Document:

<PAGE>

                                                               Exhibit 10.2(c)
[Key Biscayne]

STATE OF FLORIDA
COUNTY OF MIAMI-DADE

Prepared by:
And when recorded mail to:

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

Attention: Mark F. Copertino, Esq.

             MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, FINANCING
                  STATEMENT AND ASSIGNMENT OF LEASES AND RENTS

            THIS MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, FINANCING
STATEMENT AND ASSIGNMENT OF LEASES AND RENTS (this "Mortgage") is executed as of
May 30, 2000, by SONESTA BEACH RESORT LIMITED PARTNERSHIP, a Delaware limited
partnership ("Mortgagor"), in favor of, and for the use and benefit of,
SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation ("Mortgagee").

                                    RECITALS

            A. On or about January 6, 1997, Mortgagee made a $22,880,000.00 loan
(the "Original Cambridge Loan") to Sonesta of Massachusetts, Inc., a
Massachusetts corporation, and Roger P. Sonnabend, Peter J. Sonnabend, and Boy
A.J. van Riel, trustees of the Charterhouse of Cambridge Trust, and not
individually, under a Declaration of Trust dated December 27, 1963 and recorded
at Middlesex South, Commonwealth of Massachusetts, Deeds Book 11160, Page 340,
as amended by Amendment of Declaration of Trust dated July 8, 1966 and recorded
at

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THIS MORTGAGE SECURES ONLY THE OBLIGATIONS UNDER THAT CERTAIN NON-RECOURSE
GUARANTY AGREEMENT OF EVEN DATE HEREWITH. ACCORDINGLY, NO INTANGIBLE TAX IS DUE
AND PAYABLE. THIS MORTGAGE LIMITS RECOVERY TO $20,000,000.00. PURSUANT TO RULE
12B-4.053(32)(B), FLORIDA ADMINISTRATIVE CODE, DOCUMENTARY STAMP TAX IS DUE ON
THE AMOUNT TO WHICH RECOVERY IS LIMITED. THEREFORE, DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $70,000.00 IS DUE AND PAYABLE UPON RECORDATION OF THIS MORTGAGE.
<PAGE>

Middlesex South, Commonwealth of Massachusetts, Deeds Book 11160, Page 359
(collectively, the "Cambridge Borrower").

            B. The Original Cambridge Loan is evidenced by a Promissory Note
dated as of December 18, 1996, in the original principal amount of the Original
Cambridge Loan executed by Cambridge Borrower for the benefit of Mortgagee (the
"Original Cambridge Note"), and is secured by, among other things, a Mortgage,
Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases
and Rents (the "Original Cambridge Mortgage") dated as of December 18, 1996
executed by Cambridge Borrower for the benefit of Mortgagee and covering certain
real property commonly known as the Royal Sonesta Hotel, Cambridge,
Massachusetts, and more particularly described in the Original Cambridge
Mortgage.

            C. The Original Cambridge Note, the Original Cambridge Mortgage, and
each other document executed by Cambridge Borrower and evidencing or securing
the Original Cambridge Loan, are referred to herein, collectively, as the
"Original Cambridge Loan Documents."

            D. On or about the date hereof, Mortgagee is making an additional
advance to Cambridge Borrower in the amount of $19,865,733.66 (the "Cambridge
Additional Advance"), such that the aggregate indebtedness owing by Cambridge
Borrower to Mortgagee under the Original Cambridge Loan and the Cambridge
Additional Advance is, as of the date of this Guaranty, $41,000,000.00.

            E. Pursuant to an Amended and Restated Promissory Note (the
"Cambridge Note") of even date herewith in the original principal amount of
$41,000,000.00, Cambridge Borrower and Mortgagee are consolidating, amending and
restating the Original Cambridge Loan and the Cambridge Additional Advance.

            F. In connection with the Cambridge Additional Advance, Cambridge
Borrower and Mortgagee are this date also amending certain terms of the Original
Cambridge Mortgage and the other Original Cambridge Loan Documents. The loan
evidenced by the Cambridge Note is referred to herein as the "Cambridge Loan."
The Original Cambridge Mortgage, as modified, is referred to herein as the
"Cambridge Mortgage." The Original Cambridge Loan Documents, as modified,
together with the Cambridge Note and all other documents evidencing or executed
in connection with the Cambridge Additional Advance are referred to herein as
the "Cambridge Loan Documents."

            G. Mortgagee is this date also making a $31,000,000.00 loan (the
"Key Biscayne Loan") to Mortgagor. The Key Biscayne Loan is (a) evidenced by a
Consolidated and Renewed Promissory Note of even date herewith in the original
principal amount of the Key Biscayne Loan, and (b) secured by, among other
things, a Consolidated, Amended and Restated Mortgage, Security Agreement,
Fixture Filing, Financing Statement and Assignment of Leases and Rents of even
date herewith granted by Mortgagor for the benefit of Mortgagee covering certain
real property commonly known as the Sonesta Beach Resort, Key Biscayne, Florida,
and more particularly described in Exhibit A attached hereto, and recorded
immediately prior to the recordation of this Mortgage.
<PAGE>

            H. All of the beneficial interests in the Cambridge Borrower are
owned by Sonesta International Hotels Corporation, a New York corporation
("Sonesta"). Sonesta is also the owner of 99% of the beneficial interests in
Mortgagor.

            I. As a condition to Mortgagee making the Cambridge Additional
Advance to the Cambridge Borrower and the Key Biscayne Loan to Mortgagor,
Mortgagee has required Mortgagor to execute that certain Non-Recourse Guaranty
Agreement of even date herewith, whereby Mortgagor has agreed to guarantee the
payment and performance of the Cambridge Borrower's obligations under the
Cambridge Note and the other Cambridge Loan Documents, and has required
Mortgagor to secure Mortgagor's obligations under such Non-Recourse Guaranty
Agreement with this Mortgage.

            NOW, THEREFORE, in consideration of the premises, Ten Dollars and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Mortgagor hereby agrees as follows:

                                   Article 1

                       PARTIES, PROPERTY, AND DEFINITIONS

            The following terms and references shall have the meanings
indicated:

            1.1 Cambridge Borrower: Collectively, Sonesta of Massachusetts,
Inc., a Massachusetts corporation , and Roger P. Sonnabend, Peter J. Sonnabend,
and Boy A.J. van Riel, trustees of the Charterhouse of Cambridge Trust, and not
individually, under a Declaration of Trust dated December 27, 1963 and recorded
at Middlesex South, Commonwealth of Massachusetts, Deeds Book 11160, Page 340,
as amended by Amendment of Declaration of Trust dated July 8, 1966 and recorded
at Middlesex South, Commonwealth of Massachusetts, Deeds Book 11160, Page 359.

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

            1.3 Cambridge Note: The Amended and Restated Promissory Note of even
date herewith executed by the Cambridge Borrower and payable to the order to
Mortgagee in the principal face amount of $41,000,000.00, together with all
renewals, extensions and modifications of such amended and restated promissory
note.
<PAGE>

            1.4 Chattels: All goods, fixtures, inventory, equipment, building
and other materials, supplies, and other tangible personal property of every
nature now owned or hereafter acquired by Mortgagor and used, intended for use,
or reasonably required in the construction, development, or operation of the
Property, together with all accessions thereto, replacements and substitutions
therefor, and proceeds thereof.

            1.5 Default: Any matter which, with the giving of notice, passage of
time, or both, would constitute an Event of Default.

            1.6 Environmental Indemnity Agreement: The Environmental Indemnity
Agreement of even date herewith executed by Mortgagor and Guarantor for the
benefit of Mortgagee.

            1.7 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, together with all rules and regulations issued thereunder.

            1.8 Event of Default: As defined in Article 6.

            1.9 Financial Certificate: The certificate of even date herewith
executed by Mortgagor to Mortgagee concerning financial statements previously
delivered by Mortgagor to Mortgagee.

            1.10 First Mortgage: The Consolidated, Amended and Restated
Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment
of Leases and Rents of even date herewith executed by Mortgagor for the benefit
of Mortgagee and securing Mortgagor's obligations under the Note.

            1.11 First Mortgage Loan Documents: The Note, the First Mortgage,
the Environmental Indemnity Agreement, the Limited Guaranty Agreement, the Lease
Certificate, the Financial Certificate, the Liquor License Assignment, the
Replacement Reserve and Security Agreement, and each other document executed or
delivered by Mortgagor or Guarantor in connection with the transaction pursuant
to which the Note has been executed and delivered, but excluding the
Non-Recourse Guaranty Agreement and this Mortgage. The term "First Mortgage Loan
Documents" also includes all modifications, extensions, renewals, and
replacements of each document referred to above.

            1.12 General Partner: Florida Sonesta Corporation, a Florida
corporation, and any other or successor general partner of Mortgagor.

            1.13 Guarantor: Sonesta International Hotels Corporation, a New York
corporation.

            1.14 Intangible Personalty: All accounts, accounts receivable
arising from guest occupancy of the Property, monies in the possession of
Mortgagee (including without limitation proceeds from insurance, retainages and
deposits for taxes and insurance), permits, liquor licenses, contract rights
(including, without limitation, rights to receive insurance
<PAGE>

proceeds) and general intangibles (whether now owned or hereafter acquired, and
including proceeds thereof) relating to or arising from Mortgagor's ownership,
use, operation, leasing, or sale of all or any part of the Property,
specifically including but in no way limited to any right which Mortgagor may
have or acquire to transfer any development rights from the Property to other
real property, and any development rights which may be so transferred, and any
and all fees, charges, accounts, or other payments for the use or occupancy of
rooms and other public facilities located at the Property.

            1.15 Lease Certificate: The certificate of even date herewith
executed by Mortgagor to Mortgagee concerning Leases.

            1.16 Leases: Any and all leases, subleases and other agreements
under the terms of which any person other than Mortgagor has or acquires any
right to occupy or use the Property, or any part thereof.

            1.17 Limited Guaranty Agreement: The Limited Guaranty Agreement of
even date herewith made by Guarantor for the benefit of Mortgagee.

            1.18 Liquor License Assignment: The Security Agreement and
Collateral Assignment of Liquor Licenses of even date herewith executed by
Mortgagor for the benefit of Mortgagee.

            1.19 Loan Documents: The Non-Recourse Guaranty Agreement, the
Environmental Indemnity Agreement and this Mortgage. The term "Loan Documents"
also includes all modifications, extensions, renewals, and replacements of each
document referred to above.

            1.20 Mortgagee: The Mortgagee named in the introductory paragraph of
this Mortgage (Taxpayer Identification No. 52-502540), whose legal address is 1
SunAmerica Center, Century City, Los Angeles, California 90067-6022, together
with any future holder of the Note.

            1.21 Mortgagor: The Mortgagor named in the introductory paragraph of
this Mortgage (Taxpayer Identification No. 06-1518976), whose legal address is
c/o Sonesta International Hotels Corp., 200 Clarendon Street, 41st Floor,
Boston, Massachusetts 02116, Attention: Office of the Treasurer, together with
any future owner of the Property or any part thereof or interest therein.

            1.22 Non-Recourse Guaranty Agreement: The Non-Recourse Guaranty
Agreement of even date herewith made by Mortgagor for the benefit of Mortgagee,
pursuant to which Mortgagor has guaranteed payment and performance of the
Cambridge Note and the other Cambridge Loan Documents.

            1.23 Note: Mortgagor's Consolidated and Renewed Promissory Note of
even date herewith, payable to the order of Mortgagee in the principal face
amount of $31,000,000.00, together with all renewals, extensions and
modifications of such promissory note.
<PAGE>

            1.24 Permits: All permits, licenses, certificates and authorizations
necessary for the beneficial development, ownership, use, occupancy, operation
and maintenance of the Property, including, without limitation, all liquor,
innholder's and similar such licenses.

            1.25 Permitted Exceptions: The matters set forth in Exhibit B
attached hereto.

            1.26 Property: The tract or tracts of land described in Exhibit A
attached, together with the following:

                  (a) All buildings, structures, and improvements now or
hereafter located on such tract or tracts, as well as all rights-of-way,
easements, and other appurtenances thereto;

                  (b) All of Mortgagor's right, title and interest in any land
lying between the boundaries of such tract or tracts and the center line of any
adjacent street, road, avenue, or alley, whether opened or proposed;

                  (c) All of the rents, income, receipts, revenues, issues and
profits of and from such tract or tracts and improvements;

                  (d) All (i) water and water rights (whether decreed or
undecreed, tributary, nontributary or not nontributary, surface or underground,
or appropriated or unappropriated); (ii) ditches and ditch rights; (iii) spring
and spring rights; (iv) reservoir and reservoir rights; and (v) shares of stock
in water, ditch and canal companies and all other evidence of such rights, which
are now owned or hereafter acquired by Mortgagor and which are appurtenant to or
which have been used in connection with such tract or tracts or improvements;

                  (e) All minerals, crops, timber, trees, shrubs, flowers, and
landscaping features now or hereafter located on, under or above such tract or
tracts;

                  (f) All machinery, apparatus, equipment, fittings, fixtures
owned by Mortgagor (whether actually or constructively attached, and including
all trade, domestic, and ornamental fixtures) now or hereafter located in, upon,
or under such tract or tracts or improvements and used or usable in connection
with any present or future operation thereof, including but not limited to all
heating, air-conditioning, freezing, lighting, laundry, incinerating and power
equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards;
plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating, cooking, and communications apparatus; boilers, water heaters,
ranges, furnaces, and burners; appliances; vacuum cleaning systems; elevators;
escalators; shades; awnings; screens; storm doors and windows; stoves;
refrigerators; attached cabinets; partitions; ducts and compressors; rugs and
carpets; draperies; and all additions thereto and replacements therefor;

                  (g) All development rights associated with such tract or
tracts, whether previously or subsequently transferred to such tract or tracts
from other real property or now or hereafter susceptible of transfer from such
tract or tracts to other real property;
<PAGE>

                  (h) All awards and payments, including interest thereon,
resulting from the exercise of any right of eminent domain or any other public
or private taking of, injury to, or decrease in the value of, any of such
property; and

                  (i) All other and greater rights and interests of every nature
in such tract or tracts and in the possession or use thereof and income
therefrom, whether now owned or subsequently acquired by Mortgagor.

