**Exhibit 10.26**

 

**SECONDAMENDED AND RESTATED CONSOLIDATED GUARANTY AGREEMENT**

 

**THIS SECOND AMENDED AND RESTATED CONSOLIDATEDGUARANTY AGREEMENT**(this “Agreement”) is madeand given as of January 20, 2006 by **INTERCONTINENTAL HOTELSGROUP PLC**, a corporation organized and existing under the laws ofEngland and Wales (the “Guarantor”), for the benefit of **HPT TRS IHG-1, INC.**,a Maryland corporation (together with its successors and assigns, “TRS1”),**HPT TRS IHG-2, INC.**, a Maryland corporation (togetherwith its successors and assigns, “TRS2”), **HPT TRS IHG-3, INC.**, a Maryland corporation (together with itssuccessors and assigns, “TRS3”), **HPT IHG PR, INC.**, a Puerto Rico corporation (togetherwith its successors and assigns, “PR Landlord”), (from and after the JMLease (as hereinafter defined) is executed) **JMLANDLORD** (as hereinafter defined) and**HOSPITALITYPROPERTIES TRUST**, a Maryland real estate investment trust togetherwith its successors and assigns, “Trust”; and Trust together with TRS1,TRS2, TRS3, PR Landlord and (subject to the delivery of the JM Lease (ashereinafter), the JM Landlord, collectively, “HPT” or the “HPTParties”).

 

**WITNESSETH:**

 

**WHEREAS,**InterContinentalHotels Group PLC (now known as InterContinental Hotels Limited) (“OldGuarantor”) entered into that certain Amended and Restated ConsolidatedGuaranty Agreement, dated as of February 16, 2005 (the “Existing Guaranty”),for the benefit of the HPT Parties; and

 

**WHEREAS**,Guarantor assumed all of the obligations of Old Guarantor under the ExistingGuaranty pursuant to that certain Assumption, Termination and AmendmentAgreement dated as of July 1, 2005 between Old Guarantor and Guarantor; and

 

**WHEREAS,**it is acondition precedent to TRS3 entering into the IHG5 Management Agreement (ashereinafter defined) and the consummation of certain other transactionscontemplated by the Transaction Documents (as defined in the IHG5 ManagementAgreement) that the Guarantor enter into this Agreement; and

 

**WHEREAS,**thetransactions contemplated by the Guaranteed Agreements (as hereinafter defined)and the Transaction Documents are of direct material benefit to the Guarantor;

 

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

 

# **1.****                                     ****CertainTerms****.**Capitalized terms used but not defined herein havethe meaning ascribed thereto in the IHG5 Management Agreement. The followingterms as used in this Agreement shall have the meanings set 

 

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# forth below:

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“Accounting Principles” shall meangenerally accepted accounting principles, as adopted in the United States ofAmerica, consistently applied or, if the Guarantor’s principal place ofbusiness is the United Kingdom, generally accepted accounting principles, asadopted in the United Kingdom, consistently applied.

 

“Base Guaranteed Amount” shall meanthe sum of One Hundred Twenty Five Million Dollars ($125,000,000).

 

“Candlewood Hotels” shall mean theHotels, as defined therein, under the Candlewood Management Agreement.

 

“Candlewood Management Agreement”shall mean that certain Management Agreement, dated as of October 27, 2003,between TRS1 and InterContinental Hotels Group Resources, Inc., as the same maybe amended, modified, supplemented, or otherwise altered from time to time.

 

“Collateral Agency Agreement” shallmean a written agreement, in form and substance reasonably acceptable to HPT,among HPT, the Guarantor and the Collateral Agent pursuant to which theCollateral Agent shall agree to hold any cash delivered to such CollateralAgent pursuant to the terms of this Agreement as collateral agent on behalf ofHPT, as the same may hereafter be amended, restated, modified, supplemented, orotherwise altered. Among other things, the Collateral Agency Agreement shallprovide that (a) the Collateral Agent shall look solely to the Guarantor forany amounts owed to the Collateral Agent in connection with such agreement, (b)the Collateral Agent shall not offset any amount owed to the Collateral Agentagainst the cash delivered to it pursuant to the Collateral Agency Agreementand this Agreement, (c) the Collateral Agent shall hold such cash as trustfunds and not commingle such cash with any assets of the Collateral Agent and(d) HPT shall be entitled to apply any cash collateral held by the CollateralAgent to the overdue obligations of the Guarantor hereunder in such order andat such times as HPT may determine in its sole judgment.

 

“Collateral Agent” shall mean a bankor other financial institution reasonably acceptable to HPT having a rating ofnot less than BBB-/Baa3 rating from the Rating Agencies, which bank or otherfinancial institution is the collateral agent under the Collateral AgencyAgreement as such collateral agent may be replaced in accordance with the termsof the Collateral Agency Agreement.

 

“Dollars” and “$” shall meandollars in lawful currency of the United States of America.

 

“Excess JM Amounts” shall mean, withrespect to any “Fiscal Year,” as defined therein, under the JM Lease, theexcess, if any, of (i) the “Gross Revenues,” as defined therein, under the JMLease, over (ii) (a) “Operating Costs,” “Minimum Rent,” and “Additional Rent”,

 

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each as defined therein, under the JM Lease,(b) amounts deposited into the “FF&E Reserve” pursuant to Section 5.1.2of the JM Lease, (c) an imputed management fee of five percent (5%), (d)amounts advanced by the JM Tenant under the JM Guaranty and (e) amountsadvanced by the JM Tenant to replenish the Deposit.

 

“Guaranteed Agreements” shall mean,collectively, the Management Agreements,****thePR Lease and, when it becomes effective, the JM Lease.

