Document:

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                                                                   EXHIBIT 10.12

                                                                  EXECUTION COPY

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                               W&T OFFSHORE, INC.

                  2,000,000 SHARES OF SERIES A PREFERRED STOCK

                               EXCHANGE AGREEMENT

                          DATED AS OF NOVEMBER 25, 2002

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                                TABLE OF CONTENTS

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                                                                                      Page
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<S>                                                                                      <C>
ARTICLE I     AUTHORIZATION, ISSUANCE AND EXCHANGE OF THE SERIES A PREFERRED STOCK........1

  1.1       Authorization of the Series A Preferred Stock.................................1
  1.2       Issuance of the Series A Preferred Stock......................................1

ARTICLE II    CLOSING.....................................................................2

  2.1       Stockholder Consent...........................................................2
  2.2       Bethea Purchase Agreement.....................................................2
  2.3       Closing.......................................................................2
  2.4       Deliveries....................................................................2
  2.5       Transaction Expenses..........................................................2

ARTICLE III   REPRESENTATIONS AND WARRANTIES OF W&T.......................................2

  3.1       Representations and Warranties Relating to W&T................................2
  3.2       Representations and Warranties Related to the Burlington Assets..............21

ARTICLE IV    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...........................22

  4.1       Investment Representations...................................................22
  4.2       Authorization; Binding Obligations...........................................22
  4.3       Compliance with Instruments, etc.............................................22
  4.4       Sophistication; Due Diligence................................................23
  4.5       Agent's Fees.................................................................23

ARTICLE V     CONDITIONS TO OBLIGATIONS OF THE PURCHASERS................................23

  5.1       Representations and Warranties Correct.......................................23
  5.2       Performance..................................................................23
  5.3       Compliance Certificate.......................................................23
  5.4       No Impediments...............................................................23
  5.5       No Material Adverse Change...................................................24
  5.6       Legal Investment.............................................................24
  5.7       Qualifications...............................................................24
  5.8       Employment Agreement.........................................................24
  5.9       Issuance Taxes...............................................................24
  5.10      Stockholders' Agreement......................................................24
  5.11      Directors....................................................................24
  5.12      Credit Agreement.............................................................24
  5.13      Bethea Agreements............................................................24
  5.14      Burlington Transaction.......................................................25
  5.15      Proceedings and Other Documents..............................................25
  5.16      Opinions of Counsel..........................................................25
  5.17      Consents, Waivers, Etc.......................................................25
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<TABLE>
  <S>                                                                                    <C>
  5.18      Termination of Stockholders' Agreement.......................................25
  5.19      Shareholder Loans............................................................25
  5.20      LLC Purchase Agreement.......................................................25
  5.21      Other Matters................................................................26

ARTICLE VI    CONDITIONS TO OBLIGATIONS OF W&T...........................................26

  6.1       Representations and Warranties Correct.......................................26
  6.2       Legal Investment.............................................................26
  6.3       Presentation of Common Stock Certificates....................................26
  6.4       Performance..................................................................26
  6.5       Bethea Agreements............................................................26
  6.6       Agreement of Toronto Dominion................................................26

ARTICLE VII   COVENANTS OF W&T...........................................................27

  7.1.1     Reports......................................................................27
  7.1.2     Reports to Purchasers Representative.........................................28
  7.2       Accounts and Records.........................................................29
  7.3       Inspection...................................................................29
  7.4       Independent Accountants......................................................30
  7.5       Further Assurances...........................................................30
  7.6       Operation of Business........................................................30
  7.7       Notice of Adverse Change.....................................................30
  7.8       Certain Pre-Closing Tax Matters..............................................31
  7.9       Additional Covenants.........................................................31
  7.10      Burlington Transaction.......................................................32
  7.11      Interim Financials...........................................................33
  7.12      Long-Term Incentive Compensation Plan........................................33
  7.13      Reincorporation in Delaware..................................................33
  7.14      By-laws......................................................................33
  7.15      Key Man Life Insurance.......................................................33
  7.16      Subchapter "S"...............................................................33

ARTICLE VIII  REGISTRATION RIGHTS........................................................34

  8.1       Restrictive Legend...........................................................34
  8.2       Certain Definitions..........................................................34
  8.3       Requested Registration.......................................................35
  8.4       Piggyback Registrations......................................................36
  8.5       Holdback Agreements..........................................................37
  8.6       Registration Procedures......................................................38
  8.7       Indemnification..............................................................40
  8.8       Information by Holders.......................................................42
  8.9       Limitations on Registration of Issues of Securities..........................42
  8.10      Rule 144 Reporting...........................................................42
  8.11      Selection of Underwriters....................................................43

ARTICLE IX    TERMINATION................................................................43

  9.1       Termination of Agreement.....................................................43
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  <S>                                                                                    <C>
  9.2       Effect of Termination........................................................43

ARTICLE X     AMENDMENT AND WAIVER.......................................................43

ARTICLE XI    LOST OR MUTILATED CERTIFICATES.............................................44

ARTICLE XII   MISCELLANEOUS..............................................................44

  12.1      Effectiveness................................................................44
  12.2      Governing Law................................................................44
  12.3      Survival.....................................................................44
  12.4      Public Announcements.........................................................45
  12.5      Successors and Assigns.......................................................45
  12.6      Entire Agreement.............................................................45
  12.7      Notices, etc.................................................................45
  12.8      Delays or Omissions..........................................................46
  12.9      Severability.................................................................46
  12.10     Expenses.....................................................................47
  12.11     Litigation; Consent to Jurisdiction..........................................47
  12.12     Titles and Subtitles.........................................................47
  12.13     Counterparts.................................................................47
  12.14     Direct Purchase..............................................................47
</TABLE>

EXHIBITS

Exhibit A     -  Form of Stockholders' Agreement
Exhibit B     -  Form of Amended and Restated Articles of Incorporation
Exhibit C     -  Form of Krohn Employment Agreement
Exhibit D     -  Form of Bethea Redemption Agreement
Exhibit E     -  Form of Bethea Purchase Agreement
Exhibit F     -  Form of Opinion of Adams and Reese, L.L.P.
Exhibit G     -  Intentionally Omitted
Exhibit H     -  Election of Subchapter "S" Status by W&T and Corresponding
                 Letter of Acceptance from the Internal Revenue Service
Exhibit I     -  LLC Purchase Agreement
Exhibit J     -  Stockholder Consent
Exhibit K     -  Form of Amended and Restated By-Laws

SCHEDULE

Schedule 1    -  List of Purchasers and Number of Series A Preferred Stock to be
                 Issued and Number of W&T Common Stock to be Exchanged

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DISCLOSURE SCHEDULES

Schedule         Section
--------         -------
3.1(b)        -  Subsidiaries, etc.
3.1(c)(i)     -  Capitalization
3.1(c)(ii)    -  Capitalization
3.1(d)        -  Authorization; Binding Obligations
3.1(f)        -  Litigation
3.1(g)        -  Financial Statements
3.1(h)(i)     -  Taxes
3.1(h)(ii)    -  Taxes
3.1(h)(iii)   -  Taxes
3.1(h)(iv)    -  Taxes
3.1(h)(v)     -  Taxes
3.1(i)        -  Permits; Governmental and Other Approvals
3.1(j)        -  Sales Representative Customers and Key Employees
3.1(k)        -  Intellectual Property
3.1(l)        -  Material Agreements
3.1(m)        -  Insurance
3.1(n)        -  Properties; Liens and Encumbrances
3.1(n)(iv)    -  Properties; Liens and Encumbrances
3.1(n)(viii)  -  Properties; Liens and Encumbrances
3.1(o)        -  Leases
3.1(p)(i)     -  Environmental, Conservation, and Safety Matters
3.1(p)(ii)    -  Environmental, Conservation, and Safety Matters
3.1(p)(iii)   -  Environmental, Conservation, and Safety Matters
3.1(p)(iv)    -  Environmental, Conservation, and Safety Matters
3.1(p)(v)     -  Environmental, Conservation, and Safety Matters
3.1(p)(vii)   -  Environmental, Conservation, and Safety Matters
3.1(q)(i)     -  Oil and Gas Interests
3.1(q)(iii)   -  Oil and Gas Interests
3.1(q)(iii-a) -  Oil and Gas Interests
3.1(q)(iv)    -  Oil and Gas Interests
3.1(q)(v)     -  Oil and Gas Interests
3.1(q)(vii)   -  Oil and Gas Interests
3.1(s-a)      -  Wells
3.1(s-b)      -  Wells
3.1(t)        -  Ordinary Course; No Material Adverse Change
3.1(u)        -  Agent's Fees
3.2(a)        -  Representations and Warranties Related to the Burlington Assets
7.6           -  Operation of Business
7.9           -  Additional Covenants

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        EXCHANGE AGREEMENT, dated as of November 25, 2002 (this "Agreement"), is
entered into by and among W&T Offshore, Inc., a Nevada corporation ("W&T"), and
the persons named on the signature pages of this Agreement as purchasers (each,
a "Purchaser" and collectively, the "Purchasers"). Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Stockholders'
Agreement by and among W&T and each of its stockholders (the "Stockholder's
Agreement") attached hereto as Exhibit A.

        WHEREAS, prior to the Closing (as hereinafter defined in Section 2.2),
the Purchasers shall have purchased 1,000 shares of W&T Common Stock (as
hereinafter defined in Section 3.1(c)) from William C. Bethea for an aggregate
purchase price of $50,000,000 in contemplation of exchanging such shares of W&T
Common Stock for Series A Preferred Stock (as defined below) of W&T at the
Closing; and

        WHEREAS, prior to the Closing, W&T will amend and restate its Articles
of Incorporation to correspond to Exhibit B attached hereto, with such changes
as are necessary to conform to the Stockholders' Agreement (the "Articles of
Incorporation") authorizing a new class of preferred stock (the "Series A
Preferred Stock");

        WHEREAS, the Purchasers wish to exchange their 1,000 shares of W&T
Common Stock for, and W&T wishes to issue to the Purchasers in exchange
therefor, an aggregate of 2,000,000 Series A Preferred Stock of W&TZZZZZ ; and

        WHEREAS, the Purchasers and W&T desire to provide for such issuance and
exchange and to establish various rights and obligations in connection
therewith.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:

                                    ARTICLE I

                     AUTHORIZATION, ISSUANCE AND EXCHANGE OF
                          THE SERIES A PREFERRED STOCK

        1.1     Authorization of the Series A Preferred Stock. Prior to the
Closing, W&T will have filed the Articles of Incorporation with the Secretary of
State of the State of Nevada setting forth, among other things, terms of the
Series A Preferred Stock.

        1.2     Issuance of the Series A Preferred Stock. Subject to the terms
and conditions hereof and in reliance on the representations and warranties
contained herein, or made pursuant hereto, W&T will issue to each Purchaser, and
such Purchaser will acquire from W&T, in exchange for all of such Purchaser's
shares of W&T Common Stock, at the Closing Time (as hereinafter defined in
Section 2.2), the number of shares of Series A Preferred Stock set forth
opposite the name of such Purchaser on Schedule 1 attached hereto.

                                       -1-

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                                   ARTICLE II

                                     CLOSING

        2.1     Stockholder Consent. Prior to January 2, 2003, the Purchasers
shall deliver to W&T a Stockholder Consent, executed by the Purchasers, in the
form of Exhibit J hereto.

        2.2     Bethea Purchase Agreement. Immediately prior to the Closing, the
Purchasers shall execute and deliver the Bethea Purchase Agreement (attached
hereto as Exhibit E).

        2.3     Closing. The closing of the exchange of shares of W&T Common
Stock for the Series A Preferred Stock (the "Closing") will take place at the
offices of W&T, 8 Greenway Plaza, Suite 1300, Houston, Texas 70046 at 10:00
a.m., local time, on January 2, 2003 if all of the conditions to the obligations
of the parties hereunder set forth in Article V and VI hereof which are capable
of being satisfied prior to the Closing Time have been satisfied or waived, or
such other time, date and place as shall be mutually agreed to by W&T and FS
Private Investments III LLC, on behalf of the Purchasers. Such time and date are
hereinafter referred to as the "Closing Time."

        2.4     Deliveries. At the Closing, W&T will deliver to each Purchaser a
certificate or certificates (in definitive form) in such denominations and
registered in the name of such Purchaser (or in the name of such Purchaser's
nominee) representing the Series A Preferred Stock to be acquired by such
Purchaser against surrender to W&T of the shares of W&T Common Stock to be held
by the Purchasers as set forth on Schedule 1, by delivery to W&T of stock
certificates representing all such shares, duly endorsed in blank or accompanied
by stock powers duly endorsed in blank.

        2.5     Transaction Expenses. At the Closing, W&T shall remit to the
Purchasers the entire amount of the Transaction Expenses (as hereinafter defined
in Section 12.10).

                                   ARTICLE III

                      REPRESENTATIONS AND WARRANTIES OF W&T

        3.1     Representations and Warranties Relating to W&T. For purposes of
the representations and warranties contained in this Section 3.1, W&T shall be
deemed to include, unless the context otherwise requires, W&T and W&T Holdings,
LLC and no other subsidiaries of W&T. Specifically, W&T shall not include W&T
Offshore, LLC or the three subsidiaries of W&T formed to acquire certain assets,
liabilities, business or prospects associated with the assets of Burlington
Resources Offshore, Inc. ("Burlington") that W&T proposes to acquire pursuant to
the Burlington Agreement (as hereinafter defined). W&T represents and warrants
to the Purchasers on the date hereof and on the Closing Time to the following
effects. When used in this Agreement unless expressly stated otherwise, the
phrase "to the knowledge of W&T" shall mean what is actually known by Tracy W.
Krohn and W. Reid Lea, or what either of them would reasonably be expected to
know in view of his position as the chief executive officer and chief financial
officer, respectively, of a business organization similar to W&T. Any matter set
forth

                                       -2-

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on any schedule as an exception to one representation and warranty shall be
deemed to be included on every other schedule that would be applicable to such
matter to the extent such other exception is reasonably apparent.

                (a)     Organization and Existence, etc. W&T (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada, and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now conducted and
proposed to be conducted, and (ii) is duly qualified to do business as a foreign
corporation and is in good standing (or the equivalent thereof under applicable
law) in each jurisdiction in which the conduct of its business requires such
qualification by reason of the ownership or leasing of property or otherwise
(except for those jurisdictions in which the failure so to qualify has not had
and will not have a W&T Material Adverse Effect). "W&T Material Adverse Effect"
means any development, change or effect or any series of related developments,
changes or effects that would be reasonably expected to impact the financial
condition or results of operations of W&T by at least $10,000,000. W&T has
furnished the Purchasers with true, correct and complete copies of the articles
of incorporation and By-laws (including any amendments to date of any thereof)
of W&T, each as in full force and effect on the date hereof.

                (b)     Subsidiaries, etc. Except for those described on
Schedule 3.1(b), (i) W&T has no subsidiaries and owns no securities of other
entities, and (ii) all issued and outstanding shares of capital stock or other
equity ownership interests of W&T's subsidiaries have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights
and are owned by W&T or a direct or indirect wholly-owned subsidiary of W&T,
free and clear of all Liens. As used herein, "Lien" means any lien, pledge,
claim, option, charge, easement, security interest, financing statement,
right-of-way, encumbrance or other right of any third party.

                (c)     Capitalization.

                        (i)     As of the date hereof, (A) W&T's authorized
capital stock consists of: 100,000 shares of common stock, $.01 par value per
share ("W&T Common Stock"), of which 3,900 shares are validly issued and
outstanding, fully paid and nonassessable; and (B) W&T has outstanding the
securities set forth on Schedule 3.1(c)(i), which are convertible into or
exercisable or exchangeable for W&T Common Stock (the "W&T Derivative
Securities"). From the date hereof to the Closing Time, there will be no changes
in such authorized capital stock or W&T Derivative Securities, except as
contemplated by this Agreement. At the Closing, after giving effect to the
redemption of the W&T Common Stock from William C. Bethea, a 2,911.48115
stock-for-stock dividend to be effected immediately prior to the Closing Time,
W&T's issuance of the Series A Preferred Stock contemplated hereby and the
issuance of the shares of Common Stock to Jefferies & Company, Inc., as set
forth on Schedule 1, W&T's authorized capital stock shall consist of 20,000,000
shares of Common Stock, of which 7,601,536 shall be validly issued and
outstanding, fully paid and nonassessable, and of which 2,000,000 shall be
reserved for issuance upon conversion of the Series A Preferred Stock and (ii)
2,000,000 shares of Series A Preferred Stock, all of which will be validly
issued and outstanding.

                                       -3-

<PAGE>

                        (ii)    Schedule 3.1(c)(ii) lists each of the
shareholders and other security holders of record of W&T (other than the
Purchasers and Jefferies & Company, Inc.) and the number of shares and other
securities so held as of the date hereof and as of the Closing Time. At the
Closing, all the issued and outstanding shares of capital stock of W&T will be
free of preemptive and similar rights (except as provided in Section V of the
existing Stockholders' Agreement of W&T, a copy of which has been delivered to
the Purchasers) and will have been and will be offered, issued, sold and
delivered by W&T in transactions in compliance with applicable federal, state
and foreign securities laws. There are no outstanding agreements or commitments
requiring W&T to issue capital stock or W&T Derivative Securities, except for
this Agreement, W&T's obligations to issue 31,685 shares of W&T's Common Stock
to Jefferies & Company, Inc. and up to 505,344 shares of Common Stock as
contemplated by the Long-Term Incentive Compensation Plan.

                (d)     Authorization; Binding Obligations.

                        (i)     Subject to the ratification to be provided by
the Board of Directors of W&T prior to the Closing Time, and subject to the
approval of the stockholders of W&T as set forth on Exhibit J and as otherwise
set forth on Schedule 3.1(d), W&T has full right, power and authority to execute
and deliver this Agreement, and such other documents furnished or to be
furnished by W&T hereunder, including the Stockholders' Agreement, and, subject
to and in accordance with the terms hereof and of the Stockholder's Agreement,
to consummate the transactions contemplated hereby and thereby and to perform
its obligations hereunder and thereunder. This Agreement, the Stockholders'
Agreement and each of the other agreements required to be delivered hereunder or
thereunder to which W&T is a party will be prior to the Closing Time, duly
authorized, executed and delivered by W&T, and each constitutes, or will
constitute when executed and delivered, a legal, valid and binding agreement of
W&T, enforceable against W&T in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.
Subject to the foregoing, the compliance by W&T with the provisions of this
Agreement, the Stockholders' Agreement or any of the other agreements required
to be delivered hereunder to which it is a party, and the consummation of the
other transactions herein or therein contemplated will not result in the
creation or imposition of any Lien upon any of the assets of W&T pursuant to the
terms or provisions of, or result in a breach or violation of or conflict with
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the Articles of Incorporation and/or
By-laws or other governing instruments of W&T, (ii) any contract or other
agreement to which W&T is a party or by which W&T or any of its properties is
bound or affected, or (iii) any judgment, ruling, decree, order, statute, rule
or regulation (except state securities laws) of any court or other governmental
agency or body, domestic or foreign, applicable to the business or properties of
W&T.

                        (ii)    The Series A Preferred Stock to be issued to the
Purchasers shall be duly authorized for issuance prior to the Closing, and, when
issued and delivered in accordance with the provisions of this Agreement, shall
be validly issued and outstanding, fully paid and nonassessable, will be free of
preemptive rights and free and clear of any Liens (other

                                       -4-

<PAGE>

than as set forth in the Stockholders' Agreement) and will have the
designations, preferences and relative, participating, optional and special
rights as set forth in the Articles of Incorporation.

                        (iii)   The shares of W&T Common Stock issuable upon
conversion of the Series A Preferred Stock (the "Conversion Shares") shall be
duly authorized and reserved for issuance prior to the Closing, and when issued
and delivered in accordance with the provisions of the Articles of
Incorporation, will be validly issued and outstanding, fully paid and
nonassessable and will be free of preemptive rights and granted clear of any
Liens (other than as set forth in the Stockholders' Agreement).

                (e)     Compliance with Instruments, etc. W&T is not in breach
or violation of, or in default under, any term or provision of (i) its
organizational and governing documents, (ii) any indenture, mortgage, deed of
trust, voting trust agreement, shareholders agreement, note agreement or other
agreement or instrument to which it is a party or by which it is or may be bound
or to which any of its property or assets is or may be bound or affected, or any
indebtedness, the effect of which breach or default, individually or in the
aggregate, may have a W&T Material Adverse Effect, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to W&T or of any
arbitrator, court, regulatory body, administrative agency or any other
governmental agency or body, domestic or foreign, having jurisdiction over W&T
or any of its respective activities or properties and the effect of which breach
or default, individually or in the aggregate, would have a W&T Material Adverse
Effect.

                (f)     Litigation. Except as set forth on Schedule 3.1(f),
there has been no action, suit, proceeding, arbitration or investigation against
W&T (i) since January 1, 1992 but prior to January 1, 1997 which resulted in a
judgment or settlement involving in excess of $10,000,000 or (ii) since January
1, 1997. Except as set forth on Schedule 3.1(f), there is no action, suit,
proceeding, arbitration or investigation pending, or, to the knowledge of W&T,
threatened, against W&T before or by any court, regulatory body, arbitration
proceeding, or administrative agency or any other governmental agency or body,
domestic or foreign, or any action, suit, proceeding, arbitration or
investigation pending, or, to the knowledge of W&T, threatened, which (1)
challenges the validity of any action taken or to be taken pursuant to or in
connection with this Agreement or the consummation of the transactions
contemplated hereunder, including the issuance of the Series A Preferred Stock
to the Purchasers or (2) if adversely decided, could have a W&T Material Adverse
Effect. W&T has either furnished the Purchasers with true, correct and complete
copies of all material documentation related to the matters listed on Schedule
3.1(f), or has permitted representatives of the Purchasers to discuss such
matters with attorneys for W&T. Except as set forth on Schedule 3.1(f), W&T is
not subject to any judgment, order, writ, injunction, assessment, notice, claim
or decree of any governmental entity that has had or would be reasonably
expected to have a W&T Material Adverse Effect.

                (g)     Financial Statements. W&T has previously delivered to
the Purchasers true, correct and complete copies of its financial statements (on
a consolidated and consolidating basis) as at and for the years ended December
31, 1999, 2000 and 2001, and as at and for the nine-month period ended September
30, 2002 or such later period as may be available (such

                                       -5-

<PAGE>

interim financial statements being referred to as the "Interim W&T Financial
Statements" and all such financial statements being collectively referred to as
the "W&T Financial Statements"). A true, correct and complete copy of the
Interim W&T Financial Statements are set forth on Schedule 3.1(g). The W&T
Financial Statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and fairly present the
financial position of W&T as of the dates thereof and the results of its
consolidated operations and cash flows for the periods then ended. The W&T
Financial Statements (except for the Interim W&T Financial Statements) have been
audited by Ernst & Young LLP who are independent public accountants within the
meaning of the Securities Act and the rules and regulations promulgated
thereunder and they have expressed an opinion thereon. Except as set forth on
the balance sheet included in the Interim W&T Financial Statements or on
Schedule 3.1(g), W&T has no liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) (i) that would normally be required to be
reflected on a balance sheet or disclosed in the notes thereto in accordance
with GAAP consistently applied, except for liabilities incurred since the date
of such balance sheet in the ordinary course of business or (ii) to any officer,
director, shareholder or employee of W&T.

                (h)     Taxes.

                        (i)     Except as set forth on Schedule 3.1(h)(i), (A)
all Tax (as hereinafter defined) returns and reports (including information
returns, declarations and reports) and amended or substituted returns and
reports required to be filed with any Taxing Authority (as hereinafter defined)
by or on behalf of W&T (collectively, the "W&T Tax Returns" and singularly, a
"W&T Tax Return"), have been or will be duly and timely filed when due in
accordance with all applicable laws (including any extensions of such due date);
(B) as of the time of filing, the W&T Tax Returns correctly reflected (and, as
to any W&T Tax Returns not filed as of the date hereof, will correctly reflect)
in all material respects the income or other measure of Tax and any other
information required to be shown therein; (C) all Taxes shown or required to be
shown as due and payable on the W&T Tax Returns have been timely paid or
withheld (or, with respect to returns that have not yet been filed, adequate
provision has been made therefor); (D) the charges, accruals and reserves for
deferred and contingent Taxes reflected on the Interim W&T Financial Statements
are adequate to cover all Taxes that are or may become payable by W&T with
respect to all periods covered by such financial statements, and the books and
records of W&T will contain accruals and reserves in the amount set forth on
Schedule 3.1(h)(i) adequate to cover all Taxes that are or may become payable by
W&T for all periods ending on or prior to the Closing; (E) W&T is not delinquent
in the payment of any Tax and has not requested any extension of time within
which to file any W&T Tax Return, which W&T Tax Return either has not since been
filed or with respect to which such extended period has not yet expired; (F)
there are no pending or, to the knowledge of W&T, threatened audits,
investigations, claims, administrative or judicial proceedings, or collection
actions against or with respect to W&T in respect of any Tax or assessment; (G)
there are no Liens for Taxes upon the assets of W&T except Liens for current
Taxes not yet due; (H) W&T has not and is not required to file Tax Returns in
any jurisdiction outside of the United States of America; and (I) Schedule
3.1(h)(i) sets forth the taxable years of W&T as to which audits have been
completed, those years which are currently under audit, those years for which
audits have not been initiated,

                                       -6-

<PAGE>

and those years for which required W&T Tax Returns have not yet been filed. As
used herein, (x) "Tax" or "Taxes" means (1) all forms of taxation, charges,
levies or other assessments, whether direct or indirect and whether levied by
reference to net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, franchise, profits, license, withholding
(whether with respect to receipts or payments), payroll, privilege, employment,
excise, severance, capital gains, transfer gains, stamp, occupation, premium or
similar tax measured by insurance premiums, real and personal property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, and any interest
or any penalty, addition to tax or additional amount, imposed by any Taxing
Authority, (2) liability, whether to a Taxing Authority or pursuant to an
agreement with or legal obligation to any person or entity, for the payment of
any amounts of the type described in clause (1) of this definition as a result
of being a member of an affiliated, consolidated, combined or unitary group for
any taxable period or being an electing "S corporation" as defined in Section
1361 of the Internal Revenue Code of 1986, as amended (the "Code"), or a
stockholder thereof, and (3) liability for the payment of any amounts of the
type described in clause (1) or (2) of this definition as a result of an
obligation to indemnify any other person and (y) "Taxing Authority" means a
governmental entity or authority responsible for and having requisite
jurisdiction with respect to the imposition of Taxes.

                        (ii)    W&T's payroll, property or receipts, or other
factors used in a particular state's apportionment or allocation formula, do not
result in an apportionment or allocation of business income to any state other
than the States listed in Schedule 3.1(h)(ii), and W&T has no nonbusiness income
that is allocated, apportioned or otherwise sourced to any state other than such
States.

                        (iii)   Except as qualified on Schedule 3.1(h)(iii), but
subject to W&T's actual knowledge to the contrary, (A) W&T is treated for
federal income tax purposes as a Subchapter "S" corporation, within the meaning
of Sections 1361 et seq. of the Code, and all distributions have been made pro
rata to the stock ownership of the shareholders for the respective periods shown
on Schedule 3.1(h)(iii), and (B) W&T and its stockholders have made a properly
filed and executed election to be treated for federal income tax purposes as a
Subchapter "S" corporation, within the meaning of Sections 1361 et seq. of the
Code, for all tax periods shown on Schedule 3.1(h)(iii) through the date hereof,
and have made an equivalent election for purposes of Taxes imposed by each state
in which W&T is required to file a W&T Tax Return. Each Purchaser acknowledges
and agrees that W&T's Subchapter "S" election will be revoked on or immediately
prior to the Closing.

                        (iv)    Schedule 3.1(h)(iv) sets forth (A) all
assumptions used by W&T in calculating the 2002 income taxes of its shareholders
with respect to the actual and projected profits of W&T in 2002; (B) the amount
of tax distributions made by W&T to its stockholders as of the date of this
Agreement with respect to 2002 profits of W & T; and (C) the amount of
additional tax distributions that W&T estimates will be necessary in order to
permit W&T shareholders to pay all taxes due with respect to W&T's 2002 profits.
The anticipated tax distributions of W&T set forth on Schedule 3.1(h)(iv) have
not been included in the Interim

                                       -7-

<PAGE>

W&T Financial Statements. Schedule 3.1(h)(iv) sets forth a reasonable estimate
of such additional tax liability.

                        (v)     Except as set forth on Schedule 3.1(h)(v), W&T
shall bear full responsibility for the payment of any and all Taxes which are
owed by it that have not been reserved for on the Interim W&T Financial
Statements and for any and all Taxes owed in connection with its operations for
2002, up to and including the Closing. W&T shall have no responsibility, and the
W&T shareholders shall bear full responsibility, for the payment of any and all
Taxes which are owed by the W&T shareholders by reason of their ownership of
stock in W&T. Except as set forth on Schedule 3.1(h)(v), W&T shall have no
responsibility, and none of its assets, properties, rights or business shall be
subject to any Lien, for the payment of any and all Taxes which are owed by the
W&T shareholders by reason of their ownership of stock in W&T.

                (i)     Permits; Governmental and Other Approvals. To the
knowledge of W&T, and except as set forth on Schedule 3.1(i), W&T has such
licenses, permits, consents, orders, approvals and other authorizations
necessary for the conduct of its business as now being conducted and proposed to
be conducted by W&T. Except as set forth in Schedule 3.1(i), no approval,
consent, authorization or other order of, and no designation, filing,
registration, qualification or recording with any governmental authority,
domestic or foreign, is required for W&T's performance of this Agreement or the
consummation of the transactions contemplated hereby.

                (j)     Sales Representatives, Customers and Key Employees. To
the knowledge of W&T, except as set forth on Schedule 3.1(j), no employee of, or
party or person providing services to W&T has any intention to terminate his,
her or its relationship with W&T, or, in the case of employees, leave the employ
of W&T. Except as contemplated by this Agreement, all personnel of W&T are
employed on an "at will" basis and may be terminated upon notice of not more
than 30 days.

                (k)     Intellectual Property.

