Document:

exv10w29w4

 

Exhibit 10.29.4

	 	 	 
	RECORD AND RETURN TO: (enclose self-addressed stamped envelope)

	 	This Instrument Prepared by:
	Sidley Austin LLP

	 	Sidley Austin LLP
	One South Dearborn Street

	 	One South Dearborn Street
	Chicago, Illinois 60603

	 	Chicago, Illinois 60603
	Attention: Charles E. Schrank

	 	Attention: Charles E. Schrank

SPACE ABOVE THIS LINE FOR PROCESSING DATA

FELCOR ST. PETE (SPE), L.L.C., Borrower

and

FELCOR ST. PETE LEASING (SPE), L.L.C., Borrower

To

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender

                                                                         
                                                         (Lender)

SECOND AMENDED AND RESTATED

LEASEHOLD MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

	 	 	 	 	 
	 

	 	Dated:
	 	As of December 14, 2007
	 
	 	 	 	 
	 

	 	Location:
	 	501 Fifth Avenue, NE
	 

	 	 	 	St. Petersburg, FL

NOTE TO RECORDING CLERK:

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This Second Amended and Restated Leasehold Mortgage, Security Agreement and Fixture Filing
(“Security Instrument”) secures that certain Second Amended and Restated Promissory Note (the
“Note”), which is a “renewal note” as defined in Section 201.09 of the Florida Statutes renewing,
amending and restating that certain Promissory Note executed by WSRH VSP L.P. (“Prior Owner”) in
favor of Column Financial, Inc. (“Column”) dated June 23, 2005, in the original principal amount of
Forty-Seven Million and No/100 Dollars ($47,000,000) (“Column Note”), as subsequently assigned by
Column to Wells Fargo Bank, N.A., as Trustee for the Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-TFL2 (“Wells Fargo”) as
thereafter assigned to Lender; which Column Note was amended, restated, and renewed in its entirety
by that certain Amended and Restated Promissory Note dated April 9, 2007 in the original principal
amount of Eighty-Nine Million Two Hundred Fifty Thousand and no/100 Dollars ($89,250,000.00)
(“Original Note”).

The Florida documentary stamp tax under F.S. §201 and the Florida non-recurring intangibles tax
under F.S. §199 were paid in full on the $47,000,000 Column Note at the time of recording that
certain Leasehold Mortgage and Security Agreement dated June 23, 2005 recorded at O.R. Book 14420,
Page 568 of the Public Records of Pinellas County, Florida (the “Column Mortgage”), and said taxes
were also paid in full on the sum of $42,250,000 (the difference between the $47,000,000
indebtedness under the Column Note and the $89,250,000 indebtedness under the Original Note) for
the increased indebtedness represented by the Original Note, at the time of recording that certain
Amended and Restated Leasehold Mortgage and Security Agreement dated April 9, 2007 recorded at O.R.
Book 15735, Page 1851 of the Public Records of Pinellas County, Florida (“Original Security
Instrument”).

On even date herewith, Borrower hereunder has assumed Prior Owner’s obligations under the Original
Note, the outstanding principal balance of which is $89,250,000. In connection therewith, Borrower
has executed an Assumption Agreement (the “Assumption Agreement”), and Florida documentary stamp
taxes in the amount of $312,375 are being paid at the time of the recording, on or about the date
hereof, of a Memorandum of Assumption Agreement (“Assumption Memorandum”) in the public records of
Pinellas County, Florida, memorializing the assumption of the Original Note and Original Security
Instrument. Therefore, no additional documentary stamp taxes or non-recurring intangibles taxes
are due hereon upon the recording hereof as same were collectively paid in full on the obligation
secured hereby upon the recording of the Column Mortgage, Original Security Instrument and
Assumption Memorandum.

SECOND AMENDED AND RESTATED LEASEHOLD MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

     This SECOND AMENDED AND RESTATED LEASEHOLD MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING
(this “Security Instrument”) is made as of this ___day of December, 2007, by FELCOR ST. PETE (SPE),
L.L.C., a Delaware limited liability company, having its principal place of business at c/o FelCor
Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062 (“Hotel
Owner”) and FELCOR ST. PETE LEASING (SPE), L.L.C., a Delaware limited liability company, having
its principal place of business at c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter
Freeway, Suite 1300, Irving, Texas 75062 (“Hotel Operator”; Hotel Owner and Hotel Operator,
individually and collectively, as the context requires, with such determination to be made by
Lender in its sole discretion, are referred to herein as “Borrower”) for the benefit of GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation, having an address at 600 Steamboat Road,
Greenwich, CT 06830, as mortgagee (“Lender”).

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W I T N E S S E T H:

     WHEREAS, the Lender is presently the owner and holder of the following described instruments,
as well as other loan documents executed in connection with a leasehold mortgage loan which
encumbers certain personal property and real property situate in Pinellas County, Florida, to wit:

     1. That certain Promissory Note by WSRH VSP L.P., a Delaware limited partnership (“Prior
Owner”) to Column Financial, Inc. dated June 23, 2005, representing an indebtedness in the original
principal amount of Forty-Seven Million and No/100 Dollars ($47,000,000.00) as assigned to lender
by that certain Allonge dated April 9, 2007 and as amended and restated in its entirety by that
certain Amended and Restated Promissory Note (the “Original Note") dated April 9, 2007,
representing an indebtedness in the original principal amount of EIGHTY NINE MILLION TWO HUNDRED
FIFTY THOUSAND and NO/100 DOLLARS ($89,250,000.00) (the “Original Loan” ), the current principal
balance of which is $89,250,000.00;

     2. That certain Leasehold Mortgage and Security Agreement dated June 23, 2005 and recorded in
Official Records Book 14420, Page 568 of the Public Records of Pinellas County, Florida, as
assigned by Assignment of Leasehold Mortgage and Security Agreement dated April 9, 2007 and
recorded in Official Records Book 15736, Page 1827 of the Public Records of Pinellas County,
Florida, as further assigned by Assignment of Leasehold Mortgage and Security Agreement dated April
9, 2007 and recorded in Official Records Book 15735, Page 1829 of the Public Records of Pinellas
County, Florida, and as amended and restated in its entirety by that certain Amended and Restated
Leasehold Mortgage and Security Agreement dated April 9, 2007 and recorded in Official Records Book
15735, Page 1851 of the Public Records of Pinellas County, Florida (the “Original Security
Instrument");

     3. That certain Assignment of Leases and Rents dated June 23, 2005 and recorded in Official
Records Book 14420, Page 607 of the Public Records of Pinellas County, Florida, as assigned by
Assignment of Assignment of Leases and Rents dated April 9, 2007 and record in Official Records
Book 15735, Page 1840 of the Public Records of Pinellas County, Florida, and as amended and
restated in its entirety by that certain Amended and Restated Assignment of Leases and Rents dated
April 9, 2007 and recorded in Official Records Book 15735, Page 1892 of the Public Records of
Pinellas County, Florida (the “Original Assignment"); and

     4. Certain other agreements, documents and instruments evidencing or securing the Original
Loan or delivered in connection therewith;

     WHEREAS, Hotel Owner has acquired the Property from Prior Owner and Hotel Operator is leasing
the Property from Hotel Owner pursuant to the terms and conditions set forth in that certain lease
dated as of the date hereof between Hotel Owner and Hotel Operator (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the “Hotel Operating
Lease”);

     WHEREAS, pursuant to the terms of that certain Assumption Agreement dated as of the date
hereof, by and among Borrower, Lender and Prior Owner (“Assumption Agreement”),

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Borrower has agreed to assume the obligations of Prior Owner under the Original Loan Documents
and Lender has agreed to the assumption of the Loan by Borrower in accordance with the terms and
conditions set forth in the Assumption Agreement;

     WHEREAS, pursuant to the Assumption Agreement, Borrower and Lender have entered into that
certain Second Amended and Restated Loan Agreement, dated as of the date hereof, between Borrower
and Lender (as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time, the “Loan Agreement”);

     WHEREAS, Borrower has agreed to amend, restate and supersede the Original Note pursuant to
that certain Second Amended and Restated Promissory Note, dated the date hereof, made by Borrower
in favor of Lender in the original principal amount of EIGHTY NINE MILLION TWO HUNDRED FIFTY
THOUSAND and NO/100 DOLLARS ($89,250,000.00) (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Note").

          WHEREAS, Borrower has agreed to amend and restate the Original Security Instrument, as well as
to modify and restate the terms and conditions of said document, all as set forth in this Security
Instrument, and has agreed that this Security Instrument is given to secure the Loan assumed by
Borrower pursuant to the Assumption Agreement and the Loan Agreement, and evidenced by the Note;

          WHEREAS, Borrower desires to secure the payment of the Debt (as defined in the Loan Agreement)
and the performance of all of its obligations under the Note, the Loan Agreement and the other Loan
Documents (as herein defined); and

          WHEREAS, this Security Instrument is given pursuant to the Loan Agreement, and payment,
fulfillment, and performance by Borrower of its obligations thereunder and under the other Loan
Documents are secured hereby, and each and every term and provision of the Loan Agreement, the
Note, and that certain Second Amended and Restated Assignment of Leases and Rents of even date
herewith made by Borrower in favor of Lender delivered in connection with this Security Agreement
(as the same may be amended, restated, replaced, supplemented or otherwise modified from time to
time, the “Assignment of Leases”), including the rights, remedies, obligations, covenants,
conditions, agreements, indemnities, representations and warranties of the parties therein, are
hereby incorporated by reference herein as though set forth in full and shall be considered a part
of this Security Instrument (the Loan Agreement, the Note, this Security Instrument, the Assignment
of Leases and Rents and all other documents evidencing or securing the Debt or executed or
delivered in connection therewith, are hereinafter referred to collectively as the “Loan
Documents”).

     NOW THEREFORE, the Lender and the Borrower hereby acknowledge and agree that the recitals set
forth in the foregoing “WHEREAS” clauses, which the parties hereto acknowledge are true and
correct, are hereby incorporated by reference and made a part hereof as if set forth herein. This
Security Instrument is given as security for the performance and observance of the covenants and
agreements contained herein and to secure to the Lender the payment of the Note according to its
terms, final payment of the entire indebtedness, including accrued and unpaid interest, if any,
being due and payable on May 1, 2009 (as said date may be extended, pursuant to the applicable
terms and conditions set forth in the Loan Agreement, to a date not later than May 1, 2012).
Immediately upon recording of this Security Instrument among

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the public records of Pinellas County, Florida, the lien of the Original Security Instrument,
as modified and restated herein, is and shall continue to constitute in law a first leasehold
mortgage lien on the Property (as defined below), securing the obligations set forth in the Note.

     NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants,
agreements, representations and warranties set forth in this Security Instrument:

ARTICLE 1 — GRANTS OF SECURITY

          Section 1.1 Property Mortgaged. Borrower does hereby irrevocably mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey to Lender and its successors and
assigns the following property, rights, interests and estates now owned, or hereafter acquired by
Borrower (collectively, the “Property”):

          (a) Land. The leasehold estate of Borrower in the real property described in
Exhibit A attached hereto and made a part hereof (the “Land”);

          (b) Additional Land. All additional lands, estates and development rights hereafter
acquired by Borrower for use in connection with the Land and the development of the Land and all
additional lands and estates therein which may, from time to time, by supplemental mortgage or
otherwise, be expressly made subject to the lien of this Security Instrument and, if and when
acquired by Borrower, the fee estate in the Land;

          (c) Hotel Operating Lease. The Hotel Operating Lease and the leasehold estate created
thereby and all of Hotel Operator’s estate, right, title and interest in and under the Hotel
Operating Lease and in and to the leasehold estate created thereby, including but not limited to
(i) all assignments, modifications, extensions and renewals of the Hotel Operating Lease, (ii) all
credits, deposits, options, privileges and rights of Hotel Operator under the Hotel Operating
Lease, (iii) all rights of first refusal, if any, and all rights, if any, to renew or extend the
Hotel Operating Lease for a succeeding term or terms, (iv) all rights or privileges, if any, of
Hotel Operator to terminate, cancel, surrender or merge the Hotel Operating Lease, (v) all right,
title, claim or demand whatsoever of Hotel Operator either in law or in equity, in possession or
expectancy, of, in and to any right, as tenant under the Hotel Operating Lease, to elect under
Section 365(h)(1) of the Bankruptcy Code (as hereinafter defined), to terminate or treat the Hotel
Operating Lease as terminated in the event (A) of the bankruptcy, reorganization or insolvency of
the lessor thereunder, and (B) the rejection of the Hotel Operating Lease by the lessor thereunder,
as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the
Bankruptcy Code;

          (d) Improvements. The buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or hereafter erected or
located on the Land (collectively, the “Improvements”);

          (e) Easements. All easements, rights-of-way or use, rights, strips and gores of
land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, and all estates, rights, titles, interests, privileges,
liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any
way now or hereafter belonging, relating or pertaining to the Land and the Improvements

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and the reversions and remainders, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all
the estates, rights, titles, interests, rights of dower, rights of curtesy, property, possession,
claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land and the
Improvements and every part and parcel thereof, with the appurtenances thereto;

          (f) Equipment. All “equipment,” as such term is defined in Article 9 of the Uniform
Commercial Code (hereinafter defined), now owned or hereafter acquired by Borrower, which is used
at or in connection with the Improvements or the Land or is located thereon or therein (including,
but not limited to, all machinery, equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Borrower and any and all additions,
substitutions and replacements of any of the foregoing), together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto (collectively, the
"Equipment”). Notwithstanding the foregoing, Equipment shall not include any property belonging to
tenants under Leases (hereinafter defined) or any property manager or any leased equipment except
to the extent that Borrower shall have any right or interest therein;

          (g) Fixtures. All Equipment now owned, or the ownership of which is hereafter
acquired, by Borrower which is so related to the Land and Improvements forming part of the Property
that it is deemed fixtures or real property under the law of the particular state in which the
Equipment is located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or installation on the Property,
construction equipment, appliances, machinery, plant equipment, fittings, apparatuses, fixtures and
other items now or hereafter attached to, installed in or used in connection with (temporarily or
permanently) any of the Improvements or the Land, including, but not limited to, engines, devices
for the operation of pumps, pipes, plumbing, call and sprinkler systems, fire extinguishing
apparatuses and equipment, heating, ventilating, incinerating, electrical, air conditioning and air
cooling equipment and systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers, refrigerators and ranges, recreational
equipment and facilities of all kinds, and water, gas, electrical, storm and sanitary sewer
facilities, utility lines and equipment (whether owned individually or jointly with others, and, if
owned jointly, to the extent of Borrower’s interest therein) and all other utilities whether or not
situated in easements, all water tanks, water supply, water power sites, fuel stations, fuel tanks,
fuel supply, and all other structures, together with all accessions, appurtenances, additions,
replacements, betterments and substitutions for any of the foregoing and the proceeds thereof
(collectively, the “Fixtures”). Notwithstanding the foregoing, “Fixtures” shall not include any
property which tenants are entitled to remove pursuant to Leases, except to the extent that
Borrower shall have any right or interest therein;

          (h) Personal Property. All furniture, furnishings, objects of art, machinery, goods,
tools, supplies, appliances, general intangibles to the extent assignable, contract rights,
accounts, accounts receivable, franchises to the extent assignable, licenses to the extent
assignable, certificates and permits to the extent assignable, and all other personal property of
any kind or character whatsoever as defined in and subject to the provisions of the Uniform
Commercial Code, whether tangible or to the extent assignable intangible, other than Fixtures,
which are now or hereafter owned by Borrower and which are located within or about the Land and the
Improvements, together with all accessories, replacements and substitutions thereto or

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therefor and the proceeds thereof (collectively, the “Personal Property”), and the right,
title and interest of Borrower in and to any of the Personal Property which may be subject to any
security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state
or states where any of the Property is located (the “Uniform Commercial Code”), superior in lien to
the lien of this Security Instrument and all proceeds and products of the above;

          (i) Leases and Rents. All leases, subleases or subsubleases, lettings, licenses,
concessions or other agreements (whether written or oral) pursuant to which any Person is granted a
possessory interest in, or right to use or occupy all or any portion of the Land and the
Improvements, and every modification, amendment or other agreement relating to such leases,
subleases, subsubleases, or other agreements entered into in connection with such leases,
subleases, subsubleases, or other agreements and every guarantee of the performance and observance
of the covenants, conditions and agreements to be performed and observed by the other party
thereto, heretofore or hereafter entered into (collectively, the “Leases”), whether before or after
the filing by or against Borrower of any petition for relief under 11 U.S.C. § 101 et seq., as the
same may be amended from time to time (the “Bankruptcy Code”) and all right, title and interest of
Borrower, its successors and assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of their obligations
thereunder to the extent assignable and all rents, additional rents, revenues, issues and profits
(including all oil and gas or other mineral royalties and bonuses) from the Land and the
Improvements whether paid or accruing before or after the filing by or against Borrower of any
petition for relief under the Bankruptcy Code (collectively, the “Rents”) and all proceeds from the
sale or other disposition of the Leases and the right to receive and apply the Rents to the payment
of the Debt;

          (j) Condemnation Awards. All Awards which may heretofore and hereafter be made with
respect to the Property, whether from the exercise of the right of eminent domain (including, but
not limited to, any transfer made in lieu of or in anticipation of the exercise of the right), or
for a change of grade, or for any other injury to or decrease in the value of the Property;

          (k) Insurance Proceeds. All Insurance Proceeds in respect of the Property under any
Policies covering the Property, including, without limitation, the right to receive and apply the
proceeds of any Policies, judgments, or settlements made in lieu thereof, in connection with a
Casualty to the Property;

          (l) Tax Certiorari. All refunds, rebates or credits in connection with reduction in
Taxes or Other Charges charged against the Property;

          (m) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including, without limitation, Insurance Proceeds and Awards, into cash or
liquidation claims;

          (n) Rights. The right, in the name and on behalf of Borrower in accordance with
Section 7.4 hereof to appear in and defend any action or proceeding brought with respect to
the Property and to commence any action or proceeding to protect the interest of Lender in the
Property;

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          (o) Agreements. To the extent assignable, all agreements, contracts, certificates,
instruments, franchises, permits, licenses to the extent assignable, plans, specifications and
other documents, Borrower now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or operation of the Land
and any part thereof and any Improvements or any business or activity conducted on the Land and any
part thereof and all right, title and interest of Borrower therein and thereunder, including,
without limitation, the right, upon the occurrence and during the continuance of any Event of
Default hereunder, to receive and collect any sums payable to Borrower thereunder;

          (p) Trademarks. To the extent assignable, Borrower’s interest in all tradenames,
trademarks, servicemarks, logos, copyrights, goodwill, books and records and all other general
intangibles relating to or used in connection with the operation of the Property;

          (q) Accounts. Subject to the provisions of the Management Agreement, all reserves,
escrows and deposit accounts maintained by Borrower with respect to the Property, including,
without limitation, all accounts established or maintained pursuant to the Cash Management
Agreement; together with all deposits or wire transfers made to such accounts and all cash, checks,
drafts, certificates, securities, investment property, financial assets, instruments and other
property held therein from time to time and all proceeds, products, distributions or dividends or
substitutions thereon and thereof;

          (r) Interest Rate Cap Agreement. The Interest Rate Cap Agreement, including, but not
limited to, all “accounts”, “chattel paper”, “general intangibles” and “investment property” (as
such terms are defined in the Uniform Commercial Code as from time to time in effect) constituting
or relating to the foregoing; and all products and proceeds of any of the foregoing;

          (s) Ground Lease. All of Borrower’s estate, right, title and interest in, to and
under (i) that certain leasehold estate created pursuant to that certain Lease Agreement, dated as
of November 15, 1989, by and between Vinoy Park Hotel Co., as ground lessor (“Hotel Ground
Lessor”), and Vinoy Resort Partners, as ground lessee, as amended by that certain First Addendum to
Lease Agreement, dated February 22, 1990, a Memorandum of said Lease having been recorded on
February 23, 1990, among the Public Records of Pinellas County, Florida (the “Public Records”) in
Official Records Book 7207, Page 1293, as assigned by Vinoy Resort Partners to Vinoy Property
Partnership pursuant to that certain Assignment of Lessee’s Interest in Leases, dated as of May 17,
1995, recorded on May 17, 1995 in Official Records Book 8995, Page 1917 of the Public Records, as
amended by that certain Correction to First Addendum to “Lease Agreement” dated as of August 8,
1995, as assigned by Vinoy Property Partnership to Vinoy Investments Limited Partnership pursuant
to that certain Assignment of Lessee’s Interest in Leases dated as of December 29, 1995, recorded
on December 29, 1995 in Book 9206, Page 1955, as further assigned to Prior Owner pursuant to that
certain Assignment and Assumption of Ground Lease, dated June 23, 2005, recorded on June 30, 2005
in Book 14420, Page 535, as further amended by that certain Lessor Estoppel Certificate and
Agreement dated April 9, 2007, as further assigned to Hotel Owner pursuant to that certain
Assignment and Assumption of Ground Lease, dated and recorded on or about the date hereof by and
between Prior Owner and Hotel Owner, and as further amended by that certain Lessor Estoppel
Certificate and Agreement

