Document:

2014 Q3 8K re Term Loan Exh 10.2 Guaranty

Exhibit 10.2

FORM OF GUARANTY
GUARANTY (as amended, modified, restated and/or supplemented from time to time, this “Guaranty”), dated as of __, 2014, made by and between each of the undersigned guarantors (each, a “Guarantor” and, collectively, the “Guarantors”) in favor of Deutsche Bank AG New York Branch, as Administrative Agent (together with any successor administrative agent, the “Administrative Agent”), for the benefit of the Creditors (as defined below).  Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H : 
WHEREAS, FelCor/JPM Phoenix Hotel, L.L.C., FelCor Union Square Hotel, L.L.C., FelCor FQ Hotel, L.L.C., DJONT/JPM Phoenix Leasing, L.L.C., and FelCor Union Square Lessee, L.L.C., and FelCor FQ Lessee, L.L.C. (collectively, the “Borrowers”), the lenders from time to time party thereto (the “Lenders”), and the Administrative Agent, have entered into a Credit Agreement, dated as of July 21, 2014 (as amended, modified, restated and/or supplemented from time to time, the “Credit Agreement”), providing for the making of Loans to the Borrowers, all as contemplated therein (the Lenders and the Administrative Agent are herein called the “Creditors”);
WHEREAS, each Borrower is a direct or indirect wholly owned subsidiary of FelCor Lodging Limited Partnership and over 99.5% of FelCor Lodging Limited Partnership is directly or indirectly owned by FelCor Lodging Trust Incorporated;
WHEREAS, it is a condition precedent to the making of Loans to the Borrowers under the Credit Agreement that each Guarantor shall have executed and delivered to the Administrative Agent this Guaranty; 
WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by the Borrowers under the Credit Agreement and, accordingly, desires to execute this Guaranty in order to satisfy the condition described in the preceding paragraph and to induce the Lenders to make Loans to the Borrowers;
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Administrative Agent for the benefit of the Creditors and hereby covenants and agrees with the other Guarantor and the Administrative Agent for the benefit of the Creditors as follows:
1.  GUARANTY.  (a)    Each Guarantor, jointly and severally, irrevocably, absolutely and un-conditionally guarantees as a primary obligor and not merely as surety, to the Creditors the full and prompt payment when due (whether at the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrowers under the Credit Agreement, and (y) all other obligations (including, without limitation, obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due),

liabilities and indebtedness owing by any of the Borrowers to the Creditors under each Loan Document to which any of the Borrowers is a party; (including, without limitation, indemnities, fees and interest thereon (including, without limitation, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the Credit Agreement, whether or not such interest is an allowed claim in any such proceeding) but excluding the obligations of the Borrowers under the Loan Documents to pay Taxes and Other Charges, Insurance Premiums, FF&E Expenditures, Incentive Management Fees and any expenses described in Section 3.02(e) (vi) of the Credit Agreement, to the extent that (i) there are amounts on deposit in the Sweep Account available to pay the same pursuant to Section 3.02(e) of the Credit Agreement or (ii)  there  were amounts on deposit in the Sweep Account available to  pay the same pursuant to Section 3.02(e) of the Credit Agreement (if Administrative Agent already has applied such amount to the Obligation, or otherwise), in each case that Administrative Agent did not release to the Borrowers to pay such obligations), whether now existing or hereafter incurred under, arising out of or in connection with each such Loan Document and the due performance and compliance by each of the Borrowers with all of the terms, conditions, covenants and agreements contained in all such Loan Documents (all such principal, premium, interest, liabilities, indebtedness and obligations under this clause (a), being herein collectively called the “Guaranteed Obligations”);

Each Guarantor understands, agrees and confirms that the Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against the other Guarantor or any Borrower, or against any security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations.  This Guaranty is a guaranty of prompt payment and performance and not of collection.
Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations due or payable by the Borrowers upon the occurrence in respect of any of the Borrowers or any other Loan Party of any of the events specified in Section 10.01(f) of the Credit Agreement, and unconditionally, absolutely and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Creditors, or order, on demand.
2.  LIABILITY OF GUARANTORS ABSOLUTE.  The liability of each Guarantor hereunder is primary, absolute, joint and several, and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrowers whether executed by such Guarantor, the other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation:  (a) any direction as to application of payment by the Borrowers or any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a Guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by any of the Borrowers, (e) the failure of either  Guarantor to receive any benefit from or as a result of its execution, delivery and performance of this Guaranty, (f) any payment made to any Creditor on the indebtedness which any Creditor repays any of the Borrowers pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations 

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hereunder by reason of any such proceeding, (g) any action or inaction by the Creditors as contemplated in Section 5 hereof or (h) any invalidity, rescission, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor.

3.  OBLIGATIONS OF GUARANTORS INDEPENDENT.  The obligations of each Guarantor hereunder are independent of the obligations of the other Guarantor, any other guarantor or any of the Borrowers, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against the other Guarantor, any other guarantor, or any of the Borrowers and whether or not the other Guarantor, any other guarantor or any of the Borrowers be joined in any such action or actions.  Each Guarantor waives (to the fullest extent permitted by applicable law) the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof.  Any payment by any of the Borrowers or other circumstance which operates to toll any statute of limitations as to any of the Borrowers shall operate to toll the statute of limitations as to each Guarantor.

4.  WAIVERS BY GUARANTORS. (a)  Each Guarantor hereby waives (to the fullest extent permitted by applicable law) notice of acceptance of this Guaranty and notice of the existence, creation or incurrence of any new or additional liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, demand for performance, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Creditor against, and any other notice to, any party liable thereon (including such Guarantor, the other Guarantor, any other guarantor or any of the Borrowers) and each Guarantor further hereby waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of reliance by any Creditor upon this Guaranty, and the Guaranteed Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended, modified, supplemented or waived, in reliance upon this Guaranty.

(b)  Each Guarantor waives any right to require the Creditors to:  (i) proceed against any of the Borrowers, the other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from any of the Borrowers, the other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Creditors’ power whatsoever.  Each Guarantor waives any defense based on or arising out of any defense of any of the Borrowers, the other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full in cash of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of any of the Borrowers, the other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any of the Borrowers other than payment in full in cash of the Guaranteed Obligations.  The Creditors may, at their election, foreclose on any collateral serving as security held by the Administrative Agent or the other Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reason-able (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Creditors may have against any of the Borrowers or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash.  Each Guarantor waives any defense arising out of any such election by the Creditors, even though such election operates to impair or extinguish 

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any right of reimbursement, contribution, indemnification or subrogation or other right or remedy of such Guarantor against any of the Borrowers, the other Guarantor, any other guarantor of the Guaranteed Obligations or any other party or any security.

(c)  Each Guarantor has knowledge and assumes all responsibility for being and keeping itself informed of each of the Borrowers’ and the other Guarantor’s financial condition, affairs and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and has adequate means to obtain from each of the Borrowers and the other Guarantor on an ongoing basis information relating thereto and each of the Borrowers’ and the other Guarantor’s ability to pay and perform its respective Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect.  Each Guarantor acknowledges and agrees that (x) the Creditors shall have no obligation to investigate the financial condition or affairs of any of the Borrowers or the other Guarantor for the benefit of such Guarantor nor to advise such Guarantor of any fact respecting, or any change in, the financial condition, assets or affairs of any of the Borrowers or the other Guarantor that might become known to any Creditor at any time, whether or not such Creditor knows or believes or has reason to know or believe that any such fact or change is unknown to such Guarantor, or might (or does) increase the risk of such Guarantor as guarantor hereunder, or might (or would) affect the willingness of such Guarantor to continue as a guarantor of the Guaranteed Obligations hereunder and (y) the Creditors shall have no duty to advise any Guarantor of information known to them regarding any of the aforementioned circumstances or risks.

(d)  Each Guarantor hereby acknowledges and affirms that it understands that to the extent the Guaranteed Obligations are secured by Real Property located in the State of California, such Guarantor shall be liable for the full amount of the liability hereunder notwithstanding foreclosure on such Real Property by trustee sale or any other reason impairing such Guarantor’s or any Creditors’ right to proceed against any Borrower, the other Guarantor or any other guarantor of the Guaranteed Obligations.

(e)  Each Guarantor hereby waives (to the fullest extent permitted by applicable law) all rights and benefits under Section 580a, 580b, 580d and 726 of the California Code of Civil Procedure.  Each Guarantor hereby further waives (to the fullest extent permitted by applicable law), without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to such Guarantor under Sections 2809, 2810, 2815, 2819, 2821, 2839 (except to the extent that performance of the principal obligation guaranteed is duly made as provided in such Section 2839), 2845, 2849, 2850, 2899 and 3433 of the California Civil Code.

(f)  Until the Guaranteed Obligations have been paid in full in cash, each Guarantor waives its rights of subrogation and reimbursement and any other rights and defenses available to such Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, including, without limitation, (1) any defenses such Guarantor may have to this Guaranty by reason of an election of remedies by the Creditors and (2) any rights or defenses such Guarantor may have by reason of protection afforded to any Borrower pursuant to the antideficiency or other laws of California limiting or discharging such Borrower’s indebtedness, including, without limitation, Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.  In furtherance of such 

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provisions, each Guarantor hereby waives all rights and defenses arising out of an election of remedies by the Creditors, even though that election of remedies, such as a nonjudicial foreclosure, destroys such Guarantor’s rights of subrogation and reimbursement against any Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

(g)  Each Guarantor hereby acknowledges and agrees that no Creditor nor any other Person shall be under any obligation (a) to marshal any assets in favor of such Guarantor or in payment of any or all of the liabilities of any Borrower under the Loan Documents or the obligation of such Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or may not be able to pursue itself any right to which such Guarantor hereby waives.

(h)  Each Guarantor warrants and agrees that each of the waivers set forth in Section 3 and in this Section 4 is made with full knowledge of its significance and consequences and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by applicable law.

5.  RIGHTS OF CREDITORS.  Subject to Sections 4 and 13, any Creditor may (except as shall be required by applicable statute and cannot be waived) at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to any Guarantor, without impairing or releasing the obligations or liabilities of any Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

(a)change the manner, place or terms of payment of, and/or change, increase or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including, without limitation, any increase or decrease in the rate of interest thereon or the principal amount thereof), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, increased, accelerated, renewed or altered;

(b)take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property or other collateral by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst;

(c)exercise or refrain from exercising any rights against any of the Borrowers, any other guarantor of any of the Borrowers or others or otherwise act or refrain from acting;

(d)release or substitute any one or more endorsers, Guarantors, other guarantors, the Borrowers or other obligors;

(e)settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any of the Borrowers to creditors of any of the Borrowers other than the Creditors;

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(f)apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any of the Borrowers to the Creditors regardless of what liabilities of any of the Borrowers remain unpaid;

(g)consent to or waive any breach of, or any act, omission or default under, any of the Loan Documents or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Loan Documents or any of such other instruments or agreements;

(h)act or fail to act in any manner which may deprive such Guarantor of its right to subrogation against any of the Borrowers to recover full indemnity for any payments made pursuant to this Guaranty; and/or

(i)take any other action or omit to take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty (including, without limitation, any action or omission whatsoever that might otherwise vary the risk of such Guarantor or constitute a legal or equitable defense to or discharge of the liabilities of a guarantor or surety or that might otherwise limit recourse against such Guarantor).

