Exhibit 10.29.2
EXECUTION COPY
SECOND AMENDED AND RESTATED LOAN AGREEMENT
Dated as of December 14, 2007
Between
FELCOR ST. PETE (SPE), L.L.C.
and
FELCOR ST. PETE LEASING (SPE), L.L.C.,
collectively as Borrower
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender

 

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TABLE OF CONTENTS

                                      Page   I.   DEFINITIONS; PRINCIPLES OF
CONSTRUCTION                    
 
            Section 1.1.   Definitions     1       Section 1.2.   Principles of
Construction     24              
 
        II.   GENERAL TERMS                    
 
            Section 2.1.   Loan Assumption     24           2.1.1  
Agreement to Assume the Loan
    24           2.1.2  
Assumption Agreement
    24           2.1.3  
The Note, Mortgage and Loan Documents
    24       Section 2.2.   Interest Rate     24           2.2.1  
Interest Generally
    24           2.2.2  
Interest Calculation
    24           2.2.3  
Determination of Interest Rate
    25           2.2.4  
Additional Costs
    28           2.2.5  
Default Rate
    29           2.2.6  
Usury Savings
    29           2.2.7  
Interest Rate Cap Agreement
    29       Section 2.3.   Loan Payment     31           2.3.1  
Payments Generally
    31           2.3.2  
Payment on Maturity Date
    31           2.3.3  
Late Payment Charge
    31           2.3.4  
Method and Place of Payment
    32       Section 2.4.   Prepayments     32           2.4.1  
Voluntary Prepayments
    32           2.4.2  
Mandatory Prepayments
    33           2.4.3  
Prepayments After Default
    33           2.4.4  
Release of Property
    33           2.4.5  
Release on Payment in Full
    33       Section 2.5.   Cash Management     33           2.5.1  
Lockbox Account
    33           2.5.2  
Cash Management Account
    34           2.5.3  
Payments Received Under the Cash Management Agreement
    36       Section 2.6.   Extension of the Initial Maturity Date     36      
       
 
        III.   INTENTIONALLY OMITTED                    
 
        IV.   REPRESENTATIONS AND WARRANTIES                    
 
            Section 4.1.   Borrower Representations     37           4.1.1  
Organization
    37           4.1.2  
Proceedings
    37           4.1.3  
No Conflicts
    37  

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                                      Page           4.1.4  
Litigation
    37           4.1.5  
Agreements
    38           4.1.6  
Title
    38           4.1.7  
Solvency
    38           4.1.8  
Full and Accurate Disclosure
    39           4.1.9  
No Plan Assets
    39           4.1.10  
Compliance
    39           4.1.11  
Financial Information
    40           4.1.12  
Condemnation
    40           4.1.13  
Federal Reserve Regulations
    40           4.1.14  
Utilities and Public Access
    40           4.1.15  
Not a Foreign Person
    40           4.1.16  
Separate Lots
    41           4.1.17  
Assessments
    41           4.1.18  
Enforceability
    41           4.1.19  
No Prior Assignment
    41           4.1.20  
Insurance
    41           4.1.21  
Use of Property
    41           4.1.22  
Certificate of Occupancy; Licenses
    41           4.1.23  
Flood Zone
    41           4.1.24  
Physical Condition
    42           4.1.25  
Boundaries
    42           4.1.26  
Leases
    42           4.1.27  
Intentionally Omitted.
    42           4.1.28  
Principal Place of Business; State of Organization
    43           4.1.29  
Filing and Recording Taxes
    43           4.1.30  
Special Purpose Entity/Separateness
    43           4.1.31  
Management Agreement
    44           4.1.32  
Illegal Activity
    44           4.1.33  
No Change in Facts or Circumstances; Disclosure
    44           4.1.34  
Investment Company Act
    44           4.1.35  
Embargoed Person
    44           4.1.36  
Cash Management Account
    45           4.1.37  
Patents, Trademarks, etc
    45           4.1.38  
Ground Lease
    45           4.1.39  
Hotel Operating Lease
    46       Section 4.2.   Survival of Representations     46              
 
        V.   BORROWER COVENANTS                    
 
            Section 5.1.   Affirmative Covenants     47           5.1.1  
Existence; Compliance with Legal Requirements
    47           5.1.2  
Taxes and Other Charges
    48           5.1.3  
Litigation
    48           5.1.4  
Access to Property
    49           5.1.5  
Intentionally Omitted
    49           5.1.6  
Cooperate in Legal Proceedings
    49  

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                                      Page           5.1.7  
Perform Loan Documents
    49           5.1.8  
Award and Insurance Benefits
    49           5.1.9  
Further Assurances
    49           5.1.10  
Mortgage Taxes
    49           5.1.11  
Financial Reporting
    49           5.1.12  
Business and Operations
    52           5.1.13  
Title to the Property
    52           5.1.14  
Costs of Enforcement
    53           5.1.15  
Estoppel Statement
    53           5.1.16  
Intentionally Omitted.
    53           5.1.17  
Performance by Borrower
    54           5.1.18  
Confirmation of Representations
    54           5.1.19  
No Joint Assessment
    54           5.1.20  
Leasing Matters
    54           5.1.21  
Alterations
    56           5.1.22  
Operation of Property
    57           5.1.23  
Ground Leases.
    57           5.1.24  
Hotel Operating Lease
    59       Section 5.2.   Negative Covenants     60           5.2.1  
Operation of Property
    60           5.2.2  
Liens
    60           5.2.3  
Dissolution
    61           5.2.4  
Change in Business
    61           5.2.5  
Debt Cancellation
    61           5.2.6  
Zoning
    61           5.2.7  
Removal of FF&E
    61           5.2.8  
Principal Place of Business and Organization
    62           5.2.9  
ERISA
    62           5.2.10  
Transfers
    62           5.2.11  
Ground Lease
    66              
 
        VI.   INSURANCE; CASUALTY; CONDEMNATION; RESTORATION                    
 
            Section 6.1.   Insurance     66       Section 6.2.   Casualty     70
      Section 6.3.   Condemnation     71       Section 6.4.   Restoration     71
             
 
        VII.   RESERVE FUNDS                    
 
            Section 7.1.   Required Repair Funds     75           7.1.1  
Deposits
    75           7.1.2  
Release of Required Repair Funds
    76       Section 7.2.   Tax and Insurance Escrow Fund     76      
Section 7.3.   Replacements and Replacement Reserve     77           7.3.1  
Replacement Reserve Fund
    77           7.3.2  
Disbursements from Replacement Reserve Account
    77  

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                                      Page           7.3.3  
Balance in the Replacement Reserve Account
    78           7.3.4  
Debt Service Reserve
    78       Section 7.4.   Ground Lease Reserve Fund.     78           7.4.1  
Deposits to Ground Lease Fund
    79           7.4.2  
Release of Ground Lease Reserve Fund
    79       Section 7.5.   Reserve Funds, Generally     79              
 
        VIII.   DEFAULTS                    
 
            Section 8.1.   Event of Default     80       Section 8.2.   Remedies
    83              
 
        IX.   SPECIAL PROVISIONS                    
 
            Section 9.1.   Sale of Note and Securitization     84          
9.1.2  
Mezzanine Loans
    86       Section 9.2.   Securitization Indemnification     86      
Section 9.3.   Intentionally Omitted.     89       Section 9.4.   Exculpation  
  89       Section 9.5.   Matters Concerning Manager     91       Section 9.6.  
Servicer     91              
 
        X.   MISCELLANEOUS                    
 
            Section 10.1.   Survival     91       Section 10.2.   Lender’s
Discretion     92       Section 10.3.   Governing Law     92       Section 10.4.
  Modification, Waiver in Writing     93       Section 10.5.   Delay Not a
Waiver     93       Section 10.6.   Notices     94       Section 10.7.   Trial
by Jury     95       Section 10.8.   Headings     95       Section 10.9.  
Severability     95       Section 10.10.   Preferences     95      
Section 10.11.   Waiver of Notice     96       Section 10.12.   Remedies of
Borrower     96       Section 10.13.   Expenses; Indemnity     96      
Section 10.14.   Schedules Incorporated     97       Section 10.15.   Offsets,
Counterclaims and Defenses     97       Section 10.16.   No Joint Venture or
Partnership; No Third Party Beneficiaries     97       Section 10.17.  
Publicity     98       Section 10.18.   Waiver of Marshalling of Assets     98  
    Section 10.19.   Waiver of Counterclaim     98       Section 10.20.  
Conflict; Construction of Documents; Reliance     98       Section 10.21.  
Prior Agreements     99       Section 10.22.   Joint and Several Liability    
99       Section 10.23.   Contribution and Related Provisions.     99  

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SCHEDULES

         
Schedule I
  -   Rent Roll
Schedule II
  -   Required Repairs
Schedule III
  -   Organizational Structure
Schedule IV
  -   Licenses
Schedule V
  -   Equipment Leases
Schedule VI
  -   Litigation
Schedule VII
      Reserve Disbursement Request Schedule

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SECOND AMENDED AND RESTATED LOAN AGREEMENT
          THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of
December 14, 2007 (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this “Agreement”), by and among GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., a Delaware corporation having an address at 600
Steamboat Road, Greenwich, CT 06830 (“Lender”), FELCOR ST. PETE (SPE), L.L.C., a
Delaware limited liability company, having its principal place of business at
c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway,
Suite 1300, Irving, Texas 75062 (“Hotel Owner”) and FELCOR ST. PETE LEASING
(SPE), L.L.C., a Delaware limited liability company, having its principal place
of business c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter
Freeway, Suite 1300, Irving, Texas 75062 (“Hotel Operator”; Hotel Owner and
Hotel Operator are collectively and individually, as the context requires,
referred to herein as “Borrower”; references herein to “Borrower”, unless
otherwise specifically stated, shall also mean and refer to each and every one
of Hotel Owner and Hotel Operator jointly and severally).
W I T N E S S E T H:
          WHEREAS, Lender made the Loan to Prior Owner pursuant to the terms and
conditions of that certain Loan Agreement dated as of April 9, 2007 (the
“Original Loan Agreement”) and the other Original Loan Documents (as defined in
the Assumption Agreement);
          WHEREAS, Hotel Owner has acquired the Property from Prior Owner and
Hotel Operator is leasing the Property from Hotel Owner pursuant to the terms
and conditions set forth in the Hotel Operating Lease;
          WHEREAS, pursuant to the terms of the Assumption Agreement, Borrower
has agreed to assume the obligations of Prior Owner under the Original Loan
Documents and Lender has agreed to the assumption of the Loan by Borrower in
accordance with the terms and conditions set forth therein; and
          WHEREAS, Lender and Borrower now wish to amend and restate the
Original Loan Agreement in its entirety as more specifically set forth herein.
          NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged, Borrower and Lender hereby covenant,
agree, represent and warrant that the Original Loan Agreement is hereby amended
and restated in its entirety as follows:
          I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
          Section 1.1. Definitions. For all purposes of this Agreement, except
as otherwise expressly required or unless the context clearly indicates a
contrary intent:
          “Acceptable Counterparty” shall mean any counterparty to the Interest
Rate Cap Agreement that has and shall maintain, until the expiration of the
applicable Interest Rate Cap

 

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Agreement a long-term unsecured debt rating of at least “AA” by S&P and “Aa2”
from Moody’s, which rating shall not include a “t” or otherwise reflect a
termination risk.
          “Additional Insolvency Opinion” shall have the meaning set forth in
Section 4.1.30(d) hereof.
          “Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person or of an
Affiliate of such Person.
          “Affiliated Manager” shall mean any Manager in which Borrower,
Principal, or any Sponsor has, directly or indirectly, any legal, beneficial or
economic interest.
          “Allocable Amount” shall have the meaning set forth in Section 10.22.1
hereof.
          “ALTA” shall mean American Land Title Association, or any successor
thereto.
          “Alteration Threshold Amount” shall mean One Million Six Hundred
Twelve Thousand Five Hundred and No/100 Dollars ($1,612,500.00).
          “Annual Budget” shall mean the operating budget, including all planned
Capital Expenditures, for the Property prepared by Borrower or Manager for the
applicable Fiscal Year or other period.
          “Applicable Interest Rate” shall mean the rate or rates at which the
outstanding principal amount of the Loan bears interest from time to time in
accordance with the provisions of Section 2.2.3 hereof.
          “Approved Annual Budget” shall have the meaning set forth in
Section 5.1.11(d) hereof.
          “Approved Qualified Manager” shall mean a Qualified Manager that is
(a) the Hyatt Corporation, (b) the Four Seasons, (c) Westin, or (d) any other
Qualified Manager for which Borrower shall have obtained prior written
confirmation from the applicable Rating Agencies that the management of the
Property by such Qualified Manager as an Approved Qualified Manager will not
cause a downgrade, withdrawal or qualification of the then current ratings of
the Securities or any class thereof.
          “Assignment of Leases” shall mean that certain first priority Second
Amended and Restated Assignment of Leases and Rents, dated as of the date
hereof, from Borrower, as assignor, to Lender, as assignee, assigning to Lender
all of Borrower’s right, title and interest in and to the Leases and Rents as
security for the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
          “Assignment of Management Agreement” shall mean that certain Amended
and Restated Subordination, Non-Disturbance and Attornment Agreement, dated as
of the date hereof, among Lender, Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

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          “Assumed Note Rate” shall mean an interest rate equal to the sum of
one percent (1%) plus LIBOR as determined on the Determination Date immediately
preceding the applicable prepayment date plus the Spread.
          “Assumption Agreement” shall mean that certain Assumption Agreement,
dated as of the date hereof, by and among Borrower, Lender and Prior Owner.
          “Assumption Date” shall mean the date of the assumption of the Loan by
Hotel Operator and Hotel Owner pursuant to the terms of the Assumption
Agreement.
          “Award” shall mean any compensation paid by any Governmental Authority
in connection with a Condemnation.
          “Bankruptcy Action” shall mean with respect to any Person (a) such
Person filing a voluntary petition under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary
petition against such Person under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law, or soliciting or causing to be solicited
petitioning creditors for any involuntary petition against such Person; (c) such
Person filing an answer consenting to or otherwise acquiescing in or joining in
any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or
soliciting or causing to be solicited petitioning creditors for any involuntary
petition from any Person; (d) such Person consenting to or acquiescing in or
joining in an application for the appointment of a custodian, receiver, trustee,
or examiner for such Person or any portion of the Property; or (e) such Person
making an assignment for the benefit of creditors, or admitting, in writing or
in any legal proceeding, its insolvency or inability to pay its debts as they
become due.
          “Basic Carrying Costs” shall mean, for any period, the sum of the
following costs: (a) Taxes and (b) Insurance Premiums.
          “Borrower” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.
          “Breakage Costs” shall have the meaning set forth in Section 2.2.3(h)
hereof.
          “Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which national banks in New York, New York are not open for
business.
          “Capital Expenditures” shall mean, for any period, the amount expended
for items capitalized under GAAP and the Uniform System of Accounts (including
expenditures for building improvements or major repairs, leasing commissions and
tenant improvements).
          “Cash Management Account” shall have the meaning set forth in
Section 2.5.2(a) hereof.
          “Cash Management Agreement” shall mean that certain Amended and
Restated Cash Management Agreement, dated as of the date hereof, by and between
Borrower and

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Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
          “Casualty” shall have the meaning set forth in Section 6.2 hereof.
          “Casualty Consultant” shall have the meaning set forth in
Section 6.4(b)(iii) hereof.
          “Casualty Retainage” shall have the meaning set forth in Section
6.4(b)(iv) hereof.
          “Closing Date” shall mean the date of the funding of the Loan to Prior
Owner.
          “Co-Obligor” shall have the meaning set forth in Section 10.22.1
hereof.
          “Co-Obligor Payment” shall have the meaning set forth in
Section 10.22.1 hereof.
          “Code” shall mean the Internal Revenue Code of 1986, as amended, as it
may be further amended from time to time, and any successor statutes thereto,
and applicable U.S. Department of Treasury regulations issued pursuant thereto
in temporary or final form.
          “Collateral Assignment of Interest Rate Cap Agreement” shall mean that
certain Amended and Restated Collateral Assignment of Interest Rate Cap
Agreement, dated as of the date hereof, executed by Borrower in connection with
the Loan for the benefit of the Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
          “Condemnation” shall mean a temporary or permanent taking by any
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
the Property, or any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the Property or any
part thereof.
          “Condemnation Proceeds” shall have the meaning set forth in
Section 6.4(b) hereof.
          “Constituent Member” shall mean any direct member or partner in
Borrower and any Person that, directly or indirectly through one or more other
partnerships, limited liability companies, corporations or other entities is a
member or partner in Borrower.
          “Contribution Obligations” shall have the meaning set forth in
Section 10.22.1 hereof.
          “Counterparty” shall mean, with respect to the Interest Rate Cap
Agreement, Natixis Financial Products, Inc., and with respect to any Replacement
Interest Rate Cap Agreement, any substitute Acceptable Counterparty.

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          “Debt” shall mean the outstanding principal amount set forth in, and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Mortgage and the other Loan Documents.
          “Debt Service” shall mean, with respect to any particular period of
time, scheduled interest payments due under this Agreement and the Note.
          “Debt Service Coverage Ratio” shall mean a ratio for the applicable
period in which:
          (a) the numerator is the Net Operating Income for such period as set
forth in the financial statements required hereunder; and
          (b) the denominator is the aggregate amount of interest due and
payable on the Loan for such period.
          “Debt Service Coverage Ratio Threshold” shall mean that the Property
shall have achieved a Debt Service Coverage Ratio of not less than 1.10:1.00 for
the trailing twelve month period ending at the time of determination thereof, as
reasonably determined by Lender based upon such information and documentation
concerning operating results at the Property as Lender may reasonably require.
          “Debt Service Reserve Account” shall have the meaning set forth in
Section 7.3.4 hereof.
          “Debt Service Reserve Fund” shall have the meaning set forth in
Section 7.3.4 hereof.
          “Default” shall mean the occurrence of any event hereunder or under
any other Loan Document which, but for the giving of notice or passage of time,
or both, would be an Event of Default.
          “Default Rate” shall mean a rate per annum equal to the lesser of
(a) the Maximum Legal Rate and (b) five percent (5%) above the Applicable
Interest Rate.
          “Determination Date” shall mean, with respect to any Interest Period,
the date that is two (2) London Business Days prior to the fifth (5th) day of
the calendar month in which such Interest Period commences.
          “Disclosure Document” shall mean a prospectus, prospectus supplement,
private placement memorandum, offering memorandum, offering circular or other
offering documents, in each case in preliminary or final form, used to offer
Securities in connection with a Securitization.
          “Eligible Account” shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the

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definition of Eligible Institution or (b) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company acting in its fiduciary capacity which, in the case of a state chartered
depository institution or trust company, is subject to regulations substantially
similar to 12 C.F.R. §9.10(b), having in either case a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authority. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.
          “Eligible Institution” shall mean a depository institution or trust
company, the short term unsecured debt obligations or commercial paper of which
are rated at least “A-1+” by S&P, “P-l” by Moody’s and “F-1+” by Fitch in the
case of accounts in which funds are held for thirty (30) days or less (or, in
the case of accounts in which funds are held for more than thirty (30) days, the
long term unsecured debt obligations of which are rated at least “AA” by Fitch
and S&P and “Aa2” by Moody’s).
          “Embargoed Person” shall have the meaning set forth in Section 4.1.35
hereof.
          “Environmental Indemnity” shall mean that certain Amended and Restated
Environmental Indemnity Agreement, dated as of the date hereof, executed by
Borrower in connection with the Loan for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
          “Event of Default” shall have the meaning set forth in Section 8.1(a)
hereof.
          “Exchange Act” shall have the meaning set forth in Section 9.2(a)
hereof.
          “Excusable Delay” shall mean a delay due to acts of god, governmental
restrictions, stays, judgments, orders, decrees, enemy actions, civil commotion,
fire, casualty, strikes, work stoppages, shortages of labor or materials or
other causes beyond the reasonable control of Borrower.
          “Extended Maturity Date” shall have the meaning set forth in
Section 2.6 hereof.
          “Extension Option” shall have the meaning set forth in Section 2.6
hereof.
          “FelCor REIT” shall mean FelCor Lodging Trust Incorporated, a Maryland
corporation.
          “FelCor OP” shall mean FelCor Lodging Limited Partnership, a Delaware
limited partnership.
          “FF&E” shall mean all furniture, furnishings, fixtures and equipment
required for the operation of the Property, including, without limitation, lobby
furniture, carpeting, draperies, paintings, bedspreads, television sets, office
furniture and equipment such as safes, cash

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registers, and accounting, duplicating and communication equipment, telephone
systems, back and front of the house computerized systems, guest room furniture,
specialized hotel equipment such as equipment required for the operation of
kitchens, laundries, the front desk, dry cleaning facilities, bar and cocktail
lounges, restaurants, recreational facilities as they may exist from time to
time, and decorative lighting, material handling equipment and cleaning and
engineering equipment and all other fixtures, equipment, apparatus and personal
property needed for such purposes; but excluding Operating Equipment and
Supplies.
          “FF&E Expenditures” shall mean amounts expended for the purchase,
replacement and/or the installation of FF&E at the Property.
          “FF&E Expenditures Work” shall mean any labor performed or materials
installed in connection with any FF&E Expenditures.
          “Fiscal Year” shall mean each twelve (12) month period commencing on
January 1 and ending on December 31 during each year of the term of the Loan (or
such other corresponding period as provided in the Management Agreement with the
Marriott Manager).
          “Fitch” shall mean Fitch, Inc.
          “Foreign Taxes” shall have the meaning set forth in Section 2.2.3(e)
hereof.
          “GAAP” shall mean generally accepted accounting principles in the
United States of America as of the date of the applicable financial report.
          “Governmental Authority” shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence.
          “Gross Income from Operations” shall mean, for any period, all income
and proceeds (whether in cash or on credit, and computed in accordance with GAAP
and the Uniform System of Accounts) received by Borrower or Manager (on behalf
of Borrower) for the use, occupancy or enjoyment of the Property, or any part
thereof, or received by Borrower or Manager for the sale of any goods, services
or other items sold on or provided from the Property in the ordinary course of
the Property operation, including without limitation: (a) all income and
proceeds received from rental of rooms, Leases and commercial space, meeting,
conference and/or banquet space within the Property including net parking
revenue; (b) all income and proceeds received from food and beverage operations
and from catering services conducted from the Property even though rendered
outside of the Property; (c) all income and proceeds from business interruption,
rental interruption and use and occupancy insurance with respect to the
operation of the Property (after deducting therefrom all necessary costs and
expenses incurred in the adjustment or collection thereof); (d) all Awards for
temporary use (after deducting therefrom all costs incurred in the adjustment or
collection thereof and in Restoration of the Property); (e) all income and
proceeds from judgments, settlements and other resolutions of disputes with
respect to matters which would be includable in this definition of “Gross Income
from Operations” if received in the ordinary course of the Property operation
(after deducting therefrom all necessary costs and expenses incurred in the
adjustment or collection thereof); (f) interest on credit accounts, rent
concessions or credits, and other required pass-throughs and

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interest on Reserve Funds; and (g) deposits received for rental of rooms but
excluding, (1) gross receipts received by lessees, licensees or concessionaires
of the Property; (2) consideration received at the Property for hotel
accommodations, goods and services to be provided at other hotels, although
arranged by, for or on behalf of Borrower or Manager; (3) income and proceeds
from the sale or other disposition of goods, FF&E, capital assets and other
items not in the ordinary course of the Property operation; (4) federal, state
and municipal excise, sales and use taxes collected directly from patrons or
guests of the Property as a part of or based on the sales price of any goods,
services or other items, such as gross receipts, room, admission, cabaret or
equivalent taxes; (5) Awards (except to the extent provided in clause (d)
above); (6) refunds, rebates, discounts and other similar credits of amounts not
included in Operating Expenses at any time and uncollectible accounts;
(7) gratuities collected by the Property employees; (8) the proceeds of any
financing, refinancing or the sale of the Property (or all of the membership
interests in Borrower); (9) other non-recurring income or proceeds resulting
other than from the use or occupancy of the Property, or any part thereof, or
other than from the sale of goods, services or other items sold on or provided
from the Property in the ordinary course of business; (10) any credits or
refunds made to customers, guests or patrons in the form of allowances or
adjustments to previously recorded revenues; (11) deposits received for rental
of banquet space or business or conference meeting rooms; and (12) all proceeds
from insurance to the extent not included in income pursuant to clause
(c) above.
          “Ground Lease” shall have the meaning set forth in the Mortgage.
          “Ground Lease Reserve Account” shall have the meaning set forth in
Section 7.4.1 hereof.
          “Ground Lease Reserve Fund” shall have the meaning set forth in
Section 7.4.1 hereof.
          “Ground Lessor” shall have the meaning set forth in the Mortgage.
          “Ground Rent” shall have the meaning set forth in Section 7.4.1
hereof.
          “Ground Rent Deposit” shall have the meaning set forth in
Section 7.4.1 hereof.
          “Hotel Operator” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.
          “Hotel Operating Lease” shall mean the lease dated as of the date
hereof between Hotel Owner and Hotel Operator, as the same may be amended or
modified as permitted under this Agreement.
          “Hotel Owner” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.
          “Improvements” shall have the meaning set forth in the granting clause
of the Mortgage.

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          “Indebtedness” of a Person, at a particular date, means the sum
(without duplication) at such date of (a) all indebtedness or liability of such
Person (including, without limitation, amounts for borrowed money and
indebtedness in the form of mezzanine debt and preferred equity); (b)
obligations evidenced by bonds, debentures, notes, or other similar instruments;
(c) obligations for the deferred purchase price of property or services
(including trade obligations for which such Person or its assets are liable);
(d) obligations under letters of credit (for which such Person is liable if such
amounts were advanced thereunder or for which such Person is liable to
reimburse); (e) obligations under acceptance facilities; (f) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds, to invest in any Person or entity, or otherwise to
assure a creditor against loss for which funds are required to be paid; and (g)
obligations secured by any Liens, for which such Person or its assets are
liable.
          “Indemnified Liabilities” shall have the meaning set forth in
Section 10.13(b) hereof.
          “Independent Director” or “Independent Manager” shall mean a Person
who is not at the time of initial appointment, or at any time while serving as a
director or manager, as applicable, and has not been at any time during the
preceding five (5) years: (a) a stockholder, director (with the exception of
serving as the Independent Director or Independent Manager), officer, employee,
partner, member, attorney or counsel of the Principal, the Borrower or any
Affiliate of either of them; (b) a customer, supplier or other person who
derives any of its purchases or revenues from its activities with the Principal,
the Borrower or any Affiliate of either of them; (c) a Person controlling or
under common control with any such stockholder, director, officer, partner,
member, customer, supplier or other Person; or (d) a member of the immediate
family of any such stockholder, director, officer, employee, partner, member,
customer, supplier or other person. As used in this definition, the term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise. A
natural Person who satisfies the foregoing definition other than subparagraph
(b) shall not be disqualified from serving as an Independent Director or
Independent Manager of Borrower if such natural Person is an independent
director or independent manager provided by a nationally recognized company that
provides professional independent directors or independent managers and that
also provides other corporate services in the ordinary course of its business. A
natural Person who otherwise satisfies the foregoing definition except for being
the independent director or independent manager of a “special purpose entity”
affiliated with Borrower that does not own a direct or indirect equity interest
in Borrower or any co-borrower shall not be disqualified from serving as an
Independent Director or Independent Manager of Borrower if such individual is at
the time of initial appointment, or at any time while serving as a Independent
Director of Borrower, an Independent Director or Independent Manager of a
“special purpose entity” affiliated with Borrower (other than any Person that
owns a direct or indirect equity interest in Borrower or any co-borrower) if
such natural Person is an independent director or independent manager provided
by a nationally-recognized company that provides professional independent
directors or independent managers.
          “Initial Maturity Date” shall mean May 1, 2009.

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          “Insolvency Opinion” shall mean that certain non-consolidation opinion
letter dated the date hereof delivered by Akin Gump Strauss Hauer & Feld LLP in
connection with the Loan.
          “Insurance Premiums” shall have the meaning set forth in
Section 6.l(b) hereof.
          “Insurance Proceeds” shall have the meaning set forth in
Section 6.4(b) hereof.
          “Interest Period” shall mean (i) the period from and including the
Closing Date through and including the last day of the calendar month in which
the Closing Date occurs, and (ii) each period thereafter from and including the
first (1st) day of each calendar month through and including the last day of
each such calendar month; provided, however, that no Interest Period shall end
later than the Maturity Date (other than for purposes of calculating interest at
the Default Rate).
          “Interest Rate Cap Agreement” shall mean, as applicable, an Interest
Rate Cap Agreement (together with the confirmation and schedules relating
thereto) in form and substance reasonably satisfactory to Lender between
Borrower and an Acceptable Counterparty or a Replacement Interest Rate Cap
Agreement.
          “Interest Shortfall” shall have the meaning set forth in Section 2.4.1
hereof.
          “Lease” shall mean any lease (including the Hotel Operating Lease),
sublease or subsublease, letting, license, concession or other agreement
(whether written or oral and whether now or hereafter in effect) pursuant to
which any Person is granted a possessory interest in, or right to use or occupy
all or any portion of any space in the Property, and (a) every modification,
amendment or other agreement relating to such lease, sublease, subsublease, or
other agreement entered into in connection with such lease, sublease,
subsublease, or other agreement and (b) every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.
          “Legal Requirements” shall mean all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting the
Property or any part thereof, or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) materially limit the use and enjoyment
thereof.
          “Lender” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and assigns.
          “Lender Group” shall have the meaning set forth in Section 9.2(b)
hereof.
          “Liabilities” shall have the meaning set forth in Section 9.2(b)
hereof.

