<PAGE>
                                                                    EXHIBIT 10.1

Instrument Prepared by and When
Recorded Return to:
Marc D. Glenn, Esq.
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E., 16th Floor
Atlanta, Georgia 30303


                     MORTGAGE, SECURITY AGREEMENT, FINANCING
                          STATEMENT AND FIXTURE FILING

         THIS MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE
FILING ("MORTGAGE") is made as of October ___, 2004, by EQUITY INNS PARTNERSHIP,
L.P., a Tennessee limited partnership ("MORTGAGOR"), with the mailing address of
7700 Wolf River Boulevard, Germantown, Tennessee 38138 for the benefit of ING
USA ANNUITY AND LIFE INSURANCE COMPANY, an Iowa corporation ("MORTGAGEE") with
the mailing address of c/o ING Investment Management LLC, 5780 Powers Ferry
Road, NW, Suite 300, Atlanta, Georgia 30327-4349.

                              W I T N E S S E T H:

         WHEREAS, Mortgagor has executed and delivered to Mortgagee a Promissory
Note dated on or about this same date in the principal amount of FORTY MILLION
SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($40,600,000.00), (which Promissory
Note, together with all notes issued and accepted in substitution or exchange
therefor, and as any of the foregoing may from time to time be modified,
extended, renewed, consolidated, restated or replaced, is hereinafter sometimes
referred to as the "NOTE"), which Note provides, among other things, for final
payment of principal and interest under the Note, if not sooner paid or payable
as provided therein, to be due on or before November 1, 2024, the Note by this
reference thereto being incorporated herein; and

         WHEREAS, Mortgagee is desirous of securing the prompt payment of the
Note together with interest, charges and prepayment fees, if any, thereon in
accordance with the terms of the Note, and any additional indebtedness accruing
to Mortgagee on account of any future payments, advances or expenditures made by
Mortgagee pursuant to the Note or this Mortgage and any additional sums with
interest thereon which may be loaned to Mortgagor by Mortgagee or advanced under
the Loan Documents (as hereinafter defined) (all hereinafter sometimes
collectively referred to as the "INDEBTEDNESS").

         NOW, THEREFORE, Mortgagor, to secure payment of the Indebtedness and
the performance of the covenants and agreements herein contained to be performed
by Mortgagor, for good and valuable consideration in hand paid, the receipt and
sufficiency whereof are hereby acknowledged, and intending to be legally bound,
hereby agrees and covenants as follows:


                  NOTE TO RECORDER: DUPLICATE COUNTERPARTS OF THIS MORTGAGE ARE
                  BEING RECORDED IN BROWARD AND PALM BEACH COUNTIES, FLORIDA.
                  DOCUMENTARY STAMP AND NONRECURRING INTANGIBLES TAXES ARE BEING
                  PAID IN PALM BEACH COUNTY, FLORIDA



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         1. GRANTING CLAUSES. Mortgagor hereby irrevocably and absolutely does
by these presents GRANT AND CONVEY, MORTGAGE, TRANSFER, ASSIGN, BARGAIN AND SELL
to Mortgagee, its successors and assigns, with all powers of sale (if any) and
all statutory rights under the laws of the State of Florida, and grants to
Mortgagee a security interest in, all of Mortgagor's present and hereafter
acquired estate, right, title and interest in, to and under the following
(collectively referred to herein as the "PREMISES"):

         (a) That certain real property situated in Broward and Palm Beach
Counties, Florida and more particularly described in Exhibit "A" attached hereto
and incorporated herein by this reference (the "LAND"), together with all
buildings, structures and improvements now or hereafter erected on the Land,
together with all fixtures and items that are to become fixtures thereto
(collectively, the "IMPROVEMENTS");

         (b) To the extent legally assignable or transferable, all and singular
the easements, rights-of-way, licenses, permits, rights of use or occupancy,
privileges, tenements, appendages, hereditaments and appurtenances and other
rights and privileges attached or belonging to the Land or Improvements or in
any wise appertaining thereto, whether now or in the future, and all the rents,
issues and profits from the Land or Improvements;

         (c) The land lying within any street, alley, avenue, roadway or
right-of-way open or proposed or hereafter vacated in front of or adjoining the
Land; and all right, title and interest, if any, of Mortgagor in and to any
strips and gores adjoining the Land;

         (d) All machinery, apparatus, equipment, goods, systems, building
materials, carpeting, furnishings, fixtures, fittings, appliances, furniture and
property of every kind and nature whatsoever, now or hereafter located in or
upon or affixed to the Land or Improvements, or any part thereof, or used or
usable in connection with any construction on or any present or future operation
of the Land or Improvements, now owned or hereafter acquired by Mortgagor,
including, but without limitation of the generality of the foregoing: all right,
title and interest of Mortgagor in and to the furnishings, fixtures, equipment,
heating, lighting, refrigerating, ventilating, air-conditioning, air-cooling,
electrical, fuel, garbage, sanitary drainage, removal of dust, refuse or
garbage, fire extinguishing, plumbing, cleaning, telephone, communications and
power equipment, systems and apparatus; and all elevators, switchboards, motors,
pumps, screens, awnings, floor coverings, cabinets, partitions, conduits, ducts
and compressors; and all cranes and craneways, oil storage, sprinkler/fire
protection and water service equipment; and also including any of such property
stored on the Land or Improvements or in warehouses and intended to be used in
connection with or incorporated into the Land or Improvements or for the pursuit
of any other activity in which Mortgagor may be engaged on the Land or
Improvements, and including without limitation all tools, musical instruments
and systems, cabinets, awnings, window shades, venetian blinds, drapes and
drapery rods and brackets, screens, carpeting and other window and floor
coverings, decorative fixtures, plants, cleaning apparatus, and cleaning
equipment, refrigeration equipment, cables, computers, software, books,
supplies, kitchen equipment, motor vehicles, appliances, tractors, lawn mowers,
ground sweepers and tools, swimming pools, whirlpools, recreational or play
equipment together with all substitutions, accessions, repairs, additions and
replacements to any of the foregoing; it being understood and


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agreed that all such machinery, equipment, apparatus, goods, systems, fixtures,
fittings, appliances, furniture, building materials, and property are a part of
the Improvements and are declared to be a portion of the security for the
Indebtedness (whether in single units or centrally controlled, and whether
physically attached to said real estate or not), excluding, however, personal
property owned by tenants of the Land or Improvements;

         (e) Any and all awards, payments or insurance proceeds, including
interest thereon, and the right to receive the same, which may be paid or
payable with respect to the Land or Improvements or other properties described
above as a result of: (1) the exercise of the right of eminent domain or action
in lieu thereof; or (2) the alteration of the grade of any street; or (3) any
fire, casualty, accident, damage or other injury to or decrease in the value of
the Land or Improvements or other properties described above, to the extent of
all amounts which may be secured by this Mortgage at the date of receipt of any
such award or payment by Mortgagor or Mortgagee, and of the reasonable counsel
fees, costs and disbursements incurred by Mortgagor or Mortgagee in connection
with the collection of such award or payment. Mortgagor agrees to execute and
deliver, from time to time, such further instruments as may be requested by
Mortgagee to confirm such assignment to Mortgagee of any such award or payment;

         (f) Any and all accounts receivable and any right of Mortgagor to
payment for goods sold or leased or for services rendered, whether or not yet
earned by performance, and whether or not evidenced by an instrument or chattel
paper, arising from the operation of the Land or Improvements, now existing or
hereafter created, substitutions therefor, proceeds thereof (whether cash or
noncash, movable or immovable, tangible or intangible) received upon the sale,
exchange, transfer, collection or other disposition or substitution thereof and
any or all of the foregoing and proceeds therefrom, all income, rents, room
rates, issues, profits, revenues, deposits, accounts, and other benefits from
the operation of the hotel on the Land and/or the Improvements, including,
without limitation, all revenues and credit card receipts collected from guest
rooms, restaurants, bars, mini-bars, meeting rooms, banquet rooms and
recreational facilities and otherwise, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of sale, lease, sublease, license, concessions or other
grant of the right of the possession, use or occupancy of all or any portion of
the Land and/or Improvements, or personalty located thereon, or rendering of
services by Mortgagor 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, commercial space,
guest room or other space, halls, stores or offices, including any deposits
securing reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, health club membership
fees, food and beverage wholesale and retail sales, service charges and vending
machine sales;

         (g) To the extent permitted under applicable laws, any and all
authorizations, licenses, permits, contracts, management agreements, franchise
agreements, and occupancy and other certificates concerning the ownership, use
and operation of the Land or Improvements;

         (h) All monies on deposit for the payment of real estate taxes or
special assessments against the Land or Improvements or for the payment of
premiums on policies of fire and other


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hazard insurance covering the Collateral (as hereinafter defined) or the Land or
Improvements; all proceeds paid for damage done to the Collateral or the Land or
Improvements; all proceeds of any award or claim for damages for any of the
Collateral or the Land or Improvements taken or damaged under the power of
eminent domain or by condemnation; and all tenants' or security deposits held by
Mortgagor in respect of the Land or Improvements;

         (i) Any and all leases, occupancy agreements, tenancies affecting the
Land or Improvements and any and all names under or by which the Land or the
Improvements may at any time be operated or known (including, without
limitation, all Mortgagor's right, title and interest in any subleases, licenses
or parking agreements pursuant to the Operating Leases, or otherwise), and all
rights to carry on business under any such names or any variant thereof, and all
trademarks, trade names, patents, patents pending and goodwill with respect to
the Land or Improvements;

         (j) Any and all shares of stock, membership or partnership interest or
other evidence of ownership of any part of the Land or Improvements that is
owned by Mortgagor in common with others, including all water stock relating to
the Land or Improvements, if any, and all documents of membership in any owners'
or members' association or similar group having responsibility for managing or
operating any part of the Land or Improvements and any management agreements;

         (k) Any and all plans and specifications prepared for construction of
improvements on the Land or Improvements and all studies, data and drawings
related thereto; and all contracts and agreements of Mortgagor relating to the
aforesaid plans and specifications or to the aforesaid studies, data and
drawings, or to the construction of improvements on the Land or Improvements;

         (l) Any and all of Mortgagor's right, title and interest in, to and
under any and all reserve, deposit or escrow accounts made pursuant to any loan
documents made between Mortgagor and Mortgagee with respect to the Land or
Improvements, together with all income, profits, benefits and advantages arising
therefrom;

         (m) Any and all goods, accounts, general intangibles, chattel paper,
instruments, documents, consumer goods, equipment and inventory (as defined in
the Florida Uniform Commercial Code ("UCC")) located on and used in the
operation of the Land or Improvements;

         (n) All of Mortgagor's right, title and interest in and to deposit
accounts and letter of credit rights (as defined in the UCC) with respect to the
Land and Improvements;

         (o) Any and all substitutions, accessions, additions and replacements
to any of the foregoing;

         (p) Any and all products and proceeds of any of the foregoing, or with
respect to the Land or Improvements, including without limitation, insurance
proceeds, proceeds of any voluntary or involuntary disposition or diminution in
value of any of the foregoing or of the Land


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or Improvements, and any claim respecting any thereof (pursuant to judgment,
condemnation award or otherwise) and all goods, accounts, general intangibles,
chattel paper, instruments, documents, consumer goods, equipment and inventory,
wherever located, acquired with the proceeds of any of the foregoing or proceeds
thereof. For purposes of this Mortgage, the term "PROCEEDS" means whatever is
received when any of the foregoing or the proceeds thereof (including, without
limitation, cash proceeds) is sold, exchanged or otherwise disposed of
(including involuntary dispositions or destruction and claims for damages
thereto), including without limitation cash proceeds, insurance proceeds,
condemnation proceeds, and any other rights or property arising under or
receivable upon any such disposition; and

         (q) All right, title and interest of Mortgagor in and to (i) those five
(5) certain lease agreements (more particularly described on EXHIBIT "B"
attached hereto and, by reference, made a part hereof) between Mortgagor, as
landlord, and ENN Leasing Company, Inc., a Tennessee corporation ("ENN"), as
tenant (individually, "OPERATING LEASE" and collectively, the "OPERATING
LEASES"); (ii) that certain Subordination Agreement dated of even date herewith
executed by ENN and Mortgagor in favor of Mortgagee, together with any
extensions, modifications and renewals thereof; (iii) those five (5) certain
Management Agreements (individually, a "MANAGEMENT AGREEMENT" and collectively,
the "MANAGEMENT AGREEMENTS") by and between ENN and Hospitality Group, Inc., a
Florida corporation ("MANAGER"), with respect to the operation of the hotels on
the Premises; and (iv) the "Collateral", as that term is defined in that certain
Assignment and Security Agreement dated on or about the date hereof by and
between ENN and Mortgagor (the "ASA"), together with all other right, title and
interest granted to Mortgagor in, under and to the ASA.

         The parties intend the definition of Premises to be broadly construed
and in the case of doubt as to whether a particular item is to be included in
the definition of Premises, the doubt should be resolved in favor of inclusion.

         TO HAVE AND TO HOLD the Premises with all rights, privileges and
appurtenances thereunto belonging, and all income, rents, royalties, revenues,
issues, profits and proceeds therefrom, unto Mortgagee, its successors and
assigns, forever, for the uses and purposes herein expressed.

         THIS MORTGAGE IS GIVEN TO SECURE: Payment of the Indebtedness; payment
of such additional sums with interest thereon which may hereafter be loaned to
Mortgagor by Mortgagee pursuant to the Note or Mortgage or otherwise advanced
under the Loan Documents (as hereinafter defined), including without limitation
advances made by Mortgagee to protect the Premises or the lien and interest of
this Mortgage or to pay taxes, assessments, insurance premiums, and all other
amounts that Mortgagor has agreed to pay pursuant to the provisions hereof or
that Mortgagee has incurred by reason of the occurrence of an Event of Default
(as hereinafter defined), including without limitation, advances made to enable
the completion of the Improvements or any restoration thereof, even though the
aggregate amount outstanding at any time may exceed the original principal
balance stated herein and in the Note; and the due, prompt and complete
performance of each and every covenant, condition and agreement contained in
this Mortgage, the Note, and every other agreement, document and instrument to
which reference


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is expressly made in this Mortgage or which at any time evidences or secures the
Indebtedness evidenced by the Note (this Mortgage, the Note and guaranty of
Mortgagor to Mortgagee and all such other agreements, documents and instruments,
but excluding the certain Environmental Indemnification Agreement executed by
Mortgagor, are hereinafter sometimes collectively referred to as the "LOAN
DOCUMENTS"). Mortgagor hereby warrants that Mortgagor has good and marketable
title to the Premises, is lawfully seized and possessed of the Premises and
every part thereof, and has the right to convey same; that Mortgagor will
forever warrant and defend the title to the Premises unto Mortgagee against the
claims of all persons whomsoever; and that the Premises are unencumbered except
as set forth on Mortgagee's title insurance policy dated on or about even date
herewith regarding the Premises.

