Document:

<PAGE>

                                                                     Exhibit 4.2

                     JOHN HANCOCK FINANCIAL SERVICES, INC.
              TERMS RESOLUTIONS FOR 5.625% SENIOR NOTES DUE 2008

                               NOVEMBER 29, 2001

       Thomas Moloney, Senior Executive Vice President and Chief Financial
Officer of John Hancock Financial Services, Inc., a Delaware corporation (the
"Company"), and Gregory Winn, Vice President and Treasurer of the Company, being
 -------
two of the "Authorized Officers" of the Company authorized by the resolutions
adopted by the Board of Directors of the Company on May 14, 2001 (the
"Resolutions"), to establish the form and terms of the 5.625% Notes (as
 -----------
hereinafter defined) and to take, on behalf of the Company, certain other
actions with respect to the 5.625% Notes (the "Authorized Officers"), do hereby
                                               -------------------
adopt and execute, on behalf of the Company, as of November 29, 2001 the
following resolutions:

       WHEREAS, the Company has previously entered into an Indenture (the

"Indenture") dated as of November 29, 2001, between the Company and JPMorgan
 ---------
Chase Bank, a New York banking corporation, as trustee (the "Trustee"); and
                                                             -------

       WHEREAS, pursuant to the Resolutions the Authorized Officers have been
authorized to, among other things, (i) determine, authorize and fix the terms of
one or more series of Securities of the Company in an aggregate principal amount
up to such aggregate principal amount as shall be sold at an aggregate initial
offering price not exceeding $1,000,000,000, (ii) negotiate, execute and deliver
one or more underwriting agreements, distribution agreements, terms agreements,
pricing agreements or purchase agreements relating to such Securities, and (iii)
take all such further action as the Authorized Officers may deem to be necessary
or advisable to carry out the purpose and intent of the Resolutions which relate
to the offering of such Securities; and

       WHEREAS, the Authorized Officers wish to establish the terms of a new
series of Securities to be issued pursuant to the Indenture; and

       WHEREAS, unless otherwise specified herein, capitalized terms used in
these resolutions shall have the meanings ascribed thereto in the Indenture;
<PAGE>

                                                                               2

       NOW THEREFORE be it:

       RESOLVED, that, pursuant to Section 301 of the Indenture, there be and
hereby are approved a series of Securities under the Indenture having the terms
set forth below:

       (1)  The title of the Securities shall be the "5.625%% Senior Notes due
            2008" (the "5.625% Notes").
                        ------------

       (2)  The aggregate principal amount of the 5.625% Notes shall be
            unlimited.  There shall be initially issued, authenticated and
            delivered under the Indenture an aggregate principal amount of
            $500.0 million of 5.625% Notes (exclusive of 5.625% Notes
            authenticated and delivered upon registration of transfer of, or in
            exchange for, or in lieu of, other 5.625% Notes pursuant to Section
            304, Section 305, Section 306, Section 906, Section 1107, or Section
            1305 of the Indenture).

       (3)  The date on which the principal amount of the 5.625% Notes is
            payable is December 1, 2008, unless accelerated pursuant to the
            Indenture.  The aggregate principal amount of the 5.625% Notes
            payable at maturity shall be $500.0 million, subject to the issuance
            of additional 5.625% Notes by the Company.

       (4)  The 5.625% Notes shall bear interest at a rate of 5.625% per annum
            from December 6, 2001.  Interest shall be payable semiannually on
            December 1 and June 1 (each, an "Interest Payment Date") of each
                                             ---------------------
            year, commencing June 1, 2002, to each person in whose name the
            5.625% Notes are registered at the close of business on the Regular
            Record Date for such interest.  The Regular Record Dates for the
            payment of interest shall be the November 15 and May 15 immediately
            preceding the applicable Interest Payment Date.  Interest on the
            5.625% Notes shall be calculated on the basis of a 360-day year
            consisting of 12 30-day months.

       (5)  Principal (and premium or Make-Whole Amount, if any) and interest
            payable in respect of the 5.625% Notes shall be payable in the
            Borough of Manhattan, the City of New York at the office
<PAGE>

                                                                               3

            of the Trustee at 450 West 33rd Street, 15th Floor, New York, New
            York 10001 and any 5.625% Notes issued in the form of Registered
            Securities may be surrendered at such location for registration of
            transfer or exchange and notices or demands to or upon the Company
            in respect of the 5.625% Notes may be served at such location.

       (6)  (a) The 5.625% Notes are subject to redemption at the option of the
            Company, in whole or in part, at any time at a Redemption Price
            equal to the greater of:

                  (1) 100% of the principal amount of the 5.625% Notes being
                  redeemed; and

                  (2) an amount equal to the sum of the present values of the
                  remaining scheduled payments for principal and interest on the
                  5.625% Notes being redeemed, not including any portion of the
                  payments of interest accrued as of such Redemption Date,
                  discounted to such Redemption Date on a semi-annual basis
                  (assuming a 360-day year consisting of 12 30-day months) at
                  the Treasury Rate, plus 20 basis points;

            plus, in each case, accrued and unpaid interest on the 5.625% Notes
            ----
            being redeemed to the Redemption Date.

            (b) Notice of any such redemption shall be given not less than 30
            days nor more than 90 days (as further set forth in Section 1104 of
            the Indenture) prior to the Redemption Date.

            (c) For purposes of the aforementioned redemption provisions of the
            5.625% Notes, the following terms shall have the meanings set forth
            below:

                  "Treasury Rate" means the rate per year equal to the semi-
                   -------------
            annual equivalent yield to maturity of the Comparable Treasury
            Issue, calculated using a price for the Comparable Treasury Issue
            (expressed as a percentage of its principal amount) equal to the
            Comparable Treasury Price for such Redemption Date.  The Treasury
            Rate shall be calculated on the third Business Day preceding the
            Redemption Date.
<PAGE>

                                                                               4

                  "Comparable Treasury Issue" means the United States Treasury
                   -------------------------
            security selected by the Independent Investment Banker as having a
            maturity comparable to the remaining term of the 5.625% Notes to be
            redeemed that would be utilized, at the time of selection and in
            accordance with customary financial practice, in pricing new issues
            of corporate debt securities of comparable maturity to the remaining
            term of the 5.625% Notes.

                  "Independent Investment Banker" means either Lehman Brothers
                   -----------------------------
            Inc. or Morgan Stanley & Co. Incorporated, as specified by the
            Company, and any successor firm or, if such firm is unwilling or
            unable to select the Comparable Treasury Issue, an independent
            investment banking institution of national standing appointed by the
            Company.

                  "Comparable Treasury Price" means with respect to any
                   -------------------------
            Redemption Date for the 5.625% Notes, (1) the average of the
            Reference Treasury Dealer Quotations for such Redemption Date, after
            excluding the highest and lowest such Reference Treasury Dealer
            Quotations, or (2) if the Company obtains fewer than three such
            Reference Treasury Dealer Quotations, the average of all such
            quotations.

                  "Reference Treasury Dealer" means Lehman Brothers Inc., Morgan
                   -------------------------
            Stanley & Co. Incorporated or another primary treasury dealer, as
            specified by the Company (the "Primary Treasury Dealer"); provided,
                                           -----------------------    --------
            however, that if Lehman Brothers Inc., Morgan Stanley & Co.
            -------
            Incorporated or another primary treasury dealer, as specified by the
            Company shall cease to be the Primary Treasury Dealer, the Company
            shall substitute therefor another primary treasury dealer.

                  "Reference Treasury Dealer Quotations" means, with respect to
                   ------------------------------------
            the Reference Treasury Dealer and any Redemption Date, the average,
            as determined by the Company, of the bid and asked prices for the
            Comparable Treasury Issue (expressed, in each case, as a percentage
            of its principal amount) quoted in writing to the Company by such
            Reference Treasury Dealer at
<PAGE>

                                                                               5

            5:00 p.m., New York City time, on the third Business Day preceding
            such Redemption Date.

       (7)  The 5.625% Notes are not subject to any sinking fund or analogous
            provisions.  The 5.625% Notes will not be redeemable at the option
            of the Holders thereof prior to maturity.

