Document:

Exhibit 10.2 - Special Business Provisions

    EXHIBIT
      10.2

     

    

    SPECIAL
      BUSINESS PROVISIONS

    

    between

    

    Spirit
      AeroSystems, Inc. 

    

    and

    

    LMI
      Aerospace, Inc.

    

    

    

    

    Spirit
      Aerosystems SBP-T6B2-YB001940

    
 

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    TITLE
      PAGE

    TABLE
      OF
      CONTENTS

    AMENDMENT
      PAGE

    RECITAL
      PAGE

    

    

    
      	
              1.0

            	
              DEFINITIONS

            	
              10

            
	 	 	 
	
              2.0

            	
              CONTRACT
                FORMATION

            	
              13

            
	 	
              2.1

            	
              Order

            	
              13

            
	 	 	
              2.1.1

            	
              Issuance
                of Orders for Production Articles

            	
              13

            
	 	 	
              2.1.2

            	
              Issuance
                of Orders for Products and Services Other Than Production
                Articles

            	
              13

            
	 	
              2.2

            	
              Entire
                Agreement

            	
              14

            
	 	
              2.3

            	
              Incorporated
                by Reference

            	
              14

            
	 	 	
              2.3.1

            	
              Supporting
                Documentation and Priority

            	
              14

            
	 	 	
              2.3.2

            	
              Revision
                of Documents

            	
              15

            
	 	 	
              2.3.3

            	
              Compliance

            	
              15

            
	 	 	
              2.3.4

            	
              List
                of Certain Documents

            	
              15

            
	 	
              2.4

            	
              Order
                of Precedence

            	
              16

            
	 	
              2.5

            	
              Survival

            	
              17

            
	 	 	 	 
	
              3.0

            	
              PERIOD
                OF PERFORMANCE AND PRICES

            	
              17

            
	 	
              3.1

            	
              Performance

            	
              17

            
	 	 	
              3.1.1

            	
              Period
                of Performance

            	
              17

            
	 	 	
              3.1.2

            	
              Option
                to Extend

            	
              17

            
	 	
              3.2

            	
              Pricing

            	
              18

            
	 	 	
              3.2.1

            	
              Product
                Pricing

            	
              18

            
	 	 	
              3.2.2

            	
              Manufacturing
                Configuration

            	
              18

            
	 	 	
              3.2.3

            	
              Packaging

            	
              18

            
	 	 	
              3.2.4

            	
              Local
                Transportation Devices

            	
              18

            
	 	
              3.3

            	
              Subject
                Matter of Sale

            	
              18

            
	 	 	
              3.3.1

            	
              Nonrecurring
                Work

            	
              19

            
	 	 	
              3.3.1.1

            	
              Tooling
                - General

            	
              19

            
	 	 	
              3.3.1.2

            	
              Static
                and Fatigue Test Articles

            	
              19

            
	 	 	
              3.3.1.3

            	
              Contractor-Use
                Tooling (also known as Seller-Use Tooling

            	
              19

            
	 	 	
              3.3.1.4

            	
              Common
                - Use Tooling

            	
              19

            
	 	 	
              3.3.1.5

            	
              Use
                of Casting, Forging and Extrusion Tools

            	
              19

            
	 	 	
              3.3.1.6

            	
              Initial
                Planning

            	
              19

            
	 	 	
              3.3.1.7

            	
              Weight
                Status Reporting

            	
              20

            
	 	 	
              3.3.1.8

            	
              Integrated
                Product Team

            	
              20

            
	 	 	
              3.3.2

            	
              Recurring
                Work

            	
              20

            
	 	 	
              3.3.2.1

            	
              Production
                Articles

            	
              20

            
	 	 	
              3.3.2.2

            	
              Tool
                Maintenance

            	
              20

            
	 	 	
              3.3.2.3

            	
              Disposable
                Shipping Fixtures

            	
              20

            
	 	 	
              3.3.2.4

            	
              Maintenance
                of Production Planning

            	
              20

            
	 	 	
              3.3.3

            	
              Spares
                and Miscellaneous Work

            	
              20

            
	 	 	
              3.3.3.1

            	
              Spare
                Parts Ordering

            	
              20

            
	 	 	
              3.3.3.2

            	
              Planning
                for Fabrication of Spare Parts

            	
              20

            
	 	 	
              3.3.3.3

            	
              Sale
                of Boeing Proprietary Spare Parts

            	
              20

            
	 	 	
              3.3.3.4

            	
              Miscellaneous
                Work

            	
              21

            

    

    

    
      
        2

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              4.0

            	
              GOVERNING
                QUALITY ASSURANCE REQUIREMENTS

            	
              21

            
	 	 	 
	
              5.0

            	
              APPLICABLE
                LAW 

            	
              21

            
	 	 	 
	
              6.0

            	
              PRODUCT
                SUPPORT AND ASSURANCE 

            	
              21

            
	 	
              6.1

            	
              Warranty

            	
              21

            
	 	 	 
	
              6.2

            	
              Integrated
                Materials Management (IMM) Program 

            	
              22

            
	 	 	 
	
              7.0

            	
              PAYMENT
                

            	
              22

            
	 	
              7.1

            	
              Recurring
                Price

            	
              22

            
	 	
              7.2

            	
              Nonrecurring
                Price/Special Charges

            	
              22

            
	 	
              7.3

            	
              Payment
                Method

            	
              23

            
	 	
              7.4

            	
              Payment
                Errors

            	
              24

            
	 	
              7.5

            	
              Spare
                Parts

            	
              24

            
	 	
              7.6

            	
              Invoicing

            	
              24

            
	 	 	
              7.6.1

            	
              Invoicing
                Requirements

            	
              24

            
	 	 	
              7.6.4

            	
              Mailing
                Instructions

            	
              24

            
	 	 	
              7.6.5

            	
              Summary
                Invoices

            	
              25

            
	 	 	 	 	 
	
              8.0

            	
              SCHEDULE
                ACCELERATION/DECELERATION 

            	
              25

            
	 	 	 
	
              9.0

            	
              NOTICES
                

            	
              25

            
	 	
              9.1

            	
              Addresses

            	
              25

            
	 	 	 	 
	
              10.0

            	
              OBLIGATION
                TO PURCHASE AND SELL 

            	
              26

            
	 	 	 
	
              11.0

            	
              COST
                AND PERFORMANCE VISIBILITY 

            	
              27

            
	 	 	 
	
              12.0

            	
              CHANGE
                PROVISIONS 

            	
              27

            
	 	
              12.1

            	
              Reserved

            	
              27

            
	 	
              12.2

            	
              Computation
                of Equitable Adjustment

            	
              27

            
	 	 	
              12.2.1

            	
              Changes
                Not Subject to Price Adjustment

            	
              27

            
	 	 	
              12.2.2

            	
              Changes
                Subject to Price Adjustment

            	
              28

            
	 	 	
              12.2.3

            	
              Proposals
                for Price Adjustment

            	
              28

            
	 	 	
              12.2.3.1

            	
              Timeframe

            	
              28

            
	 	 	
              12.2.3.2

            	
              Content

            	
              29

            
	 	 	
              12.2.3.3

            	
              Review
                of Price Adjustment Proposal

            	
              29

            
	 	 	
              12.2.3.4

            	
              Future
                Derivative(s) and Follow-on Work

            	
              29

            
	 	 	
              12.2.4

            	
              Change
                Pricing Criteria

            	
              29

            
	 	 	
              12.2.4.1

            	
              Changes
                Prior to 100% Engineering Release

            	
              29

            
	 	 	
              12.2.4.1.1

            	
              Nonrecurring
                Shipset Price Adjustment Prior to 100% Engineering Release

            	
              29

            
	 	 	
              12.2.4.1.2

            	
              Recurring
                Shipset Price Adjustment Prior to 100% Engineering Release

            	
              30

            
	 	 	
              12.2.4.2

            	
              Changes
                Subsequent to 100% Engineering Release

            	
              30

            
	 	 	
              12.2.4.2.1

            	
              Nonrecurring
                Shipset Price Adjustment Subsequent to 100% Engineering
                Release

            	
              30

            
	 	 	
              12.2.4.2.2

            	
              Recurring
                Price Adjustment Subsequent to 100% Engineering Release

            	
              30

            
	 	 	
              12.2.4.3

            	
              Changes
                for Derivatives

            	
              30

            

    

    

    
      
        3

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    

    
      	 	 	
              12.2.5

            	
              Apportionment
                and Payment of Price Adjustments

            	
              30

            
	 	 	
              12.2.5.1

            	
              Nonrecurring
                Work

            	
              30

            
	 	 	
              12.2.5.1.1

            	
              Price
                Adjustment

            	
              30

            
	 	 	
              12.2.5.1.2

            	
              Apportionment
                and Payment

            	
              31

            
	 	 	
              12.2.6.1

            	
              Recurring
                Work

            	
              31

            
	 	 	
              12.2.6.1.1

            	
              Price
                Adjustment

            	
              31

            
	 	 	
              12.2.6.1.2

            	
              Apportionment
                and Payment

            	
              31

            
	 	
              12.3

            	
              Obsolescence

            	
              32

            
	 	
              12.4

            	
              Change
                Absorption (Nonrecurring/Recurring)

            	
              32

            
	 	 	
              12.4.1

            	
              Prior
                to 100% Engineering Release (Drawing Revision Level New)

            	
              32

            
	 	 	
              12.4.2

            	
              Subsequent
                to 100% Engineering Release

            	
              32

            
	 	
              12.5

            	
              Planning
                Schedule

            	
              33

            
	 	
              12.6

            	
              Total
                Cost Management

            	
              33

            
	 	 	
              12.6.1

            	
              Spirit
                Generated Technical and Cost Improvement

            	
              33

            
	 	
              12.7

            	
              Reserved

            	
              33

            
	 	
              12.9

            	
              Derivative
                Aircraft

            	
              34

            
	 	 	 	 
	
              13.0

            	
              SPARES
                AND OTHER PRICING

            	
              34

            
	 	
              13.1

            	
              Spares

            	
              34

            
	 	 	
              13.1.1

            	
              Spares
                Support

            	
              35

            
	 	 	
              13.1.3

            	
              Spare
                Pricing

            	
              35

            
	 	 	
              13.1.4

            	
              Spares
                Special Handling

            	
              36

            
	 	
              13.2

            	
              Expedite
                of Production Requirements

            	
              36

            
	 	
              13.3

            	
              Tooling

            	
              36

            
	 	 	
              13.3.1

            	
              Responsible
                Party

            	
              36

            
	 	 	
              13.3.2

            	
              Spirit
                Furnished Tooling

            	
              37

            
	 	 	
              13.3.3.1

            	
              Title
                to Tooling

            	
              37

            
	 	 	
              13.3.3.2

            	
              Use
                and Disposition of Tooling

            	
              37

            
	 	 	
              13.3.3.3

            	
              Accountability
                for Tooling

            	
              39

            
	 	 	
              13.3.3.4

            	
              Certified
                Tool Lists

            	
              39

            
	 	
              13.4

            	
              Pricing
                of Spirit's Supporting Requirements

            	
              39

            
	 	
              13.5

            	
              Pricing
                of Requirements for Modification or Retrofit

            	
              39

            
	 	 	
              13.5.1

            	
              Spirit
                Responsibility or Regulatory Requirement

            	
              39

            
	 	 	
              13.5.2

            	
              Contract
                Aftermarket Modification or Retrofit Work Performed by
                Spirit

            	
              39

            
	 	
              13.6

            	
              Pricing
                of Similar Products

            	
              40

            
	 	 	 	 
	
              14.0

            	
              STATUS
                REPORTS/REVIEWS

            	
              41

            
	 	
              14.1

            	
              General
                Reports / Reviews

            	
              41

            
	 	
              14.2

            	
              Diversity
                Reporting

            	
              41

            
	 	
              14.3

            	
              Program
                Manager

            	
              41

            
	 	
              14.4

            	
              Certified
                Tool List

            	
              42

            
	 	
              14.5

            	
              Problem
                Reports

            	
              42

            
	 	
              14.6

            	
              Reserved

            	
              43

            
	 	 	 
	
              15.0

            	
              INTERNATIONAL
                COOPERATION 

            	
              43

            
	 	
              15.1

            	
              Market
                Access and Sales Support

            	
              43

            
	 	
              15.2

            	
              Offset
                Assistance

            	
              43

            
	 	
              15.3

            	
              Reserved

            	
              44

            

    

    

    
      
        4

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    

    
      	
              16.0

            	
              Spirit
                FURNISHED MATERIAL/SUPPLIER BANKED MATERIAL

            	
              44

            
	 	 	 	 
	
              17.0

            	
              PARTICIPATION

            	
              44

            
	 	
              17.1

            	
              Other
                Spirit Entities

            	
              44

            
	 	
              17.2

            	
              Spirit
                Subcontractors/Suppliers

            	
              44

            
	 	
              17.3

            	
              Notification
                of Contract

            	
              45

            
	 	
              17.4

            	
              Notification
                of Price Reductions

            	
              45

            
	 	 	 	 
	
              18.0

            	
              INVENTORY
                AT CONTRACT COMPLETION

            	
              45

            
	 	 	 	 
	
              19.0

            	
              OWNERSHIP
                OF INTELLECTUAL PROPERTY

            	
              45

            
	 	
              19.1

            	
              Technical
                Work Product

            	
              45

            
	 	
              19.2

            	
              Inventions
                and Patents

            	
              46

            
	 	
              19.4

            	
              Pre-Existing
                Inventions and Works of Authorship

            	
              46

            
	 	
              19.5

            	
              Inapplicability

            	
              46

            
	 	 	 	 
	
              20.0

            	
              RESERVED

            	
              46

            
	 	 	 	 
	
              21.0

            	
              GUARANTEED
                WEIGHT REQUIREMENTS

            	
              46

            
	 	 	 	 
	
              22.0

            	
              SELLER
                DATA REQUIREMENTS

            	
              46

            
	 	 	 	 
	
              23.0

            	
              RESERVED

            	
              47

            
	 	 	 	 
	
              24.0

            	
              RESERVED

            	
              47

            
	 	 	 	 
	
              25.0

            	
              RESERVED
                

            	
              47

            
	 	 	 	 
	
              26.0

            	
              INFRINGEMENT

            	
              47

            
	 	 	 	 
	
              27.0

            	
              RAW
                MATERIAL PROGRAM

            	
              47

            
	 	
              27.1

            	
              Boeing
                Raw Material Strategy

            	
              47

            
	 	
              27.2

            	
              Reserved

            	
              48

            
	 	 	 	 
	
              28.0

            	
              DIGITIZATION
                OF PROPRIETARY INFORMATION AND MATERIALS

            	
              48

            
	 	 	 	 
	
              29.0

            	
              ON-SITE
                SUPPORT

            	
              48

            
	 	
              29.1

            	
              Indemnification
                Negligence of Seller or subcontractor

            	
              48

            
	 	
              29.2

            	
              Commercial
                General Liability

            	
              48

            
	 	
              29.3

            	
              Automobile
                Liability

            	
              49

            
	 	
              29.4

            	
              Workers'
                Compensation

            	
              49

            
	 	
              29.5

            	
              Certificates
                of Insurance

            	
              49

            
	 	
              29.6

            	
              Self-Assumption

            	
              49

            
	 	
              29.7

            	
              Protection
                of Property

            	
              49

            
	 	
              29.8

            	
              Compliance
                with Spirit Site Requirements

            	
              50

            

    

    

    
      
        5

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    

    
      	
              30.0

            	
              Spirit
                TECHNICAL I MANUFACTURING ASSISTANCE REGARDING SELLER'S
                NONPERFORMANCE

            	
              50

            
	 	 	 	 
	
              31.0

            	
              U.
                S. CUSTOMS INVOICE REQUIREMENTS

            	
              50

            
	 	 	 	 
	
              32.0

            	
              STRATEGIC
                ALIGNMENT

            	
              51

            
	 	 	 	 
	
              33.0

            	
              CUSTOMS-TRADE
                PARTNERSHIP AGAINST TERRORISM (C-TPAT)

            	
              51

            
	 	 	 	 
	
              34.0

            	
              ENVIRONMENTAL
                MANAGEMENT SYSTEMS AND HEALTH AND SAFETY MANAGEMENT
                SYSTEMS

            	
              51

            
	 	 	 	 
	
              35.0

            	
              DELIVERY
                - TITLE AND RISK OF LOSS

            	
              52

            
	 	
              35.1

            	
              Delivery
                Point and Schedule

            	
              52

            
	 	
              35.2

            	
              Reserved

            	
              52

            
	 	
              35.3

            	
              Reserved

            	
              52

            
	 	
              35.4

            	
              Notification
                of Shipment

            	
              52

            
	 	
              35.4.1

            	
              Title
                and Risk of Loss

            	
              52

            
	 	
              35.5

            	
              Notice
                of Delay - Premium Effort

            	
              52

            
	 	 	 	 
	
              36.0

            	
              PACKAGING
                AND SHIPPING

            	
              53

            
	 	
              36.1

            	
              Product
                Packaging

            	
              53

            
	 	
              36.2

            	
              Consolidated
                Shipments and Markings

            	
              53

            
	 	
              36.3

            	
              Freight
                Charges

            	
              54

            
	 	
              36.4

            	
              Packing
                Sheet and Test Reports

            	
              54

            
	 	
              36.5

            	
              Additional
                Copies

            	
              54

            
	 	
              36.6

            	
              Price
                Inclusive

            	
              54

            
	 	 	 	 
	
              37.0

            	
              ADDITIONAL
                QUALITY ASSURANCE REQUIREMENTS

            	
              54

            
	 	
              37.1

            	
              Federal
                Aviation Administration Inspection

            	
              54

            
	 	
              37.2

            	
              Repair
                Authorization

            	
              54

            
	 	 	
              37.2.1

            	
              Spirit-Performed
                Work

            	
              54

            
	 	 	
              37.2.2

            	
              Reimbursement
                for Repairs

            	
              55

            
	 	 	 	 
	
              38.0

            	
              CHANGES

            	
              55

            
	 	 	 	 
	
              39.0

            	
              EXAMINATION
                OF RECORDS

            	
              56

            
	 	
              39.1

            	
              Reports

            	
              56

            
	 	 	 	 
	
              40.0

            	
              EVENTS
                OF DEFAULT AND REMEDIES

            	
              56

            
	 	
              40.1

            	
              Additional
                Event of Default

            	
              56

            
	 	
              40.2

            	
              Interest
                on Overdue Amounts

            	
              56

            
	 	 	 	 
	
              41.0

            	
              CUSTOMER
                CONTACT 

            	
              56

            
	 	 	 	 
	
              42.0

            	
              SUBCONTRACTING

            	
              56

            

    

    

    
      
        6

         

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    

    
      	
              43.0

            	
              SUPPLEMENTS
                AND MODIFICATIONS

            	
              57

            
	 	 	 	 
	
              44.0

            	
              INCREMENTAL
                RELEASE AND CYCLE TIME REQUIREMENTS

            	
              58

            
	 	
              44.1

            	
              Incremental
                Release

            	
              58

            
	 	
              44.2

            	
              Cycle
                Time Requirements

            	
              58

            
	 	 	 	 
	
              45.0

            	
              SURPLUS
                PRODUCTS

            	
              58

            
	 	
              45.1

            	
              Return
                of Surplus Products

            	
              58

            
	 	
              45.2

            	
              Use
                of Surplus Products

            	
              59

            
	 	 	 	 
	
              46.0

            	
              INTEGRATED
                / LIFE CYCLE PRODUCT TEAM

            	
              59

            
	 	
              46.1

            	
              Purpose

            	
              59

            
	 	
              46.2

            	
              Qualifications

            	
              59

            
	 	
              46.3

            	
              Removal
                of Personnel

            	
              59

            
	 	
              46.4

            	
              Work
                Schedule

            	
              59

            
	 	
              46.5

            	
              Equipment
                and Supplies

            	
              60

            
	 	
              46.6

            	
              Employment
                Status

            	
              60

            
	 	
              46.7

            	
              Team
                Leader

            	
              60

            
	 	
              46.8

            	
              Discipline

            	
              60

            
	 	
              46.9

            	
              Insurance

            	
              60

            
	 	
              46.10

            	
              Indemnification

            	
              60

            
	 	
              46.11

            	
              Compensation

            	
              61

            
	 	 	 	 
	
              47.0

            	
              SELLER
                ASSISTANCE

            	
              61

            
	 	 	 	 
	
              48.0

            	
              DEFINE
                AND CONTROL AIRPLANE CONFIGURATION / MANUFACTURING RESOURCE MANAGEMENT
                (DCAC/MRM)

            	
              62

            
	 	 	 
	
              49.0

            	
              ELECTRONIC
                ACCESS AND EXCHANGE OF DIGITAL PRODUCT DEFINITION

            	
              62

            
	 	
              49.1

            	
              Exchange
                of Digital Product Definition Between Spirit and Seller

            	
              62

            
	 	
              49.2

            	
              System/Software
                Compatibility between Spirit and Seller

            	
              62

            
	 	
              49.3

            	
              Electronic
                Access, Communications and Data Exchange via

              Telecommunications

            	
              62

            

    

    

    

    
      	
              Signature
                Page

            	 
	
              Attachment
                1

            	
              Work
                Statement and Pricing

            
	
              Attachment
                1A

            	
              Component
                Spares Requirements

            
	
              Attachment
                2

            	
              Non-U.S.
                Procurement Report

            
	
              Attachment
                3

            	
              Rates
                and Factors

            
	
              Attachment
                4

            	
              Spirit
                AOG Coverage

            
	
              Attachment
                5

            	
              Spirit
                AOG Shipping Notification

            
	
              Attachment
                6

            	
              Seller
                Data Submittals

            
	
              Attachment
                7

            	
              Supplier
                Data Requirements List Customers / Engineering

            
	
              Attachment
                8

            	
              Commodity
                Listing and Terms of Sale

            

    

    

    
      
        7

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    

    
      	
              Attachment
                9

            	
              Cost
                and Performance Reviews

            
	
              Attachment
                10

            	
              Quality
                Assurance Requirements

            
	
              Attachment
                11

            	
              Second
                Tier Support Report

            
	
              Attachment
                12

            	
              Commercial
                Invoice Requirements (Customs Invoice)

            
	
              Attachment
                13

            	
              On-Site
                Terms & Conditions Supplement

            
	
              Attachment
                14

            	
              Reserved

            
	
              Attachment
                15

            	
              Production
                Article Definition & Contract Change Notices

            
	
              Attachment
                16

            	
              Non-Recurring
                and Recurring Price Status and Summary Tables

            
	
              Attachment
                17

            	
              Value
                Engineering Methodology

            
	
              Attachment
                18

            	
              Indentured
                Priced Parts List and Spares Pricing

            
	
              Attachment
                19

            	
              Incremental
                Release Plan and Lead Times

            
	
              Attachment
                20

            	
              Schedule
                Change Examples

            

    

    

    
      
        8

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    AMENDMENTS

    

    
      	
              Amend

              Number

            	
              Description

            	
              Date

            	
              Approval

            
	
               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

               

            	 	 	 

    

    
      
        9

        

        
          	
                  Special
                    Business Provisions

                	
                  Seller’s
                    Name: LMI Aerospace, Inc.

                
	 	
                  T6B2-YB001940

                
	 	
                  INITIALS:

                

        

         

      

      
        
          

        

      

      
        
        

      

    

    SPECIAL
      BUSINESS PROVISIONS

    

    RELATING
      TO

    

    AEROSTRUCTURES
      and SYSTEMS BUSINESS UNIT PRODUCTS

     

    THIS
      SPECIAL BUSINESS PROVISIONS (SBP) is entered into as of 10 March, 2006, by
      and
      between LMI Aerospace, Inc., a Missouri corporation, with its principal office
      in St. Charles, MO (“Seller”), and Spirit AeroSystems, Inc., a Delaware
      corporation ("Spirit"). Hereinafter, the Seller and Spirit may be referred
      to
      jointly as “Parties” hereto.

     

    Now,
      therefore,
      in
      consideration of the mutual covenants set forth herein, the Parties agree as
      follows:

     

    AGREEMENTS

     

    1.0  DEFINITIONS

     

     

    The
      definitions used herein are the same as those used in the GTA. In addition,
      the
      following terms are defined as follows:

     

    
      	A.  	
              "Boeing
                Lifetime Serial Number" has the meaning set forth in Document D33200-1,
                "Boeing Suppliers' Tooling
                Document"

            

    

     

    
      	B.  	
              "Boeing
                Proprietary Spare Parts" means all Spare Parts, which are manufactured
                (i)
                by Boeing, or (ii) to Boeing's detailed design with Boeing's
                authorization, or (iii) in whole or in part using Boeing Proprietary
                Information.

            

    

     

    
      	C.  	
              "Boeing-Use
                Tooling" means certain gauge and interface Tooling (not including
                Boeing
                master gauges) manufactured by Seller in accordance with designs
                provided
                by Boeing, to be used exclusively by
                Boeing.

            

    

     

    
      	D.  	
              "Common-Use
                Tooling" means all Tooling required for use by both Spirit and
                Seller.

            

    

     

    
      	E.  	
              "Contract,"
                "hereof," "hereto," "herein" and similar terms mean this Special
                Business
                Provisions, including all Exhibits and Documents, and all amendments,
                modifications and supplements
                hereto.

            

    

     

    
      	F.  	
              "Contract
                Change Notice" or "CCN" means any written notice sent by Spirit to
                Seller
                (1) describing any change to the SBP statement of work pursuant to
                SBP
                Section 36.0 and authorizing Seller to proceed with the performance
                of
                work hereunder in accordance with such change description or (2)
                setting
                forth Spirit’s requirements for Production Articles and authorizing
                Seller’s performance in producing such Production
                Articles.

            

    

     

     

    
      
        
          10

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	G.  	
              "Contractor-Use
                Tooling" (also known as “Seller-Use Tooling”) means all Tooling needed to
                manufacture Products.

            

    

     

    
      	H.  	
              "Cycle
                Time" means the period of time that elapses between the dates a Customer
                executes an implementation directive for a Program Airplane and delivery
                of such Program Airplane to such
                Customer.

            

    

     

    
      	I.  	
              "Dataset"
                means any compilation of data or information (including, without
                limitation, numerical data, geometric definitions, program instructions
                or
                coded information) which may be used directly in, integrated with
                or
                applied to, a computer program for further processing. A Dataset
                may be a
                composite of two or more other Datasets or an extract of a larger
                Dataset.

            

    

     

    
      	J.  	
              "Drawing"
                means an automated or manual depiction of graphics or technical
                information representing a Product or any part thereof and which
                includes
                the parts list and specifications relating
                thereto.

            

    

     

    
      	K.  	
              "End
                Item Assembly" means any Product which is described by a single part
                number and which is comprised of more than one component
                part.

            

    

     

    
      	L.  	
              "Engineering
                Release" means engineering Drawings, Datasets or other Documents,
                approved
                by Spirit and released through Spirit’s engineering Drawing release
                system, that define the design requirements of any
                Product.

            

    

     

    
      	M.  	
              "Integrated
                Product Team" or "IPT" or “Design Build Team” "DBT" means a team composed
                of representatives from engineering, operations, procurement,
                design-to-cost and other disciplines as Spirit shall specify, whose
                objective is to optimize designs for cost, weight, performance and
                producibility.

            

    

     

    
      	N.  	
              "Manufacturing
                Work Package" or "Work Package" means manufacturing effort that Seller
                will provide under this SBP.

            

    

     

    
      	O.  	
              “Miscellaneous
                Work” is Seller performed work or services that includes, but is not
                limited to provision of additional test articles, Spirit-use tooling,
                test
                support, field support and Spirit-used supplier
                facilities.

            

    

     

    
      	P.  	
              “Nonrecurring
                Shipset Price” or “Nonrecurring Price” shall have the meaning set forth in
                SBP Attachment 1.

            

    

     

    
      	Q.  	
              “Nonrecurring
                Work” is Seller performed work, which may include, but is not limited to
                tooling, static and fatigue test articles, local transportation devices
                and planning.

            

    

     

    
      	R.  	
              "Obsolescence"
                means the discontinuation of the requirement for any Product as a
                result
                of engineering or manufacturing change, which has rendered such Product
                no
                longer usable in the production of the Program Airplane or any
                Derivative.

            

    

     

     

    
      
        
          11

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	S.  	
              “Order”
                has the meaning set forth in GTA Section 1.0 E but shall also include
                any
                Contract Change Notice directing Seller to provide Production
                Articles.

            

    

     

    
      	T.  	
              "Person"
                means any individual, partnership, corporation, limited liability
                company,
                joint venture, association, joint-stock company, trust, unincorporated
                organization or government or any agency or political subdivision
                thereof
                or any other entity.

            

    

     

    
      	U.  	
              "Price"
                means the amount to be paid by Spirit to Seller for any Product in
                accordance with the terms of this
                SBP.

            

    

     

    
      	V.  	
              "Production
                Articles" means those completed assemblies defined and configured,
                including SCD Products, as set forth in SBP Attachment 13 for the
                Program
                Airplane.

            

    

     

    
      	W.  	
              "Program"
                means the design, development, marketing, manufacture, sales and
                customer
                support of Program Airplanes, Derivatives and other
                Products.

            

    

     

    
      	X.  	
              "Program
                Airplane" means a commercial transport aircraft incorporating advanced
                technology and having a model designation for which Seller shall
                provide
                Production Articles pursuant to this
                SBP.

            

    

     

    
      	Y.  	
              "Rate
                Tooling" for 737 means Tooling required to produce more than seven
                (7)
                Shipsets per month without regard to the production of Spare Parts
                or
                Products other than Production Articles and is comprised of Rate
                Tooling
                A, Rate Tooling B, and Rate Tooling
                C.

            

    

     

    "Rate
      Tooling A" means 737 Product Tooling required to produce more than seven (7)
      up
      to fourteen (14) Shipsets per month and

     

    "Rate
      Tooling B" means 737 Product Tooling required to produce more than fourteen
      (14)
      up to twenty-one (21) Shipsets per month.

     

    "Rate
      Tooling C" means 737 Product Tooling required to produce more than twenty-one
      (21) up to twenty-eight (28) Shipsets per month.

     

    "Rate
      Tooling" on all other Boeing Commercial Airplane programs means Tooling required
      to produce more than seven (7) Shipsets per month without regard to the
      production of Spare Parts or Products other than Production
      Articles.

     

    
      	Z.  	
              “Recurring
                Shipset Price” means the Price for the Recurring Work (RW) associated with
                each Shipset.

            

    

     

    
      	AA.  	
              “Recurring
                Work” means work Seller performs in producing Production Articles. The
                cost of Recurring Work can include, but is not limited to tool
                maintenance, replacement, and storage, packaging, disposable shipping
                fixtures and maintenance of production
                planning.

            

    

     

     

    
      
        
          12

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	BB.  	
              "SCD
                Products" means all goods, including components and parts thereof,
                designed to a Boeing Specification Control Drawing by Contractor
                or its
                Subcontractors, and provided or manufactured under this
                Contract.

            

    

     

    
      	CC.  	
              "SCD
                Spare Parts" means Spare Parts that are also SCD
                Products.

            

    

     

    
      	DD.  	
              "Shipset"
                means the total set of Production Articles provided by Seller hereunder
                necessary for production of one Program Airplane or
                Derivative.

            

    

     

    
      	EE.  	
              "Spare
                Parts" or “Spares” means Production Articles or components thereof, and
                materials, assemblies and items of equipment relating thereto, which
                are
                intended for Spirit’s use or sale as spare parts or production
                replacements. The term "Spare Parts" includes, but is not limited
                to,
                Boeing Proprietary Spare Parts.

            

    

     

    
      	FF.  	
              “Total
                Nonrecurring Work Package Price” shall have the meaning set forth in SBP
                Attachment 1.

            

    

     

    
      	GG.  	
              “Value
                Engineering” is a single component of total cost management designed to
                leverage Spirit and Supplier Engineering resources to reduce costs
                (to
                Sellers) and prices (to Spirit) for Products through engineering
                changes
                in requirements, processes, or designs which in no way reduce airplane
                safety, performance, maintainability, reliability, producibility
                or
                capability. Value Engineering Methodology is provided in Attachment
                17.

            

    

     

    
      	2.0  	
              CONTRACT
                FORMATION

            

    

     

     

    2.1  Order

     

     

    2.1.1  Issuance
      of Orders for Production Articles

     

     

    Spirit
      will notify Seller of its requirements for Production Articles by issuing
      individual Releasing Orders to authorize performance and establish a schedule
      for performance and delivery. 

     

    2.1.2 Issuance
      of Orders for Products and Services Other Than Production
      Articles

     

     

    Spirit
      will notify Seller of its requirements for any Product other than Production
      Articles and for any Service under this SBP by issuing Orders. Such Orders
      will
      authorize performance, indicate Price, establish schedule for delivery or
      performance, provide identification of any such Product or Service and effect
      payment and accountability. Any such Order shall include a statement
      incorporating this SBP by reference and shall be governed by and be deemed
      to
      include the provisions of this SBP.

     

     

    
      
        
          13

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     2.2  Entire
      Agreement

     

     

    The
      Order
      sets forth the entire agreement, and supersedes any and all other prior
      agreements understandings and communications between Spirit and Seller related
      to the subject matter of an Order. The rights and remedies afforded to Spirit
      or
      Customers pursuant to any provisions of an Order are in addition to any other
      rights and remedies afforded by any other provisions of the Order, the General
      Terms Agreement (GTA) or the SBP, by law or otherwise.

     

    2.3  Incorporated
      by Reference

     

     

    General
      Terms Agreement (“GTA”) Spirit
      AeroSystems GTA-T5P2-GB001851 dated
      14 October 2005 is incorporated in and made a part of this SBP by this
      reference.

     

    In
      addition to any other documents incorporated elsewhere in this SBP or GTA by
      reference, the following documents are incorporated in and made a part of this
      SBP by reference with full force and effect, as if set out in full text. It
      is
      the Seller’s responsibility to comply with the latest revision of these
      documents.

     

    Boeing
      Document D33200-1 “Boeing Suppliers’ Tooling Document”

     

    Boeing
      Document D953W001, “General Operations Requirements Document For Suppliers -
      External/internal Suppliers/Program Partners”

     

    Boeing
      Document D37520-1, -1A, -1B, Supplier’s Part Protection Guides

     

    Boeing
      Document D6-81628, “Shipping Label, Barcoded Preparation and
      Placement”

     

    Form
      49-5461, Furnished Material

     

    Flysheet
      856 -- INSTRUCTIONS FOR SHIPPING, PACKAGING, & MARKING.

     

    Form
      49-5868, Buyer Furnished Property

     

    Form
      49-5869, Certified Tool List

     

    2.3.1  Supporting
      Documentation and Priority

     

     

    All
      Documents (as hereinafter defined) are by this reference incorporated herein
      and
      made a part of this SBP. For purposes of this SBP, "Document" means all
      specifications, Drawings, Datasets, documents, publications and other similar
      materials, whether in a tangible or intangible form, as the same shall be
      amended from time to time, which relate to the manufacture and sale of Products
      or the provision of Services to Spirit pursuant to this SBP, including, but
      not
      limited to, the documents listed below, and any other documents specifically
      referred to in this SBP or in such other documents. Reference in any Document
      to
      "Contractor" or “Seller” or "Supplier" shall mean Seller for the purposes of
      this SBP. In the event of any inconsistency between the terms and conditions
      of
      this SBP and the terms and conditions of any Document, the terms and conditions
      of the SBP shall control. In the event any provisions of any Document or
      Documents conflict among themselves, Spirit will, on its own initiative or
      at
      the request of Seller, resolve such conflict, revise such Document or Documents
      accordingly, and so notify Seller. In resolving any such conflicts, this SBP
      shall be read as a whole and in a manner most likely to accomplish its
      purposes.

     

     

    
      
        
          14

           

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3.2  Revision
      of Documents

     

     

    Subject
      to the terms of SBP Section 2.3, Spirit may at any time revise any Document
      prepared by Spirit and Spirit shall provide Seller with revisions to Documents
      prepared by Spirit; except that stated addresses and designees for each Party
      contained therein may be modified unilaterally by such Party, and any
      modification of the Administrative Agreement shall be reflected promptly therein
      by amendment thereto.

     

    2.3.3  Compliance

     

     

    Seller
      shall, subject to the terms of this SBP Section 2.3, promptly comply with the
      provisions of all Documents, including any revisions thereto.

     

    2.3.4  List
      of Certain Documents

     

    
      	
               

              Item

            	
               

              No.

            	
               

              Title

            
	
              A.

            	
              D1-4426

            	
              Boeing
                Approved Process Sources

            
	
              B.

            	
              D6-82479

            	
              Boeing
                Quality Management System Requirements for Suppliers

            
	
              C.

            	
              D-13709

            	
              The
                Boeing Commercial Airplanes and Supplier Coordination of Engineering
                Data

            
	
              D.

            	
              D6-4806

            	
              Skin
                Quality Acceptance Standards for Clad Aluminum Raw
                Material

            
	
              E.

            	
              D6-9002

            	
              Appearance
                Control of Clad Aluminum Exterior Skins

            
	
              F.

            	
              D953W001

            	
              General
                Operations Requirements Document For Suppliers - External/internal
                Suppliers/Program Partners

            
	 	 	 
	
              G.

            	
              D33200-1

            	
              Boeing
                Suppliers' Tooling Document

            
	
              H.

            	
              D6-17781

            	
              Material
                and Performance Evaluation of Designated Parts

            
	
              I.

            	
              D6-1276

            	
              Control
                of Material and Machines

            
	
              J.

            	
              D6T-10898-1

            	
              Weight
                Compliance Requirement/Contractor and Subcontractors

            
	
              K.

            	
              D6-51991

            	
              Quality
                Assurance Standard Reflecting Digital Product Definition for Boeing
                Suppliers Using CAD/CAM

            
	
              L.

            	
              D6T10731-1

            	
              Computer-Aided
                Manufacturing Guidelines and Interface for Program Contractors and
                Suppliers

            
	 	 	 
	
              M.

            	
              ATA
                300

            	
              Specification
                for Packaging of Airline Supplies

            

    

     

     

    
      
        
          15

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              N.

            	
              D37520-1,
                -1A, -1B

            	
              Supplier’s
                Part Protection Guides

            
	
              O.

            	
              D6-56199

            	
              Hardware
                and software compatibility requirements for suppliers use of BCAG
                CATIA
                native datasets as sole authority for design, manufacturing and
                inspection

            
	
              P.

            	
              D6-81628

            	
              Shipping
                Label, Barcoded Preparation and
                Placement

            

    

     

    2.4  Order
      of Precedence

     

     

    In
      the
      event of a conflict or inconsistency between any of the terms of the following
      documents, the following order of precedence shall control:

     

    
      	A.  	
              These
                Special Business Provisions (“SBP”) including attachments (excluding all
                documents listed below), then

            

    

     

    
      	B.  	
              General
                Terms Agreement (“GTA”) (excluding all documents listed elsewhere on this
                listing), then

            

    

     

    
      	C.  	
              Purchase
                Contract, if any, then

            

    

     

    
      	D.  	
              Order
                (excluding all documents listed elsewhere on this listing),
                then

            

    

     

    
      	E.  	
              Engineering
                Revision Document (ERD), if any,
                then

            

    

     

    
      	F.  	
              The
                Subcontracted Parts - Revision, Authorization, and Transmittal (“SPRAT”),
                if any, then

            

    

     

    
      	G.  	
              Engineering
                Drawing by Part Number and, if applicable, related Outside Production,
                Specification Plan (OPSP), Specification Plan Detail (SPCD) or Supplier
                Specification Plan (SSP) then

            

    

     

    
      	H.  	
              All
                documents incorporated by reference in SBP Section 6.0, Product Support
                and Assurance, of this SBP, then

            

    

     

    
      	I.  	
              Any
                other Spirit generated exhibits, attachments, forms, flysheets, codes
                or
                documents that the Parties agree shall be part of this SBP, then
                lastly

            

    

     

    
      	J.  	
              Any
                Seller generated documents that the Parties agree shall be part of
                this
                SBP.

            

    

     

    In
      resolving any such conflicts, these documents shall be read as a whole and
      in a
      manner most likely to accomplish their purposes.

     

    Seller
      shall promptly report to Spirit in writing any inconsistencies in these
      documents, even if the inconsistency is resolvable using the above
      rules.

     

     

    
      
        
          16

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    2.5  Survival

     

     

    Without
      limiting any other survival provision contained herein and notwithstanding
      any
      other provision of this SBP or the GTA to the contrary, the representations,
      covenants, agreements and obligations of the Parties set forth in GTA Section
      12.3 “Seller’s Claim”, GTA Section 16.0 “Termination or Wrongful Cancellation”,
      GTA Section 18.0 “Responsibility for Property”, GTA Section 20.0 ‘ Proprietary
      Information and Items”, GTA Section 24.0 “Spirit’s Rights in Seller’s Patents,
      Copyrights, Trade Secrets and Tooling”, GTA Section 27.0 “Property Insurance”,
      GTA Section 29.0 “Non-Waiver/Partial Invalidity”, this SBP Section 2.5
“Survival”, SBP Section 5.0 “Applicable Law”, SBP Section 29.0 “Insurance For
      On-Site Support”(if applicable), and SBP Section 41.0 “Supplements and
      Modifications”(if applicable), shall survive any cancellation, termination or
      expiration of this SBP, any assignment of this SBP or any payment and
      performance of any or all of the other obligations of the Parties hereunder.
      Termination or cancellation of any part of this SBP shall not alter or affect
      any part of this SBP, which has not been terminated or cancelled.

     

    3.0  PERIOD
      OF PERFORMANCE AND PRICES

     

     

    3.1  Performance

     

     

    3.1.1  Period
      of Performance

     

     

    The
      period of performance for this SBP shall include initial manufacturing
      activities required to support delivery of Products beginning on 01 January,
      2007 and ending on 31 December, 2011.

     

    Period
      of
      performance set out above shall be defined as order placement with potential
      delivery beyond 31 December, 2011.

     

    3.1.2  Option
      to Extend

     

     

    Seller
      grants to Spirit an option to extend the period of performance of this SBP
      as
      set forth below. Spirit may exercise the option by written notice to the Seller
      on or before 01 March, 2011. This option may be exercised by Spirit any number
      of times so long as each option increases the period of performance of this
      SBP
      by no less than one (1) year. However, in no event may Spirit unilaterally
      extend the SBP beyond 31 December, 2013, by exercise of this
      option.

     

    Notwithstanding
      the option set forth herein, Spirit reserves the right to commence new
      negotiations with Seller concerning pricing and other terms for additional
      quantities of Products.

     

     

    
      
        
          17

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.2  Pricing

     

     

    3.2.1  Product
      Pricing

     

     

    The
      prices of Products ordered under this SBP are set forth in SBP Attachment 1.
      Prices are in United States Dollars. * 

     

    *

     

    3.2.2  Manufacturing
      Configuration

     

     

    Unit
      pricing for each Product or part number shown in SBP Attachment 1 is based
      on
      the latest revisions of the engineering drawings or specifications at the time
      of the signing of this SBP and any amendments thereof (Ref. SBP Attachment
      15).

     

    3.2.3  Packaging

     

     

    The
      prices shown in SBP Attachment 1 include all packaging costs. Seller shall
      package Product in accordance with the applicable requirements set forth in
      the
      documents referred to in SBP Section 2.3 for the location issuing the Order.
      In
      the case of Products to be shipped directly to Customers, A.T.A. Specification
      300 "Specification for Packaging of Airline Supplies" shall apply unless
      otherwise directed by Spirit. Upon Spirit’s request, Seller will provide
      discreet packaging costs.

     

    3.2.4  Local
      Transportation Devices

     

     

    All
      shipping or handling fixtures necessary for the handling, transportation and
      loading of Products prior to delivery and which are additive to those shipping
      or handling fixtures specified by Spirit for transportation via air or surface
      carrier, off loading from the air or surface carrier or handling ("Local
      Transportation Devices") shall be provided by Seller at no cost or expense
      to
      Spirit. Seller shall plan, design, manufacture or procure, and test any Local
      Transportation Devices.

     

    3.3  Subject
      Matter of Sale

     

    Subject
      to the provisions of this SBP, Seller shall sell to Spirit and Spirit shall
      purchase from Seller certain nonrecurring Products as described in SBP Section
      3.3.1, certain Production Articles and other recurring Products as described
      in
      SBP Section 3.3.2, and certain Spare Parts and other Miscellaneous Work as
      described in SBP Section 3.3.3.

     

     

     

    
      
        
          
            ____________________________

            *The
              text
              noted by asterisks has been redacted in connection with a request to
              the
              Securities and Exchange Commission for confidential treatment of such
              text
              pursuant to Rule 24b-2.  A copy of this Agreement including the redacted
              information has been submitted to the Securities and Exchange Commission
              as part
              of such request.

          

           

          18

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3.1  Nonrecurring
      Work

     

     

    3.3.1.1 Tooling
      - General

     

    All
      Tooling produced in performance of this SBP must conform to the provisions
      of
      Boeing Document D953W001, "General Operations Requirements Document for
      Suppliers External/Internal Suppliers/Program Partners," and D33200-1, "Boeing
      Suppliers' Tooling Document”.

     

    3.3.1.2 Static
      and Fatigue Test Articles

     

    NOT
      APPLICABLE.

     

    3.3.1.3 Contractor-Use
      Tooling (also known as Seller-Use Tooling)

     

    Seller
      shall plan, design, manufacture or procure, and test all Contractor-Use Tooling.
      Contractor-Use Tooling shall be in the configuration, quantity and quality
      required to produce (i) Production Articles in accordance with SBP Attachment
      1
      and (ii) other Spirit requirements for Products (including, without limitation,
      Spare Parts and Rate Tooling). All lead, zinc and kirksite material used in
      the
      fabrication of Contractor-Use Tooling shall be furnished at no cost or expense
      to Spirit and no part of any Price hereunder shall be paid for Contractor-Use
      Tooling made of such material. If Spirit, or Spirit’s Customer, takes possession
      of any Contractor-Use Tooling made of such material, Spirit shall negotiate
      reimbursement with Seller for the cost of such material used in such
      Contractor-Use Tooling.

     

    3.3.1.4 Common
      - Use Tooling

     

    Seller
      shall design, manufacture or procure, and test all Common-Use Tooling including,
      without limitation, strongback handling fixtures, rotable shipping fixtures
      and
      handling fittings. The requirements for such items, if applicable, will be
      defined and identified by Spirit.

