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Exhibit 10.15
 
MARK PATTEN
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between CNL
HOTELS & RESORTS, INC., a Maryland corporation formerly known as CNL Hospitality
Properties, Inc. (hereinafter referred to as the “Company”), and MARK PATTEN
(hereinafter referred to as the “Executive”) and is effective as of the
Effective Date hereinbelow defined at Section 7.19.
 
WHEREAS, the Company has entered into an Amended and Restated Agreement and Plan
of Merger among the Company, CNL Hotels & Resorts Acquisition, LLC, a Florida
limited liability company all of the membership interests of which are owned by
the Company (“CHPAC”), CNL Hospitality Properties Acquisition Corp., a Florida
corporation and wholly-owned subsidiary of the Company, CNL Hospitality Corp., a
Florida corporation (the “Advisor”), the Stockholders identified therein (which
includes Executive), and CNL Financial Group, Inc., a Florida corporation (the
"Merger Agreement"), pursuant to which the Advisor would be merged with and into
CHPAC pursuant to the terms and conditions of the Merger Agreement (the
“Merger”);
 
WHEREAS, the execution and delivery of this Agreement by the Executive was an
inducement to the Company and CHPAC to enter into the Merger Agreement and to
consummate the Merger;
 
and
 
WHEREAS, the Company wishes to offer employment to the Executive, and the
Executive wishes to accept such offer, on the terms set forth below.
 
Accordingly, the parties hereto agree as follows:
 
1. Term. The Company hereby employs the Executive and the Executive hereby
accepts such employment for an initial term commencing as of the Effective Date
and ending on December 31, 2009, unless sooner terminated in accordance with the
provisions of Section 4 (the period during which the Executive is employed
hereunder being hereinafter referred to as the “Term”). The Term shall be
subject to automatic one- (1-) year renewals unless either party hereto notifies
the other, in accordance with the notice provisions of Section 7.6, of
non-renewal at least ninety (90) days prior to the end of any such Term (a
“Non-Renewal”).
 
2. Duties. The Executive, in his capacity as Chief Accounting Officer of the
Company, shall faithfully perform for the Company the duties of said office and
shall perform such other duties of an executive, managerial or administrative
nature as shall be specified and designated from time to time by the Chief
Executive Officer and the Board of Directors of the Company (the “Board”). Such
duties may include, without limitation, the performance of services for, and
serving on the board of directors of, any subsidiary of the Company without any
additional compensation. The Executive shall devote substantially all of the
Executive’s business time and effort to the performance of the Executive’s
duties hereunder. Provided that the following activities do not interfere with
the Executive’s duties to the Company and provided that the following activities
do not violate the Executive’s covenant against competition as described at
Section 6 hereof, during the Term, the Executive may perform personal,
charitable and other business activities, including, without limitation, serving
as a member of one or more boards of directors of charitable or other
professional organizations, and, serve on the boards of directors of other
business organizations that are not engaged in any aspect of the lodging
industry, provided, however, that service on the boards of directors of other
business organizations would require consent of the Board .
 
 

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3. Compensation.
 
3.1 Salary. The Company shall pay the Executive during the Term a salary at the
rate of Two Hundred Fifty-Seven Thousand and No/00 Dollars ($257,000) per annum
(the “Annual Salary”), in accordance with the customary payroll practices of the
Company applicable to senior executives generally. The Annual Salary may be
increased from time to time, by an amount as may be approved by the Board or the
Compensation Committee of the Board (the “Compensation Committee”), and, upon
such increase, the increased amount shall thereafter be deemed to be the Annual
Salary.
 
3.2 Bonus. The Executive will be eligible to participate in the Company’s annual
bonus program (the “Bonus Plan”), the terms of which will be established by the
Compensation Committee; provided, however, at a minimum, Executive shall be
eligible for such bonus compensation as is set forth on Attachment “A” attached
hereto and made a part hereof by this reference.
 
3.3 Benefits - In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans,
health programs, pension and profit sharing plans and similar benefits that may
be available to other senior executives of the Company generally, on the same
terms as may be applicable to such other executives (except as otherwise
provided in this Section 3), in each case to the extent that the Executive is
eligible under the terms of such plans or programs.
 
3.4 Paid Time Off. The Executive shall be entitled to no fewer than twenty-five
(25) days of paid time off per year.
 
3.5 Disability Benefits and Life Insurance. To the extent the Company’s group
life and disability insurance plans do not provide this level of benefits, the
Executive shall be entitled to additional benefits so that his long-term
disability coverage provides benefits (to continue for such period as is
provided in the applicable disability plan or program, as amended from time to
time, and with waiting periods and pre-existing condition exceptions waived to
the extent such coverage is available on commercially reasonable terms) equal
seventy-five percent (75%) of his Annual Salary in the case of a covered
disability and life insurance coverage provides benefits with a face amount
equal to one (1) times the Executive’s Annual Salary.
 
 

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3.7 Expenses. The Company shall pay or reimburse the Executive for all ordinary
and reasonable out-of-pocket expenses actually incurred and, in the case of
reimbursement, actually paid by the Executive during the Term in the performance
of the Executive’s services under this Agreement; provided that the Executive
shall submit such expenses in accordance with the policies applicable to senior
executives of the Company generally.
 
