Document:

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                                                                 Exhibit 10.6(b)

          REAFFIRMATION AND MODIFICATION OF LIMITED GUARANTY AGREEMENT
                      AND ENVIRONMENTAL INDEMNITY AGREEMENT

          THIS REAFFIRMATION AND MODIFICATION OF LIMITED GUARANTY AGREEMENT AND
ENVIRONMENTAL INDEMNITY AGREEMENT (this "Reaffirmation"), dated as of March 24,
2004, to be effective as of December 1, 2003 (the "Effective Date"), is executed
by SONESTA INTERNATIONAL HOTELS CORPORATION, a New York corporation
("Guarantor"), for the use and benefit of SUNAMERICA LIFE INSURANCE COMPANY, an
Arizona corporation ("Lender").

                                    RECITALS

          A.   On or about January 6, 1997, Lender made a $22,880,000.00 loan
(the "Original Loan") to Charterhouse of Cambridge Trust and Sonesta of
Massachusetts, Inc. (collectively, the "Borrower").

          B.   The Original Loan (i) was evidenced by a Promissory Note dated
December 18, 1996, in the original principal amount of the Original Loan
executed by Borrower to the order of Lender (the "Original Note"), (ii) is
secured by, among other things, a Mortgage, Security Agreement, Fixture Filing,
Financing Statement and Assignment of Leases and Rents dated as of December 18,
1996 (the "Original Mortgage"), executed by Borrower for the benefit of Lender,
encumbering certain real property and improvements thereon commonly known as the
Royal Sonesta Hotel, City of Cambridge, County of Middlesex, Massachusetts, more
particularly described in the Original Mortgage (the "Property") and recorded on
July 3, 1997, at Book 26983, Page 631, in the Middlesex South District Registry
of Deeds (the "Records"), and (iii) is guaranteed as to certain obligations by
Guarantor pursuant to a Limited Guaranty Agreement dated as of December 18, 1996
(the "Original Guaranty").

          C.   In connection with the Original Loan, Borrower and Guarantor also
executed that certain Environmental Indemnity Agreement dated as of December 18,
1996 (the "Original Environmental Indemnity").

          D.   On or about June 2, 2000, Lender made an additional advance of
$19,865,733.66 (the "Additional Advance") on the Original Loan, and in
connection with the Additional Advance, (i) Lender and Borrower consolidated,
amended and restated the Original Loan and the Additional Advance pursuant to
that certain Amended and Restated Promissory Note dated May 30, 2000, in the
original principal amount of $41,000,000.00, executed by Borrower to the order
of Lender (the "Amended and Restated Note"), (ii) Lender and Borrower entered
into certain other modifications to the Original Loan pursuant to that certain
Mortgage and Loan Modification Agreement dated as of May 30, 2000 and recorded
at Book 31470, Page 360, in the Records (the "First Modification") executed by
Lender and Borrower, and (iii) Guarantor reaffirmed its obligations under the
Original Guaranty and Original Environmental Indemnity pursuant to that certain
Reaffirmation and Modification of Limited Guaranty Agreement and Environmental
Indemnity Agreement dated as of May 30, 2000 (the "First Reaffirmation")
executed by Guarantor for the benefit of Lender.

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          E.   The Original Guaranty and the Original Environmental Indemnity,
each as modified and reaffirmed pursuant to the First Reaffirmation, are
referred to herein as the "Guaranty" and "Environmental Indemnity,"
respectively. The Original Mortgage, as modified by the First Modification, is
referred to herein as the "Mortgage." The Amended and Restated Note, the
Mortgage and each other document executed by Borrower and evidencing or securing
the Original Loan, each as modified by the First Modification Agreement,
together with the First Modification Agreement and each other document executed
by Borrower in connection with the Additional Advance, are referred to herein,
collectively, as the "Loan Documents."

          F.   On or about the date hereof, but effective as of the Effective
Date, Lender and Borrower are amending certain terms and provisions of the
Amended and Restated Note, the Mortgage and certain other of the Loan Documents
pursuant to a Mortgage and Loan Modification Agreement dated as of the date
hereof (the "Second Modification Agreement") executed by Lender and Borrower to,
among other things, alter certain of the interest rate and payment provisions
set forth in the Amended and Restated Note (the "Restructure").

          G.   As a condition of Lender's willingness to enter into the
Restructure and to execute the Second Modification Agreement, Lender has
required that Guarantor execute this Reaffirmation.

          NOW THEREFORE, in consideration of the Restructure, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor hereby agrees as follows:

                                    AGREEMENT

          1.   All references to the term "Note" contained in the Guaranty and
the Environmental Indemnity shall hereafter be deemed to refer to the Amended
and Restated Note, as amended by the Second Modification Agreement.

          2.   All references to the term "Mortgage" contained in the Guaranty
and the Environmental Indemnity shall hereafter be deemed to refer to the
Mortgage, as modified by the Second Modification Agreement.

          3.   All references to the term "Loan Documents" contained in the
Guaranty and the Environmental Indemnity shall hereafter be deemed to refer to
the Loan Documents, as modified by the Second Modification Agreement.

          4.   Guarantor hereby consents to (a) the Restructure, (b) each and
every provision of the Amended and Restated Note, as modified by the Second
Modification Agreement, (c) each and every provision of the Mortgage, as
modified by the Second Modification Agreement, and (d) each and every provision
of the Loan Documents, as modified by the Second Modification Agreement.

          5.   Guarantor hereby agrees that all of the terms and provisions of
the Guaranty and the Environmental Indemnity, as modified hereby, are hereby
ratified and reaffirmed, and Guarantor hereby acknowledges the validity and
enforceability thereof.

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          6.   Guarantor hereby re-makes each and every representation of
Guarantor to Lender contained in Section 1 of the Environmental Indemnity.

          7.   Except as expressly modified herein, the terms and conditions of
the Environmental Indemnity and Guaranty shall remain unmodified and in full
force and effect.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, Guarantor has executed this Reaffirmation as of
the date first above written.

                                     GUARANTOR:

                                     SONESTA INTERNATIONAL HOTELS
                                     CORPORATION, a New York corporation

                                     By:/S/
                                        ----------------------------------------
                                        Peter J. Sonnabend, Vice President

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                                                                 Exhibit 10.7(a)

STATE OF FLORIDA
COUNTY OF MIAMI-DADE

Prepared by:
And when recorded mail to:

Otten, Johnson, Robinson,
   Neff & Ragonetti, P.C.
950 Seventeenth Street
Suite 1600
Denver, Colorado 80202

Attention:  David T. Brennan, Esq.

                    MORTGAGE AND LOAN MODIFICATION AGREEMENT

          This MORTGAGE AND LOAN MODIFICATION AGREEMENT (this "Agreement"),
dated as of March 24, 2004, to be effective as of December 1, 2003 (the
"Effective Date"), is made by and between SONESTA BEACH RESORT LIMITED
PARTNERSHIP, a Delaware limited partnership ("Borrower"), and SUNAMERICA LIFE
INSURANCE COMPANY, an Arizona corporation ("Lender").