     

    3.3.1.5 Use
      of Casting, Forging and Extrusion Tools

     

    Spirit
      or
      its designees shall retain the primary right to use all applicable Tools for
      the
      production of castings, forgings and/or extrusions produced at Seller's
      direction for use under this SBP and such Tools shall be used only in the
      performance of this SBP or any other SBP that Spirit may designate in writing.
      Such Tools shall be retained for use in production of castings, forgings and/or
      extrusions for Spirit or as Spirit directs until Spirit gives written notice
      to
      Seller that a requirement for the use of such Tools no longer exists. Spirit
      agrees to grant to Seller the right to use any Tool for the production of
      castings, forgings or extrusions that will become part of any Product, in which
      Spirit has a right of use, ownership or other proprietary interest.

     

    3.3.1.6 Initial
      Planning

     

    NOT
      APPLICABLE

     

     

    
      
        
          19

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3.1.7 Weight
      Status Reporting

     

    NOT
      APPLICABLE

     

    3.3.1.8 Integrated
      Product Team

     

    Seller
      shall, as required and in accordance with SBP Section 44.0, locate at Spirit
      facilities key personnel for Integrated Product Teams.

     

    3.3.2  Recurring
      Work

     

     

    3.3.2.1 Production
      Articles

     

    Seller
      will provide the Production Articles specified in SBP Attachment 1 in accordance
      with the delivery schedules set forth in the applicable release orders. All
      Production Articles will be manufactured and delivered in accordance with the
      specifications and requirements set forth in this SBP.

     

    3.3.2.2 Tool
      Maintenance

     

    Seller
      shall provide control, accountability, care, storage, maintenance and
      replacements of all Contractor-Use Tooling and Common-Use Tooling, in accordance
      with Document D953W001, "General Operations Requirements Document for
      Suppliers," as required to support the manufacture and delivery of
      Products.

     

    3.3.2.3 Disposable
      Shipping Fixtures

     

    NOT
      APPLICABLE

     

    3.3.2.4 Maintenance
      of Production Planning

     

    Seller
      will revise and maintain the Tool and production planning as required to support
      the production of Production Articles and Spare Parts.

     

    3.3.3  Spares
      and Miscellaneous Work

     

     

    3.3.3.1 Spare
      Parts Ordering

     

    In
      accordance with the requirements as identified in SBP Section 13.1, Seller
      will
      manufacture and sell such Spare Parts as Spirit may order from time to time.
      Seller shall accept any Order for Spare Parts during the term of the
      SBP.

     

    3.3.3.2 Planning
      for Fabrication of Spare Parts

     

    NOT
      APPLICABLE

     

    3.3.3.3 Sale
      of Boeing Proprietary Spare Parts

     

    Seller
      shall sell Boeing Proprietary Spare Parts to Spirit, or to third parties only
      with Spirit's prior written approval or at Spirit's direction. Seller shall
      respond to any inquiry from a third party concerning Boeing Proprietary Spare
      Parts in accordance with SBP Section 3.3.3.1.

     

     

     

    
      
        
          20

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3.3.4 Miscellaneous
      Work

     

     

    Seller
      shall provide to Spirit Miscellaneous Work, including, without limitation,
      test
      articles, Spirit-Use Tooling, test support, field support or other related
      program support items, as may be ordered by Spirit from time to
      time.

     

    4.0  GOVERNING
      QUALITY ASSURANCE REQUIREMENTS

     

     

    In
      addition to those general quality assurance requirements set forth in the GTA,
      the work performed under this SBP shall be in accordance with the requirements
      set forth in SBP Attachment 10.

     

    5.0  APPLICABLE
      LAW

     

     

    This
      contract shall be governed by the laws of the State of Kansas. No consideration
      shall be given to Kansas’ conflict of law rules. This contract excludes the
      application of the 1980 United Nations Convention on Contracts for the
      International Sale of Goods. Seller hereby irrevocably consents to and submits
      itself exclusively to the jurisdiction of the applicable courts of Sedgwick
      County Kansas and the federal courts of Kansas State for the purpose of any
      suit, action or other judicial proceeding arising out of or connected with
      any
      Order or the performance or subject matter thereof. Seller hereby waives and
      agrees not to assert by way of motion, as a defense, or otherwise, in any such
      suit, action or proceeding, any claim that (a) Seller is not personally subject
      to the jurisdiction of the above-named courts, (b) the suit, action or
      proceeding is brought in an inconvenient forum or (c) the venue of the suit,
      action or proceeding is improper.

     

    6.0  PRODUCT
      SUPPORT AND ASSURANCE

     

     

    6.1  Warranty

     

     

    Seller
      acknowledges that Spirit and Customers must be able to rely on each Product
      performing as specified and that Seller will provide all required support.
      Accordingly, the following provisions, including documents, if any, set forth
      below are incorporated herein and made a part hereof:

     

    "Boeing
      Designed, Sub-Contracted Products Manufacturers Warranty" Boeing Document
      M6-1124-3,

     

    Spirit
      may choose initially not to extend the Seller's full warranty of Product to
      Customers. This action shall in no way relieve Seller of any obligation set
      forth in the warranty documents listed above. Spirit, at its sole discretion,
      may extend Seller's full warranty of Product to its Customers at any time.
      Furthermore, Seller agrees to support the Product as long as any aircraft using
      or supported by the Product remains in service.

     

     

    
      
        
          21

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    6.2 Integrated
      Materials Management (IMM) Program

     

     

    If
      requested by Spirit, Seller shall participate in and support Spirit's Integrated
      Materials Management (IMM) Program pursuant to terms and conditions mutually
      determined by the parties that will achieve an efficient and low cost supply
      chain infrastructure pursuant to the goals and strategies of the IMM Program
      as
      set forth below:

     

    
      	A.  	
              Provide
                a Spirit integrated solution for customers’ material management
                operations;

            

    

     

    
      	B.  	
              Provide
                guaranteed service levels to customers’ maintenance
                operations;

            

    

     

    
      	C.  	
              Reduce
                inventory and process costs with better service levels to
                customers;

            

    

     

    
      	D.  	
              Enable
                supply chain and customers to reduce costs and share
                benefits.

            

    

     

    IMM
      on-site functions may be located at customers’ facilities and may include,
      demand planning, inventory management, repair and overhaul services and
      replenishment management. IMM global functions may include, planning and
      collaboration, global operations, systems integration, network supplier
      management, global logistics management, quality assurance, human resources,
      parts/services engineering, finance and accounting, communications, product
      development.

     

    7.0  PAYMENT

     

     

    7.1  Recurring
      Price

     

     

    * 

     

    Except
      as
      otherwise provided on applicable Order identifying Pay-From Receipt, payment
      due
      dates, including discount periods, shall be computed from (a) the date of
      receipt of the Product, (b) the date of receipt of a correct (proper) invoice
      or
      (c) the scheduled delivery date of such Product, whichever is last. Unless
      freight and other charges are itemized, any discount shall be taken on the
      full
      amount of the invoice. All payments are subject to adjustment for shortages,
      credits and rejections.

     

     

    7.2  Nonrecurring
      Price/Special Charges

     

     

    *

     

     

    
      
        
          
            ____________________________

            *The
              text
              noted by asterisks has been redacted in connection with a request to
              the
              Securities and Exchange Commission for confidential treatment of such
              text
              pursuant to Rule 24b-2.  A copy of this Agreement including the redacted
              information has been submitted to the Securities and Exchange Commission
              as part
              of such request.

          

           

          22

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.3  Payment
      Method

     

     

    All
      payments hereunder shall be made by check payable to the order of Seller
      deposited in the U.S. postal system via first-class mail to an address
      designated in writing by Seller.

    
 

    
 

    
      
        
          23

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.4  Payment
      Errors

     

     

    If
      an
      error in payment (over payment or under payment) is discovered by Spirit or
      Seller, a written notification will be submitted to the other Party and
      resolution of the error will occur in a timely manner after discovery of such
      error. 

     

    7.5  Spare
      Parts

     

     

    The
      Price
      for any Spare Part shall be paid * .

     

    7.6  Invoicing

     

     

    7.6.1  Invoicing
      Requirements

     

    Seller
      shall submit separate invoices for payment of Recurring and Nonrecurring Shipset
      Prices . Payment of any such invoice by Spirit shall be subject to the
      satisfaction of all of the following conditions:

     

    
      	A.  	
              The
                Shipset of Production Articles for which payment is to be made shall
                have
                been delivered to Spirit. Any Shipset will be deemed to be delivered
                when
                all Production Articles constituting such Shipset shall have been
                delivered to Spirit.

            

    

     

    
      	B.  	
              Spirit
                shall have received the Certified Tool List in form and substance
                satisfactory to Spirit, or otherwise in compliance with Documents
                D953W001
                "General Operations Requirements Document for Suppliers," and D33200,
                "Boeing Suppliers' Tooling Manual," for the tools required to produce
                each
                Production Article in a Shipset, and, as changes to Production Articles
                shall occur, updated Certified Tool Lists listing additional Tools
                required to accomplish any such change,
                and

            

    

     

    
      	C.  	
              The
                Spares Articles for which payment is to be made shall have been delivered
                to Spirit. Any Spare will be deemed to be delivered when all Articles
                constituting such Spare shall have been delivered to Spirit. The
                Miscellaneous Work (except for any Spare Part) for which payment
                is to be
                made shall be after delivery or provision, as the case may be, of
                the
                Product or Service constituting or containing such Miscellaneous
                Work to
                Spirit or Spirit’s designee

            

    

     

    7.6.4  Mailing
      Instructions

     

    All
      invoices shall be mailed to:

     

    Spirit
      AeroSystems, Inc.

     

     

    
      
        
          _________________________________

            *
              The text
              noted by asterisks has been redacted in connection with a request to
              the
              Securities and Exchange Commission for confidential treatment of such
              text
              pursuant to Rule 24b-2. A copy of this Agreement including the redacted
              information has been submitted to the Securities and Exchange Commission
              as part
              of such request.

          

           

          24

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    P.O.
      Box
      582808

     

    Tulsa,
      OK
      74158-2808

     

    Attention:
      Accounts Payable, D/904

     

    7.6.5  Summary
      Invoices

     

     

    Seller
      shall supply a summary invoice for those shipments that contain
      multiple-invoiced items; each item in turn having its own invoice. The summary
      invoice shall be attached along with the paperwork for the shipment and provide
      total value for the invoices that accompany it as well as specify what invoices
      are covered.

     

    An
      acceptable alternative is the use of a single invoice for multiple items, part
      numbers and purchase order numbers.

     

    All
      specific questions and concerns on customs invoicing may be addressed to the
      Spirit Traffic Organization.

     

    8.0  SCHEDULE
      ACCELERATION/DECELERATION

     

     

    Notwithstanding
      GTA Section 10.0, Spirit may revise the delivery schedule and/or firing order
      without additional cost or change to the unit price stated in the applicable
      Order if (a) the delivery date of the Product under such Order is on or before
      the last date of contract, if applicable, and (b) Spirit provides Seller with
      written notice of such changes.

     

    Upon
      receipt of written notice of the change, Seller shall make its best effort
      to
      implement the change as soon as possible, but in no event shall the change
      be
      implemented later than three
      (3) months after notification of a schedule acceleration or
      deceleration.

     

    Seller
      shall be entitled to payment for schedule changes made with less than three
      (3)
      months’ notice noted above; provided, however, that such payment shall not be
      made with respect to any Shipset delivered three (3) months or more after such
      notice is given. Any such payment shall be an amount equal to four-tenths of
      one
      percent (.4%) of the Recurring Shipset Price multiplied by the number of
      Shipsets accelerated or decelerated during such three (3) month period. The
      resulting payment amount shall be made in full net sixty (60) days after receipt
      of a correct and valid invoice. See Attachment 20 for an example of the
      above.

     

    9.0  NOTICES

     

     

    9.1  Addresses

     

     

    For
      all
      matters requiring the approval or consent of either party such approval or
      consent shall be requested in writing and is not effective until given in
      writing. Notices and other communications shall be given in writing by personal
      delivery, United States mail, express delivery, facsimile, or electronic
      transmission addressed to the respective party as follows:

     

     

    
      
        
          25

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	
              To
                Spirit:

            	 	
              Attention:
                Randall P. Garrett: Dept. 953, Bldg. 057

              Spirit
                AeroSystems, Inc. 

            
	 	 	 
	 	 	
              P.O.
                Box 582808

              Tulsa,
                Oklahoma 74158-2808

            
	 	 	 
	
              To
                Seller:

            	 	
              Attention:
                Rick Darrow

              Leonard’s
                Metal, Inc.

            
	 	 	 
	 	 	
              3600
                Mueller Road

              St.
                Charles, MO 63301

            

    

    

     

    10.0  OBLIGATION
      TO PURCHASE AND SELL

     

     

    Spirit
      and Seller agree that in consideration of the prices set forth under SBP
      Attachment 1, Spirit shall issue Orders for Products from time to time to Seller
      for all of Spirit’s requirements. Such Products shall be shipped at any
      scheduled rate of delivery, as determined by Spirit, and Seller shall sell
      to
      Spirit Spirit’s requirements of such Products, provided that, without limitation
      on Spirit’s right to determine its requirements, Spirit shall not be obligated
      to issue any Orders for any given Product if:

     

    
      	A.  	
              Any
                of Spirit’s customers specifies an alternate
                product;

            

    

     

    
      	B.  	
              Such
                Product is, in Spirit’s reasonable judgment, not technologically
                competitive at any time, for reasons including but not limited to
                the
                availability of significant changes in technology, design, materials,
                specifications, or manufacturing processes which result in a reduced
                price
                or weight or improved appearance, functionality, maintainability
                or
                reliability;

            

    

     

    
      	C.  	
              Spirit
                gives reasonable notice to Seller of a change in any of Boeing's
                aircraft
                which will result in Spirit no longer requiring such Product for
                such
                aircraft;

            

    

     

    
      	D.  	
              Seller
                has materially defaulted in any of its obligations under any Order,
                whether or not Spirit has issued a notice of default to Seller pursuant
                to
                GTA Section 13.0;

            

    

     

    
      	E.  	
              Spirit
                reasonably determines that Seller cannot support Spirit’s requirements for
                Products in the amounts and within the delivery schedules Spirit
                requires;
                or

            

    

     

    
      	F.  	
              Spirit
                gives at least six (6) months notice to Seller that the Product is
                used in
                the manufacturing of an airplane component, assembly or other product
                previously manufactured in-house by Spirit and which component, assembly
                or other product Spirit has resourced to a third party supplier;
                or,

            

    

     

     

    
      
        
          26

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    For
      purposes of this SBP Section 10.0, Spirit is defined as those organizations,
      divisions, groups or entities set forth specifically in SBP Attachment
      1.

     

    Seller
      represents and warrants to Spirit that discounts offered fairly reflect
      manufacturing, selling, or delivery cost savings resulting from this quantity
      sale and that such discounts are reasonably available to all other
      purchasers.

     

    

     

    11.0  COST
      AND PERFORMANCE VISIBILITY

     

     

    When
      requested by Spirit, Seller shall provide all necessary cost support data,
      source documents for direct and indirect costs, and assistance at the Seller's
      facility in support of cost and performance reviews performed by the Parties
      pursuant to cost reduction initiatives as set forth in SBP Section
      12.6.

     

    The
      Cost
      and Performance Review (CPR) process is the tool, which the Parties may use
      to
      measure Seller’s performance to the goals and objectives of Spirit as set forth
      in SBP Section 12.6. Spirit and Seller may implement a structured process called
      CPR to review and identify areas, processes and strategies to improve, reduce
      or
      eliminate which will result in the desired effect of reducing costs and/or
      improving cycle times for the Product(s) set forth in this SBP. The CPR process
      will address those activities, which are a direct result of both parties
      involvement. Seller will provide the resources and data sufficient to support
      the CPR process in accordance with the structure set forth in SBP Attachment
      9.

     

    12.0  CHANGE
      PROVISIONS

     

     

    12.1  Reserved

     

     

    12.2  Computation
      of Equitable Adjustment

     

     

    The
      Rates
      and Factors set forth in SBP Attachment 3, which by this reference is
      incorporated herein, shall be used to determine the equitable adjustment, if
      any, (including equitable adjustments, if any, in the prices of Products to
      be
      incorporated in Derivative Aircraft), to be paid by Spirit pursuant to GTA
      Section 10.0 and SBP Section 38.0 for each individual change.

     

    Adjustments
      to prices shall be established in accordance with SBP 12.2 and recorded in
      SBP
      Attachment 16.

     

    12.2.1  Changes
      Not Subject to Price Adjustment

     

     

    No
      adjustment to the Prices hereunder shall be made with respect to the following
      changes:

     

    
      	A.  	
              All
                Production Article delivery schedule changes, including firing order
                and
                rate changes, except as provided in SBP Section 8.0, if
                applicable.

            

    

     

     

    
      
        
          27

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	B.  	
              Any
                other change that is not subject to Price adjustment in accordance
                with
                clause 12.2.2 below.

            

    

     

    12.2.2  Changes
      Subject to Price Adjustment

     

     

    An
      adjustment to the Prices hereunder shall be made with respect to the following
      changes:

     

    
      	A.  	
              Committed
                Changes (70000 Series PRRs), Flight Changes (FCs), Master Changes
                (MCs),
                Rapid Revisions (RRs) and Modification Revisions (MRs), provided
                that such
                changes shall satisfy the criteria set forth in Paragraph 12.2.4
                below.

            

    

     

    
      	B.  	
              The
                transfer, pursuant to SBP Section 38.0, to or from Seller of
                responsibility for any part of the production of any Product or product
                or
                for the provision of any Service or
                service.

            

    

     

    
      	C.  	
              Any
                change resulting in the production of
                Derivatives.

            

    

     

    
      	D.  	
              Categorized
                changes (94000 and 95000 Series Production Revisions Records)(PRRs)
                as
                defined in Documents D6T11122-2, and D962W101, "Supplier Change
                Management".

            

    

     

    
      	E.  	
              Change
                Incorporation Requests (CIRs) as defined in Document D953W001, "General
                Operations Requirements Document for
                Suppliers".

            

    

     

    
      	F.  	
              Spirit
                generated SLCPN, “Supplier Generated Line Change Point
                Notice”.

            

    

     

    12.2.3  Proposals
      for Price Adjustment

     

     

    12.2.3.1 Timeframe

     

     

    Changes
      Prior to 100% Engineering Release - No later than thirty (30) calendar days
      after 100% Engineering Release, Seller shall submit to Spirit a listing of
      all
      changes which were received by Seller prior to 100% Engineering Release together
      with Seller’s proposal for appropriate price adjustment.

     

    Changes
      Subsequent to 100% Engineering Release - Seller must assert any claim to Spirit
      procurement Representative in writing within thirty (30) days and a fully
      supported proposal to Spirit procurement Representative within forty-five (45)
      calendar days after receipt of such direction.

     

    If
      Spirit
      does not receive any proposal within the forty-five (45) day time period, no
      such adjustment shall be made to Nonrecurring and Recurring Shipset
      Prices.

     

     

    
      
        
          28

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.2.3.2 Content

     

     

    Seller
      shall provide a detailed description of each change, the technical impact on
      the
      Product’s form, fit, and/or function, and any significant impact on
      manufacturing processes. Seller shall include with each proposal a complete
      estimate of the Change’s impact on the Seller’s cost per Product, including, but
      not limited to, the impact on labor hours, labor rates, processing costs,
      sub-tier supplier costs and raw material costs. Spirit must be able to
      substantiate and verify Seller’s submittal.

     

    12.2.3.3 Review
      of Price Adjustment Proposal

     

     

    Spirit
      will review the Seller’s provided submittal and Spirit may request from Seller
      additional data to allow Spirit to thoroughly review each submittal. Seller
      will
      provide Spirit additional data within thirty (30) days of Spirit’s request for
      such additional data. Spirit will review any additional data submitted and
      inform Seller of any further requirements. 

     

    If
      Spirit
      and Seller mutually determine that a change meets the change pricing criteria
      set forth in SBP Section 12.2.4, Spirit and Seller will negotiate an equitable
      adjustment in the price to reflect the increase or decrease. Spirit shall adjust
      the then-current Nonrecurring and Recurring Shipset Prices in accordance with
      SBP Section 12.2.5.

     

    12.2.3.4 Future
      Derivative(s) and Follow-on Work

     

     

    For
      Derivative(s) and follow-on work outside the term of this SBP, Spirit reserves
      the right to contract with any supplier Spirit determines is appropriate for
      the
      supply of the Products addressed in this SBP. In determining the appropriate
      supplier for Derivative(s), market driven target prices, based on Spirit’s
      expected revenue generated from sales of Derivative(s), will be a key
      consideration in the selection process, and in the establishment of Nonrecurring
      and Recurring Shipset Prices for Derivative(s). If Spirit selects Seller as
      the
      supplier for these Products, change pricing will be subject to SBP Section
      12.2.4.3.

     

    12.2.4  Change
      Pricing Criteria

     

     

    12.2.4.1 Changes
      Prior to 100% Engineering Release

     

     

    For
      changes received by Seller prior to 100% Engineering Release, the then current
      Nonrecurring and/or Recurring Shipset Prices set forth in SBP Attachment 1
      and/or 16 (whichever is applicable) shall be adjusted if:

     

    12.2.4.1.1 Nonrecurring
      Shipset Price Adjustment Prior to 100% Engineering
      Release

     

     

    For
      Nonrecurring Work, the price impact, up or down of each change on the Total
      Nonrecurring Work Package Price is *.

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          29

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.2.4.1.2 Recurring
      Shipset Price Adjustment Prior to 100% Engineering
      Release

     

     

    For
      Recurring Work, the price impact, up or down, of each change on the Recurring
      Shipset Price is *.

     

    12.2.4.2 Changes
      Subsequent to 100% Engineering Release

     

     

    For
      Changes received by Seller after 100% Engineering Release, the then current
      Nonrecurring and/or Recurring Shipset Prices set forth in SBP Attachments 1
      and/or 16 (whichever is applicable) shall be adjusted if:

     

    12.2.4.2.1 Nonrecurring
      Shipset Price Adjustment Subsequent to 100%
      Engineering Release

     

     

    For
      Nonrecurring Work, the price impact, up or down, of change on the Total
      Nonrecurring Work Package Price is *.

     

    12.2.4.2.2 Recurring
      Price Adjustment Subsequent to 100% Engineering
      Release

     

     

    For
      Recurring Work, the price impact, up or down, of each change on the then-current
      Recurring Shipset Price is *.

     

    12.2.4.3 Changes
      for Derivatives

     

     

    Any
      changes associated with the production of Products for a Derivative shall be
      subject to the change pricing criteria set forth in SBP Section 12.2.3.1 and
      12.2.3.2.

     

    12.2.5  Apportionment
      and Payment of Price Adjustments

     

     

    12.2.5.1 Nonrecurring
      Work

     

     

    12.2.5.1.1 Price
      Adjustment

     

     

    The
      amount of the Total Nonrecurring Work Package Price adjustment shall be equal
      to
      the value of the change subject to SBP Section 12.0 and shall be documented
      in
      SBP Attachment 16.

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

               

            

          

          30

          

          
            	
                    Special
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.2.5.1.2 Apportionment
      and Payment

     

     

    Any
      adjustment to the Shipset Nonrecurring Price shall be paid * .

     

    12.2.6.1 Recurring
      Work

     

     

    12.2.6.1.1 Price
      Adjustment

     

     

    The
      amount of the Recurring Shipset Price adjustment shall be equal to the value
      of
      the change subject to SBP Section 12.0 and shall be documented in SBP Attachment
      16.

     

    All
      changes to the Recurring Shipset Price shall be set forth in SBP Attachment
      16.

     

    12.2.6.1.2 Apportionment
      and Payment

     

     

    The
      then-current Recurring Shipset Price shall be adjusted to reflect the change
      beginning with the first Shipset, which incorporates such change. See SBP
      Attachment 16 for an example.

    
 

    
 

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          31

          

          
            	
                    Special
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.3  Obsolescence

     

     

    No
      adjustment to Prices pursuant to SBP Section 12.2 shall include any of Seller's
      costs for obsolescence. Notwithstanding the foregoing, Seller shall be entitled
      to payment for any obsolescence estimated to exceed * and
      allowable in accordance with GTA Section 12.3. Each change shall, for purposes
      of determining obsolescence costs, be considered separately. Changes, for
      purposes of determining obsolescence costs, may not be combined for the purpose
      of exceeding the limit described in this SBP Section 12.3

     

    12.4  Change
      Absorption (Nonrecurring/Recurring)

     

     

    12.4.1
       Prior
      to 100% Engineering Release (Drawing Revision Level New)

     

     

    Notwithstanding
      the provisions of GTA Section 10.0, *.

     

    *

     

     

    12.4.2  Subsequent
      to 100% Engineering Release

     

     

    Notwithstanding
      the provisions of GTA Section 10.0, *.

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

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                    Special
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    *.

     

    12.5  Planning
      Schedule 

     

     

    Any
      planning schedule, forecast, or any such quantity estimate provided by Spirit
      shall be used solely for production planning. Spirit may purchase Products
      in
      different quantities and specify different delivery dates as necessary to meet
      Spirit’s requirements. Any such estimate shall be subject to adjustment from
      time to time, and such adjustment shall not constitute a change under GTA
      Section 10.0 nor a termination under GTA Section 12.0.

     

    12.6  Total
      Cost Management

     

     

    Spirit
      and Seller shall engage in a process herein known as Total Cost Management
      (TCM). Spirit and Seller shall each identify cost reduction opportunities and
      work together for implementation. Spirit and Seller shall review TCM
      opportunities on a periodic basis, which shall include the establishment of
      targets and implementation plans. Where Spirit and Seller identify TCM cost
      improvements, beyond those previously anticipated, identified and documented
      in
      the price, the Parties will determine the amount of savings that will result
      from the improvements and share the savings. Notwithstanding any other
      provision(s) elsewhere in this SBP, where a savings is identified as part of
      TCM, the Parties agree to reduce the price accordingly including any related
      Spares work statement priced pursuant to this SBP. Seller suggestions
      disapproved by Spirit may be given consideration in achievement of TCM
      targets.

     

    12.6.1    Spirit
      Generated Technical and Cost Improvement 

     

    At
      any
      time during the Seller's performance under this SBP, Spirit may offer specific
      recommendations to Seller for the incorporation of any new technologies and
      process improvements intended to reduce Seller's costs or improve Product
      performance. These recommendations may include, but are not limited to, Spirit
      proprietary information and Spirit owned patents. Notwithstanding any other
      provision(s) elsewhere in this SBP, where a savings is identified and
      documented, the Parties agree to reduce the price accordingly. Such
      recommendations by Spirit shall not relieve Seller of its obligation to perform
      under this SBP.

     

    12.7  Reserved

     

     

    12.8     Reserved

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.9  Derivative
      Aircraft

     

     

    Spirit
      may, but is not obligated to direct Seller within the scope of the applicable
      Order and in accordance with the provisions of GTA Section 10.0 to supply
      Spirit’s requirements for Products for Derivative aircraft which correspond to
      those Products being produced under the applicable Order. For purposes of this
      SBP Section, Derivative Aircraft means any model airplane designated by Spirit
      as a derivative of an existing model airplane and which: (1) has the same number
      of engines as the existing model airplane; (2) utilizes essentially the same
      aerodynamic and propulsion design, major assembly components, and systems as
      the
      existing model airplane; (3) achieves other payload/range combinations by
      changes in body length, engine thrust, or variations in certified gross weight;
      (4) has the same body cross-section as the subject model aircraft; and (5)
      is
      designated as a Derivative to the FAA by Manufacturer. A Derivative does not
      include any subject model aircraft, which has been or was currently in
      production as of the date of execution of the applicable SBP. Furthermore,
      Spirit reserves the right to extend application of the above Products and prices
      to other aircraft models as required.

     

    13.0  SPARES
      AND OTHER PRICING

     

     

    13.1  Spares

     

     

    For
      purposes of this SBP Section, the following requirements and definitions shall
      apply:

     

    
      	A.  	
              AIRCRAFT
                ON GROUND (AOG) - means the highest Spares priority. Seller will
                expend
                best efforts to provide the earliest possible shipment of any Spare
                designated AOG by Spirit. Such effort includes but is not limited
                to
                working twenty-four (24) hours a day, seven days a week and use of
                premium
                transportation. Seller shall specify the delivery date of any such
                AOG
                Spare within two (2) hours of receipt of an AOG Spare
                request.

            

    

     

    
      	B.  	
              DEMAND
                DATE - means a date provided to Seller by Spirit when Spirit wants
                the
                Product(s) on-dock. Seller will provide a commitment to Spirit no
                later
                than three (3) days from notification of demand date.
                

            

    

     

    
      	C.  	
              SELLER’S
                FULL LEADTIME SPARE - means a Spare in which the Demand Date is equal
                to
                or greater than Seller’s normal lead-time or the Demand Date is less than
                Seller’s normal lead-time but Seller’s best effort commitment is Seller’s
                normal lead-time.

            

    

     

    
      	D.  	
              SELLER’S
                LESS THAN FULL LEADTIME SPARE - means a Spare in which the Demand
                Date is
                less than Seller’s normal lead-time and Seller’s best effort commitment to
                meet the Demand Date is less than Seller’s normal
                lead-time

            

    

     

    
      	E.  	
              PURCHASED
                ON ASSEMBLY REQUIREMENT (POA) - means any detail component needed
                to
                replace a component on an End Item Assembly currently
                in

            

    

     

     

    
      
         34
          

          
            	
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	  	
              Spirit's
                assembly line process.  Seller shall expend best efforts to provide
                the earliest possible delivery of any Spare designated as POA by
                Spirit.  Such effort includes but is not limited to working
                twenty-four (24) hours a day, seven days a week and use of premium
                transportation.  Seller shall specify the delivery date of any such
                POA within two (2) hours of a POA
                request.

            

    

     

    
      	F.  	
              IN-PRODUCTION
                SPARE - means any Spare which is in the current engineering configuration
                for the Product and is used on a model aircraft currently being
                manufactured by Spirit at the time of the
                Order.

            

    

     

    
      	G.  	
              NON-PRODUCTION
                SPARE - means any Spare which is used on model aircraft no longer
                being
                manufactured by Aircraft Manufacturer (Post Production) or is in
                a
                non-current engineering configuration for the Product (Out of
                Production).

            

    

     

    
      	H.  	
              BOEING
                PROPRIETARY SPARE - means any Spare, which is manufactured (i) by
                Boeing,
                or (ii) to Boeing's detailed designs with Boeing's authorization
                or (iii)
                in whole or in part using Boeing's Proprietary
                Materials.

            

    

     

    13.1.1  Spares
      Support

     

     

    The
      Demand Date initiative is Spirit’s means of providing Seller greater visibility
      of Customer requirements and expectations for Spares. Seller agrees to work
      with
      Spirit during the term of this SBP to identify and address those elements in
      the
      manufacturing or support processes which are critical to supporting the Demand
      Date initiative. Where possible, the parties will work to improve those critical
      elements.

     

    Seller
      shall provide Spirit with a written Spares support plan describing Seller's
      process for supporting AOG commitments and manufacturing support. The plan
      must
      provide Spirit with the name and number of a twenty-four (24) hour contact
      for
      coordination of AOG requirements. Such contact shall be equivalent to the
      coverage provided by Spirit to its Customers as outlined in SBP Attachment
      4
      "Spirit AOG Coverage".

     

    Seller
      shall notify Spirit as soon as possible via fax, telecon, or as otherwise agreed
      to by the Parties of each AOG requirement shipment using the form identified
      in
      SBP Attachment 5 "Spirit AOG Shipping Notification". Such notification shall
      include time and date shipped, quantity shipped, Order, pack slip, method of
      transportation and air bill if applicable. Seller shall also notify Boeing
      immediately upon the discovery of any delays in shipment of any requirement
      and
      identify the earliest revised shipment possible.

     

    13.1.2 Reserved

     

    13.1.3  Spare
      Pricing

     

     

    *.
      

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          35

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    *.
      

     

    During
      the term of this SBP, Spirit reserves the right to evaluate and determine if
      Seller's component part pricing (CPP) is market based. In the event Spirit,
      after consultation with Seller, determines Seller's CPP is not commensurate
      with
      market conditions, Spirit reserves the right to limit Spirit’s obligation to
      purchase the applicable part(s) from Seller under SBP Section 10.0. Spirit
      will,
      upon determination that Seller’s CPP is not market based, remove such Product
      from Attachment 1 and add it to Attachment 1A. For those items listed in
      Attachment 1A, Spirit reserves the right to purchase the items from Seller
      at
      the price set forth in Attachment 1A or from a third party as determined by
      Spirit. 

     

    13.1.4  Spares
      Special Handling

     

     

    The
      price
      for all effort associated with the handling of Spare(s) is deemed to be included
      in the price for such Spare(s). If Spirit directs delivery of Spares to a place
      other than that designated in SBP Section 3.2.1, Spirit shall reimburse Seller
      for shipping charges, including insurance, paid by Seller to the designated
      place of delivery which exceed the original cost of shipping contemplated in
      this SBP. Such charges shall be shown separately on all invoices. 

     

    13.2  Expedite
      of Production Requirements 

     

     

    Any
      expedite charges to be paid for short flow production requirements shall be
      pre-approved by the Procurement Agent. Seller shall provide data to verify
      expedite charges. If Seller fails to meet their committed delivery, Spirit
      shall
      not be obligated to pay the agreed upon amount.

     

    13.3  Tooling

     

     

    13.3.1  Responsible
      Party

     

     

    * .
      Seller
      shall not use tools, which contain, convey, embody, or were made in accordance
      with or by reference to any Proprietary Information and Materials of Spirit,
      to
      manufacture parts for anyone other than Spirit without the prior written
      authorization of Spirit.

     

    *.
      In
      addition to the requirements set forth in SBP Section 7.2, the Seller shall
      comply with the applicable Terms and Conditions as set forth in SBP Section
      2.3
      for the Spirit location issuing the Order. *.
      Invoices
      shall be dated concurrent with, or subsequent to, shipment of the Products.
      No
      repair, replacement, maintenance or rework of such Tooling shall be

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          36

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    performed
      without Spirit’s prior written consent. Spirit shall notify Seller of any action
      required for discrepant Tooling.

     

    13.3.2  Spirit
      Furnished Tooling

     

     

    In
      the
      event Spirit furnishes Tooling to Seller, Seller shall comply with the
      applicable Terms and Conditions as set forth in SBP Section 2.3 for the Spirit
      location furnishing the Tooling. No repair, replacement, maintenance or rework
      of such Tooling shall be performed without Spirit’s prior written consent.
      Spirit shall notify Seller of any action required for discrepant
      Tooling.

     

    13.3.3 Additional
      Tooling Requirement

     

    Upon
      expiration, termination or cancellation of this SBP or any Product included
      herein and for up to one year thereafter, Seller shall at no cost to Spirit,
      prepare and package for shipment any and all Tooling in the possession or under
      the effective control of Seller or any of its Subcontractors or suppliers
      associated with this SBP or the applicable Product within 30 days of receipt
      of
      written notice from Spirit. Included as part of this preparation would be the
      transfer of title, where applicable, of such Tooling free and clear of all
      liens, claims or other rights of Seller or any third party.

     

    Seller
      hereby authorizes Spirit or its representatives to enter upon its, or any of
      Seller's Subcontractors or suppliers, premises at any time during regular
      business hours upon one (1) day's advance written notice, for the limited
      purpose of taking physical possession of any or all of the aforesaid items.
      At
      the request of Spirit, Seller shall promptly provide to Spirit a detailed list
      of such items, including the location thereof, and shall catalog, crate,
      package, mark and ship such items expeditiously and in an orderly manner and
      otherwise in the manner requested by Spirit, which request may specify
      incremental or priority shipping of certain items. Seller shall, if instructed
      by Spirit, store or dispose of any or all of the aforesaid items in any
      reasonable manner requested by Spirit.

     

    13.3.3.1 Title
      to Tooling

     

     

    Except
      as
      provided in GTA Section 12.2, and GTA Section 13.0, Seller shall retain, and
      shall cause each of its subcontractors to retain, legal title to all
      Contractor-Use Tooling, Common-Use Tooling and Spirit-Use Tooling manufactured
      or procured by Seller or any of its subcontractors, as the case may be, until
      Seller shall have received full payment of the Nonrecurring Shipset Price
      therefore as provided in SBP Attachment 1 and SBP Section 7.0. Notwithstanding
      the foregoing, Seller shall retain, and shall cause each of its subcontractors
      to retain, title to such Tooling following receipt of such payment until such
      time as Spirit shall request the transfer of such title to Spirit.

     

    13.3.3.2 Use
      and Disposition of Tooling

     

     

    Seller
      shall use any and all Tooling only for the purpose of performing its obligations
      under this SBP, and shall not sell, lease or otherwise dispose of any Tooling.
      Seller shall obtain 

     

     

    
      
        37
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and
      maintain in effect insurance in respect of all Contractor-Use Tooling and
      Common-Use Tooling (other than such Tooling, which is in the actual possession
      of Spirit,) in accordance with SBP Section 45.0. Seller shall not create or
      allow to exist in respect of any Tooling any lien, claim or right of any person
      or entity other than the rights of Spirit under this SBP.

     

     

     

    
      
        38
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    13.3.3.3 Accountability
      for Tooling

     

     

    Seller
      shall control and account for all Tooling. in accordance with the provisions
      of
      Boeing Document D33200, "Boeing Suppliers' Tooling Manual," and Boeing Document
      D953W001, “General Operations Requirements Document for Suppliers
      External/Internal Suppliers/Program Partners." This requirement shall apply
      to
      Spirit-Use Tooling until delivery thereof to Spirit, and to Contractor-Use
      Tooling and Common-Use Tooling at all times prior to the removal thereof by
      Spirit or delivery to Spirit or Spirit’s designee pursuant to GTA Section 12.2.
      Seller shall identify all new, reworked and re-identified Tooling with an
      identification tag containing the Boeing Lifetime Serial Number of each Tool.
      Boeing Lifetime Serial Numbers shall be provided to Seller by
      Spirit.

     

    13.3.3.4 Certified
      Tool Lists

     

     

    Seller
      shall prepare a list or lists ("Certified Tool List") containing the Tool
      number, the Boeing Lifetime Serial Number for each Tool and such other
      information as Spirit shall request. Seller shall prepare a separate Certified
      Tool List for (i) Contractor-Use Tools, (ii) Common-Use Tools, (iii) Spirit-Use
      Tools, and (iv) Casting/Extrusion Tools. Seller shall promptly submit each
      initial Certified Tool List to Spirit. Seller shall subsequently submit from
      time to time as specified by Spirit new Certified Tool Lists to supplement
      the
      information contained in the initial Certified Tool Lists.

     

    13.4  Pricing
      of Spirit’s Supporting Requirements

     

     

    Any
      Products required to assist Spirit’s supporting requirements, including but not
      limited to requirements test requirements, factory support, flight test spares
      will be provided for not more than the applicable price as set forth in SBP
      Attachment 1.

     

    13.5  Pricing
      of Requirements for Modification or Retrofit

     

     

    13.5.1  Spirit
      Responsibility or Regulatory Requirement

     

     

    Any
      Products required by Spirit to support a modification or retrofit program which
      results from a regulatory requirement or which Spirit may be liable for the
      cost
      associated with such program shall be provided to Spirit at a price not more
      than the applicable price as set forth in SBP Attachment 1.

     

    13.5.2 Contract
      Aftermarket Modification or Retrofit Work Performed by
      Spirit

     

     

    Any
      Products required by Spirit to support modification or retrofit programs, which
      Spirit performs under contract, shall be provided for not more than the
      applicable price as set forth in SBP Attachment 1.

     

     

    
      
        39
          

          
            	
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.6  Pricing
      of Similar Products

     

     

    New
      Products ordered by Spirit that are similar to or within Product families of
      Products currently being manufactured by Seller shall be priced using the same
      methodology or basis as that used to price the existing Product(s).

     

     

    
      
        
          40

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	14.0  	
                          STATUS
                REPORTS/REVIEWS

            

    

     

    14.1  General
      Reports / Reviews

     

    When
      requested by Spirit, Seller shall update and submit, as a minimum, monthly
      status reports or data requested by Spirit using a method mutually agreed upon
      by Spirit and Seller. Spirit has the right to impose more frequent reporting
      on
      Seller to achieve program objectives.

     

    When
      requested by Spirit, Seller shall provide to Spirit a manufacturing milestone
      chart identifying the major purchasing, planning and manufacturing operations
      for the applicable Product(s).

     

    Program
      reviews will be held at Seller’s facility or Spirit’s facilities as requested by
      Spirit. The topics of these reviews may include raw material and component
      part
      status, manufacturing status, production status, Seller’s current and future
      capacity assessments, Spirit supplied components, inventory, Spirit’s
      requirements, changes, forecasts and other issues pertinent to Seller’s
      performance under this SBP. Reviews will allow formal presentations and
      discussion of status reports as set forth above.

     

    Formal
      management reviews shall be held periodically by Spirit and Seller to evaluate
      total cost performance (including overhead, man-hours (production and support)).
      During these reviews, Seller shall present and provide actual cost performance
      data with respect to this SBP.

     

    14.2  Diversity
      Reporting

     

    Seller
      shall report to Spirit on a quarterly basis, starting from the date of this
      SBP
      award, all payments to small businesses, small disadvantaged business/minority
      business enterprises, women-owned small business and historically black colleges
      and universities and minority institutions in dollars and as a percentage of
      the
      contract price paid to Seller to date, proving the information shown on the
      Second Tier Report located in SBP Attachment 11.

     

    
      	14.3  	
                          
                Program Manager

            

    

     

    When
      requested by Spirit Seller will assign a full-time program manager whose
      exclusive responsibility will be to oversee and manage Seller's performance
      hereunder. The assignment of such program manager will be subject to Spirit’s
      prior approval of such Person's resume.

     

     

    
      
        41 

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14.4  Certified
      Tool List

     

     

    If
      applicable, Seller shall provide a Certified Tool List for all accountable
      tools
      thirty (30) days after delivery of the first production unit to Spirit, in
      accordance with SBP Section 2.3. Subsequent to submittal of the initial
      Certified Tool List, Seller shall provide Certified Tool Lists for any new,
      reworked or re-identified tools, thirty (30) days after completion of the first
      affected production part. All tooling manufactured and acquired by Seller for
      use in performance of the Program shall be in accordance with all tooling
      requirements specified in SBP Section 2.3.

     

    14.5  Problem
      Reports

     

     

    Seller
      shall provide a detailed report, notifying Spirit of program problems/issues
      that could impact Seller’s ability to deliver Products on time and otherwise in
      conformance with the terms of the GTA and SBP. The report shall contain a
      detailed description of the problem, impact on the program or affected tasks,
      and corrective/remedial action, with a recovery schedule. Submittal of a report
      in no way relieves Seller of any obligations under the GTA and SBP nor does
      it
      constitute a waiver of any rights and remedies Spirit may have with respect
      to
      any default.

     

    Problem
      reports shall be submitted to the Spirit Procurement Representative within
      twenty-four (24) hours of known problem to Seller. Where problems arise prior
      to
      a normal status reporting date, Seller shall report said events immediately
      or
      within 24 hours. Status reports shall include, but are not limited to, the
      following topics:

     

    
      	A.  	
              Delivery
                schedule updates, schedule impact issues and corrective
                action;

            

    

     

    
      	B.  	
              Technical/manufacturing
                progress since the previous report period, including significant
                accomplishments, breakthroughs, problems and
                solutions;

            

    

     

    
      	C.  	
              Identification
                of changes to key manpower or staffing
                levels;

            

    

     

    
      	D.  	
              Identification
                of the critical events/activities expected within the next month
                and a
                discussion of potential risk
                factors;

            

    

     

    
      	E.  	
              Progress
                on open Action Items, including closure
                dates;

            

    

     

    
      	F.  	
              Purchased
                components and raw material status;

            

    

     

    
      	G.  	
              Identification
                of Quality issues and resolutions;

            

    

     

    
      	H.  	
              Manufacturing
                and Quality inspection progress of First Article
                products;

            

    

     

    
      	I.  	
              Status
                on tool design and fabrication, as applicable, until
                completion;

            

    

     

     

    
      
        42 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	J.  	
              Inventory
                status of castings and forgings procured by Seller (if
                applicable).

            

    

     

    14.6  Reserved

     

     

    15.0 INTERNATIONAL
      COOPERATION 

     

     

    15.1  Market
      Access and Sales Support

     

     

    Seller
      agrees to work with Spirit to develop a contracting strategy, which supports
      Spirit’s market access, and international business strategy. Spirit and Seller
      agree to work together to identify countries where Seller may subcontract in
      support of Spirit’s market access and international business strategy. With
      respect to work covered by this SBP, and if directed by Spirit, Seller agrees
      to
      procure from subcontractors or suppliers, in countries selected by Spirit,
      goods
      and services with a value to be determined by Spirit after coordination with
      Seller. Such direction may occur at any time during the performance of this
      SBP.
      Although not required to do so, Seller may satisfy such obligation through
      purchases not related to this SBP. If Seller is directed by Spirit to
      subcontract any part of its Product(s) and Seller anticipates an increase or
      decrease to the price for such Product(s) as a result of such direction, Seller
      shall immediately notify Spirit in writing. Spirit shall respond within thirty
      (30) days on whether Seller is to proceed.

     

    15.2  Offset
      Assistance

     

     

    Seller
      shall use its best reasonable efforts to cooperate with Spirit in the
      fulfillment of any non-United States offset program obligation that Spirit
      may
      have accepted as a condition of the sale of a Spirit product. In the event
      that
      Seller is either directed by Spirit, or on its own solicits bids and/or
      proposals for, or procures or offers to procure any goods or services relating
      to the work covered by this SBP from any source outside of the United States,
      Spirit shall be entitled, to the exclusion of all others, to all industrial
      benefits and other "offset" credits which may result from such solicitations,
      procurements or offers to procure. Seller shall take any actions that may be
      required on its part to assure that Spirit receives such credits. . Seller
      shall
      document on SBP Attachment 2 all offers to contract and executed contracts
      with
      such subcontractors or suppliers including the dollars contracted. Seller shall
      provide to Spirit an updated copy of SBP Attachment 2 for the six-month periods
      ending June 30 and December 31 of each year. The reports shall be submitted
      on
      the 1st
      of
      August and the 1st
      of
      February respectively. If Seller is directed by Spirit to subcontract any part
      of its Product(s) to a country in which Spirit has an offset obligation, an
      equitable price adjustment, increase or decrease, for Seller's costs and
      expenses will be considered by Spirit.

     

     

    
      
        43 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15.3  Reserved

     

     

    16.0  Spirit
      FURNISHED MATERIAL/SUPPLIER BANKED MATERIAL

     

     

    Material,
      including but not limited to raw material, standards, detail components and
      assemblies, furnished to Seller by Spirit shall be administered in accordance
      with a Bonded Stores Agreement between Spirit and Seller.