 

“Guaranteed Obligations” shall meanthe payment to TRS1, TRS2, TRS3, PR Landlord, JM Landlord (once the JM Leasebecomes effective) and Trust, as applicable, of: (a) all of the Owner’s FirstPriority as and when due under the Candlewood Management Agreement determinedwithout respect to Gross Revenues thereunder or Operating Profits thereunder;(b) subject to, and in accordance with, the provisions of Section 10hereof, all of the Owner’s First Priority as and when due under the IHG4Management Agreement determined without respect to Gross Revenues thereunder orOperating Profits thereunder; (c) all of the Owner’s Priority as and when dueunder the Staybridge Management Agreement determined without respect to GrossRevenues thereunder or Operating Profits thereunder; (d) subject to, and inaccordance with, the provisions of Section 10 hereof, all of the Owner’sFirst Priority as and when due under the IHG5 Management Agreement determinedwithout respect to Gross Revenues thereunder or Operating Profits thereunder;(e) all of the Minimum Rent as and when due under the PR Lease; (f) all of theMinimum Rent as and when due under the JM Lease; and (g) any and all liquidateddamages due to any of the HPT Parties under any of the Guaranteed Agreements.

 

“IHG4 Coverage Date” shall mean thedate which is the day after the second consecutive calendar year for which theIHG4 Coverage Ratio is equal to or exceeds 1.3.

 

“IHG4 Coverage Ratio” shall mean forany period the quotient of (i) the sum of the numerators used in calculatingboth the PR Rent Coverage Ratio under this Agreement and the Priority CoverageRatio under the IHG4 Management Agreement for such period, divided by (ii) thesum of the denominators used in calculating both the PR Rent Coverage Ratiounder this Agreement and the Priority Coverage Ratio under the IHG4 ManagementAgreement for such period.

 

“IHG4 Guaranteed Obligations” shallmean the Guaranteed Obligations described under clauses (b), (e) and, to theextent relating to the IHG4 Management Agreement or the PR Lease, (g), of thedefinition of the term “Guaranteed Obligations” herein.

 

“IHG4 Management Agreement” shall meanthat certain Amended and Restated Management Agreement, dated as of January 6,2006, between TRS2 and IHG Management (Maryland) LLC and InterContinentalHotels Group (Canada), Inc. as the same may be amended, modified, supplemented,or otherwise altered from time to time.

 

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“IHG4 Severance Date” shall have themeaning given such term in Section 10 of this Agreement.

 

“IHG5 Coverage Date” shall mean thedate which is the day after the second consecutive calendar year for which theIHG5 Priority Coverage Ratio has equaled or exceeded 1.3.

 

“IHG5 Guaranteed Obligations” shallmean the Guaranteed Obligations described under clauses (d), (f) and, to theextent relating to the IHG5 Management Agreement or the JM Lease, (g), of thedefinition of the term “Guaranteed Obligations” herein.

 

“IHG5 Management Agreement” shall meanthat certain Management Agreement dated as January    , 2006between TRS3 and IHG Management (Maryland) LLC, as the same may be amended,modified, supplemented, or otherwise altered.

 

“IHG5 Priority Coverage Ratio” shallmean, for any period, an amount equal to the quotient of (i) the excess of (a)the sum of the numerators used in calculating both the JM Rent Coverage Ratiounder this Agreement and the Priority Coverage Ratio under the IHG5 ManagementAgreement for such period, over (b) the sum of (A) any advances made by TRS3 onaccount of Working Capital under the IHG5 Management Agreement for such period,and (B) amounts drawn on the Deposit (and not replenished) under the DepositAgreement or this Guaranty for such period, (ii) divided by (ii) the sum of theOwner’s First Priority and the Owner’s Second Priority.

 

“IHG5 Severance Date” shall have themeaning given such term in Section 10 of this Agreement.

 

“JM Guaranty” shall mean that certainGuaranty Agreement to be executed and delivered in connection with the closingunder the JM Stock Agreement, from JM Tenant to TRS3 and Trust, as the same mayhereafter be amended, restated, modified, supplemented, or otherwise altered.

 

“JM Landlord” shall have the meaninggiven to the term “Landlord” in the JM Lease.

 

“JM Minimum Rent” shall have themeaning given to the term “Minimum Rent” in the JM Lease.

 

“JM Operating Costs” shall have themeaning given to the term “Operating Costs” in the JM Lease.

 

“JM Rent Coverage Ratio”  shall mean for any period, the quotient of(a) the excess of JM Total Hotel Sales over the sum of (i) JM Operating Costs(other than JM Minimum Rent and JM Additional Rent) for such period and (ii) animputed reserve for Capital Expenses equal to six percent (6%) of JM TotalHotel Sales for such period, divided by (b) the sum of JM Minimum Rent for suchperiod.

 

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“JM Stock Agreement” shall have themeaning given such term in the IHG5 Management Agreement.

 

“JM Tenant” shall mean the tenantunder the JM Lease.

 

“JM Total Hotel Sales” shall have themeaning given to the term “Total Hotel Sales” in the JM Lease.

 

“Management Agreements” shall mean theStaybridge Management Agreement, the Candlewood Management Agreement, the IHG4Management Agreement and the IHG5 Management Agreement, collectively.

 

“Managers” shall mean InterContinentalHotels Group Resources, Inc., IHG Management (Maryland) LLC andInterContinental Hotels Group (Canada), Inc., collectively.

 

“New Candlewood Guaranty” shall mean aGuaranty Agreement made by the Guarantor in favor of TRS1 and HPT and otherwisein the form attached hereto as Exhibit A.