                                    RECITALS

          A.    On or about June 2, 2000, Lender made a loan in the principal
amount of $31,000,000.00 (the "Loan") to Borrower.

          B.    The Loan is evidenced by a Consolidated and Renewed Promissory
Note dated May 30, 2000, in the original principal amount of the Loan executed
by Borrower to the order of Lender (the "Note"), and is secured by, among other
things, a Consolidated, Amended and Restated Mortgage, Security Agreement,
Fixture Filing, Financing Statement and Assignment of Leases and Rents dated as
of May 30, 2000 (the "First Mortgage"), executed by Borrower for the benefit of
Lender, encumbering certain real property and improvements thereon commonly
known as the Sonesta Beach Resort, Key Biscayne, County of Miami-Dade, Florida,
and more particularly described in the First Mortgage and in EXHIBIT A attached
hereto (the "Property"). The First Mortgage was recorded with the Clerk of
Miami-Dade County, Florida, on June 2, 2000, in Official Records Book 19137,
Page 1265.

          C.    In connection with the Loan, Borrower executed a Replacement
Reserve and Security Agreement dated as of May 30, 2000 (the "Replacement
Reserve and Security Agreement") for the benefit of Lender.

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          D.    The Note, the First Mortgage, the Replacement Reserve and
Security Agreement and each other document executed by Borrower and evidencing
or securing the Loan (excluding, however, the Non-Recourse Guaranty Agreement
and the Second Mortgage (as such terms are hereinafter defined)), are referred
to herein, collectively, as the "Loan Documents."

          E.    On or about June 2, 2000, Lender also made an additional advance
of $19,865,733.66 (the "Cambridge Additional Advance") on an existing loan (the
"Original Cambridge Loan") to certain affiliates of Borrower, Sonesta of
Massachusetts, Inc., a Massachusetts corporation, and Roger P. Sonnabend, Peter
J. Sonnabend, and Boy A.J. van Riel, trustees of the Charterhouse of Cambridge
Trust, and not individually, under a Declaration of Trust dated December 27,
1963 and recorded at Middlesex South, Commonwealth of Massachusetts, Deeds Book
11160, Page 340, as amended by Amendment of Declaration of Trust dated July 8,
1966 and recorded at Middlesex South, Commonwealth of Massachusetts, Deeds Book
11160, Page 359 (collectively, the "Cambridge Borrower"), and, in connection
with the Cambridge Additional Advance, (i) Lender and Cambridge Borrower
consolidated, amended and restated the Original Cambridge Loan and the Cambridge
Additional Advance pursuant to that certain Amended and Restated Promissory Note
dated May 30, 2000, in the original principal amount of $41,000,000.00, executed
by Cambridge Borrower to the order of Lender (the "Cambridge Note"), and (ii)
Lender and Cambridge Borrower entered into certain other modifications to the
Original Cambridge Loan pursuant to that certain Mortgage and Loan Modification
Agreement dated as of May 30, 2000 executed by Lender and Cambridge Borrower
(the "First Cambridge Modification Agreement") to, among other things,
cross-default and cross-collateralize the Original Cambridge Loan and the Loan.

          F.    In connection with the Cambridge Additional Advance, and in
order to effectuate the cross collateralization of the Original Cambridge Loan
and the Loan, Lender required Borrower to execute that certain Non-Recourse
Guaranty Agreement dated as of May 30, 2000 (the "Non-Recourse Guaranty
Agreement"), whereby Borrower guaranteed payment and performance of Cambridge
Borrower's obligations under the Original Cambridge Loan, and to secure
Borrower's obligations under such Non-Recourse Guaranty Agreement with a second
Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment
of Leases and Rents dated as of May 30, 2000 granted by Borrower for the benefit
of Lender and encumbering the Property (the "Second Mortgage"). The Second
Mortgage was recorded with the Clerk of Miami-Dade County, Florida, on June 2,
2000, in Official Records Book 19137, Page 1312.

          G.    The loan evidenced by the Cambridge Note, as modified by the
First Cambridge Modification Agreement and as modified pursuant to the Mortgage
and Loan Modification Agreement of even date herewith between Cambridge Borrower
and Lender, is referred to herein as the "Cambridge Loan."

          H.    As of the Effective Date, (i) the outstanding principal balance
existing under the Loan is $29,750,020.66 and there is no accrued and unpaid
interest due thereon, and (ii) the outstanding principal balance existing under
the Cambridge Loan is $39,346,801.84 and there is no accrued and unpaid interest
due thereon.

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          I.    Borrower and Lender wish to provide modified repayment terms for
the Loan, and wish to modify certain terms of the Note, the First Mortgage, the
Second Mortgage and the other Loan Documents to reflect certain other agreements
as hereinafter provided.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
as follows:

          1.    NO DEFENSES, SETOFFS OR COUNTERCLAIMS. The Lender has performed
all of its obligations to date under the Loan Documents, and the amounts owed by
the Borrower to the Lender under the Loan are free from any defenses, setoffs or
counterclaims in favor of the Borrower against the Lender. To the extent that
any such defenses, setoffs, or counterclaims now exist, Borrower hereby waives
and releases the same in exchange for the Lender's agreement to modify the Loan
and the Loan Documents as set forth herein.

          2.    MODIFICATION OF NOTE.

                (a)  Section 1 of the Note is hereby modified to provide that:

                     (i)   The balance of principal outstanding from time to
     time under the Note shall continue to bear interest at eight and sixty
     one-hundredths percent (8.60%, hereinafter the "Note Rate"), based on a
     360-day year for the actual number of days elapsed.

                     (ii)  Commencing on January 1, 2004, and on the first day
     of each month thereafter through and including December 1, 2006 (the
     "Reduced Payment Period"), provided that no Event of Default has occurred
     under the Note or any of the other Loan Documents, payments of interest
     only on the principal balance of the Note, at the rate of five percent
     (5.00%) per annum based on a 360-day year for the actual number of days
     elapsed (the "Reduced Payment Rate"), shall be payable, in arrears. Unpaid
     accrued interest on the Note shall be added to the principal balance of the
     Note on December 1, 2004, December 1, 2005 and December 1, 2006. Maker may
     pay any accrued but unpaid interest on the Note which has been added to the
     principal balance of the Note, without prepayment premium, at any time and
     from time to time, on or before December 31, 2007, as provided in Section
     4.23 of the First Mortgage.

                     (iii) Commencing on January 1, 2007, and on the first day
     of each month thereafter through and including December 1, 2007 (the
     "Interest Only Payment Period"), provided that no Event of Default has
     occurred under the Note or any of the other Loan Documents, payments of
     interest only on the principal balance of the Note, at the Note Rate, based
     on a 360-day year for the actual number of days elapsed, shall be payable,
     in arrears.

                     (iv)  Commencing on January 1, 2008, and on the first day
     of each month thereafter through and including June 1, 2010 (the "Principal
     and Interest

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     Payment Period"), combined payments of principal and interest shall be
     payable, in arrears, in the amount of $251,712.92.

                     (v)   The entire outstanding principal balance of the Note,
     together with all accrued and unpaid interest and all other sums due
     thereunder, shall be due and payable in full on July 1, 2010 (the "Original
     Maturity Date").

                (b)  Section 5 of the Note is hereby modified to provide that
if Maker delivers a Defeasance Notice to Holder during the Reduced Payment
Period or the Interest Only Payment Period:

                     (i)   Unpaid accrued interest on the Note shall be added to
     the principal balance of the Note on the Defeasance Date; and

                     (ii)  Maker shall then satisfy the Defeasance Requirements,
     including the remittance of the Defeasance Deposit, such that the
     Defeasance Collateral will be sufficient to pay as and when due the
     principal of and interest on the Note on each regularly scheduled payment
     date thereunder and on the Original Maturity Date, at the Note Rate and on
     the payment schedule set forth in the Note, and not as modified by Section
     2(a) of this Agreement.