     

    Seller
      shall provide Spirit with required on-dock dates for all material. Seller's
      notice shall provide Spirit with sufficient time to competitively acquire the
      material if, in its sole and absolute discretion, it desires to do
      so.

     

    17.0  PARTICIPATION

     

     

    17.1  Other
      Spirit Entities

     

     

    Seller
      agrees that any Spirit division or Spirit subsidiary ("Spirit Entity") not
      specifically included in this SBP may, by issuing a purchase order, work order,
      or other release document, place orders under this SBP during the term hereof
      or
      any written extension thereof, under the terms, conditions and pricing specified
      by this SBP. Seller agrees that the prices set forth herein may be disclosed
      by
      Spirit on a confidential basis to Spirit entities wishing to invoke this SBP
      Section 17.1. Seller shall notify the Spirit Procurement Representative named
      in
      SBP Section 9.0 of Spirit Entities not specifically referenced herein who
      frequently use this SBP.

     

    17.2  Spirit
      Subcontractors/Suppliers

     

     

    Seller
      agrees that any subcontractor or supplier (hereinafter referred to as “Spirit
      Subcontractor”) performing work for a Spirit Entity, including but not limited
      to inventory management, may issue an order or contract with Seller independent
      of this SBP. Seller agrees to sell Products or support a schedule and or a
      quantity change to such Spirit Subcontractor for its use in its contracts with
      Spirit at the prices set forth herein or at a price that reflects the pricing
      methodology used under this SBP. Spirit assumes no obligation, including payment
      obligation, with respect to such independent contract. Seller agrees that the
      prices set forth herein may be disclosed by Spirit on a confidential basis
      to
      any Spirit Subcontractor wishing to invoke this SBP Section 17.2. Seller may
      request written verification from the Spirit Subcontractor that the Products
      ordered pursuant to the authority of this SBP support Spirit requirements.
      Seller shall periodically inform the Spirit Procurement Representative of each
      such request invoking this participation right.

     

     

    
      
        44 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    17.3  Notification
      of Contract

     

     

    In
      the
      event a purchaser known by Seller to be a Spirit Entity or Spirit Subcontractor
      places an order for supplies or services covered by this SBP but fails to
      reference this SBP or otherwise seek the prices established by this SBP, Seller
      shall notify such purchaser of the existence of this SBP and the prices
      established hereunder and shall offer such prices to such
      purchaser.

     

    17.4  Notification
      of Price Reductions

     

     

    If
      Seller
      is awarded an additional order or contract by another Spirit Entity that results
      in any price less than that established under this SBP, Seller agrees to notify
      the Spirit Procurement Representative immediately of said price reductions
      and
      shall extend all such price reductions to this SBP.

     

    18.0  INVENTORY
      AT CONTRACT COMPLETION

     

     

    Subsequent
      to Seller's last delivery of Product(s), Products which contain, convey, embody
      or were manufactured in accordance with or by reference to Spirit’s Proprietary
      Materials including but not limited to finished goods, work-in-process and
      detail components (hereafter "Inventory") which are in excess of Order quantity
      shall be made available to Spirit for purchase. In the event Spirit, in its
      sole
      discretion, elects not to purchase the Inventory, Seller may scrap the
      Inventory. Prior to scrapping the Inventory, Seller shall mutilate or render
      it
      unusable. Seller shall maintain, pursuant to their quality assurance system,
      records certifying destruction of the applicable Inventory. Said certification
      shall state the method and date of mutilation and destruction of the subject
      Inventory. Spirit or applicable regulatory agencies shall have the right to
      review and inspect these records at any time it deems necessary. In the event
      Seller elects to maintain the Inventory, Seller shall maintain accountability
      for the inventory and Seller shall not sell or provide the Inventory to any
      third party without prior specific written authorization from Spirit. Failure
      to
      comply with these requirements shall be a material breach and grounds for
      default pursuant to GTA Section 13.0. Nothing in this SBP Section 18.0 prohibits
      Seller from making legal sales directly to the United States of America
      Government.

     

    19.0  OWNERSHIP
      OF INTELLECTUAL PROPERTY

     

     

    19.1  Technical
      Work Product

     

     

    All
      technical work product, including, but not limited to, ideas, information,
      data,
      documents, drawings, software, software documentation, software tools, designs,
      specifications, and processes produced by or for Seller, either alone or with
      others, in the course of or as a result of any work performed by or for Seller
      which is covered by this SBP will be the exclusive property of Spirit and be
      delivered to Spirit promptly upon request.

     

     

    
      
        
          45

          
 

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    19.2  Inventions
      and Patents

     

     

    All
      inventions conceived, developed, or first reduced to practice by or for Seller,
      either alone or with others, in the course of or as a result of any work
      performed by or for Seller, which is covered by this SBP, and any patents based
      upon such inventions (both domestic and foreign), will be the exclusive property
      of Spirit. Seller will (i) promptly disclose all such inventions to Spirit
      in
      written detail and (ii) execute all papers, cooperate with Spirit, and perform
      all acts necessary or appropriate in connection with the filing, prosecution,
      maintenance, or assignment of related patents or patent applications on behalf
      of Spirit.

     

    

     

    19.4  Pre-Existing
      Inventions and Works of Authorship

     

     

    Seller
      grants to Spirit, and to Spirit’s subcontractors, suppliers, and customers in
      connection with Products or work being performed for Spirit, an irrevocably,
      nonexclusive, paid-up, worldwide license under any patents, copyrights,
      industrial designs and mask works (whether domestic or foreign) owned or
      controlled by Seller at any time and existing prior to or during the term of
      this SBP, but only to the extent that such patents or copyrights would otherwise
      interfere with Spirit or Spirit’s subcontractors', suppliers', or customers' use
      or enjoyment of Products or the work product, inventions, or works of authorship
      belonging to Spirit under this SBP.

     

    

     

    19.5  Inapplicability

     

     

    In
      the
      event of any inconsistency between this SBP Section 19.0 and any United States
      Government contract clause incorporated by reference into this SBP or any Order
      issued under this SBP, the incorporated clause shall govern to the extent that
      the end user of the Products is the United States Government.

     

     

    20.0  RESERVED

     

    21.0  GUARANTEED
      WEIGHT REQUIREMENTS

     

    NOT
      APPLICABLE

     

    22.0  SELLER
      DATA REQUIREMENTS

     

    NOT
      APPLICABLE

     

     

    
      
        46 
          
          

          
            	
                    Special
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                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    23.0  RESERVED

     

     

    24.0  RESERVED 

     

     

    25.0  RESERVED

     

     

    26.0  INFRINGEMENT

     

     

    Seller
      will indemnify, defend, and hold harmless Spirit and its Customers from all
      claims, suits, actions, awards (including, but not limited to, awards based
      on
      intentional infringement of patents known at the time of such infringement,
      exceeding actual damages, and/or including attorneys' fees and/or costs),
      liabilities, damages, costs and attorneys' fees related to the actual or alleged
      infringement of any United States or foreign intellectual property right
      (including, but not limited to, any right in a patent, copyright, industrial
      design or semiconductor mask work, or based on misappropriation or wrongful
      use
      of information or documents) and arising out of the manufacture, sale or use
      of
      Products by either Spirit or its Customers. Spirit and/or its Customers will
      duly notify Seller of any such claim, suit or action; and Seller will, at its
      own expense, fully defend such claim, suit or action on behalf of Spirit and/or
      its Customers. Seller shall have no obligation under this SBP Section 26.0
      with
      regard to any infringement arising from: (i) Seller's compliance with formal
      specifications issued by Spirit where infringement could not be avoided in
      complying with such specifications or (ii) use or sale of Products for
      other than their intended application.
      For
      purposes of this SBP Section 26.0 only, the term Customer shall not include
      the
      United States Government; and the term Spirit shall include Spirit AeroSystems,
      Inc. and all Spirit entities and all officers, agents, and employees of Spirit
      or any Spirit entity.

     

    27.0  RAW
      MATERIAL PROGRAM

     

     

    27.1  Boeing
      Raw Material Strategy

     

     

    During
      the term of this SBP, Seller shall procure from Boeing (or its designated
      service provider who will act on behalf of Boeing) all raw material of the
      commodity type specified on the SBP Attachment entitled "Commodity Listing
      and
      Terms of Sale" (SBP Attachment 8) necessary to support any Order issued pursuant
      to this SBP. From time to time, Spirit may amend the SBP Attachment entitled
      "Commodity Listing and Terms of Sale" by adding or deleting commodity types.
      Any
      such amendment, or revisions to the raw material pricing, shall be subject
      to
      adjustment under GTA Section 10.1 (Changes), provided that Seller shall take
      no
      action to terminate its existing supply agreements when such termination would
      result in an assertion for an adjustment until the Seller has received approval
      from Spirit. The provision of any raw material by Boeing to Seller shall be
      according to Boeing's standard terms of sale, the text of which is included
      in
      the SBP Attachment entitled "Commodity Listing and Terms of Sale". Spirit shall
      advise Seller of any designated service provider to be used at the time the
      Order is issued. Upon request by Spirit, Seller must provide to Spirit
      documentation (e.g., packing slips, invoices) showing Seller's full compliance
      with the obligations under this SBP Section.
      If
      requested by Spirit or its 

     

     

    
      
        47 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    designated
      service provider, Seller will provide an annual forecast of demand for the
      applicable commodity. 

     

    27.2  Reserved

     

     

    28.0  DIGITIZATION
      OF PROPRIETARY INFORMATION AND MATERIALS

     

     

    Seller
      grants, to Spirit a license under Seller’s copyrights for the purpose of
      converting Seller’s Proprietary Informations and Materials to a digital format
      (“Digital Materials”) and make such Digital Materials available to its employees
      for company internal use through a computer data base system. Except as
      otherwise specifically agreed to in writing by the parties, said license set
      forth hereunder shall survive termination or cancellation of this SBP relative
      to Digital Materials included in Spirit’s computer data base system prior to
      receipt of such notice of termination or cancellation.

     

    
      	29.0  	
              ON-SITE
                SUPPORT

            

    

     

     

    NOT
      APPLICABLE

     

    29.1  Indemnification
      Negligence of Seller or subcontractor

     

     

    Seller
      shall indemnify and hold harmless Spirit AeroSystems, Inc., its subsidiaries,
      and their directors, officers, employees, and agents from and against all
      actions, causes of action, liabilities, claims, suits, judgments, liens, awards,
      and damages, of any kind and nature whatsoever for property damage, personal
      injury, or death (including without limitation injury to or death of employees
      of Seller or any subcontractor thereof) and expenses, costs of litigation and
      counsel fees related thereto or incident to establishing the right to
      indemnification, arising out of or in any way related to the Contract, the
      performance thereof by Seller or any subcontractor thereof or other third
      parties, including without limitation the provision of services, personnel,
      facilities, equipment, support, supervision, or review. The foregoing indemnity
      shall apply only to the extent of the negligence of Seller, any subcontractor
      thereof, or their respective employees. In no event shall Seller’s obligations
      hereunder be limited to the extent of any insurance available to or provided
      by
      the Seller or any subcontractor thereof. Seller expressly waives any immunity
      under industrial insurance, whether arising out of statute or source, to the
      extent of the indemnity set forth in this paragraph.

     

    29.2  Commercial
      General Liability

     

     

    If
      Seller
      or any subcontractor thereof will be performing work on Spirit premises, Seller
      shall carry and maintain, and ensure that all subcontractors or suppliers
      thereof carry and maintain, throughout the period when work is performed and
      until final acceptance by Spirit, Commercial General Liability insurance with
      available limits of not less than One Million Dollars ($l,000,000) per
      occurrence for bodily injury and property damage combined.

     

     

     

    
      
        48 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    29.3  Automobile
      Liability

     

     

    If
      licensed vehicles will be used in connection with the performance of the work,
      Seller shall carry and maintain, and ensure that any subcontractor thereof
      who
      uses a licensed vehicle in connection with the performance of the work carries
      and maintains, throughout the period when work is performed and until final
      acceptance by Spirit, Business Automobile Liability insurance covering all
      vehicles, whether owned, hired, rented, borrowed, or otherwise, with available
      limits of not less than One Million Dollars ($1,000,000) per occurrence combined
      single limit for bodily injury and property damage.

     

    29.4  Workers’
      Compensation

     

     

    Throughout
      the period when work is performed and until final acceptance by Spirit, Seller
      shall, and ensure that any subcontractor thereof shall, cover or maintain
      insurance in accordance with the applicable laws relating to Workers’
Compensation with respect to all of their respective employees working on or
      about Spirit premises. If Spirit is required by any applicable law to pay any
      Workers’ Compensation premiums with respect to an employee of Seller or any
      subcontractor, Seller shall reimburse Spirit for such payment.

     

    29.5  Certificates
      of Insurance

     

     

    Prior
      to
      commencement of the work Seller shall provide for Spirit review and approval
      Certificates of Insurance reflecting full compliance with the requirements
      set
      forth in SBP Section 29.2 “Commercial General Liability”, SBP Section 29.3
“Automobile Liability” and, SBP Section 29.3 “Workers’ Compensation”. Such
      certificates shall be kept current and in compliance throughout the period
      when
      work is being performed and until final acceptance by Spirit, and shall provide
      for thirty (30) days advance written notice to Spirit in the event of
      cancellation. Failure of Seller or any subcontractor thereof to furnish
      Certificates of Insurance, or to procure and maintain the insurance required
      herein or failure of Spirit to request such certificates, endorsements or other
      proof of coverage shall not constitute a waiver of the respective Seller’s or
      subcontractor’s obligations hereunder.

     

    29.6  Self-Assumption

     

     

    Any
      self-insured retention, deductibles, and exclusions in coverage in the policies
      required under this Section 29.0 shall be assumed by, for the account of, and
      at
      the sole risk of Seller or the subcontractor, which provides the insurance,
      and
      to the extent applicable shall be paid by such Seller or subcontractor. In
      no
      event shall the liability of Seller or any subcontractor thereof be limited
      to
      the extent of any of the minimum limits of insurance required
      herein.

     

    29.7  Protection
      of Property

     

     

    Seller
      assumes, and shall ensure that all subcontractors or suppliers thereof and
      their
      respective employees assume, the risk of loss or destruction of or damage to
      any
      property 

     

     

    
      
        49 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    of
      such
      parties whether owned, hired, rented, borrowed, or otherwise. Seller waives,
      and
      shall ensure that any subcontractor thereof and their respective employees
      waive, all rights of recovery against Spirit, its subsidiaries, and their
      respective directors, officers, employees, and agents for any such loss or
      destruction of or damage to any property of Seller, any subcontractor, or their
      respective employees.

     

    At
      all
      times Seller shall, and ensure that any subcontractor thereof shall, use
      suitable precautions to prevent damage to Spirit property.
      If
      any
      such property is damaged by the fault or negligence of Seller or any
      subcontractor thereof, Seller shall, at no cost to Spirit, promptly and
      equitably reimburse Spirit for such damage, or repair or otherwise make good
      such property to Spirit’s satisfaction. If Seller fails to do so, Spirit may do
      so and recover from Seller the cost thereof.

     

    29.8  Compliance
      with Spirit Site Requirements

     

     

    In
      the
      event the Seller or Seller’s Subcontractor(s) performs any aspect of an
      applicable GTA, SBP or Order on property owned, operated, leased, or controlled
      by Spirit (hereinafter “On-Site Work”), Seller agrees to comply with the
      supplemental terms and conditions set forth in Attachment 13 “On-Site Terms and
      Conditions Supplement”. 

     

    30.0 Spirit
      TECHNICAL / MANUFACTURING ASSISTANCE REGARDING SELLER’S
      NONPERFORMANCE

     

     

    Seller
      shall reimburse Spirit for all Spirit resources expended in providing Seller
      and/or Seller’s subcontractors or supplier’s technical or manufacturing
      assistance in resolving Seller nonperformance issues at the established Spirit
      internal wage rate, which shall include fringe benefits, multiplied by the
      estimated hours recorded by Spirit, plus the estimated Material costs associated
      with providing such assistance. In addition, Seller shall, at Spirit’s request,
      pay for normal and customary expenses relating to salaries, living expenses,
      travel and any other reasonable expenses related to the provision of technical
      services. Such reimbursement may be offset against any pending Seller invoice,
      regardless of Spirit model or program. Spirit’s rights under this clause are in
      addition to those available to Spirit for Seller’s nonperformance issues,
      including those where a demand for an Adequate Assurance of Performance may
      be
      made under GTA Section 17.0.

     

    31.0  U.
      S. CUSTOMS INVOICE REQUIREMENTS

     

     

     NOT
      APPLICABLE

    
 

    
      
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    32.0  STRATEGIC
      ALIGNMENT

     

     

    Spirit
      may assign this SBP or any Order, in whole or in part, to a third party who
      is
      under an obligation to supply Spirit with components, kits, assemblies or
      systems that require the Seller's Product. At the time of such assignment,
      Seller releases Spirit from any and all claims, demands and rights, which Seller
      has or may thereafter have against Spirit in connection with such assigned
      SBP
      or Order. Spirit will require that its assignee expressly assume all obligations
      and perform all duties owed to Seller under the assigned SBP or
      Order.
      Promptly
      after the assignment, Spirit will notify Seller of the assignment and its
      effective date.

     

    33.0  CUSTOMS-TRADE
      PARTNERSHIP AGAINST TERRORISM (C-TPAT)

     

     

    C-TPAT
      is
      an initiative between business and government to protect global commerce from
      terrorism and increase the efficiencies of global transportation. The program
      calls for importers, carriers and brokers to establish policies to enhance
      their
      own security practices and those of their business partners involved in their
      supply chain. Such practices may include but are not limited to the
      following:

     

    

    Procedural
      Security -Procedures in place to protect against unmanifested material being
      introduced into the supply chain-

    

    Physical
      Security -Buildings constructed to resist intrusion, perimeter fences, locking
      devices, and adequate lighting;

    

    Access
      Controls -Positive identification of all employees, visitors and
      suppliers;

    

    Personnel
      Security -Employment screening, background checks and application
      verifications

    

    Education
      and Training Awareness -Security awareness training, incentives for

    participation
      in security controls

     

    Seller
      agrees to work with Spirit and appropriate industry and governmental agencies,
      as necessary, to develop and implement policies and procedures consistent with
      the C-TPAT initiative to ensure the safe and secure transport of Products under
      this SBP.

     

    34.0
       ENVIRONMENTAL
      MANAGEMENT SYSTEMS AND HEALTH AND SAFETY MANAGEMENT
      SYSTEMS

     

     

    Seller
      shall implement an environmental management system (“EMS”) and health and safety
      management system (“HSMS”) with respect to its performance under this SBP; and
      insert, in any of its subcontractor and supplier contracts for performance
      of
      Seller’s 

     

     

    
      
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    obligations
      under this SBP, provisions substantially similar to this SBP Section 34.0 and
      GTA Section 21.1 (Compliance with Laws). 

     

    35.0  DELIVERY
      - TITLE AND RISK OF LOSS

     

     

    35.1  Delivery
      Point and Schedule

     

     

    Notwithstanding
      the provisions of GTA Section 4.1, deliveries of Recurring Products shall be
      strictly in accordance with the quantities, the schedule and other requirements
      specified in SBP Attachment 1. All Products shall be delivered for United States
      domestic deliveries F.O.B. Buyer’s dock; for non-United States origin, DDU (as
      such term is defined by the International Chamber of Commerce in Incoterms
      2000), or as otherwise specified by Spirit.

     

    35.2  Reserved

     

     

    
      	35.3  	
                         
                Reserved

            

    

     

     

    35.4  Notification
      of Shipment

     

     

    Seller
      shall notify the Spirit personnel identified by the Procurement Agent, by
      telephone, facsimile or e-mail when any shipment is made. Such notification
      will
      include (i) a list of the items and quantities of items shipped, (ii) the
      Shipset number with respect to any item shipped, (iii) the number and weight
      of
      containers shipped, (iv) the shipper or packing sheet number with respect to
      such shipment, and (v) the date of such shipment. Seller shall e-mail, express
      or facsimile copies of shipping manifests for Common-Use Tools to Spirit. Such
      manifests shall identify Common-Use Tool codes and part numbers, unit numbers
      of
      Common-Use Tools and the airplane effectivity of the Production Article
      contained in such Common-Use Tools.

     

    35.4.1  Title
      and Risk of Loss

     

     

    Title
      to
      and risk of any loss of, or damage to, all Products (except for Common-Use
      Tooling) shall pass from Seller to Spirit upon delivery as set forth in this
      SBP
      Section 35.0 (delivery point), except for loss or damage resulting from Seller's
      fault or negligence or failure to comply with the terms of this SBP. Passing
      of
      title on delivery shall not constitute final acceptance of such Products by
      Spirit.

     

    

     

    35.5  Notice
      of Delay - Premium Effort

     

     

    Seller
      shall notify Spirit by e-mail, telephone or facsimile immediately of any
      circumstances, including, but not limited to, labor disputes, that may cause
      a
      delay in delivery by Seller or any of its subcontractors. Such notification
      shall state the estimated period of such delay and the actions being taken
      by
      Seller to prevent or recover from such delay. Seller also shall require each
      of
      its subcontractors under this Contract to provide such notification to

     

     

    
      
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    Seller
      concerning any such delay in the delivery of any subcontracted goods or services
      to Seller. At Spirit’s direction, Seller shall use additional effort, including
      premium effort, and shall ship via air or other expedited routing in order
      to
      avoid or minimize delay to the maximum extent possible. All additional costs
      resulting from such premium effort and/or premium transportation shall be paid
      by Seller. Additional costs include, but are not limited to all costs and
      expenses incurred by Spirit as a result of production line disruption
      attributable to Seller’s delayed delivery. Spirit’s rights under this SBP
      Section 33.5 are not exclusive, and any other rights provided in this Contract
      or by law are reserved. Disruption costs and expenses shall be an amount equal
      to the portion of resultant planned installation time allocated for
      out-of-sequence work multiplied by Spirit’s then-current rate for labor. These
      provisions shall also apply to incomplete work shipped to Spirit for completion
      (traveled work).

     

    36.0  PACKAGING
      AND SHIPPING

     

     

    Notwithstanding
      the provisions of GTA Section 7.0, the following SBP Sections shall address
      all
      packaging and shipping matters. see GTA 7.0 for all this §36. 

     

    36.1  Product
      Packaging

     

     

    Except
      as
      expressly provided otherwise herein, all Products shall be prepared (cleaned,
      preserved, etc.) and packed for shipment in a manner acceptable to Spirit
      pursuant to Document D37520-1, -1A, & -1B, "Supplier’s Part Protection
      Guide," to (i) comply with carrier regulations and (ii) prevent damage or
      deterioration during handling, shipment and outdoor storage at destination
      for
      up to ninety (90) days. Packaging design shall be suitable for, and consistent
      with, the requirements and limitations of the transportation mode specified
      by
      Spirit. Spirit specifically reserves the right, at Spirit’s discretion; to
      direct air shipment from the delivery point specified in SBP Section 3.2.1
      and
      Seller shall maintain a capability (where reasonably practicable) for meeting
      this requirement. Seller shall submit two (2) copies of its proposed preparation
      procedure and packaging design to Spirit for approval prior to the first Product
      delivery, and shall prepare and package each Product in accordance with the
      procedure and design approved by Spirit. Notwithstanding any Spirit approval
      of
      Seller's packaging design, Seller shall be solely liable for the manufacture
      of
      such packaging. Any package (or unitized group of packages) weighing in excess
      of forty-five (45) kilograms or otherwise not suited to manual handling shall
      be
      provided with skids to permit use of mechanical handling equipment.

     

    36.2  Consolidated
      Shipments and Markings

     

     

    All
      shipments of Products (excluding Purchase on Assembly ("POA"), Aircraft on
      Ground ("AOG") and Customer Spare Parts), which are forwarded on one day via
      one
      routing, shall be consolidated in accordance with Spirit’s instructions. POA,
      AOG and Customer Spare Parts shall be packaged separately. Each container shall
      be consecutively numbered and marked with the relevant Order number and the
      part
      number of each enclosed Product. Container and Order numbers shall be indicated
      on the appropriate bill of lading. Each unit 

     

     

     

    
      
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    container
      (individual part box or other innermost package), each intermediate container
      and each shipping container (shipping box, crate or other outermost package)
      in
      each shipment shall be marked in English in accordance with Spirit’s written
      instructions. 

     

    36.3  Freight
      Charges

     

     

    Seller
      shall deliver all Products F.O.B. Buyers dock or DDU Buyer’s dock. Any
      additional declared values required for freight shipments shall be as provided
      by Spirit.

     

    36.4  Packing
      Sheet and Test Reports

     

     

    The
      No. 1
      shipping container in each shipment shall contain one (1) copy in English of
      (i)
      a packing sheet listing the contents of the entire shipment in accordance with
      Spirit’s written instructions and (ii) any test reports required by the
      specifications applicable to the Products being shipped.

     

     36.5  Additional
      Copies

     

     

    Additional
      copies of packing sheets, test reports and [customs invoices] shall be furnished
      to Spirit in accordance with Spirit’s written instructions.

     

    36.6  Price
      Inclusive

     

     

    Unless
      otherwise specified in this SBP, the Prices for Products stated in this SBP
      include the cost with respect to such Products of preparation, packaging,
      crating, shipping fixtures and containers, container marking, furnishing of
      packing sheets and test reports and loading on the carrier's equipment, in
      accordance with this SBP Section 36.0. 

     

    37.0  ADDITIONAL
      QUALITY ASSURANCE REQUIREMENTS 

     

     

    37.1  Federal
      Aviation Administration Inspection

     

     

    Upon
      receipt of notice from the FAA or appropriate equivalent non-U.S. agency or
      Spirit that a conformity inspection shall be required with respect to any first
      Production Article or any other Production Article following a change in the
      configuration thereof, Seller shall coordinate with regional FAA or appropriate
      equivalent non-U.S. agency personnel to develop and implement a plan to bring
      such Production Article into compliance with FAA requirements prior to the
      delivery thereof in accordance with SBP Attachment 10. 

     

    37.2  Repair
      Authorization

     

     

    37.2.1  Spirit-Performed
      Work

     

     

    In
      the
      event that any Product is rejected by Spirit pursuant to GTA Section 8.3, Seller
      hereby grants to Spirit the right, without prior authorization from Seller,
      to
      repair or rework such Product, or to have such Product repaired or reworked
      by a
      third party. Such repair or 

     

     

    
      
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    rework
      by
      Spirit or such third party shall be deemed not to be inconsistent with Seller's
      ownership of such Product. see §8.3

     

    All
      costs
      and expenses of Spirit relating to such repair or rework shall be paid by
      Seller. Such costs and expenses shall be an amount equal to Spirit’s estimated
      rework hours multiplied by Spirit’s then-current rate for labor and materials or
      the amount charged Spirit by any third party for performing such repair or
      rework. Disruption costs and expenses shall be an amount equal to the portion
      of
      resultant planned installation time allocated for out-of-sequence work
      multiplied by Spirit’s then-current rate for labor. These provisions shall also
      apply to incomplete work shipped to Spirit for completion (traveled
      work).

     

    37.2.2  Reimbursement
      for Repairs

     

     

    Spirit
      will advise Seller quarterly, commencing no earlier than 90 days after first
      delivery, of costs and expenses incurred in the previous quarter for repair
      of
      Products pursuant to this SBP Section 37.0. Seller shall notify Spirit within
      thirty (30) days after receipt of such advice of any significant errors detected
      by Seller in Spirit’s estimate of costs and expenses. Spirit and Seller shall
      promptly resolve such errors. Seller’s failure to so notify Spirit shall be
      deemed to be an acceptance of Spirit’s estimate of costs and expenses. Spirit
      shall be entitled to either (a) set off the amount of such costs and expenses
      against any amounts payable to Seller hereunder or (b) invoice Seller for the
      amount of such costs and expenses, and Seller shall pay the invoiced amount
      promptly upon receipt of such invoice.

     

    38.0  CHANGES

     

     

    Notwithstanding
      the provisions of GTA Section 10.1, at any time, Spirit may, by written
      direction to Seller, make changes within the general scope of this SBP in:
      (i)
      Drawings, designs, specifications, Datasets or any other Document; (ii) Tooling
      (including, without limitation, the quantities thereof), Services or Spare
      Parts
      to be provided by Seller under this SBP; (iii) the method of shipping or
      packing; (iv) the place of delivery for all Products; (v) Program schedules,
      delivery rates and schedules for performance of Services; (vi) Program Airplane
      and Derivative models and Customer variables; (vii) Spirit-Furnished Property,
      and (viii) the allocation of responsibility as between Seller and Spirit for
      production of any component of any Product or the provision of any Service.
      Seller shall immediately comply with such written direction upon receipt,
      irrespective of any failure by the Parties to agree that such change shall
      be
      subject to Price adjustment in accordance with SBP Section 12.0 “Change
      Provisions” and SBP Section 13.0 “Spares and Other Pricing”.

     

    If
      Seller
      reasonably expects that any Document or any revision to any Document shall
      significantly affect Seller's performance of any work hereunder, Seller shall,
      without affecting its obligation to comply in accordance with SBP Section 2.3
      with any such Document as revised, so notify Spirit within ten (10) days of
      Seller's receipt of such Document or revision.

     

     

    
      
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    39.0  EXAMINATION
      OF RECORDS

     

     

    39.1  Reports

     

     

    Periodically,
      upon Spirit’s written request, and at no additional cost to Spirit, Seller shall
      prepare and submit to Spirit reports on the information contained in the records
      maintained by Seller and subject to Spirit audit pursuant to GTA Section 9.0.
      Such reports will set forth in detail costs and expenses by account category,
      month, work order and quantity. Seller will provide any explanations of any
      such
      report as reasonably requested by Spirit.

     

    40.0  EVENTS
      OF DEFAULT AND REMEDIES

     

     

    40.1  Additional
      Event of Default 

     

     

    In
      addition to those events of Default specified in GTA Section 13.1, the
      occurrence of the following event shall also constitute an Event of Default
      for
      purposes of GTA Section 13.1:

     

    
      	A.  	
              Any
                Designated Event (as hereinafter defined) with respect to Seller.
                A
                Designated Event shall be deemed to have occurred at such time as
                a
                "person" or "group" (within the meaning of 14(d)(2) of the Securities
                Exchange Act of 1934) becomes the "Beneficial owner" (as defined
                in Rule
                 13d-3 under the Securities Exchange Act of 1934) of more than fifty
                percent (50%) of the then outstanding stock entitled to vote for
                the
                election of directors of Seller ("Voting Stock"). see GTA
                §28.3

            

    

     

    40.2  Interest
      on Overdue Amounts 

     

     

    If
      Seller
      shall fail to pay when and as due any amount payable hereunder, such amount
      shall bear interest, payable on demand, at the per annum rate announced by
      Citibank, New York, New York, as its prime rate on the last working day of
      the month in which such amount becomes due. 

     

    41.0  CUSTOMER
      CONTACT

     

     

    Spirit
      is
      responsible for all contact with Customers regarding the Program, Program
      Airplanes and Derivatives and any other Spirit programs. Seller shall not make
      any contact with actual or potential Customers on the subject of the Program,
      Program Airplanes or Derivatives without Spirit’s prior written consent; and
      Seller shall respond to any inquiry from actual or potential Customers regarding
      the Program, Program Airplanes or Derivatives by requesting that the inquiry
      be
      directed to Spirit. Seller shall, concurrently with such response, advise Spirit
      of such inquiry.

     

    42.0  SUBCONTRACTING

     

     

    Notwithstanding
      the provisions of GTA Section 28.1, Spirit may at any time during the
      performance of this SBP, review and approve Seller's make-or-buy plan and source
      

     

     

    
      
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    selection
      for Products, items and Tooling considered critical by Spirit because of process
      requirements or manufacturing complexity; provided that any subcontract by
      Seller for the procurement of goods or services in excess of
      $100,000 U.S.
      Dollars from any source outside of The United States shall be subject to
      Spirit’s prior written approval. Spirit’s approval shall not be unreasonably
      withheld. Seller shall in a timely manner submit to Spirit its proposed
      make-or-buy plan and proposed source selection before awarding any subcontract
      or purchase order with respect to any Products, items or Tooling. Spirit shall
      have the right to determine whether the proposed subcontractors are qualified
      to
      manufacture Products and Tooling in accordance with Spirit processes; provided,
      however, that Seller may accompany Spirit when Spirit is investigating the
      qualifications of proposed subcontractors. Approval or disapproval by Spirit
      of
      Seller's make-or-buy plan or source selection and any action taken by Spirit
      in
      connection with the qualification of subcontractors shall not be construed
      as
      relieving Seller of any of its obligations under this SBP.

     

    43.0  SUPPLEMENTS
      AND MODIFICATIONS

     

     

    Seller
      and Spirit acknowledge that this SBP does not, as of the date hereof, fully
      and
      finally determine all of the terms of the rights, obligations and liabilities
      of
      Seller and that, notwithstanding the absence of all of such terms, Seller and
      Spirit intend to make a contract hereby and intend to be bound by the terms
      hereof (including those yet to be determined). With respect to such terms which
      are not yet fully and finally determined, Spirit shall, from time to time from
      and after the execution and delivery of this SBP, specify such terms by notice
      given by Spirit to Seller pursuant to this SBP (including, without limitation,
      SBP Section 36.0), and all such terms shall be binding upon Seller. Such
      specification of terms shall be made by Spirit in its sole discretion, exercised
      in good faith and in a commercially reasonable manner. With respect to the
      commercial reasonableness of any such specific term, Seller acknowledges that
      the market for the sale of new commercial jet transport is extremely competitive
      and requires from manufacturers and suppliers the commitment of very substantial
      resources and may require the expenditure of substantial resources, and will
      likely require extraordinary effort. Accordingly, any specification of terms
      hereof by Spirit, as provided for above, shall not be deemed to be commercially
      unreasonable solely because such term requires Seller to expend substantial
      sums
      or to undertake extraordinary efforts to meet the Program requirements specified
      by Spirit. By way of example, and not as a limitation of the foregoing, Seller
      may be required in order to support Program requirements to increase its
      production rate to keep pace with Spirit’s development or production schedule
      for Program Airplanes and Derivatives as determined by Spirit from time to
      time
      with reference to actual and anticipated market demand for Program Airplanes
      and
      Derivatives. Without limiting the foregoing, nothing in this SBP Section 41.0
      is
      intended by the Parties to affect the provisions of SBP Section 12.0 or SBP
      Section 36.0 of, or any other provisions contained in, this SBP Section 43.0,
      or
      the rights or obligations of either Party with respect to any adjustment or
      change to, or the payment of, Prices, whether or not arising from the further
      determination of the terms of this SBP or the expenditure of substantial sums
      or
      the undertaking of extraordinary efforts by Seller.

     

     

    
      
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    In
      the
      case of any subcontract for assigned Products that is identified in this SBP,
      Spirit shall be solely responsible for source selection placement of all
      follow-on requirements beyond the current contract. In addition, Seller shall
      not modify or extend any such subcontract without the prior written consent
      of
      Spirit.

     

    44.0  INCREMENTAL
      RELEASE AND CYCLE TIME REQUIREMENTS

     

     

    44.1  Incremental
      Release

     

     

    Seller
      shall develop production plans and schedules for any new Production Articles
      based on SBP Attachment 19, as requested by Spirit. These production plans
      and
      schedules will include plans for the incremental purchase of material and the
      fabrication and assembly of specific numbers of Production Articles in
      accordance with pre-determined lead times ("Incremental Release Schedules").
      Incremental Release Schedules for each Production Article shall be submitted
      to
      Spirit as part of Seller's proposal, and, after review and concurrence by
      Spirit, shall be incorporated into SBP Attachment 19. Any revision to any
      Incremental Release Schedule shall be reviewed by Spirit and, subject to
      Spirit’s concurrence with such revision; SBP Attachment 19 shall be revised
      accordingly. Seller shall purchase material, standards and purchased parts
      and
      authorize fabrication and assembly of Production Articles in accordance with
      Incremental Release Schedules.

     

    44.2  Cycle
      Time Requirements

     

     

    Spirit
      and Seller acknowledge that Spirit is committed to reduce Cycle Time. Seller
      agrees to support Spirit in its commitment and to take all necessary actions
      to
      support an initial Cycle Time for new Production Articles of not more than
      nine
      (9) months. If applicable, and within thirty (30) days after receipt of written
      request from Buyer, Seller shall submit to Spirit a written plan describing
      how
      Seller will comply with the Cycle Time schedules, as specified in SBP Attachment
      19.

     

    45.0  SURPLUS
      PRODUCTS

     

     

    45.1  Return
      of Surplus Products

     

     

    Spirit
      shall be entitled to return to Seller, at Spirit’s expense, any Product that has
      been delivered to Spirit in accordance with this SBP and that is surplus to
      Spirit’s then-current requirements (including, without limitation, any Products
      returned to Spirit by any Customer), provided that such Product is in a current
      production configuration or can be, in Spirit’s determination, economically
      changed to such a configuration. On receipt of any such Product, Seller shall
      credit Spirit’s account with eighty percent (80%) of the most recent catalog
      Price for such Product as set forth in SBP Attachment 16. If instructed by
      Spirit, Seller shall rework any returned Product to put such Product in a
      current configuration. Such rework shall be considered Miscellaneous Work and
      shall be priced in accordance with the provisions of SBP Attachment
      16.

     

     

    
      
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    45.2  Use
      of Surplus Products

     

     

    In
      its
      sole discretion, Spirit may, upon providing notice to Seller within 4 months
      to
      the scheduled delivery date for any Production Article, elect to use any Product
      in inventory or any Product returned to Spirit by any Customer in the place
      of
      such Production Article. Spirit’s notice shall include the cumulative line
      number of the Program Airplane or Derivative on which Spirit intends to
      incorporate such Product returned by such Customer. Seller shall not deliver
      such Production Article to Spirit and shall not invoice Spirit for the Price
      of
      such undelivered Production Article.

     

    46.0  INTEGRATED
      / LIFE CYCLE PRODUCT TEAM

     

     

    46.1  Purpose

     

     

    As
      required, it is the objective of Spirit to utilize Integrated / Life Cycle
      Product Teams (IPT/LCPT). If applicable, Seller’s IPT/LCPT personnel located at
      Spirit’s facilities in accordance with this SBP will conduct their respective
      activities concurrently in a team environment to assist Spirit in improving
      producibility, reliability and maintainability of the Program Airplane.
      Notwithstanding Seller's participation in the IPT/LCPT, Spirit shall have the
      right to make any and all determinations with respect to the design of the
      Program Airplane and any Derivative.

     

    46.2  Qualifications

     

     

    Spirit
      shall have the right to review the qualifications of all personnel proposed
      by
      Seller for assignment to the IPT/LCPT. Seller shall forward professional resumes
      of such personnel to Spirit for review and approval by Spirit prior to
      assignment of such personnel.

     

    46.3  Removal
      of Personnel

     

     

    Upon
      receipt of a written request from Spirit for the replacement of any person
      assigned to the IPT/LCPT by Seller pursuant to this SBP Section 46.0, Seller
      shall remove such person from the IPT/LCPT. As soon thereafter as reasonably
      possible, Seller shall promptly furnish a satisfactory replacement.

     

    46.4  Work
      Schedule

     

     

    Except
      for sickness and other unavoidable absence, all personnel assigned to the
      IPT/LCPT by Seller pursuant to this SBP Section 46.0, shall be available during
      the customary work shift at the place designated by Spirit eight (8) working
      hours per day, Monday through Friday (except for identified Spirit holidays
      and
      such vacation periods as Spirit may reasonably permit) and shall work all
      overtime hours as Spirit may reasonably request.

     

     

     

    
      
        59 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    46.5  Equipment
      and Supplies

     

     

    All
      office equipment and office supplies necessary to accomplish assigned tasks
      will
      be provided to Contractor's IPT/LCPT personnel by Spirit. Spirit will not
      provide personal property (such as drafting equipment and calculators) necessary
      for the performance by Seller's IPT/LCPT personnel of their assigned tasks.
      Spirit shall not be responsible for loss or damage to such personal
      property.

     

    46.6  Employment
      Status

     

     

    Seller's
      IPT/LCPT personnel shall at all times remain employees of Seller and not
      employees of Spirit. Seller shall be responsible for all wages, salaries and
      other amounts due Seller's IPT/LCPT personnel and shall be responsible for
      all
      reports, requirements and obligations respecting them under local, state or
      federal laws of the United States, or the laws of any foreign country, including
      but not limited to social security, income tax, unemployment compensation,
      workers' compensation and any other local, state or federal taxes of the United
      States or the taxes of any foreign country.

     

    46.7  Team
      Leader

     

     

    Seller
      shall designate one of its IPT/LCPT personnel "Team Leader." Administrative
      matters between Spirit and Seller arising during the performance of this SBP
      shall be managed by the Team Leader. Timekeeping for Seller's IPT/LCPT personnel
      shall be the responsibility of the Team Leader and shall be approved by the
      appropriate Spirit engineering supervisor.

     

    46.8  Discipline

     

     

    Discipline
      of Seller's IPT/LCPT personnel shall be Seller's responsibility. While on Spirit
      premises, Seller's IPT/LCPT personnel shall obey all Spirit rules.

     

    46.9  Insurance

     

     

    Seller
      shall cover or insure all of Seller's IPT/LCPT personnel in compliance with
      the
      applicable laws relating to workers' compensation or employer's liability
      insurance, and shall comply with all other federal, state or local laws of
      the
      United States and the laws of any foreign country.

     

    46.10  Indemnification

     

     

    Seller
      shall indemnify and hold harmless Spirit, its officers, agents and employees,
      from and against any liability, obligation, claim, demand or cause of action
      for
      bodily injury, including death, or damage to property, resulting from the acts
      or omissions of Seller, its officers, agents or employees while on Spirit’s
      premises.

     

     

    
      
        60 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    46.11  Compensation

     

     

    Payment
      made to Seller for design engineering effort provided to Spirit pursuant to
      this
      SBP Section, shall be based on actual man months provided at the rate of $
      (To
      Be Determined) per man month. (A man month consists of 163 man-hours.) The
      above
      rate includes any overtime requested by Spirit. 

     

    47.0  SELLER
      ASSISTANCE

     

     

    In
      accordance with GTA 12.2 and GTA 13.2 Spirit may, by written notice to Seller,
      require Seller to transfer to Spirit or to Spirit’s designee title (to the
      extent not previously transferred) to any or all (i) Contractor-Use Tooling,
      Common-Use Tooling and other Tooling, (ii) Local Transportation Devices, (iii)
      Spirit-Furnished Property, (iv) raw materials, parts, work-in-process,
      incomplete or completed assemblies, and all other Products or parts thereof
      in
      the possession or under the effective control of Seller or any of its
      Subcontractors, and (v) Proprietary Information of Spirit, including, without
      limitation, planning data, Drawings and other Proprietary Information relating
      to the design, production, maintenance, repair and use of all Contractor-Use
      Tooling and Common-Use Tooling, in the possession or under the effective control
      of Seller or any of its Subcontractors, in each case free and clear of all
      liens, claims or other rights of any Person. Seller shall immediately transfer
      and deliver, and cause each of its Subcontractors to transfer and deliver,
      any
      or all of the aforesaid items in accordance with any written notice or notices
      given hereunder by Spirit to Seller, notwithstanding any event or circumstance
      whatsoever, including, without limitation, any claim or dispute Seller may
      assert in connection with a termination of this SBP or any payment for any
      such
      items. If Spirit shall require Seller to transfer and deliver to Spirit or
      Spirit’s designee any of the aforesaid items, Seller shall cooperate with and
      shall assist Spirit in developing and implementing plans to transfer the
      production of Products and provision of Services to Spirit, or to any other
      Person designated by Spirit, in an expeditious and orderly manner and will
      take
      such other steps to assist Spirit as Spirit may request in good faith, all
      for
      the purpose of maintaining, or attempting to maintain as nearly as may be
      possible, production of Program Airplanes and Derivatives in accordance with
      Spirit’s schedule of delivery of Program Airplanes and Derivatives to
      Customers.

     

    Spirit
      and Seller acknowledge that the Program, and Spirit’s ability to sell and
      deliver Program Airplanes and Derivatives to Customers, will be substantially
      impaired if Seller delays, for any reason, its performance under this SBP
      Section 47.0. Spirit and Seller also acknowledge that Seller's assistance
      hereunder in the event of a cancellation, in whole or in part, of this SBP
      will
      be of fundamental significance to reduce incidental, consequential or other
      damages to Spirit. Consequently, Seller shall transfer and deliver to Spirit
      any
      or all of the aforesaid items notwithstanding any dispute or claim that Seller
      may have against Spirit. Seller shall not delay its performance under this
      SBP
      Section 47.0 by any action, including, without limitation, any judicial or
      other
      proceeding, or by any failure to act. Seller hereby authorizes Spirit or its
      representatives to enter upon its, or any of Seller's Subcontractors, premises
      at any time during regular business hours upon one (1) day's advance written
      

     

     

     

    
      
        61 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    notice,
      for the limited purpose of taking physical possession of any or all of the
      aforesaid items. At the request of Spirit, Seller shall promptly provide to
      Spirit a detailed list of such items, including the location thereof, and shall
      catalog, crate, package, mark and ship such items expeditiously and in an
      orderly manner and otherwise in the manner requested by Spirit, which request
      may specify incremental or priority shipping of certain items. Seller shall,
      if
      instructed by Spirit, store or dispose of any or all of the aforesaid items
      in
      any reasonable manner requested by Spirit.

     

    48.0 DEFINE
      AND CONTROL AIRPLANE CONFIGURATION / MANUFACTURING RESOURCE MANAGEMENT
      (DCAC/MRM)

     

     

    Seller
      shall implement and maintain systems, as required, including, but not limited
      to, business, manufacturing and engineering systems that are compatible with
      Spirit’s DCAC/MRM systems.

     

    49.0 ELECTRONIC
      ACCESS AND EXCHANGE OF DIGITAL PRODUCT DEFINITION

     

     

    49.1 Exchange
      of Digital Product Definition Between Spirit and Seller

     

     

    Seller's
      approval to receive and use computerized data shall be in accordance with
      documents D6-51991 "Quality Assurance Standards Reflecting Digital Product
      Definition for Boeing Suppliers using CAD/CAM", D6-56199 "Hardware and Software
      Compatibility Requirements for Suppliers Use of BCAG CATIA Native Datasets
      as
      Authority for Design, Manufacturing and Inspection", and D6-81491, “Authority
      and Usage of CATIA Native, CATIA IGES and PDM STEP Datasets.”