No invalidity, illegality, irregularity or unenforceability of all or any part of the Guaranteed Obligations, the Loan Documents or any other agreement or instrument relating to the Guaranteed Obligations or of any security or guarantee therefor shall affect, impair or be a defense to this Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full in cash of the Guaranteed Obligations.

6.  CONTINUING GUARANTY.  This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.  No failure or delay on the part of any Creditor 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.  The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Creditor would otherwise have.  No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Creditor to any other or further action in any circumstances without notice or demand.  It is not necessary for any Creditor to inquire into the capacity or powers of any of the Borrowers or any other Loan Party or the officers, directors, partners or agents acting or purporting to act on its or their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

7.  SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS. Any indebtedness of any of the Borrowers now or hereafter held by any Guarantor is hereby subordinated to the Obligations; and such indebtedness of any of the Borrowers to any Guarantor, if the Administrative Agent, after an Event of Default has occurred and is continuing, so requests, 

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shall be collected, enforced and received by such Guarantor as trustee for the Creditors and be paid over to the Creditors on account of the Obligations, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty.  Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any indebtedness of any of the Borrowers to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination.  Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash; provided, that if any amount shall be paid to such Guarantor on account of such subrogation rights at any time prior to the irrevocable payment in full in cash of all the Guaranteed Obligations, such amount shall be held in trust for the benefit of the Creditors and shall forthwith be paid to the Creditors to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents or, if the Loan Documents do not provide for the application of such amount, to be held by the Creditors as collateral security for any Guaranteed Obligations thereafter existing.

8.  GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT.  Notwithstanding anything to the contrary contained elsewhere in this Guaranty, the Creditors agree (by their acceptance of the benefits of this Guaranty) that this Guaranty may be enforced only by the action of the Administrative Agent, in each case acting upon the instructions of the Required Lenders and that no other Creditor shall have any right individually to seek to enforce this Guaranty or to realize upon the security to be granted by the Collateral Documents, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent for the benefit of the Creditors upon the terms of this Guaranty and the Collateral Documents.  The Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner, member or stockholder of any Guarantor.  It is understood and agreed that the agreement in this Section 8 is among and solely for the benefit of the Creditors and that, if the Required Lenders so agree (without requiring the consent of any Guarantor), this Guaranty may be directly enforced by any Creditor.

9.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS.  In order to induce the Lenders to make Loans to the Borrowers pursuant to the Credit Agreement, each Guarantor represents, warrants and covenants that:

(a)    such Guarantor (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization and (ii) has the corporate, trust, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and presently proposes to engage;

(b)    such Guarantor has the corporate, trust, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of this Guaranty and has taken all necessary corporate, trust, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of this Guaranty;

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(c)    such Guarantor has duly executed and delivered this Guaranty, and this Guaranty constitutes the legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, subject to applicable Debtor Relief Laws and general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law);

(d)    neither the execution, delivery or performance by such Guarantor of this Guaranty, nor compliance by it with the terms and provisions hereof, will (i) contravene any provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality or (ii) conflict with, violate or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Collateral Documents) upon any of the property or assets of such Guarantor pursuant to the terms of its Organizational Documents, or any indenture, mortgage, deed of trust, loan agreement, credit agreement, management agreement, franchise agreement or any other agreement, contract or instrument to which such Guarantor is a party or by which it or any of its property or assets is bound or to which it may be subject, in each case, except where non-compliance would not reasonably be expected to have a Guarantor Material Adverse Effect.  (As used in this Section 9, a “Guarantor Material Adverse Effect” shall mean (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or condition (financial or otherwise) of Guarantors, taken as a whole (which shall not include any such change or effect that affects the hotel or hospitality industries generally); (b) a material impairment of the rights and remedies of Administrative Agent or any Lender under this Guaranty, or of the ability of either Guarantor to perform its obligations under this Guaranty; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against either Guarantor of this Guaranty);

(e)    no order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made prior to the date when required and which remain in full force and effect), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Guaranty by such Guarantor or (ii) the legality, validity, binding effect or enforceability of this Guaranty, in each case, except where non-compliance would not reasonably be expected to have a Guarantor Material Adverse Effect;

(f)    there are no actions, suits or proceedings pending or, to such Guarantor’s knowledge, threatened (i) with respect to this Guaranty or (ii) that could reasonably be expected to have a material adverse effect on the rights or remedies of the Creditors or on the ability of such Guarantor to perform its obligations to the Creditors hereunder; and

(g)    an executed (or conformed) copy of each of the Loan Documents has been made available to a senior officer of such Guarantor and such officer is familiar with the contents thereof.

10.  EXPENSES.  The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of the Administrative Agent and each other Creditor 

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in connection with the enforcement of this Guaranty and the protection of the Creditors’ rights hereunder and any amendment, waiver or consent relating hereto (including, in each case, without limitation, the reasonable out-of-pocket fees and disbursements of counsel employed by the Administrative Agent and each other Creditor).

11.  BENEFIT AND BINDING EFFECT.  This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Creditors and their successors and assigns.

12.  AMENDMENTS; WAIVERS.  Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except with the written consent of each Guarantor directly affected thereby (it being understood that the release of any Guarantor hereunder shall not constitute a change, waiver, discharge or termination affecting any Guarantor other than the Guarantor so added or released) and with the written consent of the Required Lenders (or, to the extent required by Section 12.01 of the Credit Agreement, with the written consent of each Lender).

13.  SET OFF.  In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include any “Event of Default” as defined in the Credit Agreement), each Creditor is hereby authorized, at any time or from time to time, without prior notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Creditor to or for the credit or the account of such Guarantor, against and on account of the Guaranteed Obligations owing to such Creditor under this Guaranty, irrespective of whether or not such Creditor shall have made any demand hereunder and although said Guaranteed Obligations shall be contingent or unmatured.  Notwithstanding anything to the contrary contained in this Guaranty, at any time that the Guaranteed Obligations shall be secured by any Real Property located in the State of California, no Creditor shall exercise any right of set-off, lien or counterclaim or take any court or administrative action or institute any proceedings to enforce any provision of this Guaranty without the prior consent of the Administrative Agent or the Required Lenders or, to the extent required by Section 12.01 of the Credit Agreement, all of the Lenders, if such setoff or action or proceeding would or might (pursuant to Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure or Section 2924 of the California Civil Code, if applicable, or otherwise) affect or impair the validity, priority, or enforceability of the liens granted to the Administrative Agent pursuant to the Collateral Documents or the enforceability of the Guaranteed Obligations hereunder, and any attempted exercise by any Creditor or the Administrative Agent of any such right without obtaining such consent of the Required Lenders or the Administrative Agent shall be null and void. It is understood and agreed that the foregoing sentence of this Section 13 is for the sole benefit of the Creditors and may be amended, modified or waived in any respect by the Required Lenders (without any requirement of prior notice to or consent by any Loan Party or any other Person) and does not constitute a waiver of any rights against any Loan Party or against any Collateral.  Each Creditor (by its acceptance of the benefits hereof) acknowledges and agrees that the provisions of this Section 13 are subject to the sharing provisions set forth in Section 2.10 of the Credit Agreement.  Each Creditor agrees to promptly notify the 

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applicable Guarantor and the Administrative Agent after any set-off made hereunder; provided, however, that the failure to give such notice shall not affect the validity of such set-off.

14.  NOTICE.  Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or over-night courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent or any Guarantor shall not be effective until received by the Administrative Agent or such Guarantor, as the case may be.  All notices and other communications shall be in writing and addressed to such party at (i) in the case of any Creditor, as provided in the Credit Agreement, and (ii) in the case of any Guarantor, at its address set forth opposite its signature page below; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing.

15.  REINSTATEMENT.  If any claim is ever made upon any Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including, without limitation, any of the Borrowers), then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise relating to the repayment of all or any part of any of the Guaranteed Obligations shall be binding upon such Guarantor, notwithstanding any revocation hereof or the cancellation of any Note or any other instrument evidencing any liability of any of the Borrowers, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

16.  CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY.  (a)  THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.  Any legal action or proceeding with respect to this Guaranty or any other Loan Document to which any Guarantor is a party may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York, in each case located within the City of New York, and, by execution and delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  Each Guarantor hereby further irrevocably waives any claim that any such courts lack jurisdiction over such Guarantor, and agrees not to plead or claim, in any legal action or proceeding with respect to this Guaranty or any other Loan Document to which such Guarantor is a party brought in any of the aforesaid courts, that any such court lacks jurisdiction over such Guarantor.  Each Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to each Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing.  Each Guarantor hereby irrevocably waives any objection to such service of process and further irrevocably waives 

10

and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Loan Document to which such Guarantor is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any of the Creditors to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against each Guarantor in any other jurisdiction.

(b)  Each Guarantor hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Loan Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)  EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

17.  COUNTERPARTS.  This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  A set of counterparts executed by all the parties hereto shall be lodged with the Borrowers and the Administrative Agent.

18.  PAYMENTS.  All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the Borrowers under Section 2.09 of the Credit Agreement.

19.  HEADINGS DESCRIPTIVE.  THE HEADINGS OF THE SEVERAL SECTIONS OF THIS GUARANTY ARE INSERTED FOR CONVENIENCE ONLY AND SHALL NOT IN ANY WAY AFFECT THE MEANING OR CONSTRUCTION OF ANY PROVISION OF THIS GUARANTY.

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written.
	
		
	Address:

545 E. John Carpenter Freeway,
Suite 1300
Irving, Texas  75062
Tel:  972-444-4900
Fax:  972-444-4949
	FELCOR LODGING TRUST INCORPORATED,
as a Guarantor

By:___________________________________,
      Name:
      Title:

	 
	 

	Address:

545 E. John Carpenter Freeway,
Suite 1300
Irving, Texas  75062
Tel:  972-444-4900
Fax:  972-444-4949
	FELCOR LODGING LIMITED PARTNERSHIP,
as a Guarantor

By:FelCor Lodging Trust Incorporated,
its general partner

By:___________________________________,
      Name:
      Title:

	
		
	Accepted and Agreed to:
	 

	

DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent

By:___________________________________,
      Name:
      Title:
	 

	

By:___________________________________,
      Name:
      Title:
	 

122014 Q3 8K re Term Loan Exh 10.3 Mortgage

Exhibit 10.3

[FORM OF] MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
between
[GROUND LESSEE/FEE OWNER]
AND [OPERATING LESSEE],
as Mortgagor
and
DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent, as Mortgagee

	
		
	Dated:
	As of  _____, 2014

	Location:
	 

	County:
	 

PREPARED BY AND UPON
RECORDATION RETURN TO:

White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention:  Leila Rachlin, Esq.