                        (i)     Except for those matters disclosed on Schedule
3.1(k), to the knowledge of W&T, having made appropriate inquiries of the
relevant senior W&T executives responsible for such matters, W&T has full and
exclusive right, title and interest in and to, or license rights to, or other
rights to use, all patents, patent applications, registered or unregistered
trademarks, service marks and trade names, registered or unregistered copyrights
and applications therefor, licenses, approvals or governmental authorizations to
conduct its business as now conducted, know-how, proprietary rights and
processes, trade secrets, customer lists, methodologies, proprietary development
and marketing information and know-how, inventions, inventors' notes (to the
extent such notes exist), drawings, software, databases, geological data,
geophysical data, engineering data, maps, interpretations, lease, land, title
and other files, records and other similar information, subject to the
limitations contained in the agreements governing the use of the same, which
limitations are customary for companies engaged in the business of the
exploration or production of oil, gas, condensate, related hydrocarbons, and
other minerals

                                       -8-

<PAGE>

produced from the properties comprising the Oil and Gas Interests (as
hereinafter defined), including oil in storage (the "Hydrocarbons"), designs
associated with the foregoing, and other technical and/or confidential
information (collectively, "W&T Intellectual Property") relating to its business
as presently conducted and proposed to be conducted by W&T or otherwise used in
or necessary for the proper conduct of its business, free and clear of all Liens
and Encumbrances, other than Permitted Encumbrances (as such terms are
hereinafter defined); and W&T has no obligation to any other person with respect
to the W&T Intellectual Property or any product or process of W&T utilizing or
embodying any W&T Intellectual Property. There are no limitations contained in
agreements of the type described in this Section 3.1(k) which in any way relate
to the W&T Intellectual Property which, upon consummation of the transactions
contemplated by this Agreement, will materially alter or impair any such rights,
materially breach any such agreement with any third party vendor, or require
payments of additional sums thereunder. W&T is in compliance in all material
respects with such licenses and agreements and there are no pending or, to the
knowledge of W&T, threatened proceedings challenging or questioning the validity
or effectiveness of any license or agreement relating to such property or the
right of W&T or any subsidiary to use, copy, modify or distribute the same.

                        (ii)    W&T does not have any patents or patent
applications nor are any patents or patent applications required for the conduct
of its business as now conducted.

                        (iii)   To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
there is (A) no infringement, misuse or misappropriation of any W&T Intellectual
Property owned, licensed or controlled by any third party arising out of any
business activities now or previously conducted by or on behalf of W&T, (B) no
pending or, to the knowledge of W&T, threatened claim or challenge of or
proceeding for infringement, misuse or misappropriation of or interference with
any W&T Intellectual Property owned, licensed or controlled by any third party
arising out of any business activities now or previously conducted by or on
behalf of W&T, (C) no pending or threatened or potential claim, challenge or
proceeding by W&T against any third party for infringement, misuse or
misappropriation of or interference with any W&T Intellectual Property owned,
licensed or controlled by W&T or (D) no notice or, to the knowledge of W&T,
facts or information rendering any W&T Intellectual Property owned, controlled
or licensed by W&T invalid or unenforceable, nor, to the knowledge of W&T, is
there any allegation that any such W&T Intellectual Property is invalid or
unenforceable.

                (l)     Material Agreements. Except as set forth in Schedule
3.1(l), W&T has no currently existing contract, obligation, agreement, plan,
arrangement, commitment or the like (written or oral) of any material nature,
including, without limitation, the following, exclusive of Basic Oil and Gas
Documents (as hereinafter defined):

                        (i)     Employment, bonus or consulting agreements,
pension, profit sharing, deferred compensation, incentive compensation, stock
bonus, retirement, stock option, stock or similar plans, including agreements
evidencing rights to purchase securities of W&T and agreements among
shareholders and W&T or an "employee benefit plan" as that term is

                                       -9-

<PAGE>

defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA");

                        (ii)    Loan or other agreements, notes, indentures, or
instruments relating to or evidencing indebtedness for borrowed money, or
mortgaging, pledging or granting or creating a Lien on any of W&T's property or
any agreement or instrument evidencing any guaranty by W&T of payment or
performance by any other person requiring the payment of more than $1,000,000;

                        (iii)   Agreements with dealers, sales representatives,
brokers or other distributors, jobbers, advertisers or sales agencies;

                        (iv)    Agreements with any labor union or collective
bargaining organization or other labor agreements;

                        (v)     Any contract or series of contracts with the
same person for the furnishing or purchase of machinery, equipment, goods or
services involving sums in excess of $1,000,000;

                        (vi)    Any indenture, agreement or other document
(including private placement brochures) relating to the sale or repurchase of
shares;

                        (vii)   Any joint venture contract or arrangement or
other agreement involving a sharing of profits or expenses to which W&T is a
party;

                        (viii)  Agreements limiting the freedom of W&T to
compete in any line of business or in any geographic area or with any person;

                        (ix)    Agreements providing for disposition of the
business, assets or shares of W&T, agreements of merger or consolidation to
which W&T is a party or letters of intent with respect to the foregoing;

                        (x)     Letters of intent or agreements with respect to
the acquisition of the business, assets or shares of any other business; and

                        (xi)    Insurance policies, health insurance plans,
medical plans or any other benefit plans.

        W&T has made available to the Purchasers for their review a true,
correct and complete copy of each of the contracts that are referred to on
Schedule 3.1(l), together with all material amendments, waivers or other changes
to all such documents.

        W&T, and to W&T's knowledge, having made appropriate inquiries of the
relevant senior W&T executives responsible for such matters (including W&T's
landman, Jamie Vasquez (the "W&T Landman")), each other party or obligor
thereto, has complied with all the material provisions of all contracts,
obligations, agreements, plans, arrangements, and commitments and

                                      -10-

<PAGE>

is not in default thereunder, except for defaults in any one case or in the
aggregate that would not have a W&T Material Adverse Effect. Each employee
benefit plan has been administered and operated in compliance in all material
respects with the applicable requirements of ERISA and the Code. Each such
contract, obligation, agreement, plan, arrangement and commitment is in full
force and effect, except as indicated on Schedule 3.1(l), and W&T has no reason
to believe that any such contract, obligation, agreement, plan, arrangement and
commitment will be terminated prior to its expiration date.

                (m)     Insurance. Except as set forth on Schedule 3.1(m), W&T
has in full force and effect insurance (including, but not limited to property
and casualty insurance, environmental liability insurance and errors and
omissions insurance), in such amounts and coverages with currently active
syndicates at Lloyd's, London and other insurance markets that, in the
reasonable judgment of the chief executive officer and the chief financial
officer of W&T, is adequate to protect W&T and its financial condition against
such losses and risks and in such amounts and with such deductibles as are
prudent and customary in the businesses in which it is engaged. W&T does not
maintain business interruption insurance. W&T has no reason to believe that,
given its claims rate as of the date hereof, it would not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business or W&T's proposed business, in each case at a cost not in excess of the
current cost, other than increases as a result of changes or developments
affecting the insurance industry generally that do not disproportionately impact
W&T compared to similarly situated companies in the same industry.

                (n)     Properties; Liens and Encumbrances. Schedule 3.1(n) sets
forth the address of all parcels of real property owned, leased or operated by
W&T, other than Oil and Gas Interests (as hereinafter defined in Section
3.1(q)(i)). To the knowledge of W&T, with the exceptions set forth on Schedule
3.1(n), W&T has good and marketable title in fee to such of its fixed assets as
are real property, and good and merchantable title to all of its other assets
(tangible or intangible), now carried on its books, including those reflected in
the balance sheet included in the Interim W&T Financial Statements, or acquired
since the date of such balance sheet (except personal property disposed of since
said date in the ordinary course of business), free and clear of any Lien or
Encumbrance, except for Permitted Encumbrances. As used herein, "Encumbrance"
shall mean and include all Liens and shall also include reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
property. For the purposes hereof, W&T shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the property has been retained
by or vested in some other person for security purposes. For the purposes
hereof, "Permitted Encumbrances" shall mean and include:

                        (i)     Encumbrances for taxes, assessments, or other
governmental charges not yet due or which are being contested in good faith by
appropriate action promptly initiated and diligently conducted, if such accruals
as shall be required by GAAP shall have been made therefor;

                                      -11-

<PAGE>

                        (ii)    any (A) undetermined or inchoate Liens or
charges constituting or securing the payment of expenses that were incurred
incidental to maintenance, development, production or operation of oil and gas
properties or for the purpose of developing, producing or processing oil, gas or
other hydrocarbons therefrom or therein securing payment of expenses not yet due
or which are being contested in good faith by appropriate action promptly
initiated and diligently conducted, if such accruals as shall be required by
GAAP shall have been made therefor, and (B) materialman's, vendors', mechanics',
repairman's, employees', contractors', operators' or other similar Liens or
charges for liquidated amounts arising in the ordinary course of business
securing payment of amounts not yet due or which are being contested in good
faith by appropriate action promptly initiated and diligently conducted, if such
accruals as shall be required by GAAP shall have been made therefor;

                        (iii)   any liens or security interests created by law
or reserved in oil and gas leases for lessor royalty, bonus or rental payments
not yet due or which are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if such reserves as shall be
required by GAAP shall have been made therefor;

                        (iv)    preferential rights to purchase or similar
rights not applicable to the transactions contemplated hereby, as listed on
Schedule 3.1(n)(iv);

                        (v)     third party consents to assignment or similar
consent rights of third parties not required for nor applicable to the
transactions contemplated hereby;

                        (vi)    all rights to consent by, required notices to,
filings with, or other actions by any regulatory authority, administrative
agency or any other governmental agency or body, domestic or foreign, in
connection with the sale or conveyance of the oil and gas leases or interests
therein;

                        (vii)   inchoate liens arising under ERISA to secure the
contingent liabilities, if any, permitted by this Agreement; and

                        (viii)  the Encumbrances described in Schedule
3.1(n)(viii) hereto.

                (o)     Leases. Set forth on Schedule 3.1(o) is a correct and
complete list (including the amount of rents called for and a description of the
leased property) of all material leases under which W&T is a lessee, other than
leases comprising any of the Oil and Gas Interests. Except as set forth on
Schedule 3.1(o), W&T enjoys peaceful and undisturbed possession under all such
leases and, all of such leases are valid and subsisting and neither W&T nor, to
the knowledge of W&T, any other party, is in default under any such leases in
any material respect.

                (p)     Environmental, Conservation and Safety Matters.

                        (i)     To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
and except as set forth on Schedule 3.1(p)(i), W&T has in effect all federal,
state and local governmental approvals,

                                      -12-

<PAGE>

authorizations, certificates, filings, franchises, licenses, notices, permits
and rights ("Operating Permits") required under applicable statutes, laws,
ordinances, rules, orders and regulations which are administered, interpreted or
enforced by the U.S. Environmental Protection Agency, Minerals Management
Service, U.S. Coast Guard or other federal, state and local agencies with
jurisdiction over protection of natural resources or the environment, or the
exploration, development, and production of oil and gas properties
(collectively, "Environmental, Conservation or Safety Laws") necessary for it to
carry on its business as now conducted, and W&T is, and has been, in compliance
in all material respects with such Operating Permits.

                        (ii)    Except as set forth on Schedule 3.1(p)(ii), to
the knowledge of W&T, having made appropriate inquiries of the relevant senior
W&T executives responsible for such matters, W&T is, and has been, in compliance
with all applicable Environmental, Conservation or Safety Laws in all material
respects. Except as set forth on Schedule 3.1(p)(ii) and to the knowledge of
W&T, having made appropriate inquiries of the relevant senior W&T executives
responsible for such matters, W&T is not subject to any liability, penalty or
expense (including legal fees) and will not hereafter suffer or incur any loss,
liability, penalty or expense (including legal fees) by virtue of any violation
of any Environmental, Conservation or Safety Law occurring prior to the Closing
Time, any activity regulated by such Laws and conducted at or prior to the
Closing Time or any regulated condition existing on or with respect to any
property at or prior to the Closing Time, in each case whether or not W&T
permitted or participated in such act or omission.

                        (iii)   Except as set forth on Schedule 3.1(p)(iii),
there is no suit, claim, action, proceeding, investigation or inquiry pending
or, to the knowledge of W&T, threatened before any court, governmental agency or
authority or other forum in which W&T has been or, with respect to threatened
suits, actions and proceedings, may be named as a defendant or respondent (A)
for alleged noncompliance (including by any predecessor) with any Environmental,
Conservation or Safety Law or (B) relating to the release or threatened release
into the environment of any Hazardous Material (as defined below), asbestos,
naturally occurring radioactive materials (as defined by Louisiana
Administrative Code LAC 33:XV.1403), polychlorinated biphenyls or petroleum,
including crude oil or any fraction or product thereof (such materials, together
with Hazardous Materials, collectively, "Regulated Materials"), whether or not
occurring at, on, under or involving a site owned, leased or operated by W&T.
"Hazardous Material" shall mean any pollutant, contaminant, or hazardous
substance within the meaning of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sections 6901 et seq., as amended
("CERCLA"), oil within the meaning of the Oil Pollution Act of 1990, 33 U.S.C.
Sections 2701 through 2761, or any similar state or local law.

                        (iv)    To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
and except as set forth on Schedule 3.1(p)(iv), there are no physical or
environmental conditions existing on any of the Oil and Gas Interests operated
by W&T or resulting from W&T's operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial obligations
under any application of any Environmental, Safety or Conservation Law, other
than normal and ordinary remedial work associated with plugging and abandoning
of oil and gas facilities.

                                      -13-

<PAGE>

                        (v)     Except as set forth on Schedule 3.1(p)(v), (A)
to the knowledge of W&T, having made appropriate inquiries of the relevant
senior W&T executives responsible for such matters, and except as set forth on
Schedule 3.1(p)(v), during the period of ownership and operation, and (B) to the
knowledge of W&T without any duty of inquiry, prior to the period of ownership
by W&T of any of its current properties and during the period of ownership by
W&T of any of its current non-operated properties, there have been no
underground storage tanks (whether currently active or not) and no
polychlorinated biphenyls in transformers or other electrical equipment and
there have been no releases of Regulated Materials in, on, under or affecting
such properties or from any such properties onto any surrounding site. Except as
set forth on Schedule 3.1(p)(v), to the knowledge of W&T, prior to the period of
operation, and to the knowledge of W&T without any duty of inquiry, prior to the
period of ownership, by W&T of any of its current properties there were no
releases of Regulated Materials in, on, under or affecting any such property or
any surrounding site.

                        (vi)    To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
W&T has not treated, stored, recycled or disposed of, or allowed or arranged for
any third person to treat, store, recycle or dispose of, any Regulated Material
other than in accordance with applicable law. To the knowledge of W&T, W&T has
not transported any Regulated Material or arranged for the transportation of any
Regulated Material to any location that is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, or any other location that is the
subject of federal, state or local enforcement action or other investigation
that may lead to claims against W&T for cleanup costs, remedial action, damages
to natural resources, or to other property or for personal injury including
claims under CERCLA. None of the properties leased or operated by W&T is either
listed or known to W&T as being proposed for listing on the National Priorities
List pursuant to CERCLA, or is subject to any other federal, state or local law
or regulation requiring remedial investigation or cleanup.

                        (vii)   W&T has made available to the Purchasers true,
correct and complete copies of all reports and filings made or filed by W&T
pursuant to the Occupational Safety and Health Act, or pursuant to worker health
and safety regulations enforced by the Minerals Management Service or the U.S.
Coast Guard. To the knowledge of W&T, having made appropriate inquiries of the
relevant senior W&T executives responsible for such matters, and except as set
forth on Schedule 3.1(p)(vii), W&T has not violated in any material respect or
failed to comply in any material respect with, or been subject of any written
allegation regarding worker health and safety by the Occupational Safety and
Health Administration, the Minerals Management Services or Coast Guard, or
violated in any material respect or, failed to comply in any material respect
with the worker health and safety rules or regulations promulgated by those
agencies.

                (q)     Oil and Gas Interests.

                        (i)     Schedule 3.1(q)(i) contains a complete and
accurate list of all oil, gas and/or mineral leases, mineral rights and
servitudes, fee interests owned for the purpose of mineral development,
MMS-approved pipeline rights-of-way and servitudes held by W&T or in

                                      -14-

<PAGE>

which W&T owns any interest (the "Oil and Gas Interests"). Schedule 3.1(q)(i)
designates those Oil and Gas Interests that collectively comprise the "Material
Oil and Gas Interests." The Material Oil and Gas Interests represent in excess
of 80 percent of the value of the Oil and Gas Interests. Schedule 3.1(q)(i) also
indicates which Oil and Gas Interests are operated by W&T.

                        (ii)    To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
W&T has good and defensible title to the Material Oil and Gas Interests free and
clear of any Encumbrance other than Permitted Encumbrances. To the knowledge of
W&T, having made appropriate inquiries of the relevant senior W&T executives
responsible for such matters, the ownership interests of W&T in the Material Oil
and Gas Interests do and will, as of the Closing Time, (A) with respect to each
tract of land described in Schedule 3.1(q)(i) (whether described directly in
Schedule 3.1(q)(i) or described by reference to another instrument) in
connection with such Material Oil and Gas Interests, (1) entitle W&T to receive
a decimal or percentage share of the Hydrocarbons produced from, or allocated
to, such tract equal to not less than the decimal or percentage share set forth
in Schedule 3.1(q)(i) in connection with such tract directly opposite the
designation "NRI" or "Net Revenue Interest" (or words or abbreviations of
similar import), (2) cause W&T to be obligated to bear a decimal or percentage
share of the cost of exploration, development, operation and abandonment of such
tract of land not greater than the decimal or percentage share set forth in
Schedule 3.1(q)(i) in connection with such tract directly opposite the
designation "WI" or "Working Interest" (or words or abbreviations of similar
import), and (B) if any such Material Oil and Gas Interest is shown on Schedule
3.1(q)(i) to be subject to a unit or units, with respect to each such unit, (1)
entitle W&T to receive a decimal or percentage share of all Hydrocarbons covered
by such unit which are produced from, or allocated to, such unit equal to not
less than the decimal or percentage share set forth in Schedule 3.1(q)(i) in
connection with such Material Oil and Gas Interest opposite the words "Unit Net
Revenue Interest" or words of similar import (and if such Material Oil and Gas
Interest is subject to more than one unit, words identifying such interest with
such unit), and (2) obligate W&T to bear a decimal or percentage share of the
cost of exploration, development, operation and abandonment of such unit not
greater than the decimal or percentage share set forth in Schedule 3.1(q)(i) in
connection with such Material Oil and Gas Interest opposite the words "Unit
Working Interest" or words of similar import (and if such Material Oil and Gas
Interest is subject to more than one unit, words identifying such interest with
such unit). With respect to each property described as a Material Oil and Gas
Interest on Schedule 3.1(q)(i) which is subject to a voluntary or involuntary
pooling, unitization or communitization agreement and/or order, the term "tract
of land" as used in this subparagraph shall mean the pooled, unitized or
communitized area as an entirety and shall not be deemed to refer to any
individual tract committed to said pooled, unitized or communitized area.
Without limitation of the foregoing, the ownership by W&T of the Material Oil
and Gas Interests does and will, as of the Closing Time, with respect to each
well or unit identified in Schedule 3.1(q)(i), made a part hereof, entitle W&T
to receive a decimal or percentage share of the oil, gas and other Hydrocarbons
produced from, or allocated to, such well or unit equal to not less than the
decimal or percentage share set forth for such well or unit in the column headed
"Net Revenue Interest" in Schedule 3.1(q)(i), and cause W&T to be obligated to
bear a decimal or percentage share of the cost of operation of such well or unit
equal to not more than the decimal or percentage share set forth for such well
or unit in the column headed "Working

                                      -15-

<PAGE>

Interest" in Schedule 3.1(q)(i). The above-described shares of production which
W&T is entitled to receive and shares of expenses which W&T is obligated to bear
are not and will not be as of the Closing Time subject to change (other than
changes which arise pursuant to non-consent provisions of operating agreements
described in Schedule 3.1(q)(i) in connection with operations hereafter
proposed), except, and only to the extent that, such changes are reflected in
Schedule 3.1(q)(i).

                        (iii)   To the knowledge of W&T, including the knowledge
of W&T Landman, the oil, gas and/or mineral leases, contracts, servitudes and
other agreements forming a part of the Material Oil and Gas Interests described
in Schedule 3.1(q)(i) and operated by W&T and, to the actual knowledge of W&T,
including the actual knowledge of the W&T Landman, operated by others, are in
full force and effect, having been maintained in accordance with the terms
thereof, except as indicated on Schedule 3.1(q)(iii). Schedule 3.1(q)(iii-a)
sets forth a list of the material contracts and agreements relating to the
Material Oil & Gas Interests, or which may affect W&T's interest therein as
described in Schedule 3.1(q)(i) (the "Basic Oil and Gas Documents"). W&T has
made available to the Purchasers for their review a true, correct and complete
copy of each of the Basic Oil & Gas Documents, together with all material
amendments, waivers or other changes to all such documents. W&T has no reason to
believe that any Basic Oil and Gas Document will be terminated prior to its
expiration date. All payments (including all delay rentals, royalties, shut-in
royalties and valid calls for payment or prepayment under operating agreements)
owing under the Basic Oil and Gas Documents have been and are being made
(timely, and before the same became delinquent) by W&T in all material respects
(and, where the non-payment of same by a third party could reasonably be
expected to materially adversely affect the ownership, operation, value or use
of a Material Oil and Gas Interest after the Closing Time have been and are
being made, to W&T's knowledge, by such third parties). For the purposes of the
representations contained in this subparagraph (and without limitation of such
representations), the non-payment of an amount, or non-performance of an
obligation, where such non-payment or non-performance could reasonably be
expected to result in the forfeiture or termination of rights of W&T under a
Basic Oil and Gas Document, shall be considered material. W&T is not in default
with respect to W&T's obligations (and W&T is not aware of any default by any
third party acting on W&T's behalf with respect to such third party's
obligations) under such leases, contracts, servitudes and other of the Basic Oil
and Gas Documents, or otherwise attendant to the ownership or operation of any
part of the Material Oil and Gas Properties by W&T where such default could
reasonably be expected to materially adversely affect the ownership or operation
of the Material Oil and Gas Properties; and to W&T's knowledge, each other party
or obligor thereto has complied with all the material provisions of the Basic
Oil and Gas Documents and is not in default thereunder. W&T is not currently
accounting (and will not, through the Closing Time, hereafter agree to account)
for any royalties, or overriding royalties or other payments out of production,
on a basis (other than delivery in kind) less favorable to W&T than the value of
the proceeds received by W&T (calculated at the well) from sale of production,
and there are no situations where W&T is aware that a contingent liability may
exist to account on a basis less favorable to W&T than the basis on which W&T is
currently accounting.

                                      -16-

<PAGE>

                        (iv)    Except as set forth in Schedule 3.1(q)(iv), W&T
has not abandoned any wells (or removed any material items of equipment, except
those replaced by items of materially equal suitability) included in the
Material Oil and Gas Interests and identified on or considered in the generating
of the Reserve Report since the effective date of the Reserve Report.

                        (v)     Schedule 3.1(q)(v) sets forth a list of all of
the contracts to which W&T is a party providing for the transportation,
processing or sale of substantially all of the Hydrocarbons (the "Schedule
3.1(q)(v) Contracts"). W&T has made available to the Purchasers for their review
a true, correct and complete copy of each of the Schedule 3.1(q)(v) Contracts,
together with all material amendments, waivers or other changes to all such
documents. Except for the Schedule 3.1(q)(v) Contracts, W&T has no currently
existing contract, obligation, agreement, plan, arrangement, commitment or the
like (written or oral) relating to the transportation, sale, or processing of
Hydrocarbons. None of the Oil and Gas Interests is subject to any contractual or
other arrangement (A) whereby payment for production is or can be deferred for a
substantial period after the month in which such production is delivered (i.e.,
in the case of oil, not in excess of 60 days, and in the case of gas, not in
excess of 90 days) except by W&T's choice, or (B) whereby payments are made to
W&T other than by checks, drafts, wire transfer advises or other similar
writings, instruments or communications for the immediate payment of money. The
Schedule 3.1(q)(v) Contracts (A) may or may not be cancelable on 120 days (or
less) notice but are priced at market rates and indexes until termination and
(B) are bona fide arm's length transactions with third parties not affiliated
with W&T. W&T is presently receiving a price for production from (or
attributable to) each of the Oil and Gas Interests covered by the Schedule
3.1(q)(v) Contracts as computed in accordance with the terms of such contracts,
and is not having deliveries of production from such properties curtailed
substantially below such properties' delivery capacity by the purchasers or
transporters of the production. As of December 31, 2001, W&T had not, and, since
December 31, 2001, to W&T's knowledge, W&T has not, received prepayments for
oil, gas or other Hydrocarbons (A) that, except as set forth on Schedule
3.1(q)(v), were produced from the Oil & Gas Interests prior to the date hereof
(or the Closing Time, as applicable) that have not been satisfied from
Hydrocarbons produced prior to the date hereof (or the Closing Time, as
applicable) from such Oil & Gas Interests and (B) that are to be produced from
the Oil & Gas Interests after the date hereof (or the Closing Time, as
applicable). To W&T's actual knowledge, none of W&T's predecessors in title has
received prepayments for oil, gas or other Hydrocarbons (A) that were produced
from the Oil & Gas Interests prior to the date hereof (or the Closing Time, as
applicable) that have not been satisfied from Hydrocarbons produced prior to the
date hereof (or the Closing Time, as applicable) from such Oil & Gas Interests
and (B) that are to be produced from the Oil & Gas Interests after the date
hereof (or the Closing Time, as applicable). Except as set forth on Schedule
3.1(q)(v-a), (A) W&T has not, to its knowledge, prior to the date hereof, taken
more ("overproduced") or less ("underproduced") oil or gas from the lands
covered thereby (or pooled or unitized therewith) than its ownership interest in
such properties would entitle it to take and excepting that normal daily
operations of oil and gas production and sales by W&T and its partners results
in routine and ongoing overproduction and underproduction and (B) some of the
properties affected by the Schedule 3.1(q)(v) Contracts may be subject to a gas
balancing arrangement under which one or more third parties may take a portion
of the production attributable to such property without payment (or without full
payment) therefore as a result of

                                      -17-

<PAGE>

production having been taken from, or as a result of other actions or inactions
with respect to, other properties. None of the properties comprising the Oil and
Gas Interests is subject at the present time to any regulatory refund obligation
that would result in an expense or liability to W&T, and, to W&T's knowledge, no
facts exist which might cause the same to be imposed.

                        (vi)    W&T maintains its equipment, inventory,
improvements, fixtures, goods and other tangible personal property in good
repair, consistent with prudent industry standards. W&T has no reason to believe
that the amount that will be spent on maintenance, including capital
maintenance, will be materially greater in 2003 (after giving credit for
insurance proceeds), as compared to such expenditures in 2002 with respect to
properties which were owned in both periods (and excluding the assets of
Burlington).

                        (vii)   To the knowledge of W&T, having made appropriate
inquiries of the relevant senior W&T executives responsible for such matters,
the Material Oil and Gas Interests that are operated by W&T, and to the actual
knowledge of W&T, including the actual knowledge of the W&T Landman, those that
are not operated by W&T, (and properties unitized therewith) are being
maintained, operated and developed in a good and workmanlike manner, in
accordance with prudent industry standards and in conformity in all material
respects with all applicable laws and all rules, regulations and orders of all
duly constituted authorities having jurisdiction and in conformity with all oil,
gas and/or other mineral leases and other material contracts and agreements
forming a part of the Material Oil and Gas Interests; specifically in this
connection, to the knowledge of W&T, having made appropriate inquiries of the
relevant senior W&T executives responsible for such matters, none of the wells
that are operated by W&T, and to the actual knowledge of W&T, including the
actual knowledge of the W&T Landman, those that are not operated by W&T and
located on any lands covered by, or otherwise forming part of, the Material Oil
and Gas Interests (or properties unitized therewith) are or will be deviated
from the vertical more than the maximum permitted by applicable laws,
regulations, rules and orders, and such wells are, and will remain, as of the
Closing Time, bottomed under and producing from, with the well bores wholly
within, the lands covered by the Material Oil and Gas Interests (or in the case
of wells located on properties unitized therewith, such unitized properties). To
the knowledge of W&T, having made appropriate inquiries of the relevant senior
W&T executives responsible for such matters, there are no wells being drilled,
deepened, plugged back or reworked by W&T, or to the actual knowledge of W&T,
including the actual knowledge of the W&T Landman, by others, and no other
similar operations by W&T are being conducted, for which consent of other
interest owners is required and has not been obtained or which is not covered by
the non-consent provisions of the applicable operating agreement. There are no
proposals currently outstanding (whether made by W&T or, to W&T's knowledge, by
any other party) to drill, deepen, plug back, sidetrack, or rework wells or to
conduct any other similar operations, or to abandon any wells (nor are there any
such proposals which have been approved either by W&T or, to W&T's knowledge, by
any other party, with respect to which the operations covered thereby have not
been commenced), which involve an expenditure to W&T in excess of $10,000,000,
except as set forth in Schedule 3.1(q)(vii) or which would otherwise be outside
the normal course of W&T's business. To the knowledge of W&T, having made
appropriate inquiries of the relevant senior W&T executives responsible for such
matters, W&T has all governmental licenses and permits necessary to own and
operate the Material Oil and Gas

                                      -18-

<PAGE>

Interests that are operated by it and W&T has not received notice of any
violations or, to W&T's knowledge, possible violations, with respect to any such
licenses or permits.

                        (viii)  W&T represents that Schedule 3.1(q)(viii) is a
printout dated November 12, 2002, generated from the accounting records
maintained by and for W&T, that lists, among other things, all of the oil, gas
or other Hydrocarbon properties with respect to which W&T has received revenues
and/or paid expenses since 1996, and that such listing includes properties that
are currently active, properties that are inactive and properties that have been
sold or abandoned or have otherwise expired.

                        (ix)    W&T represents that Schedule 3.1(q)(ix) is a
printout dated November 12, 2002, generated from the accounting records
maintained by W&T for W&T Offshore, LLC, that lists, among other things, all of
the oil, gas or other Hydrocarbon properties with respect to which W&T Offshore,
LLC has received revenues and/or paid expenses since 1996, and that such listing
includes properties that are currently active, properties that are inactive and
properties that have been sold or abandoned or have otherwise expired.

