Document:

Employment Continuation Agreement

 EXHIBIT 10.13 
  
 EXECUTIVE EMPLOYMENT CONTINUATION AGREEMENT 
  
 Micromuse Inc. (“the Company”) and Mike Donohue
(“Executive” or “you”), in recognition of his contributions to the past success of the Company and in order to promote continuing contributions in the future, in partial consideration for their continuing employment relationship
and to encourage continued employment in the event of a Change of Control, agree as follows concerning his employment by the Company: 
  
 1.    Executive agrees to continue to devote his full time efforts to the success of the Company and the Company and Executive agree that they will each be entitled from the other to 12 months Notice of
Termination of employment (“Notice Period”). During the Notice Period, Executive will be entitled to receive the compensation and benefits summarized below in Paragraph 2, in accordance with the terms of this Executive Employment
Continuation Agreement (“Agreement”). In order to receive the benefits of this Agreement, Executive agrees to execute the Company’s form of release and non-competition agreement at the beginning and end of the Notice Period. Executive
shall be entitled to the compensation and benefits contained in this Agreement provided that there is no “Cause” for termination at or after the beginning of the Notice Period. For purposes of this Agreement, “Cause” means the
commission of any act of fraud, embezzlement or dishonesty, conviction of a felony under the laws of the United States or any state thereof, gross misconduct, continued failure to perform assigned duties (other than due to physical or mental
disability) for 30 days after receiving written notification from the Board or the CEO, any unauthorized use or disclosure of confidential information or trade secrets of the Company or any parent or subsidiary (other than inconsequential
inadvertent disclosure), or any other intentional misconduct or breach of Executive’s employment obligations or commitments under this Agreement (e.g., assisting with transition of responsibilities during the Notice Period; assisting with
litigation involving the Company or its officers or directors, etc.) that adversely affects the business or affairs of the Company or any parent or subsidiary in a significant manner. 
  
 2.    In the event of Termination of Employment of Executive resulting from a Corporate Transaction, Change of Control or Hostile Take-Over (as those terms are defined in the
Company’s shareholder approved 1997 Stock Option/Stock Issuance Plan, collectively referred to in this Agreement as “Change of Control”) or from involuntary termination at any time by the Company for reasons other than Cause, the
Company will provide, during the 12 month Notice period, severance benefits as follows: 
  
 a.    One year of
Executive’s base salary, 
 b.    One year of Executive’s target bonus/commissions (the intend of a. and b. to be that Executive receives the value
of his current OTE (a and b are collectively “salary continuance”), which shall be pro-rated in the year of termination to assure receipt by Executive of 12 months value, 
 c.    Executive level medical, dental, life and disability insurance during the period of salary continuance, and 
 d.    Continued vesting of outstanding stock options during the period of salary continuance. 
  
 3.    “Termination of Employment” of Executive is deemed to have occurred when one of the following occurs: Executive’s base salary is materially reduced (other than in conjunction with identical or
larger percentage salary reductions to substantially all executives of equal and higher title) or Executive’s responsibilities are substantially reduced without express consent of Executive (e.g., he is no longer responsible for worldwide sales
of all of company’s or successor to the company software products or his title is substantially reduced) by the Company, or by any successor to the Company, in conjunction with or within one year after the close of a Change of Control.

  
 5.    This Agreement and the Executive’s offer letter set forth all of the terms of his employment by the
Company. The terms of Executive’s employment relationship can be modified only in a written document signed by the Executive and the CEO or his designee. 
 This Agreement is
entered into in California and any disputes hereunder shall first be submitted 

 

  
 to mediation by a mutually agreed mediator and thereafter any remaining disputes shall be submitted to
binding arbitration pursuant to the rules of the American Arbitration Association. 
  
 Agreed this
        day of December, 2001. 
  
 
	 MICROMUSE INC.
 	 	  	 	 MIKE DONOHUE
 
	 
	 By:
 	 	 
	 	  	 	 By:
 	 	 

	  	 	  	 	  	 	  	 	 (Signature)
 
	 
	 Title:
 	 	 
	 	  	 	 Date:Exhibit 10.18.3

                           THIRD AMENDMENT AND CONSENT

         THIRD  AMENDMENT  AND  CONSENT  (the  "Third  Amendment"),  dated as of
December 20, 2002, among FELCOR LODGING TRUST  INCORPORATED  (f/k/a FelCor Suite
Hotels,  Inc.),  a  Maryland  corporation  ("FelCor"),  FELCOR  LODGING  LIMITED
PARTNERSHIP  (f/k/a  FelCor  Suites  Limited  Partnership),  a Delaware  limited
partnership  ("FelCor  LP" and  collectively  with FelCor,  the "US  Borrower"),
FELCOR  CANADA CO., a Nova Scotia  unlimited  liability  company (the  "Canadian
Borrower" and collectively  with the US Borrower,  the "Borrower"),  the Lenders
from time to time party  thereto,  DEUTSCHE Bank Trust Company  AMERICAS  (f/k/a
Bankers Trust  Company),  as  Syndication  Agent (the  "Syndication  Agent") and
JPMORGAN CHASE BANK (f/k/a The Chase  Manhattan  Bank) ("JPMCB") and J.P. MORGAN
Bank  Canada  (f/k/a The Chase  Manhattan  Bank of  Canada)  ("JPM  Canada")  as
Administrative   Agent  for  the  Lenders.   Unless  otherwise  defined  herein,
capitalized  terms used herein and defined in the Credit  Agreement  referred to
below are used herein as so defined.