4. Termination of Employment. The Company may terminate the Executive’s
employment for any reason or for no reason and with or without Cause (as defined
hereinbelow). The Executive may terminate the Executive’s employment with the
Company for Good Reason (as defined hereinbelow) or without Good Reason. The
Company or the Executive may terminate the Executive’s employment by
Non-Renewal. The Executive shall be subject to the provisions of the Covenant
Against Competition set forth at Section 6.2. For purposes of this Agreement,
with respect to "earned and accrued" Bonus payments to be made to the Executive
in connection with the termination of his employment, Bonus payments shall be
deemed to be "earned and accrued" (a) if the Executive is employed with the
Company as of the date of the last day of the fiscal year for which a Bonus
payment shall be made; (b) to the extent that the criteria for determining the
amount of such Bonus payment is subject to objective criteria; and (c)
regardless of whether the Bonus payment award was actually calculated or
declared by the Company as of the date of the Executive's employment.
 
4.1 Termination upon the Executive’s Death or Disability.
 
a.  If the Executive dies during the Term, the obligations of the Company to or
with respect to the Executive shall terminate in their entirety except as
otherwise provided in this Section 4.1 and except for the surviving provisions
of this Agreement as described at Section 7.15.
 
b.  If the Executive becomes eligible for disability benefits under the
Company’s long-term disability plans and arrangements (or, if none apply, would
have been so eligible under the most recent plan or arrangement), the Company or
the Executive shall have the right, to the extent permitted by law, to terminate
the employment of the Executive upon at least ninety (90) days’ prior written
notice to the other party, provided that neither party shall have the right to
terminate the Executive’s employment if, in the opinion of a qualified physician
reasonably acceptable to both parties, it is reasonably certain that the
Executive will be able to resume his duties on a regular full-time basis within
one hundred eighty (180) days of the date that the notice of such termination is
delivered.
 
 

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c.  Upon the Executive’s death or the termination of the Executive’s employment
by virtue of disability, all of the following shall apply:
 
(i)  the Executive, or the Executive’s estate or beneficiaries in the case of
the death of the Executive, shall have no right to receive any compensation or
benefit hereunder on and after the effective date of the termination of
employment, except that the Executive, or the Executive’s estate or
beneficiaries the case of the death of the Executive, shall be entitled to
receive the Executive’s Annual Salary, and other benefits that are earned and
accrued under this Agreement prior to the date of termination, the Executive’s
earned and accrued bonuses as provided in the Bonus Plan, vesting providing in
clause (ii) below, and reimbursement under this Agreement for expenses incurred
prior to the date of such termination;
 
(ii)  all of the Executive’s outstanding and unvested Shares (as defined in
Attachment “A”) shall immediately be vested, any outstanding options to acquire
shares of Company stock shall immediately be vested and shall be exercisable by
the Executive or, in the case of the Executive’s death, by the beneficiaries of
Executive’s estate, for one (1) year following the termination (or, if shorter,
the balance of the regular term of the options); and
 
(iii)  this Agreement shall otherwise terminate and there shall be no further
rights with respect to the Executive hereunder except for the surviving
provisions of this Agreement as provided in Section 7.15. The payments to be
made in this Section 4.1(c) shall be in addition to, rather than in lieu of, the
entitlement of Executive or his estate to any other insurance or benefit
proceeds as a result of his death or disability.
 
4.2 Termination by the Company for Cause. The Company may terminate the
Executive’s employment at any time for “Cause” if any of the following have
occurred:
 
a. the Executive’s conviction for (or pleading nolo contendere to) any felony,
or a misdemeanor involving moral turpitude;
 
b. the Executive’s indictment for any felony or misdemeanor involving moral
turpitude, if such indictment is not discharged or otherwise resolved within
eighteen (18) months;
 
c. the Executive’s commission of an act of fraud, theft or dishonesty related to
the performance of the Executive’s duties hereunder;
 
d. the continuing failure or habitual neglect by the Executive to perform the
Executive’s duties hereunder, except that, if such failure or neglect is
curable, the Executive shall first have thirty (30) days from his receipt of
notice of such failure or neglect to cure such condition and, if the Executive
does so, such failure or neglect shall not constitute Cause hereunder;
 
 

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e. any material violation by the Executive of the covenants contained in Section
6 except that, if such violation is not willful and is curable, the executive
shall first have thirty (30) days from his receipt of notice of such violation
to cure such condition and, if the Executive does so, such violation shall not
constitute Cause hereunder; or
 
f.  the Executive’s continuing material breach of this Agreement, except that,
if such breach is curable, the Executive shall first have thirty (30) days from
his receipt of such notice of such breach to cure such breach and, if the
Executive does so, such breach shall not constitute Cause hereunder.
 
If the Company terminates the Executive’s employment for Cause, the Executive
shall have no right to receive any compensation or benefit hereunder on and
after the effective date of the termination of employment, except that the
Executive shall be entitled to receive the Executive’s Annual Salary, and other
benefits that are earned and accrued under this Agreement prior to the date of
termination, any earned and accrued bonuses as provided in the Bonus Plan, and
reimbursement under this Agreement for expenses incurred prior to the date of
termination. This Agreement shall otherwise terminate upon such termination of
employment and the Executive shall have no further rights or obligations
hereunder except for the surviving provisions of this Agreement as described at
Section 7.15.
 
4.3 Termination by the Company without Cause. The Company may terminate the
Executive’s employment at any time without Cause upon sixty (60) days prior
written notice to the Executive. If the Company terminates the Executive’s
employment without the occurrence of any of the events constituting “Cause” and
the termination is not due to the Executive’s death or disability or is not a
Non-Renewal, then the termination by the Company is without Cause. If the
Company terminates the Executive’s employment without Cause, then the Severance
Package provisions of Section 5 shall apply, and this Agreement shall otherwise
terminate and the Executive shall have no further rights or obligations
hereunder except for the surviving provisions of this Agreement as described at
Section 7.15.
 