         2. MAINTENANCE, REPAIR AND RESTORATION OF IMPROVEMENTS, PAYMENT OF
PRIOR LIENS, ETC. Mortgagor shall: (a) promptly repair, restore or rebuild any
Improvements now or hereafter on the Premises which may become damaged or be
destroyed, such Improvements to be of at least equal value and substantially the
same character as prior to such damage or destruction; (b) keep the Premises in
good condition and repair, without waste, and free from mechanics' liens or
other liens or claims for lien (except the lien of current general taxes duly
levied and assessed but not yet due and payable); (c) immediately pay when due
or within any applicable grace period any indebtedness which may be secured by a
lien or charge on the Premises (no such lien, except for current general taxes
duly levied and assessed but not yet payable, to be permitted hereunder), and
upon request exhibit reasonably satisfactory evidence to Mortgagee of the
discharge of such lien; (d) complete within a reasonable time any Improvements
now or at any time in process of erection upon the Land; (e) comply with all
requirements of law (including, without limitation, pollution control and
environmental protection laws and laws relating to the accommodation of persons
with disabilities), ordinance or other governmental regulation in effect from
time to time affecting the Premises and the use thereof, and covenants,
easements and restrictions of record with respect to the Premises and the use
thereof; (f) make no material alterations in the Premises; (g) suffer or permit
no material change in the general nature of the use of the Premises, without
Mortgagee's written consent; (h) initiate or acquiesce in no zoning
reclassification or variance with respect to the Premises without Mortgagee's
written consent; and (i) pay each item of Indebtedness when due according to the
terms hereof or of the Note.

         3. PAYMENT OF TAXES. Mortgagor shall pay before any delinquency or any
penalty or interest attaches all general taxes, special taxes, special
assessments, water charges, sewer service charges, and all other charges against
the Premises of any nature whatsoever when due, and shall, upon written request,
furnish to Mortgagee duplicate receipts therefor.

         4. TAX DEPOSITS. Mortgagor covenants and agrees to deposit with such
depositary as the Mortgagee from time to time may in writing appoint, and in the
absence of such appointment, then at the office of Mortgagee, c/o ING Investment
Management LLC, 5780 Powers Ferry Road, NW, Suite 300, Atlanta, Georgia
30327-4349, Attention: Mortgage Loan Servicing Department, commencing on the
date of disbursement of the loan secured hereby (the LOAN") and on the first day
of each month following the month in which said disbursement occurred until the
Indebtedness is fully paid, a sum equal to one-twelfth (1/12th) of the last
total

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annual taxes and assessments for the last ascertainable year (if the current
year's taxes and assessments are not yet ascertainable) (general and special) on
the Premises (unless said taxes are based upon assessments which exclude the
Improvements or any part thereof now constructed or to be constructed, in which
event the amount of such deposits shall be based upon the Mortgagee's reasonable
estimate as to the amount of taxes and assessments to be levied and assessed).
Such deposits are to be held without any allowance of interest (unless local law
requires otherwise) and are to be used for the payment of taxes and assessments
(general and special) on the Premises next due and payable when they become due.
Upon demand by such depositary, Mortgagor shall deliver and pay over to such
depositary from time to time such additional sums or such additional security as
are necessary to make up any deficiency in the amount necessary to enable such
depositary to fully pay any of the items hereinabove mentioned as they become
payable. If the funds so deposited exceed the amount required to pay such items
hereinabove mentioned for any year, the excess shall be applied on a subsequent
deposit or deposits. Said deposits need not be kept separate and apart from any
other funds of Mortgagee or such depositary.

         If any such taxes or assessments (general or special) shall be levied,
charged, assessed or imposed upon or for the Premises, or any portion thereof,
and if such taxes or assessments shall also be a levy, charge, assessment or
imposition upon or for any other property not covered by the lien of this
Mortgage, then the computation of any amount to be deposited under this
PARAGRAPH 4 shall be based upon the entire amount of such taxes or assessments,
and Mortgagor shall not have the right to apportion the amount of any such taxes
or assessments for the purposes of such computation.

         5. MORTGAGEE'S INTEREST IN AND USE OF DEPOSITS. Upon the occurrence of
an Event of Default, Mortgagee may at its option, without being required to do
so, apply any monies at the time on deposit pursuant to PARAGRAPHS 4 and 7
hereof, on any of Mortgagor's obligations herein or in the Note or any of the
Loan Documents contained, in such order and manner as the Mortgagee may elect.
When the Indebtedness has been fully paid, any remaining deposits shall be paid
to Mortgagor or to the then owner or owners of the Premises. A security interest
within the meaning of the UCC is hereby granted to the Mortgagee in and to any
monies at any time on deposit pursuant to PARAGRAPHS 4 and 7 hereof and such
monies and all of Mortgagor's right, title and interest therein are hereby
assigned to Mortgagee, all as additional security for the Indebtedness and shall
in the absence of the occurrence of an Event of Default be applied by the
depositary for the purposes for which made hereunder and shall not be subject to
the direction or control of Mortgagor; provided, however, that neither Mortgagee
nor said depositary shall be liable for any failure to apply to the payment of
taxes and assessments and insurance premiums any amount so deposited. Neither
Mortgagee nor any depositary hereunder shall be liable for any act or omission
taken in good faith or pursuant to the instruction of any party but only for its
willful misconduct.

         6. INSURANCE.

         (a) Until the Indebtedness is fully paid, the Improvements and all
fixtures, equipment and property therein contained or installed shall be kept
unceasingly insured against loss and


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damage by such hazards, casualties and contingencies in such amounts and for
such periods as may from time to time be required by Mortgagee. All insurance
shall be written in policies and by insurance companies approved by Mortgagee
which approval shall not be unreasonably withheld so long as a A.M. Best
Company's Key Rating Guide Class rating of at least A X is maintained and the
policy otherwise conforms to the terms hereof. All policies of insurance and
renewals thereof shall contain standard noncontributory mortgagee loss payable
clauses to Mortgagee, shall not contain a co-insurance clause or other clause
limiting the amount of coverage under any conditions, shall have a deductible of
not more than $100,000, and shall provide for at least thirty (30) days prior
written notice of modification, termination, nonrenewal or cancellation to
Mortgagee as well as a waiver of subrogation endorsement, all as required by
Mortgagee, in form and content acceptable to Mortgagee. All policies (or
certified copies thereof) and original ACORD 27 and ACORD 25 (as to liability
only) Certificates shall, with all premiums fully paid, be delivered to
Mortgagee as issued at least thirty (30) days before the expiration of existing
policies and shall be held by Mid-North Financial Services, Inc. having an
address at 205 West Wacker Drive, Suite 202, Chicago, Illinois 60606-1296 (or
such other entity as designated by Mortgagee) until all sums hereby secured are
fully paid. Upon request by Mortgagee, Mortgagor shall furnish Mortgagee
evidence of the replacement cost of the Improvements. In case of sale pursuant
to a foreclosure of this Mortgage or other transfer of title to the Premises and
extinguishment of the Indebtedness, complete title to all policies, other than
liability insurance policies, held by Mortgagee and all prepaid or unearned
premiums thereon shall pass to and vest in the purchaser or grantee. Mortgagee
shall not by reason of accepting, rejecting, approving or obtaining insurance
incur any liability for payment of losses.

         (b) Without in any way limiting the generality of the foregoing,
Mortgagor covenants and agrees to maintain insurance coverage on the Premises
which shall include: (i) all risk coverage insurance (including vandalism and
malicious mischief) for an amount equal to one hundred percent (100%) of the
full replacement cost of the Improvements, written on a replacement cost basis
and with a replacement cost endorsement (without depreciation) and an agreed
amount endorsement pertaining to the co-insurance clause, and containing a
mortgagee clause in Mortgagee's favor; and if at any time a dispute arises with
respect to replacement cost, Mortgagor agrees to provide at Mortgagor's expense,
an insurance appraisal prepared by an insurance appraiser approved by Mortgagee,
establishing the full replacement cost in a manner satisfactory to the insurance
carrier; (ii) business interruption or rent loss insurance insuring against loss
arising out of the perils insured against in the policy or policies referred to
in clause (i) above, in an amount equal to not less than gross revenue from the
Premises for twelve (12) months from the operation and rental of all
Improvements now or hereafter forming part of the Premises, based upon one
hundred percent (100%) occupancy of such Improvements, less any allocable
charges and expenses which do not continue during the period of restoration and
naming Mortgagee in a standard mortgagee loss payable clause thereunder; (iii)
comprehensive general public liability and property damage insurance with a
broad form coverage endorsement for an amount as required from time to time by
the Mortgagee but not less than an aggregate amount of Three Million and No/100
Dollars ($3,000,000.00) with a single occurrence limit of not less than Three
Million and No/100 Dollars ($3,000,000.00) for claims arising from any one (1)
accident or occurrence in or upon the Premises and naming Mortgagee as an
additional insured thereunder; (iv) flood insurance whenever in Mortgagee's
judgment such protection is


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necessary and is available and in such case in an amount acceptable to Mortgagee
and naming Mortgagee as the loss payee thereunder; (v) earthquake insurance
whenever in Mortgagee's judgment such protection is necessary and is available
and in such case in an amount acceptable to Mortgagee and naming Mortgagee as
the loss payee thereunder, (vi) insurance covering pressure vessels, pressure
piping and machinery, if any, and all major components of any centralized
heating or air-conditioning systems located in the Improvements, in an amount
satisfactory to Mortgagee, such policies also to insure against physical damage
to such buildings and improvements arising out of peril covered thereunder; and
(vii) such other insurance that may be reasonably required from time to time by
Mortgagee.

         (c) Mortgagor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained
hereunder.

         7. INSURANCE PREMIUM DEPOSITS. It is further covenanted and agreed that
for the purpose of providing funds with which to pay the premiums as the same
become due on the policies of insurance as herein covenanted to be furnished by
the Mortgagor, Mortgagor shall deposit with Mortgagee or the depositary referred
to in PARAGRAPH 4 hereof on the date of disbursement of the proceeds of the Loan
and on the first day of each month following the month in which said
disbursement occurred, an amount equal to the annual premiums that will next
become due and payable on such policies less any amount then on deposit with the
Mortgagee or such depositary, divided by the number of months to elapse thirty
(30) days prior to the date when such premiums become delinquent. No interest
shall be allowed to Mortgagor on account of any deposit or deposits made
hereunder and said deposits need not be kept separate and apart from any other
funds of Mortgagee or such depositary.

         8. ADJUSTMENT OF LOSSES WITH INSURER AND APPLICATION OF PROCEEDS OF
INSURANCE.

         (a) In case of loss or damage by fire or other casualty, Mortgagor
shall immediately give Mortgagee and the insurance companies that have insured
against such risks written notice of such occurrence.

         (b) In case of loss or damage by fire or other casualty, Mortgagor
shall, if no Event of Default then exists hereunder, have the sole and exclusive
right to settle, compromise or adjust any claim under, and receive, for the
purpose of rebuilding and restoration, the proceeds arising from, any and all
losses payable under insurance policies to the extent the amount thereof does
not exceed One Hundred Thousand and No/100 Dollars ($100,000.00), and all claims
for losses in excess of said amount shall be settled, compromised or adjusted
only with the mutual agreement of Mortgagor and Mortgagee and the proceeds paid
as hereinafter provided. In the event insurance proceeds in excess of One
Hundred Thousand and No/100 Dollars ($100,000.00) are payable or if an Event of
Default exists hereunder, then in either of such events, Mortgagee is authorized
to collect and receipt for any insurance proceeds. Insurance proceeds collected
by Mortgagee as aforesaid, after deducting therefrom any expenses incurred in
the collection thereof, shall, if requested by Mortgagor in writing within
thirty (30) days after the proceeds of insurance covering such damage or
destruction become available, be made available to Mortgagor for the purpose of
paying the cost of rebuilding or restoring of the Improvements if (i)


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the Premises, in Mortgagee's sole and absolute discretion is capable of being
restored to that condition which existed immediately prior to the damage or
loss, (ii) the insurance proceeds, together with all other funds which are to be
provided by Mortgagor, are sufficient to restore the Premises, (iii) Mortgagee
determines that income from the Premises shall not be materially affected
following the completion of the restoration or rebuilding, (iv) no Event of
Default then exists hereunder or under any other Loan Document, and no
circumstance or condition exists that would constitute an Event of Default upon
the giving of notice or the passage of time, or both, and (v) the rebuilding and
restoration is reasonably estimated to be completed at least one hundred eighty
(180) days prior to the Maturity Date or any Call Date, as those terms are
defined in the Note. In the event that Mortgagee makes said proceeds available
to Mortgagor to pay the cost of rebuilding or restoring of the Improvements,
such proceeds shall be made available in the manner and under the conditions
that the Mortgagee may reasonably require to assure proper application of such
proceeds. In the event such insurance proceeds are made available by the
Mortgagee, the Mortgagor shall pay all reasonable costs incurred by Mortgagee in
connection with the application of such insurance proceeds (including but not
limited to reasonable costs incurred by Mortgagee, and a title company or agent
approved by Mortgagee in overseeing the disbursement of such insurance
proceeds). The Improvements shall be restored or rebuilt so as to be of at least
equal value and substantially the same character as prior to such damage or
destruction. If the projected cost of rebuilding, repairing or restoring of the
Improvements exceeds the sum of One Hundred Thousand and No/100 Dollars
($100,000.00), then insurance proceeds shall not be made available to Mortgagor
unless and until Mortgagee has approved plans and specifications for the
proposed rebuilding and restoration, which approval shall not be unreasonably
withheld. If the proceeds are to be made available by Mortgagee to Mortgagor to
pay the cost of said rebuilding or restoration, any surplus which may remain out
of said insurance proceeds after payment of the costs of rebuilding or restoring
the Premises shall, at the option of the Mortgagee, be applied on account of the
Indebtedness or be paid to any party entitled thereto under such conditions as
Mortgagee may reasonably require. No interest shall be allowed to Mortgagor on
any proceeds held by Mortgagee.

         (c) In the event proceeds of insurance are not made available to
Mortgagor for the purpose of paying the cost of the rebuilding or restoring of
the Improvements, Mortgagee, after deducting the costs of any collection,
adjustment and compromise, shall apply such insurance proceeds in accordance
with terms of the Note upon the Indebtedness, provided that any amount so
applied by Mortgagee in reduction of the outstanding principal balance of the
Note shall be credited to installments of principal in the inverse order of
their maturity but no such application shall delay or postpone any installment
payment of principal and interest under the Note.

         9. STAMP TAX. If, by the laws of the United States of America, or of
any state having jurisdiction over Mortgagor, any tax is due or becomes due in
respect of the issuance of the Note hereby secured and this Mortgage, Mortgagor
covenants and agrees to pay such tax in the manner required by any such law.
Mortgagor further covenants to reimburse Mortgagee for any sums which Mortgagee
reasonably expends by reason of the imposition of any tax on the issuance of the
Note secured hereby and this Mortgage.

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         10. OBSERVANCE OF LEASE ASSIGNMENT.

         (a) As additional security for the payment of the Note secured hereby
and for the faithful performance of the terms and conditions contained herein,
Mortgagor, as landlord, has assigned to Mortgagee, by that certain Assignment of
Rents and Leases dated on or about this same date (the "ASSIGNMENT OF RENTS"),
all of Mortgagor's right, title and interest as landlord in and to all leases or
other rights of use and or occupancy of any part of the Premises (including,
without limitation, the Operating Leases), both present and future (hereinafter
collectively referred to as the "LEASES") and all of the rents, issues and
profits from the Leases or guaranties thereof (hereinafter collectively referred
to as the "RENTS").

         (b) No amendments or modifications to the Operating Leases shall be
permitted or valid or enforceable without Mortgagee's prior written consent. All
Leases entered into after the date hereof are subject to the approval of
Mortgagee as to form, content and tenants, and without limiting the generality
of the foregoing, Mortgagor will not without Mortgagee's prior written consent,
enter into or make any Lease. Any permitted Lease shall require actual occupancy
by the lessee thereunder.

         (c) Mortgagor will not, without Mortgagee's prior written consent: (i)
execute an assignment or pledge of any Rents and/or any Leases; (ii) accept any
prepayment of any installment of any Rents more than thirty (30) days before the
due date of such installment, and in any event no more than thirty (30) days in
advance of the then current month; or (iii) enter into non-disturbance
agreements with subtenants under any of the Operating Leases.