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

         WHEREAS,  the  Borrower,  the Lenders,  the  Syndication  Agent and the
Administrative  Agent are  party to the  Seventh  Amended  and  Restated  Credit
Agreement,  dated as of July 26, 2001 (as the same has been amended, modified or
supplemented to, but not including,  the date hereof,  the "Credit  Agreement");
and

         WHEREAS,  subject  to the terms and  conditions  set forth  below,  the
parties hereto wish to amend certain provisions the Credit Agreement as provided
herein;

         NOW, THEREFORE, it is agreed;

I.       Consent

         1. The US  Borrower  hereby  agrees  that for the  purposes of Sections
2.6(e), 2.6(f), 2.6(g), 7.4(b), 7.5(d) and 7.17 of the Credit Agreement, for the
period  from the  Third  Amendment  Effective  Date  until the  delivery  of the
Compliance  Certificate  pursuant to Section 6.11(d) of the Credit Agreement for
the Fiscal Quarter ending March 31, 2003, the US Borrower's  Total  Indebtedness
for borrowed money shall be deemed to be greater than 65% of Total Value.

II.      Amendments

         1. Section 1.1 of the Credit  Agreement  is hereby  amended by deleting
the definitions of "Applicable  Margin" and "Status" and inserting the following
new definitions in lieu thereof:

<PAGE>

                  "Applicable  Margin"  means,  with  respect to each  Revolving
         Credit Loan, the applicable  percentage per annum set forth below based
         upon (i) with respect to Level I through IV Status,  the Status then in
         effect and (ii) with respect to Level V through XIII Status, the Status
         in effect on the most recent  Applicable  Margin  Reset Date,  it being
         understood  that the Applicable  Margin for (i) Base Rate Loans,  Swing
         Advances  and  Canadian  Prime Rate Loans shall be the  percentage  set
         forth under the column  "Base  Rate/Canadian  Prime Rate  Loans",  (ii)
         Eurodollar  Rate  Loans  shall be the  percentage  set forth  under the
         column  "Eurodollar Rate Loans",  and (iii) the Commitment Fee shall be
         the percentage set forth under the column "Commitment Fee":

<TABLE>
<CAPTION>
                                    Base Rate/Canadian
                                        Prime Rate                 Eurodollar Rate                Commitment
                                          Loans                        Loans                         Fee
                                          -----                        -----                         ---
<S>                                       <C>                         <C>                            <C>

Level I Status                            0.0%                         .875%                         0.125%
Level II Status                           0.0%                        1.000%                         0.150%
Level III Status                          0.0%                        1.125%                         0.150%
Level IV Status                           0.0%                        1.250%                         0.200%
Level V Status                            0.0%                        1.375%                         0.200%
Level VI Status                           0.250%                      1.750%                         0.250%
Level VII Status                          0.375%                      1.875%                         0.250%
Level VIII Status                         0.500%                      2.000%                         0.300%
Level IX Status                           0.625%                      2.125%                         0.375%
Level X Status                            1.000%                      2.500%                         0.500%
Level XI Status                           1.375%                      2.875%                         0.500%
Level XII Status                          1.750%                      3.250%                         0.500%
Level XIII Status                         2.375%                      3.875%                         0.500%
</TABLE>

                  "Status"  means  the  existence  of Level I  Status,  Level II
Status,  Level III  Status,  Level IV Status,  Level V Status,  Level VI Status,
Level VII Status,  Level VIII Status,  Level IX Status, Level X Status, Level XI
Status, Level XII Status or Level XIII Status, as the case may be.

                  As used in this definition:

                  "Level I Status"  exists on any date if, on such date,  either
         US Borrower has a long-term  senior  unsecured actual debt rating of A-
         or better by S&P and A3 or better by  Moody's  Investor  Service,  Inc.
         ("Moody's");

                  "Level II Status" exists on any date if, on such date,  either
         US Borrower has a long-term senior unsecured actual debt rating of BBB+
         by S&P and Baa1 by Moody's;

                  "Level III Status" exists on any date if, on such date, either
         US Borrower has a long-term  senior unsecured actual debt rating of BBB
         by S&P and Baa2 by Moody's;

                  "Level IV Status" exists on any date if, on such date,  either
         US Borrower has a long-term senior unsecured debt rating of BBB- by S&P
         and Baa3 by Moody's;