                (c)  The third sentence of Section 18 of the Note is hereby
deleted in its entirety and replaced with the following:

          The agreement contained in this paragraph to limit the personal
          liability of Maker shall become null and void and be of no further
          force and effect in the event (i) that the Property or any part
          thereof or any interest therein, or any interest in Maker, shall be
          further encumbered by a voluntary lien securing any obligation upon
          which Maker or any general partner, principal or affiliate of Maker
          shall be personally liable for repayment, whether as obligor or
          guarantor which has not been approved in advance by Holder; (ii) of
          any breach or violation of Section 4.23 or 4.24 of the Mortgage; (iii)
          of any breach or violation of Section 5.4, 5.5 or 5.7 of the Mortgage;
          (iv) of any fraud or material misrepresentation by Maker in connection
          with the Property, the Loan Documents or the application made by Maker
          for the Loan; or (v) of any execution, amendment, modification or
          termination without the prior written consent of Holder, if such
          consent is required under the terms of Section 5.3 of the Mortgage, of
          any Lease.

          3.    MODIFICATION OF FIRST MORTGAGE.

                (a)  Sections 1.2, 1.3, 1.6, 1.12, 1.13, 1.15, 1.20, 1.21, 1.25
and 1.26 of the First Mortgage are hereby deleted in their entireties, and the
following substituted therefor:

          "1.2  CAMBRIDGE LOAN DOCUMENTS: The Cambridge Note, all of the
          mortgages, deeds of trust, and other instruments and

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          documents executed by the Cambridge Borrower and/or Guarantor securing
          the Cambridge Note, including any guaranty agreements, environmental
          indemnity agreements, replacement reserve agreements, collateral
          assignment of liquor licenses, lease certificates, and all other
          documents executed or delivered by the Cambridge Borrower and/or
          Guarantor in connection with the transaction pursuant to which the
          Cambridge Note has been executed and delivered, together with the
          Cambridge Modification Agreement and the other documents executed by
          the Cambridge Borrower and/or Guarantor in connection with the
          Cambridge Modification Agreement. The term 'Cambridge Loan Documents'
          also includes all modifications, extensions, renewals, and
          replacements of each document referred to above.

          1.3   CAMBRIDGE NOTE: The Amended and Restated Promissory Note dated
          as of May 30, 2000 executed by the Cambridge Borrower and payable to
          the order to Mortgagee in the principal face amount of $41,000,000.00,
          as modified by the Cambridge Modification Agreement, the last payment
          under which is due on July 1, 2010, or, if extended by Mortgagee by
          its terms, July 1, 2015, unless such due date is accelerated, together
          with all renewals, extensions and modifications of such consolidated
          and renewed promissory note.

          1.6   ENVIRONMENTAL INDEMNITY AGREEMENT: The Environmental Indemnity
          Agreement dated as of May 30, 2000 made by Mortgagor and Guarantor for
          the benefit of Mortgagee, as modified by (a) the Modification
          Agreement, and (d) the Reaffirmation Agreement.

          1.12  INTANGIBLE PERSONALTY: The right to use all trademarks and
          trade names and symbols or logos used in connection therewith, or any
          modifications or variations thereof, in connection with the operation
          of the improvements existing or to be constructed on the Property,
          together with all accounts, deposit accounts (including, without
          limitation, the Pledged Accounts), letter of credit rights, monies in
          the possession of Mortgagee (including without limitation proceeds
          from insurance, retainages, deposits for taxes and insurance and
          monies on deposit in the Additional Collateral Account), Permits,
          contract rights (including, without limitation, rights to receive
          insurance proceeds), amounts paid as rents of the Property or the
          fees, charges, accounts, or other payments for the use or occupancy of
          rooms and other public facilities in the Property, and general
          intangibles (whether now owned or hereafter acquired, and including
          proceeds thereof) relating to or arising from Mortgagor's ownership,
          use, operation, leasing, or sale of all or any part of the Property,
          specifically including but in no way

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          limited to any right which Mortgagor may have or acquire to transfer
          any development rights from the Property to other real property, and
          any development rights which may be so transferred.

          1.13  LEASE CERTIFICATE: The Certificate Concerning Leases dated as
          of March 24, 2004, and effective as of the Effective Date, made by
          Mortgagor to Mortgagee concerning the Leases.

          1.15  LIMITED GUARANTY AGREEMENT: The Limited Guaranty Agreement
          dated as of May 30, 2000 made by Guarantor for the benefit of
          Mortgagee, as modified by the Reaffirmation Agreement.

          1.20  NON-RECOURSE GUARANTY AGREEMENT: The Non-Recourse Guaranty
          Agreement dated as of May 30, 2000 made by Mortgagor for the benefit
          of Mortgagee, and secured by the Second Mortgage, as modified by the
          Reaffirmation and Modification of Non-Recourse Guaranty Agreement
          dated as of March 24, 2004, executed by Mortgagor for the benefit of
          Mortgagee, pursuant to which Mortgagor has guaranteed payment and
          performance of the Cambridge Note and the other Cambridge Loan
          Documents.

          1.21  NOTE: Mortgagor's Consolidated and Renewed Promissory Note
          dated as of May 30, 2000, payable to the order of Mortgagee in the
          principal face amount of $31,000,000.00, as modified by the
          Modification Agreement, the last payment under which is due on July 1,
          2010 or, if extended pursuant to its terms, July 1, 2015, unless such
          due date is accelerated, together with all renewals, extensions and
          modifications of such Promissory Note. All terms and provisions of the
          Note are incorporated by this reference in this Mortgage.

          1.25  REPLACEMENT RESERVE AND SECURITY AGREEMENT: The Replacement
          Reserve and Security Agreement dated as of May 30, 2000, executed by
          Mortgagor for the benefit of Mortgagee, as modified by the
          Modification Agreement.

          1.26  SECOND MORTGAGE: The Mortgage, Security Agreement, Fixture
          Filing, Financing Statement and Assignment of Leases and Rents dated
          as of May 30, 2000 executed by Mortgagor for the benefit of Mortgagee
          and securing Mortgagor's obligations under the Non-Recourse Guaranty
          Agreement, as modified by the Modification Agreement."

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                (b)  The following  definitions  are hereby added to the end of
Article 1 of the First Mortgage:

          "1.28 ADDITIONAL COLLATERAL ACCOUNT: An account maintained by
          Mortgagee or a Servicer designated by Mortgagee, into which Excess
          Cash Flow shall be deposited in accordance with Section 4.23, and
          which shall be additional Collateral for the Loan.

          1.29  ANNUAL CAPITAL EXPENSE AMOUNT: An amount equal to five percent
          (5.00%) of Gross Revenue (as defined in Section 4.23(e)) for the
          Reduced Payment Period and the Interest Only Payment Period (as
          defined in Section 4.23(a)).

          1.30  CAMBRIDGE MODIFICATION AGREEMENT: The Mortgage and Loan
          Modification Agreement dated as of March 24, 2004, executed by
          Cambridge Borrower and Mortgagee.

          1.31  CAPITAL EXPENSE LIMIT: The Annual Capital Expense Amount plus
          such Annual Capital Expense Amounts accrued in prior years and not
          applied to Capital Expenses of the Property.

          1.32  EFFECTIVE DATE: December 1, 2003.

          1.33  MODIFICATION AGREEMENT: The Mortgage and Loan Modification
          Agreement dated as of March 24, 2004, and effective as of the
          Effective Date, executed by Mortgagor and Mortgagee.

