Document:

Exhibit
10.9

LEASE
AGREEMENT

BETWEEN

BEHRINGER HARVARD CORDILLERA, LLC,

a Delaware limited
liability company

AND

BEHRINGER HARVARD RESIDENCES AT
CORDILLERA, LLC,

a Delaware limited
liability company

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
  ARTICLE I LEASE

  	
  1

  
	
  1.1

  	
  Demise

  	
  1

  
	
  1.2

  	
  Leased Property

  	
  1

  
	
  1.3

  	
  Assignment and Assumption of Contracts; Initial
  Transaction

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II DEFINITIONS

  	
  3

  
	
  2.1

  	
  Definitions

  	
  3

  
	
  2.2

  	
  Additional Definitions

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III TERM

  	
  9

  
	
  3.1

  	
  Initial Term

  	
  9

  
	
  3.2

  	
  Renewal Term

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV RENT

  	
  10

  
	
  4.1

  	
  Rent

  	
  10

  
	
  4.2

  	
  Confirmation of Percentage Rent

  	
  11

  
	
  4.3

  	
  Additional Charges

  	
  12

  
	
  4.4

  	
  Net Lease Provisions

  	
  12

  
	
  4.5

  	
  Place and Manner of Payment

  	
  13

  
	
  4.6

  	
  Late Charge

  	
  13

  
	
  4.7

  	
  Annual Budget

  	
  13

  
	
  4.8

  	
  Books and Records

  	
  15

  
	
  4.9

  	
  Changes in Operations

  	
  15

  
	
  4.10

  	
  Allocation of Revenues

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE V QUIET ENJOYMENT

  	
  15

  
	
  5.1

  	
  Quiet Enjoyment

  	
  15

  
	
  5.2

  	
  Lessor Cooperation

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI IMPOSITIONS

  	
  16

  
	
  6.1

  	
  Payment of Impositions

  	
  16

  
	
  6.2

  	
  Notice of Impositions

  	
  16

  
	
  6.3

  	
  Adjustment of Imposition

  	
  17

  
	
  6.4

  	
  Utility Charges

  	
  17

  
	
  6.5

  	
  Insurance Premiums

  	
  17

  
	
  6.6

  	
  Definition of Impositions

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII CONDITION, USE

  	
  18

  
	
  7.1

  	
  Condition of the Leased Property

  	
  18

  
	
  7.2

  	
  Use of the Leased Property

  	
  18

  
	
  7.3

  	
  Lessor to Grant Easements, Etc

  	
  19

  
	
  7.4

  	
  Inventory; Supplies; Lessee’s Personal Property

  	
  20

  
	
  7.5

  	
  FFE

  	
  21

  
	
  7.6

  	
  Lessee’s Obligation to Manage

  	
  21

  
	
  7.7

  	
  Cash Accounts; Working Capital

  	
  21

  
	
  7.8

  	
  Reserved

  	
  22

  
	
  7.9

  	
  Employees

  	
  22

  

 

 

	
  7.10

  	
  Net Worth

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII LEGAL REQUIREMENTS

  	
  23

  
	
  8.1

  	
  Compliance with Legal and Insurance Requirements,
  Etc

  	
  23

  
	
  8.2

  	
  Legal Requirement Covenants

  	
  23

  
	
  8.3

  	
  Environmental Matters and Indemnities

  	
  23

  
	
  8.4

  	
  Liquor License Matters and Indemnities

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX MAINTENANCE AND REPAIR

  	
  27

  
	
  9.1

  	
  Maintenance and Repair

  	
  27

  
	
  9.2

  	
  Encroachments, Restrictions, Etc

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ALTERATIONS

  	
  29

  
	
  10.1

  	
  Lessee Alterations

  	
  29

  
	
  10.2

  	
  Lessor Alterations

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI LIENS

  	
  29

  
	
  11.1

  	
  Liens

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII PERMITTED CONTESTS

  	
  30

  
	
  12.1

  	
  Permitted Contests

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII INSURANCE

  	
  31

  
	
  13.1

  	
  Liability Insurance

  	
  31

  
	
  13.2

  	
  Special Conditions or Hazards

  	
  31

  
	
  13.3

  	
  Casualty Insurance

  	
  32

  
	
  13.4

  	
  Parties Insured and Amounts of Coverage

  	
  33

  
	
  13.5

  	
  Evidence of Insurance

  	
  34

  
	
  13.6

  	
  Reports by Lessee

  	
  34

  
	
  13.7

  	
  Review of Insurance

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV DAMAGE AND RECONSTRUCTION

  	
  35

  
	
  14.1

  	
  Insurance Proceeds

  	
  35

  
	
  14.2

  	
  No Abatement of Rent

  	
  35

  
	
  14.3

  	
  Damage During Term

  	
  35

  
	
  14.4

  	
  Lessee’s Property and Business Interruption
  Insurance

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV CONDEMNATION

  	
  36

  
	
  15.1

  	
  Definitions

  	
  36

  
	
  15.2

  	
  Parties’ Rights and Obligations

  	
  36

  
	
  15.3

  	
  Total Taking

  	
  36

  
	
  15.4

  	
  Allocation of Award

  	
  36

  
	
  15.5

  	
  Partial Taking

  	
  37

  
	
  15.6

  	
  Temporary Taking

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI DEFAULTS

  	
  38

  
	
  16.1

  	
  Events of Default

  	
  38

  
	
  16.2

  	
  Remedies

  	
  39

  
	
  16.3

  	
  Damages

  	
  40

  
	
  16.4

  	
  Application of Funds

  	
  40

  

 

 ii
 

 

	
  16.5

  	
  Waiver

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII LESSOR’S RIGHT TO CURE

  	
  41

  
	
  17.1

  	
  Lessor’s Right to Cure Lessee’s Default

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII HOLDING OVER

  	
  41

  
	
  18.1

  	
  Holding Over

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX RISK OF LOSS

  	
  42

  
	
  19.1

  	
  Risk of Loss

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE XX INDEMNITIES

  	
  42

  
	
  20.1

  	
  Indemnification

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXI SUBLETTING; ASSIGNMENT

  	
  44

  
	
  21.1

  	
  Subletting and Assignment

  	
  44

  
	
  21.2

  	
  Attornment

  	
  45

  
	
  21.3

  	
  Management Agreement

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXII ESTOPPELS; FINANCIAL STATEMENTS

  	
  45

  
	
  22.1

  	
  Lessee Estoppel Certificates

  	
  45

  
	
  22.2

  	
  Financial Statements and Information

  	
  46

  
	
  22.3

  	
  Covenants of Lessee

  	
  47

  
	
  22.4

  	
  Certified Financial Statements

  	
  47

  
	
  22.5

  	
  Lessor Estoppel Certificates

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXIII INSPECTIONS; MEETINGS

  	
  48

  
	
  23.1

  	
  Lessor’s Right to Inspect

  	
  48

  
	
  23.2

  	
  Regular Meetings

  	
  48

  
	
  23.3

  	
  Accommodations

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXIV NO WAIVER

  	
  48

  
	
  24.1

  	
  No Waiver

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXV CUMULATIVE REMEDIES

  	
  48

  
	
  25.1

  	
  Remedies Cumulative

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXVI SURRENDER

  	
  48

  
	
  26.1

  	
  Acceptance of Surrender

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXVII NO MERGER

  	
  49

  
	
  27.1

  	
  No Merger of Title

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXVIII CONVEYANCE BY LESSOR

  	
  49

  
	
  28.1

  	
  Conveyance by Lessor

  	
  49

  
	
  28.2

  	
  Lessor May Grant Liens

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXIX NOTICES

  	
  51

  
	
  29.1

  	
  Notices

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXX APPRAISALS

  	
  52

  
	
  30.1

  	
  [Appraisers

  	
  52

  

 

 iii
 

 

	
  ARTICLE XXXI LESSOR BREACH

  	
  53

  
	
  31.1

  	
  Breach by Lessor

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXII MISCELLANEOUS

  	
  53

  
	
  32.1

  	
  Miscellaneous

  	
  53

  
	
  32.2

  	
  Waiver of Presentment, Etc

  	
  53

  
	
  32.3

  	
  Force Majeure

  	
  54

  
	
  32.4

  	
  Development Agreements

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXIII MEMORANDUM OF LEASE

  	
  54

  
	
  33.1

  	
  Memorandum of Lease

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXIV COMPLIANCE WITH AGREEMENTS

  	
  54

  
	
  34.1

  	
  Management Agreement

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXV LIMITATIONS

  	
  55

  
	
  35.1

  	
  REIT Compliance

  	
  55

  
	
  35.2

  	
  Personal Property Limitation

  	
  55

  
	
  35.3

  	
  Sublease Rent Limitation

  	
  55

  
	
  35.4

  	
  Sublease Tenant Limitation

  	
  55

  
	
  35.5

  	
  Lessee Ownership Limitation

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXVI TERMINATION RIGHTS

  	
  56

  
	
  36.1

  	
  Lessor’s Option to Terminate Lease Upon Sale

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXVII TRANSITION PROCEDURES

  	
  56

  
	
  37.1

  	
  Transition Procedures

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXXVIII ARBITRATION

  	
  57

  
	
  38.1

  	
  Arbitration

  	
  57

  
	
  38.2

  	
  Alternative Arbitration

  	
  57

  
	
  38.3

  	
  Arbitration Procedures

  	
  57

  

 

 iv
 

 

ADDITIONAL
DEFINED TERMS

 

	
  Defined Term

  	
   

  	
  Section

  
	
  AAA

  	
   

  	
  57

  
	
  actual pecuniary
  loss

  	
   

  	
  45

  
	
  Additional Base Rent

  	
   

  	
  10

  
	
  Additional
  Charges

  	
   

  	
  13

  
	
  ADR

  	
   

  	
  14

  
	
  Affiliate

  	
   

  	
  3

  
	
  Annual Audited
  Gross Revenues Statement

  	
   

  	
  11

  
	
  Annual Budget

  	
   

  	
  13

  
	
  Annual Gross
  Revenues Report

  	
   

  	
  11

  
	
  Assigned
  Agreements

  	
   

  	
  2

  
	
  Award

  	
   

  	
  36

  
	
  Bad Boy Default

  	
   

  	
  3

  
	
  Bankruptcy Code

  	
   

  	
  44

  
	
  Bankruptcy Event

  	
   

  	
  39

  
	
  Base Rate

  	
   

  	
  4

  
	
  Base Rent

  	
   

  	
  10

  
	
  Brand Standards

  	
   

  	
  4

  
	
  Business Days

  	
   

  	
  4

  
	
  Capital Budget

  	
   

  	
  13

  
	
  Cash

  	
   

  	
  22

  
	
  CERCLA

  	
   

  	
  4

  
	
  Claims

  	
   

  	
  31

  
	
  COBRA

  	
   

  	
  22

  
	
  Code

  	
   

  	
  4

  
	
  Commencement
  Date

  	
   

  	
  10

  
	
  Condemnation

  	
   

  	
  36

  
	
  Condemnor

  	
   

  	
  36

  
	
  Consolidated
  Financials

  	
   

  	
  4

  
	
  Consumable
  Supplies

  	
   

  	
  4

  
	
  Date of Taking

  	
   

  	
  36

  
	
  Developer

  	
   

  	
  4

  
	
  Development
  Agreements

  	
   

  	
  4

  
	
  Development
  Projects

  	
   

  	
  4

  
	
  Dissolution
  Event

  	
   

  	
  39

  
	
  Effective Date

  	
   

  	
  1

  
	
  Emergency
  Situations

  	
   

  	
  5

  
	
  Environmental
  Authority

  	
   

  	
  5

  
	
  Environmental
  Liabilities

  	
   

  	
  5

  
	
  Event of Default

  	
   

  	
  38

  
	
  Facility

  	
   

  	
  5

  
	
  FFE

  	
   

  	
  21

  
	
  FFE Reserve

  	
   

  	
  21

  
	
  First Class
  Operating Standards

  	
   

  	
  5

  
	
  Food Sales

  	
   

  	
  6

  
	
  Force Majeure
  Event

  	
   

  	
  54

  
	
  Franchise
  Agreement

  	
   

  	
  6

  
	
  Franchisor

  	
   

  	
  6

  
	
  full replacement
  cost

  	
   

  	
  34

  
	
  GAAP

  	
   

  	
  6

  
	
  Gross Revenues

  	
   

  	
  6

  
	
  Holder

  	
   

  	
  7

  
	
  Hotel Revenues

  	
   

  	
  7

  
	
  Impositions

  	
   

  	
  17

  
	
  Indemnified
  Party

  	
   

  	
  7

  
	
  Indemnifying
  Party

  	
   

  	
  7

  
	
  Initial
  Inventory

  	
   

  	
  20

  
	
  Initial Term

  	
   

  	
  10

  
	
  Inventory

  	
   

  	
  7

  
	
  Land

  	
   

  	
  1

  
	
  Lease

  	
   

  	
  1

  
	
  Lease Year

  	
   

  	
  7

  
	
  Leased
  Improvements

  	
   

  	
  1

  
	
  Leased Property

  	
   

  	
  1

  
	
  Legal
  Requirements

  	
   

  	
  7

  
	
  Lessee

  	
   

  	
  1

  
	
  Lessee
  Indemnified Party

  	
   

  	
  8

  
	
  Lessee’s
  Personal Property

  	
   

  	
  21

  
	
  Lessor

  	
   

  	
  1

  
	
  Lessor
  Indemnified Party

  	
   

  	
  8

  
	
  Lessor’s Audit

  	
   

  	
  8

  
	
  Lessor’s Gross
  Revenues Audit

  	
   

  	
  12

  
	
  Licenses

  	
   

  	
  56

  
	
  Liquor Licenses

  	
   

  	
  8

  
	
  Management
  Agreement

  	
   

  	
  8

  
	
  Manager

  	
   

  	
  8

  
	
  Mortgage

  	
   

  	
  49

  
	
  Operating Budget

  	
   

  	
  13

  
	
  Overdue Rate

  	
   

  	
  8

  
	
  Owner Agreement

  	
   

  	
  8

  
	
  Percentage Rent

  	
   

  	
  11

  
	
  Preliminary Statement

  	
   

  	
  22

  

 

 v
 

 

	
  Primary Intended Use

  	
   

  	
  19

  
	
  Proceeding

  	
   

  	
  8

  
	
  Property Income

  	
   

  	
  3

  
	
  Quarter

  	
   

  	
  9

  
	
  RCRA

  	
   

  	
  9

  
	
  REIT

  	
   

  	
  55

  
	
  Release

  	
   

  	
  9

  
	
  Renewal Term

  	
   

  	
  10

  
	
  Rent

  	
   

  	
  9

  
	
  Rent Report

  	
   

  	
  11

  
	
  REVPAR

  	
   

  	
  14

  
	
  SEC

  	
   

  	
  46

  
	
  Service
  Contracts

  	
   

  	
  19

  
	
  State

  	
   

  	
  9

  
	
  Subsidiaries

  	
   

  	
  9

  
	
  Subsidiary

  	
   

  	
  9

  
	
  Tax Code

  	
   

  	
  55

  
	
  Term

  	
   

  	
  9

  
	
  Trustee

  	
   

  	
  44

  
	
  Unavoidable
  Delay

  	
   

  	
  9

  
	
  Uneconomic for
  its Primary Intended Use

  	
   

  	
  9

  
	
  Uniform System

  	
   

  	
  9

  
	
  Units

  	
   

  	
  1

  
	
  Unsuitable for
  its Primary Intended Use

  	
   

  	
  9

  
	
  Working Capital

  	
   

  	
  22

  

 

 vi

LEASE
AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made and entered into to be
effective as of the 6th day of June, 2007 (“Effective Date”), by and between
BEHRINGER HARVARD CORDILLERA, LLC, a Delaware limited liability company (“Lessor”), and BEHRINGER HARVARD
RESIDENCES AT CORDILLERA, LLC, a Delaware limited liability company (“Lessee”). B

ARTICLE I

LEASE

1.1                                 Demise.  In consideration of the obligation of Lessee
to pay rent as herein provided and in consideration of the other terms,
covenants, and conditions of this Lease, Lessor does hereby LEASE, DEMISE, and
LET unto Lessee, and Lessee does hereby take and lease from Lessor, the Leased
Property (as hereinafter defined), TO HAVE AND TO HOLD the Leased Property,
together with all rights, privileges, easements and appurtenances belonging to
or in any way appertaining to the Leased Property, for the Term, upon and
subject to the terms, conditions and agreements hereinafter contained.

1.2                                 Leased Property.  The “Leased Property”
(herein so called) is comprised of the following:

(a)                                  those certain tracts
or parcels of land situated in the Cities of Avon and Edwards, Colorado, which
are more particularly described in Exhibit A
attached hereto and made a part hereof for all purposes, together with all and
singular the rights and appurtenances pertaining to such tracts and parcels,
including any right, title and interest of Lessor in and to any easements
benefiting the Leased Property, adjacent strips or gores, streets, alleys or
rights-of-way and all rights of ingress and egress thereto (the foregoing are
hereinafter referred to collectively as the “Land”);

(b)                                 all buildings,
fixtures and other improvements of every kind located on, or to be constructed,
or developed on the Land, including specifically, without limitation, the
existing 56-room lodge, approximately 20,000 square feet of spa/fitness center
space, approximately 3,000 square feet of meeting/banquet space, 2 existing
restaurants and a ski in / ski out condo at the Strawberry Park Beaver Creek
lift, the automobile parking garage, all swimming pools, restaurants, hotel
rooms, lounges, fitness facilities and various other guest and spa facilities,
and all other buildings and improvements as are located thereon (the “Leased Improvements”);

(c)                                  all personal property,
tangible or intangible, of any kind whatsoever owned by Lessor and used in
connection with the operation of the Leased Improvements, together with all
replacements, modifications, alterations and additions thereto;

(d)                                 all machinery,
apparatus, vehicles, equipment, artwork, furniture, fittings, fixtures and
articles of personal property of every kind and nature whatsoever, including
reserve stock and spare parts therefor, owned by Lessor which are located in or
on the Leased

 1
 

Improvements or stored offsite and are used or usable in connection
with any present or future occupation or operation of the Leased Improvements,
including, by way of illustration and not limitation, all furnishings,
pictures, chinaware, glassware, silverware, ornaments, uniforms, kitchen
appliances and utensils, radios, television sets, mirrors, linens, towels,
sheets, blankets, telephones, and all similar and related articles owned by
Lessor and located in or upon or used in connection with the operation or
maintenance of the Leased Improvements, together with all replacements,
modifications, alterations and additions thereto; and

(e)                                  all oral or written
agreements or leases pursuant to which any portion of the Land or Facility is
used or occupied by anyone other than Lessor.

1.3                                 Assignment and
Assumption of Contracts; Initial Transaction.

(a)                                  Effective upon the
Commencement Date, Lessor hereby transfers and assigns to Lessee, and Lessee
assumes and covenants to perform all of Lessor’s obligations under, the
following agreements and contracts to which the Leased Property remains subject
on the Commencement Date (the “Assigned Agreements”):

(i)                                     All
contracts for the use or occupancy of guest rooms and apartment units and/or
the meeting, dining, banquet, and health facilities of the Facility;

(ii)                                  All
service contracts, maintenance contracts, equipment leases, purchase orders and
other contracts pertaining to the ownership, maintenance, operation,
provisioning or equipping of the Facility, including warranties and guaranties
relating thereto;

(iii)                               All
licenses and permits (to the extent assignable) used in or relating to the
ownership, occupancy or operation of any part of the Facility; and

(iv)                              Any
developer’s, declarant’s, or owner’s interests under any operating agreements
or reciprocal easement agreements or other similar agreements affecting and/or
benefiting the Facility.

This Lease is executed by Lessor and accepted by
Lessee on the understanding that Lessee will and does hereby assume and agree
to perform all of Lessor’s obligations under all the Assigned Agreements.

(b)                                 As between Lessor and
Lessee, Lessor shall be entitled to all income and shall be responsible for the
payment or settlement of all expenses of the Leased Property accruing prior to
the Commencement Date.  Lessee shall act
as Lessor’s agent for the collection of all such income and shall remit the
same to Lessor promptly upon Lessee’s receipt thereof.  Lessee shall notify Lessor of all such
expenses and shall act as Lessor’s payment agent for such expenses using funds
provided by Lessor from time to time.

 2
 

ARTICLE
II

DEFINITIONS

2.1                                 Definitions.  For all purposes of this Lease, except as
otherwise expressly provided or unless the context otherwise requires, (a) the
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular, (b) all accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP, (c) all references in this Lease to designated “Articles”,
“Sections” and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Lease and (d) the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Lease as a whole and not to any
particular Article, Section or other subdivision:

Affiliate.  As used in this Lease the term “Affiliate” of
a person shall mean (a) any person that, directly or indirectly, controls or is
controlled by or is under common control with such person, (b) any other person
that owns, beneficially, directly or indirectly, ten percent (10%) or more of
the outstanding capital stock, shares or equity interests of such person, or
(c) any officer, director, employee, partner or trustee of such person, or (d)
any person controlling, controlled by or under common control with such person
(excluding trustees and persons serving in similar capacities who are not
otherwise an Affiliate of such person). 
The term “person” means and includes individuals, corporations, general
and limited partnerships, limited liability companies, stock companies or
associations, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts, or other entities and governments and
agencies and political subdivisions thereof. 
For the purposes of this definition, “control” (including the
correlative meanings of the terms “controlled by” and “under common control
with”), as used with respect to any person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, through the ownership of voting securities,
partnership interests or other equity interests, by contract or otherwise.

Base Rate.  The prime rate (or base rate) reported in the
Money Rates column or comparable Section of The Wall Street Journal
as the rate then in effect for corporate loans at large U.S. money center
commercial banks, whether or not such rate has actually been charged by any
such bank.  If no such rate is reported in
The Wall Street Journal or if such rate is discontinued, then Base Rate
shall mean such other successor or comparable rate as Lessor may reasonably
designate.

Brand Standards.  The operating standards set forth and defined
in the Management Agreement.

Business Days.  Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which national banks in the municipality wherein
the Leased Property is located are closed.

CERCLA.  The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

Claims.  Collectively, any claims, demands, actions
(including enforcement proceedings initiated by an government agency),
penalties, suits, administrative proceedings, and

 3
 

liabilities (including
the costs of defense, settlement, appeal, and reasonable attorneys’ fees and
costs).

Code.  The Internal Revenue Code of 1986, as
amended.

Consolidated Financials.  For Lessee and its consolidated Subsidiaries,
(a) for any fiscal month, consolidating balance sheet and statement of operations,
(b) for any fiscal quarter, consolidating statement of operations, and (c) for
any fiscal year, consolidating balance sheet, consolidating statement of
operations and working capital statement for each such period and for the
period from the beginning of the respective fiscal year to the end of each such
period, together with the notes to any such yearly statement, all in such
detail as may be reasonably required by Lessor, and setting forth in
comparative form the corresponding figures for the corresponding period in the
preceding fiscal year, and prepared in accordance with GAAP and audited
annually by a firm of independent certified public accountants approved by
Lessor.  Consolidated Financials shall be
prepared on the basis of a December 31 fiscal year of Lessee, or on such other
basis as Lessor shall designate.  Any
cost for such audit shall be borne by Lessee.

Consumable Supplies.  Office supplies, cleaning supplies, uniforms,
laundry and valet supplies, engineering supplies, fuel, stationery, soap,
matches, toilet and facial tissues, and such other supplies as are consumed
customarily on a recurring basis in the operation of the Facility, together
with food and beverages that are to be offered for sale to guests and to the
public.

Developer.  TP Cordillera, LLC, a Delaware limited
liability company.