                                       2
<PAGE>

                  "Level V Status"  exists on any date if, on such date (y) none
         of Level I Status  through  Level IV Status exists and (z) the Leverage
         Ratio is less than 25%;

                  "Level VI Status" exists on any date if, on such date (y) none
         of Level I Status  through  Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 25% but less than 35%;

                  "Level  VII  Status"  exists  on any date if, on such date (y)
         none of  Level I Status  through  Level IV  Status  exists  and (z) the
         Leverage Ratio is equal to or greater than 35% but less than 40%;

                  "Level  VIII  Status"  exists on any date if, on such date (y)
         none of  Level I Status  through  Level IV  Status  exists  and (z) the
         Leverage Ratio is equal to or greater than 40% but less than 45%;

                  "Level IX Status" exists on any date if, on such date (y) none
         of the  Level I Status  through  Level  IV  Status  exists  and (z) the
         Leverage Ratio is equal to or greater than 45% but less than 50%;

                  "Level X Status"  exists on any date if, on such date (y) none
         of Level I Status  through  Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 50% but less than 55%;

                  "Level XI Status" exists on any date if, on such date (y) none
         of Level I Status  through  Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 55% but less than 60%.

                  "Level  XII  Status"  exists  on any date if, on such date (y)
         none of  Level I Status  through  Level IV  Status  exists  and (z) the
         Leverage Ratio is equal to or greater than 60% but less than 65%.

                  "Level  XIII  Status"  exists on any date if, on such date (y)
         none of  Level I Status  through  Level IV  Status  exists  and (z) the
         Leverage Ratio is equal to or greater than 65%.

                  If S&P and/or  Moody's  shall  cease to issue  ratings of debt
         securities  of  real  estate  investment  trusts  generally,  then  the
         Administrative  Agent and the US Borrower shall negotiate in good faith
         to agree upon a substitute  rating agency or agencies (and to correlate
         the system of ratings of each substitute rating agency with that of the
         rating  agency  for  which  it is  substituting)  and  (a)  until  such
         substitute  rating agency or agencies are agreed upon,  Status shall be
         determined  on the basis of the  rating  assigned  by the other  rating
         agency (or, if both S&P and Moody's  shall have so ceased to issue such
         ratings,  on the  basis  of the  Status  in  effect  immediately  prior
         thereto) and (b) after such  substitute  rating  agency or agencies are
         agreed  upon,  Status  shall be  determined  on the basis of the rating
         assigned by the other rating agency and such  substitute  rating agency
         or the two substitute rating agencies,  as the case may be. If the long
         term senior  unsecured actual debt ratings of either US Borrower by S&P
         and Moody's are not  equivalent,  the higher  rating will apply for the
         purposes  of  determining  Status.  If the long term  senior  unsecured
         actual debt ratings of either US Borrower by S&P and Moody's are two or

                                       3
<PAGE>

         more Levels  apart,  the rating one Level below the higher  rating will
         apply for the purposes of determining Status."

         2. The definition of "Specified Investment Amount" appearing in Section
1.1 of the  Credit  Agreement  is  hereby  amended  to read in its  entirety  as
follows:

                  "Specified  Investment  Amount"  shall mean (A) the sum of (i)
         $20,000,000,  (ii) the aggregate  amount of net cash proceeds  received
         from any  Asset  Sale  consummated  during  the  period  from the First
         Amendment  Effective  Date to September  30, 2004,  less the  aggregate
         amount  of  Net  Cash  Proceeds  received  from  any  such  Asset  Sale
         consummated  during  such  period  that  (x)  have  been  added  to the
         Specified  Acquisition  Amount by the US  Borrower  pursuant to Section
         6.12(l)  and  (y) are  required  to be  applied  to  repay  outstanding
         Revolving  Credit  Loans  pursuant  to  Section  2.6(e)  and  (iii) the
         aggregate  amount of the Net Cash  Proceeds  received  from the sale or
         issuance  of  equity by FelCor  LP  during  the  period  from the First
         Amendment  Effective  Date to September  30, 2004,  less the  aggregate
         amount of net cash  proceeds  received  from such sale or  issuance  of
         equity  during  such period that (x) have been added by the US Borrower
         pursuant to Section 6.12(m) to the Specified Acquisition Amount and (y)
         are required to be applied to repay outstanding  Revolving Credit Loans
         pursuant  to  Section  2.6(f),  less (B) the  aggregate  amount  of any
         investment  in any  Joint  Enterprise  during  the  period  from  First
         Amendment Effective Date through September 30, 2004.

         3. The  definition  of "Total  Value"  appearing  in Section 1.1 of the
Credit Agreement is hereby amended by (i) inserting the word "plus"  immediately
following  the  semicolon at the end of clause (E) of said  definition  and (ii)
inserting the following new clause (F) immediately following clause (E) thereof:

                  "(F) the US  Borrower's  Pro Rata Share of (i) the cost of the
         Margate  Tower  located in Myrtle  Beach,  South  Carolina and (ii) any
         other new  development,  in each  case,  to the  extent  not  otherwise
         included in (A) through (E) above;".