          1.34  PLEDGED ACCOUNTS: The Additional Collateral Account and the
          Pledged Operating Account.

          1.35  PLEDGED OPERATING ACCOUNT: That certain deposit account (ABA #
          067001518, Account # 8026272255) maintained by Mortgagor with First
          Colonial Bank.

          1.36  REAFFIRMATION AGREEMENT: The Reaffirmation and Modification of
          Limited Guaranty Agreement and Environmental Indemnity Agreement dated
          as of March 24, 2004, and effective as of the Effective Date, executed
          by Guarantor for the benefit of Mortgagee."

                (c)  Section 4.12  of the First Mortgage is hereby  modified to
provide that, in addition to the financial reports described therein, Mortgagor
must also provide to Mortgagee, by the twentieth (20th) day of each month during
the Reduced Payment Period and the Interest Only Payment Period (as such terms
are defined in Section 4.23(a)), a report of the Gross Revenue, Operating
Expenses, Net Cash Flow and Excess Cash Flow of the Property for the previous
calendar month (the "Net Cash Flow Report"). The Net Cash Flow Report shall be
in such detail as Mortgagee may require, shall be prepared in accordance with
the Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition,
First Printing 1996 as

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adopted by the American Hotel and Motel Association, as amended or supplemented
from time to time, and shall be certified as true and correct by Mortgagor (or,
if required by Mortgagee during the continuance of any Event of Default,
certified by an independent certified public accountant acceptable to
Mortgagee).

                (d)  A new Section 4.23 is hereby added to the First Mortgage,
as follows:

          "4.23 APPLICATION OF NET CASH FLOW TO CAPITAL EXPENSES; DEFERRED
          INTEREST REDUCTION PAYMENTS; ADDITIONAL COLLATERAL ACCOUNT.

          (a)   For the period from January 1, 2004 through December 31, 2006
          (the "Reduced Payment Period"), and for the period from January 1,
          2007 to December 31, 2007 (the "Interest Only Payment Period"), all
          Net Cash Flow from the Property shall, at Mortgagor's election, either
          be (i) retained in the Pledged Operating Account or transferred by
          Mortgagor to the Central Account as provided in subsection 4.23(b),
          (ii) used to pay Capital Expenses of the Property, subject to
          Mortgagee's prior written approval to the extent that such Capital
          Expenses exceed the Capital Expense Limit, (iii) paid to Mortgagee or
          Servicer for deposit in the Additional Collateral Account, as set
          forth in subsection 4.23(b) hereof, or (iv) paid to Mortgagee (any
          such payment a "Deferred Interest Reduction Payment") and applied (A)
          first, to accrued but unpaid interest on the Loan, and (B) second, to
          accrued but unpaid interest which has been previously added to the
          principal balance of the Loan during the Reduced Payment Period
          ("Capitalized Interest"), without prepayment premium. Except for
          payments of Capitalized Interest pursuant to subsection 4.23(a)(iv)(B)
          hereof, Mortgagor shall not be permitted to prepay the principal
          balance of the Loan except as set forth in Section 5 of the Note.
          Deferred Interest Reduction Payments during the Reduced Payment Period
          and the Interest Only Payment Period, if any, may be made no more than
          once per month, and shall be remitted together with the regularly
          scheduled monthly payment of interest under the Note. Net Cash Flow
          shall not be used by Mortgagor for any purpose, other than as provided
          in this subsection 4.23(a).

          (b)   So long as no Event of Default has occurred, Mortgagor may make
          daily transfers of Net Cash Flow from the Property to a corporate bank
          account maintained by Guarantor (the "Central Account"), provided that
          Guarantor shall properly account for all funds so transferred as
          Mortgagor's funds. So long as no Event of Default has occurred, Net
          Cash Flow (as defined in subsection 4.23(d) hereof) from the Cambridge
          Property may be used to fund Operating Expenses (as defined in
          subsection 4.23(f) hereof) of the Property, and Net Cash Flow from the
          Property may be used to fund

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          Operating Expenses of the Cambridge Property. So long as no Event of
          Default has occurred, Mortgagor and Cambridge Borrower may calculate
          Gross Revenues, Operating Expenses, Net Cash Flow and Excess Cash
          Flow, for purposes of this Section 4.23, on a consolidated basis for
          both the Property and the Cambridge Property. Each month during the
          Reduced Payment Period and the Interest Only Payment Period, on or
          before the twentieth (20th) day of the month, Mortgagor shall remit to
          Mortgagee all Net Cash Flow for the prior month from the Property, or
          from the Property and the Cambridge Property on a consolidated basis,
          as applicable, which was not applied in accordance with subsections
          4.23(a)(ii) or (iv) hereof (the "Excess Cash Flow"), if any. All
          Excess Cash Flow so received by Mortgagee shall be retained in an
          account (the "Additional Collateral Account") maintained by Mortgagee
          or an entity designated by Mortgagee to service the Loan ("Servicer"),
          and held as additional Collateral for the Loan. So long as no Event of
          Default has occurred, in months in which Gross Revenue from the
          Property (or from the Property and the Cambridge Property on a
          consolidated basis, as applicable) is insufficient to fund Operating
          Expenses of the Property (or of the Property and the Cambridge
          Property on a consolidated basis, as applicable), Mortgagor may obtain
          a disbursement of funds from the Additional Collateral Account in the
          lesser of (i) the amount necessary to pay the unpaid Operating
          Expenses for the subject month, or (ii) the balance in the Additional
          Collateral Account, less any minimum required balance required by the
          depository bank to be maintained therein, upon submission of a written
          request to Mortgagee or Servicer. So long as no Event of Default has
          occurred, Mortgagor may obtain a disbursement of funds from the
          Additional Collateral Account to make a Deferred Interest Reduction
          Payment to Mortgagee as provided in subsection 4.23(a)(iv), in the
          lesser of (i) the amount requested by Mortgagor to make the Deferred
          Interest Reduction Payment, or (ii) the balance in the Additional
          Collateral Account, less any minimum required balance required by the
          depository bank to be maintained therein, upon submission of a written
          notice to Mortgagee or Servicer.

          (c)   The annual operating statements for the Property described in
          Subsection 4.12 hereof shall indicate the amount of Net Cash Flow for
          each twelve month period from January 1 through December 31 included
          in the Reduced Payment Period and the Interest Only Payment Period,
          and shall certify (i) the application of Net Cash Flow for the
          relevant period to Capital Expenses, subject to Mortgagee's prior
          written approval to the extent that

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          such Capital Expenses exceed the Capital Expense Limit; (ii) the
          payment of Net Cash Flow for the relevant period to Mortgagee for
          deposit in the Additional Collateral Account; and/or (iii) that
          Deferred Interest Reduction Payment(s) to Mortgagee have been made in
          the amount of all remaining Net Cash Flow for the relevant period.

          (d)   For purposes of this Section 4.23, "Net Cash Flow" shall mean
          the difference between Gross Revenue and Operating Expenses for the
          applicable period.