4.4 Termination of Employment by the Executive for Good Reason. The Executive
may terminate the Executive’s employment with the Company at any time for “Good
Reason” and receive the Severance Package provisions of Section 5 if any of the
following have occurred without the Executive’s written consent:
 
a. the material reduction of the Executive’s authority, duties and
responsibilities, or the assignment to the Executive of duties materially
inconsistent with the Executive’s position or positions with the Company and its
subsidiaries, except that the Company shall have thirty (30) days from the date
on which the Executive gives the notice thereof to cure such event or condition
and, if the Company does so, such event or condition shall not constitute Good
Reason hereunder;
 
 

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b. a reduction of the Annual Salary of the Executive, except that a reduction of
the Executive’s Annual Salary shall not constitute Good Reason for termination
if (i) the Company fully cures (including retroactively) such reduction no later
than thirty (30) days from the date on which the Executive gives the Company
notice that the reduction constitutes Good Reason for termination hereunder; or
(ii) such reduction is made in connection with a reduction in compensation of
not more than ten percent (10%) of the Executive’s Annual Salary and such
reduction is made generally applicable to all senior management employees of the
Company;
 
c. the failure by the Company to obtain an agreement in form and substance
reasonably satisfactory to the Executive from any successor to the business of
the Company to assume and agree to perform this Agreement;
 
d. the Company’s material breach of this Agreement, except that the Company
shall have thirty (30) days from the date on which the Executive gives the
notice thereof to cure such event or condition and, if the Company does so, such
event or condition shall not constitute Good Reason hereunder;
 
e.  a requirement by the Company that Executive’s work location be moved more
than fifty (50) miles from the Company’s principal place of business in Orlando,
Florida; or
 
f.  the occurrence of a change of control, which for purposes of this Agreement
shall mean the sale to an independent third party or group of independent third
parties of either (i) more than thirty percent (30%) of the issued and
outstanding equity securities of the Company and the voting power under normal
circumstances to elect a majority of the Company's Board (whether by merger,
consolidation, sale or transfer of the Company’s equity securities); or (ii) all
or substantially all of the Company's assets determined on a consolidated basis.
For the avoidance of doubt, a change of control shall not include the Merger or
any issuance by the Company of equity securities in an initial public offering.
 
This Agreement shall otherwise terminate upon such termination of employment and
the Executive shall have no further rights or obligations hereunder except for
the surviving provisions of this Agreement as described at Section 7.15.
 
4.5  Termination of Employment by the Executive without Good Reason. The
Executive may terminate the Executive’s employment with the Company at any time
without Good Reason. If the Executive terminates his employment without the
occurrence of any of the events constituting “Good Reason” and the termination
is not due to the Executive’s death or disability, then the termination by the
Executive is without Good Reason. If the Executive terminates the Executive’s
employment with the Company without Good Reason, the Executive shall have no
right to receive any compensation or benefit hereunder on and after the
effective date of the termination of employment, except that the Executive shall
be entitled to receive the Executive’s Annual Salary, and other benefits that
are earned and accrued under this Agreement or under applicable Company benefit
plans prior to the date of termination, any earned and accrued bonuses as
provided in the Bonus Plan, and reimbursement under this Agreement for expenses
incurred prior to the date of termination. This Agreement shall otherwise
terminate upon such termination of employment and the Executive shall have no
further rights or obligations hereunder except for the surviving provisions of
this Agreement as described at Section 7.15.
 
 

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4.6  Termination upon Expiration and Non-Renewal of Agreement. The Company may
terminate the Executive’s employment by Non-Renewal of the Term in accordance
with the provisions of Section 1 and Section 7.6 hereof, and the Severance
Package provisions of Section 5 shall apply. If the Executive terminates
employment by Non-Renewal, it will be treated as a termination of employment
without Good Reason. This Agreement shall otherwise terminate upon such
termination of employment and the Executive shall have no further rights or
obligations hereunder except for the surviving provisions of this Agreement as
described at Section 7.15.
 
5.  Severance Package for Certain Terminations of Employment. The Executive
shall be entitled to certain rights and shall be bound by certain obligations as
described in this Section 5 (the “Severance Package”) if the Executive’s
employment terminates because of the Non-Renewal by the Company of this
Agreement, or if the Company terminates the Executive’s employment without
Cause, or if the Executive terminates the Executive’s employment for Good
Reason. For purposes of this Agreement, the “Severance Package” shall consist of
all of the following rights and obligations:
 
a.  other than as set forth in this Section 5 generally, the Executive shall
have no right to receive any compensation or benefit hereunder on and after the
effective date of the termination of employment, except that the Executive shall
be entitled to receive the Executive’s Annual Salary, and other benefits that
are earned and accrued under this Agreement and under applicable Company benefit
plans prior to the date of termination, any earned and accrued bonuses as
provided in the Bonus Plan, and reimbursement under this Agreement for expenses
incurred prior to the date of termination;
 
b.  subject to the execution of a general release of claims in favor of the
Company as set forth in Attachment “B”, the Executive shall receive both:
 