     

    Seller
      will use a digital data request (DDR) form (as provided by Spirit) to request
      any Dataset to be provided by Spirit to Contractor for the performance of this
      SBP.

     

    49.2  System/Software
      Compatibility between Spirit and Seller

     

     

    After
      Seller is qualified to use the data exchange methods in accordance with Boeing
      Document D6-51991, "Quality Assurance Standards Reflecting Digital Product
      Definition for Boeing Suppliers Using CAD/CAM," Seller shall maintain
      compatibility with Boeing's systems in accordance with D6-56199 "Hardware and
      Software Compatibility Requirements for Suppliers Use of BCAG CATIA Native
      Datasets as authority for Design, Manufacturing and Inspection." Spirit shall
      provide timely notification to Contractor of revisions to Spirit's
      systems.

     

    49.3 Electronic
      Access, Communications and Data Exchange via
      Telecommunications

     

     

    Any
      electronic communications and data exchange via telecommunications between
      the
      parties shall be pursuant to a trading partner agreement executed concurrently
      with this SBP. Provided, that any amendments to the SBP, change authorizations
      and any other 

     

     

    
      
        62 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    matter
      requiring written authorization shall be communicated in writing and not solely
      by electronic communication.

     

    Any
      electronic access to Spirit by Seller shall be pursuant to an electronic access
      or similar agreement.

    
 

    
 

    
      
        63 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXECUTED
      in duplicate as of the date and year first set forth above by the duly
      authorized representatives of the Parties.

     

    

     

     

    

    

    
      	
              BUYER

               

            	
              SELLER

            
	
              Spirit
                AeroSystems, Inc.

               

            	
              LMI
                Aerospace, Inc.

            
	
                              Signature
                on File .  

            	
                            Signature
                on File .

            
	
              Name:
                Randall P. Garrett

            	
              Name:
                Richard S. Darrow

            
	
              Title:
                Procurement Agent

            	
              Title:
                Program Manager

            
	
              Date:
                4/19/06

            	
              Date:
                4/19/06

            

    

    

    

     

    
      
        64 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

 

    SBP
      ATTACHMENT 1 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    WORK
      STATEMENT AND PRICING

    (Reference
      SBP Section 3.2, etc)

    

    FOR
      PURPOSES OF SBP Section 10.0, Spirit shall be defined as the following
      organizations, divisions, groups or entities: 

     

    Spirit
      AeroSystems, Inc., Tulsa, OK

    Spirit
      AeroSystems, Inc., McAlester, OK

    
 

     

    
      
        65 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SBP
      ATTACHMENT 1 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    WORK
      STATEMENT AND PRICING

     

    A1.1 Nonrecurring
      Prices

    

    
      	
              Nonrecurring
                Item

            	
              Planning
                and Design

            	
              Fab.

            	
              Total

            
	
               

              NOT
                APPLICABLE:

               

            	 	 	 

    

     

    Total
      Nonrecurring Work Package Price:

     

     

    A1.2 Recurring
      Price

     

    The
      price
      for Products to be delivered on or before 01
      January 2007 through 31 December 2011,
      are
      firm fixed prices.

     

     

     

    
      	
               

              Part
                Number

            	
               

              Model

            	
               

              Nomenclature

            	
               

              Unit
                Price

            	
               

              ROLT

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            

    

     

     

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          66 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            

    

                                                                                    SBP
      ATTACHMENT 1
      TO

                                                                                SPECIAL
      BUSINESS
      PROVISIONS

     

    
      	
               

              Part
                Number

            	
               

              Model

            	
               

              Nomenclature

            	
               

              Unit
                Price

            	
               

              ROLT

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              * 

            

    

     

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          67 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              *

            	
              
                737NG

              

            	
              SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              
                737NG

              

            	
              SKIN

            	
               *

            	
               * 

            
	
              *

            	
              
                737NG

              

            	
              SKIN

            	
               *

            	
               *

            
	
              *

            	
              737NG

            	
              SKIN

            	
               *

            	
               * 

            
	
              * 

            	
               737NG

            	
              SKIN

            	
               *

            	
               *

            
	
              *

            	
               737NG

            	
              SKIN

            	
               *

            	
              *

            
	
              *

            	
               737NG

            	
              SKIN

            	
               *

            	
               *

            
	
              *

            	
               737NG

            	
              SKIN

            	
               *

            	
               *

            
	
              *

            	
               737NG

            	
              SKIN

            	
               *

            	
              *

            

    

     

                                                                                    SBP
      ATTACHMENT 1
      TO
                                                                                  SPECIAL
        BUSINESS
        PROVISIONS

    

     

    
      	
               

              Part
                Number

            	
               

              Model

            	
               

              Nomenclature

            	
               

              Unit
                Price

            	
               

              ROLT

            
	
              *

            	
              737NG

            	
              SKIN

            	
              * 

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              NOSE
                SKIN

            	
              *

            	
              *

            
	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              *

            

    

     

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          68 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              *

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

               

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            

    

                      SBP
      ATTACHMENT 1 TO

                                                                SPECIAL
      BUSINESS
      PROVISIONS

     

    
      	
               

              Part
                Number

            	
               

              Model

            	
               

              Nomenclature

            	
               

              Unit
                Price

            	
               

              ROLT

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
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                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
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            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          69 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN ASSY

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NG

            	
              COVE
                SKIN ASSY

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
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                SKIN

            	
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                *

              

            
	
              
                *

              

            	
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                SKIN

            	
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                *

              

            
	
              
                *

              

            	
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                *

              

            
	
              
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                *

              

            
	
              
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                *

              

            
	
              
                *

              

            	
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                SKIN

            	
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                *

              

            
	
              
                
                  
                    *

                  

                

              

            	
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                  *

                

              

            	
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                *

              

            	
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                SKIN

            	
              *

            	
              
                *

              

            

    

     

                                                                                SBP
      ATTACHMENT 1
      TO

                                                                            SPECIAL
      BUSINESS
      PROVISIONS

     

    
      	
               

              Part
                Number

            	
               

              Model

            	
               

              Nomenclature

            	
               

              Unit
                Price

            	
               

              ROLT

            
	
              
                *

              

            	
              737NGNG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              737NGNG

            	
              COVE
                SKIN

            	
              *

            	
              
                *

              

            

    

     

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          70 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
           

           

           

        

      

    

    
      	
              
                *

              

            	
              737NGNG

            	
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              *

            	
              
                *

              

            
	
              
                *

              

            	
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                *

              

            
	
              
                *

              

            	
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                *

              

            
	
              
                *

              

            	
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              *

            	
              
                *

              

            
	
              
                *

              

            	
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                *

              

            
	
              
                *

              

            	
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                *

              

            
	
              
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                *

              

            
	
              
                *

              

            	
              777

            	
              SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              777

            	
              SKIN

            	
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                *

              

            
	
              
                *

              

            	
              777

            	
              SKIN

            	
              *

            	
              
                *

              

            
	
              
                *

              

            	
              777

            	
              SKIN

            	
              *

            	
              
                *

              

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

    

       

    

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          71 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

                                                                                      SBP
        ATTACHMENT 1A
        TO

                                                      SPECIAL
        BUSINESS PROVISIONS

    

    

    

    Component
      Spares Requirements

    (See
      Section 13.1.3)

    

    

    

    The
      following Spare component parts may be purchased by Spirit at the corresponding
      price. Spirit is not obligated to purchase any of its requirements for the
      following spare component parts from Seller pursuant to SBP Section 13.1.3.
      

    

    

    PART
      NUMBER      UNIT
      PRICE

    

       
      TBD

    

    

    

    
      
        72 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

                                                                                            SBP
      ATTACHMENT 2 TO

                                                                                        SPECIAL
      BUSINESS PROVISIONS

    

    NON-U.S.
      PROCUREMENT REPORT FORM

    (Seller
      to Submit as Required)

    (Reference
      SBP Section 15.0)

    

    
      	
              Seller
                Name

            	
              Country

            	
              Commodity/

              Nomenclature

            	
              Bid

              Dollars

            	
              Contracted

              Dollars

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

    

    
      
        73 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      
        74 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SBP
      ATTACHMENT 3 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    RATES
      AND FACTORS

    (Reference
      SBP Section 12.2)

     

    The
      following Rates and Factors will be used on all price change negotiations during
      the period of performance of this SBP.

    

    

    
      	
              Labor
                Classification

            	
              Production

            
	
              Direct
                Labor Rate

            	
              * 

            
	
              Manufacturing
                Burden

            	
              *

            
	
              G&A
                (Gen. Admin. Expense)

            	
              *

            
	
              Profit

            	
              *

            
	
              Total
                Rate

            	
              *

            
	 	 
	
              Labor
                Classification

            	
              Tool
                Fab & Rework

            
	
              Direct
                Labor Rate

            	
              *

            
	
              Manufacturing
                Burden

            	
              *

            
	
              G&A
                (Gen. Admin. Expense)

            	
              *

            
	
              Profit

            	
              *

            
	
              Total
                Rate

            	
              *

            

    

    
 

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          75 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
                                                                                            SBP
      ATTACHMENT 4
      TO

    SPECIAL
      BUSINESS PROVISIONS

    

    Spirit
      AOG COVERAGE 

    (Reference
      SBP Section 13.1.1)

    

    
      	1⁄4  	
              NORMAL
                HOURS Spirit’s PROCUREMENT
                REPRESENTATIVE

            

    

    Approximately
      7:30 a.m. - 4:00 p.m.

    

    
      	þ  	
              Performs
                all functions of procurement
                process.

            

    

    
      	þ  	
              Manages
                formal communication with Seller.

            

    

    

    
      	1  	
              SECOND
                SHIFT - AOG PROCUREMENT SUPPORT 

            

    

    3:00
      p.m.
      - 11:00 p.m.

    

    
      	þ  	
              May
                place order and assist with commitment and shipping information,
                working
                with several suppliers on a priority
                basis.

            

    

    

    
      	þ  	
              Provides
                a communication link between Seller and
                Boeing.

            

    

    

    
      	)  	
              24
                HOUR AOG SERVICE - AOG CUSTOMER REPRESENTATIVE (CUSTOMER SERVICE
                DIVISION)
                (206) 662-7200

            

    

    

    
      	þ  	
              Support
                commitment information particularly with urgent
                orders.

            

    

    

    
      	þ  	
              Customer
                Service Representative needs (if
                available):

            

    

    

    
      	1.  	
              Part
                Number

            

    

    
      	2.  	
              Spirit
                Purchase Order

            

    

    
      	3.  	
              Airline
                Customer & customer purchase order
                number

            

    

    
      	4.  	
              Boeing
                S.I.S. #

            

    

    

    If
      Seller
      is unable to contact any of the above, please provide AOG shipping information
      notification via FAX using Spirit AOG shipping notification form (SBP Attachment
      5).

     

    
 

    
      
        76 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SBP
      ATTACHMENT 5 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    

    Spirit

    AOG
      SHIPPING NOTIFICATION

    (Reference
      SBP Section 13.1.1)

    

    
      	
              To:
                FAX:

            	
              (918)
                832-3019

            	
              Phone:

            	
              (918)
                832-3414

            
	
              Procurement
                Agent Name:

            	 	
              Phone:

            	 
	
              From:

            	 	
              Today’s
                Date:

            	 
	 	 	 	 
	
              Part
                Number:

            	 	
              Customer
                P.O.:

            	 
	
              Customer:

            	 	
              Ship
                Date:

            	 
	
              Qty
                Shipped:

            	 	
              *SIS
                Number:

            	 
	
              Spirit
                P.O.:

            	 	
              Pack
                Sheet:

            	 
	
              *Airway
                Bill:

            	 	
              or
                Invoice:

            	 
	
              Carrier:

            	 	
              *Flight
                #:

            	 
	
              Freight
                Forwarder:

            	 	 	 

    

    

    *If
      Applicable

    

    

    SHIPPED
      TO:

    
      	þ  	
              (check
                one)

            

    

    

    
      	o  	
              Spirit

            

    

    

    
      	o  	
              Direct
                Ship to Customer

            

    

    

    
      	o  	
              Direct
                Ship to Seller

            

    

    

    Remarks:

    
      	 
	 
	 
	 
	 
	 

    

     

     

    
      
        77 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    If
      unable to contact Procurement Agent, Please use this form to fax shipping
      information.

    
 

     

    
      
        78 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 6 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    SELLER
      DATA SUBMITTALS

    

    EXAMPLES

    
      	1.  	
              General
                Reports
                (as requested by Spirit)

            

    

    General
      reports may include, but not be limited to, Seller’s program progress reports,
      highlighting significant accomplishments and critical program issues, Seller’s
      manufacturing schedule depicting key milestone events to support program
      requirements. Refer to SBP Section
      14.1
      for
      details, etc.  

    
      	2.  	
              Diversity
                Reports 

            

    

    A
      quarterly report verifying the information included on the Spirit Second Tier
      Report (SBP Attachment 11). Refer to SBP Section 14.2 for details.

    

    
      	3.  	
              Certified
                Tool List (as
                requested by Spirit)

            

    

    Seller’s
      Certified Tool Lists for identifying all accountable tools, including any
      subsequent new, reworked or re-identified tools affecting the first production
      spares Product. Refer to SBP
      Section 14.4
      for
      details. 

    

    
      	4.  	
              Problem
                Reports
                (as required)

            

    

    Seller’s
      written notification to Spirit of program problems, potential program impact
      and
      corrective action. Refer to SBP
      Section 14.5
      for
      details. 

    

    
      	5.  	
              AOG
                Spares Support Plan

            

    

    Seller‘s
      written plan describing Seller’s procedure for supporting AOG spares delivery
      requirements. Refer to SBP
      Section 13.1.1
      for
      details.

    

    
      	6.  	
              Order
                Readiness Matrix
                (as required)

            

    

    Seller’s
      plan (matrix) identifying pre-manufacturing activities, such as, material
      procurement, tooling, planning and manufacturing readiness, that must be
      prioritized and completed prior to manufacture of a spares Product. Refer to
      SBP
      Section 14.6
      for
      details. 

    

      
      7.  Non-U.S.
      Procurement Reporting (as
      required) 

    A
      report,
      submitted in February and August annually, to document the Seller's contracts
      and solicitations with non-U.S. subcontractors or suppliers, relating to the
      work covered by this SBP. Refer to SBP Section 15.2 for details.

    

    

     

    
      
        79 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

 

    SBP
      ATTACHMENT 7 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    

    

    SUPPLIER
      DATA REQUIREMENTS LIST (“SDRL”)

    CUSTOMER
      AND ENGINEERING

    (Reference
      SBP Section 22.0)

    

    

    

     

    
      
        80 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SBP
      ATTACHMENT 8 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    

    

    COMMODITY
      LISTING AND TERMS OF SALE

    (Reference
      SBP Section 27.0)

    

    COMMODITY
      LISTING

     

    *

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          81 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

 

    SBP
      ATTACHMENT 8 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    TERMS
      OF SALE

     

    Parties

     

    The
      Seller is The Boeing Company, acting through its agent, TMX. The Customer is
      a
      Spirit subcontractor, at any tier, who is manufacturing a product in support
      of
      a Boeing requirement.

     

    Sales

     

    All
      materials to be furnished by Seller are to be within the limits and the sizes
      published by Seller and subject to Seller’s standard tolerances for variations.
      Seller will warrant that all materials to be supplied will conform to the
      descriptions contained herein and on the face of the purchase order and that
      Seller will convey good title to any such materials free from any security
      interest, or other lien or encumbrance held by any other party and unknown
      to
      the customer. THERE
      IS
      NO WARRANTY OF MERCHANTABILITY OR FITNESS AND SELLER WILL MAKE NO OTHER EXPRESS
      OR IMPLIED WARRANTIES EXCEPT AS STATED HEREIN.
      Seller
      will not be liable for any incidental or consequential damages for any breach
      of
      warranty, express or implied. Seller’s liability and the Customer’s sole and
      exclusive remedy will be limited at Seller’s option either to (a) return of the
      materials and repayment of the purchase price, or (b) replacement of
      nonconforming materials upon return thereof to Seller. The Customer shall be
      required to notify Seller in writing of any claim of breach of warranty and
      no
      materials shall be returned to Seller by the Customer without Seller’s
      consent.

     

    Payment
      Terms

     

    The
      following payment processes will be followed for material sold to Customer
      by
      Seller. All payments shall be in United States Dollars.

     

    DEBIT
      PROCESS

     

    The
      debit
      process will be used in all circumstances where the Customer has an account
      with
      the Seller. The amount due is the quantity shipped multiplied by the unit price,
      plus the price for any value added services. * .
      

    
 

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          82 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    SBP
      ATTACHMENT 8 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    INVOICE
      PROCESS

     

    The
      invoice process will be used for Customers not currently making direct sales
      to
      Boeing; foreign countries governed by MITI laws and regulations (currently
      Australia, Brazil, China, India, Japan, and Korea), and orders issued by Spirit.
      * .

     

    LATE
      PAYMENT CHARGES

     

    Payments
      due Seller representing undisputed charges for material and services that are
      not paid within *.

     

    DEBIT/INVOICE
      DISPUTE PROCEDURE

     

    Customer
      may dispute payment amounts due provided that (1) Customer contacts Seller
      within 25 days of the date of the debit/ invoice, (2) Customer provides a
      complete reason as to the dispute. If the action is Seller's to resolve, late
      payment charges will not be assessed on amounts that are under dispute. Once
      a
      dispute has been resolved, payment terms will be (net) thirty (30) days from
      the
      date of resolution.

     

    FAILURE
      TO PAY

     

    In
      the
      event Customer fails to make payments when due, Seller reserves the right to
      assert whatever remedies it may have u+nder law, including setoffs against
      amounts due from Seller to Customer on other contracts. In such an event, Seller
      may, with respect to future orders, require full payment in advance or otherwise
      alter the terms of payment specified earlier.

     

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          83 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

 

    SBP
      ATTACHMENT 9 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    COST
      AND PERFORMANCE REVIEWS

    (Reference
      SBP Section 11.0)

     

    Cost
      Performance Reviews (CPR’s) will occur on as needed basis (alternating between
      Seller and Spirit locations unless otherwise agreed) at an agreeable time.
      The
      detail of the CPR’s will be defined at a later date between Spirit and Seller.
      When they are defined, this SBP Attachment 9 will be updated.

    
 

    
      
        84 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 10 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    QUALITY
      ASSURANCE REQUIREMENTS

     

    

     

    Attachment
      10 to this SBP number T6B2-YB001940 hereby
      incorporates Tulsa Quality Flysheets TQPA 100, TQPA 101, TQPA 102, and TQPA
      104
      (revisions currently in effect as reflected and defined on releasing purchase
      orders). These Flysheets define the quality provisions that are applicable
      to
      this Statement of Work.

     

     

     

     

    
      
        85 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    

    

    

    
      
        86 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

    

    SBP
      ATTACHMENT 11 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    Spirit
      SECOND TIER SUPPORT REPORT (Reference SBP Section 14.2)

    

    
      	
              Seller
                Name:

            	
              Date:

            
	
              Seller
                Contact: Phone: 

            
	
              Spirit
                Procurement Agent Contact: Phone:

            
	
              Spirit
                Purchase Contract #:

            
	
              Reporting
                Period * Jan
                - Mar Apr
                - Jun July
                - Sept Oct
                - Dec

            	
              Year:
                

            
	
              Definitions
                **

            
	
              Small
                Business (SB)

            	
              The
                term "small business" shall mean a small business as defined pursuant
                to
                section 3 of the Small Business Act (15 U.S.C.A. 632) and relevant
                regulations issued pursuant thereto. Generally, this means a small
                business organized for profit, it is independently owned and operated,
                is
                not dominant in the field of operations in which it is bidding, and
                meets
                the size standards as prescribed in Government regulations. (Includes
                SDBs, SMBEs and WOSBs) 

            
	
              Small
                Disadvantaged Business (SDB)

               

            	
              A
                small business certified by the U.S. Small Business Administration
                as a
                socially and economically small disadvantaged business for consideration
                of Government set-a-side contracting opportunities and business
                development. (Includes SDBs who are women-owned)

            
	
              Small
                Minority Business Enterprise (SMBE)

               

            	
              A
                small business that is at least 51 percent owned, operated and controlled
                by a minority group member (Asian, Black, Hispanic, and Native Americans);
                or, in the case of a publicly-owned business, at least 51% of the
                stock is
                owned by one or more minority group members and such individuals
                control
                the management and daily operations. (Includes SDBs)

            
	
              Women-Owned
                Small Business (WOSB)

               

            	
              A
                small business concern that is at least 51 percent owned by one or
                more
                women; or, in the case of any publicly owned business, at least 51
                percent
                of the stock is owned by one or more women; and whose management
                and daily
                business operations are controlled by one or more women. (Includes
                WOSBs
                who are also SDBs)

            
	
              Contract
                Dollars Received by Seller

            
	
              A.
                

            	
              Spirit
                contract dollars received by seller for the above reporting period*
                (report in whole numbers):
                $________________________________

            
	
              Value
                of Subcontract 2nd
                Tier Dollars Awarded

               

            
	
              Diversity
                Category

            	
              Reporting
                Period (see above*)

            
	
              Dollars

              (report
                in whole numbers)

            	
              Percent
                of

              Seller
                Dollars

            
	
              B.

            	
              Small
                Business (SB)

            	 	
              (B
                ÷ A)

            
	
              C.
                

            	
              Small
                Minority Business Enterprise (SMBE)

            	 	
              (C
                ÷ A)

            

    

     

     

     

    
      
        87 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              D.

            	
              Women-owned
                Small Business (WOSB)

            	 	
              (D
                ÷ A)

            
	
              Authorized
                Company Representative (Print):

            	
              Authorized
                Company Representative (Signature): Date:
                

            

    

    
 

     

     

    
      
        88 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 12 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    Commercial
      Invoice Requirements (Customs Invoice)

     

    For
      Imports into the United States

     

    
      	1.  	
              Commercial
                Invoice must be in English.

            

    

     

    
      	2.  	
              Record
                the United States Port of Entry where merchandise is to be cleared
                by U.S.
                Customs.

            

    

     

    
      	3.  	
              Date,
                Location, and Names of Seller and/or
                Shipper

            

    

     

    
      	A.  	
              Date
                when the merchandise is sold, or agreed to be sold (Current Purchase
                Order
                date).

            

    

     

    
      	B.  	
              Name
                and address of the Seller and/or Shipper if Seller is not the Shipper
                (Company name and address).

            

    

     

    
      	C.  	
              Name
                and contact information for an employee, who is employed by the seller
                and/or shipper who has detailed knowledge of the sales
                transaction.

            

    

     

    
      	D.  	
              Name
                and address of the Buyer (Spirit company name and site
                address)

            

    

     

    
      	E.  	
              Name
                of Consignee if not the Buyer (Company receiving non-purchased
                transactions or drop ship
                destination).

            

    

     

    
      	4.  	
              Purchase
                Order Number and Item Numbers

            

    

     

    Provide
      the current purchase order and item numbers.

     

    
      	5.  	
              Commercial
                Invoice Number (Seller’s option)

            

    

     

    
      	6.  	
              Packing
                Sheet Number

            

    

     

    
      	 	 	
              If
                a separate packing sheet(s) is used to provide any of the required
                commercial invoice information, the packing sheet number(s) must
                be
                recorded on the commercial invoice.

            

    

     

    
      	7.  	
              Merchandise
                Shipment Date (month, day, year)

            

    

     

    
      	 	 	
              Provide
                the date that the merchandise shipped from the Sellers factory or
                facility.

            

    

     

     

     

    
 

    
      
        89 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SBP
      ATTACHMENT 12 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    Commercial
      Invoice Requirements (Customs Invoice)

     

    For
      Imports into the United States...continued

     

    
      	8.  	
              Related
                Party to Spirit

            

    

     

    
      	 	 	
              If
                the Seller is a Related Party to Spirit, or any of its subsidiaries,
                it
                must be stated on the invoice: “Related Party to
                Spirit”

            

    

     

    
      	9.  	
              A
                detailed description of the merchandise being shipped must be provided
                to
                ensure proper product classification per the U.S. Customs Harmonized
                Tariff Schedule (HTS) and must include at a
                minimum:

            

    

     

    
      	A.  	
              The
                full name by which each item is known. (i.e. Spirit drawing part
                name)

            

    

     

    
      	B.  	
              The
                part number on the Spirit purchase order, or if the item is a raw
                material, provide the material grade, class, and
                dimensions.

            

    

     

      
      Notes:

     

    
      	C.  	
              Generic
                descriptions, abbreviations, acronyms, and Stock Keeping Unit (SKU)
                numbers are not acceptable. 

            

    

     

    
      	D.  	
              Spirit
                may request additional description information for items that do
                not have
                a Spirit part number and/or design.

            

    

     

    
      	10.  	
              Quantities,
                Weights and Measures

            

    

     

    
      	 	
              Record
                the quantity of each part number in the shipment if not separately
                noted
                on packing sheet

            

    

     

    
      	A.  	
              Record
                the total quantity of parts being
                shipped

            

    

     

    
      	B.  	
              Provide
                the gross and net weight of the entire
                shipment

            

    

     

    
      	C.  	
              Specify
                the unit of measure being used

            

    

     

    
      	D.  	
              Specify
                the total number of boxes included on each packing
                sheet

            

    

     

    
      	E.  	
              Textiles
                must specify the net and gross weights and the length, width, and
                total
                square meters of material.

            

    

     

    

    
      
        90 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

     

    

    

    SBP
      ATTACHMENT 12 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    Commercial
      Invoice Requirements (Customs Invoice)

     

    For
      Imports into the United States...continued

     

    
      	11.  	
              Specify
                the value of items being shipped

            

    

     

    
      	 	
              In
                addition to recording the Unit cost of each part on the commercial
                invoice, list separately, all Assists and Additional costs as directed
                by
                the Spirit Procurement
                representative:

            

    

     

    
      	A.  	
              Assists

            

    

     

    Assists
      are components, materials, dies, molds and tools, that are supplied by the
      Buyer, free of charge or at a reduced cost to the seller, and used in the
      production of imported goods. This also would include the Buyer paid
      transportation costs associated with the assist. These transportation costs
      will
      be provided by the procurement focal responsible for this merchandise.

     

    
      	B.  	
              Additional
                Costs

            

    

     

    
      	i.  	
              Engineering
                and Design work - Work that is performed outside the U.S, by non-U.S.
                employees, and is not included in the unit price of the merchandise
                being
                imported.

            

    

     

    
      	ii.  	
              Packing
                Costs - Costs for packing that are incurred by the Buyer, and have
                not
                been included in the unit cost.

            

    

     

    
      	iii.  	
              Non-recurring
                Charges - One time charges, incurred by the Buyer, for such items
                as,
                expedite fees and transportation costs, which have not been included
                in
                the unit cost.

            

    

     

    
      	iv.  	
              Selling
                Commissions - Commissions incurred by Buyer that have not been included
                in
                the unit cost.

            

    

     

    
      	v.  	
              Royalties
                - Fees the Buyer is required to pay as a condition of
                sale.

            

    

     

    
      	C.  	
              If
                the item being shipped is a Repaired or Modified
                part:

            

    

     

     

     

    
      
        91 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	i.  	
              Include
                the value of the item being repaired or modified,
                and

            

    

     

    
      	ii.  	
              The
                cost of the repair or modification

            

    

     

    
      	D.  	
              Attach
                a copy of a “Shippers Declaration of Repair or Alteration”
                form.

            

    

     

    
      	i.  	
              The
                Total Value of the entire shipment must be shown on the commercial
                invoice.

            

    

     

    

     

    

     

    SBP
      ATTACHMENT 12 TO

     

    SPECIAL
      BUSINESS PROVISIONS

     

    Commercial
      Invoice Requirements (Customs Invoice)

     

    For
      Imports into the United States...continued

     

    
      	12.  	
              Type
                of Currency - Currency on all invoices must be in U.S.
                Dollars

            

    

     

    
      	 	
              Note:
                Where export license requirements mandate that the currency of the
                exporting country be stated on the invoice, include the following
“for
                (export country) Customs purposes, value in (local currency).” This must
                be stated in addition to and not in lieu of the item value in U.S.
                Dollars.

            

    

     

    
      	13.  	
              Country
                of Origin

            

    

     

    Indicate
      the country of manufacture of each item being shipped.

     

    
      	14.  	
              Discounts

            

    

     

    
      	 	
              List
                all discounts that have been agreed to between the buyer and seller,
                or
                may be allowed, that apply to the purchase price or value, but have
                not
                been included in the unit price.

            

    

     

    
      	15.  	
              Rebates,
                Drawback and Bounties

            

    

     

    
      	 	
              If
                Seller receives any of these items, as a result of export, please
                itemize
                and provide description.

            

    

     

    
      	16.  	
              Terms
                of Sale (Incoterms)

            

    

     

     

    
      
        92 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              Specify
                the International Commercial Terms of Sale (Incoterms) on the commercial
                invoice as agreed to per the Spirit
                contract.

            

    

     

    
      	 	
              Note
                - Commercial invoices are required on all shipments whether or not
                a
                purchase order has been released or payment made. Non-Procurement
                examples
                include, free samples, returned tools and test
                parts.

            

    

    
 

     

    
      
        93 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 13 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    On
      Site
      Terms and Conditions Supplement

    (See
      Section 29.8)

     

    
      	A.  	
              General:

            

    

     

    
      	1.  	
              Seller’s
                Sole Responsibility for Safety & Environmental
                Protection.
                Seller shall at all times be solely responsible for all aspects of
                safety
                and environmental protection in connection with its On-Site Work,
                including initiating, maintaining, and supervising all safety and
                environmental precautions and programs. Such responsibility for safety
                includes, without limitation, the obligations set forth in Section
                2
                (Safety) of this Supplement. Such responsibility for environmental
                protection includes, without limitation, the obligations set forth
                in
                Section 3 (Environmental) of this Supplement. Seller shall at all
                times
                perform the On-Site Work, or ensure that it is performed by its
                Subcontractors, in a manner to avoid the risks of bodily injury to
                persons
                and damage to property or the environment. Seller shall promptly
                take all
                precautions that are necessary and adequate against any conditions
                that
                involve such risks. Seller shall continuously inspect all On-Site
                Work,
                materials, and equipment to discover the existence of any such conditions
                and shall be solely responsible for discovery and correction of any
                such
                conditions.

            

    

     

    
      	2.  	
              No
                Spirit Responsibility for Seller’s Safety or Environmental Performance.
                Spirit
                shall have no responsibility for the safety or environmental performance
                of Seller or Seller’s Subcontractors, or any aspect of safety or
                environmental protection in connection with, their On-Site Work,
                including
                all safety and environmental precautions and programs of the
                Seller.

            

    

     

    
      	3.  	
              Compliance
                with the Laws; Spirit
                Guidelines.

            

    

     

    
      	a)  	
              Seller
                shall comply, and shall ensure that all Subcontractors comply, with
                all
                applicable legal requirements and the requirements of any applicable
                GTA,
                SBP and Order related to safety and environmental performance of
                their
                On-Site Work. Seller shall cooperate and coordinate with Spirit and
                other
                sellers and their subcontractors performing On-Site Work or otherwise
                present on site as necessary regarding safety and environmental protection
                matters.

            

    

     

    
      	b)  	
              Seller
                shall adhere to, and ensure that all its Subcontractors performing
                On-Site
                Work adhere to reasonable work rules including without limitation
                safety,
                health and environmental guidelines provided by Spirit to Seller.
                By
                providing any such guidance, Spirit assumes no control or responsibility
                whatsoever for any aspect of the safety or environmental performance
                of
                the On-Site Work, which shall remain solely with Seller. Seller and
                its
                Subcontractors therefore shall supplement any such 

               

            

    

     

     

    
      
        94 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              guidelines
                in their safety and environmental plans as necessary and appropriate
                to
                assure safety and environmental protection and comply with their
                obligations under applicable law and any applicable GTA, SBP or Order.
                Where any applicable law is more protective than any such guidance
                or
                obligations of a GTA, SBP or Order, such law shall be followed. Seller
                shall provide a copy of the guidelines to all Seller employees assigned
                to
                perform On-Site Work and require that its Subcontractors provide
                copies to
                their employees assigned to perform On-Site
                Work.

            

    

     

    
      	4.  	
              Indemnities.
                Environmental Indemnification. Seller shall indemnify, and hold harmless
                Spirit, its subsidiaries, and their directors, officers, employees,
                and
                agents (the “Spirit Indemnitees”) from and against: (a) all actions,
                causes of action, liabilities, claims, suits, judgments, liens, awards,
                fines, penalties, forfeitures and damages, of any kind and nature
                whatsoever (hereinafter "Claims"), (b) any expenses incurred in connection
                with the investigation or monitoring of conditions at any location
                used
                for or pertaining to Seller’s performance under an applicable GTA, SBP or
                any Order, (c) any clean up costs or other expenses incurred in connection
                with any cleanup, containment, remedial, removal, or restoration
                work, to
                the extent necessary under applicable law (and in the case of a release
                to
                Spirit property, to the extent necessary to return the property to
                its
                prior condition), and (d) expenses , costs of litigation and counsel
                fees
                related thereto or incident to establishing the right to indemnification,
                to the extent such Claims, costs, expenses, etc. arise out of an
                act or
                omission by Seller or any subcontractor thereof which (i) results
                directly
                or indirectly, in whole or in part, in the release, or threatened
                or
                suspected release, of any pollutants, hazardous substances, hazardous
                chemicals, toxic substances, hazardous wastes, dangerous wastes (as
                those
                terms are defined under any applicable law), or contaminants of any
                kind
                into the environment, or (ii) constitutes a violation of applicable
                law
                concerning environmental protection. In no event shall Seller’s
                obligations hereunder be limited to the extent of any insurance available
                to or provided by the Seller or any subcontractor
                thereof.

            

    

     

    
      	5.  	
              Observations.
                Spirit personnel may, but are not required to, visit an On-Site Work
                area
                at any time to observe the Seller’s performance under this Supplement.
                Seller recognizes and agrees that any such visits or observations
                will
                neither relieve Seller of its sole responsibility for all aspects
                of
                safety and environmental protection in connection with the On-Site
                Work,
                nor create or constitute actual control or the right to control such
                safety or environmental performance by Spirit. Neither Spirit’s
                observations, or visits, nor any actions or inactions during or as
                a
                result of such visits or observations shall give rise to a duty,
                responsibility, or liability of Spirit to the Seller, any Subcontractor,
                their agents or employees.

            

    

     

    
      	B.  	
              Safety

            

    

     

    
      	1.  	
              Safety
                Programs and Plans.
                Although Seller has sole responsibility for safety in connection
                with the
                On-Site Work, Spirit has responsibility for the safety of its own
                

            

    

     

     

     

    
      
        95 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	employees.
              Accordingly, before beginning the On-Site Work or any portion thereof,
              Seller shall develop and submit for Spirit’s review a written safety plan
              for Seller and any Subcontractor who will perform On-Site Work, in
              detail
              commensurate with the nature of that work. Such plan shall describe
              anticipated hazards and control methods the Seller will employ to provide
              adequate safeguards for all employees performing the On-Site Work,
              On-Site
              Work area invitees, Spirit agents and employees, and the public and
              shall
              describe housekeeping plans. An appropriate health or safety professional
              should prepare such a plan. Review of such plans by Spirit shall
              not:

    

     

    
      	a)  	
              Relieve
                in any manner Seller of its sole responsibility for
                safety.

            

    

     

    
      	b)  	
              Be
                construed as limiting in any manner Seller’s obligation to undertake any
                action that may be necessary or required to establish and maintain
                safe
                working conditions at the On-Site Work
                area.

            

    

     

    
      	c)  	
              Indicate
                Spirit’s control over the manner in which Seller performs its work or
                supervises its employees.

            

    

     

    
      	d)  	
              Create
                any liability for Spirit. 

            

    

     

    Seller’s
      safety plan shall be made readily available at the On-Site Work area. Seller
      shall follow its safety plan, and ensure that all its Subcontractors on site
      follow the plan.

     

    
      	2.  	
              Safety
                Representative.
                Seller shall appoint a competent safety representative with full
                authority
                to coordinate, implement, and enforce Seller’s safety plan and shall
                authorize such representative to devote whatever time is necessary
                to
                properly perform such duties. The safety representative shall attend
                all
                safety meetings and participate fully in all activities outlined
                in
                Seller’s safety plan.

            

    

     

    
      	3.  	
              Safety
                Meetings and Equipment.
                Seller shall hold initial and periodic meetings to instruct its personnel
                and all Subcontractors in safety practices for On Site Work. Minutes
                shall
                be recorded at all safety meetings and copies promptly submitted
                to Spirit
                upon request. Seller shall furnish appropriate safety equipment for
                the
                On-Site Work, train appropriate personnel in the use of the equipment,
                and
                enforce the use of such equipment by its employees. Seller shall
                ensure
                that each Subcontractor on site furnishes appropriate safety equipment
                for
                the On-Site Work, trains appropriate personnel in the use of the
                equipment, and enforces the use of such equipment by its
                employees.

            

    

     

    
      	4.  	
              Accident
                Reports.
                Accidents and incidents that involve employee time away from Work
                or
                medical cases (not including first aid cases) or incidents that require
                an
                ambulance, security, or fire department response must be reported
                to the
                Spirit representative immediately. Such reports must be submitted
                in
                writing to the Spirit representative within one (1) hour of the accident
                or incident. Further, Seller shall maintain accurate
                

            

    

     

     

    
      
        96 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	 	accident
              and injury reports and shall furnish to Spirit a copy of any accident
              report prepared pursuant to any applicable law. Furthermore, Seller
              shall
              also furnish to Spirit, in a form acceptable to Spirit, a monthly summary
              of injuries and hours worked each month.

    

     

    
      	5.  	
              Payment
                for Emergency Services.
                When any employee of Seller or any Subcontractor on site, who is
                engaged
                in any activity related to the On-Site Work, requires the services
                of an
                ambulance, physician, hospital, or other provider, Seller shall pay
                or
                arrange for such Subcontractor, or employee to pay all charges for
                any
                such services directly to the provider of such
                services.

            

    

     

    
      	6.  	
              Emergency
                Notification.
                All emergency telephone numbers shall be provided to the Spirit
                representative and shall be readily accessible at the On-Site Work
                area.
                

            

    

     

    
      	C.  	
              Environmental:

            

    

     

    
      	1.  	
              Waste
                minimization.
                The Seller shall emphasize project planning to maximize the use,
                reuse and
                recycling of any solid waste, including but not limited to construction,
                demolition, and land clearing debris, and scrap materials, to the
                greatest
                extend feasible with consideration for
                cost.

            

    

     

    
      	2.  	
              Solid
                Waste Handling.
                Covered Containers shall be used for collection of solid waste in
                locations approved by the Spirit representative. Segregation, recycling,
                disposal or other handling of solid waste shall be as approved by
                the
                Spirit representative.

            

    

     

    
      	3.  	
              Hazardous
                Waste Handling.

            

    

     

    

    If
      Seller
      or its Subcontractors expects to generate or handle hazardous waste or other
      waste materials in performance of the On-Site Work, Seller shall develop a
      written plan to be approved by the Spirit representative for the on-site
      management of such waste. The plan will identify the types and volumes of such
      waste/materials to be generated or handled in the course of the work and on-site
      management techniques for such waste/materials. Seller and its Subcontractors
      will manage such waste/materials on site as provided in the plan.

     

    If
      additional or unanticipated amounts of waste/materials are generated or
      encountered on-site, the Seller shall advise the Spirit representative as soon
      as possible, and manage that waste/material on site as directed by the Spirit
      representative.

     

    
      	4.  	
              Known
                Work Area Hazardous Materials.
                Before On-Site Work is commenced, Seller shall obtain from Spirit
                information regarding the existence of any known asbestos, petroleum,
                polychlorinated biphenyl (PCB), or other hazardous materials in a
                hazardous condition at the work area.

            

    

     

     

    
      
        97 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	5.  	
              Latent
                Work Area Hazardous Materials.
                If, in the course of the On-Site Work, Seller encounters materials
                reasonably believed to be asbestos, petroleum, PCBs, or other hazardous
                materials, which were not previously disclosed by Spirit and are
                in a
                hazardous condition at the work area, Seller shall immediately suspend
                the
                work in the area affected and immediately report, in writing, the
                condition to Spirit. The work in the affected area shall not thereafter
                be
                resumed except by written agreement of Spirit and Seller if, in fact,
                the
                materials are asbestos, petroleum, PCBs or other hazardous materials
                and
                are in a hazardous condition at the work area. The work in the affected
                area shall be resumed in the absence of the hazardous material or
                when the
                hazardous condition has been made safe through engineering or
                administrative controls.

            

    

     

    
      	6.  	
              Asbestos
                Use Prohibited.
                No material containing asbestos may be used or installed without
                the
                written permission of the Spirit representative. When requested by
                the
                Spirit representative, Seller shall provide written verification
                that no
                materials containing asbestos have been installed as part of the
                work.

            

    

     

    
      	7.  	
              Wastewater
                Handling and Stormwater Management.
                If Seller or its Subcontractors expect to produce wastewater in
                performance of the On-Site Work, including, but not limited to, water
                produced in subsurface dewatering, or expects to handle hazardous
                substances or other pollutants in an area that may be exposed to
                stormwater, Seller shall develop a written plan to be approved by
                the
                Spirit representative for handling such wastewater and/or hazardous
                substances or other pollutants. Both the control and discharge of
                stormwater shall be addressed in Seller’s plan. Such plan shall be drafted
                to adhere to applicable law and the Spirit site’s Storm Water Pollution
                Prevention Plan, National Pollution Discharge Elimination System
                Permit,
                and Sanitary Sewer System Discharge Permit, as applicable. The Spirit
                representative will inform the Seller of such permit requirements.
                The
                Seller and its Subcontractors shall adhere to the
                plan.

            

    

     

    
      	8.  	
              Air
                Pollution Control.
                If Seller or its Subcontractors expect to produce emissions of any
                air
                pollutant or contaminant in the performance of the On-Site Work,
                Seller
                shall develop a written plan to be approved by the Spirit representative
                for minimizing such emissions. Such plan shall be drafted to assure
                compliance with all applicable law and any applicable provisions
                of any
                orders, permits or approvals issued to or in the name of Spirit,
                including
                but not limited to any applicable Air Operating Permit. The Spirit
                representative will inform the Seller of such provisions. The Seller
                and
                its Subcontractors shall adhere to the
                plan.

            

    

     

     

    
      
        98 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	9.  	
              Emergency
                Response and Reporting of Spills or Releases.
                If Seller or its Subcontractors expect to bring, use, produce, encounter
                or handle any hazardous chemicals, hazardous substances, or hazardous
                waste on site, Seller shall notify the Spirit representative and
                shall
                obtain from the Spirit representative information regarding the applicable
                plans and procedures for emergency response to spills or releases
                of
                hazardous chemicals, hazardous substances, and hazardous waste. Seller
                and
                its Subcontractors shall undertake immediate response to such spills
                or
                releases to contain the spill or release and prevent spreading, but
                only
                to the extent such response can be undertaken without posing a physical
                danger to the responding personnel or others
                nearby.

            

    

     

    When
      the
      Seller or Subcontractor discovers a spill or release, whether or not Seller
      or a
      Subcontractor undertakes such response, the Seller or Subcontractor shall notify
      the Spirit representative and any other Spirit emergency response personnel
      identified in the Spirit emergency response plan and procedures provided. Unless
      the duty to report any such spills or releases to a governmental agency is
      imposed by law directly on the Seller or a Subcontractor, the Spirit
      representative shall perform such reporting. Seller and its Subcontractors
      shall
      cooperate fully with the Spirit representative in ensuring timely and complete
      reporting and response. If Seller or a Subcontractor is itself required by
      law
      to report a spill or release then the Seller or Subcontractor undertaking such
      reporting shall immediately inform the Spirit representative in detail regarding
      such reporting.

     

    
      	10.  	
              Nuisance
                and Polluting Activity Prohibited.
                Polluting, dumping or discharging of any harmful, noxious, or regulated
                materials (such as concrete truck washout, vehicle maintenance fluids,
                residue from saw cutting operations, solid waste, and hazardous
                substances) into the building drains, streams, waterways, holding
                ponds or
                to the ground surface shall not be permitted. Further, Seller shall
                conduct its activities in such fashion to avoid creating any nuisance
                conditions, including but not limited to suppression of noise and
                dust,
                control of erosion, and implementation of other measures as necessary
                to
                minimize the off-site effects of work
                activities.

            

    

     

     

    
      
        99 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              i.               
                SBP ATTACHMENT 14 TO

            

    

                                                        SBP
      ATTACHMENT 14 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

    Reserved

    
 

    
      
        100 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 15 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

     

    

    PRODUCTION
      ARTICLE DEFINITION AND CONTRACT CHANGE NOTICES

    (Reference
      SBP Section 3.2.2)

     

    

    

    A. Configuration

    

    
      	 	
              The
                configuration of each Production Article shall be as described in
                the
                Engineering Requirements Document (ERD) and Subcontracted Parts,
                Revision,
                Authorization, and Transmittal (SPRAT) as identified on Releasing
                Purchase
                Orders.

            

    

     

     

    
      
        101 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 16 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    NON-RECURRING AND
      RECURRING PRICE STATUS AND SUMMARY TABLES

    (EXAMPLES
      - Reference SBP Section 12.2)

     

    TOTAL

     

    SUMMARY

    

                      (Nonrecurring):
      (Example)

    
      	
              Event

            	
              Nonrecurring
                Price Impact

            	
              Total
                Nonrecurring

            	
              Amortize
                Over X Months - This Event

            	
              Nonrecurring
                Payment per Quarter - This Event

            	
              Nonrecurring
                Payment per Quarter - Cum Total

            
	
              Initial
                Contract

            	
              * 

            	
              *

            	
              *

            	
              *

            	
              *

            
	
              Amendment
                1

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            
	
              Amendment
                2

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            

    

    

    
      	
              This
                example reflects a ten-year contract.