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          “LIBOR” shall mean, with respect to each Interest Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/16 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m.,
London time, on the related Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m., London time, on such Determination Date,
LIBOR shall be the arithmetic mean of the offered rates (expressed as a
percentage per annum) for deposits in U.S. dollars for a one-month period that
appear on the Reuters Screen Libor Page as of 11:00 a.m., London time, on such
Determination Date, if at least two such offered rates so appear. If fewer than
two such offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time, on such Determination Date, Lender shall request the principal
London office of any four major reference banks in the London interbank market
selected by Lender in its reasonable discretion to provide such bank’s offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one-month period as of
11:00 a.m., London time, on such Determination Date for the amounts of not less
than U.S. $1,000,000. If at least two such offered quotations are so provided,
LIBOR shall be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, Lender shall request any three major banks in New
York City selected by Lender in its reasonable discretion to provide such bank’s
rate (expressed as a percentage per annum) for loans in U.S. dollars to leading
European banks for a one-month period as of approximately 11:00 a.m., New York
City time on the applicable Determination Date for amounts of not less than U.S.
$1,000,000. If at least two such rates are so provided, LIBOR shall be the
arithmetic mean of such rates. LIBOR shall be determined conclusively by Lender
or its agent, absent manifest error.
          “LIBOR Loan” shall mean the Loan at such time as interest thereon
accrues at a rate of interest based upon LIBOR.
          “Licenses” shall have the meaning set forth in Section 4.1.22 hereof.
          “Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower, the Property, any portion thereof or
any interest therein, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic’s, materialmen’s and other similar liens and
encumbrances.
          “Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.
          “Loan Documents” shall mean, collectively, this Agreement, the Note,
the Mortgage, the Assignment of Leases, the Environmental Indemnity, the O&M
Agreement, the Assignment of Management Agreement, the Cash Management
Agreement, the Collateral Assignment of Interest Rate Cap Agreement, the
Operating Lease Subordination Agreement, the Assumption Agreement and all other
documents executed and/or delivered in connection with the Loan.

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          “Loan-to-Value Ratio” shall mean the ratio, as of a particular date,
in which the numerator is equal to the outstanding principal balance of the Debt
and the denominator is equal to the appraised value of the Property based on the
latest appraisal conducted by a licensed appraiser.
          “Lockbox Account” shall have the meaning set forth in Section 2.5.1(a)
hereof. “Lockbox Bank” shall mean an Eligible Institution.
          “London Business Day” shall mean any day other than a Saturday, Sunday
or any other day on which commercial banks in London, England are not open for
business.
          “Management Agreement” shall mean that certain Management Agreement,
dated as of June 23, 2005 between Marriott Manager and Prior Owner, as amended
by that certain (i) First Amendment to Management Agreement, dated as of
September 26, 2006, between Marriott Manager and Prior Owner, (ii) Second
Amendment to Management Agreement, dated as of October 6, 2007, between Marriott
Manager and Prior Owner, and (iii) Owner Agreement, dated as of the date hereof,
by and among Hotel Owner, Hotel Operator and Marriott Manager, as assigned by
Prior Owner to Hotel Operator on our about the date hereof, pursuant to which
Marriott Manager is to provide management and other services with respect to the
Property, or, if the context requires, the Replacement Management Agreement.
          “Manager” shall mean the Marriott Manager, together with its
successors and assigns, or, if the context requires, a Qualified Manager who is
managing the Property.
          “Marina Ground Lease” shall have the meaning set forth in the
Mortgage.
          “Marriott Manager” shall mean Renaissance Hotel Operating Company, a
Delaware corporation.
          “Maturity Date” shall mean the Initial Maturity Date or, if
applicable, the Extended Maturity Date, or such other date on which the final
payment of principal of the Note becomes due and payable as therein or herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.
          “Maximum Legal Rate” shall mean the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
          “Monthly Debt Service Amount” shall mean, for any Payment Date, the
interest accrued on the Loan for the preceding Interest Period.
          “Moody’s” shall mean Moody’s Investors Service, Inc.
          “Mortgage” shall mean that certain first priority Second Amended and
Restated Leasehold Mortgage, Security Agreement and Fixture Filing, dated the
date hereof, executed and

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delivered by Borrower as security for the Loan and encumbering the Property, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.
          “Net Cash Flow” shall mean, for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.
          “Net Cash Flow Schedule” shall have the meaning set forth in
Section 5.1.11(b) hereof.
          “New Mezzanine Borrower” shall have the meaning set forth in
Section 9.1.2 hereof.
          “New Mezzanine Loan” shall have the meaning set forth in Section 9.1.2
hereof.
          “Net Operating Income” shall mean, for any period, the amount obtained
by subtracting Operating Expenses for such period from Gross Income from
Operations for such period.
          “Net Proceeds” shall have the meaning set forth in Section 6.4(b)
hereof.
          “Net Proceeds Deficiency” shall have the meaning set forth in
Section 6.4(b)(vi) hereof.
          “Note” shall mean that certain Second Amended and Restated Promissory
Note of even date herewith in the principal amount of Eighty-Nine Million Two
Hundred Fifty Thousand and No/100 Dollars ($89,250,000.00), made by Borrower in
favor of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
          “O&M Agreement” shall mean that certain Amended and Restated
Operations and Maintenance Agreement, dated as of the date hereof, between
Borrower and Lender given in connection with the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.
          “Officer’s Certificate” shall mean a certificate delivered to Lender
by Borrower which is signed by an authorized officer of Borrower or a
Constituent Member, as applicable, which shall in all events be subject to
Section 9.4 hereof.
          “Operating Equipment and Supplies” shall mean all chinaware,
glassware, linens, silverware, tools, kitchen utensils, uniforms, engineering
and housekeeping tools and utensils, food and beverage items, fuel, soap, light
bulbs, mechanical stores, cleaning supplies and materials, matches, stationary,
paper supplies, laundry supplies, food service preparation utensils,
housekeeping supplies, accounting supplies and other immediately consumable
items used in the operation of the Property.
          “Operating Expenses” shall mean, for any period, the total of all
expenditures, computed in accordance with GAAP, of whatever kind during such
period relating to the operation, maintenance and management of the Property
that are incurred on a regular monthly

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or other periodic basis, including without limitation, utilities, ordinary
repairs and maintenance (which ordinary repairs and maintenance for the purposes
of this definition shall be equal to actual expenses for ordinary repairs and
maintenance subject to normalization of such expenses), insurance, license fees,
property taxes and assessments, advertising expenses, base management fees,
payroll and related taxes, computer processing charges, tenant improvements and
leasing commissions, operational equipment or other lease payments as approved
by Lender, and other similar costs, but excluding depreciation and amortization
with respect to the Property, Debt Service, Capital Expenditures, incentive
management fees, the cost of any items incurred at Manager’s expense pursuant to
the Management Agreement, non-recurring expenses and contributions to the
Replacement Reserve Fund, the Tax and Insurance Escrow Fund, the Ground Lease
Reserve Fund and any other reserves required under the Loan Documents.
          “Operating Lease Subordination Agreement” shall mean that certain
Operating Lease Subordination Agreement; Acknowledgement of Lease Assignment,
Estoppel and Attornment Agreement dated as of the date hereof executed by Hotel
Owner, Hotel Operator and Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
          “Other Charges” shall mean all ground rents, maintenance charges,
impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property, now or hereafter levied or assessed or
imposed against the Property or any part thereof.
          “Payment Date” shall mean the first (1st) day of each calendar month
during the term of the Loan.
          “Payment Date Deficiency” shall have the meaning set forth in
Section 7.3.4 hereof.
          “Permitted Encumbrances” shall mean, collectively (a) the Liens and
security interests created by the Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Title Insurance Policy, (c) Liens, if any,
for Taxes imposed by any Governmental Authority not yet due or delinquent,
(d) such other title and survey exceptions, documents, agreements or instruments
as Lender has approved or may approve in writing in Lender’s reasonable
discretion, and (e) easements which are necessary for the operation of the
Property that do not and would not have a material adverse effect on the (i) the
business operations, economic performance, assets, financial condition, equity,
contingent liabilities, material agreements or results of operations of Borrower
or the Property or (ii) the value of, or cash flow from, the Property.
          “Permitted Investments” shall have the meaning set forth in the Cash
Management Agreement.
          “Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

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          “Personal Property” shall have the meaning set forth in the granting
clause of the Mortgage.
          “Physical Conditions Report” shall mean a report prepared by a company
reasonably satisfactory to Lender regarding the physical condition of the
Property, reasonably satisfactory in form and substance to Lender.
          “PIP Requirements” shall mean those certain repairs to be made in
accordance with the Property Improvement Plan required under the Management
Agreement and as more particularly described on Schedule II attached hereto.
          “Policies” and “Policy” shall have the meanings specified in
Section 6.1(b) hereof.
          “Prescribed Laws” shall mean, collectively, (a) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act),
(b) Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001, and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the
International Emergency Economic Power Act, 50 U.S.C. §1701 et. seq. and (d) all
other Legal Requirements relating to money laundering or terrorism.
          “Prime Rate” shall mean the annual rate of interest publicly announced
by Citibank, N.A. in New York, New York, as its base rate, as such rate shall
change from time to time. If Citibank, N.A. ceases to announce a base rate,
Prime Rate shall mean the rate of interest published in The Wall Street Journal
from time to time as the “Prime Rate”. If more than one “Prime Rate” is
published in The Wall Street Journal for a day, the average of such “Prime
Rates” shall be used, and such average shall be rounded up to the nearest
one-sixteenth of one percent. If The Wall Street Journal ceases to publish the
“Prime Rate”, the Lender shall select an equivalent publication that publishes
such “Prime Rate”, and if such “Prime Rates” are no longer generally published
or are limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a comparable interest rate
index.
          “Prime Rate Loan” shall mean the Loan at such time as interest thereon
accrues at a rate of interest based upon the Prime Rate.
          “Prime Rate Spread” shall mean the difference (expressed as the number
of basis points) between (a) LIBOR plus the Spread on the date LIBOR was last
applicable to the Loan and (b) the Prime Rate on the date that LIBOR was last
applicable to the Loan; provided, however, in no event shall such difference be
a negative number.
          “Principal” shall mean: (i) if Borrower is a limited partnership, the
Special Purpose Entity that is the general partner of Borrower; (ii) if Borrower
is a limited liability company meeting all of the requirements applicable to a
single-member limited liability company set forth in the definition of “Special
Purpose Entity,” the member of Borrower; or (iii) if Borrower is a limited
liability company other than one described in the preceding item, the Special
Purpose Entity that is the managing member of Borrower.

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          “Prior Owner” shall mean WSRH Indian Wells, L.L.C., a Delaware limited
liability company.
          “Property” shall mean each parcel of real property, the Improvements
thereon and all personal property owned by Borrower and encumbered by the
Mortgage, together with all rights pertaining to such property and Improvements,
as more particularly described in granting clause of the Mortgage and referred
to therein as the “Property”.
          “Provided Information” shall mean any and all financial and other
information prepared and provided by Borrower or Sponsor or under the
supervision or control of Borrower or Sponsor (but excluding third party
independent reports) with respect to the Property, Borrower, Principal and/or
Sponsor.
          “Qualified Manager” shall mean either (a) Manager, (b) any of the
following professional management entities, provided that there shall have been
no materially adverse change in such entity since the Closing Date: Hyatt
Corporation, Westin, Starwood Hotels & Resorts, Four Seasons, Hilton Hotels
Corporation, Omni Hotels Group PLC, Le Meridien Hotels & Resorts, St. Regis,
Sheraton and Wyndham International, Inc., or (c) in the reasonable judgment of
Lender, a reputable and experienced management organization (which may be an
Affiliate of Borrower) possessing experience in managing properties similar in
size, scope, use and value as the Property, provided, that (i)with respect to
clause (c) above, after a Securitization has occurred, Borrower shall have
obtained prior written confirmation from the applicable Rating Agencies that
management of the Property by such Person will not cause a downgrade, withdrawal
or qualification of the then current ratings of the Securities or any class
thereof, and (ii) with respect to clauses (b) and (c) above, if such Person is
an Affiliate of Borrower, Borrower shall have obtained and delivered to Lender
an Additional Insolvency Opinion.
          “Rating Agencies” shall mean, prior to the final Securitization of the
Loan, each of S&P, Moody’s and Fitch, or any other nationally recognized
statistical rating agency which has been designated by Lender and, after the
final Securitization of the Loan, shall mean any of the foregoing that have
rated any of the Securities.
          “Registration Statement” shall have the meaning set forth in
Section 9.2(b) hereof.
          “REMIC Trust” shall mean a “real estate mortgage investment conduit”
within the meaning of Section 860D of the Code that holds the Note.
          “Rents” shall mean all rents (including, without limitation,
percentage rents), rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents, royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits for rental of rooms but excluding deposits for rental of banquet space
or business or conference meeting rooms), accounts, cash, issues, profits,
charges for services rendered, and other consideration of whatever form or
nature received by or paid to or for the account of or benefit of Borrower or
its agents or employees from any and all sources arising from or attributable to
the Property, and proceeds, if any, from business interruption or other loss of

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income or insurance, including, without limitation, all hotel receipts, revenues
and net credit card receipts collected from guest rooms, restaurants, bars,
meeting rooms, banquet rooms and recreational facilities, all receivables,
customer obligations, installment payment obligations and other obligations now
existing or hereafter arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of the use and occupancy of
property or rendering of services by Borrower or any operator or manager of the
hotel or the commercial space located in the Improvements or acquired from
others (including, without limitation, from the rental of any office space,
retail space, guest rooms or other space, halls, stores, and offices, and
deposits securing reservations of such space), net license, lease, sublease and
net concession fees and rentals, health club membership fees, food and beverage
wholesale and retail sales, service charges and vending machine sales.
          “Replacement Interest Rate Cap Agreement” means an interest rate cap
agreement from an Acceptable Counterparty with terms identical to the Interest
Rate Cap Agreement except that the same shall be effective in connection with
replacement of the Interest Rate Cap Agreement following a downgrade, withdrawal
or qualification of the long-term unsecured debt rating of the Counterparty;
provided that to the extent any such interest rate cap agreement does not meet
the foregoing requirements, a “Replacement Interest Rate Cap Agreement” shall be
such interest rate cap agreement approved in writing by Lender.
          “Replacement Management Agreement” shall mean, collectively,
(a) either (i) a management agreement with a Qualified Manager substantially in
the same form and substance as the Management Agreement, or (ii) a management
agreement with a Qualified Manager, which management agreement shall be
reasonably acceptable to Lender in form and substance, provided, with respect to
this subclause (ii), Lender, at its option, may require that Borrower obtain
confirmation from the applicable Rating Agencies that such management agreement
will not cause a downgrade, withdrawal or qualification of the then current
rating of the Securities or any class thereof; and (b) an assignment of
management agreement and subordination of management fees substantially in the
form then used by Lender (or such other form and substance reasonably acceptable
to Lender), executed and delivered to Lender by Hotel Owner or Hotel Operator,
as applicable, and such Qualified Manager at Borrower’s expense.
          “Replacement Reserve Account” shall have the meaning set forth in
Section 7.3.1 hereof.
          “Replacement Reserve Fund” shall have the meaning set forth in
Section 7.3.1 hereof.
          “Replacement Reserve Monthly Deposit” shall have the meaning set forth
in Section 7.3.1 hereof.
          “Replacements” shall have the meaning set forth in Section 7.3.1
hereof.
          “Required Repair Account” shall have the meaning set forth in Section
7.1.1 hereof.
          “Required Repair Fund” shall have the meaning set forth in Section
7.1.1 hereof.

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          “Required Repairs” shall have the meaning set forth in Section 7.1
hereof.
          “Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow
Fund, the Replacement Reserve Fund, the Debt Service Reserve Fund, the Required
Repair Fund, the Ground Lease Reserve Fund and any other escrow fund established
pursuant to the Loan Documents.
          “Restoration” shall mean the repair and restoration of the Property
after a Casualty or Condemnation as nearly as possible to the condition the
Property was in immediately prior to such Casualty or Condemnation, with such
alterations as may be reasonably approved by Lender.
          “Restoration Threshold” shall mean One Million Dollars ($1,000,000).
          “Restricted Party” shall mean, collectively, Borrower, Principal and
any Affiliated Manager.
          “S&P” shall mean Standard & Poor’s Ratings Group, a division of the
McGraw-Hill Companies.
          “Sale or Pledge” shall mean a voluntary or involuntary sale,
conveyance, assignment, transfer, encumbrance or pledge of a legal or beneficial
interest.
          “Securities” shall have the meaning set forth in Section 9.1 hereof.
          “Securities Act” shall have the meaning set forth in Section 9.2(a)
hereof.
          “Securitization” shall have the meaning set forth in Section 9.1
hereof.
          “Servicer” shall have the meaning set forth in Section 9.6 hereof.
          “Servicing Agreement” shall have the meaning set forth in Section 9.6
hereof.
          “Severed Loan Documents” shall have the meaning set forth in
Section 8.2(b) hereof.
          “Special Purpose Entity” shall mean a limited partnership or limited
liability company which at all times on and after the date hereof:
          (a) is organized solely for the purpose of (i) with respect to Hotel
Owner, acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Property and incidental personal and
intangible property related thereto, entering into this Agreement with the
Lender, refinancing the Property in connection with repayment of the Loan, and
transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; (ii) acting as a general partner of the limited
partnership that owns the Property or member of the limited liability company
that owns the Property; or (iii) with respect to Hotel Operator, leasing the
Property pursuant to the Hotel Operating Lease and operating the Property;

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          (b) is not engaged and will not engage in any business unrelated to
(i) the acquisition, development, ownership, management or operation of the
Property and incidental personal and intangible property related thereto or
(ii) acting as general partner of the limited partnership that owns the
Property;
          (c) does not have and will not have any assets other than (i) in the
case of Hotel Owner, those related to the Property, (ii) in the case of Hotel
Operator, its interest in the Hotel Operating Lease and those related to the
Property, or (iii) if such entity is a general partner in a limited partnership,
its general partnership interest in the limited partnership that owns the
Property;
          (d) has not engaged, sought or consented to and to the fullest extent
permitted by law, will not engage in, seek or consent to any: (i) dissolution,
winding up, liquidation, consolidation, merger, sale of all or substantially all
of its assets outside of its ordinary course of business and other than as
expressly permitted in this Agreement; (ii) other than as expressly permitted in
this Agreement, transfer of partnership interests (if such entity is a general
partner in a limited partnership); or (iii) amendment of its limited partnership
agreement, articles of organization, certificate of formation or operating
agreement (as applicable) with respect to the matters set forth in this
definition unless Lender issues its prior written consent and the confirmation
in writing from the applicable Rating Agencies that such amendment will not, in
and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any
class thereof in connection with any Securitization;
          (e) if such entity is a limited partnership, has, as its only general
partners, Special Purpose Entities that are limited liability companies;
          (f) Reserved;
          (g) Reserved;
          (h) if such entity is a limited liability company, is a limited
liability company organized in the State of Delaware that has (i) at least two
(2) Independent Managers and has not caused or allowed and will not cause or
allow the taking of any “Material Action” (as defined in such entity’s operating
agreement) without the unanimous affirmative vote of one hundred percent (100%)
of the member and such entity’s two (2) Independent Managers; and (ii) at least
one (1) springing member (or two (2) springing members if such springing members
are natural persons who will replace a member of such entity seriatim not
simultaneously) that will become a member of such entity upon the occurrence of
an event causing the member to cease to be a member of such limited liability
company;
          (i) if such entity is (i) a limited liability company, has an
operating agreement, or (ii) a limited partnership, has a limited partnership
agreement, that, in each case, provide that such entity will not: (A) to the
fullest extent permitted by law, take any actions described in subsection (d)(i)
above; (B) engage in any other business activity, or amend its organizational
documents with respect to the matters set forth in this definition without the
prior written consent of Lender and confirmation in writing from the applicable
Rating Agencies that

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engaging in such other business activity or such amendment, as applicable, will
not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any
class thereof in connection with any Securitization; or (C) without the
affirmative vote of two (2) Independent Managers and of all the partners or
members of such entity, as applicable (or the vote of two (2) Independent
Managers of its general partner, if applicable), file a bankruptcy or insolvency
petition or otherwise institute insolvency proceedings with respect to itself or
to any other entity in which it has a direct or indirect legal or beneficial
ownership interest;
          (j) is and will remain solvent and pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from its
assets as the same shall become due, and is maintaining and will maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations;
provided, however, this provision shall not require the equity owner of such
entity to make an additional capital contribution;
          (k) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;
          (l) has maintained and will maintain its accounts, books and records
separate from any other Person and will file its own tax returns, except to the
extent that it is (i) required to file consolidated tax returns by law; or
(ii) treated as a “disregarded entity” for tax purposes and is not required to
file tax returns under applicable law;
          (m) has maintained and will maintain its own records, books,
resolutions (if any) and agreements;
          (n) other than as provided in the Cash Management Agreement or in the
Management Agreement, (i) has not commingled and will not commingle its funds or
assets with those of any other Person; and (ii) has not participated and will
not participate in any cash management system with any other Person;
          (o) has held and will hold its assets in its own name;
          (p) has conducted and will conduct its business in its name or in a
name franchised or licensed to it by an entity other than an Affiliate of
Borrower, except for services rendered under a business management services
agreement with an Affiliate that complies with the terms contained in Subsection
(dd) below, so long as the manager, or equivalent thereof, under such business
management services agreement holds itself out as an agent of the Borrower;
          (q) has maintained and will maintain its financial statements,
accounting records and other entity documents separate from any other Person and
has not permitted and will not permit its assets to be listed as assets on the
financial statement of any other entity except as required by GAAP (or such
other accounting basis acceptable to Lender); provided, however, that the
Borrower’s assets may be included in a consolidated financial statement of its
Affiliate, provided that such assets shall also be listed on such Special
Purpose Entity’s own separate balance sheet;

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          (r) has paid and will pay its own liabilities and expenses, including
the salaries of its own employees (if any), out of its own funds and assets, and
has maintained and will maintain a sufficient number of employees (if any) in
light of its contemplated business operations; provided, however, this provision
shall not require the equity owner of such entity to make an additional capital
contribution;
          (s) has observed and will observe all Delaware partnership or limited
liability company formalities, as applicable;
          (t) has not incurred and will not incur any Indebtedness other than
(i) the Debt, Taxes and Other Charges, (ii) unsecured trade payables and
operational debt not evidenced by a note and in an aggregate amount not
exceeding four percent (4%) of the then outstanding principal balance of the
Loan (not including any trade payables in an amount not to exceed $200,000 that
are the subject to a good faith dispute by Borrower, in appropriate proceedings
therefor, and for which adequate reserves have been established by Borrower);
provided that any Indebtedness incurred pursuant to subclause (ii) shall be
(x) paid within sixty (60) days of the date incurred (other than attorneys’ and
other professional fees) and (y) incurred in the ordinary course of business,
and (iii) any equipment leases entered into in the ordinary course of business
and the equipment leases shown on Schedule V, provided that the liability under
such equipment leases in the aggregate shall not exceed $500,000 annually and be
(x) paid within sixty (60) days of the date when due and (y) incurred in the
ordinary course of business;
          (u) has not and will not assume or guarantee or become obligated for
the debts of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person except as permitted pursuant to this
Agreement; except, if such entity is a general partner of a limited partnership,
in such entity’s capacity as general partner of such limited partnership;
          (v) has not and will not acquire obligations or securities of its
partners, members or shareholders or any other Affiliate except with respect to
the ownership of the limited liability company interests or partnership
interests (as applicable) of the Special Purpose Entities as shown on the
organizational chart attached to this Agreement as Schedule III;
          (w) has allocated and will allocate fairly and reasonably any overhead
expenses that are shared with any Affiliate, including, but not limited to,
paying for shared office space and services performed by any employee of an
Affiliate; provided, however, to the extent invoices for such services are not
allocated and separately billed to each entity, there is a system in place that
provides that the amount thereof that is to be allocated among the relevant
parties will be reasonably related to the services provided to each such party;
          (x) maintains and uses and will maintain and use separate invoices and
checks bearing its name. The invoices, and checks utilized by the Special
Purpose Entity or utilized to collect its funds or pay its expenses shall bear
its own name and shall not bear the name of any other entity unless such entity
is clearly designated as being the Special Purpose Entity’s agent;
          (y) has not pledged and will not pledge its assets to secure the
obligations of any other Person;

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          (z) has held itself out and identified itself and will hold itself out
and identify itself as a separate and distinct entity under its own name or in a
name franchised or licensed to it by an entity other than an Affiliate of
Borrower and not as a division or part of any other Person, except for services
rendered under a business management services agreement with an Affiliate that
complies with the terms contained in Subsection (dd) below, so long as the
manager, or equivalent thereof, under such business management services
agreement holds itself out as an agent of the Borrower;
          (aa) except as provided in the Cash Management Agreement or in the
Management Agreement, has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;
          (bb) has not made and will not make loans to any Person or hold
evidence of indebtedness issued by any other Person or entity (other than cash
and investment grade securities issued by an entity that is not an Affiliate of
or subject to common ownership with such entity);
          (cc) has not identified and will not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;
          (dd) except for capital contributions and capital distributions
expressly permitted under the terms and conditions of its organizational
documents and properly reflected in its books and records, has not entered into
or been a party to and will not enter into or be a party to, any transaction
with its partners, members, shareholders or Affiliates except in the ordinary
course of its business and on terms which are intrinsically fair, commercially
reasonable and are no less favorable to it than would be obtained in a
comparable arm’s length transaction with an unrelated third party;
          (ee) has not and will not have any obligation to, and will not,
indemnify its partners, officers, directors or members, as the case may be,
unless such an obligation is fully subordinated to the Debt and will not
constitute a claim against it in the event that cash flow in excess of the
amount required to pay the Debt is insufficient to pay such obligation;
          (ff) Reserved;
          (gg) except as contemplated herein and in the other Loan Documents,
does not and will not have any of its obligations guaranteed by any Affiliate;
provided, that if such entity is a limited partnership, such entity’s general
partner will be generally liable for its obligations; and
          (hh) has complied and will comply with all of the terms and provisions
contained in its organizational documents.
          “Sponsor” shall mean, individually and collectively, as the context
requires, with such determination to be made by Lender in its sole discretion,
each of FelCor REIT and FelCor

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OP individually, and both of them collectively, each together with its
successors and permitted assigns.
          “Spread” shall mean 1.55%.
          “State” shall mean the State or Commonwealth in which the Property or
any part thereof is located.
          “Strike Price” shall mean (a) from the Closing Date through the
Initial Maturity Date, 6.25%, and (b) after the Initial Maturity Date, 6.5%.
          “Subordinate Mezzanine Intercreditor Agreement” shall have the meaning
set forth in Section 5.2.10(f) hereof.
          “Subordinate Mezzanine Loan” shall have the meaning set forth in
Section 5.2.10(f) hereof.
          “Survey” shall mean a current survey of the Property, certified to the
title company and Lender and their successors and assigns, in form and content
reasonably satisfactory to Lender.
          “Tax and Insurance Escrow Fund” shall have the meaning set forth in
Section 7.2 hereof.
          “Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.
          “Title Insurance Policy” shall mean an ALTA mortgagee title insurance
policy in a form (reasonably acceptable to Lender) (or, if the Property is in a
State which does not permit the issuance of such ALTA policy, such form as shall
be permitted in such State and reasonably acceptable to Lender) issued with
respect to the Property and insuring the lien of the Mortgage.
          “Transfer” shall have the meaning set forth in Section 5.2.10(b)
hereof.
          “Transferee” shall have the meaning set forth in Section 5.2.10(e)
hereof.
          “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect in the State in which the Property is located.
          “Underwriter Group” shall have the meaning set forth in Section 9.2(b)
hereof.
          “Uniform System of Accounts” shall mean the most recent edition of the
Uniform System of Accounts for Hotels, as adopted by the American Hotel and
Motel Association.

