Common use of Financial Statements; Financial Condition Clause in Contracts

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- (a) The Financial Statements, the consolidated balance sheet of the Borrower at March 31, 1999, and the related consolidated statements of operations and stockholders' equity and related statement of cash flows of the Borrower for the three-month period, as the case may be, ended on such date and heretofore furnished to the Banks present fairly (i) the consolidated financial condition of the Borrower and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such financial statements have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) of the Borrower. (c) Except as fully reflected in the financial statements described in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etcETC. -----------------52 (a) The Financial Statements, the consolidated balance sheet of the Borrower at March 31, 1999, and the related consolidated statements of operations and stockholders' equity and related statement of cash flows of the Borrower for the three-month period, as the case may be, ended on such date and heretofore furnished to the Banks present fairly (i) the consolidated financial condition The (A) audited Consolidated balance sheets of the Borrower Credit Parties and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results their Subsidiaries as of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results related statements of the operations of each Consolidated Subsidiaryincome, if any, of the Borrower stockholders' equity and cash flows for the Fiscal Year then ended December 31and (B) unaudited Consolidated balance sheet of the Credit Parties and their Subsidiaries as of September 30, 1998, in each case determined on a non-consolidated basis1999, and (iii) related unaudited interim statements of income, stockholders' equity and cash flows, copies of which have been furnished to the financial condition of the Borrower Administrative Agent and its Subsidiarieseach Lender, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such financial statements have been prepared in accordance with GAAP except(except as set forth in the notes thereto), are complete in all material respects and fairly present in all material respects the assets, liabilities and financial position of the Credit Parties and their Subsidiaries as at such dates, and the results of the operations and changes of financial position for the periods then ended, subject to normal year end adjustments. (ii) As of the Closing Date, (A) the sum of the assets, at a fair valuation, of each Credit Party on a stand-alone basis and of the Credit Parties and their Subsidiaries taken as a whole will exceed its or their debts, respectively; (B) each Credit Party on a stand-alonebasis and the Credit Parties and their Subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe that it will incur, debts beyond its or their ability to pay such debts as such debts mature, respectively; and (C) each Credit Party on a stand-alone basis and the Credit Parties and their Subsidiaries taken as a whole will have sufficient capital with which to conduct its or their business, respectively. For purposes of this Section, "debt" means any liability on a claim, and "claim" means (I) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (II) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the case light of all the financial statements for facts and circumstances existing at such time, represents the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) of the Borrower. (c) Except as fully reflected in the financial statements described in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever amount that is not fully reflected in such financial statements which, either individually or in the aggregate, could can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet of the ----------------------------- Borrower and its Subsidiaries at March December 31, 19991996 and December 31, 1997 and the related consolidated statements of operations operations, cash flows and stockholdersshareholders' equity and related statement of cash flows of the Borrower and its Subsidiaries for the three-month periodfiscal years ended on such dates, as the case may be, ended on such date and heretofore copies of which have been furnished to the Banks prior to the Restatement Effective Date, present fairly (i) the consolidated financial condition position of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries at March 31, 1999 and the consolidated results date of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 such balance sheets and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries for the three-month period ended March 31, 1999periods covered thereby. All such financial statements have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March generally accepted accounting principles consistently applied. Since December 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 19991997, there has been no Material Adverse Effect upon material adverse change in the business, operations, property, assets or assets, liabilities, condition (financial or otherwise) or prospects of the BorrowerBorrower and its Subsidiaries taken as a whole. (i) On and as of the Restatement Effective Date and after giving effect to the transaction contemplated hereby and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (a) the sum of the assets, at a fair valuation, of each of the Borrower on a stand alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed its debts; (b) each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe that they will incur, debts beyond their ability to pay such debts as such debts mature; and (c) Except each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as fully reflected in the financial statements described in a whole will have sufficient capital with which to conduct its business. For purposes of this Section 5.5(a7.05(b), there are no liabilities or obligations with respect "debt" means any liability on a claim, and "claim" means (i) right to the Borrower of any nature whatsoever (whether absolutepayment, accrued, contingent or otherwise and whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrowerfixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The Borrower does not know amount of contingent liabilities at any basis for time shall be computed as the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements whichamount that, either individually or in the aggregatelight of all the facts and circumstances existing at such time, could represents the amount that can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- Attached hereto as Exhibit “D” and incorporated herein by this reference are copies of Seller’s audited financial statements for the 2001, 2002 and 2003 calendar years (a) The the “Seller’s Financial Statements, ”). The Seller’s Financial Statements and the consolidated unaudited balance sheet of the Borrower at March Seller, dated as of May 31, 19992004, and the related consolidated statements unaudited statement of operations and stockholders' equity and related statement of cash flows of the Borrower for the three-month periodfive (5) months then ended (collectively, as the case may be“Interim Financial Statements”), ended a true and complete copy of which was delivered to Buyer on such date and heretofore furnished or prior to the Banks present fairly date hereof, (i) are complete, in accordance with the consolidated financial condition books and records of the Borrower and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998Seller, (ii) accurately