Development Agreements.  Those certain agreements between Landlord and
Developer regarding the Land, the Leased Improvements and other land and
improvements located adjacent to the Leased Property.

Development Projects.  The projects described in and to be
undertaken pursuant to the Development Agreements.

Emergency Situations.  Fire, any other casualty, or any other
events, circumstances or conditions which threaten the safety or physical
well-being of the Facility’s guests or employees or which involve the risk of
material property damage or material loss to the Facility.

Environmental Authority.  Any department, agency or other body or
component of any Government that exercises any form of jurisdiction or
authority under any Hazardous Materials Law.

Environmental Liabilities: Any and
all actual or potential obligations to pay the amount of any judgment or
settlement, the cost of complying with any settlement, judgment or order for
injunctive or other equitable relief, the cost of compliance or corrective
action in response to any notice, demand or request from an Environmental
Authority, the amount of any civil penalty or criminal fine, and any court
costs and reasonable amounts for attorney’s fees,

 4
 

fees for witnesses and
experts, and costs of investigation and preparation for defense of any claim or
any Proceeding, regardless of whether such Proceeding is threatened, pending or
completed, that may be or have been asserted against or imposed upon Lessor,
Lessee, any Predecessor, the Leased Property or any property used therein and
arising out of:

(a)                                  the failure to comply
at any time with all Hazardous Materials Laws applicable to the Leased
Property;

(b)                                 the presence of any
Hazardous Materials on, in, under, at or in any way affecting the Leased
Property;

(c)                                  a Release or
threatened Release of any Hazardous Materials on, in, at, under or in any way
affecting the Leased Property;

(d)                                 the identification of
Lessee, Lessor or any Predecessor as a potentially responsible party under
CERCLA or under any other Hazardous Materials Law;

(e)                                  the presence at any
time of any above-ground and/or underground storage tanks, as defined in RCRA
or in any applicable Hazardous Materials Law on, in, at or under the Leased Property
or any adjacent site or facility; or

(f)                                    any and all claims
for injury or damage to persons or property arising out of exposure to
Hazardous Materials originating or located at the Leased Property, or resulting
from operation thereof or any adjoining property.

Facility.  The hotel and/or other facilities offering
lodging and other services or amenities being operated or proposed to be
operated on the Leased Property.

First Class Operating Standards.  Operating standards of other facilities
comparable in size to the Leased Property which represent the highest quality
of hotels and/or resorts in the United States, including without limitation,
the operation of the Leased Property (but not necessarily all facilities
thereof) on a seven days a week, twenty-four hour a day basis with adequate
staffing to provide first-class staffing, and health, fitness, food, beverage,
housekeeping, banquet, parking, bellmen and porter services; provided that such
standard of operation shall never be lower than the standard of operation
existing at the date hereof with respect to the Leased Property.

Food Sales.  Shall mean (i) gross revenue from the sale of
food and non-alcoholic beverages that are prepared at the Facility and sold or
delivered on or off the Facility by Lessee, its permitted subtenants,
licensees, or concessionaires whether for cash or for credit, including in
respect of guest rooms, banquet rooms, meeting rooms and other similar rooms,
and (ii) gross revenue from the rental of banquet, meeting and other similar
rooms.  Such gross revenue constituting
Food Sales shall include sales by Lessee and its permitted subtenants,
licensees and concessionaires, but gross revenues from subleases, licenses or
similar arrangements for space within the Facility in which the items described
in subparagraphs (i) and (ii) above are sold which are entered into by Lessor,
by any prior owner of the Leased Property, or by Lessee, in

 5
 

compliance, but only in
compliance, with Section 21.1
with parties who are not Affiliates of Lessee, shall be classified as Hotel
Revenues and shall only include rents received by Lessee under such existing
subleases, licenses or similar arrangements. 
Such gross revenue shall be determined in a manner consistent with the
Uniform System and shall not include the following:

(a)                                  Vending machine sales;

(b)                                 Any gratuities or service charges added to a
customer’s bill or statement in lieu of a gratuity which is paid directly to an
employee;

(c)                                  Non-alcoholic beverages sold from a bar or
lounge;

(d)                                 Credits, rebates or refunds; and

(e)                                  Sales taxes or taxes of any other kind imposed on
the sale of food or non­alcoholic beverages.

Franchise Agreement.  Any franchise agreement or license agreement
with a franchisor under which the Facility is hereafter operated, if any.

Franchisor.  Any franchisor under a franchise or license
agreement under which the Facility is operated.

GAAP.  United States generally accepted accounting
principles as are at the time applicable and otherwise consistently applied by
Lessor.

Gross Revenues.  All gross revenues, gross receipts, and gross
income (including rental payments) of any kind derived directly or indirectly
by Lessee from or in connection with the Facility whether on a cash basis or
credit, paid or collected, determined in accordance with GAAP and the Uniform
System, and all proceeds paid under any policy of business or rental
interruption insurance but excluding, however: 
(i) funds furnished by Lessor, (ii) federal, state and
municipal excise, sales, and use taxes collected directly from patrons and
guests or as a part of the sales price of any goods, services or displays, such
as gross receipts, admissions, cabaret or similar or equivalent taxes and paid
over to federal, state or municipal governments, (iii) gratuities, (iv) proceeds
of insurance and condemnation (other than proceeds from any business or rental
interruption insurance), (v) proceeds from sales other than sales in the
ordinary course of business, (vi) all loan proceeds from financing or
refinancings of the Facility or interests therein or components thereof, (vii)
judgments and awards, except any portion thereof arising from normal business
operations of the Facility, (viii) items constituting “allowances” under the
Uniform System, and (ix) any amount paid pursuant to a sublease of all or a
portion of the Leased Property if the rental to be paid by the sublessee
thereunder is based, in whole or in part, on the income or profits derived by
the business activities of the sublessee.

Holder.  Any holder of any indebtedness of Lessor or
any of its Affiliates, any holder of a mortgage, any purchaser of the Leased
Property or any portion thereof at a foreclosure sale or any sale in lieu
thereof, or any designee of any of the foregoing.

 6
 

Hotel Revenues.  Gross Revenues, minus Food Sales and gross
revenues from the sale of alcoholic beverages at or from the Leased Property.

Indemnified Party.  Either of a Lessee Indemnified Party or a
Lessor Indemnified Party.

Indemnifying Party.  Any party obligated to indemnify an Indemnified
Party pursuant to any provision of this Lease.

Inventory.  All “Inventory” as defined in the Uniform
System, including, but not limited to, linens, china, silver, glassware and
other non-depreciable personal property, and any property of the type described
in Section 1221(l) of the Tax Code.

Lease Year.  Any twelve-month period from January 1 to
December 31 during the Term; provided that the initial Lease Year shall be the
period beginning on the Commencement Date and ending on December 31, 2007, and
the last Lease Year shall be the period beginning on January 1 of the calendar
year in which the Term expires and ending on the expiration of the Term (to the
extent any computation or other provision hereof provides for an action to be
taken on a Lease Year basis, an appropriate proration or other adjustment shall
be made in respect of the initial and final Lease Years to reflect that such
periods are less than full calendar year periods).

Legal Requirements.  All federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Leased Property or the
maintenance, construction, use, operation or alteration thereof (whether by
Lessee or otherwise), now existing or hereafter enacted and in force, including
all laws, rules or regulations pertaining to the environment, occupational
health and safety and public health, safety or welfare at the Leased Property;
and all permits, licenses and authorizations necessary or appropriate to
operate the Leased Property for its Primary Intended Use; and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Lessee (other than encumbrances hereafter created by Lessor
without the consent of Lessee), at any time in force affecting the Leased
Property.

Lessee Indemnified Party.  Lessee, any Affiliate of Lessee, any other
Person against whom any claim for indemnification may be asserted hereunder as
a result of a direct or indirect ownership interest in Lessee, the officers,
directors, stockholders, partners, members, employees, agents and
representatives of any of the foregoing Persons and any corporate stockholder,
agent, or representative of any of the foregoing Persons, and the respective heirs,
personal representatives, successors and assigns of any such officer, director,
stockholder, employee, agent or representative.

Lessor Indemnified Party.  Lessor, any Affiliate of Lessor, any other
Person against whom any claim for indemnification may be asserted hereunder as
a result of a direct or indirect ownership interest in Lessor, the officers,
directors, stockholders, partners, members, employees, agents and
representatives of any of the foregoing Persons and of any stockholder,
partner, member, agent, or representative of any of the foregoing Persons, and
the respective 

 7
 

heirs, personal
representatives, successors and assigns of any such officer, director, partner,
stockholder, employee, agent or representative.

Lessor’s Audit.  An audit by Lessor’s independent certified
public accountants of the operation of the Leased Property during any Lease
Year, which audit may, at Lessor’s election, be either a complete audit of the
Leased Property’s operations or an
audit of Room Revenues, Food Sales, Beverage Sales and other income realized
from the operation of the Leased Property during such Lease Year.

Liquor Licenses.  Any liquor license held, from time to time,
by Lessee and used for the purchase, sale and service of alcoholic beverages on
the Leased Property.

Management Agreement.  That certain Hotel Management Agreement for
the Lodge and Spa at Cordillera between Colorado Hotel Operator, Inc. and
RockResorts International, LLC dated as of May 1, 2005 and as assigned to
Lessee by Colorado Hotel Operator, Inc.

Manager means RockResorts
International, LLC, a Delaware limited liability company, and any successor
Manager approved by Lessor in its sole discretion.  At all times during the Term of this Lease,
Manager shall be an “eligible independent contractor” as defined in
Section 856(d)(9) of the Code.

Overdue Rate.  On any date, a rate equal to the Base Rate
plus 5% per annum, but in no event greater than the maximum rate then permitted
under applicable law.

Owner Agreement.  That certain Owner Agreement dated of even
date herewith by and among Lessor, Lessee and Manager.

Proceeding.  Any judicial action, suit or proceeding
(whether civil or criminal), any administrative proceeding (whether formal or
informal), any investigation by a governmental authority or entity (including a
grand jury), and any arbitration, mediation or other non-judicial process for
dispute resolution.

Quarter.  Each calendar quarter during the Term,
provided that the first Quarter of the Term shall commence on the Commencement
Date and end on June 30, 2007.

RCRA.  The Resource Conservation and Recovery Act,
as amended.

Release.  A “Release” as defined in CERCLA or in any
Hazardous Materials Law, unless such Release has been properly authorized and
permitted in writing by all applicable Environmental Authorities or is allowed
by such Hazardous Materials Law without authorizations or permits.

Rent.  Collectively, the Base Rent, Percentage Rent
and Additional Charges.

State.  The State or Commonwealth of the United
States in which the Leased Property is located.

 8
 

Subsidiaries.  Corporations or other entities in which a
party owns, directly or indirectly, 50% or more of the voting rights or
control, as applicable (individually, a “Subsidiary”).

Term.  The Initial Term or the Renewal Term, as
applicable.

Unavoidable Delay.  Delay due to strikes, lock-outs, labor
unrest, inability to procure materials, power failure, acts of God,
governmental restrictions, acts of terrorism, enemy action, civil commotion,
fire, unavoidable casualty, condemnation or other similar causes beyond the
reasonable control of the party responsible for performing an obligation
hereunder, provided that lack of funds shall not be deemed a cause beyond the
reasonable control of either party hereto unless such lack of funds is caused
by the breach of the other party’s obligation to perform any obligations of
such other party under this Lease.

Uneconomic for its Primary Intended Use.  A state or condition of the Facility such
that in the judgment of Lessor the Facility cannot be operated on a
commercially practicable basis for its Primary Intended Use, such that Lessor
intends to, and shall, cease operations from the Facility.

Uniform System.  The most current edition of the Uniform
System of Accounts for Hotels, as published by the Hotel Association of New
York City, Inc., as the same may hereafter be revised, and as the same is
interpreted and applied by the Lessor’s independent certified public
accountants in connection with any Lessor’s Audit.

Unsuitable for its Primary Intended Use.  A state or condition of the Facility such
that in the judgment of Lessor the Facility cannot function as an integrated
hotel facility consistent with standards applicable to a well maintained and
operated hotel comparable in quality and function to that of the Facility prior
to the damage or loss.

2.2                                 Additional
Definitions.  Other capitalized terms
are defined in the Sections of this Lease specified in the Table of Contents.

ARTICLE
III

TERM

3.1                                 Initial Term.  The initial term (hereinafter called the “Initial Term”)
of this Lease shall commence on the effective date of execution of this Lease
(the “Commencement Date”) and shall end
on December 31, 2008, unless sooner terminated in accordance with the
provisions hereof.

3.2                                 Renewal Term.  Notwithstanding anything to the contrary
contained in Section 3.1 above or Sections 4.1 and 4.2
and Exhibit “B” below, (a) provided this Lease has not previously been
terminated in accordance with the provisions hereof, upon the expiration of the
Initial Term of this Lease, this Lease shall automatically renew for the period
commencing on January 1, 2009, and expiring on December 31, 2009 (the
“Renewal Term”), unless
sooner terminated in accordance with the provisions hereof, and (b) during the
Renewal Term, the Base

 9
 

Rent, Additional Base Rent and Percentage Rent (each as hereinafter
defined) shall together be an amount equal to the fair market rental value of
the Leased Property, which fair market rental value shall be determined using
the same criteria that was used by Lessor and Lessee to determine the Base
Rent, Additional Base Rent and Percentage Rent with respect to the Initial Term
of this Lease, except to the extent that Lessor and Lessee determine that such
criteria should be modified because they would not result in a determination of
fair market rental value because of a change in economic conditions between the
Commencement Date and the first day of the Renewal Term.  Promptly after the determination of the Base
Rent, Additional Base Rent and Percentage Rent applicable during the Renewal
Term, Lessor and Lessee shall enter into an amendment to this Lease
memorializing the same.

ARTICLE
IV

RENT

4.1                                 Rent.  So long as this Lease remains in force and
effect, Lessee promises to pay rents to Lessor, in lawful money of the United
States of America which shall be legal tender for the payment of public and
private debts, in immediately available funds, in the manner, at the time, and
in the amounts specified below:

(a)                                  Base Rent.  Lessee shall pay annual base rent under this
Lease (the “Base Rent”) in
advance in the monthly installments set forth in the Monthly Base Rent Payment
Schedule attached hereto as  Schedule
4.1(a) beginning on the Effective Date and continuing on or before the first
(1st) day of
each and every month thereafter during the Term.  Base Rent for any period during the Term
which is less than one (1) month shall be a pro-rata portion of the
applicable monthly installment.

(b)                                 Additional Base
Rent.  In addition to the Base Rent,
Lessee shall pay additional base rent (the “Additional Base Rent”) in the amounts and at the times set
forth in the Additional Base Rent Schedule attached hereto as Schedule
4.1(b).

(c)                                  Percentage Rent.

(i)                                     In
addition to the sums payable pursuant to Subparagraphs (a) and (b) above,
Lessee shall within forty-five (45) days after the last day of each Lease Year
during the Term, pay to Lessor “Percentage Rent”
(herein so called) for each Lease Year calculated in accordance with the
provisions of this subparagraph (c) and Exhibit B
attached hereto, which obligation will survive the expiration or early
termination of this Lease for a period of one (1) year.

(ii)                                  The
obligation to pay Percentage Rent shall survive the expiration or earlier
termination of the Term, and a final reconciliation, taking into account, among
other relevant adjustments, any adjustments which are accrued after such
expiration or termination date but which related to Percentage Rent accrued
prior to such termination date, shall be made not later than sixty (60) days
after such expiration or termination date.

 10
 

(d)                                 Adjustment of Rents.  The parties agree and acknowledge that it is
their intent that the Rent paid by Lessee hereunder reflect the fair market
rental rate of the Leased Property. 
Notwithstanding any provision of this Lease to the contrary, during the
18 month period following the Effective Date, Lessor reserves the right to
retain a lease consultant to perform a market analysis and prepare a report (a “Rent Report”) recommending the
appropriate Rent (including Base Rent, Additional Base Rent and Percentage
Rent) for the Leased Property based on such market analysis. Lessor may adjust
the Base Rent set forth in Schedule 4.1(a), the Additional Base Rent set
forth on Schedule 4.1(b) as well as the Percentage Rent, on a
prospective or retroactive basis, based on the recommendations set forth in the
Rent Report.

4.2                                 Confirmation of
Percentage Rent.

(a)                                  Lessee shall submit
to Lessor within twenty (20) days after the last day of each Quarter a written
statement signed and certified by Lessee to be correct, showing Gross Revenues
during the preceding Quarter and specifically
allocating the amounts attributable to Hotel Revenues and Food & Beverage
Revenues and the calculation of Percentage Rent for such period.  Lessee shall submit to Lessor within twenty
(20) days after the end of each Lease Year a written statement signed and
certified by Lessee to be correct, showing Gross Revenues during such preceding
Lease Year and the calculation of Percentage Rent for such Lease Year (the “Annual Gross Revenues Report”).  In addition, within ninety (90) days after
the end of each Lease Year, Lessee will provide to Lessor, at Lessee’s expense,
an audited Statement of Gross Revenues for the preceding Lease Year (the “Annual Audited Gross Revenues Statement”).  Lessee’s monthly and annual written statement
of Gross Revenues shall contain such detail and breakdown as Lessor may
reasonably require.  If, after notice
from Lessor and the expiration of the cure period provided for herein, Lessee
fails to submit the aforesaid report and statement to Lessor when due, Lessor,
in addition to any other remedies Lessor has, shall have the right to retain a
certified public accountant, at Lessee’s sole expense, to prepare such
statements and to perform all inspections and audits related thereto.  In the event that either the Annual Gross
Revenues Report or Annual Audited Gross Revenues Statement discloses that the
actual Percentage Rent exceeds the prior payments of Percentage Rent to Lessor
with respect to such year, Lessee shall within thirty (30) days of notice from
Lessor remit the difference to Lessor, together with interest thereon at the
Base Rate from the date due until paid. 
In the event the advance payments of Percentage Rent paid to Lessor with
respect to a calendar year exceed the actual Percentage Rent based upon the
Annual Gross Revenues Report or Annual Audited Gross Revenues Statement, Lessor
shall apply such overpayment to the next payment of Percentage Rent due
hereunder (or, in the event that the Lease is expired or otherwise terminated,
then Lessor shall remit the overpayment to Lessee within thirty (30) days of
notice from Lessee).

(b)                                 The acceptance by
Lessor of the estimated payments of Percentage Rent or any additional payment
of Percentage Rent (pursuant to subparagraph (a) above) shall not prejudice
Lessor’s right, at Lessor’s sole cost and expense (except as expressly provided
below), to an examination of Lessee’s records of Gross Revenues for any period
for which Lessee is required to maintain records to verify Gross Revenues.  Lessor shall have the right to examine Lessee’s
records during all regular business hours upon reasonable prior notice.  Lessee, upon

 11
 

reasonable prior notice, shall make available to Lessor for examination
any other records required to be maintained hereunder.  If the audit of the books and records by
Lessor (the “Lessor’s Gross Revenues
Audit”) discloses that Gross Revenues were underreported by
Lessee for any period covered by such Audit, Lessee shall promptly pay to
Lessor, the cost of the Lessor’s Gross Revenues Audit, as Additional Rent, in
addition to any deficiency in Percentage Rent that may be due, plus interest
thereon at the Base Rate from the date due until paid.  If the Lessor’s Gross Revenues Audit or the
Annual Audited Gross Revenues Statement for two (2) consecutive Lease Years
discloses that Gross Revenues were underreported by Lessee by five percent (5%)
or more for each such Lease Year, Lessor shall have the option, exercisable
within sixty (60) days of its discovery of the discrepancy, to consider such
event as an Event of Default.  The
provisions of this Section shall survive the expiration of the Term or the
earlier termination of this Lease for a period of one (1) year
thereafter.  Any dispute as to the existence or amount of any deficiency in the
payment of Percentage Rent as disclosed by Lessor’s Gross Revenues Audit shall,
if not otherwise settled by the parties, be submitted to arbitration pursuant
to the provisions of Section 38.2.

(c)                                  Lessee shall maintain
in a manner and form satisfactory to Lessor, during the Term, and for a period
of three (3) consecutive years thereafter, complete and accurate general books
of account, which shall reflect Gross Revenues, and which shall include, if
used by Lessee, without limitation, original invoices, sales records, sales
slips, sales checks, sales reports, cash register tapes, records of bank
deposits, inventory records prepared as of the close of the Lessee’s accounting
period, sales and occupation tax returns and all other original records and
other pertinent papers which will enable Lessor to determine the Gross Revenues
derived by Lessee during the Term.  Such
records for the three (3) most recent years shall be maintained at the Leased
Property or Lessee’s corporate headquarters. 
The provisions hereof shall survive the expiration of the Term or the
earlier termination of this Lease.

4.3                                 Additional Charges.  In addition to the Base Rent and the Percentage
Rent, (a) Lessee also will pay and discharge as and when due and payable all
other amounts, liabilities, obligations and Impositions (as defined
hereinbelow) that Lessee expressly assumes or agrees to pay under this Lease,
and (b) in the event of any failure on the part of Lessee to pay any of those
items referred to in clause (a) of this Section 4.3, Lessee also
will promptly pay and discharge every fine, penalty, interest and cost that may
be added for non-payment or late payment of such items (the items referred to
in clauses (a) and (b) of this Section 4.3 being additional rent
hereunder and being referred to herein collectively as the “Additional Charges”) and Lessor
shall have all legal, equitable and contractual rights, powers and remedies
provided either in this Lease or by statute or otherwise in the case of
non-payment of the Additional Charges as are available in the case of
non-payment of the Base Rent or the Percentage Rent.  To the extent that Lessee pays any Additional
Charges to Lessor pursuant to any requirement of this Lease, Lessee shall be
relieved of its obligation to pay such Additional Charges to the entity to
which they would otherwise be due and Lessor shall pay same from monies
received from Lessee.

4.4                                 Net Lease
Provisions.  The rent shall be paid
absolutely net to Lessor so that this Lease shall yield to Lessor the full
amount of the installments of Base Rent, Percentage Rent, and all Additional
Charges throughout the Term, all as more fully set forth herein, but subject to

 12
 

any other provisions of this Lease that expressly provide for
adjustment or abatement of rent or other charges or expressly provide that
certain expenses or maintenance shall be paid or performed by Lessor.

4.5                                 Place and Manner of
Payment.  Subject to the further
provisions hereof, the rent hereunder shall be payable to Lessor at the
original or changed address of Lessor set forth in Article XXIX hereof or
to such other address or to such other person at such address as Lessor may
designate from time to time in writing.

4.6                                 Late Charge.  If Lessor fails to pay any regular monthly
installment of Base Rent, any quarterly installment of Additional Base Rent,
any quarterly installment of Percentage Rent, or any Additional Charges within
ten (10) days after such installment or charge is due, then in addition to the
past due amount Lessee shall pay to Lessor a late charge of five percent (5%)
of the installment or amount due in order to compensate Lessor for the extra
administrative expenses incurred.

4.7                                 Annual Budget.
Not later than sixty (60) days prior to the commencement of each Lease Year,
Lessee shall prepare and submit to Lessor an operating budget (the “Operating Budget”) and a capital
budget (the “Capital Budget”) prepared in
accordance with the requirements of this Section 4.7.  The
Operating Budget and the Capital Budget (together, the “Annual
Budget”) shall be prepared in accordance with the Uniform System
and GAAP to the extent applicable and show by month and quarter and for the
year as a whole in the degree of detail specified by the Uniform System and
GAAP for monthly statements, and in accordance with the detail level of monthly
financial statements, the following:

(a)                                  Lessee’s reasonable
estimate of Gross Revenues (including room rates and Hotel Revenues) for the
forthcoming Lease Year itemized on schedules on a monthly and quarterly basis
as approved by Lessor and Lessee, together with the assumptions, in narrative
form, forming the basis of such schedules.