	
				
	ARTICLE I GRANTS OF SECURITY
	2
	

	Section 1.01
	Property Mortgaged
	2
	

	Section 1.02
	Assignment of Rents
	6
	

	Section 1.03
	Security Agreement
	6
	

	Section 1.04
	Fixture Filing
	6
	

	Section 1.05
	Conditions to Grant
	7
	

	Section 1.06
	Grants to Mortgagee
	7
	

	Section 1.07
	Homestead
	7
	

	ARTICLE II OBLIGATIONS SECURED
	7
	

	Section 2.01
	Obligations
	7
	

	Section 2.02
	Payment of Obligations
	8
	

	Section 2.03
	Incorporation by Reference
	8
	

	ARTICLE III PROPERTY REPRESENTATIONS AND COVENANTS
	8
	

	Section 3.01
	Insurance
	8
	

	Section 3.02
	Taxes and Other Charges
	8
	

	Section 3.03
	Leases
	8
	

	Section 3.04
	Warranty of Title
	8
	

	Section 3.05
	Payment for Labor and Materials
	8
	

	Section 3.06
	Maintenance and Use of Property:  Waste:  Use
	9
	

	ARTICLE IV FURTHER ASSURANCES
	10
	

	Section 4.01
	Compliance with Credit Agreement
	10
	

	Section 4.02
	Authorization to File Financing Statements:  Power of Attorney
	10
	

	Section 4.03
	Recording of Security Instrument, Etc.
	10
	

	ARTICLE V Due On Sale/Encumbrance
	10
	

	Section 5.01
	No Sale/Encumbrance
	10
	

	ARTICLE VI PREPAYMENT; RELEASE OF PROPERTY
	11
	

	Section 6.01
	Prepayment
	11
	

	Section 6.02
	Release of Property
	11
	

	ARTICLE VII DEFAULT
	11
	

	Section 7.01 
	Event of Default
	11
	

	ARTICLE VIII RIGHTS AND REMEDIES UPON DEFAULT
	11
	

	Section 8.01
	Remedies
	11
	

	Section 8.02
	Application of Proceeds
	14
	

	Section 8.03
	Right to Cure Defaults
	14
	

	Section 8.04
	Actions and Proceedings
	15
	

	Section 8.05
	Recovery of Sums Required to be Paid
	15
	

	Section 8.06
	Additional Provisions
	15
	

	Section 8.07
	Other Rights, Etc.
	15
	

	Section 8.08
	Right to Release any Portion of the Property
	16
	

	Section 8.09
	Right of Entry
	16
	

	Section 8.10
	Bankruptcy
	16
	

	Section 8.11
	Subrogation
	17
	

	ARTICLE IX INDEMNIFICATIONS
	17
	

	Section 9.01
	General Indemnification
	17
	

	Section 9.02
	Mortgage and/or Intangible Tax
	18
	

	Section 9.03
	Environmental Covenants
	18
	

	Section 9.04
	Mortgagee's Rights
	18
	

	
				
	ARTICLE X WAIVERS AND OTHER MATTERS
	18
	

	Section 10.01
	Waiver of Counterclaim
	18
	

	Section 10.02
	Mashalling and Other Matters
	18
	

	Section 10.03
	Waiver of Notice
	18
	

	Section 10.04
	Waiver of Statute of Limitations
	19
	

	Section 10.05
	Sole Discretion of Mortgagee
	19
	

	Section 10.06
	Waiver of Trial by Jury
	19
	

	Section 10.07
	Waiver of Foreclosure Defense
	19
	

	Section 10.08
	MORTGAGOR'S KNOWLEDGE
	19
	

	Section 10.09
	Usury Savings Provisions
	19
	

	ARTICLE XI CROSS COLLATERALIZATION
	20
	

	Section 11.01
	Cross-Collateralization
	20
	

	ARTICLE XII MORTGAGEE AND NOTICES
	21
	

	Section 12.01
	Failure to Act
	21
	

	Section 12.02
	Notices
	21
	

	ARTICLE XIII APPLICABLE LAWS
	21
	

	Section 13.01
	Governing Laws:  Jurisdiction:  Etc.
	21
	

	Section 13.02
	Provisions Subject to Applicable Laws
	22
	

	ARTICLE XIV DEFINITIONS
	22
	

	Section 14.01
	General Definitions
	22
	

	ARTICLE XV MISCELLANEOUS PROVISIONS
	23
	

	Section 15.01
	No Oral Change
	23
	

	Section 15.02
	Successors and Assigns
	23
	

	Section 15.03
	Inapplicable Provisions
	23
	

	Section 15.04
	Headings, Etc.
	23
	

	Section 15.05
	Number and Gender
	23
	

	Section 15.06
	Entire Agreement
	23
	

	Section 15.07
	Limitation on Mortgagee's or Lenders' Responsibility
	23
	

	ARTICLE XVI STATUS OF MORTGAGOR
	24
	

	Section 16.01
	Status of Mortgagor
	24
	

	ARTICLE XVII INTENTIONALLY OMITTED
	24
	

	ARTICLE XVIII GROUND LEASE AND OPERATING LEASE PROVISIONS
	24
	

	Section 18.01
	No Merger of Fee and Leasehold Estates:  Releases
	24
	

	Section 18.02
	Mortgagor's Acquisition of Fee Estate
	24
	

	Section 18.03
	Rejection of the Ground Lease
	25
	

	ARTICLE XIX STATE SPECIFIC PROVISIONS
	25
	

	Section 19.01
	Inconsistencies
	25
	

Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing
This Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing (this “Security Instrument”) is made as of ______, 2014 (the “Effective Date”), by [________], a [______], and [_______________], a [_________] (together and together with their permitted successors and assigns, individually or collectively (as the context requires) referred to herein as “Mortgagor”), whose address is [_______________________], as mortgagor, for the benefit of DEUTSCHE BANK AG NEW YORK BRANCH, (“DB”) as Administrative Agent (defined below) for the benefit of the Lenders (defined below) from time to time parties to the Credit Agreement (defined below) (together with its successors and assigns, “Mortgagee”), whose address is 60 Wall Street, New  York, New York 10005, as mortgagee.  All capitalized terms not defined herein shall have the respective meanings set forth in the Credit Agreement (defined below).
Recitals:
		
	(A)
	FELCOR UNION SQUARE HOTEL, L.L.C., a Delaware limited liability company (“FelCor Hotel”); FELCOR/JPM PHOENIX HOTEL, L.L.C., a Delaware limited liability company (“FelCor Phoenix”) (FelCor Hotel and FelCor Phoenix, together the “Fee Owners”, and each a “Fee Owner”); FELCOR FQ HOTEL, L.L.C., a Delaware limited liability company (“FelCor FQ” or “Ground Lessee”); FELCOR FQ LESSEE, L.L.C., a Delaware limited liability company (“FQ Lessee”); DJONT/JPM PHOENIX LEASING, L.L.C., a Delaware limited liability company (“DJONT Phoenix”); and FELCOR UNION SQUARE LESSEE, L.L.C., a Delaware corporation (“Union Square Lessee”) (FQ Lessee, DJONT Phoenix and Union Square Lessee, together the “Operating Lessees” and each an “Operating Lessee”) (Fee Owners, Ground Lessee and Operating Lessees to be referred to collectively as “Borrowers” and each, a “Borrower”), the lenders from time to time party thereto (collectively or individually as the context may require together with each of their respective successors and assigns, the “Lenders”) and DB, as administrative agent (together with any successor administrative agent, the “Administrative Agent”) for the Lenders have entered into that certain Credit Agreement dated as of July 21, 2014 (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Credit Agreement”).

		
	(B)
	Under the terms of the Credit Agreement, the Lenders have agreed, to make loans to and for the account of Borrowers (collectively, the “Loan”), which Loan may be evidenced by, among other things, certain promissory notes executed in connection with the Credit Agreement (such promissory note or promissory notes, together with all extensions, renewals, replacements, restatements or other modifications thereof, whether one or more being hereinafter collectively referred to as the “Notes”).  

		
	(C)
	Mortgagor is required by the Credit Agreement to grant to Mortgagee as security for the payment and performance of the Obligations (as defined below) a valid, enforceable, first priority lien on the Property (as defined below).

		
	(D)
	Lenders’ commitments under the Credit Agreement and the Notes to make advances of the Loan shall be in the aggregate maximum principal amount of $140,000,000, and it is the intention of Mortgagor and Mortgagee that this Security Instrument secure the payment of all such amounts and that all amounts be included in Obligations secured hereby.

		
	(E)
	This Security Instrument secures the Obligations.

(F)    It is in the best interest of Mortgagor to execute this Security Instrument inasmuch as Mortgagor will derive substantial direct and indirect benefits from the Loan

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ARTICLE I

GRANTS OF SECURITY
Section 1.01    Property Mortgaged.  Pursuant to the terms of Section 1.05 below, Mortgagor, for good and valuable consideration, does hereby irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to Mortgagee and its successors and assigns, with power of sale (subject to  applicable law) and grant to Mortgagee and its successors and assigns a security interest in and to all right, title and interest of Mortgagor in and to the following property, rights, interests, and estates now owned or hereafter acquired by Mortgagor (collectively, the “Property”):
(a)    Land.  The real property described in Exhibit A attached hereto and made a part hereof (collectively, the “Land”);
(b)    [Ground Lease.  That certain Ground Lease dated as of [description of ground lease] (as amended, restated or otherwise modified from time to time, the “Ground Lease”) and the leasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Ground Lease and all credits, deposits, options, privileges and rights of [________] as tenant under the Ground Lease, including but not limited to, options to purchase, if any, rights of first refusal, if any, and the right, if any, to renew or extend the Ground Lease for a succeeding term or terms and also including all the right title, claim or demand whatsoever of [_______] either in law or in equity, in possession or expectancy, of, in and to, the Property or any part thereof, and also including, all of [______] ’s rights, as tenant under the Ground Lease, under Section 365(h)(1) of the Bankruptcy Code, Title 11 U.S.C.A. §101 et seq. (as amended or modified from time to time, the “Bankruptcy Code”), including, without limitation, (i) its right to elect to remain in possession of the leasehold estate under the Ground Lease or to terminate or treat the Ground Lease as terminated, each in the event (x) of the bankruptcy, reorganization or insolvency of the lessor thereunder, and (y) the rejection of the Ground Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code and (ii) all of its claims, rights to damages and rent offsets and any other remedies arising from such rejection of the Ground Lease;]
(c)    Operating Lease.  That certain Operating Lease dated as of [description of operating lease] (as amended, restated or otherwise modified from time to time, the “Operating Lease”) and the leasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Operating Lease and all credits, deposits, options, privileges and rights of [________] as tenant under the Operating Lease, including but not limited to, options to purchase, if any, rights of first refusal, if any, and the right, if any, to renew or extend the Operating Lease for a succeeding term or terms and also including all the right title, claim or demand whatsoever of [_______] either in law or in equity, in possession or expectancy, of, in and to, the Property or any part thereof, and also including, all of [______] ’s rights, as tenant under the Operating Lease, under Section 365(h)(1) of the Bankruptcy Code,  including, without limitation, (i) its right to elect to remain in possession of the leasehold estate under the Operating Lease or to terminate or treat the Operating Lease as terminated, each in the event (x) of the bankruptcy, reorganization or insolvency of the lessor thereunder, and (y) the rejection of the Operating Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code and (ii) all of its claims, rights to damages and rent offsets and any other remedies arising from such rejection of the Operating Lease;