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dated on or about the date hereof (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Hotel Ground Lease”); (ii) that certain
leasehold estate created pursuant to that certain Lease Agreement, dated as of September 25, 1989,
by and between the City of St. Petersburg, as ground lessor (“Marina Ground Lessor”), and Vinoy
Development Corporation, as ground lessee, recorded on October 25, 1989, among the Public Records
in Official Records Book 7116, Page 2184, re-recorded February 23, 1990, in Official Records Book
7207, Page 1195, as amended by the First Addendum to Lease Agreement, dated September 25, 1989,
recorded on October 25, 1989, among the Public Records in Official Records Book 7116, Page 2198,
re-recorded February 23, 1990, in Official Records Book 7207, Page 1209, as affected by that
certain Settlement Agreement dated as of January 1, 1992 by and among ground Lessor, ground
Lessee, Tampa Bay Regional Planning Council and State of Florida Department of Community Affairs,
as amended by the Second Addendum to Lease Agreement, dated September 22, 1998, as assigned to
Vinoy Resort Partners by Vinoy Development Corporation pursuant to an Assignment of Lease dated
February 22, 1990, recorded in Official Records Book 7207, Page 1215, as further assigned by Vinoy
Resort Partners to Vinoy Property Partnership pursuant to that certain Assignment of Lessee’s
Interest in Leases, dated as of May 17, 1995, recorded on May 17, 1995 in Official Records Book
8995, Page 1917, as further assigned by Vinoy Property Partnership to Vinoy Investments Limited
Partnership pursuant to that certain Assignment of Lessee’s Interest in Leases dated as of December
29, 1995, recorded on December 29, 1995 in Book 9206, Page 1955, and as affected by Correction to
First Addendum to Lease Agreement-City Land recorded on August 23, 1995 in Official Records Book
9086, Page 961, and as further assigned to Prior Owner pursuant to that certain Assignment and
Assumption of Ground Lease, dated June 23, 2005 and recorded on June 30, 2005 in Book 14420, Page
546, as further amended by that certain Consent and Estoppel Agreement City Land dated April 5,
2007, as further assigned to Hotel Owner pursuant to that certain Assignment an Assumption of
Ground Lease, dated and recorded on or about the date hereof by and between Prior Owner and Hotel
Owner, and as further amended by that certain Consent and Estoppel Agreement City Land dated on or
about the date hereof (as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Marina Ground Lease”); (iii) that certain leasehold estate created
pursuant that certain Golf Course Lease Agreement, dated as of November 15, 1989, by and between
Sunset Golf Course, Inc., as ground lessor (“Golf Ground Lessor”, Hotel Ground Lessor, Marina
Ground Lessor and Golf Ground Lessor are collectively referred to as “Ground Lessor”), and Vinoy
Resort Partners, as ground lessee, as amended by First Addendum to Lease Agreement, dated February
22, 1990, as amended by Amendment to Golf Course Lease Agreement, dated September 11, 1992, as
amended by Third Addendum to Lease Agreement dated December 29, 1995, recorded in Official Records
Book 9219, Page 423, a Memorandum of said Lease having recorded on February 23, 1990, among the
Public Records in Official Records Book 7207, Page 1298, as assigned by Vinoy Resort Partners to
Vinoy Property Partnership pursuant to that certain Assignment of Lessee’s Interest in Leases,
dated as of May 17, 1995, recorded in Official Records Book 8995, Page 1917 of the Public Records,
as assigned by Vinoy Property Partnership to Vinoy Investments Limited Partnership pursuant to that
certain Assignment
 of Lessee’s Interest in Leases, dated as of December 29, 1995, recorded on
December 29, 1995 in Book 9206, Page 1955, as further assigned to Prior Owner pursuant to that
certain Assignment and Assumption of Ground Lease, dated June 23, 2005, recorded on June 30, 2005
in Book 14420, Page 554, as further amended by that certain Lessor Estoppel Certificate and
Agreement

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 dated April 9, 2007, as further assigned to Hotel Owner pursuant to that certain Assignment
and Assumption of Ground Lease, dated on or about the date hereof by and between Prior Owner and
Hotel Owner, and as further amended by that certain Lessor Estoppel Certificate and Agreement dated
on or about the date hereof (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, the “Golf Ground Lease”; collectively, the Hotel Ground
Lease, the Marina Ground Lease and the Golf Ground Lease, the “Ground Lease”), and the leasehold
estates collectively created thereby in the real property leased pursuant to the Hotel Ground
Lease, the Marina Ground Lease and the Golf Ground Lease, respectively, each as more particularly
described as Parcel “1”, “2” and “3”, respectively, in Exhibit A attached hereto, together
with all buildings, structures, fixtures, additions, enlargements, extensions, modifications,
repairs, replacements now or hereafter erected on the Land and together with all appurtenances
including, but not limited to (i) extension, renewal, modification and option rights, and all of
the estate and right of Borrower of, in, and to the Land under and by virtue of the Ground Lease,
(ii) all credits to and deposits of Borrower under the Ground Lease and all other options,
privileges and rights granted and demised to Borrower under the Ground Lease and (iii) all the
right or privilege of Borrower to terminate, cancel, surrender or merge the Ground Lease; and

          (t) Other Rights. Any and all other rights of Borrower in and to the items set forth
in Subsections (a) through (r) above.

          AND without limiting any of the other provisions of this Security Instrument, to the extent
permitted by applicable law, Borrower expressly grants to Lender, as secured party, a security
interest in the portion of the Property which is or may be subject to the provisions of the
Uniform Commercial Code which are applicable to secured transactions; it being understood and
agreed that the Improvements and Fixtures are part and parcel of the Land (the Land, the
Improvements and the Fixtures collectively referred to as the “Real Property”) appropriated to the
use thereof and, whether affixed or annexed to the Real Property or not, shall for the purposes of
this Security Instrument be deemed conclusively to be real estate and mortgaged hereby.

          Section 1.2 Assignment of Rents. Borrower hereby absolutely and unconditionally
assigns to Lender all of Borrower’s right, title and interest in and to all current and future
Leases and Rents; it being intended by Borrower that this assignment constitutes a present,
absolute assignment and not an assignment for additional security only. Nevertheless, subject to
the terms of the Assignment of Leases, the Cash Management Agreement and Section 7.1(h) of
this Security Instrument, Lender grants to Borrower a revocable license to collect, receive, use
and enjoy the Rents and Borrower shall hold the Rents, or a portion thereof sufficient to discharge
all current sums due on the Debt, for use in the payment of such sums.

          Section 1.3 Security Agreement. This Security Instrument is both a real property
mortgage and a “security agreement” within the meaning of the Uniform Commercial Code. The
Property includes both real and personal property and all other rights and interests, whether
tangible or intangible in nature, of Borrower in the Property. By executing and delivering this
Security Instrument, Borrower hereby grants to Lender, as security for the Obligations (hereinafter
defined), a security interest in the Fixtures, the Equipment and the Personal Property to the full
extent that the Fixtures, the Equipment and the Personal Property may be subject to the Uniform
Commercial Code (said portion of the Property so subject to the

10

 

Uniform Commercial Code being called the “Collateral”). If an Event of Default shall occur
and be continuing, Lender, in addition to any other rights and remedies which it may have, shall
have and may exercise immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Lender may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Lender after the occurrence and during
the continuance of an Event of Default, Borrower shall, at its expense, assemble the Collateral and
make it available to Lender at a convenient place (at the Land if tangible property) reasonably
acceptable to Lender. Borrower shall pay to Lender on demand any and all expenses, including
reasonable legal expenses and attorneys’ fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to the Collateral
after the occurrence and during the continuance of an Event of Default. Any notice of sale,
disposition or other intended action by Lender with respect to the Collateral sent to Borrower in
accordance with the provisions hereof at least ten (10) business days prior to such action, shall,
except as otherwise provided by applicable law, constitute reasonable notice to Borrower. The
proceeds of any disposition of the Collateral, or any part thereof, may, except as otherwise
required by applicable law, be applied by Lender to the payment of the Debt in such priority and
proportions as Lender in its discretion shall deem proper. Borrower’s (debtor’s) principal place
of business is as set forth on page one hereof and the address of Lender (secured party) is as set
forth on page one hereof.

          Section 1.4 Fixture Filing. Certain of the Property is or will become “fixtures” (as
that term is defined in the Uniform Commercial Code) on the Land, and this Security Instrument,
upon being filed for record in the real estate records of the city or county wherein such fixtures
are situated, shall operate also as a financing statement filed as a fixture filing in accordance
with the applicable provisions of said Uniform Commercial Code upon such of the Property that is or
may become fixtures.

          Section 1.5 Pledges of Monies Held. Borrower hereby pledges to Lender any and all
monies now or hereafter held by Lender or on behalf of Lender, including, without limitation, any
sums deposited in the Lockbox Account, the Cash Management Account, the Reserve Funds and Net
Proceeds, as additional security for the Obligations until expended or applied as provided in the
Loan Agreement, this Security Instrument or the Cash Management Agreement.

CONDITIONS TO GRANT

          TO HAVE AND TO HOLD the above granted and described Property unto and to the use and benefit
of Lender and its successors and assigns, forever;

          PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well
and truly pay to Lender the Debt at the time and in the manner provided in the Note, the Loan
Agreement and this Security Instrument, shall well and truly perform the Other Obligations
(hereafter defined) as set forth in this Security Instrument and shall well and truly abide by and
comply with each and every covenant and condition set forth herein and in the Note, the Loan
Agreement and the other Loan Documents, these presents and the estate hereby

11

 

granted shall cease, terminate and be void; provided, however, that Borrower’s obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall survive any such payment
or release.

ARTICLE 2 — DEBT AND OBLIGATIONS SECURED

          Section 2.1 Debt. This Security Instrument and the grants, assignments and transfers
made in Article 1 are given for the purpose of securing the Debt.

          Section 2.2 Other Obligations. This Security Instrument and the grants, assignments
and transfers made in Article 1 are also given for the purpose of securing the following
(collectively, the “Other Obligations”): the performance of all other obligations of Borrower
contained herein; the performance of each obligation of Borrower contained in the Loan Agreement
and any other Loan Document; and the performance of each obligation of Borrower contained in any
renewal, extension, amendment, modification, consolidation, change of, or substitution or
replacement for, all or any part of the Note, the Loan Agreement or any other Loan Document.

          Section 2.3 Debt and Other Obligations. Borrower’s obligations for the payment of the
Debt and the performance of the Other Obligations shall be referred to collectively herein as the
"Obligations.”

ARTICLE 3 — BORROWER COVENANTS

          Borrower covenants and agrees that:

          Section 3.1 Payment of Debt. Borrower will pay the Debt at the time and in the manner
provided in the Loan Agreement, the Note and this Security Instrument

          Section 3.2 Incorporation by Reference. All the covenants, conditions and agreements
contained in (a) the Loan Agreement, (b) the Note and (c) all and any of the other Loan Documents,
are hereby made a part of this Security Instrument to the same extent and with the same force as if
fully set forth herein.

          Section 3.3 Insurance. Borrower shall obtain and maintain, or cause to be maintained,
in full force and effect at all times insurance with respect to Borrower and the Property as
required pursuant to the Loan Agreement.

          Section 3.4 Maintenance of Property. Borrower shall cause the Property to be
maintained in a good and safe condition and repair in accordance with the terms of the Loan
Agreement. The Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the Fixtures, the
Equipment or the Personal Property, tenant finish and refurbishment of the Improvements) without
the consent of Lender (which consent shall not be unreasonably withheld, conditioned or delayed) or
as otherwise permitted pursuant to the Loan Agreement. Subject to the terms of the Loan Agreement,
Borrower shall promptly repair, replace or rebuild any part of the Property which may be destroyed
by any Casualty or become damaged, worn or dilapidated or which may

12

 

be affected by any Condemnation, and shall complete and pay for any structure at any time in
the process of construction or repair on the Land.

          Section 3.5 Waste. Borrower shall not commit or knowingly suffer any physical waste
of the Property or make any change in the use of the Property which will in any way materially
increase the risk of fire or other hazard arising out of the operation of the Property, or take any
action that might invalidate or allow the cancellation of any Policy, or do or knowingly permit to
be done thereon anything that may in any way materially adversely impair the value of the Property
or the security of this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or production of any
minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the
method of mining or extraction thereof.