       (8)  The 5.625% Notes shall be issuable only in denominations of $1,000
            and integral multiples thereof and all such 5.625% Notes shall be
            issued in the form of Registered Securities (which shall initially
            be global Securities).

       (9)  The Trustee shall initially act as the Registrar and Paying Agent
            for the 5.625% Notes.

       (10) One hundred percent (100%) of the principal amount of the 5.625%
            Notes shall be payable upon declaration of acceleration of the
            maturity thereof pursuant to Section 502 of the Indenture.

       (11) Payments of principal (and premium or Make-Whole Amount, if any) and
            interest on the 5.625% Notes shall be payable in Dollars.

       (12) The amount of payments of principal (and premium or Make-Whole
            Amount, if any) and interest on the 5.625% Notes shall not be
            determined with reference to an index, formula or other method.

       (13) Payments of principal (and premium or Make-Whole Amount, if any) and
            interest on the 5.625% Notes shall not be payable at the option of
            the Company or a Holder thereof in a currency or currencies,
            currency unit or units or composite currency or currencies other
            than that in which the 5.625% Notes are denominated.

       (14) Other than as set forth in these resolutions and the Indenture,
            there are no additional provisions granting special rights to the
            Holders of the Notes.

       (15) The Events of Default and covenants specified in the Indenture will
            apply to the 5.625% Notes without additions or changes.
<PAGE>

                                                                               6

       (16) The 5.625% Notes shall be issuable only in the form of Registered
            Securities.  The 5.625% Notes shall be issued initially in the form
            of one or more permanent global Securities (the "Global 5.625%
                                                             -------------
            Notes").  The depository for the Global 5.625% Notes shall be The
            Depository Trust Company, a New York limited-purpose trust company
            ("DTC"), and the Global 5.625% Notes shall be registered in the name
              ---
            of DTC or CEDE & CO., as nominee of DTC.  Except as set forth in
            Section 305 of the Indenture, the Global 5.625% Notes may only be
            transferred, in whole or in part, to DTC or another nominee of DTC,
            or to a successor to DTC.

       (17) The 5.625% Notes shall not be issued in the form of Bearer
            Securities or temporary global Securities.

       (18) Interest on the 5.625% Notes shall be payable to the Person in whose
            name a Security (or one or more Predecessor Securities) is
            registered at the close of business on the Regular Record Date for
            such interest payment.

       (19) The defeasance and covenant defeasance provisions described in
            Article Fourteen of the Indenture shall apply to the 5.625% Notes.

       (20) There shall be no conditions to the issuance of 5.625% Notes in
            definitive form other than as set forth in these resolutions and the
            Indenture.

       (21) The 5.625% Notes shall not be convertible into or exchangeable for
            common stock of the Company or other securities or property of the
            Company.

       (22) The principal amount payable at the Stated Maturity of the 5.625%
            Notes shall be that set forth in the Securities.

       (23) The terms of the 5.625% Notes shall be as set forth in these
            resolutions and the Indenture.

       RESOLVED, that pursuant to Section 201 of the Indenture, the form of
definitive security for the 5.625% Notes shall be as set forth in Exhibit A
hereto.
<PAGE>

                                                                       EXHIBIT A

       [INCLUDE IF GLOBAL SECURITY:  UNLESS THIS GLOBAL SECURITY IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

       TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.]

<PAGE>

No.: [_]                                                    CUSIP No.: [       ]

                         5.625% Senior Notes Due 2008

       John Hancock Financial Services, Inc., a Delaware corporation, promises
to pay to [           ], or registered assigns, [[   ] million dollars ($[  ])
/if global Security: the principal amount set forth on Schedule A hereto] on
December 1, 2008.

       Interest Payment Dates: June 1 and December 1.

       Regular Record Dates: May 15 and November 15.

       Additional provisions of this Security are set forth on the other side of
this Security.

Dated:

                            JOHN HANCOCK FINANCIAL
                            SERVICES, INC.,
[Seal]

                              By:_________________________

                                 Name:
                                 Title:

                            Attested:

                              By:________________________

                                 Name:
                                 Title:

TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

JPMORGAN CHASE BANK,
 AS TRUSTEE,

By:________________________
   Authorized Officer
<PAGE>

                           REVERSE SIDE OF SECURITY

                         5.625% Senior Notes Due 2008

1.  Interest
    --------

       John Hancock Financial Services, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.  The
Company will pay interest semiannually on June 1 and December 1 of each year,
commencing June 1, 2002.  Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from December 6, 2001.  Interest will be computed on the basis of a 360-day year
of 12 30-day months.

2.  Method of Payment
    -----------------

       The Company will pay interest on the Securities (except Defaulted
Interest) to the Persons who are registered holders of Securities at the close
of business on the May 15 or November 15 next preceding each Interest Payment
Date even if Securities are canceled after the Regular Record Date and on or
before such Interest Payment Date.  Holders must surrender Securities to a
Paying Agent to collect principal payments.  The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  Payments in respect of the
Securities represented by a global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company.  The Company will make all
payments in respect of a Registered Security other than a global Security
(including principal, premium and interest) at the office or agency of the
Company maintained for such purpose, which shall initially be the office of the
Trustee at 450 West 33rd Street, 15th Floor, New York, New York 10001; provided,
                                                                       --------
however, that payments on a Registered Security other than a global Security may
-------
be made by mailing a check to the registered address of each Holder thereof or
by wire transfer to a Dollar account maintained by the payee with a bank in the
United States.

3.  Paying Agent and Registrar
    --------------------------

       Initially, JPMorgan Chase Bank, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar.  The Company may appoint and
change any Paying Agent, Security Registrar or co-registrar without notice.  The
Company or any of its Subsidiaries may act as Paying Agent, Security Registrar
or co-registrar.

4.  Indenture
    ---------

       The Company issued the Securities under an Indenture dated as of November
29, 2001 (the "Indenture"), between the Company and the Trustee.  The terms of
the Securities include (1) those stated in the Indenture, (ii) those set forth
in the terms resolutions of Authorized Officers of the Company dated as of
November 29, 2001, acting pursuant
<PAGE>

                                                                               2

to resolutions adopted by the Company's Board of Directors dated as of May 14,
2001, and (iii) those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Holders are referred to the Indenture and the Act
for a statement of those terms.

       The Securities are general unsecured obligations of the Company.  The
initial Securities issued on December 6, 2001 (and any Securities issued in
exchange therefor) and any additional Securities issued upon a reopening of the
Securities in accordance with Section 301 of the Indenture (and any Securities
issued in exchange therefor) will be treated as a single class for all purposes
under the Indenture.  The Indenture contains covenants that limit the ability of
the Company to grant liens on the capital stock of John Hancock Life Insurance
Company or transfer such capital stock.  These covenants are subject to
important exceptions and qualifications.

5.  Optional Redemption
    -------------------

       (a) The Securities are subject to redemption at the option of the
Company, in whole or in part, at any time at a Redemption Price equal to the
greater of:

       (1) 100% of the principal amount of the Securities being redeemed; and

       (2) an amount equal to the sum of the present values of the remaining
       scheduled payments for principal and interest on the Securities being
       redeemed, not including any portion of the payments of interest accrued
       as of such Redemption Date, discounted to such Redemption Date on a semi-
       annual basis (assuming a 360-day year consisting of 12 30-day months) at
       the Treasury Rate, plus 20 basis points;

       plus, in each case, accrued and unpaid interest on the Securities being
       ----
       redeemed to the Redemption Date.

       (b) Notice of any such redemption shall be given not less than 30 days
nor more than 90 days (as further set forth in Section 1104 of the Indenture)
prior to the Redemption Date.

       (c) For purposes of the aforementioned redemption provisions of the
Securities, the following terms shall have the meanings set forth below:

            "Treasury Rate" means the rate per year equal to the semi-annual
       equivalent yield to maturity of the Comparable Treasury Issue, calculated
       using a price for the Comparable Treasury Issue (expressed as a
       percentage of its principal amount) equal to the Comparable Treasury
       Price for such Redemption Date.  The Treasury Rate shall be calculated on
       the third Business Day preceding the Redemption Date.