(i) a cash payment equal to two (2) times the sum of (w) the Executive’s Annual
Salary (as in effect on the effective date of such termination excluding any
reduction not permitted by this Agreement) plus (x) the average of the
Executive’s Annual Bonus actually earned for the two of the last three full
fiscal years that would result in the highest average (“Average Annual Bonus”),
payable in equal installments over the period that corresponds to the period
during which the covenants provided in Section 6.2 hereof are to be applicable
in accordance with the Company’s usual and customary salary payroll practices,
commencing on the first payday following Executive’s termination.  (If, at the
time of a termination to which this sub-subparagraph b(i) applies, at least
three full fiscal years have not occurred, then to the extent necessary to
calculate the Average Annual Bonus for the last three years as set forth above,
the annual bonus or bonuses payable to Executive by Executive’s former employer
shall be used); provided, however, that in the event the termination of
employment is in connection with a Non-Renewal by the Company, such payments
shall equal the sum of (y) the Executive’s Annual Salary (as in effect on the
effective date of such termination excluding any reduction not permitted by this
Agreement) plus (z) the Executive’s Average Annual Bonus, which together shall
be payable in equal installments over a twelve (12) month period in accordance
with the Company’s usual and customary salary payroll practices (and made
payable to the Executive’s estate in the event that the Executive dies prior to
the expiration of such period), commencing on the first payday following
Executive’s termination; and provided, further, that if the covenants provided
in Section 6.2 are not applicable, in a single lump sum within five (5) days of
termination of employment; provided, further, that if the Executive is a “key
employee” within the meaning of Internal Revenue Code of 1986, as amended,
Section 409A (“Section 409A”) payments shall not commence (or be made in the
case of a lump sum payment) until six months following the Executive’s
separation from service to the extent necessary to avoid the imposition of the
additional 20% tax under Section 409A (and in the case of installment payments,
the first payment shall include all installment payments required by this
subsection that otherwise would have been made during such six month period);
and
 
 

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(ii) for a period of twelve (12) months after termination of employment such
continuing health benefits (including any medical, vision or dental benefits),
under the Company’s health plans and programs applicable to senior executives of
the Company generally as the Executive would have received under this Agreement
(and at such costs to the Executive) as would have applied in the absence of
such termination or expiration (but not taking into account any post-termination
increases in Annual Salary that may otherwise have occurred without regard to
such termination and that may have favorably affected such benefits) it being
expressly understood and agreed that nothing in this clause (b)(ii) shall
restrict the ability of the Company to generally amend or terminate such plans
and programs from time to time in its sole discretion; provided, however, that
the Company shall in no event be required to provide such coverage after such
time as the Executive becomes entitled to receive health benefits from another
employer or recipient of the Executive’s services (and provided, further, that
such entitlement shall be determined without regard to any individual waivers or
other arrangements);
 
c.  subject to the execution of a general release of claims in favor of the
Company as set forth in Attachment “B”, the Executive’s outstanding and unvested
Shares (as defined in Attachment “A”) that would have vested in the calendar
year employment terminates (treating the performance criteria for the year of
termination as fully satisfied) shall be vested, any outstanding options to
acquire shares of Company stock shall immediately be vested and shall be
exercisable by the Executive or, in the case of the Executive’s death, by the
beneficiaries of Executive’s estate, for one (1) year following the termination
(or, if shorter, the balance of the regular term of the options); provided,
however, that if such termination of employment occurs in connection with or on
or after a change of control, all of the Executive’s outstanding awards of
Shares shall immediately be vested (treating the performance criteria for the
applicable year(s) as fully satisfied).
 
This Agreement shall otherwise terminate upon such termination of employment and
the Executive shall have no further rights hereunder except for surviving
provisions of this Agreement as provided in Section 7.15.
 
6. Covenants of the Executive.
 
6.1 General Covenants of the Executive. The Executive acknowledges that (a) the
principal business of the Company is the acquisition, development and ownership
of interests in hotel and resort properties including full service hotels and
resorts, limited service hotels, extended stay hotels and upper upscale and
luxury resorts (such business, and any and all other businesses that after the
date hereof, and from time to time during the Term, become material with respect
to the Company’s then-overall business, herein being collectively referred to as
the “Business”); (b) the Company knows of a limited number of persons who have
developed the Company’s Business; (c) the Company’s Business is, in part,
national in scope; (d) the Executive’s work for the Company and its subsidiaries
(and the predecessors of either) has given and will continue to give the
Executive access to the confidential affairs and proprietary information of the
Company and to “trade secrets,” as defined in Section 688.002(4) of the Florida
Statutes, of the Company and its subsidiaries; (e) the covenants and agreements
of the Executive contained in this Section 6 are essential to the business and
goodwill of the Company; and (f) the Company would not have entered into this
Agreement but for the covenants and agreements set forth in this Section 6.
 
 

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6.2 Covenant Against Competition. The covenant against competition herein
described shall apply as follows:
 
a.  during the Term;
 
b.  for a period of one (1) year following a termination of the Executive’s
employment by the Company for Cause, by the Company without Cause, by the
Executive without Good Reason or by either party after Non-Renewal;
 
c.  for a period of two (2) years following a termination of the Executive’s
employment by the Executive for Good Reason; or
 
d.  as to Section 6.2(bb) and (dd), at any time during and after the Executive’s
employment with the Company and its subsidiaries (and the predecessors of
either).
 
During the time periods for described hereinabove, the Executive covenants as
follows:
 
aa. The Executive shall not, directly or indirectly, own, manage, control or
participate in the ownership, management, or control of, or be employed or
engaged by or otherwise affiliated or associated as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity, engage or participate in
any business that owns and operates hotel and resort properties, or is a real
estate investment trust which owns hotel and resort properties, or in the
business of providing hotel management or consulting services, and that has
assets, or provides services to entities that have assets, in excess of Seven
Hundred Fifty Million and No/00 Dollars ($750,000,000), and such business is in
competition in any manner whatsoever with the Business of the Company in any
state or country or other jurisdiction in which the Company conducts its
Business; provided, however, that, notwithstanding the foregoing, (i) the
Executive may own or participate in the ownership of any entity which he owned
or managed or participated in the ownership or management of prior to the
Effective Date which ownership, management or participation has been disclosed
to the Company; and (ii) the Executive may invest in securities of any entity,
solely for investment purposes and without participating in the business
thereof, if (A) such securities are traded on any national securities exchange
or the National Association of Securities Dealers, Inc. Automated Quotation
System or equivalent non-U.S. securities exchange, (B) the Executive is not a
controlling person of, or a member of a group which controls, such entity and
(C) the Executive does not, directly or indirectly, own one percent (1%) or more
of any class of securities of such entity.
 