 

“New Guaranties” shall mean the NewCandlewood Guaranty and the New Staybridge Guaranty, collectively.

 

“New Staybridge Guaranty” shall mean aGuaranty Agreement made by the Guarantor in favor of TRS1 and HPT and otherwisein the form attached hereto as Exhibit B.

 

“Original Staybridge Guaranty” shallmean that certain Guaranty Agreement, dated as of July 1, 2003, made by OldGuarantor for the benefit of TRS1 in connection with the Staybridge ManagementAgreement, as amended by that certain First Amendment to Guaranty Agreement,dated as of September 18, 2003.

 

“Original Candlewood Guaranty” shallmean that certain Guaranty Agreement, dated as of October 27, 2003, made by OldGuarantor for the benefit of TRS2 in connection with the Candlewood ManagementAgreement.

 

“Other Severance Date” shall have themeaning given such term in Section 10 of this Agreement.

 

“Outstanding Balance” shall mean, fromtime to time, the Base Guaranteed Amount, less the excess of (i) the aggregateamount paid by the Guarantor under Section 3 hereof over (ii) the sum ofthe aggregate of (a) any amounts reimbursed to the Guarantor pursuant to theterms of the Management Agreements and (b) the aggregate amount of the sum ofthe Excess JM Amounts determined for each “Fiscal Year,” as defined therein,under the JM Lease from and after the effective date of the JM Lease, whichamounts shall be determined, for each such Fiscal Year as the lesser of (i) theExcess JM Amount for such Fiscal Year or (ii) the excess of (A) the BaseGuaranteed Amount over (B) the then Outstanding Balance as of the last day ofsuch Fiscal Year.

 

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“PR Additional Rent” shall have themeaning given to the term “Additional Rent” in the PR Lease.

 

“PR Guaranty” shall mean that certainGuaranty Agreement dated as of February 16, 2005 from PR Tenant to TRS2 andTrust, as the same may hereafter be amended, restated, modified, supplemented,or otherwise altered.

 

“PR Operating Costs” shall have themeaning given to the term “Operating Costs” in the PR Lease.

 

“PR Rent Coverage Ratio”  shall mean for any period, the quotient of(a) the excess of PR Total Hotel Sales over the sum of (i) PR Operating Costs(other than PR Minimum Rent and PR Additional Rent) and (ii) an imputed reservefor Capital Expenses equal to five percent (5%) of Total Hotel Sales for suchperiod, divided by (b) the sum of PR Minimum Rent for such period.

 

“PR Minimum Rent” shall have themeaning given to the term “Minimum Rent” in the PR Lease.

 

“PR Tenant” shall mean the tenantunder the PR Lease.

 

“PR Total Hotel Sales” shall have themeaning given to the term “Total Hotel Sales” in the PR Lease.

 

“Provide Collateral” or “ProvidedCollateral” shall mean:

 

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

 

(b)                                                         thedeposit of cash equal to the then Outstanding Balance with the Collateral Agentto be held by the Collateral Agent in accordance with the Collateral AgencyAgreement provided:(i) the Collateral Agency Agreement has been executed anddelivered by the parties thereto; (ii) HPT has a perfected first prioritysecurity interest in any cash delivered to the Collateral Agent; (iii) HPT hasreceived favorable opinions of counsel, in form and substance reasonablysatisfactory to HPT, with respect to such perfected first priority interest,the valid existence and good standing of the other parties to the CollateralAgency Agreement, the due execution and delivery thereof by such other parties,the enforceability of the Collateral Agency Agreement against such parties, andthat any cash held by the Collateral Agent pursuant to the Collateral AgencyAgreement shall not be “property of the estate” of Collateral Agent should anyevent described in Sections 17.1(a), (b) or (c) of the IHG4Management Agreement or the IHG5 Management Agreement occur with respect to theCollateral Agent; or

 

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

 

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provided,however, the Guarantor shall not be deemed to have Provided Collateral if atany time the Outstanding Balance exceeds the sum of (i) the then remainingbalance drawable under the Satisfactory Letter of Credit or the balance of thecash deposited by the Guarantor hereunder, plus (ii) proceeds of anySatisfactory Letter of Credit or cash deposited hereunder, in either case,applied to the Guaranteed Obligations.

 

“Rating Agencies” shall mean,collectively, Standards & Poor’s Rating Services or its successors andMoody’s Investor Services, Inc. or its successors; provided, however,if the Rating Agencies (i) cease operations without successors or (ii) cease toissue credit ratings, “Rating Agencies” shall mean a nationally recognizedorganization periodically issuing ratings of the financial strength and/orcredit of United States domestic and international banking institutionsreasonably agreed to by HPT and the Guarantor.

 

“Reorganization” shall mean anymerger, consolidation, reorganization, change of control or any transactionpursuant to which the Guarantor shall be or become a Subsidiary of any otherPerson.

 

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

 

“Severance Date” shall mean, (i) withrespect to the IHG4 Guaranteed Obligations, the IHG4 Severance Date, (ii) withrespect to the IHG5 Guaranteed Obligations, the IHG5 Severance Date, and (iii)with respect to the Guaranteed Obligations relating to the Staybridge andCandlewood Hotels, the Other Severance Date.

 

“Staybridge and Candlewood Hotels”shall mean, collectively, the Staybridge Hotels and the Candlewood Hotels.

 

“Staybridge Hotels” shall mean theHotels, as defined therein, under the Staybridge Management Agreement.