            1.27 Replacement Reserve and Security Agreement: The Replacement
Reserve and Security Agreement of even date herewith executed by Mortgagor for
the benefit of Mortgagee.

            1.28 Secured Obligations: All present and future obligations of
Mortgagor to Mortgagee evidenced by or contained in the Non-Recourse Guaranty
Agreement, whether stated in the form of promises, covenants, representations,
warranties, conditions, or prohibitions or in any other form. Notwithstanding
anything to the contrary contained in this Mortgage, recovery under this
Mortgage is limited to $20,000,000.00.

                                   Article 2

                                 GRANTING CLAUSE

            2.1 Grant to Mortgagee. As security for the Secured Obligations,
Mortgagor hereby grants, bargains, sells, conveys, mortgages, and warrants unto
Mortgagee the entire right, title, interest and estate of Mortgagor in and to
the Property, whether now owned or hereafter acquired; TO HAVE AND TO HOLD the
same, together with all and singular the rights, hereditaments, and
appurtenances in anywise appertaining or belonging thereto, unto Mortgagee and
Mortgagee's successors, substitutes and assigns forever.

            2.2 Security Interest to Mortgagee. As additional security for the
Secured Obligations, Mortgagor hereby grants to Mortgagee a security interest in
the Chattels and in the Intangible Personalty. To the extent any of the Chattels
or the Intangible Personalty may be or have been acquired with funds advanced by
Mortgagee under the Loan Documents, this security interest is a purchase money
security interest. This Mortgage constitutes a Security Agreement under the
Uniform Commercial Code of the state in which the Property is located (the
"Code") with respect to any part of the Property, Chattels and Intangible
Personalty that may or might now or hereafter be or be deemed to be personal
property, fixtures or property other than real estate (all collectively
hereinafter called "Collateral"); all of the terms, provisions, conditions and
agreements contained in this Mortgage pertain and apply to the Collateral as
fully and to the same extent as to any other property comprising the Property,
and the following provisions of this Section shall not limit the generality or
applicability of any other provisions of this Mortgage but shall be in addition
thereto:

                  (a) The Collateral shall be used by Mortgagor solely for
business purposes, and all Collateral (other than the Intangible Personalty)
shall be installed upon the real
<PAGE>

estate comprising part of the Property for Mortgagor's own use or as the
equipment and furnishings furnished by Mortgagor, as landlord, to tenants of the
Property;

                  (b) Subject to the provisions of Section 5.7, the Collateral
(other than the Intangible Personalty) shall be kept at the real estate
comprising a part of the Property, and shall not be removed therefrom without
the consent of Mortgagee (being the Secured Party as that term is used in the
Code); and the Collateral (other than the Intangible Personalty) may be affixed
to such real estate but shall not be affixed to any other real estate;

                  (c) No financing statement covering any of the Collateral or
any proceeds thereof is on file in any public office; and Mortgagor will, at its
cost and expense, upon demand, furnish to Mortgagee such further information and
will execute and deliver to Mortgagee such financing statements and other
documents in form satisfactory to Mortgagee and will do all such acts and things
as Mortgagee may at any time or from time to time reasonably request or as may
be necessary or appropriate to establish and maintain a perfected first-priority
security interest in the Collateral as security for the Secured Obligations,
subject to no adverse liens or encumbrances; and Mortgagor will pay the cost of
filing the same or filing or recording such financing statements or other
documents and this instrument in all public offices wherever filing or recording
is deemed by Mortgagee to be necessary or desirable;

                  (d) The terms and provisions contained in this Section and in
Section 7.6 of this Mortgage shall, unless the context otherwise requires, have
the meanings and be construed as provided in the Code; and

                  (e) This Mortgage constitutes a financing statement under the
Code with respect to the Collateral. As such, this Mortgage covers all items of
the Collateral that are or are to become fixtures. The filing of this Mortgage
in the real estate records of the county where the Property is located shall
constitute a fixture filing in accordance with the Code. Information concerning
the security interests created hereby may be obtained at the addresses set forth
in Article 1 of this Mortgage. Mortgagor is the "Debtor" and Mortgagee is the
"Secured Party" (as those terms are defined and used in the Code) insofar as
this Mortgage constitutes a financing statement.

                                   Article 3

                   MORTGAGOR'S REPRESENTATIONS AND WARRANTIES

            3.1 Warranty of Title. Mortgagor represents and warrants to
Mortgagee that:

                  (a) Mortgagor has good, indefeasible and marketable fee simple
title to the Property, and such fee simple title is free and clear of all liens,
encumbrances, security interests and other claims whatsoever, subject only to
the Permitted Exceptions;

                  (b) Mortgagor is the sole and absolute owner of the Chattels
and the Intangible Personalty, free and clear of all liens, encumbrances,
security interests and other claims whatsoever, subject only to the Permitted
Exceptions;
<PAGE>

                  (c) This Mortgage is a valid and enforceable first lien and
security interest on the Property, Chattels and Intangible Personalty, subject
only to the Permitted Exceptions; and

                  (d) Mortgagor, for itself and its successors and assigns,
hereby agrees to warrant and forever defend, all and singular of the property
and property interests granted and conveyed pursuant to this Mortgage, against
every person whomsoever lawfully claiming, or to claim, the same or any part
thereof.

            The warranties contained in this Section shall survive foreclosure
of this Mortgage, and shall inure to the benefit of and be enforceable by any
person who may acquire title to the Property, the Chattels, or the Intangible
Personalty pursuant to any such foreclosure.

            3.2 Due Authorization. If Mortgagor is other than a natural person,
then each individual who executes this document on behalf of Mortgagor
represents and warrants to Mortgagee that such execution has been duly
authorized by all necessary corporate, partnership, or other action on the part
of Mortgagor. Mortgagor represents that Mortgagor has obtained all consents and
approvals required in connection with the execution, delivery and performance of
this Mortgage.

            3.3 Other Representations and Warranties. Mortgagor represents and
warrants to Mortgagee as follows:

                  (a) Mortgagor is a limited partnership, duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Mortgagor is duly authorized to transact business in and is in good standing
under the laws of the State of Florida. The sole General Partner of Mortgagor is
Florida Sonesta Corporation, a corporation duly organized authorized, validly
existing and in good standing under the laws of the State of Florida;

                  (b) This Mortgage is, and each other Loan Document to which
Mortgagor is a party will, when delivered hereunder, be valid and binding
obligations of Mortgagor enforceable against Mortgagor in accordance with their
respective terms, except as limited by equitable principles and bankruptcy,
insolvency and similar laws affecting creditors' rights;

                  (c) The execution, delivery and performance by Mortgagor of
the Loan Documents will not contravene any contractual or other restriction
binding on or affecting Mortgagor, any General Partner or any Guarantor, and
will not result in or require the creation of any lien, security interest, other
charge or encumbrance (other than pursuant hereto) upon or with respect to any
of its properties;

                  (d) The execution, delivery and performance by Mortgagor of
the Loan Documents does not contravene any applicable law;

                  (e) No authorization, approval, consent or other action by,
and no notice to or filing with, any court, governmental authority or regulatory
body is required for the
<PAGE>

due execution, delivery and performance by Mortgagor of any of the Loan
Documents or the effectiveness of any assignment of any of Mortgagor's rights
and interests of any kind to Mortgagee;

                  (f) No part of the Property, Chattels, or Intangible
Personalty is in the hands of a receiver, no application for a receiver is
pending with respect to any portion of the Property, Chattels, or Intangible
Personalty, and no part of the Property, Chattels, or Intangible Personalty is
subject to any foreclosure or similar proceeding;

                  (g) Neither Mortgagor, Guarantor nor any General Partner has
made an assignment for the benefit of creditors, nor has Mortgagor, Guarantor or
any General Partner filed, or had filed against it, any petition in bankruptcy;

                  (h) There is no pending or, to the best of Mortgagor's
knowledge, threatened condemnation proceeding against the Property, and there is
no pending or, to the best of Mortgagor's knowledge, threatened, litigation,
action, proceeding or investigation against Mortgagor, Guarantor, any General
Partner or the Property before any court, governmental or quasi-governmental,
arbitrator or other authority which may have a material adverse effect upon the
Property or any such party;

                  (i) Mortgagor is a "non-foreign person" within the meaning of
Sections 1445 and 7701 of the United States Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder;

                  (j) Access to and egress from the Property are available and
provided by public streets, and Mortgagor has no knowledge of any federal,
state, county, municipal or other governmental plans to change the highway or
road system in the vicinity of the Property or to restrict or change access from
any such highway or road to the Property;

                  (k) All public utility services necessary for the operation of
all improvements constituting part of the Property for their intended purposes
are available at the boundaries of the land constituting part of the Property,
including water supply, storm and sanitary sewer facilities, and natural gas,
electric, telephone and cable television facilities;

                  (l) The Property is located in a zoning district designated
HR-Hotel Resort by the Village of Key Biscayne, Florida with a permitted use of
the Property as a hotel. Such zoning and the land use designation permit the use
and operation of the Property as a permitted use, and are consistent; however,
the Property is legally non-conforming with respect to the density requirements
of the Master Plan of the Village of Key Biscayne, Florida. The Master Plan
would not preclude the repair or reconstruction of the Property or any portion
thereof following a natural disaster or other casualty to its present form
within the existing building envelope and with the same or fewer number of units
than existed prior to any such natural disaster or other casualty. To the best
of Mortgagor's knowledge, and except as provided above, the Property complies in
all respects with all requirements, conditions, restrictions, zoning ordinances
and regulations applicable to the Property;
<PAGE>

                  (m) There are no special or other assessments for public
improvements or otherwise now affecting the Property, nor does Mortgagor know of
any pending or threatened special assessments affecting the Property or any
contemplated improvements affecting the Property that may result in special
assessments. There are no tax abatements or exceptions affecting the Property;

                  (n) Mortgagor, Guarantor and each General Partner have filed
all tax returns which are required to be filed by them, and have paid all taxes
as shown on such returns or on any assessment received pertaining to the
Property;

                  (o) Mortgagor has not received any notice from any
governmental body having jurisdiction over the Property as to any violation of
any applicable law, or any notice from any insurance company or inspection or
rating bureau setting forth any requirements as a condition to the continuation
of any insurance coverage on or with respect to the Property or the continuation
thereof at premium rates existing at present which have not been remedied or
satisfied;

                  (p) To the best of Mortgagor's knowledge, neither Mortgagor,
Guarantor nor any General Partner is in default, in any manner which would
adversely affect its properties, assets, operations or condition (financial or
otherwise), in the performance, observance or fulfillment of any of the
obligations, covenants or conditions set forth in any agreement or instrument to
which it is a party or by which it or any of its properties, assets or revenues
are bound;

                  (q) Except as set forth in the Lease Certificate, there are no
occupancy rights (written or oral), Leases or tenancies presently affecting any
part of the Property. The Lease Certificate contains a true and correct
description of all Leases presently affecting the Property. No written or oral
agreements or understandings exist between Mortgagor and the tenants under the
Leases described in the Lease Certificate that grant such tenants any rights
greater than those described in the Lease Certificate or that are in any way
inconsistent with the rights described in the Lease Certificate;

                  (r) There are no options, purchase contracts or other similar
agreements of any type (written or oral) presently affecting any part of the
Property;

                  (s) There exists no brokerage agreement with respect to any
part of the Property;

                  (t) Except as otherwise disclosed to Mortgagee in writing
prior to the date hereof, (i) there are no contracts presently affecting the
Property ("Contracts") having a term in excess of one hundred eighty (180) days
or not terminable by Mortgagor (without penalty) on thirty (30) days' notice;
(ii) Mortgagor has heretofore delivered to Mortgagee true and correct copies of
each of the Contracts together with all amendments thereto; (iii) to the best of
Mortgagor's knowledge, Mortgagor is not in default of any obligations under any
of the Contracts; and (iv) the Contracts represent the complete agreement
between Mortgagor and such other parties as to the services to be performed or
materials to be provided thereunder and the
<PAGE>

compensation to be paid for such services or materials, as applicable, and
except as otherwise disclosed herein, such other parties possess no unsatisfied
claims against Mortgagor. To the best of Mortgagor's knowledge, Mortgagor is not
in default under any of the Contracts and no event has occurred which, with the
passing of time or the giving of notice, or both, would constitute a default
under any of the Contracts;

                  (u) Mortgagor has obtained all Permits necessary or desirable
for the operation, use, ownership, development, occupancy and maintenance of the
Property as a hotel. None of the Permits has been suspended or revoked, and all
of the Permits are in full force and effect, are fully paid for, and Mortgagor
has made or will make application for renewals of any of the Permits prior to
the expiration thereof;

                  (v) All insurance policies held by Mortgagor relating to or
affecting the Property are in full force and effect and shall remain in full
force and effect until all Secured Obligations are paid in full. Mortgagor has
not received any notice of default or notice terminating or threatening to
terminate any such insurance policies. Mortgagor has made or will make
application for renewals of such insurance policies prior to the expiration
thereof;

                  (w) Mortgagor currently complies with ERISA. To the best of
Mortgagor's knowledge, neither the making of the loan evidenced by the Cambridge
Note and guaranteed by the Non-Recourse Guaranty Agreement secured by this
Mortgage nor the exercise by Mortgagee of any of its rights under the Loan
Documents constitutes or will constitute a non-exempt, prohibited transaction
under ERISA; and

                  (x) To the best of Mortgagor's knowledge, and except as
provided in Section 3.3(l), the Property is in compliance with the requirements
of all applicable comprehensive plans, including without limitation, all
concurrency requirements.