                (r)     Gas and Oil Reserves. W&T has delivered to the Purchaser
Representative (as hereinafter defined) a copy of W&T's most recent Reserve
Report, as prepared by W&T's independent reserve engineers. W&T has no reason to
believe that the conclusions of such Reserve Report are not correct in all
material respects as of the effective date of such Reserve Report.

                (s)     Wells. Schedule 3.1(s-a) includes a complete and
accurate list of each oil or gas well owned by W&T included in its Reserve
Reports (each a "Reserve Report Well") and the production status, working
interest and operating interest of W&T therein. None of W&T's wells is currently
subject to a compliance order or other similar order of a governmental agency
having jurisdiction to plug and abandon such well prior to the actual expiration
of the lease of the property on which such well is situated except that the
wells on Schedule 3.1(s-b) are on leases that will require their abandonment in
an amount of time estimated to be within the next year. W&T has provided to the
Purchaser Representative a copy of a report of Twachtman Snyder & Byrd, Inc.
("Twachtman"), dated April 22, 1998, regarding the properties to be acquired by
the Burlington Agreement. In the opinion of W&T, the costs of plugging and
abandoning all of W&T's existing wells will be approximately $35,000,000, net to
W&T after salvage. W&T has no reason to believe that the conclusions of
Twachtman or of W&T are not correct in all material respects.

                (t)     Ordinary Course; No Material Adverse Change. Since
December 31, 2001, W&T, except as set forth on Schedule 3.1(t) or as explicitly
contemplated by this Agreement or any Schedule or Exhibit hereto, has conducted
its business in the ordinary course, has not incurred any material obligation,
absolute or contingent, or entered into any material transactions not in the
ordinary course of business, and, except as set forth on Schedule 3.1(t), has
not declared or paid any dividends or other distributions, tax or otherwise, on
its capital stock. Since December 31, 2001, there has been no event, occurrence,
development, change or effect that has had, individually or in the aggregate, a
W&T Material Adverse Effect.

                                      -19-

<PAGE>

Notwithstanding the foregoing, the parties agree that (i) upon execution of the
Bethea Redemption Agreement (attached hereto as Exhibit D), W&T shall declare a
dividend in the amount of $11,400,000 payable to stockholders of record as of
the date that the Bethea Redemption Agreement is executed and (ii) W&T shall pay
a bonus in respect of 2002 to Tracy W. Krohn in the amount of $250,000.

                (u)     Agent's Fees. Except for Jefferies & Company, Inc.,
whose fees are set forth on Schedule 3.1(u) and will be paid by W&T, W&T has not
retained a finder or broker in connection with the transactions contemplated by
this Agreement nor is W&T obligated to pay any other fees or expenses (including
of Jefferies & Company, Inc.) of a finder.

                (v)     W&T Expenses. There are no expenses reimbursed, or
reimbursable, by W&T to any of its employees, consultants, officers, directors,
shareholders, agents or representatives other than reasonable, ordinary and
properly-vouchered expenses incurred in the performance of services to W&T in
accordance with reasonable policies as in effect from time to time.

                (w)     Bethea Disclosure. At the time of the closing of the
transactions contemplated by the Bethea Redemption Agreement, W&T will have
fully provided the Bethea Group with all the information that the Bethea Group
will have reasonably requested in deciding whether to sell its equity interest
in W&T and W&T Offshore LLC. The information with respect to W&T provided to the
Bethea Group upon such requests did not, or will not, as the case may be,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements and
writings contained therein not false or misleading in the light of the
circumstances under which they were made. The term "Bethea Group" shall mean
William C. Bethea, individually ("Bethea"), Claudette Bethea, individually, and
William C. Bethea, as Trustee for each of the separate irrevocable trusts
established for the benefit of each of Claude Bethea, James Bethea, Michael
Bethea, William Bethea, II, and Lori Reixach (the "Bethea Trusts").

                (x)     Burlington Disclosure. W&T has made available to the
Purchasers true, accurate and complete copies of the Agreement and Plan of
Merger, dated as of May 7, 2002 (the "Merger Agreement"), by and among
Burlington Resources Offshore, Inc., The Louisiana Land and Exploration Company,
LLOXY Holdings, Inc. and W&T Offshore, Inc. (including any amendments to date
thereof) and all agreements ancillary to the Merger Agreement (collectively, the
"Burlington Agreement").

                (y)     Disclosure. The information with respect to W&T
heretofore provided and to be provided, by W&T pursuant to this Agreement,
including the Schedules and Exhibits hereto and the Burlington Agreement, and
each of the agreements, documents, certificates and writings to be delivered to
the Purchasers or their representatives at or prior to the Closing, does not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or therein or necessary in order to
make the statements and writings contained herein and therein not false or
misleading in the light of the circumstances under which they were made;
provided, however, that to the extent the foregoing representation regards

                                      -20-

<PAGE>

a statement or omission by any party other than W&T such representation is made
subject to the knowledge of W&T. To the knowledge of W&T, there is no fact that
would have a W&T Material Adverse Effect that has not been set forth herein or
otherwise disclosed in writing to the Purchasers.

                (z)     Registration Rights. Except as may be provided in this
Agreement or in the Stockholders' Agreement, W&T is not under any obligation to
register any of its currently outstanding securities or any of its securities
that may hereafter be issued.

                (aa)    Credit Agreement. W&T has no reason to believe that it
will not be able to make commercially reasonable arrangements with its lenders
in order to satisfy the condition set forth in Section 5.12.

                (bb)    Offering. Assuming the accuracy of the Purchasers'
representations and warranties in Section 4.1, the offer and issuance of the
Series A Preferred Stock to be acquired by them as contemplated by this
Agreement, are not subject to the registration requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and neither W&T nor anyone
acting on its behalf has taken or will take any action that would cause such
registration requirements to be applicable.

                (cc)    Stockholder Equity. As of the Closing Time, after giving
effect to the consummation of the transactions contemplated hereunder W&T's
total stockholder equity shall equal at least $180,000,000, calculated without
giving effect to any adjustment to the balance sheet of W&T resulting from the
change to the accrual method of accounting or the transactions contemplated by
the Burlington Agreement. W&T estimates, in good faith, that the reduction in
total stockholder equity resulting from the change to the accrual method of
accounting for tax purposes will not exceed $$15,000,000 in respect of the next
four tax periods.

                (dd)    W&T Offshore LLC. Attached hereto as Schedule 3.1(dd) is
a statement of the assets owned by W&T Offshore LLC as of September 30, 2002.

        3.2     Representations and Warranties Related to the Burlington Assets.

                (a)     W&T has made available to the Purchasers for their
review true, correct and complete copies of the Burlington Agreement. W&T is not
aware of a breach of any of the representations, warranties, covenants, terms or
provisions of the Burlington Agreement. Except as set forth in Schedule 3.2(a),
W&T has satisfied all of its conditions necessary to consummate the transactions
contemplated by the Burlington Agreement and has no reason to believe that
Burlington will not satisfy its conditions on or prior to February 28, 2003. W&T
makes no additional representations and with respect to the assets and
liabilities acquired from Burlington Resources Offshore, Inc.

                (b)     The consummation of the Burlington Agreement will not
involve the issuance of any capital stock by W&T.

                                      -21-

<PAGE>

                (c)     Upon consummation of the transactions contemplated by
the Burlington Agreement, all issued and outstanding shares of capital stock or
other equity ownership interests of W&T Energy I LLC, W&T Energy II LLC and W&T
Energy III LLC shall have been duly authorized and validly issued and shall be
fully paid, nonassessable and free of preemptive rights and shall be owned by
W&T or a direct or indirect wholly-owned subsidiary of W&T, free and clear of
all Liens.

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

        Each Purchaser, severally but not jointly, represents and warrants to
W&T (as to itself only) as follows:

        4.1     Investment Representations. (i) It is an "accredited investor"
as that term is defined in Rule 501(a) promulgated under the Securities Act,
(ii) it has the requisite knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of an investment in
W&T, (iii) it is acquiring the Series A Preferred Stock and, upon conversion of
the Series A Preferred Stock, such Purchaser will acquire the Conversion Shares
(as hereinafter defined), for investment for its own account and not with a view
to, or for resale in connection with, any distribution thereof, except pursuant
to sales registered or exempted under the Securities Act; provided, however,
that by making the representations herein, it does not agree to hold any shares
of the Series A Preferred Stock or the Conversion Shares for any minimum or
other specific term and reserves the right to dispose of shares of the Series A
Preferred Stock or the Conversion Shares at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities Act
and in accordance with the terms of the Stockholders' Agreement, and (iv) it
understands that the shares of Series A Preferred Stock and the Conversion
Shares, if any, to be acquired by it have not been registered under the
Securities Act and it will not offer, sell, transfer, pledge, hypothecate or
otherwise dispose of any shares of the Series A Preferred Stock or Conversion
Shares, if any, except pursuant to an exemption from, or otherwise in a
transaction not subject to, the registration requirements of the Securities Act
or pursuant to an effective registration statement under the Securities Act,
and, in each case, in accordance with any applicable state securities or "blue
sky" laws.

        4.2     Authorization; Binding Obligations. (i) The person executing
this Agreement on behalf of such Purchaser has the appropriate authority to act
on behalf of such Purchaser and (ii) this Agreement has been duly authorized,
executed and delivered by such Purchaser and constitutes a legal, valid and
binding agreement of such Purchaser, enforceable against such Purchaser in
accordance with its terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general principles of equity.

        4.3     Compliance with Instruments, etc. It is not in material breach
or violation of, or in default under, any term or provision of (i) its
organizational and governing documents, (ii) any indenture, mortgage, deed of
trust, voting trust agreement, shareholders agreement, note

                                      -22-

<PAGE>

agreement or other agreement or instrument to which it is a party or by which it
is or may be bound or to which any of its property is or may be subject or (iii)
any statute, judgment, decree, order, rule or regulation applicable to such
Purchaser or of any arbitrator, court, regulatory body, administrative agency or
any other governmental agency or body, domestic or foreign, having jurisdiction
over such Purchaser or any of its activities or properties.

        4.4     Sophistication; Due Diligence. (i) It is a sophisticated and
professional investor with extensive experience and expertise in making
investments similar to the Series A Preferred Stock. It has been represented in
its negotiations with W&T by attorneys, accountants and other financial advisors
(including advisors expert in the field of oil and gas investments), and it and
its advisors had access to all premises, assets, documentation and information
necessary to form an independent determination as to the value of W&T's assets,
liabilities and the financial condition, results of operations, business and
prospects of W&T and the value of the Series A Preferred Stock. It and its
advisors have had the opportunity to question the management of W&T as to all
matters that it and its advisors deemed material in making its decision to
invest in the Series A Preferred Stock, and it has received satisfactory answers
to all such questions. The transactions contemplated by this Agreement were
jointly structured by the Purchasers, on the one hand, and W&T, on the other
hand.

        4.5     Agent's Fees. It has not retained a finder or broker in
connection with the transactions contemplated by this Agreement.

                                    ARTICLE V

                   CONDITIONS TO OBLIGATIONS OF THE PURCHASERS

        The obligations of the Purchasers under this Agreement are subject to
the fulfillment to their reasonable satisfaction on or prior to the Closing Time
of each of the following conditions:

        5.1     Representations and Warranties Correct. The representations and
warranties of W&T in Article III shall be true and correct in all material
respects on and as of the date hereof, and shall be true and correct in all
material respects on and as of the Closing Time with the same force and effect
as if they had been made on and as of the Closing Time.

        5.2     Performance. All covenants, agreements and conditions contained
in this Agreement to be performed or complied with on or prior to the Closing
Time by W&T shall have been performed or complied with by W&T on or prior to the
Closing Time.

        5.3     Compliance Certificate. W&T shall have delivered to the
Purchasers a certificate of the chief executive officer of W&T, dated the
Closing Time, certifying to the fulfillment of the conditions specified in
Sections 5.1, 5.2 and 5.5 of this Agreement and such other matters as the
Purchasers shall reasonably request.

        5.4     No Impediments. No statute, judgment, order, decree of any
court, regulatory body, administrative agency or any other governmental agency
or body shall be in effect which

                                      -23-

<PAGE>

would impose any material limitation on the ability of the Purchasers to
exercise full rights of ownership of the Series A Preferred Stock.

        5.5     No Material Adverse Change. Since December 31, 2001, except as
expressly provided for or contemplated by this Agreement (or any Schedule or
exhibit hereto), there shall have been no event, occurrence, development, change
or effect that, in any one case or in the aggregate, has had a W&T Material
Adverse Effect.

        5.6     Legal Investment. At the time of the Closing, the acquisition by
the Purchasers of the Series A Preferred Stock to be acquired by them hereunder
shall, be legally permitted by all statutes, rules and regulations to which the
Purchasers and W&T are subject.

        5.7     Qualifications. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body that are now required in
connection with the lawful issuance and sale of the Series A Preferred Stock
pursuant to this Agreement shall have been duly obtained and shall be in full
force and effect on and as of the Closing Time.

        5.8     Employment Agreement. W&T shall have in effect a five-year
employment agreement, containing non-competition, non-solicitation and
confidentiality provisions, with Tracy W. Krohn, in the form attached hereto as
Exhibit C.

        5.9     Issuance Taxes. All Taxes imposed by law in connection with the
initial issuance, sale and delivery of the Series A Preferred Stock shall have
been fully paid by W&T, and all laws imposing such Taxes shall have been fully
complied with.

        5.10    Stockholders' Agreement. W&T and each of its shareholders shall
have executed and delivered the Stockholders' Agreement in the form attached
hereto as Exhibit A.

        5.11    Directors. Messrs. James L. Luikart and Stuart B. Katz shall
have been elected to the Board of Directors of W&T effective on the Closing
Time.

        5.12    Credit Agreement. W&T shall have made arrangements under the
Credit Agreement with the lenders parties thereto and Toronto Dominion Bank, as
Administrative Agent (the "Credit Agreement"), in form and substance reasonably
satisfactory to the Purchasers, to permit borrowing of up to $180.0 million
thereunder, contingent upon the closing of the transactions contemplated by the
Burlington Agreement, or $130.0 million, not contingent upon the closing of the
transactions contemplated by the Burlington Agreement.

        5.13    Bethea Agreements.

                (a)     Bethea and each of the Bethea Trusts shall have executed
and delivered the Bethea Redemption Agreement and ancillary documentation, in
form and substance satisfactory to the Purchasers, providing for the redemption
by W&T of 300 shares of W&T Common Stock owned by Bethea and the Bethea Trusts.

                                      -24-

<PAGE>

                (b)     Bethea and each of the Bethea Trusts shall have entered
into the Bethea Purchase Agreement (a form of which is attached hereto as
Exhibit E) and ancillary documentation, in form and substance satisfactory to
the Purchasers, providing for the sale by Bethea and the Bethea Trusts to the
Purchasers of 1,000 shares of W&T Common Stock owned by Bethea and the Bethea
Trusts.

                (c)     The transactions contemplated by the Bethea Redemption
Agreement and the Bethea Purchase Agreement shall have been consummated prior to
the Closing in a manner satisfactory to the Purchasers.

        5.14    Burlington Transaction. The Burlington Agreement shall be in
full force and effect and shall not have been amended or modified in any manner
materially adverse to W&T.

        5.15    Proceedings and Other Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and such other documents contemplated hereby and thereby shall have been taken
by W&T, and the Purchasers shall have received such other documents and
instruments in form and substance reasonably satisfactory to them and their
counsel, as to such other matters incident to the transactions contemplated
hereby as they may reasonably request.

        5.16    Opinions of Counsel. The Purchasers shall have received the
opinion of Adams & Reese, L.L.P., counsel for W&T, dated the Closing Time,
substantially in the form attached hereto as Exhibit F. The Purchasers shall
have received an opinion of Nevada counsel in form and substance satisfactory to
the Purchasers.

        5.17    Consents, Waivers, Etc. Prior to the Closing, W&T shall have
obtained all consents or waivers, if any, required by the Purchasers necessary
to execute and deliver this Agreement and to issue the Series A Preferred Stock
and carry out the transactions contemplated hereby, and all such consents and
waivers shall be in full force and effect.

        5.18    Termination of Stockholders' Agreement. Prior to the Closing,
the Stockholders' Agreement, dated December 30, 1989, between W&T and the
stockholders signatory thereto (the "Old Stockholders' Agreement") shall have
been terminated and no provision of the Old Stockholders' Agreement shall
survive and be of further force and effect.

        5.19    Shareholder Loans. All outstanding loans made by W&T to its
stockholders, as described under Note 2 - "Related Party Transactions" to the
W&T Financial Statements for fiscal years 2001 and 2000, shall be repaid in
their entirety prior to the Closing, except that the $300,000 loan to William
Bethea reflected on the W&T balance sheet will be written off upon the closing
of the Bethea Redemption Agreement.

        5.20    LLC Purchase Agreement. W&T, Tracy W. Krohn and Ann K. Freel
shall have entered into the LLC Purchase Agreement (attached hereto as Exhibit
I) providing for the sale by W&T of its ownership interest in W&T Offshore LLC
to Tracy W. Krohn and Ann K. Freel.

                                      -25-

<PAGE>

        5.21    Other Matters. W&T shall have delivered to the Purchasers (i)
certificates (in definitive form) in the denominations specified by the
respective Purchasers and registered in their respective names (or in the names
of their respective nominees) representing the Series A Preferred Stock acquired
by them, and (ii) the following: (A) a certified copy of W&T's articles of
incorporation and all amendments thereto, appropriately authenticated; (B) a
copy of W&T's By-laws, as amended to date, certified as being true by a
principal officer of W & T; and (C) a certificate of good standing of W&T
certified as of a recent date by the Secretary of State of the State of Nevada,
and from every jurisdiction in which W&T is qualified to do business.

                                   ARTICLE VI

                        CONDITIONS TO OBLIGATIONS OF W&T

        W&T's obligations under this Agreement are subject to the fulfillment to
its reasonable satisfaction on or prior to the Closing Time of each of the
following conditions:

        6.1     Representations and Warranties Correct. The representations and
warranties of the Purchasers in Article IV shall be true and correct in all
material respects on and as of the date hereof and shall be true and correct in
all material respects on and as of the Closing Time with the same force and
effect as if they had been made on and as of the Closing Time.

        6.2     Legal Investment. At the time of the Closing, the acquisition by
the Purchasers of the Series A Preferred Stock to be acquired by them hereunder
shall be legally permitted by all statutes, rules and regulations to which the
Purchasers and W&T are subject.

        6.3     Presentation of Common Stock Certificates. W&T shall have
received certificates representing the Purchasers' 1,000 shares of W&T Common
Stock, executed in blank.

        6.4     Performance. All covenants, agreements and conditions contained
in this Agreement to be performed or complied with on or prior to the Closing
Time by the Purchasers shall have been performed or complied with in all
respects on or prior to the Closing Time.

        6.5     Bethea Agreements. Bethea and the Bethea Trusts shall have
executed and delivered the Bethea Redemption Agreement and the Bethea Purchase
Agreement.

        6.6     Agreement of Toronto Dominion. Toronto Dominion, on behalf of
the entire bank lending group, shall have consented to the transactions
contemplated by this Agreement including without limitation the transactions
contemplated by the Bethea Redemption Agreement.

                                      -26-

<PAGE>

                                   ARTICLE VII

                                COVENANTS OF W&T

        For so long as the FS Stockholders are the holders, in the aggregate, of
at least 5% of the Total Voting Power of W&T or in the case of Sections 7.1
through 7.6, Sections 7.8 through 7.11 and Section 7.13 until the closing of a
Qualified IPO:

        7.1.1   Reports. W&T will deliver to the Purchasers Representative for
delivery to the Purchasers:

                (a)     Financial Information.

                        (i)     within 30 days after the end of each of the
twelve monthly accounting periods in each fiscal year (or when furnished to the
Board of Directors of W&T, if earlier), unaudited consolidated and consolidating
statements of income and retained earnings and cash flows of W&T and its
subsidiaries, if any, for each monthly period and for the period from the
beginning of such fiscal year to the end of such monthly period, together with
consolidated and consolidating balance sheets of W&T and its subsidiaries, if
any, as at the end of such monthly period, setting forth in each case
comparisons to budget and to corresponding periods in the preceding fiscal year
(on a pro forma basis, if necessary);

                        (ii)    within 120 days after the end of each fiscal
year, consolidated and consolidating statements of income and retained earnings
and cash flows of W&T and its subsidiaries, if any, for the period from the
beginning of such fiscal year to the end of such fiscal year, and consolidated
and consolidating balance sheets as at the end of such fiscal year, setting
forth in each case in comparative form corresponding figures for the preceding
fiscal year, accompanied by:

                                (A)     a certificate of the chief financial
officer of W&T, addressed to each Purchaser, stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default (each, as defined in the Credit Agreement) (an "Event of
Noncompliance"), except as specified in such certificate; and

                                (B)     an unqualified report on the
consolidated statements of Ernst & Young LLP or another public accounting firm
currently known as one of the "Big Four" (an "Approved Accounting Firm"); for
purposes of this Section, a report including a "going concern" paragraph shall
not be considered "unqualified"; and

                        (iii)   within 60 days after the end of each fiscal
year, preliminary and unaudited (A) consolidated and consolidating statements of
income and retained earnings and cash flows of W&T and its subsidiaries, if any,
for the period from the beginning of such fiscal year to the end of such fiscal
year, and (B) consolidated and consolidating balance sheets as at the end of
such fiscal year, setting forth in each case in comparative form corresponding
figures for the preceding fiscal year;

                                      -27-

<PAGE>

                        (iv)    within ten days after transmission or receipt
thereof, copies of all financial statements, reports and other communications
which W&T sends to its stockholders, copies of all press releases and other
statements made generally available by W&T to the public concerning material
developments in the business of W&T and its subsidiaries, if any, and copies of
all material communications sent to and received from any lender to W&T or any
subsidiary of W & T; and

                        (v)     with reasonable promptness such other
information and financial data concerning W&T and its subsidiaries, if any, as a
Purchaser may reasonably request, including, without limitation, information and
financial data with respect to the use of proceeds by W&T from the issuance of
the Series A Preferred Stock to the Purchasers.

                (b)     Notice of Adverse Change. Promptly after the occurrence
thereof (but in any event within seven days after such occurrence is known to
W&T) notice of any condition or event which constitutes, or the occurrence of,
any of the following:

                        (i)     any Event of Noncompliance;

                        (ii)    the institution or threatened institution of an
action, suit or proceeding against W&T or any of its subsidiaries by or before
any court, regulatory authority, administrative agency or any other governmental
agency or body, domestic or foreign, which, if adversely decided, could have a
W&T Material Adverse Effect; or

                        (iii)   any information relating to any event,
development or circumstance with respect to or affecting W&T or any of its
subsidiaries which, in W&T's reasonable judgment, could have a W&T Material
Adverse Effect or materially and adversely affect the ability of W&T to perform
its obligations under this Agreement and the transactions contemplated hereby.
Any notice given under this Section 7.1(b)(iii) shall specify the nature and
period of existence of the condition, event, information, development or
circumstance, the anticipated effect thereof and what actions W&T has taken
and/or proposes to take with respect thereto.

        7.1.2   Reports to Purchasers Representative

                (a)     W&T will deliver to the Purchasers Representative:

                        (i)     the management letter of the Approved Accounting
Firm, if issued;

                        (ii)    promptly upon receipt thereof, any additional
reports or other detailed information concerning significant aspects of the
operations and condition, financial or otherwise, of W&T and its subsidiaries,
if any, given to W&T by its independent accountants;

                        (iii)   promptly upon receipt thereof, any reserve
reports or reports describing estimated reserves; and

                                      -28-

<PAGE>

                        (iv)    within 60 days following the Closing and at
least 30 days prior to the end of each fiscal year thereafter, a detailed annual
operating budget and operating plan (which shall include a detailed capital
expenditures budget) for W&T and any subsidiaries for the balance of fiscal
2002. Such budgets shall be prepared on a monthly basis, displaying consolidated
statements of anticipated income and retained earnings, consolidated statements
of anticipated cash flow and projected consolidated balance sheets, setting
forth in each case the assumptions (which assumptions and projections shall
represent and be based upon the good faith best judgment in respect thereof of
the chief executive officer and the chief financial officer of W&T) behind the
projections contained in such financial statements, and which budgets shall have
been approved by the Board of Directors of W&T for fiscal 2002 or prior to the
beginning of each twelve-month period thereafter to which they pertain and,
promptly upon preparation thereof, any other budgets that W&T may prepare and
any revisions of such annual or other budgets.

                (b)     The Company shall provide brief summaries of the
foregoing information to the Purchasers Representative for delivery to the Other
Investors. The Company may exclude from such summaries any confidential
information which could impair the Company's competitive position.

        7.2     Accounts and Records. W&T shall keep true records and books of
account in which entries will be made of all dealings or transactions in
relation to the business and affairs of W&T and its subsidiaries, if any, in
accordance with good accounting practice.

        7.3     Inspection. W&T shall grant the Purchasers the right, which the
Purchasers may exercise through their designated representative, FS Private
Investments III LLC, or any of their respective officers, employees,
representatives or such other person as the Purchasers may designate (the
"Purchaser Representative"), upon five business days' prior notice and during
normal business hours as often as such Purchaser Representative may request, to
visit and inspect the offices and properties of W&T or any of its subsidiaries,
and (i) to make extracts or copies of the books, accounts and records of W&T or
any of its subsidiaries, and (ii) to discuss the affairs, finances and accounts
of W&T or any of its subsidiaries, with W&T and officers of W&T and its
independent public accountants. The Purchaser Representative shall have the
right to participate in the semi-annual reserve reviews conducted for the
benefit of W&T's banks. W&T will furnish the Purchaser Representative with such
financial and operating data and other information with respect to the business
and properties of W&T as the Purchaser Representative may, from time to time,
reasonably request. W&T acknowledges that the rights set forth in this Section
7.3 are essential to the Purchasers as a means of evaluating their investment in
W&T and agree that in no event will they make any claim of any kind as a result
of the exercise by the Purchasers of such rights and hereby waive any and all
rights it may have to make such claims. The Purchaser Representative will not be
allowed to copy geological or geophysical data, but will be allowed to inspect
such data at W&T's offices; provided, that, the Purchaser Representative shall
not be entitled to inspect such data if any employee, member or Affiliate of an
FS Management Company serves on the board of directors (or similar governing
body) of a Competing Person; provided, however, that Ascent Energy, Inc. shall
not be a Competing Person for purposes of this Section 7.3. The Purchaser
Representative shall not disclose to the

                                      -29-

<PAGE>

Purchasers any specific geological or geophysical data (that is not, or has not
become publicly available), but may present summary information about the
classification and amount of W&T's reserves. The rights of the Purchasers and
the Purchaser Representative under this Section 7.3 shall also be in effect from
the date hereof through the Closing Time. Notwithstanding any other provision of
this Agreement and the Stockholders' Agreement, the rights of the Purchasers and
the Purchaser Representative under this Section 7.3 shall be in addition to, and
not in lieu of, any of the rights granted to the Purchasers and their
representatives under and pursuant to the Stockholders' Agreement, including,
without limitation, Article IV and Section 5.06 thereof.

        7.4     Independent Accountants. W&T will retain an Approved Accounting
Firm to audit W&T's financial statements at the end of each fiscal year. If the
services of the Approved Accounting Firm shall be terminated, W&T shall promptly
notify the Purchasers of the occurrence of such event and shall promptly
thereafter request the firm of independent public accountants whose services are
terminated to deliver to the Purchasers a letter of such firm setting forth its
understanding as to the reasons for the termination of its services and whether
there were, during the two most recent fiscal years or such period during which
said firm had been retained by W&T, any disagreements between it and W&T on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure. In its notice, W&T shall state whether the change
of accountants was recommended or approved by the Board of Directors of W&T or
any committee thereof. In the event of such termination, W&T will promptly
thereafter engage another Approved Accounting Firm approved by the Purchasers
which approval shall not be unreasonably withheld.

        7.5     Further Assurances. From time to time, W&T shall execute and
deliver to the Purchaser Representative such documents and take such actions as
may be reasonably requested by the Purchaser Representative to implement and
effectuate the terms and provisions of this Agreement.

        7.6     Operation of Business. Prior to the Closing, unless otherwise
expressly contemplated by Schedule 7.6 and this Agreement or consented to in
writing by the Purchasers, W&T shall (i) operate in the ordinary course of
business, consistent with past custom and practice and in accordance with
applicable laws; (ii) preserve in all material respects its goodwill and
business organization, maintain its rights and franchises, use its commercially
reasonable efforts to retain the services of its principal officers and key
employees and maintain its relationships with its principal lessors, licensors,
suppliers, contractors, distributors, customers and others having material
business relationships with it; (iii) maintain and keep its properties and
assets in as good repair and condition as at present, ordinary wear and tear
excepted; and (iv) keep in full force and effect insurance comparable in amount
and scope of coverage to that currently maintained.

        7.7     Notice of Adverse Change. W&T shall deliver to the Purchasers
promptly after the occurrence thereof (but in any event within seven days after
such occurrence is known to W&T) notice of any condition or event that
constitutes, or the occurrence of, any of the following: (a) the institution or
threatened institution of an action, suit or proceeding against W&T or any of
its subsidiaries by or before any court, regulatory authority, administrative

                                      -30-

<PAGE>

agency or any other governmental agency or body, domestic or foreign, which, if
adversely decided, could have a W&T Material Adverse Effect; or (b) any
information relating to any event, development or circumstance with respect to
or affecting W&T or any of its subsidiaries which, in W&T's reasonable judgment,
could have a W&T Material Adverse Effect or materially and adversely affect the
ability of W&T to perform its obligations under this Agreement and the
transactions contemplated hereby. Any notice given under this Section 7.7 shall
specify the nature and period of existence of the condition, event, information,
development or circumstance, the anticipated effect thereof and what actions W&T
has taken and/or proposes to take with respect thereto. Notwithstanding the
foregoing, if, following the closing of a Qualified IPO, delivery of a notice
required to be given under this Section 7.7 would, in the opinion of counsel to
W&T, require W&T to provide additional material public disclosure under federal
or state securities law in excess of the public disclosure that would be
required under federal or state securities laws had such notice not been given,
then W&T shall not be required to give such notice.