 

“Staybridge Management Agreement”shall mean that certain Management Agreement, dated as of July 1, 2003, betweenTRS1 and InterContinental Hotels Group Resources, Inc., as amended by thatcertain First Amendment to Management Agreement dated as of September 18, 2003,that certain Second Amendment to Management Agreement dated as of March, 2004,that certain Third Amendment to Management Agreement dated as of February 16,2005 and that certain Fourth Amendment to Management Agreement dated as ofJanuary 6, 2006, as the same may be further amended, modified, supplemented, orotherwise altered from time to time.

 

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“Staybridge Priority Coverage Ratio”shall mean, for any period, the ratio of (a) the excess of Gross Revenue underthe Staybridge Management Agreement for such period over the sum of the amountsdistributed or applied for such period pursuant to Sections 10.1(a), (b)(determined as though the Reserve Percentage thereunder for the ExpansionHotels (as defined in the Staybridge Management Agreement) was at all timesfive percent (5%)), (e), (g), (h), (i), (k) and (l) of the StaybridgeManagement Agreement, to (b) the sum for such period of Owner’s Priority underthat Agreement and Owner’s Percentage Priority under that Agreement.

 

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

 

# **2.****                                     ****Representationsand Covenants****.**The Guarantor represents,warrants, covenants and agrees that:

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# **2.1****                              ****Validityof Agreement****.**The Guarantor has duly andvalidly executed and delivered this Agreement; this Agreement constitutes thelegal, valid and binding obligation of the Guarantor, enforceable against theGuarantor in accordance with its terms, except as enforceability may be limitedby bankruptcy, insolvency, reorganization, moratorium or similar laws ofgeneral application affecting the rights and remedies of creditors; and theexecution, delivery and performance of this Agreement have been duly authorizedby all requisite action of the Guarantor and such execution, delivery andperformance by the Guarantor will not result in any breach of the terms,conditions or provisions of, or conflict with or constitute a default under, orresult in the creation of any lien, charge or encumbrance upon any of theproperty or assets of the Guarantor pursuant to the terms of, any indenture,mortgage, deed of trust, note, other evidence of indebtedness, agreement orother instrument to which the Guarantor is a party or by which the Guarantor orany property or assets of the Guarantor is bound, or violate any provision oflaw applicable to the Guarantor, or any order, writ, injunction, judgment ordecree of any court applicable to the Guarantor or any order or other publicregulation of any governmental commission, bureau or administrative agencyapplicable to the Guarantor.

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# **2.2****                              ****Paymentof Expenses****.**The Guarantor agrees, as principalobligor and not as guarantor only, to pay to HPT forthwith, upon demand, inimmediately available Federal funds, all costs and expenses (including courtcosts and reasonable legal expenses) incurred or expended by HPT in connectionwith the enforcement of this Agreement, together with 

 

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## interest at the InterestRate on amounts recoverable under this Agreement from the time such amountsbecome due until payment.

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# **2.3****                              ****Reports****.**The Guarantorshall timely deliver to HPT the Consolidated Financials required under theGuaranteed Agreements and otherwise comply with the terms of the GuaranteedAgreements applicable to it.

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# **2.4****                              ****FinancialCondition of Guarantor; Status of Guarantor****.**So long as theGuarantor’s obligations under Section 3 below are outstanding,unless the Guarantor shall have Provided Collateral to secure its obligationshereunder:

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# (a)                                  The Guarantorshall at all times maintain a tangible net worth determined in accordance withthe Accounting Principles in an amount not less than Five Hundred MillionDollars ($500,000,000) or if there has been a Reorganization, or if theGuarantor is not the originally named Guarantor, Seven Hundred Fifty MillionDollars ($750,000,000); and

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# (b)                                 The Guarantorshall not engage in any Reorganization unless following such Reorganization ithas (i) a tangible net worth determined in accordance with the AccountingPrinciples in an amount not less than Seven Hundred Fifty Million Dollars($750,000,000) and (ii) unencumbered assets with a fair market value of notless than One Hundred Million Dollars ($100,000,000) (exclusive of any note,instrument, security or claim issued by, against or in any way dependent on thecredit of, an Affiliate of Guarantor).

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## **2.5****                              ****Security**.

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# (a)                                  Upon thetermination of the Guarantor’s obligations under Section 3 or if theOutstanding Balance equals zero dollars ($0), HPT will return to the Guarantorany Satisfactory Letter of Credit previously delivered to HPT or any unappliedcash collateral then being held by HPT hereunder and shall direct theCollateral Agent to return any cash being held by it under the CollateralAgency Agreement to the Guarantor.

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# (b)                                 HPT shall beentitled to draw upon any Satisfactory Letter of Credit delivered to it (i) forthe full amount thereof if at any time there is less than thirty (30) daysuntil the expiry date of such Satisfactory Letter of Credit; (ii) for the fullamount thereof if the bank that issued such Satisfactory Letter of Credit shallnot have a credit rating of at least A/A2 (or, if after the date hereof thesystem of ratings used by the Rating Agencies changes in a material way, theirthen equivalents in HPT’s reasonable judgment) from the Rating Agencies andsuch satisfactory Letter of Credit shall not have been replaced within thirty(30) days with a new Satisfactory Letter of Credit delivered to HPT; or (iii)to the extent and in the amounts then due and payable hereunder, if theGuarantor shall fail to pay or perform any of its obligations under thisAgreement in accordance with the terms hereof.

 

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# (c)                                  HPT shall beentitled to apply any cash collateral held by it or the Collateral Agent to theoverdue obligations of the Guarantor hereunder in such order and at such timesas HPT may determine in its sole judgment. Any cash collateral held by HPTshall not be commingled with its other funds, and shall be invested, at theGuarantor’s risk, in interest bearing investments reasonably acceptable to theGuarantor. Any interest on such cash collateral, and any losses in suchinvestments, shall belong to IHG.