            3.4 Continuing Effect. Mortgagor shall be liable to Mortgagee for
any damage suffered by Mortgagee if any of the foregoing representations are
materially inaccurate as of the date hereof, regardless of when such inaccuracy
may be discovered by, or result in harm to, Mortgagee. Mortgagor further
represents and warrants that the foregoing representations and warranties, as
well as all other representations and warranties of Mortgagor to Mortgagee
relative to the Loan Documents, shall remain materially true and correct during
the term of the Non-Recourse Guaranty Agreement and shall survive termination of
this Mortgage.

                                   Article 4

                        MORTGAGOR'S AFFIRMATIVE COVENANTS

            4.1 Payment of Obligations under Non-Recourse Guaranty Agreement.
Mortgagor will pay all principal, interest, and other sums payable under the
Non-Recourse Guaranty Agreement, on the date when such payments are due, without
notice or demand.
<PAGE>

            4.2 Performance of Other Obligations. Mortgagor will promptly and
strictly perform and comply with all other covenants, conditions, and
prohibitions required of Mortgagor by the terms of the Loan Documents.

            4.3 Other Encumbrances. Mortgagor will promptly and strictly perform
and comply with all covenants, conditions, and prohibitions required of
Mortgagor in connection with any other encumbrance affecting the Property, the
Chattels, or the Intangible Personalty, or any part thereof, or any interest
therein, regardless of whether such other encumbrance is superior or subordinate
to the lien hereof.

            4.4 Payment of Taxes.

                  (a) Property Taxes. Except to the extent that Mortgagor has
made escrow payments to Mortgagee pursuant to Section 4.4(b) below, (i)
Mortgagor will pay, before delinquency, all taxes and assessments, general or
special, which may be levied or imposed at any time against Mortgagor's interest
and estate in the Property, the Chattels, or the Intangible Personalty, (ii)
within ten (10) days after each payment of any such tax or assessment, Mortgagor
will deliver to Mortgagee, without notice or demand, an official receipt for
such payment, and (iii) at Mortgagee's option, Mortgagee may retain the services
of a firm to monitor the payment of all taxes and assessments relating to the
Property, the cost of which shall be borne by Mortgagor.

                  (b) Deposit for Taxes. On or before the date hereof, Mortgagor
shall deposit with Mortgagee an amount equal to 1/12th of the amount which
Mortgagee estimates will be required to make the next annual payment of taxes,
assessments, and similar governmental charges referred to in this Section,
multiplied by the number of whole or partial months that have elapsed since the
date one month prior to the most recent due date for such taxes, assessments and
similar governmental charges. Thereafter, with each monthly payment under the
Note, Mortgagor shall deposit with Mortgagee an amount equal to 1/12th of the
amount which Mortgagee estimates will be required to pay the next annual payment
of taxes, assessments, and similar governmental charges referred to in this
Section. The purpose of these provisions is to provide Mortgagee with sufficient
funds on hand to pay all such taxes, assessments, and other governmental charges
thirty (30) days before the date on which they become past due. If the
Mortgagee, in its sole discretion, determines that the funds escrowed hereunder
are, or will be, insufficient, Mortgagor shall upon demand pay such additional
sums as Mortgagee shall determine necessary and shall pay any increased monthly
charges requested by Mortgagee. Provided no Default or Event of Default exists
hereunder, Mortgagee will apply the amounts so deposited to the payment of such
taxes, assessments, and other charges when due. Any amount deposited pursuant to
this Section 4.4(b) may be held and commingled with Mortgagee's own funds. All
amounts held in escrow pursuant to this Section 4.4(b) shall accrue interest for
the benefit of Mortgagor; provided, however, Mortgagor shall pay to Mortgagee
(or its loan servicer) the administrative costs associated with investing,
administering or otherwise providing for interest on the amounts so deposited.
<PAGE>

                  (c) Intangible Taxes. If by any reason, including, but not
limited to, by reason of any statutory or constitutional amendment or judicial
decision adopted or rendered after the date hereof, any tax, assessment, or
similar charge, including, without limitation, mortgage, documentary or other
intangible tax, is imposed against the Non-Recourse Guaranty Agreement, this
Mortgage or any other Loan Document, Mortgagee, or any interest of Mortgagee in
any real or personal property encumbered hereby, Mortgagor will pay such tax,
assessment, or other charge before delinquency and will indemnify Mortgagee
against all loss, expense, or diminution of income in connection therewith. In
the event Mortgagor fails to do so, or is unable to do so, either for economic
reasons or because the legal provisions or decisions creating such tax,
assessment or charge forbid Mortgagor from doing so, then the Note will, at
Mortgagee's option, become due and payable in full upon ninety (90) days' notice
to Mortgagor. Mortgagor's obligation to pay any tax, assessment or similar
charge referred to in this Section 4.4(c) shall not be subject to limitation on
personal liability described in the Non-Recourse Guaranty Agreement.

                  (d) Right to Contest. Notwithstanding any other provision of
this Section, Mortgagor will not be deemed to be in default solely by reason of
Mortgagor's failure to pay any tax, assessment or similar governmental charge so
long as, in Mortgagee's judgment, each of the following conditions is satisfied:

                        (i) Mortgagor is engaged in and diligently pursuing in
good faith administrative or judicial proceedings appropriate to contest the
validity or amount of such tax, assessment, or charge; and

                        (ii) Mortgagor's payment of such tax, assessment, or
charge would necessarily and materially prejudice Mortgagor's prospects for
success in such proceedings; and

                        (iii) Nonpayment of such tax, assessment, or charge will
not result in the loss or forfeiture of any property encumbered hereby or any
interest of Mortgagee therein; and

                        (iv) Mortgagor deposits with Mortgagee, as security for
such payment which may ultimately be required, a sum equal to the amount of the
disputed tax, assessment or charge plus the interest, penalties, advertising
charges, and other costs which Mortgagee estimates are likely to become payable
if Mortgagor's contest is unsuccessful.

            If Mortgagee determines that any one or more of such conditions is
not satisfied or is no longer satisfied, Mortgagor will pay the tax, assessment,
or charge in question, together with any interest and penalties thereon, within
ten (10) days after Mortgagee gives notice of such determination.

            4.5 Maintenance of Insurance.

                  (a) Coverages Required. Mortgagor shall maintain or cause to
be maintained, with financially sound and reputable insurance companies or
associations satisfactory to Mortgagee, all insurance required under the terms
of that certain Agreement
<PAGE>

Concerning Insurance Requirements of even date herewith executed by Mortgagor
for the benefit of Mortgagee (the "Insurance Agreement"), and shall comply with
each and every covenant and agreement contained in such Insurance Agreement.

                  (b) Renewal Policies. Not less than thirty (30) days prior to
the expiration date of each insurance policy required pursuant to the Insurance
Agreement, Mortgagor will deliver to Mortgagee an appropriate renewal policy (or
a certified copy thereof), together with evidence satisfactory to Mortgagee that
the applicable premium has been prepaid.

                  (c) Deposit for Premiums. Upon demand made by Mortgagee
following the occurrence of any Default or Event of Default, Mortgagor shall
deposit with Mortgagee an amount equal to 1/12th of the amount which Mortgagee
estimates will be required to make the next annual payments of the premiums for
the policies of insurance referred to in this Section, multiplied by the number
of whole and partial months which have elapsed since the date one month prior to
the most recent policy anniversary date for each such policy. Thereafter, with
each monthly payment under the Note, Mortgagor will deposit an amount equal to
1/12th of the amount which Mortgagee estimates will be required to pay the next
required annual premium for each insurance policy referred to in this Section.
The purpose of these provisions is to provide Mortgagee with sufficient funds on
hand to pay all such premiums thirty (30) days before the date on which they
become past due. If the Mortgagee, in its sole discretion, determines that the
funds escrowed hereunder are, or will be, insufficient, Mortgagor shall upon
demand pay such additional sums as Mortgagee shall determine necessary and shall
pay any increased monthly charges requested by Mortgagee. Provided no Default or
Event of Default exists hereunder, Mortgagee will apply the amounts so deposited
to the payment of such insurance premiums when due. Any amount deposited
pursuant to this Section 4.5(c) may be held and commingled with Mortgagee's own
funds. All amounts held in escrow pursuant to this Section 4.5(c) shall accrue
interest for the benefit of Mortgagor; provided, however, Mortgagor shall pay to
Mortgagee (or its loan servicer) the administrative costs associated with
investing, administering or otherwise providing for interest on the amounts so
deposited.

                  (d) Application of Hazard Insurance Proceeds. Mortgagor shall
promptly notify Mortgagee of any damage or casualty to all or any portion of the
Property or Chattels. Mortgagee may participate in all negotiations and appear
and participate in all judicial arbitration proceedings concerning any insurance
proceeds which may be payable as a result of such casualty or damage. Any such
insurance proceeds shall be paid to Mortgagee and shall be applied first to
reimburse Mortgagee for all costs and expenses, including attorneys' fees,
reasonably incurred by Mortgagee in connection with the collection of such
insurance proceeds. The balance of any insurance proceeds received by Mortgagee
with respect to an insured casualty may, in Mortgagee's sole discretion, either
(i) be retained and applied by Mortgagee toward payment of the Secured
Obligations, or (ii) be paid over, in whole or in part and subject to such
conditions as Mortgagee may reasonably impose and as are consistent with
customary construction loan disbursements, to Mortgagor to pay for repairs or
replacements necessitated by the casualty; provided, however, that if all of the
Secured Obligations have been performed or are discharged by the application of
less than all of such insurance proceeds, then any remaining proceeds will be
paid over to Mortgagor. Notwithstanding the preceding sentence, if (A) no
<PAGE>

Default or Event of Default shall exist hereunder, and (B) the proceeds received
by Mortgagee (together with any other funds delivered by Mortgagor to Mortgagee
for such purpose) shall be sufficient, in Mortgagee's reasonable judgment, to
pay for any restoration necessitated by the casualty, and (C) the cost of such
restoration shall not exceed $2,300,000.00, and (D) such restoration can be
completed, in Mortgagee's judgment, at least ninety (90) days prior to the
maturity date of the Note, then Mortgagee shall apply such proceeds as provided
in clause (ii) of the preceding sentence. Mortgagee will have no obligation to
see to the proper application of any insurance proceeds paid over to Mortgagor,
nor will any such proceeds received by Mortgagee bear interest or be subject to
any other charge for the benefit of Mortgagor. Mortgagee may, prior to the
application of insurance proceeds, commingle them with Mortgagee's own funds and
otherwise act with regard to such proceeds as Mortgagee may determine in
Mortgagee's sole discretion.

                  (e) Successor's Rights. Any person who acquires title to the
Property or the Chattels upon foreclosure hereunder will succeed to all of
Mortgagor's rights under all policies of insurance maintained pursuant to this
Section.

            4.6 Maintenance and Repair of Property and Chattels. Mortgagor will
at all times maintain the Property and the Chattels in good condition and
repair, will diligently prosecute the completion of any building or other
improvement which is at any time in the process of construction on the Property,
and will promptly repair, restore, replace, or rebuild any part of the Property
or the Chattels which may be affected by any casualty or any public or private
taking or injury to the Property or the Chattels, provided that applicable
insurance proceeds or condemnation awards are made available for such purpose
pursuant to Section 4.5 or 4.8 hereof. All costs and expenses arising out of the
foregoing shall be paid by Mortgagor whether or not the proceeds of any
insurance or eminent domain shall be sufficient therefor. Mortgagor will comply
with all statutes, ordinances, and other governmental or quasi-governmental
requirements and private covenants relating to the ownership, construction, use,
or operation of the Property, including but not limited to any environmental or
ecological requirements; provided, that so long as Mortgagor is not otherwise in
default hereunder, Mortgagor may, upon providing Mortgagee with security
reasonably satisfactory to Mortgagee, proceed diligently and in good faith to
contest the validity or applicability of any such statute, ordinance, or
requirement. Mortgagee and any person authorized by Mortgagee may enter and
inspect the Property at all reasonable times, and may inspect the Chattels,
wherever located, at all reasonable times.

            4.7 Leases. Mortgagor shall timely pay and perform each of its
obligations under or in connection with the Leases, and shall otherwise pay such
sums and take such action as shall be necessary or required in order to maintain
each of the Leases in full force and effect in accordance with its terms.
Mortgagor shall comply with applicable state statutes governing the handling of
security deposits and the payment of sales taxes on rents. Mortgagor shall
immediately furnish to Mortgagee copies of any notices given to Mortgagor by the
lessee under any Lease, alleging the default by Mortgagor in the timely payment
or performance of its obligations under such Lease and any subsequent
communication related thereto. Mortgagor shall also promptly furnish to
Mortgagee copies of any notices given to Mortgagor by the lessee
<PAGE>

under any Lease, extending the term of any Lease, requiring or demanding the
expenditure of any sum by Mortgagor (or demanding the taking of any action by
Mortgagor), or relating to any other material obligation of Mortgagor under such
Lease and any subsequent communication related thereto. Mortgagor agrees that
Mortgagee, in its sole discretion, may advance any reasonable sum or take any
action which Mortgagee believes is necessary or required to maintain the Leases
in full force and effect, and all such sums advanced by Mortgagee, together with
all reasonable costs and expenses incurred by Mortgagee in connection with
action taken by Mortgagee pursuant to this Section, shall be due and payable by
Mortgagor to Mortgagee upon demand, shall bear interest until paid at the
Default Rate, and shall be secured by this Mortgage.