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          “U.S. Obligations” shall mean non-redeemable securities evidencing an
obligation to timely pay principal and/or interest in a full and timely manner
that are direct obligations of the United States of America for the payment of
which its full faith and credit is pledged.
          “Zoning Report” shall mean that certain Zoning and Site Requirements
Summary dated as of March 28, 2007 and revised April 3, 2007 prepared by The
Planning & Zoning Resource Corporation for the Property and delivered by
Borrower to Lender.
          Section 1.2. Principles of Construction. All references to sections
and schedules are to sections and schedules in or to this Agreement unless
otherwise specified. All uses of the word “including” shall mean “including,
without limitation” unless the context shall indicate otherwise. Unless
otherwise specified, the words “hereof,” “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally
applicable to both the singular and plural forms of the terms so defined.
          II.GENERAL TERMS
          Section 2.1. Loan Assumption.
          2.1.1 Agreement to Assume the Loan. Subject to and upon the terms and
conditions set forth herein, Lender hereby agrees to consent to the assumption
of and Borrower hereby agrees to assume the Loan on the Assumption Date.
          2.1.2 Assumption Agreement. Borrower is assuming the Loan pursuant to
the terms of the Assumption Agreement and understands the Loan has been fully
funded, that there shall be no further disbursements under the Loan, and that
any amount borrowed and repaid hereunder in respect of the Loan may not be
reborrowed. Lender shall not fund any portion of the Loan from any account
holding “plan assets” of one or more plans within the meaning of 29 C.F.R.
2510.3-101 unless such Loan will not constitute a non-exempt prohibited
transaction under ERISA.
          2.1.3 The Note, Mortgage and Loan Documents. The Loan shall be
evidenced by the Note and secured by the Mortgage, the Assignment of Leases and
the other Loan Documents.
          Section 2.2. Interest Rate.
          2.2.1 Interest Generally. Interest on the outstanding principal
balance of the Loan shall accrue from the Closing Date to but excluding the
Maturity Date at the Applicable Interest Rate. Borrower shall pay to Lender on
each Payment Date the interest accrued on the Loan for the preceding Interest
Period.
          2.2.2 Interest Calculation. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day

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year by (c) the outstanding principal balance. If, at any time, Lender or
Borrower determines that Lender has miscalculated the Applicable Interest Rate
(whether because of a miscalculation of LIBOR or otherwise), such party shall
notify the other of the necessary correction. Upon the agreement of the parties
as to the correction, if the corrected Applicable Interest Rate represents an
increase in the applicable monthly payment, Borrower shall, within ten (10) days
after receipt of notice from Lender, pay to Lender the corrected amount. Upon
the agreement of the parties as to the correction, if the corrected Applicable
Interest Rate represents an overpayment by Borrower to Lender and no Event of
Default then exists, Lender shall refund the overpayment to Borrower or, at
Lender’s option, credit such amounts against Borrower’s payment next due
hereunder.
          2.2.3 Determination of Interest Rate. (a) The Applicable Interest Rate
with respect to the Loan shall be: (i) LIBOR plus the Spread with respect to the
applicable Interest Period for a LIBOR Loan or (ii) the Prime Rate plus the
Prime Rate Spread for a Prime Rate Loan if the Loan is converted to a Prime Rate
Loan pursuant to the provisions of Section 2.2.3(c) or (f).
          (b) Subject to the terms and conditions of this Section 2.2.3, the
Loan shall be a LIBOR Loan and Borrower shall pay interest on the outstanding
principal amount of the Loan at LIBOR plus the Spread for the applicable
Interest Period. Any change in the rate of interest hereunder due to a change in
the Applicable Interest Rate shall become effective as of the opening of
business on the first day on which such change in the Applicable Interest Rate
shall become effective. Each determination by Lender of the Applicable Interest
Rate shall be conclusive and binding for all purposes, absent manifest error.
          (c) In the event that Lender shall have determined in good faith
(which determination shall be conclusive and binding upon Borrower absent
manifest error) that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
LIBOR, then Lender shall forthwith give notice by telephone of such
determination, confirmed in writing, to Borrower at least one (1) Business Day
prior to the last day of the related Interest Period. If such notice is given,
the related outstanding LIBOR Loan shall be converted, on the first day of the
next occurring Interest Period, to a Prime Rate Loan.
          (d) If, pursuant to the terms of this Agreement, any portion of the
Loan has been converted to a Prime Rate Loan and Lender shall determine (which
determination shall be conclusive and binding upon Borrower absent manifest
error) that the event(s) or circumstance(s) which resulted in such conversion
shall no longer be applicable, Lender shall give notice by telephone of such
determination, confirmed in writing, to Borrower at least one (1) Business Day
prior to the last day of the related Interest Period. If such notice is given,
the related outstanding Prime Rate Loan shall be converted to a LIBOR Loan on
the first day of the next occurring Interest Period.
          (e) (i) Except as otherwise expressly provided in this
Section 2.2.3(e) with respect to a LIBOR Loan, all payments made by Borrower
hereunder shall be made free and clear of, and without reduction for or on
account of, income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions, reserves or withholdings imposed, levied, collected,

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withheld or assessed by any Governmental Authority, which are imposed, enacted
or become effective after the date hereof, excluding (A) income and franchise
taxes of the United States of America or any political subdivision or taxing
authority thereof or therein (including Puerto Rico) and (B) taxes on the
overall net income or overall gross receipts of Lender imposed as a result of a
present or former connection between Lender and the jurisdiction of any
Governmental Authority (such non-excluded taxes being referred to collectively
as “Foreign Taxes"). If any Foreign Taxes are required to be withheld from any
amounts payable to Lender hereunder, the amounts so payable to Lender shall be
increased to the extent necessary to yield to Lender (after payment of all
Foreign Taxes) interest or any such other amounts payable hereunder at the rate
or in the amounts specified hereunder. If Lender gives Borrower written notice
that any such amounts are payable by Borrower, Borrower shall pay all such
amounts by the later of (i) five (5) Business Days after receipt of demand from
Lender and (ii) their due date, and, as promptly as possible thereafter,
Borrower shall send to Lender an original official receipt, if available, or
certified copy thereof showing payment of such Foreign Tax. Borrower agrees to
indemnify Lender for any incremental taxes, interest or penalties that may
become payable by Lender as a result of any failure by Borrower, following
receipt of written demand from Lender, to pay any such Foreign Tax when due to
the appropriate taxing authority or any failure by Borrower to remit to Lender
the required receipts or other required documentary evidence.
     (ii) In the event that Lender or any successor and/or assign of Lender is
not incorporated under the laws of the United States of America or a state
thereof, Lender agrees that, prior to the first date on which any payment is due
such entity hereunder, it will deliver to Borrower two (2) duly completed copies
of United States Internal Revenue Service Form W-8BEN, Form W-8IMY and/or Form
W-8ECI or successor applicable form, as the case may be, certifying in each case
that such entity is entitled to receive payments under the Note, without
deduction or withholding of any United States federal income taxes and to
establish an exemption from United States backup withholding tax (in which case
Borrower shall not deduct or withhold any United States federal income tax).
Each entity required to deliver to Borrower a Form W-8BEN, Form W-8IMY and/or
Form W-8ECI pursuant to the preceding sentence further undertakes to deliver to
Borrower two (2) further copies of Form W-8BEN, Form W-8IMY and/or Form W-8ECI,
or successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent letter
previously delivered by it to Borrower, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
entity from duly completing and delivering any such form with respect to it.
     (iii) Lender or any successor and/or assign of Lender that is incorporated
under the laws of the United States of America or a state thereof agrees that,
promptly after written request of Borrower, it will deliver to Borrower a United
States Internal Revenue Service Form W-9 or successor applicable form, as the
case may be, to establish exemption from United States backup withholding tax.

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     (iv) If required by applicable law, Borrower is hereby authorized to deduct
from any payments due to Lender pursuant to Section 2.3 the amount of any
withholding taxes resulting from Lender’s failure to comply with
Section 2.2.3(e)(ii) or (iii).
          (f) Except as otherwise expressly provided in Section 2.2.3(e), if any
requirement of law or any change therein or in the interpretation or application
thereof, shall hereafter make it unlawful for Lender to make or maintain a LIBOR
Loan as contemplated hereunder (i) the obligation of Lender hereunder to make a
LIBOR Loan or to convert a Prime Rate Loan to a LIBOR Loan shall be canceled
forthwith and (ii) any outstanding LIBOR Loan shall be converted automatically
to a Prime Rate Loan on the next succeeding Payment Date or within such earlier
period as required by law. Borrower hereby agrees promptly to pay Lender, upon
demand, any additional amounts necessary to compensate Lender for any actual
out-of-pocket costs incurred by Lender in making any conversion in accordance
with this Agreement, including, without limitation, any interest or fees payable
by Lender to lenders of funds obtained by it in order to make or maintain the
LIBOR Loan hereunder; provided that such additional amount is generally charged
by Lender to other borrowers with loans similar to the Loan. Lender’s notice of
such costs, as certified to Borrower, shall be conclusive absent manifest error.
          (g) Except as otherwise expressly provided in Section 2.2.3(e), in the
event that any change in any requirement of law or in the interpretation or
application thereof, or compliance by Lender with any request or directive
having the force of law hereafter issued from any central bank or other
Governmental Authority:
     (i) shall hereafter impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
Lender which is not otherwise included in the determination of LIBOR hereunder;
     (ii) shall hereafter have the effect of reducing the rate of return on
Lender’s capital as a consequence of its obligations hereunder to a level below
that which Lender could have achieved but for such adoption, change or
compliance (taking into consideration Lender’s policies with respect to capital
adequacy) by any material amount; or
     (iii) shall hereafter impose on Lender any other condition and the result
of any of the foregoing is to increase the actual out-of-pocket cost to Lender
of maintaining loans or extensions of credit or to reduce any amount receivable
hereunder;
then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable; provided that such additional amount is generally
charged by Lender to other borrowers with loans similar to the Loan. If Lender
becomes entitled to claim any additional amounts pursuant to this
Section 2.2.3(g), Lender shall provide Borrower with not less than ninety
(90) days notice specifying in reasonable detail the event by reason of which it
has become so entitled and the additional amount required to fully compensate
Lender for such additional cost or reduced

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amount. A certificate as to any additional costs or amounts payable pursuant to
the foregoing sentence submitted by Lender to Borrower shall be conclusive in
the absence of manifest error.
          (h) Borrower agrees to pay to Lender and to hold Lender harmless from
any actual out-of-pocket expense which Lender sustains or incurs as a
consequence of (i) any default by Borrower in payment of the principal of or
interest on a LIBOR Loan, including, without limitation, any such loss or
expense arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain a LIBOR Loan hereunder, (ii) any prepayment
(whether voluntary or mandatory) of the LIBOR Loan on a day that (A) is not the
Payment Date immediately following the last day of an Interest Period with
respect thereto or (B) is the Payment Date immediately following the last day of
an Interest Period with respect thereto if Borrower did not give the prior
notice of such prepayment required pursuant to the terms of this Agreement,
including, without limitation, such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the LIBOR Loan hereunder and (iii) the conversion (for any reason whatsoever,
whether voluntary or involuntary) of the Applicable Interest Rate from LIBOR
plus the Spread to the Prime Rate plus the Prime Rate Spread with respect to any
portion of the outstanding principal amount of the Loan then bearing interest at
LIBOR plus the Spread on a date other than the Payment Date immediately
following the last day of an Interest Period, including, without limitation,
such actual out-of-pocket expenses arising from interest or fees payable by
Lender to lenders of funds obtained by it in order to maintain a LIBOR Loan
hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein
referred to collectively as the “Breakage Costs"); provided, however, Borrower
shall not indemnify Lender from any loss or expense arising from Lender’s
willful misconduct, fraud, illegal acts or gross negligence. No Breakage Costs
shall be due or payable if, in connection with any prepayment of the Loan by
Borrower, Borrower pays interest through (but not including) the next Payment
Date as provided in Section 2.4.1.
          (i) Subject to Section 2.2.3(e) above, Lender shall not be entitled to
claim compensation pursuant to this Section 2.2.3 for any Foreign Taxes,
increased cost or reduction in amounts received or receivable hereunder, or any
reduced rate of return, which was incurred or which accrued more than ninety
(90) days before the date Lender notified Borrower in writing of the change in
law or other circumstance on which such claim of compensation is based and
delivered to Borrower a written statement setting forth in reasonable detail the
basis for calculating the additional amounts owed to Lender under this
Section 2.2.3, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
          2.2.4 Additional Costs. Lender will use reasonable efforts (consistent
with legal and regulatory restrictions) to maintain the availability of the
LIBOR Loan and to avoid or reduce any increased or additional costs payable by
Borrower under Section 2.2.3, including, if requested by Borrower, a transfer or
assignment of the Loan to a branch, office or Affiliate of Lender in another
jurisdiction, or a redesignation of its lending office with respect to the Loan,
in order to maintain the availability of the LIBOR Loan or to avoid or reduce
such increased or additional costs, provided that the transfer or assignment or
redesignation (a) would not result in any additional costs, expenses or risk to
Lender that are not separately agreed to by Borrower to be reimbursed by
Borrower and (b) would not be disadvantageous in any other material respect to
Lender as determined by Lender in its reasonable discretion.

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          2.2.5 Default Rate. In the event that, and for so long as, any Event
of Default shall have occurred and be continuing, the outstanding principal
balance of the Loan and, to the extent permitted by law, all accrued and unpaid
interest in respect of the Loan and any other amounts due pursuant to the Loan
Documents, shall accrue interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained
herein.
          2.2.6 Usury Savings. This Agreement, the Note and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the principal balance of the Loan at a
rate which could subject Lender to either civil or criminal liability as a
result of being in excess of the Maximum Legal Rate. If, by the terms of this
Agreement or the other Loan Documents, Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the Applicable Interest Rate or the Default
Rate, as the case may be, shall be deemed to be immediately reduced to the
Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid to
Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.
          2.2.7 Interest Rate Cap Agreement. (a) Prior to or contemporaneously
with the Assumption Date, Borrower shall enter into (or assume from Prior Owner)
one or more Interest Rate Cap Agreements with a blended LIBOR strike price equal
to the Strike Price. Each Interest Rate Cap Agreement (i) shall be in a form and
substance reasonably acceptable to Lender, (ii) shall be with an Acceptable
Counterparty, (iii) shall direct such Acceptable Counterparty to deposit
directly into the Lockbox Account (or if the Lockbox Account is not then
required to be in effect, into the Cash Management Account) any amounts due
Borrower under such Interest Rate Cap Agreement so long as any portion of the
Debt exists, provided that the Debt shall be deemed to exist if the Property is
transferred by judicial or non-judicial foreclosure or deed-in-lieu thereof,
(iv) shall be for a period equal to the term of the Loan and (v) when aggregated
with all other Interest Rate Cap Agreements, shall have an initial notional
amount equal to the principal balance of the Loan. Borrower shall collaterally
assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap
Agreement, all of its right, title and interest to receive any and all payments
under all Interest Rate Cap Agreements, and shall deliver to Lender an executed
counterpart of such Interest Rate Cap Agreements (which shall, by their
respective terms, authorize the assignment to Lender and require that payments
be deposited directly into the Lockbox Account (or if the Lockbox Account is not
then required to be in effect, into the Cash Management Account)).
          (b) Borrower shall comply with all of its obligations under the terms
and provisions of each Interest Rate Cap Agreement. All amounts paid by the
Counterparty under each Interest Rate Cap Agreement to Borrower or Lender shall
be deposited immediately into the Lockbox Account or if the Lockbox Account is
not then required to be in effect, into the Cash Management Account. Borrower
shall take all actions reasonably requested by Lender to

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enforce Lender’s rights under each Interest Rate Cap Agreement in the event of a
default by the Counterparty and shall not waive, amend or otherwise modify any
of its rights thereunder.
          (c) In the event of any downgrade, withdrawal or placement on watch
for downgrade of the rating of the Acceptable Counterparty below “AA-” by S&P or
“Aa3” by Moody’s, Borrower shall, or shall cause such Acceptable Counterparty
to, not later than ten (10) Business Days following receipt of notice from
Lender of such downgrade, withdrawal or qualification, either (i) find a
replacement interest rate cap provider, at Borrower’s or such Acceptable
Counterparty’s sole cost and expense, acceptable to the Rating Agencies and
Lender, provided that, notwithstanding the downgrade, until a replacement
interest rate cap provider is in place, such Acceptable Counterparty shall
continue to perform its obligations under the Interest Rate Cap Agreement, or
(ii) deliver a guaranty of the Interest Rate Cap Agreement on terms acceptable
to the Rating Agencies and Lender from a guarantor whose S&P short-term rating
is at least “A-1” or, (iii) pledge collateral for the Acceptable Counterparty’s
obligations under the Interest Rate Cap Agreement of a type, in an amount and on
terms, acceptable to the Rating Agencies and Lender, promptly provide any
required legal opinions relating to such pledge and take such other steps as
each Rating Agency and Lender may require from time to time in connection
therewith.
          (d) In the event that Borrower fails to purchase and deliver to Lender
any Interest Rate Cap Agreement or fails to maintain each Interest Rate Cap
Agreement in accordance with the terms and provisions of this Agreement, after
ten (10) Business Days notice to Borrower and Borrower’s failure to cure, Lender
may purchase the required Interest Rate Cap Agreement and the actual
out-of-pocket cost incurred by Lender in purchasing such Interest Rate Cap
Agreement shall be paid by Borrower to Lender with interest thereon at the
Default Rate from the date such cost was incurred by Lender until such actual
out-of-pocket cost is reimbursed by Borrower to Lender.
          (e) In connection with each Interest Rate Cap Agreement, Borrower
shall obtain and deliver to Lender an opinion from counsel (which counsel may be
in-house counsel for the Counterparty) for the Counterparty (upon which Lender
and its successors and assigns may rely) which shall provide, in relevant part,
that:
     (i) the Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has the
organizational power and authority to execute and deliver, and to perform its
obligations under, such Interest Rate Cap Agreement;
     (ii) the execution and delivery of such Interest Rate Cap Agreement by the
Counterparty, and any other agreement which the Counterparty has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;
     (iii) all consents, authorizations and approvals required for the execution
and delivery by the Counterparty of such Interest Rate Cap Agreement, and any
other

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agreement which the Counterparty has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with any governmental
authority or regulatory body is required for such execution, delivery or
performance; and
     (iv) such Interest Rate Cap Agreement, and any other agreement which the
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Counterparty and constitutes the legal, valid and binding
obligation of the Counterparty, enforceable against the Counterparty in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
          (f) At such time as the Loan is repaid in full, all of Lender’s right,
title and interest in all Interest Rate Cap Agreements shall terminate and
Lender shall, at Borrower’s reasonable expense, promptly execute and deliver
such documents as may be reasonably required and prepared by the Counterparty
and/or Borrower to evidence release of each Interest Rate Cap Agreement.
          Section 2.3. Loan Payment.
          2.3.1 Payments Generally. Borrower shall pay to Lender an amount equal
to the interest accrued on the outstanding principal balance of the Loan for
each Interest Period to be paid in arrears on the Payment Date immediately
following such Interest Period. All amounts due pursuant to this Agreement and
the other Loan Documents shall be payable without setoff, counterclaim, defense
or any other deduction whatsoever, except as otherwise expressly provided in
Section 2.2.3(e).
          Lender shall have the right from time to time, in its sole discretion,
upon not less than ten (10) days prior written notice to Borrower, to change the
monthly Payment Date to a different calendar day and/or to adjust the Interest
Period and Lender and Borrower shall promptly execute an amendment to this
Agreement to evidence any such changes.
          Notwithstanding anything to the contrary set forth herein: (i) if any
payment of principal of or interest on the Loan, any fees or any other amounts
payable by Borrower hereunder shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day; and (ii) if
any payment, application or transfer of funds to be made hereunder by Lender
shall be required to be made on a day which is not a Business Day, such payment,
application or transfer shall be made on the next succeeding Business Day.
          2.3.2 Payment on Maturity Date. Borrower shall pay to Lender on the
Maturity Date the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents.
          2.3.3 Late Payment Charge. If any principal, interest or any other
sums due under the Loan Documents (other than the payment of principal due on
the Maturity Date) is not

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paid by Borrower by the date on which it is due, Borrower shall pay to Lender
upon demand an amount equal to the lesser of five percent (5%) of such unpaid
sum or the maximum amount permitted by applicable law in order to defray the
expense incurred by Lender in handling and processing such delinquent payment
and to compensate Lender for the loss of the use of such delinquent payment. Any
such amount shall be secured by the Mortgage and the other Loan Documents to the
extent permitted by applicable law.
          2.3.4 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments and prepayments under this Agreement and the Note
shall be made to Lender not later than 2:00 P.M., New York City time, on the
date when due and shall be made in lawful money of the United States of America
in immediately available funds delivered to Lender by wire transfer to such
accounts at such banks as Lender may from time to time designate, or as
otherwise directed by Lender, and any funds received by Lender after such time
shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day.
          Section 2.4. Prepayments.
          2.4.1 Voluntary Prepayments. The outstanding principal amount of the
Loan may not be prepaid in whole or in part except as expressly set forth
herein. Borrower may, at its option and upon ten (10) Business Days prior notice
to Lender (or such shorter period as may be permitted by Lender), prepay the
Debt in whole or in part on any Business Day after the Closing Date; provided
that such prepayment is accompanied by: (a) all interest which would have
accrued on the amount of the Loan to be paid through and including the last day
of the Interest Period immediately prior to the applicable Payment Date next
occurring following the date of such prepayment (the “Interest Shortfall”), or,
if such prepayment occurs on a Payment Date, through and including the last day
of the Interest Period immediately prior to the applicable Payment Date (it
being agreed that, other than with respect to a prepayment made on a Payment
Date, if such prepayment occurs prior to the Determination Date for the Interest
Period in which the prepayment occurs, the amount of the Interest Shortfall
payable under this clause (a) on the prepayment date shall be calculated at the
Assumed Note Rate); and (b) all other sums due and payable under this Agreement,
the Note, and the other Loan Documents, and all of Lender’s costs and expenses
(including reasonable attorney’s fees and disbursements) incurred by Lender in
connection with such prepayment; provided, however, that if the Interest
Shortfall paid on the prepayment date was calculated based upon the Assumed Note
Rate, upon determination of LIBOR on the Determination Date for the Interest
Period in which the prepayment occurs, (i) if the Applicable Interest Rate for
such Interest Period is less than the Assumed Note Rate, Lender shall promptly
(and in no event later than two (2) Business Days after the applicable
Determination Date) refund to Borrower the amount of the excess of the Interest
Shortfall paid on the prepayment date, as calculated at the Assumed Note Rate,
over the actual amount of the Interest Shortfall, as calculated at the
Applicable Interest Rate, and (ii) if the Applicable Interest Rate for such
Interest Period is greater than the Assumed Note Rate, Borrower shall promptly
(and in no event later than two (2) Business Days after the applicable
Determination Date) pay to Lender the amount of the excess of the actual
Interest Shortfall, as calculated at the Applicable Interest Rate, over the
amount of the Interest Shortfall paid on the prepayment date, as calculated at
the Assumed Note Rate. No prepayment premium or fee shall be due in connection
with any prepayment of the Loan. If a notice of prepayment is given by Borrower
to Lender pursuant to this Section 2.4.1, the amount designated for prepayment
and all other sums required under this

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Section 2.4 shall be due and payable on the proposed prepayment date; provided,
however, Borrower shall have the right to postpone or revoke such prepayment
upon written notice to Lender not less than two (2) Business Days prior to the
date such prepayment is due so long as Borrower pays Lender and/or Servicer all
actual out-of-pocket third party costs and expenses incurred by Lender or
Servicer in connection with such postponement or revocation.
          2.4.2 Mandatory Prepayments. On the next occurring Payment Date
following the date on which Lender actually receives any Net Proceeds, if Lender
is not obligated to make such Net Proceeds available to Borrower for
Restoration, Borrower shall prepay, or authorize Lender to apply Net Proceeds as
a prepayment of, the outstanding principal balance of the Note in an amount
equal to one hundred percent (100%) of such Net Proceeds; provided, however, if
an Event of Default has occurred and is continuing, Lender may apply such Net
Proceeds to the Debt (until paid in full) in any order or priority in its sole
discretion. No Prepayment Premium or any other penalty or premium shall be due
in connection with any prepayment made pursuant to this Section 2.4.2. Any
partial prepayment under this Section 2.4.2 shall be applied to the last
payments of principal due under the Loan. Any Net Proceeds in excess of the
amount required to pay the Debt in full shall be promptly remitted to Borrower.
          2.4.3 Prepayments After Default. If during the continuance of an Event
of Default payment of all or any part of the Debt is tendered by Borrower or
otherwise recovered by Lender (including through application of any Reserve
Funds or any Net Proceeds), such tender or recovery shall be deemed made on the
next occurring Payment Date together with the Monthly Debt Service Amount
calculated at the Default Rate from and after the date of such Event of Default.
          2.4.4 Release of Property. Except as set forth in this Section 2.4 no
repayment or prepayment of all or any portion of the Note shall cause, give rise
to a right to require, or otherwise result in, the release of the Lien of the
Mortgage.
          2.4.5 Release on Payment in Full. Upon the written request and payment
by Borrower of the customary recording fees and the actual out-of-pocket
third-party costs and expenses of Lender and upon payment in full of all
principal and interest due on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of the Note
and this Agreement, Lender shall release the Lien of the Mortgage, provided
that, at Borrower’s written request, Lender shall instead assign the Note (via
proper allonge) and Mortgage (pursuant to proper recordable instrument of
assignment) to Borrower’s designee, without representation or warranty by, or
recourse to, Lender, except that Lender shall represent that such assignment has
been duly authorized and that Lender has not assigned or encumbered the Note or
Mortgage.
          Section 2.5. Cash Management.
          2.5.1 Lockbox Account. (a) Borrower shall establish and maintain a
segregated Eligible Account (the “Lockbox Account") with Lockbox Bank in trust
for the benefit of Lender, which Lockbox Account shall be under the sole
dominion and control of Lender. The Lockbox Account shall be entitled “Greenwich
Capital Financial Products, Inc., as Lender, pursuant to Amended and Restated
Loan Agreement dated as of December 14, 2007-

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Lockbox Account”. Borrower shall grant to Lender a first priority security
interest in the Lockbox Account and all deposits at any time contained therein
and the proceeds thereof and will take all actions requested by Lender that are
necessary to maintain in favor of Lender a perfected first priority security
interest in the Lockbox Account, including, without limitation, executing and
filing UCC-1 Financing Statements and continuations thereof. Lender and Servicer
shall have the sole right to make withdrawals from the Lockbox Account for
application pursuant to the terms of this Agreement and all reasonable costs and
expenses for establishing and maintaining the Lockbox Account shall be paid by
Borrower.
          (b) Borrower shall, or shall cause Manager to, deliver irrevocable
written instructions to all tenants under Leases to deliver all Rents payable
thereunder directly to the Lockbox Account. Borrower shall, and shall cause
Manager to, deposit all amounts received by Borrower or Manager constituting
Rents into the Lockbox Account within one (1) Business Day after receipt.
Borrower shall, or shall cause Manager to, deliver irrevocable written
instructions to each of the credit card companies or credit card clearing banks
with which Borrower or Manager has entered into merchant’s agreements to deliver
all receipts payable with respect to the Property directly to the Lockbox
Account.
          (c) Borrower shall obtain from Lockbox Bank its agreement to transfer
to the Cash Management Account in immediately available funds by federal wire
transfer all amounts on deposit in the Lockbox Account once every Business Day
throughout the term of the Loan.
          (d) The provisions of Section 2.5.1(a) — (c) above shall not be
required by Lender for as long as the Property is managed by the Marriott
Manager or an Approved Qualified Manager and provided that Borrower shall
instruct Marriott Manager (or an Approved Qualified Manager, as applicable) to
deposit all amounts due to Borrower under the Management Agreement directly into
the Cash Management Account.
          2.5.2 Cash Management Account. (a) Borrower shall establish and
maintain a segregated Eligible Account (the “Cash Management Account") to be
held by Lender or by Servicer in trust for the benefit of Lender, which Cash
Management Account shall be under the sole dominion and control of Lender. The
Cash Management Account shall be entitled “Greenwich Capital Financial Products,
Inc., as Lender, pursuant to the Amended and Restated Loan Agreement dated as of
December 14, 2007 - Cash Management Account”. Borrower hereby grants to Lender a
first priority security interest in the Cash Management Account and all deposits
at any time contained therein and the proceeds thereof and will take all actions
requested by Lender that are necessary to maintain in favor of Lender a
perfected first priority security interest in the Cash Management Account,
including, without limitation, executing and filing UCC-1 Financing Statements
and continuations thereof. Lender and Servicer shall have the sole right to make
withdrawals from the Cash Management Account for application pursuant to the
terms of this Agreement and the other Loan Documents and all reasonable costs
and expenses for establishing and maintaining the Cash Management Account shall
be paid by Borrower.
          (b) Provided no Event of Default shall have occurred and be
continuing, on each Payment Date (or such other date as is expressly set forth
in the Cash Management

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Agreement) all funds on deposit in the Cash Management Account shall be applied
by Lender to the payment of the following items in the order indicated:
     (i) First, only if Marriott Manager or an Approved Qualified Manager is not
managing the Property, payments to the Ground Lease Reserve Fund in accordance
with the terms and conditions of Section 7.4 hereof;
     (ii) Second, only if Marriott Manager or an Approved Qualified Manager is
not managing the Property, payments to the Tax and Insurance Escrow Fund in
accordance with the terms and conditions of Section 7.2 hereof
     (iii) Third, payment of the Monthly Debt Service Amount in accordance with
the terms and conditions hereof;
     (iv) Fourth, only if Marriott Manager or an Approved Qualified Manager is
not managing the Property, payments to the Replacement Reserve Fund in
accordance with the terms and conditions hereof;
     (v) Fifth, payment to Lender of any other amounts then due and payable
under the Loan Documents;
     (vi) Sixth, only if Marriott Manager or an Approved Qualified Manager is
not managing the Property, payment to Borrower of an amount sufficient to pay
the monthly Operating Expenses and Capital Expenditures pursuant to the
applicable Approved Annual Budget; and
     (vii) Lastly, all amounts remaining in the Cash Management Account after
the application of the amounts required for the payments set forth above shall
be remitted as follows:
     (A) unless and until the Debt Service Coverage Ratio Threshold is achieved,
the remainder to be disbursed to Lender and deposited in the Debt Service
Reserve Account to be held and applied as additional Debt Service Reserve Fund;
or
     (B) from and after the time the Property achieves the Debt Service Coverage
Ratio Threshold, the remaining funds shall be disbursed to Borrower.
          (c) Subject to Section 2.5.3, the insufficiency of funds on deposit in
the Cash Management Account shall not relieve Borrower from the obligation to
make any payments, as and when due pursuant to this Agreement and the other Loan
Documents, and such obligations shall be separate and independent, and not
conditioned on any event or circumstance whatsoever.
          (d) All funds on deposit in the Cash Management Account following the
occurrence and during the continuance of an Event of Default may be applied by
Lender in such order and priority as Lender shall determine.

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          2.5.3 Payments Received Under the Cash Management Agreement.
Notwithstanding anything to the contrary contained in this Agreement and the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower’s obligations with respect to payment of the Monthly Debt
Service Amount and amounts due for the Tax and Insurance Escrow Fund,
Replacement Reserve Fund and any other payment reserves established pursuant to
this Agreement or any other Loan Document shall be deemed satisfied to the
extent sufficient amounts (together with any amounts paid by or on behalf of
Borrower) are deposited in the Cash Management Account established pursuant to
the Cash Management Agreement to satisfy such obligations on the dates each such
payment is required, regardless of whether any of such amounts are so applied by
Lender. Provided that sufficient funds are on deposit in the Tax and Insurance
Escrow Fund, Lender shall be responsible for any penalty or interest resulting
from a failure to pay Taxes when due. Further, the last sentence of
Section 7.4.2 hereof is hereby incorporated herein by reference.
          Section 2.6. Extension of the Initial Maturity Date. Borrower shall
have the option to extend the term of the Loan beyond the Initial Maturity Date
for three (3) successive terms (each, an “Extension Option") of one (1) year
each (the Initial Maturity Date following the exercise of each such option is
hereinafter the “Extended Maturity Date") upon satisfaction of the following
terms and conditions:
          (a) no Event of Default shall have occurred and be continuing at the
time the applicable Extension Option is exercised and on the date that the
applicable extension term is commenced;
          (b) Borrower shall notify Lender of its irrevocable election to extend
the Maturity Date as aforesaid not earlier than six (6) months, and no later
than thirty (30) days, prior to (i) with respect to the first Extension Option,
the Initial Maturity Date, (ii) with respect to the second Extension Option, the
end of the first Extension Option, and (iii) with respect to the third Extension
Option, the end of the second Extension Option;
          (c) if the Interest Rate Cap Agreement is scheduled to mature prior to
the applicable Extended Maturity Date, Borrower shall obtain and deliver to
Lender not later than one (1) Business Day prior to the first day of each
Extension Option, one or more Replacement Interest Rate Cap Agreements (or
extension of the existing Interest Rate Cap Agreement) from an Acceptable
Counterparty which Replacement Interest Rate Cap Agreement (or extension of the
existing Interest Rate Cap Agreement) shall (i) be effective commencing on the
first date of such Extension Option, (ii) have a LIBOR strike price equal to the
applicable Strike Price, and (iii) have a maturity date not earlier than the
applicable Extended Maturity Date;
          (d) If required by Lender, Borrower delivers to Lender an amendment to
the Hotel Operating Lease executed by Hotel Owner and Hotel Operator extending
the term thereof for a period of time ending no earlier than the applicable
Extended Maturity Date; and
          (e) Borrower reimburses Lender for all costs reasonably incurred by
Lender in processing the extension request, including, without limitation,
reasonable legal fees and expenses; provided, however, that in no event shall
Borrower be required to pay any such fees, costs or expenses in excess of Five
Thousand Dollars ($5,000).