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# **2.6****                              ****LegalExistence****.**The Guarantor shall do orcause to be done all things necessary to preserve and keep in full force andeffect its corporate existence. The Guarantor has appointed attorneys Alston& Bird LLP, having an address at 1201 West Peachtree Street, Atlanta,Georgia 30309-3424, Attn:  ManagingPartner as its agent for service of process. The Guarantor acknowledges andagrees that service of process on such agent shall constitute service ofprocess on Guarantor with respect to any and all claims hereunder, under theGuaranteed Agreements or under any Transaction Document.

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# **2.7****                              ****SubstituteGuarantor****.**The then Guarantor (the “DepartingGuarantor”) shall be released from obligations under Section 3hereof on the following terms and conditions:

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# (a)                                  a SubstituteGuarantor shall assume pursuant to a written instrument satisfactory to HPT allof the Guarantor’s obligations hereunder; and

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# (b)                                 HPT shall receivean opinion of counsel satisfactory to HPT with respect to, among other things,the existence and good standing of the Substitute Guarantor and the dueexecution, delivery and enforceability of such assumption.

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Upon the satisfaction of the foregoing conditionsand the expiration of all applicable preference or similar periods, HPT shalldeliver a release to the Departing Guarantor of its obligations under Section3 hereof and the Substitute Guarantor shall be deemed the “Guarantor”hereunder. Further, if the Substitute Guarantor has Provided Collateral or has(i) a tangible net worth determined in accordance with the AccountingPrinciples of not less than Seven Hundred Fifty Million Dollars ($750,000,000)and (ii) unencumbered assets with a fair market value of not less than OneHundred Million Dollars (exclusive of any note, instrument, security or claimissued by, against or in any way dependent on the credit of, an Affiliate ofGuarantor), HPT shall return to the Departing Guarantor any letter of credit orcash delivered by the Departing Guarantor and held by HPT hereunder and shalldirect the Collateral Agent to return to the Departing Guarantor any cashdelivered by the Departing Guarantor and held by such Collateral Agent pursuantto the terms of the Collateral Agency Agreement.

 

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# **3.****                                     ****Guarantee****.**

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# (a)                                  The Guarantorhereby unconditionally guarantees that the Guaranteed Obligations which becomedue and payable shall be paid in full when due and payable subject to anyapplicable cure periods, whether upon demand, at the stated or acceleratedmaturity thereof or upon any mandatory or voluntary prepayment pursuant to anyGuaranteed Agreement, or otherwise.

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# (b)                                 This guaranteeis a guarantee of payment and not of collectibility and is absolute and in noway conditional or contingent. In case any part of the Guaranteed Obligationsshall not have been paid when due and payable or performed at the timeperformance is required, subject to any applicable cure periods, the Guarantorshall, pay or cause to be paid to HPT the amount thereof as is then due andpayable and unpaid (including interest and other charges, if any, due thereonthrough the date of payment in accordance with the applicable provisions of theTransaction Documents) or perform or cause to be performed such obligations inaccordance with the Transaction Documents. Simultaneously with the giving ofany notice of default to the Managers or PR Tenant under the GuaranteedAgreements, TRS1, TRS2, TRS3, PR Landlord or JM Landlord, as applicable, shallgive a copy of such notice to the Guarantor. TRS1, TRS2, TRS3, PR Landlord orJM Landlord, as applicable, shall accept any cure of such default by theGuarantor provided such cure is completed within the applicable cure periodunder the applicable Guaranteed Agreement.

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# **4.****                                     ****Unenforceabilityof Guaranteed Obligations, Etc.**If the Managers, PR Tenantor (when the JM Lease becomes effective) JM Tenant are for any reason under nolegal obligation to discharge any of the Guaranteed Obligations, or if anyother moneys included in the Guaranteed Obligations have become unrecoverablefrom the Managers, PR Tenant or (when the JM Lease becomes effective) JM Tenantby operation of law or for any other reason, including, without limitation, theinvalidity or irregularity in whole or in part of any Guaranteed Obligation orof any Guaranteed Agreement or any limitation on the liability of the Managers,PR Tenant or (when the JM Lease becomes effective) JM Tenant thereunder or anylimitation on the method or terms of payment thereunder which may now orhereafter be caused or imposed in any manner whatsoever, the guaranteescontained in this Agreement shall nevertheless remain in full force and effectin accordance with the terms set forth herein and shall be binding upon theGuarantor to the same extent as if the Guarantor at all times had been theprincipal debtor and obligor on all such Guaranteed Obligations.

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# **5.****                                     ****AdditionalGuarantees****.**This Agreement shall be inaddition to any other guarantee or other security for the GuaranteedObligations and it shall not be prejudiced or rendered unenforceable by theinvalidity of any such other guarantee or security or by any waiver, amendment,release or modification thereof.

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# **6.****                                     ****Consentsand Waivers, Etc.**The Guarantor hereby acknowledges receipt ofcorrect and complete copies of each of the Guaranteed Agreements 

 

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# and consents to all of theterms and provisions thereof, as the same may be from time to time hereafteramended or changed in accordance therewith, and waives, to the extent theGuarantor lawfully may do so, (a) presentment, demand for payment, and protestof nonpayment, of any of the Guaranteed Obligations, (b) notice of acceptanceof this Agreement and of diligence, presentment, demand and protest, (c) noticeof any default hereunder and any default, breach or nonperformance under theGuaranteed Agreements or a Manager Event of Default or Manager Default underany Management Agreement or an Event of Default under the PR Lease or JM Leaseexcept as expressly provided in Section 3, (d) notice of the terms, timeand place of any private or public sale of collateral held as security for theGuaranteed Obligations, (e) demand for performance or observance of, and anyenforcement of any provision of, or any pursuit or exhaustion of rights orremedies against the Managers**,** orPR Tenant, JM Tenant or any other guarantor of the Guaranteed Obligations,under or pursuant to the Guaranteed Agreements, or any agreement directly orindirectly relating thereto and any requirements of diligence or promptness onthe part of the holders of the Guaranteed Obligations in connection therewith,and (f) any and all demands and notices of every kind and description withrespect to the foregoing or which may be required to be given by any statute orrule of law.