         (d) Mortgagor at its sole cost and expense will: (i) at all times
promptly and faithfully abide by, discharge and perform all of the material
covenants, conditions and agreements contained in all Leases, on the part of the
landlord thereunder to be kept and performed; (ii) enforce or secure the
performance of all of the material covenants, conditions and agreements of the
Leases on the part of the lessees to be kept and performed, but Mortgagor shall
not modify, amend, renew, extend, cancel, terminate or accept surrender of any
Lease without the prior written consent of Mortgagee which shall not be
unreasonably withheld; (iii) appear in and defend any action or proceeding
arising under, growing out of or in any manner connected with the Leases or the
obligations, duties or liabilities of landlord or of the lessees thereunder;
(iv) upon written request of Mortgagee, transfer and assign to Mortgagee, any
Lease or Leases heretofore or hereafter entered into, and make, execute and
deliver to Mortgagee upon demand, any and all instruments reasonably required to
effectuate said assignment; (v) furnish Mortgagee, within thirty (30) days after
a request by Mortgagee so to do, a written statement containing the names of all
lessees, terms of all Leases, including the spaces occupied and the rentals
payable thereunder; and (vi) exercise within thirty (30) days of any demand
therefor by Mortgagee any right to request from the lessee under any Lease a
certificate with respect to the status thereof.

         (e) Nothing in this Mortgage or in any other documents relating to the
Loan shall be construed to obligate Mortgagee, expressly or by implication, to
perform any of the covenants of Mortgagor as landlord under any of the Leases
assigned to Mortgagee or to pay any sum of


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money or damages therein provided to be paid by the landlord, each and all of
which covenants and payments Mortgagor agrees to perform and pay.

         (f) Mortgagor will not permit any Lease or any part thereof to become
subordinate to any lien other than the lien hereof.

         (g) Mortgagee shall have the option to declare this Mortgage in default
because of a default of landlord in any Lease of the Premises unless such
default is cured by Mortgagor pursuant to the terms of the Lease and within any
applicable cure period or unless such default would not permit the tenant to
terminate the Lease. It is covenanted and agreed that an Event of Default under
the Assignment of Rents shall constitute an Event of Default hereunder on
account of which the whole of the Indebtedness shall at once, at the option of
the Mortgagee, become immediately due and payable without notice to the
Mortgagor.

         (h) Mortgagor shall not, and shall not permit any tenant to, conduct
any on-site dry cleaning operations on the Premises.

         (i) In the event of the enforcement by Mortgagee of the remedies
provided for by law or by this Mortgage, the lessee under each Lease of the
Premises shall, at the option of Mortgagee, attorn to any person succeeding to
the interest of Mortgagor as a result of such enforcement and shall recognize
such successor in interest as landlord under such Lease without change in the
terms or other provisions thereof; provided, however, that said successor in
interest shall not be bound by any payment of rent or additional rent for more
than one month in advance or any amendment or modification to any Lease made
without the consent of Mortgagee or said successor in interest. Each lessee,
upon request by said successor in interest, shall execute and deliver an
instrument or instruments confirming such attornment.

         11. EFFECT OF EXTENSION OF TIME. If the payment of the Indebtedness, or
any part thereof, is extended or varied, or if any part of any security for the
payment of the Indebtedness is released, or if any person or entity liable for
the payment of the Indebtedness is released, or if Mortgagee takes other or
additional security for the payment of the Indebtedness, or if Mortgagee waives
or fails to exercise any right granted herein, or in the Note secured hereby, or
in any other instrument given to secure the payment hereof, then all persons now
or at any time hereafter liable for the payment of the Indebtedness, or any part
thereof, or interested in the Premises shall be held to assent to such
extension, variation, release, waiver, failure to exercise or the taking of
additional security, and their liability and the lien and interest and all
provisions hereof shall continue in full force, the right of recourse against
all such persons being expressly reserved by Mortgagee, notwithstanding such
extension, variation, release, waiver, failure to exercise, or the taking of
additional security.

         12. EFFECT OF CHANGES IN LAWS REGARDING TAXATION. In the event of the
enactment after this date of any law of the state in which the Premises are
located deducting from the value of the Premises for the purpose of taxation any
lien thereon, or imposing upon the Mortgagee the payment of the whole or any
part of the taxes or assessments or charges or liens herein required to be paid
by Mortgagor, or changing in any way the laws relating to the taxation of
mortgages

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or debts secured by mortgages or Mortgagee's interest in the Premises, or the
manner of collection of taxes, so as to affect this Mortgage or the debt secured
hereby or the holders thereof, then, and in any such event, Mortgagor, upon
demand by Mortgagee, shall pay such taxes or assessments, or reimburse Mortgagee
therefor if Mortgagee pays such taxes and submits proof of payment to Mortgagor;
provided, however, that if in the opinion of counsel for Mortgagee: (a) it might
be unlawful to require Mortgagor to make such payment, or (b) the making of such
payment might result in the imposition of interest beyond the maximum amount
permitted by law; then and in such event, Mortgagee may elect, by notice in
writing given to Mortgagor, to declare all of the Indebtedness to be and become
due and payable sixty (60) days from the giving of such notice, without the
applicable Prepayment Premium (as defined in the Note).

         13. MORTGAGEE'S PERFORMANCE OF DEFAULTED ACTS. Upon the occurrence of
an Event of Default herein, Mortgagee may, but need not, and whether electing to
declare the whole of the Indebtedness due and payable or not, and without waiver
of any other remedy, make any payment or perform any act herein required of
Mortgagor in any form and manner deemed expedient, and may, but need not, make
full or partial payments of principal or interest on prior encumbrances, if any,
and purchase, discharge, compromise or settle any tax lien or other prior lien
or title or claim thereof, or redeem from any tax sale or forfeiture affecting
the Premises or contest any tax or assessment or cure any default of Mortgagor
as landlord in any Lease. All monies paid for any of the purposes herein
authorized and all expenses paid or incurred in connection therewith, including
reasonable attorneys' fees, and any other monies advanced by Mortgagee in regard
to any tax referred to in PARAGRAPHS 9 and 12 hereof or to protect the Premises
or the lien and interest hereof, shall be additional Indebtedness and shall
become immediately due and payable without notice and with interest thereon at
the Default Rate of interest set forth in the Note. Inaction of Mortgagee shall
never be considered as a waiver of any right accruing to it on account of any
Event of Default on the part of Mortgagor.

         14. MORTGAGEE'S RELIANCE ON TAX BILLS, ETC. Mortgagee in making any
payment hereby authorized: (a) relating to taxes and assessments, may do so
according to any bill, statement or estimate procured from the appropriate
public office 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; or (b) relating to insurance premiums, may do so
according to any bill or statement procured from the appropriate company without
inquiry into the accuracy of such bill or statement; or (c) for the purchase,
discharge, compromise or settlement of any other prior lien, may do so without
inquiry as to the validity or amount of any claim for lien which may be
asserted.

         15. ACCELERATION OF INDEBTEDNESS IN EVENT OF DEFAULT. It is expressly
agreed by Mortgagor that time is of the essence hereof and that the whole of the
Indebtedness shall become immediately due and payable without notice to
Mortgagor at the option of the Mortgagee upon the occurrence of one or more of
the following events (hereinbefore and hereinafter collectively referred to as
"EVENTS OF DEFAULT" and individually referred to as an "EVENT OF DEFAULT"),
together with a prepayment premium in the amount, if any, required to be paid
pursuant to the terms of the Note in the event of a prepayment:


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         (a) nonpayment of any monetary sum due hereunder within ten (10) days
after the same shall become due; or

         (b) default shall be made in the due observance or performance of the
terms and conditions of PARAGRAPH 6 hereof (Insurance) or PARAGRAPH 30 hereof
(Due on Sale or Further Encumbrance); or

         (c) default shall be made in the due observance or performance of any
of the other covenants, agreements or conditions hereinbefore or hereinafter
contained, required to be kept or performed or observed by the Mortgagor which
does not relate to the nonpayment of any monetary sum, and such default is not
cured within sixty (60) days following written notice thereof by Mortgagee to
Mortgagor or within such longer period of time, not exceeding an additional
thirty (30) days, as may be reasonably necessary to cure such non-compliance if
Mortgagor is diligently and with continuity of effort pursuing such cure and the
failure is susceptible of cure within an additional period of thirty (30) days;
or

         (d) the entry of a decree or order for relief by a court having
jurisdiction in respect of Mortgagor, a general partner of Mortgagor if
Mortgagor is a partnership, the beneficiary or beneficiaries of Mortgagor if
Mortgagor is a trust, a managing member of Mortgagor if Mortgagor is a limited
liability company, or any guarantor of the Note secured hereby (any of the
foregoing parties being referred to herein as a "KEY PARTY"), in any involuntary
case under the federal bankruptcy laws now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) for any Key Party or any substantial
part of the property of any such Key Party, or for the winding up or liquidation
of the affairs of any Key Party and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days; or

         (e) the commencement by any Key Party, of a voluntary case under
federal bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or any other similar laws or
the consent by any such Key Party to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of any Key Party, or of any substantial part of the property
of any such person or entity, or the making by any such Key Party of an
assignment for the benefit of creditors or the failure of any such Key Party
generally to pay the debts of any such Key Party as such debts become due, or
the taking of action by any such Key Party in furtherance of any of the
foregoing; or

         (f) the death of any individual guarantor of the Note secured hereby,
unless a beneficiary (or beneficiaries) or other third party approved by
Mortgagee of the decedent having a net worth or an aggregate net worth, as the
case may be, greater than the net worth of the decedent upon the date hereof
shall become liable by assumption under the guaranty within ten (10) days of the
appointment of the executor or personal representative; or

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         (g) any warranty, representation, certification, financial statement,
or other information furnished or to be furnished to Mortgagee by or on behalf
of Mortgagor or any guarantor of the Note to induce Mortgagee to loan the money
evidenced by the Note proves to have been inaccurate or false in any material
respect when made; or

         (h) any breach, default, event of default or failure of performance
(however denominated) under the Note or any of the other Loan Documents and the
expiration of any applicable cure period without the same having been cured; or

         (i) Mortgagor shall be in default of, or in violation of, beyond any
applicable grace period, any conditions, covenants or restrictions which benefit
or burden the Premises; or

         (j) a default by ENN (or any successor to ENN) under any of those five
(5) certain Franchise License Agreements (individually, a "FRANCHISE AGREEMENT"
and collectively, the "FRANCHISE AGREEMENTS") with Promus Hotels, Inc., a
Delaware corporation ("FRANCHISOR"), with respect to the operation of five (5)
hotels (individually, a "HOTEL" and collectively, the "HOTELS") located on the
Premises; or

         (k) if Mortgagor fails, at any time, to own all of the Personalty (as
that term is defined in the ASA), free and clear of all liens except any liens
granted pursuant to the Loan Documents; or

         (l) a default by Mortgagor or ENN under (i) the ASA, (ii) any of the
Operating Leases or (iii) that certain Subordination Agreement executed on or
about the date hereof by Mortgagor and ENN for the benefit of Mortgagee.

If, while any insurance proceeds or condemnation awards are being held by
Mortgagee to reimburse Mortgagor for the cost of rebuilding or restoration of
buildings or improvements on the Premises, Mortgagee shall accelerate the
Indebtedness, then and in such event, the Mortgagee shall be entitled to apply
all such insurance proceeds and condemnation awards then held by it in reduction
of the Indebtedness and any excess held by it over the amount of Indebtedness
then due hereunder shall be returned to Mortgagor or any other party entitled
thereto without interest.

         16. REMEDIES.

         (a) Primary Remedies. If an Event of Default shall occur, Mortgagee
may: declare the Indebtedness to be and the same shall be, immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived and without regard to the value of the Premises held
as security for the Indebtedness or the solvency of any person liable for the
payment of such Indebtedness; and/or exercise any other right, power or remedy
available to it at law or in equity, hereunder or under any other Loan Document
without demand, protest or notice of any kind, all of which are hereby expressly
waived, except such as is expressly required hereby or by such other Loan
Document. Without limiting the generality of the foregoing, Mortgagee may:

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                  (i) enter and take possession of the Premises or any part
         thereof, exclude Mortgagor and all persons claiming under Mortgagor
         wholly or partly therefrom, and operate, use, manage and control the
         same, or cause the same to be operated by a person selected by
         Mortgagee, either in the name of Mortgagor or otherwise, and upon such
         entry, from time to time, at the expense of Mortgagor and of the
         Premises, make all such repairs, replacements, alterations, additions
         or improvements thereto as Mortgagee may deem proper, and to lease the
         Premises or any part thereof at such rental and to such persons as it
         may deem proper and collect and receive the rents, revenues, issues,
         profits, royalties, income and benefits thereof including, without
         limitation, those past due and those thereafter accruing, with the
         right of Mortgagee to terminate, cancel or otherwise enforce any Lease
         or sublease for any default that would entitle Mortgagor to terminate,
         cancel or enforce same and apply the same to the payment of all
         expenses which Mortgagee may be authorized to incur under the
         provisions of this Mortgage and applicable laws, the remainder to be
         applied to the payment, performance and discharge of the Indebtedness
         in such order as Mortgagee may determine until the same have been paid
         in full;

                  (ii) institute an action for the foreclosure of this Mortgage
         and the sale of the Premises by any law procedure or pursuant to the
         judgment or decree of a court of competent jurisdiction;

                  (iii) sell the Premises to the highest bidder or bidders at
         public auction at a sale or sales held at such place or places and time
         or times and upon such notice and otherwise in such manner as may be
         required by law, or in the absence of any such requirement, as
         Mortgagee may deem appropriate, and from time to time adjourn such sale
         by announcement at the time and place specified for such sale or for
         such adjourned sale or sales without further notice except such as may
         be required by law;

                  (iv) take all action to protect and enforce the rights of
         Mortgagee under this Mortgage by suit for specific performance of any
         covenant herein contained, or in aid of the execution of any power
         herein granted or for the enforcement of any other rights;

                  (v) exercise any or all of the rights and remedies available
         to a secured party under the UCC, including the right to (A) enter the
         Premises and take possession of any personal property without demand or
         notice and without prior judicial hearing or legal proceedings, which
         Mortgagor hereby expressly waives, (B) require Mortgagor to assemble
         any personal property, or any portion thereof, and make it available to
         Mortgagee at a place or places designated by Mortgagee and reasonably
         convenient to both parties and (C) sell all or any portion of the
         personal property at public or private sale, without prior notice to
         Mortgagor except as otherwise required by law (and if notice is
         required by law, after ten days' prior written notice), at such place
         or places and at such time or times and in


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         such manner and upon such terms, whether for cash or on credit, as
         Mortgagee in its sole discretion may determine. As to any property
         subject to Article 9 of the UCC included in the Premises, Mortgagee may
         proceed under the UCC or proceed as to both real and personal property
         in accordance with the provisions of this Mortgage and the rights and
         remedies that Mortgagee may have at law or in equity, in respect of
         real property, and treat both the real and personal property included
         in the Premises as one parcel or package of security. Mortgagor shall
         have the burden of proving that any such sale pursuant to the UCC was
         conducted in a commercially unreasonable manner;

                  (vi) terminate any management agreements, contracts, or
         agents/managers responsible, for the property management of the
         Premises, if in the sole discretion of Mortgagee such property
         management is unsatisfactory in any respect;

                  (vii) foreclose this Mortgage for the entire unpaid amount of
         the Indebtedness, or only as to the sum past due, with interest and
         costs without injury to this Mortgage or the displacement or impairment
         of the remainder of the lien thereof, and at such foreclosure sale the
         Premises shall be sold subject to all remaining items of the
         Indebtedness and Mortgagee may again foreclose, in the same manner, as
         often as there may be any sum past due. In case of sale in any action
         or proceeding to foreclose this Mortgage, the Mortgagee shall have the
         right to sell the Premises covered hereby in parts or as an entirety.
         It is intended hereby to give to the Mortgagee the widest possible
         discretion permitted by law with respect to all aspects of any such
         sale or sales.