            4.8 Eminent Domain; Private Damage. If all or any part of the
Property is taken or damaged by eminent domain or any other public or private
action, Mortgagor will notify Mortgagee promptly of the time and place of all
meetings, hearings, trials, and other proceedings relating to such action.
Mortgagee may participate in all negotiations and appear and participate in all
judicial or arbitration proceedings concerning any award or payment which may be
due as a result of such taking or damage. Any such award or payment is to be
paid to Mortgagee and will be applied first to reimburse Mortgagee for all costs
and expenses, including attorneys' fees, reasonably incurred by Mortgagee in
connection with the ascertainment and collection of such award or payment. The
balance, if any, of such award or payment may, in Mortgagee's sole discretion,
either (a) be retained by Mortgagee and applied toward the Secured Obligations,
or (b) be paid over, in whole or in part and subject to such conditions as
Mortgagee may reasonably impose and as are consistent with customary
construction loan disbursements, to Mortgagor for the purpose of restoring,
repairing, or rebuilding any part of the Property affected by the taking or
damage. Notwithstanding the preceding sentence, if (i) no Default or Event of
Default shall have occurred and be continuing hereunder, and (ii) the proceeds
received by Mortgagee (together with any other funds delivered by Mortgagor to
Mortgagee for such purpose) shall be sufficient, in Mortgagee's reasonable
judgment, to pay for any restoration necessitated by the taking or damage, and
(iii) the cost of such restoration shall not exceed $2,300,000.00, and (iv) such
restoration can be completed, in Mortgagee's judgment, at least ninety (90) days
prior to the maturity date of the Note, and (v) the remaining Property shall
constitute, in Mortgagee's sole judgment, adequate security for the Secured
Obligations, then Mortgagee shall apply such proceeds as provided in clause (b)
of the preceding sentence. Mortgagee will have no duty to see to the application
of any part of any award or payment released to Mortgagor. Mortgagor's duty to
pay the obligations set forth in the Non-Recourse Guaranty Agreement in
accordance with its terms and to perform the other Secured Obligations will not
be suspended by the pendency or discharged by the conclusion of any proceedings
for the collection of any such award or payment, and any reduction in the
Secured Obligations resulting from Mortgagee's application of any such award or
payment will take effect only when Mortgagee receives such award or payment. If
this Mortgage has been foreclosed prior to Mortgagee's receipt of such award or
payment, Mortgagee may nonetheless retain such award or payment to the extent
required to reimburse Mortgagee for all costs and expenses, including attorneys'
fees, incurred in connection therewith, and to discharge any deficiency
remaining with respect to the Secured Obligations.

            4.9 Mechanics' Liens. Mortgagor will keep the Property free and
clear of all liens and claims of liens by contractors, subcontractors,
mechanics, laborers, materialmen, and
<PAGE>

other such persons, and will cause any recorded statement of any such lien to be
released of record or transferred to bond within thirty (30) days after the
recording thereof. Notwithstanding the preceding sentence, however, Mortgagor
will not be deemed to be in default under this Section if and so long as
Mortgagor (a) contests in good faith the validity or amount of any asserted lien
and diligently prosecutes or defends an action appropriate to obtain a binding
determination of the disputed matter, and (b) provides Mortgagee with such
security as Mortgagee may require to protect Mortgagee against all loss, damage,
and expense, including attorneys' fees, which Mortgagee might incur if the
asserted lien is determined to be valid.

            4.10 Defense of Actions. Mortgagor will defend, at Mortgagor's
expense, any action, proceeding or claim which affects any property encumbered
hereby or any interest of Mortgagee in such property or in the Secured
Obligations, and will indemnify and hold Mortgagee harmless from all loss,
damage, cost, or expense, including attorneys' fees, which Mortgagee may incur
in connection therewith. Mortgagor's obligations under this Section are subject
to the following: (a) the right to settle or resolve such claim, subject to
Mortgagee's approval, which approval shall not be unreasonably withheld, (b) the
right to select legal counsel of Mortgagor's choice, subject to Mortgagee's
approval, which approval shall not be unreasonably withheld, and (c) Mortgagor
shall not indemnify Mortgagee for Mortgagee's gross negligence or willful
misconduct.

            4.11 Expenses of Enforcement. Mortgagor will pay all costs and
expenses, including attorneys' fees, which Mortgagee may incur in connection
with any effort or action (whether or not litigation or foreclosure is involved)
to enforce or defend Mortgagee's rights and remedies under any of the Loan
Documents, including but not limited to all attorneys' fees, appraisal fees,
consultants' fees, and other expenses incurred by Mortgagee in securing title to
or possession of, and realizing upon, any security for the Secured Obligations.
All such costs and expenses (together with interest thereon at the Default Rate
from the date ten (10) days following demand therefor until paid) shall
constitute part of the Secured Obligations, and may be included in the
computation of the amount owed to Mortgagee for purposes of foreclosing or
otherwise enforcing this Mortgage.

            4.12 Financial Reports. Within ninety (90) days after the end of
each fiscal year of Mortgagor, Mortgagor will furnish to Mortgagee (a)
Mortgagor's operating statements for the Property as of the end of and for the
preceding fiscal year, prepared against the budget for such year; and (b) an
annual balance sheet and profit and loss statement of Mortgagor and of each
Guarantor. The financial statements and reports described in (a) and (b) above
shall be in such detail as Mortgagee may require, shall be prepared in
accordance with generally accepted accounting principles consistently applied
and shall be prepared in accordance with the Uniform System of Accounts for the
Lodging Industry, Ninth Revised Edition, First Printing 1996, as adopted by the
American Hotel and Motel Association, as amended or supplemented from time to
time, and shall be certified as true and correct by Mortgagor or the applicable
Guarantor (or, if required by Mortgagee, such operating statements, balance
sheets and profit and loss statements shall be certified by an independent
certified public accountant acceptable to Mortgagee). Mortgagor will also
furnish or cause to be furnished to Mortgagee within thirty (30) days of
Mortgagee's request, any other financial reports or statements of Mortgagor,
including, without
<PAGE>

limitation, balance sheets, profit and loss statements, other financial
statements and certified rent rolls, required under any of the Loan Documents,
requested by any regulatory or governmental authority exercising jurisdiction
over Mortgagee, or reasonably requested by Mortgagee from time to time.

            4.13 Priority of Leases. To the extent Mortgagor has the right,
under the terms of any Lease, to make such lease subordinate to the lien hereof,
Mortgagor will, at Mortgagee's request and Mortgagor's expense, take such action
as may be required to effect such subordination. Conversely, Mortgagor will, at
Mortgagee's request and Mortgagor's expense, take such action as may be
necessary to subordinate the lien hereof to any future Lease designated by
Mortgagee.

            4.14 Inventories; Assembly of Chattels. Mortgagor will, from time to
time at the request of Mortgagee, supply Mortgagee with a current inventory of
the Chattels and the Intangible Personalty, in such detail as Mortgagee may
require. Upon the occurrence of any Event of Default hereunder, Mortgagor will
at Mortgagee's request assemble the Chattels and make them available to
Mortgagee at any place designated by Mortgagee which is reasonably convenient to
both parties.

            4.15 Compliance with Laws, Etc. Mortgagor shall comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, maintaining all Permits and paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon Mortgagor or the Property.

            4.16 Records and Books of Account. Mortgagor shall keep accurate and
complete records and books of account, in which complete entries will be made in
accordance with generally accepted accounting principles consistently applied,
reflecting all financial transactions relating to the Property.

            4.17 Inspection Rights. At any reasonable time, and from time to
time, Mortgagor shall permit Mortgagee, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the Property and to discuss with Mortgagor the affairs,
finances and accounts of Mortgagor.

            4.18 Change of Executive Offices. Mortgagor shall promptly notify
Mortgagee if changes are made in the location of Mortgagor's primary executive
offices.

            4.19 Further Assurances; Estoppel Certificates. Mortgagor will
execute and deliver to Mortgagee upon demand, and pay the costs of preparation
and recording thereof, any further documents which Mortgagee may request to
confirm or perfect the liens and security interests created or intended to be
created hereby, or to confirm or perfect any evidence of the Secured
Obligations. Mortgagor will also, within ten (10) days after any request by
Mortgagee, deliver to Mortgagee a signed and acknowledged statement certifying
to Mortgagee, or to any proposed transferee of the Secured Obligations, (a) the
balance of principal, interest, and other sums then outstanding under the
Cambridge Note, and (b) whether Mortgagor claims to have any
<PAGE>

offsets or defenses with respect to the Secured Obligations and, if so, the
nature of such offsets or defenses.

            4.20 Costs of Closing. Mortgagor shall on demand pay directly or
reimburse Mortgagee for any costs or expenses pertaining to the closing of the
loan evidenced by the Note, including, but not limited to, fees of counsel for
Mortgagee, costs and expenses for which invoices were not available at the
closing of such loan, or costs and expenses which are incurred by Mortgagee
after such closing. All such costs and expenses (together with interest thereon
at the Default Rate from the date ten (10) days following demand therefor until
paid) shall constitute a part of the Secured Obligations, and may be included in
the computation of the amount owed to Mortgagee for purposes of foreclosing or
otherwise enforcing this Mortgage.

            4.21 Fund for Electronic Transfer. All payments due under the
Non-Recourse Guaranty Agreement, and escrow deposits under this Mortgage, shall
be made by Mortgagor by electronic funds transfer from a bank account or
accounts established and maintained by Mortgagor.

            4.22 Use. Mortgagor shall use the Property solely for the operation
of a hotel and ancillary purposes and for no other use or purpose.

                                   Article 5

                         MORTGAGOR'S NEGATIVE COVENANTS

            5.1 Waste and Alterations. Mortgagor will not commit or permit any
waste with respect to the Property or the Chattels. Mortgagor shall not cause or
permit any part of the Property, including but not limited to any building,
structure, parking lot, driveway, landscape scheme, timber, or other ground
improvement, to be removed, demolished, or materially altered without the prior
written consent of Mortgagee.

            5.2 Zoning and Private Covenants. Mortgagor will not initiate, join
in, or consent to any change in any zoning ordinance or classification, any
change in the "zone lot" or "zone lots" (or similar zoning unit or units)
presently comprising the Property, any transfer of development rights, any
private restrictive covenant, or any other public or private restriction
limiting or defining the uses which may be made of the Property or any part
thereof, without the express written consent of Mortgagee. If under applicable
zoning provisions the use of all or any part of the Property is or becomes a
nonconforming use, Mortgagor will not cause such use to be discontinued or
abandoned without the express written consent of Mortgagee, and Mortgagor will
use its best efforts to prevent the tenant under any Lease from discontinuing or
abandoning such use.

            5.3 Interference with Leases. Mortgagor shall not collect rent from
all or any part of the Property for more than one month in advance, or assign
the rents from the Property or any part thereof. Without the prior written
consent of Mortgagee, which consent shall not be unreasonably withheld,
Mortgagor shall not terminate (other than at the stated expiration thereof) or
make or permit any modification to the Lease relating to that portion of the
<PAGE>

Property currently operated as the so called "Two Dragons" restaurant (the "Two
Dragons Lease"), or enter into, modify or terminate (other than at the stated
expiration thereof) any Lease approved by Mortgagee as a replacement to, or
substitution of, the Two Dragons Lease.

            5.4 Transfer or Further Encumbrance of Property. Subject to the
provisions of Section 5.7 relating to Chattels, without Mortgagee's prior
written consent, which consent may be granted or withheld in Mortgagee's sole
and absolute discretion, Mortgagor shall not (a) sell, assign, convey, transfer
or otherwise dispose of any legal, beneficial or equitable interest in all or
any part of the Property, (b) permit or suffer any owner, directly or
indirectly, of any beneficial interest in the Property or Mortgagor to transfer
such interest, whether by transfer of partnership, membership, stock or other
beneficial interest in any entity or otherwise, or (c) mortgage, hypothecate or
otherwise encumber or permit to be encumbered or grant or permit to be granted a
security interest in all or any part of the Property or Mortgagor or any
beneficial or equitable interest in either the Property or Mortgagor. The
provisions of this Section shall not prohibit transfers of title or interest
under any will or testament or applicable law of descent, and shall not prohibit
the transfer of the limited partnership interests in Mortgagor owned by Key
Biscayne Limited Partnership, a Florida limited partnership. Notwithstanding the
foregoing to the contrary, (1) Mortgagee shall permit transfers of the shares of
Guarantor (a "Guarantor Transfer") in connection with the sale of all of the
shares of Guarantor to an individual or entity previously approved in writing by
Mortgagee in its sole discretion, or, in all other cases, provided that the
Sonnabend family, or any of them, shall at all times during which any Secured
Obligation shall remain outstanding, (x) collectively own not less than 51% of
Guarantor, and (y) control Guarantor, and (2) if any Guarantor Transfer is not
permitted under the terms of this Section 5.4, then Mortgagor shall have the
right to complete a Defeasance of the Note by satisfying the Defeasance
Requirements set forth in the Note. For purposes of the foregoing, the Sonnabend
family shall be presumed to control Guarantor if the Sonnabend family, or any of
them, possesses the power, directly or indirectly, to direct, or cause the
direction of, the management or policies of Guarantor, whether through ownership
of voting securities, by contract, or otherwise.

            5.5 Further Encumbrance of Chattels. Mortgagor will neither create
nor permit any lien, security interest or encumbrance against the Chattels or
Intangible Personalty or any part thereof or interest therein, other than the
liens and security interests created by the Loan Documents, without the prior
written consent of Mortgagee, which may be withheld for any reason.

            5.6 Assessments Against Property. Mortgagor will not, without the
prior written approval of Mortgagee, which may be withheld for any reason,
consent to or allow the creation of any so-called special districts, special
improvement districts, benefit assessment districts or similar districts, or any
other body or entity of any type, or allow to occur any other event, that would
or might result in the imposition of any additional taxes, assessments or other
monetary obligations or burdens on the Property, and this provision shall serve
as RECORD NOTICE to any such district or districts or any governmental entity
under whose authority such district or districts exist or are being formed that,
should Mortgagor or any other person or entity include all or any portion of the
Property in such district or districts, whether formed or in the
<PAGE>

process of formation, without first obtaining Mortgagee's express written
consent, the rights of Mortgagee in the Property pursuant to this Mortgage or
following any foreclosure of this Mortgage, and the rights of any person or
entity to whom Mortgagee might transfer the Property following a foreclosure of
this Mortgage, shall be senior and superior to any taxes, charges, fees,
assessments or other impositions of any kind or nature whatsoever, or liens
(whether statutory, contractual or otherwise) levied or imposed, or to be levied
or imposed, upon the Property or any portion thereof as a result of inclusion of
the Property in such district or districts.