            "Comparable Treasury Issue" means the United States Treasury
       security selected by the Independent Investment Banker as having a
       maturity comparable to the remaining term of the Securities to be
       redeemed that would be utilized, at the time of selection and in
       accordance with customary financial
<PAGE>

                                                                               3

       practice, in pricing new issues of corporate debt securities of
       comparable maturity to the remaining term of the Securities.

            "Independent Investment Banker" means either Lehman Brothers Inc. or
       Morgan Stanley & Co. Incorporated, as specified by the Company, and any
       successor firm or, if such firm is unwilling or unable to select the
       Comparable Treasury Issue, an independent investment banking institution
       of national standing appointed by the Company.

            "Comparable Treasury Price" means with respect to any Redemption
       Date for the Securities, (1) the average of the Reference Treasury Dealer
       Quotations for such Redemption Date, after excluding the highest and
       lowest such Reference Treasury Dealer Quotations, or (2) if the Company
       obtains fewer than three such Reference Treasury Dealer Quotations, the
       average of all such quotations.

            "Reference Treasury Dealer" means Lehman Brothers Inc., Morgan
       Stanley & Co. Incorporated or another primary treasury dealer, as
       specified by the Company (the "Primary Treasury Dealer"); provided,
                                                                 --------
       however, that if Lehman Brothers Inc., Morgan Stanley & Co. Incorporated
       -------
       or another primary treasury dealer, as specified by the Company shall
       cease to be the Primary Treasury Dealer, the Company shall substitute
       therefor another primary treasury dealer.

            "Reference Treasury Dealer Quotations" means, with respect to the
       Reference Treasury Dealer and any Redemption Date, the average, as
       determined by the Company, of the bid and asked prices for the Comparable
       Treasury Issue (expressed, in each case, as a percentage of its principal
       amount) quoted in writing to the Company by such Reference Treasury
       Dealer at 5:00 p.m., New York City time, on the third Business Day
       preceding such Redemption Date.

6.  Denominations; Transfer; Exchange
    ---------------------------------

       The Securities are in registered form without coupons in denominations of
$1,000 principal amount and whole multiples of $1,000.  A Holder may transfer or
exchange Securities in accordance with the Indenture.  The Security Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes or other governmental charges required
by law or permitted by the Indenture.  The Security Registrar need not register
the transfer of or exchange any Security selected for redemption for a period
beginning at the opening of business 15 days before a selection of Securities to
be redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption.

7.  Persons Deemed Owners
    ---------------------

       The registered Holder of this Security may be treated as the owner of it
for all purposes.

8.  Unclaimed Money
    ---------------

       If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money
<PAGE>

                                                                               4

back to the Company at its request. After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee or Paying Agent
for payment.

9.  Discharge and Defeasance
    ------------------------

       Subject to certain conditions, the Company at any time shall be entitled
to terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money, Government Obligations
or a combination thereof for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.

10.  Amendment, Waiver
     -----------------

       Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of all Outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of all
Outstanding Securities.  Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee shall
be entitled to amend the Indenture or the Securities, inter alia, (i) to comply
                                                      ----- ----
with Article Eight of the Indenture, (ii) to add additional covenants or
surrender any right or power conferred upon the Company, (iii) to add additional
Events of Default, (iv) to secure the Securities, (v) to cure any ambiguity, to
correct or supplement any provision of the Indenture that may be defective, or
to make other provisions that shall not be inconsistent with the Indenture or to
make any other changes, provided that in each case such provisions shall not
adversely affect the interests of the Holders in any material respect and (vi)
to permit or facilitate the defeasance of the Securities in accordance with the
Indenture, provided that in each case such action shall not adversely affect the
interests of the Holders in any material respect.

11.  Defaults and Remedies
     ---------------------

       Under the Indenture, Events of Default include (i) default for 30 days in
payment of interest on the Securities; (ii) default in payment of principal on
the Securities at maturity; (iii) failure by the Company to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations of other Indebtedness of
the Company if the amount accelerated exceeds $100.0 million, in certain cases
subject to notice and lapse of time; and (v) certain events of bankruptcy or
insolvency with respect to the Company and John Hancock Life Insurance Company.
If an Event of Default (other than a bankruptcy or insolvency default) occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Securities may declare all the Securities to be due
and payable immediately.  Certain events of bankruptcy or insolvency are Events
of Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.

       Holders may not enforce the Indenture or the Securities except as
provided in the Indenture.  The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a major-
<PAGE>

                                                                               5

ity in principal amount of the Outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing Default (except a Default in payment of principal or interest)
if it determines that withholding notice is in the interest of the Holders.

12.  Trustee Dealings with the Company
     ---------------------------------

       Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its affiliates and may otherwise deal with the Company
or its affiliates with the same rights it would have if it were not Trustee.

13.  No Recourse Against Others
     --------------------------

       A promoter, as such, any past, present or future shareholder or officer
or director, as such, of the Company or any successor shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By accepting a Security, each Holder waives and
releases all such liability.  The waiver and release are part of the
consideration for the issue of the Securities.

14.  Authentication
     --------------

          This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

15.  Abbreviations
     -------------

          Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

16.  CUSIP Numbers
     -------------

          Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders.  No representation is made as
to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

17.  Governing Law
     -------------

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
<PAGE>

                                                                               6

          The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture and related  resolutions
authorizing the terms of the Securities.  Requests may be made to:

          John Hancock Financial Services, Inc.
          John Hancock Place
          200 Clarendon Street
          Boston, MA 02117

          Attention:  General Counsel
<PAGE>

____________________________________________________________

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

     (Print or type assignee's name, address and zip code)

     (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                           agent to transfer this
Security on the books of the Company.  The agent may substitute another to act
for him.

____________________________________________________________

Date: ________________ Your Signature: _____________________

____________________________________________________________
Sign exactly as your name appears on the other side of this Security.

                                    ________________________
                                           Signature

Signature Guarantee:

____________________________        ________________________
Signature must be guaranteed        Signature

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
____________________________________________________________
<PAGE>

                                                                      Schedule A

             SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

          The original principal amount of this global Security is [ ] DOLLARS
($[ ]).  The following increases or decreases in this global Security have been
made:

                                               Principal
                                               ---------
             Amount of      Amount of          amount of
             ---------      ---------          ---------
             decrease in    increase in        this global
             -----------    -----------        -----------
             principal      principal          Security        Signature of
             ---------      ---------          --------        ------------
             amount of      amount of          following       authorized
             ---------      ---------          ---------       ----------
Date of      this global    of this global     such decrease   officer of
-------      -----------    --------------     -------------   ----------
Exchange     Security       Security           or increase     Trustee
--------     --------       --------           -----------     -------<PAGE>

                                THIRD AMENDMENT
                              AND MODIFICATION TO
                             AMENDED AND RESTATED
                               CREDIT AGREEMENT

          THIRD AMENDMENT AND MODIFICATION (this "Amendment"), dated as of
November 19, 2001, among HOST MARRIOTT CORPORATION, a Maryland corporation
("Holdings"), HOST MARRIOTT, L.P., a Delaware limited partnership (the
"Borrower"), the lenders party to the Credit Agreement referred to below (the
"Banks"), and BANKERS TRUST COMPANY, as Administrative Agent (the
"Administrative Agent"). Unless otherwise defined herein, all capitalized terms
used herein and defined in the Credit Agreement are used herein as so defined.