(b)                                 An estimate of any
amounts Lessor will be requested to provide for capital improvements during the
current and the next three (3) Lease Years, subject to the limitations set
forth in Article XXXV.

(c)                                  A cash flow
projection.

(d)                                 A narrative
description of the program for marketing and managing the Facility for the
forthcoming Lease Year, including, among other things, details as to competitor
performance, demand analysis, estimated market penetration by market segment,
target accounts, marketing and advertising budgets, changes in personnel policies,
staffing levels, major events plans, franchise issues and other matters
affecting the performance and operation of the Facility, and containing a
detailed budget itemization of proposed expenditures by category and the
assumptions, in narrative form, forming the basis of such budget itemization.

(e)                                  Lessee’s reasonable estimate for each month
of the Lease Year of Percentage Rent, including Hotel Revenues, Food Sales,
Beverage Sales and other income.

 13
 

(f)                                    A description of
the status of any negotiations relating to a collective bargaining agreement,
if any, affecting Facility employees.

(g)                                 A description of the
current legal status of pending or threatened suits, actions, proceedings,
inquiries or investigations concerning the Facility.

(h)                                 Statistical information
for the Hotel, such as Average Daily Rate (“ADR”),
Revenue Per Available Room (“REVPAR”)
and occupancy.

(i)                                     Capital Budget,
listing amounts by project and estimated expenditure period (i.e. first
quarter, second quarter, third quarter or fourth quarter).

(j)                                     Annual working
capital position.

(k)                                  Upon the written
request of Lessor, any other matter reasonably required by Lessor for inclusion
in the Annual Budget.

Lessor shall have thirty (30) days after the date on
which it receives the Annual Budget to review, approve, disapprove or change
the entries and information appearing in the Annual Budget (other than the
Capital Budget).  If the parties are not
able to reach agreement on the Annual Budget for any Lease Year during Lessor’s
thirty (30) day review period, the parties shall attempt in good faith during
the subsequent thirty (30) day period to resolve any disputes, which attempt
shall include, if requested by either party, at least one (1) meeting of
executive level officers of Lessor and Lessee. 
In the event the parties are still not able to reach agreement on the
Annual Budget for any particular Lease Year after complying with the foregoing
requirements of this Section 4.7,
the parties shall adopt such portions of the Operating Budget and the Capital
Budget as they may have agreed upon,
and any matters not agreed upon shall be submitted to arbitration as provided
in Section 38.2 hereof. 
Pending the agreement of the parties, (i) if the Operating Budget
has not been agreed upon, the Leased Property will be operated in a manner
consistent with the prior Lease Year’s Operating Budget without adjustment
until a new Operating Budget is adopted, and (ii) if the Capital Budget
has not been agreed upon, no capital expenditures shall be made unless the same
are set forth in a previously approved Capital Budget or are specifically
required by Lessor or are otherwise required to comply with Legal Requirements
or to make emergency expenditures.

The Capital Budget shall be subject to the approval of
Lessor in its sole and absolute discretion. 
Notwithstanding Lessor’s approval of the Capital Budget, no capital
expenditures shall be made except upon Lessor’s authorization, other than
emergency expenditures.  Subject to any
required approvals by any Holder or a ground lessor, Lessor agrees that the
Capital Budget shall provide for and Lessor shall authorize and approve,
capital expenditures necessary to cause the Hotel to comply with the Brand
Standards so long as the Management Agreement remains in place.  Any dispute
as to same shall be resolved by arbitration pursuant to Section 38.2.

 14
 

Lessee shall operate the Leased Property consistent
with the Annual Budget and shall promptly report to Lessor in writing any
actual or anticipated deviation from the Operating Budget or Capital Budget of
any material or long term consequence.

4.8                                 Books and Records.  Lessee shall keep full and adequate books of
account and other records reflecting the results of operation of the Facility
on an accrual basis, all in accordance with the Uniform System and GAAP and the
obligations of Lessee under this Lease. 
The books of account and all other records relating to or reflecting the
operation of the Facility shall be kept either at the Facility or at Lessee’s
offices in Dallas, Texas and shall be available to Lessor and its
representatives and its auditors or accountants, at all reasonable times upon
prior notice for examination, audit, inspection, and transcription.  All of such books and records pertaining to
the Facility including, without limitation, books of account, guest records and
front office records, at all times shall be the property of Lessee but shall
not be removed from the Facility or Lessee’s offices without Lessor’s prior
written approval.  Upon termination or
expiration of this Lease, Lessee shall deliver copies of all such books and
records to Lessor.  Lessor shall be
entitled to make copies during the Term of any or all such books and records
for its own files.  Lessee’s obligations
under this Section 4.8
shall survive termination of this Lease for any reason.

4.9                                 Changes in
Operations.  Without Lessor’s prior
written consent, not to be unreasonably withheld, conditioned or delayed,
Lessee shall not (i) provide food and/or beverage operations at the
Facility if not presently provided, (ii) discontinue any food and/or
beverage operations which are presently provided, or (iii) convert a
subtenant, licensee or concessionaire to an operating department of the
Facility or vice versa.

4.10                           Allocation of Revenues.  In the event that individuals or groups
purchase rooms, food and beverage and/or the use of other hotel facilities or
services together or as part of a package, Lessee agrees that revenues shall be
allocated among Room Revenues, Food Sales, Beverage Sales and/or other revenue
categories, as applicable, in a reasonable manner consistent with the
historical allocation of such revenues.

ARTICLE V

QUIET ENJOYMENT

5.1                                 Quiet Enjoyment.  Lessor has full right to make this Lease and,
subject to the terms and provisions of this Lease and provided Lessee pays all
Rent and complies with the terms of this Lease, Lessee shall have quiet and
peaceable enjoyment of the Leased Property during the Term.  Except as otherwise specifically provided in
this Lease, Lessee, to the maximum extent permitted by law, shall remain bound
by this Lease in accordance with its terms and shall neither take any action
without the written consent of Lessor to modify, surrender or terminate the
same, nor seek nor be entitled to any abatement, deduction, deferment or
reduction of the rent, or setoff against the rent, nor shall the obligations of
Lessee be otherwise affected by reason of (a) any damage to or destruction of
the Leased Property or any portion thereof from whatever cause, (b) the lawful
or unlawful prohibition of, or restriction upon Lessee’s use of the Leased
Property, or any portion thereof, or the interference with such use by any
person, corporation, partnership or other entity or by reason of eviction by
paramount title, (c) any claim

 15
 

which Lessee has or might have against Lessor by reason of any default
or breach of any warranty by Lessor under this Lease or any other agreement
between Lessor and Lessee, or to which Lessor and Lessee are parties, (d) any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Lessor or any assignee
of or transferee of Lessor, or (e) for any other cause whether similar or
dissimilar to any of the foregoing other than a discharge of Lessee from any
such obligations as a matter of law. 
Lessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
to (i) modify, surrender or terminate this Lease or quit or surrender the
Leased Property or any portion thereof, or (ii) entitle Lessee to any
abatement, reduction, suspension or deferment of the rent or other sums payable
by Lessee hereunder, except as otherwise specifically provided in this Lease.  The obligations of Lessee hereunder shall be
separate and independent covenants and agreements and the rent and all other
sums payable by Lessee hereunder shall continue to be payable in all events
unless all the obligations to pay the same shall be terminated pursuant to the
express provisions of this Lease or by termination of this Lease other than by
reason of an Event of Default.

5.2                                 Lessor Cooperation.  Lessor shall cooperate with Lessee in the
performance of its obligations under this Lease and shall deliver such
information and execute such agreements or instruments as may be reasonably
necessary for Lessee to perform its obligations under this Lease.

ARTICLE
VI

IMPOSITIONS

6.1                                 Payment of
Impositions.  Subject to the
provisions of Article XII
relating to permitted contests, Lessee will pay, or cause to be paid, all
Impositions (as defined hereinbelow) before any fine, penalty, interest or cost
may be added for non-payment, such payments to be made directly to the taxing
or other authorities where feasible, and will promptly furnish to Lessor copies
of official receipts or other satisfactory proof evidencing such payments.  If any such Imposition may, at the option of
the obligor, lawfully be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Lessee may exercise the
option to pay the same (and any accrued interest on the unpaid balance of such
Imposition) in installments and in such event, shall pay such installments
during the Term (subject to Lessee’s right of contest pursuant to the
provisions of Article XII)
as the same respectively become due and before any fine, penalty, premium,
further interest or cost may be added thereto. 
If any refund shall be due in respect of any Imposition paid by Lessee,
the same shall be paid over to or retained by Lessee if no Event of Default
shall have occurred hereunder and be continuing.  If an Event of Default shall have occurred
and be continuing, any such refund shall be paid over to or retained by
Lessor.  Any such funds retained by
Lessor due to an Event of Default shall be applied as provided in Article XVI.  Lessor and Lessee shall, upon request of the
other, provide such data as is maintained by the party to whom the request is
made with respect to the Leased Property as may be necessary to prepare any
required returns and reports.

6.2                                 Notice of
Impositions.  Lessor shall give
prompt notice to Lessee of all Impositions payable by Lessee hereunder of which
Lessor at any time has knowledge, provided

 16
 

that Lessor’s failure to give any such notice shall in no way diminish
Lessee’s obligations hereunder to pay such Impositions, but such failure shall
obviate any default hereunder for a reasonable time after Lessee receives
notice of any Imposition which it is obligated to pay.

6.3                                 Adjustment of
Imposition.  Impositions imposed in
respect of the tax-fiscal period during which the Term terminates shall be
adjusted and prorated between Lessor and Lessee, whether or not such Imposition
is imposed before or after such termination, and Lessee’s obligation to pay its
prorated share thereof after termination shall survive such termination.

6.4                                 Utility Charges.  Lessee will be solely responsible for
obtaining and maintaining utility services to the Leased Property and will pay
or cause to be paid all charges for electricity, gas, oil, water, sewer and
other utilities used in the Leased Property during the Term.

6.5                                 Insurance Premiums.  Lessee will pay or cause to be paid all
premiums for the insurance coverages required to be maintained by it under Article XIII.

6.6                                 Definition of
Impositions.  The term “Impositions,” as used herein,
means, collectively, all taxes (including, without limitation, all ad valorem,
personal property, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Lessor or Lessee or Lessee’s business conducted upon the Leased Property),
assessments (including, without limitation, all assessments for public
improvements or benefit, whether or not commenced or completed prior to the
date hereof and whether or not to be completed within the Term and also any
assessments imposed on the Leased Property by any property owners’ association,
condominium association or other such private association, or otherwise as a
result of private deed restrictions affecting the Leased Property), ground
rents, water, sewer or other rents and charges, excises, tax inspection,
authorization and similar fees and all other such charges, in each case whether
general or special, ordinary or extraordinary, or foreseen or unforeseen, of
every character in respect of the Leased Property or the business conducted
thereon by Lessee (including all interest and penalties thereon caused by any
failure in payment by Lessee), which at any time prior to, during or with
respect to the Term may be assessed or imposed on the Leased Property, or any
part thereof or any rent therefrom or any estate, right, title or interests
therein, or any occupancy, operation, use or possession of, or sales from, or
activity conducted on or in connection with the Leased Property, or the leasing
or use of the Leased Property or any part thereof by Lessee.  Nothing contained in this definition of
Impositions shall be construed to require Lessee to pay (1) any tax based
on net income (whether denominated as a franchise or capital stock or other
tax) imposed on Lessor or any other person, or (2) any net revenue tax of
Lessor or any other person, or (3) any tax imposed with respect to the sale,
exchange or other disposition by Lessor of any Leased Property or the proceeds
thereof, or (4) any single business, gross receipts (other than tax on any rent
received by Lessor from Lessee), transaction, privilege or similar taxes as the
same relate to or are imposed upon Lessor, except to the extent that any tax,
assessment, tax levy or charge that Lessee is obligated to pay pursuant to the
first sentence of the definition and that is in effect at any time during the
Term is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (1) or (2) is levied, assessed or imposed
expressly in lieu thereof.

 17
 

ARTICLE
VII

CONDITION, USE

7.1                                 Condition of the
Leased Property.  Lessee acknowledges
receipt and delivery of possession of the Leased Property.  Lessee has examined and otherwise has
knowledge of the condition of the Leased Property and has found the same to be
satisfactory for its purposes hereunder. 
Lessee is leasing the Leased Property “as is” in its present
condition.  Lessee waives any claim or
action against Lessor in respect of the condition of or claims against the
Leased Property.  LESSOR MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED
PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY LESSEE. 
LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY
LESSEE AND IS SATISFACTORY TO IT; provided, however, to the extent permitted by
law, Lessor hereby assigns to Lessee all of Lessor’s rights to proceed against
any predecessor-in-title, contractor, subcontractor or supplier for breaches of
warranties or representations or for latent defects in the Leased
Property.  Lessor shall fully cooperate
with Lessee in the prosecution of any such claim, in Lessor’s or Lessee’s name,
all at Lessee’s sole cost and expense. 
Lessee hereby agrees to indemnify, defend and hold harmless Lessor from
and against any claims, obligation and liabilities against or incurred by
Lessor in connection with such cooperation.

7.2                                 Use of the Leased
Property.

(a)                                  Subject to the
provisions of Articles XIV, XV,
and XXI and Section 7.2(e), Lessee
covenants and agrees that it will during the Term (i) proceed with all due
diligence and will exercise its best efforts to obtain and to maintain all
licenses, permits, certificates and approvals needed to use and operate the
Leased Property in the manner required under this Lease and under applicable
local, state and federal law, except to the extent the same are the
responsibility of the Developer under the Development Agreement;
(ii) operate continuously the Leased Property in accordance with the
Primary Intended Use; (iii) keep in full force and effect and comply with
all the provisions of all agreements assigned to Lessee pursuant to the terms
hereof, and (iv) not terminate or amend any agreements constituting part
of the Leased Property without the consent of Lessor (the agreements described
in subsections (iii) and (iv) herein called (the “Service Contracts”), such consent to not be unreasonably
withheld, delayed or conditioned.

(b)                                 Lessee shall use or
cause to be used the Leased Property only for its current uses as a hotel
(together with all other existing or incidental uses, including restaurant,
retail, office, movie theater, bar, fitness center, spa, conference center and
other such uses) and for such other uses as may be necessary or incidental to
such use or such other use as otherwise approved by Lessor (the “Primary Intended Use”).  Lessee shall not use the Leased Property or
any portion thereof for any other use, nor change any names under which the
Leased Property is operated, without the prior written consent of Lessor, which
consent may be granted, denied or

 18
 

conditioned in Lessor’s sole discretion, except as may be expressly
permitted under Section 7.2(e). 
No use shall be made or permitted to be made of the Leased Property, and
no acts shall be done, which will cause the cancellation or increase the
premium of any insurance policy covering the Leased Property or any part
thereof (unless another adequate policy satisfactory to Lessor is available and
Lessee pays any premium increase), nor shall Lessee sell or permit to be kept,
used or sold in or about the Leased Property any Article which may be
prohibited by law or fire underwriter’s regulations.  Lessee shall, at its sole cost, comply with
all of the requirements pertaining to the Leased Property of any insurance
board, association, organization or company necessary for the maintenance of
insurance, as herein provided, covering the Leased Property and Lessee’s
Personal Property.

(c)                                  Lessee shall not
commit or suffer to be committed any waste on the Leased Property (normal wear
and tear excepted), nor shall Lessee cause or permit any nuisance thereon.

(d)                                 Lessee shall neither
suffer nor permit the Leased Property or any portion thereof to be used in such
a manner as (1) might reasonably tend to impair Lessor’s (or Lessee’s, as
the case may be) title thereto or to any portion thereof, or (2) may
reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or of implied dedication of the Leased
Property or any portion thereof, except as necessary in the ordinary and
prudent operation of the Facility on the Leased Property.

(e)                                  Notwithstanding
anything to the contrary in this Lease but subject to Article XXXV,
Lessee shall have the authority, without Lessor’s prior written consent, to do
the following:

(i)                                     enter
into, extend, modify, or terminate leases or subleases of commercial, office,
retail, spa, restaurant or other incidental uses at the Leased Property;
provided that (A) such incidental uses comply with the Primary Intended Use,
(B) such lease does not exceed 7,500 rentable square feet, (C) the term of such
lease is not in excess of five (5) years, (D) such lease is on market terms and
at market rental rates and (E) rental payments under any such lease are
not based on the net income or profits of the tenants.

(ii)                                  enter
into any Service Contract, license, concession and equipment lease (A) which
has a term of less than two (2) years, including renewals, unless it is
terminable within two (2) years from the date of its execution without cause,
and either without cost or penalty or if with a penalty, such penalty is less
than Twenty-Five Thousand Dollars ($25,000.00); provided that Lessee may not
enter into any Service Contract which expires later than the third anniversary
of the Commencement Date unless such Service Contract is terminable without
cost or penalty upon no more than ninety (90) days prior notice, and (B) which
binds Lessee to aggregate payments per year of not more than Fifty Thousand
Dollars ($50,000.00), adjusted for CPI.

7.3                                 Lessor to Grant
Easements, Etc.  Lessor will, from
time to time, so long as no Event of Default has occurred and is continuing, at
the request of Lessee and at Lessee’s cost and

 19
 

expense (but subject to the approval of Lessor, which approval shall
not be unreasonably withheld or delayed), (a) grant easements and other rights
in the nature of easements with respect to the Leased Property to third
parties, (b) release existing easements or other rights in the nature of
easements which are for the benefit of the Leased Property, (c) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes, (d) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district, (e) execute amendments to any
covenants and restrictions affecting the Leased Property and (f) execute and
deliver to any person any instrument appropriate to confirm or effect such
grants, releases, dedications, transfers, petitions and amendments (to the
extent of its interests in the Leased Property), but only upon delivery to
Lessor of a certificate from Lessee stating that such grant, release,
dedication, transfer, petition or amendment is not detrimental to the proper
conduct of the business of Lessee on the Leased Property and does not
materially reduce the value of the Leased Property.

7.4                                 Inventory;
Supplies; Lessee’s Personal Property.

(a)                                  Upon commencement of
the Term, Lessor shall transfer to Lessee all Nonconsumable Inventory and
Consumable Supplies located at the Facility on the Commencement Date (the “Initial Inventory”).  On the Commencement Date, Lessee shall be
required to ensure that the Leased Property contains (i) a sufficient
amount of Consumable Supplies and Non-Consumable Inventory and (ii) a
reasonably adequate amount of kitchen equipment, bar equipment, refrigeration
equipment, furniture, furnishings, color television sets, carpets, drapes,
rugs, floor coverings, mattresses, pillows, bedspreads and the like, in each
case, to furnish each guest room substantially consistent with First Class
Operating Standards and is otherwise reasonably required to operate the Leased
Property in the manner contemplated by this Lease and in compliance with First
Class Operating Standards and all Legal Requirements (provided that Lessor
shall not be required to provide, at commencement of the Term or otherwise, any
items to be furnished pursuant to the Development Agreements).  Throughout the Term, Lessee shall be required
to maintain Inventory consistent with First Class Operating Standards and as is
otherwise required to operate the Leased Property in the manner contemplated by
this Lease and in compliance with all Legal Requirements.  All Inventory shall be the property of
Lessee, subject to Lessee’s obligations under Section 7.4(b). 
Lessee may (and shall as provided hereinbelow), at its expense, install,
affix or assemble or place on any parcels of the Land or in any of the Leased
Property, any items of personal property (including Inventory) owned by Lessee
(collectively, the “Lessee’s Personal Property”).  Lessee may, subject to the second sentence of
this Section 7.4(a)
and the conditions set forth in Section 7.4(b)
below, remove any of Lessee’s Personal Property at any time during the Term or
upon the expiration or any prior termination of the Term.  All of Lessee’s Personal Property, other than
Inventory, not removed by Lessee within thirty (30) days following the
expiration or earlier termination of the Term shall be considered abandoned by
Lessee and may be appropriated, sold, destroyed or otherwise disposed of by
Lessor without first giving notice thereof to Lessee, without any payment to
Lessee and without any obligation to account therefor.  Lessee will, at its expense, restore the
Leased Property to the condition required by Section 9.1(d), including repair of all damage to the
Leased Property caused by the removal of Lessee’s Personal Property.

 20
 

(b)                                 Upon the expiration or
earlier termination of the Term for any reason, Lessee shall surrender the
Leased Property to Lessor with a quality of Nonconsumable Inventory and
Consumable Supplies substantially equal to the Initial Inventory and in an
amount of not less than ninety percent (90%) of the Initial Inventory.

7.5                                 FFE.  Lessor shall establish and maintain a reserve
(the “FFE Reserve”) equal to the lesser
of (a) the amount required by any Holder, or (b) an amount equal to the
following percent of Gross Revenues (or such other amount as may be specified
in the Annual Budget for such year):  (i)
one percent (1%) during the first and second Lease Years; (ii) two percent (2%)
during the third Lease Year; (iii) three percent (3%) during the fourth Lease
Year; and (iv) four percent (4%) during each Lease Year thereafter.  If at any time during the Term, any item of
FFE (defined below) requires replacement, (a) if such amounts were not included
in the Annual Budget, upon a written request therefor from Lessee and approval
of such expenditures by Lessor (which approval shall not be unreasonably
withheld or delayed), or (b) if such amounts were not included in the Annual
Budget, Lessor shall promptly advance sufficient funds from the FFE Reserve to
enable Lessee to purchase the required replacements.  Lessee shall make no expenditure for
replacement of FFE in excess of the amounts in the FFE Reserve without first
obtaining the approval of Lessor.  Any
additions to or replacements of furniture, fixtures, and equipment located at
the Leased Property shall become part of the FFE, which is owned by
Lessor.  Throughout the Term of this
Lease, Lessee shall, at its sole cost and expense, cause all of the items of
FFE to be in proper working order and in good condition (ordinary wear and tear
excepted).  The term “FFE” shall have the meaning as set
forth in the Uniform System and shall include, without limitation, all
vehicles, furniture, furnishings and hotel equipment (including office
equipment, exercise equipment, medical and/or health equipment, and property
management equipment as necessary).

7.6                                 Lessee’s Obligation
to Manage.  At all times during the
Term, Lessee shall be responsible for the management and operation of the
Leased Property through the Manager or a successor manager approved by Lessor
in its sole discretion, and in no event shall Lessor have any obligation with
respect to the management or operation of the Leased Property.

7.7                                 Cash Accounts;
Working Capital.  On the Commencement
Date, Lessor shall transfer to Lessee cash and funds deposited in banks (“Cash”) in the sum of $50,000 and
working capital equal to zero (0) (“Working
Capital”) as set forth in the Preliminary Statement of Cash and
Working Capital (the “Preliminary
Statement”) to be initialed by Lessor and Lessee and attached to
this Lease as Exhibit C.  Upon the expiration or early termination of
this Lease, Lessee shall (a) pay over to Lessor the same amount of Cash that
existed on the Commencement Date; and (b) restore the amount of Working Capital
to zero (0).  If, notwithstanding the
requirement in the preceding sentence, the Leased Property is returned to
Lessor with positive Working Capital, Lessor shall have the right to audit
Lessee’s and the Leased Property’s books and records and, upon confirmation of
such amount by Lessor, Lessor shall pay to Lessee the amount of positive
Working Capital.  If the Leased Property
is returned to Lessor with negative Working Capital, Lessor shall have the
right to audit Lessee’s and the Leased Property’s books and records and, upon
confirmation of such amount by Lessor, Lessee will pay to Lessor the amount of
negative Working Capital.