 

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bb. Except in connection with the business and affairs of the Company and its
affiliates: the Executive shall keep secret and retain in strictest confidence,
and shall not use for his benefit or the benefit of others, all confidential
matters relating to the Business and the business of any of its affiliates and
to the Company and any of its affiliates, learned by the Executive heretofore or
hereafter directly or indirectly from the Company or any of its subsidiaries (or
any predecessor of either) (the “Confidential Company Information”), including,
without limitation, information with respect to the Business and any aspect
thereof, profit or loss figures, and the Company’s or its affiliates’ (or any of
their predecessors) properties, and shall not disclose such Confidential Company
information to anyone outside of the Company except with the Company’s express
written consent and except for Confidential Company Information which (i) at the
time of receipt or thereafter becomes publicly known through no wrongful act of
the Executive; (ii) is clearly obtainable in the public domain; (iii) was not
acquired by the Executive in connection with the Executive’s employment or
affiliation with the Company; (iv) was not acquired by the Executive from the
Company or its representatives or from a third-party who has an agreement with
the Company not to disclose such information; or (v) is required to be disclosed
by rule of law or by order of a court or governmental body or agency. For
purposes of this Agreement, “affiliate” means, with respect to the Company, any
person, partnership, corporation or other entity that controls, is controlled by
or is under common control with the Company within the meaning of Rule 405 of
Regulation C under the Securities Act of 1933, as now in effect or as hereafter
amended.
 
cc. The Executive shall not, without the Company’s prior written consent,
directly or indirectly, (i) knowingly solicit or knowingly encourage to leave
the employment or other service of the Company or any of its affiliates, any
employee thereof or knowingly hire (on behalf of the Executive or any other
person or entity) any employee who has left the employment or other service of
the Company or any of its affiliates (or any predecessor of either) within one
(1) year of the termination of such employee’s or independent contractor’s
employment or other service with the Company and its affiliates; or (ii) whether
for the Executive’s own account or for the account of any other person, firm,
corporation or other business organization, intentionally interfere with the
Company’s or any of its affiliates, relationship with, or endeavor to entice
away from the Company or any of its affiliates, any person who during the
Executive’s employment with the Company and its affiliates (or the predecessors
of either) is or was a customer or client of the Company or any of its
affiliates (or any predecessor of either).
 
dd. All memoranda, notes, lists, records, property and any other tangible
product and documents (and all copies thereof) made, produced or compiled by the
Executive or made available to the Executive concerning the Business of the
Company and its affiliates shall be the Company’s property and shall be
delivered to the Company at any time on request.
 
6.3 Rights and Remedies upon Breach. The Executive acknowledges and agrees that
any breach by him of any of the provisions of Sections 6.1 or 6.2 (the
“Restrictive Covenants”) would result in irreparable injury and damage for which
money damages would not provide an adequate remedy. Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the Restrictive Covenants,
the Company and its affiliates shall have the right and remedy to have the
Restrictive Covenants specifically enforced (without posting bond and without
the need to prove damages) by any court having equity jurisdiction, including,
without limitation, the right to an entry against the Executive of restraining
orders and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants. This right and remedy shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company and its affiliates under
law or in equity (including, without limitation, the recovery of damages). The
existence of any claim or cause of action by the Executive, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement of the Restrictive Covenants. The Company has the right to cease
making the payments provided as part of the Severance Package in the event of a
material breach of any of the Restrictive Covenants that, if capable of cure and
not willful, is not cured within thirty (30) days after receipt of notice
thereof from the Company.
 
 

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7. Other Provisions.
 
7.1 Severability. The Executive acknowledges and agrees that the Executive has
had an opportunity to seek advice of counsel in connection with this Agreement;
and that the Restrictive Covenants are reasonable in geographical and temporal
scope and in all other respects. If it is determined that any of the provisions
of this Agreement, including, without limitation, any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the provisions of this Agreement shall not thereby be affected and shall be
given full affect, without regard to the invalid portions.
 
7.2 Duration and Scope of Covenants. If any court or other decision maker of
competent jurisdiction determines that any of the Executive’s covenants
contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, are unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.
 
7.3 Enforceability of Restrictive Covenants; Jurisdictions. The Company and the
Executive intend to and hereby consent to jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of the Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants wholly unenforceable
by reason of breadth of scope or otherwise it is the intention of the Company
and the Executive that such determination not bar or in any way affect the
Company’s right, or the right of any of its affiliates, to the relief provided
above in the courts of any other jurisdiction within the geographical scope of
such Restrictive Covenants, as to breaches of such Restrictive Covenants in such
other respective jurisdictions, such Restrictive Covenants as they relate to
each jurisdiction’s being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res judicata.
 