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS, Holdings, the Borrower, the Banks and the Administrative
Agent are parties to an Amended and Restated Credit Agreement, dated as of June
19, 1997, as amended and restated as of August 5, 1998, and as further amended
and restated as of May 31, 2000 (as further amended, modified or supplemented
through, but not including, the date hereof, the "Credit Agreement"); and

          WHEREAS, Holdings and the Borrower have requested that the Banks amend
and/or modify certain provisions of the Credit Agreement and the Banks have
agreed to amend and/or modify such provisions, in each case on the terms and
conditions provided herein;

          NOW, THEREFORE, subject to the terms and conditions set forth below,
it is agreed:

          1.  Notwithstanding anything to the contrary contained in the Credit
Agreement, for the period from September 19, 2001 through and including August
15, 2002, the Borrower shall not be permitted to incur (or request to incur) any
additional Revolving Loans; provided, however, that the Borrower shall be
                            --------  -------
permitted to incur (and may request the incurrence of) (i) up to an additional
$50,000,000 of Revolving Loans in the aggregate only during the Borrower's
fiscal quarter ending closest to March 31, 2002, (ii) up to an additional
$25,000,000 of Revolving Loans in the aggregate only during the Borrower's
fiscal quarter ending closest to June 30, 2002 but only so long as no Revolving
Loans have been incurred pursuant to preceding clause (i) or, if any such
Revolving Loans have been so incurred, so long as same have theretofore been
repaid in full, and (iii) to the extent that any Revolving Loans have been
incurred pursuant to preceding clause (i) and remain outstanding, up to an
aggregate amount of Revolving Loans only during the Borrower's fiscal quarter
ending closest to June 30, 2002 equal to the difference (but only if positive)
between $25,000,000 and the aggregate principal amount of Revolving Loans
incurred pursuant to preceding clause (i) and which remain outstanding at the
time of any incurrence pursuant to this clause (iii); provided, further, that
                                                      --------  -------
Revolving Loans may be incurred as otherwise permitted by this Section 1 only so
long as (A) all conditions to the incurrence thereof pursuant to Sections 5.02
and 5.03 of the Credit Agreement have been

                                       1

<PAGE>

satisfied and (B) an Authorized Financial Officer of the Borrower certifies to
the Administrative Agent and each of the Banks (x) in writing (and shows the
calculations therefor in reasonable detail) that the Borrower would have been in
pro forma compliance with the financial covenants contained in Sections 8.08,
--- -----
8.10, 8.11 and 8.12 of the Credit Agreement (as amended by this Amendment) for
the Test Period then most recently ended calculated on a Pro Forma Basis as if
                                                         --- -----
such Revolving Loans had been incurred on the first day of, and had remained
outstanding throughout, such Test Period, and (y) in writing that, based on
reasonable projections at the time that such Revolving Loans are incurred, the
Leverage Ratio at the end of the fiscal quarter in which the Revolving Loans are
so incurred shall not be greater than 7.25:1.00.

          2.  Section 1.14(a) of the Credit Agreement is hereby amended by
inserting the words "after August 15, 2002 and" immediately following the words
"the Borrower shall have the right at any time and from time to time" appearing
therein.

          3.  Notwithstanding anything to the contrary contained in Section
3.02(c) of the Credit Agreement, an amount equal to 100% of the Net Sale
Proceeds received by Holdings or any of its Subsidiaries from all Asset Sales
effected on or after November 19, 2001 and on or prior to August 15, 2002 shall
be applied within one Business Day of the receipt thereof as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 6 of this Amendment; provided, however, that the Net Sale Proceeds from
                             --------  -------
the sale of the Borrower's Marriott Hotel located in Vail, Colorado shall not be
required to be so applied as provided in such Section 6 so long as (i) no
Specified Default or Event of Default then exists or would result therefrom and
(ii) such Net Sale Proceeds are not otherwise required to be used to repurchase
(or to make an offer to repurchase) Senior Notes.

          4.  Section 3.02(d) of the Credit Agreement is hereby amended by (a)
inserting the text "(i) the Casualty Event occurring in September 2001 at the
World Trade Center Marriott in New York, New York and the Financial Center
Marriott in New York, New York or (ii)" in the first parenthetical thereof
immediately after the words "other than" and (b) inserting the following new
text at the end of such Section 3.02(d):

     "Promptly upon receipt by the Borrower or any of its Subsidiaries of any
     Net Insurance/Condemnation Proceeds in respect of the Casualty Event
     occurring in September 2001 at the World Trade Center Marriott in New York,
     New York (the "WTC Insurance Proceeds") or the Financial Center Marriott in
     New York, New York (the "FC Insurance Proceeds"), an amount equal to (i)
     100% of the WTC Insurance Proceeds shall be deposited into a segregated
     account (the "Segregated WTC Account") and (ii) 100% of the FC Insurance
     Proceeds shall be deposited into a separate segregated account (the
     "Segregated FC Account").  Each of the Segregated WTC Account and the
     Segregated FC Account shall be controlled by the Borrower (or, if required,
     the ground lessor of the respective Hotel Property) and shall include only
     the WTC Insurance Proceeds or the FC Insurance Proceeds, as applicable, and
     shall not be commingled with any other funds of the Borrower or any of its
     Subsidiaries.  The WTC Insurance Proceeds shall not be withdrawn from the
     Segregated WTC Account until such time as (i) the Borrower determines that
     the WTC Insurance Proceeds will not be applied to replace the World Trade

                                       2
<PAGE>

     Center Marriott, in which case 100% of the WTC Insurance Proceeds remaining
     on deposit in the Segregated WTC Account shall be applied as a mandatory
     repayment and/or commitment reduction in accordance with the requirements
     of Section 3.02(e) or (ii) the Borrower determines that the WTC Insurance
     Proceeds will be applied to replace (consistent with the terms of the then
     applicable insurance, loan documents, ground lease documents and management
     agreements) the World Trade Center Marriott, in which case (x) the WTC
     Insurance Proceeds shall be applied solely for the purpose of such
     replacement and (y) upon the completion of such replacement, any WTC
     Insurance Proceeds remaining on deposit in the Segregated WTC Account and
     not otherwise required to fund such replacement shall be applied as a
     mandatory repayment and/or commitment reduction in accordance with the
     requirements of Section 3.02(e).  The FC Insurance Proceeds shall not be
     withdrawn from the Segregated FC Account for any purpose other than to make
     expenditures to restore (consistent with the terms of the then applicable
     insurance, loan documents, ground lease documents and management
     agreements) the Financial Center Marriott.  Upon the completion of such
     restoration, 100% of the FC Insurance Proceeds remaining on deposit in the
     Segregated FC Account and not otherwise required to fund such restoration
     shall be applied as a mandatory repayment and/or commitment reduction in
     accordance with the requirements of Section 3.02(e).  Notwithstanding
     anything to the contrary in this Section 3.02(d), the Borrower shall be
     entitled at any time (including, without limitation, at the time that any
     funds become required under this Section 3.02(d) to be applied in
     accordance with Section 3.02(e)) to withdraw amounts on deposit in the
     Segregated WTC Account and the Segregated FC Account (to the extent
     permitted by the terms of the applicable insurance, loan documents, ground
     lease documents and management agreements) for the purpose of funding any
     contractual obligations described in clauses (i) through (vi) of the
     definition of "Net Insurance/Condemnation Proceeds" that were not
     previously taken into account in calculating the WTC Insurance Proceeds or
     the FC Insurance Proceeds required to be deposited pursuant to this Section
     3.02(d) into the Segregated WTC Account or the Segregated FC Account, as
     applicable."

          5.  In addition to any other mandatory repayments or commitment
reductions otherwise required pursuant to Section 3.02 of the Credit Agreement,
the Borrower hereby agrees that, within five Business Days after each date on or
after November 19, 2001 and on or prior to August 15, 2002 upon which Holdings
or the Borrower receives any cash proceeds from any capital contribution or any
sale or issuance of its equity (other than cash proceeds received from the
issuance by Holdings or the Borrower of shares of its equity (including as a
result of the exercise of any options with regard thereto), or options to
purchase shares of its equity, in either case to officers, directors and
employees of Holdings and its Subsidiaries), the Borrower shall apply an amount
equal to 100% of the Net Equity Proceeds from such capital contribution or sale
or issuance of equity as a mandatory repayment and/or commitment reduction in
accordance with the requirements of Section 6 of this Amendment.

                                       3
<PAGE>

          6.  Notwithstanding anything to the contrary contained in Section
3.02(e) of the Credit Agreement, for the period from November 19, 2001 through
and including August 15, 2002, all mandatory repayments and/or commitment
reductions otherwise required to be applied in accordance with such Section
3.02(e) instead shall be applied (i) first, to the repayment of the outstanding
principal amount of the Term Loans and (ii) second, to the extent in excess of
the amount required to be applied pursuant to preceding clause (i), to the
prepayment of the outstanding principal amount of Revolving Loans (with no
corresponding reduction to the Total Revolving Loan Commitment).