          (e)   For purposes of this Section 4.23, "Gross Revenue" shall mean
          all revenue received by or on behalf of Mortgagor from or with respect
          to the Property for the relevant period for which the calculation of
          Gross Revenue is being made, including, but not limited to rents, room
          charges, parking fees, payments from tenants and other occupants of
          any portion of the Property or from the operation of the Property, and
          payments received from insurance on account of business or rental
          interruption and condemnation proceeds from any temporary use or
          occupancy. Gross Revenue shall not include: (i) proceeds from the sale
          or other disposition of any part or all of the Property, or from any
          financing or refinancing of the Property; (ii) proceeds from any
          condemnation of any part or all of the Property (except for temporary
          use or occupancy); (iii) proceeds on account of a casualty to the
          Property (other than payments from insurance on account of business or
          rental interruption); (iv) other insurance proceeds (other than in
          compensation of lost rent or its equivalent); (v) similar items or
          transactions, the proceeds of which under generally accepted
          accounting principles are deemed attributable to capital and are not
          in the nature of rent; and (vi) contributions or loans to Borrower by
          any member or affiliate of Borrower.

          (f)   For purposes of this Section 4.23, "Operating Expenses" shall
          mean all ordinary and necessary operating expenses actually incurred
          by Mortgagor in connection with the operation of the Property and the
          continued existence in good standing of Mortgagor for the relevant
          period for which the calculation of Operating Expenses is being made,
          including but not limited to (i) payments made to Mortgagee for taxes
          and insurance, if any, under the Mortgage, (ii) debt service as
          required by the Note (excluding Deferred Interest Reduction Payments),
          and (iii) actual Capital Expenses of the Property, not in excess of
          the Capital Expense Limit, paid in accordance herewith, but excluding
          (a) any non-cash expenditure, such as depreciation, and (b) any
          payment to a member or affiliate of Mortgagor, including, without
          limitation, payments to a member or affiliate of Mortgagor for
          management of

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          the Property, not pre-approved by Mortgagee, but including management
          fees paid in accordance with a Management Agreement entered into by
          Mortgagor (if any) and approved by Mortgagee. For purposes of this
          subsection 4.23(f), the fees, and the methods of calculation thereof,
          indicated on the "Corporate Fees and Charges Schedule" delivered by
          Mortgagor to Mortgagee on February 20, 2004 have been pre-approved by
          Mortgagee.

          (g)   For purposes of this Section 4.23, "Capital Expenses" shall mean
          all cash expenditures for the Property that would be considered
          capital in nature under generally accepted accounting principles."

                (e)  A new Section 4.24 is hereby added to the First Mortgage,
as follows:

          "4.24 COVENANTS CONCERNING ACCOUNTS.

          (a)   During the term of the Loan, Mortgagor shall maintain the
          Pledged Operating Account as the exclusive account into which Gross
          Revenue from the Property shall be deposited.

          (b)   Unless and until Mortgagor has received written notice from
          Mortgagee that an Event of Default has occurred and specifying the
          Event of Default (any such notice being referred to herein,
          individually, as a "Default Notice"), (i) Mortgagor shall deposit all
          Gross Revenue received by or for the benefit of Mortgagor and
          attributable to the Property into the Pledged Operating Account, and
          (ii) funds on deposit in the Pledged Operating Account may be
          withdrawn by Mortgagor from time to time to pay Operating Expenses as
          and when due, to pay for Capital Expenses in amounts not to exceed the
          accrued Capital Expense Limit, and for transfer to the Central
          Account, subject to the restrictions contained in this Mortgage.

          (c)   After Mortgagor's receipt of a Default Notice, and during the
          continuance of any Event of Default, (i) Mortgagor shall deposit all
          revenues received by or for the benefit of Mortgagor and attributable
          to the Property into the Pledged Operating Account on the business day
          received by Mortgagor, and (ii) Mortgagor shall have no right to
          withdraw any funds in the Pledged Operating Account as contemplated in
          Section 4.24(b) above for any purpose, including without limitation
          for transfer to the Central Account.

          (d)   After Mortgagee has given any Default Notice, and during the
          continuance of any Event of Default, Mortgagee shall apply, or

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          cause to be applied, as and when due, funds on deposit in the Pledged
          Operating Account and/or the Additional Collateral Account in the
          following order and priority:

                     (i)   first, to Mortgagor to pay actual Operating Expenses
          and/or, subject to Mortgagee's prior written consent, not to be
          unreasonably withheld, Capital Expenses, as set forth in a request for
          disbursement to be delivered no more than twice monthly by Mortgagor
          to Mortgagee;

                     (ii)  second, to Mortgagor, or Mortgagor's account, in
          payment of monthly amounts pursuant to the tax and insurance escrows,
          if any, for the Property required under this Mortgage;

                     (iii) third, to Mortgagee, or Mortgagee's account, in
          payment of any late charges, default interest and other sums
          previously due under the Note or other Loan Documents (other than
          regularly scheduled monthly payments due under the Note) and to
          repayment of any advances, costs, expenses or other payments owing by
          Mortgagor to Mortgagee under this Mortgage or the other Loan
          Documents; and

                     (iv)  fourth, to Mortgagee, or Mortgagee's account, in
          payment of the regularly scheduled monthly payment then due under the
          Note.

          (e)   Mortgagor shall deposit, and Mortgagor shall cause its agents
          and/or property manager or managers to deposit, all revenues received
          by or for the benefit of Mortgagor and attributable to the Property
          into the Pledged Operating Account by wire transfer or by direct or
          traditional deposit, and, if any such revenues are received by
          Mortgagor in the form of checks, drafts or other instruments then
          Mortgagor shall also immediately endorse (if applicable) and deposit
          same into the Pledged Operating Account."

                (f)  A new Section 4.25 is hereby added to the First Mortgage,
as follows:

          "4.25 APPRAISAL. On one occasion while any portion of the Secured
          Obligations remains unpaid, upon written request by Mortgagee,
          Mortgagor shall obtain and deliver to Mortgagee, at Mortgagor's
          expense, an MAI appraisal of the Property (a) made by an appraiser
          certified in the state where the Property is located and approved by
          Mortgagee, and (b) satisfactory to Mortgagee in all other respects."

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                (g)  A new Section 4.26 is hereby added to the First Mortgage,
as follows:

          "4.26 CONSENT TO RELIEF FROM AUTOMATIC STAY. In the event of the
          filing of a petition in bankruptcy by or against Mortgagor under the
          United States Bankruptcy Code, Mortgagor consents and agrees to the
          entry of immediate relief from the automatic stay of section 362(a) of
          the Bankruptcy Code, and shall not contest any motion by Mortgagee for
          termination of, or other relief from, such automatic stay."

                (h)  A new Section 5.11 is hereby added to the First Mortgage,
as follows:

          "5.11 DISTRIBUTIONS TO OWNERS PRIOR TO PRINCIPAL AND INTEREST
          PAYMENT PERIOD. Without the prior written consent of Mortgagee,
          Mortgagor will not distribute any portion of the Gross Revenue from
          the Property to any other holder of a direct or indirect ownership
          interest in Borrower, prior to the commencement of the Principal and
          Interest Payment Period (as defined in the Note); provided, however,
          that payments to a member or affiliate of Mortgagor which have been
          pre-approved by Mortgagee, as described in subsection 4.23(f) hereof,
          shall be allowed."

                (i)  EXHIBIT B, Permitted Exception No. 1, of the First Mortgage
is hereby deleted in its entirety, and the following substituted therefor: "Real
property taxes for 2003 and subsequent years not yet due and payable."