                  (viii) if an Event of Default occurs due to the nonpayment of
         the Indebtedness, or any part thereof, as an alternative to the right
         of foreclosure for the full Indebtedness after acceleration thereof,
         Mortgagee shall have the right to institute proceedings, at Mortgagee's
         option, for partial foreclosure with respect to the portion of said
         Indebtedness so in default, as if under a full foreclosure, and without
         declaring the entire Indebtedness due (such proceedings being
         hereinafter referred to as "PARTIAL FORECLOSURE"), and provided that if
         a foreclosure sale is made because of an Event of Default in the
         payment of a part of the Indebtedness, such sale may be made subject to
         the continuing lien of this Mortgage for the unmatured part of the
         Indebtedness; and it is agreed that such sale pursuant to a Partial
         Foreclosure, if so made, shall not in any manner affect the unmatured
         part of the Indebtedness, but as to such unmatured part, this Mortgage
         and the lien thereof shall remain in full force and effect just as
         though no foreclosure sale had been made under the provisions of this
         Paragraph. Notwithstanding any Partial Foreclosure, Mortgagee may
         elect, at any time prior to sale pursuant to such Partial Foreclosure,
         to discontinue such Partial Foreclosure and to accelerate the
         Indebtedness by reason of any Event of Default upon which such Partial
         Foreclosure was predicated or by reason of any other further Event of
         Default, and proceed with full foreclosure proceedings. It is further
         agreed that several


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         foreclosures may be made pursuant to Partial Foreclosure without
         exhausting the right of full or Partial Foreclosure sale for any
         unmatured part of the Indebtedness, it being the purpose to provide for
         a Partial Foreclosure sale of the Indebtedness hereby without
         exhausting the power to foreclose and to sell the Premises pursuant to
         any such Partial Foreclosure for any other part of the Indebtedness,
         whether matured at the time or subsequently maturing, and without
         exhausting any right of acceleration and full foreclosure.

         (b) Receiver. If an Event of Default shall occur, Mortgagee shall be
entitled as a matter of right to the appointment of a receiver of the Premises
and the rents, revenues, issues, profits, royalties, income and benefits
thereof, without notice or demand, and without regard to the adequacy of the
security for the Indebtedness, the value of the Premises or the solvency of
Mortgagor, either before or after any sale, and, Mortgagee may be appointed as
such receiver. Such receiver shall have the power: (i) to collect the rents,
issues and profits of the Premises during the pendency of any foreclosure
proceedings whether by judicial or non-judicial foreclosure, and, in case of a
sale and a deficiency, for such time when Mortgagor, except for the intervention
of such receiver, would be entitled to collect such rents, issues and profits,
to the maximum time and extent permitted by law; (ii) to extend or modify any
then existing Leases and to make new leases, which extensions, modifications and
new leases may provide for terms to expire, or for options to leases to extend
or renew terms to expire, beyond the maturity date of the Note and beyond the
date of the issuance of a deed or deeds to a purchaser or purchasers at a
foreclosure sale, it being understood and agreed that any such leases, and the
options or other such provisions to be contained therein, shall be binding upon
Mortgagor and all persons whose interests in the Premises are subject to the
lien hereof and upon the purchaser or purchasers at any foreclosure sale,
notwithstanding any redemption from sale, discharge of the secured obligations,
satisfaction of any foreclosure decree, or issuance of any certificate of sale
or deed to any purchaser; and (iii) all other powers which may be necessary or
are usual in such case for the protection, possession, control, management, and
operation of the Premises during the whole of said period. The court from time
to time may authorize the receiver to apply the net income in the receiver's
hands in payment in whole or in part of: (i) the Indebtedness and all
obligations hereunder, or by any decree foreclosing this Mortgage, or in
accordance with applicable non-judicial foreclosure provisions, any tax, special
assessment or other lien which may be or become superior to the lien hereof or
of such decree; and (ii) if this is a leasehold mortgage, all rents due or which
may become due under the underlying lease.

         (c) Sales by Parcels. In any sale made under or by virtue of this
Mortgage or pursuant to any judgment or decree of court, the Premises may be
sold in one or more parts or parcels or as an entirety and in such order as
Mortgagee may elect, without regard to the right of Mortgagor, or any person
claiming under it, to the marshaling of assets. To the full extent permitted by
law, Mortgagor waives the marshaling of assets.

         (d) Effect of Sale. The purchaser at any sale made under or by virtue
of this Mortgage or pursuant to any judgment or decree of court shall take title
to the Premises or the part thereof so sold free and discharged of the estate of
Mortgagor therein, the purchaser being hereby discharged from all liability to
see to the application of the purchase money. Any person,


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including Mortgagee, may purchase at any such sale. Mortgagee is hereby
irrevocably appointed the attorney-in-fact of Mortgagor in its name and stead to
make all appropriate transfers and deliveries of the Premises or any portions
thereof so sold and, for this purpose, Mortgagee may execute all appropriate
instruments of transfer, and may substitute one or more persons with like power,
Mortgagor hereby ratifying and confirming all that its said attorneys or such
substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
promptly upon Mortgagee's written request, Mortgagor shall ratify and confirm,
or cause to be ratified and confirmed, any such sale or sales by executing and
delivering, or by causing to be executed and delivered, to Mortgagee or to such
purchaser or purchasers all such instruments as may be advisable, in the
judgment of Mortgagee, for the purpose, and as may be designated, in such
request. Any sale or sales made under or by virtue of this Mortgage, to the
extent not prohibited by law, shall operate to divest all the estate, right,
title, interest, property, claim and demand whatsoever, whether at law or in
equity, of Mortgagor in, to and under the Premises, or any portions thereof so
sold, and shall be a perpetual bar both at law and in equity against Mortgagor,
its successors and assigns, and against any and all persons claiming or who may
claim the same, or any part thereof, by, through or under Mortgagor, or its
successors or assigns. The powers and agency herein granted are coupled with an
interest and are irrevocable.

         (e) Eviction of Mortgagor After Sale. If Mortgagor fails or refuses to
surrender possession of the Premises after any sale thereof, Mortgagor shall be
deemed a tenant at sufferance, subject to eviction by means of forcible entry
and detainer proceedings, provided, that this remedy is not exclusive or in
derogation of any other right or remedy available to Mortgagee or any purchaser
of the Premises under any provision of this Mortgage or pursuant to any judgment
or decree of court.

         (f) Insurance Policies. In the event of a foreclosure sale pursuant to
this Mortgage or other transfer of title or assignment of the Premises in
extinguishment, in whole or in part, of the Indebtedness, all right, title and
interest of Mortgagor in and to all policies of insurance required under the
provisions of this Mortgage shall inure to the benefit of and pass to the
successor in interest of Mortgagor or the purchaser or grantee of the Premises
or any part thereof so transferred.

         (g) Foreclosure; Expense of Litigation. When the Indebtedness hereby
secured, or any part thereof shall become due, whether by acceleration or
otherwise, Mortgagee shall have the right to foreclose the lien hereof for such
Indebtedness or part thereof. In any suit to foreclose the lien hereof, there
shall be allowed and included as additional Indebtedness in the decree for sale
all expenditures and expenses which may be paid or incurred by or on behalf of
Mortgagee for reasonable attorneys' fees, appraiser's fees, actual costs of
environmental reviews or audits, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of the decree) of procuring all such
abstracts of title, title searches and examinations, title insurance policies,
and similar data and assurances with respect to the title as Mortgagee may deem
reasonably necessary either to prosecute such action or to evidence to bidders
at any sale which may be had pursuant to such decree the true condition of the
title to or the value of the Premises. All expenditures and expenses of the
nature in this Paragraph mentioned and such expenses and fees


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as may be incurred in the protection of the Premises and the maintenance of the
lien of this Mortgage, including the reasonable fees of any attorneys employed
by Mortgagee in any litigation or proceeding affecting this Mortgage, the Note
or the Premises, including appellate, probate and bankruptcy proceedings, or in
preparations for the commencement or defense of any proceedings or threatened
suit or proceeding shall be immediately due and payable by Mortgagor, with
interest thereon at the Default Rate of interest as set forth in the Note and
shall be secured by this Mortgage.

         17. APPLICATION OF PROCEEDS. The proceeds of any sale made either under
the power of sale hereby given or under a judgment, order or decree made in any
action to foreclose or to enforce this Mortgage, shall be applied:

         (a) first to the payment of (i) all costs and expenses of such sale,
including reasonable attorneys' fees, environmental site assessors fees and
costs, appraisers' fees and costs of procuring title searches, title insurance
policies and similar items and (ii) all charges, expenses and advances incurred
or made by Mortgagee in order to protect the lien or estate created by this
Mortgage or the security afforded hereby including any expenses of entering,
taking possession of and operating the Premises;

         (b) then to the payment of any other Indebtedness in such order as
Mortgagee may determine until the same have been paid in full; and

         (c) any balance thereof shall be paid to Mortgagor, or to whosoever
shall be legally entitled thereto, or as a court of competent jurisdiction may
direct.

         18. RIGHTS AND REMEDIES CUMULATIVE. Each right, power and remedy herein
conferred upon Mortgagee is cumulative and in addition to every other right,
power or remedy, express or implied, given now or hereafter existing, at law or
in equity, and each and every right, power and remedy herein set forth or
otherwise so existing may be exercised from time to time as often and in such
order as may be deemed expedient by Mortgagee, and the exercise or the beginning
of the exercise of one right, power or remedy shall not be a waiver of the right
to exercise at the same time or thereafter any other right, power or remedy and
no delay or omission of Mortgagee in the exercise of any right, power or remedy
accruing hereunder or arising otherwise shall impair any such right, power or
remedy, or be construed to be a waiver of any Event of Default or acquiescence
therein.

         19. MORTGAGEE'S RIGHT OF INSPECTION. Mortgagee shall, upon reasonable
notice to Mortgagor, have the right to inspect the Premises at all reasonable
times and access thereto shall be permitted for that purpose.

         20. CONDEMNATION. The Mortgagee may, at its option, in its own name (a)
appear or proceed in any condemnation proceeding, and (b) make any compromise or
settlement thereof, provided that so long as the Mortgagor promptly prosecutes
any compromise or settlement thereof, the Mortgagor shall control any compromise
or settlement proceeding with the result thereof being subject to the
Mortgagee's approval. The Mortgagor shall give the Mortgagee


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immediate notice of the initiation of any condemnation proceeding, and a copy of
every pleading, notice and other items served in any condemnation proceeding.
Mortgagor hereby assigns, transfers and sets over unto the Mortgagee the entire
proceeds of any award or any claim for damages for any of the Premises taken or
damaged under the power of eminent domain or by condemnation. Mortgagee may
elect to apply the proceeds of the award upon or in reduction of the
Indebtedness, whether due or not, or make said proceeds available for
restoration or rebuilding of the Premises. In the event that Mortgagee elects,
in Mortgagee's sole and absolute discretion, to make said proceeds available to
reimburse Mortgagor for the cost of the rebuilding or restoration of the
Improvements, such proceeds shall be made available in the manner and under the
conditions that Mortgagee may require. In any event, the Improvements shall be
restored or rebuilt in accordance with plans and specifications to be submitted
to and approved by Mortgagee prior to commencement of any building or
restoration. If the proceeds are made available by Mortgagee to reimburse
Mortgagor for the cost of said rebuilding or restoration, any surplus which may
remain out of said award after payment of such cost of rebuilding or restoration
shall at the option of Mortgagee be applied on account of the Indebtedness or be
paid to any party entitled thereto. No interest shall be allowed to Mortgagor on
the proceeds of any award held by the Mortgagee.

         21. RELEASE UPON PAYMENT AND DISCHARGE OF MORTGAGOR'S OBLIGATIONS.
Mortgagee shall release this Mortgage and the lien and interest hereof by proper
instrument upon payment and discharge of all Indebtedness including any
prepayment premium provided for herein or in the Note secured hereby. Until this
Mortgage shall be satisfied of record, Mortgagor hereby waives for itself, and
all subsequent successors in title to the Premises, any right it may now have or
hereafter have, pursuant to Florida Statutes 697.04 (1)(b), as amended from time
to time, to file for record a notice limiting the maximum amount which may be
secured by this Mortgage.

         22. GIVING OF NOTICE.

         (a) All notices, demands, requests, and other communications desired or
required to be given hereunder ("NOTICES"), shall be in writing and shall be
given by: (i) hand delivery to the address for Notices; (ii) delivery by
overnight courier service to the address for Notices; or (iii) sending the same
by United States mail, postage prepaid, certified mail, return receipt
requested, addressed to the address for Notices.

         (b) All Notices shall be deemed given and effective upon the earlier to
occur of: (i) the hand delivery of such Notice to the address for Notices; (ii)
one business day after the deposit of such Notice with an overnight courier
service by the time deadline for next day delivery addressed to the address for
Notices; or (iii) three business days after depositing the Notice in the United
States mail as set forth in (a)(iii) above. All Notices shall be addressed to
the following addresses:

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         Mortgagor:            Equity Inns Partnership, L.P.
                               7700 Wolf River Boulevard
                               Germantown, Tennessee 38138
                               Attention: Mr. Howard Silver

         With a copy to:       Equity Inns Partnership, L.P.
                               c/o Equity Inns, Inc.
                               7700 Wolf River Boulevard
                               Germantown, Tennessee 38138
                               Attention: Michelle B. Chatfield, Esq.

                                             and

                               Hunton & Williams LLP
                               2000 Riverview Tower
                               900 South Gay Street
                               Knoxville, Tennessee 37902
                               Attn: John A. Decker, Esq.

         Mortgagee:            ING USA Annuity and Life Insurance Company
                               c/o ING Investment Management LLC
                               5780 Powers Ferry Road, NW, Suite 300
                               Atlanta, Georgia, 30327-4349
                               Attention: Mortgage Loan Servicing Department

                                                and

                               ING Investment Management LLC
                               5780 Powers Ferry Road, NW, Suite 300
                               Atlanta, Georgia, 30327-4349
                               Attention: Real Estate Law Department

With a copy to:                Powell, Goldstein, Frazer & Murphy LLP
                               Sixteenth Floor
                               191 Peachtree Street N.E.
                               Atlanta, Georgia 30303-1736
                               Attention: John R. Parks, Esq.

or to such other persons or at such other place as any party hereto may by
Notice designate as a place for service of Notice. Provided, that the "copy to"
Notice to be given as set forth above is a courtesy copy only; and a Notice
given to such person is not sufficient to effect giving a Notice to the
principal party, nor does a failure to give such a courtesy copy of a Notice
constitute a failure to give Notice to the principal party.

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         23. WAIVER OF DEFENSE. No action for the enforcement of the lien or of
any provision hereof shall be subject to any defense which would not be good and
available to the party interposing same in an action at law or in equity upon
the Note hereby secured.

         24. WAIVER OF STATUTORY RIGHTS. Mortgagor shall not, and will not,
apply for or avail itself of any homestead, appraisement, valuation, stay,
extension or exemption laws, or any so-called "Moratorium Laws", now existing or
hereafter enacted, in order to prevent or hinder the enforcement or foreclosure
of this Mortgage, but to the extent lawfully allowed hereby waives the benefit
of such laws. Mortgagor, for itself and all who may claim through or under it,
waives any and all right to have the property and estates comprising the
Premises marshaled upon any foreclosure of the lien hereof and agrees that any
court having jurisdiction to foreclose such lien may order the Premises sold as
an entirety. To the extent permitted by law, Mortgagor does hereby expressly
waive any and all rights of redemption from sale under any order or decree of
foreclosure of this Mortgage on behalf of Mortgagor, the trust estate and all
persons beneficially interested therein and each and every person, acquiring any
interest in or title to the Premises subsequent to the date of this Mortgage.