         4.  Section 1.1 of the Credit  Agreement is hereby  further  amended by
inserting in the appropriate alphabetical order the following new definitions:

                  "Available  Free Cash Flow"  shall mean the Free Cash Flow for
         any Fiscal Quarter, less amounts of Free Cash Flow permitted to be used
         to make Restricted  Payments  pursuant to Section 7.4 and Discretionary
         Capital  Expenditures  pursuant  to Section  7.17  during  such  Fiscal
         Quarter.

                  "Net Cash  Proceeds"  shall mean (a) with respect to any Asset
         Sale, the proceeds in cash and Cash Equivalents (including cash or Cash
         Equivalents   paid  in  respect  of  notes  or  other  debt  securities
         constituting proceeds but only when and as paid and excluding therefrom
         any interest component thereof) resulting therefrom net of (i) expenses
         (including legal,  investment  banking and accounting fees) incurred in
         connection  therewith  (including  payment of principal of, and premium
         and  interest on,  Indebtedness  (other than the Loans) which is repaid

                                       4
<PAGE>

         under the terms thereof as a result of such Asset Sale) and (ii) taxes,
         levies,  imposts,  duties,  fees,  assessments or other similar charges
         paid solely as a result of such Asset Sale; and (b) in connection  with
         any issuance or sale of equity of the US Borrower or its  Subsidiaries,
         the cash proceeds received from such issuance,  net of attorneys' fees,
         investment banking fees,  accountants' fees, underwriting discounts and
         commissions  and  other   reasonable   fees  and  expenses   associated
         therewith.

                  "Specified  Acquisition  Amount" shall mean (A) the sum of (i)
         $50,000,000,  (ii) the aggregate  amount of net cash proceeds  received
         from any  Asset  Sale  consummated  during  the  period  from the First
         Amendment  Effective  Date to September  30, 2004,  less the  aggregate
         amount  of  net  cash  proceeds  received  from  any  such  Asset  Sale
         consummated  during  such  period  that  (x)  have  been  added  to the
         Specified  Investment  Amount by the US  Borrower  pursuant  to Section
         6.12(l)  and  (y) are  required  to be  applied  to  repay  outstanding
         Revolving  Credit  Loans  pursuant  to  Section  2.6(e)  and  (iii) the
         aggregate  amount of the net cash  proceeds  received  from the sale or
         issuance  of  equity by FelCor  LP  during  the  period  from the First
         Amendment  Effective  Date to September  30, 2004,  less the  aggregate
         amount of net cash  proceeds  received  from such sale or  issuance  of
         equity  during  such period that (x) have been added by the US Borrower
         pursuant to Section 6.12(m) to the Specified  Investment Amount and (y)
         are required to be applied to repay outstanding  Revolving Credit Loans
         pursuant  to  Section  2.6(f)  less  (B) the  aggregate  amount  of any
         acquisition of existing Hotel  properties  during the period from First
         Amendment Effective Date through September 30, 2004.

                  "Third Amendment" shall mean the Third Amendment,  dated as of
         December 20, 2002, among the Borrowers,  the Lenders party thereto, the
         Syndication Agent and the Administrative Agent.

                  "Third  Amendment  Effective  Date"  shall  have  the  meaning
         provided in the Third Amendment.

         5.  Section  2.22 of the  Credit  Agreement  is hereby  amended  by (i)
redesignating  clause  "(iii)" in clause (b)  thereof as clause  "(iv)" and (ii)
inserting the new clause (iii)  immediately  following clause (b)(ii)  appearing
therein "the US Borrower's Total Indebtedness for borrowed money was equal to or
less than 55% of Total  Value at all times on, and  after,  September  30,  2005
through, and including, the Extension Effective Date".

         6. Section 2.6 of the Credit  Agreement is hereby  amended by inserting
the  following  new clauses (e), (f) and (g)  immediately  following  clause (d)
thereof:

                  "(e) In addition to any other mandatory  prepayments  required
         pursuant to this  Section 2.6, if on any date the US Borrower or any of
         its  Subsidiaries  shall  receive Net Cash Proceeds from any Asset Sale
         and (i) the US  Borrower's  Total  Indebtedness  for borrowed  money is
         equal to or exceeds 65% of Total Value  (before to giving effect to the
         application of the proceeds  thereof) and (ii) the aggregate  principal

                                       5
<PAGE>

         amount  of  Revolving  Credit  Loans  outstanding  at the  time  of the
         application of the proceeds thereof is greater than $50,000,000,  then,
         unless the proceeds  from such Asset Sale are required to be reinvested
         in accordance with any Management  Agreement governing the sale of such
         asset,  a  prepayment  of an amount equal to lesser of (x) 100% of such
         Net Cash Proceeds (or the portion thereof not required to be reinvested
         pursuant to such Management  Agreement) and (y) the amount necessary to
         reduce the aggregate  outstanding  principal amount of Revolving Credit
         Loans to an amount that is equal to $50,000,000 shall be applied within
         five Business Days following such date.