 21

7.8           Reserved.

7.9           Employees.  Lessee acknowledges and agrees that all
employees involved in the use and operation of the Leased Property shall be
employees of Manager, or one of its Affiliates and not of Lessee, Lessor or any
of their respective Affiliates.  Lessee,
and its Affiliates shall fully comply (and shall cause Manager to fully comply)
with all Legal Requirements and all collective bargaining and other agreements
applicable to such employees.  Upon the
expiration or earlier termination of this Lease, all such employees shall be
terminated or retained by Manager or its Affiliates, as applicable, and Lessee
shall cause Manager to provide any required notices or other rights to such
employees, all without liability to Lessor or the Hotel, or any other owner,
lessee or manager of the Hotel.  Payment
of all costs and expenses associated with accrued but unpaid salary, earned but
unpaid vacation pay, accrued but unearned vacation pay, pension and welfare
benefits, the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) benefits, employee
fringe benefits, employee termination payments or any other employee benefits
due to such employees, shall be the sole responsibility and obligation of and
shall be paid when due by Manager or its Affiliates, as applicable.  Upon the expiration or earlier termination of
this Lease and the expiration or earlier termination of the Management
Agreement (to the extent permitted under the Management Agreement or Owner
Agreement), any owner, manager or lessee of the Hotel shall have the right, but
not the obligation, to extend offers of employment to some or all of such
employees on such terms and conditions as are determined solely in such party’s
discretion; and Lessee shall use reasonable efforts to assist such party in its
efforts to secure satisfactory employment arrangements with such
employees.  Lessee shall cause Manager to
provide any notices, coverages or other rights as shall be required to comply
with the medical coverage continuation requirements of COBRA to any persons who
are entitled to such rights by virtue of the maintenance of any group health
plan by Manager or its Affiliates, as applicable.  Lessee shall indemnify, defend and hold
harmless Lessor from and against any and all claims, causes of action,
proceedings, judgments, damages, penalties, liabilities, costs and expenses
(including reasonable attorney’s fees and disbursements) arising out of the
employment or termination of employment of or failure to offer employment to
any employee or prospective employee by Lessee or its Affiliates, including,
without limitation, claims of discrimination, sexual harassment, breaches of
employment or collective bargaining agreements, or the failure of Lessee or any
of its Affiliates to comply with the provisions of this section.  The indemnification rights and obligations
provided for in this Section shall survive the termination of this Lease.

7.10         Net Worth.  Lessee covenants that it shall at all times
during the term of this Lease maintain an adequate “net worth” as agreed upon
by Lessor and Lessee.  For purposes
hereof, “net worth” shall mean the sum of (i) the aggregate cash and fair
market value of any property (other than cash) contributed to the capital of
Lessee by the members or partners of Lessee after the Effective Date (net of
amounts distributed other than distributions out of earnings of Lessee) and
(ii) the aggregate balances of any line of credit obtained by Lessee and
guaranteed by one or more of the members or partners of Lessee acceptable to
Lessor to the extent such funds may be utilized by Lessee to perform its
obligations under the Lease and to comply with the terms of the Management
Agreement, and (iii) any commitments of the members or partners of Lessee to
make additional capital contributions to Lessee after the

 22
 

Effective Date, which commitments are legally binding obligations of
such members of Lessee to make additional capital contributions to Lessee.

ARTICLE
VIII

LEGAL REQUIREMENTS

8.1           Compliance with Legal and Insurance Requirements,
Etc.  Subject to the provisions of Article XII relating to
permitted contests, Lessee, at its expense, will promptly (a) comply with all
applicable legal requirements and insurance requirements in respect to the use,
operation, maintenance, repair and restoration of the Leased Property, and (b)
procure, maintain and comply with all appropriate licenses and other
authorizations required for any use of the Leased Property then being made, and
for the proper erection, installation, operation and maintenance of the Leased
Property or any part thereof.

8.2           Legal Requirement Covenants.  Lessee covenants and agrees that the Leased
Property shall not be used for any unlawful purpose, and that Lessee shall not
permit or suffer to exist any unlawful use of the Leased Property by
others.  Lessee shall acquire and
maintain all appropriate licenses, certifications, permits and other
authorizations and approvals needed to operate the Leased Property in its
customary manner for the Primary Intended Use, and any other lawful use
conducted on the Leased Property as may be permitted from time to time
hereunder.  Lessee further covenants and
agrees that Lessee’s use of the Leased Property and maintenance, alteration,
and operation of the same, and all parts thereof, shall at all times conform to
all legal requirements, unless the same are finally determined by a court of
competent jurisdiction to be unlawful (and Lessee shall cause all sub-tenants,
invitees or others to so comply with all legal requirements).  Lessee may, however, upon prior notice to
Lessor, contest the legality or applicability of any such legal requirement or
any licensure or certification decision if Lessee maintains such action in good
faith, with due diligence, without prejudice to Lessor’s rights hereunder, and
at Lessee’s sole expense.  If by the
terms of any such legal requirement compliance therewith pending the
prosecution of any such proceeding may legally be delayed without the
incurrence of any lien, charge or liability of any kind against the Leased
Property or Lessee’s leasehold interest therein and without subjecting Lessee
or Lessor to any liability, civil or criminal, for failure so to comply
therewith, Lessee may delay compliance therewith until the final determination
of such proceeding.  If any lien, charge
or civil or criminal liability would be incurred by reason of any such delay,
Lessee, on the prior written consent of Lessor, which consent shall not be
unreasonably withheld, may nonetheless contest as aforesaid and delay as aforesaid
provided that such delay would not subject Lessor to criminal liability and
Lessee both (a) furnishes to Lessor security reasonably satisfactory to Lessor
against any loss or injury by reason of such contest or delay and (b)
prosecutes the contest with due diligence and in good faith.

8.3           Environmental Matters and Indemnities.

(a)           Lessee shall, at its sole cost and expense,
keep and maintain the Leased Property in compliance with, and shall not cause
or permit the Leased Property to be in violation of, any federal, state, and
local laws, regulations, rules, and orders including without limitation those
relating to zoning, health, safety, noise, environmental protection, water
quality, air

 23
 

quality, or the generation, processing, storage, or disposal of any
Hazardous Materials (as hereinafter defined). 
Moreover, Lessee will not intentionally cause or permit the storage,
use, disposal, manufacture, discharge, leakage, spillage, emission or Release
of any Hazardous Materials on, in, or about the Leased Property.  Lessee must immediately notify Lessor in
writing of its actual knowledge of (a) any enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened in
connection with the Leased Property and any Hazardous Materials; or (b) any
claim made or threatened by any third party against Lessee or the Leased
Property relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials that could cause all or any portion
of the Leased Property to be subject to any restrictions on the ownership,
occupancy, transferability or use of the Leased Property under Hazardous
Materials Law (as hereinafter defined). 
Notwithstanding the foregoing, Lessee is not required by Lessor to
remove any Hazardous Materials located on, in, under or about the Leased
Premises on or prior to the Commencement Date of this Lease.  Without Lessor’s prior written consent, which
consent must not be unreasonably withheld or delayed, Lessee will not take any
remedial action in response to the presence of any Hazardous Materials on, in,
or under or about the Leased Property, nor enter into any settlement agreement,
consent decree or other compromise in respect to any Hazardous Materials except
as may be necessary to comply with all laws, rules, regulations or orders of
any applicable governmental authorities.

(b)           LESSEE INDEMNIFIES AND HOLDS THE LESSOR
INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST ANY CLAIM, ACTION, SUIT,
PROCEEDING, LOSS, COST, DAMAGE, LIABILITY, DEFICIENCY, FINE, PENALTY, PUNITIVE
DAMAGE OR EXPENSE (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ AND CONSULTANT
FEES), DIRECTLY OR INDIRECTLY RESULTING FROM, ARISING OUT OF, OR BASED UPON (I)
THE PRESENCE, RELEASE, USE, MANUFACTURE, GENERATION, DISCHARGE, STORAGE OR
DISPOSAL BY LESSEE (OR ITS SUBLESSEE, CONTRACTORS, LICENSEES, CONCESSIONAIRES,
GUESTS, INVITEES, EMPLOYEES, AGENTS OR REPRESENTATIVES) OF ANY HAZARDOUS
MATERIAL ON, UNDER, IN OR ABOUT, OR THE TRANSPORTATION OF ANY SUCH MATERIALS TO
OR FROM THE LEASED PROPERTY OCCURRING DURING THE TERM, (II) THE VIOLATION, OR
ALLEGED VIOLATION BY LESSEE (OR ITS SUBLESSEE, CONTRACTORS, LICENSEES,
CONCESSIONAIRES, GUESTS, INVITEES, EMPLOYEES, AGENTS OR REPRESENTATIVES) OF ANY
HAZARDOUS MATERIALS LAW AFFECTING THE LEASED PROPERTY, OR THE TRANSPORTATION BY
LESSEE (OR ITS SUBLESSEES, CONTRACTORS, LICENSEES, CONCESSIONAIRES, GUESTS,
INVITEES, EMPLOYEES, AGENTS OR REPRESENTATIVES) OF HAZARDOUS MATERIALS TO OR
FROM THE LEASED PROPERTY OR (III) ANY AND ALL ENVIRONMENTAL LIABILITIES ARISING
UNDER SUBSECTIONS (I) OR (II) ABOVE, SAVE AND EXCEPT TO THE EXTENT THAT SUCH
VIOLATIONS OF SUBSECTIONS (I) OR (II) ABOVE (A) FIRST OCCURRED PRIOR TO THE
COMMENCEMENT DATE OF THIS LEASE OR AFTER THE EXPIRATION OR EARLIER TERMINATION
OF THIS LEASE EXCEPT TO THE EXTENT EXACERBATED BY LESSEE’S ACT, OR
(B) WERE CAUSED BY THE INTENTIONALLY WRONGFUL ACTS OR GROSSLY NEGLIGENT
ACTS OR FAILURES TO ACT OF LESSOR.

 24
 

(c)           LESSOR INDEMNIFIES AND HOLDS THE LESSEE
INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST ANY CLAIM, ACTION, SUIT,
PROCEEDING, LOSS, COST, DAMAGE, LIABILITY, DEFICIENCY, FINE, PENALTY, PUNITIVE
DAMAGE OR EXPENSE (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ AND CONSULTANT
FEES), DIRECTLY OR INDIRECTLY RESULTING FROM, ARISING OUT OF, OR BASED UPON (I)
THE PRESENCE, RELEASE, USE, MANUFACTURE, GENERATION, DISCHARGE, STORAGE OR
DISPOSAL BY LESSOR (OR ITS LESSEES OR SUBLESSEES (OTHER THAN THE LESSEE
INDEMNIFIED PARTIES), CONTRACTORS, LICENSEES, CONCESSIONAIRES, GUESTS,
INVITEES, EMPLOYEES, AGENTS OR REPRESENTATIVES) OF ANY HAZARDOUS MATERIAL ON,
UNDER, IN OR ABOUT, OR THE TRANSPORTATION OF ANY SUCH MATERIALS TO OR FROM THE
LEASED PROPERTY FIRST OCCURRING AFTER THE EXPIRATION OR EARLIER TERMINATION OF
THIS LEASE, (II) THE VIOLATION, OR ALLEGED VIOLATION BY LESSOR (OR ITS LESSEES
OR SUBLESSEES (OTHER THAN THE LESSEE INDEMNIFIED PARTIES), CONTRACTORS,
LICENSEES, CONCESSIONAIRES, GUESTS, INVITEES, EMPLOYEES, AGENT OR
REPRESENTATIVES) OF ANY HAZARDOUS MATERIALS LAW AFFECTING THE LEASED PROPERTY, OR
THE TRANSPORTATION BY LESSOR (OR ITS LESSEES OR SUBLESSEES (OTHER THAN THE
LESSEE INDEMNIFIED PARTIES), CONTRACTORS, LICENSEES, CONCESSIONAIRES, GUESTS,
INVITEES, EMPLOYEES, AGENTS OR REPRESENTATIVES) OF HAZARDOUS MATERIALS TO OR
FROM THE LEASED PROPERTY, OR (III) ANY AND ALL ENVIRONMENTAL LIABILITIES
ARISING UNDER SUBSECTIONS (I) OR (II) ABOVE, SAVE AND EXCEPT TO THE EXTENT THAT
SUCH VIOLATIONS OR SUBSECTIONS (I) OR (II) ABOVE (A) ARISE DURING THE TERM
(EXCEPT TO THE EXTENT EXACERBATED BY LESSOR’S ACT), OR (B) WERE CAUSED BY THE
INTENTIONALLY WRONGFUL ACTS OR GROSSLY NEGLIGENT ACTS OR FAILURES TO ACT OF
LESSEE.

(d)           “Hazardous
Materials Law”, for purposes of this Lease, means any federal,
state, or local law, ordinance or regulation or any court judgment applicable
to Lessee or to the Leased Property relating to industrial hygiene or to
environmental conditions including, but not limited to, those relating to the
release, emission or discharge of Hazardous Materials, those in connection with
the construction, fuel supply, power generation and transmission, waste
disposal or any other operations or processes relating to the Leased
Property.  “Hazardous Materials Law”
includes, but is not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Hazardous Materials Transportation
Act, the Resources Conservation and Recovery Act, the Solid Waste Disposal Act,
the Clean Water Act, the Clean Air Act, and any amendments to these laws or
enactments of other laws occurring after the date hereof.

(e)           “Hazardous
Materials”, for purposes of this Lease Agreement, includes
flammable explosives, radioactive materials, polychlorinated biphenyls,
asbestos in any form which is or could become friable, hazardous wastes, toxic
substances or other related material whether in the form of a chemical,
element, compound, solution, mixture or otherwise including, but not limited
to, those materials defined as “hazardous substances,” “hazardous materials,”

 25
 

“toxic substances,” “air pollutants,” “toxic pollutants,” “hazardous
wastes,” “extremely hazardous wastes” or “restricted hazardous wastes” by
Hazardous Materials Law, other than common cleaning compounds, solvents and
other materials incidental to the use and operation of the Leased Property and
in compliance with Hazardous Materials Law.

8.4           Liquor License Matters and Indemnities.

(a)           Lessee acknowledges that it will, on an
exclusive basis, purchase, serve and sell alcoholic beverages on the Leased
Property.  All alcoholic beverages to be
purchased for service or sale on the Leased Property shall be purchased from
distributors and other suppliers by or in the name of Lessee.

(b)           Lessee shall not relinquish any Liquor
License (other than as required by a governmental authority) or take or fail to
take such action which would cause a suspension, revocation or termination of
such Liquor Licenses and shall renew, extend, reapply for and otherwise
continue any such Liquor Licenses as necessary to keep such Liquor Licenses in
full force and effect until the expiration of the Term of the Lease and Lessee
shall obtain any new Liquor Licenses as are necessary for the purchase, sale
and service of alcoholic beverages in connection with the operation of the
Leased Premises.  Lessee shall cooperate
with Lessor to effect the transition procedures set forth in Article XXXVII
upon the expiration or earlier termination of the Lease in connection with the
Liquor Licenses and the purchase, sale and service of alcoholic beverages.

(c)           Lessee represents that it currently has in
place all necessary Liquor Licenses needed for the operation of the Leased
Property and Lessee is not in default under any of the requirements for the
Liquor Licenses.

(d)           LESSEE HEREBY RELEASES LESSOR AND THE LESSOR
INDEMNIFIED PARTIES FOR ANY LIABILITY, DAMAGE, LOST, COST OR EXPENSE INCURRED
BY LESSOR OR THE LESSOR INDEMNIFIED PARTIES, EXCEPT TO THE EXTENT RESULTING
FROM GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT BY LESSOR, ARISING FROM OR
RELATED TO THE LIQUOR LICENSES OR THE PURCHASE, SALE AND SERVICE OF ALCOHOLIC
BEVERAGES ON THE LEASED PROPERTY.  LESSEE
SHALL INDEMNIFY AND HOLD HARMLESS LESSOR AND THE LESSOR INDEMNIFIED PARTIES
AGAINST ANY LIABILITY, DAMAGE, LOSS, COST OR EXPENSE, INCLUDING WITHOUT LIMITATION
REASONABLE ATTORNEYS FEES AND COURT COSTS INCURRED BY LESSOR OR THE LESSOR
INDEMNIFIED PARTIES ARISING FROM OR RELATED TO THE LIQUOR LICENSES OR THE
PURCHASE, SALE AND SERVICE OF ALCOHOLIC BEVERAGES ON THE LEASED PROPERTY,
EXCEPT TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OF THE LESSOR.

 26
 

ARTICLE
IX

MAINTENANCE AND REPAIR

9.1           Maintenance and Repair.

(a)           Lessee, at its sole expense, will keep the
Leased Property in good order and repair, except for ordinary wear and tear
(whether or not the need for such repairs occurred as a result of Lessee’s use,
any prior use, the elements or the age of the Leased Property, or any portion
thereof), and, except as otherwise provided in Article XIV or Article XV, with reasonable promptness, make all
necessary and appropriate repairs, replacements, and improvements thereto of
every kind and nature, whether interior or exterior, ordinary or extraordinary,
foreseen or unforeseen or arising by reason of a condition existing on or prior
to the commencement of the Term (concealed or otherwise), or required by any
governmental agency having jurisdiction over the Leased Property.  Lessee, however, shall be permitted to
prosecute claims against Lessor’s predecessors-in-title, contractors,
subcontractors and suppliers for breach of any representation or warranty or
for any latent defects in the Leased Property to be maintained by Lessee unless
Lessor is already diligently pursuing such a claim.  All repairs shall, to the extent reasonably
achievable, be at least equivalent in quality to the original work.  Lessee will not take or omit to take any
action, the taking or omission of which might materially impair the value or
the usefulness of the Leased Property or any part thereof for its Primary Intended
Use.  If Lessee fails to make any required
repairs or replacements after fifteen (15) days notice from Lessor, or after
such longer period as may be reasonably required provided that Lessee at all
times diligently proceeds with such repair or replacement, then Lessor shall
have the right, but shall not be obligated, to make such repairs or
replacements on behalf of and for the account of Lessee.  In such event, such work shall be paid for in
full by Lessee as Additional Charges.

(b)           Notwithstanding Lessee’s obligations under
Section 9.1(a) hereinabove and the other provisions of this Lease, in the
event that (i) repairs, replacements and/or improvements of the Leased
Property become necessary in order to maintain the Facility in the same quality
and condition as it currently exists, (ii) such repairs, replacements
and/or improvements are under generally accepted accounting principles
considered to be capital in nature, (iii) the funds then available to
Lessee in the FFE Reserve or at the Leased Property, either in the form of
reserves, insurance proceeds, or other income generated by the Leased Property
and available to Lessee are insufficient to enable Lessee to pay the costs of
making any such repairs, replacements and/or improvements, and (iv) Lessor
consents to the repairs, replacements, and/or improvements, then Lessor shall
be required to bear the cost of making such repairs, replacements and/or
improvements.  Except as set forth in the
foregoing sentence, Lessor shall not under any circumstances be required to
build or rebuild any improvements on the Leased Property, to make any repairs,
replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary, foreseen
or unforeseen, or to make any expenditure whatsoever with respect thereto, in
connection with this Lease, or to maintain the Leased Property in any way.  Lessee agrees that unless contemplated by the
Annual Budget, or otherwise directed by Lessor, it will not make repairs at the
expense of Lessor pursuant to any law in effect at the time of the execution of
this Lease or hereafter enacted unless ordered to do so by any governmental
authority having jurisdiction over the Leased Property.  Lessor shall have the right to give, record
and post, as appropriate, notices of nonresponsibility under any mechanic’s
lien laws now or hereafter existing.

(c)           Nothing contained in this Lease and no
action or inaction by Lessor shall be construed as (1) constituting the
request of Lessor, expressed or implied, to any contractor,

 27
 

subcontractor, laborer, materialman or vendor to or for the performance
of any labor or services or the furnishing of any materials or other property
for the construction, alteration, addition, repair or demolition of or to the
Leased Property or any part thereof, or (2) giving Lessee any right, power
or permission to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against Lessor in respect thereof or to
make any agreement that may create, or in any way be the basis of any right,
title, interest, lien, claim or other encumbrance upon the estate of Lessor in
the Leased Property, or any portion thereof.

(d)           Lessee will, upon the expiration or prior
termination of the Term, vacate and surrender the Leased Property to Lessor in
the condition in which the Leased Property was originally received from Lessor,
except as repaired, rebuilt, restored, altered or added to as permitted or
required by the provisions of this Lease and except for (i) ordinary wear and
tear (subject to the obligation of Lessee to maintain the Leased Property in
compliance with the First Class Operating Standards, during the entire Term),
or (ii) damage by casualty or condemnation (subject to the obligations of
Lessee to restore or repair to the extent set forth in the Lease; provided if
any obligations under this subsection (ii) are outstanding at the expiration or
earlier termination of this Lease, then Lessee shall assign to Lessor any
remaining proceeds or awards paid in connection with such casualty or
condemnation).

9.2           Encroachments, Restrictions, Etc.  If any of the improvements on the Leased
Property, at any time, materially encroach upon any property, street or right-of-way
adjacent to the Leased Property, or violate the agreements or conditions
contained in any restrictive covenant or other agreement affecting the Leased
Property, or any part thereof, or impair the rights of others under any
easement or right-of-way to which the Leased Property is subject, then promptly
upon the request of Lessor or at the behest of any person affected by any such
encroachment, violation or impairment, Lessee shall, at its expense, subject to
its right to contest the existence of any encroachment, violation or impairment
and in such case, in the event of an adverse final determination, either (a)
obtain valid and effective waivers or settlements of all claims, liabilities
and damages resulting from each such encroachment, violation or impairment,
whether the same shall affect Lessor or Lessee or (b) make such changes in the
improvements on the Leased Property and take such other actions, as Lessee in
the good faith exercise of its judgment deems reasonably practicable to remove
such encroachment, and to end such violation or impairment, including, if
necessary, the alteration of any such improvements, and in any event take all
such actions as may be necessary in order to be able to continue the operation
of the Leased Property for the Primary Intended Use substantially in the manner
and to the extent the Leased Property was operated prior to the assertion of
such violation, impairment and encroachment. 
Any such alteration shall be made in conformity with the applicable
requirements of Article X.  Lessee’s obligations under this Section 9.2 shall be in
addition to and shall in no way discharge or diminish any obligation of any
insurer under any policy of title or other insurance held by Lessor.  Notwithstanding anything to the contrary
contained in this Section 9.2,
(i) so long as any encroachment, violation or impairment described above does
not materially interfere with the operation of the Facility, Lessor shall not
require Lessee to remedy or otherwise address the same and (ii) Lessee shall
have no obligations with respect to any encroachment, violation or impairment
that exists on the Effective Date.

 28
 

ARTICLE X

ALTERATIONS

10.1         Lessee Alterations.  Subject to obtaining Lessor’s prior written
approval, not to be unreasonably withheld, conditioned or delayed, Lessee shall
have the right to make additions, modifications or improvements to the Leased
Property from time to time as Lessee, in its discretion, may deem to be
desirable for its permitted uses and purposes, provided that such action will
not significantly alter the character or purposes or significantly detract from
the value or operating efficiency thereof and will not significantly impair the
revenue-producing capability of the Leased Property or adversely affect the
ability of the Lessee to comply with the provisions of this Lease.  Notwithstanding the foregoing, Lessor’s prior
written approval shall not be required for (a) expenses paid from the FFE
Reserve for items included in the Annual Budget, or (b) any items approved as
part of the Annual Budget.  The cost of
such additions, modifications or improvements to the Leased Property shall be
paid by Lessee, and all such additions, modifications or improvements shall,
without payment by Lessor at any time, be included under the terms of this
Lease and upon expiration or earlier termination of this Lease shall pass to
and become the property of Lessor.  In no
event shall any alterations, additions or other improvements made by Lessee be
removed from the Leased Property unless request is made by Lessor to Lessee to
remove such alterations, additions and other improvements which were made
without Lessor’s approval where such approval was required under this Lease.