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          III. INTENTIONALLY OMITTED
          IV. REPRESENTATIONS AND WARRANTIES
          Section 4.1. Borrower Representations. Borrower represents and
warrants as of the Assumption Date that:
          4.1.1 Organization. Hotel Owner has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged. Hotel
Operator has been duly organized and is validly existing and in good standing
with requisite power and authority to own the lessee’s interest in the Hotel
Operating Lease and to operate the Property and to transact the businesses in
which it is now engaged. Borrower is duly qualified to do business and is in
good standing in each jurisdiction where it is required to be so qualified in
connection with its properties, businesses and operations. Borrower possesses
all rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its properties and to transact the businesses in
which it is now engaged. The sole business of Hotel Owner is the ownership,
management and operation of the Property and the sole business of Hotel Operator
is the leasing of the Property and the operation thereof. The ownership
interests of Borrower are as set forth on the organizational chart attached
hereto as Schedule III.
          4.1.2 Proceedings. Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents. This Agreement and such other Loan Documents have been
duly executed and delivered by or on behalf of Borrower and constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, subject only to applicable bankruptcy,
insolvency and similar laws affecting rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
          4.1.3 No Conflicts. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, management agreement or other
agreement or instrument to which Borrower is a party or by which any of
Borrower’s property or assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any Governmental Authority having jurisdiction over Borrower or any of
Borrower’s properties or assets, and any consent, approval, authorization,
order, registration or qualification of or with any such Governmental Authority
required for the execution, delivery and performance by Borrower of this
Agreement or any other Loan Documents has been obtained and is in full force and
effect.
          4.1.4 Litigation. Except as set forth on Schedule VI attached hereto,
there is no action, suit, proceeding or investigation pending against Borrower
or, to Borrower’s actual knowledge, pending against the Property or, to
Borrower’s actual knowledge, threatened in

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writing against Borrower or the Property in any court or by or before any other
Governmental Authority that would have a material adverse effect on (i) the
business operations, economic performance, assets, financial condition, equity,
contingent liabilities, material agreements or results of operations of Borrower
or the Property, (ii) the enforceability or validity of any Loan Document, the
perfection or priority of any Lien created under any Loan Document or the
remedies of Lender under any Loan Document, (iii) the ability of Borrower to
perform, in all material respects, its obligations under each of the Loan
Documents, or (iv) the value of, or cash flow from the Property.
          4.1.5 Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which would materially and adversely
affect Borrower or the Property, or Borrower’s business, properties or assets,
operations or condition, financial or otherwise. To the best of Borrower’s
knowledge, Borrower is not in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which Borrower or the Property are bound. Borrower has no material financial
obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Borrower is a party or by which Borrower or the
Property is otherwise bound, other than (a) obligations incurred in the ordinary
course of the operation of the Property as permitted pursuant to clause (t) of
the definition of “Special Purpose Entity” set forth in Section 1.1 hereof,
(b) obligations under the Loan Documents, (c) the Hotel Operating Lease,
(d) obligations pursuant to the Management Agreement, and (e) the Ground Lease.
          4.1.6 Title. Borrower has good, marketable and insurable leasehold
title to the real property comprising part of the Property and good title to the
balance of the Property, free and clear of all Liens whatsoever except the
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. To the best of Borrower’s
knowledge, the Permitted Encumbrances in the aggregate do not materially and
adversely affect the operation or use of the Property (as currently used) or
Borrower’s ability to repay the Loan. The Mortgage, when properly recorded in
the appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected first priority lien on the real property portion of the
Property, subject only to Permitted Encumbrances and the Liens created by the
Loan Documents and (b) together with the filing of the required Uniform
Commercial Code financing statements, perfected security interests in and to,
and perfected collateral assignments of, all personalty (including the Leases),
all in accordance with the terms thereof, in each case subject only to any
applicable Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. To Borrower’s
knowledge after due inquiry, there are no claims for payment for work, labor or
materials affecting the Property which are or may become a Lien prior to, or of
equal priority with, the Liens created by the Loan Documents.
          4.1.7 Solvency. Borrower has (a) not entered into the transaction or
executed the Note, this Agreement or any other Loan Documents with the actual
intent to hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents. The
fair saleable value of Borrower’s assets exceeds and will, immediately following
the assumption of the Loan, exceed Borrower’s total liabilities, including,

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without limitation, subordinated, unliquidated, disputed and contingent
liabilities. The fair saleable value of Borrower’s assets is and will,
immediately following the assumption of the Loan, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Borrower’s assets do not
and, immediately following the assumption of the Loan will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Borrower does not intend to, and does not believe that it will,
incur Indebtedness and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debt and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of obligations of Borrower). No
petition in bankruptcy has been filed against Borrower, Principal or Sponsor,
and neither Borrower, Principal nor Sponsor has ever made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit of
debtors. Neither Borrower, Principal nor Sponsor are contemplating either the
filing of a petition by it under any state or federal bankruptcy or insolvency
laws or the liquidation of all or a major portion of Borrower’s assets or
properties, and Borrower has no knowledge of any Person contemplating the filing
of any such petition against it, Principal or Sponsor.
          4.1.8 Full and Accurate Disclosure. To Borrower’s actual knowledge, no
statement of fact made by Borrower in this Agreement or in any of the other Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact or circumstance presently known to Borrower which
has not been disclosed to Lender and which will have a material adverse effect
on (a) the use and operation of the Property, (b) the enforceability or validity
of any Loan Document, the perfection or priority of any Lien created under any
Loan Document or the remedies of Lender under any Loan Document, or (c) the
ability of Borrower to perform, in all material respects, its obligations under
each of the Loan Documents.
          4.1.9 No Plan Assets. As of the date hereof and throughout the term of
the Loan (a) Borrower is not and will not be an “employee benefit plan,” as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of the
assets of Borrower constitutes or will constitute “plan assets” of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c) Borrower is
not and will not be a “governmental plan” within the meaning of Section 3(32) of
ERISA, and (d) none of the assets of Borrower constitute “plan assets” of a
governmental plan within the meaning of 29 C.F.R. Section 2510.3-101 for
purposes of any state law provisions regulating investments of, or fiduciary
obligations with respect to, governmental plans.
          4.1.10 Compliance. Except as set forth in the Zoning Report, otherwise
disclosed to Lender in writing or shown on the attached Schedule IV hereto (with
respect to certain permits and licenses), Borrower and, to the best of
Borrower’s knowledge after due inquiry, the Land and Improvements (including the
use thereof) comply in all material respects with all applicable Legal
Requirements, including, without limitation, building and zoning ordinances and
codes and Prescribed Laws. Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority. There has not
been committed by Borrower or, to Borrower’s actual knowledge, any other Person
in occupancy of or involved with the operation or use of the Property any act or
omission affording the federal

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government or any other Governmental Authority the right of forfeiture as
against the Property or any part thereof or any monies paid in performance of
Borrower’s obligations under any of the Loan Documents.
          4.1.11 Financial Information. To Borrower’s actual knowledge, all
historical financial data, including, without limitation, the statements of cash
flow and income and operating expense, that have been delivered to Lender in
connection with the Loan (i) are true, complete and correct in all material
respects, (ii) accurately represent in all material respects the financial
condition of the Property as of the date of such reports, and (iii) to the
extent prepared or audited by an independent certified public accounting firm,
have been prepared in accordance with the Uniform System of Accounts and
reconciled with GAAP throughout the periods covered, except as disclosed
therein. Except for Permitted Encumbrances, Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and reasonably likely to have a materially adverse
effect on the Property or the operation thereof as a hotel, except as referred
to or reflected in said financial statements. Since the date of such financial
statements, there has been no material adverse change in the financial
condition, operation or business of Borrower or, to Borrower’s knowledge after
due inquiry, the Property from that set forth in said financial statements.
          4.1.12 Condemnation. No Condemnation or other proceeding has been
commenced or, to Borrower’s actual knowledge, is threatened in writing received
by Borrower or contemplated with respect to all or any portion of the Property
or for the relocation of roadways providing direct access to the Property.
          4.1.13 Federal Reserve Regulations. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.
          4.1.14 Utilities and Public Access. The Property has rights of access
to public ways and is served by water, sewer, sanitary sewer and storm drain
facilities adequate to service the Property for its intended uses. All public
utilities necessary to the continued use and enjoyment of the Property are
located either in the public right-of-way abutting the Property or in recorded
easements serving the Property and such easements are set forth in and insured
by the Title Insurance Policy. All roads necessary for the use of the Property
for its current purpose have been completed and dedicated to public use and
accepted by all Governmental Authorities or are located in recorded easements
serving the Property and such easements are set forth in and insured by the
Title Insurance Policy.
          4.1.15 Not a Foreign Person. Borrower is not a “foreign person” within
the meaning of §1445(f)(3) of the Code.

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          4.1.16 Separate Lots. The Property is comprised of one (1) or more
parcels which constitute a separate tax lot or lots and does not constitute a
portion of any other tax lot not a part of the Property.
          4.1.17 Assessments. Except as disclosed in the Title Insurance Policy,
to Borrower’s actual knowledge there are no pending or proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.
          4.1.18 Enforceability. The Loan Documents are not subject to any right
of rescission, set-off, counterclaim or defense by Borrower or Principal,
including the defense of usury, nor would the operation of any of the terms of
the Loan Documents, or the exercise of any right thereunder, render the Loan
Documents unenforceable (subject to principles of equity and bankruptcy,
insolvency and other laws generally affecting creditors’ rights and the
enforcement of debtors’ obligations), and Borrower and Principal have not
asserted any right of rescission, set-off, counterclaim or defense with respect
thereto.
          4.1.19 No Prior Assignment. There are no prior assignments of the
Leases or any portion of the Rents due and payable or to become due and payable
which are presently outstanding.
          4.1.20 Insurance. Borrower has obtained and has delivered to Lender
certified copies of all Policies (or “Acord” certificates evidencing coverage
thereof) reflecting the insurance coverages, amounts and other requirements set
forth in this Agreement. No claims have been made under any such Policies, and
no Person, including Borrower, has done, by act or omission, anything which
would impair the coverage of any such Policies.
          4.1.21 Use of Property. The Property is used exclusively as a hotel
and other appurtenant and related uses.
          4.1.22 Certificate of Occupancy; Licenses. To the best of Borrower’s
knowledge after due inquiry and except as otherwise disclosed on Schedule IV
attached hereto, all certifications, permits, licenses and approvals, including
without limitation, certificates of completion and occupancy permits and any
applicable liquor license required for the legal use, occupancy and operation of
the Property as a hotel (collectively, the “Licenses"), have been obtained and
are in full force and effect. Borrower shall keep and maintain, or cause to be
kept and maintained, all Licenses necessary for the operation of the Property as
a hotel. To the best of Borrower’s knowledge after due inquiry, the use being
made of the Property is in conformity with the certificate of occupancy issued
for the Property. Attached hereto as Schedule IV is, to the best of Borrower’s
knowledge after due inquiry, a true and complete list of all current Licenses
and those which are subject to renewal.
          4.1.23 Flood Zone. None of the Improvements on the Property are
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards or, if so located, the flood insurance
required pursuant to Section 6.l(a)(i) is in full force and effect with respect
to the Property.

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          4.1.24 Physical Condition. Except as provided in the Physical
Conditions Report and except with respect to the PIP Requirements, to the best
of Borrower’s knowledge after due inquiry, (a) the Property, including, without
limitation, all buildings, improvements, parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; (b) there exists no
structural or other material defects or damages in the Property, whether latent
or otherwise, and (c) Borrower has not received notice from any insurance
company or bonding company of any defects or inadequacies in the Property, or
any part thereof, which would adversely affect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.
          4.1.25 Boundaries. Except as disclosed on the Survey, to Borrower’s
actual knowledge all of the improvements which were included in determining the
appraised value of the Property lie wholly within the boundaries and building
restriction lines of the Property, and no improvements on adjoining properties
encroach upon the Property, and no easements or other encumbrances upon the
Property encroach upon any of the improvements, so as to materially and
adversely affect the value or marketability of the Property except those which
are insured against by the Title Insurance Policy.
          4.1.26 Leases. To the best of Borrower’s knowledge after due inquiry
and except as set forth on Schedule I, (a) the Property is not subject to any
Leases other than the Leases described in Schedule I attached hereto and made a
part hereof and the Hotel Operating Lease, (b) Hotel Owner is the owner and
lessor of landlord’s interest in the Hotel Operating Lease and Hotel Operator is
the lessor under all other Leases, (c) no Person has any possessory interest in
the Property or right to occupy the same except under and pursuant to the
provisions of the Leases, (d) the current Leases are in full force and effect
and there are no defaults thereunder by either party and there are no conditions
that, with the passage of time or the giving of notice, or both, would
constitute defaults thereunder, (e) no Rent has been paid more than one
(1) month in advance of its due date, (f) all work to be performed by Borrower
under each Lease has been performed as required and has been accepted by the
applicable tenant, and any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to any tenant has already been received by such tenant, (g) there has
been no prior sale, transfer or assignment, hypothecation or pledge of any Lease
or of the Rents received therein which is still in effect, (h) no tenant listed
on Schedule I has assigned its Lease or sublet all or any portion of the
premises demised thereby, no such tenant holds its leased premises under
assignment or sublease, nor does anyone except such tenant and its employees
occupy such leased premises, (i) no tenant under any Lease has a right or option
pursuant to such Lease or otherwise to purchase all or any part of the leased
premises or the building of which the leased premises are a part, and (j) no
tenant under any Lease has any right or option for additional space in the
Improvements except for rights expressly set forth in the applicable Lease.
          4.1.27 Intentionally Omitted.

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          4.1.28 Principal Place of Business; State of Organization. Borrower’s
principal place of business as of the date hereof is the address set forth in
the introductory paragraph of this Agreement. Hotel Owner and Hotel Operator are
each organized under the laws of the State of Delaware.
          4.1.29 Filing and Recording Taxes. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Property to Borrower have been paid. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgage, have been paid, and, under current Legal Requirements,
the Mortgage is enforceable against Borrower in accordance with its terms by
Lender (or any subsequent holder thereof), subject to principles of equity and
bankruptcy, insolvency and other laws generally applicable to creditors’ rights
and the enforcement of debtors’ obligations.
          4.1.30 Special Purpose Entity/Separateness.
          (a) Until the Debt has been paid in full, each Borrower hereby
represents, warrants and covenants that Borrower is, shall be and shall continue
to be a Special Purpose Entity.
          (b) The representations, warranties and covenants set forth in
Section 4.1.30(a) shall survive for so long as any amount remains payable to
Lender under this Agreement or any other Loan Document.
          (c) All of the assumptions made in the Insolvency Opinion, including,
but not limited to, any exhibits attached thereto, are true and correct in all
respects. Borrower has complied and will comply with all of the assumptions made
with respect to Borrower in the Insolvency Opinion.
          (d) Borrower hereby covenants and agrees that (i) any assumptions made
in any subsequent non-consolidation opinion required to be delivered in
connection with the Loan Documents (an “Additional Insolvency Opinion"),
including, but not limited to, any exhibits attached thereto, shall be true and
correct in all respects, (ii) Borrower will comply with all of the assumptions
made with respect to Borrower in any Additional Insolvency Opinion, and
(iii) each Person other than Borrower with respect to which an assumption shall
be made in any Additional Insolvency Opinion will comply with all of the
assumptions made with respect to it in any Additional Insolvency Opinion.
          (e) Borrower hereby further represents, warrants and certifies to and
for the benefit and reliance of Lender that: (i) Borrower has provided Lender
with true, correct and complete copies of (A) Borrower’s current (and since the
date of its inception) financial statements and (B) Borrower’s current (and
since the date of its inception) organizational documents; and (iii) Borrower
has prior to the Assumption Date (and at all times since the date of its
inception) conducted its affairs as a special purpose bankruptcy remote entity
in substantial

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accordance with (A) the provisions of this Section 4.1.30 and (B) the provisions
of Borrower’s organizational documents (as in effect now and as in effect at all
times since the date of its inception).
          4.1.31 Management Agreement. The Management Agreement is in full force
and effect and there is no default thereunder by any party thereto and no event
has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder.
          4.1.32 Illegal Activity. No portion of the Property has been or will
be purchased with proceeds of any illegal activity.
          4.1.33 No Change in Facts or Circumstances; Disclosure. To Borrower’s
actual knowledge, all material information submitted by Borrower to Lender and
in all financial statements, rent rolls, reports, certificates and other
documents submitted in connection with the Loan or in satisfaction of the terms
thereof and all statements of fact made by Borrower in this Agreement or in any
other Loan Document, are accurate, complete and correct in all material
respects. To Borrower’s actual knowledge, there has been no material adverse
change in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely impairs the use or operation
of the Property or the business operations or the financial condition of
Borrower. Borrower has disclosed to Lender all material facts known to Borrower
and has not failed to disclose any material fact known to Borrower that could
cause any Provided Information or representation or warranty made herein to be
materially misleading.
          4.1.34 Investment Company Act. Borrower is not (a) an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended; (b) a “holding
company” or a “subsidiary company” of a “holding company” or an “affiliate” of
either a “holding company” or a “subsidiary company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (c) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
          4.1.35 Embargoed Person. To the best of Borrower’s knowledge, at all
times throughout the term of the Loan, including after giving effect to any
Transfers permitted pursuant to the Loan Documents, (a) none of the funds or
other assets of Borrower, Principal and Sponsor constitute property of, or are
beneficially owned, directly or indirectly, by any person, entity or government
subject to trade restrictions under U.S. law, including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Borrower, Principal or Sponsor, as applicable (whether directly or indirectly),
is prohibited by law or the Loan made by the Lender is in violation of law
(“Embargoed Person"); (b) no Embargoed Person has any interest of any nature
whatsoever in Borrower, Principal or Sponsor, as applicable, with the result
that the investment in Borrower, Principal or Sponsor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law; and (c) none of the funds of Borrower, Principal or Sponsor, as applicable,
have been derived from any unlawful activity with the result

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that the investment in Borrower, Principal or Sponsor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law.
          4.1.36 Cash Management Account. (a) This Agreement, together with the
other Loan Documents, creates a valid and continuing security interest (as
defined in the Uniform Commercial Code of the applicable State) in the Lockbox
Account, if any, and Cash Management Account in favor of Lender, which security
interest is prior to all other Liens, other than Permitted Encumbrances, and is
enforceable as such against creditors of and purchasers from Borrower. Other
than in connection with the Loan Documents and except for Permitted
Encumbrances, Borrower has not sold or otherwise conveyed the Lockbox Account,
if any, and Cash Management Account;
          (b) Each of the Lockbox Account, if any, and Cash Management Account
constitute “deposit accounts” within the meaning of the Uniform Commercial Code
of the State of Delaware); and
          (c) The Lockbox Account, if any, and Cash Management Account are not
in the name of any Person other than Borrower, as pledgor, or Lender, as
pledgee.
          4.1.37 Patents, Trademarks, etc. Subject to the terms of the
Management Agreement, Borrower has obtained and holds in full force and effect
all patents, trademarks, service marks, trade names, copyrights and other such
rights, which are necessary for the operation of the Property. To Borrower’s
actual knowledge, no material product, process, method, substance, part or other
material presently sold by or employed by Borrower in connection with such
business infringes any patent, trademark, service mark, trade name, copyright,
license or other such right owned by any other Person. There is not pending or,
to Borrower’s actual knowledge, threatened any claim or litigation against or
affecting Borrower contesting its right to sell or use any of such rights.
          4.1.38 Ground Lease. Borrower hereby represents and warrants to Lender
the following to the best of Borrower’s knowledge after due inquiry with respect
to the Ground Lease:
          (a) Recording; Modification. A memorandum of the Ground Lease has been
duly recorded. The Ground Lease permits the interest of Borrower to be
encumbered by a mortgage (provided that the mortgage is at all times subject and
subordinate to the Ground Lease) or the Ground Lessor has approved and consented
to the encumbrance of the Property by the Mortgage. There have not been
amendments or modifications to the terms of the Ground Lease since recordation
of the Ground Lease (or a memoranda thereof), with the exception of written
instruments which have been recorded or copies of which have been delivered to
Lender. The Ground Lease may not be terminated, surrendered or amended in any
material respect without the prior written consent of Lender; provided that
Ground Lessor shall not be prevented from exercising its remedies in accordance
with the Ground Lease if the obligations of Borrower under the Ground Lease are
not performed as provided in the Ground Lease.
          (b) No Liens. Except for the Permitted Encumbrances and other
encumbrances of record, Borrower’s interest in the Ground Lease is not subject
to any Liens or

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encumbrances superior to, or of equal priority with, the Mortgage other than the
ground lessor’s related fee interest.
          (c) Ground Lease Assignable. Borrower’s interest in the Ground Lease
is assignable without the consent of the Ground Lessor to Lender, the purchaser
at any foreclosure sale or the transferee under a deed or assignment in lieu of
foreclosure in connection with the foreclosure of the Lien of the Mortgage or
transfer of Borrower’s leasehold state by deed or assignment in lieu of
foreclosure. Thereafter, the Ground Lease is further assignable by such
transferee and its successors and assigns without the consent of the Ground
Lessor.
          (d) Default. As of the date hereof, the Ground Lease is in full force
and effect and no default has occurred under the Ground Lease and there is no
existing condition which, but for the passage of time or the giving of notice,
could result in a default under the terms of the Ground Lease.
          (e) Notice. The Ground Lease requires the Ground Lessor to give notice
of any default by Borrower to Lender prior to exercising its remedies
thereunder.
          (f) Cure. Lender is permitted the opportunity (including, where
necessary, sufficient time to gain possession of the interest of Borrower under
the Ground Lease) to cure any default under the Ground Lease, which is curable
after the receipt of notice of any of the default before the Ground Lessor
thereunder may terminate the Ground Lease.
          (g) Term. The Ground Lease has a term which extends not less than ten
(10) years beyond the Maturity Date.
          (h) New Lease. Except with respect to the Marina Ground Lease, the
Ground Lease requires the Ground Lessor to enter into a new lease upon
termination of the Ground Lease for any reason, including rejection or
disaffirmation of the Ground Lease in a bankruptcy proceeding.
          (i) Insurance Proceeds. Except with respect to the Marina Ground
Lease, under the terms of the Ground Lease and the Mortgage, taken together, any
related insurance and condemnation proceeds that are paid or awarded with
respect to the leasehold interest will be applied either to the repair or
restoration of all or part of the Property, with Lender having the right to hold
and disburse the proceeds as the repair or restoration progresses, or to the
payment of the outstanding principal balance of the Loan together with any
accrued interest thereon.
          (j) Subleasing. The Ground Lease does not impose any restrictions on
subleasing pursuant to tenant Leases.
          4.1.39 Hotel Operating Lease. The Hotel Operating Lease is in full
force and effect and there is no default thereunder by any party thereto and no
event has occurred that, with the passage of time and/or the giving of notice
would constitute a default thereunder.
          Section 4.2. Survival of Representations. Borrower agrees that all of
the representations and warranties of Borrower set forth in Section 4.1 and
elsewhere in this Agreement and in the other Loan Documents shall survive for so
long as any amount remains

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owing to Lender under this Agreement or any of the other Loan Documents by
Borrower. All representations, warranties, covenants and agreements made in this
Agreement or in the other Loan Documents by Borrower shall be deemed to have
been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf.
          V. BORROWER COVENANTS
          Section 5.1. Affirmative Covenants. From the Assumption Date and until
payment and performance in full of all obligations of Borrower under the Loan
Documents or the earlier release of the Lien of the Mortgage (and all related
obligations) in accordance with the terms of this Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:
          5.1.1 Existence; Compliance with Legal Requirements. Borrower shall do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence, rights, licenses, permits and franchises and
comply in all material respects with all Legal Requirements applicable to
Borrower and the Property, including, without limitation, Prescribed Laws. There
shall never be committed by Borrower and Borrower shall not knowingly permit any
other Person in occupancy of or involved with the operation or use of the
Property to commit any act or omission affording the federal government or any
state or local government the right of forfeiture against the Property or any
part thereof or any monies paid in performance of Borrower’s obligations under
any of the Loan Documents. Borrower hereby covenants and agrees not to commit,
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect in all
material respects all franchises and trade names and preserve all the remainder
of its property used in the conduct of its business and shall keep the Property
in good working order and repair in all material respects, and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgage. Borrower shall keep the Property insured at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as is more fully provided in
this Agreement. Borrower shall operate the Property in accordance with the terms
and provisions of the O&M Agreement in all material respects. After prior notice
to Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding promptly initiated and conducted in good faith and with due
diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Borrower or the Property or any alleged violation of any Legal
Requirement, provided that (i) no Event of Default has occurred and remains
uncured; (ii) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iv) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, cancelled or lost; (v) Borrower shall promptly upon
final determination thereof comply with any such Legal Requirement determined to
be valid or applicable or cure any violation of any Legal Requirement; (vi) such
proceeding shall suspend the enforcement of the contested Legal Requirement
against Borrower and the Property; and (vii) Borrower shall furnish such
security as may be required in the proceeding, or as may be requested by Lender,
to

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insure compliance with such Legal Requirement, together with all interest and
penalties payable in connection therewith. Following any non-compliance with
such Legal Requirement, Lender may apply any such security, as necessary to
cause compliance with such Legal Requirement at any time when, in the reasonable
judgment of Lender, the validity, applicability or violation of such Legal
Requirement is finally established or the Property (or any part thereof or
interest therein) shall be in danger of being sold, forfeited, terminated,
cancelled or lost.
          5.1.2 Taxes and Other Charges. Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Property or
any part thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall be suspended for so long as
Borrower complies with the terms and provisions of Section 7.2 hereof. Borrower
will deliver to Lender receipts for payment or other evidence satisfactory to
Lender that the Taxes and Other Charges have been so paid or are not then
delinquent. Borrower shall furnish to Lender receipts for the payment of the
Taxes and the Other Charges prior to the date the same shall become delinquent
provided, however, Borrower is not required to furnish such receipts for payment
of Taxes in the event that such Taxes have been paid by Lender pursuant to
Section 7.2 hereof. Borrower shall not suffer and shall promptly cause to be
paid and discharged (or provide reasonable security for) any Lien or charge
against the Property, and shall promptly pay for all utility services provided
to the Property. After prior notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes or Other Charges, provided that (a) no Event of
Default exists; (b) Borrower is permitted to do so under the provisions of any
mortgage or deed of trust superior in lien to the Mortgage; (c) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (d) neither the Property nor any part
thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (e) Borrower shall promptly upon final
determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (f) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (g) Borrower shall
furnish such security as may be required in the proceeding, or as may be
reasonably requested by Lender, to insure the payment of any such Taxes or Other
Charges, together with all interest and penalties thereon. Lender may pay over
any such cash deposit or part thereof held by Lender to the claimant entitled
thereto at any time when, in the reasonable judgment of Lender, the entitlement
of such claimant is established or the Property (or part thereof or interest
therein) shall be in danger of being sold, forfeited, terminated, cancelled or
lost or there shall be any danger of the Lien of the Mortgage being primed by
any related Lien.
          5.1.3 Litigation. Borrower shall give prompt notice to Lender of any
litigation or governmental proceedings pending or threatened in writing against
Borrower or Principal which if adversely determined would have a material
adverse effect on (a) the business operations, economic performance, assets,
financial condition, equity, contingent liabilities, material agreements or
results of operations of Borrower, Principal or the Property, (b) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the remedies of Lender under any
Loan Document, (c) the ability

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of Borrower to perform, in all material respects, its obligations under each of
the Loan Documents or (d) value of, or cash flow from, the Property.
          5.1.4 Access to Property. Borrower shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice.
          5.1.5 Intentionally Omitted.
          5.1.6 Cooperate in Legal Proceedings. Borrower shall reasonably
cooperate fully with Lender with respect to any proceedings before any court,
board or other Governmental Authority which in any way affects the rights of
Lender hereunder or any rights obtained by Lender under any of the other Loan
Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings.
          5.1.7 Perform Loan Documents. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and expenses to the extent required under the Loan
Documents executed and delivered by, or applicable to, Borrower.
          5.1.8 Award and Insurance Benefits. Subject to the terms of Article VI
hereof, Borrower shall reasonably cooperate with Lender in obtaining for Lender
the benefits of any Awards or Insurance Proceeds to which Lender is entitled
under the Loan Documents and which is lawfully or equitably payable in
connection with the Property, and Lender shall be reimbursed for any actual,
reasonable expenses incurred in connection therewith (including attorneys’ fees
and disbursements) out of such Insurance Proceeds or Awards.
          5.1.9 Further Assurances. Borrower shall, at Borrower’s sole cost and
expense:
          (a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require; and
          (b) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.
          5.1.10 Mortgage Taxes. Borrower represents that as of the Assumption
Date it has paid all state, county and municipal recording and all other taxes
imposed upon the execution and recordation of the Mortgage.
          5.1.11 Financial Reporting. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
the Uniform System of Accounts and reconciled each year in accordance with GAAP
(or such other accounting basis acceptable to Lender), proper and accurate
books, records and accounts reflecting all of the

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financial affairs of Borrower and all items of income and expense in connection
with the operation of the Property. Subject to the terms of the Management
Agreement, Lender shall have the right from time to time at all times during
normal business hours upon reasonable written notice to examine such books,
records and accounts at the office of Borrower or any other Person maintaining
such books, records and accounts and to make such copies or extracts thereof as
Lender shall desire. After the occurrence and during the continuance of an Event
of Default, Borrower shall pay any actual costs and expenses incurred by Lender
to examine Borrower’s accounting records with respect to the Property, as Lender
shall determine to be necessary or appropriate in the protection of Lender’s
interest. With respect to the reporting requirements of Section 5.1.11, it is
acknowledged and accepted by Lender that annual, quarterly and monthly reporting
may not precisely reflect a calendar year, quarter or month due to the need to
conform with Marriott Manager’s use of thirteen Marriott Accounting Periods
(approximately a calendar year) for reporting, and the need to derive certain
information based on Marriott Manager’s financial data prepared on the basis of
such Marriott Manager’s Accounting Periods.
          (b) Borrower will furnish to Lender (1) within one hundred twenty
(120) days following the end of the Fiscal Year of Borrower ending December 31,
2007, an unaudited cash flow statement for such Fiscal year, and (2) within one
hundred twenty (120) days following the end of each Fiscal Year of Borrower
thereafter, a complete copy of Borrower’s annual financial statements (prepared
on a consolidated basis for Hotel Owner and Hotel Operator) audited by a “Big
Four” accounting firm or other independent certified public accountant
reasonably acceptable to Lender in accordance with the Uniform System of
Accounts and reconciled each year in accordance with GAAP (or such other
accounting basis acceptable to Lender) covering the Property for such Fiscal
Year and containing statements of profit and loss for Borrower and the Property
and a balance sheet for Borrower. Such statements, under each of the foregoing
clauses (1) and (2), shall set forth the financial condition and the results of
operations for the Property for the applicable Fiscal Year, and shall include,
but not be limited to, amounts representing annual Net Cash Flow, Net Operating
Income, Gross Income from Operations and Operating Expenses. The 2007 unaudited
cash flow statement required under clause (1) above shall be accompanied by
(i) a comparison of the budgeted income and expenses and the actual income and
expenses for the prior Fiscal Year, (ii) a schedule reconciling Net Operating
Income to Net Cash Flow, which shall itemize all material adjustments made to
Net Operating Income to arrive at Net Cash Flow, and (iii) an Officer’s
Certificate certifying that such unaudited cash flow statement presents fairly
the financial condition and the results of operations of the Property being
reported upon; provided, however, that such 2007 unaudited cash flow statement
shall not be required to set forth interest paid with respect to the Loan during
such period. Borrower’s annual financial statements required under clause
(2) above shall be accompanied by (i) a comparison of the budgeted income and
expenses and the actual income and expenses for the prior Fiscal Year, (ii) an
unqualified opinion of a “Big Four” accounting firm or other independent
certified public accountant reasonably acceptable to Lender, (iii) a schedule
audited by such independent certified public accountant reconciling Net
Operating Income to Net Cash Flow (the “Net Cash Flow Schedule”), which shall
itemize all adjustments made to Net Operating Income to arrive at Net Cash Flow
deemed material by such independent certified public accountant, and (iv) an
Officer’s Certificate certifying that each annual financial statement presents
fairly the financial condition and the results of operations of Borrower and the
Property being reported upon and that such financial statements have been
prepared in accordance with the Uniform System of Accounts and reconciled in
accordance with GAAP.