2

(d)    Additional Land.  All additional lands, estates and development rights hereafter acquired by Mortgagor for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the Lien of this Security Instrument;
(e)    Improvements.  The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the “Improvements”);
(f)    Easements.  All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, mineral rights, oil and gas rights and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements including, but not limited to, those arising under and by virtue of the Ground Lease and the reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Mortgagor of, in and to the Land and the Improvements, and every part and parcel thereof, with the appurtenances thereto;
(g)    Fixtures and Personal Property.  All machinery, equipment, fixtures (including, but not limited to, all heating, air-conditioning, plumbing, lighting, communications and elevator fixtures, inventory and goods), inventory and articles of personal property and accessions thereof and renewals, replacements thereof and substitutions therefor (including, but not limited to, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, Venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets, glassware, silverware, food carts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers, icemakers, radios, television sets, intercom and paging equipment, electric and electronic equipment, dictating equipment, private telephone systems, medical equipment, potted plants, heating, lighting and plumbing fixtures, fire prevention and extinguishing apparatus, cooling and air-conditioning systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other customary hotel equipment and other tangible property of every kind and nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter located upon the Land or the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (hereinafter collectively called the “Personal Property”), and the right, title and interest of Mortgagor in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the “Uniform Commercial Code”), or equipment leases superior in priority to the Lien of this Security Instrument and all proceeds and products of all of the above;

3

(h)    Leases and Rents.  All existing and future leases, subleases, rental agreements, registration cards and agreements, if any, and other agreements whether or not in writing affecting the use, enjoyment or occupancy of the Land and/or the Improvements heretofore or hereafter entered into (including, without limitation, the Operating Lease) and all extensions, amendments and modifications thereto, whether before or after the filing by or against Mortgagor of any petition for relief under Creditor’s Rights Laws (defined below) (collectively, the “Leases”) and all right, title and interest of Mortgagor, its successors and assigns therein and thereunder, including, without limitation, any guaranties of the lessees’ obligations thereunder, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues, registration fees, if any, and profits (including all oil and gas or other mineral royalties and bonuses and all rents, revenues, bonus money, royalties, rights and benefits accruing to Mortgagor under all present and future oil, gas and mineral leases on any parts of the Land and the Improvements), from the Land and the Improvements, all income, rents, room rates, issues, profits, revenues, deposits, accounts and other benefits from the operation of the hotel on the Land and/or the Improvements, including, without limitation, all revenues and credit card receipts collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet rooms and recreational facilities and otherwise, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of sale, lease, sublease, license, concession or other grant of the right of the possession, use or occupancy of all or any portion of the Land and/or Improvements, or personalty located thereon, or rendering of services by Mortgagor or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others including, without limitation, from the rental of any office space, retail space, commercial space, guest room or other space, halls, stores or offices, including any deposits securing reservations of such space, exhibit or sales space of every kind, license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance relating to the use, enjoyment or occupancy of the Land and/or the Improvements whether paid or accruing before or after the filing by or against Mortgagor of any petition for relief under Creditors Rights Laws (the “Rents”) and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Obligations.  As used herein, the term “Creditors Rights Laws” shall mean any existing or future Laws of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts or debtors;
(i)    Insurance Proceeds.  All insurance proceeds in respect of the Property under any insurance policies covering the Property, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property (collectively, the “Insurance Proceeds”);
(j)    Condemnation Awards.  All condemnation awards, including interest thereon, which may heretofore and hereafter be made with respect to the Property by reason of any taking or condemnation, whether from the exercise of the right of eminent domain (including, but not limited to, any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property (collectively, the “Awards”);
(k)    Tax Certiorari.  All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;

4

(l)    Rights.  The right, in the name and on behalf of Mortgagor, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Mortgagee or Lenders in the Property;
(m)    Agreements.  All other agreements, management agreements, operating agreements, contracts, certificates, instruments, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of any part of the Land and Improvements or any business or activity conducted on any part of the Land and Improvements including, but not limited to, the Management Agreement to which the Operating Lessee under the Operating Lease is a party and any and all agreements executed in connection therewith, and all right, title and interest of Mortgagor therein and thereunder;
(n)    Intangibles.  All trade names, trademarks, service marks, logos, copyrights, goodwill, books and records, tenant or guest lists, advertising materials, telephone exchange numbers identified in such materials, and all other general intangibles relating to or used in connection with the operation of the Land, the Improvements and the Personal Property;
(o)    Mortgagor Accounts.  All right, title and interest of Mortgagor, if any, arising from the operation of the Land and the Improvements in and to all payments for goods or property sold, leased or occupied or for services rendered, whether or not yet earned by performance, and not evidenced by an instrument or chattel paper, (hereinafter referred to as “Accounts Receivable”) including, without limiting the generality of the foregoing, (i) all accounts, contract rights, book debts, and notes arising from the operation of a hotel on the Land and the Improvements or arising from the sale, lease or exchange of goods or other property and/or the performance of services, (ii) Mortgagor’s rights to payment from any consumer credit/charge card organization or entities which sponsor and administer such cards as the American Express Card, the Visa Card and the MasterCard or other similar credit cards, (iii) Mortgagor’s rights in, to and under all purchase orders for goods, services or other property, (iv) Mortgagor’s rights to any goods, services or other property represented by any of the foregoing, (v) monies due to or to become due to Mortgagor under all contracts for the sale, lease or exchange of goods or other property and/or the performance of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by performance on the part of Mortgagor) and (vi) all collateral security and guaranties of any kind given by any Person with respect to any of the foregoing.  Accounts Receivable shall include those now existing or hereafter created, substitutions therefor, proceeds (whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom;
(p)    Reserve Accounts.  All reserves, working capital, escrows and deposit accounts required under the Credit Agreement, the other Loan Documents, the Ground Lease, the Operating Lease, any management agreement or any other agreement, and all cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property held therein from time to time and all proceeds, products, distributions or dividends or substitutions thereon and thereof;
(q)    Causes of Action.  All causes of action and claims (including, without limitation, all causes of action or claims arising in tort, by contract, by fraud or by concealment of material fact) against any Person for damages or injury to the Property or in connection with any transactions financed in whole or in part by the proceeds of the Loan (“Cause of Action”);

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(r)    Security Interests.  All right, title and interest of the lessor under the Operating Lease as secured party in the personal property and collateral pursuant to any security interest granted by lessees or by operation of Laws thereunder (the “Lease Security Agreements”);
(s)    Proceeds.  All proceeds of any of the foregoing items set forth in subsections (a) through (r) including, without limitation, Insurance Proceeds and Awards and Causes of Action, into cash or liquidation claims; and
(t)    Other Rights.  Any and all other rights of Mortgagor in and to the items set forth in subsections (a) through (s) above.
Section 1.02    Assignment of Rents.  Mortgagor hereby absolutely and unconditionally assigns to Mortgagee all of Mortgagor’s right, title and interest in and to all current and future Leases and Rents; it being intended by Mortgagor that this assignment constitutes a present, absolute assignment and not an assignment for additional security only.  Nevertheless, subject to the terms of the Credit Agreement and Section 8.01(g) of this Security Instrument, Mortgagee grants to Mortgagor a revocable license to (i) collect, receive, use and enjoy the Rents and, except as otherwise permitted under the Credit Agreement, Mortgagor shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such sums, and (ii) enforce the terms of the Leases.
Section 1.03    Security Agreement.  This Security Instrument is both a real property mortgage and a “security agreement” within the meaning of the Uniform Commercial Code.  The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Mortgagor in the Property.  By executing and delivering this Security Instrument, Mortgagor hereby grants to Mortgagee, as security for the Obligations, a security interest in all Property, including without limitation, the Personal Property, to the full extent that such Property may be subject to the Uniform Commercial Code (such portion of the Property subject to the Uniform Commercial Code, the “Collateral”).
Section 1.04    Fixture Filing.  Without in any manner limiting the generality of any of the other provisions of this Security Instrument: (a) some portions of the goods described or to which reference is made herein are or are to become fixtures on the Land described or to which reference is made herein or on Exhibit A attached to this Security Instrument; (b) this Security Instrument is to be filed of record in the real estate records as a financing statement and shall constitute a “fixture filing” for purposes of the Uniform Commercial Code; and (c) the record owner of the Land is _____________.  Information concerning the security interest herein granted may be obtained at the addresses set forth on the first page hereof.  Upon filing, this Security Instrument shall be effective as a financing statement filed as a fixture filing with respect to all fixtures included within the Property and is to be filed for record in the real property or other applicable records in the office of the County Clerk or Recorder, as applicable, where the Property (including said fixtures) is situated.  Upon filing, this Security Instrument shall also be effective as a financing statement covering as-extracted minerals or the like (including oil and gas) and accounts subject to the applicable provisions of the Uniform Commercial Code of the State in which the Property is located, if applicable.  The address of the Debtor (Mortgagor) is set forth on the first page hereof and the address of the Secured Party (Mortgagee) is set forth below.  In that regard, the following information is provided:
	
		
	Name of First Debtor:
	[_____________]

	Type of Organization:
	[_____________]

	State:
	Delaware

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	Organizational ID Number:
	[_____________]

	Name of Secured Party:
	Deutsche Bank AG New York Branch, as Administrative Agent

	Address of Secured Party:
	60 Wall Street, New York, New York 10005

	Name of Second Debtor:
	[____________________]

	Type of Organization:
	[____________________]

	State:
	Delaware

	Organizational ID Number:
	[_____________]

	Name of Secured Party:
	Deutsche Bank AG New York Branch, as Administrative Agent

	Address of Secured Party:
	60 Wall Street, New York, New York 10005

Section 1.05    Conditions to Grant.  To have and to hold the above granted and described Property unto Mortgagee and to the use and benefit of Mortgagee and Lenders and their successors and assigns, forever; provided, however, these presents are upon the express condition that, upon final payment and performance of the Obligations or the full and final release of this Security Instrument, these presents and the estate hereby granted shall cease, terminate and be void; provided, however, that all indemnities set forth in this Security Instrument (including, without limitation, Section 9.01 hereof) shall survive such termination.
Section 1.06    Grants to Mortgagee.  This Security Instrument and the grants, assignments and transfers made to Mortgagee in this Article I shall inure to Mortgagee solely in its capacity as Administrative Agent under the Credit Agreement.
Section 1.07    Homestead.  None of the Property forms any part of any property owned, used or claimed by Mortgagor as a residence or business homestead and is not exempt from forced sale, to the extent applicable, under the Laws of the state in which Land and Improvements are located.  Mortgagor hereby disclaims and renounces each and every claim to the Property as a homestead.
ARTICLE II
OBLIGATIONS SECURED
Section 2.01    Obligations.  This Security Instrument and the grants, assignments and transfers made in Article I are given for the purpose of securing the complete payment or performance in full when due of:  all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding (collectively, the “Obligations”); it being acknowledged and agreed that “Obligations”, includes, without limitation, any advances made by Mortgagee or any Lender for the construction, improvement, operation, 