        7.8     Certain Pre-Closing Tax Matters. Except as expressly
contemplated by this Agreement, without prior notice to the Purchasers, W&T
shall not make or change any election, file any amended Tax Return, enter into
any closing agreement, settle any Tax claim or assessment relating to W&T,
surrender any right to claim a refund of Taxes, consent to any extension or
waiver of the limitation period applicable to any Tax claim or assessment
relating to W&T, fail to timely file any Tax Return, take a position on a Tax
Return not in keeping with prior practice or take any other similar action, or
omit to take any action relating to the filing of any Tax Return or the payment
of any Tax, if such election, adoption, change, amendment, agreement,
settlement, surrender, consent or other action or omission could have the effect
of increasing the present or future tax liability or decreasing any present or
future tax asset of W&T, W&T or the Purchasers. The Purchasers acknowledge and
agree that W&T will allow or cause its Subchapter "S" election status to lapse
at or prior to the Closing.

        7.9     Additional Covenants. Except as expressly contemplated by
Schedule 7.9 and this Agreement or otherwise consented to in writing by the
Purchasers, from the date hereof until the Closing Time, W&T shall not:

                (a)     (i) increase the compensation payable to any of its
directors, officers or employees, except for increases in salary, wages or
bonuses payable to non-managerial employees in the ordinary course of business;
or (ii) grant any severance or termination pay to, or enter into or modify any
employment or severance agreement with, any of its directors, officers or
employees, except as may be required by any settlement of pending litigation; or
(iii) adopt or amend any employee benefit plan or arrangement, except as may be
required by any settlement of pending litigation or except as may be required by
applicable law;

                (b)     declare, set aside or pay any dividend on, or making
other distributions in respect of, any of its capital stock;

                (c)     (i) redeem, repurchase or otherwise reacquire any shares
of its capital stock or any securities or obligations convertible into or
exercisable or exchangeable for any

                                      -31-

<PAGE>

shares of its capital stock, or any options, warrants or conversion or other
rights to acquire any shares of its capital stock or any such securities or
obligations; (ii) effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its capital stock;

                (d)     (i) issue, deliver, award, grant or sell, or authorize
or propose the issuance, delivery, award, grant or sale of, any shares of any
class of its capital or other equity securities, any securities or obligations
directly or indirectly convertible into or exercisable or exchangeable for any
such shares, or any rights (including, without limitation, stock appreciation or
stock depreciation rights), warrants or options to acquire, any such shares or
securities or any rights, warrants or options directly or indirectly to acquire
any such shares or securities; or (ii) amend or otherwise modify the terms of
any such securities, obligations, rights, warrants or options;

                (e)     acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or agree
to acquire all or substantially all assets of any other person;

                (f)     sell, lease, license, exchange, mortgage, pledge,
transfer, abandon or otherwise dispose of, or agree to sell, lease, exchange,
mortgage, pledge, transfer or otherwise dispose of, any of its assets (tangible
or intangible including its W&T Intellectual Property), except for sales of
inventory and other dispositions or abandonments of assets in the ordinary
course of business;

                (g)     adopt any amendments to the Articles of Incorporation or
By-laws (provided, however, W&T may (i) amend and restate its Articles of
Incorporation to correspond to Exhibit B and (ii) amend its By-laws to
correspond to Exhibit K);

                (h)     change any of its methods of accounting in effect at
December 31, 2001, except as may be required by law or GAAP;

                (i)     pay any of its long-term debt otherwise than in
accordance with its terms, or incur any obligation for borrowed money, whether
or not evidenced by a note, bond, debenture or similar instrument, other than
(i) indebtedness (including its reimbursement obligations under letters of
credit and sight drafts) incurred in the ordinary course of business under its
existing loan agreements or under any refinancing, renewal or refunding thereof,
and (ii) trade payables incurred in the ordinary course of business;

                (j)     take any action that would or would reasonably be
expected to result in any of its representations and warranties set forth in
this Agreement being untrue; or

                (k)     agree in writing or otherwise to do any of the
foregoing.

        7.10    Burlington Transaction. The Burlington Agreement shall not be
amended or modified in any manner adverse to W&T without the prior written
consent of FS Private

                                      -32-

<PAGE>

Investments III LLC. W&T shall deliver to FS Private Investments III LLC
promptly upon the occurrence thereof, notice of any proposed amendment or
modification to the Burlington Agreement, or of any information relating to any
material event, development or circumstance with respect to or affecting the
Burlington Agreement, or the ability of any party thereto to perform its
obligations under the Burlington Agreement or consummate the transactions
contemplated thereby.

        7.11    Interim Financials. Not later than five business days prior to
the Closing Time, W&T shall provide to the Purchasers a true, correct and
complete copy of its most recent financial statements (on a consolidated and
consolidating basis) which have been prepared in accordance with GAAP
consistently applied, and which fairly present the financial position of W&T as
of the dates thereof and the results of its consolidated operations and cash
flows for the periods then ended.

        7.12    Long-Term Incentive Compensation Plan. The aggregate number of
shares of W&T Common Stock issued pursuant to W&T's existing Long-Term Incentive
Compensation Plan shall not exceed 5% of the W&T Common Stock on a Fully Diluted
Basis.

        7.13    Reincorporation in Delaware. W&T shall exercise its best efforts
to take all actions necessary to cause W&T to be reincorporated in Delaware on
or prior to February 28, 2003.

        7.14    By-laws. The By-laws of W&T shall be amended in the form
attached hereto as Exhibit K. As part of such reincorporation the Company shall
revise the Articles of Incorporation to comply with Delaware law and utilize the
right granted under Delaware business corporation law to incorporate by
reference the terms and provisions of the Stockholders' Agreement.

        7.15    Key Man Life Insurance. The Company shall use commercially
reasonable efforts to help FS Private Investments III LLC obtain a seven-year
(or longer) twenty million dollar ($20,000,000) renewable "key man" insurance
policy on the life of Tracy W. Krohn, naming FS Private Investments III LLC as
beneficiary.

        7.16    Subchapter "S". If a Stockholder of W&T receives any refund of
Taxes as a result of any successful challenge to W&T's status as a Subchapter
"S" corporation within the meaning of Section 1361 et seq. of the Code
(including, but not limited to, any refund of Taxes as a result of any
successful challenge by a taxing authority of W&T's status as a Subchapter "S"
corporation) prior to the Closing Date, then, such stockholder shall pay to W&T
the amount of such refund (together with any interest thereon actually received
by the Stockholder) within five days of receipt thereof. For purposes of this
covenant, any credit against other Taxes of a stockholder shall be treated, upon
the filing of a tax return claiming such credit, as a refund of Taxes paid on
account of W&T's status as a Subchapter "S" corporation.

                                      -33-

<PAGE>

                                  ARTICLE VIII

                               REGISTRATION RIGHTS

        8.1     Restrictive Legend. Any certificates representing the Series A
Preferred Stock or the Conversion Shares and any other securities issued in
respect of such securities upon any split, dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend in the following form (in addition to any legend required under
applicable state securities laws):

                "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR ANY
                STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD
                OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE
                REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE
                ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
                OPINION OF COUNSEL REASONABLY SATISFACTORY TO W&T
                OFFSHORE, INC., THAT SUCH REGISTRATION IS NOT
                REQUIRED."

        8.2     Certain Definitions. As used in this Article VIII, the following
terms shall have the following respective meanings:

        "Holders" shall mean the holders of Registrable Securities.

        "Initiating Holders" shall mean any persons who in the aggregate are
holders of at least 25% of the Registrable Securities.

        "IPO" shall mean the first sale of equity securities by W&T pursuant to
a registration statement under the Securities Act.

        "Registrable Securities" shall mean (i) the Conversion Shares (ii) the
Common Stock held by Jefferies & Company, Inc. and (iii) any other securities
issued in respect of such Conversion Shares or Common Stock upon any split,
dividend, recapitalization, merger, consolidation or similar event; provided,
however, that Registrable Securities shall not include any securities that have
previously been registered or that have been sold to the public either pursuant
to a registration statement or under Rule 144 promulgated under the Securities
Act, or that have been sold in a private transaction in which the transferor's
rights under this Agreement are not assigned.

        The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

                                      -34-

<PAGE>

        "Registration Expenses" shall mean all expenses incurred by W&T in
compliance with Sections 8.3 and 8.4, including, without limitation, all
registration and filing fees (including with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and the NASD
Regulation, Inc.), printing expenses, fees and disbursements of counsel for W&T,
blue sky fees and expenses (including fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications), fees and disbursements
of all independent certified public accountants of W&T (including the expenses
of any special audits and "comfort" letters required by or incident to such
performance), fees and expenses incurred in connection with the listing of the
securities on a securities exchange or quotation system, and rating agency fees,
except for Selling Expenses.

        "Restricted Securities" shall mean the securities of W&T required to
bear or bearing the legend set forth in Section 8.1.

        "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.

        "Underwritten Offering" shall mean the offering and sale of Registrable
Securities in a registration pursuant to a firm commitment underwriting to an
underwriter at a fixed price for reoffering or pursuant to agency or best
efforts arrangements with a placement agent or underwriter.

        8.3     Requested Registration.

                (a)     Requests for Registration. At any time after six months
from the date that the Securities and Exchange Commission (the "SEC") declares
effective an IPO, the Initiating Holders may request registration of all or part
of their Registrable Securities under the Securities Act. Within ten days after
receipt of any such request, W&T will give written notice of such requested
registration to all other Holders of Registrable Securities. W&T will include in
such registration all Registrable Securities with respect to which it has
received written requests for inclusion therein within 20 days after delivery of
W&T's notice. All registrations effected by W&T under this Section 8.3 are
referred to herein as "Demand Registrations." The Holders of Registrable
Securities will be entitled to two Demand Registrations.

                (b)     Cooperation by W&T. W&T shall and shall cause its
management to cooperate fully and to use its best efforts to effect the
registration of Registrable Securities and the sale of Registrable Securities
pursuant to a request for a Demand Registration as promptly as is practicable;
provided, however, that in the event that W&T is not then eligible to use a
registration statement on Form S-3 or other short form registration statement
under the Securities Act and W&T furnishes to the Holders a certificate of a
senior executive officer of W&T stating that the Board of Directors of W&T has
determined, in its good faith judgment, that effecting the registration at such
time would materially and adversely affect a material financing, acquisition,
disposition of assets or securities, merger or other comparable transaction by
W&T, or would require W&T to make public disclosure of information the public
disclosure of which would have a W&T Material Adverse Effect, then W&T's
obligation to effect such registration shall be deferred but not more than once
in any twelve-month period for not more than 90 days in the

                                      -35-

<PAGE>

aggregate. Cooperation by W&T and its management shall include, but not be
limited to, management's attendance and reasonable presentations in respect of
W&T at road shows with respect to the offering of Registrable Securities.

                (c)     Expenses. W&T will pay all Registration Expenses for
each Demand Registration. A registration will not count as a Demand Registration
until it has become effective; provided, however, that in any event W&T shall
not be required to pay any Registration Expenses if, as a result of the
withdrawal of a request for registration by the Initiating Holders (other than
due to a material adverse change in the business of W&T or any refusal to
proceed based upon the advice of counsel that the registration statement, or any
prospectus contained therein, contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in which case, W&T will be required
to pay all Registration Expenses), the registration statement does not become
effective, in which case the Holders of Registrable Securities requesting
registration shall bear such Registration Expenses pro rata to the number of
Registrable Securities so included in the registration request, unless they
agree to count such registration as a Demand Registration.

                (d)     Priority on Demand Registrations. If a Demand
Registration is an Underwritten Offering, and the managing underwriters advise
W&T in writing that in their opinion the number of Registrable Securities
requested to be included exceeds the number which, in the opinion of such
managing underwriters, may be sold in such offering without materially adversely
affecting the distribution or pricing of such securities, W&T will include in
such registration such number of securities, which in the opinion of such
underwriters, may be sold, allocated among the Holders electing to participate
pro rata in accordance with the amounts of securities requested to be so
included by the respective Holders; provided, however, if less than 75% of the
Registrable Securities requested to be included in such Demand Registration have
been sold thereunder (other than at the discretion of the Holders) such
registration shall not count as a Demand Registration. W&T will not include in
any Demand Registration any securities that are not Registrable Securities
without the written consent of the Holders of a majority of the Registrable
Securities requesting such registration.

        8.4     Piggyback Registrations.

                (a)     Right to Piggyback. Whenever W&T proposes to register
any of its securities under the Securities Act (other than pursuant to a Demand
Registration, a registration relating solely to employee benefit plans on Form
S-8 or any other similar form for employee benefit plans, a registration on Form
S-3 or any similar form relating solely to a dividend reinvestment plan or a
registration relating solely to a Rule 145 transaction) and the registration
form to be used may be used for the registration and contemplated disposition of
Registrable Securities (a "Piggyback Registration"), W&T will give prompt
written notice to all Holders of Registrable Securities of its intention to
effect such a registration so that such notice is received by each Holder at
least 20 business days before the anticipated filing date. W&T will include in
such registration all Registrable Securities with respect to which W&T has
received written requests for inclusion therein within ten business days after
the receipt of W&T's notice.

                                      -36-

<PAGE>

                (b)     Piggyback Expenses. The Registration Expenses of the
Holders of Registrable Securities will be paid by W&T.

                (c)     Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of W&T, and the
managing underwriters advise W&T in writing that in their opinion the
distribution of the Registrable Securities to be included in the Piggyback
Registration concurrently with the securities being registered on behalf of W&T
would materially adversely affect the distribution of such securities by W&T,
W&T will include in such registration (i) first, the securities W&T proposes to
sell, (ii) second, the Registrable Securities, with each holder of Registrable
Securities desiring to register its Registrable Securities participating pro
rata in accordance with the total number of Registrable Securities requested by
such holder to be included in such registration and (iii) third, any other
securities requested to be included in such registration.

                (d)     Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
W&T's securities, and the managing underwriters advise W&T in writing that in
their opinion the distribution of the Registrable Securities in such Piggyback
Registration concurrently with the securities being registered on behalf of
holders of W&T's securities would materially adversely affect the distribution
of such securities, W&T will include in such registration (i) first, the
securities requested to be included therein by the holders requesting such
registration, (ii) second, the Registrable Securities, with each holder of
Registrable Securities desiring to register its Registrable Securities
participating pro rata in accordance with the total number of Registrable
Securities requested by such holder to be included in such registration and
(iii) third, any other securities requested to be included in such registration.

                (e)     Other Restrictions. W&T hereby agrees that if it has
previously filed a registration statement with respect to Registrable Securities
pursuant to Section 8.3 or pursuant to this Section 8.4, and if such previous
registration has not been withdrawn or abandoned, W&T will not file or cause to
be effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any other similar form for employee
benefit plans or on Form S-3 or any similar form for a registration of shares to
be issued solely pursuant to a dividend reinvestment plan), whether on its own
behalf or at the request of any holder or holders of such securities, until (i)
six months has elapsed from the effective date of such previous registration or
(ii) sooner if all Registrable Securities included in such previous registration
have been sold.

        8.5     Holdback Agreements.

                (a)     Each Holder of Registrable Securities which is a party
to this Agreement agrees not to effect any sale or distribution of equity
securities of W&T, or any securities convertible into or exchangeable or
exercisable for such securities, during the period commencing seven days prior
to and ending 90 days after the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration except for a Piggyback

                                      -37-

<PAGE>

Registration in connection with the IPO, in which case the period shall end 180
days after the effective date of the IPO (except as part of such underwritten
registration or with the consent of the managing underwriter), provided that the
executive officers and directors (or their equivalents) and each of the holders
of 5% or more of the then outstanding equity securities of W&T on a fully
diluted basis shall have entered into similar agreements. The commencement of
such period shall be determined in good faith by the managing underwriter and
advised to the Holders.

                (b)     W&T agrees (i) not to effect any sale or distribution of
its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the period commencing seven days prior
to and ending 90 days after the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except (A) as part of
such underwritten registration, (B) with the consent of the managing underwriter
of such underwritten registration or (C) pursuant to registrations on Form S-8
or any other similar form for employee benefit plans or on Form S-3 or any other
similar form for the registration of securities to be issued solely pursuant to
a dividend reinvestment plan), and (ii) to use its reasonable best efforts to
cause each holder of its equity securities, or any securities convertible into
or exchangeable or exercisable for such securities, purchased from W&T at any
time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted, or with the consent of the managing underwriter). The
commencement of such period shall be determined in good faith by the managing
underwriter.

        8.6     Registration Procedures. Whenever the Holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Article VIII, W&T will promptly take all such actions to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto W&T will as
expeditiously as reasonably possible:

                (a)     prepare and file with the SEC a registration statement
with respect to such Registrable Securities, and use its best efforts to cause
such registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
W&T will furnish to each of the Holders of Registrable Securities covered by
such registration and counsel selected by such Holders, copies of all such
documents proposed to be filed, which documents will be subject to their review
and approval);

                (b)     prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period set forth in Section 8.6(l) and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement during such period in accordance with the
intended methods of disposition by the Holders thereof set forth in such
registration statement;

                                      -38-

<PAGE>

                (c)     furnish to each Holder of Registrable Securities covered
by such registration such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as
such Holder may reasonably request in order to facilitate the disposition of
such Registrable Securities;

                (d)     use its best efforts to register or qualify Registrable
Securities covered by such registration under such other securities or blue sky
laws of such jurisdictions as any Holder reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the Holders thereof to consummate the disposition in such jurisdictions of the
Registrable Securities as requested by such Holders (provided that W&T will not
be required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subsection, (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service
of process in any such jurisdiction);

                (e)     notify each Holder of Registrable Securities covered by
such registration, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus included in such registration statement (or any document
incorporated therein by reference) contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and W&T will prepare a
supplement or amendment to such prospectus (or any document incorporated therein
by reference) immediately thereafter so that such prospectus (or any document
incorporated therein by reference) will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;

                (f)     cause all such Registrable Securities covered by such
registration to be listed on each securities exchange or automated quotation
system on which similar securities issued by W&T are then listed or quoted;

                (g)     provide a transfer agent and registrar for all
Registrable Securities covered by such registration not later than the effective
date of such registration statement;

                (h)     enter into such customary agreements (including an
underwriting agreement) and take all such other actions as the Holders of a
majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;

                (i)     make available for inspection by any Holder of
Registrable Securities covered by such registration, any underwriter
participating in any disposition pursuant to such registration, and any
attorney, accountant or other agent retained by any such Holder or underwriter,
all financial and other records, pertinent corporate documents and properties of
W&T, and cause W&T's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant or
agent in connection with such registration statement;

                                      -39-

<PAGE>

                (j)     obtain (i) a "comfort letter" from W&T's independent
public accountants in customary form and covering such matters of the type
customarily covered by comfort letters and (ii) opinions of counsel from W&T's
counsel in customary form and covering such matters of the type customarily
covered in a public issuance of securities, in each case, in form and substance
reasonably satisfactory to the Holders and any underwriters and addressed to the
Holders and any underwriters;

                (k)     otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to its
security holders, earnings statements satisfying the provisions of Section 11(a)
of the Securities Act, no later than 45 days after the end of any 12-month
period (i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold and (ii) beginning with the first month of W&T's first
fiscal quarter commencing after the effective date of the registration
statement, which statements shall cover said 12-month periods; and

                (l)     keep each registration statement effective until the
Holders of Registrable Securities covered by such registration have completed
the distribution described in the registration statement relating thereto
(including a shelf registration) or until Rule 144(k) under the Securities Act
becomes available with respect to the Registrable Securities covered by such
registration.

        8.7     Indemnification.

                (a)     W&T will indemnify each Holder, each Holder's officers,
directors, managers, members and partners, and each person controlling such
Holder (within the meaning of the Securities Act and the rules and regulations
thereunder), against all claims, losses, damages, liabilities (or actions in
respect thereof) and expenses arising out of or based on any untrue or alleged
untrue statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by W&T of the Securities
Act or any rule or regulation thereunder applicable to W&T and relating to
action or inaction required of W&T in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, such Holder's
officers, directors, managers, members and partners, and each person controlling
such Holder for any legal and any other expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, that W&T will not be liable in any such case to the extent that any
such claim, loss, damage, liability or action arises out of or is based on any
untrue or alleged untrue statement or omission or alleged omission of material
fact based upon written information furnished to W&T by such Holder and stated
to be specifically for use therein.

                (b)     Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration is being effected, indemnify W&T, each of W&T's directors and
officers and each person who controls W&T (within the meaning of the Securities
Act and the rules and regulations thereunder), each other Holder whose

                                      -40-

<PAGE>

securities are included in such registration and each of such other Holder's
officers, directors, managers, members and partners and each person controlling
such other Holder, against all claims, losses, damages and liabilities (or
actions in respect thereof) and expenses arising out of or based on any untrue
or alleged untrue statement of a material fact contained in any such
registration statement, prospectus or preliminary prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
W&T, its officers and directors, each person controlling W&T, each other Holder,
and such other Holder's officers, directors, managers, members, partners and
control persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such registration statement,
prospectus or preliminary prospectus in reliance upon and in conformity with
written information furnished to W&T by such Holder and stated to be
specifically for use therein.

                (c)     Each party entitled to indemnification under this
Section 8.7 (a "Section 8.7 Indemnified Party") shall give notice to the party
required to provide indemnification (a "Section 8.7 Indemnifying Party")
promptly after such Section 8.7 Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and, unless in such Section 8.7
Indemnified Party's reasonable judgment, a conflict of interest may exist
between such Section 8.7 Indemnified Party and such Section 8.7 Indemnifying
Party with respect to such claim, shall permit the Section 8.7 Indemnifying
Party to assume the defense of any such claim or any litigation resulting
therefrom; provided, that counsel for the Section 8.7 Indemnifying Party, who
shall conduct the defense of such claim or any litigation resulting therefrom,
shall be reasonably satisfactory to the Section 8.7 Indemnified Party, and the
Section 8.7 Indemnified Party may participate in such defense at such party's
expense; provided, further, that the failure of any Section 8.7 Indemnified
Party to give notice as provided herein shall not relieve the Section 8.7
Indemnifying Party of its obligations under this Article VIII, except to the
extent that the Section 8.7 Indemnifying Party's ability to conduct such defense
shall have been materially prejudiced by such failure. To the extent that, in
the written opinion of counsel to the Section 8.7 Indemnified Party, a conflict
of interest exists between a Section 8.7 Indemnified Party and the Section 8.7
Indemnifying Party, then such Section 8.7 Indemnified Party shall be entitled to
separate counsel at the expense of the Section 8.7 Indemnifying Party. Each
Section 8.7 Indemnified Party shall furnish such information regarding itself or
the claim in question as an Section 8.7 Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection with the
defense of such claim and any litigation resulting therefrom.

                (d)     To the extent any indemnification by a Section 8.7
Indemnifying Party is prohibited or limited by law, the Section 8.7 Indemnifying
Party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under this Section 8.7 to the fullest extent
permitted by law; provided, however, that: (i) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution under this Section 8.7(d) from any person who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any
Holder of Registrable Securities shall

                                      -41-

<PAGE>

be limited in amount to the net amount of proceeds received by such Holder from
the sale of such Registrable Securities pursuant to a registration.

        8.8     Information by Holders. FS Private Investments III LLC, on
behalf of each Holder of Registrable Securities included in any registration,
shall furnish to W&T such information regarding such Holder and the distribution
proposed by such Holder as W&T may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Article VIII. It is understood that in the case
of any such information with respect to a Holder other than one of the Initial
FS Stockholders, FS Private Investments III LLC shall merely transmit such
information without any responsibility for its accuracy or completeness.

        8.9     Limitations on Registration of Issues of Securities. From and
after the date of this Agreement, W&T shall not enter into any agreement with
any holder or prospective holder of any securities of W&T giving such holder or
prospective holder the right to require W&T to register any securities of W&T
equal to or more favorable than the rights granted under this Article VIII,
unless such action is consented to by Holders holding at least a majority of the
Registrable Securities. Any right given by W&T to any holder or prospective
holder of W&T's securities in connection with the registration of securities
shall be conditioned such that it shall be consistent with the provisions of
this Article VIII and with the rights of the Holders provided in this Agreement
and such holder or prospective holder agrees to be bound by the terms of this
Article VIII.

        8.10    Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the SEC which may permit the sale of the
Restricted Securities to the public without registration, W&T agrees to:

                (a)     make and keep public information available as those
terms are understood and defined and interpreted in and under Rule 144 under the
Securities Act, at all times from and after 90 days following the effective date
of the IPO;

                (b)     use its best efforts to file with the SEC in a timely
manner all reports and other documents required of W&T under the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), at any
time after it has become subject to such reporting requirements; and

                (c)     so long as the Holders own any Restricted Securities,
furnish to such Holders forthwith upon request a written statement by W&T as to
its compliance with the reporting requirements of Rule 144 (at any time from and
after 180 days following the effective date of the IPO) and of the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report of
W&T, and such other reports and documents so filed as such Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing such
Holder to sell any such securities without registration.

                                      -42-

<PAGE>

        8.11    Selection of Underwriters. If any Demand Registration is an
underwritten offering, the Holders of a majority of the Registrable Securities
included in such registration shall have the right to select the investment
banker(s) and manager(s) to administer the offering, subject to the approval of
W&T (which approval will not be unreasonably withheld).

                                   ARTICLE IX

                                   TERMINATION

        9.1     Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement shall terminate if the Closing does not occur on
or before the close of business on January 31, 2003 (the "Termination Date"),
unless extended by mutual written consent of the parties hereto and otherwise
may be terminated at any time before the Closing as follows:

                (a)     by mutual consent in writing of all of the parties
hereto; or

                (b)     by the Purchasers or W&T if there has been a material
representation or other material breach by the other party in its
representations, warranties, or covenants set forth herein; provided, however,
that if such breach is susceptible to cure, the breaching party shall have ten
calendar days after receipt of notice from the other party of its intention to
terminate this Agreement if such breach continues in order to cure such breach.

        9.2     Effect of Termination. If this Agreement shall be terminated
pursuant to Section 9.1, then all further obligations of the parties under this
Agreement shall terminate without any further liability of any party to another;
provided that the obligations of the parties contained in Section 12.10 shall
survive any such termination. A termination under Section 9.1 shall not relieve
any party of any liability for breach of, or for any misrepresentation under
this Agreement, or be deemed to constitute a waiver of any available remedy for
any such breach or misrepresentation.

                                    ARTICLE X

                              AMENDMENT AND WAIVER

        This Agreement may not be amended or modified (or any provision hereof
waived), except that W&T and the Purchasers (and assignees of the Purchasers)
holding at least a majority of the Series A Preferred Stock and the Conversion
Shares purchased or to be purchased hereunder may by written instrument amend or
waive any term or condition of this Agreement relating to the rights or
obligations of such holders, but in no event shall the obligation of any holder
of Series A Preferred Stock or Conversion Shares hereunder be increased, except
upon the written consent of each such holder; provided, however, that the
provisions of Article VIII hereof may only be amended with the consent of the
holders of a majority of the Registrable Securities.

        W&T and each holder of Series A Preferred Stock and Conversion Shares
shall be bound by any amendment or waiver effected in accordance with the
provisions of this Article X, whether or not such Series A Preferred Stock or
Conversion Shares shall have been marked to

                                      -43-

<PAGE>

indicate such modification, but any Series A Preferred Stock or Conversion
Shares issued thereafter shall bear a notation as to any such modification.
Promptly after obtaining the written consent of the holders herein provided, W&T
shall transmit a copy of such modification to all holders of Series A Preferred
Stock and Conversion Shares.

                                   ARTICLE XI

                         LOST OR MUTILATED CERTIFICATES

        Upon receipt of evidence satisfactory to W&T of the loss, theft,
destruction or mutilation of any certificate representing Series A Preferred
Stock, and, in the case of any such loss, theft, or destruction, upon delivery
of a bond of indemnity satisfactory to W&T (provided that if the holder is a
financial institution, its own agreement will be satisfactory), or in the case
of any such mutilation, upon surrender and cancellation of such certificate, W&T
will issue a new certificate of like tenor as if the lost, stolen, destroyed or
mutilated certificate were then surrendered for exchange in lieu of such lost,
stolen, destroyed or mutilated certificate.

                                   ARTICLE XII

                                  MISCELLANEOUS

        12.1    Effectiveness. This Agreement shall not be binding upon the
parties hereto until, and shall only become effective upon and contemporaneously
with, the approval by the Board of Directors of W&T of the transactions
contemplated hereby.

        12.2    Governing Law. This Agreement and the rights of the parties
hereunder shall be governed in all respects by the laws of the State of
Delaware, without giving effect to the provisions thereof relating to conflicts
of law. W&T agrees that it will not assert against any partner of the Purchasers
(or against any partner, officer, director, employee or agent of the Purchasers
or any of their affiliates) any claim it may have under this Agreement by reason
of any failure or alleged failure by a Purchaser to meet its obligations
hereunder. FS Private Investments III LLC agrees to indemnify W&T and hold
harmless W&T, and any director, officer or equity holder of W&T against any
claim made or threatened to be made against any such person by any beneficial
owner of any interest in any Purchaser if such claim relates to any alleged
untrue statement of a material fact in the information provided to such person
by a Purchaser or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
with respect to an investment in the Series A Preferred Stock.

        12.3    Survival. The representations, warranties, covenants and
agreements made herein shall survive (i) any investigation made by the
Purchasers and (ii) the Closing for the two-year period immediately following
the Closing Time, except that (A) the representations contained in Sections
3.1(a), 3.1(b), 3.1(c), 3.1(d), and 3.1(z) shall survive indefinitely and (B)
the representations in Section 3.1(h) shall survive until the applicable statute
of limitations (including all waivers or extensions thereof) has expired with
respect to each matter addressed therein; and provided that any claims made or
asserted by a party within the applicable time

                                      -44-

<PAGE>

period prescribed above shall survive until such claim is finally resolved and
all obligations with respect thereto are fully satisfied.

        12.4    Public Announcements. W&T shall consult with, and obtain the
prior written consent of, FS Private Investments III LLC before issuing any
press release or otherwise making any public comment, statement or communication
with respect to, or otherwise disclose or permit the disclosure of the existence
of discussions regarding, a possible transaction among the parties or any of the
terms, condition or other aspects of the transaction contemplated by this
Agreement, and shall not issue any such press release or make any such public
comment, statement or communication prior to such consultation, except to the
extent required by applicable law.