                  (f) In addition to any other  mandatory  prepayments  required
         pursuant to this  Section 2.6, if on any date the US Borrower or any of
         its  Subsidiaries  shall  receive  Net Cash  Proceeds  from the sale or
         issuance of equity by the US Borrower  or its  Subsidiaries  and, if at
         the time of such issuance (i) the US Borrower's Total  Indebtedness for
         borrowed  money is equal to or exceeds  65% of Total  Value  (before to
         giving effect to the application of the proceeds  thereof) and (ii) the
         aggregate principal amount of Revolving Credit Loans outstanding at the
         time  of the  application  of the  proceeds  thereof  is  greater  than
         $50,000,000, then, a prepayment of an amount equal to the lesser of (x)
         100% of such Net Cash  Proceeds and (y) the amount  necessary to reduce
         the aggregate outstanding principal amount of Revolving Credit Loans to
         an amount  that is equal to  $50,000,000  shall be applied  within five
         Business Days following such date.

                  (g) In addition to any other  mandatory  prepayments  required
         pursuant to this Section 2.6, 45 days after the last day of each Fiscal
         Quarter of the US Borrower,  beginning  with the Fiscal  Quarter ending
         December 31, 2002, if the US Borrower's Total Indebtedness for borrowed
         money is equal to or exceeds  65% of Total  Value as of the last day of
         such Fiscal Quarter, then a prepayment in an amount equal to the lesser
         of (x) 100% of Available Free Cash Flow for such Fiscal Quarter and (y)
         the amount  necessary  to reduce the  aggregate  outstanding  principal
         amount  of  Revolving  Credit  Loans  to an  amount  that is  equal  to
         $50,000,000, shall be applied."

         7. Section 5.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.1.  Unsecured  Interest Expense  Coverage.  The US Borrower
         shall maintain at the end of each Fiscal  Quarter,  commencing with the
         Fiscal Quarter ending on June 30, 2000, a ratio of (a) Unencumbered NOI
         to (b) Unsecured Interest Expense, in each case determined on the basis
         of the four (4) Fiscal Quarters ending on the date of determination, of
         not less than  1.90:1.0,  provided  that,  the minimum  ratio set forth
         above shall be (i) 1.45:1.0 for the Fiscal Quarters ending December 31,
         2002 through  March 31,  2004,  (ii)  1.50:1.0  for the Fiscal  Quarter
         ending June 30, 2004 and (iii)  1.60:1.0 for the Fiscal  Quarter ending
         on September 30, 2004."

                                       6
<PAGE>

         8. Section 5.2 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.2.  Fixed  Charge  Coverage  Ratio.  The US Borrower  shall
         maintain at the end of each Fiscal Quarter,  commencing with the Fiscal
         Quarter ending on June 30, 2000, a ratio of (a) Adjusted  EDITDA to (b)
         Fixed  Charges,  in each case  determined  on the basis of the four (4)
         Fiscal Quarters ending on the date of  determination,  of not less than
         1.50:1.0, provided that, the minimum ratio set forth above shall be (i)
         1.10:1.0 for the Fiscal Quarters ending December 31, 2002 through March
         31, 2004, (ii) 1.15:1.0 for the Fiscal Quarter ending June 30, 2004 and
         (iii) 1.20:1.0 for the Fiscal Quarter ending September 30, 2004."

         9. Section 5.4 of the Credit Agreement is hereby amended to read in its
entirety as follows:

                  "5.4. Limitations on Total Indebtedness. The US Borrower shall
         not,  during each Fiscal  Quarter on a consolidated  basis,  permit the
         Total Indebtedness (including,  without limitation, the Obligations and
         all  Capitalized  Lease  Obligations)  of the US Borrower  for borrowed
         money to exceed (i) 70% of Total Value from and including  December 31,
         2002  through  March  31,  2004,  (ii)  67.5% of Total  Value  from and
         including April 1, 2004 through  September 30, 2004, (iii) 55% of Total
         Value from and including October 1, 2005 through September 30, 2006 and
         (iii) 60% of Total Value at all other times."

         10.  Section 5.5 of the Credit  Agreement is hereby  amended to read in
its entirety as follows:

                  "5.5.  Limitations  on  Total  Secured  Indebtedness.  The  US
         Borrower shall not, during each Fiscal Quarter on a consolidated basis,
         permit the Total Secured Indebtedness  (including,  without limitation,
         secured  Obligations  and  Capitalized  Lease  Obligations)  of  the US
         Borrower,  to exceed 30% of Total Value,  provided that,  Total Secured
         Indebtedness  shall not exceed (i) 32% of Total Value from December 31,
         2002  through  March 31,  2004 and (B) 31% of Total Value from April 1,
         2004 through September 30, 2004."