10.2         Lessor Alterations.  Lessor shall have the right, without Lessee’s
consent, to make or cause to be made alterations to the Leased Property
required in connection with (i) Emergency Situations, (ii) Legal
Requirements, (iii) compliance with the Management Agreement,
(iv) compliance with any Franchise Agreement, and (v) the performance
by Lessor of its obligations under this Lease, so long as such alterations do
not materially and adversely impair the operating efficiency or revenue
producing capability of the Leased Property or the ability of Lessee to comply
with the provisions of this Lease during the remainder of the Term.  Without Lessee’s consent, Lessor shall
further have the right, but not the obligation, to make such other additions to
the Leased Property as it may reasonably deem appropriate during the Term, so long
as such alterations do not materially and adversely impair the operating
efficiency or revenue producing capability of the Leased Property or the
ability of Lessee to comply with the provisions of this Lease during the
remainder of the Term.  All such work
unless necessitated by Lessee’s negligent acts or omissions or unless otherwise
required to be performed by Lessee under this Lease (subject to the notice and
cure provisions herein) (in which event work shall be paid for by Lessee) shall
be performed at Lessor’s expense and shall be done after reasonable notice to
and coordination with Lessee, so as to minimize any disruptions or interference
with the operation of the Facility.

ARTICLE
XI

LIENS

11.1         Liens. 
Subject to the provision of Article XII
relating to permitted contests, Lessee will not directly or indirectly create
or allow to remain and will promptly discharge at its expense any lien,
encumbrance, attachment, title retention agreement or claim upon the Leased

 29
 

Property or any attachment, levy, claim or encumbrance in respect of
the rent payable hereunder, not including, however, (a) this Lease, (b) the
matters, if any, included as exceptions in the title policy insuring Lessor’s
interest in the Leased Property to be issued on or about the Commencement Date,
(c) restrictions, liens and other encumbrances which are consented to in
writing by Lessor or any easements granted pursuant to the provisions of Section 7.3 of this Lease,
(d) liens for those taxes upon Lessor which Lessee is not required to pay
hereunder, (e) subleases permitted by Article XXI hereof, (f) liens for Impositions or for
sums resulting from noncompliance with legal requirements so long as
(1) the same are not yet payable or are payable without the addition of
any fine or penalty or (2) such liens are in the process of being
contested as permitted by Article XII
hereof, (g) liens of mechanics, laborers, materialmen, suppliers or vendors for
sums either disputed or not yet due provided that (1) the payment of such
sums shall not be postponed under any related contract for more than 60 days
after the completion of the action giving rise to such lien and such reserve or
other appropriate provisions as shall be required by law or generally accepted
accounting principles shall have been made therefor or (2) any such liens
are in the process of being contested as permitted by Article XII hereof, and (h)
any liens which are the responsibility of Lessor pursuant to the provisions of Article XXVIII of this
Lease.  Notwithstanding the provisions of
this Section 11.1, Lessee shall have no obligation with respect to
any lien or encumbrance arising out of the Projects and Lessor shall promptly
discharge at its expense any such lien or encumbrance, provided that Lessor
shall have the right to contest the amount or validity of any such lien or
encumbrance by appropriate legal proceedings in good faith and with due
diligence.

ARTICLE
XII

PERMITTED CONTESTS

12.1         Permitted Contests.  Lessee shall have the right to contest the
amount or validity of any Imposition to be paid by Lessee or any legal
requirement or insurance requirement or any lien, attachment, levy,
encumbrance, charge or claim (“Claims”)
not otherwise permitted by Article XI, by appropriate legal proceedings in good
faith and with due diligence (but this shall not be deemed or construed
in any way to relieve, modify or extend Lessee’s covenants to pay or its
covenants to cause to be paid any such charges at the time and in the manner as
in this Article provided), on condition, however, that such legal
proceedings shall not operate to relieve Lessee from its obligations hereunder
and shall not cause the sale or risk the loss of the Leased Property, or any
part thereof, or cause Lessor or Lessee to be in default under any mortgage,
deed of trust or security deed encumbering the Leased Property or any interest
therein.  Upon the request of Lessor,
Lessee shall either (a) provide a bond or other assurance reasonably
satisfactory to Lessor that all Claims which may be assessed against the Leased
Property together with interest and penalties, if any, thereon will be paid, or
(b) deposit within the time otherwise required for payment with a bank or trust
company as trustee upon terms reasonably satisfactory to Lessor, as security
for the payment of such Claims, money in an amount sufficient to pay the same,
together with interest and penalties in connection therewith, as to all Claims
which may be assessed against or become a Claim on the Leased Property, or any
part thereof, in said legal proceedings. 
Lessee shall furnish Lessor and any lender of Lessor with reasonable
evidence of such deposit within five days of the same.  Lessor agrees to join in any such proceedings
if the same be required to legally prosecute such contest of the validity of
such Claims; provided,

 30
 

however, that Lessor shall not thereby be subjected to any liability
for the payment of any costs or expenses in connection with any proceedings
brought by Lessee; and Lessee covenants to indemnify and save harmless Lessor
from any such costs or expenses.  Lessee
shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Lessee or paid by Lessor and for which
Lessor has been fully reimbursed.  In the
event that Lessee fails to pay any Claims when due or to provide the security
therefor as provided in this paragraph and to diligently prosecute any contest
of the same, Lessor may, upon ten days advance written notice to Lessee, pay
such charges together with any interest and penalties and the same shall be
repayable by Lessee to Lessor at the next rent payment date provided for in
this Lease.  Provided, however, that
should Lessor reasonably determine that the giving of such notice would risk
loss to the Leased Property or cause damage to Lessor, then Lessor shall give
such notice as is practical under the circumstances.  Lessor reserves the right to contest at its
expense any of the Claims not pursued by Lessee.  Lessor and Lessee agree to cooperate in
coordinating the contest of any Claims.

ARTICLE
XIII

INSURANCE

13.1         Liability Insurance.  Subject to the terms of this Section 13.1
and Section 13.4 below, Lessee shall, at all times during the term of
this Lease, and at Lessee’s cost and expense, maintain the following insurance
for the benefit of Lessee and Lessor in connection with the Leased Property:

(a)           commercial general liability insurance with
limits of liability in an amount no less than fifty million dollars
($50,000,000) per occurrence and in the annual aggregate, including coverage
for products liability, innkeepers’ liability, liquor liability, and Claims for
personal and bodily injury or death and property damage occurring upon, in, or
about the Leased Property, or any elevator or escalator therein, and upon, in,
or about the adjoining streets and passageways thereof, or otherwise, arising
under this Lease;

(b)           comprehensive automobile liability insurance
with limits of liability of at least fifty million dollars ($50,000,000) per
occurrence and in the annual aggregate;

(c)           appropriate worker’s compensation and
employer’s liability insurance; and

(d)           such other insurance (including
fidelity/crime coverage/errors and omissions) against other insurable risks not
covered under subsections (a) and (b) which, at the time, are commonly
insured against by owners of comparable hotels in the State of Colorado, with
due regard being or to be given to the then-existing circumstances and to the
type, construction, design, use and occupancy of the Leased Property.

13.2         Special Conditions or Hazards.  Lessee shall disclose to the Lessor the
presence of any condition or hazard within the actual knowledge of Lessee, and
Lessor shall likewise disclose to Lessee the existence of any condition or
hazard within the actual knowledge of Lessee, to the extent that such condition
or hazard may create or contribute to any Claims,

 31
 

damages, losses, or expenses not typically insured against by the
coverages specified in Section 13.1(a). 
If any such condition or hazard requires removal, abatement, or any
other special procedures, such special procedures shall be performed at Lessee’s
expense in compliance with all Legal Requirements.  Conditions or hazards to which this Section
13.2 refers include latent risks to health such as asbestos, silicosis,
toxic or hazardous chemicals and waste products; hazards to the environment
such as underground storage tanks; and latent or patent toxic, nontoxic,
abrasive, or irritant pollutants.  At
Lessee’s expense, Lessee shall endeavor to obtain appropriate insurance coverage
against such conditions and hazards to protect the interests of Lessee and
Lessor.

13.3         Casualty Insurance.

(a)           Subject to Section 13.4 below, Lessee
shall, at all times during the term of this Lease, and at Lessee’s cost and
expense, keep the Leased Property insured (through Lessee’s own insurers) for
the benefit of Lessee and Lessor, as their interests may appear.

(i)            against
“all risks” of physical loss or damage for the Full Replacement Value thereof,
in form no less comprehensive than ISO Form CP 10 30 (ED 10/91), as amended
from time to time, and without exclusion for loss or damage by fire, lightning,
windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke,
vandalism, malicious mischief, sprinkler leakage, volcanic action, breakage of
glass, falling objects, weight of ice and snow or sleet, water damage, weather
conditions or collapse;

(ii)           against
such other “all risk” perils, including earthquake and flood, commonly insured
against by a Difference in Conditions insurance policy in such amounts as are
obtainable from time to time, but in no event in amounts less than those
required under the terms of the Mortgage

(iii)          on
equipment for the supply or control of heat, light, power, hot water, cold
water, gas, refrigeration, or air-conditioning against direct or consequential
loss or damage, as customarily covered under a Boiler and Machinery policy with
a comprehensive definition of insured equipment, in the amount of at least Five
Million Dollars ($5,000,000) or amounts as Lessee may from time to time
reasonably require;

(iv)          for
such other risks (including loss to fine arts, accounts receivable, valuable
papers and records, electronic media and records, and shipments in transit)
that, at the time, are commonly insured against by Lessees of hotel premises in
the State of Colorado, with due regard being or to be given to the
then-existing circumstances and to the type, construction, design, use and
occupancy of the Hotel; and

(v)           against
“Business Interruption and Extra Expense” (as that phrase is used within the
United States insurance industry for application to transient lodging
facilities) in form no less comprehensive than ISO Form CP 00 30 (10/91),
as amended from time to time, resulting from loss or damage from the hazards
specified above, to owned or non-owned property, which prevents normal
operations from continuing; such

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coverage
shall: be on an “Actual Loss Sustained” basis in an amount equal to at least
one (1) year’s expected net income before income tax (calculated according to
Generally Accepted Accounting Principles and the Uniform System), plus
continuing normal Operating Expenses, including Operator’s Management Fee,
Reimbursable Expenses and other amounts payable to Operator under this Lease,
that necessarily continue, notwithstanding the business interruption; the
insurance shall also provide “extended period of indemnity” or “extended
business income” provisions for payment of loss until normal operations resume,
but in any event for a period of not less than one hundred eighty (180) days
after business operations for resumed; the insurance shall also include an “ordinary
payroll” endorsement for a minimum of ninety (90) days.

(b)           Notwithstanding anything to the contrary in
the Lessee, Lessee shall not place any insurance with respect to the Leased
Property under this Lease unless and until such insurance has been reviewed and
approved by Lessor.

13.4         Parties Insured and Amounts of Coverage.

(a)           The carriers of all insurance policies
provided by Lessee or Lessor under this Lease shall be rated no less than A-,
in the most recent “Best” insurance guide and shall be licensed in the State of
Colorado and shall be subject to the approval of Lessee and Lessor.  All insurance policies provided for in this Article
XIII shall include:

(i)            Lessee
and Lessor as parties insured thereunder, as their interests may appear;

(ii)           where
appropriate and/or as required by any Mortgage, endorsement(s) in favor of
Mortgagee(s), as its/their interest may appear;

(iii)          where
appropriate (including the insurance provided for in Section 13.1(a)),
the insurer’s waiver of subrogation rights against Lessee and Lessor; and

(iv)          a
requirement that the insurer provide at least thirty (30) days’ written notice
of cancellation or material change in the terms and provisions of the
applicable policy and ten (10) days’ written notice of cancellation for
non-payment of premiums.

(b)           All insurance carriers and programs shall be
subject to the reasonable approval of Lessee, Lessor and any Mortgagee.  If the insurance referred to in Section
13.3(a) could be obtained at lower premiums and otherwise on terms and
conditions including amounts of coverage and deductibles more advantageous to
Lessor under blanket insurance policies available to Lessee from time to time,
then Lessor or Lessee may request that such insurance be placed by Lessee at
Lessee’s cost and expense, subject to the provisions of this Section 13.4.

(c)           In the event that either Lessee or Lessor
desires to make a change in the carrier, type or amount of any of the insurance
policies to be maintained under this Lease, it shall notify the other party of
the desired change at least sixty (60) days in advance of the expiration of

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the current policy proposed to be changed.  Lessee or Lessor shall promptly thereafter
meet to discuss and resolve any questions or disagreements with respect to the
proposed change, and if either Lessee or Lessor agrees not to withhold or delay
its consent unreasonably to any such proposed change requested by the other party
so long as such requested change is consistent with the standards described in
this Article XIII.  In any event,
the Lessee and Lessor agree to work diligently and in good faith to resolve any
disagreements with respect to the proposed change as quickly as possible so
that a determination of the coverage to be maintained for any period of time
can be made at least sixty (60) days in advance of the expiration date of the
policy or policies proposed to be changed.

13.5         Evidence of Insurance.

(a)           As soon as practicable, Lessee shall provide
the Lessor with certificates of insurance evidencing that the applicable
insurance requirements of this Lease have been satisfied.  As soon as practicable prior to the
expiration date of each such policy, Lessee obtaining such insurance shall
provide the Lessor with updated certificates evidencing renewal of existing or
acquisition of new coverages.  Upon the
request of Lessor, the Lessee shall provide a certified copy of any renewed or
new policy.

(b)           On request, Lessee shall furnish Lessor with
a schedule of insurance obtained under this Article XIII, listing the
policy numbers of the insurance obtained, the names of the companies issuing
such policies, the names of the parties insured, the amounts of coverage, the
expiration date or dates of such policies, and the risks covered thereby.

13.6         Reports by Lessee.  Lessee shall promptly:

(a)           cause to be investigated all accidents and
Claims for damage relating to the operation and maintenance of the Leased
Property, as they become known to Lessee, and shall report to Lessor any such
incident in which the claimant is seeking more than $5,000 or with respect to
which, Lessee projects the exposure to be greater than $5,000;

(b)           cause to be investigated all damage to or
destruction of the Leased Property, as it becomes known to Lessee, and shall
report to Lessor any such incident that appears to require repair expenditures
of greater than $5,000, together with the estimated cost of repair thereof;

(c)           prepare any and all reports required by any
insurance company as the result of an incident mentioned in this Section
13.6, acting as the sole agent for all other named insureds, additional
insureds, mortgagees, and loss payees; and

(d)           retain on behalf of Lessee all consultants
and experts, including architects, engineers, contractors, accountants, and
attorneys, as needed, and at Lessee’s expense, to assist in analyzing any loss
or damage, determining the nature and cost of repair, and preparing and
presenting any proofs of loss or Claims to any insurers (with Lessor’s prior
written consent in the event that the total cost exceeds $15,000).

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13.7         Review of Insurance.  All insurance policy limits provided pursuant
to this Article XIII shall be reviewed by the Lessee and Lessor every
year following the Commencement Date, or sooner if reasonably requested by
Lessee, to determine the suitability of such insurance limits in view of
exposures reasonably anticipated over the ensuing three (3) years.  Lessee and Lessor hereby acknowledge that changing
practices in the insurance industry and changes in the local law and custom may
necessitate changes or additions to types or amounts of coverage during the
term of this Lease.  Lessor agrees to
comply with any other insurance requirements Lessee reasonably requests in
order to protect the Leased Property and the respective interests of Lessee and
Lessor.

ARTICLE
XIV

DAMAGE AND RECONSTRUCTION

14.1         Insurance Proceeds.  If during the Term the Leased Property is
partially destroyed by a risk covered by the insurance described in Article XIII, but the
Facility is not thereby rendered Unsuitable for its Primary Intended Use or
Uneconomic for its Primary Intended Use, Lessor or, at the election of Lessor,
Lessee shall, if insurance proceeds are made available by the Holder, if any,
of the Leased Property, restore the Facility at Lessor’s cost to substantially
the same condition as existed immediately before the damage or destruction and
otherwise in accordance with the terms of the Lease, and this Lease shall not
terminate as a result of such damage or destruction.  If Lessee restores the Facility, the
insurance proceeds shall be paid out by Lessor from time to time for the
reasonable costs of such restoration upon satisfaction of terms and conditions
specified by Lessor, and any excess proceeds remaining after such restoration
shall be paid to Lessor except for any amount thereof paid with respect to
Lessee’s Personal Property.  If the
insurance proceeds are not adequate to complete such restoration and Lessor
rebuilds, Lessor shall fund all such excess costs.

14.2         No Abatement of Rent.  Any damage or destruction due to casualty
notwithstanding, this Lease shall remain in full force and effect, and Lessee’s
obligation to make rental payments and to pay all other charges required by
this Lease shall remain unabated.  Lessor
and Lessee agree to cooperate to make the proceeds of all business or rent
interruption insurance available to Lessee for purposes of making Rent payments
due under this Lease.

14.3         Damage During Term.  Notwithstanding any provisions of Section 14.1 to the
contrary, if damage to or destruction of the Leased Property occurring during
the Term renders the Leased Property Unsuitable for its Primary Intended Use or
if the Holder does not make the insurance proceeds available for restoration,
then either Lessor or Lessee (but in Lessee’s case only if the Leased Property
is rendered Unsuitable for its Primary Intended Use for a period in excess of
one (1) year), shall have the right to terminate this Lease by giving
written notice to the other party, in Lessor’s case at any time after the
occurrence of such damage or destruction, or in Lessee’s case within thirty
(30) days after the expiration of such period, whereupon all accrued rent shall
be paid immediately, and this Lease shall automatically terminate.

14.4         Lessee’s Property and Business Interruption
Insurance.  All insurance proceeds
payable by reason of any loss of or damage to any of Lessee’s Personal Property
and the business interruption insurance maintained for the benefit of Lessee
shall be paid to Lessee;

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provided, however, no such payments shall diminish or reduce the
insurance payments otherwise payable to or for the benefit of Lessor hereunder.

ARTICLE
XV

CONDEMNATION

15.1         Definitions.

(a)           “Condemnation”
means a transfer of and/or compensation for the diminished value of all or
portion of the Leased Property resulting from (1) the exercise of any
governmental power, whether by legal proceedings or otherwise, by a Condemnor,
and (2) a voluntary sale or transfer by Lessor to any Condemnor, either
under threat of condemnation or while legal proceedings for condemnation are
pending.

(b)           “Date of Taking”
means the date the Condemnor has the right to possession of the property being
condemned.

(c)           “Award” means
all compensation, sums or anything of value awarded, paid or received on a
total or partial Condemnation.

(d)           “Condemnor”
means any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation.

15.2         Parties’ Rights and Obligations.  If during the Term there is any Condemnation
of all or any part of the Leased Property or any interest in this Lease, the
rights and obligations of Lessor and Lessee shall be determined by this Article XV.

15.3         Total Taking.  If title to the fee of the whole of the
Leased Property is condemned by any Condemnor, this Lease shall cease and
terminate as of the Date of Taking by the Condemnor.  If title to the fee of less than the whole of
or substantially all of the Leased Property is so taken or condemned, which
nevertheless renders the Leased Property Unsuitable for its Primary Intended
Use or Uneconomic for its Primary Intended Use, Lessee and Lessor shall each
have the option, by notice to the other, at any time prior to the Date of
Taking, to terminate this Lease as of the Date of Taking.  Upon such date, if such notice has been
given, this Lease shall thereupon cease and terminate.  All Base Rent, Percentage Rent and Additional
Charges paid or payable by Lessee hereunder shall be apportioned as of the Date
of Taking, and Lessee shall promptly pay Lessor such amounts.

15.4         Allocation of Award.  The total Award made with respect to the
Leased Property or for loss of rent, or for Lessor’s loss of business beyond
the Term, shall be solely the property of and payable to Lessor.  Any Award made for loss of business during
the remaining Term, if any, or for removal and relocation expenses of Lessee in
any such proceedings shall be the sole property of and payable to Lessee.  In any Condemnation proceedings Lessor and
Lessee shall each seek its Award in conformity herewith, at its respective
expense; provided, however, Lessee shall not initiate, prosecute or acquiesce
in any proceedings that may result in a diminution of any Award payable to
Lessor.

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15.5         Partial Taking.

(a)           If title to less than the whole of or
substantially all of the Leased Property is condemned, and the Leased Property
is still Suitable for its Primary Intended Use, and not Uneconomic for its
Primary Intended Use, or if Lessee or Lessor is entitled but neither elects to
terminate this Lease as provided in Section 15.3,
the Lessor or, at Lessor’s election, Lessee shall with all reasonable dispatch
and to the extent the Holder permits the application of the Award thereof and
the Award is sufficient therefore, restore the untaken portion of the Leased
Property so that such Leased Property contains the same architectural units of
the same general character and condition (as nearly as may be possible under
the circumstances) as the Leased Property existing immediately prior to the
Condemnation and this Lease shall remain in full force and effect.  Lessee and Lessor, if permitted by any
Holder, shall each contribute to the cost of restoration that part of its Award
specifically allocated to such restoration, if any, together with severance and
other damages awarded for the taken Leased Property; provided, however, that
the amount of such contributions shall not exceed such cost.

(b)           In the event of a partial Taking as described
in Section 15.5(a)
which does not result in a termination of this Lease by Lessor, the Base Rent
shall be adjusted in the manner and to the extent that is fair, just and
equitable to both Lessee and Lessor, taking into consideration, among other relevant
factors, the number of usable rooms, the amount of square footage, or the
revenues affected by such partial Taking. 
If Lessor and Lessee are
unable to agree upon the amount of such abatement within thirty (30) days after
such partial Taking, the matter shall be submitted to arbitration as provided
for in Section 38.2 hereof.

15.6         Temporary Taking.  If the whole or any part of the Leased
Property or of Lessee’s interest under this Lease is condemned by any Condemnor
for its temporary use or occupancy, this Lease shall not terminate by reason
thereof, and Lessee shall continue to pay, in the manner and at the terms
herein specified, the full amount of all Base Rent, Percentage Rent, and
Additional Charges.  Except only to the
extent that Lessee may be prevented from so doing pursuant to the terms of the
order of the Condemnor, Lessee shall continue to perform and observe all of the
other terms, covenants, conditions and obligations hereof on the part of the
Lessee to be performed and observed, as though such Condemnation had not
occurred.  In the event of any
Condemnation as is in this Section 15.6
described, the entire amount of any Award made for such Condemnation allocable
to the Term, whether paid by way of damages, rent or otherwise, shall be paid to
Lessee if permitted by any Holder. 
Lessee covenants that upon the termination of any such period of
temporary use or occupancy it will, at its sole cost and expense (subject to
Lessor’s contribution as set forth below), restore the Leased Property as nearly
as may be reasonably possible to the condition in which the same was
immediately prior to such Condemnation, unless such period of temporary use or
occupancy extends beyond the expiration of the Term, in which case Lessee shall
not be required to make such restoration. 
If restoration is required hereunder, Lessor shall contribute to the
cost of such restoration that portion of its entire Award that is specifically
allocated to such restoration in the judgment or order of the court, if any,
and Lessee shall fund the balance of such costs in advance of restoration in a
manner reasonably satisfactory to Lessor.