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          (c) Borrower will furnish, or cause to be furnished, to Lender on or
before thirty (30) days after the end of each calendar month the following
items, accompanied by an Officer’s Certificate stating that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Property (subject to normal
year-end adjustments): (i) an occupancy report for the subject month; (ii) a
rent roll for the subject month; (iii) monthly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar month,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund), each
in the form prepared by Manager pursuant to the Management Agreement and, within
thirty (30) days of Lender’s reasonable written request, other existing
information necessary and sufficient to fairly represent the financial position
and results of operation of the Property during such calendar month, and
containing a comparison of budgeted income and expenses and the actual income
and expenses together with a detailed explanation of any variances of five
percent (5%) or more between budgeted and actual amounts for such periods, all
in form reasonably satisfactory to Lender; and (iv) a Net Cash Flow Schedule. In
addition, such Officer’s Certificate shall also state that the representations
and warranties of Borrower set forth in Section 4.1.30 are true and correct as
of the date of such certificate and that there are no trade payables outstanding
for more than sixty (60) days. On or before forty-five (45) days after the end
of each calendar month, Borrower also will furnish, or cause to be furnished, to
Lender the most current Smith Travel Research Reports then available to Borrower
reflecting market penetration and relevant hotel properties competing with the
Property.
          (d) For each Fiscal Year commencing after the date hereof, Borrower
shall submit to Lender an Annual Budget not later than fifteen (15) days prior
to the commencement of such period or Fiscal Year in form reasonably
satisfactory to Lender. The Annual Budget shall be subject to Lender’s written
reasonable approval, which approval rights shall (i) be limited as follows:
(A) with respect to the Business Plan (as defined in the Management Agreement),
Lender’s consent shall be required before Borrower consents to any Business Plan
containing any materially adverse changes from the Business Plan of the
preceding Fiscal Year; (B) with respect to the budget for FF&E Expenditures,
Lender’s consent shall be required before Borrower consents to such budget if
such budget for such FF&E Expenditures (excluding Required Repairs) exceeds four
percent (4%) of Gross Income from Operations; and (C) with respect to the budget
for Capital Expenditures, Lender’s consent shall be required before Borrower
consents if the budget for such Capital Expenditures (excluding FF&E
Expenditures and Required Repairs) exceeds four percent (4%) of Gross Income
from Operations; and (ii) be subject in all respects to Borrower’s budget
approval rights under the Management Agreement for as long as the Property is
managed by the Marriott Manager (each such Annual Budget, an “Approved Annual
Budget"). Lender’s approval of a proposed Annual Budget shall be deemed to have
been given if (i) such proposed Annual Budget is submitted to Lender with a
request for approval set forth in a written notice that states clearly (in
14-point type or larger): “THIS IS A REQUEST FOR APPROVAL OF AN ANNUAL BUDGET
AND IF LENDER DOES NOT RESPOND WITHIN TEN (10) BUSINESS DAYS, BORROWER MAY
DELIVER A DEEMED APPROVAL NOTICE” and Lender does not respond by approving such
proposed Annual Budget or stating in reasonable detail its objections to such
proposed Annual Budget within ten (10) Business Days of Lender’s receipt thereof
and (ii) after Lender’s failure to respond to the initial request for approval
of such proposed Annual Budget within the time period set forth in clause (i),
Borrower shall re-submit such proposed Annual Budget to

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Lender with a request for approval set forth in a written notice that states
clearly (in 14-point type or larger): “THIS IS A REQUEST FOR APPROVAL OF AN
ANNUAL BUDGET. APPROVAL WILL BE DEEMED GIVEN IF LENDER DOES NOT RESPOND WITHIN
FIVE (5) BUSINESS DAYS” and Lender does not respond to such second submission of
such proposed Annual Budget by approving such proposed Annual Budget or stating
in reasonable detail its objection thereto within five (5) Business Days of
Lender’s receipt of such second submission. In the event that Lender objects to
a proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of
such objections within ten (10) Business Days after receipt thereof (and deliver
to Borrower a reasonably detailed description of such objections) and Borrower
shall promptly revise such Annual Budget (subject to the provisions of the
Management Agreement) and resubmit the same to Lender. Lender shall advise
Borrower of any objections to such revised Annual Budget within ten (10) days
after receipt thereof (and deliver to Borrower a reasonably detailed description
of such objections) and Borrower shall promptly revise the same (subject to the
provisions of the Management Agreement) in accordance with the process described
in this subsection until Lender approves the Annual Budget. Until such time that
Lender approves a proposed Annual Budget (or is deemed to have approved such
Annual Budget), the most recently Approved Annual Budget shall apply; provided,
that such Approved Annual Budget shall be automatically adjusted (i) to reflect
actual increases in Taxes and Insurance Premiums, (ii) by three percent (3%) to
account for inflation and (iii) to reflect any expenses that must be incurred on
an “emergency basis” in order to prevent the occurrence of any harm to any
individuals on the Property or the Property itself or the operation thereof.
          (e) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in paper form, (ii) on a
diskette, and (iii) if requested by Lender and within the capabilities of
Borrower’s data systems without change or modification thereto, in electronic
form and prepared using a Microsoft Word for Windows or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved as word
processing files). Borrower agrees that Lender may disclose information
regarding the Property and Borrower that is provided to Lender pursuant to this
Section in connection with the Securitization to such parties requesting such
information in connection with such Securitization.
          5.1.12 Business and Operations. Borrower will continue to engage in
the businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Property. Borrower will qualify to do business and will remain in good standing
under the laws of each jurisdiction as and to the extent the same are required
for the ownership, maintenance, management and operation of the Property.
          5.1.13 Title to the Property. Borrower will warrant and defend (a) the
title to the Property and every part thereof, subject only to Liens permitted
hereunder (including Permitted Encumbrances) and (b) the validity and priority
of the Lien of the Mortgage and the Assignment of Leases, subject only to Liens
permitted hereunder (including Permitted Encumbrances), in each case against the
claims of all Persons whomsoever. Borrower shall reimburse Lender for any actual
losses, actual costs, actual damages (excluding lost profits, diminution in
value and other consequential damages) or reasonable expenses (including
reasonable attorneys’ fees and court costs) incurred by Lender if an interest in
the Property, other than as permitted hereunder, is claimed against Lender by
another Person.

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          5.1.14 Costs of Enforcement. In the event (a) that the Mortgage is
foreclosed in whole or in part or that the Mortgage is put into the hands of an
attorney for collection, suit, action or foreclosure, (b) of the foreclosure of
any mortgage prior to or subsequent to the Mortgage in which proceeding Lender
is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other
similar proceeding in respect of Borrower or any of its Constituent Members or
an assignment by Borrower or any of its Constituent Members for the benefit of
its creditors, in which Lender is made a party, Borrower, its successors or
assigns, shall be chargeable with and agrees to pay all actual out-of-pocket
costs of collection and defense, including attorneys’ fees and costs, incurred
by Lender or Borrower in connection therewith and in connection with any
appellate proceeding or post-judgment action involved therein.
          5.1.15 Estoppel Statement. (a) After request by Lender, Borrower shall
within ten (10) Business Days furnish Lender with a statement, duly acknowledged
and certified, setting forth (i) the original principal amount of the Loan,
(ii) the unpaid principal amount of the Loan, (iii) the Applicable Interest Rate
of the Loan, (iv) the date installments of interest and/or principal were last
paid, (v) any offsets or, to the best of Borrower’s knowledge, defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.
          (b) After request by Borrower, Lender shall within ten (10) Business
Days furnish Borrower with a statement, duly acknowledged and certified, stating
(i) the unpaid principal amount of the Note, (ii) the Applicable Interest Rate,
(iii) the date installments of interest and/or principal were last paid, and
(iv) whether or not Lender has sent any notice of default under the Loan
Documents which remains uncured in the opinion of Lender.
          (c) Borrower shall use commercially reasonable efforts to deliver to
Lender within thirty (30) days of receipt of written request, tenant estoppel
certificates from each commercial tenant paying rent in an amount greater than
$75,000 per annum in form and substance reasonably satisfactory to Lender
provided that Borrower shall not be required to deliver such certificates more
frequently than once in any calendar year or less frequently if, and to the
extent, so restricted by the terms of any Leases entered into prior to the
Closing Date.
          (d) Borrower shall, promptly upon request of Lender, deliver to Lender
an estoppel certificate from Hotel Operator stating that (i) the Hotel Operating
Lease is in full force and effect and has not been modified, amended (except to
the extent permitted under Section 5.1.20 hereof) or assigned (and, if the same
has been modified or amended, stating that the Hotel Operating Lease, as so
modified or amended, is in full force and effect), (ii) Hotel Owner is not in
default under any of the terms, covenants or provisions of the Hotel Operating
Lease and Hotel Operator knows of no event which, but for the passage of time or
the giving of notice or both, would constitute an event of default under the
Hotel Operating Lease, (iii) Hotel Owner has not commenced any action or given
or received any notice for the purpose of terminating the Hotel Operating Lease
and (iv) all sums due and payable under the Hotel Operating Lease have been paid
in full.
          5.1.16 Intentionally Omitted.

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          5.1.17 Performance by Borrower. Borrower shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower, and shall
not enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower without the prior consent of Lender.
          5.1.18 Confirmation of Representations. Borrower shall deliver, in
connection with any Securitization, one or more Officer’s Certificates
certifying as to the accuracy of all representations made by Borrower in the
Loan Documents as of the date of the closing of such Securitization in all
relevant jurisdictions (or if any such representations are no longer accurate,
providing an explanation as to the reason for such inaccuracy).
          5.1.19 No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of the Property (a) with any other real property
constituting a tax lot separate from the Property, and (b) which constitutes
real property with any portion of the Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to such real property portion of the Property.
          5.1.20 Leasing Matters. Any Leases with respect to the Property
executed after the date hereof providing for rent due thereunder in an amount
greater than $75,000 per annum shall be approved by Lender, which approval shall
not be unreasonably withheld, conditioned or delayed, provided, however,
(a) renewals of any Lease by Borrower initially executed prior to the Closing
Date shall not require the approval of Lender if the terms of any such Lease
provided for renewals at a fixed rent, or (b) if the terms of any Lease
initially executed prior to the Closing Date do not provide for specific
renewals, Borrower can lease space to the same tenant under a new Lease if the
economic terms of such new Lease are the same or better than the economic terms
of the prior Lease. Upon request, Borrower shall furnish Lender with executed
copies of all Leases. All renewals of Leases and all proposed Leases shall
provide for rental rates comparable to existing local market rates. All proposed
Leases shall be on commercially reasonable terms and shall not contain any terms
which would materially adversely affect Lender’s rights under the Loan
Documents. All Leases executed after the date hereof shall provide that they are
subordinate to the Mortgage and that the lessee agrees to attorn to Lender or
any purchaser at a sale by foreclosure or power of sale, provided that Lender
provides commercially reasonable nondisturbance language. Borrower (i) shall
observe and perform the obligations imposed upon the lessor under the Leases in
a commercially reasonable manner; (ii) shall enforce and may amend or terminate
the terms, covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed in a commercially reasonable
manner and in a manner not to impair the value of the Property involved except
that no termination by Borrower or acceptance of surrender by a tenant of any
Leases shall be permitted unless by reason of a tenant default and then only in
a commercially reasonable manner to preserve and protect the Property; provided,
however, that no such termination or surrender of any Lease executed after the
Closing Date providing for rent due thereunder in an amount greater than $75,000
per annum will be permitted without the consent of Lender; (iii) shall not
collect any of the rents more than one (1) month in advance (other than security
deposits); and (iv) shall not execute any other assignment of lessor’s interest
in the Leases or the

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Rents (except as contemplated by the Loan Documents); (v) shall not alter,
modify or change the terms of the Leases in a manner inconsistent with the
provisions of the Loan Documents. To the extent Lender’s prior written approval
is required pursuant to this Section 5.1.20, Lender shall endeavor to respond to
a request for Lender’s approval within ten (10) Business Days after Borrower’s
written request therefore, delivered together with any documents or information
required to be provided by Borrower hereunder in connection with Lender’s review
of the proposed Lease. If the correspondence from Borrower requesting such
approval contains the following statement at the top of the first page thereof
in capitalized, boldfaced, 14 point type lettering: “IF YOU FAIL TO RESPOND TO
OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN
(10) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN”, and if Lender shall
fail to respond to or to expressly deny such request for approval in writing
(stating in reasonable detail the reason for such disapproval) within ten
(10) Business Days after receipt of Borrower’s written request therefor together
with the documents and information required above and any other information
reasonably requested by Lender in writing prior to the expiration of such ten
(10) Business Day period in order to adequately review the same, then (x) if the
annual rent of the proposed Lease is less than $250,000 per annum, Lender’s
approval shall be deemed given or (y) if the annual rent of the proposed Lease
is $250,000 per annum or greater, Borrower shall re-submit such proposed Lease
and accompanying information to Lender with a request for approval containing
the following statement at the top of the first page thereof in capitalized,
boldfaced, 14 point type lettering: “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY
DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN” and if Lender does not respond to such second
request by approving such proposed Lease or stating its objection thereto within
five (5) Business Days of Lender’s receipt of such second submission, Lender’s
approval shall be deemed given. Notwithstanding anything to the contrary
contained herein, Borrower shall not enter into a lease of all or substantially
all of the Property without Lender’s prior consent and (i) neither Hotel Owner
nor Hotel Operator shall terminate the Hotel Operating Lease nor enter into any
material amendment, modification or supplement to the Hotel Operating Lease
without, in either case, Lender’s prior written consent, and (ii) Borrower shall
promptly provide Lender with a copy of any termination, amendment, modification
or supplement to the Hotel Operating Lease entered into by Borrower, together
with written certification from an officer of Borrower which confirms that
(x) the copy delivered is a true, complete and correct copy of such termination,
amendment, modification or supplement and (y) Borrower has satisfied all
conditions of this Section; provided, however, that Borrower shall be permitted,
without any approval of Lender, to make (I) non-material amendments,
modifications or supplements to the Hotel Operating Lease and (II) such other
amendments, modifications or supplements to the Hotel Operating Lease which
modify, change or adjust the amounts payable by Hotel Operator to Hotel Owner,
extend the term thereof, or which are otherwise necessary or appropriate in
order for Hotel Operator to qualify and/or be treated as a “taxable REIT
subsidiary” under the Code and/or for FelCor REIT to qualify and/or be treated
as a “real estate investment trust” under the Code, provided that, in each case,
such amendments, modifications or supplements do not result in an Event of
Default (or an event which but for the passage of time or the giving of notice
or both would constitute an Event of Default), violate or result in a breach of
the Management Agreement, invalidate or adversely affect the rights of Lender
under the Assignment of Management Agreement, or result in a material adverse
effect on (A) the business operations, economic performance, assets,

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financial condition, equity, contingent liabilities, material agreements or
results of operations of Borrower (collectively) or the Property, (B) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the remedies of Lender under any
Loan Document, (C) the ability of Borrower to perform, in all material respects,
its obligations under each of the Loan Documents, or (D) the value of, or cash
flow from the Property. Borrower shall promptly provide Lender notice in writing
of any amendments, modifications or supplements to the Hotel Operating Lease
permitted under this Section and copies of any documents evidencing such
amendments, modifications or supplements to the Hotel Operating Lease.
          5.1.21 Alterations. Borrower shall obtain Lender’s prior consent to
any material alterations to any Improvements, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing,
Lender’s consent shall not be required in connection with any alterations that
will not have a material adverse effect on Borrower’s financial condition, the
value of the Property or the Net Operating Income, provided that such
alterations (a) are made in connection with tenant improvement work performed
pursuant to the terms of any Lease, (b) do not materially adversely affect any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building constituting a part of any
Improvements and the aggregate cost thereof does not exceed the Alteration
Threshold Amount, (c) are performed in connection with the Restoration of the
Property after the occurrence of a Casualty or Condemnation in accordance with
the terms and provisions of this Agreement, (d) are made pursuant to and in
accordance with the Management Agreement, or (e) are made in connection with the
PIP Requirements or otherwise constitute Required Repairs. To the extent
Lender’s prior written approval is required pursuant to this Section 5.1.21,
Lender shall have fifteen (15) Business Days from receipt of written request and
any and all reasonably required information and documentation relating thereto
in which to approve or disapprove such request and such written request shall
state thereon in bold letters of 14 point font or larger that action is required
by Lender. If Lender fails to approve or disapprove the request within such
fifteen (15) Business Days, Lender’s approval shall be deemed given. Should
Lender fail to approve any such request, Lender shall give Borrower written
notice setting forth in reasonable detail the basis for such disapproval. In no
event shall Lender require any “consent fee” as a condition to any required
approval. If the total unpaid amounts due and payable with respect to
alterations to the Improvements at the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) shall at any time exceed the
Alteration Threshold Amount, Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower’s obligations under the Loan Documents any of the following: (A) cash,
(B) U.S. Obligations, (C) other securities having a rating acceptable to Lender
and that the applicable Rating Agencies have confirmed in writing will not, in
and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or any
class thereof in connection with any Securitization, or (D) a completion and
performance bond or an irrevocable letter of credit (payable on sight draft
only) issued by a financial institution having a rating by S&P of not less than
“A-1+” if the term of such bond or letter of credit is no longer than three
(3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Lender and that the
applicable Rating Agencies have confirmed in writing will not, in and of itself,
result in a downgrade, withdrawal or qualification of the initial, or, if
higher, then current ratings assigned to any Securities or any class thereof in
connection with any

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Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the
Property (other than such amounts to be paid or reimbursed by tenants under the
Leases) over the Alteration Threshold Amount and during the occurrence of an
Event of Default, Lender may apply such security from time to time at the option
of Lender to pay for such alterations.
          5.1.22 Operation of Property. (a) Borrower shall cause the Property to
be operated, in all material respects, in accordance with the Management
Agreement. In the event that the Management Agreement expires or is terminated
(without limiting any obligation of Borrower to obtain Lender’s consent to any
termination or modification of the Management Agreement, if applicable, in
accordance with the terms and provisions of this Agreement), Borrower shall
promptly enter into a Replacement Management Agreement with Manager or another
Qualified Manager, as applicable.
          (b) Borrower shall: (i) promptly perform and/or observe, in all
material respects, all of the covenants and agreements required to be performed
and observed by it under the Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder; (ii) promptly
notify Lender of any material default under the Management Agreement of which it
is aware; (iii) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate received
by it under the Management Agreement; and (iv) enforce the performance and
observance of all of the material covenants and agreements required to be
performed and/or observed by Manager under the Management Agreement, in a
commercially reasonable manner.
          5.1.23 Ground Leases.
          (a) Borrower shall, at its sole cost and expense, promptly and timely
perform and observe all the material terms, covenants and conditions required to
be performed and observed by Borrower as lessee under the Ground Lease
(including, but not limited to, the payment of all rent, additional rent,
percentage rent and other charges required to be paid under the Ground Lease).
          (b) If Borrower shall be in default under the Ground Lease, then,
subject to the terms of the Ground Lease, Borrower shall grant Lender the right
(but not the obligation), to cause the default or defaults under the Ground
Lease to be remedied and otherwise exercise any and all rights of Borrower under
the Ground Lease, as may be necessary to prevent or cure any default provided
such actions are necessary to protect Lender’s interest under the Loan
Documents, and, subject to the terms of the Management Agreement, Lender shall
have the right upon reasonable prior written notice to enter all or any portion
of the Property at such times and in such manner as Lender deems necessary to
cure any such default.
          (c) The actions or payments of Lender to cure any default by Borrower
under the Ground Lease shall not remove or waive, as between Borrower and
Lender, the default that occurred under this Agreement by virtue of the default
by Borrower under the Ground Lease. All sums expended by Lender to cure any such
default shall be paid by Borrower to Lender, within ten (10) days of demand,
with interest on such sum at the rate set forth in this Agreement

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from the date such sum is expended to and including the date the reimbursement
payment is made to Lender. All such indebtedness shall be deemed to be secured
by the Mortgage.
          (d) Borrower shall notify Lender promptly in writing of the occurrence
of any material default by the lessor under the Ground Lease and the receipt by
Borrower of any notice (written or otherwise) from the Ground Lessor noting or
claiming the occurrence of any default by Borrower under the Ground Lease.
Borrower shall promptly deliver to Lender a copy of any such written notice of
default.
          (e) Borrower shall use commercially reasonable efforts to obtain from
the Ground Lessor and furnish to Lender within thirty (30) days of receipt of
written request, the estoppel certificate of the Ground Lessor stating the date
through which rent has been paid and whether or not there are any defaults
thereunder and specifying the nature of such claimed defaults, if any, provided
that Borrower shall not be required to use such commercially reasonable efforts
to obtain and deliver such certificate more frequently than once in any calendar
year.
          (f) Borrower shall within ten (10) Business Days execute, acknowledge
and deliver to Lender such instruments as may reasonably be required to permit
Lender to cure any default under the Ground Lease if not so timely cured by
Borrower or permit Lender to take such other action required to enable Lender to
cure or remedy the matter in default and preserve the security interest of
Lender under the Loan Documents with respect to the Property. Upon the failure
of Borrower to execute, acknowledge or deliver such instruments within such ten
(10) Business Day period, Borrower irrevocably appoints Lender as its true and
lawful attorney-in-fact to do any and all acts and to execute any and all
documents that are necessary to preserve any rights of Borrower under or with
respect to the Ground Lease, including, without limitation, the right to
effectuate any extension or renewal of the Ground Lease, or to preserve any
rights of Borrower whatsoever in respect of any part of the Ground Lease (and
the above powers granted to Lender are coupled with an interest and shall be
irrevocable), provided that the same do not subject Borrower to any increased
liabilities thereunder.
          (g) Notwithstanding anything to the contrary contained in this
Agreement with respect to the Ground Lease:
     (i) The lien of the Mortgage attaches to all of Borrower’s rights and
remedies at any time arising under or pursuant to Subsection 365(h) of the
Bankruptcy Code, including, without limitation, all of Borrower’s rights, as
debtor, to remain in possession of the Property.
     (ii) Borrower shall not, without Lender’s written consent, elect to treat
the Ground Lease as terminated under subsection 365(h)(l) of the Bankruptcy
Code. Any such election made without Lender’s prior written consent shall be
void.
     (iii) As security for the Debt, Borrower unconditionally assigns, transfers
and sets over to Lender all of Borrower’s claims and rights to the payment of
damages arising from any rejection by the Ground Lessor under the Bankruptcy
Code. Lender and Borrower shall proceed jointly or in the name of Borrower in
respect of any claim, suit,

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action or proceeding relating to the rejection of the Ground Lease, including,
without limitation, the right to file and prosecute any proofs of claim,
complaints, motions, applications, notices and other documents in any case in
respect of lessor under the Bankruptcy Code. This assignment constitutes a
present, irrevocable and unconditional assignment of the foregoing claims,
rights and remedies, and shall continue in effect until all of the Debt shall
have been satisfied and discharged in full. Any amounts received by Lender or
Borrower as damages arising out of the rejection of the Ground Lease as
aforesaid shall be applied to all actual out-of-pocket costs and reasonable
expenses of Lender (including, without limitation, attorney’s fees and costs)
incurred in connection with the exercise of any of its rights or remedies in
accordance with the applicable provisions of this Agreement.
     (iv) If, pursuant to subsection 365(h) of the Bankruptcy Code, Borrower
seeks to offset, against the rent reserved in the Ground Lease, the amount of
any damages caused by the nonperformance by the lessor of any of its obligations
thereunder after the rejection by the Ground Lessor under the Bankruptcy Code,
then Borrower shall not effect any offset of the amounts so objected to by
Lender. If Lender has failed to object as aforesaid within ten (10) days after
notice from Borrower in accordance with the first sentence of this subsection,
Borrower may proceed to offset the amounts set forth in Borrower’s notice.
     (v) If any action, proceeding, motion or notice shall be commenced or filed
in respect of Ground Lessor in connection with any case under the Bankruptcy
Code, Lender and Borrower shall cooperatively conduct and control any such
litigation with counsel agreed upon between Borrower and Lender in connection
with such litigation. Borrower shall, upon demand, pay to Lender all costs and
reasonable expenses (including reasonable attorneys’ fees and costs) actually
paid or actually incurred by Lender in connection with the cooperative
prosecution or conduct of any such proceedings. All such costs and expenses
shall be secured by the lien of the related Mortgage.
     (vi) Borrower shall promptly, after obtaining knowledge of such filing
notify Lender orally of any filing by or against the lessor under the Ground
Lease of a petition under the Bankruptcy Code’ Borrower shall thereafter
promptly give written notice of such filing to Lender, setting forth any
information available to Borrower as to the date of such filing, the court in
which such petition was filed, and the relief sought in such filing. Borrower
shall promptly deliver to Lender any and all notices, summonses, pleadings,
applications and other documents received by Borrower in connection with any
such petition and any proceedings relating to such petition.
          5.1.24 Hotel Operating Lease. (a) Borrower shall:
     (i) promptly perform and/or observe all of the covenants and agreements
required to be performed and observed by it under the Hotel Operating Lease and
do all things necessary to preserve and to keep unimpaired its rights
thereunder;
     (ii) promptly notify Lender of any event of default under the Hotel
Operating Lease;

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     (iii) promptly enforce the performance and observance of all of the
covenants and agreements required to be performed and/or observed by the Hotel
Operator or Hotel Owner under the Hotel Operating Lease; and
     (iv) maintain the Hotel Operating Lease in full force and effect during the
term of the Loan.
          (b) Except as expressly provided below, Borrower shall not consent to
or enter into any of the following transactions, or any combination thereof,
unless it has received written confirmation from the Rating Agencies that such
transaction or combination thereof will not result in a qualification, downgrade
or withdrawal of the then current ratings assigned to the Securities: (i) the
surrender of the Hotel Operating Lease to an unaffiliated third party, (ii) the
assignment by the Hotel Operator of its interest under the Hotel Operating
Lease, (iii) the termination or cancellation of the Hotel Operating Lease, or
(iv) any modification, change, supplement, alteration or amendment of the Hotel
Operating Lease that is not otherwise permitted by Section 5.1.20 hereof (it
being acknowledged and agreed that this Section 5.1.24(b) shall not be deemed to
give Borrower any right to enter into any modification, change, supplement,
alteration or amendment of the Hotel Operating Lease that is not otherwise
permitted by Section 5.1.20 hereof).
          Section 5.2. Negative Covenants. From the Assumption Date until
payment and performance in full of all obligations of Borrower under the Loan
Documents or the earlier release of the Lien of the Mortgage in accordance with
the terms of this Agreement and the other Loan Documents, Borrower covenants and
agrees with Lender that it will not do, directly or indirectly, any of the
following:
          5.2.1 Operation of Property. (a) Borrower shall not, without Lender’s
prior consent (which consent shall not be unreasonably withheld, conditioned or
delayed): (i) surrender, terminate or cancel the Management Agreement; provided,
that Borrower may, without Lender’s consent, replace the Manager so long as the
replacement manager is a Qualified Manager pursuant to a Replacement Management
Agreement; (ii) reduce or consent to the reduction of the term of the Management
Agreement; (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement; or (iv) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, the Management Agreement in any material respect.
          (b) Following the occurrence and during the continuance of an Event of
Default, Borrower shall not exercise any rights, make any decisions, grant any
approvals or otherwise take any action under the Management Agreement without
the prior consent of Lender, which consent may be withheld in Lender’s sole
discretion.
          5.2.2 Liens. Borrower shall not create, incur, assume or suffer to
exist any Lien on any portion of the Property or knowingly permit any such
action to be taken, except: (i) Permitted Encumbrances; (ii) Liens created by or
permitted pursuant to the Loan Documents; (iii) Liens for Taxes or Other Charges
not yet due; and (iv) Liens arising in connection with equipment leases entered
into in the ordinary course of the operation of the Property to the extent