7.4 Arbitration. Except with regard to Section 6, all disputes between the
parties or any claims concerning the performance, breach, construction or
interpretation of this Agreement, or in any manner arising out of this
Agreement, shall be submitted to binding arbitration in accordance with the
Commercial Arbitration Rules, as amended from time to time, of the American
Arbitration Association (the “AAA”), which arbitration shall be carried out in
the manner set forth below:
 
 

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a.  Within fifteen (15) days after written notice by one party to the other
party of its demand for arbitration, which demand shall set forth the name and
address of its designated arbitrator, the other party shall appoint its
designated arbitrator and so notify the demanding party. Within fifteen (15)
days thereafter, the two arbitrators so appointed shall appoint the third
arbitrator. If the two appointed arbitrators cannot agree on the third
arbitrator, then the AAA shall appoint an independent arbitrator as the third
arbitrator. The dispute shall be heard by the arbitrators within ninety (90)
days after appointment of the third arbitrator. The decision of any two (2) or
all three (3) of the arbitrators shall be binding upon the parties without any
right of appeal. The decision of the arbitrators shall be final and binding upon
the Company, its successors and assigns, and upon Executive, his heirs, personal
representatives, and legal representatives
 
b.  The arbitration proceedings shall take place in Orlando, Florida, and the
judgment and determination of such proceedings shall be binding on all parties.
Judgment upon any award rendered by the arbitrators may be entered into any
court having competent jurisdiction without any right of appeal.
 
c.  Each party shall pay its or his own expenses of arbitration, and the
expenses of the arbitrators and the arbitration proceeding shall be shared
equally. However, if in the opinion of a majority of the arbitrators, any claim
or defense was unreasonable, the arbitrators may assess, as part of their award,
all or any part of the arbitration expenses of the other party (other than
attorneys’ fees, which are addressed in Section 7.5 below) and of the
arbitrators and the arbitration proceeding.
 
7.5 Attorneys’ Fees. In the event of any legal proceeding (including an
arbitration proceeding) relating to this Agreement or any term or provision
thereof, the losing party shall be responsible to pay or reimburse the
prevailing party for all reasonable attorneys’ fees and expenses incurred by the
prevailing party in connection with such proceeding.
 
7.6 Notices. Any notice, consent or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice, consent or other communication
shall be deemed given when so delivered personally, delivered by overnight
courier, telexed or sent by facsimile transmission or, if mailed, five days
after the date of deposit in the United States mails as follows:
 
a. If to the Company, to:
 
CNL Hotels & Resorts, Inc.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
Attention: Chairman (James M. Seneff, Jr.)
Facsimile: (407) 650-1011

with a copy in either case to:
 
Greenberg Traurig, LLP
The MetLife Building
200 Park Avenue
 
New York, NY 10166
 
Attention: Judith D. Fryer, Esq.
 
Facsimile: (212) 805-9330
 
 

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b. If to the Executive, to:
 
Mark Patten
6240 Donegal Drive
Orlando, FL 32819
Fascimile: (407) 876-9554

with a copy in either case to:
 
Baker & Hostetler LLP
SunTrust Center
200 South Orange Avenue, Suite 2300
Orlando, Florida 32801
Attention: G. Thomas Ball, Esq.
Facsimile: (407) 841-0168

Any such person may by notice given in accordance with this Section to the other
parties hereto designate another address or person for receipt by such person of
notices hereunder.
 
7.7 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with the Company or its subsidiaries (or any
predecessor of either).
 
7.8 Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right, power
or privilege. If the Executive is terminated without Cause or is terminated due
to a Non-Renewal of this Agreement by the Company, the Company hereby waives, as
to the Executive only, the no-hire provision in the Merger Agreement.
 
7.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
 
7.10 Assignment. This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive; any purported assignment by the
Executive in violation hereof shall be null and void. In the event of any sale,
transfer or other disposition of all or substantially all of the Company’s
assets or business, whether by merger, consolidation or otherwise, the Company
may assign this Agreement and its rights hereunder.
 
7.11 Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of withholding required by law. In the event that the
Company determines that any federal, state, local or foreign tax or withholding
payment is required relating to the vesting in or delivery of Shares, the
Company shall have the right to require such payments from the Executive or
withhold such amounts from other payments due to the Executive from the Company
or any affiliate, or to withhold Shares that would otherwise have been issued to
the Executive. The Executive shall have the right to elect, in his discretion,
the manner in which such payments shall be made or withheld. No other taxes,
fees, impositions, duties or other charges or offsets of any kind shall be
deducted or withheld from amounts payable hereunder, unless otherwise required
by law.
 
 

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7.12 No Duty to Mitigate. The Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor will any payments hereunder be
subject to offset in the event the Executive does mitigate.
 
7.13 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
 
7.14 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.
 
7.15 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 3.7, 4, 5, 6, 7.3, 7.4, 7.5, 7.11,
7.12, 7.18, 7.19 and 7.21 and the other provisions of this Section 7 (to the
extent necessary to effectuate the survival of Sections 4, 5, 6, 7.3, 7.4, 7.11,
and 7.12) shall survive the termination of this Agreement and any termination of
the Executive’s employment hereunder.
 
7.16 Existing Agreements. Executive represents to the Company that the Executive
is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which
might prohibit the Executive from executing this Agreement or limit the
Executive’s ability to fulfill the Executive’s responsibilities hereunder.
 
7.17 Headings. The headings in this Agreement are for reference only and shall
not affect the interpretation of this Agreement.
 