            	 	 	 
	 	 	 	 	 	 
	
              The
                initial Contract Non-Recurring Price was *

            	 	 
	 	 	 	 	 	 
	
              Amendment
                1 *

            	 	 	 
	 	 	 	 	 	 
	
              Amendment
                2 *

            	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
              years

            	
              year

            	
              months

            	 	
              quarters

            	
              *

            
	
              1

            	
              2002

            	
              120

            	 	
              40

            	
              *

            
	
              2

            	
              2003

            	
              108

            	
              amendment
                1

            	
              36

            	
              *

            
	
              3

            	
              2004

            	
              96

            	 	
              32

            	 
	
              4

            	
              2005

            	
              84

            	 	
              28

            	
              *

            
	
              5

            	
              2006

            	
              72

            	
              amendment
                2

            	
              24

            	
              *

            
	
              6

            	
              2007

            	
              60

            	 	
              20

            	
              *

            

    

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          102 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              7

            	
              2008

            	
              48

            	 	
              16

            	 
	
              8

            	
              2009

            	
              36

            	 	
              12

            	
              *

            
	
              9

            	
              2010

            	
              24

            	 	
              8

            	
              *

            
	
              10

            	
              2011

            	
              12

            	 	
              4

            	
              *

            

    

     

    SBP
      ATTACHMENT 16 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

    NON-RECURRING AND
      RECURRING PRICE STATUS AND SUMMARY TABLES

    (EXAMPLES
      - Reference SBP Section 12.2)

    continued...

    

    

    
      	
              Recurring:
                (Example)

            	 	 	 	 	 
	 	 	 	 	 	 
	
              Event

            	
              Starting
                Recurring Shipset Price

            	
              Recurring
                Impact per Shipset from Change

            	
              Adjusted
                Recurring Shipset Price

            	
              Starting
                Shipset

            	
              Applicable
                Block

            
	
              Initial
                Shipset Price

            	
              * 

            	
              *

            	
              *

            	
              *

            	
              *

            
	
              Amendment
                1

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            
	
              Amendment
                2

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            
	
              Amendment
                3

            	
              *

            	
              *

            	
              *

            	
              *

            	
              *

            
	 	 	 	 	 	 
	
              This
                example reflects a ten-year contract.

            	 	 	 	 
	 	 	 	 	 	 
	
              The
                initial Contract price was * per
                Shipset.

            	 	 	 
	 	 	 	 	 	 
	
              Amendment
                1 price change affected *.
                The increase was * per
                Shipset.

            	 
	 	 	 	 	 	 
	
              Amendment
                2 price change affected *.
                The
                decrease was * per
                Shipset.

            	 
	 	 	 	 	 	 
	
              Amendment
                3 price change affected *.
                The
                increase was * per
                Shipset.

            	 

    

    

     

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          103 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

 

    

    SBP
      ATTACHMENT 16 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

     

    NON-RECURRING
      AND RECURRING PRICE STATUS AND SUMMARY TABLES

     

    (DATA
      ENTRY - Reference SBP Section 12.2)

     

    continued...

     

    TOTAL

     

    SUMMARY

    (Nonrecurring):

    
      	
              Event

            	
              Nonrecurring
                Price Impact

            	
              Total
                Nonrecurring

            	
              Amortize
                Over X Months - This Event

            	
              Nonrecurring
                per Month - This Event

            	
              Nonrecurring
                per Month Cum Total

            
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

    

    

    Recurring:

    
      	
              Event

            	
              Starting
                Recurring Shipset Price

            	
              Recurring
                Impact per Shipset from Change

            	
              Adjusted
                Recurring Shipset Price

            	
              Starting
                Shipset

            	
              Applicable
                Block

            
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

    

    
 

     

     

    
      
        104 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    

    SBP
      ATTACHMENT 17 TO

    SPECIAL
      BUSINESS PROVISIONS

    

     

    VALUE
      ENGINEERING METHODOLOGY

     

    (EXAMPLE
      - Reference
      SBP Section 1.0 GG)

     

    In
      the
      following example, the baseline P.O. price for a certain end item is
      $500,000.00. The Seller has submitted a Value Engineering proposal, which has
      subsequently been accepted by Spirit for incorporation. The submittal contained
      a statement of work and the resultant savings if implemented. In addition,
      the
      first affected unit, Cum Line 101 was identified and the Seller and Spirit
      agreed upon a split of the savings with the result being * to Spirit
      and * to the supplier. Finally, the P.O. price was adjusted down to
      * starting at C/L 101 and carrying through the end of the contracted
      shipsets.

     

    
      	1.  	
              Purchase
                Order Price:    $500,000

            

    

     

    
      	2.  	
              First
                (1st)
                Affected Unit:    C/L
                101

            

    

     

    
      	3.  	
              Recurring
                Savings per Shipset:    $2,500

            

    

     

    
      	4.  	
              Negotiated
                Savings Split ( * ):      *

            

    

     

    
      	5.  	
              Price
                adjustment C/L101 and on:    $500,000
                - * = *

            

    

     

    

    
 

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          105 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    SBP
      ATTACHMENT 18 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

     

    INDENTURED
      PRICED PARTS LIST AND SPARES PRICING

     

    

     

    

    A.         INDENTURE
      PRICED PARTS LIST

    (Reference
      SBP 13.1.3)

     

    

     

    

     

    

     

    B.         FOR
      AOG’S AND POA’s

                                      

                                         
      (1)

    Shipset      Reorder       Unit
      Price   
      (1) x
* 

    Part
      No.      Quantity       Lead
      Time     
(per
“A”
      above)

     

     

                                $
          
      $

     

    

     

    

     

    C.         FOR
      LESS THAN LEADTIME

     

     

    Shipset      Reorder       Unit
      Price =
   
      (1)
      x*

    Part
      No.      Quantity    
Lead
      Time     
(per
“A”
      above)

     

     

                             $
          
      $

     

               

     

    
      
        
          
            _________________________________

              *
                The text
                noted by asterisks has been redacted in connection with a request
                to the
                Securities and Exchange Commission for confidential treatment of
                such text
                pursuant to Rule 24b-2. A copy of this Agreement including the redacted
                information has been submitted to the Securities and Exchange Commission
                as part
                of such request.

            

          

           

          106 
            

          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SBP
      ATTACHMENT 19 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

    INCREMENTAL
      RELEASE PLAN AND LEAD TIMES

    (Reference
      SBP Section 44.0)

    

    A.   Lead
      Times

    

    
      	 	
              Lead
                times for material procurements, fabrication and assembly are as
                tabulated
                below in months prior to delivery of the first Shipset affected,
                and will
                be used to calculate incremental release schedules in Paragraph B.1
                of this SBP Attachment 19.

            

    

    

    Material Months

    Metallic
      Raw Material (TBN)

    Nonmetallic
      Raw Material 

    Castings/Forgings/Extrusions 

    Purchased
      Parts 

    

    Fabrication Months

    Detail
      Parts (TBN)

    

    Assembly

    

    Rate
      Tooling A Months

    (Greater
      than [ ] to [ ] S/S per Month) (TBN)

     

    Rate
      Tooling B 

    (Greater
      than [ ] to [ ] S/S per Month) (TBN)

    

    B.   Incremental
      Release Plan

    

    
      	 	
              1.

            	
              In
                accordance with SBP Section 44.0, Seller will release Shipsets as
                scheduled herein on the dates indicated
                below.

            

    

    

    Qty     Support
      Point        Release

    Material                         S/S      Shipset
      No.           Date
      

    

     

    Metallic
      Raw Material                 (TBN)

    Nonmetallic
      Raw Material 

    Castings/Forgings/Extrusions

    Purchased
      Parts

    

    Fabrication

    

    Lot
      1

    Lot
      2

    Lot
      3

    Lot
      4

     

     

    
      
        107 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Lot
      5

    

    

    

    

    

    

    

    SBP
      ATTACHMENT 19 TO

    SPECIAL
      BUSINESS PROVISIONS

    

    INCREMENTAL
      RELEASE PLAN AND LEAD TIMES

    (Reference
      SBP Section 44.0)

    continued...

    

    Assembly

    

    Lot
      1

    Lot
      2

    Lot
      3

    Lot
      4

    Lot
      5

    

    
      	 	
              2.

            	
              Release
                dates are based upon the following Master
                Schedule:

            

    

    

    Block                             MS
      No.

    

    C.   
Cycle
      Time Plan

    

    In
      order
      to enable Seller to meet the nine (9) month Cycle Time requirement:

    

    1)
      Spirit
      shall notify Seller not less than [_TBN__]
      months prior to the scheduled delivery date for any Product that will be
      incorporated into a Program Airplane which is (i) a Customer's first purchase
      of
      a particular, existing configuration of the Program Airplane or (ii) a
      Customer's second or greater purchase of a particular existing configuration
      of
      the Program Airplane, but which will have potential configuration changes (not
      including material changes or changes of a greater magnitude than any previous
      change already made).

    

    2)
      Spirit
      shall notify Seller not less than [_TBN__]
      months prior to the scheduled delivery date for any Product that is impacted
      by
      a change in the assignment of a Customer or Program Airplane model to a specific
      line number.

     

    

    

     

     

    
      
        108 
          
          

          
            	
                    Special
                      Business Provisions

                  	
                    Seller’s
                      Name: LMI Aerospace, Inc.

                  
	 	
                    T6B2-YB001940

                  
	 	
                    INITIALS:

                  

          

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

 

    SBP
      ATTACHMENT 20 TO

    SPECIAL
      BUSINESS PROVISIONS

     

    

    

    SCHEDULE
      CHANGE EXAMPLES

    (Reference
      SBP Section 8.0)

    

    EXAMPLE

    

    Current
      Shipset Billing Price = * 

    

    

    Schedule
      No. 1

    

    Month         1     2     3     4     5     6     7     8     9     10

    

    S/S
      Per
      Month     *     *     *     *     *     *     *     *     *      *

    

    

    DECELERATION
      - Notice
      of deceleration of Schedule No. 1 is given at Month 3 resulting in the following
      schedule:

    

    

    Schedule
      No. 2

    

    S/S
      Per
      Month     7     7     *10    10     7     7     7     7     7     7

     

    

    Shipsets
      Decelerated          0     
0    3

    

    *

    

    

    ACCELERATION
      - Notice
      of acceleration of Schedule No. 2 is given at Month 7 resulting in the following
      schedule:

    

    

    Schedule
      No. 3

    

    S/S
      Per
      Month     7     7     10     10     7     7     *7     10     10     10

    

    Shipsets
      Accelerated             0     3     3

    

    *

    

       

      
        
          
            
              _________________________________

                *
                  The text
                  noted by asterisks has been redacted in connection with a request
                  to the
                  Securities and Exchange Commission for confidential treatment of
                  such text
                  pursuant to Rule 24b-2. A copy of this Agreement including the
                  redacted
                  information has been submitted to the Securities and Exchange Commission
                  as part
                  of such request.

              

            

             

            109 
              

            

            
              	
                      Special
                        Business Provisions

                    	
                      Seller’s
                        Name: LMI Aerospace, Inc.

                    
	 	
                      T6B2-YB001940

                    
	 	
                      INITIALS:Exhibit 10.122

    

    
      
        

      

    

    

    

    MORTGAGE
      

    _________________________________

     

    

    

    AH
      HOTEL
      PARTNERS, LP, as mortgagor

    (Borrower)

     

    to

     

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA, as mortgagee

    (Lender)

     

    Dated
      and
      Effective: As
      of
      April 3, 2006

     

                                 
      Location: 
2300
      Featherstone, Auburn Hills, Michigan

     

                                                                                                                                     
        County:  Oakland

     

           
      Tax Parcel No.: 14-26-126-003

                                         
      

                                          Loan
      Number: 70-6-106-306

     

     

     

    PREPARED
      BY AND UPON

    RECORDATION
      RETURN TO:

     

    Stephen
      A. Cowan

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, Suite 800

    San
      Francisco, CA 94107

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    
      	 	
              Table
                of Contents

               

            	
              Page

               

            
	
              ARTICLE
                I

               

            	
              -
                OBLIGATIONS

               

            	 
	
              Section
                1.01

               

            	
              Obligations

               

            	
              3

               

            
	
              Section
                1.02

               

            	
              Documents

               

            	
              3

               

            
	
              ARTICLE
                II

               

            	
              -
                REPRESENTATIONS AND WARRANTIES

               

            	 
	
              Section
                2.01

               

            	
              Title,
                Legal Status and Authority

               

            	
              3

               

            
	
              Section
                2.02

               

            	
              Validity
                of Documents

               

            	
              4

               

            
	
              Section
                2.03

               

            	
              Litigation

               

            	
              4

               

            
	
              Section
                2.04

               

            	
              Status
                of Property

               

            	
              4

               

            
	
              Section
                2.05

               

            	
              Tax
                Status of Borrower

               

            	
              5

               

            
	
              Section
                2.06

               

            	
              Bankruptcy
                and Equivalent Value

               

            	
              5

               

            
	
              Section
                2.07

               

            	
              Disclosure

               

            	
              5

               

            
	
              Section
                2.08

               

            	
              Illegal
                Activity

               

            	
              5

               

            
	
              Section
                2.09

               

            	
              Executive
                Order 13224

               

            	
              5

               

            
	
              ARTICLE
                III

               

            	
              -
                COVENANTS AND AGREEMENTS

               

            	 
	
              Section
                3.01

               

            	
              Payment
                of Obligations

               

            	
              5

               

            
	
              Section
                3.02

               

            	
              Continuation
                of Existence

               

            	
              5

               

            
	
              Section
                3.03

               

            	
              Taxes
                and Other Charges

               

            	
              5

               

            
	
              Section
                3.04

               

            	
              Defense
                of Title, Litigation, and Rights under Documents

               

            	
              6

               

            
	
              Section
                3.05

               

            	
              Compliance
                with Laws and Operation and Maintenance of Property

               

            	
              6

               

            
	
              Section
                3.06

               

            	
              Insurance

               

            	
              7

               

            
	
              Section
                3.07

               

            	
              Damage
                and Destruction of Property

               

            	
              9

               

            
	
              Section
                3.08

               

            	
              Condemnation

               

            	
              10

               

            
	
              Section
                3.09

               

            	
              Liens
                and Liabilities

               

            	
              11

               

            
	
              Section
                3.10

               

            	
              Tax
                and Insurance Deposits

               

            	
              11

               

            
	
              Section
                3.11

               

            	
              ERISA

               

            	
              12

               

            
	
              Section
                3.12

               

            	
              Environmental
                Representations, Warranties, and Covenants

               

            	
              13

               

            
	
              Section
                3.13

               

            	
              Electronic
                Payments

               

            	
              14

               

            
	
              Section
                3.14

               

            	
              Inspection

               

            	
              14

               

            
	
              Section
                3.15

               

            	
              Records,
                Reports, and Audits

               

            	
              14

               

            
	
              Section
                3.16

               

            	
              Borrower’s
                Certificates

               

            	
              15

               

            
	
              Section
                3.17

               

            	
              Full
                Performance Required; Survival of Warranties

               

            	
              16

               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

      
        	
                Section
                  3.18

                 

              	
                Additional
                  Security

                 

              	
                16

                 

              
	
                Section
                  3.19

                 

              	
                Further
                  Acts

                 

              	
                16

                 

              
	
                Section
                  3.20

                 

              	
                Capital
                  Lease

                 

              	
                16

                 

              
	
                Section
                  3.21

                 

              	
                Other
                  Leases

                 

              	
                16

                 

              
	
                Section
                  3.22

                 

              	
                Inventory
                  Levels

                 

              	
                17

                 

              
	
                Section
                  3.23

                 

              	
                Single
                  Purpose Entity

                 

              	
                17

                 

              
	
                ARTICLE
                  IV

                 

              	
                -
                  ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

                 

              	 
	
                Section
                  4.01

                 

              	
                Expenses
                  and Advances

                 

              	
                18

                 

              
	
                Section
                  4.02

                 

              	
                Subrogation

                 

              	
                18

                 

              
	
                ARTICLE
                  V

                 

              	
                -
                  SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY

                 

              	 
	
                Section
                  5.01

                 

              	
                Due-on-Sale
                  or Encumbrance

                 

              	
                18

                 

              
	
                Section
                  5.02

                 

              	
                Permitted
                  Transfer

                 

              	
                19

                 

              
	
                Section
                  5.03

                 

              	
                Permitted
                  Admission

                 

              	
                20

                 

              
	
                ARTICLE
                  VI

                 

              	
                -
                  DEFAULTS AND REMEDIES

                 

              	 
	
                Section
                  6.01

                 

              	
                Events
                  of Default The following shall be an “Event of Default”:

                 

              	
                20

                 

              
	
                Section
                  6.02

                 

              	
                Remedies

                 

              	
                22

                 

              
	
                Section
                  6.03

                 

              	
                Expenses

                 

              	
                23

                 

              
	
                Section
                  6.04

                 

              	
                Rights
                  Pertaining to Sales

                 

              	
                23

                 

              
	
                Section
                  6.05

                 

              	
                Applications
                  of Proceeds

                 

              	
                23

                 

              
	
                Section
                  6.06

                 

              	
                Additional
                  Provisions as to Remedies

                 

              	
                23

                 

              
	
                Section
                  6.07

                 

              	
                Waiver
                  of Rights and Defenses

                 

              	
                24

                 

              
	
                ARTICLE
                  VII

                 

              	
                -
                  SECURITY AGREEMENT

                 

              	 
	
                Section
                  7.01

                 

              	
                Security
                  Agreement

                 

              	
                24

                 

              
	
                ARTICLE
                  VIII

                 

              	
                -
                  LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

                 

              	 
	
                Section
                  8.01

                 

              	
                Recourse
                  Liability

                 

              	
                24

                 

              
	
                Section
                  8.02

                 

              	
                General
                  Indemnity

                 

              	
                24

                 

              
	
                Section
                  8.03

                 

              	
                Transaction
                  Taxes Indemnity

                 

              	
                24

                 

              
	
                Section
                  8.04

                 

              	
                ERISA
                  Indemnity

                 

              	
                25

                 

              
	
                Section
                  8.05

                 

              	
                Environmental
                  Indemnity

                 

              	
                25

                 

              
	
                Section
                  8.06

                 

              	
                Duty
                  to Defend, Costs and Expenses

                 

              	
                25

                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                Section
                  8.07

                 

              	
                Recourse
                  Obligation and Survival

                 

              	
                25

                 

              
	
                ARTICLE
                  IX

                 

              	
                -
                  ADDITIONAL PROVISIONS

                 

              	 
	
                Section
                  9.01

                 

              	
                Usury
                  Savings Clause

                 

              	
                25

                 

              
	
                Section
                  9.02

                 

              	
                Notices

                 

              	
                25

                 

              
	
                Section
                  9.03

                 

              	
                Sole
                  Discretion of Lender

                 

              	
                27

                 

              
	
                Section
                  9.04

                 

              	
                Applicable
                  Law and Submission to Jurisdiction

                 

              	
                27

                 

              
	
                Section
                  9.05

                 

              	
                Construction
                  of Provisions

                 

              	
                27

                 

              
	
                Section
                  9.06

                 

              	
                Transfer
                  of Loan

                 

              	
                27

                 

              
	
                Section
                  9.07

                 

              	
                Miscellaneous

                 

              	
                28

                 

              
	
                Section
                  9.08

                 

              	
                Entire
                  Agreement

                 

              	
                28

                 

              
	
                Section
                  9.09

                 

              	
                WAIVER
                  OF TRIAL BY JURY

                 

              	
                29

                 

              
	
                Section
                  9.10

                 

              	
                Partial
                  Release

                 

              	
                29

                 

              
	
                Section
                  9.11

                 

              	
                Property
                  Substitutions

                 

              	
                29

                 

              
	
                ARTICLE
                  X

                 

              	
                -
                  LOCAL LAW PROVISIONS

                 

              	 
	
                ARTICLE
                  XI

                 

              	
                -
                  OPERATING LEASE PROVISIONS

                 

              	 
	
                EXHIBIT
                  A

              	 	 
	
                EXHIBIT
                  B

              	 	 
	
                EXHIBIT
                  C

              	 	 
	
                EXHIBIT
                  D

              	 	 

      

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      

        DEFINITIONS

         

        The
          terms
          set forth below are defined in the following sections of this Deed of Trust
          and
          Security Agreement: 

         
 

    

    

       

      
        	
                Action

              	
                Section
                  9.04

              
	
                Additional
                  Funds 

              	
                Section
                  3.07 (c)

              
	
                Affecting
                  the Property

              	
                Section
                  3.12 (a)

              
	
                Affiliate
                  Loan

              	
                Section
                  5.01

              
	
                Affiliate
                  Loan Lender

              	
                Section
                  5.01

              
	
                All

              	
                Section
                  9.05 (m)

              
	
                Any

              	
                Section
                  9.05 (m)

              
	
                Assessments

              	
                Section
                  3.03 (a)

              
	
                Assignment

              	
                Recitals,
                  Section 2 (B)

              
	
                Awards

              	
                Section
                  3.08 (b)

              
	
                Bankruptcy
                  Code

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Borrower

              	
                Preamble

              
	
                Costs

              	
                Section
                  4.01

              
	
                Damage

              	
                Section
                  3.07 (a)

              
	
                Default
                  Rate

              	
                Section
                  1.01 (a)

              
	
                Deposits

              	
                Section
                  3.10

              
	
                Documents

              	
                Section
                  1.02

              
	
                Environmental
                  Indemnity

              	
                Section
                  8.05

              
	
                Environmental
                  Law

              	
                Section
                  3.12 (a) 

              
	
                Environmental
                  Liens

              	
                Section
                  3.12 (b)

              
	
                Environmental
                  Report

              	
                Section
                  3.12 (a)

              
	
                ERISA

              	
                Section
                  3.11

              
	
                Event
                  of Default

              	
                Section
                  6.01

              
	
                Flood
                  Acts

              	
                Section
                  2.04 (a)

              
	
                Foreign
                  Person

              	
                Section
                  2.05

              
	
                Full
                  Replacement Cost

              	
                Section
                  3.06 (a)

              
	
                Grace
                  Period

              	
                Section
                  6.01(b)

              
	
                Hazardous
                  Materials

              	
                Section
                  3.12 (a)

              
	
                Impositions

              	
                Section
                  3.10

              
	
                Improvements

              	
                Recitals,
                  Section 2 (A) (ii)

              
	
                Include,
                  Including

              	
                Section
                  9.05 (f)

              
	
                Indemnified
                  Parties

              	
                Section
                  8.02

              
	
                Indemnify

              	
                Section
                  8.02

              
	
                Instrument

              	
                Preamble

              
	
                Insurance
                  Premiums

              	
                Section
                  3.10

              
	
                Investors

              	
                Section
                  9.06

              
	
                Land

              	
                Recitals,
                  Section 2 (A) (i)

              
	
                Laws

              	
                Section
                  3.05(c)

              
	
                Lease

              	
                Section
                  9.05 (k)

              
	
                Leases

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Lender

              	
                Preamble

              
	
                Lessee

              	
                Section
                  9.05 (k)

              
	
                Lessor

              	
                Section
                  9.05 (k)

              
	
                Liens

              	
                Section
                  3.09

              
	
                Loan

              	
                Recitals,
                  Section 1

              
	
                Losses

              	
                Section
                  8.02

              
	
                Major
                  Tenants

              	
                Section3.21

              
	
                Microbial
                  Matter

              	
                Section
                  3.12 (a)

              
	
                Net
                  Proceeds

              	
                Section
                  3.07 (d)

              
	
                Note

              	
                Recitals,
                  Section 1

              
	
                Notice

              	
                Section
                  9.02

              
	
                Obligations

              	
                Section
                  1.01

              
	
                On
                  Demand

              	
                Section
                  9.05 (n)

              

      

      

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        
 

    

     

    

      
        	
                Operating
                  Lessee

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Operating
                  Lease

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Organization
                  State

              	
                Section
                  2.01

              
	
                Owned

              	
                Section
                  9.05 (l)

              
	
                Permitted
                  Encumbrances

              	
                Section
                  2.01

              
	
                Person

              	
                Section
                  9.05 (i)

              
	
                Personal
                  Property

              	
                Section
                  6.02 (j)

              
	
                Prepayment
                  Premium

              	
                Section
                  1.01(a)

              
	
                Property

              	
                Recitals,
                  Section 4 (A)

              
	
                Property
                  State

              	
                Section
                  2.01

              
	
                Provisions

              	
                Section
                  9.05 (j)

              
	
                Rating
                  Agency

              	
                Section
                  9.06

              
	
                Release

              	
                Section
                  3.12 (a)

              
	
                Rent
                  Loss Proceeds

              	
                Section
                  3.07 (c)

              
	
                Rents

              	
                Recitals,
                  Section 2 (A) (x)

              
	
                Restoration

              	
                Section
                  3.07 (a)

              
	
                Securities

              	
                Section
                  9.06

              
	
                Security
                  Agreement

              	
                Section
                  7.01

              
	
                Taking

              	
                Section
                  3.08 (a)

              
	
                Tenant

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Tenants

              	
                Section
                  9.05 (k)

              
	
                Transaction
                  Taxes

              	
                Section
                  3.03 (c)

              
	
                UCC

              	
                Section
                  2.02

              
	
                Upon
                  Demand

              	
                Section
                  9.05 (n)

              
	
                Violation

                 

              	
                Section
                  3.11

                 

              
	 	 

      

    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    MORTGAGE

     

    THIS
      MORTGAGE,
      which
      also constitutes a Security Agreement (this “Instrument”)
      is
      dated and effective as of the 3rd day of April, 2006, by AH
      HOTEL PARTNERS, LP,
      a
      Delaware limited partnership, having its principal office and place of business
      at c/o CNL Hospitality Corp., 420 South Orange Avenue, Suite 700, Orlando,
      Florida 32801-3313, as mortgagor (“Borrower”),
      to
THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA,
      a New
      Jersey corporation, having an office at c/o Prudential Asset Resources, 2200
      Ross Avenue, Suite 4900-E, Dallas, Texas 75201, as mortgagee (“Lender”).
      

     

    RECITALS:

     

    1. Borrower,
      by the terms of its Promissory Note (“Note”)
      executed on the same date as this Instrument and in connection with the loan
      (“Loan”)
      from
      Lender to Borrower and other entities affiliated with Borrower, is indebted
      to
      Lender in the principal sum of up to ONE HUNDRED TWENTY MILLION AND NO/100
      U.S.
      DOLLARS ($120,000,000.00). The Maturity Date of the Loan set forth in the Note
      is April 5, 2011.

     

    2. Borrower
      desires to secure the payment of and the performance of all of its obligations
      under the Note and certain additional Obligations (as defined in Section 1.01
      hereof).

     

    IN
      CONSIDERATION of the principal sum of the Note, and other good and valuable
      consideration, the receipt and sufficiency of which are acknowledged, Borrower
      irrevocably:

     

    A. Grants,
      bargains, sells, assigns, transfers, pledges, mortgages, warrants, and conveys
      to Lender, and grants Lender a security interest in, the following property,
      rights, interests and estates owned by Borrower (collectively, the “Property”):

     

    (i) The
      real
      property in Oakland County, State of Michigan, and described in Exhibit
      “A”
      attached
      hereto and incorporated herein by this reference (the “Land”);

     

    (ii) All
      buildings, structures and improvements (including fixtures) now or later located
      in or on the Land (“Improvements”);

     

    (iii) All
      easements, estates, and interests including hereditaments, servitudes,
      appurtenances, tenements, mineral and oil/gas rights, water rights, (riparian,
      appropriative or otherwise and whether or not appurtenant), water, water
      courses, water stock, air rights, development power or rights, options,
      reversion and remainder rights, and any other rights owned by Borrower and
      relating to or usable in connection with or access to the Property (including,
      without limitation, all party rights);

     

    (iv) All
      right, title, and interest owned by Borrower in and to all land lying within
      the
      rights-of-way, roads, or streets, open or proposed, adjoining the Land to the
      center line thereof, and all sidewalks, alleys, and strips and gores of land
      adjacent to or used in connection with the Property;

     

    
      	(v)  	
              All
                right, title, and interest of Borrower in, to, and under all plans,
                specifications, surveys, studies, reports, permits, licenses, agreements,
                contracts, instruments, books of account, insurance policies, and
                any
                other documents relating to the use, construction, occupancy, leasing,
                activity, or operation of the
                Property

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    

     

    (vi) All
      fixtures and personal property described in Exhibit
      B
      owned by
      Borrower and replacements thereof; but excluding all personal property owned
      by
      any tenant (a “Tenant”),
      including AH Tenant Corporation (“Operating
      Lessee”),
      of
      the Property;

     

    (vii)
      All
      of Borrower’s right, title and interest in the proceeds (including conversion to
      cash or liquidation claims) of (A) insurance relating to the Property and (B)
      all awards made for the taking by eminent domain (or by any proceeding or
      purchase in lieu thereof) of the Property, including awards resulting from
      a
      change of any streets (whether as to grade, access, or otherwise) and for
      severance damages;

     

    (viii)
      All tax refunds, including interest thereon, tax rebates, tax credits, and
      tax
      abatements, and the right to receive the same, which may be payable to Borrower
      or available to Borrower with respect to the Property;

     

    (ix) All
      of
      Borrower’s right, title and interest in and to all leasehold estates, ground
      leases, leases, (including, without limitation, that certain Amended and
      Restated Lease Agreement dated as of April 3, 2006 respecting the Property
      entered into with the Operating Lessee, as Tenant (the “Operating
      Lease”)
      subleases, licenses, or other agreements, including, without limitation, all
      reservations, security interests, contractual liens and security deposits,
      affecting the use, enjoyment or occupancy of the Property now or later existing
      (including any use or occupancy arrangements created pursuant to Title 7 or
      11
      of the United States Code, as amended from time to time, or any similar federal
      or state laws now or later enacted for the relief of debtors (the “Bankruptcy
      Code”)
      and
      all extensions and amendments thereto (collectively, the “Leases”),
      including all guaranties thereof; and

     

    (x) All
      of
      Borrower’s right, title and interest in and to all rents, issues, profits,
      royalties, receivables, use and occupancy charges (including, without
      limitation, all oil, gas or other mineral royalties and bonuses), room rents,
      revenues, accounts and receivables derived from the use or occupancy of all
      or
      any portion of the Improvements, all revenues and credit card receipts collected
      from guest rooms, restaurants, bars, meeting rooms, banquet rooms and
      recreational facilities, all receivables, customer obligations, installment
      payment obligations and other obligations now existing or hereafter arising
      or
      created out of the sale, lease, sublease, license, concession or other grant
      of
      the right of the use and occupancy of property or rendering of services by
      Borrower or any operator or manager of the hotel or the commercial space located
      in the Improvements or acquired from others (including, without limitation,
      from
      the rental of any office space, retail space, guest rooms, conference rooms,
      meeting rooms, or other space, halls, stores, and offices, and fees and deposits
      securing reservations of such space), license, lease, sublease and concession
      fees and rentals, parking fees and revenues, health club membership fees, food
      and beverage wholesale and retail sales (including mini-bar revenues), service
      charges, vending machine sales and proceeds, if any, from business interruption
      or other loss of income insurance and
      other
      sums payable by the tenants, whether evidenced by the Leases or other
      instruments),
      income
      and other benefits now or later derived from any portion or use of the Property
      (including any payments received with respect to any Tenant, any reservation
      party, or the Property pursuant to the Bankruptcy Code) and all cash, security
      deposits, advance rentals, or similar payments relating thereto (collectively,
      the “Rents”)
      and
      all proceeds from the cancellation, termination, surrender, sale or other
      disposition of any reservation and the Leases, and the right to receive and
      apply the Rents and all such other amounts to the payment of the
      Obligations.

     

    B. Absolutely
      and unconditionally assigns, sets over, and transfers to Lender all of
      Borrower’s right, title, interest and estates in and to the Leases and the
      Rents, subject to the terms and license granted to the Borrower under that
      certain Assignment of Leases and Rents made by Borrower to Lender dated the
      same
      date as this Instrument (the “Assignment”),
      which
      document shall govern and control the provisions of this
      assignment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    

     

    C. Absolutely
      and unconditionally assign, sets over, and transfers to Lender all of Borrower’s
      right, title, interest and estates in and to all agreements, leases, franchises
      and contracts pertaining to
      the
      operation of the Property subject
      to the terms and license granted to Borrower under that certain Assignment
      of
      Agreements made by Borrower to Lender dated the same date as this Instrument
      (the “Assignment
      of Agreements”),
      which
      document shall govern and control the provisions of this
      assignment.

     

    TO
      HAVE
      AND TO HOLD the Property unto the Lender and its successors and assigns forever,
      subject only to the provisions of this Instrument.

     

    PROVIDED,
      HOWEVER, if and when Borrower shall fully pay and perform the Obligations as
      provided for in the Documents (defined below) and shall comply with and fully
      discharge all the provisions in the Documents, these presents and the estates
      hereby granted (except for the obligations of Borrower set forth in Sections
      3.11 and 3.12 and Article VIII hereof) shall cease and terminate.

     

    IN
      FURTHERANCE of the foregoing, Borrower warrants, represents, covenants and
      agrees as follows:

     

    ARTICLE
      I  -
      OBLIGATIONS

     

    Section
      1.01  
      Obligations.
      This
      Instrument is executed, acknowledged, and delivered by Borrower to secure and
      enforce the following obligations (collectively, the “Obligations”):

     

    (a)  Payment
      of all obligations, indebtedness and liabilities under the Documents including,
      without limitation, (i) the Prepayment Premium (as defined in the Note), (ii)
      interest at both the rate specified in the Note and at the Default Rate (as
      defined in the Note), if applicable and to the extent not prohibited by Laws
      (defined below), and (iii) renewals, extensions, and amendments of the
      Documents;

     

    (b)  Performance
      of every obligation, covenant, and agreement under the Documents (except any
      obligation, covenant, and agreement of Lender or Manager) including renewals,
      extensions, and amendments of the Documents; and

     

    (c)  Payment
      of all sums advanced (including costs and expenses) by Lender pursuant to the
      Documents including renewals, extensions, and amendments of the
      Documents.

     

    Section
      1.02  
      Documents.
      The
“Documents”
shall
      mean each and all of the documents and agreements listed on Exhibit
      D
      attached
      hereto and by this reference a part hereof, and every other written agreement
      executed in connection with the Loan (but excluding the Loan application and
      Loan commitment) and by the party against whom enforcement is sought, including
      those given to evidence or further secure the payment and performance of any
      of
      the Obligations, and any written renewals, extensions, and amendments of the
      foregoing, executed by the party against whom enforcement is sought. All of
      the
      provisions of the Documents are incorporated into this Instrument as if fully
      set forth in this Instrument. All capitalized terms used herein that are not
      otherwise defined herein shall have the meaning ascribed to such terms in the
      Note.

     

    ARTICLE
      II  -
      REPRESENTATIONS AND WARRANTIES

     

    Borrower
      hereby represents and warrants to Lender as follows:

     

    Section
      2.01  
      Title, Legal Status and Authority.
      Borrower (i) is seised of the Land and Improvements, and good and marketable
      fee
      title, to the Property, free and clear of all liens, charges, encumbrances,
      and
      security interests, except the matters listed in Exhibit
      C
      attached
      hereto (“Permitted
      Encumbrances”);
      (ii) will forever warrant and defend its title to the Property and the
      validity, enforceability, and priority of the lien and security interest created
      by

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Section
      2.02  
      this
      Instrument against the claims of all persons; (iii) is a limited partnership
      duly organized, validly existing, and in good standing and qualified to transact
      business under the laws of its state of organization or incorporation
      (“Organization
      State”)
      and
      the state where the Property is located (“Property
      State”);
      and
      (iv) has all necessary approvals, governmental and otherwise, and full power
      and
      authority to own its properties (including the Property) and carry on its
      business.

     

    Section
      2.03  
      Validity of Documents.
      The
      execution, delivery and performance of the Documents and the borrowing evidenced
      by the Note (i) are within the power of Borrower; (ii) have been authorized
      by
      all requisite action; (iii) have received all necessary approvals and consents;
      (iv) will not violate, conflict with, breach, or constitute (with notice or
      lapse of time, or both) a default under (1) any law, order or judgment of any
      court, governmental authority, or the governing instrument of Borrower or (2)
      any indenture, agreement, or other instrument to which Borrower is a party
      or by
      which it or any of its property is bound or affected; (v) will not result in
      the
      creation or imposition of any lien, charge, or encumbrance upon any of its
      properties or assets except for those in this Instrument; and (vi) will not
      require any authorization or license from, or any filing with, any governmental
      or other body (except for the recordation of this Instrument, the Assignment
      and
      Uniform Commercial Code (“UCC”)
      filings). The Documents constitute legal, valid, and binding obligations of
      Borrower.

     

    Section
      2.04  
      Litigation.
      There
      is no action, suit, or proceeding, judicial, administrative, or otherwise
      (including any condemnation or similar proceeding), pending or, to the knowledge
      of Borrower, threatened or contemplated against, or affecting, Borrower or
      the
      Property which would have a material adverse effect on either the Property
      or
      Borrower’s ability to perform its obligations.

     

    Section
      2.05  
      Status of Property.

     

    (a)  The
      Land
      and Improvements are not located in an area identified by the Secretary of
      Housing and Urban Development, or any successor, as an area having special
      flood
      hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster
      Protection Act of 1973, or the National Flood Insurance Reform Act of 1994,
      as
      each have been or may be amended, or any successor law (collectively, the
“Flood
      Acts”)
      or, if
      located within any such area, Borrower has and will maintain the insurance
      prescribed in Section 3.06 below.

     

    (b)  Borrower
      has all necessary (i) certificates, licenses, and other approvals, governmental
      and otherwise, for the operation of the Property and the conduct of its business
      and (ii) zoning, building code, land use, environmental and other similar
      permits or approvals, all of which are currently in full force and effect and
      not subject to revocation, suspension, forfeiture, or modification. The Property
      and its use and occupancy is in full compliance with all Laws and Borrower
      has
      received no notice of any violation or potential violation of the Laws which
      has
      not been remedied or satisfied.

     

    (c)  The
      Property is served by all utilities (including water and sewer) required for
      its
      use.

     

    (d)  All
      public roads and streets necessary to serve the Property for its use have been
      completed, are serviceable, are legally open, and have been either dedicated
      to
      and accepted by the appropriate governmental entities or granted by a recorded
      easement or right of way.

     

    (e)  The
      Property is free from damage caused by fire or other casualty.

     

    (f)  All
      costs
      and expenses for labor, materials, supplies, and equipment used in the
      construction of the Improvements have been paid in full.

     

    (g)  Borrower
      or Operating Lessee owns and has paid in full for, or leases pursuant to the
      Capital Leases, all furnishings, fixtures, and equipment (other than Tenants’
property (which term “Tenant” shall not include Operating Lessee for purposes of
      this section)) used in connection with the operation of the Property, free
      of
      all security
      interests, liens, or encumbrances except the Permitted Encumbrances, the Capital
      Leases, and those created by this Instrument.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h)  The
      Property is assessed for real estate tax purposes as one or more wholly
      independent tax lot(s), separate from any adjoining land or improvements and
      no
      other land or improvements is assessed and taxed together with the
      Property.

     

    Section
      2.06  
      Tax Status of Borrower.
      Borrower is not a “foreign person” within the meaning of Sections 1445 and 7701
      of the Internal Revenue Code of 1986, as amended, and the regulations
      thereunder.

     

    Section
      2.07  
      Bankruptcy and Equivalent Value.
      No
      bankruptcy, reorganization, insolvency, liquidation, or other proceeding for
      the
      relief of debtors has been instituted by or against Borrower, or any general
      partner of Borrower. Borrower has received reasonably equivalent value for
      granting this Instrument.

     

    Section
      2.08  
      Disclosure.
      Borrower has disclosed to Lender all material facts and has not failed to
      disclose any material fact that could cause any representation or warranty
      made
      herein to be materially misleading. There has been no adverse change in any
      condition, fact, circumstance, or event that would make any such information
      materially inaccurate, incomplete or otherwise misleading.

     

    Section
      2.09  
      Illegal Activity.
      No
      portion of the Property has been or will be purchased, improved, fixtured,
      equipped or furnished with proceeds of any illegal activity and, to the best
      of
      Borrower’s knowledge, there are no illegal activities at or on the
      Property.

     

    Section
      2.10  
      Executive Order 13224. Borrower
      and all persons or entities holding any legal or beneficial interest whatsoever
      in Borrower, including, without limitation any guarantor, are not included
      in,
      owned by, controlled by, acting for or on behalf of, providing assistance,
      support, sponsorship, or services of any kind to, or otherwise associated with
      any of the persons or entities referred to or described in Executive Order
      13224
-
      Blocking
      Property and Prohibiting Transactions with Persons Who Commit, Threaten to
      Commit, or Support Terrorism, as amended. It shall constitute an Event of
      Default hereunder if the foregoing representation and warranty shall ever become
      false.

     

    ARTICLE
      III  -
      COVENANTS AND AGREEMENTS

     

    Borrower
      covenants and agrees with Lender as follows:

     

    Section
      3.01  
      Payment of Obligations.
      Borrower shall timely pay and cause to be performed the
      Obligations.

     

    Section
      3.02  
      Continuation of Existence.
      Borrower shall not (a) dissolve, terminate, or otherwise dispose of, directly,
      indirectly or by operation of law, all or substantially all of its assets;
      (b)
      reorganize or change its legal structure without Lender’s prior written consent;
      (c) change its name, address, or the name under which Borrower conducts its
      business without promptly notifying Lender; or (d) do anything to cause the
      representations in Section 2.02 to become untrue.

     

    

    Section
      3.03  
      Taxes and Other Charges

     

    (a)  Payment
      of Assessments. Borrower shall pay when due (but in all events at least one
      business day prior to the date any fine, penalty, interest or charge for
      nonpayment may be imposed, referred to herein as the “Tax
      Payment Date”)
      all
      taxes, liens, assessments, utility charges (public or private and including
      sewer fees), ground rents, maintenance charges, dues, fines, impositions, and
      public and other charges of any character (including penalties and interest)
      assessed against, or which are liens or could become a lien against, the
      Property (“Assessments”).
      Unless Borrower is making deposits per Section 3.10, Borrower shall provide
      Lender with receiptsevidencing
      such payments (except for income taxes, franchise taxes, ground rents,
      maintenance charges, and utility charges) within thirty (30) days after the
      Tax
      Payment Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  Right
      to
      Contest. So long as no Event of Default (defined below) is continuing, Borrower
      may, prior to delinquency and at its sole expense, contest any Assessment,
      but
      this shall not change or extend Borrower’s obligation to pay the Assessment as
      required above unless (i) Borrower gives Lender prior written notice of its
      intent to contest an Assessment; (ii) Borrower demonstrates to Lender’s
      reasonable satisfaction that (1) the Property will not be sold to satisfy the
      Assessment prior to the final determination of the legal proceedings, (2) it
      has
      taken such actions as are required or permitted to accomplish a stay of any
      such
      sale, or (3) it has furnished a bond or surety (satisfactory to Lender in form
      and amount) sufficient to prevent a sale of the Property; (iii) at Lender’s
      option, Borrower has deposited the full amount necessary to pay any unpaid
      portion of the Assessments with Lender; and (iv) such proceeding shall be
      permitted under any other instrument to which Borrower or the Property is
      subject (whether superior or inferior to this Instrument); provided, however,
      that the foregoing shall not apply to the contesting of any income taxes,
      franchise taxes, ground rents, maintenance charges, and utility
      charges.

     

    (c)  Documentary
      Stamps and Other Charges. Borrower shall pay all taxes, assessments, charges,
      expenses, costs and fees (including registration and recording fees and revenue,
      transfer, stamp, intangible, and any similar taxes)(collectively, the
“Transaction
      Taxes”)
      required in connection with the making and/or recording of any of the Documents.
      If Borrower fails to pay the Transaction Taxes after demand, Lender may (but
      is
      not obligated to) pay these and Borrower shall reimburse Lender on demand for
      any amount so paid with interest at the applicable interest rate specified
      in
      the Note, which shall be the Default Rate unless prohibited by Laws.
      Notwithstanding anything to the contrary in this Mortgage or any of the other
      Documents, this Section 3.03(c) shall survive repayment of the Note and
      satisfaction of this Mortgage.

     

    (d)  Changes
      in Laws Regarding Taxation. If any law (i) deducts from the value of real
      property for the purpose of taxation any lien or encumbrance thereon, (ii)
      taxes
      mortgages or debts secured by mortgages for federal, state or local purposes
      or
      changes the manner of the collection of any such existing taxes, and/or (iii)
      imposes a tax, either directly or indirectly, on any of the Documents or the
      Obligations, Borrower shall, if permitted by law, pay such tax within the
      statutory period or within twenty (20) days after demand by Lender, whichever
      is
      less; provided,
      however,
      that
      if, in the reasonable opinion of Lender, Borrower is not permitted by law to
      pay
      such taxes, Lender shall have the option to declare the Obligations immediately
      due and payable (without any Prepayment Premium) upon sixty (60) days’ notice to
      Borrower.

     

    (e)  No
      Credits on Account of the Obligations. Borrower will not claim or be entitled
      to
      any credit(s) on account of the Obligations for any part of the Assessments
      and
      no deduction shall be made or claimed from the taxable value of the Property
      for
      real estate tax purposes by reason of the Documents or the Obligations. If
      such
      claim, credit or deduction is required by law, Lender shall have the option
      to
      declare the Obligations immediately due and payable (without any Prepayment
      Premium) upon sixty (60) days’ notice to Borrower.

     

    Section
      3.04  
      Defense of Title, Litigation, and Rights under
      Documents.
      Borrower shall forever warrant, defend and preserve Borrower’s title to the
      Property, the validity, enforceability and priority of this Instrument and
      the
      lien or security interest created thereby, and any rights of Lender under the
      Documents against the claims of all persons, and shall promptly notify Lender
      of
      any such claims. Lender (whether or not named as a party to such proceedings)
      is
      authorized and empowered (but shall not be obligated) to take such additional
      steps as it may reasonably deem necessary or proper for the defense of any
      such
      proceeding or the protection of the lien, security interest, validity,
      enforceability, or priority of this Instrument, title to the Property, or any
      rights of Lender under the Documents, including the employment of counsel,
      the
      prosecution and/or defense of litigation, the compromise, release, or discharge
      of such adverse claims, the purchase of any tax title, the removal of any such
      liens and security interests, and any other actions Lender deems necessary
      to
      protect its interests. Borrower authorizes Lender to take any actions required
      to be taken by Borrower, or permitted to be taken by Lender, in the Documents
      in
      the name and on behalf of Borrower. Borrower shall reimburse Lender on demand
      for all expenses (including attorneys’ fees) incurred by it in connection with
      the foregoing and Lender’s exercise of its rights under the Documents. All such
      expenses of Lender, until reimbursed by Borrower, shall be part of the
      Obligations, bear interest at the applicable interest rate specified in the
      Note, which shall be the Default Rate unless prohibited by Laws, and shall
      be
      secured by this Instrument.

     

    Section
      3.05  
      Compliance with Laws and Operation and Maintenance of
      Property.