         25. FURNISHING OF FINANCIAL STATEMENTS TO MORTGAGEE.

         (a) Mortgagor covenants and agrees that it will keep and maintain books
and records of account, or cause books and records of account to be kept and
maintained in which full, true and correct entries shall be made of all dealings
and transactions relative to the Premises, which books and records of account
shall, at reasonable times during business hours and on reasonable notice, be
open to inspection by Mortgagee and Mortgagee's accountants and other duly
authorized representatives. Such books of record and account shall be kept and
maintained either:

                  (i) In accordance with generally accepted accounting
         principles consistently applied; or

                  (ii) In accordance with an accrual basis.

         (b) Mortgagor covenants and agrees to furnish, or cause to be furnished
to Mortgagee, annually, within ninety (90) days following the end of each fiscal
year of Mortgagor unaudited annual financial reports prepared on an accrual
basis, a copy of a report of the operations of the Premises, including a balance
sheet and supporting schedules and containing a detailed statement of income and
expenses, a current rent roll of the Premises and occupancy rates and average
daily room rates. Mortgagor shall simultaneously deliver to Mortgagee a
financial statement of Mortgagor, and each of its general partners if Mortgagor
is a partnership, and of any guarantor prepared in accordance with the
accounting requirements set forth above, certified by Mortgagor, or an officer,
manager or a general partner of any corporate, limited liability company or
partnership Mortgagor or by guarantor, as applicable. Each report or statement
shall be certified as correct by the appropriate party.

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         (c) If Mortgagor omits to deliver as required any report or statement
required by this PARAGRAPH 25, and said omission is not cured by Mortgagor
within thirty (30) days after written notice of such omission has been given by
Mortgagee to Mortgagor, Mortgagee may elect, in addition to exercising any
remedy for an Event of Default as provided for in this Mortgage, to make an
audit of all books and records of Mortgagor including its bank accounts which in
any way pertain to the Premises and to prepare the statement or statements which
Mortgagor failed to procure and deliver. Such audit shall be made and such
statement or statements shall be prepared by an independent certified public
accountant to be selected by Mortgagee. Mortgagor shall pay all reasonable
expenses of the audit and other services, which expenses shall be secured hereby
as additional Indebtedness and shall be immediately due and payable with
interest thereon at the Default Rate of interest as set forth in the Note and
shall be secured by this Mortgage.

         26. FILING AND RECORDING FEES. Mortgagor will pay all filing,
registration or recording fees and all reasonable expenses incident to the
execution and acknowledgment of this Mortgage and all federal, state, county and
municipal taxes and other taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of said Note and
this Mortgage.

         27. BUSINESS PURPOSE. Mortgagor represents, covenants and agrees that
all of the proceeds of the Note secured by this Mortgage will be used solely for
business purposes and in furtherance of the regular business affairs of
Mortgagor.

         28. EXCULPATORY. The liability of the Mortgagor personally to pay the
Note or any interest that may accrue thereon, or any Indebtedness or obligation
accruing or arising hereunder is limited to the extent set forth in the Note.

         29. SECURITY AGREEMENT. Mortgagor and Mortgagee agree that this
Mortgage shall constitute a security agreement within the meaning of the UCC
with respect to all sums on deposit with the Mortgagee with respect to insurance
proceeds or condemnation proceeds ("DEPOSITS") and with respect to any personal
property and fixtures included in the definition herein of the word "PREMISES",
which property may not be deemed to form a part of the real estate described in
Exhibit "A" or may not constitute a "fixture" within the meaning of the UCC, and
all replacements of such property, substitutions and additions thereto and the
proceeds thereof, all such property being sometimes hereinafter collectively
referred to as the "COLLATERAL", and that a security interest in and to the
Collateral and the Deposits is hereby granted to Mortgagee and the Deposits and
all of Mortgagor's right, title and interest therein are hereby assigned to
Mortgagee, all to secure payment of the Indebtedness and to secure performance
by Mortgagor of the terms, covenants and provisions hereof. Upon the occurrence
of an Event of Default under this Mortgage, Mortgagee, pursuant to the
appropriate provisions of the UCC, shall have the option of proceeding with
respect to the Collateral in accordance with its rights and remedies with
respect to the real property, in which event the default provisions of the UCC
shall not apply. The parties agree that, in the event Mortgagee shall elect to
proceed with respect to the Collateral separately from the real property, ten
(10) days' notice of the sale of the Collateral shall be reasonable notice. The
reasonable expenses of retaking, holding, preparing


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<PAGE>
for sale, selling and the like incurred by Mortgagee shall include, but not be
limited to, reasonable attorneys' fees and legal expenses incurred by Mortgagee.
Mortgagor agrees that, without the written consent of Mortgagee, Mortgagor will
not remove or permit to be removed from the Premises any of the Collateral
except that so long as the Mortgagor is not in default hereunder, Mortgagor
shall be permitted to sell or otherwise dispose of the Collateral in the
ordinary course of business, when obsolete, worn out, inadequate, unserviceable
or unnecessary for use in the operation of the Premises, upon replacing the same
or substituting for the same other Collateral at least equal in value to the
initial value to that disposed of and in such a manner so that said Collateral
shall be subject to the security interest created hereby, and so that the
security interest of Mortgagee shall be first in priority, it being expressly
understood and agreed that all replacements of the Collateral and any additions
to the Collateral shall be and become immediately subject to the security
interest of this Mortgage and covered hereby. Mortgagor shall, from time to
time, on request of Mortgagee, deliver to Mortgagee an inventory of the
Collateral in reasonable detail. Mortgagor covenants and represents that all
Collateral, and all replacements thereof, substitutions therefor or additions
thereto, unless Mortgagee otherwise consents, now are and will be free and clear
of liens (other than the lien of taxes not yet due or payable), encumbrances or
security interests of others. Mortgagor shall, upon demand execute and deliver
to Mortgagee such financing statements and other documents in form satisfactory
to Mortgagee, and will do all such acts and things as Mortgagee may at anytime,
or from time to time, reasonably request or as may be necessary or appropriate
to establish and maintain a first perfected security interest in the Deposits
and Collateral, subject to no liens (other than the lien of taxes not yet due or
payable), encumbrances, or security interests of others.

         This Mortgage also constitutes a financing statement for the purpose of
the UCC and shall constitute a "fixture filing" under such statutes and shall be
filed in the real estate records of the County in which the Land is located. For
such purpose the name and address of the debtor and the secured party are as set
forth below:

         Name of Debtor:            Equity Inns Partnership, L.P.

         Debtor's Mailing
          Address:                  7700 Wolf River Boulevard
                                    Germantown, Tennessee 38138
         Debtor's Taxpayer
          Identification Number:    62-1550848

         Address of Property:       660 West Hillsboro Boulevard
                                    Deerfield Beach, Florida

                                    1455 Yamato Road
                                    Boca Raton, Florida

                                    1475 West Gateway Boulevard
                                    Boynton Beach, Florida

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<PAGE>
                                    2025 Vista Parkway
                                    West Palm Beach, Florida

                                    4001 RCA Boulevard
                                    Palm Beach Gardens, Florida

         Name of Secured Party:     ING USA Annuity and Life Insurance Company

         Address of Secured
          Party:                    ING USA Annuity and Life Insurance Company
                                    c/o ING Investment Management LLC
                                    5780 Powers Ferry Road, NW, Suite 300
                                    Atlanta, Georgia 30327-4349
                                    Attention: Real Estate Law Department

This financing statement covers the Collateral. Some of the items or types of
property comprising the Collateral are or are to become fixtures on the real
property described in this Mortgage. Mortgagor is the record owner of the real
property described herein upon which the foregoing fixtures and other items and
types of property are located.

Mortgagor hereby represents and warrants to Mortgagee, and covenants and agrees
with Mortgagee as follows:

         (a) Mortgagor shall not merge or consolidate into, or transfer any of
the Collateral to, any other entity or person without the prior written consent
of the Mortgagee.

         (b) Mortgagor shall not change its name unless it has given Mortgagee
sixty (60) days prior written notice thereof and executed and authorized at the
request of Mortgagee, such additional financing statements to be filed in such
jurisdiction as the Mortgagee may deem necessary or desirable in its sole
discretion.

         (c) It shall be an Event of Default hereunder if any amendment to or
termination of a financing statement naming the Mortgagor as debtor and the
Mortgagee as secured party, or any correction statement with respect thereto, is
filed in any jurisdiction by any party other than the Mortgagee or its counsel
without the prior written consent of the Mortgagee.

         (d) Mortgagor hereby authorizes the Mortgagee, its counsel or its
representative, at any time and from time to time, to file financing statements
and amendments that describe the collateral covered by such financing statements
in such jurisdictions as the Mortgagee may deem necessary or desirable in order
to perfect the security interest granted by the Mortgagor under this security
agreement.

         30. DUE ON SALE OR FURTHER ENCUMBRANCE. (a) If, without Mortgagee's
prior written consent, (i) the Premises or any part thereof or any interest in
the Premises or the

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Mortgagor (including beneficial interests) is sold or conveyed; (ii) title to
the Premises or any interest therein is divested; (iii) the Premises or any
ownership interest in the Mortgagor is further encumbered or pledged; (iv) any
lease which gives the lessee any option to purchase the Premises or any part
thereof is entered into, or, (v) without limiting the generality of clause (i)
above, the ownership of shares of the Mortgagor, if a corporation, or of any
corporate general partner of Mortgagor, if a partnership, or the general
partnership interests in any partnership which is a general partner of
Mortgagor, or any membership interest in a Mortgagor which is a limited
liability company, or any beneficial or fiduciary interest in any Mortgagor
which is a trust or trustee, is sold or conveyed, the Mortgagee shall at its
sole discretion be entitled to accelerate the Indebtedness and declare the then
unpaid principal balance and all accrued interests and other sums due and
payable under the Note due and payable and exercise all remedies available to
Mortgagee under the Loan Documents. The Mortgagor understands that the present
ownership of the Premises and Improvements are a material inducement to
Mortgagee in the making of the Loan. Any consent by Mortgagee to a change in
ownership or to a change in the composition of the Mortgagor may be conditioned
upon payment of a transfer fee equal to one percent (1%) of the then outstanding
Indebtedness for processing such request for consent, upon an increase in the
rate of interest on the unpaid balance of the Indebtedness to a then-current
market rate, and/or other terms and conditions as Mortgagee may impose in its
sole discretion.

         (b) Notwithstanding the foregoing SUBPARAGRAPH (a), Mortgagee will
permit one transfer of the Premises, provided: (i) the transferee has a
financial and credit standing and management expertise acceptable to Mortgagee
as equal to or greater than that of Mortgagor on the date hereof; (ii)
assumption documents in form and substance satisfactory to Mortgagee are
executed by the transferee; (iii) Mortgagee is paid a transfer fee equal to one
percent (1%) of the then outstanding Indebtedness; (iv) Mortgagor reimburses
Mortgagee all reasonable fees and expenses associated with the transfer
including legal fees; (v) Mortgagee receives an endorsement to the
MortgageeSection s title policy, in form and substance acceptable to Mortgagee;
and (vi) at Mortgagee's option, Mortgagee receives opinions of counsel, and
Mortgagor and transferee authorization documents, in form and substance
acceptable to Mortgagee. Further, Mortgagee, in its sole judgement and
discretion, may require individuals specifically named by Mortgagee to deliver
to Mortgagee an Environmental Indemnification Agreement on MortgageeSection s
standard form. The rights granted to Mortgagor in this SUBPARAGRAPH (b) are
personal to Mortgagor, shall be extinguished after the exercise thereof, and
shall not inure to the benefit of any subsequent transferee. Such transfer and
assumption will not, however, release the Mortgagor or any guarantors from any
liability to the Mortgagee without the prior written consent of Mortgagee, which
consent may be given or withheld in MortgageeSection s sole discretion, but if
given, may be conditioned upon, without limitation, the execution of new
guaranties from principals of the transferee as Mortgagee deems necessary,
execution by the principals of the transferee of MortgageeSection s standard
Environmental Indemnification Agreement and such other requirements as Mortgagee
may deem appropriate in its discretion.

         (c) Notwithstanding the foregoing SUBPARAGRAPH (a) Mortgagee will
permit the following transfers of ownership interests in Mortgagor without the
1% fee or any change in the Loan terms provided that: (i) no Event of Default
shall have occurred or be continuing hereunder


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<PAGE>
or under the Loan Documents; (ii) Mortgagee is promptly notified of such
proposed transfer and provided with such documentation evidencing the transfer
and identity of the transferee as reasonably requested by Mortgagee; (iii)
assumption documents, if deemed necessary by the Mortgagee, in a form that is
acceptable to Mortgagee are executed by the transferee; and (iv) Mortgagor
reimburses Mortgagee for all reasonable fees and expenses including reasonable
attorney's fees associated with Mortgagee's review and documentation of the
transfer:

                  (i) Any ownership interest in the Mortgagor may be transferred
         by operation of law upon the death of the owner of said interest but
         only by will or intestacy;

                  (ii) Any ownership interest in the Mortgagor may be
         voluntarily sold, transferred, conveyed or assigned for estate planning
         purposes to immediate family members or to a family trust, provided
         that at all times there exists a minimum of 51% control of the Premises
         and the Mortgagor by parties owning an ownership interest in Mortgagor
         as of the date hereof. "IMMEDIATE FAMILY MEMBERS" shall mean the
         spouse, children, grandchildren, siblings, and the siblings' children,
         of each holder of an ownership interest in Mortgagor, as of the date
         hereof, or a trust for the benefit of one or more of any such persons;

                  (iii) Any ownership interest in the Mortgagor may be
         voluntarily sold, transferred or conveyed or assigned to another person
         owning an ownership interest in the Mortgagor as of the date hereof;

                  (iv) Limited partnership interests representing not more than
         ten (10%) percent of the total ownership interest.

         (d) Notwithstanding the foregoing SUBPARAGRAPH (a), Mortgagor may
encumber the Premises with a sole additional mortgage, subordinate in every
respect to the lien and interest of this Mortgage, for the purpose of securing
secondary indebtedness which, when combined with the indebtedness under this
Loan, does not exceed sixty-five percent (65%) of the value of the Premises as
established by a current MAI appraisal prepared not more than ninety (90) days
prior to the closing of the proposed subordinate financing transaction (the
"SUBORDINATE FINANCING"), provided that:

                  (i) the subordinate mortgagee, the documentation for the
         Subordinate Financing, and the form and terms of the Subordinate
         Financing are satisfactory in all respects to Mortgagee;

                  (ii) all such documentation as Mortgagee may reasonably
         require shall be submitted to Mortgagee including, but not limited to,
         operating statements of the Premises for the previous two Loan Years (a
         "LOAN YEAR" is a period of twelve consecutive months commencing on the
         date hereof if it is the first of the month and otherwise commencing on
         the first day of the month immediately following the date hereof, and
         the first Loan Year shall include the


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         period, if any, between the date hereof and the commencement date of
         the first Loan Year) and a pro forma operating statement for the
         current Loan Year, and a then - current MAI appraisal of the Premises,
         provided at Mortgagee's expense, by an appraiser approved by Mortgagee;

                  (iii) the Net Operating Income (for the purpose of this
         subparagraph, Net Operating Income shall mean gross cash operating
         receipts from the Premises less normal and customary operating expenses
         incurred in the operation, management, and maintenance of the Premises)
         shall not be less than one hundred fifty percent (150%) of the combined
         aggregate of the Indebtedness and Subordinate Financing debt service
         payments;

                  (iv) the total of the outstanding principal balance of the
         Indebtedness and the Subordinate Financing does not exceed sixty-five
         percent (65%) of the value of the Premises as established by a
         then-current MAI appraisal;

                  (v) The mortgagee of the mortgage securing the Subordinate
         Financing shall expressly acknowledge the priority of the debt, liens
         and security interests of the Indebtedness and agree to provide
         Mortgagee with written notice of any default under the Subordinate
         Financing in a subordination agreement in form and substance
         satisfactory to Mortgagee. Mortgagor shall pay any fees, costs or
         expenses, including reasonable attorneys' fees, incurred by Mortgagee
         in connection with the Subordinate Financing;

                  (vi) Any default under the Subordinate Financing shall at
         Mortgagee's option constitute an Event of Default under this Mortgage
         and the other Loan Documents; and

                  (vii) If previously waived, Mortgagee shall have the right to
         reinstate escrow payments for taxes and insurance premiums.