            5.7 Transfer or Removal of Chattels. Mortgagor will not sell,
transfer or remove from the Property all or any part of the Chattels, unless the
items sold, transferred, or removed are simultaneously replaced with similar
items of equal or greater value. Mortgagor shall not replace any Chattel owned
by any Mortgagor as of the date hereof by leasing such Chattel or Chattels
unless Mortgagee consents to such lease, which consent shall not be unreasonably
withheld provided (a) Mortgagee may, under the terms of any such lease, succeed
to Mortgagor's rights as lessee, and (b) Mortgagee is given notice and an
opportunity to cure any default by Mortgagor under any such lease.

            5.8 Change of Name. Mortgagor will not change the name under which
Mortgagor does business, or adopt or begin doing business under any other name
or assumed or trade name, without first notifying Mortgagee of Mortgagor's
intention to do so and delivering to Mortgagee such executed modifications or
supplements to this Mortgage (and to any financing statement which may be filed
in connection herewith) as Mortgagee may require.

            5.9 Improper Use of Property or Chattels. Mortgagor will not use the
Property or the Chattels for any purpose or in any manner which violates any
applicable law, ordinance, or other governmental requirement, the requirements
or conditions of any insurance policy, or any private covenant.

            5.10 ERISA. Mortgagor shall not engage in any transaction which
would cause the Non-Recourse Guaranty Agreement (or the exercise by Mortgagee of
any of its rights under the Loan Documents) to be a non-exempt (under a class
exemption), prohibited transaction under ERISA (including for this purpose the
parallel provisions of Section 4975 of the Internal Revenue Code of 1986, as
amended), or otherwise result in Mortgagee being deemed in violation of any
applicable provisions of ERISA. Mortgagor shall indemnify, protect, defend, and
hold Mortgagee harmless from and against any and all losses, liabilities,
damages, claims, judgments, costs, and expenses (including, without limitation
attorneys' fees and costs reasonably incurred in the investigation, defense, and
settlement of claims and in obtaining any individual ERISA exemption or state
administrative exception that may be required, in Mortgagee's sole and absolute
discretion) that Mortgagee may incur, directly or indirectly, as the result of
the breach by Mortgagor of any warranty or representation set forth in Section
3.3(w) hereof or the breach by Mortgagor of any covenant contained in this
Section. This indemnity shall survive any termination, satisfaction or
foreclosure of this Mortgage and shall not be subject to the limitation on
personal liability described in the Non-Recourse Guaranty Agreement.
<PAGE>

                                   Article 6

                                EVENTS OF DEFAULT

            Each of the following events will constitute an event of default (an
"Event of Default") under this Mortgage and under each of the other Loan
Documents:

            6.1 Default Under Non-Recourse Guaranty Agreement. The failure by
Mortgagor to make any payment due under the Non-Recourse Guaranty Agreement or
Mortgagor's failure to make any payment due under any other Loan Document within
five (5) days following its due date.

            6.2 Due on Sale or Encumbrance. The occurrence of any violation of
any covenant contained in Section 5.4, 5.5 or 5.7 hereof.

            6.3 Other Obligations. The failure of Mortgagor to properly perform
any obligation contained herein or in any of the other Loan Documents (other
than the obligation to make payments under the Non-Recourse Guaranty Agreement
or the other Loan Documents) and the continuance of such failure for a period of
thirty (30) days following written notice thereof from Mortgagee to Mortgagor;
provided, however, that if such failure is not curable within such thirty (30)
day period, then, so long as Mortgagor commences to cure such failure within
such thirty (30) day period and is continually and diligently attempting to cure
to completion, such failure shall not be an Event of Default unless such failure
remains uncured for ninety (90) days after such written notice to Mortgagor.

            6.4 Levy Against Property. The levy against any of the Property,
Chattels or Intangible Personalty, of any execution, attachment, sequestration
or other writ, unless discharged within thirty (30) days.

            6.5 Liquidation. The liquidation, termination or dissolution of
Mortgagor, any General Partner, any Guarantor, or any other party directly or
indirectly liable for the payment of the Non-Recourse Guaranty Agreement,
whether as maker, endorser, guarantor, surety, general partner or otherwise.

            6.6 Appointment of Receiver. The appointment of a trustee,
liquidator or receiver for Mortgagor, any General Partner or any Guarantor, or
the assets, or any part thereof, of Mortgagor, any General Partner, any
Guarantor or any other party directly or indirectly liable for the payment of
the Non-Recourse Guaranty Agreement, whether as maker, endorser, guarantor,
surety, general partner or otherwise, or the appointment of a trustee or
receiver for any real or personal property, or the like, or any part thereof,
representing the security for the Non-Recourse Guaranty Agreement, unless
discharged within thirty (30) days.

            6.7 Assignments. The making by Mortgagor, any General Partner, any
Guarantor or by any other person or entity directly or indirectly liable for the
payment of the Non-Recourse Guaranty Agreement, whether as maker, endorser,
guarantor, surety, general
<PAGE>

partner or otherwise, of a transfer in fraud of creditors or an assignment for
the benefit of creditors.

            6.8 Order for Relief. The entry in bankruptcy of an order for relief
for or against Mortgagor, any General Partner, any Guarantor or any other party
directly or indirectly liable for the payment of the Non-Recourse Guaranty
Agreement, whether as maker, endorser, guarantor, surety, general partner or
otherwise.

            6.9 Bankruptcy. The filing of any petition (or answer admitting the
material allegations of any petition), or other pleading, seeking entry of an
order for relief for or against Mortgagor, any General Partner, any Guarantor or
any other party directly or indirectly liable for the payment of the
Non-Recourse Guaranty Agreement, whether as maker, endorser, guarantor, surety,
general partner or otherwise as a debtor or bankrupt or seeking an adjustment of
any of such parties' debts, or any other relief under any state or federal
bankruptcy, reorganization, debtor's relief or insolvency laws now or hereafter
existing, including, without limitation, a petition or answer seeking
reorganization or admitting the material allegations of a petition filed against
any of such parties in any bankruptcy or reorganization proceeding, or the act
of any of such parties in instituting or voluntarily being or becoming a party
to any other judicial proceedings intended to effect a discharge of the debts of
any such parties, in whole or in part, or a postponement of the maturity or the
collection thereof, or a suspension of any of the rights or powers of a trustee
or of any of the rights or powers granted to Mortgagee herein, or in any other
document executed in connection herewith; provided, however, that no Event of
Default shall occur under this Section if an involuntary bankruptcy or
insolvency petition is filed against Mortgagor, any General Partner, any
Guarantor or any other party directly or indirectly liable for the payment of
the Non-Recourse Guaranty Agreement unless such petition not dismissed within
sixty (60) days following its filing.

            6.10 Misrepresentation. If any representation or warranty made by
Mortgagor, any General Partner, any Guarantor or any other party directly or
indirectly liable for the payment of the Non-Recourse Guaranty Agreement,
whether as maker, endorser, guarantor, surety, general partner or otherwise,
herein, or in any of the other Loan Documents or any other instrument or
document modifying, renewing, extending, evidencing, securing or pertaining to
the Non-Recourse Guaranty Agreement is false, misleading or erroneous in any
material respect.

            6.11 Judgments. The failure of Mortgagor, any General Partner, any
Guarantor or any party directly or indirectly liable for the payment of the
Non-Recourse Guaranty Agreement, whether as maker, endorser, guarantor, surety,
general partner or otherwise, to pay any money judgment in excess of $50,000.00
against any such party before the expiration of thirty (30) days after such
judgment becomes final and no longer appealable.

            6.12 Admissions Regarding Debts. The admission of Mortgagor, any
General Partner, any Guarantor or any other party directly or indirectly liable
for the payment of the Non-Recourse Guaranty Agreement, whether as maker,
endorser, guarantor, surety, general partner or otherwise, in writing of any
such party's inability to pay such party's debts as they become due.
<PAGE>

            6.13 Assertion of Priority. The assertion of any claim of priority
over this Mortgage, by title, lien, or otherwise, unless Mortgagor within thirty
(30) days after such assertion either causes the assertion to be withdrawn or
provides Mortgagee with such security as Mortgagee may require to protect
Mortgagee against all loss, damage, or expense, including attorneys' fees, which
Mortgagee may incur in the event such assertion is upheld.

            6.14 Other Loan Documents. The occurrence of any default by
Mortgagor, after the lapse of any applicable grace or cure period, or the
occurrence of any event or circumstance defined as an Event of Default, under
any of the Loan Documents other than this Mortgage.

            6.15 Other Liens. The occurrence of any default by Mortgagor, after
the lapse of any applicable grace or cure period, or the occurrence of any event
or circumstance defined as an Event of Default, under any other consensual lien
encumbering the Property, or any part thereof or interest therein, or any
document or instrument evidencing obligations secured thereby.

            6.16 Default Under Cambridge Loan Documents. The occurrence of any
default by Cambridge Borrower or Guarantor, after the lapse of any applicable
grace or cure period, or the occurrence of any event or circumstance defined as
an Event of Default, under any of the Cambridge Loan Documents.

            6.17 Default First Mortgage Loan Documents. The occurrence of any
default, after the lapse of any applicable grace or cure period, or the
occurrence of any event or circumstance defined as an Event of Default, under
the Note or any of the other First Mortgage Loan Documents.

                                   Article 7

                              MORTGAGEE'S REMEDIES

            Immediately upon or any time after the occurrence of any Event of
Default hereunder, Mortgagee may exercise any remedy available at law or in
equity, including but not limited to those listed below and those listed in the
other Loan Documents, in such sequence or combination as Mortgagee may determine
in Mortgagee's sole discretion:

            7.1 Performance of Defaulted Obligations. Mortgagee may make any
payment or perform any other obligation under the Loan Documents which Mortgagor
has failed to make or perform, and Mortgagor hereby irrevocably appoints
Mortgagee as the true and lawful attorney-in-fact for Mortgagor to make any such
payment and perform any such obligation in the name of Mortgagor. All payments
made and expenses (including attorneys' fees) incurred by Mortgagee in this
connection, together with interest thereon at the Default Rate from the date
paid or incurred until repaid, will be part of the Secured Obligations and will
be immediately due and payable by Mortgagor to Mortgagee. In lieu of advancing
Mortgagee's own funds for such purposes, Mortgagee may use any funds of
Mortgagor which may be in Mortgagee's possession,
<PAGE>

including but not limited to insurance or condemnation proceeds and amounts
deposited for taxes, insurance premiums, or other purposes.

            7.2 Specific Performance and Injunctive Relief. Notwithstanding the
availability of legal remedies, Mortgagee will be entitled to obtain specific
performance, mandatory or prohibitory injunctive relief, or other equitable
relief requiring Mortgagor to cure or refrain from repeating any Default.

            7.3 Acceleration of Secured Obligations. Mortgagee may, without
notice or demand, declare all of the Secured Obligations immediately due and
payable in full.

            7.4 Suit for Monetary Relief. Subject to the non-recourse provisions
of the Non-Recourse Guaranty Agreement, with or without accelerating the
maturity of the Secured Obligations, Mortgagee may sue from time to time for any
payment due under any of the Loan Documents, or for money damages resulting from
Mortgagor's default under any of the Loan Documents.

            7.5 Possession of Property. Mortgagee may enter and take possession
of the Property without seeking or obtaining the appointment of a receiver, may
employ a managing agent for the Property, and may lease or rent all or any part
of the Property, either in Mortgagee's name or in the name of Mortgagor, and may
collect the rents, issues, and profits of the Property and may exclude Mortgagor
and its agents and employees wholly therefrom. If Mortgagor for any reason fails
to surrender or deliver the Property or any part thereof after Mortgagee's
demand, Mortgagee may obtain a judgment or order conferring on Mortgagee the
right to immediate possession or requiring Mortgagor to deliver immediate
possession to Mortgagee, and Mortgagor hereby specifically consents to the entry
of any such judgment or decree. Any revenues collected by Mortgagee under this
Section will be applied first toward payment of all expenses (including
attorneys' fees) incurred by Mortgagee, together with interest thereon at the
Default Rate from the date incurred until repaid, and the balance, if any, will
be applied against the Secured Obligations.

            7.6 Enforcement of Security Interests. Mortgagee may exercise all
rights of a secured party under the Code with respect to the Chattels and the
Intangible Personalty, including but not limited to taking possession of,
holding, and selling the Chattels and enforcing or otherwise realizing upon any
accounts and general intangibles. Any requirement for reasonable notice of the
time and place of any public sale, or of the time after which any private sale
or other disposition is to be made, will be satisfied by Mortgagee's giving of
such notice to Mortgagor at least five (5) days prior to the time of any public
sale or the time after which any private sale or other intended disposition is
to be made.

            7.7 Foreclosure Against Property.

                  (a) Mortgagee may bring an action in any court of competent
jurisdiction to foreclose this Mortgage. Mortgagee may bid for and purchase all
or any portion of the Property at any foreclosure sale thereof.
<PAGE>

                  (b) If any installment or part of the Secured Obligations
under the Loan Documents shall fail to be paid when due, Mortgagee shall be
entitled to sue for and to recover judgment against Mortgagor for the amounts so
due and unpaid together with all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by Mortgagee in
connection with such proceedings, together with interest thereon at the Default
Rate from the date incurred by Mortgagee. All such costs and expenses shall be
secured by this Mortgage and shall be due and payable by Mortgagor immediately.

