Document:

Exhibit 10.124

    
      

    

     

    PREPARED
      BY AND UPON

    RECORDATION
      RETURN TO:

     

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, Suite 800

    San
      Francisco, CA 94107

    Attention:
      Stephen A. Cowan

     

    HMA
      HOTEL
      PARTNERS, LP; PH HOTEL PARTNERS, LP; AH HOTEL PARTNERS, LP; 

    and
      CM
      HOTEL PARTNERS, LP, as Borrower/mortgagor

    (Borrower)

     

    to

     

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA, as mortgagee/Lender

    (Lender)

     

    _________________________________

     

    MULTI-STATE
      MORTGAGE AND

    SECURITY
      AGREEMENT

    _________________________________

     

    Dated
      and
      Effective: As
      of
      April 3, 2006

     

                                     Location:  5101
      Blue
      Lagoon Drive East, Miami, Florida

                                                      

                                                    
      County:  Miami-Dade

                                                        
      

                                                         Loan
      Number: 70-6-106-306

     

    Note
      to
      Clerk: This Multi-State Mortgage and Security Agreement (the “Instrument”)
      is
      given in connection with a multi-state mortgage transaction and is partial
      security for a Promissory Note of even date herewith in the original principal
      amount of $120,000,000.00 (the “Note”).
      The
      Note was made, executed and delivered inside the State of Florida. The Note
      is
      also secured by Deeds of Trust or Mortgages encumbering property located in
      Oregon, Michigan and California.

    

    The
      original principal balance of the Note is $120,000,000.00. The total value
      of
      all properties securing the Note is $266,200,000.00 and is allocated as
      follows:

    

    Value
      of
      Oregon property: $53,800,000.00

    Value
      of
      Michigan property: $26,300,000.00

    Value
      of
      California property: $90,100,000.00

    Value
      of
      Florida property: $96,000,000.00

    TOTAL: $266,200,000.00

    

    The
      percentage of the value allocated to the Florida property to the total property
      securing the Note is 36.06% ($96,000,000.00/$266,200,000.00).

    

    Pursuant
      to Rule 12B-4.053(32) and Rule 12C-2.004(2)(b) of the Florida Administrative
      Code, the “Taxable Base” for Florida documentary stamp and non-recurring
      intangible tax purposes is calculated based on the value of the Florida property
      securing the Note ($96,000,000.00), divided by the value of all property
      securing the Note ($266,200,000.00), multiplied by the principal amount of
      the
      Note ($120,000,000.00). The Taxable Base for purposes of determining Florida
      taxes related to securing the Note by this Mortgage is
      $43,272,000.00.

    

    Accordingly,
      Florida Non-Recurring Intangible Tax and Documentary Stamp Tax is due as
      follows:

    

    Documentary
      Stamp Tax Calculation: $43,272,000 X .0035= $151,452.00.

    

    Non-recurring
      Intangible Tax Calculation: $43,272,000.00 X .002 = $86,544.00.

     

    The
      foregoing documentary stamp tax and non-recurring intangible tax due has been
      paid upon the recordation of this Instrument among the Public Records of
      Miami-Dade County, Florida

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    
      	
              ARTICLE
                I

               

            	
              -
                OBLIGATIONS

               

            	 
	
              Section
                1.01

               

            	
              Obligations

               

            	
              4

               

            
	
              Section
                1.02

               

            	
              Documents

               

            	
              4

               

            
	
              ARTICLE
                II

               

            	
              -
                REPRESENTATIONS AND WARRANTIES

               

            	 
	
              Section
                2.01

               

            	
              Title,
                Legal Status and Authority

               

            	
              4

               

            
	
              Section
                2.02

               

            	
              Validity
                of Documents

               

            	
              5

               

            
	
              Section
                2.03

               

            	
              Litigation

               

            	
              5

               

            
	
              Section
                2.04

               

            	
              Status
                of Property

               

            	
              5

               

            
	
              Section
                2.05

               

            	
              Tax
                Status of Borrower

               

            	
              6

               

            
	
              Section
                2.06

               

            	
              Bankruptcy
                and Equivalent Value

               

            	
              6

               

            
	
              Section
                2.07

               

            	
              Disclosure

               

            	
              6

               

            
	
              Section
                2.08

               

            	
              Illegal
                Activity

               

            	
              6

               

            
	
              Section
                2.09

               

            	
              Executive
                Order 13224

               

            	
              6

               

            
	
              ARTICLE
                III

               

            	
              -
                COVENANTS AND AGREEMENTS

               

            	 
	
              Section
                3.01

               

            	
              Payment
                of Obligations

               

            	
              6

               

            
	
              Section
                3.02

               

            	
              Continuation
                of Existence

               

            	
              6

               

            
	
              Section
                3.03

               

            	
              Taxes
                and Other Charges

               

            	
              7

               

            
	
              Section
                3.04

               

            	
              Defense
                of Title, Litigation, and Rights under Documents

               

            	
              8

               

            
	
              Section
                3.05

               

            	
              Compliance
                with Laws and Operation and Maintenance of Property

               

            	
              8

               

            
	
              Section
                3.06

               

            	
              Insurance

               

            	
              9

               

            
	
              Section
                3.07

               

            	
              Damage
                and Destruction of Property

               

            	
              11

               

            
	
              Section
                3.08

               

            	
              Condemnation

               

            	
              13

               

            
	
              Section
                3.09

               

            	
              Liens
                and Liabilities

               

            	
              14

               

            
	
              Section
                3.10

               

            	
              Tax
                and Insurance Deposits

               

            	
              14

               

            
	
              Section
                3.11

               

            	
              ERISA

               

            	
              15

               

            
	
              Section
                3.12

               

            	
              Environmental
                Representations, Warranties, and Covenants

               

            	
              16

               

            
	
              Section
                3.13

               

            	
              Electronic
                Payments

               

            	
              18

               

            
	
              Section
                3.14

               

            	
              Inspection

               

            	
              18

               

            
	
              Section
                3.15

               

            	
              Records,
                Reports, and Audits

               

            	
              18

               

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Section
                  3.16

                 

              	
                Borrower’s
                  Certificates

                 

              	
                19

                 

              
	
                Section
                  3.17

                 

              	
                Full
                  Performance Required; Survival of Warranties

                 

              	
                19

                 

              
	
                Section
                  3.18

                 

              	
                Additional
                  Security

                 

              	
                19

                 

              
	
                Section
                  3.19

                 

              	
                Further
                  Acts

                 

              	
                20

                 

              
	
                Section
                  3.20

                 

              	
                Capital
                  Lease

                 

              	
                20

                 

              
	
                Section
                  3.21

                 

              	
                Other
                  Leases

                 

              	
                20

                 

              
	
                Section
                  3.22

                 

              	
                Inventory
                  Levels

                 

              	
                21

                 

              
	
                Section
                  3.23

                 

              	
                Single
                  Purpose Entity

                 

              	
                21

                 

              
	
                ARTICLE
                  IV

                 

              	
                -
                  ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

                 

              	 
	
                Section
                  4.01

                 

              	
                Expenses
                  and Advances

                 

              	
                22

                 

              
	
                Section
                  4.02

                 

              	
                Subrogation

                 

              	
                22

                 

              
	
                ARTICLE
                  V

                 

              	
                -
                  SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY

                 

              	 
	
                Section
                  5.01

                 

              	
                Due-on-Sale
                  or Encumbrance

                 

              	
                22

                 

              
	
                Section
                  5.02

                 

              	
                Permitted
                  Transfer

                 

              	
                23

                 

              
	
                Section
                  5.03

                 

              	
                Permitted
                  Admission

                 

              	
                24

                 

              
	
                ARTICLE
                  VI

                 

              	
                -
                  DEFAULTS AND REMEDIES

                 

              	 
	
                Section
                  6.01

                 

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

                 

              	
                25

                 

              
	
                Section
                  6.02

                 

              	
                Remedies

                 

              	
                26

                 

              
	
                Section
                  6.03

                 

              	
                Expenses

                 

              	
                28

                 

              
	
                Section
                  6.04

                 

              	
                Rights
                  Pertaining to Sales

                 

              	
                28

                 

              
	
                Section
                  6.05

                 

              	
                Applications
                  of Proceeds

                 

              	
                29

                 

              
	
                Section
                  6.06

                 

              	
                Additional
                  Provisions as to Remedies

                 

              	
                29

                 

              
	
                Section
                  6.07

                 

              	
                Waiver
                  of Rights and Defenses

                 

              	
                29

                 

              
	
                ARTICLE
                  VII

                 

              	
                -
                  SECURITY AGREEMENT

                 

              	 
	
                Section
                  7.01

                 

              	
                Security
                  Agreement

                 

              	
                30

                 

              
	
                ARTICLE
                  VIII

                 

              	
                -
                  LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

                 

              	 
	
                Section
                  8.01

                 

              	
                Recourse
                  Liability

                 

              	
                30

                 

              
	
                Section
                  8.02

                 

              	
                General
                  Indemnity

                 

              	
                30

                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Section
                  8.03

                 

              	
                Transaction
                  Taxes Indemnity

                 

              	
                30

                 

              
	
                Section
                  8.04

                 

              	
                ERISA
                  Indemnity

                 

              	
                30

                 

              
	
                Section
                  8.05

                 

              	
                Environmental
                  Indemnity

                 

              	
                30

                 

              
	
                Section
                  8.06

                 

              	
                Duty
                  to Defend, Costs and Expenses

                 

              	
                31

                 

              
	
                Section
                  8.07

                 

              	
                Recourse
                  Obligation and Survival

                 

              	
                31

                 

              
	
                ARTICLE
                  IX

                 

              	
                -
                  ADDITIONAL PROVISIONS

                 

              	 
	
                Section
                  9.01

                 

              	
                Usury
                  Savings Clause

                 

              	
                31

                 

              
	
                Section
                  9.02

                 

              	
                Notices

                 

              	
                31

                 

              
	
                Section
                  9.03

                 

              	
                Sole
                  Discretion of Lender

                 

              	
                33

                 

              
	
                Section
                  9.04

                 

              	
                Applicable
                  Law and Submission to Jurisdiction

                 

              	
                33

                 

              
	
                Section
                  9.05

                 

              	
                Construction
                  of Provisions

                 

              	
                33

                 

              
	
                Section
                  9.06

                 

              	
                Transfer
                  of Loan

                 

              	
                34

                 

              
	
                Section
                  9.07

                 

              	
                Miscellaneous

                 

              	
                34

                 

              
	
                Section
                  9.08

                 

              	
                Entire
                  Agreement

                 

              	
                35

                 

              
	
                Section
                  9.09

                 

              	
                WAIVER
                  OF TRIAL BY JURY

                 

              	
                35

                 

              
	
                Section
                  9.10

                 

              	
                Partial
                  Release

                 

              	
                36

                 

              
	
                Section
                  9.11

                 

              	
                Property
                  Substitutions

                 

              	
                36

                 

              
	
                ARTICLE
                  X

                 

              	
                -
                  LOCAL LAW PROVISIONS

                 

              	 
	
                ARTICLE
                  XI

                 

              	
                -
                  OPERATING LEASE PROVISIONS

                 

              	 
	
                EXHIBIT
                  A

              	 	 
	
                EXHIBIT
                  B

              	 	 
	
                EXHIBIT
                  C

              	 	 
	
                EXHIBIT
                  D

              	 	 

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

    

    

      DEFINITIONS

       

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

       

      
        	
                Action

              	
                Section
                  9.04

              
	
                Additional
                  Funds 

              	
                Section
                  3.07 (c)

              
	
                Affecting
                  the Property

              	
                Section
                  3.12 (a)

              
	
                Affiliate
                  Loan

              	
                Section
                  5.01

              
	
                Affiliate
                  Loan Lender

              	
                Section
                  5.01

              
	
                All

              	
                Section
                  9.05 (m)

              
	
                Any

              	
                Section
                  9.05 (m)

              
	
                Assessments

              	
                Section
                  3.03 (a)

              
	
                Assignment

              	
                Recitals,
                  Section 2 (B)

              
	
                Awards

              	
                Section
                  3.08 (b)

              
	
                Bankruptcy
                  Code

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Borrower

              	
                Preamble

              
	
                Costs

              	
                Section
                  4.01

              
	
                Damage

              	
                Section
                  3.07 (a)

              
	
                Default
                  Rate

              	
                Section
                  1.01 (a)

              
	
                Deposits

              	
                Section
                  3.10

              
	
                Documents

              	
                Section
                  1.02

              
	
                Environmental
                  Indemnity

              	
                Section
                  8.05

              
	
                Environmental
                  Law

              	
                Section
                  3.12 (a) 

              
	
                Environmental
                  Liens

              	
                Section
                  3.12 (b)

              
	
                Environmental
                  Report

              	
                Section
                  3.12 (a)

              
	
                ERISA

              	
                Section
                  3.11

              
	
                Event
                  of Default

              	
                Section
                  6.01

              
	