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repair, maintenance, preservation or operation of the Property, whether such future advances are obligatory or are made at Mortgagee’s or such Lender’s option, for any purpose.
Section 2.02    Payment of Obligations.  Mortgagor will pay and perform the Obligations at the time and in the manner provided in the Credit Agreement and the other Loan Documents, subject to and as required by the terms and provisions thereof.
Section 2.03    Incorporation by Reference.  All the covenants, conditions and agreements contained in (a) the Credit Agreement (including, without limitation, the exculpatory provisions set forth in Section 12.09 thereof), (b) the Notes and (c) all and any of the other Loan Documents, are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein.
ARTICLE III

PROPERTY REPRESENTATIONS AND COVENANTS
Mortgagor represents, warrants, covenants and agrees as follows:
Section 3.01    Insurance.  Mortgagor shall obtain and maintain, or cause to be obtained and maintained, in full force and effect at all times insurance with respect to Mortgagor and the Property as required pursuant to the Credit Agreement.
Section 3.02    Taxes and Other Charges.  Mortgagor shall pay all real estate and personal property taxes, assessments, water rates or sewer rents (collectively, “Taxes”), ground rents, maintenance charges, impositions (other than Taxes), and any Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof in accordance with the Credit Agreement.
Section 3.03    Leases.  Mortgagor shall not (and shall not permit any other applicable Person to) enter into or modify any Leases for all or any portion of the Property except in accordance with the provisions of the Credit Agreement.
Section 3.04    Warranty of Title.  Mortgagor has good and marketable title to the Property [(other than the fee simple estate in the Land)], subject only to the Permitted Liens, and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same.  [Mortgagor possesses an unencumbered leasehold estate under the Ground Lease, except for the Permitted Liens.] [Operating Lessee] possesses an unencumbered leasehold estate under the Operating Lease except for the Permitted Liens.    Subject to the Permitted Liens, Mortgagor shall forever warrant, defend and preserve the title and the validity and priority of the Lien of this Security Instrument and shall forever warrant and forever defend the same to Mortgagee and/ or Lenders, as applicable, against the claims of all Persons whatsoever.  This Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority Lien on the Property, subject only to Permitted Liens and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Liens.
Section 3.05    Payment for Labor and Materials.  (a)  Subject to Section 3.05(b) below, Mortgagor will promptly pay (or cause to be paid) when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property (each, a “Work Charge”) and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any Lien or security interest other than the Permitted Liens, even though inferior to the Liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other 

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or additional Lien or security interest other than the Liens or security interests hereof except for the Permitted Liens.  Mortgagor represents there are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.
(b)    After prior written notice to Mortgagee, Mortgagor, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the validity of any Work Charge, the applicability of any Work Charge to Mortgagor or to the Property or any alleged non-payment of any Work Charge, provided that (i) no Event of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Mortgagor is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost during the duration of such legal proceeding; (iv) Mortgagor shall promptly upon final determination thereof pay (or cause to be paid) any such Work Charge determined to be valid, applicable and unpaid; (v) such proceeding shall suspend the collection of such contested Work Charge from the Property or Mortgagor shall have paid the same (or shall have caused the same to be paid) under protest; and (vi) Mortgagor shall furnish (or cause to be furnished) such security as may be required in the proceeding by applicable Laws or Legal Requirements, or as may be reasonably requested by Mortgagee, to insure payment of such Work Charge, together with all interest and penalties payable in connection therewith.  Mortgagee may apply any such security or part thereof, as necessary to pay for such Work Charge at any time when, in the sole but reasonable judgment of Mortgagee, the validity, applicability and non-payment of such Work Charge is finally established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost during or as a result of such legal proceeding or Work Charge.
Section 3.06    Maintenance and Use of Property:  Waste:  Use.  Mortgagor shall cause the Property to be maintained in a good and safe condition and repair in accordance with the terms of the Credit Agreement.  Except as otherwise permitted under the Credit Agreement, the Improvements and the Personal Property shall not be removed, demolished or materially altered or expanded (except for normal replacement of the Personal Property) without the consent of Mortgagee.  Subject to the terms of the Credit Agreement, Mortgagor shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be affected by any condemnation and shall complete and pay for any structure at any time in the process of construction or repair on the Land.  Subject to the terms of the Credit Agreement, Mortgagor shall not initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Property or any part thereof.  Subject to the provisions of the Credit Agreement with respect thereto, if under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Mortgagor will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express written consent of Mortgagee.  Mortgagor shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or give cause for cancellation of any policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security of this Security Instrument.  Mortgagor will not, without the prior written consent of Mortgagee, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof.  The Property shall be used only for a hotel and any ancillary uses relating thereto, and for no other uses without the prior written consent of Mortgagee.

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ARTICLE IV

FURTHER ASSURANCES
Section 4.01    Compliance with Credit Agreement.  Mortgagor shall comply with all covenants set forth in the Credit Agreement relating to acts or other further assurances to be made on the part of Mortgagor in order to protect and perfect the Lien or security interest hereof upon, and in the interest of Mortgagee and Lenders in, the Property.
Section 4.02    Authorization to File Financing Statements:  Power of Attorney.  Mortgagor hereby authorizes Mortgagee at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements as authorized by applicable Laws, as applicable to all or part of the Collateral and as necessary or required in connection herewith.  For purposes of such filings, Mortgagor agrees to furnish any information requested by Mortgagee promptly upon request by Mortgagee.  Mortgagor also ratifies its authorization for Mortgagee to have filed any like initial financing statements, amendments thereto or continuation statements, if filed prior to the date of this Security Instrument.  Mortgagor hereby irrevocably constitutes and appoints Mortgagee and any officer or agent of Mortgagee, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Mortgagor or in Mortgagor’s own name to execute in Mortgagor’s name any such documents and otherwise to carry out the purposes of this Section 4.02, to the extent that Mortgagor’s authorization above is not sufficient and Mortgagor fails or refuses to promptly execute such documents.  To the extent permitted by Laws, Mortgagor hereby ratifies all acts said attorneys-in-fact have lawfully done in the past or shall lawfully do or cause to be done in the future by virtue hereof.  This power of attorney is a power coupled with an interest and shall be irrevocable until final payment and performance of the Obligations or the full and final release of this Security Instrument.
Section 4.03    Recording of Security Instrument. Etc.  Mortgagor, upon execution and delivery of this Security Instrument and thereafter, from time to time, will cause this Security Instrument and any of the other Loan Documents creating a Lien or evidencing the Lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future Laws in order to publish notice of and fully to protect and perfect the Lien hereof upon, and the interest of Mortgagee in, the Property.  Mortgagor will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, and all federal state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, except where prohibited by Laws so to do.
ARTICLE V

Due On Sale/Encumbrance
Section 5.01    No Sale/Encumbrance.  Except as and to the extent permitted by the Credit Agreement, Mortgagor shall not cause or permit a sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or grant of any options with respect to, or any other transfer or disposition (directly or indirectly, voluntarily or involuntarily, by operation of Laws or otherwise, and whether or not for consideration or of record) of a legal or beneficial interest in the Property or any Restricted Party or any part thereof or interest therein.

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ARTICLE VI

PREPAYMENT; RELEASE OF PROPERTY
Section 6.01    Prepayment.  The Obligations may not be prepaid in whole or in part except in strict accordance with the express terms and conditions of the Notes and the Credit Agreement.
Section 6.02    Release of Property.  Mortgagor shall not be entitled to a release of any portion of the Property from the Lien of this Security Instrument except in accordance with the express terms and conditions of the Credit Agreement.
ARTICLE VII

DEFAULT
Section 7.01    Event of Default.  The term “Event of Default” as used in this Security Instrument shall have the meaning assigned to such term in the Credit Agreement.
ARTICLE VIII

RIGHTS AND REMEDIES UPON DEFAULT
Section 8.01    Remedies.  Upon the occurrence and during the continuance of any Event of Default, Mortgagor agrees that Mortgagee may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Mortgagor and in and to the Property including, but not limited to, the following actions, each of which may be pursued alternatively, concurrently or otherwise, at such time and in such order as Mortgagee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Mortgagee:
(a)    Mortgagee may declare the Obligations to be immediately due and payable.  Notwithstanding the foregoing, if and to the extent the Credit Agreement provides for automatic acceleration of the Loan upon the occurrence of certain Events of Default, such provisions with respect to automatic acceleration shall govern and control, without any further notice, demand or other action by Lenders, Mortgagee or any other Person.
(b)    With respect to foreclosure, judicial or otherwise, with respect to any of the Property:
(i)    Mortgagee may institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of Laws, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner.
(ii)    Mortgagee may, with or without entry, to the extent permitted and pursuant to the procedures provided by applicable Laws, institute proceedings for the partial foreclosure of this Security Instrument, conducting the sale as herein provided, and without declaring the whole Obligations due, and provided that if sale is made because of default as hereinabove mentioned, such sale may be made subject to the unmatured part of the Notes and/or the Obligations secured hereby, and it is agreed that such sale, if so made, shall not in any manner affect any other Obligations secured hereby, but as to such other Obligations this Security Instrument and the Liens created hereby shall remain in full force and effect just as though no sale had been made under the provisions of this Section 8.01(b)(ii).  It is further agreed that several sales may be made hereunder without exhausting the right of sale 

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for any remaining Obligations secured hereby, it being the purpose to provide for a foreclosure and sale of the Property for any matured portion of any of the Obligations secured hereby or other items provided for herein without exhausting the power to foreclose and to sell the Property for any remaining Obligations secured hereby, whether matured at the time or subsequently maturing.
(iii)    Mortgagee may institute proceedings to foreclose the Liens of this Security Instrument in whole or in part and in such parcels and order as Mortgagee may determine, and the Liens hereunder shall not be exhausted by one or more sales, but successive sales may be had until all of the Property has been legally sold.
(iv)    Mortgagee and/ or one or more Lenders may become the purchaser at any such sale if it is the highest bidder, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Obligations owing, in lieu of cash payment.
(v)    It shall not be necessary for Mortgagee to have constructively in its possession any part of the real or personal property covered by this Security Instrument, and the title and right of possession of said property shall pass to the purchaser or purchasers at any sale hereunder as fully as if the same had been actually present and delivered.  Likewise, on foreclosure of this Security Instrument whether by judicial proceedings or as otherwise permitted by applicable Laws or otherwise, Mortgagor or any person claiming any part of the Property by, through or under Mortgagor, shall not be entitled to a marshalling of assets or a sale in inverse order of alienation.
(vi)    The recitals and statements of fact contained in any notice or in any conveyance to the purchaser or purchasers at any sale hereunder shall be prima facie evidence of the truth of such facts, and all prerequisites and requirements necessary to the validity of any such sale shall be presumed to have been performed.
(vii)    To the extent permitted by applicable Laws, any sale under the powers granted by this Security Instrument shall be a perpetual bar against Mortgagor, its heirs, successors, assigns and legal representatives.
(viii)    Mortgagee may sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by applicable Laws.
(ix)    In the event of a sale, by foreclosure, power of sale or otherwise, of less than all of Property, this Security Instrument shall continue as a Lien and security interest on the remaining portion of the Property unimpaired and without loss of priority.
(c)    In the event any sale hereunder is not completed or is defective in the opinion of Mortgagee or the holder of any part of the Obligations, to the extent permitted by applicable Laws, such sale shall not exhaust the power of sale hereunder, and Mortgagee or such holder shall have the right to cause a subsequent sale or sales to be made by Mortgagee.
(d)    In the event of a foreclosure under the powers granted by this Security Instrument, Mortgagor and all other Persons in possession of any part of the Property shall be deemed tenants at will of the purchaser at such foreclosure sale and shall be liable for a reasonable rental for the use 