reflect the assets, liabilities and financial condition and results of each Consolidated Subsidiary, if any, operations of the Borrower Business as at December 31the respective dates thereof and for the respective periods indicated therein, 1998 except as otherwise noted therein and subject, in the results case of the operations of each Consolidated SubsidiaryInterim Financial Statements, if anyto normal and recurring year-end adjustments that will not, of individually or in the Borrower for the Fiscal Year ended December 31aggregate, 1998, in each case determined on a non-consolidated basisbe material, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such financial statements have been prepared in accordance with GAAP consistently applied (except as may be indicated in the notes thereto, and except, in the case of the financial statements Interim Financial Statements, for the three-month period ended inclusion of notes). Except as set forth on March Schedule 5.5, since the date of Seller’s Balance Sheet dated as of December 31, 19992003, for none of the following has occurred or arisen in the operation of the Business: (a) (i) Any change, event, development, circumstance or condition that has caused or reasonably may be expected to cause, in any one case or in the aggregate, a material adverse condition or material adverse change in or affecting (x) normal year-end audit adjustments and the transactions contemplated by this Agreement, or (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise), results of operations, assets, liabilities or prospects of the Business, taken as a whole, (a “Material Adverse Change”). (i) For a change in the historical operating results of the Business to constitute a Material Adverse Change such change must result in either (I) the EBITDA of the Business for the most recently completed rolling twelve month period being less than ninety percent (90%) of the BorrowerEBITDA of the Business for the year ended December 31, 2003 or (II) the EBITDA of the Business in each of any two consecutive months after May, 2004 being less than 85% of the EBITDA of the Business for the corresponding months in the prior year. (ii) If Buyer desires to terminate this Agreement due to the occurrence of a Material Adverse Change, it must do so within forty five (45) days after it receives notice of the event giving rise to the Material Adverse Change. For example, if the EBITDA of the Business for August and September of 2004 are less than 85% of the EBITDA of the Business for the August and September of 2003, then Buyer must elect to terminate this Agreement within 45 days after it receives the monthly financial report for September 2004 which shows the second consecutive month of reduction. If Buyer fails to timely elect to terminate this Agreement due to such Material Adverse Change, then Buyer’s right to terminate this Agreement due to such Material Adverse Change shall terminate as to that 2 month period, provided that (A) if subsequently the EBITDA of the Business in for September and October of 2004 are less than 85% of the EBITDA of the Business for the September and October of 2003, then this will constitute a new Material Adverse Change with a new time period, and (B) the failure of Buyer to terminate this Agreement due to a 2 month drop in EBITDA shall not affect Buyer’s right to terminate the Agreement due to a rolling 12 month drop. (iii) In determining the EBITDA for December 2003 and December 2004 only, all normal and customary year end adjustments made to the Business’s financial statements shall be annualized over the entire year in question (i.e. only one-twelfth of the year end adjustments shall be allocated to December) to avoid any year-end distortions of EBITDA. (iv) A reduction in EBITDA caused by a non-recurring expense (such as a casualty loss or other one-time expense) shall be ignored for purposes of determining whether a Material Adverse Change has occurred (subject to Buyer’s rights under Section 15 below). (v) Buyer acknowledges that Buyer is aware that the Iowa legislature has passed HF 2302 (the “New Gaming Legislation”), that the New Gaming Legislation was taken into account in negotiating the Purchase Price payable hereunder and accordingly agrees that the New Gaming Legislation shall not constitute a Material Adverse Change within the meaning of this Section 5.5(a), nor shall any change in the Business’s EBITDA caused by the increase in Iowa taxes on the Business provided for in the New Gaming Legislation be considered in determining whether a Material Adverse Change has occurred; (b) Any material casualty, loss, damage or destruction to any of the Business Assets (as defined in Section 15 below); (c) Except as fully reflected for normal, periodic increases in the financial statements described ordinary course of business and consistent with past practices, increase in Section 5.5(acompensation payable by Seller to any officer, employee or other representative or agent of Seller (collectively “Personnel”), there are no liabilities and employee welfare, pension, retirement, profit-sharing or obligations with respect similar payment or arrangement made or agreed to by Seller for any Personnel except pursuant to the Borrower existing plans and arrangements described on Schedule F; (d) Sale, assignment or transfer of any nature whatsoever (whether absolute, accrued, contingent of the properties or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know assets of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or Seller used in the aggregateBusiness, could reasonably be expected to have a Material Adverse Effect.other than in the ordinary course of business;

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet of the ------------------------------ Borrower and its Subsidiaries at March December 31, 19991996 and June 30, 1997 and the related consolidated statements of operations operations, cash flows and stockholdersshareholders' equity and related statement of cash flows of the Borrower and its Subsidiaries for the threefiscal year and six-month periodperiod ended on such dates, as the case may be, ended on such date and heretofore copies of which have been furnished to the Banks prior to the Effective Date, present fairly (i) the consolidated financial condition position of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries at March 31, 1999 and the consolidated results date of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 such balance sheets and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries for the three-month period ended March 31, 1999periods covered thereby. All such financial statements have been prepared in accordance with GAAP exceptgenerally accepted accounting principles consistently applied, in the case of the financial statements for the three-month period ended on March 31, 1999, for (x) subject to normal year-end audit adjustments and (y) in the failure case of the six-month financial statements referred to use consolidation principles. (b) above. Since March 31June 30, 19991997, there has been no Material Adverse Effect upon material adverse change in the business, operations, property, assets or assets, liabilities, condition (financial xxxxx cial or otherwise) or prospects of the BorrowerBorrower and its Subsidiaries taken as a whole. (i) On and as of the Effective Date and after giving effect to the transaction contemplated hereby and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (a) the sum of the assets, at a fair valuation, of each of the Borrower on a stand alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed its debts; (b) each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe that they will incur, debts beyond their ability to pay such debts as such debts mature; and (c) Except each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as fully reflected in the financial statements described in a whole will have sufficient capital with which to conduct its business. For purposes of this Section 5.5(a7.05(b), there are no liabilities or obligations with respect "debt" means any liability on a claim, and "claim" means (i) right to the Borrower of any nature whatsoever (whether absolutepayment, accrued, contingent or otherwise and whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrowerfixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The Borrower does not know amount of contingent liabilities at any basis for time shall be computed as the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements whichamount that, either individually or in the aggregatelight of all the facts and circumstances existing at such time, could represents the amount that can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- (a) The Financial Statements, the audited consolidated balance sheet of the Borrower and its Subsidiaries at March December 31, 1999, 2023 and the related consolidated statements of operations income and stockholders' equity and related statement of cash flows of the Borrower for the three-month period, as the case may be, ended on such date and heretofore furnished to the Banks present fairly (i) the consolidated financial condition changes in shareholders’ equity of the Borrower and its Consolidated SubsidiariesSubsidiaries for the fiscal year of the Borrower ended on such date furnished to the Lenders prior to the Closing Date, if any, at March 31, 1999 and presents fairly in all material respects the consolidated results of the operations financial position of the Borrower and its Consolidated Subsidiaries, if any, for Subsidiaries at the Fiscal Year ended December 31, 1998, (ii) the date of said financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 statements and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999covered thereby. All such Such financial statements have been prepared in accordance with U.S. GAAP except, consistently applied except to the extent provided in the case of the notes to said financial statements for the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principlesstatements. (b) Since March 31On and as of the Closing Date, 1999and after giving effect to the Transactions and to all Indebtedness (including the Loans) being incurred or assumed or paid and discharged by the Credit Parties in connection therewith, there has been no Material Adverse Effect upon (i) the businessfair value of the assets of the Borrower and its Subsidiaries on a consolidated basis, operationsat a fair valuation, propertywill exceed the debts and liabilities, assets or condition (financial direct, subordinated, contingent or otherwise) , of the BorrowerBorrower and its Subsidiaries on a consolidated basis; (ii) the present fair saleable value of the property of the Borrower and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of the Borrower and its Subsidiaries on a consolidated basis on their debts and other liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date. For the purposes of this Section 6.5(b), the amount of any contingent liability at any time shall be computed as the amount that, in light of all the facts and circumstances existing as of the date hereof, would reasonably be expected to become an actual and matured liability. (c) Except as fully reflected in the financial statements described in Section 5.5(a)Since December 31, there are no liabilities 2023, nothing has occurred that has had, or obligations with respect to the Borrower of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have have, a Material Adverse Effect.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet of the Borrower at March 31Holdings ----------------------------- and its Subsidiaries for its fiscal years and twelve Fiscal Month period ended on December 30, 19991995, December 28, 1996, December 27, 1997 and November 28, 1998, respectively, and the related consolidated statements of operations income, cash flows and stockholdersshareholders' equity of Holdings and related statement of cash flows of the Borrower its Subsidiaries for the three-month fiscal year or twelve Fiscal Month period, as the case may be, ended on such date and heretofore dates, copies of which have been furnished to the Banks Lenders prior to the Initial Borrowing Date, present fairly (i) in all material respects the consolidated financial condition position of the Borrower Holdings and its Consolidated Subsidiaries, if any, Subsidiaries at March 31, 1999 the dates of such balance sheets and the consolidated results of the operations of the Borrower Holdings and its Consolidated Subsidiaries, if any, Subsidiaries for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, periods covered thereby. All of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such foregoing financial statements have been prepared in accordance with GAAP generally accepted accounting principles consistently applied (except, in the case of the aforementioned twelve Fiscal Month interim financial statements for the three-month period ended on March 31, 1999statements, for (x) normal year-end audit adjustments adjustment and the absence of footnotes). The pro forma consolidated balance sheet of Holdings and its Subsidiaries as of the Initial Borrowing Date (y) after giving effect to the failure transactions contemplated herein), a copy of which has been furnished to use consolidation principles. the Lenders prior to the Initial Borrowing Date, presents fairly in all material respects the pro forma financial position of Holdings and its Subsidiaries as of the Initial Borrowing Date. After giving effect to the transactions contemplated herein and in the other Credit Documents (b) Since March 31but for this purpose assuming that such transactions and the related financing had occurred prior to December 27, 19991997), since December 27, 1997, there has been no Material Adverse Effect upon material adverse change in the business, operations, property, assets or assets, liabilities, condition (financial or otherwise) or prospects of the BorrowerBorrower or of Holdings and its Subsidiaries taken as a whole. (cb) Except On and as fully reflected of the Initial Borrowing Date and after giving effect to the transactions contemplated herein and in the financial statements described other Credit Documents and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith (i) the sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone basis and of Holdings and its Subsidiaries taken as a whole will exceed its debts; (ii) each of the Borrower on a stand-alone basis and Holdings and its Subsidiaries taken as a whole has not incurred, does not intend to incur, and does not believe that it will incur, debts beyond its ability to pay such debts as such debts mature; and (iii) each of the Borrower on a stand-alone basis and Holdings and its Subsidiaries taken as a whole will have sufficient capital with which to conduct its business. For purposes of this Section 5.5(a7.05(b), there are no liabilities or obligations with respect "debt" means any liability on a claim, and "claim" means (a) right to the Borrower of any nature whatsoever (whether absolutepayment, accrued, contingent or otherwise and whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrowerfixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The