#  

# **7.****                                     ****NoImpairment, Etc.**The obligations, covenants, agreements andduties of the Guarantor under this Agreement shall not be affected or impairedby any assignment or transfer in whole or in part of any of the GuaranteedObligations without notice to the Guarantor, or any waiver by HPT or any holderof any of the Guaranteed Obligations or by the holders of all of the GuaranteedObligations of the performance or observance by the Managers**,** PR Tenant, JM Tenant or any otherguarantor of any of the agreements, covenants, terms or conditions contained inthe Guaranteed Obligations or the Guaranteed Agreements or any indulgence in orthe extension of the time for payment by the Managers**,** PR Tenant, JM Tenant or any other guarantor of any amountspayable under or in connection with the Guaranteed Obligations or theGuaranteed Agreements or any other instrument or agreement relating to theGuaranteed Obligations or of the time for performance by the Managers**,** PR Tenant, JM Tenant or any otherguarantor of any other obligations under or arising out of any of the foregoingor the extension or renewal thereof, or the modification or amendment made withthe consent of the Guarantor of any duty, agreement or obligation of theManagers**,** PR Tenant or any otherguarantor set forth in any of the foregoing, or the voluntary or involuntarysale or other disposition of all or substantially all the assets of theManagers**,** PR Tenant, JM Tenant orany other guarantor or insolvency, bankruptcy, or other similar proceedingsaffecting the Managers**,** PR Tenant,JM Tenant or any other guarantor or any assets of the Managers**,** PR Tenant, JM Tenant or any such otherguarantor, or the release or discharge of the Managers**,** PR Tenant, JM Tenant or any such otherguarantor from the performance or observance of any agreement, covenant, termor condition contained in any of the foregoing without the consent of theholders of the Guaranteed Obligations by operation of law.

 

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# **8.****                                     ****Reimbursement,Subrogation, Etc.**The Guarantor hereby covenants and agreesthat the Guarantor will not enforce or otherwise exercise any rights ofreimbursement, subrogation, contribution or other similar rights against theManagers**,** PR Tenant or any otherperson with respect to the Guaranteed Obligations prior to the irrevocablepayment in full of all amounts then due and owing but unpaid under theGuaranteed Agreements. Until the Guaranteed Obligations have been satisfied infull, the Guarantor shall not have any right of subrogation, and the Guarantorwaives any defense it may have based upon any election of remedies by HPT whichdestroys the Guarantor’s subrogation rights or the Guarantor’s rights toproceed against the Managers or PR Tenant for reimbursement, including, withoutlimitation, any loss of rights the Guarantor may suffer by reason of anyrights, powers or remedies of the Managers or PR Tenant in connection with anyanti-deficiency laws or any other laws limiting, qualifying or discharging theindebtedness to HPT. Until all obligations of the Managers and PR Tenantpursuant to the Guaranteed Agreements shall have been irrevocably paid andsatisfied in full, the Guarantor waives any right to enforce any remedy whichHPT now has or may in the future have against the Managers**,** PR Tenant, any other guarantor or anyother person and any benefit of, or any right to participate in, any securitywhatsoever now or in the future held by HPT. Nothing contained in this Section8 shall limit any of Guarantor’s rights under the Management Agreements.

#  

# **9.****                                     ****Defeasance;Guaranty Limitations****.**The Guarantor’s obligationsunder Section 3 shall terminate upon the date on which the GuaranteedObligations have been paid and performed in full and all other obligations ofthe Guarantor to HPT under this Agreement have been irrevocably satisfied infull; provided, however, certain of the Guarantor’s obligationsunder Section 3 shall be subject to early termination subject to, andupon, the terms and conditions set forth in Section 10 hereof; providedfurther, however, if at any time, all or any part of any paymentapplied on account of the Guaranteed Obligations is or must be rescinded orreturned for any reason whatsoever (including, without limitation, theinsolvency, bankruptcy or reorganization of the Managers, PR Tenant or JMTenant), this Agreement, to the extent such payment is or must be rescinded orreturned, shall be deemed to have continued in existence notwithstanding anysuch termination. Notwithstanding anything contained in this Agreement to thecontrary, in no event shall the Guarantor’s liability under Section 3exceed the Outstanding Balance.

#  

# **10.****                              ****Severance****.**Subject, in each case, to the second provisocontained in Section 9 above, the Guarantor’s obligations under thisAgreement shall terminate as follows:

#  

# **10.1****                       ****IHG4**. (a)  If (i) the IHG4 Coverage Date shall haveoccurred, and (ii) the Guarantor is not then in default of its obligationsunder this Agreement, then, on such date (the “IHG4Severance Date”),the Guarantor’s obligations under this Agreement shall terminate with respectto the IHG4 Guaranteed Obligations.

 

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# **10.2****                       ****IHG5**. (a)  If (i) the IHG5 Coverage Date shall haveoccurred, and (ii) the Guarantor is not then in default of its obligationsunder this Agreement, then, on such date (the “IHG5Severance Date”),the Guarantor’s obligations under this Agreement shall terminate with respectto the IHG5 Guaranteed Obligations.