          4.    MODIFICATION OF SECOND MORTGAGE.

                (a)  Sections 1.2, 1.3, 1.6, 1.10, 1.14, 1.15, 1.17, 1.22, 1.23
and 1.27 of the Second Mortgage are hereby deleted in their entireties, and the
following substituted therefor:

          "1.2  CAMBRIDGE LOAN DOCUMENTS: The Cambridge Note, all of the
          mortgages, deeds of trust, and other instruments and documents
          executed by the Cambridge Borrower and/or Guarantor securing the
          Cambridge Note, including any guaranty agreements, environmental
          indemnity agreements, replacement reserve agreements, collateral
          assignment of liquor licenses, lease certificates, and all other
          documents executed or delivered by the Cambridge Borrower and/or
          Guarantor in connection with the transaction pursuant to which the
          Cambridge Note has been executed and delivered, together with the
          Cambridge Modification Agreement and the other documents executed by
          the Cambridge Borrower and/or Guarantor in connection with the
          Cambridge Modification Agreement. The term 'Cambridge Loan Documents'

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          also includes all modifications, extensions, renewals, and
          replacements of each document referred to above.

          1.3   CAMBRIDGE NOTE: The Amended and Restated Promissory Note dated
          as of May 30, 2000 executed by the Cambridge Borrower and payable to
          the order to Mortgagee in the principal face amount of $41,000,000.00,
          as modified by the Cambridge Modification Agreement, the last payment
          under which is due on July 1, 2010, or, if extended by Mortgagee by
          its terms, July 1, 2015, unless such due date is accelerated, together
          with all renewals, extensions and modifications of such consolidated
          and renewed promissory note.

          1.6   ENVIRONMENTAL INDEMNITY AGREEMENT: The Environmental Indemnity
          Agreement dated as of May 30, 2000 made by Mortgagor and Guarantor for
          the benefit of Mortgagee, as modified by (a) the Modification
          Agreement, and (d) the Reaffirmation Agreement.

          1.10  FIRST MORTGAGE: The Consolidated, Amended and Restated Mortgage,
          Security Agreement, Fixture Filing, Financing Statement and Assignment
          of Leases and Rents dated as of May 30, 2000 executed by Mortgagor for
          the benefit of Mortgagee and securing Mortgagor's obligations under
          the Note, as modified by the Modification Agreement.

          1.14  INTANGIBLE PERSONALTY: The right to use all trademarks and trade
          names and symbols or logos used in connection therewith, or any
          modifications or variations thereof, in connection with the operation
          of the improvements existing or to be constructed on the Property,
          together with all accounts, deposit accounts (including, without
          limitation, the Pledged Accounts), letter of credit rights, monies in
          the possession of Mortgagee (including without limitation proceeds
          from insurance, retainages, deposits for taxes and insurance and
          monies on deposit in the Additional Collateral Account), Permits,
          contract rights (including, without limitation, rights to receive
          insurance proceeds), amounts paid as rents of the Property or the
          fees, charges, accounts, or other payments for the use or occupancy of
          rooms and other public facilities in the Property, and general
          intangibles (whether now owned or hereafter acquired, and including
          proceeds thereof) relating to or arising from Mortgagor's ownership,
          use, operation, leasing, or sale of all or any part of the Property,
          specifically including but in no way limited to any right which
          Mortgagor may have or acquire to transfer any development rights from
          the Property to other real property, and any development rights which
          may be so transferred.

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          1.15  LEASE CERTIFICATE: The Certificate Concerning Leases dated as
          of March 24, 2004, and effective as of the Effective Date, made by
          Mortgagor to Mortgagee concerning the Leases.

          1.17  LIMITED GUARANTY AGREEMENT: The Limited Guaranty Agreement
          dated as of May 30, 2000 made by Guarantor for the benefit of
          Mortgagee, as modified by the Reaffirmation Agreement.

          1.22  NON-RECOURSE GUARANTY AGREEMENT: The Non-Recourse Guaranty
          Agreement dated as of May 30, 2000 made by Mortgagor for the benefit
          of Mortgagee, as modified by the Reaffirmation and Modification of
          Non-Recourse Guaranty Agreement dated as of March 24, 2004, executed
          by Mortgagor for the benefit of Mortgagee, pursuant to which Mortgagor
          has guaranteed payment and performance of the Cambridge Note and the
          other Cambridge Loan Documents.

          1.23  NOTE: Mortgagor's Consolidated and Renewed Promissory Note
          dated as of May 30, 2000, payable to the order of Mortgagee in the
          principal face amount of $31,000,000.00, as modified by the
          Modification Agreement, the last payment under which is due on July 1,
          2010 or, if extended pursuant to its terms, July 1, 2015, unless such
          due date is accelerated, together with all renewals, extensions and
          modifications of such Promissory Note.

          1.27  REPLACEMENT RESERVE AND SECURITY AGREEMENT: The Replacement
          Reserve and Security Agreement dated as of May 30, 2000, executed by
          Mortgagor for the benefit of Mortgagee, as modified by the
          Modification Agreement."

                (b)  The following definitions are hereby added to the end of
Article 1 of the Second Mortgage:

          "1.29 ADDITIONAL COLLATERAL ACCOUNT: An account maintained by
          Mortgagee or a Servicer designated by Mortgagee, into which Excess
          Cash Flow shall be deposited in accordance with Section 4.23 of the
          First Mortgage.

          1.30  CAMBRIDGE MODIFICATION AGREEMENT: The Mortgage and Loan
          Modification Agreement dated as of March 24, 2004, executed by
          Cambridge Borrower and Mortgagee.

          1.31  EFFECTIVE DATE: December 1, 2003.

          1.32  MODIFICATION AGREEMENT: The Mortgage and Loan Modification
          Agreement dated as of March 24, 2004, and effective as of the
          Effective Date, executed by Mortgagor and Mortgagee.

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<Page>

          1.33  PLEDGED ACCOUNTS: The Additional Collateral Account and the
          Pledged Operating Account.

          1.34  PLEDGED OPERATING ACCOUNT: That certain deposit account (ABA #
          067001518, Account # 8026272255) maintained by Mortgagor with First
          Colonial Bank.

          1.35  REAFFIRMATION AGREEMENT: The Reaffirmation and Modification of
          Limited Guaranty Agreement and Environmental Indemnity Agreement dated
          as of March 24, 2004, and effective as of the Effective Date, executed
          by Guarantor for the benefit of Mortgagee."

                (c)  EXHIBIT B, Permitted Exception No. 1, of the Second
Mortgage is hereby deleted in its entirety, and the following substituted
therefor: "Real property taxes for 2003 and subsequent years not yet due and
payable."

          5.    MODIFICATION OF REPLACEMENT RESERVE AND SECURITY AGREEMENT. The
Replacement Reserve and Security Agreement is modified as follows:

                (a)  All references to the term "Note" contained in the
Replacement Reserve and Security Agreement shall be deemed to refer to the Note
as defined herein and as modified by this Agreement; all references to the term
"Loan" contained in the Replacement Reserve and Security Agreement shall be
deemed to refer to the loan evidenced by the Note.

                (b)  All references to the term "Mortgage" contained in the
Replacement Reserve and Security Agreement shall be deemed to refer to the First
Mortgage, as defined herein and as modified by this Agreement.

                (c)  All references contained in the Replacement Reserve and
Security Agreement to the term "Loan Documents" shall be deemed to refer to such
term as defined herein and as modified by this Agreement.