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permitted pursuant to Section 4.1.30 hereof and clause (t) of the definition of
“Special Purpose Entity” set forth in Section 1.1 hereof.
          5.2.3 Dissolution. Borrower shall not (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, or (d) modify, amend, waive or terminate its organizational documents
or its qualification and good standing in any jurisdiction, in each case,
without obtaining the prior consent of Lender.
          5.2.4 Change in Business. Borrower shall not enter into any line of
business other than the ownership and operation of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in a material manner in activities other
than the continuance of its present business. For purposes of clarification (and
not as a sole example), Borrower’s present business includes operating a marina
at the Property, involving slips and marina club members, and changes to the
marina club membership program would not constitute a breach of this
Section 5.2.4, although under no circumstance would such members be given direct
or indirect equity or other interests in the Property under any such membership
program.
          5.2.5 Debt Cancellation. Borrower shall not cancel or otherwise
forgive or release any material claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business.
          5.2.6 Zoning. Borrower shall not initiate or consent to any zoning
reclassification of any portion of the Property or seek any variance under any
existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non-conforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation, without the prior consent of Lender not to be unreasonably withheld.
          5.2.7 Removal of FF&E. Except in the ordinary course of business,
Borrower shall not remove or transfer any material article of FF&E or other
personal property owned by Borrower used in the operation of the Property unless
the same is replaced with substantially similar FF&E, without the prior written
consent of Lender in each instance, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent Lender’s prior written approval
is required pursuant to this Section 5.2.7, Lender shall endeavor to respond to
a request for Lender’s approval within ten (10) Business Days after Borrower’s
written request therefore, delivered together with any documents or information
required to be provided by Borrower hereunder in connection with Lender’s review
of the proposed action or matter. If the correspondence from Borrower requesting
such approval contains the following statement at the top of the first page
thereof in capitalized, boldfaced, 14 point type lettering: “IF YOU FAIL TO
RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN
(10) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN”, and if Lender shall
fail to respond to or to expressly deny such request for

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approval in writing (stating in reasonable detail the reason for such
disapproval) within ten (10) Business Days after receipt of Borrower’s written
request therefor together with the documents and information required above and
any other information reasonably requested by Lender in writing prior to the
expiration of such ten (10) Business Day period in order to adequately review
the same, then Lender’s approval shall be deemed given.
          5.2.8 Principal Place of Business and Organization. Borrower shall not
change its principal place of business set forth in the introductory paragraph
of this Agreement without first giving Lender thirty (30) days prior notice.
Borrower shall not change the place of its organization as set forth in
Section 4.1.28 without the consent of Lender, which consent shall not be
unreasonably withheld. Upon Lender’s request, Borrower shall execute and deliver
additional financing statements, security agreements and other instruments which
may be necessary to effectively evidence or perfect Lender’s security interest
in the Property as a result of such change of principal place of business or
place of organization.
          5.2.9 ERISA. (a) Assuming that Lender is not, and is not lending the
assets of, an “employee benefit plan” as defined in Section 3(3) of ERISA,
Borrower shall not engage in any transaction which would cause any obligation,
or action taken or to be taken, hereunder (or the exercise by Lender of any of
its rights under the Note, this Agreement or the other Loan Documents) to be a
non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA.
          (b) Borrower shall deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as requested by
Lender in its sole discretion, that (i) Borrower is not an “employee benefit
plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii) none
of the assets of Borrower constitute “plan assets” within the meaning of
Section 3(3) of ERISA for purposes of any state law provisions regulating
investments of, or fiduciary obligations with respect to, governmental plans;
and (iii) one or more of the following circumstances is true:
     (A) Equity interests in Borrower are publicly offered securities, within
the meaning of 29 C.F.R. §2510.3-101(b)(2);
     (B) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Borrower is held by “benefit plan investors” within the meaning of
29 C.F.R. §2510.3-101(f)(2); or
     (C) Borrower qualifies as an “operating company”, a “venture capital
operating company” or a “real estate operating company” within the meaning of 29
C.F.R. §2510.3-101(c), (d) or (e).
          5.2.10 Transfers. (a) Borrower acknowledges that Lender has examined
and relied on the experience of Borrower and its general partners, members,
principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower’s ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the

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performance of the obligations contained in the Loan Documents. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the repayment of the
Debt or the performance of the obligations contained in the Loan Documents,
Lender can recover the Debt by a sale of the Property.
          (b) Without the prior consent of Lender and except to the extent
otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not
permit any Restricted Party to, (i) sell, convey, mortgage, grant, bargain,
encumber, pledge, assign, grant options with respect to, or otherwise transfer
or dispose of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) the Property or any part thereof or any legal or beneficial interest
therein, other than pursuant to Leases of space in the Improvements to tenants
in accordance with the provisions of Section 5.1.20, or (ii) permit a Sale or
Pledge of any direct or indirect interest in any Borrower or other Restricted
Party (any of the acts set forth in clause (i) or (ii) being referred to herein
collectively as a “Transfer”) except as permitted under, and subject to the
satisfaction of the conditions set forth in, Section 5.2.10(d) below.
          (c) A Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower’s right, title and interest
in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation,
any merger, consolidation or Sale or Pledge of such corporation’s stock or the
creation or issuance of new stock; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general partner or any profits or proceeds
relating to such partnership interest, or the Sale or Pledge of limited
partnership interests or any profits or proceeds relating to such limited
partnership interest or the creation or issuance of new limited partnership
interests; (v) if a Restricted Party is a limited liability company, any merger
or consolidation or the change, removal, resignation or addition of a managing
member or non-member manager (or if no managing member, any member) or the Sale
or Pledge of the membership interest of a managing member (or if no managing
member, any member) or any profits or proceeds relating to such membership
interest, or the Sale or Pledge of non-managing membership interests or the
creation or issuance of new non-managing membership interests; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; or (vii) the removal
or the resignation of the managing agent (including, without limitation, an
Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
          (d) Notwithstanding the provisions of this Section 5.2.10, the
following transfers shall not be deemed to be a Transfer and may occur without
the consent of Lender or the payment of any transfer or other fee: Transfers of
direct and/or indirect interests in Borrower and in its constituent partners,
stockholders, members and beneficiaries (including transfers between and among
such Persons), provided that (i) FelCor OP must continue to control, directly or
indirectly, on an unencumbered basis (subject to Section 5.2.10(f) below), each
Borrower and each Principal and own, directly or indirectly, at least fifty-one
percent (51%) of the equity and

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economic interests in each Borrower, (ii) FelCor REIT must at all times be the
sole general partner of and control FelCor OP and continue to own, directly or
indirectly, at least eighty percent (80%) of the equity and economic interests
in FelCor OP, (iii) each Borrower shall remain, directly or indirectly, on an
unencumbered basis (subject to Section 5.2.10(f) below), under 100% common
ownership and control by FelCor OP, (iv) Lender receives prior written notice of
any such transfer and copies of the documents transferring such interest,
provided that the foregoing requirement set forth in this subsection (iv) shall
not be applicable in the case of transfers of limited partnership interests in
FelCor OP or of publicly traded stock in FelCor REIT, and (v) if after such
transfer any Person and its Affiliates collectively owns more than forty-nine
(49%) in the aggregate of the direct and/or indirect interests of Borrower and
as of the Assumption Date such Person and its Affiliates collectively owned
forty-nine percent (49%) or less in the aggregate of the direct and/or indirect
interests of Borrower, Lender shall have received an Additional Insolvency
Opinion reasonably satisfactory to Lender and the Rating Agencies.
          (e) Notwithstanding the other provisions of this Section 5.2.10,
Transfers of one hundred percent (100%) of the direct and/or indirect interests
in Borrower or transfers of the Property, shall be permitted with Lender’s prior
written consent, which consent shall not be unreasonably withheld after
consideration of all relevant factors and provided that Borrower satisfies the
following conditions:
     (i) no Event of Default has occurred and is continuing;
     (ii) the proposed transferee (“Transferee”) shall be a reputable entity or
person of good character, creditworthy, and shall have sponsorship with
sufficient financial worth considering the obligations assumed and undertaken,
as evidenced by financial statements and other information reasonably requested
by Lender;
     (iii) the Transferee or its sponsor and its property manager shall have
sufficient experience in the ownership and management of properties similar to
the Property, and Lender shall be provided with reasonable evidence thereof (and
Lender reserves the right to approve the Transferee without approving the
substitution of the property manager);
     (iv) if a Securitization has occurred, confirmation in writing from the
Rating Agencies to the effect that such transfer will not result in a
re-qualification, reduction or withdrawal of the then current rating assigned to
the Securities or any class thereof in any applicable Securitization;
     (v) Lender shall have received evidence reasonably satisfactory to it
(which shall include a legal non-consolidation opinion reasonably acceptable to
Lender) that the single purpose nature and bankruptcy remoteness of Transferee
following such transfers are in accordance with the standards of the Rating
Agencies;
     (vi) the Transferee shall have executed and delivered to Lender an
assumption agreement in form and substance reasonably acceptable to Lender,
evidencing such Transferee’s agreement to abide and be bound by the terms of the
Note, the Mortgage and

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the other Loan Documents, together with such legal opinions and title insurance
endorsements as may be reasonably requested by Lender;
     (vii) Lender shall have received from Borrower or Transferee on or prior to
the date of the sale or transfer (A) an assumption fee equal to one percent
(1.0%) of the Loan amount, (B) a rating confirmation fee for each of the Rating
Agencies delivering a confirmation pursuant to clause (iv) above, which
confirmation fees shall be equal to the then customary fees charged by each
applicable Rating Agency for such a confirmation and (C) the payment of all
out-of-pocket third-party costs and expenses incurred by Lender, Servicer and
the Rating Agencies in connection with such assumption (including reasonable
attorneys’ fees and costs); and
     (viii) Borrower shall have provided to Lender at least thirty (30) days
prior written notice of such proposed transfer.
          (f) Notwithstanding anything to contrary contained in this Agreement,
provided that no Event of Default has occurred and is continuing, certain owners
of Borrower shall be permitted to obtain mezzanine financing (the “Subordinate
Mezzanine Loan”), which Subordinate Mezzanine Loan shall be secured by the
membership or partnership interests in Hotel Owner and/or Hotel Operator (as
applicable) or the owners of Borrower, subject to the following conditions and
requirements:
     (i) Lender’s review and approval in its reasonable discretion of the terms
and conditions of the Subordinate Mezzanine Loan and the documents evidencing
the Subordinate Mezzanine Loan, but only to the extent such review of the
documents is to confirm such terms and conditions;
     (ii) the Subordinate Mezzanine Loan shall only be payable out of any excess
cash flow from the Property;
     (iii) the Subordinate Mezzanine Loan together with the Loan (and any New
Mezzanine Loan) shall have a combined loan-to-value ratio of no greater than
eighty percent (80%);
     (iv) the lender under the Subordinate Mezzanine Loan shall enter into, and
be subject to, an intercreditor agreement in the form and substance reasonably
satisfactory to Lender in its reasonable discretion (the “Subordinate Mezzanine
Intercreditor Agreement”);
     (v) the Subordinate Mezzanine Loan shall be nonrecourse as to principal and
interest required to be paid under the Subordinate Mezzanine Loan and shall not
be secured by a lien against the Property;
     (vi) Borrower shall reimburse Lender for all reasonable out-of-pocket
expenses incurred by Lender in reviewing the Subordinate Mezzanine Loan
documents and negotiating and documenting the Subordinate Mezzanine
Intercreditor Agreement;

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     (vii) Borrower shall have obtained and delivered to Lender at Borrower’s
sole cost and expense a confirmation in writing from each of the Rating Agencies
that such Subordinate Mezzanine Loan will not result in a requalification,
reduction, downgrade or withdrawal of the ratings in effect immediately before
such Subordinate Mezzanine Loan was incurred for the Securities or any class
thereof issued in connection with a Securitization which are then outstanding;
and
     (viii) the final capital structure of the Subordinate Mezzanine Loan is
subject in all respects to the Rating Agencies’ approval and to Lender’s
reasonable approval, including, without limitation, any changes to the
organizational structure of Borrower.
          5.2.11 Ground Lease.
          (a) Borrower shall not waive, excuse, condone or in any way release or
discharge the Ground Lessor of or from such Ground Lessor’s material
obligations, covenants and/or conditions under the related Ground Lease without
the prior written consent of Lender.
          (b) Borrower shall not, without Lender’s prior written consent,
surrender, terminate, forfeit, or suffer or permit the surrender, termination or
forfeiture of, or change, modify or amend in a material or adverse manner, any
Ground Lease. Consent to one amendment, change, agreement or modification shall
not be deemed to be a waiver of the right to require consent to other, future or
successive amendments, changes, agreements or modifications. Any acquisition of
Ground Lessor’s interest in any Ground Lease by Borrower or any Affiliate of
Borrower shall be accomplished by Borrower in such a manner so as to avoid a
merger of the interests of lessor and lessee in such Ground Lease, unless
consent to such merger is granted by Lender.
          VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
          Section 6.1. Insurance. (a) Borrower shall obtain and maintain, or
cause to be maintained, insurance for Borrower and the Property providing at
least the following coverages:
     (i) comprehensive all risk insurance (including, without limitation,
windstorm coverage in form and nature of coverage reasonably acceptable to
Lender) on the Improvements and the Personal Property, including contingent
liability from Operation of Building Laws, Demolition Costs and Increased Cost
of Construction Endorsements, in each case (A) in an amount equal to one hundred
percent (100%) of the “Full Replacement Cost,” which for purposes of this
Agreement shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of
depreciation, provided that the required amount of windstorm coverage may, in
lieu of full replacement cost, be in the amount of 110% of the probable maximum
loss from windstorm perils in the event Borrower provides, at Borrower’s cost
and expense, a probable maximum loss report addressed to and reasonably
acceptable to Lender as to form, methodology (which shall include, without
limitation, an on-site engineering inspection of the Property and an analysis of
impact from storm surge and from increased labor and materials costs resulting
from catastrophic events) and content, prepared by an experienced, independent
reputable consultant reasonably approved by

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Lender (such 110% of probable maximum loss coverage limit shall be based upon
such report, as the same may be required to be updated by Lender from time to
time, but not more frequently than annually; the reasonable out-of-pocket costs
and expenses of Lender incurred in connection with any such review and updating
of any initial or updated probable maximum loss reports shall be paid by
Borrower); (B) containing an agreed amount endorsement with respect to the
Improvements and Personal Property waiving all co-insurance provisions; (C)
providing for no deductible in excess of Fifty Thousand Dollars ($50,000) for
all such insurance coverage except that the deductible for earthquake or
windstorm insurance shall not exceed five percent (5%) of the total value of the
Property and the deductible for flood insurance shall not exceed One Hundred
Thousand Dollars ($100,000); and (D) containing an “Ordinance or Law Coverage”
or “Enforcement” endorsement if any of the Improvements or the use of the
Property shall at any time constitute legal non-conforming structures or uses.
In addition, Borrower shall obtain: (x) if any portion of the Improvements is
currently or at any time in the future located in a federally designated
“special flood hazard area”, flood hazard insurance in an amount equal to the
lesser of (1) the outstanding principal balance of the Note or (2) the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended or such greater amount as Lender
shall reasonably require; and (y) earthquake insurance in a reasonable amount
based on the maximum probable loss and in form and substance reasonably
satisfactory to Lender in the event the Property is located in an area with a
high degree of seismic activity, provided that the insurance pursuant to clauses
(x) and (y) hereof shall be on terms consistent with the comprehensive all risk
insurance policy required under this subsection (i);
     (ii) commercial general liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Property, including “Dram Shop” or other liquor liability coverage if alcoholic
beverages are sold from or may be consumed at the Property, such insurance
(A) to be on the so-called “occurrence” form with a combined limit of not less
than Two Million Dollars ($2,000,000) in the aggregate and One Million Dollars
($1,000,000) per occurrence (and, if on a blanket policy, containing an
“Aggregate Per Location” endorsement); (B) to continue at not less than the
aforesaid limit until required to be changed by Lender in writing by reason of
changed economic conditions making such protection inadequate; (C) to contain a
waiver of subrogation against Lender, and (D) to cover at least the following
hazards: (1) premises and operations; (2) products and completed operations on
an “if any” basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability covering the
indemnities contained in Article 8 of the Mortgage to the extent the same is
available;
     (iii) business income insurance (A) with Lender named as loss payee;
(B) covering all risks required to be covered by the insurance provided for in
Section 6.1(a)(i) above; (C) containing an extended period of indemnity
endorsement which provides that after the physical loss to the Improvements and
Personal Property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior to
the loss, or the expiration of twelve (12) months from the date that

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the Property is repaired or replaced and operations are resumed, whichever first
occurs, and notwithstanding that the policy may expire prior to the end of such
period; and (D) in an amount equal to one hundred percent (100%) of the
projected gross income from the Property for a period of eighteen (18) months
from the date of such Casualty (assuming such Casualty had not occurred) and
notwithstanding that the policy may expire at the end of such period. The amount
of such business income insurance shall be determined prior to the date hereof
and at least once each year thereafter based on Borrower’s reasonable estimate
of the gross income from the Property for the succeeding eighteen (18) month
period. Notwithstanding anything to the contrary in Section 2.6 hereof, all
proceeds payable to Lender as its interest may appear pursuant to this
subsection shall be held by Lender and shall be applied to (I) the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note and (II) made available to Borrower to pay Operating Expenses in
accordance with the Management Agreement; provided, however, that nothing herein
contained shall be deemed to relieve Borrower of its obligations to pay the
obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such business income insurance;
     (iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Property coverage form does not otherwise apply, (A) contractor’s liability
insurance covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability insurance policy; and (B) the
insurance provided for in subsection (i) above written in a so-called builder’s
risk completed value form (1) on a non-reporting basis, (2) against all risks
insured against pursuant to subsection (i) above, (3) including permission to
occupy the Property, and (4) with an agreed amount endorsement waiving
co-insurance provisions;
     (v) if the Property includes commercial property, worker’s compensation
insurance with respect to any employees of Borrower, as required by any
Governmental Authority or Legal Requirement;
     (vi) comprehensive boiler and machinery insurance, if applicable, in
amounts as shall be reasonably required by Lender on terms consistent with the
commercial property insurance policy required under subsection (i) above;
     (vii) umbrella liability insurance in an amount not less than Ninety-Nine
Million and No/100 Dollars ($99,000,000) per occurrence on terms consistent with
the commercial general liability insurance policy required under subsection
(ii) above;
     (viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence of One Million and No/100 Dollars ($1,000,000);
     (ix) if the Property is or becomes a legal “non-conforming” use, ordinance
or law coverage and insurance coverage to compensate for the cost of demolition
or

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rebuilding of the undamaged portion of the Property along with any reduced value
and the increased cost of construction in amounts as requested by Lender;
     (x) the commercial property, commercial general liability and business
income insurance required under Sections 6.1 (a) above shall cover perils of
terrorism and acts of terrorism and Borrower shall maintain commercial property
and business income insurance for loss resulting from perils and acts of
terrorism on terms (including amounts) consistent with those required under
Sections 6.1(a) above at all times during the term of the Loan, provided,
however, if Borrower is unable to obtain such terrorism coverage under a blanket
policy, Borrower shall acquire a separate stand-alone policy providing such
coverage as is available at a premium cost up to but not in excess of two
hundred percent (200%) of the cost for such coverage as of the Closing Date,
provided that the amount of such coverage shall not be required to exceed the
amount of the Loan; and
     (xi) upon sixty (60) days’ notice, such other reasonable insurance and in
such reasonable amounts as Lender from time to time may reasonably request
against such other insurable hazards which at the time are commonly insured
against for property similar to the Property located in or around the region in
which the Property is located.
          (b) All property insurance provided for in Section 6.1(a) shall be
obtained under valid and enforceable policies (collectively, the “Policies” or
in the singular, the “Policy”), and shall be subject to the reasonable approval
of Lender. If the correspondence from Borrower requesting such approval contains
the following statement at the top of the first page thereof in capitalized,
boldfaced, 14 point type lettering: “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY
DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN THIRTY (30) BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN”, and if Lender shall fail to respond to or to
expressly deny such request for approval in writing (stating in reasonable
detail the reason for such disapproval) within thirty (30) Business Days after
receipt of Borrower’s written request therefor together with the necessary
documents and information and any other information reasonably requested by
Lender in writing prior to the expiration of such thirty (30) Business Day
period in order to adequately review the same, then Lender’s approval shall be
deemed given. The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and having a claims
paying ability rating of “A” or better (and the equivalent thereof) by at least
two (2) of the Rating Agencies rating the Securities (one of which shall be S&P
if they are rating the Securities and one of which will be Moody’s if they are
rating the Securities), or if only one Rating Agency is rating the Securities,
then only by such Rating Agency; provided, however, if five (5) or more
insurance companies issue the Policies required hereunder, and at least sixty
percent (60%) of the applicable insurance coverage is provided by insurance
companies having a claims paying ability of “A” or better (and the equivalent
thereof), then the remaining forty percent (40%) or less of the applicable
insurance coverage required hereunder may be provided by insurance companies
having a claims paying ability of “BBB” or better (and the equivalent thereof).
The Policies described in Section 6.1(a) (other than those strictly limited to
liability protection) shall designate Lender as loss payee. Not less than five
(5) Business Days prior to the expiration dates of the Policies theretofore
furnished to Lender, certificates of insurance evidencing the Policies

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accompanied by evidence satisfactory to Lender of payment of the premiums due
thereunder (the “Insurance Premiums”), shall be delivered by Borrower to Lender.
          (c) Any blanket insurance Policy shall substantially fulfill the
requirements contained herein and shall otherwise provide the same protection as
would a separate Policy insuring only the Property in compliance with the
provisions of Section 6.1(a).
          (d) All Policies provided for or contemplated by Section 6.1(a),
except for the Policy referenced in Section 6.l(a)(v), shall name Borrower as
the insured and Lender as the additional insured, as its interests may appear,
and in the case of property damage, boiler and machinery, flood and earthquake
insurance, shall contain a so-called New York standard non-contributing
mortgagee clause in favor of Lender providing that the loss thereunder shall be
payable to Lender. Any insurance maintained by Manager pursuant to the
Management Agreement shall name Borrower and Lender as additional insureds (or
mortgagee, as applicable), as their interests may appear.
          (e) All property Policies provided for in Section 6.1 shall contain
clauses or endorsements to the effect that:
     (i) no act or negligence of Borrower, or anyone acting for Borrower, or of
any tenant or other occupant, or failure to comply with the provisions of any
Policy, which might otherwise result in a forfeiture of the insurance or any
part thereof, shall in any way affect the validity or enforceability of the
insurance insofar as Lender is concerned;
     (ii) the Policies shall not be materially changed (other than to increase
the coverage provided thereby) or canceled without at least thirty (30) days’
notice to Lender; and
     (iii) Lender shall not be liable for any Insurance Premiums thereon or
subject to any assessments thereunder.
          (f) If at any time Lender is not in receipt of written evidence that
all Policies are in full force and effect, Lender shall have the right, after
five (5) Business Days written notice to Borrower, to take such reasonable
action as Lender deems necessary to protect its interest in the Property,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate. All premiums incurred by Lender
in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender within ten (10) days demand and,
until paid, shall be secured by the Mortgage and shall bear interest at the
Default Rate from the date of demand.
          Section 6.2. Casualty. If the Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall
give prompt notice of such damage to Lender and shall promptly commence and
diligently prosecute the completion of the Restoration of the Property as nearly
as possible to the condition the Property was in immediately prior to such
Casualty, with such alterations as may be reasonably approved by Lender and
otherwise in accordance with Section 6.4, provided, that if (A) Lender is
obligated to make Net Proceeds available to Borrower for purposes of restoration
in accordance with Section

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6.4, (B) Lender has received such Net Proceeds and (C) Lender has not made such
Net Proceeds available to Borrower, then Borrower shall not be required to
repair and restore the Property. It being understood, however, that Borrower
shall not be obligated to restore the Property to the precise condition of the
Property prior to such Casualty provided the Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but
shall not be obligated to make proof of loss if not made promptly by Borrower.
In addition, Lender may participate in any settlement discussions with any
insurance companies (and shall approve any final settlement) with respect to any
Casualty in which the Net Proceeds or the costs of completing the Restoration
are equal to or greater than the Restoration Threshold and Borrower shall
deliver to Lender all instruments reasonably required by Lender to permit such
participation. In the event of a Casualty in which the Net Proceeds and the
costs of completing the Restoration are each less than the Restoration
Threshold, Borrower may settle and adjust such claim without Lender’s consent or
participation.
          Section 6.3. Condemnation. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any proceeding for the Condemnation
of the Property and shall deliver to Lender copies of any and all papers served
in connection with such proceedings. Lender may participate in any such
proceedings, and Borrower shall from time to time deliver to Lender all
instruments reasonably requested by it to permit such participation. Borrower
shall, at its expense, diligently prosecute any such proceedings, and shall
consult with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking by
any public or quasi-public authority through Condemnation or otherwise
(including, but not limited to, any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall promptly commence and diligently prosecute
the Restoration of the Property and otherwise comply with the provisions of
Section 6.4, provided, that if (A) Lender is obligated to make Net Proceeds
available to Borrower for purposes of restoration in accordance with
Section 6.4, (B) Lender has received such Net Proceeds and (C) Lender has not
made such Net Proceeds available to Borrower, then Borrower shall not be
obligated to repair and restore the Property. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender
shall have the right, whether or not a deficiency judgment on the Note shall
have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.
          Section 6.4. Restoration. The following provisions shall apply in
connection with the Restoration:
          (a) If the Net Proceeds shall be less than the Restoration Threshold
and the costs of completing the Restoration shall be less than the Restoration
Threshold, the Net Proceeds will be disbursed by Lender to Borrower upon
receipt, provided that each of the conditions set forth in Section 6.4(b)(i)(A),
(B), (D), (F)(2), (3) and (4), (G), (H) and (I) are met

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and Borrower delivers to Lender a written undertaking to expeditiously commence
and to satisfactorily complete with due diligence the Restoration in accordance
with the terms of this Agreement.
          (b) If the Net Proceeds are equal to or greater than the Restoration
Threshold or the costs of completing the Restoration is equal to or greater than
the Restoration Threshold, the Net Proceeds will be held by Lender and Lender
shall make the Net Proceeds available for the Restoration in accordance with the
provisions of this Section 6.4. The term “Net Proceeds” for purposes of this
Section 6.4 shall mean: (i) the net amount of all insurance proceeds received by
Lender pursuant to Section 6.1 (a)(i), (iv), (vi), (ix) and (x) as a result of
such damage or destruction, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
same (“Insurance Proceeds”), or (ii) the net amount of the Award, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”),
whichever the case may be.
     (i) Subject to the provisions of Section 6.4(a) above, the Net Proceeds
shall be made available to Borrower for Restoration upon the approval of Lender
in its reasonable discretion that the following conditions are met:
     (A) no Event of Default shall have occurred and be continuing;
     (B) (1) in the event the Net Proceeds are Insurance Proceeds, either
(x) less than thirty percent (30%) of the total floor area of the Improvements
on the Property has been damaged, destroyed or rendered unusable as a result of
such Casualty or (y) the costs of completing the Restoration are less than forty
percent (40%) of the full replacement cost, or (2) in the event the Net Proceeds
are Condemnation Proceeds, less than ten percent (10%) of the land constituting
the Property is taken, and such land is located along the perimeter or periphery
of the Property, and no portion of the Improvements is located on such land;
     (C) intentionally omitted;
     (D) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than sixty (60) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;
     (E) Lender shall be satisfied that any operating deficits, including all
scheduled payments of principal and interest under the Note, which will be
incurred with respect to the Property as a result of the occurrence of any such
Casualty or Condemnation, whichever the case may be, will be covered out of the
aggregate amount of (l) the Net Proceeds, (2) the insurance coverage referred to
in Section 6.l(a)(iii), if applicable, and (3) by other funds of Borrower;
     (F) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) three (3) months prior to the Maturity Date
(as may be extended), (2) the earliest date required for such completion under
the terms of the

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Management Agreement, (3) such time as may be required under applicable Legal
Requirements or (4) the expiration of the insured period provided by the
insurance coverage referred to in Section 6.1(a)(iii);
     (G) the Property and the use thereof after the Restoration will be in
compliance in all material respects with and permitted under all applicable
Legal Requirements;
     (H) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;
     (I) such Casualty or Condemnation, as applicable, does not result in the
loss of access to the Property or the related Improvements;
     (J) intentionally omitted;
     (K) the Loan-to-Value Ratio, after giving effect to the Restoration, shall
be equal to or less than eighty percent (80%);
     (L) Borrower shall deliver, or cause to be delivered, to Lender a signed
detailed budget approved in writing by Borrower’s architect or engineer stating
the entire cost of completing the Restoration, which budget shall be reasonably
acceptable to Lender; and
     (M) the Net Proceeds together with any cash or cash equivalent deposited by
Borrower with Lender are sufficient in Lender’s reasonable discretion to cover
the cost of the Restoration.
     (ii) In the event the Net Proceeds are equal to or exceed the Restoration
Threshold, the Net Proceeds shall be held by Lender in an interest-bearing
account and, until disbursed in accordance with the provisions of this
Section 6.4(b), shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed by
Lender to, or as directed by, Borrower from time to time during the course of
the Restoration, upon receipt of evidence reasonably satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices
of pendency, stop orders, mechanic’s or materialman’s liens or notices of
intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Property arising out of the Restoration which have not either
been fully bonded to the satisfaction of Lender and discharged of record or in
the alternative fully insured to the satisfaction of Lender by the title company
issuing the Title Insurance Policy.
     (iii) In the event the Net Proceeds are equal to or exceed the Restoration
Threshold, all plans and specifications required in connection with the
Restoration shall be subject to prior reasonable approval by Lender and by an
independent consulting engineer selected by Lender (the “Casualty Consultant”).
Lender shall have the use of

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the plans and specifications and all permits, licenses and approvals required or
obtained in connection with the Restoration. The identity of the contractors,
subcontractors and materialmen engaged in the Restoration the cost of which is
greater than $25,000, as well as the contracts under which they have been
engaged, shall be subject to prior review and reasonable acceptance by Lender
and the Casualty Consultant. All out-of-pocket costs and expenses incurred by
Lender in connection with making the Net Proceeds available for the Restoration
including, without limitation, reasonable counsel fees and disbursements and the
Casualty Consultant’s fees, shall be paid by Borrower.
     (iv) In the event the Net Proceeds are equal to or exceed the Restoration
Threshold, in no event shall Lender be obligated to make disbursements of the
Net Proceeds in excess of an amount equal to the costs actually incurred from
time to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage”
shall mean an amount equal to ten percent (10%) of the costs actually incurred
for work in place as part of the Restoration, as certified by the Casualty
Consultant, until the Restoration has been completed. The Casualty Retainage
shall be reduced to five percent (5%) of the costs incurred for work upon
receipt by Lender of reasonably satisfactory evidence that fifty percent (50%)
of the Restoration has been completed. The Casualty Retainage shall in no event,
and notwithstanding anything to the contrary set forth above in this
Section 6.4(b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
reasonably satisfactory to Lender that the costs of the Restoration have been
paid in full or will be paid in full out of the Casualty Retainage; provided,
however, that Lender will release the portion of the Casualty Retainage being
held with respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, the
contractor, subcontractor or materialman delivers the lien waivers and evidence
of payment in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title company
issuing the Title Insurance Policy, and Lender receives an endorsement to the
Title Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.
     (v) Lender shall not be obligated to make disbursements of the Net Proceeds
more frequently than once every calendar month.