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of the Property; and if any such tenants refuse to surrender possession of the Property upon demand, the purchaser shall be entitled to institute and maintain the statutory action of forcible entry and detainer and procure a writ of possession thereunder, and Mortgagor expressly waives all damages sustained by reason thereof.
(e)    Mortgagee may institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein or in the Notes, the Credit Agreement or in the other Loan Documents.
(f)    Mortgagee may recover judgment on the Notes either before, during or after any proceedings for the enforcement of this Security Instrument or the other Loan Documents.
(g)    Mortgagee may apply for the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Obligations and without regard for the solvency of Mortgagor, any Borrower or Guarantor, any Other Mortgagor or any other guarantor or indemnitor under the Loan or any other Person liable for the payment of the Obligations.
(h)    The license granted to Mortgagor under Section 1.02 hereof shall automatically be revoked and, to the extent permitted by applicable Laws, Mortgagee may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess Mortgagor and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude Mortgagor and its agents or servants wholly therefrom, and take possession of all books, records and accounts relating thereto and Mortgagor agrees to surrender possession of the Property and of such books, records and accounts to Mortgagee upon demand, and thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct the business thereat; (ii) complete any construction on the Property in such manner and form as Mortgagee deems advisable; (iii) make alterations, additions, renewals, replacements and improvements to or on the Property; (iv) exercise all rights and powers of Mortgagor with respect to the Property, whether in the name of Mortgagor or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require Mortgagor to pay monthly in advance to Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Mortgagor; (vi) require Mortgagor to vacate and surrender possession of the Property to Mortgagee or to such receiver and, in default thereof, Mortgagor may be evicted by summary proceedings or otherwise; and (vii) apply the receipts from the Property to the payment of the Obligations, in such order, priority and proportions as Mortgagee shall deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys’ fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Mortgagee and Lenders, and their respective counsel, agents and employees.  Notwithstanding the provisions of this Section 8.01(h) hereof, no credit shall be given by Mortgagee for any sum or sums received from the rents, issues and profits of the Property until the money collected is actually received by Mortgagee at its principal office, or at such other place as Mortgagee shall designate in writing, and no such credit shall be given for any uncollected rents or other uncollected amounts or bills, nor shall such credit be given for any rents, issues and profits derived from the Property after foreclosure or other transfer of the Property (or part thereof from which rents, issues and/or profits are derived pursuant to the Security Instrument or by agreement) to Mortgagee or any other third party.  Receipt of rents, issues and/or profits by Mortgagee shall not 

13

be deemed to constitute a pro-tanto payment of the indebtedness evidenced by, or arising under, this Security Instrument, the Notes, the Credit Agreement or any of the other Loan Documents, but shall be applied as provided in Section 8.02.
(i)    To the extent permitted by applicable Laws, Mortgagee may exercise any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right to take possession of the Collateral or any part thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection and preservation of the Collateral, and (ii) request Mortgagor at its expense to assemble the Collateral and make it available to Mortgagee at a convenient place acceptable to Mortgagee.  Any notice of sale, disposition or other intended action by Mortgagee with respect to the Collateral sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute commercially reasonable notice to Mortgagor.
(j)    Mortgagee may apply any sums then deposited or held in escrow or otherwise by or on behalf of Mortgagee in accordance with the terms of the Credit Agreement, this Security Instrument or any other Loan Document to the payment of the following items in any order in its sole discretion: (i) Taxes and Other Charges; (ii) insurance premiums; (iii) interest on the unpaid principal balance of the Notes; (iv) amortization of the unpaid principal balance of the Notes; (v) all other sums payable pursuant to the Notes, the Credit Agreement, this Security Instrument and the other Loan Documents, including without limitation advances made by Mortgagee or any Lender pursuant to the terms of this Security Instrument.
(k)    Mortgagee may surrender the insurance policies maintained pursuant to the Credit Agreement, collect the unearned insurance premiums for such insurance policies and apply such sums as a credit on the Obligations in such priority and proportion as Mortgagee in its discretion shall deem proper, and in connection therewith, Mortgagor hereby appoints Mortgagee as agent and attorney-in-fact (which is coupled with an interest and is therefore irrevocable) for Mortgagor to collect such insurance premiums.
(l)    Mortgagee may apply the undisbursed balance of any deposit made by Mortgagor with Mortgagee in connection with the restoration of the Property after a casualty thereto or condemnation thereof, together with interest thereon, to the payment of the Obligations in such order, priority and proportions as Mortgagee shall deem to be appropriate in its discretion.
(m)    Mortgagee may pursue such other remedies as Mortgagee may have under applicable Laws.
Section 8.02    Application of Proceeds.  The purchase money, proceeds and avails of any disposition of the Property, and or any part thereof, or any other sums collected by Mortgagee on behalf of Lenders pursuant to the Notes, this Security Instrument or the other Loan Documents shall, subject to the terms and conditions of the Credit Agreement, be applied by Mortgagee to the payment of the Obligations in such priority and proportions as Mortgagee in its discretion shall deem proper.
Section 8.03    Right to Cure Defaults.  Upon the occurrence and during the continuance of any Event of Default, Mortgagee may, but without any obligation to do so and without notice to or demand on Mortgagor and without releasing Mortgagor from any obligation hereunder, make any payment or do any act required of Mortgagor hereunder in such manner and to such extent as Lenders may deem necessary to protect the security hereof.  Mortgagee is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Obligations, and the cost and expense thereof (including reasonable attorneys’ fees to the extent permitted by Laws), with interest as provided in this Section 8.03, shall constitute a portion of 

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the Obligations and shall be due and payable to Mortgagee on behalf of Lenders upon demand.  All such costs and expenses incurred by Mortgagee or any Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or proceeding shall bear interest at any default rate specified in the Credit Agreement, if any (the “Default Rate”), for the period after notice from Mortgagee or any Lender that such cost or expense was incurred to the date of payment to Mortgagee or such Lender.  All such costs and expenses incurred by Mortgagee or any Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Obligations and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and payable upon demand by Mortgagee or such Lender therefor.
Section 8.04    Actions and Proceedings.  Mortgagee has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Mortgagor, which Mortgagee, in its discretion, decides should be brought to protect its interest in the Property.
Section 8.05    Recovery of Sums Required to be Paid.  Mortgagee and Lenders shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Obligations as the same become due, without regard to whether or not the balance of the Obligations shall be due, and without prejudice to the right of Mortgagee and Lenders thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Mortgagor existing at the time such earlier action was commenced.
Section 8.06    Additional Provisions.  With respect to the Collateral, from the Effective Date until the Obligations are paid and performed in full or this Security Instrument is otherwise released by written instrument executed by Mortgagee and authorized to be recorded in the applicable public records of the jurisdiction in which the Property is located, Mortgagee is hereby irrevocably appointed the true and lawful attorney of the Mortgagor (coupled with an interest), in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Collateral, and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more Persons with such power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof.  Notwithstanding the foregoing, Mortgagor, if so requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for such purpose, and as may be designated in such request.  To the extent permitted by Laws, any such sale or sales made under or by virtue of this Section 8.06 shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law, or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all Persons claiming or who may claim the same, or any part thereof, from, through or under Mortgagor.  Upon any sale made under or by virtue of this Section 8.06, Mortgagee may, to the extent permitted by Laws, bid for and acquire the Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Obligations secured hereby the net sales price after deducting therefrom the expenses of the sale and the cost of the auction and any other sums which Mortgagee is authorized to deduct by Laws or under this Security Instrument.  At any sale pursuant to this Section 8.06, whether made under power herein granted, under or as otherwise authorized by applicable Laws or pursuant to Legal Requirements, or by virtue of any judicial proceeding or any other legal right, remedy or recourse, it shall not be necessary for Mortgagee to be physically present, or to have constructive possession of, the Property, and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually presented and delivered to the purchaser at such sale.
Section 8.07    Other Rights. Etc.  (a) The failure of Lenders or Mortgagee to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument 

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or any other Loan Document.  Mortgagor shall not be relieved of Mortgagor’s obligations hereunder by reason of (i) the failure of Lenders or Mortgagee to comply with any request of Mortgagor or any guarantor or indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Notes or the other Loan Documents, (ii) the release, regardless of consideration, of less than the whole of the Property, or of any Person liable for the Obligations or any portion thereof unless, in connection with such release, Mortgagee releases of record this Security Instrument in its entirety, or (iii) any agreement or stipulation by Mortgagee or Lenders extending the time of payment or otherwise modifying or supplementing the terms of the Notes, this Security Instrument or the other Loan Documents.
(b)    It is agreed that the risk of loss or damage to the Property is on Mortgagor, and neither Mortgagee nor Lenders shall have any liability whatsoever for decline in the value of the Property, for failure to maintain the insurance policies required to be maintained pursuant to the Credit Agreement, or for failure to determine whether insurance in force is adequate as to the amount of risks insured.  Possession by Mortgagee shall not be deemed an election of judicial relief if any such possession is requested or obtained with respect to any Property or collateral not in Mortgagee’s possession.
(c)    Mortgagee or Lenders may resort for the payment of the Obligations to any other security held by Mortgagee or Lenders in such order and manner as Mortgagee or Lenders, in their discretion, may elect.  Mortgagee or Lenders may take action to recover the Obligations, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Mortgagee or Lenders thereafter to foreclose this Security Instrument.  The rights of Mortgagee and Lenders under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others.  No act of Lenders or Mortgagee shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision.  None of Lenders or Mortgagee shall be limited exclusively to the rights and remedies herein stated but shall be entitled to every right and remedy now or hereafter afforded at law or in equity.
(d)    In the event of a foreclosure sale, whether made under the terms hereof, or under judgment of a court, the Collateral may, at the option of Mortgagee, be sold as a whole with the Land and Improvements.
Section 8.08    Right to Release any Portion of the Property.  Mortgagee may release any portion of the Property for such consideration as Mortgagee may require without, as to the remainder of the Property, in any way impairing or affecting the Lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Mortgagee or any Lender for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Mortgagee may require without being accountable for so doing to any other lienholder.  This Security Instrument shall continue as a Lien and security interest in the remaining portion of the Property.
Section 8.09    Right of Entry.  Upon reasonable notice to Mortgagor, Mortgagee and its agents shall have the right to enter and inspect the Property at all reasonable times.
Section 8.10    Bankruptcy.  (a) Upon the occurrence and during the continuance of an Event of Default, Mortgagee shall have the right to proceed in its own name or in the name of Lenders or in the name of Mortgagor in respect of any claim, suit, action or proceeding relating to the rejection of any Lease, including, without limitation, the right to file and prosecute, to the exclusion of Mortgagor, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in respect of the lessee under such Lease under the Bankruptcy Code (defined below).

