Agreement described in Item
2 of Annex I hereto (as such Credit Agreement may have heretofore been and/or
hereafter be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Unless defined in Annex I hereto, terms defined in the
Credit Agreement are used herein as therein defined.                      (the
“Assignor”) and                      (the “Assignee”) hereby agree as follows:

 

1.     The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor’s rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I hereto (the “Assigned Share”) of all of the
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 4 of Annex I hereto, including, without limitation,
all rights and obligations with respect to (i) the Assigned Share of the Total
Revolving Loan Commitment, (ii) the Assigned Share of the related Total Maximum
Canadian Dollar Revolving Loan Sub-Commitment, if any, (iii) the Assigned Share
of the related Total Canadian Dollar Revolving Loan Sub-Commitment in effect as
of the date hereof, if any and (iv) the Assigned Share of any outstanding
Revolving Loans and Letters of Credit.

 

2.     The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by it; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the U.S. Borrower or
any of its Subsidiaries or the performance or observance by the U.S. Borrower or
any of its Subsidiaries of any of their respective obligations under the Credit
Agreement or the other Credit Documents to which they are a party or any other
instrument or document furnished pursuant thereto.

 

3.    The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit

 

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

Agreement; (iii) confirms that it is an Eligible Transferee under Section
14.03(b) of the Credit Agreement; (iv) appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to the Administrative Agent and the Collateral
Agent, by the terms thereof, together with such powers as are reasonably
incidental thereto; [and] (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
and the other Credit Documents are required to be performed by it as a Lender;
[and] [(vi) to the extent legally entitled to do so, attaches the forms
described in Section 14.03(b) of the Credit Agreement;]1 [and (vii) represents
that it is an authorized foreign bank which at all times holds all of its
interest in any Canadian Obligations in the course of its Canadian banking
business for purposes of subsection 212(13.3) of the Income Tax Act (Canada),
or, based on applicable law in effect on the date hereof, that it is otherwise
not subject to deduction or withholding of Canadian Taxes with respect to any
payments to such Assignee of interest, fees, commissions, or any other amount
payable by any Canadian Revolving Loan Borrower under the Credit Documents.]2

 

4.    Following the execution of this Assignment and Assumption Agreement by the
Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee, the receipt of the consent of the
Administrative Agent and the U.S. Borrower to the extent required by Section
14.03(b) and (d) of the Credit Agreement, the receipt by the Administrative
Agent of the administrative fee referred to in such Section 14.03(b) and the
recordation of the assignment effected hereby on the Register by the
Administrative Agent as provided in Section 14.15 of the Credit Agreement, or
such later date, if any, which may be specified in Item 5 of Annex I hereto (the
“Settlement Date”).

 

5.    Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Lender thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights
(except under Sections 2.11, 2.12, 3.06, 5.04 and 14.01 of the Credit Agreement
in respect of the period prior to the Settlement Date) and be released from its
obligations under the Credit Agreement and the other Credit Documents.

 

6.    It is agreed that the Assignee shall be entitled to (x) all interest on
the Assigned Share of the Revolving Loans at the rates specified in Item 6 of
Annex I; (y) all Commitment Commission (if applicable) at the rate specified in
Item 7 of Annex I hereto; and (z) all Letter of Credit Fees (if applicable) on
the Assignee’s participation in all Letters of Credit at the rate specified in
Item 8 of Annex I hereto, which, in each case, accrue on and after the
Settlement

 

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1 Include if the Assignee is organized under the laws of a jurisdiction outside
of the United States.

 

2 Include if the Assignee is assuming a Canadian Dollar Revolving Loan
Sub-Commitment and is not a resident in Canada for the purpose of the Income Tax
Act (Canada).

 

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Date, such interest and, if applicable, Commitment Commission and Letter of
Credit Fees, to be paid by the Administrative Agent directly to the Assignee. It
is further agreed that all payments of principal made on the Assigned Share of
the Revolving Loans which occur on and after the Settlement Date will be paid
directly by the Administrative Agent to the Assignee. Upon the Settlement Date,
the Assignee shall pay to the Assignor an amount specified by the Assignor in
writing which represents the Assigned Share of the principal amount of the
respective Revolving Loans made by the Assignor pursuant to the Credit Agreement
which are outstanding on the Settlement Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.

 

7.    THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Assignment and Assumption Agreement, as of
the date first above written, such execution also being made on Annex I hereto.

 

Accepted this              day

of             , 20    

     

[NAME OF ASSIGNOR]

as Assignor

            By                    

Title:

       

[NAME OF ASSIGNEE]

as Assignee

            By                    

Title:

 

[Acknowledged and Agreed as of                          , 20    :

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

By        

Title:]3

 

HOST MARRIOTT, L.P.