         31. ENVIRONMENTAL MATTERS; NOTICE; INDEMNITY. Mortgagor covenants and
agrees as follows:

         (a) For purposes of this Mortgage, the following definitions shall
apply:

                  (i) The term "ENVIRONMENTAL LAW" means and includes any
         federal, state or local law, statute, regulation or ordinance
         pertaining to health, industrial hygiene or the environmental or
         ecological conditions on, under or about the Premises, including
         without limitation each of the following (and their respective
         successor provisions): the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, as amended, 42 U.S.C. sections
         9601 et seq. ("CERCLA"); the Resource Conservation and Recovery Act of
         1976, as amended, 42 U.S.C. sections 6901 et seq. ("RCRA"); the Federal
         Hazardous


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         Materials Transportation Act, as amended, 49 U.S.C. sections 1801 et
         seq.; the Toxic Substance Control Act, as amended, 15 U.S.C. sections
         2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. sections 1857 et
         seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
         sections 1251 et seq.; and the rules, regulations and ordinances of the
         U.S. Environmental Protection Agency and of all other federal, state,
         county and municipal agencies, boards, commissions and other
         governmental bodies and officers having jurisdiction over the Premises
         or the use or operation of the Premises.

                  (ii) The term "HAZARDOUS SUBSTANCE" means and includes: (1)
         those substances included within the definitions of "hazardous
         substances", "hazardous materials", "hazardous waste", "pollutants",
         "toxic substances" or "solid waste" in any Environmental Law; (2) those
         substances listed in the U.S. Department of Transportation Table or
         amendments thereto (49 CFR 172.101) or by the U.S. Environmental
         Protection Agency (or any successor agency) as hazardous substances (40
         CFR Part 302 and any amendments thereto); (3) those other substances,
         materials and wastes which are or become, regulated under any
         applicable federal, state or local law, regulation or ordinance or by
         any federal, state or local governmental agency, board, commission or
         other governmental body, or which are or become classified as hazardous
         or toxic by any such law, regulation or ordinance; and (4) any
         material, waste or substance which is any of the following: (A)
         asbestos; (B) polychlorinated biphenyl; (C) designated or listed as a
         "hazardous substance" pursuant to section 311 or section 307 of the
         Clean Water Act (33 U.S.C. sections 1251 et seq.); (D) explosive; (E)
         radioactive; (F) a petroleum product; (G) infectious waste; or (H) mold
         or other similar fungal growth. As used herein, the term "mold or other
         similar fungal growth" shall mean and include mycotoxin producing molds
         in amounts sufficient to create a health risk to humans.
         Notwithstanding anything to the contrary herein, the term "HAZARDOUS
         SUBSTANCE" shall not include commercially sold products otherwise
         within the definition of the term "HAZARDOUS SUBSTANCE", but (X) which
         are used or disposed of by Mortgagor or used or sold by tenants of the
         Premises in the ordinary course of their respective businesses, (Y) the
         presence of which product is not prohibited by applicable Environmental
         Law, and (Z) the use and disposal of which are in all respects in
         accordance with applicable Environmental Law.

                  (iii) The term "Enforcement or Remedial Action" means and
         includes any action taken by any person or entity in an attempt or
         asserted attempt to enforce, to achieve compliance with, or to collect
         or impose assessments, penalties, fines, or other sanctions provided
         by, any Environmental Law.

                  (iv) The term "Environmental Liability" means and includes any
         claim, demand, obligation, cause of action, accusation, allegation,
         order, violation, damage (including consequential damage), injury,
         judgment, assessment, penalty, fine, cost of Enforcement or Remedial
         Action, or any other cost or expense whatsoever, including actual,
         reasonable attorneys' fees and


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         disbursements, resulting from or arising out of the violation or
         alleged violation of any Environmental Law, any Enforcement or Remedial
         Action, or any alleged exposure of any person or property to any
         Hazardous Substance.

         (b) Mortgagor, its successors and assigns, after reasonable inquiry,
covenants, warrants and represents to its actual knowledge, that, except as
disclosed in any environmental report or study obtained by, or provided to,
Mortgagee in connection with the making of the Loan,

                  (i) No Hazardous Substances have been or shall be discharged,
         disbursed, released, stored, treated, generated, disposed of, or
         allowed to escape or migrate, or shall threaten to be injected,
         emptied, poured, leached, or spilled on or from the Premises.

                  (ii) No asbestos or asbestos-containing materials have been or
         will be installed, used, incorporated into, placed on, or disposed of
         on the Premises.

                  (iii) No polychlorinated biphenyls ("PCBS") are or will be
         located on or in the Premises, in the form of electrical transformers,
         fluorescent light fixtures with ballasts, cooling oils, or any other
         device.

                  (iv) No underground storage tanks are or will be located on
         the Premises or were located on the Premises and subsequently removed
         or filled.

                  (v) No investigation, administrative order, consent order and
         agreement, litigation, settlement, lien or encumbrance with respect to
         Hazardous Substances is proposed, threatened, anticipated or in
         existence with respect to the Premises.

                  (vi) The Premises and Mortgagor's operations at the Premises
         are in compliance with all applicable Environmental Laws including
         without limitation any, state and local statutes, laws and regulations.
         No notice has been served on Mortgagor, or any subsidiary of Mortgagor,
         from any entity, government body, or individual claiming any violation
         of any law, regulation, ordinance or code, or requiring compliance with
         any law, regulation, ordinance or code, or demanding payment or
         contribution for environmental damage or injury to natural resources.
         Copies of any such notices received subsequent to the date hereof shall
         be forwarded to Mortgagee within three (3) days of their receipt.

                  (vii) The Mortgagor has no knowledge of the release or threat
         of release of any Hazardous Substances from any property adjoining or
         in the immediate vicinity of the Premises.

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                  (viii) No portion of the Premises is a wetland or other water
         of the United States subject to jurisdiction under Section 404 of the
         Clean Water Act (33 U.S.C. 1344) or any comparable state statute or
         local ordinance or regulation defining or protecting wetlands or other
         special aquatic areas.

                  (ix) There are no concentrations of radon or other radioactive
         gases or materials in any buildings or structures on the Premises that
         exceed background ambient air levels.

                  (x) To the best of Mortgagor's knowledge, there have been no
         complaints of illness or sickness alleged to result from conditions
         inside any buildings or structures on the Premises.

         (c) Mortgagor will give prompt written notice to Mortgagee of:

                  (i) any proceeding, known investigation or inquiry commenced
         by any governmental authority with respect to the presence of any
         Hazardous Substance on, under or about the Premises or the migration
         thereof to or from adjoining property;

                  (ii) all claims made or threatened by any individual or entity
         against Mortgagor or the Premises relating to any loss or injury
         allegedly resulting from any Hazardous Substance; and

                  (iii) the discovery by Mortgagor of any occurrence or
         condition on any real property adjoining or in the vicinity of the
         Premises which might cause the Premises or any part thereof to be
         subject to any restriction on the ownership, occupancy, transferability
         or use of the Premises under any Environmental Law.

         (d) Mortgagee shall have the right and privilege to: (i) join in and
participate in, as a party if it so elects, any one or more legal proceedings or
actions initiated with respect to the Premises; and to (ii) have all costs and
expenses thereof (including without limitation Mortgagee's reasonable attorneys'
fees and costs) paid by Mortgagor.

         (e) Mortgagor agrees to protect, defend, indemnify and hold harmless
Mortgagee, its directors, officers, employees, agents, contractors,
sub-contractors, licensees, invitees, participants, successors and assigns, from
and against any Environmental Liability and any and all claims, demands,
judgments, settlements, damages, actions, causes of action, injuries,
administrative orders, consent agreements and orders, liabilities, losses,
penalties, reasonable costs, including but not limited to any cleanup costs,
remediation costs and response costs, and all reasonable expenses of any kind
whatsoever including reasonable attorneys' fees and expenses, including but not
limited to those claims arising out of loss of life, injury to persons, property
or business or damage to natural resources in connection with the activities of
Mortgagor, its predecessors in interest, third parties who have trespassed on
the Premises, or


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parties in a contractual relationship with Mortgagor, and any of them, whether
or not occasioned wholly or in part by any condition, accident or event caused
by any act or omission of Mortgagee, the foregoing being collectively referred
to as "CLAIMS", which:

                  (i) arise out of the actual, alleged or threatened migration,
         spill, leaching, pouring, emptying, injection, discharge, dispersal,
         release, storage, treatment, generation, disposal or escape of any
         Hazardous Substances onto or from the Premises; or

                  (ii) actually or allegedly arise out of, in connection with
         the Premises, the use, specification or inclusion of any product,
         material or process containing Hazardous Substances, the failure to
         detect the existence or proportion of Hazardous Substances in the soil,
         air, surface water or ground water, or the performance of or failure to
         perform the abatement of any Hazardous Substances source or the
         replacement or removal of any soil, water, surface water or ground
         water containing any Hazardous Substances; or

                  (iii) arise out of the breach of any covenant, warranty or
         representation contained in any statement or other information given by
         Mortgagor to Mortgagee relating to environmental matters; or

                  (iv) arise out of any Enforcement or Remedial Action or any
         judicial or administrative action brought pursuant to any Environmental
         Law.

         Mortgagor, its successors and assigns, shall bear, pay and discharge
when and as the same become due and payable, any and all such judgments or
claims for damages, penalties or otherwise against Mortgagee described in this
SUBPARAGRAPH (e), shall hold Mortgagee harmless for those judgments or claims,
and shall assume the burden and expense of defending all suits, administrative
proceedings, and negotiations of any description with any and all persons,
political subdivisions or government agencies arising out of any of the
occurrences set forth in this SUBPARAGRAPH (e).

         Mortgagor's indemnifications and representations made herein shall
survive any termination or expiration of the documents evidencing or securing
the Loan and/or the repayment of the indebtedness evidenced by the Note,
including, but not limited to, any foreclosure on this Mortgage or acceptance of
a deed in lieu of foreclosure. Without limiting the generality of the foregoing,
Mortgagor's indemnifications and representations shall not extend to Hazardous
Substances which first originate on the Premises subsequent to Mortgagee's
succession to title by virtue of a foreclosure or acceptance of a deed in lieu
of foreclosure.

         (f) If any investigation, site monitoring, containment, cleanup,
removal, restoration or other remedial work of any kind or nature (the "REMEDIAL
WORK") is reasonably desirable (in the case of an operation and maintenance
program or similar monitoring or preventative programs) or necessary, both as
determined by an independent environmental consultant selected by Mortgagee
under any applicable federal, state or local law, regulation or ordinance, or
under



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any judicial or administrative order or judgment, or by any governmental person,
board, commission or agency, because of or in connection with the current or
future presence, suspected presence, release or suspected release of a Hazardous
Substance into the air, soil, groundwater, or surface water at, on, about, under
or within the Premises or any portion thereof, Mortgagor shall within thirty
(30) days after written demand by Mortgagee for the performance (or within such
shorter time as may be required under applicable law, regulation, ordinance,
order or agreement), commence and thereafter diligently prosecute to completion
all such Remedial Work to the extent required by law. All Remedial Work shall be
performed by contractors approved in advance by Mortgagee (which approval in
each case shall not be unreasonably withheld or delayed) and under the
supervision of a consulting engineer approved in advance by Mortgagee. All costs
and expenses of such Remedial Work (including without limitation the reasonable
fees and expenses of Mortgagee's counsel) incurred in connection with monitoring
or review of the Remedial Work shall be paid by Mortgagor. If Mortgagor shall
fail or neglect to timely commence or cause to be commenced, or shall fail to
diligently prosecute to completion, such Remedial Work, Mortgagee may (but shall
not be required to) cause such Remedial Work to be performed; and all costs and
expenses thereof, or incurred in connection therewith (including, without
limitation, the reasonable fees and expenses of Mortgagee's counsel), shall be
paid by Mortgagor to Mortgagee forthwith after demand and shall be a part of the
Indebtedness.

         32. CAPTIONS. The captions or headings preceding the text of the
paragraphs or subparagraphs of this Mortgage are inserted only for convenience
of reference and shall not constitute a part of this Mortgage, nor shall they in
any way affect its meaning, construction or effect.

         33. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on the
part of Mortgagee in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any party at law or in equity or otherwise. No amendment,
modification, supplement, termination or waiver of or to any provision of this
Mortgage, nor consent to any departure therefrom, shall be effective unless the
same shall be in writing and signed by or on behalf of the party to be charged
with the enforcement thereof. Any amendment, modification or supplement of or to
any provision of this Mortgage, any waiver of any provision of this Mortgage,
and any consent to any departure from the terms of any provision of this
Mortgage, shall be effective only in the specific instance and for the specific
purpose for which made or given.

         34. RELATIONSHIP. Mortgagee is only a lender under the Loan Documents,
and nothing contained in this Mortgage or the other Loan Documents and no action
taken by the parties pursuant hereto shall be deemed to constitute the Mortgagee
and any other of the parties to any of the Loan Documents a partnership, an
association, a joint venture or other entity, nor constitute Mortgagee as a
fiduciary for any of the parties.

         35. GOVERNING LAW. This Mortgage shall be governed by the laws
(excluding conflicts of laws rules) of the State of Florida.


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         36. TIME OF ESSENCE. Time is of the essence in the performance by the
parties of this Mortgage.

         37. CONSTRUCTION. Mortgagor has been represented by its own counsel in
this transaction, and this Mortgage shall not be construed more strongly against
any party regardless of who was more responsible for its preparation.

         38. GENDER; NUMBER; TERMS. Words and phrases herein shall be construed
as in the singular or plural number and as masculine, feminine or neuter gender,
according to the context. The use of the words "herein," "hereof," "hereunder"
and other similar compounds of the word "here" shall refer to this entire
Mortgage and not to any particular section, paragraph or provision. The term
"person" and words importing persons as used in this Mortgage shall include
firms, associations, partnerships (including limited partnerships), joint
ventures, trusts, corporations, limited liability companies, and other legal
entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

         39. INTEGRATION. This Mortgage, together with the other Loan Documents
and the certain Environmental Indemnification Agreement executed by Mortgagor,
constitute the entire agreement between the parties hereto pertaining to the
subject matters hereof and thereof and supersede all negotiations, preliminary
agreements and all prior or contemporaneous discussions and understandings of
the parties hereto in connection with the subject matters hereof and thereof.