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ARTICLE
XVI

DEFAULTS

16.1         Events of Default.  Any one or more of the following events shall
constitute an “Event of Default”
(herein so called) hereunder:

(a)           if Lessee fails to pay any Base Rent,
Percentage Rent, Impositions or Additional Charges, and such failure  continues for a period of ten (10) days after
written notice specifying such failure has been provided Lessee by Lessor,
provided that Lessor shall not be required to give any such Notice more than
two (2) times in any Lease Year and that any third or subsequent failure
by Lessee during such Lease Year to make any payment of Base Rent, Percentage
Rent or Additional Charges on the date the same becomes due and payable shall
constitute an immediate Event of Default; or

(b)           if Lessee fails to observe or perform any
other term, covenant or condition of this Lease and such failure is not cured
by Lessee within a period of 30 days after receipt by the Lessee of notice
thereof from Lessor, unless such failure cannot with due diligence be cured
within a period of 30 days, in which case it shall not be deemed an Event of
Default if Lessee proceeds promptly and with due diligence to cure the failure
and diligently completes the curing thereof; or

(c)           if an event of default by Lessee has
occurred under the Management Agreement with respect to the Facility or the
Leased Property and such default has not been cured by Lessee within a period
of fifteen (15) days after receipt by Lessee of notice of such default from
either Manager or Lessor; or

(d)           if Lessee shall (i) be generally not
paying its debts as they become due, (ii) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction,
(iii) make an assignment for the benefit of its creditors, (iv) consent
to the appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of
its assets, (v) be adjudicated insolvent, or (vi) take corporate action
for the purpose of any of the foregoing; or if a court or governmental
authority of competent jurisdiction shall enter an order appointing, without
consent by Lessee, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its assets
(the events described in (i) through (vi) and the immediately preceding
clause herein called a “Bankruptcy Event”),
or if an order for relief shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of Lessee, or if any petition for any such relief shall be filed
against Lessee and such petition shall not be dismissed within ninety (90)
days; or

(e)           if Lessee is liquidated or dissolved, or
begins proceedings toward such liquidation or dissolution, or, in any manner,
ceases to do business or permits the sale or divestiture of substantially all
of its assets (a “Dissolution Event”);
or

 38
 

(f)            if the estate or interest of Lessee in the
Leased Property or any part thereof is voluntarily or involuntarily
transferred, assigned, conveyed, levied upon or attached in any Proceeding,
except to the extent expressly permitted in this Lease and unless any such levy
or attachment is released within ninety (90) days of the filing of the same; or

Notwithstanding anything to the contrary contained in Section 16.1(c), the cure
periods set forth in Section 16.1(c)
shall not apply to any failure by Lessee to perform any term, covenant or
condition for which a different grace or cure period is expressly set forth in
any other provision of this Lease, and in either of the foregoing events such
failure shall, after the expiration of any other grace or cure period expressly
set forth elsewhere herein, constitute an immediate Event of Default.

If litigation is commenced with respect to any alleged
default under this Lease, the prevailing party in such litigation shall
receive, in addition to its damages incurred, such sum as the court shall
determine as its reasonable attorneys’ fees, and all costs and expenses
incurred in connection therewith.

16.2         Remedies.  If an Event of Default occurs Lessor shall
have the right, at Lessor’s option, to elect to do any one or more of the
following without further notice or demand to Lessee:  (a) terminate this Lease, in which event
Lessee shall immediately surrender the Leased Property to Lessor, and, if
Lessee fails to so surrender, Lessor shall have the right, without notice, to enter
upon and take possession of the Leased Property and to expel or remove Lessee
and its effects without being liable for prosecution or any claim for damages
therefor; and Lessee shall, and hereby agrees to, indemnify Lessor for all loss
and damage which Lessor suffers by reason of such termination, including
without limitation, damages in an amount calculated pursuant to Section 16.3 below; or (b)
enter upon and take possession of the Leased Property without terminating this
Lease and without being liable for prosecution or any claim for damages
therefor, and, if Lessor elects, relet the Leased Property on such terms as
Lessor deems advisable, in which event Lessee shall pay to Lessor on demand the
reasonable costs of repossessing and reletting the Leased Property and any
deficiency between the Rent payable hereunder (including Percentage Rent as
determined below) and the rent paid under such reletting; provided, however,
that Lessee shall not be entitled to any excess payments received by Lessor
from such reletting and Lessor’s failure to relet the Leased Property shall not
release or affect Lessee’s liability for Rent or for damages; or (c) enter the
Leased Property without terminating this Lease and without being liable for
prosecution or any claim for damages therefor and maintain the Leased Property
and repair or replace any damage thereto or do anything for which Lessee is
responsible hereunder.  Lessee shall
reimburse Lessor immediately upon demand for any expense which Lessor incurs in
thus effecting Lessee’s compliance under this Lease, and Lessor shall not be
liable to Lessee for any damages with respect thereto.  Lessee hereby waives any and all requirements
of applicable laws for service of notice to re-enter the Leased Property.  Except as may be required under applicable
law, Lessor shall be under no obligation to, but may if it so chooses, relet
the Leased Property or otherwise mitigate Lessor’s damages.

 39
 

16.3         Damages.  Neither (a) the termination of this Lease
(which shall not include the expiration of the Term pursuant to the express
provisions hereof), (b) the repossession of the Leased Property, (c) the
failure of Lessor to relet the Leased Property, nor (d) the reletting of all or
any portion thereof, shall relieve Lessee of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting.  In the event of any such
termination, Lessee shall forthwith pay to Lessor all Rent due and payable with
respect to the Leased Property to and including the date of such
termination.  Lessor shall use
commercially reasonable efforts to relet the Leased Property and Lessee’s
obligations to Lessor under this Lease.

Lessee shall
forthwith pay to Lessor, at Lessor’s option, as and for liquidated and agreed
current damages for Lessee’s default, either:

(1)           Without termination of Lessee’s right to
possession of the Leased Property, each installment of rent and other sums
payable by Lessee to Lessor under the Lease as the same becomes due and
payable, which rent and other sums shall bear interest at the rate of 12% per
annum until paid, and Lessor may enforce, by action or otherwise, any other
term or covenant of this Lease; or

(2)           the sum of:

(A)          the unpaid rent which had been earned at the
time of termination, repossession or reletting, and

(B)           the worth at the time of termination,
repossession or reletting of the amount by which the unpaid rent for the
balance of the Term after the time of termination, repossession or reletting,
exceeds the amount of such rental loss that Lessee proves could be reasonably
avoided, and

(C)           any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee’s failure to perform
its obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom.  The
worth at the time of termination, repossession or reletting of the amount
referred to in subparagraph (B) is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of New York at the time of award plus
1%.

Percentage Rent for the purposes of this Section 16.3 shall be a sum
equal to (i) the average of the annual amounts of Percentage Rent for the
three calendar years immediately preceding the calendar year in which the
termination, re-entry or repossession takes place, or (ii) if three
calendar years shall not have elapsed, the Percentage Rent during the preceding
calendar year during which this Lease was in effect, or (iii) if one
calendar year has not elapsed, the amount derived by annualizing the Percentage
Rent from the effective date of this Lease.

16.4         Application of Funds.  Any payments received by Lessor under any of
the provisions of this Lease during the existence or continuance of any Event
of Default shall be

 40
 

applied to Lessee’s obligations in the order that Lessor may determine
or as may be prescribed by the laws of the State of Colorado.

16.5         Waiver. 
Each party waives, to the extent permitted by applicable law, any right
to a trial by jury in any proceedings brought by either party to enforce the
provisions of this Lease, including, without limitation, proceedings to enforce
the remedies set forth in this Article XVI,
and Lessee waives the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt.

ARTICLE
XVII

LESSOR’S RIGHT TO CURE

17.1         Lessor’s Right to Cure Lessee’s Default.  If Lessee fails to make any payment or to
perform any act required to be made or performed under this Lease including,
without limitation, Lessee’s failure to comply with the terms of the Management
Agreement, and fails to cure the same within the relevant time periods provided
in Section 16.1,
Lessor, without waiving or releasing any obligation of Lessee, and without
waiving or releasing any obligation or default, may (but shall be under no
obligation to) and subject to the rights of the Manager under the Management
Agreement, at any time thereafter make such payment or perform such act for the
account and at the expense of Lessee, and may, to the extent permitted by law,
enter upon the Leased Property for such purpose and take all such action
thereon as, in Lessor’s opinion, may be necessary or appropriate therefor.  No such entry shall be deemed an eviction of
Lessee.  All sums so paid by Lessor and
all costs and expenses (including, without limitation, reasonable attorneys’
fees and expenses, in each case to the extent permitted by law) so incurred,
together with a late charge thereon (to the extent permitted by law) at the
Overdue Rate from the date on which such sums or expenses are paid or incurred
by Lessor, shall be paid by Lessee to Lessor on demand.  The obligations of Lessee and rights of
Lessor contained in this Article shall survive the expiration or earlier
termination of this Lease.

ARTICLE
XVIII

HOLDING OVER

18.1         Holding Over.  If Lessee for any reason remains in
possession of the Leased Property after the expiration or earlier termination
of the Term, such possession shall be as a tenant at sufferance during which
time Lessee shall pay as rental each month 150% of the aggregate of (a)
one-twelfth of the aggregate Base Rent and Percentage Rent payable with respect
to the last year of the Term, (b) all Additional Charges accruing during the
applicable month and (c) all other sums, if any, payable by Lessee under this
Lease with respect to the Leased Property. 
During such period, Lessee shall be obligated to perform and observe all
of the terms, covenants and conditions of this Lease, but shall have no rights
hereunder other than the right, to the extent given by law to tenancies at
sufferance, to continue its occupancy and use of the Leased Property.  Nothing contained herein shall constitute the
consent, express or implied, of Lessor to the holding over of Lessee after the
expiration or earlier termination of this Lease.

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ARTICLE
XIX

RISK OF LOSS

19.1         Risk of Loss.  During the Term, the risk of loss or of
decrease in the enjoyment and beneficial use of the Leased Property in
consequence of the damage or destruction thereof by fire, the elements, casualties,
thefts, riots, acts of terrorism, wars or otherwise, or in consequence of
foreclosures, attachments, levies or executions (other than those caused by
Lessor and those claiming from, through or under Lessor) is assumed by Lessee,
and, in the absence of gross negligence, willful misconduct or breach of this
Lease by Lessor pursuant to Section 31.1 (including without limitation, any failure
by Lessor to maintain insurance required to be maintained by Lessor pursuant to
this Lease, if any), Lessor shall in no event be answerable or
accountable therefor, nor shall any of the events mentioned in this
Section 19.1 entitle Lessee to any abatement of rent except as
specifically provided in this Lease.

ARTICLE
XX

INDEMNITIES

20.1         Indemnification.

(a)           NOTWITHSTANDING THE EXISTENCE OF ANY
INSURANCE, AND WITHOUT REGARD TO THE POLICY LIMITS OF ANY SUCH INSURANCE OR
SELF-INSURANCE, LESSEE WILL PROTECT, INDEMNIFY, HOLD HARMLESS, AND DEFEND
LESSOR INDEMNIFIED PARTIES FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS,
DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES), TO THE EXTENT PERMITTED
BY LAW, INCLUDING THOSE RESULTING FROM A LESSOR INDEMNIFIED PARTY’S OWN
NEGLIGENCE BUT EXCLUDING THOSE RESULTING FROM LESSOR’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST LESSOR BY
REASON OF (A) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF OR DAMAGE
TO PROPERTY OCCURRING ON OR ABOUT THE LEASED PROPERTY OR ADJOINING SIDEWALKS
DURING THE TERM, INCLUDING WITHOUT LIMITATION ANY CLAIMS UNDER LIQUOR
LIABILITY, “DRAM SHOP” OR SIMILAR LAWS, (B) ANY PAST, PRESENT OR FUTURE USE,
MISUSE, NON-USE, CONDITION, MANAGEMENT, MAINTENANCE OR REPAIR BY LESSEE OR ANY
OF ITS AGENTS, EMPLOYEES OR INVITEES OF THE LEASED PROPERTY OR ANY LITIGATION,
PROCEEDING OR CLAIM BY GOVERNMENTAL ENTITIES OR OTHER THIRD PARTIES TO WHICH
LESSOR IS MADE A PARTY OR PARTICIPANT RELATED TO SUCH USE, MISUSE, NON-USE,
CONDITION, MANAGEMENT, MAINTENANCE, OR REPAIR THEREOF BY LESSEE OR ANY OF ITS
AGENTS, EMPLOYEES OR INVITEES, INCLUDING ANY FAILURE OF LESSEE OR ANY OF ITS
AGENTS, EMPLOYEES OR INVITEES TO PERFORM ANY OBLIGATIONS UNDER THIS LEASE OR
IMPOSED BY APPLICABLE LAW (OTHER THAN ARISING OUT OF CONDEMNATION PROCEEDINGS),
(C) ANY IMPOSITIONS THAT ARE THE OBLIGATIONS OF LESSEE PURSUANT TO THE
APPLICABLE PROVISIONS OF THIS LEASE, (D) ANY FAILURE ON THE PART OF LESSEE TO
PERFORM OR COMPLY WITH ANY OF THE TERMS OF THIS LEASE, AND (E) THE NON-PERFORMANCE
OF ANY OF THE TERMS AND

 42
 

PROVISIONS OF ANY AND ALL EXISTING AND FUTURE SUBLEASES OF THE LEASED
PROPERTY TO BE PERFORMED BY THE LANDLORD THEREUNDER.

(b)           LESSOR WILL PROTECT, INDEMNIFY, HOLD
HARMLESS AND DEFEND LESSEE INDEMNIFIED PARTIES FROM AND AGAINST ALL
LIABILITIES, OBLIGATIONS, CLAIMS, DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS
AND EXPENSES IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST LESSEE INDEMNIFIED
PARTIES AS A RESULT OF (A) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR
ARISING IN CONNECTION WITH THIS LEASE, (B) ANY FAILURE ON THE PART OF LESSOR TO
PERFORM OR COMPLY WITH ANY OF THE TERMS OF THIS LEASE OR (C) ANY ACTIONS OF
LESSOR OR DEVELOPER ARISING OUT OF THE DEVELOPMENT AGREEMENTS.

(c)           LESSEE’S OR LESSOR’S LIABILITY FOR A BREACH OF
THE PROVISIONS OF THIS ARTICLE SHALL SURVIVE ANY TERMINATION OF THIS
LEASE.

(d)           Any amounts that become payable by an
Indemnifying Party under this Article XX
shall be paid within thirty (30) days after liability therefor on the part of
the Indemnifying Party is determined by litigation or otherwise, and if not
timely paid, shall bear a late charge (to the extent permitted by law) at the
Overdue Rate from the date of such determination to the date of payment.  Any such amounts shall be reduced by insurance
proceeds received and any other recovery (net of costs) obtained by the
Indemnified Party.  An Indemnifying
Party, upon request, shall at its sole expense resist and defend any
Proceeding, claim or action, or cause the same to be resisted and defended by
counsel designated by the Indemnified Party and approved by the Indemnifying
Party, which approval shall not be unreasonably withheld; provided, however,
that such approval shall not be required in the case of defense by counsel
designated by any insurance company undertaking such defense pursuant to any
applicable policy of insurance.  Each
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding, claim or action and to participate in the defense thereof, but the
fees and expenses of such counsel will be at the sole expense of such
Indemnified Party unless a conflict of interest prevents representation of such
Indemnified Party by the counsel selected by the Indemnified Party and such
separate counsel has been approved by the Indemnifying Party, which approval
shall not be unreasonably withheld.  The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding, claim or action made without its consent, which consent shall not
be unreasonably withheld, but if settled with the consent of the Indemnifying
Party, or if settled without its consent (if its consent shall be unreasonably
withheld), or if there be a final, non-appealable judgment for an adversary
party in any such Proceeding, claim or action, the Indemnifying Party shall
indemnify and hold harmless the Indemnified Party from and against any
liabilities incurred by such Indemnified Party by reason of such settlement or
judgment.  Nothing herein shall be
construed as indemnifying a Lessor Indemnified Party against its own grossly
negligent acts or omissions or willful misconduct.

 43
 

ARTICLE
XXI

SUBLETTING; ASSIGNMENT

21.1         Subletting and Assignment.

(a)           Lessee shall not sell, assign or transfer
all or any portion of its leasehold estate or sublet all or any portion of the
Leased Property without first obtaining the prior written consent of Lessor,
not to be unreasonably withheld, conditioned or delayed.  In the event of an assignment or subletting
by Lessee which is approved by Lessor, Lessee shall nevertheless remain fully
liable for the due performance of all obligations on Lessee’s part to be
performed under this Lease.  No permitted
assignment, sale or transfer shall be effective until there shall have been
delivered to Lessor an undertaking in recordable form, executed by the proposed
assignee or sublessee, wherein such assignee or sublessee assumes the due
performance of all obligations on Lessee’s part to be performed under this
Lease.  Each sublease must satisfy the
requirements of Section 35.3 and Section 35.4.

(b)           Lessee, as the debtor in possession, or the
trustee for Lessee (collectively, the “Trustee”)
in any proceeding under Title 11 of the United States Bankruptcy Code relating
to Bankruptcy, as amended (the “Bankruptcy Code”),
shall not have the right to assign this Lease or sublet the Leased Property to
an assignee or sublessee that (i) is a competitor of Lessor or
(ii) is not a capable, reliable, qualified Person of good reputation and
character with the financial capacity to satisfy Lessee’s obligations under
this Lease.  The Trustee shall not have
the right to assign this Lease or sublet the Leased Property to a real estate
investment trust that is, or intends to be, publicly traded.

(c)           The Trustee shall have the right to assume
Lessee’s rights and obligations under this Lease only if the Trustee:  (a) promptly cures or provides adequate
assurance that the Trustee will promptly cure any default under this Lease; (b)
compensates or provides adequate assurance that the Trustee will promptly compensate
Lessor for any actual pecuniary loss incurred by Lessor as a result of Lessee’s
default under this Lease; and (c) provides adequate assurance of future
performance under this Lease.  Adequate
assurance of future performance by the proposed assignee shall include, as a
minimum, that:  (i) any proposed
assignee of this Lease shall provide to Lessor an audited financial statement,
dated no later than six (6) months prior to the effective date of such proposed
assignment or sublease with no material change therein as of the effective
date, which financial statement shall show the proposed assignee has sufficient
financial capacity to fulfill its obligations under this Lease, or, in the
alternative, the proposed assignee shall provide a guarantor of such proposed
assignee’s obligations under this Lease, which guarantor shall provide an
audited financial statement meeting the requirements of (i) above and
shall execute and deliver to Lessor a guaranty agreement in form and substance
acceptable to Lessor; and (ii) any proposed assignee shall grant to Lessor
a security interest in favor of Lessor in all furniture, fixtures, and other
personal property to be used by such proposed assignee in the Leased
Property.  All payments required of
Lessee under this Lease, whether or not expressly denominated as such in this
Lease, shall constitute rent for the purposes of Title 11 of the Bankruptcy
Code.

(d)           The parties agree that for the purposes of
the Bankruptcy Code relating to (a) the obligation of the Trustee to provide
adequate assurance that the Trustee will “promptly” cure defaults and
compensate Lessor for actual pecuniary loss, the word “promptly” shall mean

 44

that cure of defaults and compensation will occur no later than sixty
(60) days following the filing of any motion or application to assume this
Lease; and (b) the obligation of the Trustee to compensate or to provide
adequate assurance that the Trustee will promptly compensate Lessor for “actual
pecuniary loss”.  The term “actual pecuniary loss” shall mean,
in addition to any other provisions contained herein relating to Lessor’s
damages upon default, the obligations of Lessee to pay money under this Lease
and all attorneys’ fees and related costs of Lessor incurred in connection with
any default of Lessee in connection with Lessee’s bankruptcy proceedings).

(e)                                  Any person or entity
to which this Lease is assigned pursuant to the provisions of the Bankruptcy
Code shall be deemed, without further act or deed, to have assumed all of the
obligations arising under this Lease and each of the conditions and provisions
hereof on and after the date of such assignment.  Any such assignee shall, upon the request of
Lessor, forthwith execute and deliver to Lessor an instrument, in form and
substance acceptable to Lessor, confirming such assumption.

21.2                           Attornment.  Lessee shall insert in each future sublease
permitted under Section 21.1
provisions to the effect that (a) such sublease is subject and subordinate to
all of the terms and provisions of this Lease and to the rights of Lessor
hereunder, (b) if this Lease terminates before the expiration of such sublease,
the sublessee thereunder will, at Lessor’s option, attorn to Lessor and waive
any right the sublessee may have to terminate the sublease or to surrender
possession thereunder as a result of the termination of this Lease, and (c) if
the sublessee receives a written Notice from Lessor or Lessor’s assignees, if
any, stating that an uncured Event of Default exists under this Lease, the
sublessee shall thereafter be obligated to pay all rentals accruing under said
sublease directly to the party giving such Notice, or as such party may direct.  All rentals received from the sublessee by
Lessor or Lessor’s assignees, if any, as the case may be, shall be credited
against the amounts owing by Lessee under this Lease.

21.3                           Management Agreement.

(a)                                  Lessee shall not
enter into (i) any management or agency agreement relating to the management or
operation of the Facility other than the Management Agreement, (ii) any
material modifications to the Management Agreement, without Lessor’s prior
written approval of the terms and conditions thereof, such approval to not be
unreasonably withheld, conditioned or delayed, or (iii) agree to a change in
the identity of any manager of the Facility.

(b)                                 All amounts due to the
Manager under the Management Agreement shall be paid prior to any payments of
Rent due under this Lease, which payments of Rent shall be subject and
subordinate to payment of all fees, expenses, or other amounts payable pursuant
to the Management Agreement.  The
disposition of the Management Agreement upon any permitted termination of this
Lease shall be governed by the Owner Agreement.

ARTICLE
XXII

ESTOPPELS; FINANCIAL STATEMENTS

22.1                           Lessee Estoppel
Certificates.  At any time and from
time to time upon not less than ten (10) days notice by Lessor, Lessee will
furnish to Lessor a statement certifying that this 

 45
 

Lease is
unmodified and in full force and effect (or that this Lease is in full force
and effect as modified and setting forth the modifications), the date to which
the rent has been paid, whether to the knowledge of Lessee there is any
existing default or Event of Default exists thereunder by Lessor or Lessee, and
such other information as may be reasonably requested by Lessor.  Any such certificate furnished pursuant to
this Section may be relied upon by Lessor, any lender and any prospective
purchaser of the Leased Property.

22.2                           Financial Statements and
Information.  Lessee will furnish the
following statements and operating information to Lessor (provided that the
delivery of any of the following statements or operating information may be
waived by Lessor, in its sole discretion):

(a)                                  within sixty (60)
days after the end of each fiscal year of Lessee, audited Consolidated
Financials of the Lessee;

(b)                                 with reasonable
promptness, such other information respecting the financial condition,
operations and affairs of Lessee or the Leased Property (A) as Lessor or the
Company may be required or may deem desirable in its reasonable discretion to
file with or provide to the Security and Exchange Commission (“SEC”) or any other governmental
agency or any other Person, all in the form, and either audited or unaudited,
as Lessor may request in Lessor’s reasonable discretion, (B) as may be
reasonably necessary to confirm compliance by Lessee and its Affiliates with
the requirements of this Lease, and (C) as may be required or requested by any
existing, potential or future Holder;

(c)                                  on or before the
fifteenth (15th) day of
each month, a balance sheet, and detailed profit and loss and cash flow
statements showing the financial position of the Facility as at the end of the
preceding month and the results of operation of the Facility for such preceding
month and the Lease Year to date (including a comparison to the Operating
Budget as approved);

(d)                                 on or before the
fifteenth (15th) day of
each month, the Facility’s general manager’s written critique of the financial
report submitted pursuant to subsection (c) immediately above, setting
forth in narrative form any variations during the preceding month from the
Annual Budget and including a preview of the Facility’s financial operations
during the current month;

(e)                                  on or before the
twentieth (20th) day of
each April, July and October during the Term, an updated estimate for each
calendar quarter remaining in the Lease Year of the information required by Section 4.7(a) and (e) hereof;

(f)                                    monthly STR Reports
within five (5) days of Lessee’s receipt thereof;

(g)                                 Lessee will furnish to
Lessor a copy of all financial reports and statements received from the Manager
on the twentieth (20th) day
of each month for the preceding month;

(h)                                 Lessee will furnish to
Lessor on the twentieth (20th)
day of each month for the preceding month and year-to-date the following
statistical information:

 46
 

(i)                                     Statistical
information for the Hotel for the prior month, such as ADR, REVPAR and
occupancy; and

(ii)                                  Year-to-date
annual working capital positions.