          Section 3.6 Payment for Labor and Materials. (a) Subject to Section 3.6(b)
hereof, Borrower will promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials (“Labor and Material Costs”) incurred in connection with the
Property and never permit to exist beyond the due date thereof in respect of the Property or any
part thereof any lien or security interest, even though inferior to the liens and the security
interests hereof, and in any event never permit to be created or exist in respect of the Property
or any part thereof any other or additional lien or security interest other than the liens or
security interests hereof except for the Permitted Encumbrances.

          (b) After prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of the Labor and
Material Costs, provided that (i) no Event of Default has occurred and is continuing under the Loan
Agreement, the Note, this Security Instrument or any of the other Loan Documents, (ii) Borrower is
permitted to do so under the provisions of any other mortgage, deed of trust or deed to secure debt
affecting the Property, (iii) such proceeding shall suspend the collection of the Labor and
Material Costs from Borrower and from the Property or Borrower shall have paid all of the Labor and
Material Costs under protest, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder, (v) neither the Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall
have furnished the security as may be required in the proceeding, or as may be reasonably requested
by Lender, to insure the payment of any contested Labor and Material Costs, together with all
interest and penalties thereon.

          Section 3.7 Performance of Other Agreements. Borrower shall observe and perform each
and every term, covenant and provision to be observed or performed by Borrower pursuant to the Loan
Agreement, any other Loan Document and any other material agreement or recorded instrument
affecting or pertaining to the Property and any amendments, modifications or changes thereto.

          Section 3.8 Change of Name, Identity or Structure. Except as expressly permitted
under the Loan Agreement, Borrower shall not change Borrower’s name, identity (including its trade
name or names) or, if not an individual, Borrower’s corporate, partnership or

13

 

other structure without notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in Borrower’s structure,
without first obtaining the prior written consent of Lender, except as otherwise permitted pursuant
to Section 5.2.10 of the Loan Agreement. Borrower shall execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing statement or financing
statement change required by Lender to establish or maintain the validity, perfection and priority
of the security interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under which Borrower intends to
operate the Property, and representing and warranting that Borrower does business under no other
trade name with respect to the Property.

          Section 3.9 Title. Borrower has good, marketable and insurable leasehold title to the
real property comprising part of the Property and good title to the balance of the Property, free
and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. To the best
of Borrower’s knowledge, the Permitted Encumbrances in the aggregate do not materially and
adversely affect the operation or use of the Property (as currently used) or Borrower’s ability to
repay the Loan. This Security Instrument, when properly recorded in the appropriate records,
together with any Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first priority lien on the real property portion of
the Property, subject only to Permitted Encumbrances and the Liens created by the Loan Documents
and (b) perfected security interests in and to, and perfected collateral assignments of, all
personalty (including the Leases), all in accordance with the terms thereof, in each case subject
only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the
Loan Documents and the Liens created by the Loan Documents. To Borrower’s knowledge after due
inquiry, there are no claims for payment for work, labor or materials affecting the Property which
are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

          Section 3.10 Ground Lease. Borrower shall (a) pay all rents, additional rents and
other sums required to be paid by Borrower, as tenant under and pursuant to the provisions of the
Ground Lease as and when such rent or other charge is payable, (b) diligently perform and observe
in all material respects all of the terms, covenants and conditions of the Ground Lease on the part
of Borrower, as tenant thereunder, to be performed and observed prior to the expiration of any
applicable grace period therein provided, and (c) promptly notify Lender of the giving of any
notice by the Ground Lessor to Borrower of any material default by Borrower in the performance or
observance of any of the material terms, covenants or conditions of the Ground Lease on the part of
Borrower, as tenant thereunder, to be performed or observed and deliver to Lender a true copy of
each such notice. Subject to the terms of the Loan Agreement, Borrower shall not, without the
prior consent of Lender, surrender the leasehold estate created by the Ground Lease or terminate or
cancel the Ground Lease or without the prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed, modify, change, supplement, alter or amend the
Ground Lease, in any respect, either orally or in writing, and Borrower hereby assigns to Lender,
as further security for the payment of the Debt and for the performance and observance of the
terms, covenants and conditions of this Security Instrument and the Loan Agreement, all of the
rights, privileges and prerogatives of Borrower, which rights, privileges and prerogatives may be
exercised by Lender upon and during the

14

 

continuance of an Event of Default, as tenant under the Ground Lease, to surrender the
leasehold estate created by the Ground Lease or to terminate, cancel, modify, change, supplement,
alter or amend the Ground Lease, and any such surrender of the leasehold estate created by the
Ground Lease or termination, cancellation, modification, change, supplement, alteration or
amendment of the Ground Lease without the prior consent of Lender (as provided in the Loan
Agreement) shall be void and of no force and effect. If Borrower shall default in the performance
or observance of any term, covenant or condition of the Ground Lease on the part of Borrower, as
tenant thereunder, to be performed or observed, and such default shall remain uncured after the
expiration of any applicable cure or grace period, then, without limiting the generality of the
other provisions of this Security Instrument and the Loan Agreement, and without waiving or
releasing Borrower from any of its obligations hereunder or thereunder, Lender shall have the
right, but shall be under no obligation, upon three (3) business days written notice to pay any
sums and to perform any act or take any action as may be appropriate to cause all of the terms,
covenants and conditions of the Ground Lease on the part of Borrower, as tenant thereunder, to be
performed or observed or to be promptly performed or observed on behalf of Borrower, to the end
that the rights of Borrower in, to and under the Ground Lease shall be kept unimpaired and free
from default. If Lender shall make any payment or perform any act or take action in accordance
with the preceding sentence, Lender will notify Borrower of the making of any such payment, the
performance of any such act, or the taking of any such action. In any such event, subject to the
terms of the Management Agreement and to the rights of tenants, subtenants and other occupants
under the Leases, Lender and any person designated by Lender shall have, and are hereby granted,
the right to enter upon the Property at any time and from time to time after such default by
Borrower, which remains uncured after the expiration of any applicable cure or grace period, for
the purpose of taking any such action. Lender may pay and expend such sums of money as Lender
deems reasonably necessary for any such purpose and upon so doing shall be subrogated to any and
all rights of the Ground Lessor. Borrower hereby agrees to pay to Lender upon ten (10) days demand
therefor, all such sums so paid and expended by Lender, together with interest thereon from the day
of such demand at the Default Rate. All sums so paid and expended by Lender and the interest
thereon shall be secured by the legal operation and effect of this Security Instrument. If the
Ground Lessor shall deliver to Lender a copy of any notice of default sent by said Ground Lessor to
Borrower, as tenant under the Ground Lease, such notice shall constitute full protection to Lender
for any action taken or omitted to be taken by Lender, in good faith, in reliance thereon. Subject
to the terms of the Ground Lease and the terms of the Loan Agreement, Borrower will not subordinate
or consent to the subordination of the Ground Lease to any mortgage, security deed, lease or other
interest on or in the Ground Lessor’s interest in all or any part of the Property, unless, in each
such case, the written consent of Lender shall have been first had and obtained.

          Section 3.11 No Merger of Fee and Leasehold Estates. So long as any portion of the
Debt shall remain unpaid, unless Lender shall otherwise consent, such consent not to be
unreasonably withheld or delayed, the fee title to the Property and the leasehold estate therein
created pursuant to the provisions of the Ground Lease or the Hotel Operating Lease shall not merge
but shall always be kept separate and distinct, notwithstanding the union of such estates in
Borrower, Lender, or in any other person by purchase, operation of law or otherwise. Lender
reserves the right, at any time, to release portions of the Property, including, but not limited
to, the leasehold estate created by the Ground Lease or the Hotel Operating Lease, with or without
consideration, at Lender’s election, without waiving or affecting any of its rights

15

 

hereunder or under the Note or the other Loan Documents and any such release shall not affect
Lender’s rights in connection with the portion of the Property not so released.

          Section 3.12 Borrower’s Acquisition of Fee Estate. In the event that Borrower, so
long as any portion of the Debt remains unpaid, shall be the owner and holder of the fee title to
the Property, the lien of the Security Instrument shall be spread to cover Borrower’s fee title to
the Property and said fee title shall be deemed to be included in the Property without any further
action. In such event, Borrower agrees, at its reasonable cost and expense, including without
limitation Lender’s reasonable attorneys’ fees, to (a) execute any and all documents or instruments
necessary to subject its fee title to the Property to the lien of this Security Instrument; and (b)
provide a title insurance policy which shall insure that the lien of the Security Instrument is a
first lien on Borrower’s fee title to the Property. Notwithstanding the foregoing, if the Ground
Lease is for any reason whatsoever terminated prior to the natural expiration of its term, and if,
pursuant to any provisions of the Ground Lease or otherwise, Lender or its designee shall acquire
from the Ground Lessor thereunder another lease of the Property, Borrower shall have no right,
title or interest in or to such other lease or the leasehold estate created thereby.

          Section 3.13 Rejection of the Ground Lease.

          (a) If the Ground Lease is terminated for any reason in the event of the rejection or
disaffirmance of the Ground Lease pursuant to the Bankruptcy Code, or any other law affecting
creditors rights, subject to the provisions of the Loan Agreement, (i) the Borrower, immediately
after obtaining notice thereof, shall give notice thereto to Lender, (ii) Borrower, without the
prior written consent of Lender, shall not elect to treat the Ground Lease as terminated pursuant
to Section 365(h) of the Bankruptcy Code or any comparable federal or state statute or law, and any
election by Borrower made without such consent shall be void and (iii) this Security Instrument and
the Loan Agreement and all the liens, terms, covenants and conditions of this Security Instrument
and the Loan Agreement hereby extends to and covers Borrower’s possessory rights under Section
365(h) of the Bankruptcy Code and to any claim for damages due to the rejection of the Ground Lease
or other termination of the Ground Lease. Subject to the provisions of the Loan Agreement, in
addition, Borrower hereby assigns irrevocably to Lender Borrower’s rights to treat the Ground Lease
as terminated pursuant to Section 365(h) of the Bankruptcy Code and to offset rents under such
Ground Lease in the event any case, proceeding or other action is commenced by or against the
Ground Lessor under the Bankruptcy Code or any comparable federal or state statute or law.

          (b) In the event Borrower files for bankruptcy, Borrower hereby assigns to Lender (i)
Borrower’s right to reject the Ground Lease under Section 365 of the Bankruptcy Code or any
comparable federal or state statute or law with respect to any case, proceeding or other action
commenced by or against Borrower under the Bankruptcy Code or comparable federal or state statute
or law and (ii) Borrower’s right to seek an extension of the 60-day period within which Borrower
must accept or reject the Ground Lease under Section 365 of the Bankruptcy Code or any comparable
federal or state statute or law with respect to any case, proceeding or other action commenced by
or against Borrower under the Bankruptcy Code or comparable federal or state statute or law.
Further, if the foregoing assignment is not effective under applicable law and Borrower shall
desire to so reject the Ground Lease, at Lender’s

16

 

request, Borrower shall assign its interest in the Ground Lease to Lender in lieu of rejecting
the Ground Lease, upon receipt by Borrower of notice from Lender of such request together with
Lender’s agreement to cure any existing defaults of Borrower under the Ground Lease.