                Flood
                  Acts

              	
                Section
                  2.04 (a)

              
	
                Foreign
                  Person

              	
                Section
                  2.05

              
	
                Full
                  Replacement Cost

              	
                Section
                  3.06 (a)

              
	
                Grace
                  Period

              	
                Section
                  6.01(b)

              
	
                Hazardous
                  Materials

              	
                Section
                  3.12 (a)

              
	
                Impositions

              	
                Section
                  3.10

              
	
                Improvements

              	
                Recitals,
                  Section 2 (A) (ii)

              
	
                Include,
                  Including

              	
                Section
                  9.05 (f)

              
	
                Indemnified
                  Parties

              	
                Section
                  8.02

              
	
                Indemnify

              	
                Section
                  8.02

              
	
                Instrument

              	
                Preamble

              
	
                Insurance
                  Premiums

              	
                Section
                  3.10

              
	
                Investors

              	
                Section
                  9.06

              
	
                Land

              	
                Recitals,
                  Section 2 (A) (i)

              
	
                Laws

              	
                Section
                  3.05(c)

              
	
                Lease

              	
                Section
                  9.05 (k)

              
	
                Leases

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Lender

              	
                Preamble

              
	
                Lessee

              	
                Section
                  9.05 (k)

              

      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                Lessor

              	
                Section
                  9.05 (k)

              
	
                Liens

              	
                Section
                  3.09

              
	
                Loan

              	
                Recitals,
                  Section 1

              
	
                Losses

              	
                Section
                  8.02

              
	
                Major
                  Tenants

              	
                Section
                  3.21

              
	
                Microbial
                  Matter

              	
                Section
                  3.12 (a)

              
	
                Net
                  Proceeds

              	
                Section
                  3.07 (d)

              
	
                Note

              	
                Recitals,
                  Section 1

              
	
                Notice

              	
                Section
                  9.02

              
	
                Obligations

              	
                Section
                  1.01

              
	
                On
                  Demand

              	
                Section
                  9.05 (n)

              
	
                Operating
                  Lessee

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Operating
                  Lease

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Organization
                  State

              	
                Section
                  2.01

              
	
                Owned

              	
                Section
                  9.05 (l)

              
	
                Permitted
                  Encumbrances

              	
                Section
                  2.01

              
	
                Person

              	
                Section
                  9.05 (i)

              
	
                Personal
                  Property

              	
                Section
                  6.02 (j)

              
	
                Prepayment
                  Premium

              	
                Section
                  1.01(a)

              
	
                Property

              	
                Recitals,
                  Section 4 (A)

              
	
                Property
                  State

              	
                Section
                  2.01

              
	
                Provisions

              	
                Section
                  9.05 (j)

              
	
                Rating
                  Agency

              	
                Section
                  9.06

              
	
                Release

              	
                Section
                  3.12 (a)

              
	
                Rent
                  Loss Proceeds

              	
                Section
                  3.07 (c)

              
	
                Rents

              	
                Recitals,
                  Section 2 (A) (x)

              
	
                Restoration

              	
                Section
                  3.07 (a)

              
	
                Securities

              	
                Section
                  9.06

              
	
                Security
                  Agreement

              	
                Section
                  7.01

              
	
                Taking

              	
                Section
                  3.08 (a)

              
	
                Tenant

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Tenants

              	
                Section
                  9.05 (k)

              
	
                Transaction
                  Taxes

              	
                Section
                  3.03 (c)

              
	
                UCC

              	
                Section
                  2.02

              
	
                Upon
                  Demand

              	
                Section
                  9.05 (n)

              
	
                Violation

                 

              	
                Section
                  3.11

                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    MULTI-STATE
      MORTGAGE AND SECURITY AGREEMENT

     

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

     

    RECITALS:

     

    1. Borrower,
      by the terms of its Promissory
      Note (“Note”)
      executed on the same date as this Instrument and in connection with the loan
      (“Loan”)
      from
      Lender to Borrower and other entities affiliated with Borrower, is indebted
      to
      Lender in the principal sum of up to ONE HUNDRED TWENTY MILLION AND NO/100
      U.S.
      DOLLARS ($120,000,000.00). The Maturity Date of the Loan set forth in the Note
      is April 4, 2011.

     

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

     

    3. The
      Note
      is secured by property located in Oregon valued at $24,300,000.00, property
      located in Michigan valued at $11,800,000.00, property located in California
      valued at $40,600,000.00, and the Florida property described on Exhibit
      “A”
      attached
      hereto which is valued at $43,300,000.00.

     

    4. The
      non-Florida properties that secure the Note that are pledged as collateral
      for
      the Note are described on Exhibits
      “A-1” through “A-3”
      attached
      hereto.

     

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

     

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

     

    (i) The
      real
      property in Miami-Dade County, State of Florida, and described in Exhibit
      “A”
      attached
      hereto and the non-Florida properties described in Exhibits
      “A-1” through “A-3”
      attached
      hereto and incorporated herein by this reference (collectively the “Land”);

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    With
      respect to the Property, (i) HMA Partners, LP owns the Land described on the
      Exhibit “A” and Property related thereto, (ii) PH Hotel Partners, LP owns the
      Land described on the Exhibit “A-1” and Property related thereto, (iii) AH Hotel
      Partners, LP owns the Land described on the Exhibit “A-2” and Property related
      thereto, and (iv) CM Hotel Partners, LP owns the Land described on the Exhibit
      “A-3” and Property related thereto.

     

    Although
      the term “Borrower” is used as a collective term herein, it shall be used to
      mean that each separate Borrower pledges and agrees to the terms and conditions
      hereof with respect to the Property owned by it and not to other Property
      pledged hereunder which is owned by any other Borrower. Each Borrower hereunder
      makes the representations and warranties contained herein only as to the
      Property it owns as set forth in this paragraph.

     

    Notwithstanding
      any provision herein to the contrary, each of the Borrowers acknowledge and
      agree that (i) the portions of the Property owned by Borrowers and described
      in
      Exhibits A-1 through A-3 and located outside the state of Florida (“Non-Florida
      Property”)
      are
      also encumbered by separate mortgages or deeds of trust and security instruments
      filed in each of those jurisdictions (“Non-Florida
      Mortgages”),
      and
      (ii) to the extent of any conflict between the terms and provisions of this
      Instrument and the terms and provisions of any of the Non-Florida Mortgages
      with
      respect to a Non-Florida Property, the terms and provisions of the Non-Florida
      Mortgages will control.

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    ARTICLE
      I  -
      OBLIGATIONS

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      II  -
      REPRESENTATIONS AND WARRANTIES

     

    Borrower
      hereby represents and warrants to Lender as follows:

     

    Section
      2.01  
      Title, Legal Status and Authority.
      Borrower (i) is seised of the Land and Improvements, and good and marketable
      fee
      title, to the Property, free and clear of all liens, charges, encumbrances,
      and
      security interests, except the matters listed in Exhibit
      C
      attached
      hereto (“Permitted
      Encumbrances”);
      (ii) will forever warrant and defend its title to the Property and the
      validity, enforceability, and priority of the lien and security interest created
      by this Instrument against the claims of all persons; (iii) is a limited
      partnership duly organized, validly existing, and in good standing and qualified
      to transact business under the laws of its state of organization or
      incorporation (“Organization
      State”)
      and
      the state where the Property is located (“Property
      State”);
      and
      (iv) has all necessary approvals, governmental and otherwise, and full power
      and
      authority to own its properties (including the Property) and carry on its
      business.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.02  
      Validity of Documents.
      The
      execution, delivery and performance of the Documents and the borrowing evidenced
      by the Note (i) are within the power of Borrower; (ii) have been authorized
      by
      all requisite action; (iii) have received all necessary approvals and consents;
      (iv) will not violate, conflict with, breach, or constitute (with notice or
      lapse of time, or both) a default under (1) any law, order or judgment of any
      court, governmental authority, or the governing instrument of Borrower or (2)
      any indenture, agreement, or other instrument to which Borrower is a party
      or by
      which it or any of its property is bound or affected; (v) will not result in
      the
      creation or imposition of any lien, charge, or encumbrance upon any of its
      properties or assets except for those in this Instrument; and (vi) will not
      require any authorization or license from, or any filing with, any governmental
      or other body (except for the recordation of this Instrument, the Assignment
      and
      Uniform Commercial Code (“UCC”)
      filings). The Documents constitute legal, valid, and binding obligations of
      Borrower.

     

    Section
      2.03  
      Litigation.
      There
      is no action, suit, or proceeding, judicial, administrative, or otherwise
      (including any condemnation or similar proceeding), pending or, to the knowledge
      of Borrower, threatened or contemplated against, or affecting, Borrower or
      the
      Property which would have a material adverse effect on either the Property
      or
      Borrower’s ability to perform its obligations.

     

    Section
      2.04  
      Status of Property.

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      2.05  
      Tax Status of Borrower.
      Borrower is not a “foreign person” within the meaning of Sections 1445 and 7701
      of the Internal Revenue Code of 1986, as amended, and the regulations
      thereunder.

     

    Section
      2.06  
      Bankruptcy and Equivalent Value.
      No
      bankruptcy, reorganization, insolvency, liquidation, or other proceeding for
      the
      relief of debtors has been instituted by or against Borrower, or any general
      partner of Borrower. Borrower has received reasonably equivalent value for
      granting this Instrument.

     

    Section
      2.07  
      Disclosure.
      Borrower has disclosed to Lender all material facts and has not failed to
      disclose any material fact that could cause any representation or warranty
      made
      herein to be materially misleading. There has been no adverse change in any
      condition, fact, circumstance, or event that would make any such information
      materially inaccurate, incomplete or otherwise misleading.

     

    Section
      2.08  
      Illegal Activity.
      No
      portion of the Property has been or will be purchased, improved, fixtured,
      equipped or furnished with proceeds of any illegal activity and, to the best
      of
      Borrower’s knowledge, there are no illegal activities at or on the
      Property.

     

    Section
      2.09  
      Executive Order 13224. Borrower
      and all persons or entities holding any legal or beneficial interest whatsoever
      in Borrower, including, without limitation any guarantor, are not included
      in,
      owned by, controlled by, acting for or on behalf of, providing assistance,
      support, sponsorship, or services of any kind to, or otherwise associated with
      any of the persons or entities referred to or described in Executive Order
      13224
-
      Blocking
      Property and Prohibiting Transactions with Persons Who Commit, Threaten to
      Commit, or Support Terrorism, as amended. It shall constitute an Event of
      Default hereunder if the foregoing representation and warranty shall ever become
      false.

     

    ARTICLE
      III  -
      COVENANTS AND AGREEMENTS

     

    Borrower
      covenants and agrees with Lender as follows:

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    Section
      3.03  
      Taxes and Other Charges

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      3.06  
      Insurance.

     

    (a)  Property
      and Time Element Insurance. Borrower shall maintain or cause its Manager to
      maintain insurance coverage of the types and minimum limits, during the term
      of
      this Instrument, to keep the Property appropriately insured for the benefit
      of
      Borrower and Lender (with Lender named as mortgagee) by (i) an “All Risks of
      Physical Loss” property insurance policy with an agreed amount endorsement for
“full replacement cost” (defined below) without any coinsurance provisions or
      penalties, or the broadest form of coverage available, in an amount sufficient
      to prevent Lender from ever becoming a coinsurer under the policy or Laws,
      and
      with a deductible not to exceed One Hundred Thousand Dollars ($100,000.00)
      for
      all perils and shall not exceed 5% of the insured value of the Property with
      respect to non-Federal flood insurance; (ii) a policy or endorsement insuring
      against acts of terrorism throughout the term of the Loan (including any
      extension terms) on a per occurrence basis in an amount equal to the Terrorism
      Insurance Amount (the “Terrorism
      Insurance Amount”
      shall
      mean an amount equal to the full replacement cost of the Property); (iii) loss
      of rents insurance and business income insurance, as applicable, (A) with loss
      payable to Lender and Borrower as their interest may appear; (B) covering all
      risks required to be covered by the insurance provided for in this
      section;
      and (C)
      which provides that after the physical loss to the Property occurs, the loss
      of
      rents and income, as applicable, will be insured until such rents or income,
      as
      applicable, either return to the same level that existed prior to the loss,
      or
      the expiration of twelve (12) months, whichever first occurs, and
      notwithstanding that the policy may expire prior to the end of such period;
      and
      (D) which contains an extended period of indemnity endorsement which provides
      that after the physical loss to the Improvements and Personal Property has
      been
      repaired, the continued loss of income will be insured until such income either
      returns to the same level it was at prior to the loss, or the expiration of
      twelve (12) months from the date that such Property is repaired or replaced
      and
      operations are resumed, whichever first occurs, and notwithstanding that the
      policy may expire prior to the end of such period. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
The
        amount of such loss of rents and business income insurance, as applicable,
        shall
        be determined prior to the date hereof and at least once each year thereafter
        based on Borrower's reasonable estimate of the gross income less non-continuing
        expenses from the Property for the succeeding period of coverage required
        above.; (v) flood insurance if any part of any structure or improvement
        comprising the Property is located in an area identified by the Federal
        Emergency Management Agency as an area federally designated a "100 year flood
        plain" and (a) flood insurance is generally available at reasonable premiums
        and
        in such amount as generally required by Lender for similar properties or
        (b) if
        not so available from a private carrier, from the federal government at
        commercially reasonable premiums to the extent available.; (vi) a policy
        or
        endorsement covering against damage or loss from (A) sprinkler system leakage
        and (B) boilers, boiler tanks, HVAC systems, heating and air-conditioning
        equipment, pressure vessels, auxiliary piping, and similar apparatus, in
        an
        amount generally available at reasonable premiums and generally required
        by
        Lender for similar properties; (vii) during the period of any construction,
        repair, restoration, or replacement of the Property, a standard builder’s risk
        policy with extended coverage in an amount at least equal to the full
        replacement cost of such Property; and (viii) a policy or endorsement covering
        against damage or loss by earthquake in the amounts reasonably required by
        Lender; (ix) if the Property constitutes a legal non-conforming use, an
        ordinance of law coverage endorsement which contains coverage for the (A)
        undamaged portion of building, (B) demolition costs, and (C) increased cost
        of
        construction, covering the Property in an amount not less than coverage (A)
        value included to full building limit, and coverage (B) and (C) a combined
        per
        occurrence limit of not less than $25 million. “Full
        replacement cost”
shall
        mean an amount equal to one hundred percent (100%) of the actual replacement
        cost of each property without allowance for depreciation (exclusive of the
        cost
        of excavations, foundations, footings underground utilities, and value of
        land)
        subject to Borrower's best efforts to obtain such limits at commercially
        reasonable pricing as approved by Lender and Borrower. Full replacement cost
        will be determined, at Borrower’s expense, periodically (but at least once every
        three (3) years) by or for the insurance company conducted by an appraiser
        experienced in valuing properties of similar types, engineer, architect,
        or
        contractor acceptable to Lender.