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(b)    If there shall be filed by or against Mortgagor a petition under the Bankruptcy Code, and Mortgagor, as lessor or lessee under any Lease, shall determine to reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then Mortgagor shall give Mortgagee not less than ten (10) days’ prior notice of the date on which Mortgagor shall apply to the bankruptcy court for authority to reject the Lease.  Mortgagee shall have the right, but not the obligation, to serve upon Mortgagor within such ten-day period a notice stating that (i) Mortgagee demands that Mortgagor assume and assign the Lease to Mortgagee pursuant to Section 365 of the Bankruptcy Code and (ii) Mortgagee covenants to cure or provide adequate assurance of future performance under the Lease.  If Mortgagee serves upon Mortgagor the notice described in the preceding sentence, Mortgagor shall not seek to reject the Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Mortgagee of the covenant provided for in clause (ii) of the preceding sentence. If Mortgagee fails to respond in writing within such ten-day period, then Mortgagor shall be free to reject the applicable Lease if Mortgagor’s notice was marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN TEN (10) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A MORTGAGE BY THE UNDERSIGNED IN FAVOR OF ADMINISTRATIVE AGENT” and the envelope containing the request was marked “PRIORITY”.  
Section 8.11    Subrogation.  If any or all of the proceeds of the Notes have been used to extinguish, extend or renew any indebtedness heretofore existing against all or any portion of the Property, then, to the extent of the funds so used, Mortgagee and Lenders shall be subrogated to all of the rights, claims, Liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, Liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Mortgagee and Lenders and are merged with the Lien and security interest created herein as cumulative security for the payment and performance of the Obligations.
ARTICLE IX

INDEMNIFICATIONS
Section 9.01    General Indemnification.  Mortgagor shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for an Indemnitee) (collectively, “Losses”) imposed upon or incurred by or asserted against any Indemnitee and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks , curbs, adjacent property or adjacent parking areas, streets or ways; (b) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) performance of any labor services or the furnishing of any materials or other property in respect of the Property or any part thereof; (d) any failure of the Property to be in compliance with any Legal Requirements; (e) any and all claims and demands whatsoever which may be asserted against Mortgagee or any Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in the Ground Lease, the Operating Lease or any Lease; or (f) the payment of any commission charge or brokerage fee to anyone which may be payable in connection with the Loan; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if any Borrower 

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or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction (in which case, if and to the extent required by such judgment, any indemnification payments made by any Loan Party with respect to such losses, claims, damages, liabilities or related expenses shall be promptly reimbursed by the applicable Indemnitee(s)).  Any amounts payable to an Indemnitee by reason of the application of this Section 9.01 shall be immediately due and payable, shall constitute a portion of the Obligations and shall bear interest at the Default Rate form the date the Loss is sustained by an Indemnitee until paid.
Section 9.02    Mortgage and/or Intangible Tax.  Mortgagor shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all Losses imposed upon or incurred by or asserted against any Indemnitee and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument or any other Loan Document.
Section 9.03    Environmental Covenants.  Certain Loan Parties have provided representations, warranties and covenants regarding environmental matters set forth either in the Credit Agreement or in the Environmental Indemnity defined therein, and Mortgagor shall comply with the aforesaid covenants regarding environmental matters.
Section 9.04    Mortgagee’s Rights.  Mortgagee and any other Person designated by Mortgagee, including but not limited to any representative of a governmental authority, and any environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in Mortgagee’s sole (but reasonable) discretion) and taking samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing.  Mortgagor shall cooperate with and provide access to Mortgagee and any such Person designated by Mortgagee.  Mortgagee agrees that it shall not exercise its rights under this Section 9.04 more frequently than once per calendar year unless Mortgagee reasonably believes that the Property is not in full compliance with all Environmental Laws.
ARTICLE X

WAIVERS AND OTHER MATTERS
Section 10.01    Waiver of Counterclaim.  Mortgagor hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Mortgagee or any Lender arising out of or in any way connected with this Security Instrument, the Property, the Note, the Credit Agreement, any of the other Loan Documents or the Obligations.
Section 10.02    Marshalling and Other Matters.  Mortgagor hereby waives, to the extent permitted by Laws, the benefit of all Legal Requirements now or hereafter in force regarding appraisement, valuation, stay, extension, reinstatement and redemption and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein.  Further, Mortgagor hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Mortgagor, and on behalf of each and every Person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all Persons to the extent permitted by Legal Requirements.
Section 10.03    Waiver of Notice.  Mortgagor shall not be entitled to any notices of any nature whatsoever from Lenders or Mortgagee, except with respect to matters for which this Security Instrument or the Credit Agreement specifically and expressly provide for the giving of notice by Lenders or Mortgagee 

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to Mortgagor and except with respect to matters for which Mortgagor is not permitted by Legal Requirements to waive its right to receive notice, and Mortgagor hereby expressly waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate or other notice of any kind from Lenders, Mortgagee with respect to any matter for which this Security Instrument does not specifically and expressly provide for the giving of notice by Lenders, Mortgagee to Mortgagor.
Section 10.04    Waiver of Statute of Limitations.  Mortgagor hereby expressly waives and releases to the fullest extent permitted by applicable Laws, the pleading of any statute of limitations as a defense to payment or performance of the Obligations.
Section 10.05    Sole Discretion of Mortgagee.  Whenever pursuant to this Security Instrument, Mortgagee exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Mortgagee, the decision of Mortgagee to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically provided herein or in the Credit Agreement) be in the sole discretion of Mortgagee and shall be final and conclusive.
Section 10.06    Waiver of Trial by Jury.  MORTGAGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  MORTGAGOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
Section 10.07    Waiver of Foreclosure Defense.  Mortgagor hereby waives any defense Mortgagor might assert or have by reason of Mortgagee’s failure to make any tenant or lessee of the Property a party defendant in any foreclosure proceeding or action instituted by Mortgagee.
Section 10.08    MORTGAGOR’S KNOWLEDGE.  MORTGAGOR SPECIFICALLY ACKNOWLEDGES AND AGREES (a) THAT IT HAS A DUTY TO READ THIS SECURITY INSTRUMENT AND THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS HEREOF, (b) THAT IT HAS IN FACT READ THIS SECURITY INSTRUMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS SECURITY INSTRUMENT, (c) THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS SECURITY INSTRUMENT AND HAS RECEIVED THE ADVICE OF SUCH COUNSEL IN CONNECTION WITH ENTERING INTO THIS SECURITY INSTRUMENT, AND (d) THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS SECURITY INSTRUMENT PROVIDE FOR (i) CERTAIN WAIVERS AND FOR (ii) THE ASSUMPTION BY ONE PARTY OF, AND/OR RELEASE OF THE OTHER PARTY FROM, CERTAIN LIABILITIES THAT SUCH PARTY MIGHT OTHERWISE BE RESPONSIBLE FOR UNDER APPLICABLE LAWS.  MORTGAGEE FURTHER AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS SECURITY INSTRUMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT SUCH PROVISIONS ARE NOT “CONSPICUOUS.”
Section 10.09    Usury Savings Provisions.  It is the intent of Mortgagee, Lenders and Mortgagor in the execution of the Credit Agreement and the other Loan Documents and any other written or oral 

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agreement by Mortgagor in favor of Mortgagee and Lenders to contract in strict compliance with applicable usury Laws.  In furtherance thereof, Mortgagee, Lenders and Mortgagor stipulate and agree that none of the terms and provisions contained in the Credit Agreement and the other Loan Documents, or in any other written or oral agreement by Mortgagor, any Other Mortgagor or any Loan Party in favor of Mortgagee and Lenders, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, or interest at a rate in excess of the maximum interest rate permitted to be charged by applicable Laws; that neither Mortgagor nor any guarantors, endorsers or other Persons now or hereafter becoming liable for payment of the Obligations are agreeing to pay at a rate in excess of the maximum interest that may be lawfully charged under applicable Laws; and that the provisions of this subsection shall control over all other provisions of the Credit Agreement and the other Loan Documents or any other oral or written agreements which may be in apparent conflict herewith.  Mortgagee and Lenders expressly disavow any intention to charge or collect excessive unearned interest or finance charges in the event the maturity of the Loan or the remaining Obligations are accelerated.  If the maturity of the Loan or the remaining Obligations shall be accelerated for any reason or if the principal of the Loan or the remaining Obligations are paid prior to the end of the term of the Loan or the Obligations, as applicable, and as a result thereof the interest received for the actual period of existence of the Loan or the Obligations, as applicable, exceeds the applicable maximum lawful rate, Mortgagee and Lenders shall, at Mortgagee’s option, either refund to Mortgagor the amount of such excess or credit the amount of such excess against the principal balance of the Obligations then outstanding and thereby shall render inapplicable any and all penalties of any kind provided by applicable Laws as a result of such excess interest.  In the event that Mortgagee and Lenders shall contract for, charge or receive any amount or amounts and/or any other thing of value which are determined to constitute interest which would increase the effective interest rate on the Loan or the Obligations to a rate in excess of that permitted to be charged by applicable Laws, an amount equal to interest in excess of the lawful rate shall, upon such determination, at the option of Mortgagee, be either immediately returned to Mortgagor or credited against the Obligations then outstanding, in which event any and all penalties of any kind under applicable Laws as a result of such excess interest shall be inapplicable.
ARTICLE XI

CROSS COLLATERALIZATION
Section 11.01    Cross-Collateralization.  Mortgagor acknowledges that the Obligations are secured by this Security Instrument together with, among other things, those certain other Mortgages (as defined in the Credit Agreement) now or hereafter given by Mortgagor and/or certain other Persons (whether one or more, collectively, the “Other Mortgagors”) to Mortgagee (whether one or more, collectively, the “Other Mortgages”) encumbering the real and personal property more particularly described in the Other Mortgages (such real and personal property, collectively, the “Other Properties”), all as set forth in the Credit Agreement.  Upon the occurrence of an Event of Default, Mortgagee shall have the right to institute a proceeding or proceedings for the total or partial foreclosure of this Security Instrument and any or all of the Other Mortgages whether by court action, power of sale or otherwise, under any applicable provision of Laws, for all of the Obligations and the Lien and the security interest created by the Other Mortgages shall continue in full force and effect without loss of priority as a Lien and security interest securing the payment of that portion of the Obligations then due and payable but still outstanding.  Mortgagor acknowledges and agrees that the Property and the Other Properties are located in one or more States and/or counties, and therefore Mortgagee shall be permitted to enforce payment and performance of the Obligations and the performance of any term, covenant or condition of the Notes, this Security Instrument, the Other Mortgages or the other Loan Documents and exercise any and all rights and remedies under the Notes, this Security Instrument, the other Loan Documents or the Other Mortgages or, as provided by law or at equity, by one or more proceedings, whether contemporaneous, consecutive or both, to be determined by Mortgagee, in its 