Borrower does not know amount of contingent and/or unliquidated liabilities at any basis for time shall be computed as the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements whichamount that, either individually or in the aggregatelight of all the facts and circumstances existing at such time, could represents the amount that can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet of the ------------------------------ Borrower and its Subsidiaries at March December 31, 19991998 and December 31, 1999 and the related consolidated statements of operations operations, cash flows and stockholdersshareholders' equity and related statement of cash flows of the Borrower and its Subsidiaries for the three-month periodfiscal years ended on such dates, as the case may be, ended on such date and heretofore copies of which have been furnished to the Banks prior to the Restatement Effective Date, present fairly (i) the consolidated financial condition position of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries at March 31, 1999 and the consolidated results date of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 such balance sheets and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries for the three-month period ended March 31, 1999periods covered thereby. All such financial statements have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) generally accepted accounting principles consistently applied. Since March December 31, 1999, there has been no Material Adverse Effect upon material adverse change in the business, operations, property, assets or assets, liabilities, condition (financial or otherwise) or prospects of the BorrowerBorrower and its Subsidiaries taken as a whole. (i) On and as of the Restatement Effective Date and after giving effect to the transaction contemplated hereby and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (a) the sum of the assets, at a fair valuation, of each of the Borrower on a stand alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed its debts; (b) each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe that they will incur, debts beyond their ability to pay such debts as such debts mature; and (c) Except each of the Borrower on a stand alone basis and the Borrower and its Subsidiaries taken as fully reflected in the financial statements described in a whole will have sufficient capital with which to conduct its business. For purposes of this Section 5.5(a7.05(b), there are no liabilities or obligations with respect "debt" means any liability on a claim, and "claim" means (i) right to the Borrower of any nature whatsoever (whether absolutepayment, accrued, contingent or otherwise and whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrowerfixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The Borrower does not know amount of contingent liabilities at any basis for time shall be computed as the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements whichamount that, either individually or in the aggregatelight of all the facts and circumstances existing at such time, could represents the amount that can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet sheets of each of ----------------------------- Holdings and its Subsidiaries and the Borrower at March and its Subsidiaries for the fiscal year ended December 31, 19991999 and the fiscal quarter ended March 24, 2000, and the related consolidated statements of operations income, cash flows and stockholdersshareholders' equity and related statement of cash flows of the Borrower such Persons for the three-month periodfiscal year and fiscal quarter ended on such dates, as the case may be, ended on such date and heretofore copies of which have been furnished to the Banks on or prior to the Effective Date, present fairly (i) in all material respects the consolidated financial condition position of each of Holdings and its Subsidiaries and the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries at March 31, 1999 the date of such balance sheets and the consolidated results of the operations of the Borrower and its Consolidated Subsidiaries, if any, such Persons for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, periods covered thereby. All of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such foregoing financial statements have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March generally accepted accounting principles consistently applied. Since December 31, 1999, for (x) normal year-end audit adjustments and (y) the failure nothing has occurred that has had, or could reasonably be expected to use consolidation principleshave, a Material Adverse Effect. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) On and as of the Borrower. Effective Date and on the date on which each Loan is made, on a Pro Forma Basis after giving effect to all Indebtedness (cincluding --- ----- the Loans) Except as fully reflected being incurred or assumed and Liens created by each Credit Party in connection therewith, (x) the financial statements described in Section 5.5(a)sum of the assets, there are no liabilities or obligations with respect to at a fair valuation, of the Borrower and its Subsidiaries (taken as a whole) and the Borrower (on a stand-alone basis) will exceed their respective debts, (y) the Borrower and its Subsidiaries (taken as a whole) and the Borrower (on a stand-alone basis) have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their ability to pay such debts as such debts mature and (z) the Borrower and its Subsidiaries (taken as a whole) and the Borrower (on a stand-alone basis) have sufficient capital with which to conduct its business. For purposes of this Section 6.05(b) "debt" means any nature whatsoever liability on a claim, and "claim" means (whether absolute, accrued, contingent or otherwise and i) right to payment whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability fixed, contingent, matured, unmatured, disputed, undisputed, secured or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effectunsecured.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- The Borrowers have furnished Agent and the Lenders with the following financial statements, identified by the chief financial officer of Parent: (a) The Financial Statements, the consolidated a balance sheet of the Borrower at March 31, 1999, and the related consolidated statements of operations and stockholders' equity and related income statement of cash flows of the Borrower for the three-month period, as the case may be, ended on such date and heretofore furnished to the Banks present fairly (i) the consolidated financial condition of the Borrower Parent and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results Subsidiaries for each of the operations of the Borrower five fiscal years ended September 30, 1994, 1995, 1996, 1997, and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiaryall certified by Parent's independent certified public accountants, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such which financial statements have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation generally accepted accounting principles. ; (b) Since March 31an unaudited balance sheet and income statement of Parent and its Consolidated Subsidiaries as of June 30, 19991999 certified (subject to normal adjustments and the absence of footnotes and other disclosures) as to fairness of presentation, generally accepted accounting principles by the principal financial officer of Parent; and (c) a pro forma balance sheet and income --------- statement of Parent and its Consolidated Subsidiaries after giving effect to the consummation of the SPHL Acquisition and to the incurrence of the initial Loans by the Borrowers hereunder. The Borrowers further represent that: (a) said balance sheets and their accompanying notes fairly present in all material respects the condition of Parent and its Consolidated Subsidiaries as of the dates thereof; (b) there has been no Material Adverse Effect upon the businessChange since September 30, operations, property, assets or condition (financial or otherwise) of the Borrower. 