    

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      3.07  
      Damage and Destruction of Property

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      3.08  
      Condemnation

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.11  
      ERISA

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.12  
      Environmental Representations, Warranties, and
      Covenants

     

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

     

    (b)  Environmental
      Covenants.
      Borrower covenants and agrees that: (i) all use and operation of the Property
      shall be in compliance with all Environmental Laws and required permits; (ii)
      there shall be no Releases of Hazardous Materials affecting the Property; (iii)
      there shall be no Hazardous Materials affecting the Property except (A) routine
      office, cleaning

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
 and
        janitorial supplies, (B) in compliance with all Environmental Laws, (C) with
        all
        required permits, and (D) (1) in only the amounts necessary to operate the
        Property or (2) fully disclosed to and approved by Lender in writing; (iv)
        Borrower shall keep the Property free and clear of all liens and encumbrances
        imposed by any Environmental Laws due to any act or omission by Borrower
        or any
        person (the “Environmental
        Liens”);
        (v)
        Borrower shall, at its sole expense, fully and expeditiously cooperate in
        all
        activities in Section 3.12(c) including providing all relevant information
        and
        making knowledgeable persons available for interviews; (vi) Borrower shall,
        at
        its sole expense, (A) perform any environmental site assessment or other
        investigation of environmental conditions at the Property upon Lender’s request
        based on Lender’s reasonable belief that the Property is not in compliance with
        all Environmental Laws, (B) share with Lender the results and reports and
        Lender
        and the Indemnified Parties (defined below) shall be entitled to rely on
        such
        results and reports, and (C) complete any remediation of Hazardous Materials
        affecting the Property or other actions required by any Environmental Laws;
        (vii) Borrower shall not allow any Tenant or other user of the Property to
        violate any Environmental Law; (viii) Borrower shall promptly notify Lender
        in
        writing after it becomes aware of (A) the presence, Release, or threatened
        Release of Hazardous Materials affecting the Property, (B) any non-compliance
        of
        the Property with any Environmental Laws, (C) any actual or potential
        Environmental Lien, (D) any required or proposed remediation of environmental
        conditions relating to the Property, or (E) any written or oral communication
        or
        notice from any person relating to Hazardous Materials, and (ix) if at any
        time
        Lender reasonably requires any or all of an Asbestos Operation and Maintenance
        Plan, Lead Paint Abatement Plan, Storage Tank Closure and Removal Plan, Mold
        Operation and Maintenance Plan, and any other Operation and Maintenance Plan
        (collectively, the “O&M
        Plan”)
        be in
        effect (or required to be implemented by Lender), then Borrower shall, at
        its
        sole expense, implement, continue, and complete, as applicable, the O&M Plan
        (with any modifications required to comply with applicable Laws) until payment
        and full satisfaction of the Obligations. While any portion of the Loan is
        outstanding, upon the request of Lender, which request shall be made upon
        Lender’s reasonable determination that the governing law or applicable facts or
        circumstances respecting the Property warrant updated lead paint, asbestos,
        tank
        and/or mold survey(s) of the Property, at Borrower’s sole cost and expense,
        Borrower shall conduct such updated survey(s) of the Property. Each such
        survey
        shall be conducted by a consultant reasonably acceptable to Lender who shall
        determine the condition of the lead paint, asbestos, tank and/or mold at
        the
        Property, and whether the applicable O&M Plan should be revised or any other
        measures taken to ensure the continued safe condition of the Property. Borrower
        shall deliver to Lender a copy of such survey and shall enter into the revised
        O&M Plan, and Borrower shall certify to Lender in writing, no later than
        thirty (30) days after Borrower’s receipt of such survey, that Borrower has
        complied with all of the recommendations of the consultant contained in the
        survey and the revised O&M Plan. Any failure of Borrower to perform its
        obligations under this Section 3.12 shall constitute bad faith waste of the
        Property.

    

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      3.15  
      Records, Reports, and Audits

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      3.21  
      Other Leases.
      

     

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

     

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

     

    (b)  Minimum
      Leasing Requirements: 

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      3.22  
      Inventory Levels.
      At all
      times during the term of the Loan, Borrower shall maintain (or cause the
      Operating Lessee to maintain and pledge the same in full to Lender) inventory
      levels of linens; tableware; kitchen utensils and equipment; and tables, chairs
      and equipment for the Property, which are appropriate, but in no event less
      than
      the levels required pursuant to the Management Agreement and the Hotel Franchise
      Agreement (if any) respecting the Property.

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV  -
      ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

    
       

    

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    ARTICLE
      VI  -
      DEFAULTS AND REMEDIES

     

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

     

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

     

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

     

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

     

    (d)  if
      any
      default under Article V occurs;

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Lender,
      at its option, at its option, is authorized to foreclose this Mortgage subject
      to the rights of any tenants of the Property, and the failure to make any such
      tenants parties defendant to any foreclosure proceedings or to foreclose their
      rights or the failure to disturb the possession of any such tenants after
      foreclosure will not be, nor may it be asserted by Borrower as, a defense to
      any
      proceedings instituted by Lender to collect the sums secured hereby or to
      collect any deficiency remaining unpaid after the foreclosure sale of the
      Property.

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII  -
      SECURITY AGREEMENT

     

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

     

    ARTICLE
      VIII  -
      LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    ARTICLE
      IX  -
      ADDITIONAL PROVISIONS

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If
      to
      Borrower:

     

    PH
      Hotel
      Partners, LP

    c/o
      CNL
      Hospitality Corp.

    420
      South
      Orange Avenue, Suite 700

    Orlando,
      Florida 32801-3313

    Attention:
      Chief General Counsel       
      Facsimile: (407) 540-2702

     

    With
      a
      copy to: 

    Greenburg
      Traurig P.A.

    450
      S.
      Orange Avenue, Suite 650

    Orlando,
      FL 32801

    Attention:
      Michael J. Sullivan, Esq.

    Facsimile:
      (407) 650-8425

    

    And
      a
      copy to:

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

    215
      N.
      Eola Drive

    Orlando,
      FL 32802-2806

    Attention:
      Richard J. Fildes, Esq.

    Facsimile:
      (407) 843-4444

    

    

    If
      to
      Lender:

    

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    Dallas,
      Texas 75201

    Attention:
      Asset Management Department

    Reference
      Loan No. 70-6-106-306

    

    with
      a
      copy to:

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    Dallas,
      Texas 75201

    Attention:
      Legal Department

    Reference
      Loan No. 70-6-106-306

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    And
      a
      copy to:

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, 8th
      Floor

    San
      Francisco, CA 94107

    Attention:
      Stephen A. Cowan, Esq. 

    Facsimile:
      (415) 836-2500

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    BORROWER’S
      INITIAL: __________

     

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

     

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

     

    ARTICLE
      X  -
      LOCAL LAW PROVISIONS

     

    Section
      10.1 It
      is
      agreed that any additional sum or sums advanced by the then holder of the Note
      secured hereby to or for the benefit of the Borrower, whether such advances
      are
      obligatory or are made at the option of the Lender, or otherwise, at any time
      within twenty (20) years from the date of this Mortgage, or within such lesser
      period of time as may be provided hereafter by law as a prerequisite for the
      sufficiency of actual notice or record notice of the optional future and
      additional advances as against the rights of creditors or subsequent purchasers
      for valuable consideration, with interest thereof at the rate agreed upon at
      any
      time of each additional loan or advance, shall be equally secured and have
      the
      same priority as the original indebtedness evidenced by the Note and be subject
      to all of the terms and provisions of this Mortgage, whether or not such
      additional loan or advance is evidenced by a note of the Borrower and whether
      or
      not identified by a recital that it is secured by this Mortgage; provided,
      however, that the aggregate amount of the principal indebtedness outstanding
      and
      so secured any one time shall not exceed One Hundred Twenty Million and NO/100
      Dollars ($120,000,000.00) plus interest and disbursements made for the payment
      of taxes, levies, or insurance on the property covered by this Mortgage and
      provided further that it is understood and agreed that this future advance
      provision shall not be construed to obligate the Lender to make any such
      additional loans or advances. Nothing herein shall oblige the Lender to loan
      the
      Borrower at any time a sum in excess of the face amount of the Note. It is
      further agreed that any additional note or notes executed and delivered under
      this future advance provision shall be included in the word "Note" or "Notes"
      wherever it applies in the context of this Mortgage.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      10.2 Maturity
      Date.
      The
      maturity date of the Note is April 5, 2011.

     

    Section
      10.3 Secondary
      Financing.
      Except
      as expressly set forth herein, Borrower shall not cause or allow any other
      mortgages (or instruments in the nature thereof) to encumber the Property or
      any
      portion thereof.

     

    Section
      10.4 Time
      is of the Essence.
      Time is
      of the essence with respect to each and every covenant, agreement and obligation
      of Borrower under this Mortgage and the other Documents.

     

    Section
      10.5 Attorneys’
      Fees. All
      references to “attorneys fees” herein shall mean all costs, charges, and
      expenses, including attorneys’ and paralegals’ fees, expended or incurred in
      connection therewith, including attorneys’ and paralegals’ fees incurred in any
      appellate, past-judgment or bankruptcy proceedings.

     

    Section
      10.6 Execution
      in Counterparts.
      This
      Mortgage may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, and all of such counterparts shall constitute one
      Mortgage.

     

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

     

    Section
      10.8 Alcoholic Beverage License. At
      the
      time of any foreclosure sale under the Instrument, or any deed in lieu of
      foreclosure, the Borrower shall, at Borrower's expense and without additional
      consideration to Borrower, immediately take all actions required under
      applicable laws, regulations, rules, and policies to transfer the Liquor
      Licenses to the person or entity which acquires title to the Mortgaged Property
      pursuant to such foreclosure or deed in lieu of foreclosure. Such actions shall
      include, without limitation, filing with the local division of the State of
      Florida Department of Business and Professional Regulation, Division of
      Alcoholic Beverages & Tobacco such affidavits, applications, declarations,
      documents and other materials to be executed or provided by Borrower as may
      be
      necessary or appropriate to effect such transfer, and Borrower shall thereafter
      diligently pursue such transfer in order to consummate the same as soon as
      reasonably possible. Borrower’s obligations under this Section 10.8 shall
      survive any foreclosure of the Instrument or any deed in lieu of
      foreclosure.

     

    ARTICLE
      XI  -
      OPERATING LEASE PROVISIONS

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    

     

    (Signature
      pages follow)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              HMA
                HOTEL PARTNERS, LP,

              a
                Delaware limited partnership

            
	 	
              By: 
                HMA HOTEL GP, LLC,

              a
                Delaware limited liability company

              Its:
                General Partner

            
	 	
              By: /s/
                John X. Brady, Jr.     

              Name:
                John X. Brady, Jr.