                (d)  From the Effective Date until the earlier of (i) the
expiration of the Interest Only Payment Period (as defined in Section 4.23(a) of
the First Mortgage), or (ii) the occurrence of a Reinstatement as set forth in
Section 6 of this Agreement, Borrower's obligations to make monthly deposits to
the Replacement Reserve Account pursuant to Section 4 of the Replacement Reserve
and Security Agreement, to submit Capital Budgets pursuant to Section 6 of the
Replacement Reserve and Security Agreement, and to submit reports pursuant to
Section 8 of the Replacement Reserve and Security Agreement shall be suspended,
it being the intent of the parties that such obligations shall be superseded by
the provisions of the new Sections 4.23, 4.24 and 5.11 of the First Mortgage
during such period.

                (e)  Any amounts on deposit in the Replacement Reserve Account
on the Effective Date may be withdrawn by Borrower and applied to Capital
Expenses during the Reduced Payment Period and/or the Interest Only Payment
Period with the prior written approval of Lender, which consent shall not be
unreasonably withheld or delayed.

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                (f)  Upon the earlier of (i) the expiration of the Interest Only
Payment Period, or (ii) the occurrence of a Reinstatement as set forth in
Section 6 of this Agreement, Borrower's obligations to make monthly deposits to
the Replacement Reserve Account pursuant to Section 4 of the Replacement Reserve
and Security Agreement, to submit Capital Budgets pursuant to Section 6 of the
Replacement Reserve and Security Agreement, and to submit reports pursuant to
Section 8 of the Replacement Reserve and Security Agreement shall be fully
reinstated.

          6.    REINSTATEMENT. On the first day of any month during the Reduced
Payment Period or the Interest Only Payment Period, provided that no Event of
Default has occurred under the Note or any of the other Loan Documents, the
Borrower may effect a "Reinstatement" of the Loan by satisfying the following
conditions:

                (a)  Borrower shall deliver written notice to Lender, not less
than thirty (30) days prior to the Reinstatement, of Borrower's intent to effect
a Reinstatement; and

                (b)  On the date of the Reinstatement, Borrower shall pay all
accrued and unpaid interest on the Note, except any accrued and unpaid interest
which has been added to the principal balance of the Note.

Upon the occurrence of a Reinstatement pursuant to this Section 6:

                (a)  Section 1 of the Note shall be amended to provide that (i)
commencing on the date of the Reinstatement, and on the first day of each month
thereafter through and including June 1, 2010, combined payments of principal
and interest shall be payable, in arrears, in the amount of $251,712.92; and
(ii) the entire outstanding principal balance of the Note, together with all
accrued and unpaid interest and all other sums due thereunder, shall be due and
payable in full on the Original Maturity Date.

                (b)  Borrower's obligations to submit monthly Net Cash Flow
Reports pursuant to Section 4.12 of the First Mortgage shall be terminated.

                (c)  Sections 4.23, 4.24 and 5.11 of the First Mortgage shall
be terminated and of no further effect.

                (d)  Borrower's obligations to make monthly deposits to the
Replacement Reserve Account pursuant to Section 4 of the Replacement Reserve and
Security Agreement, to submit Capital Budgets pursuant to Section 6 of the
Replacement Reserve and Security Agreement, and to submit reports pursuant to
Section 8 of the Replacement Reserve and Security Agreement shall be fully
reinstated.

          7.    MODIFICATION OF ENVIRONMENTAL INDEMNITY AGREEMENT. The
Environmental Indemnity Agreement dated as of May 30, 2000, executed by Borrower
and Guarantor (the "Environmental Indemnity Agreement"), is modified as follows:

                (a)  All references to the term "Note" contained in the
Environmental Indemnity Agreement shall be deemed to refer to the Note as
defined herein and as modified by

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this Agreement; all references to the term "Loan" contained in the Environmental
Indemnity Agreement shall be deemed to refer to the loan evidenced by the Note.

                (b)  All references to the term "Mortgage" contained in the
Environmental Indemnity Agreement shall be deemed to refer to the First
Mortgage, as defined herein and as modified by this Agreement.

                (c)  All references contained in the Environmental Indemnity
Agreement to the term "Loan Documents" shall be deemed to refer to such term as
defined herein and as modified by this Agreement.

                (d)  In consideration of Lender's willingness to enter into this
Agreement, Borrower hereby reaffirms all of its agreements and obligations under
the Environmental Indemnity Agreement, as modified hereby.

          8.    MODIFICATION OF OTHER LOAN DOCUMENTS.

                (a)  All references to the term "Note" contained in the Loan
Documents shall be deemed to refer to the Note as defined herein and as modified
by this Agreement; all references to the term "Loan" contained in the Loan
Documents shall be deemed to refer to the loan evidenced by the Note.

                (b)  All references to the term "Mortgage" contained in the Loan
Documents shall be deemed to refer to the First Mortgage as defined herein and
as modified by this Agreement.

                (c)  All references to the term "Second Mortgage" contained in
the Loan Documents shall be deemed to refer to the Second Mortgage as defined
herein and as modified by this Agreement.

                (d)  All references contained in any of the Loan Documents to
the term "Loan Documents" shall be deemed to refer to such term as defined
herein and as modified by this Agreement.

          9.    REAFFIRMATION OF LOAN DOCUMENTS.

                (a)  Borrower hereby re-makes each and every representation and
warranty of Borrower to Lender contained in Article III of the First Mortgage,
Article III of the Second Mortgage, and Section 1 of the Environmental Indemnity
Agreement, each as modified hereby.

                (b)  As modified hereby, the terms and provisions of the First
Mortgage, Second Mortgage and the other Loan Documents are hereby ratified and
confirmed, and shall be and remain in full force and effect, enforceable in
accordance with their terms.

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          10.   GRANT OF LIEN AND SECURITY INTEREST.

                (a)  Borrower hereby acknowledges and confirms that the First
Mortgage,  as modified hereby, constitutes a first priority security conveyance
of and first lien on the Property, subject only to the Permitted Exceptions set
forth therein. Borrower hereby acknowledges and confirms that the Second
Mortgage, as modified hereby, constitutes a second priority security conveyance
of and second lien on the Property, subject only to the First Mortgage and to
the Permitted Exceptions set forth in the Second Mortgage.

                (b)  In consideration of Lender's willingness to enter into this
Agreement and (i) with respect to the First Mortgage, as security for Borrower's
obligations under the Note and the other Loan Documents (as such terms are
defined in the First Mortgage, as modified hereby), and (ii) with respect to the
Second Mortgage, as security for Borrower's obligations under the Non-Recourse
Guaranty Agreement (as defined in the Second Mortgage, as modified hereby),
Borrower hereby (A) grants, bargains, sells, conveys, mortgages, and warrants
unto Lender the entire right, title, interest and estate of Borrower in and to
the Property, whether now owned or hereafter acquired; TO HAVE AND TO HOLD the
same, together with all and singular the rights, hereditaments, and
appurtenances in anywise appertaining or belonging thereto, unto Lender and
Lender's successors, substitutes and assigns forever, and (B) grants to Lender a
security interest in the Property, Chattels and Intangible Personalty (as
defined in the First Mortgage and Second Mortgage, each as modified hereby),
each on the terms and conditions set forth in the First Mortgage and Second
Mortgage, as modified hereby. Notwithstanding anything to the contrary contained
in this Agreement, recovery under the Second Mortgage continues to be limited to
$20,000,000.00.