          Section 3.14 Borrower hereby agrees that if the Ground Lease is terminated for any reason in
the event of the rejection or disaffirmance of the Ground Lease pursuant to the Bankruptcy Code or
any other law affecting creditor’s rights, any property not removed by the Borrower as permitted or
required by the Ground Lease, shall at the option of Lender be deemed abandoned by Borrower,
provided that Lender may remove any such property required to be removed by Borrower pursuant to
the Ground Lease and all reasonable costs and expenses associated with such removal shall be paid
by Borrower within five (5) business days of receipt by Borrower of an invoice for such removal
costs and expenses.

ARTICLE 4 — OBLIGATIONS AND RELIANCES

          Section 4.1 Relationship of Borrower and Lender. The relationship between Borrower
and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special
relationship with Borrower, and no term or condition of the Loan Agreement, the Note, this Security
Instrument and the other Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of debtor and creditor.

          Section 4.2 No Reliance on Lender. The general partners, members, principals and (if
Borrower is a trust) beneficial owners of Borrower are experienced in the ownership and operation
of properties similar to the Property, and Borrower and Lender are relying solely upon such
expertise and business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender’s expertise, business acumen or advice in connection with the
Property.

          Section 4.3 No Lender Obligations. (a) Notwithstanding the provisions of
Subsections 1.1 (h) and (n) or Section 1.2, Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such
agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and
other documents.

          (b) By accepting or approving anything required to be observed, performed or fulfilled or to
be given to Lender pursuant to this Security Instrument, the Loan Agreement, the Note or the other
Loan Documents, including, without limitation, any Officer’s Certificate, balance sheet, statement
of profit and loss or other financial statement, survey, appraisal, or Policy, Lender shall not be
deemed to have warranted or affirmed the sufficiency, the legality or effectiveness of same, and
such acceptance or approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.

          Section 4.4 Reliance. Borrower recognizes and acknowledges that in accepting the Loan
Agreement, the Note, this Security Instrument and the other Loan Documents, Lender is expressly and
primarily relying on the truth and accuracy of the warranties and representations set forth in
Section 4.1 of the Loan Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Lender; that such reliance existed on the part
of Lender prior to the date hereof, that the warranties and

17

 

representations are a material inducement to Lender in making the Loan; and that Lender would
not be willing to make the Loan and accept this Security Instrument in the absence of the
warranties and representations as set forth in Section 4.1 of the Loan Agreement.

ARTICLE 5 — FURTHER ASSURANCES

          Section 5.1 Recording of Security Instrument, etc. Borrower forthwith upon the
execution and delivery of this Security Instrument and thereafter, from time to time, will cause
this Security Instrument and any of the other Loan Documents creating a Lien or security interest
or evidencing the Lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be required by any present
or future law in order to publish notice of and fully to protect and perfect the Lien or security
interest hereof upon, and the interest of Lender in, the Property. Except as expressly provided in
the Loan Agreement, Borrower will pay all taxes, filing, registration or recording fees, and all
reasonable expenses incident to the preparation, execution, acknowledgment and/or recording of the
Note, this Security Instrument, the other Loan Documents, any note, deed of trust or mortgage
supplemental hereto, any security instrument with respect to the Property and any instrument of
further assurance, and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any deed of trust or
mortgage supplemental hereto, any security instrument with respect to the Property or any
instrument of further assurance, and any modification or amendment of the foregoing documents,
except where prohibited by law so to do.

          Section 5.2 Further Acts, etc. Borrower will, at the reasonable cost of Borrower, and
without expense to Lender, do, execute, acknowledge and deliver all further acts, deeds,
conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and
assurances as Lender shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and rights hereby
mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out the intention or facilitating the
performance of the terms of this Security Instrument or for filing, registering or recording this
Security Instrument, or for complying with all Legal Requirements. Borrower, on demand, will
execute and deliver, and in the event it shall fail to so execute and deliver following five (5)
Business Days’ notice to Borrower, hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one or more financing
statements to evidence more effectively the security interest of Lender in the Property. In (i)
such case set forth in the immediately preceding sentence or (ii) upon the occurrence and during an
Event of Default, Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and remedies available to
Lender at law and in equity, including without limitation, such rights and remedies available to
Lender pursuant to this Section 5.2.

          Section 5.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws. (a) If any law
is enacted or adopted or amended after the date of this Security Instrument which deducts the Debt
from the value of the Property for the purpose of taxation or which imposes a

18

 

tax, either directly or indirectly, on the Debt or Lender’s interest in the Property, Borrower
will pay the tax, with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury then Lender shall have the option by
written notice of not less than one hundred twenty (120) days to declare the Debt immediately due
and payable, provided that the Debt shall not be subject to any prepayment fee, premium or penalty
in connection with any payment under this Section 5.3(a) but shall be otherwise due and payable in
accordance with the provisions of the Loan Agreement.

          (b) Borrower will not claim or demand or be entitled to any credit or credits on account of
the Debt for any part of the Taxes or Other Charges assessed against the Property, or any part
thereof, and no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument
or the Debt. If such claim, credit or deduction shall be required by law, Lender shall have the
option, by written notice of not less than one hundred twenty (120) days, to declare the Debt
immediately due and payable, provided that the Debt shall not be subject to any prepayment fee,
premium or penalty in connection with any payment under this Section 5.3(b) but shall be otherwise
due and payable in accordance with the provisions of the Loan Agreement.

          (c) If at any time the United States of America, any State thereof or any subdivision of any
such State shall require revenue or other stamps to be affixed to the Note, this Security
Instrument, or any of the other Loan Documents or impose any other tax or charge on the same,
Borrower will pay for the same, with interest and penalties thereon, if any.

          Section 5.4 Severing of Mortgage. Subject to the terms of the Loan Agreement, this
Security Instrument and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be severed into two or more notes and two or more
security instruments in such denominations as Lender shall determine in its sole discretion, each
of which shall cover all or a portion of the Property to be more particularly described therein.
To that end, subject to the terms of the Loan Agreement, Borrower, upon written request of Lender,
shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered by the
then owner of the Property, to Lender and/or its designee or designees, substitute notes and
security instruments in such principal amounts, aggregating not more than the then unpaid principal
amount of this Security Instrument, and containing terms, provisions and clauses similar to those
contained herein and in the Note, and such other documents and instruments as may be required by
Lender at no additional cost, expense or liability to Borrower.

          Section 5.5 Replacement Documents. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document
which is not of public record, and, in the case of any such mutilation, upon surrender and
cancellation of such Note or other Loan Document, Borrower will issue, in lieu thereof, a
replacement Note or other Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and otherwise of like
tenor.

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ARTICLE 6 — DUE ON SALE/ENCUMBRANCE

          Section 6.1 Lender Reliance. Borrower acknowledges that Lender has examined and
relied on the experience of Borrower and its general partners, members, principals and (if Borrower
is a trust) beneficial owners in owning and operating properties such as the Property in agreeing
to make the Loan, and, subject to the terms of the Loan Agreement, will continue to rely on
Borrower’s ownership of the Property as a means of maintaining the value of the Property as
security for repayment of the Debt and the performance of the Other Obligations. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the performance of the Other
Obligations, Lender can recover the Debt by a sale of the Property.

          Section 6.2 No Sale/Encumbrance. Neither Borrower nor any Restricted Party shall
Transfer the Property or any part thereof or any interest therein or permit or suffer the Property
or any part thereof or any interest therein to be Transferred other than as expressly permitted
pursuant to the terms of the Loan Agreement.

ARTICLE 7 — RIGHTS AND REMEDIES UPON DEFAULT

          Section 7.1 Remedies. Upon the occurrence and during the continuance of any Event of
Default, Borrower agrees that Lender may take such action, without notice or demand, as it deems
advisable to protect and enforce its rights against Borrower and in and to the Property, including,
but not limited to, the following actions, each of which may be pursued concurrently or otherwise,
at such time and in such order as Lender may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Lender:

          (a) declare the entire unpaid Debt to be immediately due and payable;

          (b) institute proceedings, judicial or otherwise, for the complete foreclosure of this
Security Instrument under any applicable provision of law, in which case the Property or any
interest therein may be sold for cash or upon credit in one or more parcels or in several interests
or portions and in any order or manner;

          (c) with or without entry, to the extent permitted and pursuant to the procedures provided by
applicable law, institute proceedings for the partial foreclosure of this Security Instrument for
the portion of the Debt then due and payable, subject to the continuing Lien and security interest
of this Security Instrument for the balance of the Debt not then due, unimpaired and without loss
of priority;

          (d) sell for cash or upon credit the Property or any part thereof and all estate, claim,
demand, right, title and interest of Borrower therein and rights of redemption thereof, pursuant to
power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or permitted by law;

          (e) institute an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note, the Loan Agreement or in the other
Loan Documents;

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          (f) subject to Section 9.4 of the Loan Agreement, recover judgment on the Note either before,
during or after any proceedings for the enforcement of this Security Instrument or the other Loan
Documents;

          (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security for the Debt and
without regard for the solvency of Borrower, any guarantor, indemnitor with respect to the Loan or
of any Person liable for the payment of the Debt;

          (h) the license granted to Borrower under Section 1.2 hereof shall automatically be
revoked and Lender may enter into or upon the Property, either personally or by its agents,
nominees or attorneys and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly
therefrom, and subject to the provisions of the Management Agreement, take possession of all books,
records and accounts relating thereto and Borrower agrees to surrender possession of the Property
and of such books, records and accounts to Lender upon demand, and thereupon subject to the
provisions of the Management Agreement, Lender may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the Property and conduct
the business thereat; (ii) complete any construction on the Property in such manner and form as
Lender deems reasonably advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of Borrower with respect to
the Property, whether in the name of Borrower or otherwise, including, without limitation, the
right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for,
collect and receive all Rents; (v) require Borrower to pay monthly in advance to Lender, or any
receiver appointed to collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi) require Borrower to
vacate and surrender possession of the Property to Lender or to such receiver and, in default
thereof Borrower may be evicted by summary proceedings or otherwise; and (vii) apply the receipts
from the Property to the payment of the Debt, in such order, priority and proportions as Lender
shall deem appropriate in its sole discretion after deducting therefrom all expenses (including
reasonable attorneys’ fees) incurred in connection with the aforesaid operations and all amounts
necessary to pay the Taxes, Other Charges, Insurance Premium and other expenses in connection with
the Property, as well as just and reasonable compensation for the services of Lender, its counsel,
agents and employees;

          (i) exercise any and all rights and remedies granted to a secured party upon default under the
Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right
to take possession of the Fixtures, the Equipment, the Personal Property or any part thereof, and
to take such other measures as Lender may deem necessary for the care, protection and preservation
of the Fixtures, the Equipment, the Personal Property, and (ii) request Borrower at its expense to
assemble the Fixtures, the Equipment, the Personal Property and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale, disposition or other intended action by
Lender with respect to the Fixtures, the Equipment, the Personal Property sent to Borrower in
accordance with the provisions hereof at least ten (10) Business Days prior to such action, shall
constitute commercially reasonable notice to Borrower;

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          (j) apply any sums then deposited or held in escrow or otherwise by or on behalf of Lender in
accordance with the terms of the Loan Agreement, this Security Instrument or any other Loan
Document to the payment of the following items in any order in its sole discretion:

          (i) Taxes and Other Charges;

          (ii) Insurance Premiums;

          (iii) Interest on the unpaid principal balance of the Note;

          (iv) Intentionally omitted;

          (v) All other sums payable pursuant to the Note, the Loan Agreement, this
Security Instrument and the other Loan Documents, including, without limitation,
advances made by Lender pursuant to the terms of this Security Instrument;

          (k) pursue such other remedies as Lender may have under applicable law; or

          (l) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together with
interest thereon, to the payment of the Debt in such order, priority and proportions as Lender
shall deem to be appropriate in its discretion.