         11. Section 6.12 of the Credit  Agreement is hereby amended by deleting
(l) and (m) and inserting the following new clauses (l) and (m) in lieu thereof:

                  "(l)  promptly,  and in any event  within ten days,  after the
         designation by the US Borrower (which such designation  shall be in the
         US Borrower's sole  discretion),  written notice to the  Administrative
         Agent of the  designation  of the amount of Net Cash Proceeds  received
         from any  Asset  Sales  during  the  period  from the  First  Amendment
         Effective Date to September 30, 2004, as a Specified Acquisition Amount
         or a Specified Investment Amount; and

                  (m)  promptly,  and in any event  within  ten days,  after the
         designation by the US Borrower (which such designation  shall be in the
         US Borrower's sole  discretion),  written notice to the  Administrative
         Agent of the  designation  of the amount of Net Cash Proceeds  received

                                       7
<PAGE>

         from any equity  issuances  during the period from the First  Amendment
         Effective Date to September 30, 2004, as a Specified Acquisition Amount
         or a Specified Investment Amount."

         12. Section 7.4(b) of the Credit Agreement is hereby amended to read in
its entirety as follows:

                  "(b)  Notwithstanding  anything to the  contrary  contained in
         clause (a) of this Section 7.4, other than Restricted  Payments made in
         accordance  with clauses (a)(i) and (a)(ii) of this Section 7.4, the US
         Borrower  shall not make  Restricted  Payments  under  such  clause (a)
         during any Fiscal Quarter  ending from and including  December 31, 2002
         through  September 30, 2004,  at any time that the US Borrower's  Total
         Indebtedness  for  borrowed  money is equal to or exceeds  55% of Total
         Value,  except  that (x) to the  extent  that the US  Borrower's  Total
         Indebtedness  for  borrowed  money is equal to or exceeds  55% of Total
         Value  but is less  than 65% of Total  Value,  at the time of and after
         giving effect to such Restricted Payments, when added to the Restricted
         Payments made during the immediately preceding three consecutive Fiscal
         Quarters,  in an  amount  equal  to  the  lesser  of  (I)  85%  of  the
         consolidated  Adjusted  Funds From  Operations and (II) 85% of the Free
         Cash  Flow  of the US  Borrower,  in  each  case  for  the  immediately
         preceding four  consecutive  Fiscal Quarters and (y) to the extent that
         the US Borrower's Total  Indebtedness for borrowed money is equal to or
         exceeds  65% of Total Value at the time of and after  giving  effect to
         any such Restricted Payment, when added to the Restricted Payments made
         during the immediately  preceding three consecutive Fiscal Quarters, in
         an amount equal to the lesser of (I) 85% of the  consolidated  Adjusted
         Funds  From  Operations  and (II) 75% of the Free  Cash  Flow of the US
         Borrower,  in each case for the immediately  preceding four consecutive
         Fiscal Quarters; provided that notwithstanding anything to the contrary
         in  this  Section  7.4(b),  if  the  outstanding  principal  amount  of
         Revolving  Credit Loans is equal to or less than  $50,000,000 as of the
         end of any Fiscal  Quarter,  the US Borrower shall be permitted to make
         Restricted Payments,  when added to the Restricted Payments made during
         the immediately  preceding three  consecutive  Fiscal  Quarters,  in an
         amount  equal to 100% of Free Cash Flow for the  immediately  preceding
         four   consecutive   Fiscal   Quarters;    provided,    further,   that
         notwithstanding the foregoing limitation on Restricted Payments, the US
         Borrower  shall be permitted to declare or authorize the payment of (I)
         current  dividends on its preferred  stock during any Fiscal Quarter in
         an aggregate  amount not to exceed 100% of the Free Cash Flow of the US
         Borrower  for such Fiscal  Quarter  (less the amount of any  Restricted
         Payments made during such Fiscal  Quarter  pursuant to the  immediately
         preceding  proviso) and (II) current  dividends on its common stock and
         units during the Fiscal Quarters  ending  December 31, 2002,  March 31,
         2003 and June 30, 2003,  in an amount equal to $0.15  multiplied by the
         number of shares and units of the US  Borrower's  common  stock  and/or
         units  outstanding  as of the record date declared by the US Borrower's
         Board of Directors for such fiscal quarter."