              Title:
                Vice President

            

    

    WITNESSED
      BY:

    

    /s/
      Cathleen A. Coffey

    Print
      Name: Cathleen A. Coffey

    

    

    WITNESSED
      BY:

    

    /s/
      Patti Cook

    Print
      Name: Patti Cook 

    

    

    
      	 	
              CM
                HOTEL PARTNERS, LP,

              a
                Delaware limited partnership

            
	 	
              By: 
                CM HOTEL GP, LLC,

              a
                Delaware limited liability company

              Its:
                General Partner

            
	 	
              By: /s/
                John X. Brady, Jr.     

              Name:
                John X. Brady, Jr.

              Title:
                Vice President

            

    

    

    WITNESSED
      BY:

    

    /s/
      Cathleen A. Cook

    Print
      Name: Cathleen A. Cook 

    

    

    WITNESSED
      BY:

    /s/
      Patti Cook

    Print
      Name: Patti Cook 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	
              PH
                HOTEL PARTNERS, LP,

              a
                Delaware limited partnership

            
	 	
              By: 
                PH HOTEL GP, LLC,

              a
                Delaware limited liability company

              Its:
                General Partner

            
	 	
              By: /s/
                John X. Brady, Jr.    

              Name:
                John X. Brady, Jr.

              Title:
                Vice President

            

    

    

    WITNESSED
      BY:

    /s/
      Cathleen A. Cook

    Print
      Name: Cathleen A. Cook 

    

    

    WITNESSED
      BY:

    

    /s/
      Patti Cook

    Print
      Name: Patti Cook 

    

    
      	 	
              AH
                HOTEL PARTNERS, LP,

              a
                Delaware limited partnership

            
	 	
              By: 
                AH HOTEL GP, LLC,

              a
                Delaware limited liability company

              Its:
                General Partner

            
	 	
              By: /s/
                John X. Brady, Jr.    

              Name:
                John X. Brady, Jr.

              Title:
                Vice President

            

    

    

    WITNESSED
      BY:

    

    /s/
      Cathleen A. Coffey

    Print
      Name: Cathleen A. Coffey

    

    WITNESSED
      BY:

    

    /s/
      Patti Cook

    Print
      Name: PAtti Cook 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGEMENTS

     

    STATE
      OF
FL     

    

    COUNTY
      OF
Orange    

    

    The
      foregoing instrument was acknowledged before me this 23 day of 
March, 2006, by John X. Brady, Jr. , as Vice President of HMA
      Hotel GP LLC, a Delaware LLC , on behalf of such entity. He/she is
      either personally known to me, or has produced a ____________________________
      driver’s license as identification.

    

    /s/
      Cathleen A. Coffey

    Printed
      Name: Cathleen A. Coffey

    NOTARY
      PUBLIC

    State
      of FL at Large

    (Notarial
      Seal)

    My
      Commission Expires:September
      24, 2009

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    ACKNOWLEDGEMENTS

     

     

    
      STATE
        OF
FL     

      

      COUNTY
        OF
Orange    

      

      The
        foregoing instrument was acknowledged before me this 23 day of 
March, 2006, by John X. Brady, Jr. , as Vice President
        of CM Hotel GP LLC, a Delaware LLC , on behalf of such
        entity. He/she is either personally known to me, or has produced a
        ____________________________ driver’s license as identification.

      

      /s/
        Cathleen A. Coffey

      Printed
        Name: Cathleen A. Coffey

      NOTARY
        PUBLIC

      State
        of FL at Large

      (Notarial
        Seal)

      My
        Commission Expires:September
        24, 2009

       

    

    

     

    

     

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    ACKNOWLEDGEMENTS

     

     

    
      
        STATE
          OF
FL     

        

        COUNTY
          OF
Orange    

        

        The
          foregoing instrument was acknowledged before me this 23 day of 
March, 2006, by John X. Brady, Jr. , as Vice President
          of PH Hotel GP LLC, a Delaware LLC , on behalf of such
          entity. He/she is either personally known to me, or has produced a
          ____________________________ driver’s license as identification.

        

        /s/
          Cathleen A. Coffey

        Printed
          Name: Cathleen A. Coffey

        NOTARY
          PUBLIC

        State
          of FL at Large

        (Notarial
          Seal)

        My
          Commission Expires:September
          24, 2009

         

      

    

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    ACKNOWLEDGEMENT

     

    
      
        STATE
          OF
FL     

        

        COUNTY
          OF
Orange    

        

        The
          foregoing instrument was acknowledged before me this 23 day of 
March, 2006, by John X. Brady, Jr. , as Vice President
          of AH Hotel GP LLC, a Delaware LLC , on behalf of such
          entity. He/she is either personally known to me, or has produced a
          ____________________________ driver’s license as identification.

        

        /s/
          Cathleen A. Coffey

        Printed
          Name: Cathleen A. Coffey

        NOTARY
          PUBLIC

        State
          of FL at Large

        (Notarial
          Seal)

        My
          Commission Expires:September
          24, 2009

         

      

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      A

     

    LEGAL
      DESCRIPTION OF THE PROPERTY

     

    All
      that
      certain real property located in the City of Miami, County of Miami-Dade, State
      of Florida described as follows:

     

    Parcel
      A:

    

    Lot
      4,
      Block 2 of Blue Lagoon East, according to the Plat thereof as recorded in Plat
      Book 120, Page 63, of the Public Records of Miami-Dade County,
      Florida.

    

    Parcel
      B:

    

    A
      non-exclusive easement for the benefit of Parcel A as created by the Plat of
      Blue Lagoon East, recorded in Plat Book 120, Page 63, of the Public Records
      of
      Miami-Dade County, Florida, for the purpose of the joint use of the lake
      pursuant to Plat Restriction, over, under and across Lake delineated on said
      Plat.

    

    Parcel
      C:

    

    A
      non-exclusive easement for the benefit of Parcel A as created by Declaration
      of
      Joint Use and Restrictive Covenants, dated April 22, 1982 and recorded April
      23,
      1982 in Official Records Book 11420, Page 835, of the Public Records of
      Miami-Dade County, Florida for the purpose described therein, over, under and
      across lands described therein.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A-1

    

    LEGAL
      DESCRIPTION OF THE NON-FLORIDA PROPERTY - Oregon

    

    

    All
      that
      certain real property located in the City of Portland, County of Multnomah,
      State of Oregon, and described as follows:

    

     PARCEL
      I:

    

    All
      of
      Block 44, CITY OF PORTLAND, in the City of Portland, County of Multnomah and
      State of Oregon.

    

    PARCEL
      II:

    

    Lots
      1,
      2, 7 and 8, Block 45, CITY OF PORTLAND, in the City of Portland, County of
      Multnomah and State of Oregon.

    Exhibit
      A-2

    

    LEGAL
      DESCRIPTION OF THE NON-FLORIDA PROPERTY - Michigan

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A-3

    

    LEGAL
      DESCRIPTION OF THE NON-FLORIDA PROPERTY - California

    

    All
      that
      certain real property located in the City of Costa Mesa, County of Orange,
      State
      of California, and described as follows:

    

    PARCEL
      A:

    

    PARCEL
      3
      OF PARCEL MAP NO. 83-382, AS SHOWN ON A MAP FILED IN BOOK 185, PAGES 19, 20
      AND
      21 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
      COUNTY.

    

    PARCEL
      B:

    

    A
      RECIPROCAL NON-EXCLUSIVE PERPETUAL EASEMENT FOR PEDESTRIAN AND VEHICULAR INGRESS
      AND EGRESS, UTILITIES AND OVERFLOW PARKING OF VEHICLES, AS SET FORTH IN THAT
      CERTAIN AMENDED AND RESTATED HOTEL RECIPROCAL EASEMENT AGREEMENT, RECORDED
      DECEMBER 24, 1987 AS INSTRUMENT NO. 87-708558 OF OFFICIAL RECORDS OF ORANGE
      COUNTY, CALIFORNIA, AND AS AMENDED BY THAT CERTAIN AMENDMENT No. 1 TO AMENDED
      AND RESTATED HOTEL RECIPROCAL EASEMENT AGREEMENT, RECORDED JULY 29, 1988 AS
      INSTRUMENT NO. 88-367953 OF SAID OFFICIAL RECORDS.

    

    PARCEL
      C:

    

    A
      NON-EXCLUSIVE EASEMENT FOR PURPOSES OF PURPOSES OF PARKING AUTOMOBILES AT ALL
      TIMES OTHER THAN DURING NORMAL BUSINESS HOURS DEFINED THEREIN AS MONDAY THROUGH
      FRIDAY BETWEEN THE HOURS OF 7:00 AM AND 6:00 PM, TOGETHER WITH VEHICULAR AND
      PEDESTRIAN INGRESS AND EGRESS THERETO, AS SET FORTH IN THAT CERTAIN RECIPROCAL
      PARKING AGREEMENT, RECORDED MARCH 07, 1991 AS INSTRUMENT NO. 91-104643 OF
      OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, OVER THAT PORTION OF PARCEL
      2 OF
      PARCEL MAP NO. 83-382, AS SHOWN ON A MAP FILED IN BOOK 185, PAGES 19, 20 AND
      21
      OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED
      AS FOLLOWS:

    

    BEGINNING
      AT THE SOUTHWESTERLY CORNER OF PARCEL 2 OF SAID PARCEL MAP NO. 83-382; THENCE
      ALONG THE SOUTHERLY BOUNDARY LINE OF PARCEL 2 OF SAID PARCEL MAP, SOUTH 89° 06'
      09" EAST 93.00 FEET; THENCE ALONG THE EASTERLY BOUNDARY LINE OF PARCEL 2 OF
      SAID
      PARCEL MAP, NORTH 00° 53' 51" EAST 29.00 FEET TO THE TRUE POINT OF BEGINNING;
      THENCE CONTINUING ALONG SAID LINE, NORTH 00° 53' 51" EAST 131.00 FEET TO A POINT
      ON A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 12.00 FEET, A RADIAL LINE
      THROUGH SAID POINT BEARS NORTH 89° 06' 09" WEST; THENCE SOUTHERLY ALONG SAID
      CURVE THROUGH A CENTRAL ANGLE OF 90° 00' 00" AN ARC DISTANCE OF 18.85 FEET;
      THENCE NORTH 89° 06' 09" WEST 51.00 FEET; THENCE SOUTH 00° 53 ' 51" WEST 125.00
      FEET; THENCE SOUTH 89° 06' 09" EAST 57.00 FEET TO A POINT ON A TANGENT CURVE
      CONCAVE NORTHWESTERLY HAVING A RADIUS OF 6.00 FEET; THENCE NORTHERLY ALONG
      SAID
      CURVE THROUGH A CENTRAL ANGLE OF 90° 00' 00" AN ARC DISTANCE OF 9.42 FEET TO THE
      TRUE POINT OF BEGINNING.

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      B

     

    DESCRIPTION
      OF PERSONAL PROPERTY SECURITY

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      C

     

    PERMITTED
      ENCUMBRANCES

     

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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      D

     

    DOCUMENTS

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      	96.  	
              Anti-Coercion
                Statement (CM) dated April 3, 2006 y CM Hotel Partners,
                LPExhibit 10.125

    
      

    

     

    PREPARED
      BY AND UPON RECORDATION RETURN TO:

     

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, Suite 800

    San
      Francisco, CA 94107

    Attention:
      Stephen A. Cowan

     

    

    

    PH
      HOTEL
      PARTNERS, LP, as Borrower/mortgagor

    (Borrower)

     

    to

     

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA, as mortgagee/Lender

    (Lender)

     

     

     

    DEED
      OF
      TRUST, SECURITY AGREEMENT

    AND
      FIXTURE FILING

    

    THIS
      DOCUMENT CONSTITUTES A FIXTURE FILING

    IN
      ACCORDANCE WITH ORS § 79.0502(3)

     

     

    Dated
      and
      Effective: As
      of
      April 3, 2006

     

    Location:  319
      SW
      Pine Street, Portland, Oregon

     

    Tax
      Lot
      #: R246063; R246064; R246069

     

    County:  Multnomah

     

    Loan
      Number: 70-6-106-306

     

     

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

     

    
      	
              ARTICLE
                I

               

            	
              -
                OBLIGATIONS

               

            	 
	
              Section
                1.01

               

            	
              Obligations

               

            	
              3

               

            
	
              Section
                1.02

               

            	
              Documents

               

            	
              4

               

            
	
              ARTICLE
                II

               

            	
              -
                REPRESENTATIONS AND WARRANTIES

               

            	 
	
              Section
                2.01

               

            	
              Title,
                Legal Status and Authority

               

            	
              4

               

            
	
              Section
                2.02

               

            	
              Validity
                of Documents

               

            	
              4

               

            
	
              Section
                2.03

               

            	
              Litigation

               

            	
              5

               

            
	
              Section
                2.04

               

            	
              Status
                of Property

               

            	
              5

               

            
	
              Section
                2.05

               

            	
              Tax
                Status of Borrower

               

            	
              5

               

            
	
              Section
                2.06

               

            	
              Bankruptcy
                and Equivalent Value

               