(i)                                     upon request by
Lessor, to the extent not previously provided by Lessee, (i) copies of all
licenses, permits, occupancy agreements, operating agreements, leases,
contracts, inspection reports, studies, appraisals, assessments, default or
other notices and similar materials and information existing with respect to
the Leased Property and (ii) such additional financial information as required
to comply with, and to evidence compliance with, the Sarbanes-Oxley Act of
2002, as may be amended, as such statute relates to financial reports in
respect of the Leased Property.

22.3                           Covenants of Lessee.  Lessee covenants to cause its officers and
employees, Manager and its auditors to cooperate fully and promptly with Lessor
and with the auditors for Lessor in connection with the timely preparation and
filing of Lessor’s filings, reports and returns under applicable federal, state
and other governmental securities, blue sky and tax laws and regulations.  Lessor covenants to cause its officers and
employees and auditors to cooperate fully with Lessee and Lessee’s auditors in
connection with the timely preparation and filing of Lessee’s filings, reports
and returns under applicable federal, state and other governmental securities,
blue sky and tax laws and regulations.

22.4                           Certified Financial
Statements.  Upon request of Lessor,
the financial statements required under Section 22.2(a)-(c) shall be certified by a member or
an authorized officer (as the case may be) of Lessee.  All financial statements of Lessee delivered
to Lessor shall be true and correct in all respects, shall be prepared in
accordance with generally accepted accounting principles, consistently applied,
and fairly present the financial condition of the subject thereof as of the
dates thereof.  Any materially adverse
change that occurs in the financial condition reflected therein after the date
thereof shall be reported to Lessor promptly. 
None of the aforesaid financial statements, or any certificate or
statement furnished to Lessor by or on behalf of Lessee in connection with the
transactions contemplated hereby, shall contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading.

22.5                           Lessor Estoppel
Certificates.  At any time and from
time to time upon not less than ten (10) days notice by Lessee, Lessor will
furnish to Lessee or to any person designated by Lessee an estoppel certificate
certifying that this Lease is unmodified and in full force and effect (or that
this Lease is in full force and effect as modified and setting forth the
modifications), the date to which rent has been paid, whether to the knowledge
of Lessor there is any existing default or Event of Default on Lessee’s part
hereunder, and such other information as may be reasonably requested by Lessee.

 47
 

ARTICLE
XXIII

INSPECTIONS; MEETINGS

23.1                           Lessor’s Right to Inspect.  Lessee shall permit Lessor and its authorized
representatives as frequently as reasonably requested by Lessor to inspect the
Leased Property and Lessee’s accounts and records pertaining thereto and make
copies thereof, during usual business hours upon reasonable advance notice,
subject only to any business confidentiality requirements reasonably requested
by Lessee.

23.2                           Regular Meetings.  Lessee agrees that it will make available a
senior level representative of operations of the Facility (such as the general
manager or controller) and if requested by Lessor, the general manager, to meet
with Lessor and its representatives on a monthly basis throughout each Lease
Year in order to discuss all aspects of the management, maintenance and
operation of the Facility.

23.3                           Accommodations.  Subject to availability, Lessee will provide
reasonable gratuitous accommodations, food and beverage, and other services and
amenities to Lessor and its representatives in connection with all such
meetings and inspections.

ARTICLE
XXIV

NO WAIVER

24.1                           No Waiver.  No failure by Lessor or Lessee to insist upon
the strict performance of any term hereof or to exercise any right, power or
remedy consequent upon a breach thereof, and no acceptance of full or partial
payment of rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of any such term. 
To the extent permitted by law, no waiver of any breach shall affect or
alter this Lease, which shall continue in full force and effect with respect to
any other then existing or subsequent breach.

ARTICLE
XXV

CUMULATIVE REMEDIES

25.1                           Remedies Cumulative.  To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Lessor or Lessee now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy and the exercise or beginning of the exercise by Lessor or Lessee of
any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Lessor or Lessee of any or all of such
other rights, powers and remedies.

ARTICLE
XXVI

SURRENDER

26.1                           Acceptance of Surrender.  No surrender to Lessor of this Lease or of
the Leased Property or any part thereof, or of any interest therein, shall be
valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or any representative or agent of Lessor, other than such a
written acceptance by Lessor, shall constitute an acceptance of any such
surrender.

 48
 

ARTICLE
XXVII

NO MERGER

27.1                           No Merger of Title.  There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same person
or entity may acquire, own or hold, directly or indirectly:  (a) this Lease or the leasehold estate
created hereby or any interest in this Lease or such leasehold estate and (b)
the fee estate in the Leased Property.

ARTICLE
XXVIII

CONVEYANCE BY LESSOR

28.1                           Conveyance by Lessor.  If Lessor or any successor owner of the
Leased Property conveys the Leased Property in accordance with the terms hereof
other than as security for a debt, and the grantee or transferee of the Leased
Property expressly assumes all obligations of Lessor hereunder arising or
accruing from and after the date of such conveyance or transfer, Lessor or such
successor owner, as the case may be, shall thereupon be released from all
future liabilities and obligations of Lessor under this Lease arising or
accruing from and after the date of such conveyance or other transfer as to the
Leased Property and all such future liabilities and obligations shall thereupon
be binding upon the new owners.

28.2                           Lessor May Grant Liens.

(a)                                  Without the consent
of Lessee, Lessor may from time to time, directly or indirectly, create or
otherwise cause to exist any lien, encumbrance or title retention agreement
upon the Leased Property, or any portion thereof or interest therein, or upon
Lessor’s interest in this Lease, whether to secure any borrowing or other means
of financing or refinancing.  This Lease
and Lessee’s interest hereunder shall at all times be subject and subordinate
to the lien and security title of any deeds to secure debt, deeds of trust,
mortgages, or other interests heretofore or hereafter granted by Lessor or
which otherwise encumber or affect the Leased Property and to any and all
advances to be made thereunder and to all renewals, modifications,
consolidations, replacements, substitutions, and extensions thereof (all of
which are herein called the “Mortgage”),
provided that (i) the Mortgage and all security agreements delivered by Lessor
in connection therewith shall be subject to Lessee’s rights under this Lease
prior to the expiration or earlier termination of this Lease pursuant to its
terms, and (ii) the foregoing subordination agreement shall only be effective
in the event that the Holder of the Mortgage agrees not to disturb Lessee’s
rights under this Lease.  In confirmation
of such subordination, Lessee shall, at Lessor’s request, promptly execute,
acknowledge and deliver any instruments which may be reasonably required to
evidence subordination to any Mortgage and to the Holder thereof, subject to
the terms and conditions of this Section 28.2 and in form and substance
acceptable to Lessee, and the assignment of this Lease and Lessor’s rights and
interests thereunder to such Holder.  In
the event of Lessee’s failure to deliver such instruments and if the Mortgage
and such instruments do not change materially and adversely any term of this
Lease, Lessor may, in addition to any other remedies for breach of covenant
hereunder, execute, acknowledge, and deliver the instrument as the agent or
attorney in fact of Lessee, and Lessee hereby irrevocably constitutes Lessor
its attorney in fact for such purpose, Lessee acknowledging that the
appointment is coupled with an interest and is irrevocable.

 49
 

(b)                                 Lessee shall, upon the
request of Lessor or any existing, potential or future Holder (but in no event
more than once every twelve months during the Term), (i) provide Lessor or
such Holder with copies of all licenses, permits, occupancy agreements,
operating agreements, leases, contracts, inspection reports, studies,
appraisals, assessments, default or other notices and similar materials
reasonably requested in connection with any existing or proposed financing of
the Leased Property, and (ii) execute and/or cause the Manager to execute,
as applicable, such estoppel agreements and collateral assignments with respect
to the Facility’s liquor license, the Management Agreement, any Franchise
Agreement and any of the other aforementioned agreements as Holder may
reasonably request in connection with any such financing, provided that no such
estoppel agreement or collateral assignment shall in any way affect the Term or
affect adversely in any material respect any rights of Lessee under this Lease.

(c)                                  No act or failure to
act on the part of Lessor which would entitle Lessee under the terms of this
Lease, or by law, to be relieved of any of Lessee’s obligations hereunder
(including, without limitation, its obligation to pay Rent) or to terminate
this Lease, shall result in a release or termination of such obligations of
Lessee or a termination of this Lease unless: 
(i) Lessee shall have first given written notice of Lessor’s act or
failure to act to any Holder of whom Lessee has been given written notice of
such Holder’s status as a Holder, specifying the act or failure to act on the
part of Lessor which would give basis to Lessee’s rights; and (ii) the
Holder, after receipt of such notice, shall have failed or refused to correct
or cure the condition complained of within a reasonable time thereafter (in no
event less than sixty (60) days), which shall include a reasonable time for
such Holder to obtain possession of the Leased Property, if possession is
reasonably necessary for the Holder to correct or cure the condition, or to
foreclose such Mortgage, and if the Holder notifies the Lessee of its intention
to take possession of the Leased Property or to foreclose such Mortgage, and
correct or cure such condition.  If such
Holder is prohibited by any process or injunction issued by any court or by
reason of any action by any court having jurisdiction or any bankruptcy, debtor
rehabilitation or insolvency proceedings involving Lessor from commencing or
prosecuting foreclosure or other appropriate proceedings in the nature thereof,
provided, however, that this Lease shall continue to be in full force and
effect, the times for commencing or prosecuting such foreclosure or other
proceedings shall be extended for the period of such prohibition.

(d)                                 Lessee shall deliver
by notice delivered in the manner provided in Article XXIX to any Holder who gives Lessee written
notice of its status as a Holder, at such Holder’s address stated in the Holder’s
written notice or at such other address as the Holder may designate by later
written notice to Lessee, a duplicate copy of any and all notices regarding any
default which Lessee may from time to time give or serve upon Lessor pursuant
to the provisions of this Lease.  Copies
of such notices given by Lessee to Lessor shall be delivered to such Holder
simultaneously with delivery to Lessor. 
No such notice by Lessee to Lessor hereunder shall be deemed to have
been given unless and until a copy thereof has been mailed to such Holder as
provided above.

(e)                                  At any time, and from
time to time, upon not less than twenty (20) days’ notice by a Holder to
Lessee, Lessee shall deliver to such Holder an estoppel certificate 

 50
 

certifying as to the information required in Section 22.1(c), and such
other information as may be reasonably requested by such Holder.  Any such certificate may be relied upon by
such Holder.

(f)                                    Lessee shall
cooperate in all reasonable respects, and as generally described in Section 28.2 of this Lease,
with any transfer of the Leased Property to a Holder that succeeds to the
interest of Lessor in the Leased Property (including, without limitation, in
connection with the transfer of any franchise, license, lease, permit,
contract, agreement, or similar item to such Holder or such Holder’s designee
necessary or appropriate to operate the Leased Property).  Lessor and Lessee shall cooperate in
(i) including in this Lease by suitable amendment from time to time any
provision which may be requested by any proposed Holder, or may otherwise be
reasonably necessary, to implement the provisions of this Article and
(ii) entering into any further agreement with or at the request of any
Holder which may be reasonably requested or required by such Holder in
furtherance or confirmation of the provisions of this Article ; provided,
however, that any such amendment or agreement shall not in any way affect the
Term nor affect adversely in any material respect any rights of Lessor or
Lessee under this Lease.

ARTICLE
XXIX

NOTICES

29.1                           Notices.  All notices, demands, or other communications
of any type given by the Lessor to the Lessee, or by the Lessee to the Lessor,
whether required by this Lease or in any way related to the transaction
contracted for herein, shall be void and of no effect unless given in
accordance with the provisions of this paragraph.  All notices shall be in writing and delivered
to the person to whom the notice is directed, either in person, by facsimile
transmission, by nationally recognized overnight delivery service, or by United
States Mail, as a registered or certified item, return receipt requested.  Notices delivered by mail shall be deemed
given on the third (3rd)
business day after being deposited in a post office or other depository under
the care or custody of the United States Postal Service, enclosed in a wrapper
with proper postage affixed, on the first business day after being deposited
with a nationally recognized overnight delivery service, or when received, if
delivered in person or by facsimile, addressed as follows:

Lessor:

Behringer Harvard
Cordillera, LLC

c/o Behringer Harvard Opportunity OP I LP

15601 Dallas Parkway, Suite 600

Addison, Texas   75001

Attn:  Joe Jernigan

Facsimile:  (214) 655-1610

with a copy to:

Powell Coleman, LLP

8080 North Central Expressway, Suite 1380

Dallas, Texas  75206

Attn:  Patrick M. Arnold

Facsimile:  (214) 373-8768

 51
 

Lessee:

Behringer Harvard Residences at Cordillera, LLC

c/o Behringer Harvard Opportunity OP I LP

15601 Dallas Parkway, Suite 600

Addison, Texas   75001

Attn:  Joe Jernigan

Facsimile:  (214) 655-1610

with a copy to:

Powell Coleman, LLP

8080 North Central Expressway, Suite 1380

Dallas, Texas  75206

Attn:  Patrick M. Arnold

Facsimile:  (214) 373-8768

ARTICLE
XXX

APPRAISALS

30.1                           Appraisers.  If
it becomes necessary to determine the fair market value of the Leased Property
for any purpose of this Lease, the party required or permitted to give notice
of such required determination shall include in the notice the name of a person
selected to act as appraiser on its behalf. 
Within ten (10) days after notice, Lessor (or Lessee, as the case may
be) shall by notice to Lessee (or Lessor, as the case may be) appoint a second
person as appraiser on its behalf.  The
appraisers thus appointed, each of whom must be a member of the American Institute
of Real Estate Appraisers (or any successor organization thereto) with at least
five years experience in the State appraising property similar to the Leased
Property, shall, within forty-five (45) days after the date of the notice
appointing the first appraiser, proceed to appraise the Leased Property to
determine the fair market value thereof as of the relevant date (giving effect
to the impact, if any, of inflation from the date of their decision to the
relevant date); provided, however, that if only one appraiser shall have been
so appointed, then the determination of such appraiser shall be final and
binding upon the parties.  If two
appraisers are appointed and if the difference between the amounts so determined
does not exceed five percent (5%) of the lesser of such amounts, then the fair
market value shall be an amount equal to fifty percent (50%) of the sum of the
amounts so determined.  If the difference
between the amounts so determined exceeds five percent (5%) of the lesser of
such amounts, then such two appraisers shall have twenty (20) days to appoint a
third appraiser.  If no such appraiser
shall have been appointed within such twenty (20) days or within ninety (90)
days of the original request for a determination of fair market value, whichever
is earlier, either Lessor or Lessee may apply to any court having jurisdiction
to have such appointment made by such court. 
Any appraiser appointed by the original appraisers or by such court
shall be instructed to determine the fair market value or fair market rental
within forty-five (45) days after appointment of such appraiser.  The determination of the appraiser which
differs most in the terms of dollar amount from the determinations of the other
two appraisers shall be excluded, and fifty percent (50%) of the sum of the
remaining two determinations shall be final and binding upon Lessor and Lessee
as the fair market value or fair market rental of the Leased Property, as the
case may be.  This provision for
determining by 

 52
 

appraisal shall be specifically enforceable
to the extent such remedy is available under applicable law, and any
determination hereunder shall be final and binding upon the parties except as
otherwise provided by applicable law. 
Lessor and Lessee shall each pay the fees and expenses of the appraiser
appointed by it and each shall pay one-half of the fees and expenses of the
third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.

ARTICLE
XXXI

LESSOR BREACH

31.1                           Breach by Lessor.  It shall be a breach of this Lease if Lessor
fails to observe or perform any term, covenant or condition of this Lease on
its part to be performed and such failure continues for a period of thirty (30)
days after notice thereof from Lessee, unless such failure cannot with due
diligence be cured within a period of thirty (30) days, in which case such
failure shall not be deemed to continue if Lessor, within such 30-day period,
proceeds promptly and with due diligence to cure the failure and diligently completes
the curing thereof.  In the event that
Lessor fails to cure such breach as provided above, then Lessee shall have the
right to perform Lessor’s uncured obligation and all costs and expenses
incurred by Lessee in connection therewith shall be paid by Lessor to Lessee
within thirty (30) days after Lessee gives Lessor written demand for payment;
any amounts not paid by Lessor as required in this Section 31.1 shall be
subject to arbitration pursuant to Section 38.2.

ARTICLE
XXXII

MISCELLANEOUS

32.1                           Miscellaneous.  Anything contained in this Lease to the
contrary notwithstanding, all claims against, and liabilities of, Lessee or
Lessor arising prior to any date of termination of this Lease shall survive
such termination.  If any term or
provision of this Lease or any application thereof is invalid or unenforceable,
the remainder of this Lease and any other application of such term or
provisions shall not be affected thereby. 
If any late charges or any interest rate provided for in any provision
of this Lease are based upon a rate in excess of the maximum rate permitted by
applicable law, the parties agree that such charges shall be fixed at the
maximum permissible rate.  Neither this
Lease nor any provision hereof may be changed, waived, discharged or terminated
except by a written instrument in recordable form signed by Lessor and
Lessee.  All the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
The headings in this Lease are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.  This Lease shall be governed by and construed
in accordance with the laws of the State of Texas, but not including its
conflicts of laws rules.  If any payment
required to be made pursuant to this Lease shall become due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day.

32.2                           Waiver of Presentment,
Etc.  Lessee waives all presentments,
demands for payment and for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance and waives
all notices of the existence, creation, or incurring of new or additional
obligations, except as expressly granted herein.

 53
 

32.3                           Force Majeure.  Neither Lessor nor Lessee, nor any successor
in interest of Lessor or Lessee, shall be considered in breach or default of
their respective obligations under this Lease, and times for performance of
obligations hereunder shall be extended, except with respect to the payment of
Rent, which shall not be subject to the terms of this Section 32.3, in
the event of any delay caused by any event of force majeure occurring at or
affecting the Leased Property (a “Force
Majeure Event”), which Force Majeure Events shall include,
without limitation, damage or destruction by fire or other casualty; general
strike; lockout; labor disputes; labor shortages; civil disorder; riots; war;
acts of God; epidemics; earthquakes; acts of terrorism; failure of utilities;
shortage or delay in shipment of material or fuel; or other similar events
beyond the party’s reasonable control.

32.4                           Development Agreements.

(a)                                  Lessor has advised
Lessee that it intends to make certain alterations and improvements to the
Leased Property pursuant to the Development Agreements.  Lessor shall comply with its obligations
under the Development Agreements and shall use reasonably commercial efforts to
enforce the obligations of Developer under the Development Agreements.

(b)                                 All costs of the
Projects shall be borne by Lessor, and Lessee shall have no obligation to
perform any work contemplated by the Development Agreements.  In the course of implementing and completing
the Projects, Lessor shall not unreasonably interfere with the operation of the
Facility by Lessee or the performance of Lessee’s obligations under this Lease.

(c)                                  In furtherance of and
not in limitation of subsection (b) above. Lessor confirms that (i) neither
Lessee nor Manager shall be responsible for any obligations of the Developer
under the Development Agreements, nor shall Lessee or Manager have any
obligation to pay any costs or expenses incurred or contemplated pursuant to
the Development Agreements, (ii) in no event shall any Annual Budget include any
costs of the Projects described in the Development Agreements, and (iii)
amounts in the FFE Reserve shall not be available to pay any costs described in
any of the Development Agreements.

ARTICLE
XXXIII

MEMORANDUM OF LEASE

33.1                           Memorandum of Lease.  Lessor and Lessee shall promptly upon the
request of either party enter into a short form memorandum of this Lease, in
form suitable for recording under the laws of the State of Colorado in which
reference to this Lease shall be made. 
Lessee shall pay all costs and expenses of recording such memorandum of
this Lease.

ARTICLE
XXXIV

COMPLIANCE WITH AGREEMENTS

34.1                           Management Agreement.  To the extent any provisions of the
Management Agreement impose a greater obligation on Lessee than the
corresponding provisions of the Lease, then Lessee shall be obligated to comply
with the provisions of the Management 

 54
 

Agreement, it being the intent of the parties hereof that Lessee comply
with the provisions of the Management Agreement so as to avoid any default
thereunder.

ARTICLE
XXXV

LIMITATIONS

35.1                           REIT Compliance.  Lessee acknowledges that Lessor’s parent,
Behringer Harvard Opportunity REIT I, Inc. (the “REIT”),
intends to qualify as a real estate investment trust under the Internal Revenue
Code of 1986, as amended (the “Tax Code”).  Lessee agrees that it will not knowingly or
intentionally take or omit any action, or permit any status to exist at the
Leased Property, which Lessee knows would or could result in the REIT being
disqualified from treatment as a real estate investment trust under the Tax
Code.

35.2                           Personal Property
Limitation.  Anything contained in
this Lease to the contrary notwithstanding, the average of the fair market
values of the items of personal property that are leased to the Lessee under
this Lease at the beginning and at the end of any calendar year shall not
exceed fifteen percent (15%) of the average of the aggregate fair market values
of the Leased Property (including both all real property and all personal
property subject to this Lease) at the beginning and at the end of each such
calendar year.  This Section 35.2 is intended to
insure that all of the rent payable hereunder qualifies as “rents from real
property,” within the meaning of Section 856(d) of the Tax Code, or any
similar or successor provisions thereto, and shall be interpreted in a manner
consistent with such intent.

35.3                           Sublease Rent Limitation.  Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublet the Leased Property on any
basis such that the rental to be paid by the sublessee thereunder would be
based, in whole or in part, on either (a) the income or profits derived by the
business activities of the sublessee, or (b) any other formula such that any
portion of the rent payable hereunder would fail to qualify as “rents from real
property” within the meaning of Section 856(d)
of the Tax Code, or any similar or successor provisions thereto.

35.4                           Sublease Tenant
Limitation.  Anything contained in
this Lease to the contrary notwithstanding, Lessee shall not sublease the
Leased Property to any person or entity in which Lessor or the REIT owns,
directly or indirectly, a ten percent (10%) or more interest, within the
meaning of Section 856(d)(2)(B) of the Tax Code, or any similar or
successor provisions thereto.  In the
event that Lessee subleases any portion of the Leased Property in violation of Section 35.3
and this Section 35.4 on a basis such that the rental to be paid by
the sublessee thereunder would be based, in whole or in part, on either (a) the
income or profits derived by the business activities of the sublessee or (b)
any other formula such that any portion of the rent payable hereunder would
fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Tax Code,
or any similar or successor provisions thereto, then notwithstanding any
indication in this Lease to the contrary, the Percentage Rent shall be computed
without treating any amount paid pursuant to such sublease as Gross Revenues.

35.5                           Lessee Ownership Limitation.  Anything contained in this Lease to the
contrary notwithstanding, neither Lessee nor any affiliate of the Lessee shall
acquire, directly or 

 55
 

indirectly, a ten percent (10%) or more interest in the REIT, within
the meaning of Section 856(d)(2)(B) of the Tax Code, or any similar or
successor provisions thereto.