        12.5    Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding upon
and enforceable by and against, the successors, permitted assigns, heirs,
executors and administrators of the parties hereto. Neither W&T nor its existing
stockholders may assign any of their rights or obligations under this Agreement
without the prior written consent of the Purchasers holding a majority of the
Series A Preferred Stock purchased or to be purchased hereunder. The Purchasers
may assign to Other Investors all or any part of their rights and obligations
hereunder to purchase not more than 40% in the aggregate of the Series A
Preferred Stock purchased or to be purchased hereunder, but only during the
180-day period immediately following the Closing Time, and provided that, as a
condition to any such transfer, the transferor will obtain representations from
the transferee comparable to those in Section 4.1, which representations shall
state explicitly that such representations are for the benefit of W&T. An Other
Investor to whom all or a part of the Purchasers' rights are assigned shall
become a party to this Agreement, entitled to all the rights and benefits
hereunder. The rights and powers of the Purchasers hereunder are granted to the
Purchasers as owners of the Series A Preferred Stock and Conversion Shares
purchased or to be purchased hereunder. Any subsequent owner of any Series A
Preferred Stock or Conversion Shares purchased or to be purchased hereunder
during the 180-day period following the Closing Time, whether becoming such by
transfer, assignment, operation of law or otherwise, shall be deemed to be a
Purchaser hereunder, shall have the same rights and powers which a Purchaser
owning such securities has hereunder, and shall be entitled to exercise them in
full. Each Holder shall have the rights and powers set forth in Article VIII
hereof and in the Stockholders' Agreement.

        12.6    Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof.

        12.7    Notices, etc. All notices, demands or other communications given
hereunder shall be in writing and shall be sufficiently given if delivered
either personally or by a United States nationally recognized courier service
marked for next business day delivery or sent by facsimile or in a sealed
envelope by first class mail, postage prepaid and either registered or
certified, addressed as follows:

                                      -45-

<PAGE>

                (a)     if to W&T:

                        W&T Offshore, Inc.
                        8 Greenway Plaza
                        Suite 1300
                        Houston, Texas 70046
                        Attention:  Tracy W. Krohn
                        Telephone:  (713) 626-8525
                        Facsimile:  (713) 686-8527

                with a copy to:

                        Adams & Reese, L.L.P.
                        One Shell Square, 45th Floor
                        New Orleans, LA 70139
                        Attention:  Virginia Boulet, Esq.
                        Telephone:  (504) 585-0331
                        Facsimile:  (504) 566-0210

If to a Purchaser, to it at the address and facsimile number set forth on
Schedule 1, with copies to such Purchaser's representatives as set forth on
Schedule 1, or to such other address with respect to any party hereto as such
party may from time to time notify (as provided above) the other parties hereto.
Any such notice, demand or communication shall be deemed to have been received
(i) on the date of delivery, if delivered personally, (ii) one business day
after delivery to a nationally recognized overnight courier service, if marked
for next day delivery, (iii) five business days after the date of mailing, if
mailed or (iv) on the date of transmission, if sent by facsimile.

        12.8    Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Series A Preferred Stock or
Conversion Shares upon any breach or default of W&T under this Agreement shall
impair any such right, power or remedy of such holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence, therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any holder of any breach or
default under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement must be, made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.

        12.9    Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

                                      -46-

<PAGE>

        12.10   Expenses. Except as set forth in the following sentence, if the
transactions contemplated by this Agreement are not consummated, each party
shall bear its own expenses and legal fees incurred with respect to the
negotiation of the transactions contemplated by this Agreement. If the
transactions contemplated by this Agreement are consummated, W&T shall pay, in
addition to its own expenses and legal fees, an amount equal to $1,000,000 in
respect of the expenses and legal fees of the Purchasers (collectively, the
"Transaction Expenses"). W&T shall not be liable to make any other payment to
the Purchasers in respect of their expenses and legal fees.

        12.11   Litigation; Consent to Jurisdiction.

                (a)     Each party to this Agreement hereby consents to personal
jurisdiction, service of process and venue in any court in which any claim is
brought by a third party against any of the parties hereto related to this
Agreement or by any other person entitled to the benefits of Section 8.7 hereof.

                (b)     In the event of any litigation between the parties
related to this Agreement, the parties agree that the losing party in such
litigation shall be responsible for the expenses (including reasonable legal
fees and expenses) incurred by the winning party.

                (c)     Except as set forth in clause (a) above, in the event of
any disputes between the parties hereto not involving third parties, the parties
hereto agree that any action or proceeding arising directly, indirectly or
otherwise in connection with, out of, related to or from this Agreement, any
breach hereof or any transaction covered hereby, shall be resolved within the
County of New Castle, City of Wilmington and State of Delaware. Accordingly, the
parties consent and submit to the jurisdiction of the federal and state courts
seated therein. The parties further agree that any such action or proceeding
brought by either party to enforce any right, assert any claim, or obtain any
relief whatsoever in connection with this Agreement shall be brought by such
party exclusively in federal or state courts located within the County of New
Castle, City of Wilmington and State of Delaware.

        12.12   Titles and Subtitles. The titles of the articles, sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

        12.13   Counterparts. This Agreement may be executed in counterparts,
including via facsimile, each of which shall be an original, but all of which
together shall constitute one instrument.

        12.14   Direct Purchase. If W&T should redeem all the shares of W&T
Common Stock owned by the Bethea Group and issue the Series A Preferred Stock to
the Purchasers for cash, then the parties shall, in good faith, negotiate
amendments to Article I and Article II of this Agreement and such other
provisions of this Agreement as must be changed if the Series A Preferred Stock
is to be purchased for cash, provided that such amendments shall not adversely
affect the rights and obligations of, or economic consequences to, either W&T or
the Purchasers.

                                      -47-

<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.

                                   W&T OFFSHORE, INC.

                                   By: /s/ Tracy W. Krohn
                                       -------------------------------
                                   Name: Tracy W. Krohn
                                   Title: CEO

                                   PURCHASERS:
                                   ING FURMAN SELZ INVESTORS III L.P.
                                   ING BARINGS U.S. LEVERAGED EQUITY PLAN LLC
                                   ING BARINGS GLOBAL LEVERAGED EQUITY PLAN LTD.

                                   By: FS PRIVATE INVESTMENTS III LLC

                                   By: /s/James L. Luikart
                                       -------------------------------
                                   Name: James L. Luikart
                                   Title: Managing Member

                                      -48-

<PAGE>

With respect to Article VIII only:

                                   JEFFERIES & COMPANY, INC.

                                   By: /s/ Daniel O. Conwill IV
                                       -------------------------------
                                   Name: Daniel O. Conwill IV
                                   Title: EVP

                                      -49-

<PAGE>

                   Exhibit A - Form of Stockholders' Agreement

<PAGE>

       Exhibit B - Form of Amended and Restated Articles of Incorporation

<PAGE>

                 Exhibit C - Form of Krohn Employment Agreement

<PAGE>

                 Exhibit D - Form of Bethea Redemption Agreement

<PAGE>

                  Exhibit E - Form of Bethea Purchase Agreement

<PAGE>

             Exhibit F - Form of Opinion of Adams and Reese, L.L.P.

<PAGE>

                        Exhibit G - Intentionally Omitted

<PAGE>

            Exhibit H - Election of Subchapter "S" Status by W&T and
      Corresponding Letter of Acceptance from the Internal Revenue Service

<PAGE>

                       Exhibit I - LLC Purchase Agreement

<PAGE>

                         Exhibit J - Stockholder Consent

<PAGE>

                Exhibit K - Form of Amended and Restated By-Laws

<PAGE>

                                   Schedule 1

                                   Purchasers

<TABLE>
<CAPTION>
                                                 Number of shares     Number of shares of
                                                   of Series A        W&T Common Stock to
                                                 Preferred Stock        be Exchanged by           Representative's
        Name and Address of Purchaser           to be Issued by W&T       Purchaser              Name and Address
---------------------------------------------   -------------------   -------------------   -----------------------------
<S>                                                  <C>                   <C>              <C>
ING Furman Selz Investors III L.P.                                                          Stroock & Stroock & Lavan LLP
c/o FS Private Investments III LLC                                                          180 Maiden Lane
520 Madison Avenue                                                                          New York, NY  10038
8th Floor                                                                                   Attn: Melvin Epstein, Esq.
New York, NY 10022                                   1,393,590              696.795         Tel: (212) 806-5400
Attention: Mr. Brian Friedman                                                               Fax: (212) 806-6006
Telephone: (212) 284-1701
Facsimile: (212) 284-1717

ING Barings U.S. Leveraged Equity Plan LLC                                                  Stroock & Stroock & Lavan LLP
c/o FS Private Investments III LLC                                                          180 Maiden Lane
520 Madison Avenue                                                                          New York, NY  10038
8th Floor                                                                                   Attn: Melvin Epstein, Esq.
New York, NY 10022                                     423,805             211.9025         Tel: (212) 806-5400
Attention: Mr. Brian Friedman                                                               Fax: (212) 806-6006
Telephone: (212) 284-1701
Facsimile: (212) 284-1717

ING Barings Global Leveraged Equity Plan Ltd.                                               Stroock & Stroock & Lavan LLP
c/o FS Private Investments III LLC                                                          180 Maiden Lane
520 Madison Avenue                                                                          New York, NY  10038
8th Floor                                                                                   Attn: Melvin Epstein, Esq.
New York, NY 10022                                     182,605              91.3025         Tel: (212) 806-5400
Attention: Mr. Brian Friedman                                                               Fax: (212) 806-6006
Telephone: (212) 284-1701
Facsimile: (212) 284-1717
                                                -------------------   -------------------
                       Total:                        2,000,000                1,000
                                                ===================   ===================
</TABLE>EXHIBIT 4.17

 Exhibit 4.17 
  
 THIRTEENTH SUPPLEMENTAL INDENTURE TO 
 AMENDED AND RESTATED INDENTURE 
  
 THIRTEENTH SUPPLEMENTAL INDENTURE, dated as of March 16, 2004, among HOST MARRIOTT, L.P., a Delaware limited partnership (the “Company”), Host Marriott Corporation, a Maryland Corporation (“Host REIT), the Subsidiary
Guarantors signatory to this Thirteenth Supplemental Indenture and THE BANK OF NEW YORK, as Trustee (the “Trustee”) to the Amended and Restated Indenture, dated as of August 5, 1998, as amended and supplemented through the date of this
Thirteenth Supplemental Indenture (the “Indenture”). 
  
 R E C I T A L S 
  
 WHEREAS, the Company, its Parents, certain of the Subsidiary Guarantors and HSBC Bank USA (f/k/a Marine Midland Bank) executed and delivered the Amended and Restated Indenture, dated as of August 5, 1998, amending and
restating the form of Indenture previously filed as Exhibit 4.1 to the Registration Statement (No. 333-50729) filed with the Securities and Exchange Commission (“Commission”) on Form S-3 by the Company, its Parents and certain of the
Subsidiary Guarantors; 
  
 WHEREAS, the Trustee has succeeded HSBC
Bank USA as the trustee under such indenture. 
  
 WHEREAS, the
Company and the Subsidiary Guarantors desire to create a Series of Securities to be issued under the Indenture, as hereby supplemented, to be known as the 3.25% Exchangeable Senior Debentures due April 15, 2024 and Subsidiary Guarantees thereof of
the Subsidiary Guarantors (hereinafter, the “Exchangeable Debentures”); 
  
 WHEREAS, Section 9.1(e) of the Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture without the written consent of the Holders of the outstanding
Securities to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by the Indenture; 
  
 WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws of the Company, the Subsidiary
Guarantors and the Trustee necessary to make this Thirteenth Supplemental Indenture a valid instrument legally binding on the Company, the Subsidiary Guarantors and the Trustee, in accordance with its terms, have been duly done and performed; and

  

 1 

 WHEREAS, all conditions precedent to amend or supplement the Indenture have been met. 
  
 NOW, THEREFORE, to comply with the provisions of the Indenture, and in
consideration of the above premises, the Company, the Subsidiary Guarantors and the Trustee covenant and agree as follows: 
  
 WHEREAS, Section 9.1(h) of the Indenture provides that the Company, the Subsidiary Guarantors under the Indenture and the Trustee may amend and supplement
the Indenture without the written consent of the Holders of the outstanding Securities to provide for the release of guarantors to Securities of any Series as permitted by the Indenture; 
  
 WHEREAS, HMC JWDC GP LLC has been unconditionally and completely released from its Guarantee of all Guaranteed Indebtedness
other than its Guarantee of the Existing Senior Notes and the Company desires to amend the Indenture to remove such Subsidiary Guarantor as a Subsidiary Guarantor of the Existing Senior Notes; 
  
 NOW, THEREFORE, in consideration of the material promises contained herein,
the parties agree as set forth below: 
  
 ARTICLE 1 
  
 Section 1.01 Nature of Supplemental Indenture. This Thirteenth
Supplemental Indenture supplements the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes. 
  
 Section 1.02 Establishment of New Series. Pursuant to Section 2.2 of
the Indenture, there is hereby established the Exchangeable Debentures having the terms, in addition to those set forth in the Indenture and this Thirteenth Supplemental Indenture, set forth in the form of Exchangeable Debentures, attached to this
Thirteenth Supplemental Indenture as Exhibit A, which is incorporated herein as a part of this Thirteenth Supplemental Indenture. 
  
 Section 1.03 Redemption. (a) At any time on or after April 19, 2009, if, during each of the 30 consecutive days prior to and including the
Redemption Date, the Registration Statement (as defined in the Registration Rights Agreement) is effective and available for the resale of Host REIT Common Stock, the Company may redeem the Exchangeable Debentures for cash, in whole or in part, at
the following Redemption Prices (expressed as percentages of the principal amount), in each case, together with accrued and unpaid interest and Liquidated Damages, if any, thereon to 
  

 2 

 the applicable Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest
due on an Interest Payment Date that is on or prior to the applicable Redemption Date): 
  

				
	 Redemption Date

	  	Percentage

	 
	 April 19, 2009
	  	100.542	%
	 July 15, 2009
	  	100.407	%
	 October 15, 2009
	  	100.271	%
	 January 15, 2010
	  	100.136	%
	 April 15, 2010 and thereafter
	  	100.000	%

  
 (b) The Exchangeable
Debentures will not have the benefit of any sinking fund. 
  
 (c)
Solely with respect to the Exchangeable Debentures, if less than all of the Exchangeable Debentures are to be redeemed, the Trustee shall select the Exchangeable Debentures to be redeemed on a pro rata basis; provided, that if any
Exchangeable Debenture selected for partial redemption is exchanged in part before termination of the exchange right with respect to the portion of the Exchangeable Debenture so selected, the exchanged portion of such Exchangeable Debenture shall be
deemed (so far as may be) to be the portion selected for redemption. Exchangeable Debentures which have been exchanged during a selection of Exchangeable Debentures to be redeemed may be treated by the Trustee as outstanding for the purpose of such
selection. 
  
 (d) In the event of any redemption, the Company
will not be required to: 
  

	 	•	Issue or register the transfer or exchange of any Exchangeable Debenture during a period beginning at 9:00 am New York City time 15 days before any selection of debentures for
redemption and ending at 5:00 pm New York City time on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of Exchangeable Debentures to be so redeemed, or 

  

	 	•	Register the transfer or exchange of any Exchangeable Debenture so selected for redemption, in whole or in part, except the unredeemed portion of any Exchangeable Debenture being
redeemed in part. 

  
 Section 1.04 Tax
Withholding. The Company or Host REIT is permitted to withhold from payment of interest otherwise due to Holder, from cash payable to a Holder on redemption or from shares of Host REIT common stock otherwise deliverable to a Holder upon exchange
of an Exchangeable Debenture, any amount that either the Company or Host REIT is required by applicable laws to withhold. 
  

 3 

 Section 1.05 Release of Guarantor. Pursuant to Section 12.4 of the Indenture, HMC JWDC GP LLC is
hereby unconditionally and completely released of such Subsidiary Guarantor’s Guarantee under each series of Existing Senior Notes. 
  
 ARTICLE 2 
  
 Section 2.01 “Subsidiary Guarantors” means, with respect to the Exchangeable Debentures, (A) the Subsidiary Guarantors listed in Section
2.03 below and (B) any Future Subsidiary Guarantors that become Subsidiary Guarantors pursuant to the terms of the Indenture, but excluding any Persons whose Guarantees have been released pursuant to the terms of the Indenture. The provisions of
Article 12 of the Indenture will be applicable to the Exchangeable Debentures. 
  
 Section 2.02 The second sentence of the definition of “Subsidiary Guarantee” set forth in Section 1.1 of the Indenture shall read, for purposes of the Exchangeable Debentures, as follows: “Each
Subsidiary Guarantee with respect to the Exchangeable Debentures will be a senior obligation of the Subsidiary Guarantor and will be full and unconditional regardless of the enforceability of the Exchangeable Debentures, the Thirteenth Supplemental
Indenture or the Indenture.” 
  
 Section 2.03 The following
entities shall constitute the “Subsidiary Guarantors” with respect to the Exchangeable Debentures until such time as their Guarantees are released in accordance with the terms of the Indenture: 
  

	 	(1)	Airport Hotels LLC; 

	 	(2)	Host of Boston, Ltd.; 

	 	(3)	Host of Houston, Ltd; 

	 	(4)	Host of Houston 1979; 

	 	(5)	Chesapeake Financial Services LLC; 

	 	(6)	City Center Interstate Partnership LLC; 

	 	(7)	HMC Retirement Properties, L.P.; 

	 	(8)	HMH Marina LLC; 

	 	(9)	Farrell’s Ice Cream Parlour Restaurants LLC; 

	 	(10)	HMC Atlanta LLC; 

	 	(11)	HMC BCR Holdings LLC; 

	 	(12)	HMC Burlingame LLC; 

	 	(13)	HMC California Leasing LLC; 

	 	(14)	HMC Capital LLC; 

	 	(15)	HMC Capital Resources LLC; 

	 	(16)	HMC Park Ridge LLC; 

  

 4 

	 	(17)	HMC Partnership Holdings LLC; 

	 	(18)	Host Park Ridge LLC; 

	 	(19)	HMC Suites LLC; 

	 	(20)	HMC Suites Limited Partnership; 

	 	(21)	PRM LLC; 

	 	(22)	Wellsford-Park Ridge HMC Hotel Limited Partnership; 

	 	(23)	YBG Associates LLC; 

	 	(24)	HMC Chicago LLC; 

	 	(25)	HMC Desert LLC; 

	 	(26)	HMC Palm Desert LLC; 

	 	(27)	MDSM Finance LLC; 

	 	(28)	HMC Diversified LLC; 

	 	(29)	HMC East Side II LLC; 

	 	(30)	HMC Gateway LLC; 

	 	(31)	HMC Grand LLC; 

	 	(32)	HMC Hanover LLC; 

	 	(33)	HMC Hartford LLC; 

	 	(34)	HMC Hotel Development LLC; 

	 	(35)	HMC HPP LLC; 

	 	(36)	HMC IHP Holdings LLC; 

	 	(37)	HMC Manhattan Beach LLC; 

	 	(38)	HMC Market Street LLC; 

	 	(39)	New Market Street LP; 

	 	(40)	HMC Georgia LLC; 

	 	(41)	HMC Mexpark LLC; 

	 	(42)	HMC Polanco LLC; 

	 	(43)	HMC NGL LLC; 

	 	(44)	HMC OLS I L.P.; 

	 	(45)	HMC OP BN LLC; 

	 	(46)	HMC Pacific Gateway LLC; 

	 	(47)	HMC PLP LLC; 

	 	(48)	Chesapeake Hotel Limited Partnership; 

	 	(49)	HMC Potomac LLC; 

	 	(50)	HMC Properties I LLC; 

	 	(51)	HMC Properties II LLC; 

	 	(52)	HMC SBM Two LLC; 

	 	(53)	HMC Seattle LLC; 

	 	(54)	HMC SFO LLC; 

	 	(55)	HMC Swiss Holdings LLC; 

	 	(56)	HMC Waterford LLC; 

	 	(57)	HMH General Partner Holdings LLC; 

	 	(58)	HMH Norfolk LLC; 

  

 5 

	 	(59)	HMH Norfolk, L.P.; 

	 	(60)	HMH Pentagon LLC; 

	 	(61)	HMH Restaurants LLC; 

	 	(62)	HMH Rivers LLC; 

	 	(63)	HMH Rivers, L.P.; 

	 	(64)	HMH WTC LLC; 

	 	(65)	HMP Capital Ventures LLC; 

	 	(66)	HMP Financial Services LLC; 

	 	(67)	Host La Jolla LLC; 

	 	(68)	City Center Hotel Limited Partnership; 

	 	(69)	Times Square LLC; 

	 	(70)	Ivy Street LLC; 

	 	(71)	Market Street Host LLC; 

	 	(72)	MFR of Illinois LLC; 

	 	(73)	MFR of Vermont LLC; 

	 	(74)	MFR of Wisconsin LLC; 

	 	(75)	Philadelphia Airport Hotel LLC; 

	 	(76)	PM Financial LLC; 

	 	(77)	PM Financial LP; 

	 	(78)	HMC Property Leasing LLC; 

	 	(79)	HMC Host Restaurants LLC; 

	 	(80)	Santa Clara HMC LLC; 

	 	(81)	S.D. Hotels LLC; 

	 	(82)	Times Square GP LLC; 

	 	(83)	Durbin LLC; 

	 	(84)	HMC HT LLC; 

	 	(85)	HMC JWDC LLC; 

	 	(86)	HMC OLS I LLC; 

	 	(87)	HMC OLS II L.P.; 

	 	(88)	HMT Lessee Parent, LLC; 

	 	(89)	HMT/Interstate Ontario, L.P.; 

	 	(90)	HMC/Interstate Manhattan Beach, L.P.; 

	 	(91)	Host/Interstate Partnership, L.P.; 

	 	(92)	HMC/Interstate Waterford, L.P.; 

	 	(93)	Ameliatel; 

	 	(94)	HMC Amelia I LLC; 

	 	(95)	HMC Amelia II LLC; 

	 	(96)	Rockledge Hotel LLC; 

	 	(97)	Fernwood Hotel LLC; 

	 	(98)	HMC Copley LLC; 

	 	(99)	HMC Headhouse Funding LLC; 

	 	(100)	Ivy Street Hopewell LLC; 

  

 6 

	 	(101)	HMC Diversified American Hotels, L.P.; and 

	 	(102)	Potomac Hotel Limited Partnership. 

  
 By execution of this Thirteenth Supplemental Indenture, each of the Subsidiary Guarantors makes and confirms the Guarantees set forth in Section 12.1 of
the Indenture and shall be deemed to have signed the notation of guarantee set forth on the Securities as provided in Section 12.2 of the Indenture. 
  
 ARTICLE 3 
  
 Section 3.01 Subject to the further provisions of this Article 3 and Article 5 of this Thirteenth Supplemental Indenture, the covenants set forth in
Sections 4.7 through and including 4.15 of the Indenture shall not be applicable to the Exchangeable Debentures. 
  
 ARTICLE 4 
  
 Section 4.01 The following definitions are hereby added to the Indenture solely with respect to the Exchangeable Debentures: 
  
 “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Security, the rules
and procedures of the Depository, Euroclear and Clearstream that apply to such transfer or exchange at the relevant time. 
  
 “Certificated Exchangeable Debenture” means a certificated Exchangeable Debenture registered in the name of the Holder thereof and issued
in accordance with Section 6.01 of this Thirteenth Supplemental Indenture, in the form of Exhibit A to this Thirteenth Supplemental Indenture except that such Exchangeable Debentures shall not include the information called for by footnotes 1 and 2
thereof. 
  
 “Change of Control” means at the
time after the Series Issue Date for the Exchangeable Debentures, any of the following occurs (i) any sale, transfer or other conveyance, whether direct or indirect, of all or substantially all of the Company’s assets or the assets of Host REIT
(for so long as Host REIT is a Parent of the Company immediately prior to such transaction or series of related transactions), on a consolidated basis, in one transaction or a series of related transactions, if, immediately after giving effect to
such transaction, any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), other than an Excluded Person, is or becomes the “beneficial

  

 7 

 owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate normally entitled to
vote in the election of directors, managers, or trustees, as applicable, of the transferee; (ii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable), other than the Excluded Person, is or becomes the “beneficial owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of the Company’s Capital Stock (or the Capital Stock
of Host REIT for so long as Host REIT is a Parent of the Company immediately prior to such transaction or series of related transactions) then outstanding normally entitled to vote in elections of directors, managers or trustees, as applicable;
(iii) during any period of 12 consecutive months after the Series Issue Date of the Exchangeable Debentures (for so long as Host REIT is a Parent of the Company immediately prior to such transaction or series of related transactions), Persons who at
the beginning of such 12- month period constituted the Board of Host REIT (together with any new persons whose election was approved by a vote of a majority of the persons then still comprising the Board who were either members of the Board at the
beginning of such period or whose election, designation or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Host REIT, then in office; or (iv) Host REIT ceases to be a general partner
of the Company or ceases to control the Company; provided, however, that the pro rata distribution by Host REIT to its shareholders of shares of the Company’s Capital Stock or shares of any of Host REIT’s other subsidiaries,
will not, in and of itself, constitute a Change of Control for purposes of this definition; provided, however, that a Change of Control shall not be deemed to have occurred if either: (A) the Sale Price per share of Host REIT Common Stock for
any five trading days within the period of ten consecutive Trading Days ending immediately after the later of the Change of Control or the public announcement of the Change of Control, in the case of a Change of Control relating to an acquisition of
Capital Stock, or the period of ten consecutive trading days ending immediately after the Change of Control, in the case of Change of Control relating to a merger, consolidation or asset sale, equals or exceeds 105% of the Exchange Price of the
Exchangeable Debentures in effect on each of those Trading Days; or (B) at least 90% of the consideration (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in a merger or
consolidation otherwise constituting a Change of Control under clause (1) and/or clause (2) above consists of shares of common stock, depositary receipts or other certificates representing common equity interests traded on a national securities
exchange or quoted on the Nasdaq National Market (or will be so traded or quoted immediately following the merger or consolidation) and as a result of the merger or consolidation the Exchangeable Debentures become exchangeable into such shares of
common stock, depositary receipts or other certificates representing common equity interests. For purposes of this definition, the “Exchange Price” is equal to $1,000 divided by the Exchange Rate and “person” includes any
syndicate or group that would be deemed to be a “person under Section 13(d)(3) of the Exchange Act. 
  

 8 

 “Ex-Dividend Date” means the first date upon which a sale of the Host REIT Common Stock
does not automatically transfer the right to receive the relevant dividend from the seller of the Host REIT Common Stock to its buyer. 
  
 “Exchange Agent” means an office or agency where Exchangeable Debentures may be presented for exchange, which shall initially be The Bank
of New York. 
  
 “Existing Senior Notes” means
amounts outstanding from time to time of (i) the 7 7/8% Series B Senior Notes due 2008 of the Company, (ii) the
8 3/8% Series E Senior Notes due 2006 of the Company, (iii) the 9 1/4% Series G Senior Notes due 2007 of the Company; (iv) the 9 1/2% Series I Senior Notes due 2007 of the Company; and (v) the 7 1/8% Series K Senior Notes due 2013 of the Company, in each case not in excess of amounts outstanding immediately following the Series Issue Date of the Exchangeable Debentures, less amounts retired from time to time.

  
 “Global
Security” means an Exchangeable Debenture, which includes the information referred to in footnotes 1 and 2 to the form of Exchangeable Debenture attached to this Thirteenth Supplemental Indenture as Exhibit A, issued under the Indenture,
and that is deposited with or on behalf of and registered in the name of the Depository or a nominee of the Depository. 
  
 “Global Security Legend” means the legend set forth in Section 7.01(f)(ii) of this Thirteenth Supplemental Indenture, which is required
to be placed on all Global Securities issued under the Indenture. 
  
 “Host REIT” means Host Marriott Corporation, a Maryland corporation and the successor by merger to Host, which is the sole general partner of the Company following the REIT Conversion, and its successors and assigns.

  
 “Host REIT Common Stock” means the common
stock, par value $0.01 per share, of Host REIT. 
  
 “Indirect Participant” means an entity that, with respect to DTC, clears through or maintains a direct or indirect custodial relationship with a Participant. 
  
 “Initial Purchasers” means Goldman, Sachs & Co., Merrill Lynch & Co. and UBS Securities LLC.

  

 9 

 “Liquidated Damages” shall have the meaning set forth in the Registration Rights
Agreement. 
  
 “Market Price” means the average
of the closing Sale Prices of Host REIT Common Stock for the ten trading day period ending on the third Business Day prior to the applicable measurement date (if the third Business Day prior to the applicable Repurchase Date is a Trading Day, or if
not, then on the last Trading Day prior to the third Business Day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of the Trading Days during the ten Trading Day period and ending on the
measurement date, of some events that would result in an adjustment of the Exchange Rate with respect to Host REIT Common Stock. 
  
 “Offering Circular” means the Offering Circular of the Company and the Subsidiary Guarantors, dated March 10, 2004, with respect to the
Exchangeable Debenture. 
  
 “Officer’s
Certificate” means a certificate signed on behalf of the Company or Subsidiary Guarantor, as applicable, by an officer of the Company or Subsidiary Guarantor, as applicable, who must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the Company or Subsidiary Guarantor, as applicable. 
  
 “OP Units” means the limited partnership units of the Company. 
  
 “Participant” means, with respect to the Depository, Euroclear or Clearstream, a Person who has an account
with the Depository, Euroclear or Clearstream, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream). 
  
 “Paying Agent” means, until otherwise designated, the Trustee. 
  
 “Private Placement Legend” means the legend set forth in Section 7.01(f)(i) of this Thirteenth Supplemental
Indenture to be placed on all Exchangeable Debenture issued under the Indenture. 
  
 “QIB” means a “qualified institutional buyer” as defined in Rule 144A. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of March 16, 2004, by and among the Company, Host REIT,
the Subsidiary Guarantors and the Initial Purchasers, as such agreement may be amended, modified or supplemented from time to time. 
  

 10 

 “Rule 144A” means Rule 144A promulgated under the Securities Act, as it may be amended
from time to time, and any successor provision thereto. 
  
 “Rule 144A Global Security” means a Global Security issued in accordance with Rule 144A. 
  