7.18 Parachute Provisions. If any amount payable to or other benefit receivable
by the Executive pursuant to this Agreement is deemed to constitute a Parachute
Payment (as defined below), alone or when added to any other amount payable or
paid to or other benefit receivable or received by the Executive which is deemed
to constitute a Parachute Payment (whether or not under an existing plan,
arrangement or other agreement), and would result in the imposition on the
Executive of an excise tax under Section 4999 of the Internal Revenue Code of
1986, as amended, then, in addition to any other benefits to which the Executive
is entitled under this Agreement, the Executive shall be paid by the Company an
amount in cash equal to the sum of the excise taxes payable by the Executive by
reason of receiving Parachute Payments plus the amount necessary to put the
Executive in the same after-tax position (taking into account any and all
applicable federal, state and local excise, income or other taxes at the highest
applicable rates on such Parachute Payments and on any payments under this
Section 7.18) as if no excise taxes had been imposed with respect to Parachute
Payments. The amount of any payment under this Section 7.18 shall be computed by
a certified public accounting firm mutually and reasonably acceptable to the
Executive and the Company, the computation expenses of which shall be paid by
the Company. “Parachute Payment” shall mean any payment deemed to constitute a
“parachute payment” as defined in Section 280G of the Internal Revenue Code of
1986, as amended.
 
 

--------------------------------------------------------------------------------

 
 
7.19 Company’s Repurchase of Certain Shares. At the Excutive’s option,
exercisable at any time within twelve (12) months after the date Shares (as
defined in Attachment “A”) (including any additional shares of the Company’s
Common Stock then owned by the Executive and attributable to such Shares as a
result of a stock dividend, stock-split, or recapitalization of the Company) are
includible in Executive’s taxable income, the Company shall purchase from the
Executive an amount of shares of the Company’s Stock then owned by the Executive
sufficient to pay the difference between the income tax attributable to the
inclusion of the value of such Shares in Executive’s taxable income and the
amount previously withheld (“Put Right”); provided, however, that such Put Right
shall not be exercisable with regard to any shares of the Company’s Stock the
repurchase of which would result in an accounting charge to the Company. The
Executive’s Put Right shall be exercisable at the fair market value of the
shares as of the date such Put Right is exercised (the “Purchase Price”) as
determined in good faith by the Company. Unless the Company and the Executive
shall mutually agree upon other terms, the Purchase Price shall be paid in cash
or other readily available funds, to be paid to the Executive thirty (30) days
from the date that the Executive elects to exercise his Put Right. If the shares
Company Common Stock are listed on an established national or regional stock
exchange or are admitted to quotation on The Nasdaq Stock Market, Inc., or are
publicly traded in an established securities market, the foregoing Put Right
shall terminate as of the first date that the shares of Common Stock are so
listed, quoted or publicly traded.
 
7.20 Effective Date. The Effective Date shall be the Effective Time (as such
term is defined in the Merger Agreement).
 
7.21 Indemnification. Subject to the Company’s Articles of Incorporation and
Bylaws, the Company shall indemnify the Executive with respect to his
performance of services hereunder on the Company’s and its affiliates’ behalf,
to the fullest extent allowed under the laws of the State of Florida, and if
such is held not to be applicable, then to the fullest extent allowed under the
laws of the state of the Company’s incorporation.  
 

IN WITNESS WHEREOF, the parties hereto have signed their names to this
Employment Agreement as of the day and year set forth below.

 
 
 

     COMPANY:             CNL HOTELS & RESORTS, INC., a Maryland corporation:  
   
   
  Date: June 15, 2006 By:   /s/ Thomas J. Hutchison III  

--------------------------------------------------------------------------------

Name: Thomas J. Hutchison III   Title: CEO

 
 

     EXECUTIVE:      
   
   
  Date: June 15, 2006 By:   /s/ Mark E. Patten  

--------------------------------------------------------------------------------

Name: Mark E. Patten    

--------------------------------------------------------------------------------

MARK PATTEN
EMPLOYMENT AGREEMENT

ATTACHMENT “A”
 
A. BONUS COMPENSATION
 
1. Annual Bonus Compensation. Executive shall be eligible to participate in the
Bonus Plan during the term of this Agreement. Executive’s bonus will be subject
to Executive’s achievement of performance criteria established annually by the
Compensation Committee: 

1.1.  For Threshold level, Executive shall receive 50% of his Annual Salary as
bonus compensation;

1.2. For Target level, Executive shall receive 75% of his Annual Salary as bonus
compensation; and

1.3. For Maximum level, Executive shall receive 100% of his Annual Salary as
bonus compensation.

For purpose of the Annual Bonus, Annual Salary means the Annual Salary paid the
Executive during the calendar or portion of the calendar year covered by the
bonus. Any bonus compensation in excess of 100% of Executive’s Annual Salary may
be paid, in whole or in part, at the option of the Executive, in shares of the
Company’s common stock. Executive’s performance criteria shall be established
annually by the Compensation Committee. For each fiscal year, Executive’s bonus,
if any, will be paid to Executive in a lump sum on or before seventy five (75)
days after the end of such fiscal year.

2. Withholding. All amounts payable to Executive hereunder shall be subject to
all required federal, state or local income tax or other withholding by the
Company.
 
B. OTHER BENEFITS AND PAYMENTS
 

3.  Shares. Subject to the Company’s 2004 Omnibus Long-Term Incentive Plan, as
an incentive bonus, shares of the Company’s common stock (“Shares”) shall be
granted to the Executive in accordance with the following provisions:
 
3.1. A total of eighteen thousand (18,000) Shares shall be granted in the form
of stock units which shall vest in four equal installments on each of December
31, 2006, December 31, 2007, December 31, 2008 and December 31, 2009, if
Executive then remains in service to the Company. The shares related to the
vested stock units shall be delivered to the Executive when vested.
 