                                       8
<PAGE>

         13. Section 7.5(d) of the Credit Agreement is hereby amended to read in
its entirety as follows:

                  "(d)  Notwithstanding  anything to the  contrary  contained in
         this Agreement,  for the period from the Third Amendment Effective Date
         through  September 30, 2004, the US Borrower may acquire existing Hotel
         properties, so long as (I) the Total Indebtedness for borrowed money of
         the US  Borrower  does not  exceed 60% of Total  Value both  before and
         after giving effect to such  acquisition  and (II) at least 10 Business
         Days prior to the  consummation of any such acquisition the US Borrower
         shall  deliver  to the  Administrative  Agent a  certificate  of the US
         Borrower's chief financial officer or treasurer certifying (and showing
         calculations in reasonable detail) that the US Borrower would have been
         in compliance  with the financial  covenants set forth in Sections 5.1,
         5.2,  5.3,  5.4,  5.5,  5.6 and 5.7,  as amended  hereby,  for the most
         recently  ended  four  (4)  Fiscal  Quarters  prior to the date of such
         acquisition,   in  each  case  with  such  financial  covenants  to  be
         determined  on a pro  forma  basis  as if  such  acquisition  had  been
         consummated  on the first day of such four (4)  Fiscal  Quarter  period
         (and assuming that any Indebtedness incurred, issued, assumed or repaid
         in connection therewith had been incurred, issued, assumed or repaid on
         the first day of such four (4) Fiscal Quarter period); provided that to
         the extent that the US Borrower's Total Indebtedness for borrowed money
         exceeds  60% of Total  Value  but is less than or equal to 65% of Total
         Value before such  acquisition,  the US Borrower  may acquire  existing
         Hotel  properties at such time, so long as (I) the US Borrower's  Total
         Indebtedness  for borrowed  money as a percentage  of Total Value after
         giving  effect  to such  acquisition  is equal  to or less  than the US
         Borrower's  Total  Indebtedness  for borrowed  money as a percentage of
         Total Value  immediately  prior to such  acquisition,  (II) at least 10
         Business Days prior to the consummation of any such acquisition, the US
         Borrower shall deliver to the Administrative Agent a certificate of the
         US Borrower's  chief  financial  officer or treasurer  certifying  (and
         showing  calculations in reasonable  detail) that the US Borrower would
         have  been in  compliance  with the  financial  covenants  set forth in
         Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6 and 5.7, as amended  hereby,  for
         the most recently  ended (4) Fiscal  Quarters prior to the date of such
         acquisition,   in  each  case  with  such  financial  covenants  to  be
         determined  on a pro  forma  basis  as if  such  acquisition  had  been
         consummated  on the first day of such (4) Fiscal  Quarter  period  (and
         assuming that any Indebtedness  incurred,  issued, assumed or repaid in
         connection  therewith had been incurred,  issued,  assumed or repaid on
         the  first  day of such  four  (4)  Fiscal  Quarter  period);  provided
         further,  that to the extent that the US Borrower's Total  Indebtedness
         for borrowed  money exceeds 65% of Total Value either at the time of or
         after  giving  effect to such  acquisition,  the US  Borrower  may only
         acquire  existing Hotel  properties  (I) in an aggregate  amount not to
         exceed the Specified Acquisition Amount at the time of such acquisition
         and (II) if the US Borrower's Total  Indebtedness for borrowed money as
         a percentage of Total Value after giving effect to such  acquisition is
         equal to or less than the US Borrower's Total Indebtedness for borrowed
         money  as a  percentage  of  Total  Value  immediately  prior  to  such
         acquisition."

                                       9
<PAGE>

         14.  Section  7.6(c) of the Credit  Agreement is hereby  amended by (i)
deleting the date "December 31, 2002" and inserting the text "December 31, 2004,
at any time the US Borrower's  Total  Indebtedness for borrower money is greater
than 60% of Total Value" in lieu thereof and (ii) deleting the text "$10,000,000
in a Holiday Inn prototype to be located in Denver,  Colorado" appearing in said
Section  and  inserting  the text  "$65,000,000  in up to three  Holiday  Inn or
Embassy Suites prototypes (or any combination  thereof) owned by the Borrower or
its Subsidiaries" in lieu thereof.

         15.  Section  7.13(a)  of the  Credit  Agreement  is hereby  amended by
inserting the text ", it being  understood and agreed,  for the purposes of this
Section  7.13,  that  in the  case of a sale  by the US  Borrower  or any of its
Subsidiaries  of less than 100% of its interest in an existing  Hotel  property,
the interest retained in such existing Hotel property by the US Borrower or such
Subsidiary  shall  not  be  considered  an  investment  in a  Joint  Enterprise"
immediately preceding the period at the end of said Section.