In the event of a sale, by foreclosure, power of sale or otherwise, of less than all of Property,
this Security Instrument shall continue as a lien and security interest on the remaining portion of
the Property unimpaired and without loss of priority.

          Section 7.2 Application of Proceeds. Upon the occurrence and during the continuance
of an Event of Default, the purchase money, proceeds and avails of any disposition of the Property,
and or any part thereof, or any other sums collected by Lender pursuant to the Note, this Security
Instrument or the other Loan Documents, may be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.

          Section 7.3 Right to Cure Defaults. Upon the occurrence and during the continuance of
any Event of Default, Lender may, but without any obligation to do so and without notice to or
demand on Borrower and without releasing Borrower from any obligation hereunder, make any payment
or do any act required of Borrower hereunder in such manner and to such extent as Lender may deem
necessary to protect the security hereof. Lender is authorized to enter upon the Property for such
purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the
Property or to foreclose this Security Instrument or collect the Debt, and the out-of-pocket cost
and expense thereof (including reasonable attorneys’ fees to the extent permitted by law), with
interest as provided in this Section 7.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred by Lender in
remedying such Event of Default or such failed payment or act or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate, for the period
after notice from Lender that such cost or expense was incurred to the date of payment to Lender.
All such costs and expenses incurred by Lender together with

22

 

interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the
Debt and be secured by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.

          Section 7.4 Actions and Proceedings. Upon the occurrence and during the continuance
of an Event of Default, Lender has the right to appear in and defend any action or proceeding
brought with respect to the Property and to bring any action or proceeding, in the name and on
behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its
interest in the Property.

          Section 7.5 Recovery of Sums Required to Be Paid. Subject to Section 9.4 of the Loan
Agreement, Lender shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by Borrower existing at
the time such earlier action was commenced.

          Section 7.6 Examination of Books and Records. Subject to the provisions of the
Management Agreement, at reasonable times and upon reasonable notice, Lender and at Lender’s
expense (unless an Event of Default has occurred and is continuing), its agents, accountants and
attorneys shall have the right to examine the records, books, management and other papers of
Borrower which reflect upon their financial condition, at the Property or at any office regularly
maintained by Borrower where the books and records are located such right to be exercised not more
frequently than once per year unless an Event of Default exists. Lender and its agents shall have
the right to make copies and extracts from the foregoing records and other papers.

          Section 7.7 Other Rights, etc. (a) The failure of Lender to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of this Security
Instrument Borrower shall not be relieved of Borrower’s obligations hereunder by reason of (i) the
failure of Lender to comply with any request of Borrower or any guarantor or indemnitor with
respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce
any of the provisions hereof or of the Note or the other Loan Documents, (ii) the release,
regardless of consideration, of the whole or any part of the Property, or of any person liable for
the Debt or any portion thereof (except upon repayment in full of the Debt), or (iii) any agreement
or stipulation by Lender extending the time of payment or otherwise modifying or supplementing the
terms of the Note, this Security Instrument or the other Loan Documents.

          (b) It is agreed that the risk of loss or damage to the Property is on Borrower, and Lender
shall have no liability whatsoever for decline in value of the Property, for failure to maintain
the Policies, or for failure to determine whether insurance in force is adequate as to the amount
of risks insured. Possession by Lender shall not be deemed an election of judicial relief if any
such possession is requested or obtained with respect to any Property or collateral not in Lender’s
possession.

          (c) Upon the occurrence and during the continuance of an Event of Default, Lender may resort
for the payment of the Debt to any other security held by Lender in such order

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and manner as Lender, in its discretion, may elect. Lender may take action to recover the
Debt, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of
Lender thereafter to foreclose this Security Instrument. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision. Lender shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

          Section 7.8 Right to Release Any Portion of the Property. Lender may release any
portion of the Property for such consideration as Lender may require without, as to the remainder
of the Property, in any way impairing or affecting the lien or priority of this Security
Instrument, or improving the position of any subordinate lienholder with respect thereto, except to
the extent that the obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by assignment, pledge or
otherwise any other property in place thereof as Lender may require without being accountable for
so doing to any other lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.

          Section 7.9 Violation of Laws. Subject to the terms of the Loan Agreement, if the
Property is not in material compliance with Legal Requirements, Lender may impose reasonable
additional requirements upon Borrower in connection herewith including, without limitation,
monetary reserves or financial equivalents.

          Section 7.10 Intentionally Omitted.

          Section 7.11 Right of Entry. Subject to the terms of the Loan Agreement and the
Management Agreement, upon reasonable notice to Borrower, Lender and its agents shall have the
right to enter and inspect the Property at all reasonable times.

ARTICLE 8 — INDEMNIFICATION

          Section 8.1 General Indemnification. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties (hereinafter defined)
from and against any and all third party claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts, actual losses, reasonable costs,
reasonable expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in
settlement, damages (but not lost revenues, diminution in value and other consequential and
punitive damages) of whatever kind or nature (including, but not limited, to reasonable attorneys’
fees and other costs of defense) (collectively, the “Losses”) imposed upon or incurred by or
asserted against any Indemnified Parties (other than claims against Lender by banking regulatory
authorities or shareholders of Lender) and arising out of or in any way relating to any one or more
of the following: (a) ownership of this Security Instrument, the Property or any interest therein
or receipt of any Rents; (b) any amendment to, or restructuring of, the Debt, the Note, the Loan
Agreement, this Security Instrument, or any other Loan

24

 

Documents requested by Borrower; (c) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of this Security Instrument, the Loan Agreement,
the Note or any of the other Loan Documents, whether or not suit is filed in connection with same,
or in connection with Borrower, any guarantor or indemnitor and/or any partner, joint venturer or
shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to, or death of, persons or loss of or
damage to property occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use, nonuse
or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on the part of
Borrower to perform or be in compliance with any of the terms of this Security Instrument, the
Note, the Loan Agreement or any of the other Loan Documents; (g) performance of any labor or
services or the furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of Borrower to file timely with the Internal Revenue Service an
accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, if required in connection with this Security Instrument, or to supply a copy
thereof in a timely fashion to the recipient of the proceeds of the transaction in connection with
which this Security Instrument is made; (i) any failure of the Property to be in compliance with
any Legal Requirements; (j) the enforcement by any Indemnified Party of the provisions of this
Article 8; (k) any and all claims and demands whatsoever which may be asserted against Lender by
reason of any alleged obligations or undertakings on its part to perform or discharge any of the
terms, covenants, or agreements contained in any Lease; or (1) the payment of any commission,
charge or brokerage fee to anyone claiming through Borrower which may be payable in connection with
the funding of the Loan. Any amounts payable to Lender by reason of the application of this
Section 8.1 shall become due and payable within ten (10) Business Days of notice from
Lender and, if not paid within such ten (10) Business Day period, shall bear interest at the
Default Rate from the date loss or damage is sustained by Lender until paid. For purposes of this
Article 8, the term “Indemnified Parties” means Lender and any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been involved in the
servicing of the Loan, any Person in whose name the encumbrance created by this Security Instrument
is or will have been recorded, Persons who may hold or acquire or will have held a full or partial
interest in the Loan (including, but not limited to, investors or prospective investors in the
Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of
the foregoing (including, but not limited to, any other Person who holds or acquires or will have
held a participation or other full or partial interest in the Loan, whether during the term of the
Loan or as a part of or following a foreclosure of the Loan and any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender’s assets and business).
Notwithstanding the provisions
of this Section 8.1, (A) Borrower shall have no liability to
Lender or any other Indemnified Party for any Losses caused by the gross negligence, willful
misconduct or fraud of Lender or such other Indemnified Party, and (B) the obligations of Borrower
under this Section 8.1 shall exclude Losses arising solely from a state of facts that first
came into existence after Lender, its nominee or designee, or a bona fide third party acquired
title to the Property through foreclosure, exercise

25

 

 of a power of sale or deed in lieu of foreclosure. For the purpose of this Section
8.1 only, successors and assigns shall not include any bona fide third party who purchases
title to the Property through foreclosure, deed in lieu of foreclosure or the exercise of any other
remedies available to Lender hereunder, under the Note or under any of the other Loan Documents, or
who purchased title to the Property at a foreclosure sale.

          Section 8.2 Mortgage and/or Intangible Tax. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and
against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties
and arising out of or in any way relating to any tax on the making and/or recording of this
Security Instrument, the Note or any of the other Loan Documents, but excluding any income,
franchise or other similar taxes.

          Section 8.3 ERISA Indemnification. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any
and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred in the
investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction
or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction
exemption under ERISA that may be required by any applicable federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities) that Lender may incur, as a result of a default under
Sections 4.1.9 or 5.2.9 of the Loan Agreement.

          Section 8.4 Duty to Defend; Attorneys’ Fees and Other Fees and Expenses. Upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants
in any such claim or proceeding include both Borrower and any Indemnified Party and Borrower and
such Indemnified Party shall have reasonably concluded that there are any legal defenses available
to it and/or other Indemnified Parties that are different from or additional to those available to
Borrower, such Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on behalf of such
Indemnified Party, provided that no compromise or settlement shall be entered without Borrower’s
consent, which consent shall not be unreasonably withheld. Within ten (10) days of written demand,
Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse,
the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in connection therewith.

ARTICLE 9  — WAIVERS

          Section 9.1 Waiver of Counterclaim. To the extent permitted by applicable law,
Borrower hereby waives the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Loan Agreement, the Note, any of the other Loan
Documents, or the Obligations.

26

 

          Section 9.2 Marshalling and Other Matters. To the extent permitted by applicable law,
Borrower hereby waives the benefit of all appraisement, valuation, stay, extension, reinstatement
and redemption laws now or hereafter in force and all rights of marshalling in the event of any
sale hereunder of the Property or any part thereof or any interest therein. Further, Borrower
hereby expressly waives any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of each and every
person acquiring any interest in or title to the Property subsequent to the date of this Security
Instrument and on behalf of all persons to the extent permitted by applicable law.

          Section 9.3 Waiver of Notice. To the extent permitted by applicable law, Borrower
shall not be entitled to any notices of any nature whatsoever from Lender except with respect to
matters for which this Security Instrument specifically and expressly provides for the giving of
notice by Lender to Borrower and except with respect to matters for which Lender is required by
applicable law to give notice, and Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Security Instrument does not specifically and
expressly provide for the giving of notice by Lender to Borrower.