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sole discretion, in any one or more of the States or counties in which the Property or any of the Other Properties are located.  Neither the acceptance of this Security Instrument, the Other Mortgages or the other Loan Documents nor the enforcement thereof in any one State or county, whether by court action, foreclosure, power of sale or otherwise, shall prejudice or in any way limit or preclude enforcement by court action, foreclosure, power of sale or otherwise, of the Notes, this Security Instrument, the Other Mortgages or the other Loan Documents through one or more additional proceedings in that State or county or in any other State or county.  Any and all sums received by Mortgagee or any Lender under the Notes, this Security Instrument, and the other Loan Documents shall be applied to the Obligations in such order and priority as Mortgagee shall determine, in its sole discretion, without regard to any portion of the Loan allocated to any Property or any of the Other Properties or the appraised value of the Property or any of the Other Properties.
ARTICLE XII

MORTGAGEE AND NOTICES
Section 12.01    Failure to Act.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, the failure of Mortgagee to take any action hereunder or under any other Loan Document shall not (a) be deemed to be a waiver of any term or condition of this Security Instrument or any of the other Loan Documents, (b) adversely affect any rights of Mortgagee or any Lender hereunder or under any other Loan Document, or (c) relieve Mortgagor of any of Mortgagor’s obligations hereunder or under any other Loan Document.
Section 12.02    Notices.  All notices or other written communications hereunder shall be delivered in accordance with the applicable terms and conditions of the Credit Agreement; provided, however, that any notice given in accordance with the requirements of any applicable statute (including, without limitation, statutes governing foreclosure or notices of foreclosure) shall be effective when given in accordance with statutory requirements, notwithstanding anything to the contrary contained herein or in any other Loan Document.
ARTICLE XIII

APPLICABLE LAWS
Section 13.01    Governing Laws:  Jurisdiction:  Etc.  (a) GOVERNING LAWS.  THE PROVISIONS OF THIS SECURITY INSTRUMENT REGARDING THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF  [_____________(add state where property is located)].  ALL OTHER PROVISIONS OF THIS SECURITY INSTRUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  WHENEVER REFERENCE IS MADE TO THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, THOSE INSTRUMENTS SHALL BE DEEMED TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS AND TO THE EXTENT EACH DOCUMENT SO PROVIDES.
(b)    SUBMISSION TO JURISDICTION.  MORTGAGOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES 

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HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, IN SUCH FEDERAL COURT.  MORTGAGOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT OR THE JUDGMENT OR IN ANOTHER MANNER PROVIDED BY LAWS.  NOTHING IN THIS SECURITY INSTRUMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT AGAINST MORTGAGOR OR ANY OTHER PERSON OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION, INCLUDING, WITHOUT LIMITATION, THE COURTS OF THE STATE WHERE THE PROPERTY IS LOCATED.
(c)    WAIVER OF VENUE.  MORTGAGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN SUBSECTION (b), ABOVE.  MORTGAGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)    SERVICE OF PROCESS.  MORTGAGOR IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAWS.
Section 13.02    Provisions Subject to Applicable Laws.  All rights, powers and remedies provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of Laws and are intended to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable Laws.  If any term of this Security Instrument or any application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the term shall not be affected thereby.
ARTICLE XIV

DEFINITIONS
Section 14.01    General Definitions.  Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and
(a)    the word “Mortgagor” shall mean “each Mortgagor and any subsequent owner or owners of the Property or any part thereof or any interest therein”;
(b)    the word “Other Mortgagor” shall mean “each Other Mortgagor and any subsequent owner or owners of any of the applicable Other Properties (defined below) or any part thereof or any interest therein”;
(c)    the word “Mortgagee” shall mean “Mortgagee and any of Mortgagee’s successors and assigns”;

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(d)    the word “Lenders” shall mean “all or each of the Lenders and any of their or its respective successors and assigns”;
(e)    the word “Notes” shall mean “the Notes and any other evidence of indebtedness secured by this Security Instrument”;
(f)    [Intentionally Omitted];
(g)    the word “Property” shall include any portion of the Property and any interest therein”;
(h)    the word “Other Properties” shall include any portion of the Other Properties and any interest therein”; and
(i)    the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Mortgagee in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder.
ARTICLE XV

MISCELLANEOUS PROVISIONS
Section 15.01    No Oral Change
.  This Security Instrument, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Mortgagor, Lenders or Mortgagee, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.
Section 15.02    Successors and Assigns
.  This Security Instrument shall be binding upon and inure to the benefit of Mortgagor, Mortgagee and Lenders and their respective successors and assigns forever.
Section 15.03    Inapplicable Provisions
.  If any term, covenant or condition of the Credit Agreement, the Notes or this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Credit Agreement, the Notes and this Security Instrument shall be construed without such provision.
Section 15.04    Headings, Etc.  The headings and captions of various Sections of this Security Instrument are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
Section 15.05    Number and Gender.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.
Section 15.06    Entire Agreement.  This Security Instrument and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, are superseded by the terms of this Security Instrument and the other Loan Documents.
Section 15.07    Limitation on Mortgagee’s or Lenders’ Responsibility.  No provision of this Security Instrument shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Lenders or Mortgagee, nor shall it operate to make Lenders or Mortgagee 

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responsible or liable for any waste committed on the Property by the tenants or any other Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, employee or stranger.  Nothing herein contained shall be construed as constituting Lenders or Mortgagee a “mortgagee in possession.”
ARTICLE XVI

STATUS OF MORTGAGOR
Section 16.01    Status of Mortgagor.  Mortgagor’s exact legal name is correctly set forth in the first paragraph of this Security Instrument and the signature block at the end of this Security Instrument.  Mortgagor is an organization of the type specified in the first paragraph of this Security Instrument.  Mortgagor is incorporated in or organized under the Laws of the state specified in Section 1.04 of this Security Instrument.  Mortgagor’s principal place of business and chief executive office, and the place where Mortgagor kept its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire period of the existence of Mortgagor) [_____________________________].  Mortgagor’s organizational identification number, if any, assigned by the state of incorporation or organization is correctly set forth in Section 1.04 of this Security Instrument.  Mortgagor will not change or permit to be changed (a) Mortgagor’s name, (b) Mortgagor’s identity (including its trade name or names), (c) Mortgagor’s principal place of business set forth on the first page of this Security Instrument, (d) the corporate, partnership or other organizational structure of Mortgagor, (e) Mortgagor’s state of organization, or (f) Mortgagor’s organizational number, without notifying Mortgagee of such change in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in Mortgagor’s structure not permitted by the Credit Agreement, without first obtaining the prior written consent of Mortgagee.  If Mortgagor does not now have an organizational identification number and later obtains one, Mortgagor promptly shall notify the Mortgagee of such organizational identification number.
ARTICLE XVII
INTENTIONALLY OMITTED
ARTICLE XVIII
GROUND LEASE AND OPERATING LEASE PROVISIONS.
Section 18.01    No Merger of Fee and Leasehold Estates:  Releases.  So long as any portion of the Obligations remains unpaid or unsatisfied, unless Mortgagee shall otherwise consent, the fee title to the Land and the leasehold estates created under the Ground Lease and the Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates by purchase, operation of Laws or otherwise.  Mortgagee reserves the right, at any time, to release portions of the Property, including, but not limited to, the leasehold estates created by the Ground Lease and the Operating Lease, with or without consideration, at Mortgagee’s election, without waiving or affecting any of its rights hereunder or under the Notes or the other Loan Documents and any such release shall not affect Mortgagee’s rights in connection with the portion of the Property not so released.
Section 18.02    Mortgagor’s Acquisition of Fee Estate.  So long as any portion of the Obligations remains unpaid or unsatisfied, if any Mortgagor shall be the owner of fee title and/or a leasehold estate in all or any portion of the Property, the Lien of this Security Instrument shall be spread to cover such additional title and rights and said title and rights shall be deemed to be included in the Property.  Mortgagor agrees, 

24

at its sole cost and expense, including without limitation, reasonable attorney’s fees to (i) execute any and all documents or instruments necessary to subject its title and rights to the Property to the Lien of this Security Instrument; and (ii) provide a title insurance policy which shall insure that the Lien of this Security Instrument is a first lien on its title and rights to the Property.
Section 18.03    [Rejection of the Ground Lease.   Mortgagor hereby assigns to Mortgagee (a) Mortgagor’s right to reject the Ground Lease under Section 365(a) of the Bankruptcy Code or any comparable federal or state statute or law with respect to any case, proceeding or other action commenced by or against Mortgagor under the Bankruptcy Code or comparable federal or state statute or law and (b) Mortgagor’s right to seek an extension of the sixty (60)-day period within which Mortgagor must accept or reject the Ground Lease under Section 365(a) of the Bankruptcy Code or any comparable federal or state statute or law.  Notwithstanding the foregoing assignment, if Mortgagor shall desire to reject the Ground Lease, then Mortgagor shall give Mortgagee not less than twenty (20) days’ prior notice of the date on which Mortgagor shall apply to the bankruptcy court for authority to reject the Ground Lease.  Mortgagee shall have the right, but not the obligation, to serve upon Mortgagor within such twenty-day period a notice stating that (i) Mortgagee demands that Mortgagor assume and assign the Ground Lease to Mortgagee pursuant to Section 365(a) of the Bankruptcy Code and (ii) Mortgagee covenants to cure or provide adequate assurance of future performance under the Ground Lease. If Mortgagee serves upon Mortgagor the notice described in the preceding sentence, Mortgagor shall not seek to reject the Ground Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Mortgagee of the covenant provided for in clause (ii) of the preceding sentence. If Mortgagee fails to respond in writing within such twenty-day period, Mortgagor shall be free to reject the Ground Lease if Mortgagor’s notice was marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN TWENTY (20) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A MORTGAGE BY THE UNDERSIGNED IN FAVOR OF ADMINISTRATIVE AGENT” and the envelope containing the request was marked “PRIORITY”.  
ARTICLE XIX
STATE SPECIFIC PROVISIONS
Section 19.01    Inconsistencies.  In the event of any inconsistencies between the terms and conditions of this Article XIX and the terms and conditions of this Security Instrument, the terms and conditions of this Article XIX shall control and be binding.

[STATE SPECIFIC PROVISIONS TO BE ADDED HERE]

[Remainder of page intentionally blank.  Signature page(s) follow.]

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IN WITNESS WHEREOF, this Security Instrument has been executed by Mortgagor as of the day and year first above written.
    
	
					
	 
	 
	 
	[__________________], a Delaware [___________________]

	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/

	 
	 
	 
	Name:
	 

	 
	 
	 
	Title:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	[__________________], a Delaware [___________________]

	 
	 
	 
	as a Borrower

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/

	 
	 
	 
	Name:
	 

	 
	 
	 
	Title:
	 

	 
	 
	 
	 
	 

[STATE FORMS OF ACKNOWLEDGMENT TO BE ADDED HERE]

EXHIBIT A

LEGAL DESCRIPTION

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