            	
              6

               

            
	
              Section
                2.07

               

            	
              Disclosure

               

            	
              6

               

            
	
              Section
                2.08

               

            	
              Illegal
                Activity

               

            	
              6

               

            
	
              Section
                2.09

               

            	
              Executive
                Order 13224

               

            	
              6

               

            
	
              ARTICLE
                III

               

            	
              -
                COVENANTS AND AGREEMENTS

               

            	 
	
              Section
                3.01

               

            	
              Payment
                of Obligations

               

            	
              6

               

            
	
              Section
                3.02

               

            	
              Continuation
                of Existence

               

            	
              6

               

            
	
              Section
                3.03

               

            	
              Taxes
                and Other Charges

               

            	
              6

               

            
	
              Section
                3.04

               

            	
              Defense
                of Title, Litigation, and Rights under Documents

               

            	
              7

               

            
	
              Section
                3.05

               

            	
              Compliance
                with Laws and Operation and Maintenance of Property

               

            	
              8

               

            
	
              Section
                3.06

               

            	
              Insurance

               

            	
              9

               

            
	
              Section
                3.07

               

            	
              Damage
                and Destruction of Property

               

            	
              11

               

            
	
              Section
                3.08

               

            	
              Condemnation

               

            	
              13

               

            
	
              Section
                3.09

               

            	
              Liens
                and Liabilities

               

            	
              14

               

            
	
              Section
                3.10

               

            	
              Tax
                and Insurance Deposits

               

            	
              14

               

            
	
              Section
                3.11

               

            	
              ERISA

               

            	
              15

               

            
	
              Section
                3.12

               

            	
              Environmental
                Representations, Warranties, and Covenants

               

            	
              16

               

            
	
              Section
                3.13

               

            	
              Electronic
                Payments

               

            	
              17

               

            
	
              Section
                3.14

               

            	
              Inspection

               

            	
              18

               

            
	
              Section
                3.15

               

            	
              Records,
                Reports, and Audits

               

            	
              18

               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

     

    

      
        	
                Section
                  3.16

                 

              	
                Borrower’s
                  Certificates

                 

              	
                19

                 

              
	
                Section
                  3.17

                 

              	
                Full
                  Performance Required; Survival of Warranties

                 

              	
                19

                 

              
	
                Section
                  3.18

                 

              	
                Additional
                  Security

                 

              	
                19

                 

              
	
                Section
                  3.19

                 

              	
                Further
                  Acts

                 

              	
                20

                 

              
	
                Section
                  3.20

                 

              	
                Capital
                  Lease

                 

              	
                20

                 

              
	
                Section
                  3.21

                 

              	
                Other
                  Leases

                 

              	
                20

                 

              
	
                Section
                  3.22

                 

              	
                Inventory
                  Levels

                 

              	
                21

                 

              
	
                Section
                  3.23

                 

              	
                Single
                  Purpose Entity

                 

              	
                21

                 

              
	
                ARTICLE
                  IV

                 

              	
                -
                  ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

                 

              	 
	
                Section
                  4.01

                 

              	
                Expenses
                  and Advances

                 

              	
                22

                 

              
	
                Section
                  4.02

                 

              	
                Subrogation

                 

              	
                22

                 

              
	
                ARTICLE
                  V

                 

              	
                -
                  SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY

                 

              	 
	
                Section
                  5.01

                 

              	
                Due-on-Sale
                  or Encumbrance

                 

              	
                22

                 

              
	
                Section
                  5.02

                 

              	
                Permitted
                  Transfer

                 

              	
                23

                 

              
	
                Section
                  5.03

                 

              	
                Permitted
                  Admission

                 

              	
                24

                 

              
	
                ARTICLE
                  VI

                 

              	
                -
                  DEFAULTS AND REMEDIES

                 

              	 
	
                Section
                  6.01

                 

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

                 

              	
                25

                 

              
	
                Section
                  6.02

                 

              	
                Remedies

                 

              	
                27

                 

              
	
                Section
                  6.03

                 

              	
                Expenses

                 

              	
                28

                 

              
	
                Section
                  6.04

                 

              	
                Rights
                  Pertaining to Sales

                 

              	
                29

                 

              
	
                Section
                  6.05

                 

              	
                Applications
                  of Proceeds

                 

              	
                30

                 

              
	
                Section
                  6.06

                 

              	
                Additional
                  Provisions as to Remedies

                 

              	
                30

                 

              
	
                Section
                  6.07

                 

              	
                Waiver
                  of Rights and Defenses

                 

              	
                30

                 

              
	
                ARTICLE
                  VII

                 

              	
                -
                  SECURITY AGREEMENT AND FIXTURE FILING

                 

              	 
	
                Section
                  7.01

                 

              	
                Security
                  Agreement

                 

              	
                31

                 

              
	
                Section
                  7.02

                 

              	
                Fixture
                  Filing

                 

              	
                31

                 

              
	
                ARTICLE
                  VIII

                 

              	
                -
                  LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

                 

              	 
	
                Section
                  8.01

                 

              	
                Recourse
                  Liability

                 

              	
                31

                 

              

      

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Section
                  3.16

                 

              	
                Borrower’s
                  Certificates

                 

              	
                19

                 

              
	
                Section
                  3.17

                 

              	
                Full
                  Performance Required; Survival of Warranties

                 

              	
                19

                 

              
	
                Section
                  3.18

                 

              	
                Additional
                  Security

                 

              	
                19

                 

              
	
                Section
                  3.19

                 

              	
                Further
                  Acts

                 

              	
                20

                 

              
	
                Section
                  3.20

                 

              	
                Capital
                  Lease

                 

              	
                20

                 

              
	
                Section
                  3.21

                 

              	
                Other
                  Leases

                 

              	
                20

                 

              
	
                Section
                  3.22

                 

              	
                Inventory
                  Levels

                 

              	
                21

                 

              
	
                Section
                  3.23

                 

              	
                Single
                  Purpose Entity

                 

              	
                21

                 

              
	
                ARTICLE
                  IV

                 

              	
                -
                  ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

                 

              	 
	
                Section
                  4.01

                 

              	
                Expenses
                  and Advances

                 

              	
                22

                 

              
	
                Section
                  4.02

                 

              	
                Subrogation

                 

              	
                22

                 

              
	
                ARTICLE
                  V

                 

              	
                -
                  SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY

                 

              	 
	
                Section
                  5.01

                 

              	
                Due-on-Sale
                  or Encumbrance

                 

              	
                22

                 

              
	
                Section
                  5.02

                 

              	
                Permitted
                  Transfer

                 

              	
                23

                 

              
	
                Section
                  5.03

                 

              	
                Permitted
                  Admission

                 

              	
                24

                 

              
	
                ARTICLE
                  VI

                 

              	
                -
                  DEFAULTS AND REMEDIES

                 

              	 
	
                Section
                  6.01

                 

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

                 

              	
                25

                 

              
	
                Section
                  6.02

                 

              	
                Remedies

                 

              	
                27

                 

              
	
                Section
                  6.03

                 

              	
                Expenses

                 

              	
                28

                 

              
	
                Section
                  6.04

                 

              	
                Rights
                  Pertaining to Sales

                 

              	
                29

                 

              
	
                Section
                  6.05

                 

              	
                Applications
                  of Proceeds

                 

              	
                30

                 

              
	
                Section
                  6.06

                 

              	
                Additional
                  Provisions as to Remedies

                 

              	
                30

                 

              
	
                Section
                  6.07

                 

              	
                Waiver
                  of Rights and Defenses

                 

              	
                30

                 

              
	
                ARTICLE
                  VII

                 

              	
                -
                  SECURITY AGREEMENT AND FIXTURE FILING

                 

              	 
	
                Section
                  7.01

                 

              	
                Security
                  Agreement

                 

              	
                31

                 

              
	
                Section
                  7.02

                 

              	
                Fixture
                  Filing

                 

              	
                31

                 

              
	
                ARTICLE
                  VIII

                 

              	
                -
                  LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

                 

              	 
	
                Section
                  8.01

                 

              	
                Recourse
                  Liability

                 

              	
                31

                 

              

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        	
                Section
                  8.02

                 

              	
                General
                  Indemnity

                 

              	
                31

                 

              
	
                Section
                  8.03

                 

              	
                Transaction
                  Taxes Indemnity

                 

              	
                32

                 

              
	
                Section
                  8.04

                 

              	
                ERISA
                  Indemnity

                 

              	
                32

                 

              
	
                Section
                  8.05

                 

              	
                Environmental
                  Indemnity

                 

              	
                32

                 

              
	
                Section
                  8.06

                 

              	
                Duty
                  to Defend, Costs and Expenses

                 

              	
                32

                 

              
	
                Section
                  8.07

                 

              	
                Recourse
                  Obligation and Survival

                 

              	
                32

                 

              
	
                ARTICLE
                  IX

                 

              	
                -
                  ADDITIONAL PROVISIONS

                 

              	 
	
                Section
                  9.01

                 

              	
                Usury
                  Savings Clause

                 

              	
                32

                 

              
	
                Section
                  9.02

                 

              	
                Notices

                 

              	
                33

                 

              
	
                Section
                  9.03

                 

              	
                Sole
                  Discretion of Lender

                 

              	
                34

                 

              
	
                Section
                  9.04

                 

              	
                Applicable
                  Law and Submission to Jurisdiction

                 

              	
                34

                 

              
	
                Section
                  9.05

                 

              	
                Construction
                  of Provisions

                 

              	
                35

                 

              
	
                Section
                  9.06

                 

              	
                Transfer
                  of Loan

                 

              	
                35

                 

              
	
                Section
                  9.07

                 

              	
                Miscellaneous

                 

              	
                36

                 

              
	
                Section
                  9.08

                 

              	
                Entire
                  Agreement

                 

              	
                37

                 

              
	
                Section
                  9.09

                 

              	
                WAIVER
                  OF TRIAL BY JURY

                 

              	
                37

                 

              
	
                Section
                  9.10

                 

              	
                Partial
                  Release

                 

              	
                38

                 

              
	
                Section
                  9.11

                 

              	
                Property
                  Substitutions

                 

              	
                38

                 

              
	
                Section
                  9.12

                 

              	
                Concerning
                  the Trustee

                 

              	
                38

                 

              
	
                Section
                  9.13

                 

              	
                Attorneys’
                  Fees

                 

              	
                38

                 

              
	
                Section
                  9.14

                 

              	
                Standard
                  of Approval; Covenant of Good Faith and Fair Dealing

                 

              	
                38

                 

              
	
                ARTICLE
                  X

                 

              	
                -
                  LOCAL LAW PROVISIONS

                 

              	 
	
                Section
                  10.01

                 

              	
                State
                  Specific Provisions

                 

              	
                39

                 

              
	
                ARTICLE
                  XI

                 

              	
                -
                  OPERATING LEASE PROVISIONS

                 

              	 
	
                EXHIBIT
                  A

              	 	 
	
                EXHIBIT
                  B

              	 	 
	
                EXHIBIT
                  C

              	 	 
	
                EXHIBIT
                  D

              	 	 

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

    

      DEFINITIONS

       

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

       

      
        	
                Action

              	
                Section
                  9.04

              
	
                Additional
                  Funds 

              	
                Section
                  3.07 (c)

              
	
                Affecting
                  the Property

              	
                Section
                  3.12 (a)

              
	
                Affiliate
                  Loan

              	
                Section
                  5.01

              
	
                Affiliate
                  Loan Lender

              	
                Section
                  5.01

              
	
                All

              	
                Section
                  9.05 (m)

              
	
                Any

              	
                Section
                  9.05 (m)

              
	
                Assessments

              	
                Section
                  3.03 (a)

              
	
                Assignment

              	
                Recitals,
                  Section 2 (B)

              
	
                Awards

              	
                Section
                  3.08 (b)

              
	
                Bankruptcy
                  Code

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Borrower

              	
                Preamble

              
	
                Costs

              	
                Section
                  4.01

              
	
                Damage

              	
                Section
                  3.07 (a)

              
	
                Default
                  Rate

              	
                Section
                  1.01 (a)

              
	
                Demand

              	
                Section
                  9.14 (n)

              
	
                Deposits

              	
                Section
                  3.10

              
	
                Documents

              	
                Section
                  1.02

              
	
                Environmental
                  Indemnity

              	
                Section
                  8.05

              
	
                Environmental
                  Law

              	
                Section
                  3.12 (a) 

              
	
                Environmental
                  Liens

              	
                Section
                  3.12 (b)

              
	
                Environmental
                  Report

              	
                Section
                  3.12 (a)

              
	
                ERISA

              	
                Section
                  3.11

              
	
                Event
                  of Default

              	
                Section
                  6.01

              
	
                Flood
                  Acts

              	
                Section
                  2.04 (a)

              
	
                Foreign
                  Person

              	
                Section
                  2.05

              
	
                Full
                  Replacement Cost

              	
                Section
                  3.06 (a)

              
	