          Section 9.4 Waiver of Statute of Limitations. To the extent permitted by applicable
law, Borrower hereby expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or performance of its
Other Obligations.

          Section 9.5 Survival. The indemnifications made pursuant to Section 8.3
herein shall continue indefinitely in full force and effect and shall survive and shall in no
way be impaired by any of the following: any satisfaction or other termination of this Security
Instrument, any assignment or other transfer of all or any portion of this Security Instrument or
Lender’s interest in the Property (but, in such case, shall benefit both Indemnified Parties and
any assignee or transferee), any exercise of Lender’s rights and remedies pursuant hereto
including, but not limited to, foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Loan Agreement, the Note or any of the other
Loan Documents, any transfer of all or any portion of the Property (whether by Borrower or by
Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at any other time),
any amendment to this Security Instrument, the Loan Agreement, the Note or the other Loan
Documents, and any act or omission that might otherwise be construed as a release or discharge of
Borrower from the obligations pursuant hereto.

ARTICLE 10 — EXCULPATION

          The provisions of Section 9.4 of the Loan Agreement are hereby incorporated by reference into
this Security Instrument to the same extent and with the same force as if fully set forth herein.

ARTICLE 11 — NOTICES

          All notices or other written communications hereunder shall be delivered in accordance with
Section 10.6 of the Loan Agreement.

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ARTICLE 12 — APPLICABLE LAW

          Section 12.1 Governing Law. (a) SUBJECT TO THE PROVISIONS OF ARTICLE 15 OF THIS
SECURITY INSTRUMENT, THE PARTIES HEREBY AGREE AND IRREVOCABLY ELECT THAT, IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE
LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL OF THE
OBLIGATIONS ARISING HEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS SECURITY INSTRUMENT, AND THIS SECURITY INSTRUMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5 1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

          (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING
TO THIS SECURITY INSTRUMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5 1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CT CORPORATION SYSTEM

111 EIGHTH AVENUE, 13th FLOOR

NEW YORK, NEW YORK 10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID

28

 

AGENT AT SAID ADDRESS AND NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY
SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME
TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS),
AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

          Section 12.2 Usury Laws. Notwithstanding anything to the contrary, (a) all agreements
and communications between Borrower and Lender are hereby and shall automatically be limited so
that, after taking into account all amounts deemed interest, the interest contracted for, charged
or received by Lender shall never exceed the Maximum Legal Rate or amount, (b) in calculating
whether any interest exceeds the Maximum Legal Rate, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal indebtedness of
Borrower to Lender, and (c) if through any contingency or event, Lender receives or is deemed to
receive interest in excess of the Maximum Legal Rate, any such excess shall be deemed to have been
applied toward payment of the principal of any and all then outstanding indebtedness of Borrower to
Lender, or if there is no such indebtedness, shall immediately be returned to Borrower.

          Section 12.3 Provisions Subject to Applicable Law. All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that the exercise thereof
does not violate any applicable provisions of law and are intended to be limited to the extent
necessary so that they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term shall not be affected
thereby.

ARTICLE 13 — DEFINITIONS

          All capitalized terms not defined herein shall have the respective meanings set forth in the
Loan Agreement. Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Security Instrument may be used interchangeably in
singular or plural form and the word “Borrower” shall mean “each Borrower and any subsequent owner
or owners of the Property or any part thereof or any interest therein,” the word “Lender” shall
mean “Lender and any subsequent holder of the Note,” the word “Note” shall mean “the Note and any
other evidence of indebtedness secured by this Security Instrument,” the word “Property” shall
include any portion of the Property and any interest therein, and subject to the provisions of the
Loan Documents, the phrases “attorneys’ fees”, “legal fees” and “counsel fees” shall include any
and all attorneys, paralegal and law clerk fees

29

 

and disbursements, including, but not limited to, fees and disbursements at the pre-trial,
trial and appellate levels incurred or paid by Lender in protecting its interest in the Property,
the Leases and the Rents and enforcing its rights hereunder.

ARTICLE 14 — MISCELLANEOUS PROVISIONS

          Section 14.1 No Oral Change. This Security Instrument, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act
or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by
the party against whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.

          Section 14.2 Successors and Assigns. This Security Instrument shall be binding upon
and inure to the benefit of Borrower and Lender and their respective successors and assigns
forever.

          Section 14.3 Inapplicable Provisions. If any term, covenant or condition of the Loan
Agreement, the Note or this Security Instrument is held to be invalid, illegal or unenforceable in
any respect, the Loan Agreement, the Note and this Security Instrument shall be construed without
such provision.

          Section 14.4 Headings, etc. The headings and captions of various Sections of this
Security Instrument are for convenience of reference only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.

          Section 14.5 Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular form
of nouns and pronouns shall include the plural and vice versa.

          Section 14.6 Subrogation. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the
extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens,
titles, and interests existing against the Property heretofore held by, or in favor of, the holder
of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of Lender and are merged with the
lien and security interest created herein as cumulative security for the repayment of the Debt, the
performance and discharge of Borrower’s obligations hereunder, under the Loan Agreement, the Note
and the other Loan Documents and the performance and discharge of the Other Obligations.

          Section 14.7 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS SECURITY INSTRUMENT, THE NOTE,
OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.

30

 

          Section 14.8 Entire Agreement. The Note, the Loan Agreement, this Security Instrument
and the other Loan Documents constitute the entire understanding and agreement between Borrower and
Lender with respect to the transactions arising in connection with the Debt and supersede all prior
written or oral understandings and agreements between Borrower and Lender with respect thereto.
Borrower hereby acknowledges that, except as incorporated in writing in the Note, the Loan
Agreement, this Security Instrument and the other Loan Documents, there are not, and were not, and
no Persons are or were authorized by Lender to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the transaction which is the
subject of the Note, the Loan Agreement, this Security Instrument and the other Loan Documents.

          Section 14.9 Limitation on Lender’s Responsibility. No provision of this Security
Instrument shall operate to place any obligation or liability for the control, care, management or
repair of the Property upon Lender, nor shall it operate to make Lender responsible or liable for
any waste committed on the Property by the tenants or any other Person, or for any dangerous or
defective condition of the Property, or for any negligence in the management, upkeep, repair or
control of the Property resulting in loss or injury or death to any tenant, licensee, employee or
stranger unless such loss or damage is caused by fraud, willful misconduct, gross negligence or bad
faith of Lender or its agents. Nothing herein contained shall be construed as constituting Lender
a “mortgagee in possession.”

          Section 14.10 Conflict. In the event of any inconsistencies between the terms and
conditions hereof and the terms and conditions of the Loan Agreement, the terms of the Loan
Agreement shall control and be binding.

ARTICLE 15 — STATE-SPECIFIC PROVISIONS

          Section 15.1 Principles of Construction. In the event of any inconsistencies between
the terms and conditions of this Article 15 and the terms and conditions of this Security
Instrument, the terms and conditions of this Article 15 shall control and be binding.

          Section 15.2 Governing Law. At the end of Section 12.1 (Applicable Law), add
the following:

          “THIS SECURITY INSTRUMENT SHALL BE CONSTRUED, INTERPRETED, ENFORCED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW) AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN FLORIDA, EXCEPT THAT THE
LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, INTERPRETATION, ENFORCEMENT AND GOVERNANCE OF THE
NOTE, THE LOAN AGREEMENT AND THE DEBT AND THE OBLIGATIONS. THE PROCEDURES GOVERNING THE
ENFORCEMENT BY LENDER OF ITS FORECLOSURE AND PROVISIONAL REMEDIES AGAINST BORROWER UNDER THIS
SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS WITH RESPECT TO THE LAND OR OTHER ASSETS SITUATED
IN

31

 

FLORIDA, INCLUDING BY WAY OF ILLUSTRATION, BUT NOT LIMITATION, ACTIONS FOR FORECLOSURE,
REPLEVIN, FOR CLAIM AND DELIVERY OF PROPERTY, FOR INJUNCTIVE RELIEF OR FOR THE APPOINTMENT OF A
RECEIVER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.”

          Section 15.3 Future Advances. This Security Instrument is given to secure not only
the existing Debt, but also such future advances, whether such advances are obligatory or are to be
made at the option of Lender or the holder hereof 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 Security Instrument. The total amount of Debt that may be so secured by this
Security Instrument may be increased or decreased from time to time (as set forth in the Loan
Agreement), but the total unpaid balance so secured at any one time shall not exceed twice the face
amount of the Note, plus interest thereon, and any disbursements made under this Security
Instrument for the payment of impositions, taxes, assessments, levies, insurance, or otherwise with
interest on such disbursements at the rate set forth in the Note, plus any increases in the
principal balance as the result of negative amortization or deferred interest, if any. It is
agreed that any additional sum or sums advanced by Lender pursuant to the terms hereof shall be
equally secured with and have the same priority as the original Debt and shall be subject to all of
the terms, provisions and conditions of this Security Instrument, whether or not such additional
loans or advances are evidenced by other promissory notes or other guaranties of Borrower and
whether or not identified by a recital that it or they are secured by this Security Instilment. It
is further agreed that any additional promissory note or guaranty or promissory notes or guaranties
executed and delivered pursuant to this paragraph shall automatically be deemed to be included in
the term “Note” wherever each appears in the context of this Security Instrument. Without the
prior written consent of Lender, which Lender may grant or withhold in its sole discretion,
Borrower shall not file for record any notice limiting the maximum principal amount that may be
secured by this Security Instrument to a sum less than the maximum principal amount set form in
this paragraph.

[NO FURTHER TEXT ON THIS PAGE]

32

 

          IN WITNESS WHEREOF, this Security Instrument has been executed by Borrower as of the day and
year first above written.

BORROWER:

FELCOR ST. PETE (SPE), L.L.C.,

a Delaware limited liability company

	 	 	 	 	 
	By:

	 	/s/ Charles N. Nye
 

	 	 
	Name:

	 	Charles N. Nye	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	Signed, Sealed & Delivered in the	 	 
	presence of:	 	 
	 
	 	 	 	 
	/s/ Elizabeth Cowart	 	 
	 	 	 
	Name: Elizabeth Cowart	 	 
	 
	 	 	 	 
	/s/ Jesus Torres	 	 
	 	 	 
	Name: Jesus Torres	 	 
	 
	 	 	 	 
	FELCOR ST. PETE LEASING (SPE), L.L.C.,	 	 
	a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ Charles N. Nye	 	 
	 

	 	 	 	 
	Name:

	 	Charles N. Nye	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	Signed, Sealed & Delivered in the	 	 
	presence of:	 	 
	 
	 	 	 	 
	/s/ Elizabeth Cowart	 	 
	 	 	 
	Name: Elizabeth Cowart	 	 
	 
	 	 	 	 
	/s/ Jesus Torres	 	 
	 	 	 
	Name: Jesus Torres	 	 

33

 

	 	 	 	 	 	 	 
	STATE OF Texas

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.:
	COUNTY OF Dallas

	 	 	)	 	 	 

On the 11 day of December, 2007, before me, the undersigned, a Notary Public in and for
said State, personally appeared Charles Nye, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by
his/her signature on the instrument, the individuals, or the persons upon behalf of which the
individual acted, executed the instrument.