3.2 A total of eighty-two thousand (82,000) Shares shall be granted in the form
of stock units which shall be subject to vesting based on the achievement of
performance criteria over partial year, annual and cumulative performance
periods starting December 31, 2006 and ending on the last day of each calendar
year through December 31, 2009, as determined by the Compensation Committee and
the shares related to the vested stock units shall be delivered to the Executive
when vested or, to the extent vested, on an earlier termination of employment.
 
3.3 Delivery of shares of Company common stock subject to the stock units shall
be delayed six months if such delivery is made in connection with the
Executive’s separation from service and such delay is necessary to avoid the 20%
additional tax imposed by Section 409A. In the event share delivery is delayed,
at the same time the Shares are delivered, the Executive shall receive an amount
equal to the dividend(s) that would be payable on the number of Shares subject
to the delayed delivery if the record date of such dividend(s) is after the date
of the Executive’s separation from service and prior to the delivery of the
shares to the Executive.
 
 
 

 

--------------------------------------------------------------------------------

MARK PATTEN
EMPLOYMENT AGREEMENT

ATTACHMENT “B”

 
General Release of Claims If Executive Is 40 Years-Old or Older on the Date of
Execution

Consistent with Section 5 of the Employment Agreement dated _______ __, 2006
between me and CNL Hotels & Resorts Inc. (the “Employment Agreement”) and in
consideration for and contingent upon my receipt of the Severance Package set
forth in Sections 5(b) and 5(c) of the Employment Agreement, I, for myself, my
attorneys, heirs, executors, administrators, successors, and assigns, do hereby
fully and forever release and discharge CNL Hotels & Resorts Inc. and its
affiliated entities (as defined in the Employment Agreement), as well as their
predecessors, successors, assigns, and their current or former directors,
officers, partners, agents, employees, attorneys, and administrators from all
suits, causes of action, and/or claims, demands or entitlements of any nature
whatsoever, whether known, unknown, or unforeseen, which I have or may have
against any of them arising out of or in connection with my employment by CNL
Hotels & Resorts Inc., the Employment Agreement, the termination of my
employment with CNL Hotels & Resorts Inc., or any event, transaction, or matter
occurring or existing on or before the date of my signing of this General
Release, except that I am not releasing any (a) right to indemnification that I
may otherwise have, (b) right to Annual Salary and benefits under applicable
benefit plans that are earned and accrued but unpaid as of the date of my
signing this General Release, (c) right to reimbursement for business expenses
incurred and not reimbursed as of the date of my signing this General Release,
(d) right to any bonus payment(s) under the Bonus Plan that are earned and
accrued for the most recent completed calendar year for which a bonus payment
has not then been paid as of the date of my signing this General Release, or (e)
claims arising after the date of my signing this General Release. I agree not to
file or otherwise institute any claim, demand or lawsuit seeking damages or
other relief and not to otherwise assert any claims, demands or entitlements
that are lawfully released herein. I further hereby irrevocably and
unconditionally waive any and all rights to recover any relief or damages
concerning the claims, demands or entitlements that are lawfully released
herein. I represent and warrant that I have not previously filed or joined in
any such claims, demands or entitlements against CNL Hotels & Resorts Inc. or
the other persons released herein and that I will indemnify and hold them
harmless from all liabilities, claims, demands, costs, expenses and/or
attorneys’ fees incurred as a result of any such claims, demands or lawsuits.

Except as otherwise expressly provided above, this General Release specifically
includes, but is not limited to, all claims of breach of contract, employment
discrimination (including any claims coming within the scope of Title VII of the
Civil Rights Act, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Equal Pay Act, the Americans with Disabilities Act,
the Family and Medical Leave Act, and any comparable Florida law, all as
amended, or any other applicable federal, state, or local law), claims under the
Employee Retirement Income Security Act, as amended, claims under the Fair Labor
Standards Act, as amended (or any other applicable federal, state or local
statute relating to payment of wages), claims concerning recruitment, hiring,
termination, salary rate, severance pay, stock options, wages or benefits due,
sick leave, holiday pay, vacation pay, life insurance, group medical insurance,
any other fringe benefits, worker’s compensation, termination, employment
status, libel, slander, defamation, intentional or negligent misrepresentation
and/or infliction of emotional distress, together with any and all tort,
contract, or other claims which might have been asserted by me or on my behalf
in any suit, charge of discrimination, or claim against CNL Hotels & Resorts or
the persons released herein.

I acknowledge that I have been given an opportunity of twenty-one (21) days to
consider this General Release and that I have been encouraged by CNL Hotels &
Resorts Inc. to discuss fully the terms of this General Release with legal
counsel of my own choosing. Moreover, for a period of seven (7) days following
my execution of this General Release, I shall have the right to revoke the
waiver of claims arising under the Age Discrimination in Employment Act, a
federal statute that prohibits employers from discriminating against employees
who are age 40 or over. If I elect to revoke this General Release within this
seven-day period, I must inform CNL Hotels & Resorts Inc. by delivering a
written notice of revocation to CNL Hotels & Resorts Inc.’s Director of Human
Resources, ________________________, no later than 11:59 p.m. on the seventh
calendar day after I sign this General Release. I understand that, if I elect to
exercise this revocation right, this General Release shall be voided in its
entirety and CNL Hotels & Resorts Inc. shall be relieved of all obligations to
make the portion of the Severance Package described in Section 5(b) and (c) of
the Employment Agreement. I may, if I wish, elect to sign this General Release
prior to the expiration of the 21-day consideration period, and I agree that if
I elect to do so, my election is made freely and voluntarily and after having an
opportunity to consult counsel.

AGREED:

[Form of Agreement Only - Do No Execute]
_____________________________  ______________________________
Mark Patten    Date