                  (c) If Mortgagor shall fail to pay upon Mortgagee's demand,
after acceleration as provided for in Section 7.3, all of the unpaid Secured
Obligations including all accrued interest represented thereby, Mortgagee shall
be entitled to sue for and to recover judgment against Mortgagor for the entire
amount so due and unpaid together with all costs and expenses (including without
limitation, reasonable attorneys' fees and expenses) incurred by Mortgagee in
connection with such proceeding, together with interest thereon at the Default
Rate from the date incurred by Mortgagee. All such costs and expenses shall be
secured by this Mortgage and shall be payable by Mortgagor immediately.
Mortgagee's rights under this subsection (c) may be exercised by Mortgagee
either before, after or during the pendency of any proceeding for the
enforcement of this Mortgage, including appellate proceedings.

                  (d) No recovery of any judgment as provided in subsections (b)
and (c) above and no attachment or levy or any execution on any of the Property
or any other property shall in any way affect the lien of this Mortgage upon the
Property or any part thereof, or any lien, rights, powers, or remedies of
Mortgagee hereunder, but such lien, rights, powers and remedies shall continue
unimpaired as before.

                  (e) Mortgagee may institute proceedings for the partial or
complete foreclosure of this Mortgage and Mortgagee may, pursuant to any final
judgment of foreclosure, sell the Property as an entirety or in separate lots,
units or parcels. Mortgagee is authorized to foreclose this Mortgage subject to
the rights of any tenant of the Property, or Mortgagee may elect which tenants
Mortgagee desires to name as parties defendant in such foreclosure and failure
to make any such tenants parties defendants to any such foreclosure proceedings
and to foreclose their rights will not be, nor be asserted by Mortgagor to be, a
defense to any proceeding instituted by Mortgagee to collect the Secured
Obligations.

                  (f) All fees, costs and expenses of any kind incurred by
Mortgagee in connection with foreclosure of this Mortgage, including, without
limitation, the costs of any appraisals of the Property obtained by Mortgagee,
the cost of any title reports or abstracts, all costs of any receivership for
the Property advanced by Mortgagee, and all attorneys' and consultants' fees and
expenses incurred by Mortgagee, shall constitute a part of the Secured
Obligations and may be included as part of the amount owing from Mortgagor to
Mortgagee at any foreclosure sale.

                  (g) The proceeds of any sale under this Section shall be
applied first to the fees and expenses of the officer conducting the sale, and
then to the reduction or discharge of the Secured Obligations in such order and
manner as Mortgagee may elect in its sole discretion;
<PAGE>

any surplus remaining shall be paid over to Mortgagor or to such other person or
persons as may be lawfully entitled to such surplus.

                  (h) Nothing in this Section dealing with foreclosure
procedures or specifying particular actions to be taken by Mortgagee shall be
deemed to contradict or add to the requirements and procedures now or hereafter
specified by Florida law, and any such inconsistency shall be resolved in favor
of Florida law applicable at the time of foreclosure.

            7.8 Appointment of Receiver. To the extent permitted by law,
Mortgagee shall be entitled, as a matter of absolute right and without regard to
the value of any security for the Secured Obligations or the solvency of any
person liable therefor, to the appointment of a receiver for the Property upon
ex parte application to any court of competent jurisdiction. Mortgagor waives
any right to any hearing or notice of hearing prior to the appointment of a
receiver. Such receiver and its agents shall be empowered, but shall not be
obligated, to (a) take possession of the Property and any businesses conducted
by Mortgagor or any other person thereon and any business assets used in
connection therewith, (b) exclude Mortgagor and Mortgagor's agents, servants,
and employees from the Property, (c) collect the rents, issues, profits, and
income therefrom, (d) complete any construction which may be in progress, (e) do
such maintenance and make such repairs and alterations as the receiver deems
necessary, (f) use all stores of materials, supplies, and maintenance equipment
on the Property and replace such items at the expense of the receivership
estate, (g) pay all taxes and assessments against the Property and the Chattels,
all premiums for insurance thereon, all utility and other operating expenses,
and all sums due under any prior or subsequent encumbrance, and (h) generally do
anything which Mortgagor could legally do if Mortgagor were in possession of the
Property. All expenses incurred by the receiver or its agents shall constitute a
part of the Secured Obligations. Any revenues collected by the receiver shall be
applied first to the expenses of the receivership, including attorneys' fees
incurred by the receiver and by Mortgagee, together with interest thereon at the
Default Rate from the date ten (10) days following demand therefor until paid,
and the balance shall be applied toward the Secured Obligations in such order or
manner as Mortgagee may in its sole discretion elect or in such other manner as
the court may direct. Unless sooner terminated with the express consent of
Mortgagee, any such receivership will continue until the Secured Obligations
have been discharged in full, or until title to the Property has passed after
foreclosure sale and all applicable periods of redemption have expired.

            7.9 Right to Make Repairs, Improvements. Should any part of the
Property come into the possession of Mortgagee after an Event of Default,
Mortgagee may, but shall not be obligated to, use, operate, and/or make repairs,
alterations, additions and improvements to the Property for the purpose of
preserving it or its value. Mortgagor covenants to promptly reimburse and pay to
Mortgagee, at the place where the Note is payable, or at such other place as may
be designated by Mortgagee in writing, the amount of all reasonable expenses
(including the cost of any insurance, taxes, or other charges) incurred by
Mortgagee in connection with its custody, preservation, use or operation of the
Property, together with interest thereon from the date incurred by Mortgagee at
the Default Rate, and all such expenses, costs, taxes, interest, and other
charges shall be a part of the Secured Obligations. It is agreed, however, that
the risk of accidental loss or damage to the Property is undertaken by Mortgagor
and Mortgagee shall have
<PAGE>

no liability whatsoever for decline in value of the Property, for failure to
obtain or maintain insurance, or for failure to determine whether any insurance
ever in force is adequate as to amount or as to the risks insured.

            7.10 Prima Facie Evidence. Mortgagor agrees that, in any
assignments, deeds, bills of sale, notices of sale, or postings, given by
Mortgagee, any and all statements of fact or other recitals therein made as to
the identity of Mortgagee, or as to the occurrence or existence of any Event of
Default, or as to the acceleration of the maturity of the Secured Obligations,
or as to the request to sell, posting of notice of sale, notice of sale, time,
place, terms and manner of sale and receipt, distribution and application of the
money realized therefrom, and without being limited by the foregoing, as to any
other act or thing having been duly done by Mortgagee, shall be taken by all
courts of law and equity as prima facie evidence that such statements or
recitals state facts and are without further question to be so accepted, and
Mortgagor does hereby ratify and confirm any and all acts that Mortgagee may
lawfully do by virtue hereof.

            7.11 Other Proceedings. Mortgagee may institute and maintain any
suits and proceedings as Mortgagee may deem advisable (i) to prevent any
impairment of the Property by any acts which may be unlawful or in violation of
this Mortgage, (ii) to preserve or protect its interest in the Property, and
(iii) to restrain the enforcement or compliance with any governmental
requirement that may be unconstitutional or otherwise invalid, if the
enforcement of or compliance with such governmental requirement might impair the
security hereunder or be prejudicial to Mortgagee's interest.

            7.12 Credit of Mortgagee. To the maximum extent permitted by the
laws of the State of Florida, on a sale made under or by virtue of this Article,
Mortgagee may bid for and acquire the Property, or any part thereof, and in lieu
of paying cash thereof may apply to the purchase price, all or any portion of
the unpaid Secured Obligations in such order as Mortgagee may elect.

            7.13 Sale. Any sale or sales made under or by virtue of this Article
shall operate to divest all of the estate, right, title, interest, claim and
demand whatsoever at law or in equity, of Mortgagor and all persons, except
tenants pursuant to leases approved by Mortgagee claiming by, through or under
Mortgagor in and to the properties and rights so sold, whether sold to Mortgagee
or to others.

            7.14 Waiver of Redemption, Notice, Marshalling, Etc. Mortgagor
hereby waives and releases for itself and anyone claiming through, by, or under
it, to the maximum extent permitted by the laws of the State of Florida:

                  (a) All benefits that might accrue to Mortgagor by virtue of
any present or future law exempting the Property, or any part of the proceeds
arising from any sale thereof, from attachment, levy or sale on execution, or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment;
<PAGE>

                  (b) Unless specifically required herein, all notices of
default, or Mortgagee's actual exercise of any option or remedy under the Loan
Documents; and

                  (c) Any right to have the Property marshaled.

            7.15 Discontinuance of Proceedings. If Mortgagee shall have
proceeded to enforce any rights under any Loan Document and such proceeding
shall have been discontinued or abandoned for any reason, then except as may be
provided in any written agreement between Mortgagor and Mortgagee providing for
the discontinuance or abandonment of such proceeding, Mortgagor and Mortgagee
shall be restored to their former positions and the rights, remedies and powers
of Mortgagee shall continue as if no such proceeding had been instituted.

                                   Article 8

                         ASSIGNMENT OF LEASES AND RENTS

            8.1 Assignment of Leases and Rents. Assignment of Leases and Rents.
Pursuant to Section 697.07, Florida Statutes, as further security for the
Secured Obligations, Mortgagor hereby unconditionally and absolutely grants,
transfers and assigns unto Mortgagee all rents, royalties, issues, profits and
income ("Rents") now or hereafter due or payable for the occupancy or use of the
Property, and all Leases, whether written or oral, with all security therefor,
including all guaranties thereof, now or hereafter affecting the Property;
reserving unto Mortgagor, however, a license to collect and retain such Rents
prior to the occurrence of any Event of Default (and Mortgagee shall not revoke
such license prior to the occurrence of any Event of Default). Such license
shall be revocable by Mortgagee without notice to Mortgagor at any time after
the occurrence of an Event of Default. Mortgagor represents that the Rents and
the Leases have not been heretofore sold, assigned, transferred or set over by
any instrument now in force and will not at any time during the life of this
assignment be sold, assigned, transferred or set over by Mortgagor or by any
person or persons whomsoever; and Mortgagor has good right to sell, assign,
transfer and set over the same and to grant to and confer upon Mortgagee the
rights, interest, powers and authorities herein granted and conferred. Failure
of Mortgagee at any time or from time to time to enforce the assignment of Rents
and Leases under this Section shall not in any manner prevent its subsequent
enforcement, and Mortgagee is not obligated to collect anything hereunder, but
is accountable only for sums actually collected. The assignment contained in
this Section 8.1 is a collateral assignment but will become absolute upon the
occurrence of an Event of Default.

            8.2 Further Assignments. Mortgagor shall give Mortgagee at any time
upon demand any further or additional forms of assignment or transfer of such
Rents, Leases and security as may be reasonably requested by Mortgagee, and
shall deliver to Mortgagee executed copies of all such Leases and security.

            8.3 Application of Rents. Mortgagee shall be entitled to deduct and
retain a just and reasonable compensation from monies received hereunder for its
services or that of its agents in collecting such monies. Any monies received by
Mortgagee hereunder may be applied when received from time to time in payment of
any taxes, assessments or other liens affecting the
<PAGE>

Property regardless of the delinquency, such application to be in such order as
Mortgagee may determine. The acceptance of this Mortgage by Mortgagee or the
exercise of any rights by it hereunder shall not be, or be construed to be, an
affirmation by it of any Lease nor an assumption of any liability under any
Lease.

            8.4 Collection of Rents. Upon or at any time after an Event of
Default shall have occurred and be continuing, Mortgagee may declare all sums
secured hereby immediately due and payable, and may, at its option, without
notice, and whether or not the Secured Obligations shall have been declared due
and payable, either in person or by agent, with or without bringing any action
or proceeding, or by a receiver to be appointed by a court, (a) enter upon, take
possession of, manage and operate the Property, or any part thereof (including
without limitation making necessary repairs, alterations and improvements to the
Property); (b) make, cancel, enforce or modify Leases; (c) obtain and evict
tenants; (d) fix or modify Rents; (e) do any acts which Mortgagee deems
reasonably proper to protect the security thereof; (f) either with or without
taking possession of the Property, in its own name sue for or otherwise collect
and receive such Rents, including those past due and unpaid; and (g) upon
written demand, collect the Rents pursuant to Section 697.07, Florida Statutes.
In connection with the foregoing, Mortgagee shall be entitled and empowered to
employ attorneys, and management, rental and other agents in and about the
Property and to effect the matters which Mortgagee is empowered to do, and in
the event Mortgagee shall itself effect such matters, Mortgagee shall be
entitled to charge and receive reasonable management, rental and other fees
therefor as may be customary in the area in which the Property is located; and
the reasonable fees, charges, costs and expenses of Mortgagee or such persons
shall be additional Secured Obligations. Mortgagee may apply all funds collected
as aforesaid, less costs and expenses of operation and collection, including
reasonable attorneys' and agents' fees, charges, costs and expenses, as
aforesaid, upon any Secured Obligations, and in such order as Mortgagee may
determine. The entering upon and taking possession of the Property, the
collection of such Rents and the application thereof as aforesaid shall not cure
or waive any default or waive, modify or affect notice of default under the
Non-Recourse Guaranty Agreement or this Mortgage or invalidate any act done
pursuant to such notice.

            8.5 Authority of Mortgagee. Any tenants or occupants of any part of
the Property are hereby authorized to recognize the claims of Mortgagee
hereunder without investigating the reason for any action taken by Mortgagee, or
the validity or the amount of secured obligations owing to Mortgagee, or the
existence of any default in the Non-Recourse Guaranty Agreement or this
Mortgage, or under or by reason of this assignment of Rents and Leases, or the
application to be made by Mortgagee of any amounts to be paid to Mortgagee. The
sole signature of Mortgagee shall be sufficient for the exercise of any rights
under this assignment and the sole receipt of Mortgagee for any sums received
shall be a full discharge and release therefor to any such tenant or occupant of
the Property. Checks for all or any part of the rentals collected under this
assignment of Rents and Leases shall be drawn to the exclusive order of
Mortgagee.