         16.  Section 7.17 of the Credit  Agreement is hereby amended to read in
its entirety as follows:

                  "7.17. Limitation on Capital Expenditures. At any time, if the
         US  Borrower's  Total  Indebtedness  for borrowed  money is equal to or
         exceeds 55% of Total  Value,  the US Borrower  shall not, and shall not
         permit any of its Subsidiaries or Eligible Joint Ventures to, incur any
         Discretionary Capital Expenditures,  except that during any consecutive
         four (4) Fiscal Quarter period, beginning with the four (4) consecutive
         Fiscal  Quarters  ending  June  30,  2002,  the  US  Borrower  and  its
         Subsidiaries and Eligible Joint Ventures may make Discretionary Capital
         Expenditures during such consecutive four (4) Fiscal Quarter period for
         the  expansion  or  renovation  of Hotels in a aggregate  amount not to
         exceed (x) 4.5% of  Consolidated  Total  Revenue  during  such four (4)
         consecutive   Fiscal  Quarter   period  if  the  US  Borrower's   Total
         Indebtedness  for  borrowed  money is equal to or exceeds  55% of Total
         Value but is less than 65% of Total Value on the date of such  proposed
         Discretionary  Capital  Expenditure  and (y) 2% of  Consolidated  Total
         Revenue during such four (4)  consecutive  Fiscal Quarter period if the
         US  Borrower's  Total  Indebtedness  for borrowed  money is equal to or
         exceeds  65%  of  Total  Value  on  the  date  such  of  such  proposed
         Discretionary Capital Expenditure,  it being understood and agreed that
         notwithstanding  anything to the  contrary  contained  in this  Section
         7.17,  so long as there as no Default or Event of Default has  occurred
         and is  continuing,  the US  Borrower  and its  Subsidiaries  shall  be
         permitted to make up to $15,000,000  in the aggregate of  Discretionary
         Capital  Expenditures  in  connection  with the  Wyndham  Myrtle  Beach
         located  in Myrtle  Beach,  South  Carolina  and the  SouthPark  Suites
         located in Charlotte, North Carolina."

III. Miscellaneous Provisions

         1. In order to induce the  Lenders to enter into this Third  Amendment,
each  Borrower  hereby  represents  and  warrants  on behalf  of itself  and its
respective Subsidiaries that (i) the representations and warranties of contained
in Article  IV of the  Credit  Agreement  are true and  correct in all  material

                                       10
<PAGE>

respects on and as of the Third  Amendment  Effective  Date (as  defined  below)
(except  with respect to any  representations  and  warranties  limited by their
terms to a  specific  date,  which  shall be true and  correct  in all  material
respects as of such date),  and (ii) there exists no Default or Event of Default
under the Credit  Agreement on the Third Amendment  Effective Date, in each case
both before and after giving effect to this Third Amendment.

         2. The US Borrower  hereby agrees to pay each Lender which  delivers an
executed  copy of this  Third  Amendment  (by  hard  copy or  facsimile)  to the
Administrative Agent by no later than 12:00 p.m. (New York time) on December 20,
2002, a fee (the  "Amendment  Fee") in an amount equal to 0.10% of such Lender's
Revolving Credit Commitment (after giving effect to this Third Amendment), which
Amendment  Fee shall be due and payable on the first  Business Day following the
date on which the Super Majority  Lenders shall have executed and delivered this
Third Amendment.

         3.  This  Third  Amendment  is  limited  as  specified  and  shall  not
constitute  an  amendment,  modification,  acceptance  or  waiver  of any  other
provision of the Credit Agreement or any other Loan Document.

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

         5. This Third Amendment shall become  effective on the date (the "Third
Amendment Effective Date") when (i) each Borrower and the Super Majority Lenders
shall  have  signed  a  counterpart   hereof  (whether  the  same  or  different
counterparts) and shall have delivered (including by way of telecopier) the same
to the  Administrative  Agent and (ii) the US Borrower has terminated  Revolving
Credit  Commitments  in an aggregate  amount equal to at least  $315,000,000  in
accordance with Section 2.4 of the Credit Agreement.

         6. From and after the Third Amendment Effective Date, all references in
the  Credit  Agreement  and in the other  Loan  Documents  shall be deemed to be
referenced to the Credit Agreement as modified hereby.

                                      * * *

                                       11
<PAGE>

                                      FELCOR LODGING TRUST INCORPORATED

                                      By: /s/ Andrew J. Welch
                                         ---------------------------------------
                                         Name: Andrew J. Welch
                                         Title: Senior Vice President

                                      FELCOR LODGING LIMITED PARTNERSHIP

                                      By: FelCor Lodging Trust Incorporated,
                                          its general partner

                                      By: /s/ Andrew J. Welch
                                         ---------------------------------------
                                         Name: Andrew J. Welch
                                         Title: Senior Vice President

                                     FELCOR CANADA CO.

                                      By: /s/ Andrew J. Welch
                                         ---------------------------------------
                                         Name: Andrew J. Welch
                                         Title: Senior Vice President

<PAGE>

                                     JPMORGAN CHASE BANK (f/k/a The Chase
                                     Manhattan Bank), Individually and as
                                     Administrative Agent

                                     By: /s/ Charles E. Hoagland
                                        ----------------------------------------
                                        Name: Charles E. Hoagland
                                        Title: Vice President

                                     J.P. MORGAN BANK CANADA  (f/k/a The
                                     Chase Manhattan Bank of Canada), as
                                     Administrative Agent

                                     By: /s/ Christine Chan
                                        ----------------------------------------
                                        Name: Christine Chan
                                        Title: Vice President

                                     JPMORGAN CHASE BANK, TORONTO
                                     BRANCH (f/k/a  The Chase Manhattan
                                     Bank, Toronto Branch)

                                     By: /s/ Christine Chan
                                        ----------------------------------------
                                        Name: Christine Chan
                                        Title: Vice President

              REMAINDER OF SIGNATURE PAGES INTENTIONALLY OMITTED.

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