                Grace
                  Period

              	
                Section
                  6.01(b)

              
	
                Hazardous
                  Materials

              	
                Section
                  3.12 (a)

              
	
                Impositions

              	
                Section
                  3.10

              
	
                Improvements

              	
                Recitals,
                  Section 2 (A) (ii)

              
	
                Include,
                  Including

              	
                Section
                  9.05 (f)

              
	
                Indemnified
                  Parties

              	
                Section
                  8.02

              
	
                Indemnify

              	
                Section
                  8.02

              
	
                Instrument

              	
                Preamble

              
	
                Insurance
                  Premiums

              	
                Section
                  3.10

              
	
                Investors

              	
                Section
                  9.06

              
	
                Land

              	
                Recitals,
                  Section 2 (A) (i)

              
	
                Laws

              	
                Section
                  3.05(c)

              

      

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                Lease

              	
                Section
                  9.05 (k)

              
	
                Leases

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Lender

              	
                Preamble

              
	
                Lessee

              	
                Section
                  9.05 (k)

              
	
                Lessor

              	
                Section
                  9.05 (k)

              
	
                Liens

              	
                Section
                  3.09

              
	
                Loan

              	
                Recitals,
                  Section 1

              
	
                Losses

              	
                Section
                  8.02

              
	
                Major
                  Tenants

              	
                Section
                  3.21

              
	
                Microbial
                  Matter

              	
                Section
                  3.12 (a)

              
	
                Net
                  Proceeds

              	
                Section
                  3.07 (d)

              
	
                Note

              	
                Recitals,
                  Section 1

              
	
                Notice

              	
                Section
                  9.02

              
	
                Obligations

              	
                Section
                  1.01

              
	
                On
                  Demand

              	
                Section
                  9.05 (n)

              
	
                Operating
                  Lessee

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Operating
                  Lease

              	
                Recitals,
                  Section 2 (A) (ix)

              
	
                Organization
                  State

              	
                Section
                  2.01

              
	
                Owned

              	
                Section
                  9.05 (l)

              
	
                Permitted
                  Encumbrances

              	
                Section
                  2.01

              
	
                Person

              	
                Section
                  9.05 (i)

              
	
                Personal
                  Property

              	
                Section
                  6.02 (j)

              
	
                Prepayment
                  Premium

              	
                Section
                  1.01 (a)

              
	
                Proceeding

              	
                Section
                  6.01 (b)

              
	
                Property

              	
                Recitals,
                  Section 2 (A)

              
	
                Property
                  State

              	
                Section
                  2.01

              
	
                Provisions

              	
                Section
                  9.05 (j)

              
	
                Rating
                  Agency

              	
                Section
                  9.06

              
	
                Release

              	
                Section
                  3.12 (a)

              
	
                Rent
                  Loss Proceeds

              	
                Section
                  3.07 (c)

              
	
                Rents

              	
                Recitals,
                  Section 2 (A) (x)

              
	
                Restoration

              	
                Section
                  3.07 (a)

              
	
                Securities

              	
                Section
                  9.06

              
	
                Security
                  Agreement

              	
                Section
                  7.01

              
	
                Taking

              	
                Section
                  3.08 (a)

              
	
                Tenant

              	
                Recitals,
                  Section 2 (A) (vi)

              
	
                Tenants

              	
                Section
                  9.05 (k)

              
	
                Transaction
                  Taxes

              	
                Section
                  3.03 (c)

              
	
                Trustee

              	
                Preamble,
                  Section 9.05 (o)

              
	
                UCC

              	
                Section
                  2.02

              
	
                Unsecured
                  Obligations

              	
                Section
                  10.01 (b)

              
	
                Upon
                  Demand

              	
                Section
                  9.05 (n)

              
	
                Violation

                 

              	
                Section
                  3.11

                 

              

      

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    DEED
      OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

     

    THIS
      DEED
      OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
      (this
“Instrument”)
      is
      dated and effective as of April 3, 2006, by PH
      HOTEL PARTNERS, LP,
      a
      Delaware limited partnership, having its principal office and place of business
      at c/o CNL Hospitality Corp., 420 South Orange Avenue, Suite 700, Orlando,
      Florida 32801-3313, as Borrower/mortgagor (“Borrower”),
      to
FIRST
      AMERICAN TITLE COMPANY,
      a
      California corporation, having an address at 222 SW Columbia, Fourth Floor,
      Portland, Oregon 97201, as
      trustee (“Trustee”),
      for
      the benefit of THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA,
      a New
      Jersey corporation, having an office at c/o Prudential Asset Resources, 2200
      Ross Avenue, Suite 4900-E, Dallas, Texas 75201, as mortgagee/Lender
      (“Lender”).
      

    RECITALS:

     

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

     

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

     

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

     

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

     

    (i) The
      real
      property in Multnomah County, State of Oregon, and described in Exhibit
      “A”
      attached
      hereto (“Land”);

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    IN
      TRUST,
      WITH POWER OF SALE, to secure payment and performance of the Obligations in
      the
      time and manner set forth in the Documents (defined below). Notwithstanding
      the
      foregoing or any other term contained herein or in the Documents, none of
      Borrower's obligations under or pursuant to the Environmental Indemnity (defined
      below) shall be secured by the lien of this Instrument.

     

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

     

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

     

    ARTICLE
      I  -
      OBLIGATIONS

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    ARTICLE
      II  -
      REPRESENTATIONS AND WARRANTIES

     

    Borrower
      hereby represents and warrants to Lender as follows:

     

    Section
      2.01  
      Title, Legal Status and Authority.
      Borrower (i) is seised of the Land and Improvements, and good and marketable
      fee
      title, to the Property, free and clear of all liens, charges, encumbrances,
      and
      security interests, except the matters listed in Exhibit
      C
      attached
      hereto (“Permitted
      Encumbrances”);
      (ii) will forever warrant and defend its title to the Property and the
      validity, enforceability, and priority of the lien and security interest created
      by this Instrument against the claims of all persons; (iii) is a limited
      partnership duly organized, validly existing, and in good standing and qualified
      to transact business under the laws of its state of organization or
      incorporation (“Organization
      State”)
      and
      the state where the Property is located (“Property
      State”);
      and
      (iv) has all necessary approvals, governmental and otherwise, and full power
      and
      authority to own its properties (including the Property) and carry on its
      business.

     

    Section
      2.02  
      Validity of Documents.
      The
      execution, delivery and performance of the Documents and the borrowing evidenced
      by the Note (i) are within the power of Borrower; (ii) have been authorized
      by
      all requisite action; (iii) have received all necessary approvals and consents;
      (iv) will not violate, conflict with, breach, or constitute (with notice or
      lapse of time, or both) a default under (1) any law, order or judgment of any
      court, governmental authority, or the governing instrument of Borrower or (2)
      any indenture, agreement, or other instrument to which Borrower is a party
      or by
      which it or any of its property is bound or affected; (v) will not result in
      the
      creation or imposition of any lien, charge, or encumbrance upon any of its
      properties or assets except for those in this Instrument; and (vi) will not
      require any authorization or license from, or any filing with, any governmental
      or other body (except for the recordation of this Instrument, the Assignment
      and
      Uniform Commercial Code (“UCC”)
      filings). The Documents constitute legal, valid, and binding obligations of
      Borrower.

     

    Section
      2.03  
      Litigation.
      There
      is no action, suit, or proceeding, judicial, administrative, or otherwise
      (including any condemnation or similar proceeding), pending or, to the knowledge
      of Borrower, threatened or contemplated against, or affecting, Borrower or
      the
      Property which would have a material adverse effect on either the Property
      or
      Borrower’s ability to perform its obligations.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.04  
      Status of Property.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      2.05  
      Tax Status of Borrower.
      Borrower is not a “foreign person” within the meaning of Sections 1445 and 7701
      of the Internal Revenue Code of 1986, as amended, and the regulations
      thereunder.

     

    Section
      2.06  
      Bankruptcy and Equivalent Value.
      No
      bankruptcy, reorganization, insolvency, liquidation, or other proceeding for
      the
      relief of debtors has been instituted by or against Borrower, or any general
      partner of Borrower. Borrower has received reasonably equivalent value for
      granting this Instrument.

     

    Section
      2.07  
      Disclosure.
      Borrower has disclosed to Lender all material facts and has not failed to
      disclose any material fact that could cause any representation or warranty
      made
      herein to be materially misleading. There has been no adverse change in any
      condition, fact, circumstance, or event that would make any such information
      materially inaccurate, incomplete or otherwise misleading.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.08  
      Illegal Activity.
      No
      portion of the Property has been or will be purchased, improved, fixtured,
      equipped or furnished with proceeds of any illegal activity and, to the best
      of
      Borrower’s knowledge, there are no illegal activities at or on the
      Property.

     

    Section
      2.09  
      Executive Order 13224. Borrower
      and all persons or entities holding any legal or beneficial interest whatsoever
      in Borrower, including, without limitation any guarantor, are not included
      in,
      owned by, controlled by, acting for or on behalf of, providing assistance,
      support, sponsorship, or services of any kind to, or otherwise associated with
      any of the persons or entities referred to or described in Executive Order
      13224
-
      Blocking
      Property and Prohibiting Transactions with Persons Who Commit, Threaten to
      Commit, or Support Terrorism, as amended. It shall constitute an Event of
      Default hereunder if the foregoing representation and warranty shall ever become
      false.

     

    ARTICLE
      III  -
      COVENANTS AND AGREEMENTS

     

    Borrower
      covenants and agrees with Lender as follows:

     

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

     

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

     

    Section
      3.03  
      Taxes and Other Charges

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.06  
      Insurance.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      3.07  
      Damage and Destruction of Property

     

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

     

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

     

    (c)  Application
      of Proceeds to Restoration. All insurance proceeds received by Borrower either
      directly or through Lender shall be used and applied by Borrower in strict
      accordance with the requirements of this Instrument and the Documents.
      Notwithstanding anything to the contrary herein, if at any time (i) Lender
      reasonably determines Borrower has failed, for any reason, to use and apply
      any
      insurance proceeds in strict according with the Indenture or (ii) an Event
      of
      Default occurs under the Documents, then, at Lender’s sole election, Lender may
      exercise all rights set forth in this Instrument with respect to any and all
      Damage and insurance proceeds regardless of whether such Damage gives rise
      to a
      Major Restoration, as defined above. Lender shall make the Net Proceeds (defined
      below) available to Borrower for Restoration if:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
(i)
        there
        shall then be no Event of Default; (ii) Lender shall be satisfied, in its
        reasonable determination, that Restoration can and will be completed within
        one
        (1) year after the Damage occurs and at least one (1) year prior to the maturity
        of the Note and Leases which are terminated or terminable as a result of
        the
        Damage cover an aggregate of less than ten percent (10%) of the total rentable
        square footage contained in the Property at the closing of the Loan or such
        Tenants agree in writing to continue their Leases, as applicable; (iii) Borrower
        shall have entered into a general construction contract acceptable in all
        respects to Lender for Restoration, which contract must include provision
        for
        retainage of not less than ten percent (10%) until final completion of the
        Restoration; and (iv) in Lender’s reasonable judgment, after Restoration has
        been completed, the net cash flow of the Property will be sufficient to cover
        all costs and operating expenses of the Property, including payments due
        and
        reserves required under the Documents. Notwithstanding any provision of this
        Instrument to the contrary, Lender shall not be obligated to make any portion
        of
        the Net Proceeds available for Restoration unless, at the time of the
        disbursement request, Lender has determined in its reasonable discretion
        that
        (y) Restoration can be completed at a cost which does not exceed the aggregate
        of the remaining Net Proceeds and any funds deposited with Lender by Borrower
        (“Additional
        Funds”)
        and
        (z) the aggregate of any loss of rental income insurance proceeds which the
        carrier has acknowledged to be payable (“Rent
        Loss Proceeds”)
        and
        any funds deposited with Lender by Borrower are sufficient to cover all costs
        and operating expenses of the Property, including payments due and reserves
        required under the Documents.

    

     

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

     

    Section
      3.08  
      Condemnation

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.09  
      Liens and Liabilities.
      Borrower shall pay, bond, or otherwise discharge all claims and demands of
      mechanics, materialman, laborers, and others which, if unpaid, might result
      in a
      lien or encumbrance on the Property or the Rents (collectively, “Liens”)
      and
      Borrower shall, at its sole expense, do everything necessary to preserve the
      lien and security interest created by this Instrument and its priority. Nothing
      in the Documents shall be deemed or construed as constituting the consent or
      request by Lender or Trustee, express or implied, to any contractor,
      subcontractor, laborer, mechanic or materialman for the performance of any
      labor
      or the furnishing of any material for any improvement, construction, alteration,
      or repair of the Property. Borrower further agrees that neither Lender nor
      Trustee stands in any fiduciary relationship to Borrower. All contributions
      made, directly or indirectly, to Borrower by or on behalf of any of its
      partners, members, principals or any party related to such parties shall be
      treated as equity and shall be subordinate and inferior to the rights of Lender
      under the Documents.