            8.6 Indemnification of Mortgagee. Nothing herein contained shall be
deemed to obligate Mortgagee to perform or discharge any obligation, duty or
liability of any
<PAGE>

lessor under any Lease of the Property unless and until Mortgagee forecloses
this Mortgage or takes title to the Property, and Mortgagor shall and does
hereby indemnify and hold Mortgagee harmless from any and all liability, loss or
damage which Mortgagee may or might incur under any Lease or by reason of the
assignment; and any and all such liability, loss or damage incurred by
Mortgagee, together with the costs and expenses, including reasonable attorneys'
fees, incurred by Mortgagee in defense of any claims or demands therefor
(whether successful or not), shall be additional Secured Obligations, and
Mortgagor shall reimburse Mortgagee therefor on demand. Mortgagor's obligations
under this Section are subject to the following: (a) the right to settle or
resolve such claim, subject to Mortgagee's approval, which approval shall not be
unreasonably withheld, (b) the right to select legal counsel of Mortgagor's
choice, subject to Mortgagee's approval, which approval shall not be
unreasonably withheld, and (c) Mortgagor shall not indemnify Mortgagee for
Mortgagee's gross negligence or willful misconduct.

                                   Article 9

                            MISCELLANEOUS PROVISIONS

            9.1 Time of the Essence. Time is of the essence with respect to all
provisions of the Loan Documents.

            9.2 Joint and Several Obligations. If Mortgagor is more than one
person or entity, then (a) all persons or entities comprising Mortgagor are
jointly and severally liable for all of the Secured Obligations; (b) all
representations, warranties, and covenants made by Mortgagor shall be deemed
representations, warranties, and covenants of each of the persons or entities
comprising Mortgagor; (c) any breach, Default or Event of Default by any of the
persons or entities comprising Mortgagor hereunder shall be deemed to be a
breach, Default, or Event of Default of Mortgagor; (d) any reference herein
contained to the knowledge or awareness of Mortgagor shall mean the knowledge or
awareness of any of the persons or entities comprising Mortgagor; and (e) any
event creating personal liability of any of the persons or entities comprising
Mortgagor shall create personal liability for all such persons or entities.

            9.3 Waiver of Homestead and Other Exemptions. To the extent
permitted by law, Mortgagor hereby waives all rights to any homestead or other
exemption to which Mortgagor would otherwise be entitled under any present or
future constitutional, statutory, or other provision of applicable state or
federal law. Mortgagor hereby waives any right it may have to require Mortgagee
to marshal all or any portion of the security for the Secured Obligations.

            9.4 Non Recourse; Exceptions to Non-Recourse. Except as expressly
set forth in the Non-Recourse Guaranty Agreement, the recourse of Mortgagee with
respect to the obligations evidenced by the Non-Recourse Guaranty Agreement and
the other Loan Documents shall be solely to the Property, Chattels and
Intangible Personalty, and any other collateral given as security for the
Non-Recourse Guaranty Agreement.

            9.5 Rights and Remedies Cumulative. Mortgagee's rights and remedies
under each of the Loan Documents are cumulative of the rights and remedies
available to
<PAGE>

Mortgagee under each of the other Loan Documents and those otherwise available
to Mortgagee at law or in equity. No act of Mortgagee shall be construed as an
election to proceed under any particular provision of any Loan Document to the
exclusion of any other provision in the same or any other Loan Document, or as
an election of remedies to the exclusion of any other remedy which may then or
thereafter be available to Mortgagee.

            9.6 No Implied Waivers. Mortgagee shall not be deemed to have waived
any provision of any Loan Document unless such waiver is in writing and is
signed by Mortgagee. Without limiting the generality of the preceding sentence,
neither Mortgagee's acceptance of any payment with knowledge of a Default by
Mortgagor, nor any failure by Mortgagee to exercise any remedy following a
Default by Mortgagor shall be deemed a waiver of such Default, and no waiver by
Mortgagee of any particular Default on the part of Mortgagor shall be deemed a
waiver of any other Default or of any similar Default in the future.

            9.7 No Third Party Rights. No person shall be a third party
beneficiary of any provision of any of the Loan Documents. All provisions of the
Loan Documents favoring Mortgagee are intended solely for the benefit of
Mortgagee, and no third party shall be entitled to assume or expect that
Mortgagee will not waive or consent to modification of any such provision in
Mortgagee's sole discretion.

            9.8 Preservation of Liability and Priority. Without affecting the
liability of Mortgagor or of any other person (except a person expressly
released in writing) for payment and performance of all of the Secured
Obligations, and without affecting the rights of Mortgagee with respect to any
security not expressly released in writing, and without impairing in any way the
priority of this Mortgage over the interests of any person acquired or first
evidenced by recording subsequent to the recording hereof, Mortgagee may without
notice or consent: (a) release any person liable for payment or performance of
all or any part of the Secured Obligations; (b) make any agreement altering the
terms of payment or performance of all or any of the Secured Obligations; (c)
exercise or refrain from exercising, or waive, any right or remedy which
Mortgagee may have under any of the Loan Documents; (d) accept additional
security of any kind for any of the Secured Obligations; or (e) release or
otherwise deal with any real or personal property securing the Secured
Obligations. Any person acquiring or recording evidence of any interest of any
nature in the Property, the Chattels, or the Intangible Personalty shall be
deemed, by acquiring such interest or recording any evidence thereof, to have
agreed and consented to any or all such actions by Mortgagee.

            9.9 Subrogation of Mortgagee. Mortgagee shall be subrogated to the
lien of any previous encumbrance discharged with funds advanced by Mortgagee
under the Loan Documents, regardless of whether such previous encumbrance has
been released of record.

            9.10 Notices. Any notice required or permitted to be given by
Mortgagor or Mortgagee under this Mortgage shall be in writing and will be
deemed given (a) upon personal delivery, (b) on the first business day after
receipted delivery to a courier service which guarantees next-business-day
delivery, or (c) on the fifth business day after mailing, by registered
<PAGE>

or certified United States mail, postage prepaid, in any case to the appropriate
party at its address set forth below:

                  If to Mortgagor:

                        c/o Sonesta International Hotels Corporation
                        200 Clarendon Street, 41st Floor
                        Boston, Massachusetts  02116
                        Attn: Office of the Treasurer

                  with a copy to:

                        Broad and Cassel
                        Corporate Centre at Boca Raton
                        7777 Glades Road, Suite 300
                        Boca Raton, Florida  33434
                        Attn: Arvin J. Jaffe, Esq.

                  If to Mortgagee:

                        SunAmerica Life Insurance Company
                        1 SunAmerica Center
                        Century City
                        Los Angeles, California  90067-6022
                        Attn: Director-Mortgage Lending and Real Estate

Either party may change such party's address for notices or copies of notices by
giving notice to the other party in accordance with this Section.

            9.11 Defeasance. Upon payment and performance in full of all of the
Secured Obligations and satisfaction of the obligations set forth in the First
Mortgage Loan Documents (or upon the satisfaction of all Defeasance Requirements
specified in the Note in connection with the Defeasance of the Note), Mortgagee
will execute and deliver to Mortgagor such documents as may be required to
reconvey this Mortgage of record.

            9.12 Illegality. If any provision of this Mortgage is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Mortgage, the legality, validity, and enforceability of the
remaining provisions of this Mortgage shall not be affected thereby, and in lieu
of each such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Mortgage a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable. If the rights and liens created by this Mortgage shall
be invalid or unenforceable as to any part of the Secured Obligations, then the
unsecured portion of the Secured Obligations shall be completely paid prior to
the payment of the remaining and secured portion of the Secured Obligations, and
all payments made on the Secured Obligations shall be considered to have been
<PAGE>

paid on and applied first to the complete payment of the unsecured portion of
the Secured Obligations.

            9.13 Usury Savings Clause. It is expressly stipulated and agreed to
be the intent of Mortgagee and Mortgagor at all times to comply with the
applicable law governing the highest lawful interest rate. If the applicable law
is ever judicially interpreted so as to render usurious any amount called for
under any of the Loan Documents, or contracted for, charged, taken, reserved or
received with respect to the loan evidenced thereby, or if acceleration of the
Secured Obligations, any prepayment by Mortgagor, or any other circumstance
whatsoever, results in Mortgagor having paid any interest in excess of that
permitted by applicable law, then it is the express intent of Mortgagor and
Mortgagee that all excess amounts theretofore collected by Mortgagee be credited
on the principal balance of the Secured Obligations (or, at Mortgagee's option,
paid over to Mortgagor), and the provisions of the Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
maturity of the Secured Obligations does not include the right to accelerate any
interest which has not otherwise accrued on the date of such acceleration, and
Mortgagee does not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Mortgagee for the use,
forbearance or detention of the Secured Obligations evidenced hereby shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such Secured Obligations until payment in
full so that the rate or amount of interest on account of such Secured
Obligations does not exceed the maximum rate or amount of interest permitted
under applicable law. The term "applicable law" as used herein shall mean any
federal or state law applicable to the transaction giving rise to the Secured
Obligations.

            9.14 Obligations Binding Upon Mortgagor's Successors. This Mortgage
is binding upon Mortgagor and Mortgagor's successors and assigns, and shall
inure to the benefit of Mortgagee, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties,
covenants, conditions, obligations, and warranties of Mortgagor in this Mortgage
shall be joint and several obligations of Mortgagor and Mortgagor's successors
and assigns

            9.15 Future Advances. This Mortgage shall secure not only existing
indebtedness, but also such future advances, whether such advances are
obligatory or to be made at the option of Mortgagee, or otherwise, as are made
within twenty (20) years from the date hereof, to the same extent as if such
future advances were made on the date of the execution of this Mortgage, but
such secured indebtedness shall not exceed at any time the maximum principal
amount of two times the amount of the Secured Obligations, plus interest
thereon, and any disbursements made for the payment of taxes, levies, or
insurance, on the Property, with interest on such disbursements. Any such future
advances, whether obligatory or to be made at the option of the Mortgagee, or
otherwise, may be made either prior to or after the due date of the Secured
Obligations. This Mortgage is given for the specific purpose of securing any and
all indebtedness by the Mortgagor to Mortgagee (but in no event shall the
secured indebtedness
<PAGE>

exceed at any time the maximum amount set forth in this Section) in whatever
manner this indebtedness may be evidenced or represented, until this Mortgage is
satisfied of record. All covenants and agreements contained in this Mortgage
shall be applicable to all further advances made by Mortgagee to Mortgagor under
this future advance clause.

            If, pursuant to Florida Statutes, Section 697.04, Mortgagor files a
notice specifying the dollar limit beyond which future advances made pursuant to
this Mortgage will not be secured by this Mortgage, then Mortgagor shall, within
one (1) day of filing such notice, notify Mortgagee and its counsel by certified
mail pursuant to Section 9.10 of this Mortgage. In addition, such a filing shall
constitute an Event of Default hereunder.

            9.16 Construction. All pronouns and any variations of pronouns
herein shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the identity of the parties may require. Whenever the terms herein
are singular, the same shall be deemed to mean the plural, as the identity of
the parties or the context requires.

            9.17 Waiver of Removal to Federal Court. Mortgagor and each General
Partner hereby waive any right they may have to remove any action or proceeding
brought against them to any federal court of the United States, and hereby waive
any right they may have to transfer or change the venue of any litigation
brought against them, whether such action or proceeding arises directly,
indirectly or otherwise in connection with, out of, related to, or from the
Non-Recourse Guaranty Agreement, this Mortgage or any of the other Loan
Documents.

            9.18 Attorneys' Fees. Any reference in this Mortgage to attorneys'
or counsel fees paid or incurred by Mortgagee shall be deemed to mean reasonable
fees and shall be further deemed to include reasonable paralegals' fees and
reasonable legal assistants' fees. Moreover, wherever provision is made herein
for payment of attorneys' or counsels fees or expenses incurred by Mortgagee,
such provision shall include but not be limited to, such fees or expenses
incurred in any and all judicial, bankruptcy, reorganization, administrative, or
other proceedings, including appellate proceedings, whether such fees or
expenses arise before proceedings are commenced, during such proceedings or
after entry of a final judgment.

            9.19 Waiver and Agreement. MORTGAGOR HEREBY EXPRESSLY WAIVES ANY
RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THE NOTE, IN WHOLE OR IN PART,
WITHOUT PREPAYMENT CHARGE (EXCEPT AS OTHERWISE PROVIDED IN THE NOTE), UPON
ACCELERATION OF THE MATURITY DATE OF THE NOTE, AND AGREES THAT, IF FOR ANY
REASON A PREPAYMENT OF ALL OR ANY PART OF THE NOTE IS MADE, WHETHER VOLUNTARILY
OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THE NOTE BY MORTGAGEE ON
ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING FOR ANY REASON,
INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY PROHIBITED OR RESTRICTED
TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF THE PROPERTY OR ANY PART THEREOF
SECURING THE NOTE, THEN MORTGAGOR SHALL BE OBLIGATED TO PAY, CONCURRENTLY WITH
SUCH PREPAYMENT, THE PREPAYMENT PREMIUM PROVIDED FOR IN THE NOTE.
<PAGE>

MORTGAGOR HEREBY DECLARES THAT MORTGAGEE'S AGREEMENT TO MAKE THE LOAN EVIDENCED
BY THE NOTE AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THE NOTE
CONSTITUTES ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MORTGAGOR, FOR
THIS WAIVER AND AGREEMENT.

            9.20 Waiver of Jury Trial. MORTGAGEE AND MORTGAGOR KNOWINGLY,
IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS
MORTGAGE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE OR ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE AND MORTGAGOR TO ENTER INTO THE
LOAN TRANSACTION EVIDENCED BY THE NOTE.

            9.21 Governing Laws. The substantive laws of the State of Florida
shall govern the validity, construction, enforcement and interpretation of this
Mortgage.

            9.22 Inconsistency. In the event of any inconsistency between the
terms of the Loan Documents and the terms of that certain First Mortgage Loan
Application between Mortgagor and Mortgagee dated March 9, 2000, as amended by
Addendum to First Mortgage Loan Application, the terms of the Loan Documents
shall govern and control in all respects.

            9.23 Incorporation of Recitals. The Recitals to this Mortgage are
hereby incorporated into this Mortgage and made a part hereof.