 “Sale Price” of the Host REIT Common Stock on any date means the last reported share sale price (or, if no last sale price is reported,
the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the principal U.S. securities exchange on which the Host
REIT Common Stock then is listed, or if the Host REIT Common Stock is not listed on a U.S. national or regional exchange, as reported on the National Association of Securities Dealers Automated Quotation System, or if the Host REIT Common Stock is
not quoted on the National Association of Securities Dealers Automated Quotation System, as reported on the principal other market on which the Host REIT Common Stock is then traded. In the absence of such quotations, the Board of Directors of Host
REIT shall make a good faith determination of the Sale Price. 
  
 “Series Issue Date” means with respect to any series of Indebtedness issued under the Indenture, the date of any notes of such series are first issued. 
  
 “Trading Day” means (a) if the applicable security is listed or admitted for trading on the New York Stock
Exchange, a day on which the New York Stock Exchange is open for business; (b) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made on the Nasdaq National Market; or (c) if the applicable security is
not so listed or admitted for trading on the NYSE and not so quoted on the Nasdaq National Market, a day on which the principal U.S. national or regional exchange on which the applicable security is listed or admitted for trading is open for
business. 
  
 “Trading Price” has the meaning set
forth in Section 6.02(c). 
  
 ARTICLE 5 
  
 Section 5.01 Repurchase at Option of Holders upon a Change of
Control. (a) For purposes of the Exchangeable Debentures, Section 10.1(a) of the Indenture is hereby replaced and superceded by the following and the following shall apply to the Exchangeable Debentures: 
  
 “10.1 (a) If a Change of Control occurs at any time prior to April 15,

  

 11 

 2010, each Holder of Exchangeable Debentures will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder’s Exchangeable Debentures, not previously called for redemption, pursuant to the unconditional, irrevocable offer to purchase described below (the “Change of Control
Offer”) at a cash repurchase price equal to 100% of the principal amount of the Exchangeable Debentures to be repurchased, plus accrued and unpaid interest and Liquidated Damages, if any, to but not including the Change of Control Purchase
Date (the “Change of Control Payment”) on a date that is not more than 30 Business Days after the date of the notice delivered by the Company pursuant to Section 10.1(b)(6) (the “Change of Control Payment Date”). If
a Change of Control occurs on or after April 15, 2010, no Holder shall have the right to require the Company to purchase any Exchangeable Debenture, except as provided for under Section 5.02 of the Thirteenth Supplemental Indenture.”

  
 (b) For purposes of the Exchangeable Debentures, the first
clause of Section 10.1(b)(6) is hereby amended to state “within 30 days after the occurrence of a Change of Control and on or before the commencement of any Change of Control Offer,”. 
  
 Section 5.02 Repurchase Rights. (a) The Exchangeable Debentures
shall be subject to repurchase by the Company at the option of the Holder on April 15, 2010, April 15, 2014 and April 15, 2019 (each a “Repurchase Date”), at a repurchase price equal to 100% of the principal amount of the
Exchangeable Debentures to be repurchased, subject to the satisfaction by or on behalf of the Holder of the requirements set forth in clause (b) below. 
  
 (b) Repurchases of Exchangeable Debentures under this Section 5.02 shall be made, at the option of the Holder thereof, upon: 
  
 (1) delivery to the Paying Agent by the Holder of a written notice of
repurchase (a “Repurchase Notice”) during the period beginning at any time from 9:00 am, New York City time, on the date that is 20 Business Days prior to the relevant Repurchase Date until 5:00 pm on the second Business Day prior
to the Repurchase Date stating: 
  
 (i) if certificated
Exchangeable Debentures have been issued, the certificate number of the Exchangeable Debenture which the Holder will deliver to be purchased, or if not certificated, the appropriate Depositary procedures; 
  
 (ii) the portion of the principal amount at maturity of the Exchangeable
Debentures which the Holder will deliver to be purchased, which portion must be in principal amounts at maturity of $1,000 or an integral multiple thereof; 
  

 12 

 (iii) that such Exchangeable Debentures shall be purchased by the Company as of the Repurchase Date
pursuant to the terms and conditions specified in this Thirteenth Supplemental Indenture and in the Indenture; 
  
 (2) book-entry transfer or, if the Exchangeable Debentures are certificated, delivery of such Exchangeable Debenture to the Paying Agent prior to, on or
after the Repurchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery being a condition to receipt by the Holder of the Repurchase Price therefor; provided, however, that such Repurchase Price
shall be so paid pursuant to this Section 5.02 only if the Exchangeable Debenture so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Repurchase Notice, as determined by the Company. 

 
 (c) If the Exchangeable Debentures are not in certificated form, the
Repurchase Notice must comply with applicable Depositary procedures. 
  
 (d) The Company shall purchase from the Holder thereof, pursuant to this Section 5.02, a portion of an Exchangeable Debenture, if the principal amount at maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Thirteenth Supplemental Indenture and the Indenture that apply to the purchase of all of the Exchangeable Debentures also apply to the purchase of such portion of such Exchangeable Debenture. 
  
 (e) Any purchase by the Company contemplated pursuant to the provisions of
this Section 5.02 shall be consummated by the delivery to the Paying Agent of the cash or securities sufficient to pay the Repurchase Price to be received by the Holder promptly following the later of the Repurchase Date or the time of book-entry
transfer or delivery of the Exchangeable Debentures. 
  
 (f)
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Repurchase Notice contemplated by this Section 5.02 shall have the right to withdraw such Repurchase Notice at any time prior to 5:00 pm New York City
time on the second Business Day prior to the Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 5.03(b), which must comply with appropriate Depositary procedures. 
  
 (g) Simultaneously with the Repurchase Notice, the Company will disseminate a
press release through Dow Jones & Company, Inc. or Bloomberg Business News containing the information set forth in this Section 5.02, or publish such information on the Company’s web site or through such other public medium the Company may
use at the time. 
  

 13 

 (h) The Company may arrange for a third party to purchase any Exchangeable Debentures for which it
receives a valid Repurchase Notice that is not withdrawn in accordance with Section 5.03(b), in the manner and otherwise in compliance with the requirements set forth in this Thirteenth Supplemental Indenture and the Indenture relating to the
repurchase of the Exchangeable Debentures as contemplated pursuant to this Section 5.02. Such Exchangeable Debentures purchased pursuant to this Section 5.02(h) shall continue to be outstanding under Section 2.9 of the Indenture. 
  
 Section 5.03 Effect of Repurchase Notice. (a) Upon receipt by
the Paying Agent of the Repurchase Notice specified in Section 5.02(b), the Holder of the Exchangeable Debenture in respect of which such Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn as specified in clause (b) below)
thereafter be entitled to receive solely the Repurchase Price with respect to such Exchangeable Debenture. Such Repurchase Price shall be paid to such Holder, subject to receipts of funds and/or securities by the Paying Agent, promptly following the
later of (x) the Repurchase Date with respect to such Exchangeable Debenture and (y) the time of delivery of such Exchangeable Debenture to the Paying Agent by the Holder thereof in the manner required by Section 5.02(b)(2). Exchangeable Debentures
in respect of which a Repurchase Notice has been given by the Holder thereof may not be exchanged pursuant to Article 6 below on or after the date of delivery of such Repurchase Notice unless such Repurchase Notice has first been validly withdrawn
as specified in clause (b) below. 
  
 (b) Withdrawal of a
Repurchase Notice. A Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Repurchase Notice, at any time prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Repurchase Date, specifying: 
  
 (1) the certificate number of the Exchangeable Debenture in respect of which such notice of withdrawal is being submitted if Certificated Exchangeable Debentures have been issued, 
  
 (2) the principal amount of the Exchangeable Debentures with respect to which
such notice of withdrawal is being submitted, and 
  
 (3) the
principal amount, if any, of such Exchangeable Debentures which remains subject to the original Repurchase Notice, and which has been or will be delivered for purchase by the Company. 
  
 If Exchangeable Debentures are not in certificated form, the withdrawal notice must comply with applicable Depositary
procedures. 
  

 14 

 The Paying Agent shall promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof. 
  
 (c) Deposit of
Repurchase Price. Prior to 10:00 a.m. New York City time on the Repurchase Date, the Company shall deposit with the Trustee or with the Paying Agent an amount of cash (in immediately available funds if deposited on such Business Day), sufficient
to pay the aggregate Repurchase Price of all the Exchangeable Debentures or portions thereof which are to be purchased as of the Repurchase Date. 
  
 If the Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City time, on the Business Day immediately following the
applicable Repurchase Date, as the case may be, cash or securities, sufficient to pay the Repurchase Price of any Exchangeable Debentures for which a Repurchase Notice has been tendered and not withdrawn pursuant to clause (b) above, then, on such
Repurchase Date, such Exchangeable Debentures will cease to be outstanding and interest and Liquidated Damages, if any, on such Exchangeable Debentures will cease to accrue, whether or not such Exchangeable Debentures are delivered to the Paying
Agent, and the rights of the Holders in respect thereof shall terminate (other than the right to receive the Repurchase Price, upon delivery of such Exchangeable Debentures). 
  
 (d) Exchangeable Debentures Purchased in Part. Any Certificated Exchangeable Debenture which is to be purchased only
in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Exchangeable Debentures, without service charge, a new Exchangeable Debenture or
Exchangeable Debentures, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Exchangeable Debenture so surrendered which is not purchased.

  
 (e) Covenant to Comply With Securities Laws Upon Purchase
of Exchangeable Debentures. When complying with the provisions of Section 5.02 (provided that such offer or purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or purchase), and subject to any exemption under applicable laws, the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any applicable successor provision), under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, as applicable and (iii) otherwise comply with any applicable Federal 
  

 15 

 and state securities laws so as to permit the rights and obligations under Section 5.02 to be exercised in the time and
in the manner specified in Section 5.02. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 5.02, the Company’s compliance with such laws and regulations shall not in and of itself
cause a breach of its obligations under Section 5.02. 
  
 (f)
Repayment to the Company. The Trustee and the Paying Agent shall return to the Company any cash or securities that remain unclaimed for two years, together with interest or dividends, if any, thereon, held by them for the payment of the
Repurchase Price; provided, however, that to the extent that the aggregate amount of cash or securities deposited by the Company pursuant to clause (c) above exceeds the aggregate Repurchase Price of the Exchangeable Debentures or portions
thereof which the Company is obligated to purchase as of the Repurchase Date, then, promptly after the Business Day following the Repurchase Date, as the case may be, the Trustee shall return any such excess to the Company together with interest, if
any, or dividends thereon. 
  
 Section 5.04 Merger and Sale
of Assets by Host REIT. For purposes of the Exchangeable Debentures, Article 5 of the Indenture is hereby superseded with the following. 
  
 “Neither the Company nor Host REIT may (1) consolidate or merge into any other Person or sell, convey, lease or transfer its
properties and assets substantially as an entirety to any other Person in any one transaction or series of related transactions, or (2) permit any person to consolidate with or merge into it, unless, (a) in case of merger or consolidation, either
the Company or Host REIT (as the case may be) are the surviving Person or if the Company or Host REIT are not the surviving Person, the surviving Person formed by such consolidation or into which the Company or Host REIT are merged or the person to
which the Company’s or Host REIT’s properties and assets are so transferred shall be an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall execute and
deliver to the Trustee a supplemental indenture expressly assuming, in the case of a transaction involving the Company, the payment when due of the principal of and interest on the debentures and in the case of a transaction involving the Company or
Host REIT, the performance of each of the Company or Host REIT’s (as the case may be) other covenants under this Thirteenth Supplemental Indenture, and (b) in either case, immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing;” 
  
 Section 5.05 Successor Person Substituted. Upon any consolidation or merger or any transfer of all or substantially all of the assets of the Company or Host REIT (as the case may be), in accordance with Section 5.04, the
successor Person 
  

 16 

 formed by such consolidation or into which the Company or Host REIT, as applicable, is merged or to which such transfer
is made, shall succeed to, be substituted for, and may exercise every right and power of the Company or Host REIT, as applicable, under this Indenture with the same effect as if such successor Person had been named therein as the Company or Host
REIT, as applicable, and the Company or Host REIT, as applicable, shall be released from the obligations under the Exchangeable Debentures and this Indenture. 
  

ARTICLE 6 
  
 Section 6.01 Exchange Right. A Holder of an Exchangeable Debenture may surrender for exchange such Exchangeable Debenture into shares of
Host REIT Common Stock as set forth in this Article 6. The Company shall notify the Trustee of the date on which the Exchangeable Debentures first become exchangeable, which certificate shall set forth the calculations on which such determination
was made. Unless and until the Trustee receives such certificate, the Trustee may conclusively assume without inquiry that the Exchangeable Debentures are not exchangeable. 
  
 Section 6.02 Subject to and upon compliance with the provisions of this Article 6, a Holder of an Exchangeable Debenture may
surrender its Exchangeable Debentures for exchange into shares of Host REIT Common Stock at the applicable Exchange Rate (as defined below) in effect on the date of exchange only as follows: 
  
 (a) during any Exchange Period prior to April 15, 2023, if the Sale Price of
Host REIT Common Stock for at least 20 Trading Days in the 30 consecutive Trading Day period ending on the first day of such Exchange Period is more than 120% of the Exchange Price on the first day of such Exchange Period. If an event set forth in
Section 6.07 below shall have occurred during the period of 30 consecutive Trading Days ending on the first day of an Exchange Period, the Sale Price of Host REIT Common Stock on each Trading Day of such period elapsing prior to the occurrence of
the event shall be deemed to have been appropriately adjusted to reflect the occurrence of the event. An “Exchange Period” will be the period from and including the eleventh Trading Day in a fiscal quarter to, but not including, the
eleventh Trading Day in the immediately following fiscal quarter. 
  
 (b) on any date after April 15, 2023 and prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Stated Maturity of the Exchangeable Debentures, if the Sale Price of the Host REIT Common Stock is more than 120%
of the then-current Exchange Price. 
  
 (c) during the five
consecutive Trading Day period beginning on the first Trading Day after any 20 consecutive Trading Day period in which the average of the Trading Prices for an Exchangeable Debenture for such 20 consecutive Trading Day period was less than 95% of
the average Sale Price of the Host REIT Common Stock during such 20 consecutive Trading Day period multiplied by the applicable Exchange Rate for such period. 
  

 17 

 The “Trading Price” of the Exchangeable Debentures on any date of determination means
the average of the secondary market bid quotations per Exchangeable Debenture obtained by the Trustee for $5,000,000 principal amount of the Exchangeable Debentures at approximately 3:30 p.m., New York City time, on such determination date from two
independent nationally recognized securities dealers designated by the Company, which may include any of the Initial Purchasers, provided that if at least two such bids cannot reasonably be obtained by the Trustee, but one such bid can
reasonably be obtained by the Trustee, this one bid shall be used. If the Trustee cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Exchangeable Debentures from a nationally recognized securities dealer or in the
reasonable judgment of the Company, the bid quotations are not indicative of the secondary market value of the Exchangeable Debentures, then the Trading Price of the Exchangeable Debentures will equal (a) the then-applicable Exchange Rate of the
Exchangeable Debentures multiplied by (b) 92% of the closing price on the New York Stock Exchange of Host REIT Common Stock on such determination date; provided that the Trustee shall not determine the Trading Price of the Exchangeable
Debentures unless requested by the Company; and provided, further, that the Company shall have no obligation to make such request unless a holder of Exchangeable Debentures provides the Company with reasonable evidence that the Trading Price
of the Exchangeable Debenture for a 20 consecutive Trading Day period may be less than 95% of the average Sale Price of the Common Stock during such 20 consecutive Trading-Day period multiplied by the applicable Exchange Rate; and at which time, the
Company shall instruct the Trustee to determine the Trading Price of the Exchangeable Debentures for the past 20 consecutive Trading Day period to determine whether the Exchangeable Debentures are exchangeable pursuant to Section 6.02(c).

  
 (d) at any time prior to 5:00 p.m., New York City time, on the
second Business Day prior to the Redemption Date, if such Exchangeable Debenture has been called for redemption pursuant to Sections 1.03 of this Thirteenth Supplemental Indenture. 
  
 (e) if the Company or Host REIT elects to distribute to all Holders of Host REIT Common Stock (i) rights, options or
warrants entitling them to purchase, for a period expiring within 60 days, Host REIT Common Stock at less than the Sale Price of Host REIT Common Stock on the Trading Day immediately preceding the declaration of the dividend, or (ii) the
Company’s or Host REIT’s assets, debt securities or rights, options or warrants to purchase the Company’s or Host REIT’s securities, which distribution has a per share of value exceeding 12.5% of the Sale Price of Host REIT
Common Stock as of the Business Day preceding the date of declaration for such distribution, in each case, the Exchangeable Debentures may be surrendered for exchange beginning on the date the Company gives notice to the 
  

 18 

 Holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Date for such dividend or
distribution and Exchangeable Debentures may be surrendered for exchange at any time thereafter until 5:00 p.m. on the earlier of the Business Day prior to the Ex-Dividend Date and the date the Company announces that such distribution will not take
place. 
  
 (f) if the Company or Host REIT is party to a
consolidation, merger or binding share exchange, pursuant to which shares of Host REIT Common Stock would be exchanged into cash, securities or other property, the Exchangeable Debentures may be surrendered for exchange at any time from and after
the date which is 15 Business Days prior to the date the Company announces as the anticipated effective time until 5 Business Days after the actual date of such transaction. 
  
 (g) during any period in which the Host REIT Common Stock is not listed on a United States national securities exchange for
more than 30 consecutive days. 
  
 The Exchange Agent shall, on
behalf of the Company, determine daily if the Exchangeable Debentures are exchangeable as a result of the Sale Price of the Host REIT Common Stock and shall notify the Company and the Trustee; provided that the Company shall provide to the Exchange
Agent upon request, the Sale Price of the Host REIT Common Stock. 
  
 An Exchangeable Debenture in respect of which a Holder has delivered a Repurchase Notice or a Change of Control purchase notice exercising the option of such Holder to require the Company to purchase such Exchangeable Debenture may be
exchanged only if such notice of exercise is withdrawn in accordance with this Thirteenth Supplemental Indenture or the Indenture, as applicable. 
  
 No adjustment to the ability of a Holder to exchange shall be made if the Holder will otherwise participate in the distributions specified in clauses (e)
or (f) above without exchange. 
  
 Section 6.03 Exchange
Rate. The number of shares of Host REIT Common Stock issuable upon exchange of an Exchangeable Debenture per $1,000 of principal amount thereof (the “Exchange Rate”) shall initially be 54.6448 shares of Host REIT Common
Stock per $1,000 principal amount, subject to adjustment in certain events described below. 
  
 Section 6.04 Exchange Procedures. A Holder may exchange a portion of the principal amount at maturity of an Exchangeable Debenture if the portion exchanged is in a $1,000 principal amount or an integral
multiple of $1,000. Provisions of this Thirteenth Supplemental Indenture that apply to the exchange of all of an Exchangeable Debenture also apply to an exchange of a portion of an Exchangeable Debenture. 
  

 19 

 To surrender an Exchangeable Debenture for exchange, a Holder must, in the case of a Global Security,
comply with all applicable procedures of the Depositary, and in the case of a Certificated Exchangeable Debenture, (1) complete and manually sign the form of irrevocable exchange notice (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Exchange Agent, and (2) surrender, if the Exchangeable Debenture is in certificated form, the Certificated Exchangeable Debenture to the Exchange Agent, and in any such case, furnish appropriate endorsements and transfer
documents and pay any transfer or similar taxes and all other taxes or duties, if required. The first Business Day on which the Holder satisfies all those requirements is the exchange date (the “Exchange Date”). 
  
 As soon as practicable after the Exchange Date, the Company shall deliver to
the Holder, through the Exchange Agent, a certificate for the number of full shares of Host REIT Common Stock issuable upon the exchange, and cash in lieu of any fractional share determined pursuant to Section 6.05 below (other than in the case of
Holders of Exchangeable Debentures in book-entry form with the Depositary, which shares shall be delivered in accordance with the Depositary’s customary practice). The Person in whose name the certificate is registered shall be treated as a
shareholder of record as of 5:00 p.m. on the Exchange Date. Upon exchange of an Exchangeable Debenture in its entirety, such Person shall no longer be a Holder of such Exchangeable Debenture. 
  
 No payment or adjustment will be made for dividends on, or other
distributions with respect to, any shares of Host REIT Common Stock except as provided in this Article 6. On exchange of an Exchangeable Debenture, that portion of accrued and unpaid cash interest (including Liquidated Damages), if any, through the
Exchange Date with respect to the exchanged Exchangeable Debenture shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of the shares of Host REIT Common Stock
(together with the cash payment, if any, in lieu of fractional shares) for the Exchangeable Debenture being exchanged pursuant to the provisions hereof; and the fair market value of such shares of Host REIT Common Stock (together with any such cash
payment in lieu of fractional shares) shall be treated as issued, to the extent thereof, first in exchange for accrued and unpaid cash interest (including Liquidated Damages), if any, through the Exchange Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be treated as issued for the principal amount of the Exchangeable Debenture, including any accrued and unpaid interest (including Liquidated Damages) of the Exchangeable
Debenture being exchanged pursuant to the provisions hereof. The Company will not adjust the Exchange Rate to account for accrued interest, if any. If the Holder exchanges more than one Exchangeable Debenture at the same time, the number of shares
of Host REIT Common Stock issuable upon the exchange shall be based on the total principal amount of the Exchangeable Debentures, including any accrued and unpaid interest (including Liquidated Damages) of the Exchangeable Debentures exchanged.

  

 20 

 If the last day on which an Exchangeable Debenture may be exchanged is not a Business Day, the
Exchangeable Debenture may be surrendered on the next succeeding Business Day; notwithstanding the forgoing, an Exchangeable Debenture may not be surrendered for exchange after the Stated Maturity of the Exchangeable Debentures. 
  
 Upon surrender of an Exchangeable Debenture that is exchanged in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Exchangeable Debenture in an authorized denomination equal in principal amount at maturity to the unexchanged portion of the Exchangeable Debenture
surrendered. 
  
 Except as provided in this Section 6.03, an
exchanging Holder of Exchangeable Debentures shall not be entitled to receive any accrued and unpaid interest (including Liquidated Damages, if any) on any such Exchangeable Debentures being exchanged. By delivery to the Holder of the number of
shares of Host REIT Common Stock or other consideration issuable or payable upon exchange in accordance with this Section 6.03, any principal and accrued and unpaid interest (including Liquidated Damages, if any), on such Exchangeable Debentures
will be deemed to have been paid in full. If any Exchangeable Debentures are surrendered for exchange subsequent to the Regular Record Date preceding an Interest Payment Date but prior to such Interest Payment Date, the Holder of such Exchangeable
Debentures at 5:00 p.m. New York City time on such Record Date shall receive the interest payable on such Exchangeable Debenture on such Interest Payment Date (including Liquidated Damages, if any) notwithstanding the exchange thereof. Exchangeable
Debentures surrendered for exchange during the period from 5:00 p.m. New York City time on any Record Date preceding any Interest Payment Date to 9:00 a.m. New York City time on such Interest Payment Date shall (except in the case of Exchangeable
Debentures which have been called for redemption on a Redemption Date within such period) be accompanied by payment from exchanging Holders, for the account of the Company, in New York Clearing House funds, or other funds of an amount equal to the
interest payable on such Interest Payment Date (including Liquidated Damages, if any) on the Exchangeable Debentures being surrendered for exchange; provided, however, if the Company elects to redeem Exchangeable Debentures on a date
that is after the Regular Record Date but on or prior to the corresponding Interest Payment Date, and such Holder elects to exchange those Exchangeable Debentures, the Holder will not be required to pay the Company, at the time that Holder
surrenders those Exchangeable Debentures for exchange, the amount of interest such Holder will have received on the Interest Payment Date. 
  
 Notwithstanding the foregoing, if the Holder is exchanging their Exchangeable Debentures pursuant to Section 6.02(c) above and on the day before the
Exchange Date, the Sale Price of Host REIT Common Stock is equal to or greater than 100% but less than or equal to 120% of the Exchange Price, then a Holder surrendering its 
  

 21 

 Exchangeable Debentures for exchange shall receive, in lieu of Host REIT Common Stock based on the applicable Exchange
Rate, Host REIT Common Stock or cash, at the Company’s option, if on or prior to April 15, 2019, or cash, if after April 15, 2019, in each case, with a value equal to the principal amount of the Exchangeable Debenture (plus accrued and unpaid
interest and Liquidated Damages, if any) on the Exchange Date (such exchange, a “Principal Value Exchange”). Any Host REIT Common Stock to be delivered to the Holder by the Company upon a Principal Value Exchange shall be valued at
100% of the average Sale Price for the 20 consecutive Trading Days preceding such Exchange Date. The Company shall notify the Trustee and any surrendering Holder of Exchangeable Debentures whose exchange is a Principal Value Exchange of such
Principal Value Conversion by the second Trading Day following such Exchange Date and in such notice, state whether the Company shall pay to such Holder all or a portion of the principal amount of such Exchangeable Debentures in cash or, if prior to
April 15, 2019, Host REIT Common Stock. 
  
 Section 6.05
Fractional Shares. The Company will not issue fractional shares of Host REIT Common Stock upon exchange of an Exchangeable Debenture. Instead, the Company will pay cash based on the current market value of the fractional shares. The
current market value of a fractional share shall be determined, to the nearest 1/1,000th of a share, by multiplying the Sale Price of the Common Stock, on the last Trading Day immediately prior to the Exchange Date, of a full share by the fractional
amount and rounding the product to the nearest whole cent. Whether fractional shares are issuable upon a exchange will be determined on the basis of the total number of Exchangeable Debentures that the Holder is then exchanging into Host REIT Common
Stock and the aggregate number of shares of Host REIT Common Stock issuable upon such exchange. 
  
 Section 6.06 Taxes on Conversion. If a Holder submits an Exchangeable Debenture for exchange, the Company shall pay all stamp and all other
duties, if any, which may be imposed by the United States or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of shares of Host REIT Common Stock upon the exchange. However, the Holder shall pay
any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Exchange Agent may refuse to deliver the certificates representing the shares of Host REIT Common Stock being issued in a
name other than the Holder’s name until the Exchange Agent receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax
withholding required by law or regulations. 
  
 Section 6.07
Exchange Rate Adjustments. The Exchange Rate shall be subject to adjustment, without duplication, upon the occurrence of the below listed events. 
  

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 (a) Adjustment for Change in Host REIT Common Stock. If, after the Series Issue Date of the
Exchangeable Debentures, Host REIT: 
  
 (1) pays
a dividend or makes another distribution to all holders of Host REIT Common Stock payable exclusively in shares of Host REIT Common Stock; 
  
 (2) subdivides the outstanding shares of Host REIT Common Stock into a greater number of shares; 
  
 (3) combines the outstanding shares of Host REIT Common
Stock into a smaller number of shares; or 
  
 (4)
reclassifies the outstanding shares of Host REIT Common Stock, 
  
 then the
exchange privilege and the Exchange Rate in effect immediately prior to such action shall be adjusted so that the Holder of an Exchange Debenture thereafter exchanged may receive the number of shares of Host REIT Common Stock which such Holder would
have owned immediately following such action if such Holder had exchanged the Exchangeable Debenture immediately prior to such action. 
  
 The adjustment shall become effective immediately after the record date in the case of a dividend, distribution or subdivision and immediately after the
effective date in the case of a combination or reclassification. 
  
 If after an adjustment a Holder of an Exchangeable Debenture upon exchange of such Exchangeable Debenture may receive shares of two or more classes of Host REIT Capital Stock, the Exchange Rate shall thereafter be subject to adjustment upon
the occurrence of an action taken with respect to any such class of Host REIT Capital Stock as is contemplated by this Article 6 with respect to the Host REIT Common Stock, on terms comparable to those applicable to Host REIT Common Stock in this
Article 6. 
  
 (b) Adjustment for Rights Issue. If, after
the Series Issue Date of the Exchangeable Debentures, Host REIT distributes any rights, options or warrants to all holders of Host REIT Common Stock entitling them to subscribe for or purchase shares of Host REIT Common Stock at a price per share
less (or having an exchange price per share less) than the Market Price (on the Trading Day immediately preceding the time of announcement of such issuance) (except that no adjustment will be made if Holders of the Exchangeable Debentures may
participate in the distribution on a basis and with the notice that the Company’s Board of Directors determines to be fair and appropriate), the Exchange Rate shall be adjusted in accordance with the formula: 
  

			
	 R’ = R x
	  	      (O + N)      
	  	(O + (N x P)/M)

  

 23 

 where: 
  
 R’ = the adjusted Exchange Rate. 
  
 R = the current Exchange Rate. 
  
 O = the number of shares of Host REIT Common Stock outstanding on the record date for the distribution to which this clause (b) is being applied.

  
 N = the number of additional shares of Host REIT Common Stock
offered pursuant to the distribution. 
  
 P = the offering price
per share of the additional shares. 
  
 M = the Market Price.

  
 The adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive the rights, warrants or options to which this clause (b) applies. If all of the shares of Host REIT Common Stock subject to such rights, warrants or options have not been issued
when such rights, warrants or options expire, then the Exchange Rate shall promptly be readjusted to the Exchange Rate which would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of
the actual number of shares of Host REIT Common Stock issued upon the exercise of such rights, warrants or options. 
  
 No adjustment shall be made under this clause (b) if the application of the formula stated above in this clause (b) would result in a value of R’
that is equal to or less than the value of R. 
  
 (c)
Adjustment for Other Distributions. If, after the Series Issue Date of the Exchangeable Debentures, Host REIT makes the payment of dividends or distributions to all holders of Host REIT Common Stock consisting of evidence of indebtedness,
shares of capital stock or assets (excluding cash) or any rights, warrants or options to purchase securities, except for (w) those rights, options or warrants referred to in clause (b) above, (x) distributions referred to in clause (a) above, (y)
dividends and distributions paid exclusively in cash other than referred to in clauses (d) and (e) below), and (z) distributions upon mergers or consolidations, the Exchange Rate shall be adjusted, subject to the provisions of the last paragraph of
this clause (c), in accordance with the formula: 
  

			
	 R’ = R x
	  	    M    
	  	(M - F)

  

 24 

 where: 
  
 R’ = the adjusted Exchange Rate. 
  
 R = the current Exchange Rate. 
  
 M = the Market Price. 
  