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     (vi) In the event the Net Proceeds are equal to or exceed the Restoration
Threshold, if at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the good faith opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and other
obligations under the Loan Documents.
     (vii) The excess, if any, of the Net Proceeds and the remaining balance, if
any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b) and the receipt by Lender
of evidence reasonably satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing.
          (c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) may be retained and applied by Lender in accordance with
Section 2.4.2 hereof toward the payment of the Debt whether or not then due and
payable in such order, priority and proportions as Lender in its sole discretion
shall deem proper, or, at the discretion of Lender, the same may be paid, either
in whole or in part, to Borrower for such purposes as Lender shall approve, in
its discretion. Notwithstanding anything to the contrary contained herein, if
Lender is obligated under this Agreement to disburse the Net Proceeds to
Borrower for Restoration, and if Lender fails to do so, then any obligation of
Borrower to restore or repair the Property under the Loan Documents shall not
apply until such Net Proceeds have been disbursed to Borrower.
          (d) In the event of foreclosure of the Mortgage, or other transfer of
title to the Property in extinguishment in whole or in part of the Debt all
right, title and interest of Borrower in and to the Policies that are not
blanket Policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or Lender
or other transferee in the event of such other transfer of title.
          VII. RESERVE FUNDS
          Section 7.1. Required Repair Funds.
          7.1.1 Deposits. Borrower shall perform, or course to be performed, the
maintenance, repairs, environmental remediation and PIP Requirements at the
Property as more particularly set forth on Schedule II hereto (such maintenance,
repairs and environmental remediation hereinafter, collectively, referred to as
“Required Repairs”) in accordance with all applicable provisions of the
Management Agreement. Borrower shall complete (x) the PIP

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Requirements in accordance with the applicable deadlines set forth in the
Management Agreement and (y) the Required Repairs (other than the PIP
Requirements) within twelve (12) months of the Closing Date subject to Excusable
Delay. It shall be an Event of Default under this Agreement if after notice from
Lender and a thirty (30) day cure period has elapsed or such longer period as is
reasonably necessary to effectuate such cure provided that Borrower is
diligently proceeding to cure, Borrower does not complete the Required Repairs
by the required deadline for each repair as set forth above. On the Closing
Date, Prior Owner deposited with Lender the amount of One Hundred Thousand and
No/100 Dollars ($100,000.00), which amount so deposited with Lender shall be
held by Lender in accordance with Section 7.5 hereof. Amounts so deposited shall
hereinafter be referred to as Borrower’s “Required Repair Fund” and the account
in which such amounts are held shall hereinafter be referred to as Borrower’s
“Required Repair Account”. As of the Assumption Date, the amount held in the
Required Repair Fund is $100,527.88.
          7.1.2 Release of Required Repair Funds. Lender shall disburse to
Borrower the Required Repair Funds from the Required Repair Account not later
than ten (10) Business Days after Borrower has submitted evidence of
satisfaction by Borrower of each of the following conditions: (a) Borrower shall
submit a written request for payment to Lender at least ten (10) Business Days
prior to the date on which Borrower requests such payment be made, (b) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (c) Lender shall have
received reasonably satisfactory evidence, which evidence shall include a “no
further action” letter or the equivalent letter or evidence of “case closed”
status issued by the appropriate regulatory authority, if available, that the
cleanup of the two (2) former underground storage tanks at the Property has been
completed and that the two (2) groundwater monitoring wells have been properly
abandoned.
          Section 7.2. Tax and Insurance Escrow Fund. Borrower shall pay to
Lender on each Payment Date (a) one-twelfth of the Taxes that Lender estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate with Lender sufficient funds to pay all such Taxes at least fifteen
(15) days prior to their respective dates of delinquency, and (b) one-twelfth of
the Insurance Premiums that Lender estimates will be payable for the renewal of
the coverage afforded by the Policies upon the expiration thereof in order to
accumulate with Lender sufficient funds to pay all such Insurance Premiums at
least fifteen (15) days prior to the expiration of the Policies (said amounts in
(a) and (b) above hereinafter called the “Tax and Insurance Escrow Fund”).
Lender will apply the Tax and Insurance Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Section 5.1.2
hereof and under the Mortgage. In making any payment relating to the Tax and
Insurance Escrow Fund, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax and Insurance Escrow Fund shall exceed the amounts due for Taxes and
Insurance Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax and Insurance Escrow Fund. To the extent
sufficient amounts have been deposited into the Tax and Insurance Escrow Fund
with Lender in compliance with this Section 7.2, it shall not be an Event of
Default if the Insurance Premiums and/or the Taxes are not paid due to Lender’s
failure to apply such

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amounts to the payment of the Insurance Premiums and the Taxes on the respective
dates on which each are due provided that Borrower has not impeded Lender’s
attempt to pay such Insurance Premiums or Taxes. Any amount remaining in the Tax
and Insurance Escrow Fund after the Debt has been paid in full shall be returned
to Borrower. In allocating such excess, Lender may deal with the Person shown on
the records of Lender to be the owner of the Property. If at any time Lender
reasonably determines that the Tax and Insurance Escrow Fund is not or will not
be sufficient to pay Taxes and Insurance Premiums by the dates set forth in
(a) and (b) above, Lender shall notify Borrower of such determination and
Borrower shall increase its monthly payments to Lender by the amount that Lender
reasonably estimates is sufficient to make up the deficiency at least thirty
(30) days prior to the date of delinquency of the Taxes and/or thirty (30) days
prior to expiration of the Policies, as the case may be. Notwithstanding the
foregoing provisions of this Section 7.2, provided that the Manager of the
Property is the Marriott Manager (or an Approved Qualified Manager) and such
Marriott Manager (or Approved Qualified Manager) is required to reserve for and
pay all Taxes and Insurance Premiums pursuant to the terms of the Management
Agreement, then Borrower shall not be required to make any deposits to the Tax
and Insurance Escrow Fund. Borrower shall provide Lender with evidence
reasonably satisfactory to Lender that all applicable Taxes and Insurance
Premiums have been paid when due.
          Section 7.3. Replacements and Replacement Reserve.
          7.3.1 Replacement Reserve Fund. Borrower shall pay (or cause Manager
to pay) to Lender on each Payment Date an amount equal to four percent (4%) of
Gross Income from Operations for the calendar month occurring two (2) calendar
months prior to the calendar month of the applicable Payment Date on which such
deposit is required (the “Replacement Reserve Monthly Deposit”) to be applied in
accordance with this Agreement to the costs of FF&E Expenditures and FF&E
Expenditures Work required to be made to the Property during the calendar year
(collectively, the “Replacements”). Amounts so deposited shall hereinafter be
referred to as Borrower’s “Replacement Reserve Fund” and the account in which
such amounts are held shall hereinafter be referred to as Borrower’s
“Replacement Reserve Account”. Notwithstanding the foregoing, provided that the
Manager of the Property is the Marriott Manager (or an Approved Qualified
Manager) and such Marriott Manager (or Approved Qualified Manager, as
applicable) is reserving for the Replacements under the Management Agreement,
then Borrower shall not be required to make the Replacement Reserve Monthly
Deposits. Borrower shall provide Lender with evidence reasonably satisfactory to
Lender that the Marriott Manager (or Approved Qualified Manager, as applicable)
is reserving such amounts.
          7.3.2 Disbursements from Replacement Reserve Account. If such
Replacement Reserve Fund is required, Lender shall make disbursements from the
Replacement Reserve Fund as requested by Borrower or Manager, and reasonably
approved by Lender, which approval shall not be unreasonably conditioned,
withheld or delayed, no more frequently than once in any thirty (30) day period
of no less than Five Thousand Dollars ($5,000) upon delivery by Borrower or
Manager of Lender’s standard form of draw request accompanied by information of
the type set forth on the sample reserve disbursement request schedule attached
hereto as Schedule VII, copies of paid invoices for the amounts requested (with
respect to requests in excess of Fifty Thousand Dollars ($50,000) for a single
item) and, if required by Lender for requests in excess of One Hundred Thousand
Dollars ($100,000) for a single item, lien waivers

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and releases from all parties furnishing materials and/or services in connection
with the requested payment. Lender may require an inspection of the Property at
Borrower’s expense prior to making a monthly disbursement in order to verify
completion of replacements and repairs of items in excess of Two Hundred Fifty
Thousand Dollars ($250,000) for which reimbursement is sought. Lender shall
cause the disbursement of the applicable Replacement Reserve Funds within five
(5) Business Days after receipt of Borrower’s or Manager’s request and all
required documentation. Notwithstanding the foregoing, Lender’s approval of any
disbursement from the Replacement Reserve Fund shall not be required and none of
the foregoing conditions shall be applicable if (a) the Replacement for which
such disbursement is sought is set forth in the Annual Budget, as approved by
Lender, if and to the extent, required hereunder and (b) the cost of such
Replacement does not cause such Annual Budget, as a whole, to deviate by more
than five percent (5%).
          7.3.3 Balance in the Replacement Reserve Account. The insufficiency of
any balance in the Replacement Reserve Account shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.
          7.3.4 Debt Service Reserve. On the Closing Date, Prior Owner deposited
with Lender the amount of $1,000,000.00, which amount so deposited with Lender,
together with any additional deposits with Lender pursuant to
Section 2.5.2(b)(vi)(A) hereof, shall be held by Lender in accordance with
Section 7.5 hereof. As of the Assumption Date, the amount held in the Debt
Service Reserve Fund is $88.55. Amounts so deposited shall hereinafter be
referred to as Borrower’s “Debt Service Reserve Fund” and the account in which
such amounts are held shall hereinafter be referred to as Borrower’s “Debt
Service Reserve Account”. Provided no Event of Default exists and is continuing,
in the event on any Payment Date the funds available in the Cash Management
Account for application on such Payment Date pursuant to Section 2.5.2(b)(ii)
are not sufficient to fund the Monthly Debt Service Amount on such Payment Date
in full (the amount of insufficiency being herein referred to as the “Payment
Date Deficiency” for such Payment Date), then to the extent of funds available
in the Debt Service Reserve Account, Lender shall authorize the transfer on such
Payment Date from the Debt Service Reserve Account to the Cash Management
Account, for application on such Payment Date pursuant to Section 2.5.2(b)(ii)
to satisfy the Payment Date Deficiency. To the extent sufficient amounts are
available in the Debt Service Reserve Account in accordance with this
Section 7.4.3 and Lender is required hereunder to so authorize a transfer on
such Payment Date of funds from the Debt Service Reserve Account to the Cash
Management Account to satisfy the Payment Date Deficiency but Lender fails to so
authorize the same, it shall not be a default or an Event of Default if such
Payment Date Deficiency is not paid due to such failure by Lender and,
accordingly, no late charges or default interest shall be payable by Borrower.
When the Property shall have achieved the Debt Service Coverage Ratio Threshold,
then provided no Event of Default exists and is continuing, the balance of the
Debt Service Reserve Fund shall be disbursed to Borrower. The Debt Service
Coverage Ratio shall be determined as of the end of each calendar quarter upon
receipt by Lender from Borrower of such information and documentation concerning
operating results at the Property as Lender may reasonably require to determine
the same.
          Section 7.4. Ground Lease Reserve Fund.

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          7.4.1 Deposits to Ground Lease Fund. On each Payment Date, Borrower or
Manager shall pay to Lender one-twelfth of the rents (including both base and
additional rents) and other charges due under the Ground Lease that Lender
reasonably estimates will be payable by Borrower as lessee under the Ground
Lease (collectively, the “Ground Rent”) during the next ensuing twelve
(12) months in order to accumulate with Lender sufficient funds to pay all such
Ground Rent at least ten (10) Business Days prior to the respective due dates.
Amounts so deposited shall hereinafter be referred to as the “Ground Lease
Reserve Fund” and the account in which such amounts are held shall hereinafter
be referred to as the “Ground Lease Reserve Account”. Notwithstanding the
foregoing, provided that (a) the Manager of the Property is the Marriott Manager
(or an Approved Qualified Manager) and such Marriott Manager (or Approved
Qualified Manager, as applicable) is reserving for the Ground Rent pursuant to
the terms of the Management Agreement, and (b) Borrower has deposited with
Lender on the Closing Date an amount equal to one month of the Ground Rent due
under the Ground Lease (the “Ground Rent Deposit”), then Borrower shall not be
required to make the deposits for Ground Rent into the Ground Lease Reserve
Account. Borrower shall provide Lender with evidence reasonably satisfactory to
Lender that the Ground Rent has been paid when due.
          7.4.2 Release of Ground Lease Reserve Fund. If such Ground Lease
Reserve Fund is required, Lender shall apply amounts in the Ground Lease Reserve
Fund to the payment of the Ground Rent. In making any payment relating to the
Ground Rent, Lender shall do so according to the terms of the Ground Lease or
any bill, statement or estimate procured from the lessor under the Ground Lease,
and may do so without inquiry into the accuracy of such bill, statement or
estimate. If the amount of Ground Lease Reserve Funds shall exceed the amounts
due for the Ground Rent under the Ground Lease for the immediately succeeding
twelve (12) months as determined by Lender, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Ground Lease Reserve Fund. Any amounts remaining in
the Ground Lease Reserve Fund after the Debt has been paid in full shall be
returned to Borrower. If at any time Lender reasonably determines that the
Ground Lease Reserve Fund is not or will not be sufficient to pay the Ground
Rent by the dates set forth above, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to Lender by the
amount that Lender reasonably estimates is sufficient to make up the deficiency
at least thirty (30) days prior to the due date of the Ground Rent. If a Ground
Lease Reserve Fund is required pursuant to this Section 7.4 and provided that
there are sufficient funds on deposit in the Ground Lease Reserve Account,
Lender shall be responsible for any late fees, penalties or interest resulting
from Lender’s failure to apply amounts on deposit in the Ground Lease Reserve
Account to the payment of Ground Rent on or before the date due under the Ground
Lease.
          Section 7.5. Reserve Funds, Generally. (a) Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds held by
Lender and any and all monies now or hereafter deposited in each Reserve Fund as
additional security for payment of the Debt. Until expended or applied in
accordance herewith, the Reserve Funds shall constitute additional security for
the Debt. Upon the occurrence and continuance of an Event of Default and
acceleration of the Loan as a result thereof, Lender may, in addition to any and
all other rights and remedies available to Lender, apply any sums then present
in any or all of the Reserve Funds to the payment of the Debt in any order in
its sole discretion. The Reserve Funds shall not constitute trust funds and may
be commingled with other monies held by Lender. Borrower shall

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not, without obtaining the prior consent of Lender, further pledge, assign or
grant any security interest in any Reserve Fund or the monies deposited therein
or permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto.
          (b) The Reserve Funds shall be held in an Eligible Account in
Permitted Investments pursuant to the Cash Management Agreement. All interest or
other earnings on a Reserve Fund (with the exception of the Tax and Insurance
Escrow Fund) shall be added to and become a part of such Reserve Fund and shall
be disbursed in the same manner as other monies deposited in such Reserve Fund.
Borrower shall have the right to direct Lender to invest sums on deposit in the
Eligible Account in Permitted Investments provided (i) such investments are then
regularly offered by Lender for accounts of this size, category and type,
(ii) such investments are permitted by applicable federal, state and local
rules, regulations and laws, (iii) the maturity date of the Permitted Investment
is not later than the date on which the applicable Reserve Funds are required
for payment of an obligation for which such Reserve Fund was created, and
(iv) no Event of Default shall have occurred and be continuing. Borrower shall
be responsible for payment of any federal, state or local income or other tax
applicable to the interest or income earned on the Reserve Funds (with the
exception of the Tax and Insurance Escrow Fund). No other investments of the
sums on deposit in the Reserve Funds shall be permitted except as set forth in
this Section 7.5. Borrower shall bear all reasonable costs associated with the
investment of the sums in the account in Permitted Investments. Such costs shall
be deducted from the income or earnings on such investment, if any, and to the
extent such income or earnings shall not be sufficient to pay such costs, such
costs shall be paid by Borrower promptly on demand by Lender. Lender shall have
no liability for the rate of return earned or losses incurred on the investment
of the sums in Permitted Investments.
          (c) Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, third party claims, demands, liabilities,
actual losses, actual damages (excluding lost profits, diminution in value and
other consequential damages), obligations and reasonable costs and expenses
(including litigation costs and reasonable attorneys fees and expenses) arising
from or in any way connected with the Reserve Funds held by Lender or the
performance of the obligations for which the Reserve Funds were established,
excluding matters arising from Lender’s or its agents’ fraud, willful
misconduct, illegal acts or gross negligence. Borrower shall assign to Lender
all rights and claims Borrower may have against all Persons supplying labor,
materials or other services which are to be paid from or secured by the Reserve
Funds; provided, however, that Lender may not pursue any such right or claim
unless an Event of Default has occurred and remains uncured.
          VIII. DEFAULTS
          Section 8.1. Event of Default. (a) Each of the following events shall
constitute an event of default hereunder (an “Event of Default”):
     (i) if (A) any monthly installment of interest due under this Agreement and
the Note or the payment in full of the Debt due on the Maturity Date is not paid
when due or (B) any other portion of the Debt is not paid when due and such
non-payment in this

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Section 9.1(a)(i)(B) continues for three (3) Business Days following notice to
Borrower that the same is due and payable;
     (ii) if any of the Taxes or Other Charges are not paid when the same are
due and payable subject to Section 7.2 hereof;
     (iii) if the Policies are not kept in full force and effect;
     (iv) if Borrower Transfers or otherwise encumbers any portion of the
Property without Lender’s prior consent in violation of the provisions of this
Agreement or Article 6 of the Mortgage and, if such breach is susceptible to
cure, has not been cured within ten (10) Business Days of notice thereof;
     (v) if any representation or warranty made by Borrower herein or in any
other Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made, provided, however, if such representation or warranty is susceptible
of being cured, Borrower shall have the right to cure such representation or
warranty within ten (10) Business Days of notice thereof;
     (vi) if Borrower, Principal or Sponsor shall make an assignment for the
benefit of creditors;
     (vii) if a receiver, liquidator or trustee shall be appointed for Borrower,
Principal or Sponsor, or if Borrower, Principal or Sponsor shall be adjudicated
a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower,
Principal or Sponsor, or if any proceeding for the dissolution or liquidation of
Borrower, Principal or Sponsor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower, Principal or Sponsor, upon the same not being
discharged, stayed or dismissed within ninety (90) days;
     (viii) if Borrower attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
     (ix) if Borrower breaches any of its respective negative covenants
contained in Section 5.2 or any covenant contained in Section 4.1.30 or Section
5.1.11 hereof, provided, however, that a breach of any covenant contained in
Section 4.1.30, Section 5.1.11 or in Section 5.2 shall not constitute an Event
of Default if (A) such breach is inadvertent and non-recurring, (B) if such
breach is curable, Borrower shall promptly cure such breach within thirty
(30) days after notice thereof from Lender, and (C) with respect to a material
breach of any material covenant contained in Section 4.1.30, within fifteen
(15) Business Days of the request of Lender, Borrower delivers to Lender an
Additional Insolvency Opinion, or a modification of the Insolvency Opinion, to
the effect that such breach shall not in any way impair, negate or amend the
opinions rendered in

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the Insolvency Opinion, which opinion or modification any counsel delivering
such opinion or modification shall be acceptable to Lender in its reasonable
discretion;
     (x) with respect to any term, covenant or provision set forth herein which
specifically contains a notice requirement or grace period, if Borrower shall be
in default under such term, covenant or condition after the giving of such
notice or the expiration of such grace period;
     (xi) if any of the assumptions contained in the Insolvency Opinion
delivered to Lender in connection with the Loan, or in the Additional Insolvency
Opinion delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect;
     (xii) if a material default by Borrower has occurred and continues beyond
any applicable cure period under the Management Agreement (or any Replacement
Management Agreement) and as a result of such default Manager thereunder
terminates or cancels the Management Agreement (or any Replacement Management
Agreement);
     (xiii) if Borrower fails to comply in any material respect with the
covenants as to Prescribed Laws set forth in Section 5.1.1 hereof and such
failure to comply continues after ten (10) Business Days notice thereof;
     (xiv) if (A) a material breach or default by Borrower under any condition
or obligation contained in the Ground Lease is not cured within any applicable
cure period provided therein, (B) the Ground Lease Property shall be surrendered
or the Ground Lease shall be terminated or cancelled for any reason or under any
circumstances whatsoever, or (C) any of the terms, covenants or conditions of
the Ground Lease shall in any manner be modified, changed, supplemented,
altered, or amended in any material respect without the prior written consent of
Lender;
     (xv) if Borrower ceases to do business as a hotel at the Property or
terminates such business for any reason whatsoever (other than temporary
cessation in connection with any diligent Restoration of the Property following
a Casualty or Condemnation);
     (xvi) if Borrower shall continue to be in Default under any of the other
terms, covenants or conditions of this Agreement not specified in subsections
(i) to (xv) above, for ten (10) Business Days after notice to Borrower from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such thirty (30) day period and
provided further that Borrower shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds
to cure the same, such thirty (30) day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed ninety (90) days, subject to
Excusable Delay; or
     (xvii) if there shall be Default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents (or thirty
(30) days if no such

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cure period is specified), whether as to Borrower or the Property, or if any
other such event shall occur or condition shall exist, if the effect of such
event or condition is to accelerate the maturity of any portion of the Debt or
to permit Lender to accelerate the maturity of all or any portion of the Debt.
          (b) Upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default described in clauses (vi), (vii) or
(viii) above) and at any time thereafter, in addition to any other rights or
remedies available to it pursuant to this Agreement and the other Loan Documents
or at law or in equity, Lender may take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in and to the Property, including, without limitation, declaring the Debt to
be immediately due and payable, and Lender may enforce or avail itself of any or
all rights or remedies provided in the Loan Documents against Borrower and the
Property, including, without limitation, all rights or remedies available at law
or in equity; and upon any Event of Default described in clauses (vi), (vii) or
(viii) above, the Debt and all other obligations of Borrower hereunder and under
the other Loan Documents shall immediately and automatically become due and
payable, without notice or demand, and Borrower hereby expressly waives any such
notice or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
          Section 8.2. Remedies. (a) Upon the occurrence and during the
continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower under
this Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents. Any such actions taken by Lender shall
be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents. Without limiting the generality of the foregoing, Borrower agrees
that if an Event of Default is continuing (i) Lender is not subject to any “one
action” or “election of remedies” law or rule, and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted all of its remedies against the Property and
the Mortgage has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.
          (b) Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder, provided that Borrower’s
liability or obligation shall not be increased by such severance. Borrower shall
execute and deliver to Lender from time to time, promptly after the request of
Lender, a severance agreement and such other documents as Lender shall
reasonably request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender. Borrower
hereby absolutely and irrevocably appoints Lender

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as its true and lawful attorney, coupled with an interest, in its name and stead
to make and execute all documents necessary or desirable to effect the aforesaid
severance, Borrower ratifying all that its said attorney shall do by virtue
thereof; provided, however, Lender shall not make or execute any such documents
under such power until five (5) Business Days after notice has been given to
Borrower by Lender of Lender’s intent to exercise its rights under such power.
Except as may be required in connection with a Securitization and expressly
provided pursuant to Section 9.1 hereof, (i) Borrower shall not be obligated to
pay any costs or expenses incurred in connection with the preparation,
execution, recording or filing of the Severed Loan Documents, and (ii) the
Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents (modified to reflect the current
status of such representations and warranties) and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Assumption Date.
          (c) Remedies Cumulative; Waivers. The rights, powers and remedies of
Lender under this Agreement shall be cumulative and not exclusive of any other
right, power or remedy which Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued singularly,
concurrently or otherwise, at such time and in such order as Lender may
determine in Lender’s sole discretion. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one Default or Event of Default with respect to
Borrower shall not be construed to be a waiver of any subsequent Default or
Event of Default by Borrower or to impair any remedy, right or power consequent
thereon.
          IX. SPECIAL PROVISIONS
          Section 9.1. Sale of Note and Securitization. Borrower acknowledges
and agrees that the Lender may sell all or any portion of the Loan and the Loan
Documents, or issue one or more participations therein, or consummate one or
more private or public securitizations of rated single- or multi-class
securities (the “Securities”) secured by or evidencing ownership interests in
all or any portion of the Loan and the Loan Documents or a pool of assets that
include the Loan and the Loan Documents (such sales, participations and/or
securitizations, collectively, a “Securitization”). At the request of Lender,
and to the extent not already required to be provided by Borrower under this
Agreement, Borrower shall use commercially reasonable good faith efforts to
provide existing information not in the possession of Lender or which may be
reasonably required by Lender (excluding any confidential information concerning
Marriott Manager as required by the terms of the Management Agreement or
Sponsor’s Constituent Members) in order to satisfy the market standards to which
Lender customarily adheres or which may be reasonably required by prospective
investors and/or the Rating Agencies in connection with any such Securitization
including, without limitation, to:
          (a) provide updated Provided Information or other existing information
with respect to the Property, together with appropriate verification and/or
consents related to the Provided Information through letters of auditors or
opinions of counsel of independent attorneys reasonably acceptable to Lender and
the Rating Agencies;

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          (b) review descriptive materials for presentations to any or all of
the Rating Agencies, and work with, third-party service providers engaged to
obtain, collect, and deliver information reasonably requested or reasonably
required by Lender, prospective investors or the Rating Agencies;
          (c) if required by any Rating Agency, deliver (i) updated opinions of
counsel as to non-consolidation, due execution and enforceability with respect
to the Property, Borrower, the Principal and the Loan Documents, and (ii) amend
the Special Purpose Entity provisions of the organizational documents for
Borrower, which counsel opinions and amendments to the organizational documents
shall be reasonably satisfactory to Lender and the Rating Agencies;
          (d) provide updated representations and warranties made in the Loan
Documents as are customarily provided in securitization transactions as may be
reasonably requested by Lender or the Rating Agencies and consistent with the
facts covered by such representations and warranties made in the Loan Documents
to the extent they are true as of the closing of the Securitization;
          (e) execute such amendments to the Loan Documents as may be reasonably
requested by Lender or the Rating Agencies to effect the Securitization and/or
deliver one or more new component notes to replace the original note or modify
the original note to reflect multiple components of the Loan (and such new notes
or modified note shall have the same initial weighted average coupon of the
original note, but such new notes or modified note may change the interest rate
of the Loan), provided, however, that (i) such new notes or modified note will
not change the interest rate, the stated maturity or the amortization of
principal set forth in the Note unless the varying interest rates shall have the
same initial weighted average coupon of the original Note, (ii) such amendments
to the Loan Documents or the new notes or modified note will not modify or amend
any other economic or material term of the Loan in a manner adverse to Borrower
or its Constituent Members, or (iii) such amendments to the Loan Documents will
not materially increase Borrower’s obligations and liabilities under the Loan
Documents or materially decrease the rights of Borrower under the Loan
Documents;
          (f) if requested by Lender, review any information regarding the
Property, Borrower, Principal, the Manager and the Loan which is contained in a
preliminary or final private placement memorandum, prospectus, prospectus
supplement (including any amendment or supplement to either thereof), or other
disclosure document to be used by Lender or any affiliate thereof; and
          (g) supply to Lender such existing documentation, financial statements
and reports of Borrower in form and substance required in order to comply with
any applicable securities laws.
          Lender shall pay all reasonable third party costs and expenses
(excluding fees and expenses of Borrower’s legal counsel) in excess of Five
Thousand Dollars ($5,000) incurred by Borrower in connection with Borrower’s
complying with requests made under this Section 9.1 and/or under Section 9.1.2
hereof, provided, however, the fees and expenses of Borrower’s legal counsel and
Borrower’s administrative costs shall not be included in such amount and
Borrower