     

    (a)  Repair
      and Maintenance. Borrower will operate and maintain the Property in good order,
      repair, and operating condition. Borrower will promptly make all necessary
      repairs, replacements, additions, and improvements necessary to ensure that
      the
      Property shall not in any way be materially diminished or impaired. Borrower
      will not cause or allow any of the Property to be misused, wasted, or to
      deteriorate and Borrower will not abandon the Property. No new building,
      structure, or other improvement shall be constructed on the Land nor shall
      any
      material part of the Improvements be removed, demolished, or structurally or
      materially altered, without Lender’s prior written consent.

     

    (b)  Replacement
      of Property. Borrower will keep the Property fully equipped and will replace
      all
      worn out or obsolete Property (including fixtures) with replacement Property
      that is new and/or of better quality than the replaced Property . Borrower
      will
      not, without Lender’s prior written consent, remove any Property covered by this
      Instrument unless the same is replaced by Borrower with Property that is new
      and/or of better quality than the replaced Property and the replacement Property
      (i) is owned by Borrower free and clear of any lien or security interest (other
      than the Permitted Encumbrances and those created by this Instrument) or (ii)
      is
      leased by Borrower (A) with Lender’s prior written consent or (B) if the
      replaced Property was leased at the time of execution of this
      Instrument.

     

    (c)  Compliance
      with Laws. Borrower shall comply with and shall cause the Property to be
      maintained, used, and operated in full compliance with all (i) present and
      future laws, Environmental Laws (defined below), ordinances, regulations, rules,
      orders and requirements (including zoning and building codes) of any
      governmental or quasi-governmental authority or agency applicable to Borrower
      or
      the Property (collectively, the “Laws”);
      (ii)
      orders, rules, and regulations of any regulatory, licensing, accrediting,
      insurance underwriting or rating organization, or other body exercising similar
      functions; (iii) duties or obligations of any kind imposed under any Permitted
      Encumbrance or by law, covenant, condition, agreement, or easement, public
      or
      private; and (iv) policies of insurance at any time in force with respect to
      the
      Property. If proceedings are initiated or Borrower receives notice that Borrower
      or the Property is not in compliance with any of the foregoing, Borrower will
      promptly send Lender notice and a copy of the proceeding or violation notice.
      Without limiting Lender’s rights and remedies under Article VI or otherwise, if
      Borrower or the Property is not in compliance with all Laws, Lender may impose
      additional requirements upon Borrower including monetary reserves or financial
      equivalents.

     

    (d)  Zoning
      and Title Matters. Borrower shall not, without Lender’s prior written consent,
      (i) initiate or support any zoning reclassification of the Property or variance
      under existing zoning ordinances; (ii) modify or supplement any of the Permitted
      Encumbrances; (iii) impose any restrictive covenants or encumbrances upon the
      Property; (iv) execute or file any subdivision plat affecting the Property;
      (v)
      consent to the annexation of the Property to any municipality; (vi) permit
      the
      Property to be used by the public or any person in a way that might make a
      claim
      of adverse possession or any implied dedication or easement possible; (vii)
      cause or permit the Property to become a non-conforming use under zoning
      ordinances or any present or future non-conforming use of the Property to be
      discontinued; or (viii) fail to comply or cause compliance with the terms of
      the
      Permitted Encumbrances.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.06  
      Insurance.

     

    (a)  Property
      and Time Element Insurance. Borrower shall maintain or cause its Manager to
      maintain insurance coverage of the types and minimum limits, during the term
      of
      this Instrument, to keep the Property appropriately insured for the benefit
      of
      Borrower and Lender (with Lender named as mortgagee) by (i) an “All Risks of
      Physical Loss” property insurance policy with an agreed amount endorsement for
“full replacement cost” (defined below) without any coinsurance provisions or
      penalties, or the broadest form of coverage available, in an amount sufficient
      to prevent Lender from ever becoming a coinsurer under the policy or Laws,
      and
      with a deductible not to exceed One Hundred Thousand Dollars ($100,000.00)
      for
      all perils and shall not exceed 5% of the insured value of the Property with
      respect to non-Federal flood insurance; (ii) a policy or endorsement insuring
      against acts of terrorism throughout the term of the Loan (including any
      extension terms) on a per occurrence basis in an amount equal to the Terrorism
      Insurance Amount (the “Terrorism
      Insurance Amount”
      shall
      mean an amount equal to the full replacement cost of the Property); (iii) loss
      of rents insurance and business income insurance, as applicable, (A) with loss
      payable to Lender and Borrower as their interest may appear; (B) covering all
      risks required to be covered by the insurance provided for in this
      section;
      and (C)
      which provides that after the physical loss to the Property occurs, the loss
      of
      rents and income, as applicable, will be insured until such rents or income,
      as
      applicable, either return to the same level that existed prior to the loss,
      or
      the expiration of twelve (12) months, whichever first occurs, and
      notwithstanding that the policy may expire prior to the end of such period;
      and
      (D) which contains an extended period of indemnity endorsement which provides
      that after the physical loss to the Improvements and Personal Property has
      been
      repaired, the continued loss of income will be insured until such income either
      returns to the same level it was at prior to the loss, or the expiration of
      twelve (12) months from the date that such Property is repaired or replaced
      and
      operations are resumed, whichever first occurs, and notwithstanding that the
      policy may expire prior to the end of such period. The amount of such loss
      of
      rents and business income insurance, as applicable, shall be determined prior
      to
      the date hereof and at least once each year thereafter based on Borrower's
      reasonable estimate of the gross income less non-continuing expenses from the
      Property for the succeeding period of coverage required above.; (v) flood
      insurance if any part of any structure or improvement comprising the Property
      is
      located in an area identified by the Federal Emergency Management Agency as
      an
      area federally designated a "100 year flood plain" and (a) flood insurance
      is
      generally available at reasonable premiums and in such amount as generally
      required by Lender for similar properties or (b) if not so available from a
      private carrier, from the federal government at commercially reasonable premiums
      to the extent available.; (vi) a policy or endorsement covering against damage
      or loss from (A) sprinkler system leakage and (B) boilers, boiler tanks, HVAC
      systems, heating and air-conditioning equipment, pressure vessels, auxiliary
      piping, and similar apparatus, in an amount generally available at reasonable
      premiums and generally required by Lender for similar properties; (vii) during
      the period of any construction, repair, restoration, or replacement of the
      Property, a standard builder’s risk policy with extended coverage in an amount
      at least equal to the full replacement cost of such Property; and (viii) a
      policy or endorsement covering against damage or loss by earthquake in the
      amounts reasonably required by Lender; (ix) if the Property constitutes a legal
      non-conforming use, an ordinance of law coverage endorsement which contains
      coverage for the (A) undamaged portion of building, (B) demolition costs, and
      (C) increased cost of construction, covering the Property in an amount not
      less
      than coverage (A) value included to full building limit, and coverage (B) and
      (C) a combined per occurrence limit of not less than $25 million. “Full
      replacement cost”
shall
      mean an amount equal to one hundred percent (100%) of the actual replacement
      cost of each property without allowance for depreciation (exclusive of the
      cost
      of excavations, foundations, footings underground utilities, and value of land)
      subject to Borrower's best efforts to obtain such limits at commercially
      reasonable pricing as approved by Lender and Borrower. Full replacement cost
      will be determined, at Borrower’s expense, periodically (but at least once every
      three (3) years) by or for the insurance company conducted by an appraiser
      experienced in valuing properties of similar types, engineer, architect, or
      contractor acceptable to Lender.

     

    (b)  Liability
      and Other Insurance. Borrower shall maintain or cause Manager to maintain
      commercial general liability insurance with per occurrence limits of $1,000,000,
      and a general aggregate limit of $2,000,000, with an excess/umbrella liability
      policy of not less than $10,000,000 per occurrence and annual aggregate covering
      Borrower, with Lender named as an additional insured, against claims for bodily
      injury or death or property damage occurring in, upon, or about the Property.
      In
      addition to any other requirements, such commercial general liability and
      excess/umbrella liability insurance shall provide insurance against acts of
      terrorism, or such coverages shall be provided by separate policies or
      endorsements. The insurance policies shall also include operations and blanket
      contractual liability coverage which insures contractual liability under the
      indemnifications set forth in Section 8.02 below (but such coverage or the
      amount thereof shall in no way limit such indemnifications). Upon request,
      Borrower shall or cause Manager to also carry additional insurance or additional
      amounts of insurance covering Borrower or the Property as Lender shall
      reasonably require with thirty (30) days written notice to Borrower.

     

    (c)  Form
      of
      Policy. All insurance required under this Section shall be fully paid for,
      non-assessable, and the policies shall contain such provisions, endorsements,
      and expiration dates as Lender shall reasonably require. The policies shall
      be
      issued by insurance companies authorized to do business in the Property State,
      approved by Lender, and must have and maintain a current financial strength
      rating of “A-, VII” (or higher) from A.M. Best or equivalent (or if a rating by
      A.M. Best is no longer available, a similar rating from a similar or successor
      service). In addition, all policies shall (i) include a standard mortgagee
      clause, without contribution, in the name of Lender, (ii) provide that they
      shall not be canceled, amended, or materially altered (including reduction
      in
      the scope or limits of coverage) without at least thirty (30) days’ prior
      written notice to Lender except in the event of cancellation for non-payment
      of
      premium, in which case only ten (10) days’ prior written notice will be given to
      Lender, and (iii) include a waiver of subrogation clause substantially
      equivalent to the following: “The Company may require from the Insured an
      assignment of all rights of recovery against any party for loss to the extent
      that payment therefor is made by the Company, but the Company shall not acquire
      any rights of recovery which the Insured has expressly waived prior to loss,
      nor
      shall such waiver affect the Insured’s rights under this policy”.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  Original
      Policies. Borrower shall deliver to Lender on or prior to the Closing Date
      and
      at the expiration date of the policy(ies) thereafter (i) certificates evidencing
      coverage under all policies (and renewals) required under this Section and
      (ii)
      satisfactory evidence of payment of all premiums on such policies If original
      and renewal policies are unavailable or if coverage is under a blanket policy,
      Borrower shall deliver to Lender certificates evidencing coverage under all
      policy(ies) required under this Section and, upon request of Lender, certified
      copies of the original policies.

     

    (e)  General
      Provisions. Borrower shall not carry separate or additional insurance concurrent
      in form or contributing in the event of loss with that required under this
      Section unless endorsed in favor of Lender as per this Section and approved
      by
      Lender in all respects. The insurance coverage required under this Section
      may
      be effected under a blanket policy(ies) covering the Property and other
      properties and assets not constituting a part of the Property; provided that
      any
      such blanket policy shall specify, except in the case of public liability
      insurance, the portion of the total coverage of such policy that is allocated
      to
      the Property, and any sublimits in such blanket policy applicable to the
      Property, which amounts shall not be less than amounts required pursuant to
      this
      Section and which shall in any case comply in all other respects with the
      requirements of this Section. No approval by Lender of any insurer shall be
      construed to be a representation, certification, or warranty of its solvency.
      No
      approval by Lender as to the amount, type, or form of any insurance shall be
      construed to be a representation, certification, or warranty of its sufficiency.
      Borrower shall comply with all insurance requirements and shall not cause or
      permit any condition to exist which would be prohibited by any insurance
      requirement or would invalidate the insurance coverage on the Property.

     

    (f)  Waiver
      of
      Subrogation. A waiver of subrogation shall be obtained by Borrower from its
      insurers and, consequently, Borrower for itself, and on behalf of its insurers,
      hereby waives and releases any and all right to claim or recover against Lender,
      its officers, employees, agents and representatives, for any loss of or damage
      to Borrower, other Persons, the Property, Borrower’s property or the property of
      other Persons from any cause required to be insured against by the provisions
      of
      this Instrument or otherwise insured against by Borrower.

     

    Section
      3.07  
      Damage and Destruction of Property

     

    (a)  Borrower’s
      Obligations. If any damage to, loss, or destruction of the Property occurs
      (any
“Damage”),
      (i)
      Borrower shall promptly notify Lender and take all necessary steps to preserve
      any undamaged part of the Property and (ii) if the insurance proceeds are made
      available for Restoration (defined below) (but regardless of whether any
      proceeds are sufficient for Restoration), Borrower shall promptly commence
      and
      diligently pursue to completion the restoration, replacement, and rebuilding
      of
      the Property as nearly as possible to its value and condition immediately prior
      to the Damage or a Taking (defined below) in accordance with plans and
      specifications approved by Lender (“Restoration”).
      Borrower shall comply with other reasonable requirements established by Lender
      to preserve the security under this Instrument.

     

    (b)  Lender’s
      Rights. If any Damage occurs and (i) the Restoration costs for which Damage
      equal or exceed $5,000,000 in Lender’s reasonable determination (“Major
      Restoration”)
      or
      (ii) at any time following an Event of Default under the Documents, and some
      or
      all of the Damage is covered by insurance, then (i) Lender may, but is not
      obligated to, make proof of loss if not made promptly by Borrower and Lender
      is
      authorized and empowered by Borrower to settle, adjust, or compromise any claims
      for the Damage; (ii) each insurance company concerned is authorized and directed
      to make payment directly to Lender for the Damage; and (iii) Lender may apply
      the insurance proceeds in any order it determines (1) to reimburse Lender for
      all Costs (defined below) related to collection of the proceeds and (2) subject
      to Section 3.07(c) and at Lender’s option, to (A) payment (without any
      Prepayment Premium) of all or part of the Obligations, whether or not then
      due
      and payable, in the order determined by Lender (provided that if any Obligations
      remain outstanding after this payment, the unpaid Obligations shall continue
      in
      full force and effect and Borrower shall not be excused in the payment thereof);
      (B) the cure of any default under the Documents; or (C) the Restoration. Any
      insurance proceeds held by Lender shall be held without the payment of interest
      thereon. If Borrower receives any insurance proceeds for the Damage which
      constitutes a Major Restoration, or promptly upon Lender’s request following on
      Event of Default under the Documents, Borrower shall promptly deliver the
      proceeds to Lender. Notwithstanding anything in this Instrument or at law or
      in
      equity to the contrary, none of the insurance proceeds paid to Lender shall
      be
      deemed trust funds and Lender may dispose of these proceeds as provided in
      this
      Section. Borrower expressly assumes all risk of loss from any Damage, whether
      or
      not insurable or insured against.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Application
      of Proceeds to Restoration. All insurance proceeds received by Borrower either
      directly or through Lender shall be used and applied by Borrower in strict
      accordance with the requirements of this Instrument and the Documents.
      Notwithstanding anything to the contrary herein, if at any time (i) Lender
      reasonably determines Borrower has failed, for any reason, to use and apply
      any
      insurance proceeds in strict according with the Indenture or (ii) an Event
      of
      Default occurs under the Documents, then, at Lender’s sole election, Lender may
      exercise all rights set forth in this Instrument with respect to any and all
      Damage and insurance proceeds regardless of whether such Damage gives rise
      to a
      Major Restoration, as defined above. Lender shall make the Net Proceeds (defined
      below) available to Borrower for Restoration if: (i) there shall then be no
      Event of Default; (ii) Lender shall be satisfied, in its reasonable
      determination, that Restoration can and will be completed within one (1) year
      after the Damage occurs and at least one (1) year prior to the maturity of
      the
      Note and Leases which are terminated or terminable as a result of the Damage
      cover an aggregate of less than ten percent (10%) of the total rentable square
      footage contained in the Property at the closing of the Loan or such Tenants
      agree in writing to continue their Leases, as applicable; (iii) Borrower shall
      have entered into a general construction contract acceptable in all respects
      to
      Lender for Restoration, which contract must include provision for retainage
      of
      not less than ten percent (10%) until final completion of the Restoration;
      and
      (iv) in Lender’s reasonable judgment, after Restoration has been completed, the
      net cash flow of the Property will be sufficient to cover all costs and
      operating expenses of the Property, including payments due and reserves required
      under the Documents. Notwithstanding any provision of this Instrument to the
      contrary, Lender shall not be obligated to make any portion of the Net Proceeds
      available for Restoration unless, at the time of the disbursement request,
      Lender has determined in its reasonable discretion that (y) Restoration can
      be
      completed at a cost which does not exceed the aggregate of the remaining Net
      Proceeds and any funds deposited with Lender by Borrower (“Additional
      Funds”)
      and
      (z) the aggregate of any loss of rental income insurance proceeds which the
      carrier has acknowledged to be payable (“Rent
      Loss Proceeds”)
      and
      any funds deposited with Lender by Borrower are sufficient to cover all costs
      and operating expenses of the Property, including payments due and reserves
      required under the Documents.

     

    (d)  Disbursement
      of Proceeds. If Lender elects or is required to make insurance proceeds
      available for Restoration, Lender shall, through a disbursement procedure
      established by Lender, periodically make available to Borrower in installments
      the net amount of all insurance proceeds received by Lender after deduction
      of
      all costs and expenses incurred by Lender in connection with the collection
      and
      disbursement of such proceeds (“Net
      Proceeds”)
      and,
      if any, the Additional Funds. All insurance proceeds received directly by
      Borrower and all amounts periodically disbursed to Borrower by Lender shall
      be
      applied by Borrower to the amounts currently due under the construction contract
      for Restoration and Lender’s receipt of (i) appropriate lien waivers, (ii) a
      certification of the percentage of Restoration completed by an architect or
      engineer acceptable to Lender, and (iii) title insurance protection against
      materialmen’s and mechanic’s liens. At Lender’s election, the disbursement of
      funds may be handled by a disbursing agent selected by Lender, and such agent’s
      reasonable fees and expenses shall be paid by Borrower. The Net Proceeds, Rent
      Loss Proceeds, and any Additional Funds shall constitute additional security
      for
      the Loan and Borrower shall execute, deliver, file and/or record, at its
      expense, such instruments as Lender requires to grant to Lender a perfected,
      first-priority security interest in these funds. If the Net Proceeds are made
      available for Restoration and (x) Borrower refuses or fails to complete the
      Restoration, (y) an Event of Default occurs, or (z) the Net Proceeds or
      Additional Funds are not applied to Restoration, then any undisbursed portion
      may, at Lender’s option, be applied to the Obligations in any order of priority,
      and any application to principal shall be deemed a voluntary prepayment subject
      to the Prepayment Premium.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.08  
      Condemnation

     

    (a)  Borrower’s
      Obligations. Borrower will promptly notify Lender of any threatened or
      instituted proceedings for the condemnation or taking by eminent domain of
      the
      Property including any change in any street (whether as to grade, access, or
      otherwise)(a “Taking”).
      Borrower shall, at its expense, (i) diligently prosecute these proceedings,
      (ii)
      deliver to Lender copies of all papers served in connection therewith, and
      (iii)
      with respect to any condemnation in an amount equal to or greater than
      $5,000,000 ( “Major
      Condemnation”)
      and,
      upon Lender’s request, at any time following on Event of Default under the
      Documents, consult and cooperate with Lender in the handling of these
      proceedings. No settlement of any Major Condemnation or any proceeding following
      on Event of Default under the Documents shall be made by Borrower without
      Lender’s prior written consent, which consent shall not be unreasonably withheld
      or delayed. Lender may participate in the proceedings (but shall not be
      obligated to do so) respecting any Major Condemnation and respecting any Taking
      at any time following an Event of Default under the Documents, and Borrower
      will
      sign and deliver all instruments requested by Lender to permit this
      participation.

     

    (b)  Lender’s
      Rights to Proceeds. All condemnation awards, judgments, decrees, or proceeds
      of
      sale in lieu of condemnation (“Award”)
      are
      assigned and shall be paid to Lender. Borrower authorizes Lender to collect
      and
      receive them, to give receipts for them, to accept them in the amount received
      without question or appeal, and/or to appeal any judgment, decree, or award.
      Borrower will sign and deliver all instruments requested by Lender to permit
      these actions.

     

    (c)  Application
      of Award. Lender shall have the right to apply any Award, subject to Section
      3.08(d), as per Section 3.07 for insurance proceeds held by Lender, including
      the waiver of Prepayment Premium. If Borrower receives any Award, Borrower
      shall
      promptly deliver them to Lender. Notwithstanding anything in this Instrument
      or
      at law or in equity to the contrary, none of the Award paid to Lender shall
      be
      deemed trust funds and Lender may dispose of these proceeds as provided in
      this
      Section.

     

    (d)  Application
      of Award to Restoration. With respect to any portion of the Award that is not
      for loss of value or property, Lender shall permit the application of the Award
      to Restoration in accordance with the provisions of Section 3.07 if: (i) no
      more
      than (A) twenty percent (20%) of the gross area of the Improvements or (B)
      ten
      percent (10%) of the parking spaces is affected by the Taking or, if more than
      ten percent (10%) of the parking spaces is affected by the Taking, the parking
      nonetheless remains in compliance, in Lender’s reasonable determination, with
      all zoning codes, other governmental regulations, and applicable conditions,
      covenants, restrictions and/or easements affecting the Property; (ii) the amount
      of the loss does not exceed twenty percent (20%) of the original amount of
      the
      Note; (iii) the Taking does not affect access to the Property from any public
      right-of-way; (iv) there is no Event of Default at the time of application;
      (v)
      after Restoration, the Property and its use will be in compliance with all
      Laws;
      (vi) in Lender’s reasonable judgment, Restoration is practical and can be
      completed within one (1) year after the Taking and at least one (1) year prior
      to the maturity of the Note; and (vii) the Major Tenants (defined in Section
      3.21(c) below) agree in writing to continue their Leases without abatement
      of
      rent. Upon an Event of Default under the Documents or if any portion of the
      Award that is (i) for loss of value or property or (ii) in excess of the cost
      of
      any Restoration permitted above, Lender may, in its sole discretion, be applied
      against the Obligations or paid to Borrower.

     

    (e)  Effect
      on
      the Obligations. Notwithstanding any Taking, Borrower shall continue to pay
      and
      perform the Obligations as provided in the Documents. Any reduction in the
      Obligations due to application of the Award shall take effect only upon Lender’s
      actual receipt and application of the Award to the Obligations. If the Property
      shall have been foreclosed, sold pursuant to any power of sale granted
      hereunder, or transferred by deed-in-lieu of foreclosure prior to Lender’s
      actual receipt of the Award, Lender may apply the Award received to the extent
      of any deficiency upon such sale and Costs incurred by Lender in connection
      with
      such sale.

     

    Section
      3.09  
      Liens and Liabilities.
      Borrower shall pay, bond, or otherwise discharge all claims and demands of
      mechanics, materialman, laborers, and others which, if unpaid, might result
      in a
      lien or encumbrance on the Property or the Rents (collectively, “Liens”)
      and
      Borrower shall, at its sole expense, do everything necessary to preserve the
      lien and security interest created by this Instrument and its priority. Nothing
      in the Documents shall be deemed or construed as constituting the consent or
      request by Lender, express or implied, to any contractor, subcontractor,
      laborer, mechanic or materialman for the performance of any labor or the
      furnishing of any material for any improvement, construction, alteration, or
      repair of the Property. Borrower further agrees that Lender does not stand
      in
      any fiduciary relationship to Borrower. All contributions made, directly or
      indirectly, to Borrower by or on behalf of any of its partners, members,
      principals or any party related to such parties shall be treated as equity
      and
      shall be subordinate and inferior to the rights of Lender under the
      Documents.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.10  
      Tax and Insurance Deposits.
      Upon
      Lender’s request, following an Event of Default under any Document, Borrower
      shall make monthly deposits (“Deposits”)
      with
      Lender equal to one-twelfth (1/12) of the annual Assessments (except for income
      taxes, franchise taxes, ground rents, maintenance charges and utility charges)
      and the premiums for insurance required under Section 3.06 (the “Insurance
      Premiums”)
      together with amounts sufficient to pay these items thirty (30) days before
      they
      are due (collectively, the “Impositions”).
      Lender shall estimate the amount of the Deposits until ascertainable. At that
      time, Borrower shall promptly deposit any deficiency. Borrower shall promptly
      notify Lender of any changes to the amounts, schedules and instructions for
      payment of the Impositions. Borrower authorizes Lender or its agent to obtain
      the bills for Assessments directly from the appropriate tax or governmental
      authority. All Deposits are pledged to Lender and shall constitute additional
      security for the Obligations. The Deposits shall be held by Lender without
      interest (except to the extent required under Laws) and may be commingled with
      other funds. If (i) there is no Event of Default at the time of payment, (ii)
      Borrower has delivered bills or invoices to Lender for the Impositions in
      sufficient time to pay them when due, (iii) the Deposits are sufficient to
      pay
      the Impositions or Borrower has deposited the necessary additional amount,
      then
      Lender shall pay the Impositions prior to their due date. Any Deposits remaining
      after payment of the Impositions shall, at Lender’s option, be credited against
      the Deposits required for the following year or paid to Borrower. If an Event
      of
      Default occurs, the Deposits may, at Lender’s option, be applied to the
      Obligations in any order of priority. Any application to principal shall be
      deemed a voluntary prepayment subject to the Prepayment Premium. Borrower shall
      not claim any credit against the principal and interest due under the Note
      for
      the Deposits. Upon an assignment or other transfer of this Instrument, Lender
      may pay over the Deposits in its possession to the assignee or transferee and
      then it shall be completely released from all liability with respect to the
      Deposits. Borrower shall look solely to the assignee or transferee with respect
      thereto. This provision shall apply to every transfer of the Deposits to a
      new
      assignee or transferee. Subject to Article V, a transfer of title to the
      Property shall automatically transfer to the new owner the beneficial interest
      in the Deposits. Upon full payment and satisfaction of this Instrument or,
      at
      Lender’s option, at any prior time, the balance of the Deposits in Lender’s
      possession shall be paid over to the record owner of the Land and no other
      party
      shall have any right or claim to the Deposits. Lender may transfer all its
      duties under this Section to such servicer or financial institution as Lender
      may periodically designate and Borrower agrees to make the Deposits to such
      servicer or institution.

     

    Section
      3.11  
      ERISA

     

    (a)  Borrower
      understands and acknowledges that, as of the date hereof, the source of funds
      from which Lender is extending the Loan will include one or more of the
      following accounts: (i) an “insurance company general account,” as that term is
      defined in Prohibited Transaction Class Exemption (“PTE”)
      95-60
      (60 Fed. Reg. 35925 (Jul. 12, 1995)), as to which Lender meets the conditions
      for relief in Sections I and IV of PTE 95-60; (ii) pooled and single client
      insurance company separate accounts, which are subject to the provisions of
      the
      Employee Retirement Income Security Act of 1974, as amended (“ERISA”); and (iii)
      one or more insurance company separate accounts maintained solely in connection
      with fixed contractual obligations of the insurance company, under which the
      amounts payable or credited to the plan are not affected in any manner by the
      investment performance of the separate account.

     

    (b)  Borrower
      represents and warrants to Lender that (i) Borrower is not an “employee benefit
      plan” as defined in Section 3(3) of ERISA, or a “governmental plan” within the
      meaning of Section 3(32) of ERISA; (ii) Borrower is not a “party in interest”,
      as defined in Section 3(14) of ERISA, other than as a service provider or an
      affiliate of a service provider, to any employee benefit plan that has invested
      in a separate account described in Section 3.11(a)(ii) above, from which funds
      have been derived to make the Documents, or if so, the execution of the
      Documents and making of the Loan thereunder do not constitute nonexempt
      prohibited transactions under ERISA; (iii) Borrower is not subject to state
      statutes regulating investments and fiduciary obligations with respect to
      governmental plans, or if subject to such statutes, is not in violation thereof
      in the execution of the Documents and the making of the Loan thereunder; (iv)
      the assets of the Borrower do not constitute “plan assets” of one or more plans
      within the meaning of 29 C.F.R. Section 2510.3-101; and (v) one or more of
      the
      following circumstances is true: (1) equity interests in Borrower are publicly
      offered securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
      (2) less than twenty-five percent (25%) of all equity interests in Borrower
      are
      held by “benefit plan investors” within the meaning of 29 C.F.R. Section
      2510.3-101(f)(2); or (3) Borrower qualifies as an “operating company,” a
“venture capital operating company” or a “real estate operating company” within
      the meaning of 29 C.F.R. Section 2510.3-101(c), (d) or (e), respectively.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)  Borrower
      shall deliver to Lender such certifications and/or other evidence periodically
      requested by Lender, in its sole discretion, to verify the representations
      and
      warranties in Section 3.11(b) above. Failure to deliver these certifications
      or
      evidence, breach of these representations and warranties, or consummation of
      any
      transaction which would cause this Instrument or any exercise of Lender’s rights
      under this Instrument to (i) constitute a non-exempt prohibited transaction
      under ERISA or (ii) violate ERISA or any state statute regulating governmental
      plans (collectively, a “Violation”), shall be an Event of Default.
      Notwithstanding anything in the Documents to the contrary, no sale, assignment,
      or transfer of any direct or indirect right, title, or interest in Borrower
      or
      the Property (including creation of a junior lien, encumbrance or leasehold
      interest) shall be permitted which would, in Lender’s opinion, negate Borrower’s
      representations in this Section or cause a Violation. At least fifteen (15)
      days
      before consummation of any of the foregoing, Borrower shall obtain from the
      proposed transferee or lienholder (i) a certification to Lender that the
      representations and warranties of this Section 3.11 will be true after
      consummation and (ii) an agreement to comply with this Section
      3.11.

     

    Section
      3.12  
      Environmental Representations, Warranties, and
      Covenants

     

    (a)  Environmental
      Representations and Warranties.
      Borrower represents and warrants, to the best of Borrower’s knowledge and
      additionally based upon the environmental site assessment report of the Property
      (the “Environmental
      Report”),
      that
      except as fully disclosed in the Environmental Report delivered to and approved
      by Lender prior to the date hereof: (i) there are no Hazardous Materials
      (defined below) or underground storage tanks affecting the Property
      (“affecting
      the Property”
shall
      mean “in, on, under, stored, used or migrating to or from the Property”) except
      for (A) routine office, cleaning, janitorial and other materials and supplies
      necessary to operate the Property for its current use and (B) Hazardous
      Materials that are (1) in compliance with Environmental Laws (defined below),
      (2) have all required permits, and (3) are in only the amounts necessary to
      operate the Property; (ii) there are no past, present or threatened Releases
      (defined below) of Hazardous Materials in violation of any Environmental Law
      affecting the Property; (iii) there is no past or present non-compliance with
      Environmental Laws or with permits issued pursuant thereto; (iv) Borrower does
      not know of, and has not received, any written or oral notice or communication
      from any person relating to Hazardous Materials affecting the Property; and
      (v)
      Borrower has provided to Lender, in writing, all information relating to
      environmental conditions affecting the Property known to Borrower or contained
      in Borrower’s files. “Environmental
      Law”
means
      any present and future federal, state and local laws, statutes, ordinances,
      rules, regulations, standards, policies and other government directives or
      requirements, as well as common law, that apply to Borrower or the Property
      and
      relate to Hazardous Materials including the Comprehensive Environmental
      Response, Compensation and Liability Act and the Resource Conservation and
      Recovery Act. “Hazardous
      Materials”
shall
      mean petroleum and petroleum products and compounds containing them, including
      gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
      materials; polychlorinated biphenyls (“PCBs”)
      and
      compounds containing them; lead and lead-based paint; Microbial Matter,
      infectious substances, asbestos or asbestos-containing materials in any form
      that is or could become friable; underground or above-ground storage tanks,
      whether empty or containing any substance; any substance the presence of which
      on the Property is prohibited by any federal, state or local authority; any
      substance that requires special handling; and any other material or substance
      now or in the future defined as a “hazardous substance,” “hazardous material,”
“hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or
“pollutant” within the meaning of any Environmental Law. “Release”
of
      any
      Hazardous Materials includes any release, deposit, discharge, emission, leaking,
      spilling, seeping, migrating, pumping, pouring, escaping, dumping, disposing
      or
      other movement of Hazardous Materials. “Microbial
      Matter”
shall
      mean the presence of fungi or bacterial matter which reproduces through the
      release of spores or the splitting of cells, including, but not limited to,
      mold, mildew and viruses, whether or not such Microbial Matter is
      living.

     

    (b)  Environmental
      Covenants.
      Borrower covenants and agrees that: (i) all use and operation of the Property
      shall be in compliance with all Environmental Laws and required permits; (ii)
      there shall be no Releases of Hazardous Materials affecting the Property; (iii)
      there shall be no Hazardous Materials affecting the Property except (A) routine
      office, cleaning and janitorial supplies, (B) in compliance with all
      Environmental Laws, (C) with all required permits, and (D) (1) in only the
      amounts necessary to operate the Property or (2) fully disclosed to and approved
      by Lender in writing; (iv) Borrower shall keep the Property free and clear
      of
      all liens and encumbrances imposed by any Environmental Laws due to any act
      or
      omission by Borrower or any person (the “Environmental
      Liens”);
      (v)
      Borrower shall, at its sole expense, fully and expeditiously cooperate in all
      activities in Section 3.12(c) including providing all relevant information
      and
      making knowledgeable persons available for interviews; (vi) Borrower shall,
      at
      its sole expense,

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
(A)
        perform any environmental site assessment or other investigation of
        environmental conditions at the Property upon Lender’s request based on Lender’s
        reasonable belief that the Property is not in compliance with all Environmental
        Laws, (B) share with Lender the results and reports and Lender and the
        Indemnified Parties (defined below) shall be entitled to rely on such results
        and reports, and (C) complete any remediation of Hazardous Materials affecting
        the Property or other actions required by any Environmental Laws; (vii) Borrower
        shall not allow any Tenant or other user of the Property to violate any
        Environmental Law; (viii) Borrower shall promptly notify Lender in writing
        after
        it becomes aware of (A) the presence, Release, or threatened Release of
        Hazardous Materials affecting the Property, (B) any non-compliance of the
        Property with any Environmental Laws, (C) any actual or potential Environmental
        Lien, (D) any required or proposed remediation of environmental conditions
        relating to the Property, or (E) any written or oral communication or notice
        from any person relating to Hazardous Materials, and (ix) if at any time
        Lender
        reasonably requires any or all of an Asbestos Operation and Maintenance Plan,
        Lead Paint Abatement Plan, Storage Tank Closure and Removal Plan, Mold Operation
        and Maintenance Plan, and any other Operation and Maintenance Plan
        (collectively, the “O&M
        Plan”)
        be in
        effect (or required to be implemented by Lender), then Borrower shall, at
        its
        sole expense, implement, continue, and complete, as applicable, the O&M Plan
        (with any modifications required to comply with applicable Laws) until payment
        and full satisfaction of the Obligations. While any portion of the Loan is
        outstanding, upon the request of Lender, which request shall be made upon
        Lender’s reasonable determination that the governing law or applicable facts or
        circumstances respecting the Property warrant updated lead paint, asbestos,
        tank
        and/or mold survey(s) of the Property, at Borrower’s sole cost and expense,
        Borrower shall conduct such updated survey(s) of the Property. Each such
        survey
        shall be conducted by a consultant reasonably acceptable to Lender who shall
        determine the condition of the lead paint, asbestos, tank and/or mold at
        the
        Property, and whether the applicable O&M Plan should be revised or any other
        measures taken to ensure the continued safe condition of the Property. Borrower
        shall deliver to Lender a copy of such survey and shall enter into the revised
        O&M Plan, and Borrower shall certify to Lender in writing, no later than
        thirty (30) days after Borrower’s receipt of such survey, that Borrower has
        complied with all of the recommendations of the consultant contained in the
        survey and the revised O&M Plan. Any failure of Borrower to perform its
        obligations under this Section 3.12 shall constitute bad faith waste of the
        Property.

    

    
       

       

    

    (c)  Lender’s
      Rights.
      Lender
      and any person designated by Lender may enter the Property to assess the
      environmental condition of the Property and its use including (i) conducting
      any
      environmental assessment or audit (the scope of which shall be determined by
      Lender) and (ii) taking samples of soil, groundwater or other water, air, or
      building materials, and conducting other invasive testing at all reasonable
      times when (A) an Event of Default has occurred and is continuing under the
      Documents, (B) Lender reasonably believes that a Release has occurred or the
      Property is not in compliance with all Environmental Laws, or (C) the Loan
      is
      being considered for sale. Borrower shall cooperate with and provide access
      to
      Lender and such person, and Lender shall endeavor to conduct such entry,
      inspections and tests in a manner that shall not unreasonably interfere with
      the
      operation of the Property. 

     

    Section
      3.13  
      Electronic Payments.
      Unless
      directed otherwise in writing by Lender, all payments due under the Documents
      shall be paid, at Borrower’s option, either (i) by wire transfer to the loan
      servicing account or accounts selected by Lender, or (ii) by Electronic Fund
      Transfer debit entries to Borrower's account at an Automated Clearing House
      member bank satisfactory to Lender or by similar electronic transfer process
      selected by Lender. If Borrower elects to pay by Electronic Fund Transfer,
      the
      following additional provisions shall apply: (a) each payment due under the
      Loan
      Documents shall be initiated by Lender through the Automated Clearing House
      network (or similar electronic process) for settlement on the due date for
      the
      payment, (b) Borrower shall, at Borrower's sole cost and expense, direct its
      bank in writing to permit such Electronic Fund Transfer debit entries (or
      similar electronic transfer) to be made by Lender, (c) prior to each payment
      due
      date under the Loan Documents, Borrower shall deposit and/or maintain sufficient
      funds in Borrower's account to cover each debit entry, and (d) any charges
      or
      costs, if any, by Borrower's bank for the foregoing shall be paid by
      Borrower.

     

    Section
      3.14  
      Inspection.
      Borrower shall allow Lender and any person designated by Lender to enter upon
      the Property and conduct tests or inspect the Property at all reasonable times.
      Borrower shall assist Lender and such person in effecting said inspection,
      and
      Lender shall endeavor to conduct such entry, inspections and tests in a manner
      that shall not unreasonably interfere with the operation of the Property.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.15  
      Records, Reports, and Audits

     

    (a)  Records
      and Reports.
      Borrower shall maintain complete and accurate books and records with respect
      to
      all operations of or transactions involving the Property. Annually, Borrower
      shall furnish Lender financial statements (which financial statements may be
      consolidated statements, provided they set forth the financial condition of
      Borrower and the operating information of the Property in detail reasonably
      satisfactory to Lender) for the most current fiscal year (including a schedule
      of all related Obligations and contingent liabilities) for (i) Borrower, (ii)
      any general partner of Borrower, (iii) the Guarantors and any other guarantors
      or sureties (if any) of the Note, to the extent not readily available in the
      public domain, and (iv) any Major Tenants, to the extent available through
      commercially reasonable efforts by Borrower. Annually (or quarterly upon
      Lender’s reasonable request), Borrower shall furnish Lender (i) operating
      statements showing cash flow and capital expenditures for the Property including
      income and expenses (before and after Obligations service), major capital
      improvements, a schedule showing tenant
      sales and percentage rent for retail properties where sales are reported, and
      the average daily rate and average daily occupancy for hotel
      properties;
      (ii)
      copies of paid tax receipts for the Property; (iii) a certified rent roll
      including security deposits held, the expiration of the terms of the Leases,
      and
      identification and explanation of any Tenants in default; (iv) a budget showing
      projected income and expenses (before and after Obligations service) for the
      next twelve (12) month budget period; (v) any
      appraisals of the Property performed during the previous year, and
      (vi)
      upon Lender’s request, (A) a schedule showing the Borrower’s tax basis in the
      Property, (B) the distribution of economic interests in the Property, and (C)
      copies of any other loan documents affecting the Property. 

     

    (b)  Delivery
      of Reports.
      All of
      the reports, statements, and items required under this Section shall be (i)
      certified as being true, correct, and accurate by an authorized person, partner,
      or officer of the delivering party or, at the deliverer’s option, audited by a
      Certified Public Accountant; (ii) satisfactory to Lender in form and substance;
      and (iii) delivered within (A) sixty (60) days after the end of Borrower’s
      fiscal year for annual reports and (B) thirty (30) days after the end of each
      calendar quarter for quarterly reports (if any are reasonably requested by
      Lender). If any one report, statement, or item is not received by Lender on
      its
      due date, a late fee of Five Hundred and No/100 Dollars ($500.00) per month
      shall be due and payable by Borrower. If any one report, statement, or item
      is
      not received by Lender on or before its due date, and Borrower fails to deliver
      the same to Lender within five (5) Business Days following Lender’s written
      request therefore, then Lender may immediately declare an Event of Default
      under
      the Documents. Borrower shall (i) provide Lender with such additional financial,
      management, or other information regarding Borrower, any general partner of
      Borrower, or the Property, as Lender may reasonably request and (ii) upon
      Lender’s request, deliver all items required by Section 3.15 in an electronic
      format (i.e. on computer disks) or by electronic transmission acceptable to
      Lender. 

     

    (c)  Inspection
      of Records.
      Borrower shall allow Lender or any person designated by Lender to examine,
      audit, and make copies of all such books and records and all supporting data
      at
      the place where these items are located at all reasonable times after reasonable
      advance notice; provided that no notice shall be required after any Event of
      Default has occurred under the Documents and during the continuance thereof.
      Borrower shall assist Lender in effecting such examination. Upon five (5) days’
prior notice, Lender may inspect and make copies of Borrower’s or any manager or
      managing member of Borrower’s income tax returns with respect to the Property
      for the purpose of verifying any items referenced in this Section.

     

    Section
      3.16  
      Borrower’s Certificates.
      Within
      ten (10) days after Lender’s request, Borrower shall furnish a written
      certification to Lender and any Investors (defined below) as to (a) the amount
      of the Obligations outstanding; (b) the interest rate, terms of payment, and
      maturity date of the Note; (c) the date to which payments have been paid under
      the Note; (d) whether any offsets or defenses exist against the Obligations
      and
      a detailed description of any listed; (e) whether all Leases are in full force
      and effect and have not been modified (or if modified, setting forth all
      modifications); (f) the date to which the Rents have been paid; (g) whether,
      to
      the best knowledge of Borrower, any defaults exist under the Leases and a
      detailed description of any listed; (h) the security deposit held by Borrower
      under each Lease and that such amount is the amount required under such Lease;
      (i) whether there are any Events of Default (or events which with the passage
      of
      time and/or notice would constitute an Event of Default) under the Documents
      and
      a detailed description of any listed; (j) whether the Documents are in full
      force and effect; and (k) any other matters reasonably requested by Lender
      related to the Leases, the Obligations, the Property, or the Documents. For
      all
      non-residential properties and promptly upon Lender’s request, Borrower shall
      use its best efforts to deliver a written certification to Lender and Investors
      from Tenants specified by Lender that: (a) their Leases are in full force and
      effect; (b) there are no defaults (or events which with the passage of time
      and/or notice would constitute a default) under their Leases or a detailed
      description of any listed; (c) none of the Rents have been paid more than one
      month in advance; (d) there are no offsets or defenses against the Rents or
      a
      detailed description of any listed; and (e) any other matters reasonably
      requested by Lender related to the Leases; provided, however, that Borrower
      shall not have to pay money to a Tenant to obtain such certification, but it
      will deliver a landlord’s certification for any certification it cannot
      obtain.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.17  
      Full Performance Required; Survival of Warranties.
      All
      representations and warranties of Borrower in that certain First Mortgage Loan
      Application between Lender and Borrower dated February 10, 2006 or made in
      connection with the Loan shall survive the execution and delivery of the
      Documents and shall remain continuing warranties, and representations of
      Borrower. 

     

    Section
      3.18  
      Additional Security.
      No
      other security now existing or taken later to secure the Obligations shall
      be
      affected by the execution of the Documents and all additional security shall
      be
      held as cumulative. The taking of additional security, execution of partial
      releases, or extension of the time of payment obligations of Borrower shall
      not
      diminish the effect and lien of this Instrument and shall not affect the
      liability or obligations of any maker or guarantor. Neither the acceptance
      of
      the Documents nor their enforcement shall prejudice or affect Lender’s right to
      realize upon or enforce any other security now or later held by Lender. Lender
      may enforce the Documents or any other security in such order and manner as
      it/either of them may determine in its/their discretion.

     

    Section
      3.19  
      Further Acts.
      Borrower shall take all necessary actions to (i) keep valid and effective the
      lien and rights of Lender under the Documents and (ii) protect the lawful owner
      of the Documents. Promptly upon request by Lender, and at Borrower’s expense,
      Borrower shall execute additional instruments and take such actions as Lender
      reasonably believes are necessary or desirable to (a) maintain or grant Lender
      a
      first-priority, perfected lien on the Property, (b) grant to Lender, to the
      fullest extent permitted by Laws, the right to foreclose on, or transfer title
      to, the Property non judicially, (c) correct any error or omission in the
      Documents, and (d) effect the intent of the Documents, including
      filing/recording the Documents, additional mortgages, financing statements,
      and
      other instruments.

     

    Section
      3.20  
      Capital Lease.
      Borrower shall not, without first obtaining Lender’s written consent in each
      case, enter into any lease for capital goods and/or equipment (each, a “Capital
      Lease”) that, when aggregated with all other Capital Leases for the Property,
      covers goods and/or equipment, which, if purchased, would exceed $1,000,000.00
      in value.

     

    Section
      3.21  
      Other Leases.
      

     

    (a)  With
      respect to all leases of the Property other than the Operating Lease and
      occupancy agreements respecting guest rooms (such leases shall collectively
      be
      referred to herein as “Leases”), Borrower may do the following without Lender’s
      consent, provided Borrower delivers prior written notices thereof to Lender:
      

     

    (i)  terminate
      any Lease (other than the Lease of a Major Tenant); (ii) Borrower may amend
      any
      Lease (other than the Lease of a Major Tenant); and (iii) Borrower may enter
      into new Leases (or extend or renew existing Leases) with third-party tenants
      for premises of 10,000 square feet or less provided each Lease (x) satisfies
      the
      minimum leasing requirements in this Section 3.21(b), and (y) does not give
      the
      tenant any rights (whether in the form of expansion rights, purchase rights,
      rights of first refusal to lease or purchase, or otherwise) relating to property
      which is not part of the Property and/or would require Borrower and/or Lender
      to
      possess or control any property (other than the Property) to honor such rights.
      Except as expressly provided in this Section 3.21(a) (or after obtaining
      Lender's prior written consent), Borrower shall not (1) amend or modify any
      Lease, (2) extend or renew (except in accordance with the existing Lease
      provisions, if any) any Lease (3) terminate or accept the surrender of any
      Lease, (4) enter into any new Lease of the Property, or (5) accept any
      prepayment of rent, termination fee, or any similar payment.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Minimum
      Leasing Requirements: 

     

    (i)  All
      Leases shall be third-party, arm's-length leases.