 F = the fair market value (on the record date for the distribution to which this clause (c) applies) of the assets, securities, rights, warrants or
options to be distributed in respect of each share of Host REIT Common Stock in the distribution to which this clause (c) is being applied (including, in the case of cash dividends or other cash distributions giving rise to an adjustment, all such
cash distributed concurrently). 
  
 In the event Host REIT
distributes shares of Capital Stock of a Subsidiary to all Holders of Host REIT Common Stock, the Exchange Rate will be adjusted, if at all, based on the market value of the Subsidiary Capital Stock so distributed relative to the market value of the
shares of Host REIT Common Stock, as discussed below. The Board of Directors shall determine fair market values for the purposes of this clause (c), except that in respect of a dividend or other distribution of shares of Capital Stock of any class
or series, or similar equity interests, of or relating to a Subsidiary or other business unit of Host REIT to all Holders of Host REIT Common Stock (a “Spin-off”), the fair market value of the securities to be distributed shall
equal the average of the daily Sale Prices of those securities for the five consecutive Trading Days commencing on and including the sixth day of trading of those securities after the effectiveness of the Spin-off. In the event, however, that an
underwritten initial public offering of the securities in the Spin-off occurs simultaneously with the Spin-off, fair market value of the securities distributed in the Spin-off shall mean the initial public offering price of such securities and the
Market Price shall mean the Sale Price for the Common Stock on the same Trading Day. 
  
 The adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive the distribution to which this clause (c) applies, except that an adjustment related to
a Spin-off shall become effective at the earlier to occur of (i) 10 consecutive Trading Days after the effective date of the Spin-off and (ii) the initial public offering of the securities distributed in the Spin-off. 
  
 In the event that, with respect to any distribution to which this clause (c)
would otherwise apply, the difference “M-F” as defined in the above formula is less than $1.00 or “F” is equal to or greater than “M”, then the adjustment provided by this clause (c) shall not be made and in lieu
thereof the provisions of clause (k) shall apply to such distribution. 
  
 (d) Adjustment for Company Tender Offer. If, after the Series Issue Date of the Exchangeable Debentures, Host REIT or any Subsidiary of Host REIT pays holders of the shares of Host REIT Common Stock in respect of a tender offer,
other than an odd-lot offer, by Host REIT or any of its Subsidiaries for shares of Host REIT 
  

 25 

 Common Stock to the extent that the offer involves aggregate consideration that, together with any cash and the fair
market value of any other consideration payable in respect of any tender offer by Host REIT or any of its Subsidiaries for shares of Host REIT Common Stock consummated within the 365-day period preceding the expiration of such tender offer not
triggering an Exchange Rate adjustment, exceeds an amount equal to 12.5% of the market capitalization of the shares of Host REIT Common Stock on the expiration date of the tender offer, the Exchange Rate shall be increased in accordance with the
following formula: 
  

			
	 R’ = R x
	  	    M    
	  	(M - A)

  
 where: 
  
 R’ = the adjusted Exchange Rate. 
  
 R = the current Exchange Rate. 
  
 M = the Market Price. 
  
 A = the amount per share of such dividend or distribution (appropriately
adjusted from time to time for any stock dividends on or subdivisions or combination of Host REIT). 
  
 (e) Adjustment for Cash Distributions. If Host REIT shall, at any time or from time to time while any of the Exchangeable Debentures are
outstanding, by dividend or otherwise, distribute cash to all holders of Host REIT Common Stock (and such dividend or distribution does not trigger an adjustment pursuant to clause (d) above), the Exchange Rate will be adjusted in accordance with
the following formula: 
  

			
	 R’ = R x
	  	    M    
	  	(M - A)

  
 where: 
  
 R’ = the adjusted Exchange Rate. 
  
 R = the current Exchange Rate. 
  
 M = the Market Price. 
  
 A = the amount per share of such dividend or distribution (appropriately
adjusted from time to time for any stock dividends on or subdivisions or combination of Host REIT). 
  

 26 

 Notwithstanding the foregoing, in the event of an adjustment pursuant to clauses (d) and (e) above, in no
event shall the Exchange Rate be greater than the quotient of $1,000, divided by the Sale Price on March 16, 2004, subject to adjustment pursuant to clauses (a) through (c) above. 
  
 (f) When Adjustment May Be Deferred. No adjustment in the Exchange Rate need be made unless the adjustment would
require an increase or decrease of at least 1% in the Exchange Rate. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. Notwithstanding the foregoing, if the Exchangeable Debentures are
called for redemption, all adjustments not previously made will be made on the applicable Redemption Date. 
  
 All calculations under this Article 6 shall be made to the nearest cent or to the nearest 1/1,000th of a share, as the case may be. 
  
 (g) When No Adjustment Required. Host REIT has adopted a stockholders
rights plan under which Host REIT issued rights to all holders Host REIT Common Stock. If each share of the Host REIT Common Stock issued upon exchange of the Exchangeable Debentures at any time prior to the distribution of separate certificates
representing the rights will be entitled to receive the right, then no adjustment to the Exchange Rate need be made as a result of the issuance of such rights pursuant to such rights plan. Upon the occurrence of an event of separation of the rights
from the Host REIT Common Stock, the Exchange Ratio shall be adjusted in accordance with clause (b) above. If such an adjustment is made and the rights are later redeemed, invalidated or terminated, then a reversing adjustment shall be made.

  
 The applicable Exchange Rate will not be adjusted: 

 
 (1) upon the issuance of any shares of Host REIT Common Stock pursuant to
any present or future plan providing for the reinvestment of dividends or interest payable on securities of Host REIT and the investment of additional optional amounts in Host REIT Common Stock under any plan; 
  
 (2) upon the issuance of any shares of Host REIT Common Stock or options or
rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of the Host REIT; 
  
 (3) upon the issuance of any shares of Host REIT Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security
outstanding as of the Series Issue Date; 
  
 (4) as a result of a
tender offer solely to holders of less than 100 share of Host REIT Common Stock; and 
  
 (5) for the avoidance of doubt, upon the issuance of OP Units by the Company and the issuance of Host REIT Common Stock or cash upon redemption thereof. 
  

 27 

 No adjustment need be made if Holders of the Exchangeable Debentures may participate in the transaction
on an “as exchanged” basis. 
  
 Except as set forth in
clauses (a) through (e) above, the applicable Exchange Rate shall not be subject to an adjustment in the case of the issuance of any Host REIT Common Stock or Host REIT preferred stock, or securities exchangeable into or exchangeable for Host REIT
Common Stock or Host REIT preferred stock. 
  
 (h) Notice of
Adjustment. Whenever the Exchange Rate is adjusted, the Company shall promptly mail to Holders a notice of the adjustment. The Company shall file with the Trustee and the Exchange Agent such notice briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct. Neither the Trustee nor any Exchange Agent shall be under any duty or responsibility with respect to any such certificate except
to exhibit the same to any Holder desiring inspection thereof. 
  
 (i) Voluntary Increase. The Company from time to time may increase the Exchange Rate by any amount at any time (a) in order to avoid or diminish any income tax to holders of Host REIT Common Stock resulting from certain dividends,
distributions or issuance of rights or warrants, or (b) otherwise as the Company deems appropriate, for at least 20 Business Days, so long as the increase is irrevocable during such period. Whenever the Exchange Rate is increased, the Company shall
mail to Holders and file with the Trustee and the Exchange Agent a notice of the increase. The Company shall mail the notice at least 15 days before the date the increased Exchange Rate takes effect. The notice shall state the increased Exchange
Rate and the period it will be in effect. A voluntary increase of the Exchange Rate does not change or adjust the Exchange Rate otherwise in effect for purposes of clauses (a) through (e). 
  
 (j) Notice of Certain Transactions. If: 
  
 (1) the Company takes any action that would require an adjustment in the
Conversion Rate pursuant to clauses (a), (b), (c), (d) or (e) (unless no adjustment is to occur pursuant to clause (g)); or 
  
 (2) the Company takes any action that would require a supplemental indenture pursuant to clause (k) below; or 
  
 (3) there is a liquidation or dissolution of the Company;

  
 then the Company shall mail to Holders and file with the Trustee and the
Exchange Agent a notice stating the proposed record date for a dividend, distribution or subdivision or the proposed effective date of a combination, reclassification, consolidation, merger, binding share exchange, transfer, liquidation or
dissolution. The Company shall file and mail the notice at least 10 days before such date. Failure to file or mail the notice or any defect in it shall not affect the validity of the transaction. 
  

 28 

 (k) Reorganization of Company; Special Distributions. If the Company or Host REIT is a party to a
transaction subject to Article 5 of the Indenture (other than a sale of all or substantially all of the assets of Host REIT in a transaction in which the holders of Host REIT Common Stock immediately prior to such transaction do not receive
securities, cash or other assets of the Company or any other Person) or a merger or binding share exchange which reclassifies or changes its outstanding shares of Host REIT Common Stock, the Person obligated to deliver securities, cash or other
assets upon exchange of Exchangeable Debentures shall enter into a supplemental indenture. If the issuer of securities deliverable upon exchange of Exchangeable Debentures is an Affiliate of the successor company, that issuer shall join in the
supplemental indenture. 
  
 The supplemental indenture shall
provide that the Holder of an Exchangeable Debenture may exchange it into the kind and amount of securities, cash or other assets which such Holder would have received immediately after the consolidation, merger, binding share exchange or transfer
if such Holder had exchanged the Exchangeable Debenture immediately before the effective date of the transaction, assuming (to the extent applicable) that such Holder (i) was not a constituent Person or an Affiliate of a constituent Person to such
transaction; (ii) made no election with respect thereto; and (iii) was treated alike with the plurality of non-electing Holders. The supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article 6. The successor Company shall mail to Holders a notice briefly describing the supplemental indenture. 
  
 If Host REIT makes a distribution to all holders of Host REIT Common Stock of any of its assets, or debt securities or any rights, warrants or options to
purchase securities of Host REIT that, but for the provisions of the last paragraph of clause (c), would otherwise result in an adjustment in the Exchange Rate pursuant to the provisions of clause (c), then, from and after the record date for
determining the holders of Host REIT Common Stock entitled to receive the distribution, a Holder of an Exchangeable Debenture that exchanges such Exchangeable Debenture in accordance with the provisions of the Indenture shall upon such exchange be
entitled to receive, in addition to the shares of Host REIT Common Stock into which the Exchangeable Debenture is exchange, the kind and amount of securities, cash or other assets comprising the distribution that such Holder would have received if
such Holder had exchanged the Exchangeable Debenture immediately prior to the record date for determining the holders of Host REIT Common Stock entitled to receive the distribution. 
  
 Section 6.08 Company Determination Final. The Company shall make all calculations called for under the Exchangeable
Debentures in good faith and, absent manifest error, the Company’s calculations will be final and binding on Holders of the Exchangeable Debentures. A schedule of such calculations shall be provided to the Trustee, and the Trustee shall forward
the Company’s calculations to any Holder of the Exchangeable Debentures upon the request of that Holder. 
  

 29 

 Section 6.09 Trustee’s Adjustment Disclaimer. The Trustee has no duty to determine when an
adjustment under this Article 6 should be made, how it should be made or what it should be. The Trustee has no duty to determine whether a supplemental indenture under Section 6.07(j) need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable for and makes no representation as to the validity or value of any securities or assets issued upon exchange of Exchangeable Debentures. The Trustee shall not be responsible
for the Company’s failure to comply with this Article 6. The Trustee is entitled to conclusively rely upon the accuracy of the Company’s calculations without independent verification. Each Exchange Agent shall have the same protection
under this Section 6.09 as the Trustee. 
  
 Section 6.10
Simultaneous Adjustments. In the event that this Article 6 requires adjustments to the Exchange Rate under more than one of clauses (a), (b), (d) or (e) of Section 6.07, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by applying, first, the provisions of Section 6.07(a), second, the provisions of Section 6.07(b), third, the provisions of Section 6.07(c), fourth, the provisions of
Section 6.07(d), and fifth, the provision of Section 6.07(e). 
  
 Section 6.11 Successive Adjustments. After an adjustment to the Exchange Rate under this Article 6, any subsequent event requiring an adjustment under this Article 6 shall cause an adjustment to the Exchange Rate as so
adjusted. 
  
 Section 6.12 Ownership Limitation.
Notwithstanding any other provision of the Exchangeable Debenture, no Holders of Exchangeable Debentures shall be entitled to exchange such Exchangeable Debenture for Host REIT Common Stock to the extent that receipt of such shares would cause such
Holder (together with such Holder’s affiliates) to exceed the ownership limit contained in the Articles of Incorporation of Host REIT. 
  
 ARTICLE 7 
  
 Section 7.01 For purposes of the Exchangeable Debentures, Section 2.7 of the Indenture is hereby supplemented with, and where inconsistent replaced by,
the following provisions: 
  
 (a) Transfer and Exchange of
Global Securities. A Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another nominee of the Depository, or by the Depository or any
such nominee to a successor Depository or a nominee of such successor Depository. All Global Securities will be 
  

 30 

 exchanged by the Company for Certificated Exchangeable Debentures if (i) the Company delivers to the Trustee notice from
the Depository (A) that it is unwilling or unable to continue to act as Depository and a successor Depository is not appointed by the Company within 90 days after the date of such notice from the Depository or (B) that it is no longer a clearing
agency registered under the Exchange Act and a successor Depository is not appointed by the Company within 90 days after the date of such notice from the Depository, (ii) the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of Certificated Exchangeable Debentures or (iii) upon request of the Trustee or Holders of a majority of the aggregate principal amount of outstanding Exchangeable Debentures if there shall have occurred and be continuing a
Default or Event of Default with respect to the Exchangeable Debenture. Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above, upon surrender by the Depositary of the Global Security, Certificated Exchangeable Debentures
shall be issued in such names as the Depository shall instruct the Trustee. Global Securities also may be exchanged or replaced, in whole or in part, as provided in Sections 2.8 and 2.11 of the Indenture. A Global Security may not be exchanged for
another Exchangeable Debenture other than as provided in this Section 7.01(a) of this Thirteenth Supplemental Indenture; however, beneficial interests in a Global Security may be transferred and exchanged as provided in Section 7.01(b) or (c) of
this Thirteenth Supplemental Indenture. 
  
 (b) Transfer and
Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depository, in accordance with the provisions of the Indenture, the Applicable
Procedures, and the restrictions on transfer set forth herein. Transfers of beneficial interests in the Global Securities also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other
following subparagraphs, as applicable: 
  
 (i) Transfer of
Beneficial Interests in the Same Global Security. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security in accordance with the
transfer restrictions set forth in the Private Placement Legend. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 7.01(b)(i) of this Thirteenth Supplemental
Indenture. 
  
 (ii) All Other Transfers and Exchanges of
Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 7.01(b)(i) of this Thirteenth Supplemental Indenture, the transferor of such beneficial interest
must deliver to the Registrar either (A) (1) an order from a Participant or an Indirect Participant given to the Depository in accordance with the Applicable Procedures directing the Depository to credit or cause 
  

 31 

 to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) an order from a Participant or an Indirect
Participant given to the Depository in accordance with the Applicable Procedures directing the Depository to cause to be issued a Certificated Exchangeable Debenture in an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depository to the Registrar containing information regarding the Person in whose name such Certificated Exchangeable Debenture shall be registered to effect the transfer or exchange referred to in (B)(1) above. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in the Indenture and the Exchangeable Debentures, the Trustee shall adjust the principal amount of the relevant Global
Security(s) pursuant to Section 7.01(h) of this Thirteenth Supplemental Indenture. 
  
 (iii) Transfer of Beneficial Interests to Another Global Security. A beneficial interest in any Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in
another Global Security if the transfer complies with the requirements of Section 7.01(b)(ii) of this Thirteenth Supplemental Indenture and the Registrar receives a certificate in the form of Exhibit B to this Thirteenth Supplemental Indenture,
including the certifications in item (1) thereof. 
  
 (c) Transfer
or Exchange of Beneficial Interests for Certificated Exchangeable Debentures. 
  
 (i) Beneficial Interests in Global Securities to Certificated Exchangeable Debentures. If any holder of a beneficial interest in a Global Security proposes to exchange such beneficial interest for a
Certificated Exchangeable Debenture or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Certificated Exchangeable Debenture, then, if the exchange or transfer complies with the requirements of Section
7.01(a) of this Thirteenth Supplemental Indenture, upon receipt by the Registrar of the following documentation: 
  
 a) if the holder of such beneficial interest in a Global Security proposes to exchange such beneficial interest for a Certificated
Exchangeable Debenture, a certificate from such holder in the form of Exhibit C to this Thirteenth Supplemental Indenture, including the certifications in item (1)(a) thereof; 
  

 32 

 b) if such beneficial interest is being transferred to a QIB in accordance with Rule
144A under the Securities Act, a certificate to the effect set forth in Exhibit B to this Thirteenth Supplemental Indenture, including the certifications in item (1) thereof; or 
  
 c) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B to this Thirteenth Supplemental Indenture, including the certifications in item (2) thereof, 
  
 the Trustee shall cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 7.01(h) of this Thirteenth
Supplemental Indenture, and the Company shall execute and, upon receipt of a Company Order pursuant to Section 2.3 of the Indenture, the Trustee shall authenticate and deliver to the Person designated in the instructions a Certificated Exchangeable
Debenture in the appropriate principal amount. Any Certificated Exchangeable Debenture issued in exchange for a beneficial interest in a Global Security pursuant to this Section 7.01(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depository and the Participant or Indirect Participant. The Trustee shall deliver such Certificated
Exchangeable Debentures to the Persons in whose names such Exchangeable Debenture are so registered. Any Certificated Exchangeable Debenture issued in exchange for a beneficial interest in a Global Security pursuant to this Section 7.01(c)(i) shall
bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. 
  
 (d) Transfer and Exchange of Certificated Exchangeable Debentures for Beneficial Interests. 
  
 (i) Certificated Exchangeable Debentures to Beneficial Interests in
Restricted Global Securities. If any Holder of a Certificated Exchangeable Debenture proposes to exchange such Exchangeable Debenture for a beneficial interest in a Global Security or to transfer such Certificated Exchangeable Debentures to a
Person who takes delivery thereof in the form of a beneficial interest in a Global Security, then, upon receipt by the Registrar of the following documentation: 
  
 a) if the Holder of such Certificated Exchangeable Debenture proposes to exchange such Exchangeable
Debenture for a beneficial interest in a Global Security, a certificate from such Holder in the form of Exhibit C to this Thirteenth Supplemental Indenture, including the certifications in item (1)(b) thereof; or 
  

 33 

 b) if such Certificated Exchangeable Debenture is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B to this Thirteenth Supplemental Indenture, including the certifications in item (1) thereof, 
  
 the Trustee shall cancel the Certificated Exchangeable Debenture, and increase or cause to be
increased the aggregate principal amount of the appropriate Global Security. 
  
 (e) Transfer and Exchange of Certificated Exchangeable Debentures for Certificated Exchangeable Debentures. Upon request by a Holder of Certificated Exchangeable Debentures and such Holder’s compliance
with the provisions of this Section 7.01(e) of this Thirteenth Supplemental Indenture, the Registrar shall register the transfer or exchange of Certificated Exchangeable Debentures. Prior to such registration of transfer or exchange, the requesting
Holder shall present or surrender to the Registrar the Certificated Exchangeable Debentures duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly
authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 7.01(e) of this Thirteenth Supplemental
Indenture. 
  
 (i) Any Certificated Exchangeable Debenture may be
transferred to and registered in the name of Persons who take delivery thereof in the form of a Certificated Exchangeable Debenture if the Registrar receives from the transferor a certificate in the form of Exhibit B to this Thirteenth Supplemental
Indenture, including the certifications in item (1) thereof. 
  
 (f) Legends. The following legends shall appear on the face of all Global Securities and Certificated Exchangeable Debentures issued under the Indenture unless specifically stated otherwise in the applicable provisions of the
Indenture. 
  
 (i) Private Placement Legend. 

 
 a) Each Global Security and each Certificated
Exchangeable Debenture (and all Exchangeable Debentures issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: 
  
 “THIS DEBENTURE (OR ITS PREDECESSOR) AND ANY COMMON STOCK ISSUABLE UPON THE EXCHANGE OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED 
  

 34 

 (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: 
  
 (1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE OPERATING PARTNERSHIP OR ANY GUARANTOR WHOLLY OWNED BY THE OPERATING PARTNERSHIP OR ANY OF THEIR RESPECTIVE WHOLLY OWNED
SUBSIDIARIES, OR (B) TO A PERSON WHO IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE AS TO THE ABOVE
RESTRICTIONS. 
  
 THE HOST REIT COMMON STOCK ISSUABLE UPON EXCHANGE OF THE
DEBENTURES IS SUBJECT TO CERTAIN RESTRICTIONS ON OWNERSHIP AND TRANSFER. HOST MARRIOTT, L.P. WILL FURNISH A FULL STATEMENT ABOUT THE RESTRICTIONS ON TRANSFERABILITY AND OWNERSHIP OF THE HOST REIT COMMON STOCK TO ANY HOLDER ON REQUEST AND WITHOUT
CHARGE. SUCH REQUEST MAY BE MADE TO THE HOST REIT CORPORATE SECRETARY AT HOST REIT’S PRINCIPLE OFFICE. THIS DEBENTURE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS EXCHANGE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS DEBENTURE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS DEBENTURE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS DEBENTURE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.” 
  
 PURSUANT TO SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS
DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. TO OBTAIN (I) THE ISSUE PRICE OF THIS 
  

 35 

 DEBENTURE, (II) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, (III) THE ISSUE DATE, OR (IV) THE YIELD TO MATURITY; CONTACT
INVESTOR RELATIONS AT 9603 ROCKLEDGE DRIVE, SUITE 1500, BETHESDA, MARYLAND 20817, OR BY PHONE AT (240) 744-1000. 
  
 (ii) Global Security Legend. To the extent required by the Depository, each Global Security shall bear a legend in substantially the following
form: 
  
 “THIS GLOBAL SECURITY IS HELD BY THE DEPOSITORY
(AS DEFINED IN THE INDENTURE GOVERNING THIS GLOBAL SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 7.01 OF THE THIRTEENTH SUPPLEMENTAL INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 7.01(a) OF THE THIRTEENTH SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL
SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.” 
  
 (g) Cancellation and/or Adjustment of Global Securities. At such time
as all beneficial interests in a particular Global Security have been exchanged for Certificated Exchangeable Debentures or a particular Global Security has been redeemed, repurchased or cancelled in whole and not in part, each such Global Security
shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.12 of the Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another Global Security or for Certificated Exchangeable Debentures, the principal amount of Exchangeable Debentures represented by such Global Security shall be reduced accordingly
and an endorsement shall be made on such Global Security by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository at the direction
of the Trustee to reflect such increase. 
  

 36 

 (h) General Provisions Relating to Transfers and Exchanges. 
  
 (i) To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Global Securities and Certificated Exchangeable Debentures upon receipt of a Company Order. 
  
 (ii) No service charge shall be made to a holder of a beneficial interest in a Global Security or to a Holder of a Certificated Exchangeable Debenture
for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.6, 4.12 and 10.1 of the Indenture). 
  
 (iii) The Registrar shall not be required to register the transfer of or exchange any Exchangeable Debenture selected for redemption in whole or in part,
except the unredeemed portion of any Exchangeable Debenture being redeemed in part. 
  
 (iv) All Global Securities and Certificated Exchangeable Debentures issued upon any registration of transfer or exchange of Global Securities or Certificated Exchangeable Debentures shall be the valid obligations of
the Company, evidencing the same Indebtedness, and entitled to the same benefits under the Indenture, as the Global Securities or Certificated Exchangeable Debentures surrendered upon such registration of transfer or exchange. 
  
 (v) Prior to due presentment for the registration of a transfer of any
Exchangeable Debenture, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Exchangeable Debenture is registered as the absolute owner of such Exchangeable Debenture for the purpose of receiving payment of
principal of and interest on such Exchangeable Debentures and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. 
  
 (vi) The Trustee shall authenticate Global Securities and Certificated Exchangeable Debentures in accordance with the
provisions of Section 2.3 of the Indenture. 
  
 (vii) All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 7.01 to effect a registration of transfer or exchange may be submitted by facsimile. 
  

 37 

 Notwithstanding anything herein to the contrary, as to any certifications and certificates delivered to
the Registrar pursuant to this Section 7.01 of this Thirteenth Supplemental Indenture, the Registrar’s duties shall be limited to confirming that any such certifications and certificates delivered to it are substantially in the form of Exhibits
A, B and C attached to this Thirteenth Supplemental Indenture. The Registrar shall not be responsible for confirming the truth or accuracy of representations made in any such certifications or certificates. 
  
 ARTICLE 8 
  
 Section 8.01 Events of Default. For purposes of the Exchangeable Debentures, Section 6.1(c) of the Indenture
shall be amended to read: 
  
 “(c) the failure by the
Company, any Subsidiary Guarantors, or Host REIT to observe or perform any other covenant or agreement contained in the Exchangeable Debentures or the Indenture with respect to the Exchangeable Debentures and the continuance of such failure for a
period of 30 days after written notice is given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Exchangeable Debentures;”. 
  
 ARTICLE 9 
  
 Section 9.01 Amendments and Supplements. (a) For purposes of the Exchangeable Debentures, Section 9.1 of the
Indenture is hereby amended by replacing subsection (a) with the following: 
  
 “(a) to cure any ambiguity, omission, defect or inconsistency, or correct or supplement any provision in the Indenture which may be defective or inconsistent with any other provision; provided that such
modification will not adversely affect the interests of the holders of the Debentures.” 
  
 (b) For purposes of the Exchangeable Debentures, Section 9.1 of the Indenture is hereby supplemented by adding the following: 
  
 “(k) to increase the Exchange Rate or reduce the Exchange Price; provided that the increase or reduction, as the
case may be, is in accordance with Article 6 of the Thirteenth Supplemental Indenture and this Indenture or will not adversely affect the interest of the Holders of the Exchangeable Debentures; 
  

 38 

 (l) to add events of default with respect to the Exchangeable Debentures; and 
  
 (m) to add circumstances under which the Company shall pay Liquidated
Damages on the Exchangeable Debentures. 
  
 (n) to provide for
the assumption of our obligations under the Indenture by a successor upon any merger, consolidation or asset transfer permitted under the indenture; 
  
 (o) to add covenants that would benefit the holders of Debentures or to surrender any rights we have under the Indenture.” 
  
 (c) For purposes of the Exchangeable Debentures, Section 9.3 of the Indenture
is hereby supplemented by adding the following: 
  
 “(j)
alter the provisions relating to the Holders’ rights upon a Change of Control in a manner adverse to the Holders of the Exchangeable Debentures, including the Company’s obligations to repurchase the Exchangeable Debentures upon a Change of
Control; 
  
 (k) reduce the redemption price or Repurchase Price
of the Exchangeable Debentures or change the time at which the Exchangeable Debentures may or must be redeemed or repurchased; 
  
 (l) make payments on the Exchangeable Debentures in currency other than as originally stated in the Exchangeable Debentures; and 
  
 (m) adversely affect the Holders’ rights contained in Articles 5 and 6
of the Thirteenth Supplemental Indenture.” 
  
 ARTICLE 10

  
 Section 10.01 Except as specifically modified herein, the
Indenture is in all respects ratified and confirmed and shall remain in full force and effect in accordance with its terms. 
  
 Section 10.02 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed or shall be construed to be assumed by
the Trustee by reason of this Thirteenth Supplemental Indenture. This Thirteenth Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if
those terms and conditions were repeated at length herein and made applicable to the Trustee with respect to this Thirteenth Supplemental Indenture. 
  

 39 

 Section 10.03 The Trustee shall not be responsible in any manner whatsoever for or in respect of the
recitals contained herein, all of which recitals are made solely by the Company and the Subsidiary Guarantors. 
  
 Section 10.04 THIS THIRTEENTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b). EACH OF THE COMPANY AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE
AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY AND THE SUBSIDIARY GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY AND THE SUBSIDIARY GUARANTORS IN ANY OTHER JURISDICTION. 
  
 Section 10.05 The parties may sign any number of copies of this Thirteenth Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.

  
 Section 10.06 All capitalized terms used in this Thirteenth
Supplemental Indenture which are not otherwise defined herein, shall have the respective meanings specified in the Indenture, unless the context otherwise requires. 
  
 Section 10.07 The Exchangeable Debentures may be issued in whole or in part in the form of one or more Global Securities,
registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). For so long as the Debentures are in Book-Entry Form, all notices, reports and other documents to the Holders shall be delivered through the
facilities of the DTC by the Trustee. 
  

 40 

 IN WITNESS WHEREOF, the parties to this Thirteenth Supplemental Indenture have caused this Thirteenth
Supplemental Indenture to be duly executed, all as of the date first written above. 
  

			
	COMPANY
	
	 HOST MARRIOTT, L.P., a Delaware limited partnership

	     BY: HOST MARRIOTT CORPORATION, its general partner

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

	
	 HOST MARRIOTT CORPORATION

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  
  

	
	SUBSIDIARY GUARANTORS
	
	 AIRPORT HOTELS LLC,

	 HOST OF BOSTON, LTD.,

	         BY: AIRPORT HOTELS LLC,

	 HOST OF HOUSTON, LTD.,

	         BY: AIRPORT HOTELS LLC

	 HOST OF HOUSTON 1979,

	         BY: AIRPORT HOTELS LLC

	         BY: HOST OF HOUSTON, LTD.