          7.  Section 6.05(a) of the Credit Agreement is hereby amended
by deleting the last sentence thereof and inserting the following new sentence
in lieu thereof:

          "Except as, and to the extent, disclosed in the Borrower's Form 10-Q
          filed with the SEC in October 2001, since December 31, 1999, nothing
          has occurred that has had, or could reasonably be expected to have, a
          Material Adverse Effect."

          8.  Section 7.01(d) of the Credit Agreement is hereby amended
by (i) inserting the text "7.19 (to the extent applicable)," immediately after
the word "Sections" appearing in clause (x) thereof and (ii) inserting the
following parenthetical immediately after the words "as the case may be"
appearing in such clause (x):

          "(it being understood that, in any event, such officer's certificate
          shall set forth in reasonable detail the calculations required to
          establish the Consolidated Fixed Charge Coverage Ratio for the
          relevant Test Period whether or not Section 8.09 is applicable for
          such Test Period)".

          9.  Section 7.01 of the Credit Agreement is hereby further amended by
inserting the following new clauses (j) and (k) at the end thereof:

          "(j)  Within 10 days after the end of each four week accounting period
     in each fiscal year of the Borrower (commencing with the first four week
     accounting period ending following November 19, 2001), four week statements
     for comparable Hotel Properties operated by Marriott International under
     the Marriott flag (on a consolidated basis) in respect of which the
     Borrower shall have received such information from the respective
     management company of such Hotel Properties, including average daily rates,
     occupancy rates and revenue per available room, in each case for such four
     week accounting period and setting forth comparative figures for the
     corresponding fiscal periods in the prior fiscal year.

          (k)  Within 30 days after the end of each four week accounting period
     in each fiscal year of the Borrower (commencing with the first four week
     accounting period ending following November 19, 2001), statements for Hotel
     Properties (on a consolidated basis) in respect of which the Borrower shall
     have received reports from the respective management company of such Hotel
     Properties, including

                                       4
<PAGE>

     "EBITDA" for such Hotel Properties (determined on a basis consistent with
     the definition of Consolidated EBITDA hereunder, but excluding any amounts
     not directly attributable to such Hotel Properties), average daily rates,
     occupancy rates and revenue per available room, in each case for such four
     week accounting period and for the elapsed portion of the fiscal year ended
     with the last day of such four week accounting period and setting forth
     comparative figures for the corresponding fiscal periods in the prior
     fiscal year."

          10.  Section 7 of the Credit Agreement is hereby further amended by
inserting the following new Section 7.19 at the end thereof:

          "7.19  Unrestricted Cash and Cash Equivalents.  The Borrower and its
                 --------------------------------------
     Subsidiaries shall have as of the last day of the Borrower's fiscal
     quarters ending closest to each of December 31, 2001, March 31, 2002 and
     June 30, 2002, on a consolidated basis, not less than $25,000,000 of
     unrestricted cash and Cash Equivalents (it being understood that, in any
     event, unrestricted cash and/or Cash Equivalents shall not include (i)
     until forfeited to, or otherwise entitled to be retained by, the Borrower
     or any of its Subsidiaries, tenant security and other restricted deposits
     or (ii) any amounts subject to any Lien in favor of any Person)."

          11.  Notwithstanding anything to the contrary contained in Section
8.02(xiv) or (xv) of the Credit Agreement, on or prior to August 15, 2002,
neither the Borrower nor any of its Subsidiaries may make any acquisitions
otherwise permitted thereunder; provided, however, the Borrower or a Wholly-
                                --------  -------
Owned Subsidiary thereof may consummate an acquisition pursuant to such Section
8.02(xiv) or (xv) so long as (i) the only consideration paid in respect of any
such acquisition consists solely of equity interests in Holdings or the Borrower
otherwise permitted to be issued under the Credit Agreement, Acquired
Indebtedness assumed as part of such acquisition and/or Indebtedness (other than
Revolving Loans) created and/or incurred the proceeds of which are used solely
to refinance any then existing Indebtedness of the property or Person so
acquired, (ii) the ratio of (A) all Indebtedness to be assumed, created and/or
incurred by the Borrower and/or its Subsidiaries as part of any such acquisition
to (B) the "EBITDA" of the property or Person so acquired for the Test Period
then most recently ended (with such "EBITDA" to be calculated on a basis
consistent with the definition of "Consolidated EBITDA" contained in the Credit
Agreement) does not exceed 3.50:1.00 and (iii) all other conditions set forth in
such Section 8.02(xiv) or (xv), as applicable, also are satisfied in connection
therewith.

          12.  Notwithstanding anything to the contrary contained in Section
8.02(xvi) or (xvii) of the Credit Agreement, on or prior to August 15, 2002,
neither the Borrower nor any other Subsidiary of Holdings may consummate a
merger otherwise permitted thereunder to the extent that any cash consideration
is paid to any third parties in connection therewith.

          13.  Notwithstanding anything to the contrary contained in Section
8.03(iv) of the Credit Agreement, on or prior to August 15, 2002, the only
Dividends permitted to be paid pursuant to such Section 8.03(iv) are (i)
Dividends on common stock that are required to maintain (and in an amount not to
exceed that amount required to maintain (taking into account

                                       5
<PAGE>

all other Dividends theretofore or then being paid and/or declared)) Holdings'
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 Holdings making the election provided for
therein, so long as (x) such Dividends are declared and/or paid during the
Borrower's fiscal quarter ending closest to December 31, 2001 and (y) such
Dividends are otherwise permitted to be paid at such time pursuant to such
Section 8.03(iv), (ii) Dividends to the holders of any Qualified Preferred Stock
as constituted (and with respect to those shares outstanding) on November 19,
2001, so long as (w) such Dividends are otherwise permitted to be paid at such
time pursuant to such Section 8.03(iv), (x) the Leverage Ratio at the time of
the declaration of such Dividends, and immediately after giving effect to, such
Dividends (in each case calculated as if such Dividends were paid on the date of
declaration) is no greater than 7.25:1.00 (or, if less, the ratio then required
to be maintained under Section 8.11 of the Credit Agreement, as modified by this
Agreement, so that no Default or Event of Default exists), (y) such Dividends
are declared and/or paid on or before the last day of the Borrower's fiscal
quarter ending closest to June 30, 2002, and (z) an Authorized Financial Officer
of the Borrower certifies to the Administrative Agent and each of the Banks in
writing that the conditions described in preceding clauses (w), (x) and (y) of
this subclause (ii) are satisfied and, based on reasonable projections at the
time that such Dividends are declared, the Leverage Ratio at the end of the
fiscal quarter in which such Dividends are declared will be no greater than
7.25:1.00 (or, if less, the ratio required to be maintained at the end of such
fiscal quarter under Section 8.11 of the Credit Agreement, as modified by this
Amendment, so that no Default or Event of Default will exist), and (iii)
Dividends to the holders of any common stock, so long as (v) such Dividends are
otherwise permitted to be paid at such time pursuant to such Section 8.03(iv),
(w) such Dividends are, at the time declared (taking into account all other
Dividends theretofore or then being declared during the fiscal quarter in which
such Dividends are declared), in an amount not greater than one quarter of the
minimum annual amount required (based on reasonable projections of taxable
income for the fiscal year and taking into account all other Dividends
theretofore or then being declared during such fiscal year) to maintain
Holdings' 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 Holdings making the election
provided for therein, (x) the Leverage Ratio at the time of the declaration of
such Dividends, and immediately after giving effect to, such Dividends (in each
case calculated as if such Dividends were paid on the date of declaration) is
less than 6.25:1.00 (or, if less, the ratio then required to be maintained under
Section 8.11 of the Credit Agreement, as modified by this Amendment, so that no
Default or Event of Default exists), (y) such Dividends are declared and/or paid
after the Borrower's fiscal quarter ending closest to December 31, 2001 and on
or before the last day of the Borrower's fiscal quarter ending closest to June
30, 2002, and (z) an Authorized Financial Officer of the Borrower certifies to
the Administrative Agent and each of the Banks in writing that the conditions
described in preceding clauses (v), (w), (x) and (y) of this subclause (iii) are
satisfied and, based on reasonable projections at the time that such Dividends
are declared, the Leverage Ratio at the end of the fiscal quarter in which such
Dividends are declared will be less than 6.25:1.00 (or, if less, the ratio
required to be maintained a the end of such fiscal quarter under Section 8.11 of
the Credit Agreement, as modified by this Amendment, so that no Default or Event
of Default will exist).

