FOURTH AMENDMENT TO CREDIT AGREEMENT

FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of October 31,
2005 and effective as of the Fourth Amendment Effective Date (as defined below),
among STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland corporation (the
“Corporation”), each additional ALTERNATE CURRENCY REVOLVING LOAN BORROWER from
time to time party to the Credit Agreement as referred to below (together with
the Corporation, collectively, the “Borrowers”), SHERATON HOLDING CORPORATION, a
Nevada corporation (“Sheraton”), the LENDERS from time to time party to the
Credit Agreement (the “Lenders”) and DEUTSCHE BANK AG, NEW YORK BRANCH, as
Administrative Agent (in such capacity, the “Administrative Agent”). Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings provided such terms in the Credit Agreement referred to
below.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Lenders, the Administrative Agent, JPMORGAN CHASE
BANK, as Syndication Agent (in such capacity, the “Syndication Agent”), BANK OF
AMERICA, N.A., FLEET NATIONAL BANK and SOCIETE GENERALE, as Co-Documentation
Agents (in such capacity, collectively, the “Co-Documentation Agents” and each,
a “Co-Documentation Agent”), and DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN
SECURITIES INC., as Co-Lead Arrangers and Joint Book Running Managers (in such
capacity, collectively, the “Managers”), are parties to that certain Credit
Agreement, dated as of October 9, 2002 (as amended, modified and/or supplemented
to, but not including, the date hereof, the “Credit Agreement”); and

WHEREAS, subject to the terms and conditions of this Amendment, the Lenders and
the Borrowers wish to (x) amend certain provisions of the Credit Agreement and
(y) enter into certain agreements with respect to the Credit Agreement, in each
case as herein provided.

     
 
  NOW, THEREFORE, it is agreed:
PART I.
  Amendments and Agreements.
 
   

SECTION 1. Definition of “Applicable Margin”; Section 11.01. The definition of
“Applicable Margin” appearing in Section 11.01 of the Credit Agreement is hereby
amended by inserting the following new clause (v) immediately before clause
(x) appearing in the last proviso of said definition:

“(v) subject to clauses (x) and (z) below, at any time on and after the date
Starwood Italia becomes an Alternate Currency Revolving Loan Borrower in
accordance with the terms of this Agreement in the case of any Euro Revolving
Loan made to Starwood Italia by an Alternate Currency Lender, the “Applicable
Margin” for (and only for) such Euro Revolving Loans shall be that percentage
per annum equal to the remainder of (I) the “Applicable Margin” for Eurodollar
Loans as then in effect (determined as provided in this definition) less
(II) 0.40 % per annum,”.

SECTION 2. Definition of “Euro LIBOR Rate”; Section 11.01. The definition of
“Euro LIBOR Rate” appearing in Section 11.01 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:

“Euro LIBOR Rate” shall mean (i) in the case of a Euro Revolving Loan made to
Starwood Italia, (x) the rate per annum for deposits in Euros for a period
corresponding to the duration of the relevant Interest Period which appears on
the Reuters Screen which displays the rate of the Banking Federation of the
European Union for the Euro (being currently page “EURIBOR01”) at approximately
11:00 A.M. (Brussels time) on the date which is two Business Days prior to the
commencement of such Interest Period (for delivery on the first day of such
Interest Period) or, if such page shall cease to be available, such other page
or such other service for the purpose of displaying an average rate of the
Banking Federation of the European Union as the Administrative Agent, after
consultation with Alternate Currency Lenders with Euro Revolving Loan
Sub-Commitments and the Corporation, shall select or (y) if such rate is not
available at such time for any reason, and the Administrative Agent has not
selected an alternative service on which a quotation is displayed, then the
“Euro LIBOR Rate” for the relevant Interest Period shall be the arithmetic mean
(rounded upwards to four decimal places) of the rates (as notified to the
Administrative Agent at its request) at which each Euro Reference Bank was
offering to prime banks in the European interbank market deposits in Euros for
the relevant Interest Period at approximately 11:00 a.m., Brussels time, two
(2) Business Days prior to the commencement of such Interest Period and (ii) in
the case of a Euro Revolving Loan made to any Alternate Currency Revolving Loan
Borrower (other than Starwood Italia), (x) the rate per annum that appears on
page 3740 of the Dow Jones Markets Screen (or any successor page) for deposits
in Euros with maturities comparable to the Interest Period applicable to the
Euro Revolving Loans subject to the respective Borrowing commencing two Business
Days thereafter as of 11:00 A.M. (London time) on the date which is two Business
Days prior to the commencement of the respective Interest Period or (y) if such
a rate does not appear on page 3740 of the Dow Jones Markets Screen (or any
successor page), the offered quotation to first-class banks in the London
interbank market by the Administrative Agent for deposits in Euros of amounts in
immediately available funds comparable to the outstanding principal amount of
the Euro Revolving Loan of the Administrative Agent (or, if the Administrative
Agent has no outstanding Euro Revolving Loans, another Lender with outstanding
Euro Revolving Loans) with maturities comparable to the Interest Period
applicable to such Euro Revolving Loan commencing two Business Days thereafter
as of 11:00 A.M. (London time) on the date which is two Business Days prior to
the commencement of such Interest Period; provided, however, that in the event
the Administrative Agent has made any determination pursuant to
Section 1.11(a)(i) in respect of Euro Revolving Loans, or in the circumstances
described in clause (i) to the proviso to Section 1.11(b) in respect of Euro
Revolving Loans, the Euro LIBOR Rate determined pursuant to this definition
shall instead be the rate determined by the Administrative Agent as the
all-in-cost of funds for the Administrative Agent (or such other Lender) to fund
a Borrowing of Euro Revolving Loans with maturities comparable to the Interest
Period applicable thereto.”

SECTION 3. Definitions; Section 11.01. Section 11.01 of the Credit Agreement is
hereby further amended by inserting the following new definition in appropriate
alphabetical order in said Section:

“Euro Reference Banks” means, as to the Euro Revolving Loans of any Alternate
Currency Revolving Loan Borrower organized in a given jurisdiction, the
principal offices in such jurisdiction of each of DB, JPMorgan Chase Bank, N.A.
and/or the relevant affiliate of any of the foregoing (or any successor to any
of the foregoing) and any other bank or financial institution appointed as such
by the Administrative Agent under this Agreement.

SECTION 4. Agreement Relating to Certain Euro Revolving Loan Sub-Commitments.
Notwithstanding anything to the contrary in the Credit Agreement, the Borrowers
and the Lenders hereby agree that on and as of the Fourth Amendment Effective
Date (as defined below), the Euro Revolving Loan Sub-Commitment of Erste Bank
shall automatically (and without further action on its part) be reduced to zero,
with the following to occur concurrently therewith: (i) the Non-Alternate
Currency Revolving Loan Sub-Commitment of Erste Bank shall be increased by the
amount of the reduction to its Euro Revolving Loan Sub-Commitment (i.e.,
$5,000,000), (ii) the relevant Borrowers shall, in coordination with the
Administrative Agent, (x) repay outstanding Dollar Revolving Loans and/or Euro
Revolving Loans of the relevant RL Lenders, and incur additional Dollar
Revolving Loans and/or Euro Revolving Loans from the relevant RL Lenders or
(y) take such other actions as may be required by the Administrative Agent
(including by requiring new Dollar Revolving Loans or Euro Revolving Loans to be
incurred and added to then outstanding Borrowings of the respective such Loans,
even though as a result thereof such new Loans (to the extent required to be
maintained as Euro Rate Loans) may have a shorter Interest Period than the then
outstanding Borrowings of the respective such Loans), in each case to the extent
necessary so that (I) all of the RL Lenders effectively participate in each
outstanding Borrowing of Dollar Revolving Loans pro rata on the basis of their
Dollar Percentages (determined after giving effect to the decrease in the Euro
Revolving Loan Sub-Commitment of Erste Bank (and the increase in the
Non-Alternate Currency Revolving Loan Sub-Commitment of Erste Bank) pursuant to
this Section 4) and (II) all Alternate Currency Lenders with a Euro Revolving
Loan Sub-Commitment effectively participate in each outstanding Borrowing of
Euro Revolving Loans pro rata on the basis of their Alternate Currency RL
Percentages with respect to Euros (determined after giving effect to the
decrease in the Euro Revolving Loan Sub-Commitment of Erste Bank (and the
increase in the Non-Alternate Currency Revolving Loan Sub-Commitment of Erste
Bank) pursuant to this Section 4), (iii) the Corporation shall pay to the
respective RL Lenders any costs of the type referred to in Section 1.12 in
connection with any repayment and/or Borrowing required pursuant to preceding
clause (ii) and (iv) to the extent Dollar Revolving Loans or Euro Revolving
Loans are to be so incurred or added to the then outstanding Borrowings of the
respective such Loans which are maintained as Euro Rate Loans, the Lenders that
have made such Loans shall be entitled to receive from the Borrowers such
amounts, as reasonably determined by the respective Lenders, to compensate them
for funding the various Revolving Loans during an existing Interest Period
(rather than at the beginning of the respective Interest Period, based upon
rates then applicable thereto). All determinations by any Lender pursuant to
clause (iv) of the immediately preceding sentence shall, absent manifest error,
be final and conclusive and binding on all parties hereto.