##  

# **10.3****                       ****Candlewoodand Staybridge**. (a)  If (i)the IHG4 Coverage Severance Date shall have occurred, (ii) the IHG5 CoverageSeverance Date shall have occurred, (iii) the Guarantor is not then in defaultof its obligations under this Agreement, and (iv) the Guarantor shall havedelivered to HPT and TRS1 executed counterparts of the New Guaranties and anopinion of counsel satisfactory to Trust with respect to, among other things,the existence and good standing of the Guarantor and the due execution,delivery and enforceability of the New Guaranties then, on the date on whichthe New Guaranties and such opinion are delivered (the “**OtherSeverance Date**”), theGuarantor’s obligations under this Agreement shall terminate.

##  

If any Substitute Guarantor has succeeded tothe interests of the Guarantor named herein, then the termination of suchSubstitute Guarantor’s obligations under this Agreement shall be furtherconditioned upon such Substitute Guarantor satisfying the requirements withrespect to a Substitute Guarantor under each of the New Guaranties, including,without limitation, the obligation to Provide Collateral under each of the NewGuaranties (if applicable). Notwithstanding the foregoing, the termination ofthe Guarantor’s obligations under this Agreement shall not diminish, impair orotherwise affect the Guarantor’s obligations under the New Guaranties.

 

# **11.****                              ****Notices****.**(a)  Any and all notices,demands, consents, approvals, offers, elections and other communicationsrequired or permitted under this Agreement shall be deemed adequately given ifin writing and the same shall be delivered either by hand, by telecopier withwritten acknowledgment of receipt (provided a copy thereof is sent by FederalExpress or similar expedited commercial carrier for delivery on the nextbusiness day), or Federal Express or similar expedited commercial carrier,addressed to the recipient of the notice, postpaid and registered or certifiedwith return receipt requested (if by mail), or with all freight charges prepaid(if by Federal Express or similar carrier).

#  

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

 

(c) All such notices shall be addressed,

 

14

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if to HPT to:

 

c/o Hospitality Properties Trust

400 Centre Street

Newton, Massachusetts 02458

Attn: Mr. John G. Murray

[Telecopier No. (617) 969-5730]

 

with a copy to:

 

Sullivan & Worcester LLP

One Post Office Square

Boston, Massachusetts 02109

Attn: Nancy S. Grodberg, Esq.

[Telecopier No. (617) 338-2880]

 

if to the Guarantor to:

 

Intercontinental Hotels Group PLC

67 Alma Road

Windsor

Berkshire SL4 3HD

ENGLAND

Attn: Company Secretary

Telecopier No. +44 1753 410101

 

with a copyto:

 

Intercontinental Hotels Resources Group, Inc.

Three Ravinia Drive

Suite 100

Atlanta, Georgia 30346

Attn: Vice President, Asset Management

[Telecopier No. 770-604-5340]

 

(d)                                 Bynotice given as herein provided, the parties hereto and their respectivesuccessors and assigns shall have the right from time to time and at any timeduring the term of this Agreement to change their respective addresseseffective upon receipt by the other parties of such notice and each shall havethe right to specify as its address any other address within the United Statesof America.

 

# **12.****                              ****Successorsand Assigns****.**Whenever in this Agreement,any of the parties hereto is referred to, such reference shall be deemed toinclude the successors and assigns of such party, including without limitationthe holders, from time to time, of the Guaranteed Obligations; and allrepresentations, warranties, covenants and agreements by or on behalf of theGuarantor which are contained in this Agreement shall inure to the benefit ofHPT’s successors and assigns, including, without limitation, such holders,whether so expressed or not.

 

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# **13.****                              ****ApplicableLaw****.**Except as to matters regarding the internal affairsof HPT and issues of or limitations on any personal liability of theshareholders and trustees of HPT for obligations of HPT, as to which the lawsof the State of Maryland shall govern, this Agreement and any other instrumentsexecuted and delivered to evidence, complete or perfect the transactionscontemplated hereby shall be interpreted, construed, applied and enforced inaccordance with the laws of New York applicable to contracts between residentsof New York which are to be performed entirely within New York, regardless of(i) where any such instrument is executed or delivered; or (ii) where anypayment or other performance required by any such instrument is made orrequired to be made; or (iii) where any breach of any provision of any suchinstrument occurs, or any cause of action otherwise accrues; or (iv) where anyaction or other proceeding is instituted or pending; or (v) the nationality,citizenship, domicile, principal place of business, or jurisdiction oforganization or domestication of any party; or (vi) whether the laws of theforum jurisdiction otherwise would apply the laws of a jurisdiction other thanNew York; or (vii) any combination of the foregoing.

#  

All actions and proceedings arising out of orin any way relating to this Agreement shall be brought, heard, and determinedexclusively in an otherwise appropriate federal or state court located withinthe State of New York. Guarantor hereby (i) submits to the exclusivejurisdiction of any New York federal or state court of otherwise competentjurisdiction for the purpose of any action or proceeding arising out of orrelating to this Agreement and (ii) voluntarily and irrevocably waives, andagrees not to assert by way of motion, defense, or otherwise in any such actionor proceeding, any claim or defense that it is not personally subject to thejurisdiction of such a court, that such a court lacks personal jurisdictionover Guarantor or the matter, that the action or proceeding has been brought inan inconvenient or improper forum, that the venue of the action or proceedingis improper, or that this Agreement may not be enforced in or by such a court. Tothe maximum extent permitted by applicable law, Guarantor consents to serviceof process by registered mail, return receipt requested, or by any other mannerprovided by law.