          11.   ENDORSEMENT TO LENDER'S TITLE INSURANCE POLICY. Upon closing of
the loan restructure transaction described in this Agreement, Borrower shall
deliver to Lender, at Borrower's sole expense, an endorsement to Lender's title
insurance policy or a new title insurance policy, satisfactory in form and
substance to Lender, issued by a title insurance company approved by Lender, in
an amount not less than the amount of the Loan, insuring Lender (a) that the
First Mortgage as modified by this Agreement is a valid first and prior lien on
the Property, subject only to such exceptions to and conditions of title as
Lender may approve, and containing such additional endorsements as Lender may
require; and (b) that the Second Mortgage as modified by this Agreement is a
valid second lien on the Property, subject only to the First Mortgage and such
exceptions to and conditions of title as Lender may approve, and containing such
additional endorsements as Lender may require.

          12.   OPINION OF BORROWER'S COUNSEL. Upon closing of the loan
restructure transaction described in this Agreement, Borrower shall deliver to
Lender a legal opinion of independent counsel to Borrower, in form and substance
satisfactory to Lender, opining that the Loan as restructured is not usurious
under any applicable law, that the loan restructure transaction and the
execution and delivery of all documents in connection therewith have been duly
authorized by all necessary parties (other than Lender), and that all such
documents are binding and enforceable in accordance with their terms, and
addressing such other matters as Lender may reasonably require.

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<Page>

          13.   PAYMENT OF COSTS AND EXPENSES. Borrower shall pay all costs and
expenses incurred by Lender in connection with this Agreement and in connection
with the restructure of the Loan, including, without limitation, all reasonable
attorneys' fees, recording fees and title insurance fees (including the fees for
issuance of the endorsement to Lender's title insurance policy or a new title
insurance policy, as applicable) deemed necessary by Lender. Such costs and
expenses shall be paid by Borrower upon closing of the loan restructure
transaction described in this Agreement ("Closing"). Such costs and expenses
shall be considered Operating Expenses of the Property, as defined in subsection
4.23(f) of the First Mortgage, for the period in which they are paid by
Borrower. Failure to pay such costs and expenses upon Closing shall constitute a
default by Borrower under Section 6.3 of the First Mortgage, and continuance of
such failure for a period of thirty (30) days following written notice thereof
from Lender to Borrower shall constitute an Event of Default under the First
Mortgage.

          14.   MISCELLANEOUS.

                (a)  All capitalized terms used herein without definition shall
have the meanings given to them in the First Mortgage.

                (b)  This Agreement may be executed in several counterparts, and
executed counterparts bearing signatures of Borrower and Lender shall constitute
a fully-executed original of this Agreement.

                (c)  This Agreement shall be governed by the laws of the State
of Florida, without giving effect to its principles of conflicts of laws.

                (d)  The parties hereby agree to execute any and all additional
documents that may reasonably be required in order to evidence, secure or carry
out the agreements and undertakings set forth in this Agreement.

                (e)  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns.

                (f)  EACH PARTY TO THIS AGREEMENT KNOWINGLY, IRREVOCABLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS AGREEMENT, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE NOTE, THE FIRST MORTGAGE, SECOND
MORTGAGE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR
TO ANY LOAN DOCUMENT OR ORIGINAL LOAN DOCUMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THE TRANSACTIONS EVIDENCED BY THIS
AGREEMENT.

                (g)  Borrower shall not deposit funds attributable to the
Property into the Pledged Operating Account unless and until a Notice of
Assignment and Control Agreement concerning such account, in form and substance
satisfactory to Lender, has been executed by Borrower, Lender and the depository
bank at which the account is maintained, and a fully

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<Page>

executed original of such Notice of Assignment and Control Agreement has been
delivered to Lender.

          15.   NOVATION. It is the intent of the parties to this Agreement that
this Agreement shall not constitute a novation and shall in no way adversely
affect the lien priority of the First Mortgage or the Second Mortgage. In the
event that this Agreement, or any part hereof, shall be construed by a court of
competent jurisdiction as operating to affect the lien priority of said First
Mortgage or Second Mortgage, or either of them, over the claims which would
otherwise be subordinate thereto, then to the extent so ruled by such court, and
to the extent that third persons acquiring an interest in such property as is
encumbered by the First Mortgage and the Second Mortgage between the time of
execution of the First Mortgage and the Second Mortgage and the execution hereof
are prejudiced thereby, then, at Lender's option, this Agreement, or such
portion hereof as shall be so construed, shall be void and of no force and
effect, and this Agreement shall constitute, as to that portion, a subordinate
lien on the collateral described herein, incorporating by reference the terms of
the First Mortgage and the Second Mortgage, and which First Mortgage and Second
Mortgage then shall be enforced pursuant to the terms therein contained,
independent of this Agreement; provided, however, that notwithstanding the
foregoing, the parties hereto, as between themselves, shall be bound by all
terms and conditions hereof until all indebtedness owing from the Borrower to
the Lender shall have been paid in full.

          16.   TAXES; INDEMNIFICATION. Borrower shall pay when due any
documentary stamp taxes, intangible personal property taxes or other taxes which
are assessed in connection with the execution, delivery or recordation of this
Agreement (collectively, "Taxes"). Borrower shall indemnify, defend and hold
harmless Lender from any and all such Taxes.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                                                              76
<Page>

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.

                                      BORROWER:

Witnesses:                            SONESTA BEACH RESORT LIMITED
                                      PARTNERSHIP, a Delaware limited
                                      partnership

/S/                                   By: Florida Sonesta Corporation, a Florida
-----------------------------------       corporation, its General Partner
Print Name: Boy Van Riel
            -----------------------

/S/                                       By:/S/
-----------------------------------          ------------------------------
Print Name: Bonnie Atzl                      Peter J. Sonnabend, Vice President
            -----------------------

COMMONWEALTH OF MASSACHUSETTS )
                              )  ss.
COUNTY OF SUFFOLK             )

          The foregoing instrument was acknowledged before me this 22nd day of
March, 2004, by Peter J. Sonnabend, as Vice President of Florida Sonesta
Corporation, a Florida corporation, General Partner of Sonesta Beach Resort
Limited Partnership, a Delaware limited partnership, who is known to me.

                          Serial Numbers, if any:
                                                 -------------------------

                          My commission expires: 4/2/2010

                                              /S/
                                              ----------------------------------
                                              Notary Public

                                              Karen K. Pettiford
                                              ----------------------------------
                                              Print Name

                       [SIGNATURES CONTINUED ON NEXT PAGE]

                                                                              77
<Page>

                                      LENDER:

Witnesses:                            SUNAMERICA LIFE INSURANCE
                                      COMPANY, an Arizona corporation

/S/                                   By: AIG Global Investment Corp., a
------------------------------------      New Jersey corporation, its investment
Print Name: Lisa C. Wright                advisor
            ------------------------

/S/                                       By:/S/
------------------------------------         -----------------------------------
Print Name: Tara Macneill                 Name: Keith Honig
            ------------------------            --------------------------------
                                          Title: Managing Director
                                                 -------------------------------

STATE OF CALIFORNIA                    )
                                       )  ss.
COUNTY OF LOS ANGELES                  )

          The foregoing instrument was acknowledged before me this 22nd day of
March, 2004, by Keith Honig, as Managing Director of AIG Global Investment
Corp., a New Jersey corporation, investment advisor of SunAmerica Life Insurance
Company, an Arizona corporation, WHO IS KNOWN TO ME,

                          Serial Numbers, if any:
                                                 -------------------------

                          My commission expires: 1/10/07
                                                 -------------------------

                                              /S/
                                              ----------------------------------
                                              Notary Public

                                              Catherine Muslein
                                              ----------------------------------
                                              Print Name

                                                                              78

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