By: Host Marriott Corporation, its General Partner

By        

Title:]4

 

Deutsche Bank Trust Company Americas,

as an Issuing Bank

By        

Title:

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3 The consent of the Administrative Agent is required for assignments pursuant
to Section 14.03(b)(y) of the Credit Agreement.

 

4 At any time when no Default or Event of Default is in existence, the approval
of the U.S. Borrower is required with respect to all assignments pursuant to
Section 14.03(b)(y) of the Credit Agreement.

 

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ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT

 

1.    U.S. Borrowers:    Host Marriott, L.P.     
Canadian Revolving Loan Borrowers:   

Calgary Charlotte Partnership

HMC Toronto Air Company

HMC Toronto EC Company

HMC AP Canada Company

 

2. Name and Date of Credit Agreement:

 

Amended and Restated Credit Agreement, dated as of September 10, 2004, among
Host Marriott, L.P., each Canadian Revolving Loan Borrower from time to time
party thereto, various lenders from time to time party thereto (the “Lenders”)
and Deutsche Bank Trust Company Americas, as Administrative Agent for such
Lenders.

 

3. Date of Assignment Agreement:                                 

 

4. Amounts (as of date of item #3 above):

 

    

Total Revolving

Loan Commitment

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

  Total Maximum
Canadian Dollar
Revolving Loan
Sub-Commitment

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

 

Total

Canadian Dollar
Revolving Loan
Sub-Commitment*

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

a. Aggregate Amount for Lenders

   $                                $                                $
                            

b. Assigned Share

                                 %                                 %    
                            %

c. Amount of Assigned Share

   $                                $                                $
                            

 

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

* As of the date hereof.

 

    

Outstanding Principal
of Dollar

Revolving A Loans

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

 

Outstanding Principal
of Dollar

Revolving B Loans

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

 

Outstanding Principal

of Canadian

Revolving A Loans

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

 

Outstanding Principal

of Canadian

Revolving B Loans

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

a. Aggregate Amount for Lenders

   $                                $                                Cdn.$
                           Cdn.$                         

b. Assigned Share

                                 %                                 %    
                            %                                 %

c. Amount of Assigned Share

   $                                $                                Cdn.$
                           Cdn.$                         

 

5. Settlement Date:

 

6.    Rate of Interest to the Assignee:    As set forth in Section 2.09 of the
Credit Agreement (unless otherwise agreed to by the

 

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

          Assignor and the Assignee)1 7.    Commitment Commission:    As set
forth in Section 4.01(a) of the Credit Agreement (unless otherwise agreed to by
the Assignor and the Assignee)2 8.    Letter of Fees to the Assignee:    As set
forth in Section 3.01(b) of the Credit Agreement (unless otherwise agreed to by
the Assignor and the Assignee)3 9.    Notice:     

 

    

ASSIGNOR:

         

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

         

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

         

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

         

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

          Attention:           Telephone:           Telecopier:          
Reference:          

ASSIGNEE:

         

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

         

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

         

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

         

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

          Attention:           Telephone:           Telecopier:          
Reference:     

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1 The Borrowers and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 2.09 of the Credit
Agreement, with the Assignor and Assignee effecting the agreed upon sharing of
the interest through payments by the Assignee to the Assignor.

 

2 Insert “Not Applicable” in lieu of text if no portion of the Total Revolving
Loan Commitment is being assigned. Otherwise, the U.S. Borrower and the
Administrative Agent shall direct the entire amount of the Commitment Commission
to the Assignee at the rate set forth in Section 4.01(a) of the Credit
Agreement, with the Assignor and the Assignee effecting the agreed upon sharing
of the Commitment Commission through payment by the Assignee to the Assignor.

 

3 Insert “Not Applicable” in lieu of text if no portion of the Total Revolving
Loan Commitment is being assigned. Otherwise, the Dollar Revolving Loan
Borrowers and the Administrative Agent shall direct the entire amount of the
Letter of Credit Fees to the Assignee at the rate set forth in Section 4.01(b)
of the Credit Agreement, with the Assignor and the Assignee effecting the agreed
upon sharing of Letter of Credit Fees through payment by the Assignee to the
Assignor.

 

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     Payment Instructions:          

ASSIGNOR:

         

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

         

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

         

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

         

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

          Attention:           Reference:          

ASSIGNEE:

         

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

         

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

         

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

         

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

          Attention:           Reference:     

 

Accepted and Agreed:

 

[NAME OF ASSIGNEE]

     

[NAME OF ASSIGNOR]

By           By                      

 

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EXHIBIT M

 

SENIOR NOTE INDENTURE AND THE TWELFTH SUPPLEMENTAL INDENTURE

 

Filed separately as Exhibit 4.4 to Host Marriott Corporation’s annual report on
Form 10-K for the year ended December 31, 2002 and Exhibit 4.11 to Host Marriott
L.P.’s annual report on Form 10-K

for the year ended December 31, 2003