1998; and (c) Except neither Parent nor any of its Consolidated Subsidiaries has any direct or contingent liabilities which are not disclosed on said financial statements (to the extent disclosure thereof would be required under generally accepted accounting principles); (d) on and as fully reflected of the date hereof, after giving effect to the consummation of the SPHL Acquisition and to the incurrence of the initial Loans by the Borrowers hereunder, (i) the sum of the assets, at a fair valuation, of the Parent and its Consolidated Subsidiaries will exceed their debts; (ii) the Borrowers have not incurred and do not intend to incur, and do not believe they will incur, debts beyond their ability to pay such debts as such debts mature, (iii) the Borrowers will have sufficient capital with which to conduct their businesses, and (iv) the Borrowers are is in pro forma compliance with --------- the financial statements described covenants set forth in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower 7.1(i) of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effectthis Agreement.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- The Borrowers have furnished Agent and the Lenders with the following financial statements, identified by the chief financial officer of Parent: (a) The Financial Statements, the consolidated a balance sheet of the Borrower at March 31, 1999, and the related consolidated statements of operations and stockholders' equity and related income statement of cash flows of the Borrower for the three-month period, as the case may be, ended on such date and heretofore furnished to the Banks present fairly (i) the consolidated financial condition of the Borrower Parent and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results Subsidiaries for each of the operations of the Borrower and its Consolidated Subsidiariesfive fiscal years ended September 30, if any1995, for the Fiscal Year ended December 311996, 1997, 1998, (ii) the financial condition of each Consolidated Subsidiaryand 1999, if anyall certified by Parent's independent certified public accountants, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such which financial statements have been prepared in accordance with GAAP except, in the case generally accepted accounting principles; and (b) an unaudited balance sheet and income statement of the financial statements for the three-month period ended on Parent and its Consolidated Subsidiaries as of March 31, 1999, for 2000 certified (x) subject to normal year-end audit adjustments and the absence of footnotes and other disclosures) as to fairness of presentation, generally accepted accounting principles by the principal financial officer of Parent. The Borrowers further represent that: (ya) said balance sheets and their accompanying notes fairly present in all material respects the failure to use consolidation principles. condition of Parent and its Consolidated Subsidiaries as of the dates thereof; (b) Since March 31, 1999, there has been no Material Adverse Effect upon the businessChange since March 31, operations, property, assets or condition (financial or otherwise) of the Borrower. 2000; and (c) Except neither Parent nor any of its Consolidated Subsidiaries has any direct or contingent liabilities which are not disclosed on said financial statements (to the extent disclosure thereof would be required under generally accepted accounting principles); (d) on and as fully reflected of the date hereof, after giving effect to the incurrence of the initial Loans by the Borrowers hereunder, (i) the sum of the assets, at a fair valuation, of the Parent and its Consolidated Subsidiaries will exceed their debts; (ii) the Borrowers have not incurred and do not intend to incur, and do not believe they will incur, debts beyond their ability to pay such debts as such debts mature, (iii) the Borrowers will have sufficient capital with which to conduct their businesses, and (iv) the Borrowers are is in pro forma --------- compliance with the financial statements described covenants set forth in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower 7.1(i) of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect-------------- this Agreement.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. -----------------Projections. (ai) The Financial Statementsconsolidated balance sheet of each of the ------------------------ Borrower and the Target for its fiscal year ended on December 31, 2000 and the related consolidated statements of income, cash flows and shareholders' equity of each of the Borrower and the Target for its fiscal year ended on such date, copies of which have been furnished to the Lenders prior to the Initial Borrowing Date, present fairly in all material respects the consolidated financial position of each of the Borrower and the Target at the date of such balance sheet and the consolidated results of their respective operations for the period covered thereby. All of the foregoing historical financial statements have been prepared in accordance with generally accepted accounting principles consistently applied except as otherwise noted therein. (ii) The pro forma consolidated balance sheet of the Borrower at March as of --- ----- December 31, 1999, 2000 (after giving effect to the Transaction and the financing therefor) and the related pro forma consolidated statements of operations income, cash --- ----- flows and stockholders' shareholders equity and related statement of cash flows of the Borrower for the threetwelve-month period, as the case may be, period ended on such date December 31, 2000 (after giving effect to the Transaction and heretofore the financing therefor), copies of which have been furnished to the Banks Lenders prior to the Initial Borrowing Date, present fairly (i) in all material respects the pro forma --- ----- consolidated financial condition position of the Borrower and its Consolidated Subsidiaries, if any, at March as of December 31, 1999 2000 and the pro forma consolidated results of the operations of the Borrower for the period --- ----- covered thereby. All of the foregoing pro forma financial statenments have been --- ----- prepared on a basis consistent with the historical financial statements of the Borrower set forth in preceding clause (i). (b) On and as of the Initial Borrowing Date and after giving effect to the Transaction and to all Indebtedness (including the Loans and the Senior Subordinated Notes) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone basis and of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998Subsidiaries taken as a whole will exceed their respective debts, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 on a stand-alone basis and the results of the operations of each Consolidated SubsidiaryBorrower and its Subsidiaries taken as a whole have not incurred and do not intend to incur, if anyand do not believe that they will incur, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basisdebts beyond their respective ability to pay such debts as such debts mature, and (iii) each of the financial condition of Borrower on a stand-alone basis and the Borrower and its SubsidiariesSubsidiaries taken as a whole will have sufficient capital with which to conduct their respective businesses. For purposes of this Section 7.05(b), "debt" means any liability on a claim, and "claim" means (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if anysuch breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at March 31, 1999 and any time shall be computed as the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such financial statements have been prepared in accordance with GAAP exceptamount that, in the case light of all the financial statements for facts and circumstances existing at such time, represents the three-month period ended on March 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) of the Borrower. (c) Except as fully reflected in the financial statements described in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever amount that is not fully reflected in such financial statements which, either individually or in the aggregate, could can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability of the Borrower or any of its Subsidiaries.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ LiabilitiesUNDISCLOSED LIABILITIES; etc. -----------------PROJECTIONS; ETC. (a) The Financial Statements, the consolidated balance sheet financial statements and financial statement schedules of the Borrower at March Corporation and its Subsidiaries, as of December 31, 1999, 2000 and 2001, filed with the related consolidated statements of operations and stockholders' equity and related statement of cash flows SEC as part of the Borrower for the threeCorporation's annual report on Form 10-month periodK, as the case may be, ended on such date and heretofore furnished to the Banks fairly present fairly (i) the consolidated financial condition of the Borrower and its Consolidated Subsidiaries, if any, at March 31, 1999 and in all material respects the consolidated results of the operations of the Borrower Corporation and its Consolidated Subsidiaries, if any, Subsidiaries for the respective Fiscal Year Years ended December 31on such dates, 1998, (ii) and the consolidated financial condition of each Consolidated Subsidiary, if any, position of the Borrower Corporation and its Subsidiaries as at December 31the dates of such balance sheets. Furthermore, 1998 and the results consolidated financial statements of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower Corporation and its Subsidiaries, if anyas at June 30, at March 31, 1999 2002 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the threesix-month period ended March 31on such date, 1999fairly present in all material respects the consolidated results of operations of the Corporation and its Subsidiaries for the six-month period ended on such date, and the consolidated financial position of the Corporation and its Subsidiaries at the date of such balance sheet. All such financial statements have been prepared in accordance with GAAP exceptconsistently applied, in the case of the financial statements for the three-month period ended on March 31, 1999, for (x) subject to normal year-end audit adjustments and (y) the failure to use consolidation principlesabsence of footnotes in the case of the June 30, 2002 financial statements. (b) Since March December 31, 19992001 (but, there for this purpose, assuming that the Transaction had been consummated on such date), nothing has been no occurred that has had, or could reasonably be expected to have, a Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) of the BorrowerEffect. (c) Except On and as fully reflected in of the financial statements described in Section 5.5(a)Initial Borrowing Date, there are no liabilities or obligations with respect after giving effect to the Transaction and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (a) the sum of the assets, at a fair valuation, of the Corporation and its Subsidiaries taken as a whole and each Borrower of any nature whatsoever on a stand-alone basis will exceed their respective debts; (whether absoluteb) the Corporation and its Subsidiaries taken as a whole and each Borrower on a stand-alone basis have not incurred and do not intend to incur, accruedand do not believe that they will incur, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material debts beyond their ability to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in pay such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.debts as such debts mature; and

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial Statements, the consolidated balance sheet sheets of each of ------------------------------ Host Marriott and its Subsidiaries, HMH and its Subsidiaries and CRHC and its Subsidiaries for the Borrower at fiscal year ended on January 2, 1998 and the fiscal quarter ended on March 3127, 19991998, and the related consolidated statements of operations income, cash flows and stockholdersshareholders' equity and related statement of cash flows of the Borrower such Persons for the three-month periodfiscal year and fiscal quarter ended on such dates, as the case may be, ended on such date and heretofore copies of which have been furnished to the Banks on or prior to the Effective Date, present fairly (i) in all material respects the consolidated financial condition position of the Borrower each of Host Marriott and its Consolidated Subsidiaries, if any, HMH and its Subsidiaries and CRHC and its Subsidiaries at March 31, 1999 the date of such balance sheets and the consolidated results of the operations of the Borrower and its Consolidated Subsidiaries, if any, such Persons for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, periods covered thereby. All of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999. All such foregoing financial statements have been prepared in accordance with GAAP except, in the case of the generally accepted accounting principles consistently applied. The pro forma consolidated financial statements --- ----- of Host Marriott and its Subsidiaries and HMH and its Subsidiaries as of March 27, 1998 and after giving effect to the Initial Transaction, copies of which have been furnished to the Banks on or prior to the Effective Date, present fairly in all material respects the pro forma consolidated financial position of --- ----- Host Marriott and its Subsidiaries and HMH and its Subsidiaries as of March 27, 1998 and for the three52-month week period ended on March 31such date. Since January 2, 19991998 (but for this purpose, for (x) normal year-end audit adjustments and (y) assuming that the failure Initial Transaction had been consummated on such date), nothing shall have occurred that has had, or could reasonably be expected to use consolidation principles. (b) Since March 31have, 1999, there has been no Material Adverse Effect upon a material adverse effect on the business, operations, property, assets or assets, liabilities, condition (financial or otherwise) or prospects of Holdings, Holdings and its Subsidiaries taken as a whole, the BorrowerBorrower or the Borrower and its Subsidiaries taken as a whole. (cb) Except On and as fully reflected of the Effective Date and on the date on which each Loan is made, on a Pro Forma Basis after giving effect to all Indebtedness --- ----- (including the Loans) being incurred or assumed and Liens created by each Credit Party in connection therewith, (x) the financial statements described in Section 5.5(a)sum of the assets, there are no liabilities or obligations with respect to at a fair valuation, of Holdings and its Subsidiaries (taken as a whole) and the Borrower (on a stand-alone basis) will exceed their respective debts, (y) Holdings and its Subsidiaries (taken as a whole) and the Borrower (on a stand-alone basis) have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their ability to pay such debts as such debts mature and (z) Holdings and its Subsidiaries (taken as a whole) and the Borrower (on a stand- alone basis) have sufficient capital with which to conduct its business. For purposes of this Section 7.05(b) "debt" means any nature whatsoever liability on a claim, and "claim" means (whether absolute, accrued, contingent or otherwise and i) right to payment whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability fixed, contingent, matured, unmatured, disputed, undisputed, secured or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effectunsecured.