                                       6
<PAGE>

          14.  Notwithstanding anything to the contrary contained in Section
8.03(v), (vii) or (viii) of the Credit Agreement, on or prior to August 15,
2002, no Dividends may be paid pursuant to any such Section; provided, however,
                                                             --------  -------
(i) Dividends may be paid pursuant to such Section 8.03(v) so long as (w) such
Dividends are otherwise permitted to be paid at such time pursuant to such
Section 8.03(v), (x) either (A) the payment of such Dividends is required to
enable Holdings to maintain (and in an amount not to exceed that amount required
to maintain (taking into account all other Dividends theretofore or then being
paid and/or declared)) Holdings' 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 Holdings
making the election provided for therein, provided that such Dividends are
                                          -------- ----
declared and/or paid during the Borrower's fiscal quarter ending closest to
December 31, 2001, or (B) the Leverage Ratio at the time of the declaration of
such Dividends, and immediately after giving effect to, such Dividends (in each
case, calculated as if such Dividends were paid on the date of declaration) is
no greater than 7.25:1.00 (or, if less, the ratio then required to be maintained
under Section 8.11 of the Credit Agreement, as modified by this Amendment, so
that no Default or Event of Default exists), (y) such Dividends are declared
and/or paid on or before the last day of the Borrower's fiscal quarter ending
closest to June 30, 2002, and (z) except for Dividends paid pursuant to clause
(x)(A) above, an Authorized Financial Officer of the Borrower certifies to the
Administrative Agent and each of the Banks in writing that the conditions
described in preceding clauses (w), (x) and (y) are satisfied and, based on
reasonable projections at the time that such Dividends are paid, the Leverage
Ratio at the end of the fiscal quarter in which such Dividends are paid will be
no greater than 7.25:1.00 (or, if less, the ratio required to be maintained at
the end of such fiscal quarter under Section 8.11 of the Credit Agreement, as
modified by this Amendment, so that no Default or Event of Default will exist),
and (ii) up to $1,000,000 of Dividends in the aggregate may be paid pursuant to
such Section 8.03(vii) so long as such Dividends are otherwise permitted to be
paid at such time pursuant to such Section 8.03(vii).

          15.  Notwithstanding anything to the contrary contained in Section
8.04(vi) of the Credit Agreement, on or prior to August 15, 2002, neither the
Borrower nor any of its Subsidiaries shall incur any additional Indebtedness
pursuant to such Section 8.04(vi) except (i) pursuant to committed credit
facilities (including this Agreement) existing on November 19, 2001, (ii) for
refinancings of Secured Indebtedness or Subsidiary Indebtedness constituting
Existing Indebtedness, (iii) for the Indebtedness assumed, created and/or
incurred as part of any acquisition permitted by Section 11 of this Amendment
and (iv) for other Indebtedness for borrowed money (and guaranties thereof by
Subsidiary Guarantors) so long as 100% of the Net Debt Proceeds therefrom are
applied on the date of receipt thereof as a mandatory repayment provided in
Section 6 of this Amendment (it being understood that nothing in this Section 15
shall prohibit an incurrence by the Borrower of Indebtedness for borrowed money
issued under the Senior Note Indenture (and guaranties thereof by Subsidiary
Guarantors) in an exchange offer in which one series of notes is exchanged for a
new series of notes under such Senior Note Indenture and so long as (x) neither
the aggregate principal amount of such Indebtedness nor the stated interest rate
thereon is increased as a result of such exchange offer and (y) such exchange
offer does not result in any cash proceeds), in each case to the extent that
such additional Indebtedness is otherwise permitted to be incurred under such
Section 8.04(vi) at the time of the incurrence thereof.

                                       7
<PAGE>

          16.  Notwithstanding anything to the contrary contained in Section
8.05(x), (xi) or (xiii) of the Credit Agreement, on or prior to August 15, 2002,
neither Holdings, the Borrower nor any of their respective Subsidiaries may make
any additional Investments otherwise permitted pursuant to any such Section;

provided, however, up to $1,000,000 of Investments in the aggregate may be made
--------  -------
pursuant to such Sections 8.05(x) and (xi) so long as such Investments are
otherwise permitted to be made at such time pursuant to such Section 8.05(x) or
(xi), as applicable.

          17.  Notwithstanding anything to the contrary contained in Section
8.05(xii) of the Credit Agreement, on or prior to August 15, 2002, neither the
Borrower nor its Subsidiaries may make additional Investments pursuant to such
Section 8.05(xii); provided, however, that the Borrower and its Subsidiaries
                   --------  -------
(other than Taxable REIT Subsidiaries) may make additional Investments that are
otherwise permitted pursuant to such Section 8.05(xii) so long as such
additional Investments are permitted under one of the following categories:  (i)
up to $45,000,000 of Investments in the aggregate (excluding for purposes of
such calculation any Investment which is paid as a Dividend from and after
November 19, 2001 to the Person who made the Investment) may be made so long as
(A) such Investments are made in Subsidiaries of the Borrower (other than HMC
Grand LLC or a Subsidiary thereof) that are not Subsidiary Guarantors, and (B)
such Investments are made in the form of intercompany loans or equity
contributions; (ii) up to $7,500,000 of Investments in the aggregate (excluding
for purposes of such calculation any Investment which is paid as a Dividend from
and after November 19, 2001 to the Person who made the Investment) may be made
in any one or more Persons of which the Borrower owns, directly or indirectly,
an equity interest in as of November 19, 2001 (other than a Subsidiary of
Holdings or the Borrower, but including HMC Grand LLC or a Subsidiary thereof)
so long as the amount of the Investment in any such Person does not exceed the
debt service of such Person during the period from November 19, 2001 through
August 15, 2002; or (iii) Investments in any Taxable REIT Subsidiary so long as
such Investment is made (A) in the form of intercompany loans or equity
contributions and (B) in order to (x) permit a Taxable REIT Subsidiary to pay
obligations owed to (or on behalf of) the Borrower or its other Subsidiaries or
(y) to provide the minimum capital necessary to maintain the existence of a
Taxable REIT Subsidiary, provided, however, to the extent that a rental payment
funded by this clause (iii) is used by a Subsidiary of Holdings or the Borrower
that is not a Subsidiary Guarantor to pay debt service to a third party lender,
such Investment shall be subject to and counted towards the $45,000,000
limitation on Investments pursuant to clause (i) of this Section 17.

          18.  Section 8.05 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (xii) thereof, (ii)
deleting the period appearing at the end of clause (xiii) thereof and inserting
"; and" in lieu thereof and (iii) inserting the following new clause (xiv) at
the end thereof:

          "(xiv) Taxable REIT Subsidiaries may make Investments in other Taxable
    REIT Subsidiaries so long as such Investments are made (A) in the form of
    intercompany loans or equity contributions and (B) in order to (x) permit a
    Taxable REIT Subsidiary to pay obligations owed to (or on behalf of) the
    Borrower or its other Subsidiaries or (y) to provide the minimum capital
    necessary to maintain the existence of a Taxable REIT Subsidiary."