     

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

     

    Section
      3.11  
      ERISA

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    Section
      3.12  
      Environmental Representations, Warranties, and
      Covenants

     

    (a)  Environmental
      Representations and Warranties.
      Borrower represents and warrants, to the best of Borrower’s knowledge and
      additionally based upon the environmental site assessment report of the Property
      (the “Environmental
      Report”),
      that
      except as fully disclosed in the Environmental Report delivered to and approved
      by Lender prior to the date hereof: (i) there are no Hazardous Materials
      (defined below) or underground storage tanks affecting the Property
      (“affecting
      the Property”
shall
      mean “in, on, under, stored, used or migrating to or from the Property”) except
      for (A) routine office, cleaning, janitorial and other materials and supplies
      necessary to operate the Property for its current use and (B) Hazardous
      Materials that are (1) in compliance with Environmental Laws (defined below),
      (2) have all required permits, and (3) are in only the amounts necessary to
      operate the 

     

    
      
        
        

      

      
        
        

        
          

        

      

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

    

     

    (b)  Environmental
      Covenants.
      Borrower covenants and agrees that: (i) all use and operation of the Property
      shall be in compliance with all Environmental Laws and required permits; (ii)
      there shall be no Releases of Hazardous Materials affecting the Property; (iii)
      there shall be no Hazardous Materials affecting the Property except (A) routine
      office, cleaning and janitorial supplies, (B) in compliance with all
      Environmental Laws, (C) with all required permits, and (D) (1) in only the
      amounts necessary to operate the Property or (2) fully disclosed to and approved
      by Lender in writing; (iv) Borrower shall keep the Property free and clear
      of
      all liens and encumbrances imposed by any Environmental Laws due to any act
      or
      omission by Borrower or any person (the “Environmental
      Liens”);
      (v)
      Borrower shall, at its sole expense, fully and expeditiously cooperate in all
      activities in Section 3.12(c) including providing all relevant information
      and
      making knowledgeable persons available for interviews; (vi) Borrower shall,
      at
      its sole expense, (A) perform any environmental site assessment or other
      investigation of environmental conditions at the Property upon Lender’s request
      based on Lender’s reasonable belief that the Property is not in compliance with
      all Environmental Laws, (B) share with Lender the results and reports and Lender
      and the Indemnified Parties (defined below) shall be entitled to rely on such
      results and reports, and (C) complete any remediation of Hazardous Materials
      affecting the Property or other actions required by any Environmental Laws;
      (vii) Borrower shall not allow any Tenant or other user of the Property to
      violate any Environmental Law; (viii) Borrower shall promptly notify Lender
      in
      writing after it becomes aware of (A) the presence, Release, or threatened
      Release of Hazardous Materials affecting the Property, (B) any non-compliance
      of
      the Property with any Environmental Laws, (C) any actual or potential
      Environmental Lien, (D) any required or proposed remediation of environmental
      conditions relating to the Property, or (E) any written or oral communication
      or
      notice from any person relating to Hazardous Materials, and (ix) if at any
      time
      Lender reasonably requires any or all of an Asbestos Operation and Maintenance
      Plan, Lead Paint Abatement Plan, Storage Tank Closure and Removal Plan, Mold
      Operation and Maintenance Plan, and any other Operation and Maintenance Plan
      (collectively, the “O&M
      Plan”)
      be in
      effect (or required to be implemented by Lender), then Borrower shall, at its
      sole expense, implement, continue, and complete, as applicable, the O&M Plan
      (with any modifications required to comply with applicable Laws) until payment
      and full satisfaction of the Obligations. While any portion of the Loan is
      outstanding, upon the request of Lender, which request shall be made upon
      Lender’s reasonable determination that the governing law or applicable facts or
      circumstances respecting the Property warrant updated lead paint, asbestos,
      tank
      and/or mold survey(s) of the Property, at Borrower’s sole cost and expense,
      Borrower shall conduct such updated survey(s) of the Property. Each such survey
      shall be conducted by a consultant reasonably acceptable to Lender who shall
      determine the condition of the lead paint, asbestos, tank and/or mold at the
      Property, and whether the applicable O&M Plan should be revised or any other
      measures taken to ensure the continued safe condition of the Property. Borrower
      shall deliver to Lender a copy of such survey and shall enter into the revised
      O&M Plan, and Borrower shall certify to Lender in writing, no later than
      thirty (30) days after Borrower’s receipt of such survey, that Borrower has
      complied with all of the recommendations of the consultant contained in the
      survey and the revised O&M Plan. Any failure of Borrower to perform its
      obligations under this Section 3.12 shall constitute bad faith waste of the
      Property.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    Section
      3.15  
      Records, Reports, and Audits

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.21  
      Other Leases.
      

     

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

     

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

     

    (b)  Minimum
      Leasing Requirements: 

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.23  
      Single Purpose Entity.
      Borrower hereby represents, warrants and covenants to Lender that Borrower
      is a
      single-purpose entity whose sole asset is the Property, and whose sole business
      and purpose is to acquire, refurbish, operate, lease, maintain, market, finance,
      sell and otherwise use the Property, and uses incidental thereto. Borrower
      covenants and agrees that, until payment in full of the Obligations, Borrower
      will not, directly or indirectly, take any actions in violation of the
      formation documents or that would otherwise adversely affect the Borrower’s
      existence as a single purpose entity. Specifically, except only to the extent
      required or permitted by the Documents, Borrower has not and shall not do,
      cause, or permit any of the following: (a) engage in any business or activity
      other than to own, operate, finance, develop, manage, lease, maintain, market
      and sell the Property and activities incidental thereto; (b) acquire or own
      any
      material assets other than the Property; (c) except as otherwise permitted
      in
      Article V of this Instrument, merge into or consolidate with any Person or
      dissolve, terminate or liquidate in whole or in part, transfer or otherwise
      dispose of all or substantially all of its assets or change its legal structure,
      without in each case Lender’s consent; (e) make any investment in any Person
      without the consent of Lender; (f) commingle its assets with the assets of
      any
      affiliate of Borrower or any other Person; (g) incur any debt, secured or
      unsecured, direct or contingent (including guaranteeing any obligation), other
      than in the ordinary course of operating the Property, except as provided
      herein; (h) fail to maintain its records, books of account and bank accounts
      separate and apart from those of the affiliates of Borrower or any other Person;
      (i) hold itself out to be 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    responsible
      for the debts of another Person, except as provided in the Documents; (j) make
      any loans or advances to any third party, including any affiliate of Borrower,
      except for distributions; (k) fail to file its own tax returns or file on a
      consolidated basis; (l) fail either to hold itself out to the public as a legal
      entity separate and distinct from any other Person or to conduct its business
      solely in its own name in order not (i) to mislead others as to the
      identity with which such other party is transacting business, or
      (ii) to suggest that Borrower is responsible for the debts of any
      third party (including any affiliate of Borrower); (m) file or consent to the
      filing of any petition, either voluntary or involuntary, to take advantage
      of
      any applicable insolvency, bankruptcy, liquidation or reorganization statute,
      or
      make an assignment for the benefit of creditors; (n) share any common logo
      with
      or hold itself out as or be considered as a department or division of
      (i) any affiliate of Borrower or (ii) any other Person or entity; (o)
      fail to preserve its existence as an entity duly organized, validly existing
      and
      in good standing (if applicable) under the laws of the jurisdiction of its
      organization or formation, and qualification to do business in the states where
      the Property is located, if applicable, or without the prior written consent
      of
      Lender, amend, modify or fail to comply with (in any material respect), or
      terminate the provisions of the formation documents or similar organizational
      documents, as the case may be; (p) fail to pay its debts and liabilities from,
      and to the extent of, its assets as the same shall become due and payable;
      (q)
      transact any business with affiliates, except on an arm’s-length basis and
      pursuant to written agreements that are terminable at will without the payment
      of a fee (except as otherwise approved by Lender); and (r) fail to maintain
      adequate capital to the extent available from revenues for the normal
      obligations reasonably foreseeable in a business of its size and character
      and
      in light of its contemplated business operations.

     

    ARTICLE
      IV  -
      ADDITIONAL ADVANCES; EXPENSES; SUBROGATION

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      VI  -
      DEFAULTS AND REMEDIES

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    (d)  if
      any
      default under Article V occurs;

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      6.04  
      Rights Pertaining to Sales.
      

     

    (a)  Should
      Lender elect to foreclose by exercise of the power of sale herein contained,
      Lender shall notify Trustee and shall deposit with Trustee this Instrument
      and
      the Note and such receipts and evidence of expenditures made and secured hereby
      as Trustee may require. Upon receipt of such notice from Lender, Trustee shall
      cause to be recorded, published and delivered to Borrower such notice of default
      and notice of sale as then required by law and by this Instrument. Trustee
      shall, without demand on Borrower, after lapse of such time as may then be
      required by law and after recordation of such notice of default and after notice
      of sale having been given as required by law, sell the Property at the time
      and
      place of sale fixed by it in said notice of sale, either as a whole, or in
      separate lots or parcels or items as Lender shall determine, and in such order
      as Lender may determine, at public auction to the highest bidder for cash in
      lawful money of the United States payable at the time of sale. Trustee shall
      deliver to such purchaser or purchasers thereof its good and sufficient deed
      or
      deeds conveying the property so sold, but without any covenant or warranty,
      express or implied. The recitals in such deed of any matters or facts shall
      be
      conclusive proof of the truthfulness thereof. Any Person, including Borrower,
      Trustee or Lender, may purchase at such sale and Borrower hereby covenants
      to
      warrant and defend the title of such purchaser or purchasers. After deducting
      all costs, fees and expenses of Trustee and of the trust created by this
      Instrument, including costs of evidence of title in connection with sale,
      Trustee shall apply the proceeds of sale in the following priority, to payment
      of: (i) first, all sums expended under the terms hereof, not then repaid, with
      accrued interest at the Default Rate; (ii) second, all other sums then secured
      hereby; and (iii) the remainder, if any, to the person or persons legally
      entitled thereto. Lender may, in its sole discretion, designate the order in
      which the Property shall be offered for sale or sold through a single sale
      or
      through two or more successive sales, or in any other manner Lender deems to
      be
      in its best interest. If Lender elects more than one sale or other disposition
      of the Property, Lender may at its option cause the same to be conducted
      simultaneously or successively, on the same day or at such different days or
      times and in such order as Lender may deem to be in its best interests, and
      no
      such sale shall terminate or otherwise affect the lien of this Instrument on
      any
      part of the Property not then sold until all Obligations secured hereby have
      been fully paid. If Lender elects to dispose of the Property through more than
      one sale, Borrower shall pay the costs and expenses of each such sale of its
      interest in the Property and of any proceedings where the same may be made.
      Trustee may postpone the sale of all or any part of the Property by public
      announcement at such time and place of sale, and from time to time thereafter
      may postpone such sale by public announcement at the time fixed by the preceding
      postponement, and without further notice make such sale at the time fixed by
      the
      last postponement; or Trustee may, in its discretion, give a new notice of
      sale.
      Lender may rescind any such notice of default at any time before Trustee’s sale
      by executing a notice of rescission and recording the same. The recordation
      of
      such notice shall constitute a cancellation of any prior declaration of default
      and demand for sale and of any acceleration of maturity of Obligations affected
      by any prior declaration or notice of default. The exercise by Lender of the
      right of rescission shall not constitute a waiver of any default then existing
      or subsequently occurring, or impair the right of Lender to execute other
      declarations of default and demand for sale, or notices of default and of
      election to cause the Property to be sold, or otherwise affect the Note or
      this
      Instrument, or any of the rights, obligations or remedies of Lender or Trustee
      hereunder.

     

    (b)  In
      the
      event of a sale of the Property, or any part thereof, and the execution of
      a
      deed therefor, the recital therein of default, and of recording the notice
      of
      default and notice of sale, and of the elapse of the required time (if any)
      between the recording and the notice, and of the giving of notice of sale,
      and
      of a demand by Lender, or its successors or assigns, that such sale should
      be
      made, shall be conclusive proof of such default, recording, election, elapse
      of
      time, and giving of such notice, and that the sale was regularly and validly
      made on due and proper demand by Lender, its successors or assigns. Any such
      deed or deeds with such recitals therein shall be effective and conclusive
      against Borrower, its successors and assigns, and all other Persons. The receipt
      for the purchase money recited or contained in any deed executed to the
      purchaser as aforesaid shall be sufficient discharge to such purchaser from
      all
      obligations to see to the proper application of the purchase money.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII  -
      SECURITY AGREEMENT AND FIXTURE FILING

     

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

     

    Section
      7.02  
      Fixture Filing.
      This
      Instrument covers certain goods which are or are to be come fixtures related
      to
      the Land and for purposes of Article 9 of the Uniform Commercial Code (Oregon
      Revised Statutes Chapter 79), this Instrument constitutes a Security Agreement
      and Financing Statement with respect to such goods executed by Borrower as
      debtor in favor of Lender as secured party.