SECTION 5. Agreements Relating to Utilization of Euro Revolving Loan
Sub-Commitments. Notwithstanding anything to the contrary contained in
Section 1.01(b) of the Credit Agreement or elsewhere in the Credit Agreement, on
and after the Fourth Amendment Effective Date, no Alternate Currency Revolving
Loan Borrower (other than Starwood Italia) may incur any Euro Revolving Loans
pursuant to the Credit Agreement.

PART II. Miscellaneous Provisions

A. Each Guarantor, by its signature below, hereby confirms that its Guaranty
shall remain in full force and effect and its Guaranty covers the obligations of
each of the relevant Borrowers under the Credit Agreement, as modified and
amended by this Amendment.

B. In order to induce the Lenders to enter into this Amendment, the Corporation
represents and warrants to the Lenders that, on the Fourth Amendment Effective
Date, before, as of and after giving effect to the execution, delivery and
performance by the Corporation of this Amendment and the transactions
contemplated hereby, (i) there shall exist no Default or Event of Default and
(ii) all representations and warranties contained in the Credit Agreement and in
the other Credit Documents are true and correct in all material respects with
the same effect as though such representations and warranties had been made on
the Fourth Amendment 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 true and correct in all material respects only as of such specified
date).

C. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.

D. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Corporation and the Administrative Agent.

E. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.

F. This Amendment shall become effective on the date (the “Fourth Amendment
Effective Date”) when each of the Borrowers, each Guarantor, the Lenders
constituting the Required Lenders and each Alternate Currency Lender with a Euro
Revolving Loan Sub-Commitment shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including by way
of facsimile transmission) the same to the Administrative Agent (or its
designee). The Administrative Agent shall promptly deliver notice to the
Corporation of the occurrence of the Fourth Amendment Effective Date.

G. From and after the Fourth Amendment Effective Date, all references in the
Credit Agreement and each of the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
This Amendment shall constitute a Credit Document for all purposes under the
Credit Agreement and the other Credit Documents.

[Signatures appear on the following page.]

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment as of the date first above
written.

 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC., as the Borrower and
Guarantor
By:
Name:
Title:
 
STARWOOD CANADA CORP., as an Alternate Currency Revolving Loan Borrower
By:
Name:
Title:
 
SHERATON HOLDING CORPORATION, as Guarantor
By:
Name:
Title:
 
DEUTSCHE BANK AG, NEW YORK BRANCH,
Individually and as Administrative Agent
By:
 
Name:
Title:
By:
 
Name:
Title:
 

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