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shall remain at all times responsible for the fees and expenses of its legal
counsel and its own administrative costs.
          9.1.2 Mezzanine Loans. Notwithstanding the provisions of Section 9.1
to the contrary and subject to the cap on costs and expenses set forth in the
last paragraph thereof, Borrower covenants and agrees that after the Closing
Date and prior to a Securitization, Lender shall have the right after reasonable
consultation with Borrower to create one or more additional mezzanine loans
(each, a “New Mezzanine Loan”), to establish different interest rates and to
reallocate principal balances of each of the Loan and any New Mezzanine Loan(s)
amongst each other and to require the payment of the Loan and any New Mezzanine
Loan(s) in such order of priority as may be designated by Lender; provided, that
(i) in no event shall (A) the weighted average spread of the Loan and any New
Mezzanine Loan(s) following any such reallocation or modification change from
the weighted average spread for all in effect immediately preceding such
reallocation, modification or creation of any New Mezzanine Loan(s) and (B) the
Loan be subject to any interest rate floor, and (ii) such New Mezzanine Loan(s)
will not materially increase Borrower’s obligations and liabilities under the
Loan Documents or materially decrease the rights of Borrower under the Loan
Documents (other than, in each case, administratively or in a de minimus
respect). Borrower shall execute and deliver such documents as shall reasonably
be required by Lender as promptly as possible under the circumstances in
connection with this Section 9.1.2, all in form and substance reasonably
satisfactory to Borrower, Lender and the Rating Agencies, including, without
limitation, in connection with the creation of any New Mezzanine Loan, a
promissory note and loan documents necessary to evidence such New Mezzanine
Loan, and Borrower shall execute such amendments to the Loan Documents as are
necessary in connection with the creation of such New Mezzanine Loan all of
which shall be on substantially the same terms and conditions as the Loan
Documents. In addition, Borrower shall cause the formation of one or more
special purpose, bankruptcy remote entities as required by Lender in order to
serve as the borrower under any New Mezzanine Loan (each, a “New Mezzanine
Borrower”) and the applicable organizational documents of Borrower shall be
amended and modified as necessary or required in the formation of any New
Mezzanine Borrower. Further, in connection with any New Mezzanine Loan, Borrower
shall deliver to Lender opinions of legal counsel, in substantially the same
form as were delivered in connection with the Loan, with respect to due
execution, authority and enforceability of the New Mezzanine Loan and the Loan
Documents, as amended and an Additional Insolvency Opinion for the Loan and a
substantive non-consolidation opinion with respect to any New Mezzanine Loan,
each as reasonably acceptable to Lender, prospective investors and/or the Rating
Agencies.
          Section 9.2. Securitization Indemnification. (a) Borrower understands
that information provided to Lender by Borrower and its agents, counsel and
representatives may be included in Disclosure Documents in connection with the
Securitization and may also be included in filings with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
“Securities Act”), or the Securities and Exchange Act of 1934, as amended (the
“Exchange Act”), and may be made available to investors or prospective investors
in the Securities, the Rating Agencies, and service providers relating to the
Securitization. Notwithstanding the foregoing, Lender and its agents shall keep
confidential such information specifically identified by Borrower as being
subject to confidentiality provisions set forth in the Management Agreement and,
without limitation on the foregoing, no reference to Marriott Manager, any
Affiliate of Marriott Manager, or any “Renaissance Trademark” (as defined in the

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Marriott Management Agreement) shall be made in any prospectus, private
placement memorandum, offering circular or offering documentation related
thereto issued which is designed to interest potential investors in debt or
equity securities related to the Property, unless Marriott Manager has given its
prior written approval to each such reference, which Marriott Manager may
withhold in its sole and absolute discretion.
          (b) Upon Lender’s reasonable request, Borrower shall provide in
connection with each of (i) a preliminary and a final private placement
memorandum or (ii) a preliminary and final prospectus or prospectus supplement,
as applicable, an agreement (A) certifying that Borrower has examined such
Disclosure Documents specified by Lender and that to Borrower’s actual
knowledge, each such Disclosure Document, as it relates to Borrower, Borrower
Affiliates, the Property and Manager, does not contain any untrue statement of a
material fact or omit to state a material fact in Borrower’s actual knowledge
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not materially misleading,
(B) indemnifying Lender (and for purposes of this Section 9.2, Lender hereunder
shall include its officers and directors), the Affiliate of Lender that has
filed the registration statement relating to the Securitization (the
“Registration Statement”), each of its directors, each of its officers who have
signed the Registration Statement and each Person that controls the Affiliate
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Lender Group”), and Lender, and any other
placement agent or underwriter with respect to the Securitization, each of their
respective directors and each Person who controls Lender or any other placement
agent or underwriter within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any
out-of-pocket losses, third party claims, actual damages (but not lost revenues,
diminution in value and other consequential damages) or liabilities
(collectively, the “Liabilities”) to which Lender, the Lender Group or the
Underwriter Group may become subject insofar as the Liabilities arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such sections known by Borrower to be untrue or arise out of
or are based upon the omission or alleged omission to state therein a material
fact in Borrower’s actual knowledge, required to be stated in such sections or
necessary in order to make the statements in such sections, in light of the
circumstances under which they were made, not misleading and (C) agreeing to
reimburse Lender, the Lender Group and/or the Underwriter Group for any
reasonable legal or other reasonable expenses reasonably incurred by Lender, the
Lender Group and the Underwriter Group in connection with investigating or
defending the Liabilities; provided, however, that Borrower will be liable in
any such case under clauses (B) or (C) above only to the extent that any such
loss claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by Borrower in connection with the preparation
of the Disclosure Document or in connection with the underwriting or closing of
the Loan, including, without limitation, financial statements of Borrower,
operating statements and rent rolls with respect to the Property.
Notwithstanding anything to the contrary herein, if there is a lawsuit based
upon an alleged untrue statement or an alleged omission and such allegations are
proved to be untrue pursuant to a final court order which is unappealable,
Borrower shall not be responsible for the legal fees incurred by Lender, Lender
Group and the Underwriter Group. This indemnity agreement will be in addition to
any liability which Borrower may otherwise have.

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          (c) In connection with Exchange Act Filings, Borrower shall
(i) indemnify Lender, the Lender Group and the Underwriter Group for Liabilities
to which Lender, the Lender Group or the Underwriter Group may become subject
insofar as the Liabilities arise out of or are based upon the omission or
alleged omission to state in the Disclosure Document a material fact in
Borrower’s actual knowledge, required to be stated in the Disclosure Document in
order to make the statements in the Disclosure Document, in light of the
circumstances under which they were made, not misleading and (ii) reimburse
Lender, the Lender Group or the Underwriter Group for any reasonable legal or
other expenses reasonably incurred by Lender, the Lender Group or the
Underwriter Group in connection with defending or investigating the Liabilities.
Notwithstanding anything to the contrary contained herein, if there is a lawsuit
based upon an alleged untrue statement or an alleged omission and such
allegations are proved to be untrue pursuant to a final court order which is
unappealable, Borrower shall not be responsible for the legal fees incurred by
Lender, Lender Group and the Underwriter Group.
          (d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party under this Section 9.2, such indemnified party shall
pay for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
          (e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to an indemnified party in
respect of any Liabilities (or action in respect thereof) referred to therein
which would otherwise be indemnifiable under Section 9.2(b) or (c), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall

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be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) Lender’s and Borrower’s relative knowledge and access to information
concerning the matter with respect to which the claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances.
          (f) Subject to the provisions of Section 9.4 hereof, the liabilities
and obligations of both Borrower and Lender under this Section 9.2 shall survive
the termination of this Agreement and the satisfaction and discharge of the
Debt.
          Section 9.3. Intentionally Omitted.
          Section 9.4. Exculpation. Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note, this Agreement, the Mortgage or
the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Borrower, except that Lender may bring a foreclosure
action, an action for specific performance or any other appropriate action or
proceeding to enable Lender to enforce and realize upon its interest under the
Note, this Agreement, the Mortgage and the other Loan Documents, or in the
Property, the Rents, or any other collateral given to Lender pursuant to the
Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall be enforceable against
Borrower only to the extent of Borrower’s interest in the Property, in the Rents
and in any other collateral given to Lender, and Lender, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, agrees that it shall
not sue for, seek or demand any deficiency judgment against Borrower in any such
action or proceeding under, or by reason of, or in connection with, the Note,
this Agreement, the Mortgage or the other Loan Documents. The provisions of this
Section shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) impair the right of Lender to
obtain the appointment of a receiver; (d) impair the enforcement of the
Assignment of Leases; (e) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(f) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage (excluding any lost revenue, diminution of value and other
consequential damages), reasonable cost, reasonable expense, liability, claim or
other obligation incurred by Lender (including attorneys’ fees and costs
reasonably incurred) arising out of or in connection with the following:
     (i) fraud or intentional misrepresentation by Borrower in connection with
the Loan;
     (ii) physical damage to the Property arising from intentional, active waste
of Borrower;

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     (iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity Agreement or in the
Mortgage concerning environmental laws, hazardous substances and asbestos and
any indemnification of Lender with respect thereto in either document;
     (iv) the removal or disposal of any portion of the Property in violation of
this Agreement or the other Loan Documents after an Event of Default;
     (v) the misappropriation or conversion by Borrower of (A) any Insurance
Proceeds paid by reason of any Casualty, to the extent so misappropriated or
converted, (B) any Awards received in connection with a Condemnation, to the
extent so misappropriated or converted, (C) any Rents following and during the
continuance of an Event of Default, or (D) any Rents paid more than one
(1) month in advance in violation of this Agreement or the other Loan Documents,
to the extent so misappropriated or converted; and
     (vi) any Liens on any portion of the Property with priority over or equal
to the Lien of the Loan Documents, in violation of this Agreement or the other
Loan Documents.
          Notwithstanding anything to the contrary in this Agreement, the Note
or any of the Loan Documents, (A) Lender shall not be deemed to have waived any
right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt secured by the Mortgage or to require that all collateral shall
continue to secure all of the Debt owing to Lender in accordance with the Loan
Documents, and (B) the Debt shall be fully recourse to Borrower (i) in the event
of: (a) Borrower filing a voluntary petition under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law; (b) Borrower soliciting or
causing to be solicited petitioning creditors to file a petition against
Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (c) Borrower consenting in advance of the filing of a petition
with its creditors to any involuntary petition filed against it under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; or
(d) Borrower colluding with any Person other than Lender with respect to the
filing of involuntary insolvency proceedings against Borrower; or (e) Borrower
voluntarily making an assignment for the benefit of creditors; (ii) if Borrower
fails to maintain its status as a Special Purpose Entity as required by, and in
accordance with, the terms and provisions of the Loan Documents to the extent
the same results in a consolidation of assets of Borrower with another Person;
(iii) if Borrower fails to obtain Lender’s prior consent to any subordinate
financing or other voluntary Lien encumbering the Property if such consent is
required under the Loan Documents; or (iv) if Borrower violates the restrictions
to Transfer as set forth in the Loan Documents.
          Notwithstanding anything to the contrary in this Agreement or any
other Loan Document, no present or future Constituent Member in Borrower, nor
any present or future shareholder, officer, director, employee, trustee,
beneficiary, advisor, member, partner, principal, participant or agent of or in
Borrower or of or in any person or entity that is or becomes a Constituent
Member in Borrower, shall have any personal liability, directly or indirectly,
under or in connection with this Agreement or any of the Loan Documents, or any
amendment or

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amendments to any of the foregoing made at any time or times, heretofore or
hereafter, and Lender on behalf of itself and its successors and assigns, hereby
waives any and all such personal liability. In addition, Lender, for itself and
its successors and assigns, acknowledges and agrees that neither Borrower, nor
any Constituent Member, nor any other party, is assuming any personal liability,
directly or indirectly, under or in connection with any agreement, lease,
instrument, claim or right constituting a part of the Property or to which the
Property is now or hereafter subject.
          For purposes of this Agreement and each of the other Loan Documents,
neither the negative capital account of any Constituent Member in Borrower nor
any obligation of any Constituent Member in Borrower to restore a negative
capital account or to contribute or loan capital to Borrower or to any other
Constituent Member in Borrower shall at any time be deemed to be the property or
an asset of Borrower (or any such other Constituent Member) and neither Lender
nor any of its successors or assigns shall have any right to collect, enforce or
proceed against with respect to any such negative capital account or obligation
to restore, contribute or loan.
          Section 9.5. Matters Concerning Manager. If (i) the Manager shall
become bankrupt or insolvent, or (ii) a material default by Manager of its
material obligations occurs under the Management Agreement beyond any applicable
grace and cure periods, Borrower shall, at the request of Lender and after
Lender’s reasonable consultation with Borrower, terminate the Management
Agreement and replace the Manager with a Qualified Manager pursuant to a
Replacement Management Agreement.
          Section 9.6. Servicer. (a) At the option of Lender, the Loan may be
serviced by a servicer/trustee (the “Servicer”) selected by Lender and Lender
may delegate all or any portion of its responsibilities under this Agreement and
the other Loan Documents to the Servicer pursuant to a servicing agreement (the
“Servicing Agreement”) between Lender and Servicer. Borrower shall not be
responsible for any set-up fees or any other initial costs relating to or
arising under the Servicing Agreement nor shall Borrower be responsible for
payment of the monthly servicing fee due to the Servicer under the Servicing
Agreement.
          (b) Lender shall endeavor in good faith (without liability for failure
to do so) to provide Borrower with notification of any change in the Person
servicing the Loan; provided that it shall not constitute a Default or Event of
Default hereunder if due to such failure Borrower sends any payments required to
be made hereunder to Lender or any predecessor Person servicing the Loan.
          X. MISCELLANEOUS
          Section 10.1. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth herein or in the other Loan Documents. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants,

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promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.
          Section 10.2. Lender’s Discretion. Whenever pursuant to this
Agreement, Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender and shall be final and
conclusive. Whenever this Agreement expressly provides that Lender may not
withhold its consent or its approval of an arrangement or term, such provisions
shall also be deemed to prohibit Lender from delaying or conditioning such
consent or approval. Prior to a Securitization, whenever pursuant to this
Agreement the Rating Agencies are given any right to approve or disapprove, or
any arrangement or term is to be satisfactory to the Rating Agencies, the
decision of Lender to approve or disapprove or to decide whether arrangements or
terms are satisfactory or not satisfactory, based upon Lender’s determination of
Rating Agency criteria, shall be substituted therefore.
          Section 10.3. Governing Law. (A) THE PARTIES HEREBY AGREE AND
IRREVOCABLY ELECT THAT, IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS)
AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES
THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE
LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS
AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.
          (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS

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AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN
ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT
TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES
ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM
NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
CT CORPORATION SYSTEM
111 EIGHTH AVENUE, 13TH FLOOR
NEW YORK, NEW YORK 10011
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
          Section 10.4. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, or of the Note, or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly
provided herein, no notice to, or demand on Borrower, shall entitle Borrower to
any other or future notice or demand in the same, similar or other
circumstances.
          Section 10.5. Delay Not a Waiver. Neither any failure nor any delay on
the part of Lender in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder, or under the Note or under any other Loan Document, or any other
instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
future exercise, or the exercise of any other right, power, remedy or privilege.
In particular, and not by way of

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limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.
          Section 10.6. Notices. Except as otherwise required by applicable law,
all notices, consents, approvals and requests required or permitted hereunder or
under any other Loan Document shall be given in writing and shall be effective
for all purposes if (a) hand delivered, (b) sent by (i) certified or registered
United States mail, postage prepaid, return receipt requested or (ii) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, and (c) by telecopier (with answer back
acknowledged and followed by a hard copy via one of the other methods described
above), addressed as follows (or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
notice to the other parties hereto in the manner provided for in this Section
10.6):

         
 
  If to Lender:   Greenwich Capital Financial Products, Inc.
 
      600 Steamboat Road
 
      Greenwich, CT 06830
 
      Attention: Commercial Mortgage Loan Department
 
      Facsimile No. (203) 629-8363
 
       
 
  with a copy to:   Greenwich Capital Financial Products, Inc.
 
      600 Steamboat Road
 
      Greenwich, CT 06830
 
    Legal and Compliance Department
 
      Attention: Legal Department
 
      Facsimile No. (203) 629-5718
 
       
 
  with a copy to:   Sidley Austin LLP
 
      One South Dearborn Street
 
      Chicago, Illinois 60603
 
    Attention: Charles E. Schrank
Facsimile No. (312) 853-7036
 
       
 
  If to Hotel Owner or Hotel Operator:   c/o FelCor Lodging Trust Incorporated
 
      545 E. John Carpenter Freeway, Suite 1300
 
      Irving, Texas 75062
 
      Attention: Finance Department
 
      Facsimile No.: (972) 444-4949
 
       
 
  With a copy to:   c/o FelCor Lodging Trust Incorporated
 
      545 E. John Carpenter Freeway, Suite 1300
 
      Irvine, Texas 75062

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      Attention: General Counsel
 
      Facsimile No.: (972) 444-4195
 
       
 
  With a copy to:   Akin Gump Strauss Hauer & Feld LLP
 
      1700 Pacific Avenue, Suite 4100
 
      Dallas, Texas 75201
 
      Attention: Robert W. Dockery
 
      Facsimile No.: (214) 969-4343

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day; or in the case of telecopy, on the date of transmission if sent by
telefax during business hours on a Business Day (otherwise on the next Business
Day) (with receipt of confirmation) and provided a hard copy follows on the next
Business Day by one of the other methods permitted above.
          Section 10.7. Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE
A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY THE OTHER.
          Section 10.8. Headings. The Article and/or Section headings and the
Table of Contents in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
          Section 10.9. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
          Section 10.10. Preferences. Lender shall have the continuing and
exclusive right to apply or reverse and reapply any and all payments by Borrower
to any portion of the obligations of Borrower hereunder. To the extent Borrower
makes a payment or payments to Lender, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds received, the obligations
hereunder or part thereof intended

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to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.
          Section 10.11. Waiver of Notice. Borrower hereby expressly waives, and
shall not be entitled to, any notices of any nature whatsoever from Lender
except with respect to matters for which this Agreement or the other Loan
Documents specifically and expressly provide for the giving of notice by Lender
to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice.
          Section 10.12. Remedies of Borrower. In the event that a claim or
adjudication is made that Lender or its agents have acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement or
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower’s sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment unless Lender’s actions are arbitrary and capricious. The
parties hereto agree that any action or proceeding to determine whether Lender
has acted reasonably shall be determined by an action seeking declaratory
judgment unless Lender’s actions are arbitrary and capricious.
          Section 10.13. Expenses; Indemnity. (a) Borrower covenants and agrees
to pay or, if Borrower fails to pay, to reimburse, Lender within ten (10) days
of receipt of notice from Lender for all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by Lender in
connection with (i) Borrower’s ongoing performance of and compliance with
Borrower’s respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (ii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (iii) securing Borrower’s compliance
with its obligations pursuant to the provisions of this Agreement and the other
Loan Documents; (iv) the filing and recording fees and expenses, title insurance
and reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting
the Liens in favor of Lender pursuant to this Agreement and the other Loan
Documents; (v) subject to the terms hereof, enforcing or preserving any rights,
either in response to third party claims or in prosecuting or defending any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; and (vi) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in the
nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided,
however, that Borrower shall not be liable for the payment of any such costs and
expenses to the extent the same arise by reason of the gross negligence, illegal
acts, fraud or willful misconduct of Lender. Notwithstanding the provision set
forth in this Section 10.13(a) or in any other provision of this Agreement or
the other Loan Documents, in the event that (A) Lender employs counsel to
collect the Debt, protect or foreclose the Mortgage or as otherwise permitted in
this Agreement and the

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other Loan Documents and (B) Lender has sold or transferred any interests in the
Note, then Borrower shall only be responsible for the attorney’s fees and
expenses of the counsel of only one Lender.
          (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, out-of-pocket losses, actual
damages (but not lost revenues, diminution in value and other consequential
damages), penalties, actions, judgments, third party suits, third party claims,
reasonable costs, reasonable expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for Lender in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not Lender shall be
designated a party thereto), that may be imposed on, incurred by, or asserted
against Lender in any manner relating to or arising out of (i) any breach by
Borrower of its obligations under, or any material misrepresentation by Borrower
contained in, this Agreement or the other Loan Documents, or (ii) the use or
intended use of the proceeds of the Loan (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower shall not have any obligation to
Lender hereunder to the extent that such Indemnified Liabilities arise from the
gross negligence, illegal acts, fraud or willful misconduct of Lender. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Lender.
          (c) Borrower covenants and agrees to pay for or, if Borrower fails to
pay, to reimburse Lender for, any fees and expenses incurred by any Rating
Agency in connection with any consent, approval, waiver or confirmation obtained
from such Rating Agency and required pursuant to the terms and conditions of
this Agreement or any other Loan Document in connection with any request or
approval sought by Borrower and Lender shall be entitled to require payment of
such fees and expenses as a condition precedent to the obtaining of any such
consent, approval, waiver or confirmation.
          Section 10.14. Schedules Incorporated. The Schedules annexed hereto
are hereby incorporated herein as a part of this Agreement with the same effect
as if set forth in the body hereof.
          Section 10.15. Offsets, Counterclaims and Defenses. Any assignee of
Lender’s interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to such documents which Borrower may otherwise have
against any assignor of such documents, and no such unrelated counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
          Section 10.16. No Joint Venture or Partnership; No Third Party
Beneficiaries. (a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or

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therein is intended to create a joint venture, partnership, tenancy-in-common,
or joint tenancy relationship between Borrower and Lender nor to grant Lender
any interest in the Property other than that of mortgagee, beneficiary or
lender.
          (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.
          Section 10.17. Publicity. All news releases, publicity or advertising
by Borrower or its Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, or any of its Affiliates shall be subject to the prior
approval of Lender not to be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, disclosure required by applicable state or
federal securities laws, rules or regulations or other applicable Legal
Requirements shall not be subject to Lender’s prior written approval.
          Section 10.18. Waiver of Marshalling of Assets. To the fullest extent
permitted by law, Borrower, for itself and its successors and assigns, waives
all rights to a marshalling of the assets of Borrower, Borrower’s partners and
others with interests in Borrower, and of the Property, or to a sale in inverse
order of alienation in the event of foreclosure of the Mortgage, and agrees not
to assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of
estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Property
for the collection of the Debt without any prior or different resort for
collection or of the right of Lender to the payment of the Debt out of the net
proceeds of the Property in preference to every other claimant whatsoever.
          Section 10.19. Waiver of Counterclaim. Borrower hereby waives the
right to assert a counterclaim, other than a compulsory counterclaim, in any
action or proceeding brought against it by Lender or its agents.
          Section 10.20. Conflict; Construction of Documents; Reliance. In the
event of any conflict between the provisions of this Agreement and any of the
other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or

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recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.
          Section 10.21. Brokers and Financial Advisors. Borrower hereby
represents that it has dealt with no financial advisors, brokers, underwriters,
placement agents, agents or finders in connection with the transactions
contemplated by this Agreement, other than Hodges Ward Elliott, Inc., the fees
of which are being paid at the assumption of the Loan]. Borrower hereby agrees
to indemnify, defend and hold Lender harmless from and against any and all
third-party claims, liabilities, out-of-pocket costs and reasonable expenses of
any kind (including Lender’s reasonable attorneys’ fees and expenses) in any way
relating to or arising from a claim by any Person that such Person acted on
behalf of Borrower or Lender in connection with the transactions contemplated
herein. The provisions of this Section 10.21 shall survive the expiration and
termination of this Agreement and the payment of the Debt.
          Section 10.21. Prior Agreements. This Agreement and the other Loan
Documents contain the entire agreement of the parties hereto and thereto in
respect of the transactions contemplated hereby and thereby, and all prior
agreements among or between such parties, whether oral or written, are
superseded by the terms of this Agreement and the other Loan Documents.
          Section 10.22. Joint and Several Liability. All representations,
warranties, covenants (both affirmative and negative) and all other obligations
hereunder shall be the joint and several obligation of each Person comprising
Borrower and a default or Event of Default by any Borrower shall be deemed a
default or Event of Default by each Person comprising Borrower. The
representations, covenants and warranties contained herein or in any other Loan
Document shall be read to apply to each Person comprising Borrower when the
context so requires but a breach of any such representation, covenant or
warranty or a breach of any obligation under the Loan Documents shall be deemed
a breach by all Persons comprising Borrower, entitling Lender to exercise all of
its rights and remedies under all the Loan Documents and under applicable law.
          Section 10.23. Contribution and Related Provisions.
          (a) Notwithstanding that each Person comprising Borrower (each a
“Co-Obligor”) is jointly and severally liable with each other Borrower to Lender
for payment of the Loan and other Debt, as between the Co-Obligors, to the
extent that a payment is made on the Debt by a Co-Obligor (a “Co-Obligor
Payment”), which, taking into account all other Co-Obligor Payments then
previously or concurrently made by or attributable to any other Co-Obligor,
exceeds the amount of the Co-Obligor Payment which otherwise would have been
made by or attributable to such Co-Obligor if each such Co-Obligor had paid the
aggregate Debt

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satisfied by such Co-Obligor Payments in the same proportion as such
Co-Obligor’s Allocable Amount in effect immediately prior to such Co-Obligor
Payment bore to the aggregate Allocable Amounts of all such Co-Obligors in
effect immediately prior to such Co-Obligor Payment, then such Co-Obligor shall
be entitled to contribution and indemnification from, and to be reimbursed by,
the other Co-Obligors for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Co-Obligor
Payment (such obligations of one Co-Obligor to another are herein referred to as
the “Contribution Obligations”). The Co-Obligors acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets in favor of
the Co-Obligor to which such contribution and indemnification is owing. As used
herein, the “Allocable Amount” of any Co-Obligor, as of any date of
determination, shall be determined to be an amount equal to the maximum amount
of the Indebtedness which could then be claimed against such Co-Obligor without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the United States Federal Bankruptcy Code (11 U.S.C. Sec. 101 et seq.) or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
          (b) Each Co-Obligor hereby postpones and subordinates payment of all
the Contribution Obligations, and makes all the Contribution Obligations subject
in right of satisfaction, payment and performance, to the full and absolute
payment of the Loan and other Debt. Until the date that is one (1) year and one
(1) day after the date that all of the Indebtedness has been paid and satisfied
in full none of the Co-Obligors shall (a) assert, collect, sue upon, or enforce
all or any part of the Contribution Obligations; (b) commence or join with any
other creditors of any Co-Obligor in commencing any bankruptcy, reorganization,
receivership or insolvency proceeding against any other Co-Obligor; (c) take,
accept, ask for, sue for, receive, set off or demand any payments upon the
Contribution Obligations; or (d) take, accept, ask for, sue for, receive, demand
or allow to be created liens, security interests, mortgages, or pledges of or
with respect to any of the assets of a Co-Obligor in favor of or for the benefit
of the any other Co-Obligor
          (c) Each of Co-Obligors agrees that in the event of any bankruptcy,
insolvency, arrangement, reorganization or receivership proceeding relating to
any other Co-Obligor, the following shall apply:
(i) In any such proceeding the Lender may, and is hereby irrevocably authorized
and empowered (in its own name or in the name of the said Co-Obligor) but shall
have no obligation to: demand, sue for, collect and receive every payment or
distribution in respect of the Contribution Obligations and give acquittance
therefor; and file claims and proofs of claims and take such other action
(including, without limitation, voting the Contribution Obligations and
approving or objecting to a plan of reorganization) as the Lender may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Lender under this Section 13.27(C).
(ii) In any such proceeding, each Co-Obligor will duly and promptly take such
action as the Lender may request to (i) collect for the account of the Lender
the Contribution Obligations and to file appropriate claims or proofs of claim
with respect thereto; and (ii) execute and deliver to the Lender such powers of
attorney,

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assignments or other instruments as the Lender may request in order to enable it
to enforce any and all claims with respect to the Contribution Obligations.
          (d) Each of the Co-Obligors acknowledges and agrees that (i) Lender
would not make the Loan unless each Co-Obligor jointly and severally became
obligated for the repayment of the Loan and granted liens on the collateral
owned by said Co-Obligor to secure the payment of all of the Loan and other
Debt, and (ii) each Co-Obligor derives benefits from the Loan and the granting
of liens by each Co-Obligor on the collateral owned by it securing the payment
of the Loan and other Debt.
[NO FURTHER TEXT ON THIS PAGE]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.

          FELCOR ST. PETE (SPE), L.L.C.,     a Delaware limited liability
company    
 
       
By:
Name:
  /s/ Charles N. Nye                 
 
Charles N. Nye                          
Title:
  Vice President                        
 
        FELCOR ST. PETE LEASING (SPE), L.L.C.,     a Delaware limited liability
company    
 
       
By:
Name:
  /s/ Charles N. Nye                 
 
Charles N. Nye                          
Title:
  Vice President                        

 

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                  LENDER:    
 
                GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,         a Delaware
corporation    
 
           
 
  By:
Name:   /s/ John M. Burke                 
 
John M. Burke                         
 
  Title:   Managing Director                  

 

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SCHEDULE I
(Rent Roll)
None

 

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SCHEDULE II
(Required Repairs)
          The Required Repairs consist of (i) the Remaining Renovation (as
defined in the Original SNDA (as defined in the Assignment of Management
Agreement)), which Remaining Renovation also includes the remaining PIP
Requirements under the Management Agreement, under the terms of the Original
SNDA, and (ii) the restoration/redevelopment of the marina facilities at the
Property damaged by storm in 2005, presently underway.

 

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SCHEDULE III
(Organizational Structure)
[See attached]

 

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SCHEDULE IV
(Licenses)
[See attached]

 

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SCHEDULE V
(Equipment Leases)
[See attached]

 

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SCHEDULE VI
(Litigation)
[None]

 

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SCHEDULE VII
Reserve Disbursement Request Schedule
[See attached]