         40. GENERAL INDEMNIFICATION.

         (a) Mortgagor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties (defined below)
from and against any and all Losses (defined below) imposed upon or incurred by
or asserted against any Indemnified Parties and directly or indirectly arising
out of or in any way relating to any one or more of the following: (i) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Premises or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(ii) any use, nonuse or condition in, on or about the Premises or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (iii) performance of any labor or services or
the furnishing of any materials or other property in respect of the Premises or
any part thereof; (iv) any failure of the Premises to be in compliance with any
applicable laws; (v) any and all claims, demands or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease; or (vi) the payment of any commission, charge or brokerage fee to anyone
which may be payable in connection with the funding of the Loan. Any amounts
payable to Mortgagee by reason of the application of this Paragraph shall become
immediately due and payable and shall bear interest at the Default Rate (as
defined in the Note) from the date loss or damage is sustained by Mortgagee
until paid. The term "LOSSES" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, judgments, awards,


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amounts paid in settlement of whatever kind or nature (including but not limited
to attorneys' fees and other costs of defense). The term "INDEMNIFIED PARTIES"
shall mean (i) Mortgagee, (ii) any prior owner or holder of the Note, (iii) any
servicer or prior servicer of the Loan, (iv) any participant or any prior
participant in any portion of the Loan, (v) any trustees, custodians or other
fiduciaries who hold or who have held a full or partial interest in the Loan for
the benefit of any participant or other third party, (vi) any receiver or other
fiduciary appointed in a foreclosure or other collection proceeding, (vii) any
officers, directors, shareholders, partners, members, employees, agents,
servants, representatives, contractors, subcontractors, affiliates or
subsidiaries of any and all of the foregoing, and (viii) the heirs, legal
representatives, successors and assigns of any and all of the foregoing
(including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the Indemnified Parties' assets
and business), in all cases whether during the term of the Loan or as part of or
following a foreclosure of the Loan.

         (b) Upon written request by any Indemnified Party, Mortgagor shall
defend such Indemnified Party (if requested by any Indemnified Party, in the
name of the Indemnified Party) by attorneys and other professionals approved by
the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties
may, in their sole discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of the Indemnified
Parties, their attorneys shall control the resolution of any claim or
proceeding. Upon demand, Mortgagor shall pay or, in the sole discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.

         (c) Mortgagor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all Losses imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of this Mortgage, the Note or
any of the other Loan Documents.

         41. MISCELLANEOUS.

         (a) This Mortgage and all provisions hereof shall extend to and be
binding upon Mortgagor and its heirs, successors, grantees and assigns, any
subsequent owner or owners of the Premises and all persons claiming under or
through Mortgagor (but this clause shall not be construed as constituting the
consent by Mortgagee to the transfer of any interest in the Premises), and the
word "Mortgagor" when used herein shall include any such person and all persons
liable for the payment of the Indebtedness or any part thereof, whether or not
such persons shall have executed said Note or this Mortgage. The word
"Mortgagee", when used herein, shall include the successors and assigns of
Mortgagee, and the holder or holders, from time to time, of the Note secured
hereby. In addition, in the event Mortgagor is a land trust or similar entity,
the term "Mortgagor" as used herein shall include the beneficiary or
beneficiaries of such land trust or similar entity.


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         (b) In the event one or more of the provisions contained in this
Mortgage or the Note secured hereby, or in any other security documents given to
secure the payment of the Note secured hereby, shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall, at the option of Mortgagee, not affect any other
provision of this Mortgage, and this Mortgage shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.

         (c) The Mortgagor will, from time to time, upon ten (10) business days'
prior written request from Mortgagee, make, execute, acknowledge and deliver to
Mortgagee such supplemental mortgages, certificates and other documents,
including without limitation UCC financing statements, as may be necessary for
better assuring and confirming unto Mortgagee any of the Premises, or for more
particularly identifying and describing the Premises, or to preserve or protect
the priority of this Mortgage lien, and generally do and perform such other acts
and things and execute and deliver such other instruments and documents as may
reasonably be deemed necessary or advisable by Mortgagee to carry out the
intentions of this Mortgage.

         (d) Mortgagor shall not by act or omission permit any building or other
improvement on any premises not subject to the lien of this Mortgage to rely on
the Premises or any part thereof or any interest therein to fulfill any
municipal or governmental requirement, and Mortgagor hereby assigns to Mortgagee
any and all rights to give consent for all or any portion of the Premises or any
interest therein to be so used. Similarly, no building or other Improvement on
the Premises shall rely on any premises not subject to the lien of this Mortgage
or any interest therein to fulfill any governmental or municipal requirement.
Mortgagor shall not by act or omission impair the integrity of the Premises as a
single zoning lot separate and apart from all other premises. Any act or
omission by Mortgagor which would result in a violation of any of the provisions
of this paragraph shall be void.

         (e) Mortgagor will, from time to time, upon ten (10) business days'
prior written request by Mortgagee, execute, acknowledge and deliver to
Mortgagee, a certificate stating that this Mortgage is unmodified and in full
force and effect (or, if there have been modifications, that this Mortgage is in
full force and effect as modified and setting forth such modifications) and
stating the principal amount secured hereby and the interest accrued to date on
such principal amount. The estoppel certificate from Mortgagor shall also state
to the best knowledge of Mortgagor whether any offsets or defenses to the
Indebtedness exist and if so shall identify them.

         (f) The Note secured hereby includes provisions for the assessment of a
Late Charge, as defined therein. Said Late Charge shall be secured hereby as
Indebtedness, as that term is used herein.

         (g) Mortgagee shall have the right and option to exercise power of sale
or to commence a civil action to foreclose this Mortgage and to obtain a decree
of foreclosure. The failure to join any tenant or tenants as party defendant or
defendants in any such civil action or the failure of any decree of foreclosure
and sale to foreclose their rights shall not be asserted by Mortgagor as a
defense in any civil action instituted to collect the Indebtedness, or any part


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thereof, or any deficiency remaining unpaid after foreclosure and sale of the
Premises, any statute or rule of law at any time existing to the contrary
notwithstanding.

         (h) At the option of Mortgagee, this Mortgage shall become, subject and
subordinate, in whole or in part (but not with respect to priority of
entitlement to insurance proceeds or any award in condemnation) to any one or
more, or to all, Leases upon the execution by Mortgagee and recording or
registration thereof, at any time hereafter, in the Office of the Recorder in
and for the county wherein the Premises are situated, or such other office as
determined by Mortgagee, of a unilateral declaration to that effect.

         (i) In the event that maturity of the Indebtedness is accelerated by
Mortgagee because of the occurrence of an Event of Default hereunder and a
tender of payment is made by or on behalf of Mortgagor in the amount necessary
to satisfy the Indebtedness at any time prior to judicial confirmation or other
conclusion if confirmation is not required, of a foreclosure sale or sale under
a power of sale, then such tender shall constitute a prepayment under the Note
and shall, to the extent specified in the Note, require payment of the
prepayment premium provided for in the Note.

         (j) All agreements between Mortgagor and Mortgagee (including, without
limitation, those contained in this Mortgage and the Note) are expressly limited
so that in no event whatsoever shall the amount paid or agreed to be paid to the
Mortgagee exceed the highest lawful rate of interest permissible under the laws
of the State of Florida. If, from any circumstances whatsoever, fulfillment of
any provision hereof or the Note or any other documents securing the
Indebtedness at the time performance of such provision shall be due, shall
involve the payment of interest exceeding the highest rate of interest permitted
by law which a court of competent jurisdiction may deem applicable hereto, then,
ipso facto, the obligation to be fulfilled shall be reduced to the highest
lawful rate of interest permissible under the laws of the State of Florida; and
if for any reason whatsoever Mortgagee shall ever receive as interest an amount
which would be deemed unlawful, such interest shall be applied to the payment of
the last maturing installment or installments of the principal Indebtedness
(whether or not then due and payable) and not to the payment of interest.

         (k) Mortgagor covenants and agrees that it shall constitute an Event of
Default hereunder if any of the proceeds of the Loan will be used, or were used,
as the case may be, for the purpose (whether immediate, incidental or ultimate)
of "purchasing" or "carrying" any "margin security" as such terms are defined in
Regulation G of the Board of Governors of the Federal Reserve System (12 CFR
Part 207) or for the purpose of reducing or retiring any indebtedness which was
originally incurred for any such purpose.

         (l) Mortgagor shall exert its best efforts to include a "no lien"
provision in any property management agreement hereafter entered into by
Mortgagor or its beneficiary with a property manager for the Premises, whereby
the property manager waives and releases any and all mechanics' lien rights that
he, or anyone claiming through or under such manager, may have. Such property
management agreement containing such "no lien" provision or a short form


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thereof shall, at Mortgagee's request, be recorded in the office of the in and
for the County wherein the Premises is situated, or such other office as
reasonably requested by Mortgagee.

         42. ERISA REPRESENTATION AND WARRANTY. Mortgagor hereby represents,
warrants and agrees that as of the date hereof, none of the investors in or
owners of Mortgagor is an employee benefit plan as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 as amended, a plat as
defined in Section 4975(e)(1) of the Internal Revenue Code of 1986 as amended,
nor an entity the assets of which are deemed to include plan assets pursuant to
Department of Labor regulation Section 2510.3-101 (the "PLAN ASSET REGULATION").
Mortgagor further represents, warrants and agrees that at all times during the
term of the Loan the assets of Mortgagor shall not be deemed to include plan
assets. If at any time during the entire term of the Loan any of the investors
in or owners of Mortgagor shall include a plan or entity described in the first
sentence of this Section 42, Mortgagor shall as soon as reasonably possible
following an investment by such plan or entity provide Mortgagee with an opinion
of counsel reasonably satisfactory to Mortgagee indicating that the assets of
Mortgagor are not deemed to include plan assets pursuant to the Plan Asset
Regulation. In lieu of such opinion, the Mortgagee may in its sole discretion
accept such other assurances from Mortgagor as are necessary to satisfy
Mortgagee in its sole discretion that the assets of Mortgagor are not deemed to
include plan assets pursuant to the Plan Asset Regulation.

         43. ADDITIONAL COLLATERAL.

         (a) Mortgagor acknowledges and agrees that the Indebtedness and all
other obligations hereunder such Indebtedness and other obligations collectively
called the "OBLIGATIONS" are secured by the Premises and various other
collateral including, without limitation, at the time of execution of this
Mortgage certain personal property of Mortgagor and other parties described in
the Loan Documents. The Mortgagor specifically acknowledges and agrees that the
Premises, in and of itself, if foreclosed or realized upon would not be
sufficient to satisfy the outstanding amount of the Obligations. Accordingly,
Mortgagor acknowledges that, to the fullest extent permitted by applicable law,
it is in the Mortgagor's contemplation that the other collateral pledged to
secure the Obligations may be pursued by the Mortgagee in separate proceedings
in the various states, counties and other countries where such collateral may be
located and additionally that Mortgagor and other parties liable for payment of
the Obligations will remain liable for any deficiency judgments in addition to
any amounts the Mortgagee may realize on sales of other property or any other
collateral given as security for the Obligations except as otherwise set forth
in this Mortgage. Specifically, and without limitation of the foregoing, it is
agreed that it is the intent of the parties hereto that in the event of a
foreclosure of this Mortgage, the Obligations shall not be deemed merged into
any judgment of foreclosure, but rather shall remain outstanding. It is the
further intent and understanding of the parties that the Mortgagee, following an
Event of Default, may, to the fullest extent permitted by applicable law, pursue
all of its Collateral with the Obligations remaining outstanding and in full
force and effect notwithstanding any judgment of foreclosure or any other
judgment which the Mortgagee may obtain.

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         (b) Mortgagor acknowledges and agrees that the Premises and the other
collateral which may from time to time be encumbered by the other Loan Documents
may be located in more than one state, county or country and therefore
Mortgagor, to the fullest extent permitted by applicable law, waives and
relinquishes any and all rights it may have, whether at law or equity, to
require the Mortgagee to proceed to enforce or exercise any rights, powers and
remedies it may have under the Loan Documents in any particular manner, in any
particular order, or in any particular state or other jurisdiction. Furthermore,
Mortgagor acknowledges and agrees, to the fullest extent permitted by applicable
law, that the Mortgagee shall be allowed to enforce payment and performance of
the Obligations and to exercise all rights and powers provided under this
Mortgage, or the other Loan Documents or under any provision of law, by one or
more proceedings, (whether contemporaneous, consecutive or both) in any one or
more states, counties or countries in which the security is located. To the
fullest extent permitted by applicable law, neither the acceptance of this
Mortgage or any Loan Document nor the enforcement in one state, county or
country, whether by court action, power of sale, or otherwise, shall prejudice
or in any way limit or preclude enforcement of such documents through one or
more additional proceedings, in that state or in any other state, county or
country.

         (c) To the fullest extent permitted by applicable law, Mortgagor
further agrees that any particular remedy or proceeding, including, without
limitation, foreclosure through court action (in a state or federal court) or
power of sale, may be brought and prosecuted in the local or federal courts of
any one or more states as to all or any part of the Premises or the collateral
encumbered by the Loan Documents, wherever located, without regard to the fact
that any one or more prior or contemporaneous proceedings have been situation
elsewhere with respect to the same or any other part of the Premises and the
other collateral encumbered by the Loan Documents.

         (d) To the fullest extent permitted by applicable law, Mortgagee may
resort to any other security held by the Mortgagee for the payment of the
Obligations in such order and manner as the Mortgagee may elect.

         (e) To the fullest extent permitted by applicable law, notwithstanding
anything contained herein to the contrary, Mortgagee shall be under no duty to
Mortgagor or others, including, without limitation, the holder of any junior,
senior or subordinate deed of trust, deed to secure debt or mortgage on the
Premises or any part thereof or on any other security held by Mortgagee, to
exercise or exhaust all or any of the rights, powers and remedies available to
Mortgagee.

         44. PROPERTY RELEASE PRIVILEGE. Provided no event of default exists
under the terms of the Loan or the Loan Documents, Mortgagor shall be allowed,
subsequent to the Lockout Period (as that term is defined in the Note), to
partially prepay the Loan, upon thirty (30) days prior written notice to
Mortgagee ("RELEASE REQUEST"), and to thereby obtain a partial release of this
Mortgage of any of the five (5) parcels (each, a "PARCEL" and collectively, the
"PARCELS") included within the Premises (the "RELEASE PRIVILEGE") subject to the
following conditions:

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         (a) The total principal amount of the Loan to be funded pursuant to the
Commitment is hereby allocated by Mortgagee to each of the five (5) Parcels
included within the Premises in the following initial amounts ("PRINCIPAL
ALLOCATION") and in the following percentages of the total Loan amount
("ALLOCATION PERCENTAGE"):

<TABLE>
<CAPTION>

          PARCELS                            PRINCIPAL ALLOCATION       ALLOCATION PERCENTAGE
---------------------------------------------------------------------------------------------
<S>                                          <C>                        <C>
(1)Hampton Inn -- Deerfield                      $ 6,400,000                   15.764%
---------------------------------------------------------------------------------------------
(2)Hampton Inn - Boca Raton                      $ 6,600,000                   16.256%
---------------------------------------------------------------------------------------------
(3)Hampton Inn - Boynton Beach                   $10,700,000                   26.355%
---------------------------------------------------------------------------------------------
(4)Hampton Inn - West Palm Beach                 $ 8,500,000                   20.935%
---------------------------------------------------------------------------------------------
(5)Hampton Inn - Palm Beach Gardens              $ 8,400,000                   20.690%
---------------------------------------------------------------------------------------------
               TOTAL                             $40,600,000                   100.00%
---------------------------------------------------------------------------------------------
</TABLE>

         As monthly installments of principal and interest are made in
accordance with the terms and conditions of the Loan Documents, the Principal
Allocation for each Parcel shall be reduced by that Allocation Percentage of the
amortized principal amount paid, but the Allocation Percentage for each Parcel
shall remain constant until Mortgagor exercises its Release Privilege, at which
time the Allocation Percentage for each remaining Parcel shall be redetermined
and reallocated among the remaining Parcels by Mortgagee in its sole discretion.