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial StatementsAt the time of delivery thereof pursuant to ------------------------------ Section 8.01(l), the consolidated balance sheet statements of the Borrower financial condition of Holdings and its Subsidiaries at March October 31, 1999, 1995 and the related consolidated statements of operations income and stockholderscash flow and changes in shareholders' equity of Holdings and related statement of cash flows of the Borrower its Subsidiaries for the three-month period, as the case may be, fiscal year ended on such date and heretofore furnished to the Banks date, will present fairly (i) the consolidated financial condition of Holdings at the Borrower and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results date of the operations such statement of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the consolidated operations of each Consolidated Subsidiary, if any, of the Borrower Holdings for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) the financial condition of the Borrower and its Subsidiaries, if any, at March 31, 1999 and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999such fiscal year. All such financial statements will have been prepared in accordance with GAAP except, in the case of the financial statements for the three-month period ended on March -38- generally accepted accounting principles and practices consistently applied. Since October 31, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 19991995, there has been no Material Adverse Effect upon material adverse change in the business, operations, property, assets or assets, liabilities, condition (financial or otherwise) or prospects of Holdings, the Borrower or of Holdings and its Subsidiaries taken as a whole. (i) On and as of the Borrower.Restatement Effective Date, after giving effect to all Indebtedness (including the Loans) being incurred or assumed and Liens created by each of Holdings, the Borrower and their respective Subsidiaries in connection therewith (assuming the full utilization of the Total Revolving Loan Commitment on the Restatement Effective Date), (a) the sum of the assets, at a fair valuation, of each of Holdings and the Borrower (on a stand- alone basis), and of Holdings and its Subsidiaries (on a consolidated basis), will exceed their respective debts; (b) each of Holdings and the Borrower (on a stand-alone basis), and Holdings and its Subsidiaries (on a consolidated basis), have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their ability to pay such debts as such debts mature; and (c) Except as fully reflected in each of Holdings and the financial statements described in Section 5.5(aBorrower (on a stand-alone basis), there are no liabilities or obligations and Holdings and its Subsidiaries (on a consolidated basis), will have sufficient capital with respect which to the Borrower conduct its business. For purposes of this Section 7.05(b), "debt" means any nature whatsoever liability on a claim, and "claim" means (whether absolutei) right to payment, accrued, contingent or otherwise and whether or not duesuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, un matured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii) whichright to an equitable remedy for breach of performance if such breach gives rise to a payment, either individually whether or in aggregatenot such right to an equitable remedy is reduced to judgment, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability fixed, contingent, matured, unmatured, disputed, undisputed, secured or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effectunsecured.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; etc. ----------------- (a) The Financial Statements, the audited consolidated balance sheet of the Borrower and its Subsidiaries at March December 31, 1999, 2017 and the related consolidated statements of operations income and stockholders' equity and related statement of cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the three-month period, as fiscal year of the case may be, Borrower ended on such date and heretofore furnished to the Banks present fairly (i) the unaudited consolidated financial condition balance sheets of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries at the end of the Fiscal Quarter ended March 31, 1999 2018 and the related consolidated results statements of the operations income and cash flows and changes in shareholders’ equity of the Borrower and its Consolidated Subsidiaries, if any, Subsidiaries for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998Quarter then ended, in each case determined on a non-furnished to the Lenders prior to the Closing Date, present fairly in all material respects the consolidated basis, and (iii) the financial condition position of the Borrower and its Subsidiaries, if any, Subsidiaries at March 31, 1999 the date of said financial statements and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999respective periods covered thereby. All such financial statements have been prepared in accordance with U.S. GAAP exceptconsistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements for the three-month period ended on March 31statements, 1999, for (x) to normal year-end audit adjustments (all of which are of a recurring nature and (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) none of the Borrower. (c) Except as fully reflected in the financial statements described in Section 5.5(a), there are no liabilities or obligations with respect to the Borrower of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in aggregate, would be material to the Borrower. The Borrower does not know of any basis for the assertion against the Borrower of any liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, could would be material) and the absence of footnotes. (b) On and as of the Closing Date, and after giving effect to the Transaction and to all Indebtedness (including the Loans) being incurred or assumed or paid and discharged by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of the Borrower (on a stand-alone basis) and of the Borrower and its Subsidiaries (taken as a whole) will exceed their respective debts, (ii) the Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (taken as a whole) have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their respective ability to pay such debts as such debts mature, and (iii) the Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct their respective businesses. For purposes of this Section 6.5(b), “debt” means any liability on a claim, and “claim” means (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to have a Material Adverse Effectbecome an actual or matured liability.