     

    (ii)  All
      Leases shall satisfy the conditions, standards and requirements under the
      applicable Hotel Management Agreement, which shall mean collectively, the
      Management Agreement dated September 27, 2001, Owner Agreement dated September
      27, 2001 and Recognition Agreement dated April 3, 2006 respecting the Property,
      referred to herein as the “Management
      Agreement”;
      the
      applicable Hotel Franchise Agreement, which shall mean any hotel franchise
      agreement, whether evidenced in a separate franchise agreement or as part of
      a
      Management Agreement affecting the Property and any related software and/or
      hardware licensing, communications and technical support agreements, referred
      to
      herein collectively as the “Hotel
      Franchise Agreement”;
      and
      the Operating Lease.

     

    (c)  The
      tenants under any and all Leases for space consisting of over 10,000 square
      feet
      of rentable area shall be referred
      to herein as “Major
      Tenants.”

     

    (d)  No
      portion of the Property shall be leased to a dry cleaner that uses dry cleaning
      solvents on the Property.

     

    Section
      3.22  
      Inventory Levels.
      At all
      times during the term of the Loan, Borrower shall maintain (or cause the
      Operating Lessee to maintain and pledge the same in full to Lender) inventory
      levels of linens; tableware; kitchen utensils and equipment; and tables, chairs
      and equipment for the Property, which are appropriate for a hotel similar to
      the
      hotel situate on the Property and located in such hotel’s market, as determined
      by Lender in its reasonable judgment, but in no event less than the levels
      required pursuant to the Management Agreement and the Hotel Franchise Agreement
      (if any) respecting the Property.

     

    Section
      3.23  
      Single Purpose Entity.
      Borrower hereby represents, warrants and covenants to Lender that Borrower
      is a
      single-purpose entity whose sole asset is the Property, and whose sole business
      and purpose is to acquire, refurbish, operate, lease, maintain, market, finance,
      sell and otherwise use the Property, and uses incidental thereto. Borrower
      covenants and agrees that, until payment in full of the Obligations, Borrower
      will not, directly or indirectly, take any actions in violation of the
      formation documents or that would otherwise adversely affect the Borrower’s
      existence as a single purpose entity. Specifically, except only to the extent
      required or permitted by the Documents, Borrower has not and shall not do,
      cause, or permit any of the following: (a) engage in any business or activity
      other than to own, operate, finance, develop, manage, lease, maintain, market
      and sell the Property and activities incidental thereto; (b) acquire or own
      any
      material assets other than the Property; (c) except as otherwise permitted
      in
      Article V of this Instrument, merge into or consolidate with any Person or
      dissolve, terminate or liquidate in whole or in part, transfer or otherwise
      dispose of all or substantially all of its assets or change its legal structure,
      without in each case Lender’s consent; (e) make any investment in any Person
      without the consent of Lender; (f) commingle its assets with the assets of
      any
      affiliate of Borrower or any other Person; (g) incur any debt, secured or
      unsecured, direct or contingent (including guaranteeing any obligation), other
      than in the ordinary course of operating the Property, except as provided
      herein; (h) fail to maintain its records, books of account and bank accounts
      separate and apart from those of the affiliates of Borrower or any other Person;
      (i) hold itself out to be responsible for the debts of another Person, except
      as
      provided in the Documents; (j) make any loans or advances to any third party,
      including any affiliate of Borrower, except for distributions; (k) fail to
      file
      its own tax returns or file on a consolidated basis; (l) fail either to hold
      itself out to the public as a legal entity separate and distinct from any other
      Person or to conduct its business solely in its own name in order not
      (i) to mislead others as to the identity with which such other party
      is transacting business, or (ii) to suggest that Borrower is
      responsible for the debts of any third party (including any affiliate of
      Borrower); (m) file or consent to the filing of any petition, either voluntary
      or involuntary, to take advantage of any applicable insolvency, bankruptcy,
      liquidation or reorganization statute, or make an assignment for the benefit
      of
      creditors; (n) share any common logo with or hold itself out as or be considered
      as a department or division of (i) any affiliate of Borrower or
      (ii) any other Person or entity; (o) fail to preserve its existence as an
      entity duly organized, validly existing and in good standing (if applicable)
      under the laws of the jurisdiction of its organization or formation, and
      qualification to do business in the states where the Property is located, if
      applicable, or without the prior written consent of Lender, amend, modify or
      fail to comply with (in any material respect), or terminate the provisions
      of
      the formation documents or similar organizational documents, as the case may
      be;
      (p) fail to pay its debts and liabilities from, and to the extent of, its assets
      as the same shall become due and payable; (q) transact any business with
      affiliates, except on an arm’s-length basis and pursuant to written agreements
      that are terminable at will without the payment of a fee (except as otherwise
      approved by Lender); and (r) fail to maintain adequate capital to the extent
      available from revenues for the normal obligations reasonably foreseeable in
      a
      business of its size and character and in light of its contemplated business
      operations.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV  -
      ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

     

    Section
      4.01  
      Expenses and Advances.
      Borrower shall pay all reasonable appraisal, recording, filing, registration,
      brokerage, abstract, title insurance (including premiums), title searches and
      examinations, surveys and similar data and assurances with respect to title,
      UCC
      search, escrow, attorneys’ (both in-house staff and retained attorneys),
      engineers’, environmental engineers’, environmental testing, and architects’
fees, costs (including travel), expenses, and disbursements incurred by Borrower
      or Lender and reasonable fees charged by Lender in connection with the granting,
      closing, servicing, and enforcement of (a) the Loan and Documents or (b)
      attributable to Borrower as owner of the Property. The term “Costs”
shall
      mean any of the foregoing incurred in connection with (a) any default by
      Borrower under the Documents, (b) the servicing of the Loan, or (c) the
      exercise, enforcement, compromise, defense, litigation, or settlement of any
      of
      Lender’s rights or remedies under the Documents or relating to the Loan or the
      Obligations. If Borrower fails to pay any amounts or perform any actions
      required under the Documents, Lender may (but shall not be obligated to) advance
      sums to pay such amounts or perform such actions. Borrower grants Lender the
      right to enter upon and take possession of the Property to prevent or remedy
      any
      such failure and the right to take such actions in Borrower’s name. No advance
      or performance shall be deemed to have cured a default by Borrower. All (a)
      sums
      advanced by or payable to Lender per this Section or under applicable Laws,
      (b)
      except as expressly provided in the Documents, payments due under the Documents
      which are not paid in full when due, and (c) all Costs, shall: (i) be deemed
      demand obligations, (ii) bear interest at the applicable interest rate specified
      in the Note, which shall be the Default Rate unless prohibited by Laws, until
      paid if not paid on demand, (iii) be part of, together with such interest,
      the
      Obligations , and (iv) be secured by the Documents. Lender, upon making any
      such
      advance, shall also be subrogated to rights of the person receiving such
      advance.

     

    Section
      4.02  
      Subrogation.
      If any
      proceeds of the Note were used to extinguish, extend or renew any indebtedness
      on the Property, then, to the extent of the funds so used, (a) Lender shall
      be
      subrogated to all rights, claims, liens, titles and interests existing on the
      Property held by the holder of such indebtedness and (b) these rights, claims,
      liens, titles and interests are not waived but rather shall (i) continue in
      full
      force and effect in favor of Lender and (ii) are merged with the lien and
      security interest created by the Documents as cumulative security for the
      payment and performance of the Obligations.

     

    ARTICLE
      V  -
      SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY

     

    Section
      5.01  
      Due-on-Sale or Encumbrance.
      It shall
      be an Event of Default and, at the sole option of Lender, Lender may accelerate
      the Obligations and the entire Obligations (including the Prepayment Premium)
      shall become immediately due and payable, if, without Lender’s prior written
      consent (which may be withheld for any or no reason, including the possibility
      of an ERISA violation or the proposed transferee’s failure to agree in writing
      to Lender increasing the interest payable on the Obligations to any rate,
      changing any other terms (including maturity) of the Obligations or Documents,
      or requiring the payment of a transfer fee) any of the following shall
      occur:

     

    (a)  Borrower
      shall sell, convey, assign, transfer, dispose of or be divested of its title
      to,
      convey security title to the Property, mortgage, encumber or cause to be
      encumbered (except for the imposition of mechanics’ or materialmens’ liens) the
      Property or any interest therein, in any manner or way, whether voluntary or
      involuntary (except only as expressly permitted pursuant to the One-Time
      Transfer provision set forth in Section 13 of the Note); or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  in
      the
      event of any merger, consolidation, sale, transfer, assignment, or dissolution
      involving all or substantially all of the assets of Borrower, or any general
      partner of Borrower, except only in connection with a Permitted Transfer
      (defined in Section 5.02 below) or a One Time Transfer pursuant to Section
      13 of
      the Note; or

     

    (c)  in
      the
      event of the assignment, transfer, pledge, voluntary or involuntary sale, or
      encumbrance (or any of the foregoing at one time or over any period of time),
      except only in connection with a Permitted Transfer or Permitted Admission
      (as
      defined in Section 5.03 below), of:

     

    (i)  of
      (1)
      the ownership interests in Borrower, regardless of the type or form of entity
      of
      Borrower, (2) the voting stock or ownership interest of any corporation or
      limited liability company which is, respectively, general partner or managing
      member of Borrower or any corporation or limited liability company directly
      or
      indirectly owning any such corporation or limited liability company, (3) the
      ownership interests of any owner of the beneficial interests of Borrower if
      Borrower is a trust; or

     

    (ii)  any
      general partner’s interest in (1) Borrower, (2) a partnership that is in
      Borrower's chain of ownership and which is derivatively liable for the
      obligations of Borrower, or (3) any general partner that has the legal
      right to participate directly or indirectly in the control of the management
      or
      operations of Borrower; or

     

    (d)  in
      the
      event of the conversion of any general partnership interest in Borrower to
      a
      limited partnership interest, if Borrower is a partnership; or

     

    (e)  in
      the
      event of any change, removal, or resignation of any general partner of Borrower;
      if Borrower is a partnership; or

     

    (f)  in
      the
      event of any change, removal, addition or resignation of a managing member
      (or
      if no managing member, any member) if Borrower is a limited liability company;
      or

     

    (g)  shall
      obtain any unsecured debt except for customary and reasonable short-term trade
      payables obtained and repaid in the ordinary course of business. 

     

    Section
      5.02  
      Permitted Transfer.
      Notwithstanding the terms and conditions of Section 5.01, provided Borrower
      satisfies each and all of the Transfer Conditions (defined below), the following
      transfers shall be deemed “Permitted
      Transfers”
      and
      Borrower shall not be required to obtain Lender’s prior written consent to such
      transfers: (i) a transfer made in accordance with the buy-sell provisions of
      the
      Limited partnership Agreement of CNL HHC Partners, LP, provided the transferee
      shall be CNL (defined below), HHC (defined below), or a CNL/HHC Affiliate
      (defined below) and provided that upon giving effect to the transfer the
      Borrower shall continue to be a CNL/HHC Affiliate; (ii) a transfer of direct
      or
      indirect interests in Borrower or in any entity owning a direct or indirect
      interest in Borrower; provided the transferee shall be a CNL/HHC Affiliate
      and
      provided that upon giving effect to the transfer the Borrower shall continue
      to
      be a CNL/HHC Affiliate; (iii) a transfer of direct or indirect interests in
      CNL
      or HHC in connection with a public offering or a “privatization,” provided that
      upon giving effect to the transfer the Borrower shall continue to be a CNL/HHC
      Affiliate, and (iv) a transfer of direct or indirect interests in CNL or HHC
      Partners in connection with a publicly traded stock or any public offering
      of
      equity ownership interests, provided that upon giving effect to the transfer
      the
      Borrower shall continue to be a CNL/HHC Affiliate.

     

    For
      purposes hereof, the term “Transfer
      Conditions”
means:
      (1)
      there
      shall be no material adverse change in the financial condition of Borrower
      or
      any Key Party (defined below) as a result of the transfer, (2) for each transfer
      made pursuant to (i) and (ii) above, or by CNL pursuant to (iii) above in a
      listing on a national stock exchange, not less than thirty (30) days prior
      to
      the transfer, Borrower shall deliver to Lender (a) a written notice of the
      subject transfer, including a representation and warranty that the transfer
      satisfies the requirements of this Section, and (b) copies of all applicable
      amendments to the organization documents of Borrower or any Key Party that
      is
      the subject of the transfer, if any; (3) the Loan is current and there exists
      no
      Event of Default under any Document, except only a non-monetary default that
      shall be fully cured immediately upon the consummation of the transfer
      contemplated herein, and there exists no other event, which, with the giving
      of
      notice or the passage of time or both, would constitute an Event of Default
      under the Documents; (4) Borrower pays Lender a fee equal to $10,000 for each
      transfer made pursuant to (i), (ii), or (iii) above, and (5) Borrower pays
      all
      third-party costs (including reasonable outside attorneys’ fees) incurred by
      Lender relating to the transfer transaction, if any.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    For
      purposes hereof, the term “CNL”
      shall
      mean CNL Hotels & Resorts, Inc.

     

    For
      purposes hereof, the term “HHC”
      shall
      mean Hilton Hotel Corporation.

     

    For
      purposes hereof, the term “CNL/HHC
      Affiliate”
      shall
      mean an entity in which (a) CNL and/or HHC owns 100% ownership interest,
      directly or indirectly, and
      (b) CNL
      and/or HHC manages and
      controls, directly or indirectly, affairs and decisions of the CNL/HHC
      Affiliate, including, without limitation, the day-to-day
      and major/strategic management, business, operations, accounting and investment
      affairs and decisions.

     

    For
      purposes hereof, the term “Key
      Party”
      shall
      mean Borrower, any general partner or managing member of Borrower, any general
      partner or managing member of any general partner or managing member of
      Borrower, Guarantor, Manager (or other manager) under the Management Agreement,
      and Operating Lessee (or other tenant) under the Operating Lease.

     

    Section
      5.03  
      Permitted Admission.
      Notwithstanding the terms and conditions of Section 5.01, provided Borrower
      satisfies each and all of the Admission Conditions (defined below), the
      following shall be deemed a “Permitted
      Admission”:
      the
      admission of any person or entity that is not CNL, HHC or a CNL/HHC Affiliate
      into CNL HHC Partners, LP or into any entity that has a direct or indirect
      interests in CNL HHC Partners, LP in connection with a publicly traded stock
      transaction or any public or private offering of equity ownership interests,
      provided that upon giving effect to the admission, HHC, CNL or CNL/HHC Affiliate
      shall own a majority interest, directly or indirectly, in Borrower and all
      Key
      Parties and HHC, CNL or CNL/HHC Affiliate shall manage and
      control,
      directly or indirectly, the affairs and decisions of Borrower and all Key
      Parties, including, without limitation, the day-to-day and major/strategic
      management, business, operations, accounting and investment affairs and
      decisions (without limiting the generality of the foregoing, the admitted party
      may have consent rights over new or “elective” transactions, which consent
      rights shall not pertain to the operation of the Property or any rights, duties,
      or obligations under the Documents). 

     

    For
      purposes hereof, the term “Admission
      Conditions”
      means:
      (1)
      there
      shall be no material adverse change in the financial condition Borrower or
      any
      Key Party as a result of the admission, (2) the admitted party is a Person
      which
      has financial capability, creditworthiness, and reputation reasonably approved
      by Lender, (3) not less than thirty (30) days prior to the admission, Borrower
      shall deliver to Lender (a) a written notice of the subject admission, and
      (b)
      copies of all applicable amendments to the organization documents of Borrower
      or
      any Key Party that is the subject of the admission, if any; (4) the Loan is
      current, there exists no Event of Default under any Document except only a
      non-monetary Event of Default that shall be fully cured immediately upon the
      consummation of the admission contemplated in this section, and there exists
      no
      other event, which, with the giving of notice or the passage of time or both,
      would constitute an Event of Default under the Documents, except only an event
      that shall be fully remedied or cured immediately upon the consummation of
      the
      admission contemplated in this section; (5) Borrower pays Lender a fee equal
      to
      $20,000 for each admission, and (6) Borrower pays all third-party costs incurred
      by Lender relating to the admission transaction, if any.

     

    

     

    ARTICLE
      VI  -
      DEFAULTS AND REMEDIES

     

    Section
      6.01  
      Events of Default The following shall be an “Event of
      Default”:

     

    (a)  any
      payment required under any of the Documents is not made when due and such
      failure continues for five (5) days after written notice from Lender; provided,
      however, that if Lender gives one (1) notice of a monetary default within any
      twelve (12) month period, Borrower shall have no further right to any notice
      of
      monetary default during that twelve (12) month period; 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  except
      for defaults listed in the other subsections of this Section 6.01, any failure
      to perform or comply for any reason with any other provision contained in any
      of
      the Documents and such failure is not cured within the applicable grace period
      in that document (if any), or if no grace period is provided in that document,
      within thirty (30) days of Lender providing written notice thereof (the
“Grace
      Period”);
      provided, however, the Grace Period shall be extended for up to an additional
      sixty (60) days (for a total of ninety (90) days from the date of default)
      if
      (i) a cure is immediately commenced and diligently pursued, and Borrower
      delivers (within the Grace Period) to Lender a written request for more time
      to
      cure and (ii) Lender determines in good faith that (1) such default cannot
      be
      cured within the Grace Period but can be cured within ninety (90) days after
      the
      default, (2) no lien or security interest created by the Documents will be
      impaired prior to completion of such cure, and (3) Lender’s immediate exercise
      of any remedies provided hereunder or by law is not necessary for the protection
      or preservation of the Property or Lender’s security interest ;

     

    (c)  if
      any
      representation made (i) in connection with the Loan or Obligations or (ii)
      in
      the Loan application executed by Borrower in connection with the Loan or in
      any
      Documents shall be false or misleading in any material respect; 

     

    (d)  if
      any
      default under Article V occurs;

     

    (e)  if
      any
      Borrower under the Documents shall (i) become insolvent, (ii) make a transfer
      in
      fraud of creditors, (iii) make an assignment for the benefit of its creditors,
      (iv) not be able to pay its debts as such debts become due, or (v) admit in
      writing its inability to pay its debts as they become due;

     

    (f)  if
      any
      bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding,
      or any other proceedings for the relief of debtors, is instituted by or against
      Borrower, and, if instituted against Borrower, is allowed, consented to, or
      not
      dismissed within the earlier to occur of (i) ninety (90) days after such
      institution or (ii) the filing of an order for relief; 

     

    (g)  if
      any of
      the events in Sections 6.01 (e) or (f) shall occur with respect to any (i)
      managing member of Borrower, (ii) general partner of Borrower, or (iii)
      guarantor of payment or performance of any of the Obligations;

     

    (h)  if
      the
      Property shall be taken, attached, or sequestered on execution or other process
      of law in any action against Borrower;

     

    (i)  if
      any
      default occurs under the Environmental Indemnity (defined below) and such
      default is not cured within any applicable grace period in that document;

     

    (j)  if
      any
      default occurs under the Recourse Liabilities Guaranty by Guarantor dated of
      even date herewith and such default is not cured within any applicable grace
      period in that document;

     

    (k)  if
      any
      default occurs under the Lessee Security Agreement related to the Property
      by
      Operating Lessee dated of even date herewith and such default is not cured
      within any applicable grace period in that document;

     

    (l)  if
      Borrower shall fail at any time to obtain, maintain, renew, or keep in force
      the
      insurance policies required by Section 3.06 within ten (10) days after written
      notice;

     

    (m)  if
      Borrower shall be in default under any other mortgage or security agreement
      covering any part of the Property, whether it be superior or junior in lien
      to
      this Instrument, which default is not cured within any applicable grace period
      (if any) set forth in such other mortgage or security agreement;

     

    (n)  if
      any
      claim of priority (except based upon a Permitted Encumbrance) to the Documents
      by title, lien, or otherwise shall be upheld by any court of competent
      jurisdiction or shall be consented to by Borrower; or

     

    (o)  (i)
      the
      consummation by Borrower of any transaction which would cause (A) the Loan
      or
      any exercise of Lender’s rights under the Documents to constitute a non-exempt
      prohibited transaction under ERISA or (B) a violation of a state statute
      regulating governmental plans; (ii) the failure of any representation in Section
      3.11 to be true and correct in all respects; or (iii) the failure of Borrower
      to
      provide Lender with the written certifications required under Section
      3.11.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    It
      is
      expressly acknowledged and agreed by Borrower that any Event of Default under
      any Document shall constitute an immediate Event of Default under this
      Instrument, and Lender shall have no obligation to give and Borrower shall
      have
      no right to receive, any additional notice and/or opportunity to cure said
      Event
      of Default.

     

    Section
      6.02  
      Remedies.
      If an
      Event of Default occurs, Lender or any person designated by Lender may (but
      shall not be obligated to) take any action (separately, concurrently,
      cumulatively, and at any time and in any order) permitted under any Laws,
      without notice, demand, presentment, or protest (all of which are hereby
      waived), to protect and enforce Lender’s rights under the Documents or Laws
      including the following actions:

     

    (a)  accelerate
      and declare the entire unpaid Obligations immediately due and payable, except
      for defaults under Section 6.01 (f), (g), or (h) which shall automatically
      make
      the Obligations immediately due and payable; 

     

    (b)  judicially
      or otherwise, (i) completely foreclose this Instrument or (ii) partially
      foreclose this Instrument for any portion of the Obligations due and the lien
      and security interest created by this Instrument shall continue unimpaired
      and
      without loss of priority as to the remaining Obligations not yet
      due;

     

    (c)  sell
      for
      cash or upon credit the Property and all right, title and interest of Borrower
      therein and rights of redemption thereof, pursuant to power of sale;

     

    (d)  recover
      judgment on the Note either before, during or after any proceedings for the
      enforcement of the Documents and without any requirement of any action being
      taken to (i) realize on the Property or (ii) otherwise enforce the Documents;
      

     

    (e)  seek
      specific performance of any provisions in the Documents; 

     

    (f)  apply
      for
      the appointment of a receiver, custodian, trustee, liquidator, or conservator
      of
      the Property without (i) notice to any person, (ii) regard for (A) the adequacy
      of the security for the Obligations or (B) the solvency of Borrower or any
      person liable for the payment of the Obligations; and Borrower and any person
      so
      liable waives or shall be deemed to have waived the foregoing and any other
      objections to the fullest extent permitted by Laws and consents or shall be
      deemed to have consented to such appointment; 

     

    (g)  with
      or
      without entering upon the Property, (i) exclude Borrower and any person from
      the
      Property without liability for trespass, damages, or otherwise, (ii) take
      possession of, and Borrower shall surrender on demand, all books, records,
      and
      accounts relating to the Property, (iii) give notice to Tenants or any person,
      make demand for, collect, receive, sue for, and recover in its own name all
      Rents and cash collateral derived from the Property; (iv) use, operate, manage,
      preserve, control, and otherwise deal with every aspect of the Property
      including (A) conducting its business, (B) insuring it, (C) making all repairs,
      renewals, replacements, alterations, additions, and improvements to or on it,
      (D) completing the construction of any Improvements in manner and form as Lender
      deems advisable, and (E) executing, modifying, enforcing, and terminating new
      and existing Leases and reservations on such terms as Lender deems advisable
      and
      evicting any Tenants in default; (v) apply the receipts from the Property to
      payment of the Obligations, in any order or priority determined by Lender,
      after
      first deducting all Costs, expenses, and liabilities incurred by Lender in
      connection with the foregoing operations and all amounts needed to pay the
      Impositions and other expenses of the Property, as well as just and reasonable
      compensation for the services of Lender and its attorneys, agents, and
      employees; and/or (vi) in every case in connection with the foregoing, exercise
      all rights and powers of Borrower or Lender with respect to the Property, either
      in Borrower’s name or otherwise; 

     

    (h)  release
      any portion of the Property for such consideration, if any, as Lender may
      require without, as to the remainder of the Property, impairing or affecting
      the
      lien or priority of this Instrument or improving the position of any subordinate
      lienholder with respect thereto, except to the extent that the Obligations
      shall
      have been actually reduced, and Lender may accept by assignment, pledge, or
      otherwise any other property in place thereof as Lender may require without
      being accountable for so doing to any other lienholder; 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)  apply
      any
      Deposits to the following items in any order and in Lender’s sole discretion:
      (A) the Obligations, (B) Costs, (C) advances made by Lender under the Documents,
      and/or (D) Impositions; 

     

    (j)  take
      all
      actions permitted under the UCC of the Property State including (i) the right
      to
      take possession of all tangible and intangible personal property now or
      hereafter included within the Property (“Personal
      Property”)
      and
      take such actions as Lender deems advisable for the care, protection and
      preservation of the Personal Property and (ii) request Borrower at its expense
      to assemble the Personal Property and make it available to Lender at a
      convenient place acceptable to Lender. Any notice of sale, disposition or other
      intended action by Lender with respect to the Personal Property sent to Borrower
      at least ten (10) days prior to such action shall constitute commercially
      reasonable notice to Borrower; or

     

    (k)  take
      any
      other action permitted under any Laws.

     

    If
      Lender
      exercises any of its rights under Section 6.02(g), Lender shall not (a) be
      deemed to have entered upon or taken possession of the Property except upon
      the
      exercise of its option to do so, evidenced by its demand and overt act for
      such
      purpose; (b) be deemed a Lender or mortgagee in possession by reason of such
      entry or taking possession; nor (c) be liable (i) to account for any action
      taken pursuant to such exercise other than for Rents actually received by
      Lender, (ii) for any loss sustained by Borrower resulting from any failure
      to
      lease the Property, or (iii) any other act or omission of Lender except for
      losses caused by Lender’s willful misconduct or gross negligence. Borrower
      hereby consents to, ratifies, and confirms the exercise by Lender of its rights
      under this Instrument and appoints Lender as its attorney-in-fact, which
      appointment shall be deemed to be coupled with an interest and irrevocable,
      for
      such purposes.

     

    Section
      6.03  
      Expenses.
      All
      Costs, expenses, or other amounts paid or incurred by Lender in the exercise
      of
      its rights under the Documents, together with interest thereon at the applicable
      interest rate specified in the Note, which shall be the Default Rate unless
      prohibited by Laws, shall be (a) part of the Obligations, (b) secured by this
      Instrument, and (c) allowed and included as part of the Obligations in any
      foreclosure, decree for sale, or other judgment or decree enforcing Lender’s
      rights under the Documents.

     

    Section
      6.04  
      Rights Pertaining to Sales.
      To the
      extent permitted under (and in accordance with) any Laws, the following
      provisions shall, as Lender may determine in its sole discretion, apply to
      any
      sales of the Property under Article VI, whether by judicial proceeding,
      judgment, decree, power of sale, foreclosure or otherwise: (a) Lender may
      conduct multiple sales of any part of the Property in separate tracts or in
      its
      entirety and Borrower waives any right to require otherwise; (b) any sale may
      be
      postponed or adjourned by public announcement at the time and place appointed
      for such sale or for such postponed or adjourned sale without further notice;
      and (c) Lender may acquire the Property and, in lieu of paying cash, may pay
      by
      crediting against the Obligations the amount of its bid, after deducting
      therefrom any sums which Lender is authorized to deduct under the provisions
      of
      the Documents.

     

    Section
      6.05  
      Applications of Proceeds.
      Any
      proceeds received from any sale or disposition under Article VI or otherwise,
      together with any other sums held by Lender, shall, except as expressly provided
      to the contrary, be applied in the order determined by Lender to: (a) payment
      of
      all Costs and expenses of any enforcement action or foreclosure sale, including
      interest thereon at the applicable interest rate specified in the Note, which
      shall be the Default Rate unless prohibited by Laws, (b) all taxes, Assessments,
      and other charges unless the Property was sold subject to these items; (c)
      payment of the Obligations in such order as Lender may elect; (d) payment of
      any
      other sums secured or required to be paid by Borrower; and (e) payment of the
      surplus, if any, to any person lawfully entitled to receive it. Borrower and
      Lender intend and agree that during any period of time between any foreclosure
      judgment that may be obtained and the actual foreclosure sale that the
      foreclosure judgment will not extinguish the Documents or any rights contained
      therein including the obligation of Borrower to pay all Costs and to pay
      interest at the applicable interest rate specified in the Note, which shall
      be
      the Default Rate unless prohibited by Laws.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      6.06  
      Additional Provisions as to Remedies.
      No
      failure, refusal, waiver, or delay by Lender to exercise any rights under the
      Documents upon any default or Event of Default shall impair Lender’s rights or
      be construed as a waiver of, or acquiescence to, such or any subsequent default
      or Event of Default. No recovery of any judgment by Lender and no levy of an
      execution upon the Property or any other property of Borrower shall affect
      the
      lien and security interest created by this Instrument and such liens, rights,
      powers, and remedies shall continue unimpaired as before. Lender may resort
      to
      any security given by this Instrument or any other security now given or
      hereafter existing to secure the Obligations, in whole or in part, in such
      portions and in such order as Lender may deem advisable, and no such action
      shall be construed as a waiver of any of the liens, rights, or benefits granted
      hereunder. Acceptance of any payment after any Event of Default shall not be
      deemed a waiver or a cure of such Event of Default and such acceptance shall
      be
      deemed an acceptance on account only. If Lender has started enforcement of
      any
      right by foreclosure, sale, entry, or otherwise and such proceeding shall be
      discontinued, abandoned, or determined adversely for any reason, then Borrower
      and Lender shall be restored to their former positions and rights under the
      Documents with respect to the Property, subject to the lien and security
      interest hereof.

     

    Section
      6.07  
      Waiver of Rights and Defenses.
      To the
      fullest extent Borrower is not prohibited from doing so under Laws, Borrower
      (a)
      will not at any time insist on, plead, claim, or take the benefit of any statute
      or rule of law now or later enacted providing for any appraisement, valuation,
      stay, extension, moratorium, redemption, or any statute of limitations; (b)
      for
      itself, its successors and assigns, and for any person ever claiming an interest
      in the Property (other than Lender), waives and releases all rights of
      redemption, reinstatement, valuation, appraisement, notice of intention to
      mature or declare due the whole of the Obligations, all rights to a marshaling
      of the assets of Borrower, including the Property, or to a sale in inverse
      order
      of alienation, in the event of foreclosure of the liens and security interests
      created under the Documents; (c) shall not be relieved of its obligation to
      pay
      the Obligations as required in the Documents nor shall the lien or priority
      of
      the Documents be impaired by any agreement renewing, extending, or modifying
      the
      time of payment or the provisions of the Documents (including a modification
      of
      any interest rate), unless expressly released, discharged, or modified by such
      agreement. Regardless of consideration and without any notice to or consent
      by
      the holder of any subordinate lien, security interest, encumbrance, right,
      title, or interest in or to the Property, Lender may (a) release any person
      liable for payment of the Obligations or any portion thereof or any part of
      the
      security held for the Obligations or (b) modify any of the provisions of the
      Documents without impairing or affecting the Documents or the lien, security
      interest, or the priority of the modified Documents as security for the
      Obligations over any such subordinate lien, security interest, encumbrance,
      right, title, or interest.

     

    ARTICLE
      VII  -
      SECURITY AGREEMENT

     

    Section
      7.01  
      Security Agreement.
      This
      Instrument constitutes both a real property mortgage and a “security
      agreement”
within
      the meaning of the UCC The Property includes real and personal property and
      all
      tangible and intangible rights and interest of Borrower in the Property.
      Borrower grants to Lender, as security for the Obligations, a security interest
      in the Personal Property to the fullest extent that the same may be subject
      to
      the UCC Borrower authorizes Lender to file any financing or continuation
      statements and amendments thereto relating to the Personal Property without
      the
      signature of Borrower if permitted by Laws.

     

    ARTICLE
      VIII  -
      LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

     

    Section
      8.01  
      Recourse Liability.
      The
      provisions of Paragraphs 9 and 10 of the Note are incorporated into this
      Instrument as if such provisions were set forth in their entirety in this
      Instrument.

     

    Section
      8.02  
      General Indemnity.
      Borrower agrees that while Lender has no liability to any person in tort or
      otherwise as lender and that Lender is not an owner or operator of the Property,
      Borrower shall, at its sole expense, protect, defend, release, indemnify and
      hold harmless (“indemnify”)
      the
      Indemnified Parties (defined below) from any Losses (defined below) imposed
      on,
      incurred by, or asserted against the Indemnified Parties, directly or
      indirectly, arising out of or in connection with the Property, Loan, or
      Documents, including Losses; provided, however, that the foregoing indemnities
      shall not apply to any Losses caused by the gross negligence or willful
      misconduct of the Indemnified Parties. The term “Losses”
shall
      mean any claims, suits, liabilities (including strict liabilities), actions,
      proceedings, obligations, debts, damages, losses, Costs, expenses, fines,
      penalties, charges, fees, judgments, awards, and amounts paid in settlement
      of
      whatever kind including attorneys’ fees (both in-house staff and retained
      attorneys) and all other costs of defense. The term “Indemnified
      Parties”
shall
      mean (a) Lender, (b) any prior owner or holder of the Note, (c) any existing
      or
      prior servicer of the Loan, (d) the officers, directors, shareholders, partners,
      members, employees and trustees of any of the foregoing, and (e) the heirs,
      legal representatives, successors and assigns of each of the
      foregoing.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.03  
      Transaction Taxes Indemnity.
      Borrower shall, at its sole expense, indemnify the Indemnified Parties from
      all
      Losses imposed upon, incurred by, or asserted against the Indemnified Parties
      or
      the Documents relating to Transaction Taxes.

     

    Section
      8.04  
      ERISA Indemnity.
      Borrower shall, at its sole expense, indemnify the Indemnified Parties against
      all Losses imposed upon, incurred by, or asserted against the Indemnified
      Parties (a) as a result of a Violation, (b) in the investigation, defense,
      and
      settlement of a Violation, (c) as a result of a breach of the representations
      in
      Section 3.11 or default thereunder, (d) in correcting any prohibited transaction
      or the sale of a prohibited loan, and (e) in obtaining any individual prohibited
      transaction exemption under ERISA that may be required, in Lender’s sole
      discretion.

     

    Section
      8.05  
      Environmental Indemnity.
      Borrower and other persons, if any, have executed and delivered the
      Environmental Indemnity Agreement dated the date hereof to Lender (“Environmental
      Indemnity”).

     

    Section
      8.06  
      Duty to Defend, Costs and Expenses.
      Upon
      request, whether Borrower’s obligation to indemnify Lender arises under Article
      VIII or in the Documents, Borrower shall defend the Indemnified Parties (in
      Borrower’s or the Indemnified Parties’ names) by attorneys and other
      professionals reasonably approved by the Indemnified Parties. Notwithstanding
      the foregoing, the Indemnified Parties may, in their sole discretion, engage
      their own attorneys and professionals to defend or assist them and, at their
      option, their attorneys shall control the resolution of any claims or
      proceedings. Upon demand, Borrower shall pay or, in the sole discretion of
      the
      Indemnified Parties, reimburse and/or indemnify the Indemnified Parties for
      all
      Costs imposed on, incurred by, or asserted against the Indemnified Parties
      by
      reason of any items set forth in this Article VIII and/or the enforcement or
      preservation of the Indemnified Parties’ rights under the Documents. Any amount
      payable to the Indemnified Parties under this Section shall (a) be deemed a
      demand obligation, (b) be part of the Obligations, (c) bear interest at the
      applicable interest rate specified in the Note, which shall be the Default
      Rate
      unless prohibited by Laws, until paid if not paid on demand, and (d) be secured
      by this Instrument.

     

    Section
      8.07  
      Recourse Obligation and Survival.
      Notwithstanding anything to the contrary in the Documents and in addition to
      the
      recourse obligations in the Note, the obligations of Borrower under Sections
      8.03, 8.04, 8.05, and 8.06 shall be a full recourse obligation of Borrower,
      shall not be subject to any limitation on personal liability in the Documents,
      and shall survive (a) repayment of the Obligations, (b) any termination,
      satisfaction, assignment or foreclosure of this Instrument, (c) the acceptance
      by Lender (or any nominee) of a deed in lieu of foreclosure, (d) a plan of
      reorganization filed under the Bankruptcy Code, or (e) the exercise by the
      Lender of any rights in the Documents. Borrower’s obligations under Article VIII
      shall not be affected by the absence or unavailability of insurance covering
      the
      same or by the failure or refusal by any insurance carrier to perform any
      obligation under any applicable insurance policy.

     

    ARTICLE
      IX  -
      ADDITIONAL PROVISIONS

     

    Section
      9.01  
      Usury Savings Clause.
      All
      agreements in the Documents are expressly limited so that in no event whatsoever
      shall the amount paid or agreed to be paid under the Documents for the use,
      forbearance, or detention of money exceed the highest lawful rate permitted
      by
      Laws. If, at the time of performance, fulfillment of any provision of the
      Documents shall involve transcending the limit of validity prescribed by Laws,
      then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
      of such validity. If Lender shall ever receive as interest an amount which
      would
      exceed the highest lawful rate, the receipt of such excess shall be deemed
      a
      mistake and (a) shall be canceled automatically or (b) if paid, such excess
      shall be (i) credited against the principal amount of the Obligations to the
      extent permitted by Laws or (ii) rebated to Borrower if it cannot be so credited
      under Laws (in which event, no Prepayment Premium shall be due with respect
      to
      the amount so credited). Furthermore, all sums paid or agreed to be paid under
      the Documents for the use, forbearance, or detention of money shall to the
      extent permitted by Laws be amortized, prorated, allocated, and spread
      throughout the full stated term of the Note until payment in full so that the
      rate or amount of interest on account of the Obligations does not exceed the
      maximum lawful rate of interest from time to time in effect and applicable
      to
      the Obligations for so long as the Obligations are outstanding.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      9.02  
      Notices.
      Any
      notice, request, demand, consent, approval, direction, agreement, or other
      communication (any “notice”) required or permitted under the Documents shall be
      in writing and shall be validly given if sent by a nationally-recognized courier
      that obtains receipts, delivered personally by a courier that obtains receipts,
      or mailed by United States certified mail (with return receipt requested and
      postage prepaid) addressed to the applicable person as follows, or by facsimile
      followed by a confirmation delivered in the manner provided
      above:

     

    If
      to
      Borrower:

     

    PH
      Hotel
      Partners, LP

    c/o
      CNL
      Hospitality Corp.

    420
      South
      Orange Avenue, Suite 700

    Orlando,
      Florida 32801-3313

    Attention:
      Chief General Counsel

    Facsimile:
      (407) 540-2702

    

    With
      a
      copy to: 

    Greenburg
      Traurig P.A.

    450
      S.
      Orange Avenue, Suite 650

    Orlando,
      FL 32801

    Attention:
      Michael J. Sullivan, Esq.

    Facsimile:
      (407) 650-8425

    

    And
      a
      copy to:

    Lowndes,
      Drosdick, Doster, Kantor & Reed, P.A.

    215
      N.
      Eola Drive

    Orlando,
      FL 32802-2806

    Attention:
      Richard J. Fildes, Esq.

    Facsimile:
      (407) 843-4444

    

    

    If
      to
      Lender:

    

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    Dallas,
      Texas 75201

    Attention:
      Asset Management Department

    Reference
      Loan No. 70-6-106-306

    

    with
      a
      copy to:

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    Dallas,
      Texas 75201

    Attention:
      Legal Department

    Reference
      Loan No. 70-6-106-306

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    And
      a
      copy to:

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, 8th
      Floor

    San
      Francisco, CA 94107

    Attention:
      Stephen A. Cowan, Esq. 

    Facsimile:
      (415) 836-2500

    

     

    Each
      notice shall be effective upon being so sent, delivered, or mailed, but the
      time
      period for response or action shall run from the date of receipt as shown on
      the
      delivery receipt. Refusal to accept delivery or the inability to deliver because
      of a changed address for which no notice was given shall be deemed receipt.
      Any
      party may periodically change its address for notice and specify up to two
      (2)
      additional addresses for copies by giving the other party at least ten (10)
      days’ prior notice.

     

    Section
      9.03  
      Sole Discretion of Lender.
      Except
      as otherwise expressly stated, whenever Lender’s judgment, consent, or approval
      is required or Lender shall have an option or election under the Documents,
      such
      judgment, the decision as to whether or not to consent to or approve the same,
      or the exercise of such option or election shall be in the sole and absolute
      discretion of Lender.

     

    Section
      9.04  
      Applicable Law and Submission to Jurisdiction.
      The
      validity and interpretation of this Instrument and of all other documents
      evidencing or securing the Obligations shall be construed in accordance with
      the
      laws of the State of Florida, except that the laws of the State of Michigan
      shall govern any question regarding the creation, perfection and priority of,
      or
      procedures for enforcing the lien on, real property granted Lender under this
      Instrument. Questions concerning the availability of a post-foreclosure
      deficiency, any requirement to exhaust security, the availability of personal
      judgments against and recourse to the Borrower, the order in which a creditor
      exercises its remedies and the effect of exercising remedies are not questions
      concerning the creation, perfection or priority of, or procedures for enforcing
      the lien on, real property and shall be governed by the laws of Florida. Without
      limiting Lender’s right to bring any action or proceeding against Borrower or
      the Property relating to the Obligations (an “Action”) in the courts of other
      jurisdictions, Borrower irrevocably (a) submits to the jurisdiction of any
      state
      or federal court in Michigan and in Florida, (b) agrees that any Action may
      be
      heard and determined in such court, and (c) waives, to the fullest extent
      permitted by Laws, the defense of an inconvenient forum to the maintenance
      of
      any Action in such jurisdiction.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      9.05  
      Construction of Provisions.
      The
      following rules of construction shall apply for all purposes of this Instrument
      unless the context otherwise requires: (a) all references to numbered Articles
      or Sections or to lettered Exhibits are references to the Articles and Sections
      hereof and the Exhibits annexed to this Instrument and such Exhibits are
      incorporated into this Instrument as if fully set forth in the body of the
      Instrument; (b) all Article, Section, and Exhibit captions are used for
      convenience and reference only and in no way define, limit, or in any way affect
      this Instrument; (c) words of masculine, feminine, or neuter gender shall mean
      and include the correlative words of the other genders, and words importing
      the
      singular number shall mean and include the plural number, and vice versa; (d)
      no
      inference in favor of or against any party shall be drawn from the fact that
      such party has drafted any portion of this Instrument; (e) all obligations
      of
      Borrower hereunder shall be performed and satisfied by or on behalf of Borrower
      at Borrower’s sole expense; (f) the terms “include,”
      “including,”
and
      similar terms shall be construed as if followed by the phrase “without
      being limited to”;
      (g)
      the terms “Property”,
      “Land”,
      “Improvements”,
      and
“Personal
      Property”
shall
      be construed as if followed by the phrase “or any part thereof”; (h) the term
“Obligations”
shall
      be construed as if followed by the phrase “or
      any other sums secured hereby, or any part thereof”;
      (i)
      the term “person”
shall
      include natural persons, firms, partnerships, corporations, governmental
      authorities or agencies, and any other public or private legal entities; (j)
      the
      term “provisions,”
when
      used with respect hereto or to any other document or instrument, shall be
      construed as if preceded by the phrase “terms,
      covenants, agreements, requirements, and/or conditions”;
      (k)
      the term “lease”
shall
      mean “tenancy,
      subtenancy, lease, sublease, or rental agreement,”
the
      term “lessor”
shall
      mean “landlord,
      sublandlord, lessor, and sublessor,”
and
      the term “Tenants”
or
      “lessee”
      shall mean “tenant, subtenant, lessee, and sublessee”;
      (l)
      the term “owned”
shall
      mean “now
      owned or later acquired”;
      (m)
      the terms “any”
and
      “all”
shall
      mean “any
      or all”;
      and
      (n) the term “on
      demand”
or
      “upon
      demand”
shall
      mean “within
      five (5) business days after written notice”.

     

    Section
      9.06  
      Transfer of Loan.
      Lender
      may, at any time, (i) sell, transfer or assign the Documents and any servicing
      rights with respect thereto or (ii) grant participations therein or issue
      mortgage pass-through certificates or other securities evidencing a beneficial
      interest in a rated or unrated public offering or private placement
      (collectively, the “Securities”).
      Lender may forward to any purchaser, transferee, assignee, servicer,
      participant, or investor in such Securities (collectively, “Investors”),
      to
      any Rating Agency (defined below) rating such Securities and to any prospective
      Investor, all documents and information which Lender now has or may later
      acquire relating to the Obligations, Borrower, any guarantor, any indemnitor(s),
      the Leases, and the Property, whether furnished by Borrower, any guarantor,
      any
      indemnitor(s) or otherwise, as Lender determines advisable. Borrower, any
      guarantor and any indemnitor agree to cooperate with Lender in connection with
      any transfer made or any Securities created pursuant to this Section including
      the delivery of an estoppel certificate in accordance with Section 3.16 and
      such
      other documents as may be reasonably requested by Lender. Borrower shall also
      furnish any consent of Borrower, any guarantor and any indemnitor in order
      to
      permit Lender to furnish such Investors or such prospective Investors or such
      Rating Agency with any and all information concerning the Property, the Leases,
      the financial condition of Borrower, any Guarantor and any indemnitor, as may
      be
      reasonably requested by Lender, any Investor, any prospective Investor or any
      Rating Agency and which may be complied with without undue expense. Lender
      shall
      require that such prospective Investors and Rating Agencies comply with
      reasonable confidentiality restrictions respecting the financial information
      concerning Guarantor and CNL HHC Partners, LP, provided the subject financial
      information concerning Guarantor and CNL HHC Partners, LP, is not otherwise
      available to Lender or the public by electronic or hard copy publications,
      and
      Lender shall have no liability whatsoever for any claim or loss arising from
      and
      such Investors or Rating Agencies failing to comply with the terms thereof.
      “Rating Agency” shall mean any one ore more credit rating agencies approved by
      Lender.