	             BY: AIRPORT HOTELS LLC

	 CHESAPEAKE FINANCIAL SERVICES LLC,

	 CITY CENTER INTERSTATE PARTNERSHIP LLC,

	 HMC RETIREMENT PROPERTIES, L.P.,

	         BY: DURBIN LLC

	 HMH MARINA LLC,

	 FARRELL’S ICE CREAM PARLOUR RESTAURANTS LLC,

	 HMC ATLANTA LLC,

  

 41 

	
	 HMC BCR HOLDINGS LLC,

	 HMC BURLINGAME LLC,

	 HMC CALIFORNIA LEASING LLC,

	 HMC CAPITAL LLC,

	 HMC CAPITAL RESOURCES LLC,

	 HMC PARK RIDGE LLC,

	 HMC PARTNERSHIP HOLDINGS LLC,

	 HOST PARK RIDGE LLC,

	 HMC SUITES LLC,

	 HMC SUITES LIMITED PARTNERSHIP,

	         BY: HMC SUITES LLC,

	 PRM LLC,

	 WELLSFORD-PARK RIDGE HMC HOTEL LIMITED
 PARTNERSHIP,

	         BY: HOST PARK RIDGE LLC,

	 YBG ASSOCIATES LLC,

	 HMC CHICAGO LLC,

	 HMC DESERT LLC,

	 HMC PALM DESERT LLC,

	 MDSM FINANCE LLC,

	 HMC DIVERSIFIED LLC,

	 HMC EAST SIDE II LLC,

	 HMC GATEWAY LLC,

	 HMC GRAND LLC,

	 HMC HANOVER LLC,

	 HMC HARTFORD LLC,

	 HMC HOTEL DEVELOPMENT LLC,

	 HMC HPP LLC,

	 HMC IHP HOLDINGS LLC,

	 HMC MANHATTAN BEACH LLC,

	 HMC MARKET STREET LLC,

	 NEW MARKET STREET LP,

	         BY: HMC MARKET STREET LLC

	 HMC GEORGIA LLC,

	 HMC MEXPARK LLC,

	 HMC POLANCO LLC,

	 HMC NGL LLC,

	 HMC OLS I L.P.,

	         BY: HMC OLS I LLC

	 HMC OP BN LLC,

	 HMC PACIFIC GATEWAY LLC,

	 HMC PLP LLC,

	 CHESAPEAKE HOTEL LIMITED PARTNERSHIP,

	         BY: HMC PLP LLC

	
	 HMC POTOMAC LLC,

	 HMC PROPERTIES I LLC,

	 HMC PROPERTIES II LLC,

	 HMC SBM TWO LLC,

	 HMC SEATTLE LLC,

	 HMC SFO LLC,

	 HMC SWISS HOLDINGS LLC,

	 HMC WATERFORD LLC,

	 HMH GENERAL PARTNER HOLDINGS LLC,

	 HMH NORFOLK LLC,

	 HMH NORFOLK, L.P.,

	         BY: HMH NORFOLK LLC

	 HMH PENTAGON LLC,

	 HMH RESTAURANTS LLC,

	 HMH RIVERS LLC,

	 HMH RIVERS, L.P.,

	         BY: HMH RIVERS LLC

	 HMH WTC LLC,

	 HMP CAPITAL VENTURES LLC,

	 HMP FINANCIAL SERVICES LLC,

	 HOST LA JOLLA LLC,

	 CITY CENTER HOTEL LIMITED PARTNERSHIP,

	         BY: HOST LA JOLLA LLC

	 TIMES SQUARE LLC,

	 IVY STREET LLC,

	 MARKET STREET HOST LLC,

	 MFR OF ILLINOIS LLC,

	 MFR OF VERMONT LLC,

	 MFR OF WISCONSIN LLC,

	 PHILADELPHIA AIRPORT HOTEL LLC,

	 PM FINANCIAL LLC,

	 PM FINANCIAL LP,

	         BY: PM FINANCIAL LLC

	 HMC PROPERTY LEASING LLC,

	 HMC HOST RESTAURANTS LLC,

	 SANTA CLARA HMC LLC,

	 S.D. HOTELS LLC,

	 TIMES SQUARE GP LLC,

	 DURBIN LLC,

	 HMC HT LLC,

	 HMC JWDC LLC,

	 HMC OLS I LLC,

	 HMC OLS II L.P.,

	         BY: HMC OLS I LLC

	
	 HMT LESSEE PARENT, LLC,

	 HMC/INTERSTATE ONTARIO, L.P.

	         BY: HMC PARTNERSHIP HOLDINGS LLC

	 HMC/INTERSTATE MANHATTAN BEACH, L.P.,

	         BY: HMC MANHATTAN BEACH LLC

	 HOST/INTERSTATE PARTNERSHIP, L.P.

	         BY: CITY CENTER INTERSTATE PARTNERSHIP LLC

	 HMC/INTERSTATE WATERFORD, L.P.

	         BY: HMC WATERFORD LLC

	 AMELIATEL,

	         BY: HMC AMELIA I LLC,

	             BY: HMC AMELIA II LLC,

	 HMC AMELIA I LLC,

	 HMC AMELIA II LLC,

	 ROCKLEDGE HOTEL LLC,

	 FERNWOOD HOTEL LLC,

	 HMC COPLEY LLC,

	 HMC HEADHOUSE FUNDING LLC,

	 IVY STREET HOPEWELL LLC,

	 HMC DIVERSIFIED AMERICAN HOTELS, L.P.,

	         BY: HMC DIVERSIFIED LLC, AND

	 POTOMAC HOTEL LIMITED PARTNERSHIP,

	         BY: HMC POTOMAC LLC

	
	 By:

	         Name:

	         Title:

			
	TRUSTEE
	
	 THE BANK OF NEW YORK,

	 as Trustee

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

 EXHIBIT A 
  

[Face of Debenture] 
  
 THIS GLOBAL SECURITY IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS GLOBAL SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 7.01 OF THE THIRTEENTH SUPPLEMENTAL INDENTURE, (II) THIS GLOBAL SECURITY
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 7.01(a) OF THE THIRTEENTH SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 
  
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR 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.]1 
  
 THIS DEBENTURE (OR ITS PREDECESSOR) AND ANY COMMON STOCK ISSUABLE UPON THE EXCHANGE OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: 
  
 (1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE OPERATING PARTNERSHIP OR ANY
GUARANTOR WHOLLY OWNED BY THE OPERATING PARTNERSHIP OR ANY OF THEIR RESPECTIVE WHOLLY OWNED SUBSIDIARIES, (B) TO A PERSON WHO IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS DEBENTURE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE AS TO THE ABOVE RESTRICTIONS. 
  
 THE HOST REIT COMMON STOCK ISSUABLE UPON EXCHANGE OF THE DEBENTURES IS SUBJECT TO CERTAIN RESTRICTIONS ON OWNERSHIP AND TRANSFER. HOST MARRIOTT, L.P. WILL FURNISH A FULL STATEMENT ABOUT THE RESTRICTIONS ON
TRANSFERABILITY AND OWNERSHIP OF THE HOST REIT COMMON STOCK TO ANY HOLDER ON REQUEST AND WITHOUT CHARGE. SUCH REQUEST MAY BE MADE TO THE HOST REIT CORPORATE SECRETARY AT HOST REIT’S PRINCIPLE OFFICE. THIS DEBENTURE, ANY SHARES OF COMMON STOCK
ISSUABLE UPON ITS EXCHANGE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS DEBENTURE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF 

	1	To be used only if the Exchangeable Debenture is issued as a Global Security. 

 RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS DEBENTURE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS
DEBENTURE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. 
  
 PURSUANT TO SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. TO OBTAIN THE (I) THE ISSUE PRICE OF THIS DEBENTURE, (II) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, (III) THE ISSUE DATE, OR (IV) THE YIELD TO MATURITY; CONTACT INVESTOR RELATIONS AT 6903 ROCKLEDGE DRIVE, SUITE 1500, BETHESDA, MARYLAND 20817, OR BY PHONE AT (240) 744-1000. 
  
 HOST MARRIOTT, L.P. 
  
 3.25% EXCHANGEABLE SENIOR DEBENTURES DUE APRIL 15, 2024 
  

			
	 No. 1
	  	CUSIP: 44108EAT5
	 	  	$                               

  
 Host Marriott, L.P.,
a Delaware limited partnership (hereinafter called the “Company,” which term includes any successors under the Indenture hereinafter referred to), for value received, hereby promises to pay to
            , or registered assigns, the principal sum of $            , on April 15, 2024. The Security is one of
the 3.25% Exchangeable Senior Debentures due 2024 referred to in such Indenture. 
  
 Interest Payment Dates: January 15, April 15, July 15 and October 15. 
  
 Record Dates: December 31, March 31, June 30 and September 30. 
  

Reference is made to the further provisions of this Debenture on the reverse side, which shall, for all purposes, have the same effect as if set forth
at this place. 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 
  

			
	 HOST MARRIOTT, L.P.

	 a Delaware limited partnership

	     By: Host Marriott Corporation, its general partner

		
	 By:
	 	  

	 	 	Name:
	 	 	Title:

  

			
	 Attest:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 TRUSTEE’S
CERTIFICATE OF AUTHENTICATION 
  
 This is one of the Securities
described in the within-mentioned Indenture. 
  

			
	 THE BANK OF NEW YORK

		
	 By
	 	  

	 	 	 Authorized Signatory

  

			
	 Dated:
	 	  

 [Reverse of Debenture] 
 3.25% EXCHANGEABLE SENIOR DEBENTURES DUE APRIL 15, 2024 
  
 1. Interest. 
  
 This Debenture shall bear interest at a rate of 3.25%
per year on the principal hereof, from March 16, 2004 or from the most recent Interest Payment Date (as defined below) to which payment has been made or duly provided for, payable quarterly in arrears on January 15, April 15, July 15 and October 15
of each year, beginning April 15, 2004 (each an “Interest Payment Date”) to the persons in whose names the Notes are registered at 5:00 p.m., New York City time, on December 31, March 31, June 30 and September 30 (each a “Regular
Record Date”) (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date. Each payment of interest shall include interest accrued for the period (the “Interest Period”), commencing on and
including the immediately preceding Interest Payment Date (or, if none, March 16, 2004) to, but excluding the applicable Interest Payment Date. The amount of interest payable for any Interest Period shall be computed on the basis of a 360-day year
consisting of twelve 30-day months. The amount of interest payable for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the days elapsed in any partial month. 
  
 Holders of Debentures at 5:00 p.m., New York City time, on a Regular Record Date will receive
payment of interest, including Liquidated Damages, if any, payable on the corresponding Interest Payment Date notwithstanding the exchange of such Notes at any time after 5:00 p.m., New York City time, on such Regular Record Date. Debentures
surrendered for exchange by a Holder during the period from 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the immediately following Interest Payment Date must be accompanied by payment of an amount
equal to the interest, including Liquidated Damages, if any, that the Holder is to receive on the Debentures; provided, however, that no such payment need be made if the Company has specified a redemption date that is after a Regular Record
Date and on or prior to the immediately following Interest Payment Date. 
  
 The
Company or Host REIT is permitted to withhold from payment of interest otherwise due to a Holder, from cash payable to a Holder on redemption or from shares of Host REIT common stock otherwise deliverable to a Holder upon exchange of a Debenture,
any amounts that either the Company or Host REIT is required by applicable laws to withhold. 
  
 2. Method of Payment. 
  
 The Company shall pay
interest on the Debentures (except defaulted interest) to the Persons who are the registered Holders at 5:00 p.m. on the Record Date immediately preceding the Interest Payment Date. Holders must surrender Debentures to a Paying Agent to collect
principal payments. Principal of, premium, if any, and interest on the Debentures will be payable in United States Dollars at the office or agency of the Company maintained for such purpose, in the Borough of Manhattan, The City of New York or at
the option of the Company, payment of interest may be made by check mailed to the Holders of the Debentures at the addresses set forth upon the registry books of the Company; provided, however, Holders of Global Securities will be entitled to
receive interest payments (other than at maturity) by wire transfer of immediately available funds, if appropriate wire transfer instructions have been received in writing by the Trustee not fewer than 15 days prior to the applicable Interest
Payment Date. Such wire instructions, upon receipt by the Trustee, shall remain in effect until revoked by such Holder. No service charge will be made for any registration of transfer or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 3. Paying Agent, Exchange Agent and Registrar. 
  
 Initially, the Trustee, shall act as Paying Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent, Exchange Agent, Registrar or co-registrar or approve a change in the office through which any Paying
Agent acts without notice, other than notice to the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may, subject to certain exceptions, act as Paying Agent, Exchange Agent, Registrar or co-registrar. 

 4. Indenture. 
  
 The Company issued the Debentures and the Subsidiary Guarantors issued their Guarantees under an Amended and Restated Indenture, dated as of
August 5, 1998, as supplemented (the “Indenture”), between the Company, its Parents, the Subsidiary Guarantors and the Trustee. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The Debentures
are limited to $500,000,000 in aggregate principal amount. The terms of the Debentures include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the
Indenture. The Debentures are subject to all such terms, and Holders of Debentures are referred to the Indenture and said Act for a statement of them. The Debentures are senior, general obligations of the Company, secured initially by a pledge of
Capital Stock of certain Subsidiaries of the Company, which pledge is shared equally and ratably with the Credit Facility, the Existing Senior Notes and certain future Indebtedness of the Company ranking pari passu with the Debentures. Each
Holder of this Debenture, by accepting the same, (a) agrees to and shall be bound by the provisions of the Indenture, (b) authorizes and directs the Trustee on his behalf to take such action as may be provided in the Indenture and (c) appoints the
Trustee his attorney-in-fact for such purpose. 
  
 5. Redemption at the Option of the Company. 
  
 No sinking fund is
provided for the Debentures. The Debentures shall be redeemable, in whole or in part, at any time on or after April 15, 2009, at the Company’s option, at the following prices expressed as a percentage of the principal amount, plus accrued and
unpaid interest and Liquidated Damages, if any, to the Redemption Date: 
  

				
	 Redemption Date

	  	Percentage

	 
	 April 19, 2009
	  	100.542	%
	 July 15, 2009
	  	100.407	%
	 October 15, 2009
	  	100.271	%
	 January 15, 2010
	  	100.136	%
	 April 15, 2010 and thereafter
	  	100.000	%

  
 If the Paying Agent holds, in
accordance with the terms of the Indenture, at 10:00 a.m., New York City time, on the applicable Redemption Date, money sufficient to pay the redemption price of any Debentures for which notice of redemption is given, then, on such Redemption Date,
such Debentures will cease to be outstanding and interest (including Liquidated Damages, if any) on such Debentures will cease to accrue, whether or not such Notes are delivered to the Paying Agent, and the rights of Holders in respect thereof shall
terminate (other than the right to receive the Redemption Price upon delivery of such Debentures). 
  
 6. Notice of Redemption. 
  
 Notice of redemption at the option of the Company shall be mailed at least 30 days but not more than 60 days before a redemption date to the each Holder of Debentures to
be redeemed at the Holder’s registered address. Notes in denominations larger than $1,000 principal amount may be redeemed in part but only in integral multiples of $1,000 principal amount. 
  
 7. Purchase By the Company at the Option of the Holder.

  
 (a) Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of the Debentures held by such Holder on April 15, 2010, April 15, 2014 and on April 15, 2019 (each a “Repurchase Date”), in integral multiples of $1,000 at a
Repurchase Price equal to 100% of the principal amount of the Debentures to be repurchased. 
  
 (b) At the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to offer to purchase the Debentures held by such Holder upon a Change of Control. The
Debentures shall be purchased at a repurchase price equal to 100% of the principal amount of the Debentures to be repurchased plus accrued and unpaid interest (including Liquidated Damages), if any, to, but not including, such Change of Control
Payment Date (the “Change in Control Payment”). 
  
 (c) Holders have the
right to withdraw any written notice delivered pursuant to Paragraph 7(a) above or Change of Control purchase notice delivered pursuant to Paragraph 7(b), as the case may be, by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture. 

 8. Exchange. 
  
 (a) The initial Exchange Rate is 54.6448 shares of Host REIT Common Stock per $1,000 principal amount at maturity, subject to adjustment in
certain events described in the Thirteenth Supplemental Indenture. A Holder that surrenders Debentures for exchange will receive cash in lieu of any fractional share of Host REIT Common Stock based on the Sale Price of the Host REIT Common Stock of
the Company on the Trading Day immediately prior to the Exchange Date. 
  
 (b)
Subject to and in compliance with the provisions of the Indenture (including, without limitation, the conditions to exchange of this Debentures set forth in Article 6 of the Thirteenth Supplemental Indenture) (and subject to the Company’s right
to deliver cash or Host REIT Common Stock upon a Principal Value Exchange), a Holder is entitled, at such Holder’s option, to exchange the Holder’s Note into shares of Host REIT Common Stock at the applicable Exchange Rate in effect on the
date of exchange. 
  
 (c) A Debenture in respect of which a Holder has delivered a
Repurchase Notice or Change of Control purchase notice, as the case may be, exercising the right of such Holder to require the Company to repurchase such Debenture may be exchanged only if such Repurchase Notice or Change of Control purchase notice
is withdrawn in accordance with the terms of the Indenture. 
  
 (d) No payment or
adjustment will be made for accrued and unpaid interest (including Liquidated Damages, if any) or dividends on the shares of Host REIT Common Stock, except as provided in the Indenture. 
  
 (e) To surrender a Debenture for exchange, in the case of a Global Security, a Holder must comply with all applicable procedures of the
Depository, and in the case of a Certificated Security, a Holder must (1) complete and manually sign the irrevocable exchange notice below (or complete and manually sign a facsimile of such notice) and deliver such notice to the Exchange Agent, (2)
surrender the Debenture, if certificated, to the Exchange Agent and in any such case furnish appropriate endorsements and transfer documents and pay any transfer or similar taxes and all other taxes or duties, if required. 
  
 (f) If the Company or Host REIT is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets as set forth in Article 5 of the Indenture, or a merger or binding share exchange which reclassifies or changes the outstanding shares of Host REIT Common Stock, the right to exchange
a Debentures into shares of Host REIT Common Stock may be changed into a right to exchange it into securities, cash or other assets of the Company or another Person. 
  
 9. Events of Default. 
  
 If an Event of Default with respect to the Debentures occurs and is continuing (other than an Event of Default relating to bankruptcy,
insolvency or reorganization of the Company), then either the Trustee or the Holders of 25% in aggregate principal amount of the Debentures then outstanding may declare all Debentures to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Debentures may not enforce the Indenture or the Debentures, except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Debentures.
Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Debentures may direct the Trustee in its exercise of any trust or power with respect to such Debentures. The Trustee may withhold from Holders of
Debentures notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines that withholding notice is in their interest. 
  
 10. Amendments and Waivers. 
  
 The Company, the Subsidiary Guarantors and the Trustee may enter into a supplemental indenture for certain limited purposes without the
consent of the Holders. Subject to certain exceptions, the Indenture or the Debentures may be amended or supplemented with the written consent of the Holders of not less than a majority in aggregate principal 

 amount of the Debentures then outstanding (except that any amendments or supplements to the provisions relating to
security interests or with respect to the Guarantees of the Subsidiary Guarantors shall require the consent of the holders of not less than 66% of the aggregate principal amount of the Securities then outstanding), and any existing Default or Event
of Default or compliance with any provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Debentures then outstanding. Without notice to or consent of any Holder, the parties thereto may under
certain circumstances amend or supplement the Indenture or the Debentures to, among other things, cure any ambiguity, defect or inconsistency, or make any other change that does not adversely affect the rights of any Holder of a Debentures.

  
 11. Denominations; Transfer; Exchange.

  
 The Debentures are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of, or exchange Debentures in accordance with, the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Debentures (a) selected for redemption except the unredeemed portion of any Debentures being
redeemed in part or (b) for a period beginning 15 Business Days before the mailing of a notice of an offer to repurchase or redemption and ending at 5:00 p.m. on the day of such mailing. 
  
 12. Persons Deemed Owners. 
  
 The registered Holder of this Debenture may be treated as the owner of it for all purposes. 
  
 13. Unclaimed Money or Securities. 
  
 If money for the payment of principal or interest remains unclaimed for two years, the
Trustee and the Paying Agent(s) will pay the money back to the Company at its written request. After that, all liability of the Trustee and such Paying Agent(s) with respect to such money shall cease. 
  
 14. Trustee Dealings with the Company. 
  
 The Trustee and each Agent under the Indenture, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company or any Subsidiary Guarantor or any of their Subsidiaries or any of their respective Affiliates, and may otherwise deal with such Persons as if it were not the Trustee or such
agent. 
  
 15. Calculations in Respect of
Securities. 
  
 The Company will be responsible for making all calculations
called for under the Debentures. The Company will make these calculations in good faith and, absent manifest error, the calculations will be final and binding on Holders of the Debentures. The Company shall provide to the Trustee a schedule of its
calculations, and the Trustee is entitled to rely upon the accuracy of such calculations without independent verification. The Trustee shall forward the Company’s calculations to any Holder of the Debentures upon the request of such Holder.

  
 16. No Recourse Against Others. 

 
 No recourse for the payment of the principal of, premium, if any, or interest on the
Debentures or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company or the Subsidiary Guarantors in the Indenture, or in the Debentures or because of the
creation of any Indebtedness represented thereby, shall be had against any incorporator, partner, stockholder, officer, director, employee or controlling Person of the Company or the Subsidiary Guarantors or of any successor Person thereof, except
as an obligor or guarantor of the Debentures pursuant to the Indenture. Each Holder, by accepting the Debentures, waives and releases all such liability. 

 17. Authentication. 
  
 This Debenture shall not be valid until an authorize signatory of the Trustee manually signs the Trustee’s Certificate of Authentication on the other side of this
Security. 
  
 18. 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 right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 
  
 19. CUSIP Numbers. 
  
 Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company will cause CUSIP numbers to be printed on the Debentures as a convenience to the Holders of the Debentures. No representation is made as to the accuracy of such numbers as printed on the Debentures and reliance may be placed
only on the other identification numbers printed hereon. 
  
 21. Additional Rights of Holders. 
  
 In addition
to the rights provided to Holders of Debentures under the Indenture, Holders of Debentures shall have all the rights set forth in the Registration Rights Agreement dated as of the date of the Thirteenth Supplemental Indenture, among the Company,
Host REIT, the Subsidiary Guarantors and the Initial Purchasers. 
  
 22. Governing Law. 
  
 THE INDENTURE AND THE
DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b).

  
 The Company will furnish to any Holder upon written request and without charge
a copy of the Indenture. Requests may be made to: 
  
 Host
Marriott, L.P. 
 6903 Rockledge Drive 
 Bethesda, Maryland 20817 
 Attention: Chief Financial Officer 

 ASSIGNMENT FORM 
  
 To assign this Debenture, fill in the form below: (I) or (We) assign and transfer this Debenture to 
  

 (Insert assignee’s soc.
sec. or tax I.D. no.) 
  

  

  

  

 (Print or type assignee’s name, address and zip code) 
  
 and irrevocably appoint                                 
                                        
                                        
                                        
                                        
                    
 to transfer this Debenture 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 face of this Security)

  
 Signature Guarantee* 
  

			
	
	  	 

	*	NOTICE: The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent
Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee. 

 EXCHANGE NOTICE 
  
 To exchange this Debenture into shares of Common Stock of Host REIT, check the box  ̈. 
  
 To
exchange only part of this Debenture, state the principal amount at maturity to be exchanged
                                     (which must be $1,000 or
an integral multiple of $1,000): 
  
 If you want the stock certificate made out in
another person’s name, fill in the form below: 
  

	
	                                      
                                        
                                        
                                        
                                        
                                        
                   
	(Insert assignee’s soc. sec. or tax I.D. no.)
	  

	  

	  

	  

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

  
  

					
	 	 	 	  	Your Signature:
	 Date:                       
	 	 	  	 
	 	 	 	 	

	 	 	 	  	(Sign exactly as your name appears on the other side of this Security)

  
 *Signature guaranteed by: 

 

			
		
	By:	 	 
	 	 	

  

	*	The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i)the Securities Transfer Agent Medallion
Program (STAMP); (ii)the New York Stock Exchange Medallion Program (MSP); (iii)the Stock Exchange Medallion Program (SEMP); or (iv)such other guaranty program acceptable to the Trustee. 

 OPTION OF HOLDER TO ELECT PURCHASE 
  
 If you want to elect to have this Security purchased by the Company pursuant to Section 5.02 of the Thirteenth Supplemental
Indenture or Article 10 of the Indenture, check the appropriate box: 
  

	 ̈	Section 5.02 

  

	 ̈	Article 10. 

  
 If you want to elect to have only part of this Security purchased by the Company pursuant to Section 5.02 or Article 10 of the Indenture, as the case may be, state the amount you want to be purchased:
$            . 
  

					
	 Date:                       
	 	 	  	Signature:                                     
                                        
    
	 	 	 	  	                  (Sign exactly as your name appears on
                  the other side of this Security)

  

	
	                    Signature
Guarantee***                                      
                                        
                                        
                               

  

	***	NOTICE: The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent
Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee. 

 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY2 
  
 The following exchanges of an interest in this Global Security for an interest in another Global Securities or for a Certificated Security, or exchanges of an interest in another Global Security or Certificated
Security for an interest in this Global Security, have been made: 
  

									
	 Date of Exchange

	 	 Amount of
 Decrease in
 Principal Amount
 of this Global
 Security

	 	 Amount of Increase
 in Principal
 Amount of this
 Global
 Security

	  	 Principal Amount
 of this Global
 Security Following
 Such Decrease
 (or Increase)

	  	 Signature of
 Authorized
 Officer of Trustee
 or Security
 Custodian

  

	2	This should be included only if the Security is issued in global form. 

 EXHIBIT B 
 FORM OF CERTIFICATE OF TRANSFER 
  
 Host Marriott, L.P. 
 6903 Rockledge Drive, Suite 1500 
 Bethesda, Maryland 20817 
 Attention: Chief Financial Officer 
  
 The Bank of New York 
 101 Barclay Street 
 New York, New York 10286 
 Attention: Corporate Trust Department 
  
 Re: 3.25% Exchangeable Senior Debentures due 2024 
  
 Dear Sirs: 
  
 Reference is
hereby made to the Amended and Restated Indenture, dated as of August 5, 1998 (the “Base Indenture”), among HMH Properties, Inc., its Parents and the Subsidiary Guarantors named therein (collectively, the “Subsidiary Guarantors”)
and The Bank of New York (the “Trustee”), and the Thirteenth Supplemental Indenture to the Base Indenture, dated as of March 16, 2004 (the “Thirteenth Supplemental Indenture” and, together with the Base Indenture, the
“Indenture”), among Host Marriott, L.P., as issuer (the “Company”), the Subsidiary Guarantors and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
                    , (the “Transferor”) owns and proposes to transfer the Debenture[s] or interest in such Debenture[s] specified
in Annex A hereto, in the principal amount of $                     in such Note[s] or interests (the “Transfer”), to
                     (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that: 
  
 [CHECK ALL THAT APPLY]

  
 1.      ̈    Check if Transferee will take delivery of a beneficial interest in a Rule 144A Global Security or a Certificated Exchangeable Debenture Pursuant
to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that
the beneficial interest or Certificated Exchangeable Debenture is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Certificated Exchangeable Debenture for its own account, or
for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any State of the United States and the restrictions set forth in the Private Placement Legend. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Exchangeable Debenture will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and/or
the Certificated Exchangeable Debenture and in the Indenture and the Securities Act. 
  
 2.     ̈    Check and complete if Transferee will take delivery of a
beneficial interest in a Certificated Exchangeable Debenture pursuant to any provision of the Securities Act other than Rule 144A . The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in
Global Securities and Certificated Exchangeable Debentures and pursuant to and in 

 accordance with the Securities Act and any applicable blue sky securities laws of any State of the United States, and
accordingly the Transferor hereby further certifies that such Transfer is being effected to the Company or a subsidiary thereof. 
  
 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. 
  

			
	                                      
                                        
                                        
      	  	 Dated:                                     
                                        
                                  

	 [Insert Name of Transferor]
	  	 

  

			
	 By:
	 	                                      
                                        
                  
	 	 	 Name:

	 	 	 Title:

 ANNEX A TO CERTIFICATE OF TRANSFER 
  

	1.	The Transferor owns and proposes to transfer the following: 

  
 [CHECK ONE OF (a) OR (b)] 
  

	 ̈	(a)     a beneficial interest in a Global Security (CUSIP[            ]), or

  

	 ̈	(b)     a Certificated Exchangeable Debenture. 

  
 2. After the Transfer the Transferee will hold: 
  
 [CHECK ONE] 
  

	 ̈	(a)     a beneficial interest in a Restricted Global Security (CUSIP[            ]); or

  

	 ̈	(b)     a Certificated Exchangeable Debenture. 

  
 in accordance with the terms of the Indenture. 

 EXHIBIT C 
 FORM OF CERTIFICATE OF EXCHANGE 
  
 Host Marriott, L.P. 
 6903 Rockledge Drive, Suite 1500 
 Bethesda, Maryland 20817 
 Attention: Chief Financial Officer 
  
 The Bank of New York 
 101 Barclay Street 
 New York, New York 10286 
 Attention: Corporate Trust Department 
  
 Re: 3.25% Exchangeable Senior Debentures due 2024 
  
 Dear Sirs: 
  
 Reference is hereby made to the Amended and Restated Indenture, dated as of August 5, 1998 (the “Base Indenture”), among HMH Properties, Inc.,
its Parents and the Subsidiary Guarantors named therein (collectively, the “Subsidiary Guarantors”) and The Bank of New York, as trustee (the “Trustee”), and the Thirteenth Supplemental Indenture to the Base Indenture, dated as
of March 16, 2004 (the “Thirteenth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), among Host Marriott, L.P., as issuer (the “Company”), the Subsidiary Guarantors and the Trustee.
Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 
  
                     , (the “Owner”)
owns and proposes to exchange the Debenture[s] or interest in such Debenture[s] specified herein, in the principal amount of
$                     in such Debenture[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby
certifies that: 
  
 1. Exchange of Certificated Exchangeable
Debentures or Beneficial Interests in Global Securities for Certificated Exchangeable Debentures or Beneficial Interests in Global Securities 
  
 (a)      ̈     Check if Exchange is from beneficial interest in a Global Security to Certificated Exchangeable Debenture. In connection with the Exchange of the Owner’s beneficial interest in a Global Security for a
Certificated Exchangeable Debenture with an equal principal amount, the Owner hereby certifies that the Certificated Exchangeable Debenture is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Certificated Exchangeable Debenture issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Certificated Exchangeable
Debenture and in the Indenture and the Securities Act. 
  
 (b)      ̈     Check if Exchange is from Certificated Exchangeable Debenture to beneficial
interest in a Global Security. In connection with the Exchange of the Owner’s Certificated Exchangeable Debenture for a beneficial interest in the Global Security with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Securities and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky securities laws of any State of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be
subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Global Security and in the Indenture and the Securities Act. 

 This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

  

			
	  

	 [Insert Name of Owner]

	 
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

	 	 	 
	 Dated:

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