ARTICLE
XXXVI

TERMINATION RIGHTS

36.1                           Lessor’s Option to
Terminate Lease Upon Sale.  In the
event Lessor consummates a bona fide contract to sell the Leased Property, then
Lessor may terminate the Lease by giving not less than thirty (30) days prior
notice to Lessee of Lessor’s election to terminate the Lease upon the closing
under such contract.  Effective upon such
date, this Lease shall terminate and be of no further force and effect except
as to any obligations of the parties existing as of such date that survive
termination of this Lease and all Base Rent and Percentage Rent shall be
adjusted as of the termination date.

ARTICLE
XXXVII

TRANSITION PROCEDURES

37.1                           Transition Procedures.  Lessee and Manager shall cooperate in good
faith to provide access and information to any prospective purchaser or lessee
of the Leased Property which may acquire the Leased Property or lease it upon
the expiration or termination of the Term. 
Upon any expiration or termination of the Term, Lessor and Lessee shall
do the following and, in general, shall cooperate in good faith to effect an
orderly transition of the management or lease of the Facility.  The provisions of this Article 38 shall survive
the expiration or termination of this Lease until they have been fully
performed.  Nothing contained herein
shall limit Lessor’s rights and remedies under this Lease if such termination
occurs as the result of an Event of Default.

(a)                                  Upon the expiration
or earlier termination of the Term, Lessee shall use its best efforts
(i) to transfer to Lessor or Lessor’s designee all licenses, operating
permits and other governmental authorizations and all contracts with
governmental or quasi-governmental entities, that may be necessary for the
operation of the Facility (collectively, “Licenses”),
or (ii) if such transfer is prohibited by law or Lessor otherwise elects,
to cooperate with Lessor or Lessor’s designee in connection with the processing
by Lessor or Lessor’s designee of any applications for all Licenses, including
Lessee continuing to operate the liquor operations under its licenses with
Lessor or its designee agreeing to indemnify and hold Lessee harmless as a
result thereof except for the gross negligence or willful misconduct of Lessee;
provided, in either case, that the costs and expenses of any such transfer or
the processing of any such application shall be paid by Lessor or Lessor’s
designee and such arrangement will terminate not later than one hundred eighty
(180) days following its execution.

(b)                                 Lessee shall assign or
cause to be assigned to Lessor or Lessor’s designee simultaneously with the
termination of this Agreement, and the assignee shall assume all leases,
contracts, concession agreements and agreements in effect with respect to the
Facility then in Lessee’s name; provided, however, Lessor shall not be
obligated to assume and may reject (i) any operating or service agreements
entered into subsequent to the date hereof which have a term in excess of one
year or termination rights that must be exercised more than sixty (60) days 

 56
 

prior to the end of the annual term, and (ii) equipment leases
which were entered into subsequent to the date hereof and were not previously
approved by Lessor, if such approval is required pursuant to this Lease, in
which event the agreement or agreements and/or leases so rejected shall not be
assigned or shall be deemed reassigned and shall remain the property and
responsibility of Lessee.

(c)                                  To the extent that
Lessor has not already received copies thereof, copies of all books and records
(including computer records) for the Facility kept by Lessee shall be promptly
delivered to Lessor or Lessor’s designee.

(d)                                 Lessee shall be
entitled to retain all cash, bank accounts and house banks, and to collect all
Gross Revenues and accounts receivable accrued through the termination
date.  Lessee shall be responsible for
the payment of rent, all operating expenses of the Facility and all other obligations
of Lessee accrued under this Lease prior to the termination date, and Lessor
shall be responsible for all operating expenses of the Facility accruing on and
after the termination date.  Lessee shall
surrender the Leased Property with an amount and quality of Nonconsumable
Inventory and Consumable Supplies as provided in Section 7.4 above.

ARTICLE
XXXVIII

ARBITRATION

38.1                           Arbitration.  Except as set forth in Section 38.2, in each case
specified in this Lease in which it shall become necessary to resort to
arbitration, such arbitration shall be determined as provided in this Section 38.1.  The party desiring such arbitration shall
give Notice to that effect to the other party, and an arbitrator shall be
selected by mutual agreement of the parties, or if they cannot agree within
thirty (30) days of such notice, by appointment made by the American
Arbitration Association (“AAA”)
from among the members of its panels who are qualified and who have experience
in resolving matters of a nature similar to the matter to be resolved by
arbitration.

38.2                           Alternative Arbitration.  In each case specified in this Lease for a
matter to be submitted to arbitration pursuant to the provisions of this Section 38.2, Lessor shall
be entitled to designate HVS Valuation Services; or if the foregoing has ceased
to do business, any nationally recognized accounting firm with a hospitality
division of which Lessor or an Affiliate of Lessor and Lessee and Affiliates of
Lessee are not significant clients to serve as arbitrator of such dispute
within fifteen (15) days after written demand for arbitration is received or
sent by Lessor.  In the event Lessor
fails to make such designation within such fifteen (15) day period, Lessee
shall be entitled to designate any nationally recognized accounting firm with a
hospitality division of which Lessee or an Affiliate of Lessee is not a
significant client to serve as arbitrator of such dispute within fifteen (15)
days after Lessor fails to timely make such designation.  In the event no nationally recognized
accounting firm satisfying such qualifications is available and willing to
serve as arbitrator, the arbitration shall instead be administered as set forth
in Section 38.1.

38.3                           Arbitration Procedures.  In any arbitration commenced pursuant to Sections 38.1 or 38.2, a single arbitrator shall
be designated and shall resolve the dispute. 
The arbitrator’s 

 57
 

decision shall be final and binding on all parties and shall not be
subject to further review or appeal except as otherwise allowed by applicable
law.  Upon the failure of either party
(the “non-complying party”) to comply with his decision, the arbitrator shall
be empowered, at the request of the other party, to order such compliance by
the non-complying party and to supervise or arrange for the supervision of the
non-complying party’s obligation to comply with the arbitrator’s decision, all
at the expense of the non-complying party. 
To the maximum extent practicable, the arbitrator and the parties, and
the AAA if applicable, shall take any action necessary to insure that the
arbitration shall be concluded within ninety (90) days of the filing of such
dispute.  The fees and expenses of the
arbitrator shall be shared equally by Lessor and Lessee except as otherwise
specified above in this Section 38.3. Unless otherwise agreed in writing by the
parties or required by the arbitrator or AAA, if applicable, arbitration
proceedings hereunder shall be conducted in the State.  Notwithstanding formal rules of evidence,
each party may submit such evidence as each party deems appropriate to support
its position and the arbitrator shall have access to and right to examine all
books and records of Lessee and Lessor regarding the Facility during the
arbitration.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 58

IN WITNESS
WHEREOF, the parties have executed this Lease by their duly authorized officers
as of the date first above written.

 

	
  LESSOR:

  	
  BEHRINGER HARVARD CORDILLERA, LLC,

  
	
   

  	
  a Delaware limited liability company,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

  

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

	
  LESSEE:

  	
  BEHRINGER HARVARD RESIDENCES AT 

  
	
   

  	
  CORDILLERA, LLC, 

  
	
   

  	
  a Delaware limited liability company,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

  

 

EXHIBIT
A

LAND

Grouse
on the Green Real Property

TRACT F, CORDILLERA SUBDIVISION,
FILING NO. 16, ACCORDING TO THE CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN
BOOK 655 AT PAGE 562, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH EASEMENTS AND
BENEFITS AS DESCRIBED IN AMENDED AND RESTATED DECLARATION OF PROTECTIVE
CONVENANTS RECORDED MAY 12, 1993 IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT
THRETO RECORDED MAY 11, 1998 AT RECEPTION NO. 6557728, AFFIDAVIT OF
CLARIFICATION RECORDED MAY 10, 1995 IN BOOK 663 AT PAGE 72, COUNTY OF EAGLE,
STATE OF COLORADO.

TOGETHER WITH NONEXCLUSIVE
INGRESS AND EGRESS EASEMENTS RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED
APRIL 21, 2003 AT RECEPTION NO. 830524, 830525, 830526, 830527, 830528, 830529
AND 830530, COUNTY OF EAGLE, STATE OF COLORADO.

 1

EXHIBIT
B

REVENUE
PERCENTAGES AND BREAK POINTS, CALCULATION OF PERCENTAGE RENT

Calculation
of Percentage Rent:
Percentage Rent for any Lease Year shall be 15% of the amount by which
Gross Revenues for the applicable Lease Year exceed $8,000,000.

 1

EXHIBIT
C

PRELIMINARY
STATEMENT OF CASH AND WORKING CAPITAL

(To Be
Inserted)

ASSETS

LIABILITIES

NET WORKING CAPITAL ASSET

 1

SCHEDULE
4.1

RESERVED

 1

SCHEDULE
4.1(a)

MONTHLY
BASE RENT PAYMENT SCHEDULE

	
  

  	
   

  	
  2007

  	
   

  	
  2008

  	
   

  
	
  January

  	
   

  	
   

  	
   

  	
  9,000

  	
   

  
	
  February

  	
   

  	
   

  	
   

  	
  10,000

  	
   

  
	
  March

  	
   

  	
   

  	
   

  	
  20,000

  	
   

  
	
  April

  	
   

  	
   

  	
   

  	
  7,000

  	
   

  
	
  May

  	
   

  	
   

  	
   

  	
  7,000

  	
   

  
	
  June

  	
   

  	
  19,000

  	
   

  	
  19,000

  	
   

  
	
  July

  	
   

  	
  189,000

  	
   

  	
  189,000

  	
   

  
	
  August

  	
   

  	
  302,000

  	
   

  	
  302,000

  	
   

  
	
  September

  	
   

  	
  90,000

  	
   

  	
  90,000

  	
   

  
	
  October

  	
   

  	
  7,000

  	
   

  	
  7,000

  	
   

  
	
  November

  	
   

  	
  7,000

  	
   

  	
  7,000

  	
   

  
	
  December

  	
   

  	
  53,000

  	
   

  	
  53,000

  	
   

  
	
  TOTAL

  	
   

  	
  667,000

  	
   

  	
  720,000

  	
   

  

 

 1

SCHEDULE 4.1(b)

ADDITIONAL BASE RENT SCHEDULE

None.

 1Exhibit 10.10

PROMISSORY
NOTE

	
  $26,250,000

  	
  June 6, 2007

  

 

Behringer Harvard
Cordillera, LLC, a Delaware limited liability company (“Borrower”)
FOR VALUE RECEIVED, promises to pay to the order of Behringer Harvard
Opportunity OP I, LP, a Texas limited partnership or its assigns (“Lender”), at such place as Lender may from time to time
designate in writing, the principal sum of Twenty Six Million Two Hundred Fifty
Thousand Dollars ($26,250,000) with interest on the outstanding principal
amount at the rates set forth herein (the “Indebtedness”).

DEFINITIONS

“Business Day” shall mean all days other than Saturday,
Sunday or any other day on which
national banks doing business in Dallas, Texas are not open for business.

“Deed of Trust” shall mean that certain Deed of Trust
executed by Borrower on behalf of Lender and dated of even date herewith.

“Default Interest” shall mean any
interest accruing at the Default Interest Rate and payable pursuant to the
terms hereof or of the Deed of Trust.

“Default Interest Rate” shall mean a
rate of interest per annum equal to the lesser of either (a) thirteen
percent (13%) or (b) the maximum rate of interest which may be collected
from Borrower under applicable law.

“Event of Default” shall mean any one or
more of the following, without limitation as to the others: (i) failure of
Borrower to pay when due any installment of principal or interest due under
this Note, (ii) any assignment for the benefit of creditors by Borrower or
(iii) commencement of any proceeding under the U.S. Bankruptcy Code or any law
of the United States or of any state relating to the insolvency, receivership,
custodianship or debt adjustment by Borrower or the commencement of any such
proceeding against Borrower, or if Borrower admits in writing an inability to
pay debts generally as they become due or becomes insolvent, or if a receiver,
trustee, custodian or liquidator shall be appointed for Borrower or any
substantial part of the Property (as defined in the Deed of Trust).

“Extended Maturity Date” shall mean June
6, 2008, the date which shall be six months after the Maturity Date.

“Interest Rate” shall mean nine percent
(9.0%) per annum.

“LLC Agreement” shall mean that certain
limited liability company agreement of Borrower dated as of May 10, 2007.

“Maturity Date” shall mean December 6,
2007.

“Payment Date” shall mean the
first day of each calendar month, commencing on the date set forth in Section
1.1, and the Maturity Date (or, if any such date is not a Business Day, then
the first Business Day immediately before such date).

“Security Agreement” shall mean that certain
Security Agreement executed by Borrower on behalf of Lender and dated of even
date herewith.

 1
 

SECTION
1 - STATED MATURITY; INTEREST AND PRINCIPAL PAYMENTS.

1.1           Payment of Interest.  Commencing on July 1, 2007,
and continuing monthly on the same date of each calendar month thereafter up to
and until the Maturity Date or the Extended Maturity Date, as applicable, an
installment of all accrued and unpaid interest shall be due and payable to
Lender at the Interest Rate or, during any time at which an Event of Default is
continuing at the Default Interest Rate.

1.2           Payments
of Principal.  On the Maturity Date
or the Extended Maturity Date, if such Maturity Date is extended pursuant to
Section 1.3 below, the unpaid principal balance, together with all accrued but
unpaid interest, shall be due and payable in full.

1.3           Payment on Stated Maturity Date.  Any
remaining unpaid Indebtedness shall be due and payable in full at the Maturity
Date provided, however, that Borrower may extend the Maturity Date for one six
month period upon written notice to Lender no less than thirty days prior to
the Maturity Date.

1.4           Computation of Interest.  Interest
under this Note shall be paid as set forth herein  and shall be calculated based on actual days
elapsed and a three hundred sixty (360) day year.

1.5           Method of Payment.  Each payment due hereunder shall
not be deemed received by Lender until received on a Business Day in Federal
funds in lawful money of the United States of America immediately available to
Lender prior to 2:00 p.m. local time at the place then designated by
Lender.  Any payment received on a
Business Day after the time established by the preceding sentence, shall be
deemed to have been received on the immediately following Business Day for all
purposes.

1.6           Application of Payments.  Payments
under this Note shall be applied first to the payment of Default Interest and
other costs and charges due in connection with this Note, as Lender determines
in its sole discretion, then to the payment of accrued but unpaid interest, and
then to reduction of the outstanding principal balance (first to payment of the
current installment and the balance in inverse order of maturity whether or not
then due).  No principal amount repaid
may be reborrowed.  All amounts due under
this Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.

1.7           Prepayment.  The Indebtedness evidenced by this
Note may be prepaid in whole or in part at any time without penalty.

1.8           No
Usury.  Borrower and Lender intend at
all times to comply with applicable state law or applicable United States
federal law.  If the applicable law
(state or federal) is every judicially interpreted so as to render usurious any
amount called for under the Note or contracted for, charged, taken, reserved or
received with respect to the Indebtedness or if 
Lender’s exercise of the option to accelerate the maturity of the Loan
or any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable law, then it is Borrower’s and Lender’s
express intent that all excess amounts theretofore collected by Lender shall be
credited against the unpaid principal and all other Indebtedness.  All sums paid or agreed to be paid to Lender,
to the extent permitted by applicable law, shall (i) characterize any
non-principal payment as an expense, fee, charge or premium rather than as
interest (ii) exclude voluntary pre-payments and the effects thereof, (iii)
amortize, prorate, allocate and spread the total amount of interest through the
full stated term of the Indebtedness so that the rate or amount of interest on
account of the Indebtedness does not exceed the maximum lawful rate from time
to time in effect and applicable to the Indebtedness as long as the
Indebtedness is outstanding.  Lender
agrees that it will not charge or collect unearned interest in excess of the
maximum amount permitted by applicable law in the event that the maturity of
the Loan is accelerated or the Loan is prepaid or required to be prepaid.

 2
 

SECTION 2 - DEFAULT; REMEDIES

2.1           Acceleration.  Lender may, by notice to Borrower at any time
during the existence of an Event of Default, declare immediately due and
payable the entire principal amount outstanding hereunder together with all
interest and other charges due hereunder including, without limitation, all
Default Interest.

2.2           Default
Interest Rate  After an Event of
Default, the Default Interest Rate shall apply, in place of the Interest Rate,
to all amounts outstanding under the Loan. 
Such Default Interest shall be compounded on the monthly anniversary of
such Event of Default until paid in full.

2.3           Remedies.  The remedies of Lender as provided herein, or
in the Deed of Trust, or at law or in equity shall be cumulative and
concurrent, and may be pursued singly, successively, or together at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
occur.  The failure at any time to exercise
any right or remedy shall not constitute a waiver of the right to exercise the
right or remedy at any other time.

SECTION 3 - SECURITY

Borrower’s
obligations under this Note are secured by the Deed of Trust and the Security
Agreement.  The covenants of the Deed of
Trust are incorporated by reference into this Note.

SECTION 4 - WAIVER

Presentment for
payment, demand, notice of dishonor, protest, and notice of protest, stay of
execution and all other defenses to payment generally are hereby waived by Borrower.  No extension or indulgence or release of
collateral granted from time to time shall be construed as a novation of this
Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver
of the rights of Lender herein.

SECTION 5 - EXCULPATION

5.1           Lender
Exculpation.  Notwithstanding
anything to the contrary contained in this Note, neither Lender nor any present
or future shareholder, director, officer or partner of Lender or of any entity
which is now or hereafter a shareholder, director, officer or partner of Lender
(or of any entity which is now or hereafter a shareholder, director, officer or
partner of a shareholder, director, officer or partner of Lender) shall have
any personal liability, directly or indirectly, under or in connection with
this Note or any agreement made or entered into under or in connection with the
provisions of this Note, or any amendment or amendments to any of the foregoing
made at any time or times, heretofore or hereafter, and Borrower hereby forever
and irrevocably waives and releases any and all such personal liability.  In addition, neither Lender nor any successor
or assign of Lender shall have at any time or times hereafter any personal
liability, directly or indirectly, under or in connection with or secured by
any agreement, lease, instrument, encumbrance, claim or right affecting or
relating to the Property or to which the Property is now or hereafter
subject.  The limitation of liability
provided in this paragraph is in addition to, and not in limitation of, any
limitation on liability applicable to Lender provided by law or by any other
contract, agreement or instrument.

5.2           Borrower
Exculpation.  The personal liability
of Borrower to pay the amounts due under the Note shall be limited to Borrower’s
interest in the Collateral (as defined in the Security Agreement), the
Mortgaged Property (as defined in the Deed of Trust) and in any other
collateral given to Lender as security for the Indebtedness.

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SECTION 6 - GOVERNING LAW;
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; SEVERABILITY

6.1           Governing
Law.  This Note shall be governed by,
and construed in accordance with, the substantive law of the State of Colorado.

6.2           SUBMISSION TO JURISDICTION/SERVICE OF PROCESS.  BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF COLORADO.  FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS NOTE, THE SUBJECT MATTER HEREOF,
OR THE LOAN. BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY
WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE,
IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN THE ABOVE-NAMED COURTS
ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF SUCH COURTS,
THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT
THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS  NOTE, THE SUBJECT MATTER HEREOF, OR THE OTHER
LOAN (AS APPLICABLE) MAY NOT BE ENFORCED IN OR BY SUCH COURT AND (B) HEREBY
WAIVES THE RIGHT TO REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED BY A
LENDER IN STATE COURT TO FEDERAL COURT, OR TO REMAND AN ACTION INSTITUTED IN
FEDERAL COURT TO STATE COURT (UNLESS THE FEDERAL COURT HAS NO SUBJECT MATTER
JURISDICTION.  BORROWER HEREBY CONSENTS
TO SERVICE OF PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN
TO IT PURSUANT TO SECTION 7 HEREOF. 
BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO
SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF LENDER.  FINAL JUDGMENT AGAINST BORROWER IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED
OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE
AMOUNT OF INDEBTEDNESS OR LIABILITY OF BORROWER THEREIN DESCRIBED, OR (Y) IN
ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER
JURISDICTION, PROVIDED, HOWEVER, THAT THE LENDER MAY AT ITS
OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST BORROWER OR
ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY
COUNTRY OR PLACE WHERE THE SUBMITTING PARTY OR SUCH ASSETS MAY BE FOUND.

6.3           Waiver
of Jury Trial.  BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT BORROWER MAY
HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH
THIS NOTE OR THE DEED OF TRUST, OR ANY OTHER STATEMENTS OR ACTIONS OF THE
LENDER.  BORROWER ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR THE LENDER TO DISBURSE THE MONEY EVIDENCED
BY THIS NOTE.

6.4           Severability.  If any provision of this Note is held to be
invalid or unenforceable by a court of competent jurisdiction, the other provisions
of this Note shall remain in full force and effect, and shall be liberally
construed in favor of Lender.

 4
 

SECTION 7 - NOTICES

7.1           Notices.  All notices, demands and other communications
(“Notice”) under or concerning this
Agreement shall be in writing.  Each
notice shall be addressed to the intended recipient at its address set forth in
the LLC Agreement and shall be deemed given on the earliest to occur of (1) the
date when the notice is received by the addressee; (2) the first (1st) Business
Day after the notice is delivered to a recognized overnight courier service,
with arrangements made for payment of charges for next Business Day delivery;
or (3) the third Business Day after the notice is deposited in the United
States mail with postage prepaid, certified mail, return receipt requested.

7.2           Any
party to this Agreement may change the address to which notices intended for it
are to be directed by means of notice given to the other party in accordance
with this Section 7.  Any notice under
the Note and or Deed of Trust which does not specify how notices are to be
given shall be given in accordance with this Section 7.

SECTION 8 - MISCELLANEOUS

8.1           Costs.  If, and as often as, this Note is referred to
an attorney for the collection of any sum payable hereunder, or to defend or
enforce any of Lender’s rights hereunder, or to commence an action,
cross-claim, third-party claim or counterclaim by Lender against Borrower
relating to this Note, Borrower agrees to pay to Lender all costs incurred in
connection therewith including reasonable attorney’s fees (including such fees
incurred in appellate, bankruptcy or insolvency proceedings), with or without
the institution of any action or proceeding, and in addition all costs,
disbursements and allowances provided by law.

8.2           Modification.  Neither this Note nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified orally, but only
by an instrument in writing executed by the party against which enforcement of
the termination, amendment, supplement, waiver or modification is sought.

8.3           Successors.  As used herein, the terms “Borrower” and “Lender”
shall be deemed to include their respective successors and assigns whether by
voluntary action of the parties or by operation of law.  All of the rights, privileges and obligations
hereof shall inure to the benefit of and bind such successors and assigns.

8.4           No
Waiver.  No failure or delay by
Lender in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  Without limiting the foregoing, no
disbursement by Lender after a default by Borrower hereunder shall constitute a
waiver of any of the Lender’s remedies established or referred to hereunder or
shall obligate Lender to make any further disbursement.  No waiver, consent or approval of any kind by
Lender shall be effective unless (and it shall be effective only to the extent)
expressly set out in a writing signed and delivered by Lender.  No notice to or demand on Borrower in any
case shall entitle Borrower to any other notice or demand in similar or other
circumstances, nor shall such notice or demand constitute a waiver of the
rights of Lender to any other or further actions.  In its sole discretion, Lender may, at any
time and from time to time, waive any one or more of the requirements contained
herein, but such waiver in any instance or under any particular circumstances
shall not be considered a waiver of such requirement or requirements in any
other instance or under any other circumstance.

8.5           Sole
and Absolute Discretion.  Any option,
consent, approval, discretion or similar right of Lender set forth in this Note
may be exercised by Lender in its sole and absolute discretion, unless the

 5
 

provisions of this Note specifically require such option, consent,
approval, discretion or similar right to be exercised in Lender’s reasonable
discretion.

[Signature follows on next page.]

 6

IN WITNESS
WHEREOF, the undersigned has duly executed and delivered this Note as of the
date first set forth above.

	
   

  	
  BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD CORDILLERA, LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President

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