     

    ARTICLE
      VIII  -
      LIMITATION ON PERSONAL LIABILITY AND INDEMNITIES

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    ARTICLE
      IX  -
      ADDITIONAL PROVISIONS

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    If
      to
      Borrower:

     

    PH
      Hotel
      Partners, LP

    c/o
      CNL
      Hospitality Corp.

    420
      South
      Orange Avenue, Suite 700

    Orlando,
      Florida 32801-3313

    Attention:
      Chief General Counsel       
      Facsimile: (407) 540-2702

     

    With
      a
      copy to: 

    Greenburg
      Traurig P.A.

    450
      S.
      Orange Avenue, Suite 650

    Orlando,
      FL 32801

    Attention:
      Michael J. Sullivan, Esq.

    Facsimile:
      (407) 650-8425

    

    And
      a
      copy to:

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

    215
      N.
      Eola Drive

    Orlando,
      FL 32802-2806

    Attention:
      Richard J. Fildes, Esq.

    Facsimile:
      (407) 843-4444

    

    

    

    

    

    

    

    

    If
      to
      Lender:

    

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Dallas,
      Texas 75201

    Attention:
      Asset Management Department

    Reference
      Loan No. 70-6-106-306

    

    with
      a
      copy to:

    THE
      PRUDENTIAL INSURANCE COMPANY OF AMERICA

    Prudential
      Asset Resources

    2200
      Ross
      Avenue

    Suite
      4900-E

    Dallas,
      Texas 75201

    Attention:
      Legal Department

    Reference
      Loan No. 70-6-106-306

    

    And
      a
      copy to:

    DLA
      Piper
      Rudnick Gray Cary US LLP

    153
      Townsend Street, 8th
      Floor

    San
      Francisco, CA 94107

    Attention:
      Stephen A. Cowan, Esq. 

    Facsimile:
      (415) 836-2500

    

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

     

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

     

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

     

    Section
      9.05  
      Construction of Provisions.
      The
      following rules of construction shall apply for all purposes of this Instrument
      unless the context otherwise requires: (a) all references to numbered Articles
      or Sections or to lettered Exhibits are references to the Articles and Sections
      hereof and the Exhibits annexed to this Instrument and such Exhibits are
      incorporated 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    

     

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      further text on this page)

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    DOCUMENT
      OR DOCUMENT ENTERED INTO BETWEEN BORROWER AND LENDER IN CONNECTION WITH THIS
      INSTRUMENT OR ANY DOCUMENT. IN THE EVENT OF LITIGATION, THIS INSTRUMENT MAY
      BE
      FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY.

     

    BORROWER’S
      INITIAL: __________

     

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

     

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

     

    Section
      9.12  
      Concerning the Trustee.
      By
      recording a written substitution in the county where the Property is located
      or
      by any other means permitted by Laws, Lender may (a) remove Trustee or any
      successor Trustee at any time (or times) without notice or cause and (b) replace
      any Trustee who dies or resigns. To the extent permitted by Laws, Trustee waives
      any statutory fee for its services and agrees to accept reasonable compensation
      in lieu thereof. Trustee may resign upon thirty (30) days notice to Lender
      and
      Borrower. If more than one person is appointed Trustee, all rights granted
      to
      Trustee under this Instrument may be exercised by any of them, without the
      others, with the same effect as if exercised by all of them jointly. In addition
      to exercising all rights set forth in this Instrument, Trustee may exercise
      all
      rights under Laws.

     

    Section
      9.13  
      Attorneys’ Fees.
      If any
      suit, action or proceeding of any kind (an “action”)
      is
      brought by any party hereto to enforce, defend or interpret any provision of
      this Instrument or any of the Documents (including an action for declaratory
      relief), the prevailing party in such action shall recover from the other
      non-prevailing parties to such action all reasonable costs and expenses which
      the prevailing party may incur in bringing such action and/or enforcing any
      judgment granted therein and/or incurred at or in preparation for any appeal
      or
      review, all of which shall be deemed to have accrued upon the commencement
      of
      such action and shall be paid whether or not such action is prosecuted to
      judgment. The “prevailing
      party”
means
      the party entitled to recover costs of suit, whether or not any action proceeds
      to final judgment. Any judgment or order entered in such action shall
      specifically provide for the recovery of all reasonable costs and expenses
      incurred by the prevailing party in connection therewith including costs and
      expenses incurred in enforcing such judgment. For the purpose of this Section
      9.13, “costs
      and expenses”
include
      all court costs and attorneys’ fees, such as court costs and attorneys’ fees
      incurred in connection with any of the following: (i) post-judgment motions,
      (ii) contempt proceedings, (ii) garnishment, levy and debtor and third party
      examinations, (iv) discovery, (v) bankruptcy litigation and (vi) any appeal
      or
      review of the foregoing. Lender shall have the right (but not the obligation)
      to
      commence, appear in, or defend any action purporting to affect any of the
      interests, rights, obligations or liabilities of Lender or Borrower in
      connection with this Instrument or any of the Documents, and Borrower shall
      pay
      to Lender on demand all costs and expenses reasonably incurred by Lender in
      connection therewith.

     

    Section
      9.14  
      Standard of Approval; Covenant of Good Faith and Fair
      Dealing.
      Whenever Trustee or Lender has been specifically granted a right to exercise
      its
      business judgment, or act, in a subjective manner, with respect to any matter,
      or the right to act in its sole and absolute discretion or sole judgment,

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      9.15  or
      the
      right to make a subjective judgment under any provision of this Instrument,
      whether or not “objectively” reasonable under the circumstances, any such
      exercise shall not be deemed inconsistent with any covenant of good faith and
      fair dealing otherwise implied by law to be part of the Documents.

     

    ARTICLE
      X  -
      LOCAL LAW PROVISIONS

     

    Section
      10.01  
      State Specific Provisions.
      

     

    (a) Any
      reference herein to Borrower as Borrower shall also mean Borrower in its
      capacity as Trustor under a deed of trust

    

    (b) Notwithstanding
      anything to the contrary set forth herein or in any of the Documents, this
      Instrument does not secure the following obligations (the “Unsecured
      Obligations”): (i) any guarantee executed by any party in connection with the
      Loan; (ii) any obligations evidenced by or arising under the Hazardous
      Substances Indemnity; or (iii) any other obligations in this Instrument or
      in
      any of the other Documents to the extent that such other obligations relate
      specifically to the presence on the Property of Hazardous Materials (as defined
      in the Hazardous Substances Indemnity) and are the same or have the same effect
      as any of the obligations evidenced by or arising under the Hazardous Substances
      Indemnity. Any breach or default not cured within any applicable grace or cure
      period thereunder with respect to the Unsecured Obligations shall constitute
      an
      Event of Default hereunder, notwithstanding the fact that such Unsecured
      Obligations are not secured by this Instrument. Nothing in this section shall,
      in itself, impair or limit Lender’s right to obtain a judgment in accordance
      with applicable law after foreclosure for any deficiency in recovery of all
      obligations that are secured by this Instrument following
      foreclosure.

    

    (c) The
      property does not now and Borrower covenants that during the term of this
      Instrument the Property will not contain any residential structure or unit
      so
      that at no time will this Instrument be a residential trust deed as defined
      in
      ORS §86.705(3). This Instrument secures and obligation incurred exclusively for
      commercial , business or investment purposes. Borrower warrants to Lender that
      the Loan proceeds shall be used exclusively for commercial, business or
      investment purposes.

    

    (d) As
      used
      herein, the term “Borrower” shall be deemed to refer to each and every Borrower,
      both individually and collectively, when more than one Borrower exists, and
      to
      the original Borrower, and its or their successors and assigns (whether or
      not
      such assign assumed the Obligations hereunder); the term “Lender” includes the
      Lender named herein or any future owner or holder, including pledgee and
      participants, of the Note, or any other instrument secured hereby, or any
      participation. References to “foreclosure” and related phrases shall be deemed
      references to the appropriate procedure in connection with Trustee’s private
      power of sale as well as any judicial foreclosure proceeding or a conveyance
      in
      lieu of foreclosure.

    

    (e) Notice
      Under ORS §746.201 - WARNING.

     

    Unless
      Borrower provides Lender with evidence of the insurance coverage as required
      herein, Lender may purchase insurance at Borrower’s expense to protect Lender’s
      interest. This insurance may, but need not, also protect Borrower’s interest. If
      the collateral becomes damaged, the coverage Lender purchases may not pay any
      claim Borrower makes or any claim made against Borrower. Borrower may later
      cancel this coverage by providing evidence that Borrower has obtained property
      coverage elsewhere.

     

    Borrower
      is responsible for the cost of any insurance purchased by Lender. The cost
      of
      this insurance may be added to the indebtedness secured hereby. If the cost
      is
      added to the indebtedness secured hereby, the interest rate on the indebtedness
      secured hereby will apply to this added amount. The effective date of coverage
      may be the date the prior coverage lapsed or the date Borrower failed to provide
      proof of coverage.

     

    The
      coverage Lender purchases may be considerably more expensive than insurance
      Borrower can obtain on Borrower’s own and may not satisfy any need for property
      damage coverage or any mandatory liability insurance requirements imposed by
      applicable law."

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) ORS
      Chapter 93 Warning. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
      TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER
      CHAPTER 1, OREGON LAWS 2005 (BALLOT MEASURE 37(2004)). THIS INSTRUMENT WILL
      NOT
      ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF
      APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS
      INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH
      THE
      APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND
      TO
      DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED
      IN ORS §30.930 AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS,
      IF ANY, UNDER CHAPTER 1, OREGON LAWS 2005 (BALLOT MEASURE 37
      (2004))

    

    (g). At
      the
      time of any foreclosure sale under the Instrument, or any deed in lieu of
      foreclosure, the Borrower shall, at Borrower's expense and without additional
      consideration to Borrower, immediately take all actions required under
      applicable laws, regulations, rules, and policies to transfer the Liquor
      Licenses to the person or entity which acquires title to the Mortgaged Property
      pursuant to such foreclosure or deed in lieu of foreclosure. Such actions shall
      include, without limitation, filing with the local division of the Oregon Liquor
      Control Commission such affidavits, applications, declarations, documents and
      other materials to be executed or provided by Borrower as may be necessary
      or
      appropriate to effect such transfer, and Borrower shall thereafter diligently
      pursue such transfer in order to consummate the same as soon as reasonably
      possible. Borrower’s obligations under this Section 10.01(g) shall survive
      any foreclosure of the Instrument or any deed in lieu of
      foreclosure.

     

    ARTICLE
      XI  -
      OPERATING LEASE PROVISIONS

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    

     

    (No
      further text on this page)

     

    (Signature
      page follows)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              PH
                HOTEL PARTNERS, LP,

               

              a
                Delaware limited partnership

               

            
	 	
              By: 
                PH HOTEL GP, LLC,

               

              a
                Delaware limited liability company

               

              Its:
                General Partner

               

            
	 	
               

               

              By: /s
                / John X. Brady, Jr.    

               

              Name:
                John X. Brady, Jr.

               

              Title:
                Vice President

               

            

    

    WITNESSED
      BY:

    

    

    By:
      /s/ Cathleen A. Coffey

    Print
      Name: Cathleen A. Coffey

    

    

    

    WITNESSED
      BY:

    

    

    By:
      /s/ Patti Cook

    Print
      Name: Patti Cook 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ACKNOWLEDGMENT

    STATE
      OF
Florida    

    

    COUNTY
      OF Orange    

    

    The
      foregoing instrument was acknowledged before me this 23 day of
March, 2006, by John X. Brady, Jr.,  as Vice President
      of PH Hotel Gp, LLC, a Delaware LLC , on behalf of such entity.
      He/she is either personally known to me, or has produced a
      ____________________________ driver’s license as identification.

    

     

     

    /s/
      Cathleen A. Coffey

    Printed
      Name: Cathleen A. Coffey

    NOTARY
      PUBLIC

    State
      of  FL at Large

    (Notarial
      Seal)

    My
      Commission Expires: Semptember 24, 2009

     

    

     

    

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      A

     

    LEGAL
      DESCRIPTION OF THE PROPERTY

     

    All
      that
      certain real property located in the City of Portland, County of Multnomah,
      State
      of Oregon described as follows:

     

     PARCEL
      I:

    

    All
      of
      Block 44, CITY OF PORTLAND, in the City of Portland, County of Multnomah and
      State of Oregon.

    

    PARCEL
      II:

    

    Lots
      1,
      2, 7 and 8, Block 45, CITY OF PORTLAND, in the City of Portland, County of
      Multnomah and State of Oregon.

    

    

     

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    DESCRIPTION
      OF PERSONAL PROPERTY SECURITY

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      C

     

    PERMITTED
      ENCUMBRANCES

     

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

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    Exhibit
      D

     

    DOCUMENTS

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

            

    

     

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

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