Financial Statements; Financial Condition. Undisclosed ------------------------------------------------------ Liabilities; Projections; etc. -----------------. (a) The Financial StatementsTo the best knowledge of Holdings and the ----------------------------- Borrower, the consolidated balance sheet statements of the Borrower financial condition of Holdings and its Subsidiaries at March 3128, 19991997 and of Xxxxx as of June 30, 1997 and the related consolidated statements of operations income and stockholders' equity cash flow for the last fiscal year ended on such date, as the case may be, and related statement furnished to the Banks prior to the Amendment Effective Date present fairly in all material respects the financial condition of cash flows Holdings and its Subsidiaries and of Xxxxx and its Subsidiaries at the date of such statements of financial condition and the results of the Borrower operations of Holdings and its Subsidiaries for the respective last fiscal year or three-month period, as the case may be. To the best knowledge of Holdings and the Borrower, ended all such financial statements have been prepared in accordance with GAAP consistently applied, except as disclosed therein and subject to normal year end audit adjustments. (b) The annual and interim financial statements included in the SEC Reports (both as to Holdings and as to its Subsidiaries on such date a combined basis) (including statements of income and heretofore furnished to the Banks cash flows and changes in shareholders' equity), present fairly (i) the consolidated financial condition of the Borrower and its Consolidated Subsidiaries, if any, at March 31, 1999 and the consolidated results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the Fiscal Year ended December 31, 1998, (ii) the financial condition of each Consolidated Subsidiary, if any, of the Borrower at December 31, 1998 and the results of the operations of each Consolidated Subsidiary, if any, of the Borrower for the Fiscal Year ended December 31, 1998, in each case determined on a non-consolidated basis, and (iii) all material respects the financial condition of the Borrower and its Subsidiaries, if any, relevant Persons at March 31, 1999 the dates of said statements and the results of the operations of the Borrower and its Consolidated Subsidiaries, if any, for the three-month period ended March 31, 1999periods covered thereby. All such financial statements have been prepared in accordance with GAAP except, in the case of consistently applied and the financial statements as of and for the three-month period ended on March 31fiscal years have been audited by and accompanied by the opinion of Ernst & Young LLP, 1999, for (x) normal year-end audit adjustments and (y) the failure to use consolidation principles. (b) Since March 31, 1999, there has been no Material Adverse Effect upon the business, operations, property, assets or condition (financial or otherwise) of the Borrowerindependent public accountants. (c) Since September 30, 1997, after giving effect to the Acquisition, nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect. (d) Except as fully reflected in the financial statements described in Section 5.5(a7.05(b) and the Indebtedness incurred under this Agreement and except as set forth in Schedule 7.05, (i) there were as of the Amendment Effective Date (and after giving effect to any Loans made on such date), there are no liabilities or obligations (excluding obligations or liabilities incurred in the ordinary course of business, which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect) with respect to Holdings or the Borrower or any of their respective Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due), and (ii) which, either individually or in aggregate, would be material to neither Holdings nor the Borrower. The Borrower does not know nor any of their respective Subsidiaries knows of any basis for the assertion against Holdings or the Borrower or any of their respective Subsidiaries of any such liability or obligation of any nature whatsoever that is not fully reflected in such financial statements which, either individually or in the aggregate, has, or could be reasonably be expected likely to have have, a Material Adverse Effect. (e) The pro forma information contained in the SEC Reports and the --- ----- Projections are based on good faith estimates and assumptions made by Holdings or Borrower, and on the Amendment Effective Date Holdings or Borrower believes that the Projections and such pro forma information were reasonable and, in the --- ----- case of the Projections, attainable under the facts and circumstances known to Holdings or Borrower, it being recognized by the Banks, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections are likely to differ from the projected results and that the differences could be material. There is no material fact known to Holdings or the Borrower or any of their respective Subsidiaries which would have a Material Adverse Effect and which is not publicly available or has not been disclosed herein or in such other documents, certificates and statements furnished to the Banks for use in connection with the transactions contemplated hereby. (f) On and as of the Amendment Effective Date, after giving effect to the Acquisition and to all Indebtedness (including the Loans) being incurred or assumed and Liens created by the Borrower in connection therewith (assuming the full utilization of all Commitments on the Effective Date), (a) the sum of the assets, at a going business value (i.e., the amount that may be realized within --- a reasonable time, considered to be six months to one year, either through collection or sale at the regular market value, conceiving the latter as the amount that would be obtained for such assets within such period by a capable and diligent businessman from an interested buyer who is willing to purchase under ordinary selling conditions), of each of Holdings, individually, and the Borrower, individually, will exceed its debts; (b) each of Holdings, individually, and the Borrower, individually, has not incurred and does not intend to incur, and does not believe that it will incur, debts