     

    Section
      9.07  
      Miscellaneous.
      If any
      provision of the Documents shall be held to be invalid, illegal, or
      unenforceable in any respect, this shall not affect any other provisions of
      the
      Documents and such provision shall be limited and construed as if it were not
      in
      the Documents. If title to the Property becomes vested in any person other
      than
      Borrower, Lender may, without notice to Borrower, deal with such person
      regarding the Documents or the Obligations in the same manner as with Borrower
      without in any way vitiating or discharging Borrower’s liability under the
      Documents or being deemed to have consented to the vesting. If both the lessor’s
      and lessee’s interest under any Lease ever becomes vested in any one person,
      this Instrument and the lien and security interest created hereby shall not
      be
      destroyed or terminated by the application of the doctrine of merger and Lender
      shall continue to have and enjoy all its rights and privileges as to each
      separate estate. Upon foreclosure of this Instrument, none of the Leases shall
      be destroyed or terminated as a result of such foreclosure, by application
      of
      the doctrine of merger or as a matter of law, unless Lender takes all actions
      required by law to terminate the Leases as a result of foreclosure. All of
      Borrower’s covenants and agreements under the Documents shall run with the land
      and time is of the essence. Borrower appoints Lender, as its attorney-in-fact,
      which appointment is irrevocable and shall be deemed to be coupled with an
      interest, with respect to the execution, acknowledgment, delivery, filing or
      recording for and in the name of Borrower of any of the documents reasonably
      required to give effect to the rights, covenants, provisions and requirements
      set forth in Sections 3.04, 3.19, 4.01 and 6.02 of this Instrument. The
      Documents cannot be amended, terminated, or discharged except in a writing
      signed by the party against whom enforcement is sought. No waiver, release,
      or
      other forbearance by Lender will be effective unless it is in a writing signed
      by Lender and then only to the extent expressly stated. The provisions of the
      Documents shall be binding upon Borrower and its heirs, devisees,
      representatives, successors, and assigns including successors in interest to
      the
      Property and inure to the benefit of Lender and its heirs, successors,
      substitutes, and assigns. Where two or more persons have executed the Documents,
      the obligations of such persons shall be joint and several, except to the extent
      the context clearly indicates otherwise. The Documents may be executed in any
      number of counterparts with the same effect as if all parties had executed
      the
      same document. All such counterparts shall be construed together and shall
      constitute one instrument, but in making proof hereof it shall only be necessary
      to produce one such counterpart. Upon receipt of an affidavit of an officer
      of
      Lender as to the loss, theft, destruction or mutilation of any Document which
      is
      not of public record, and, in the case of any mutilation, upon surrender and
      cancellation of the Document, Borrower will issue, in lieu thereof, a
      replacement Document, dated the date of the lost, stolen, destroyed or mutilated
      Document containing the same provisions. Any reviews, inspections, reports,
      approvals or similar items conducted, made or produced by or on behalf of Lender
      with respect to Borrower, the Property or the Loan are for loan underwriting
      and
      servicing purposes only, and shall not constitute an acknowledgment,
      representation or warranty of the accuracy thereof, or an assumption of
      liability with respect to Borrower, Borrower's contractors, architects,
      engineers, employees, agents or invitees, present or future tenants, occupants
      or owners of the Property, or any other party.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      9.08  
      Entire Agreement.
      Except
      as provided in Section 3.17, (a) the Documents constitute the entire
      understanding and agreement between Borrower and Lender with respect to the
      Loan
      and supersede all prior written or oral understandings and agreements with
      respect to the Loan including the Loan application and Loan commitment and
      (b)
      Borrower is not relying on any representations or warranties of Lender except
      as
      expressly set forth in the Documents.

     

    Section
      9.09  
      WAIVER OF TRIAL BY JURY.
      TO THE
      FULLEST EXTENT NOT PROHIBITED BY LAW, BORROWER AND LENDER BY LENDER’S ACCEPTANCE
      OF THIS INSTRUMENT HEREBY AGREES TO, AND DOES, WAIVE ITS RESPECTIVE RIGHTS
      TO A
      JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE
      LOAN, ANY DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT BETWEEN INDEMNITOR AND
      LENDER RELATING TO THE LOAN, THE DOCUMENTS, THE PROPERTY OR ANY DEALINGS BETWEEN
      BORROWER AND LENDER RELATING TO THE SUBJECT MATTER OF ANY OF THE DOCUMENTS.
      THE
      SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
      (EACH A “DISPUTE,” AND COLLECTIVELY, ANY OR ALL, THE “DISPUTES”) OF ANY KIND
      WHATSOEVER THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
      OF THE LOAN, ANY DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT BETWEEN BORROWER
      AND LENDER RELATING TO THE LOAN, THE DOCUMENTS, THE PROPERTY OR ANY DEALINGS
      BETWEEN BORROWER AND LENDER RELATING TO THE SUBJECT MATTER OF ANY OF THE
      DOCUMENTS, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
      ANTITRUST CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON-LAW OR STATUTORY
      CLAIMS. BORROWER AND LENDER EACH ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
      INDUCEMENT TO ENTERING INTO THIS INSTRUMENT AND ALL OTHER AGREEMENTS AND
      INSTRUMENTS PROVIDED FOR HEREIN, AND THAT EACH WILL CONTINUE TO BE BOUND BY
      AND
      RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER EACH
      FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH LEGAL
      COUNSEL OF ITS OWN CHOOSING, OR HAS HAD AN OPPORTUNITY TO DO SO, AND THAT IT
      KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS HAVING HAD THE
      OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
      THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
      APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS
      TO
      THIS INSTRUMENT OR ANY OTHER DOCUMENT OR DOCUMENT ENTERED INTO BETWEEN BORROWER
      AND LENDER IN CONNECTION WITH THIS INSTRUMENT OR ANY DOCUMENT. IN THE EVENT
      OF
      LITIGATION, THIS INSTRUMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
      THE
      COURT WITHOUT A JURY.

     

    

     

    BORROWER’S
      INITIAL: __________

     

    Section
      9.10  
      Partial Release.
      This
      Instrument is subject to the Partial Release provision set forth in Section
      15
      of the Note to which reference is hereby made.

     

    Section
      9.11  
      Property Substitutions.
      This
      Instrument is subject to the Property Substitutions provision set forth in
      Section 16 of the Note to which reference is hereby made.

     

    ARTICLE
      X  -
      LOCAL LAW PROVISIONS

     

    Section
      10.01 Non-judicial
      Foreclosure.
      Lender
      may foreclose this Instrument by advertisement pursuant to the statutes in
      such
      case made and provided, in addition to all other rights and remedies hereunder.
      By execution of this Instrument, Borrower hereby grants to Lender the power
      to
      sell and convey the Property at public sale in accordance with the statutes
      providing therefor in connection with a foreclosure of this
      Instrument.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      10.02 Michigan
      Statutes Regarding Assignment of Rents.
      The
      Lender shall be entitled to all the rights and remedies conferred by Act No.
      210
      of the Michigan Public Acts of 1953 as amended by Act No. 151 of the Michigan
      Public Acts of 1966 (MCLA 554.231 et seq.)
      or Act
      No. 228 of the Michigan Public Acts of 1925, as amended by Act No. 55 of the
      Michigan Public Acts of 1933 (MCLA 554.211 et seq.),
      whichever is applicable. The assignment of Rents provided for in this Instrument
      and in any separate instrument granting an Assignment of rents given in
      connection with this Instrument shall, notwithstanding anything to the contrary
      contained therein, constitute an assignment of rents pursuant to MCLA 554.231
      et seq.
      or MCLA
      554.211 et seq.,
      whichever is applicable, and shall be interpreted and applied in accordance
      therewith.

    

    Section
      10.03 Waste.
      The
      failure of the Borrower to pay any taxes or assessments assessed against the
      Property, or any installment thereof, or any premiums payable with respect
      to
      any insurance policy covering the Property, shall constitute waste, as provided
      by Act No. 236 of the Michigan Public Acts of 1961 as amended (MCL 600.2927).
      The Borrower further hereby consents to the appointment of a receiver under
      said
      statute, should Lender elect to seek such relief thereunder.

    

    Section
      10.04
      Alcoholic Beverage License.
      At the
      time of any foreclosure sale under the Instrument, or any deed in lieu of
      foreclosure, the Borrower shall, at Borrower's expense and without additional
      consideration to Borrower, immediately take all actions required under
      applicable laws, regulations, rules, and policies to transfer the Liquor
      Licenses to the person or entity which acquires title to the Property pursuant
      to such foreclosure or deed in lieu of foreclosure. Such actions shall include,
      without limitation, filing with the local division of the State of Michigan
      Liquor Control Commission such affidavits, applications, declarations, documents
      and other materials to be executed or provided by Borrower as may be necessary
      or appropriate to effect such transfer, and Borrower shall thereafter diligently
      pursue such transfer in order to consummate the same as soon as reasonably
      possible. Borrower’s obligations under this Section 10.05 shall survive any
      foreclosure of the Instrument or any deed in lieu of foreclosure.

     

    Section
      10.5 Future Advance Mortgage. This
      Mortgage secures future advances and is a future advance mortgage under Act
      No.
      348 of the Michigan Public Acts of 1990 (MCL 565.901 et seq.).

     

    Section
      10.6 Principals of Construction.
      In the
      event of any inconsistencies between the terms and conditions of this Article
      X
      and the terms and conditions of this Instrument, the terms and conditions of
      this Article X shall control and be binding.

     

    ARTICLE
      XI  -
      OPERATING LEASE PROVISIONS

     

    Borrower
      hereby covenants, represents and warrants to Lender with respect to the
      Operating Lease as follows:

     

    (a)  There
      is
      and has been no default in the performance of the Operating Lease by Borrower
      nor, to the best of Borrower’s knowledge, by Operating Tenant with respect to
      the Property, nor has any event occurred or condition arisen to the best
      knowledge of Borrower which, with the passage of time, or the giving of notice,
      or both, would constitute a default under or a breach of the Operating Lease
      by
      the Borrower and or the Operating Tenant.

     

    (b)  All
      rents, additional rents, percentage rents and all other charges due and payable
      under the Operating Lease have been fully paid to the extent same were payable
      prior to the date hereof.

     

    (c)  Except
      as
      otherwise previously disclosed in writing by Borrower to Lender, the Operating
      Lease covers one hundred percent (100%) of the leasehold interest in and to
      the
      Property demised thereby, and Borrower is the owner of the entire tenant's
      interest in, to and under the Operating Lease and has the right and authority
      under such Operating Lease to execute this Instrument and to encumber Borrower's
      interest therein.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)  Borrower
      shall, at its sole cost and expense, promptly and timely perform and observe
      all
      the terms, covenants and conditions required to be performed and observed by
      Borrower as landlord under the Operating Lease, and shall use its best efforts
      to cause the Operating Tenant thereunder to promptly and timely perform and
      observe all the terms, covenants and conditions required to be performed and
      observed by such Operating Tenant as tenant under the Operating Lease
      (including, but not limited to, the payment of all rent, additional rent,
      percentage rent and other charges required to be paid under the Operating
      Lease). Any default by Borrower and/or the Operating Tenant under the Operating
      Lease shall constitute a default by Borrower under this Investment.

     

    (e)  If
      Borrower and/or the Operating Tenant shall violate any of the covenants
      specified in (d) above, Borrower grants to Lender the right (but not the
      obligation), without notice to Borrower, to take any action as may be necessary
      to prevent or cure any default of Borrower and/or Operating Tenant under the
      Operating Lease, if necessary to protect Lender's interest hereunder, and Lender
      shall have the right to enter all or any portion of the Property at such times
      and in such manner as Lender deems necessary, in order to prevent or to cure
      any
      such default.

     

    (f)  The
      curing by Lender of any default by Borrower and/or Operating Tenant under the
      Operating Lease shall not remove or waive, as between Borrower and Lender,
      the
      default which occurred hereunder by virtue of the default by Borrower and/or
      Operating Tenant under such Operating Lease. All sums expended by Lender in
      order to cure any such default shall be paid by Borrower to Lender, upon demand,
      with interest thereon at the Default Rate unless prohibited by Laws. All such
      indebtedness shall be deemed to be secured by this Instrument. No action or
      payment taken or made by Lender to prevent or cure a default by Borrower and/or
      Operating Tenant under the Operating Lease shall waive or cure the corresponding
      default by Borrower under this Instrument.

     

    (g)  Borrower
      shall notify Lender promptly in writing of (i) the occurrence of any material
      default by the Operating Tenant under the Operating Lease or the occurrence
      of
      any event which, with the passage of time or service of notice, or both, would
      constitute a material default by the Operating Tenant under the Operating Lease,
      and (ii) the receipt by Borrower of any notice (written or otherwise) from
      the
      tenant under the Operating Lease noting or claiming the occurrence of any
      default by Borrower under the Operating Lease or the occurrence of any event
      which, with the passage of time or service of notice, or both, would constitute
      a default by Borrower under the Operating Lease. Borrower shall deliver to
      Lender a copy of any such written notice of default.

     

    (h)  Promptly
      upon demand by Lender from time to time, Borrower shall use reasonable efforts
      (other than payment to the landlord) to obtain from the tenant under the
      Operating Lease and furnish to Lender the estoppel certificate of such tenant
      stating the date through which rent has been paid and whether or not there
      are
      any defaults under the Operating Lease and specifying the nature of such claimed
      defaults, if any.

     

    (i)  Borrower
      shall promptly notify Lender, in writing, of any request made by either party
      to
      the Operating Lease for arbitration or appraisal proceedings pursuant to the
      Operating Lease, and of the institution of any arbitration or appraisal
      proceedings, as well as of all proceedings thereunder, and shall promptly
      deliver to Lender a copy of the determination of the arbitrators or appraisers
      in each such arbitration or appraisal proceeding. Lender shall have the right
      (but not the obligation), following the delivery of written notice of Borrower,
      to participate in the appointment of any arbitrator or appraiser to be appointed
      by Borrower and to participate in such arbitration or appraisal proceedings
      in
      association with Borrower or on its own behalf as an interested party. Borrower
      shall promptly notify Lender, in writing, of the institution of any legal
      proceedings involving obligations under the Operating Lease. Lender may
      intervene in any such legal proceedings and be made a party to them. Borrower
      shall promptly provide Lender with a copy of any decisions rendered in
      connection with such proceedings.

     

    (j)  Borrower
      shall promptly execute, acknowledge and deliver to Lender such instruments
      as
      may reasonably be required to permit Lender to cure any default under the
      Operating Lease or permit Lender to take such other action required to enable
      Lender to cure or remedy the matter in default and preserve the security
      interest of Lender under this Instrument with respect to the Operating Lease.
      Borrower hereby irrevocably appoints Lender as its true and lawful
      attorney-in-fact to do, in its name or otherwise, any and all acts and to
      execute any and all documents which are necessary to preserve any rights of
      Borrower under or with respect to the Operating Lease, including, without
      limitation, the right to effectuate any extension or renewal of the Operating
      Lease, or to preserve any rights of Borrower whatsoever in respect of any part
      of the Operating Lease (and the above powers granted to Lender are coupled
      with
      an interest and shall be irrevocable).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (k)  Borrower
      shall not, without Lender's prior written consent, surrender, terminate,
      forfeit, or suffer or permit the surrender, termination or forfeiture of, or
      change, modify or amend, the Operating Lease. Consent to one amendment, change,
      agreement or modification shall not be deemed to be a waiver of the right to
      require consent to other, future or successive amendments, changes, agreements
      or modifications.

     

    (l)  Any
      acquisition of the tenant's interest in the Operating Lease by Borrower or
      any
      affiliate of Borrower shall be accomplished by Borrower in such a manner so
      as
      to avoid a merger of the interests of the landlord and tenant in the Operating
      Lease. In the event both the landlord's and tenant's estate under the Operating
      Lease or any portion thereof which constitutes a part of the Property, shall
      at
      any time become vested in one owner, this Instrument and the lien created hereby
      shall not be destroyed or terminated by application of the doctrine of merger
      unless Lender so elects as evidenced by recording a written declaration so
      stating and, unless and until Lender so elects, Lender shall continue to have
      and enjoy all of the rights and privileges of Lender and mortgagee as to the
      separate estates. In addition, upon the foreclosure of the lien created by
      this
      Instrument on the Property pursuant to the provisions hereof, any leases or
      subleases then existing and affecting all or any portion of the Property shall
      not be destroyed or terminated by application of the law of merger or as a
      matter of law or as a result of such foreclosure unless Lender or any purchaser
      at such foreclosure shall so elect. No act by or on behalf of Lender or any
      such
      purchaser shall constitute a termination of any lease or sublease unless Lender
      or such purchaser shall give written notice thereof to such tenant or subtenant.
      

     

    (m)  Notwithstanding
      anything to the contrary herein contained with respect to the Operating
      Lease:

     

    (i)  As
      security
      for the Obligations, Borrower hereby unconditionally assigns, transfers and
      sets
      over to Lender all of Borrower’s claims and rights to the payment of damages
      arising from any rejection by Operating Tenant of the Operating Lease under
      the
      Bankruptcy Code. Lender and Borrower shall proceed jointly or in the name of
      Borrower in respect of any claim, suit, action or proceeding relating to the
      rejection of the Operating Lease, including, without limitation, the right
      to
      file and prosecute any proofs of claim, complaints, motions, applications,
      notices and other documents in any case in respect of such tenant under the
      Bankruptcy Code. This assignment constitutes a present, irrevocable and
      unconditional assignment of the foregoing claims, rights and remedies, and
      shall
      continue in effect until all of the Obligations secured by this Instrument
      shall
      have been satisfied and discharged in full. Any amounts received by Lender
      or
      Borrower as damages arising out of the rejection of the Operating Lease as
      aforesaid shall be applied first to all costs and expenses of Lender (including,
      without limitation, attorneys’ fees and costs) incurred in connection with the
      exercise of any of its rights or remedies under this Article XI and then in
      accordance with the other applicable provisions of this Instrument.

     

    (ii)  If
      any
      action, proceeding, motion or notice shall be commenced or filed in respect
      of
      any Operating Tenant under the Operating Lease in connection with any case
      under
      the Bankruptcy Code, Lender and Borrower shall cooperatively conduct and control
      any such litigation with counsel agreed upon between Borrower and Lender in
      connection therewith. Borrower shall, upon demand, pay to Lender all costs
      and
      expenses (including reasonable attorneys' fees and costs) paid or incurred
      by
      Lender in connection with the cooperative prosecution or conduct of any such
      proceedings. All such costs and expenses shall be secured by the lien of this
      Instrument. Lender shall be deemed a party to the Operating Lease (but shall
      not
      have any obligations thereunder) for purposes of Section 363 and 365 of the
      Bankruptcy Code, and shall have standing to appear and act as a party in
      interest in relation to any matter arising out of or related to the Operating
      Lease or the Property.

     

    (iii)  Borrower
      shall promptly, after obtaining knowledge thereof, notify Lender orally of
      any
      filing by or against any Operating Tenant of a petition under the Bankruptcy
      Code. Borrower shall thereafter promptly give written notice of such filing
      to
      Lender, setting forth any information available to Borrower as to the date
      of
      such filing, the court in which such petition was filed, and the relief sought
      therein. Borrower shall promptly deliver to Lender, following its receipt
      thereof, any and all notices, summonses, pleadings, applications and other
      documents received by Borrower in connection with any such petition and any
      proceedings relating thereto.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (n)  Borrower
      hereby grants and assigns to Lender a security interest in all prepaid rent
      and
      security deposits and all other security under the Operating Lease which
      Borrower may hold now or later for the performance of Operating Tenant’s
      obligations as the tenant under the Operating Lease.

     

    (o)  Borrower
      shall ensure that all subleases entered into by any Operating Tenant (and all
      existing subleases modified or amended by Operating Tenant) shall provide that
      such subleases are subordinate to the lien of this Instrument and any
      extensions, replacements and modifications of this Instrument and the
      Obligations.

     

    (p)  The
      Operating Lease has not been amended, modified, extended, renewed, substituted
      or assigned, and Borrower has delivered to Lender true, accurate and complete
      copy of the Operating Lease. Upon the request of Lender, Borrower shall deposit
      with Lender an original fully executed counterpart of the Operating Lease,
      as
      further security to the Lender, until all of the Obligations are fully paid
      and
      performed. Borrower hereby represents that the Operating Lease or a legally
      valid memorandum thereof has been properly filed or recorded in the city, town,
      county or parish records (as appropriate) in which the Land covered thereby
      is
      located and that the filing and recording data for the same is accurately set
      forth in Exhibit
      A
      attached
      hereto.

     

    (q)  Borrower
      shall not waive, excuse, condone or in any way release or discharge the
      Operating Tenant under the Operating Lease or such Operating Tenant’s
      obligations, covenants and/or conditions under the Operating Lease without
      the
      prior written consent of Lender.

     

    The
      generality of the provisions of this Article XI relating to the Operating Lease
      shall not be limited by other provisions of this Instrument setting forth
      particular obligations of Borrower which are also required of Borrower with
      respect to the Land.  

     

    

     

    (Signature
      pages follow)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Instrument as of the day first set forth
      above.      

     

    
      	 	
              AH
                HOTEL PARTNERS, LP,

              a
                Delaware limited partnership

            
	 	
              By: 
                AH HOTEL GP, LLC,

              a
                Delaware limited liability company

              Its:
                General Partner

            
	 	
              By: /s
                / John X Brady, Jr.    

              Name:
                John X. Brady, Jr.

              Title:
                Vice President

            

    

    WITNESSED
      BY:

    

    /s/
      Peter
      Lopez                    

    Print
      Name: Peter Lopez

    

    

    WITNESSED
      BY:

    

    /s/ Patti
      Cook                    

    Print
      Name: Patti Cook

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ACKNOWLEDGEMENTS

     

    STATE
      OF
Florida             

    

    COUNTY
      OF
Orange           
    

    

    The
      foregoing instrument was acknowledged before me this 1st day of
April, 2006, by John X.
      Brady                   
, as Vice
      President          of 
AH Hotel GP, LLC, general , partner of AH Hotel Partners, LP , on behalf
      of such entity. He/she is either personally known to me, or has produced a
      ____________________________ driver’s license as identification.

    

    /s/
      Peter
      Lopez                           

    Printed
      Name: Peter Lopez

    NOTARY
      PUBLIC

    State
      of
Florida at Large

    (Notarial
      Seal)

    My
      Commission Expires: December 14, 2007

    

     

    

     

    

     

    

     

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      A

     

    LEGAL
      DESCRIPTION OF THE PROPERTY

     

    All
      that
      certain real property located in the City of Auburn Hills, County of Oakland,
      State of Michigan described as follows:

     

    A
      part of
      the Northwest 1/4 of Section 26, Town 3 North, Range 10 East, City of Auburn
      Hills, Oakland County, Michigan, being more particularly described as:
      Commencing at the Northwest corner of Section 26; thence North 88 degrees 20
      minutes 02 seconds East, 1,861.05 feet along the North line of said Section
      26;
      thence South 07 degrees 58 minutes 22 seconds East, 120.73 feet to the Point
      of
      Beginning on the Westerly line of Executive Hills Boulevard; thence the
      following three courses along said line: (1) continuing South 07 degrees 58
      minutes 22 seconds East, 96.36 feet, and (2) a curve to the left 380.96 feet,
      said curve having a radius of 1,380.00 feet, central angel of 15 degrees 49
      minutes 01 second and a long chord bearing of South 15 degrees 52 minutes 53
      seconds East, 379.75 feet, and (3) South 23 degrees 47 minutes 27 seconds East,
      63.68 feet; thence South 88 degrees 20 minutes 02 seconds West, 653.07 feet;
      thence North 01 degree 39 minutes 58 seconds West, 522.90 feet; thence North
      88
      degrees 20 minutes 02 seconds East, 525.25 feet to the Point of
      Beginning.

    

    Together
      with easements for installation, maintenance, repair and replacement of any
      telephone, cable television, optic cable or other communication lines or
      conduits, electrical lines or conduits, gas lines or similar utilities as
      reserved in deed recorded in Liber 10811, Page 639, Oakland County
      Records. 

     

    Commonly
      known as 2300
      Featherstone, Auburn Hills, Michigan

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

    DESCRIPTION
      OF PERSONAL PROPERTY SECURITY

     

    1. All
      existing and future machinery, apparatus, goods (including, without limitation,
      consumables and inventory), equipment, materials, fittings, fixtures, chattels,
      and tangible personal property, and all appurtenances and additions thereto
      and
      betterments, renewals, substitutions, and replacements thereof, owned by
      Borrower, wherever situate, and now or hereafter located on, attached to,
      contained in, or used or usable in connection with the real property described
      in Exhibit
      A
      attached
      hereto and incorporated herein (the “Land”),
      and
      all improvements located thereon (the “Improvements”)
      or
      placed on any part thereof, though not attached thereto, including, without
      limitation, all existing and future goods, materials, supplies, chattels,
      appliances, furniture, furnishings, televisions, radios, fixtures, equipment
      (including, without limitation, Borrower’s rights as lessee under leases of
      appliances, furniture, furnishings, fixtures and equipment), building service
      equipment, building materials and machinery, of every nature whatsoever now
      owned or later to be owned by Borrower, and attached or to be attached or
      affixed to, placed in or on or used in connection with the use, enjoyment,
      occupancy or operation of all or any part of the Property or in any restaurant,
      bar, conference or retail facilities thereon, whether stored on the Property
      or
      elsewhere, and including any of the foregoing as may be held in storage, or
      in
      transit or otherwise earmarked for the Property or any other such facilities,
      including, but not limited to, all signs (whether detachable or affixed),
      pumping plants, engines, pipes, ditches and flumes; also all gas, electric,
      power, cooking, heating, cooling, air conditioning, lighting, laundry,
      refrigeration, incinerating and plumbing fixtures and equipment; also all pumps,
      tanks, motors, conduits, lifting, cleaning, fire prevention, fire extinguishing,
      ventilating, switchboards and communications apparatuses; also all elevators,
      escalators and related machinery and equipment; also all shades, awnings,
      blinds, curtains, drapes and attached and unattached floor coverings, including
      rugs and carpeting; also all television, radio and music cable antennae systems;
      also all screens, storm doors and windows; also all stoves, refrigerators,
      dishwashers and other appliances, attached cabinets, partitions, ducts and
      compressors; also all trees, plants and other items of landscaping; also all
      shuttle buses and vehicles of any nature whatsoever; also all visual and
      electronic surveillance systems, beds, dressers, cabinets, tables, chairs,
      mirrors, desks, wall coverings, clocks, lamps, televisions, radios, telephones,
      minibars, intercoms, blankets, linens, towels, pillows and bedspreads; also
      all
      kitchen, restaurant and other operating equipment, including, but not limited
      to, menus, dishes, china, silverware, glassware, uniforms, aprons, cooking
      utensils, tables, refrigerating units, stoves, microwave equipment, ovens,
      timers, cocktail lounge supplies, bars and bottles; also all food and beverages,
      fuel, soap, shampoos and lotions, all cleaning materials, matches, stationary
      and other crested or similar items; also all chaise lounges, swimming pool
      heaters and equipment, recreational equipment and maintenance supplies; and
      also
      all office supplies, telephones, facsimile machines, all other electronic
      communication systems and all security deposits relating to all of the
      foregoing.

     

    2. All
      existing and future funds, accounts, deposits, instruments, drafts, letters
      of
      credit, documents, contract rights including, without limitation, all management
      agreements and franchise agreements, advance reservation contracts, general
      intangibles, notes, letters of credit in favor of Lender, and chattel paper
      arising from or by virtue of any transaction related to the Land, the
      Improvements, or any of the personal property described in this Exhibit
      B,
      including, without limitation, the FF&E Reserve that is established and
      funded from and after the date of this Instrument pursuant to the Pledge
      Agreement, operating accounts and reserve accounts, all checking accounts,
      time
      deposit accounts, interest bearing demand deposit accounts, non-interest bearing
      demand deposit accounts, management accounts, and all other accounts, and all
      now existing or hereafter arising rights of Borrower associated with the
      operation of the Property and any facilities on the Property or payment for
      rental of rooms, banquet rooms, conference rooms or other space or for goods
      sold or leased or for services rendered, whether or not yet earned by
      performance, including, without limiting the generality of the foregoing, all
      account receivables, all rights to payment from any third party, including,
      without limitation, any consumer credit/charge card organization or entity
      (including, without limitation, payments arising from use of the American
      Express Card, the Visa Card, the Carte Blanche Card, the Diners Club Card,
      the
      MasterCard, the Discover Card or any other credit, travel, and entertainment
      or
      similar card), reserves, deferred payments, refunds, cost savings, payments
      and
      deposits, no matter how evidenced and whether now or later to be received from
      third parties (including all earnest money sales or rental deposits) or
      deposited by Borrower with third parties (including all utility deposits),
      chattel paper, instruments, documents, notes, drafts and letters of credit
      (other than letters of credit in favor of Lender, if any), which arise from
      or
      relate to any business or operations now or later to be conducted on the
      Property, or to the Property and to all contracts and agreements which relate
      to
      the foregoing.

     

    3. All
      existing and future permits, licenses (including, but not limited to, any
      operating licenses and liquor licenses), franchises, certificates, and other
      rights and privileges now held or hereafter acquired by Borrower in connection
      with the Land, the Improvements, or any of the personal property described
      in
      this Exhibit
      B,
      including, without limitation, all existing and future general intangibles
      relating to the entitlements, development, construction, ownership, use,
      occupancy or operation of the Property thereon, including, but not limited
      to,
      all governmental permits, licenses, applications, management agreements and
      all,
      franchise agreements, governmental licenses, permits, variances, approvals,
      agreements, authorizations and land use entitlements relating to construction
      on
      the Property or relating to the use or operation of the Property or any
      restaurant, bar, conference, retail and computer or computer related facilities
      thereon (including, without limitation, any and all liquor licenses); all
      warranties and guaranties for the Property; all contracts, contract rights,
      agreements, commitments, undertakings and arrangements relating to the
      construction, construction management, use, operation or management of the
      Property or any business on the Property (including, without limitation, any
      maintenance, repair or other service contracts relating to the Property, and
      any
      modification, replacement, renewal or extension thereof); and all 1-800 and
      other telephone numbers, as well as related intangible assets.

     

    4. All
      existing and future right, title, and interest of Borrower in and to the name
      and style by which the Land and/or the Improvements is known, including
      trademarks and trade names relating thereto.

     

    5. All
      existing and future right, title, and interest of Borrower in, to, and under
      all
      architectural and engineering plans, specifications, drawings, maps, surveys,
      reports, permits, licenses, architectural, engineering and construction
      contracts, books of account, insurance policies, and other documents of whatever
      kind or character, relating to the use, construction upon, occupancy, leasing,
      sale, or operation of the Land and/or the Improvements.

     

    6. All
      existing and future interests, estates, or other claims or demands, in law
      and
      in equity, which Borrower now has or may hereafter acquire in the Land, the
      Improvements, or the personal property described in this Exhibit
      B.

     

    7. All
      existing and future right, title, and interest owned by Borrower in and to
      all
      options to purchase or lease the Land, the Improvements, or any other personal
      property described in this Exhibit
      B,
      or any
      portion thereof or interest therein, and in and to any greater estate in the
      Land, the Improvements, or any of the personal property described in this
Exhibit
      B.

     

    8. All
      of
      the estate, interest, right, title, other claim or demand, both in law and
      in
      equity, including claims or demands with respect to the proceeds of insurance
      relating thereto, which Borrower now has or may hereafter acquire in the Land,
      the Improvements, or any of the personal property described in this Exhibit
      B,
      or any
      portion thereof or interest therein, and any and all awards made for the taking
      by eminent domain, or by any proceeding or purchase in lieu thereof, of the
      whole or any part of such property, including without limitation, any award
      resulting from a change of any streets (whether as to grade, access, or
      otherwise) and any award for severance damages.

     

    9. All
      existing and future right, title, and interest of Borrower in and to all
      contracts, permits, certificates, licenses, approvals, utility deposits, utility
      capacity, and utility rights issued, granted, agreed upon, or otherwise provided
      by any governmental or private authority, person or entity relating to the
      ownership, development, construction, operation, maintenance, marketing, sale,
      or use of the Land and/or the Improvements, including all of the Borrower’s
      rights and privileges hereto or hereafter otherwise arising in connection with
      or pertaining to the Land and/or the Improvements, including, without limiting
      the generality of the foregoing, all water and/or sewer capacity, all water,
      sewer and/or other utility deposits or prepaid fees, and/or all water and/or
      sewer and/or other utility tap rights or other utility rights, any right or
      privilege of Borrower under any loan commitment, lease, contract, Declaration
      of
      Covenants, Restrictions and Easements or like instrument, Developer’s Agreement,
      or other agreement with any third party pertaining to the ownership,
      development, construction, operation, maintenance, marketing, sale, or use
      of
      the Land and/or the Improvements. 

     

    10.
       All
      existing and future right, title and interest of Borrower in and to all building
      materials, equipment, work in progress, and other personal property of any
      kind,
      whether stored on the Land or elsewhere, which have been or later will be
      acquired for the purpose of being delivered to, incorporated into, or installed
      in or about the Land or Improvements.

     

    AND
      ALL
      PROCEEDS AND PRODUCTS OF THE FOREGOING PERSONAL PROPERTY DESCRIBED IN THIS
      EXHIBIT
      B.

     

    A
      PORTION
      OF THE ABOVE DESCRIBED GOODS ARE OR ARE TO BE AFFIXED TO THE REAL PROPERTY
      DESCRIBED IN EXHIBIT
      A.

     

    THE
      BORROWER IS THE RECORD TITLE HOLDER AND OWNER OF THE REAL PROPERTY DESCRIBED
      IN
EXHIBIT
      A.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      C

     

    PERMITTED
      ENCUMBRANCES

     

    Those
      certain exceptions to title as specifically set forth in Schedule B, Part I,
      of
      that certain Pro Forma Title Policy dated April 3, 2006 issued by First American
      Title Insurance Company respecting the Property, Order/File No.
      FA-C-198384c-ORL

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      D

     

    DOCUMENTS

     

    
      	1.  	
              Promissory
                Note dated April 3, 2006, by PH Hotel Partners, LP, AH Hotel Partners,
                LP,
                HMA Hotel Partners, LP, and CM Hotel Partners,
                LP

            

    

     

    
      	2.  	
              Deed
                of Trust and Security Agreement (PH) dated April 3, 2006, granted
                by PH
                Hotel Partners, LP

            

    

     

    
      	3.  	
              Mortgage
                (AH) dated April 3, 2006, granted by AH Hotel Partners,
                LP

            

    

     

    
      	4.  	
              Mortgage
                and Security Agreement (HMA) dated April 3, 2006, granted by HMA
                Hotel
                Partners, LP

            

    

     

    
      	5.  	
              Deed
                of Trust and Security Agreement (CM) dated April 3, 2006, granted
                by CM
                Hotel Partners, LP

            

    

     

    
      	6.  	
              Assignment
                of Leases and Rents (PH) dated April 3, 2006, by PH Hotel Partners,
                LP

            

    

     

    
      	7.  	
              Assignment
                of Leases and Rents (AH) dated April 3, 2006, by AH Hotel Partners,
                LP

            

    

     

    
      	8.  	
              Assignment
                of Leases and Rents (HMA) dated April 3, 2006, by HMA Hotel Partners,
                LP

            

    

     

    
      	9.  	
              Assignment
                of Leases and Rents (CM) dated April 3, 2006, by CM Hotel Partners,
                LP

            

    

     

    
      	10.  	
              Assignment
                of Agreements (PH) dated April 3, 2006, by PH Hotel Partners,
                LP

            

    

     

    
      	11.  	
              Assignment
                of Agreements (AH) dated April 3, 2006, by AH Hotel Partners,
                LP

            

    

     

    
      	12.  	
              Assignment
                of Agreements (HMA) dated April 3, 2006, by HMA Hotel Partners,
                LP

            

    

     

    
      	13.  	
              Assignment
                of Agreements (CM) dated April 3, 2006, by CM Hotel Partners,
                LP

            

    

     

    
      	14.  	
              Pledge
                Agreement (PH) dated April 3, 2006, by AH Tenant Corporation and
                PH Hotel
                Partners, LP

            

    

     

    
      	15.  	
              Pledge
                Agreement (AH) dated April 3, 2006, by AH Tenant Corporation and
                AH Hotel
                Partners, LP

            

    

     

    
      	16.  	
              Pledge
                Agreement (HMA) dated April 3, 2006, by AH Tenant Corporation and
                HMA
                Hotel Partners, LP

            

    

     

    
      	17.  	
              Pledge
                Agreement (CM) dated April 3, 2006, by AH Tenant Corporation and
                CM Hotel
                Partners, LP

            

    

     

    
      	18.  	
              Environmental
                and ERISA Indemnity (PH) dated April 3, 2006, by PH Hotel Partners,
                LP,
                CNL Hospitality Partners, LP, and Hilton Hotels
                Corporation

            

    

     

    
      	19.  	
              Environmental
                and ERISA Indemnity (AH) dated April 3, 2006, by AH Hotel Partners,
                LP,
                CNL Hospitality Partners, LP, and Hilton Hotels
                Corporation

            

    

     

    
      	20.  	
              Environmental
                and ERISA Indemnity (HMA) dated April 3, 2006, by HMA Hotel Partners,
                LP,
                CNL Hospitality Partners, LP, and Hilton Hotels
                Corporation

            

    

     

    
      	21.  	
              Environmental
                and ERISA Indemnity (CM) dated April 3, 2006, by CM Hotel Partners,
                LP,
                CNL Hospitality Partners, LP, and Hilton Hotels
                Corporation

            

    

     

    
      	22.  	
              Land
                Use Certification (PH) dated April 3, 2006, by PH Hotel Partners,
                LP

            

    

     

    
      	23.  	
              Land
                Use Certification (AH) dated April 3, 2006, by AH Hotel Partners,
                LP

            

    

     

    
      	24.  	
              Land
                Use Certification (HMA) dated April 3, 2006, by HMA Hotel Partners,
                LP

            

    

     

    
      	25.  	
              Land
                Use Certification (CM) dated April 3, 2006, by CM Hotel Partners,
                LP

            

    

     

    
      	26.  	
              ERISA
                Certification dated April 3, 2006, by PH Hotel Partners,
                LP

            

    

     

    
      	27.  	
              ERISA
                Certification dated April 3, 2006, by PH Hotel GP,
                LLC

            

    

     

    
      	28.  	
              ERISA
                Certification dated April 3, 2006, by AH Hotel Partners,
                LP

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	29.  	
              ERISA
                Certification dated April 3, 2006, by AH Hotel GP,
                LLC

            

    

     

    
      	30.  	
              ERISA
                Certification dated April 3, 2006, by AH Tenant
                Corporation

            

    

     

    
      	31.  	
              ERISA
                Certification dated April 3, 2006, by HMA Hotel Partners,
                LP

            

    

     

    
      	32.  	
              ERISA
                Certification dated April 3, 2006, by HMA Hotel GP,
                LLC

            

    

     

    
      	33.  	
              ERISA
                Certification dated April 3, 2006, by CM Hotel Partners,
                LP

            

    

     

    
      	34.  	
              ERISA
                Certification dated April 3, 2006, by CM Hotel GP,
                LLC

            

    

     

    
      	35.  	
              ERISA
                Certification dated April 3, 2006, by CNL HHC Partners,
                LP

            

    

     

    
      	36.  	
              ERISA
                Certification dated April 3, 2006, by CNL Hospitality Partners,
                LP

            

    

     

    
      	37.  	
              ERISA
                Certification dated April 3, 2006, by CNL HHC,
                LLC

            

    

     

    
      	38.  	
              ERISA
                Certification dated April 3, 2006, by CNL Hotels & Resorts,
                Inc.

            

    

     

    
      	39.  	
              ERISA
                Certification dated April 3, 2006, by CNL Hospitality GP
                Corp.

            

    

     

    
      	40.  	
              ERISA
                Certification dated April 3, 2006, by Hilton Hotels
                Corporation

            

    

     

    
      	41.  	
              UCC-1
                Financing Statement (PH) PH Hotel Partners, LP (filed in
                Delaware)

            

    

     

    
      	42.  	
              UCC-1
                Financing Statement (PH) PH Hotel Partners, LP (recorded in
                Oregon)

            

    

     

    
      	43.  	
              UCC-1
                Financing Statement (PH) AH Tenant Corporation (filed in
                Delaware)

            

    

     

    
      	44.  	
              UCC-1
                Financing Statement (PH) AH Tenant Corporation (recorded in
                Oregon)

            

    

     

    
      	45.  	
              UCC-1
                Financing Statement (AH) AH Hotel Partners, LP (filed in
                Delaware)

            

    

     

    
      	46.  	
              UCC-1
                Financing Statement (AH) AH Hotel Partners, LP (recorded in
                Michigan)

            

    

     

    
      	47.  	
              UCC-1
                Financing Statement (AH) AH Tenant Corporation (filed in
                Delaware)

            

    

     

    
      	48.  	
              UCC-1
                Financing Statement (AH) AH Tenant Corporation (recorded in
                Michigan)

            

    

     

    
      	49.  	
              UCC-1
                Financing Statement (HMA) HMA Hotel Partners, LP (filed in
                Delaware)

            

    

     

    
      	50.  	
              UCC-1
                Financing Statement (HMA) HMA Hotel Partners, LP (recorded in
                Florida)

            

    

     

    
      	51.  	
              UCC-1
                Financing Statement(HMA) AH Tenant Corporation (filed in
                Delaware)

            

    

     

    
      	52.  	
              UCC-1
                Financing Statement(HMA) AH Tenant Corporation (recorded in
                Florida)

            

    

     

    
      	53.  	
              UCC-1
                Financing Statement (CM) CM Hotel Partners, LP (filed in
                Delaware)

            

    

     

    
      	54.  	
              UCC-1
                Financing Statement (CM) CM Hotel Partners, LP (recorded in
                California)

            

    

     

    
      	55.  	
              UCC-1
                Financing Statement (CM) AH Tenant Corporation (filed in
                Delaware)

            

    

     

    
      	56.  	
              UCC-1
                Financing Statement (CM) AH Tenant Corporation (recorded in
                California)

            

    

     

    
      	57.  	
              Recourse
                Liabilities Guaranty dated April 3, 2006, by Hilton Hotels Corporation
                and
                CNL Hospitality Partners, LP

            

    

     

    
      	58.  	
              Estoppel
                Certificate Operating Lease (PH) dated April 3, 2006, by AH Tenant
                Corporation and PH Hotel Partners,
                LP

            

    

     

    
      	59.  	
              Estoppel
                Certificate Operating Lease (AH) dated April 3, 2006, by AH Tenant
                Corporation and AH Hotel Partners,
                LP

            

    

     

    
      	60.  	
              Estoppel
                Certificate Operating Lease (HMA) dated April 3, 2006, by AH Tenant
                Corporation and HMA Hotel Partners,
                LP

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	61.  	
              Estoppel
                Certificate Operating Lease (CM) dated April 3, 2006, by AH Tenant
                Corporation and CM Hotel Partners,
                LP

            

    

     

    
      	62.  	
              Subordination
                Agreement (PH) dated April 3, 2006, by AH Tenant Corporation and
                PH Hotel
                Partners, LP

            

    

     

    
      	63.  	
              Subordination
                Agreement (AH) dated April 3, 2006, by AH Tenant Corporation and
                AH Hotel
                Partners, LP

            

    

     

    
      	64.  	
              Subordination
                Agreement (HMA) dated April 3, 2006, by AH Tenant Corporation and
                HMA
                Hotel Partners, LP

            

    

     

    
      	65.  	
              Subordination
                Agreement (CM) dated April 3, 2006, by AH Tenant Corporation and
                CM Hotel
                Partners, LP

            

    

     

    
      	66.  	
              Manager’s
                Consent and Subordination (PH) dated April 3, 2006, by Promos Hotels,
                Inc.

            

    

     

    
      	67.  	
              Manager’s
                Consent and Subordination (AH) dated April 3, 2006, by Hilton Suites,
                Inc.

            

    

     

    
      	68.  	
              Manager’s
                Consent and Subordination (HMA) dated April 3, 2006, by Hilton Hotels
                Corporation

            

    

     

    
      	69.  	
              Manager’s
                Consent and Subordination (CM) dated April 3, 2006, by Hilton Hotels
                Corporation

            

    

     

    
      	70.  	
              Lessee
                Security Agreement (PH) dated April 3, 2006, by AH Tenant
                Corporation

            

    

     

    
      	71.  	
              Lessee
                Security Agreement (AH) dated April 3, 2006, by AH Tenant
                Corporation

            

    

     

    
      	72.  	
              Lessee
                Security Agreement (HMA) dated April 3, 2006, by AH Tenant
                Corporation

            

    

     

    
      	73.  	
              Lessee
                Security Agreement (CM) dated April 3, 2006, by AH Tenant
                Corporation

            

    

     

    
      	74.  	
              Embassy
                Suites Comfort Letter (PH) dated April 3, 2006 by Promos Hotels,
                Inc.

            

    

     

    
      	75.  	
              Partnership
                Certificate dated April 3, 2006, respecting PH Hotel Partners,
                LP

            

    

     

    
      	76.  	
              Partnership
                Certificate dated April 3, 2006, respecting AH Hotel Partners,
                LP

            

    

     

    
      	77.  	
              Partnership
                Certificate dated April 3, 2006, respecting HMA Hotel Partners,
                LP

            

    

     

    
      	78.  	
              Partnership
                Certificate dated April 3, 2006, respecting CM Hotel Partners,
                LP

            

    

     

    
      	79.  	
              Partnership
                Certificate dated April 3, 2006, respecting CNL Hospitality Partners,
                LP

            

    

     

    
      	80.  	
              Partnership
                Certificate dated April 3, 2006, respecting CNL HHC Partners,
                LP

            

    

     

    
      	81.  	
              Corporate
                Certificate dated April 3, 2006, respecting AH Tenant
                Corporation

            

    

     

    
      	82.  	
              Corporate
                Certificate dated April 3, 2006, respecting Hilton Hotels
                Corporation

            

    

     

    
      	83.  	
              Corporate
                Certificate dated April 3, 2006, respecting CNL Hospitality GP
                Corp.

            

    

     

    
      	84.  	
              LLC
                Certificate dated April 3, 2006, respecting CNL HHC,
                LLC

            

    

     

    
      	85.  	
              LLC
                Certificate dated April 3, 2006, respecting AH Hotel GP,
                LLC

            

    

     

    
      	86.  	
              LLC
                Certificate dated April 3, 2006, respecting PH Hotel GP,
                LLC

            

    

     

    
      	87.  	
              LLC
                Certificate dated April 3, 2006, respecting HMA Hotel GP,
                LLC

            

    

     

    
      	88.  	
              LLC
                Certificate dated April 3, 2006, respecting CM Hotel GP,
                LLC

            

    

     

    
      	89.  	
              Cash
                Management/Clearing Account Agreements (if any)
                (PH)

            

    

     

    
      	90.  	
              Cash
                Management/Clearing Account Agreements (if any)
                (AH)

            

    

     

    
      	91.  	
              Cash
                Management/Clearing Account Agreements (if any)
                (HMA)

            

    

     

    
      	92.  	
              Cash
                Management/Clearing Account Agreements (if any)
                (CM)

            

    

     

    
      	93.  	
              Anti-Coercion
                Statement (PH) dated April 3, 2006 by PH Hotel Partners,
                LP

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	94.  	
              Anti-Coercion
                Statement (AH) dated April 3, 2006 by AH Hotel Partners,
                LP

            

    

     

    
      	95.  	
              Anti-Coercion
                Statement (HMA) dated April 3, 2006 by HMA Hotel Partners,
                LP

            

    

     

    
      	96.  	
              Anti-Coercion
                Statement (CM) dated April 3, 2006 by CM Hotel Partners,
                LP

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]