         (b) Promptly following Mortgagee's receipt of a Release Request from
Mortgagor, Mortgagee shall determine the release price (the "RELEASE PRICE")
payable for the Parcel to be released, which shall be an amount equal one
hundred fifteen percent (115%) of the then remaining Principal Allocation for
such Parcel, based upon the Allocation Percentage for such Parcel multiplied by
the then outstanding principal balance of the Loan ("AMORTIZED PRINCIPAL
ALLOCATION"). For example, if Mortgagor submitted a request for a release of
Parcel (1) [Hampton Inn - Deerfield] in accordance with the conditions herein
set forth, the calculation would be as follows:

         (i)   Release Price      =   115%  x    Amortized Principal Allocation

                                      and

         (ii)  Amortized Principal Allocation =   15.764%  x  outstanding
         principal balance of Note

         (iii) Assuming a principal balance of $35,000,000, the Parcel (1)
         Release Price would be calculated as:

                  1.15     x    0.15764 x   $35,000,000   =    $6,345,010.00


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         (c) In addition to the Release Price, Mortgagor also shall pay to
Mortgagee, simultaneously with the Release Price, the Prepayment Premium (as
that term is defined in the Note) on such Release Price calculated in accordance
with the Terms of the Note;

         (d) Mortgagee shall have the right to apply the Release Price to the
Loan in such manner as Mortgagee may determine in its sole discretion;

         (e) After the Mortgagee has applied the Release Price to the Loan,
Mortgagee shall redetermine and reallocate the Allocation Percentages and
redetermine the Principal Allocations for the remaining Parcels, in its sole
discretion, and shall advise Mortgagor in writing within thirty (30) days of
receipt of the Release Request as to the amounts of the reallocated Allocation
Percentages and Principal Allocations;

         (f) Mortgagor shall pay all costs, fees and expenses associated with
the Release Privilege, including without limitation, one hundred percent (100%)
of all attorneys' fees and expenses incurred by or on behalf of Mortgagee in
connection therewith, and all such sums shall be due and payable on the date of
closing and delivery of the release documentation by Mortgagee;

         (g) Mortgagor shall provide Mortgagee with an endorsement to its
mortgagee title insurance policy with respect to the remaining Parcels in form
and substance satisfactory to Mortgagee in its sole discretion insuring the Loan
through the date and time of recording of the release and modification
instrument, with no new exceptions since the original Loan closing unless
approved by Mortgagee in writing. To the extent that a released Parcel adjoined
a remaining Parcel or shared common areas, parking, utilities or amenities or
services with the a remaining Parcel, such endorsement will also (a) insure that
the remaining Premises has access to the same publicly dedicated streets as it
did prior to the release and (b) amend the legal description to include only the
remaining parcels.

         45. SUBSTITUTION OF COLLATERAL. Mortgagor may submit a written request
("SUBSTITUTION REQUEST"), upon at least ninety (90) days prior notice, that
Mortgagee permit a substitution (each a "SUBSTITUTION") of a substitute property
(which previously has not been the subject of inclusion in the collateral for
the Loan) (each a "SUBSTITUTE PROPERTY") for any individual Parcel (in such
capacity a "Replaced Property") upon and subject to the following terms and
conditions:

         (a) The Mortgagor shall submit a written request for Substitution,
identifying the proposed Substitute Property and the proposed Replaced Property
at least ninety (90) days prior to the proposed closing date for the
Substitution. Mortgagee shall evaluate the request for the proposed Substitution
and Substitute Property pursuant to its then customary underwriting and pricing
criteria. The amount of the "Principal Allocation" Mortgagee would determine to
allocate to the Substitute Property must be at least equal to the amount of the
then remaining Principal Allocation for the proposed Replaced Property, and the
loan-to-value ("LTV") ratio for the Mortgagee's proposed Principal Allocation
for the Substitute Property, based upon a current MAI appraisal in accordance
with subsection (h) below, must be at least equal to the then current LTV

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ratio for the proposed Replaced Property. In its underwriting and pricing
analysis, Mortgagee may review items such as, but not limited to, location,
occupancy, lease term, rollover, tenant exposure, tenant's credit.

         (b) The owner of the Substitute Property must be the Mortgagor (such
that the Substitute Property is owned one hundred percent (100%) by the same
entity as owns all the collateral constituting the Premises. The Substitute
Property must be located in the continental United States.

         (c) Mortgagee in its sole discretion shall acknowledge within ten (10)
business days of the Mortgagee's receipt of the Substitution Request whether the
proposed Substitution Property appears to be acceptable to permit the
Substitution. If in the Mortgagee's sole discretion it is determined that the
proposed Substitution Property is equal to or greater in value and quality than
the Replaced Property, then Mortgagee, through its loan correspondent, Mid-North
Financial Services, will process Mortgagor's formal request for Substitution.
The proposal will be reviewed by and presented to Mortgagee's investment review
committee pursuant to its then current commercial mortgage loan policies,
practices, standards and procedures. If the investment review committee approves
the formal request for Substitution, the Substitution will be subject to the
other conditions outlined herein.

         (d) No more than two (2) Substitution Requests shall be considered in
any calendar year for the entire Loan.

         (e) Mortgagor shall not be permitted to request and close more than a
total of three (3) Substitutions during the Loan term.

         (f) Mortgagor shall pay a processing fee to Mortgagee equal to $25,000
at closing of each approved Substitution. A "Substitution Deposit" of $5,000
shall be required with submission of a Substitution Request, which deposit shall
be applied to the processing fee at closing of the Substitution. The deposit and
processing fee contemplated by this subsection are in addition to reasonable
attorneys' fees and expenses incurred in the documentation of such Substitution
and in the review of due diligence.

         (g) All improvements on the Substitute Property shall have been
completed in a good and workmanlike manner and in compliance, in all material
respects, with all applicable governmental requirements. The Substitute Property
must be lien free and all land, improvements and personal property must be paid
for in full.

         (h) The appraised fair market "As Is" value of the Substitute Property
shall be equal to or greater than the greater of (x) the then appraised fair
market value, or gross sales proceeds, as the case may be, of the Replaced
Property and (y) the original appraised value of the Replaced Property as set
forth in the appraisal delivered to Mortgagee in connection with the closing of
this Loan. The fair market "As Is" value of the Replaced Property and Substitute
Property shall be determined by a firm of appraisers selected by Mortgagor and
approved by the Mortgagee, based on an MAI appraisal satisfactory to Mortgagee,
dated not more than ninety (90) days prior


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to the closing of the Substitution. All costs of such appraisals shall be paid
by the Mortgagors on or prior to the closing of the Substitution. Mortgagee
shall have the right to readjust the Principal Allocations and Allocation
Percentages for all five (5) Parcels (or such number remaining if the Release
Privilege previously has been exercised). The Release Factor (i.e., 115%) set
forth in Section 43 subsection (ii) above shall remain the same upon closing of
the Substitution.

         (i) The actual net operating income relating to the Substitute Property
(based upon the trailing twelve (12) month financial results or such shorter
period, as Mortgagee deems appropriate, for a Substitute Property opened for
less than one year) shall equal or exceed the actual net operating income
relating (based upon the trailing twelve (12) month financial results or such
shorter period, as Mortgagee reasonably deems appropriate, for any Substitute
Property opened for less than one (1) year) to the Replaced Property.

         (j) Mortgagee's outside counsel shall prepare and Mortgagor shall
execute (1) amendments to the Note, Mortgage, assignment of rents and leases,
loan agreement, environmental indemnities, tax and insurance escrows and (2) all
other Loan Documents Mortgagee shall deems appropriate, including, but not
limited to, any new Mortgage, assignment of rents and leases, environmental
indemnities, etc. relating to the Substitute Property (all of which
documentation shall be substantially in the form of the applicable documents
executed in connection with the Loan with such changes thereto as Mortgagee
reasonably deems appropriate to reflect the terms and circumstances of the
Substitution and Substitute Property) (collectively, the "SUBSTITUTE LOAN
DOCUMENTS"). The Substitution Loan Documents shall be cross-defaulted and
cross-collateralized with the existing Loan Documents for the Loan.

         (k) Mortgagor shall be required to supply for Mortgagee's review and
approval due diligence materials relating to the Substitute Property prior to
closing of the Substitution including those items contained in that certain
Application Letter dated August 25, 2004 between Mortgagor and Mortgagee as a
requirement for closing of this Loan, and such other materials as may then be
customarily required as part of its then current commercial loan closing
policies, procedures, standards and practices for properties of similar type and
in similar locations as the Substitute Property, including, without limitation,
a current as-built ALTA survey, proof of adequate insurance, title insurance,
proof of compliance with governmental regulations, tenant estoppel certificates,
subordination, non-disturbance and attornment agreements. The Mortgagee shall,
at the Mortgagors' sole cost and expense, receive for its review and approval
all additional due diligence materials in any way relating to the Substitute
Property, including but not limited to, appraisal, Hazardous Substance report
and engineer report as required by Mortgagee in its sole discretion. The items
listed in this section are not exhaustive.

         (l) The Substitute Loan Documents, financing statements, and other
instruments required to perfect the liens in the Substitute Property and all
collateral under such documents shall be recorded, registered and filed (as
applicable) in such manner as may be required by law to create a valid,
perfected lien and security interest with respect to the Substitute Property and
the personal property related thereto. The liens created by the Substitute Loan
Documents shall be first liens and security interests on the Substitute Property
and the personal property related



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thereto, subject only to such exceptions as Mortgagee shall approve in its sole
discretion. At closing of the Substitution, the Mortgagor shall have good and
marketable title to the Substitute Property and good and valid title to any
personal property located thereon or used in connection therewith, in each case
satisfactory to the Mortgagee. The title policies to the remaining parcels of
Land in the Loan must also be endorsed to bring forward the effective dates
thereof through the dates and times of recording of the modification instruments
and showing no new exceptions since the original Loan closing unless approved by
Mortgagee in writing and continuing all coverage provided in the original loan
title policies.

         (m) Mortgagee shall receive (1) a confirmation and reaffirmation of all
Loan Documents by the Mortgagor for the other properties in the Loan, (2) a
consent to such Substitution by any "Carve-Out" or other guarantors or
indemnitors, if any, and (3) such other instruments and agreements and such
certificates and opinions of counsel, in form and substance satisfactory to the
Mortgagee in connection with such Substitution as it may reasonably request.

         (n) The Substitute Property shall be located within the continental
United States. Mortgagor shall consider all implications for documentary stamp
and intangible taxes on the Substitution and the Mortgage encumbering the other
Parcels of Land in the Loan that shall arise in connection with such
Substitution. Mortgagee shall require payment of all such documentary stamp and
intangibles taxes required by law and authorities having jurisdiction as a
condition of closing the Substitution and the corresponding loan modifications
to the Loan, regardless of whether the taxing authority imposes taxes
duplicative of those incurred at the original closing of the Loan.

         (o) No default or Event of Default shall have occurred and be
continuing hereunder or under any other Loan Documents for the Loan on the date
of Substitution Request or at closing of the Substitution.

         (p) Mortgagee shall be satisfied that no material adverse change in the
financial condition, operations or prospects of any guarantor, Mortgagor (or
General Partner or Limited Partner as applicable) has occurred after closing of
this Loan.

         (q) The Mortgagor shall pay all reasonable out-of-pocket costs and
expenses incurred in connection with any such Substitution and the out-of-pocket
fees and expenses incurred by Mortgagee (including, without limitation, the
reasonable fees and expenses of its outside counsel) and its loan correspondent
and servicer in connection therewith. Without limiting the generality of the
foregoing, the Mortgagor shall, in connection with, and as a condition to, each
Substitution, pay the reasonable fees and expenses of Mortgagee's counsel, the
fees and expenses of Mortgagee's engineers, appraisers, construction
consultants, insurance consultants and other due diligence consultants and
contractors, recording charges, title insurance charges, and stamp and/or
mortgage or similar taxes, transfer taxes.

         46. FF&E RESERVE. Mortgagor agrees to fund an FF&E escrow account (the
"RESERVE"), pursuant to the terms of Paragraph 25 of that certain commitment
letter between Mortgagor and Mortgagee dated August 5, 2004, as amended (the
"COMMITMENT LETTER"), and to


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enter into an agreement, satisfactory to Mortgagee, regarding such FF&E Account
(the "FF&E AGREEMENT"). Notwithstanding anything contained herein, Mortgagor's
obligation to fund the Reserve shall be waived during the first five (5) Loan
Years (as that term is defined in the Note), provided (i) no event of default
has occurred under any of the Loan Documents, (ii) the Franchise Agreements
continue to be in full force and effect without modification, unless approved by
Mortgagee, and (iii) the annual gross revenue of the Premises during each fiscal
year of Mortgagor during the term of the Loan (the "AGI"), as reported to
Mortgagee pursuant to PARAGRAPH 25 herein, equals or exceeds $15,500,000.00.
Mortgagor's obligation to fund the Reserve shall be waived for subsequent five
(5) year periods provided that, at the end of the immediately prior five (5)
year period, Mortgagor promptly provides documentation, sufficient in
Mortgagee's sole discretion, documenting that not less than three percent (3%)
of the gross revenues generated by the Premises over the immediately prior five
(5) year period have been spent on furnishings, fixtures and equipment for the
Premises. Notwithstanding the foregoing, if Mortgagor is required to fund the
Reserve solely because of a failure of condition (iii) in the second sentence of
this Paragraph (i.e., the AGI does not equal or exceed $15,500,000.00 during
each said fiscal year), then at such time as the AGI during a twelve (12) month
period exceeds $17,000,000.00 (and provided further that Mortgagor does not
violate any other condition hereunder), Mortgagor shall have the right to
request that said funding requirement be waived for the remainder of the current
five-year period. Mortgagor shall make such request in writing to Mortgagee,
which shall not be unreasonably denied.



IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. MORTGAGOR
ACKNOWLEDGES AND AGREES THAT THERE ARE NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT AND NO SUCH OTHER TERMS AND PROVISIONS MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER
WRITTEN AGREEMENT.

         Mortgagor acknowledges receipt of a copy of this instrument at the time
of execution hereof.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]







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         IN WITNESS WHEREOF, the Mortgagor has executed this instrument the day
and year first above written.

Signed and delivered in the presence of:    EQUITY INNS PARTNERSHIP, L.P., a
                                            Tennessee limited partnership

                                            By: Equity Inns Trust, a Maryland
----------------------------------------        real estate investment trust,
Witness                                         its sole general partner
Print Name:
           -----------------------------
                                                By:
                                                   -----------------------------
                                                Name:
                                                     ---------------------------
----------------------------------------        Title:
Witness                                               --------------------------
Print Name:
           -----------------------------


STATE OF
         -------------------------------

COUNTY OF
          ------------------------------

The foregoing instrument was acknowledged before me this ______day of October,
2004, by _________________________________________, the _____________________ of
Equity Inns Trust, a Maryland real estate investment trust, the sole general
partner of Equity Inns Partnership, L.P., a Tennessee limited partnership (the
"LIMITED PARTNERSHIP"), on behalf of the Limited Partnership. The aforesaid
__________________ is personally known to me or has produced
____________________________________ as identification and [did][did not] take
an oath.



                                       -----------------------------------------
                                       Notary Public
                                       Type or Print Name:
                                                          ----------------------
(Seal)
                                       My Commission expires:
                                                             -------------------



::ODMA\PCDOCS\ATL\803203\4







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                                    EXHIBIT A
                                LEGAL DESCRIPTION






























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