                   [Balance of page intentionally left blank]
<PAGE>

            IN WITNESS WHEREOF, Mortgagor has executed and delivered this
Mortgage as of the date first mentioned above.

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

                                      By: Florida Sonesta Corporation, a Florida
---------------------------------     corporation, its General Partner
Print Name:
           ----------------------

                                          By: /s/
---------------------------------             ----------------------------------
Print Name:                                   Peter J. Sonnabend, Vice President
           ----------------------

COMMONWEALTH OF MASSACHUSETTS          )
                                       )  ss.
COUNTY OF __________________________   )

            The foregoing instrument was acknowledged before me this _____ day
of May, 2000, by Peter J. Sonnabend, as Vice President of Florida Sonesta
Corporation, a Florida corporation, General Partner of Sonesta Beach Resort
Limited Partnership, a Delaware limited partnership, who is known to me, or
produced _________________________________ as identification.

                        Serial Numbers, if any:
                                               ----------------------
                        My commission expires:
                                              -----------------------

                                          --------------------------------------
                                          Notary Public

                                          --------------------------------------
                                          Print Name
<PAGE>

                                    EXHIBIT A
                                       to
                                    MORTGAGE

                               (Legal Description)
<PAGE>

                                    EXHIBIT B
                                       to
                                    MORTGAGE

                             (Permitted Exceptions)

                            [INCLUDE FIRST MORTGAGE]<PAGE>

                                                               Exhibit 10.2(d)

                           LIMITED GUARANTY AGREEMENT

            This LIMITED GUARANTY AGREEMENT (this "Guaranty") is made as of May
30, 2000, by SONESTA INTERNATIONAL HOTELS CORPORATION, a New York corporation
("Guarantor"), in favor of SUNAMERICA LIFE INSURANCE COMPANY, an Arizona
corporation ("Lender").

            1. Loan and Note. This Guaranty is executed in connection with a
$31,000,000.00 loan ("Loan") made by Lender to Sonesta Beach Resort Limited
Partnership, a Delaware limited partnership ("Borrower"). The Loan is (a)
evidenced by a Consolidated and Renewed Promissory Note of even date herewith in
the original principal amount of the Loan ("Note"), and (b) secured by, among
other things, a Consolidated, Amended and Restated Mortgage, Security Agreement,
Fixture Filing, Financing Statement and Assignment of Leases and Rents of even
date herewith granted by Borrower for the benefit of Lender ("Mortgage," and,
together with the Note and all other documents evidencing and/or securing the
Loan, "Loan Documents") covering certain real property commonly known as the
Sonesta Beach Resort, Key Biscayne, Florida, and more particularly described in
the Mortgage (the "Property"). All capitalized terms used herein without
definition shall have the meanings given to such terms in the Mortgage.

            2. Purpose and Consideration. The execution and delivery of this
Guaranty by Guarantor is a condition to Lender's willingness to make the Loan to
Borrower, is made in order to induce Lender to make the Loan, and is made in
recognition that Lender will be relying upon this Guaranty in making the Loan
and performing any other obligations it may have under the Loan Documents.
Guarantor has a significant ownership interest in Borrower, and, accordingly,
acknowledges that Guarantor will receive material direct and indirect benefit
from Lender making the Loan to Borrower.

            3. Guaranty. Guarantor hereby guarantees absolutely, primarily, and
irrevocably, payment and performance of (a) all obligations of Borrower under
the Loan Documents for which Borrower incurs personal liability to Lender under
the exceptions to the non-recourse provisions described in Section 18 of the
Note, and (b) the obligation of Borrower to pay all documentary stamp taxes and
intangible taxes under Section 4.4(c) of the Mortgage and under Section 4.4(c)
of that certain second Mortgage, Security Agreement, Fixture Filing, Financing
Statement and Assignment of Leases and Rents of even date herewith granted by
Borrower for the benefit of Lender covering the Property (collectively, the
"Obligations").

            4. Guaranty is Independent and Absolute. The obligations of
Guarantor hereunder are independent of the obligations of Borrower and of any
other person who may become liable with respect to the Obligations. Guarantor is
jointly and severally liable with Borrower and with any other guarantor for the
full and timely payment and performance of all of the Obligations. Guarantor
expressly agrees that a separate action or actions may be brought and prosecuted
against Guarantor (or any other guarantor), whether or not any action is brought
against Borrower, any other guarantor or any other person for any Obligations
guaranteed hereby and whether or not Borrower, any other guarantor or any other
persons are joined in any action
<PAGE>

against Guarantor. Guarantor further agrees that Lender shall have no obligation
to proceed against any security for the Obligations prior to enforcing this
Guaranty against Guarantor, and that Lender may pursue or omit to pursue any and
all rights and remedies Lender has against any person or with respect to any
security in any order or simultaneously or in any other manner. All rights of
Lender and all obligations of Guarantor hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Note or any other Loan Document, and (b) any other circumstances which might
otherwise constitute a defense available to, or a discharge of Borrower in
respect of, the Obligations.

            5. Authorizations to Lender. Guarantor authorizes Lender, without
notice or demand and without affecting Guarantor's liability hereunder, from
time to time (a) to renew, extend, accelerate or otherwise change the time for
payment of, change, amend, alter, cancel, compromise or otherwise modify the
terms of the Note, including increasing the rate or rates of interest thereunder
agreed to by Borrower, and to grant any indulgences, forbearances, or extensions
of time; (b) to renew, extend, change, amend, alter, cancel, compromise or
otherwise modify any of the terms, covenants, conditions or provisions of any of
the Loan Documents or any of the Obligations; (c) to apply any security and
direct the order or manner of sale thereof as Lender, in Lender's discretion,
may determine; (d) to proceed against Borrower, Guarantor or any other guarantor
with respect to any or all of the Obligations without first foreclosing against
any security therefor; (e) to exchange, release, surrender, impair or otherwise
deal in any manner with, or waive, release or subordinate any security interest
in, any security for the Obligations; (f) to release or substitute Borrower, any
other guarantors, endorsers, or other parties who may be or become liable with
respect to the Obligations, without any release being deemed made of Guarantor
or any other such person; and (g) to accept a conveyance or transfer to Lender
of all or any part of any security in partial satisfaction of the Obligations,
or any of them, without releasing Borrower, Guarantor, or any other guarantor,
endorser or other party who may be or become liable with respect to the
Obligations, from any liability for the balance of the Obligations.

            6. Application of Payments Received by Lender. Any sums of money
Lender receives from or for the account of Borrower may be applied by Lender to
reduce any of the Obligations or any other liability of Borrower to Lender, as
Lender in Lender's discretion deems appropriate.

            7. Waivers by Guarantor. In addition to all waivers expressed in any
of the Loan Documents, all of which are incorporated herein by Guarantor,
Guarantor hereby waives (a) presentment, demand, protest and notice of protest,
notice of dishonor and of non-payment, notice of acceptance of this Guaranty,
and diligence in collection; (b) notice of the existence, creation, or incurring
of any new or additional Obligations under or pursuant to any of the Loan
Documents; (c) any right to require Lender to proceed against, give notice to,
or make demand upon Borrower; (d) any right to require Lender to proceed against
or exhaust any security or to proceed against or exhaust any security in any
particular order; (e) any right to require Lender to pursue any remedy of
Lender; (f) any right to direct the application of any security held by Lender;
(g) any right of subrogation or to enforce any remedy which Lender may have
against Borrower and any right to participate in any security now or hereafter
held by Lender and any
<PAGE>

right to reimbursement from the Borrower for amounts paid to Lender by
Guarantor; (h) benefits, if any, of Guarantor under any anti-deficiency statutes
or single-action legislation; (i) any defense arising out of any disability or
other defense of Borrower, including bankruptcy, dissolution, liquidation,
cessation, impairment, modification, or limitation, from any cause, of any
liability of Borrower, or of any remedy for the enforcement of such liability;
(j) any statute of limitations affecting the liability of Guarantor hereunder;
(k) any right to plead or assert any election of remedies by Lender; and (l) any
other defenses available to a surety under applicable law.

            8. Subordination by Guarantor. Guarantor hereby agrees that any
indebtedness of Borrower to Guarantor, whether now existing or hereafter
created, shall be and is hereby subordinated to the indebtedness of Borrower to
Lender under the Loan Documents. At any time during which a Default or Event of
Default exists, Guarantor shall not accept or seek to receive any amounts from
Borrower on account of any indebtedness of Borrower to Guarantor.

            9. Bankruptcy Reimbursements. Guarantor hereby agrees that if any
amounts paid to Lender by Borrower or any other party liable for payment and
satisfaction of the Obligations (other than Guarantor) are recovered from Lender
in any bankruptcy proceeding, Guarantor shall reimburse Lender immediately on
demand for all amounts so recovered from Lender (together with interest thereon
at the default rate set forth in the Note from the date ten (10) days following
demand therefor until paid), and, for this purpose, this Guaranty shall survive
repayment of the Loan. Without limiting the foregoing, Guarantor shall pay all
costs and expenses incurred by Lender in connection with any bankruptcy
proceeding of Borrower, Guarantor or any other party liable for payment and
satisfaction of the Obligations, including attorneys' fees and expenses.

            10. Jurisdiction and Venue. Guarantor hereby submits itself to the
jurisdiction and venue of any state court located in Miami-Dade County, Florida,
or federal court located in the State of Florida in connection with any action
or proceeding brought for enforcement of Guarantor's obligations hereunder, and
hereby waives any and all personal or other rights under the law of any other
country or state to object to jurisdiction within such locations, for purposes
of litigation to enforce such obligations. Guarantor agrees that service of
process upon Guarantor shall be complete upon delivery thereof in any manner
permitted by law.

            11. Financial Statements. In addition to those obligations set forth
in any of the Loan Documents, for so long as any of the Obligations remain
unsatisfied, within one hundred twenty (120) days after the end of each calendar
year, Guarantor shall furnish to Lender such financial statements of Guarantor
for such calendar year as Lender may request, in such detail as Lender may
request, certified by Guarantor as being true and correct in all respects.
Guarantor shall also furnish to Lender copies of his federal and state income
tax returns for the preceding year within ten (10) days of the filing thereof
with the appropriate governmental agencies.

            12. Assignability. This Guaranty shall be binding upon Guarantor and
Guarantor's heirs, representatives, successors, and assigns and shall inure to
the benefit of Lender and Lender's successors and assigns. This Guaranty shall
follow the Note and other
<PAGE>

Loan Documents which are for the benefit of Lender, and, in the event the Note
and other Loan Documents are negotiated, sold, transferred, assigned, or
conveyed by Lender in whole or in part, this Guaranty shall be deemed to have
been sold, transferred, assigned, or conveyed by Lender to the holder or holders
of the Note and other Loan Documents, with respect to the Obligations contained
therein, and such holder or holders may enforce this Guaranty as if such holder
or holders had been originally named as Lender hereunder.

            13. Payment of Costs of Enforcement. In the event any action or
proceeding is brought to enforce this Guaranty, Guarantor shall pay all costs
and expenses of Lender in connection with such action or proceeding, including,
without limitation, all reasonable attorneys' fees incurred by Lender.

            14. Notices. Any notice required or permitted to be given by
Guarantor or Lender under this Guaranty shall be in writing and will be deemed
given (a) upon personal delivery, (b) on the first business day after receipted
delivery to a courier service which guarantees next-business day delivery, or
(c) on the fifth (5th) business day after mailing, by registered or certified
United States mail, postage prepaid, in any case to the appropriate party at its
address set forth below:

                  If to Guarantor:

                  Sonesta International Hotels Corporation
                  200 Clarendon Street, 41st Floor
                  Boston, Massachusetts  02116
                  Attn: Office of the Treasurer

                  If to Lender:

                  SunAmerica Life Insurance Company
                  1 SunAmerica Center
                  Century City
                  Los Angeles, California 90067-6022
                  Attn: Director-Mortgage Lending and Real Estate

Either party may change such party's address for notices or copies of notices by
giving notice to the other party in accordance with this Section 14.

            15. Reinstatement of Obligations. If at any time all or any part of
any payment made by Guarantor or received by Lender from Guarantor under or with
respect to this Guaranty is or must be rescinded or returned for any reason
whatsoever (including, but not limited to, the insolvency, bankruptcy or
reorganization of any Guarantor), then the obligations of Guarantor hereunder
shall, to the extent of the payment rescinded or returned, and to the extent
permitted by law, be deemed to have continued in existence, notwithstanding such
previous payment made by Guarantor, or receipt of payment by Lender, and the
obligations of Guarantor hereunder shall continue to be effective or be
reinstated, as the case may be, as to such payment, all as though such previous
payment by Guarantor had never been made.
<PAGE>

            16. Severability of Provisions. If any provision hereof or of any
other Loan Document shall, for any reason and to any extent, be invalid or
unenforceable, then the remainder of the document in which such provision is set
forth, the application of the provision to other persons, entities or
circumstances, and any other document referred to herein shall not be affected
thereby but instead shall be enforceable to the maximum extent permitted by law.

            17. Waiver. Neither the failure of Lender to exercise any right or
power given hereunder or to insist upon strict compliance by Borrower,
Guarantor, any other guarantor, or any other person with any of its obligations
set forth herein or in any of the Loan Documents, nor any practice of Borrower
or Guarantor at variance with the terms hereof or of any Loan Documents, shall
constitute a waiver of Lender's right to demand strict compliance with the terms
and provisions of this Guaranty.

            18. Certain Waivers. GUARANTOR, BY SIGNING THIS GUARANTY, AND
LENDER, BY ACCEPTING IT, EACH KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS GUARANTY, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
AND GUARANTOR ENTERING INTO THE SUBJECT LOAN TRANSACTION.

            19. Applicable Law. This Guaranty and the rights and obligations of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Florida.

                   [Balance of page intentionally left blank]
<PAGE>

            IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
day and year first above written.

                                   GUARANTOR:

                                   SONESTA INTERNATIONAL HOTELS
                                   CORPORATION, a New York corporation

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

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