 

**To the maximum extentpermitted by applicable law, each of the parties hereto waives its rights totrial by jury with respect to this Agreement or any matter arising inconnection herewith.**

 

# **14.****                              ****Modificationof Agreement****.**No modification or waiver ofany provision of this Agreement, nor any consent to any departure by theGuarantor therefrom, shall in any event be effective unless the same shall bein writing and signed by HPT, and such modification, waiver or consent shall beeffective only in the specific instances and for the purpose for which given. Nonotice to or demand on the Guarantor in any case shall entitle the Guarantor toany other or further notice or demand in the same, similar or othercircumstances.

#  

# **15.****                              ****Waiverof Rights by HPT****.**Neither any failure nor anydelay on HPT’s part in exercising any right, power or privilege under thisAgreement 

 

16

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# shall operate as a waiverthereof, nor shall a single or partial exercise thereof preclude any other orfurther exercise, or the exercise of any other right, power or privilege.

#  

# **16.****                              ****Severability****.**In case any oneor more of the provisions contained in this Agreement should be invalid,illegal or unenforceable in any respect, the validity, legality andenforceability of the remaining provisions contained herein shall not in anyway be affected or impaired thereby, but this Agreement shall be reformed andconstrued and enforced to the maximum extent permitted by applicable law.

#  

# **17.****                              ****EntireContract****.**This Agreement constitutesthe entire agreement between the parties hereto with respect to the subjectmatter hereof and shall supersede and take the place of any other instrumentspurporting to be an agreement of the parties hereto relating to the subjectmatter hereof.

#  

# **18.****                              ****Headings;Counterparts****.**Headings in this Agreementare for purposes of reference only and shall not limit or otherwise affect themeaning hereof. This Agreement may be executed in any number of counterparts,each of which shall be an original, but all of which together shall constituteone instrument, and in pleading or proving any provision of this Agreement, itshall not be necessary to produce more than one of such counterparts.

#  

# **19.****                              ****RemediesCumulative****.**No remedy herein conferredupon HPT is intended to be exclusive of any other remedy, and subject to thelimitations set forth in Section 9 above, each and every remedy shall becumulative and shall be in addition to every other remedy given hereunder ornow or hereafter existing at law or in equity or by statute or otherwise.

#  

# **20.****                              ****Nonliabilityof Trustees**. THE DECLARATION OF TRUST ESTABLISHING TRUST, ACOPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”),IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OFMARYLAND, PROVIDES THAT, AND THE GUARANTOR HEREBY AGREES THAT, THE NAME “HOSPITALITYPROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY ASTRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER,SHAREHOLDER, EMPLOYEE OR AGENT OF TRUST SHALL BE HELD TO ANY PERSONALLIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, TRUST.ALL PERSONS DEALING WITH TRUST, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OFTRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

#  

# **21.****                              ****EffectiveDate**. This Agreement shall be of no force or effectunless and until the Effective Date occurs.

#  

# **22.****                              ****PR GuarantyObligations****.**Guarantor acknowledges andagrees that at any time there is any amount due and otherwise payable under thePR Guaranty, HPT shall be entitled to treat any payment by Guarantor as apayment by the PR Tenant under the PR Guaranty and to the extent HPT 

 

17

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# so elects such payment shall not result in a reduction in theOutstanding Balance.

#  

# **23.****                              ****Restatement**. This Agreement supercedes, amends andrestates in its entirety the Existing Guaranty.

 

18

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

 
|       | **INTERCONTINENTAL HOTELS GROUP PLC** |
|------------|---------------------------------------|
|       |                                  |
|       |                                  |
|       | By:                                   | /s/ Richard Solomons |
|       |                                  | Its: | Director |
|       |                                  |
|       | By:                                   | /s/ Stevan Porter |
| ** ** | ** **                            | **Its:** | **Director** |
|            |                                       |  |  |  |  |

 

 

**[Signaturescontinue on next page.]**

 

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| **ACKNOWLEDGED AND AGREED:**     | ** **          |
|----------------------------------|---------------------|
| ** **                       | ** **          |
| **HPT TRS IHG-1, INC.**          | ** **          |
| ** **                       | ** **          |
| ** **                       | ** **          |
| By:                              | /s/ John G. Murray  |   |
|                             | John G. Murray      |   |
|                             | Vice President      |   |
|                             |                |
|                             |                |
| **HPT TRS IHG-2, INC.**          | ** **          |
| ** **                       | ** **          |
| ** **                       | ** **          |
| By:                              | /s/ John G. Murray  |   |
| ** **                       | **John G.  Murray** | ** ** |
|                             | Vice  President     |   |
|                             |                |
|                             |                |
| **HPT TRS IHG-3, INC.**          | ** **          |
| ** **                       | ** **          |
| ** **                       | ** **          |
| By:                              | /s/ John G. Murray  |   |
| ** **                       | **John G.  Murray** | ** ** |
|                             | Vice  President     |   |
|                             |                |
| **HPT IHG PR, INC.**             | ** **          |
| ** **                       | ** **          |
| ** **                       | ** **          |
| By:                              | /s/ John G. Murray  |   |
|                             | John G. Murray      |   |
|                             | President           |   |
|                             |                |
|                             |                |
| **HOSPITALITY PROPERTIES TRUST** | ** **          |
| ** **                       | ** **          |
| ** **                       | ** **          |
| By:                              | /s/ John G. Murray  |   |
|                             | John G. Murray      |   |
|                             | President           |   |
|                                  |                     |  |  |  |

 

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