                                       8
<PAGE>

          19.  Notwithstanding anything to the contrary contained in Section
8.07(ii) or (v) of the Credit Agreement, for the period from September 8, 2001
through and including August 15, 2002, (i) the aggregate amount of all Capital
Expenditures made pursuant to such Section 8.07(ii) (A) for the period from
September 8, 2001 through and including the last day of the Borrower's fiscal
quarter ending closest to December 31, 2001, shall not exceed $85,000,000, (B)
for the period from the beginning of the Borrower's fiscal quarter beginning
closest to January 1, 2002 through and including the last day of the Borrower's
fiscal quarter ending closest to March 31, 2002, shall not exceed an amount
equal to 5.25% of the Gross Revenues from all such Hotel Properties and other
high quality real estate for such period and (C) for the period from the
beginning of the Borrower's fiscal quarter beginning closest to April 1, 2002
through and including August 15, 2002, shall not exceed an amount equal to 5% of
the Gross Revenues from all such Hotel Properties and other high quality real
estate for such period; provided, however, to the extent that Capital
Expenditures not otherwise permitted under the immediately preceding clauses
(A), (B) or (C) are required during any such period on account of any emergency,
Holdings and its Subsidiaries may make such additional emergency Capital
Expenditures for the period from September 8, 2001 through and including August
15, 2002 in an aggregate amount not to exceed $5,000,000 (although nothing in
this Section 19 shall permit any Capital Expenditures in excess of the amounts
otherwise permitted by such Section 8.07(ii)) and (ii) no Capital Expenditures
may be made pursuant to such Section 8.07(v) except for Capital Expenditures in
respect of any Hotel Property set forth on Annex A attached to this Amendment in
an aggregate amount for such Hotel Property which at no time exceeds the
aggregate Capital Expenditures listed for such Hotel Property on such Annex A
for the period from September 8, 2001 through and including August 15, 2002.

          20.  Section 8.08 of the Credit Agreement is hereby deleted and the
following new Section 8.08 is inserted in lieu thereof:

               "8.08  Minimum Consolidated Interest Coverage Ratio; Minimum
                      -----------------------------------------------------
          Unsecured Interest Coverage Ratio.  (a)  Holdings and the Borrower
          ---------------------------------
          will not permit the Consolidated Interest Coverage Ratio for any Test
          Period ending on the last day of a fiscal quarter of the Borrower set
          forth below to be less than the ratio set forth opposite such fiscal
          quarter below:

<TABLE>
<CAPTION>

Fiscal Quarter Ending Closest To                                   Ratio
--------------------------------                                   -----
<S>                                                           <C>
September 30, 2001                                               2.15:1.00

December 31, 2001                                                1.75:1.00

March 31, 2002                                                   1.60:1.00

June 30, 2002                                                    1.50:1.00

The last day of each fiscal quarter thereafter                   2.15:1.00".
</TABLE>

                                       9
<PAGE>

               (b)  Holdings and the Borrower will not permit the Unsecured
          Interest Coverage Ratio for any Test Period ending on the last day of
          a fiscal quarter of the Borrower set forth below to be less than the
          ratio set forth opposite such fiscal quarter below:

<TABLE>
<CAPTION>

           Fiscal Quarter Ending Closest To                                      Ratio
           --------------------------------                                      -----
           <S>                                                               <C>
           September 30, 2001                                                  1.80:1.00
           December 31, 2001                                                   1.55:1.00
           March 31, 2002                                                      1.40:1.00
           June 30, 2002                                                       1.30:1.00
           The last day of each fiscal quarter thereafter                      1.80:1.00".
</TABLE>

          21.  Section 8.09 of the Credit Agreement is hereby deleted and the
following new Section 8.09 is inserted in lieu thereof:

          "8.09 Minimum Consolidated Fixed Charge Coverage Ratio.  Holdings and
          the 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 Borrower set forth below to be less than the ratio set forth
          opposite such fiscal quarter below:

          Fiscal Quarter ending Closest To                  Ratio
          --------------------------------                  -----

          September 30, 2001                              1.40:1.00

          September 30, 2002 and the last day of each
          fiscal quarter thereafter                       1.40:1.00".

          22.  Section 8.11 of the Credit Agreement is hereby deleted and the
following new Section 8.11 is inserted in lieu thereof:

               "8.11  Maximum Leverage Ratio.  Holdings and the 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:

                                      10
<PAGE>

<TABLE>
<CAPTION>

          Period                                                                                     Ratio
          ------                                                                                     -----
         <S>                                                                                       <C>

          Effective Date through and including the day immediately before last day of the
          Borrower's fiscal quarter ending closest to December 31, 2001                             5.50:1.00

          The last day of the Borrower's fiscal quarter ending closest to December 31, 2001
          through and including the day immediately before the last day of the Borrower's
          fiscal quarter ending closest to March 31, 2002                                           6.50:1.00

          The last day of the Borrower's fiscal quarter ending closest to March 31, 2002
          through and including the day immediately before the last day of the Borrower's
          fiscal quarter ending closest to June 30, 2002                                            7.40:1.00

          The last day of the Borrower's fiscal quarter ending closest to June 30, 2002
          through and including August 15, 2002                                                     7.25:1.00

          Thereafter                                                                                5.50:1.00".
</TABLE>

          23.  Notwithstanding anything to the contrary contained in Section
8.13(i) of the Credit Agreement or in the last sentence of such Section 8.13(i),
on or prior to August 15, 2002, the Borrower may not prepay, redeem or otherwise
make any principal payments in respect of the Limited Partner Notes or the QUIPs
Debt otherwise permitted thereunder.

          24.  The definition of "Applicable Margin" appearing in Section 10.01
of the Credit Agreement is hereby amended as follows:

          (i)  the text "greater than or equal to "5.25:1.00" appearing opposite
     "Level VI" in the table therein is deleted and the following new text is
     inserted in lieu thereof:

               "greater than or equal to 5.25:1.00 but less than or equal to
5:50";

          (ii) the following new Level VII and VIII are inserted immediately
     after such Level VI:

<TABLE>
        <S>              <C>                                            <C>           <C>
          Level VII        greater than 5.50:1.00 but less than or        2.125%       3.125%
                           equal to 6.50:1.00

          Level VIII       greater than 6.50:1.00                         2.625%       3.625%
</TABLE>

                                      11
<PAGE>

          and (iii) the text "Level VI" appearing each place in the proviso and
     further proviso of such definition is deleted and the text "Level VIII" is
     inserted in each such place in lieu thereof.

          25.  The definition of "Consolidated Net Income" appearing in Section
10.01 of the Credit Agreement is hereby amended by inserting the following new
clause at the end thereof:

     "; provided, further, that Consolidated Net Income for any period shall be
        --------  -------
     increased by the amount of any Insurance Proceeds received by the 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."

          26.  The definition of "Net Insurance/Condemnation Proceeds" appearing
in Section 10.01 of the Credit Agreement is hereby deleted and the following new
definition of "Net Insurance/Condemnation Proceeds" is inserted in lieu thereof:

          "Net Insurance/Condemnation Proceeds" shall mean all Insurance
     Proceeds on account of any Casualty Event to any Hotel Property or other
     Real Property owned or leased by Holdings or any of its Subsidiaries or all
     Condemnation Proceeds in respect of any Taking of any Hotel Property or any
     such other Real Property, net of (i) the reasonable cost, if any, of
     recovering such proceeds and of paying out such proceeds, including
     reasonable attorneys' fees and costs allocable to inspecting the Work and
     the plans and specifications therefor, (ii) the amount of such Insurance
     Proceeds or Condemnation Proceeds required to be used to repay any
     Indebtedness which is secured by the respective property which is the
     subject of such Casualty Event or Taking, (iii) amounts required to be used
     under contractual obligations with a manager or ground lessor relating to
     the respective property which is the subject of such Casualty Event or
     Taking, (iv) Insurance Proceeds for business interruption or time element
     losses, (v) the estimated marginal increase in income taxes which will be
     payable by Holdings or any of its Subsidiaries as a result of such Casualty
     Event or Taking, and (vi) amounts required to be distributed as a result of
     the realization of gains from the respective Casualty Event or Taking in
     order to maintain or preserve Holdings' status as a real estate investment
     trust (including any such distributions by the Borrower to Holdings and to
     all other holders of OP Units as otherwise permitted by Section
     8.03(iv)(y)).

          27.  The definition of "Net Sale Proceeds" appearing in Section 10.01
of the Credit Agreement is hereby amended by deleting clauses (iii) and (iv)
thereof and inserting the following new clauses (iii) and (iv) in lieu thereof:

     "(iii) the estimated marginal increase in income taxes which will be
     payable by Holdings or any of its Subsidiaries as a result of such Asset
     Sale, and (iv) amounts required to be distributed as a result of the
     realization of gains from the respective

                                      12
<PAGE>

     Asset Sale in order to maintain or preserve Holdings' status as a real
     estate investment trust (including any such distributions by the Borrower
     to Holdings and to all other holders of OP Units as otherwise permitted by
     Section 8.03(iv)(y))."

          28.  The definition of "Subsidiary" appearing in Section 10.01 of the
Credit Agreement is hereby amended by (i) inserting "(a)" immediately after the
words "the term Subsidiary shall not include" appearing in clause (y) of the
proviso thereof and (ii) inserting the following new sub-clause (b) at the end
of such clause (y):

     "or (b) for purposes of Sections 9.04 and 9.05 only, HMC Grand LLC only so
     long as (A) the only material asset of such Person is the Hotel located at
     75 14th Street, Atlanta, Georgia 30307, and the related Personal Property,
     and (B) there is no recourse, whether contractual, by operation of law or
     otherwise, against Holdings or any its other Subsidiaries in respect of the
     Indebtedness and other liabilities of such Person (other than in respect of
     Customary Non-Recourse Exclusions)".

          29.  In order to induce the Banks to enter into this Amendment, each
Credit Party hereto represents and warrants that (a) the representations and
warranties contained in Section 6 of the Credit Agreement are and will be as of
the Amendment Effective Date (as defined below), true and correct in all
material respects, and (b) there exists, and will exist as of the Amendment
Effective Date, no Default or Event of Default.

          30.  In order to induce the Banks to enter into this Amendment, the
Borrower hereby agrees to pay to each Bank which executes and delivers to the
Administrative Agent a counterpart of this Amendment on or before 5:00 P.M. (New
York time) on December 4, 2001, a non-refundable fee equal to .20% of the sum of
(I) such Bank's Revolving Loan Commitment on the Amendment Effective Date and
(II) the aggregate outstanding principal amount of such Bank's Term Loans on the
Amendment Effective Date, with such fee to be earned on the Amendment Effective
Date and payable on the Business Day immediately thereafter.

          31.  This Amendment shall become effective on the date (the
"Amendment Effective Date") when Holdings, the Borrower and the Supermajority
Banks 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 at the Notice Office.

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

          33.  Notwithstanding anything to the contrary contained in this
Amendment, from and after such time, if any, as the Borrower shall have
delivered the financial statements and related officer's certificate pursuant to
Section 7.01(a) or (b) of the Credit Agreement, as applicable, and Section
7.01(d) of the Credit Agreement, with respect to any Test Period ending

                                      13
<PAGE>

on or after the last day of the Borrower's fiscal quarter ending closest to
December 31, 2001 and demonstrating that the Borrower would have been in
compliance with all of the provisions of the Credit Agreement (including, but
not limited to, Sections 8.08 through 8.12, inclusive), as such provisions were
in effect prior to giving effect to this Amendment, and so long as no Default or
Event of Default then exists, the provisions of this Amendment (and the
additional restrictions created hereby), other than the provisions contained in
Sections 4, 7, 18, 25, 26, 27 and 28 of this Amendment, shall cease to be of any
further force or effect and all of the provisions of the Credit Agreement, as
same were in effect prior to giving effect to this Amendment, shall continue to
be binding on Holdings, the Borrower and their respective Subsidiaries in
accordance with the terms thereof, as amended by Sections 4, 7, 18, 25, 26, 27
and 28 of this Amendment.

          34.  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 Borrower and the Administrative Agent.

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

          36.  From and after the Amendment Effective Date, all references in
the Credit Agreement and in the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as amended and/or
modified hereby.

                    [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                      14
<PAGE>

          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.

                               HOST MARRIOTT CORPORATION

                               By:_____________________________
                                  Name:
                                  Title:

                               HOST MARRIOTT, L.P.
                               By:  Host Marriott Corporation,
                                    its General Partner

                               By:_____________________________
                                  Name:
                                  Title:

                                       15
<PAGE>

                               BANKERS TRUST COMPANY,
                               Individually and as Administrative Agent

                               By:_____________________________
                                 Name:
                                 Title:

                               CREDIT LYONNAIS NEW YORK BRANCH

                               By:_____________________________
                                 Name:
                                 Title:

                               THE BANK OF NOVA SCOTIA

                               By:_____________________________
                                 Name:
                                 Title:

                               BANK LEUMI USA

                               By:_____________________________
                                 Name:
                                 Title:

                               BANK OF HAWAII

                               By:_____________________________
                                 Name:
                                 Title:

                                       16
<PAGE>

                               FLEET NATIONAL BANK

                               By:_____________________________
                                 Name:
                                 Title:

                               ERSTE BANK DER OESTERREICHISCHEN
                                 SPARKASSEN AG

                               By:_____________________________
                                 Name:
                                 Title:

                               FIRST COMMERCIAL BANK, NEW YORK AGENCY

                               By:_____________________________
                                 Name:
                                 Title:

                               HELLER FINANCIAL, INC.

                               By:_____________________________
                                 Name:
                                 Title:

                               BANK OF AMERICA, N.A.

                               By:_____________________________
                                 Name:
                                 Title:

                                       17
<PAGE>

                               SOCIETE GENERALE, SOUTHWEST AGENCY

                               By:_____________________________
                                 Name:
                                 Title:

                               THE BANK OF NEW YORK

                               By:_____________________________
                                 Name:
                                 Title:

                               CREDIT SUISSE FIRST BOSTON

                               By:_____________________________
                                 Name:
                                 Title:

                               BANK ONE, N.A.

                               By:_____________________________
                                 Name:
                                 Title:

                               THE INTERNATIONAL COMMERCIAL BANK
                                 OF CHINA, NEW YORK AGENCY

                               By:_____________________________
                                 Name:
                                 Title:

                                       18
<PAGE>

                               WELLS FARGO BANK, N.A.

                               By:_____________________________
                                 Name:
                                 Title:

                               KZH CNC LLC

                               By:_____________________________
                                 Name:
                                 Title:

                               WINGED FOOT FUNDING TRUST

                               By:_____________________________
                                 Name:
                                 Title:

                               CHANG HWA COMMERCIAL BANK, LTD.,
                                NEW YORK BRANCH

                               By:_____________________________
                                 Name:
                                 Title:

                               CHINATRUST COMMERCIAL BANK

                               By:_____________________________
                                 Name:
                                 Title:

                                       19
<PAGE>

                               TAIPEI BANK

                               By:_____________________________
                                 Name:
                                 Title:

                               ING PILGRIM CLO 1999-1, LTD.

                               By:_____________________________
                                 Name:
                                 Title:

                               ING SEQUILS PILGRIM-1, LTD.

                               By:_____________________________
                                 Name:
                                 Title:

                               BOS (USA) INC.

                               By:_____________________________
                                 Name:
                                 Title:

                               BANK OF SCOTLAND

                               By:_____________________________
                                 Name:
                                 Title:

                               PILGRIM PRIME RATE TRUST

                               By:_____________________________
                                 Name:
                                 Title:

                                       20
<PAGE>

                           Host Marriott Corporation
              Summary of Expansions and Development Expenditures
                                (in thousands)

<TABLE>
<CAPTION>

                                                                                 Q3, 2002
                                                                                 (through         ------
                                  Q4, 2001       Q1, 2002      Q2, 2002          8/15/02)         Totals
                                  --------       --------      --------          -------          ------
<S>                              <C>             <C>            <C>              <C>              <C>
Expansions
  Memphis                              200          1,500         2,500           3,000            7,200
  Orlando                              300            400           100              --              800
                                   -------       --------       -------         -------         --------
Subtotal Expansions                    500          1,900         2,600           3,000            8,000
                                   -------       --------       -------         -------         --------
Development
  Naples Golf Lodge                 14,000         10,000         1,000              --           25,000
  Naples Golf Course                   600            100           500             500            1,700
  Tampa Convention Center               20            200           400              --              620
                                   -------       --------       -------         -------         --------
Subtotal Development                14,620         10,300          1,900           500            27,320
                                   -------       --------       -------         -------         --------
Total Expansions &                  15,120         12,200          4,500         3,500            35,320
 Development                      ========       ========        =======       =======         =========
                                                                                               ---------
</TABLE>

                                       21

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