	 	 	 	 	 
	 	 	 
	 	/s/ Dana K. Drake
 	 
	 	         Notary Public 	 
	 	 	 
	 

[SEAL]

My commission expires:

       April 13, 2008

 

 

	 	 	 	 	 	 	 
	STATE OF Texas

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.:
	COUNTY OF Dallas

	 	 	)	 	 	 

     On the 11 day of December, 2007, before me, the undersigned, a Notary Public in and for
said State, personally appeared Charles Nye, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by
his/her signature on the instrument, the individuals, or the persons upon behalf of which the
individual acted, executed the instrument.

	 	 	 	 	 
	 	 	 
	 	/s/ Dana K. Drake
 	 
	 	         Notary Public 	 
	 	 	 
	 

[SEAL]

My commission expires:

       April 13, 2008

 

 

EXHIBIT A

(Legal Description)

All that certain lot, piece or parcel of land, with the buildings and improvements thereon erected,
situate, lying and being in the City of St. Petersburg, County of Pinellas and the State of Florida
and being more particularly described as follows:

PARCEL 1

HOTEL PHASE I

LOCATED IN SECTION 17, TOWNSHIP 31 SOUTH, RANGE 17 EAST, PINELLAS COUNTY, FLORIDA, BEING A PORTION
OF BAYWOOD PARK, LOTS I, J, K, L, M AND N, REVISED MAP OF BAYSHORE SUBDIVISION OF ST. PETERSBURG,
FLORIDA, AS RECORDED IN PLAT BOOK 3, PAGE 41, PUBLIC RECORDS OF HILLSBOROUGH COUNTY, FLORIDA, OF
WHICH PINELLAS COUNTY WAS FORMERLY A PART AND FURTHER REVISED IN PLAT BOOK 10, PAGE 35, PUBLIC
RECORDS OF PINELLAS COUNTY, FLORIDA, TOGETHER WITH A PORTION OF THE VACATED RIGHTS OF WAY OF NORTH
SHORE DRIVE AND 6TH AVENUE N.E., BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHWEST CORNER OF SAID LOT I, ALSO BEING THE INTERSECTION OF THE SOUTHERLY
RIGHT OF WAY OF 7TH AVENUE N.E., AND THE EASTERLY RIGHT OF WAY OF BEACH DRIVE N.E. AS A POINT OF
REFERENCE; THENCE SOUTH 89 DEG. 59’43” EAST, ALONG SAID 7TH AVENUE RIGHT OF WAY 200.00 FEET TO THE
POINT OF BEGINNING; THENCE CONTINUE SOUTH 89 DEG. 59’43” EAST, 1072.52 FEET TO THE INTERSECTION OF
THE WESTERLY RIGHT OF WAY OF BAY SHORE DRIVE N.E.; THENCE SOUTH 11 DEG. 53’59” WEST, ALONG SAID BAY
SHORE DRIVE N.E. RIGHT OF WAY 69.00 FEET TO A POINT BEGINNING A NON-TANGENT CURVE; THENCE ALONG THE
ARC OF SAID CURVE TO THE LEFT, HAVING A RADIUS OF 5767.87 FEET, ARC LENGTH OF 136.52 FEET, CHORD
BEARING OF SOUTH 08 DEG. 34’41” WEST, 136.51 FEET; THENCE WEST 876.35 FEET; THENCE SOUTH 397.58
FEET TO A POINT ON THE NORTHERLY RIGHT OF WAY OF 5TH AVENUE N.E.; THENCE WEST ALONG SAID RIGHT OF
WAY 661.33 FEET TO THE INTERSECTION OF THE AFOREMENTIONED BEACH DRIVE N.E. EASTERLY RIGHT OF WAY;
THENCE NORTH 00 DEG. 06’12” EAST, ALONG SAID RIGHT OF WAY, 112.06 FEET; THENCE NORTH 31 DEG. 32’10”
EAST, 334.99 FEET; THENCE EAST ALONG THE NORTH LINE OF SAID LOT J, 169.00 FEET; THENCE NORTH 29
DEG. 39’16” EAST, 155.44 FEET TO A POINT ON THE SOUTH LINE OF LOT I, THENCE SOUTH 89 DEG. 59’43”
EAST ALONG SAID LINE 78.45 FEET, THENCE NORTH 00 DEG. 01’02” WEST, 67.52 FEET TO THE POINT OF
BEGINNING.

ALSO KNOWN AS

A PORTION OF LOT 1, BLOCK 1 ACCORDING TO THE PLAT OF “VINOY REPLAT” AS RECORDED IN PLAT BOOK 105,
PAGES 91 AND 92 OF THE PUBLIC RECORDS OF

 

 

PINELLAS COUNTY, FLORIDA AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHWEST
CORNER OF SAID PLAT AS A POINT OF BEGINNING; RUN THENCE SOUTH 89 DEG. 59’43” EAST 1072.52 FEET TO
THE NORTHEAST CORNER OF SAID PLAT; THENCE SOUTH 11 DEG. 53’59” WEST AND ALONG THE EAST LINE THEREOF
69.00 FEET TO A POINT BEGINNING A NON-TANGENT CURVE; THENCE ALONG THE ARC OF SAID CURVE TO THE
LEFT, THE SAME BEING THE EASTERLY LINE OF SAID PLAT, HAVING A RADIUS OF 5767.87 FEET, ARC LENGTH OF
136.52 FEET, CHORD SOUTH 08 DEG. 34’41” WEST 136.51 FEET; THENCE WEST 876.35 FEET; THENCE SOUTH
397.58 FEET, TO A POINT OF THE SOUTH LINE OF SAID PLAT; THENCE WEST ALONG SAID SOUTH PLAT LINE
661.33 FEET TO THE SOUTHWEST CORNER OF SAID PLAT; THENCE TRAVERSE THE WESTERLY BOUNDARY OF SAID
PLAT BY THE FOLLOWING 6 COURSES. (1) NORTH 00 DEG. 06’12” EAST, 112.06 FEET, (2) NORTH 31 DEG.
32’10” EAST 334.99 FEET (3) EAST 169.00 FEET (4) NORTH 29 DEG. 39’16” EAST 155.44 FEET, (5) SOUTH
89 DEG. 59’43” EAST 78.45 FEET; (6) NORTH 00 DEG. 01’02” WEST 67.52 FEET TO THE POINT OF BEGINNING.

PARCEL 1

HOTEL PHASE II

LOCATED IN SECTION 17, TOWNSHIP 31 SOUTH, RANGE 17 EAST, PINELLAS COUNTY, FLORIDA BEING A PORTION
OF LOTS J, K, L, M AND N, REVISED MAP OF BAYSHORE SUBDIVISION OF ST. PETERSBURG, FLORIDA, AS
RECORDED IN PLAT BOOK 3, PAGE 41, PUBLIC RECORDS OF HILLSBOROUGH COUNTY, FLORIDA, OF WHICH PINELLAS
COUNTY WAS FORMERLY A PART, AND FURTHER REVISED IN PLAT BOOK 10, PAGE 35, PUBLIC RECORDS OF
PINELLAS COUNTY, FLORIDA, TOGETHER WITH PORTION OF THE VACATED RIGHT OF WAY OF 6TH AVENUE N.E.
BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCE AT THE SOUTHWEST CORNER OF SAID LOT N, ALSO BEING THE INTERSECTION OF THE EASTERLY RIGHT
OF WAY OF BEACH DRIVE N.E. AND THE NORTHERLY RIGHT OF WAY OF 5TH AVENUE N.E. AS A POINT OF
REFERENCE; THENCE EAST ALONG SAID 5TH AVENUE N.E. RIGHT OF WAY 661.33 FEET TO THE POINT OF
BEGINNING; THENCE NORTH 397.58 FEET; THENCE EAST 255.42 FEET; THENCE SOUTH 397.58 FEET TO THE
INTERSECTION WITH THE NORTH RIGHT OF WAY LINE OF 5TH AVENUE N.E.; THENCE WEST ALONG SAID RIGHT OF
WAY LINE 255.42 FEET TO THE POINT OF BEGINNING.

ALSO KNOWN AS

A PORTION OF LOT 1, BLOCK 1 ACCORDING TO THE PLAT OF “VINOY REPLAT” AS RECORDED IN PLAT BOOK 105,
PAGES 91 AND 92 OF THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS
FOLLOWS: COMMENCING AT THE SOUTHWEST CORNER OF SAID PLAT RUN THENCE EAST

 

 

ALONG THE SOUTH LINE THEREOF 661.33 FEET TO THE POINT OF BEGINNING; THENCE NORTH 397.58 FEET;
THENCE EAST 255.42 FEET; THENCE SOUTH 397.58 FEET TO THE SOUTH LINE OF SAID PLAT; THENCE WEST ALONG
SAID SOUTH LINE 255.42 FEET TO THE POINT OF BEGINNING.

PARCEL 1A

EASEMENT

AN EASEMENT FOR THE BENEFIT OF PARCEL 1 AS CREATED BY THAT CERTAIN DRAINAGE EASEMENT DATED FEBRUARY
22, 1990, RECORDED FEBRUARY 23, 1990, IN O. R. BOOK 7207, PAGE 1282, PUBLIC RECORDS OF PINELLAS
COUNTY, FLORIDA, FOR PERMANENT, EXCLUSIVE, RECIPROCAL DRAINAGE; DETENTION AND RETENTION,
MAINTENANCE, RECONSTRUCTION AND REPAIR OF THE PONDS AND LANDSCAPING OVER, UNDER AND ACROSS THE LAND
DESCRIBED ON EXHIBIT “C” AND EXHIBIT “D” THEREIN.

PARCEL 2 (MARINA)

THOSE CERTAIN SUBMERGED LANDS WITHIN THE NORTH YACHT BASIN LYING WITHIN THE NORTH 1/2 OF SECTION
20, TOWNSHIP 31, SOUTH, RANGE 17 EAST, COMMENCING AT THE SOUTHWEST CORNER OF LOT N, ACCORDING TO
THE REVISED MAP OF BAYSHORE SUBDIVISION, AS RECORDED IN PLAT BOOK 3, PAGE 41, PUBLIC RECORDS OF
HILLSBOROUGH COUNTY, FLORIDA, OF WHICH PINELLAS COUNTY WAS FORMERLY A PART AND FURTHER REVISED IN
PLAT BOOK 10, PAGE 35 PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA; RUN THENCE EAST ALONG THE SOUTH
LINE OF SAID LOT N, 24.79 FEET TO A CONCRETE MONUMENT; THENCE CONTINUE EAST ALONG SAID SOUTH LOT
LINE 389.03 FEET; THENCE SOUTH ACROSS THE RIGHT OF WAY OF 5TH AVENUE N.E. 80 FEET TO THE SOUTH
RIGHT OF WAY LINE OF 5TH AVENUE N.E. TO THE WATERSIDE FACE OF EXISTING BULKHEAD AND THE POINT OF
BEGINNING; THENCE RUN NORTH 89 DEG. 57’05” EAST ALONG THE SAID WATERSIDE NORTH BULKHEAD FACE,
740.54 FEET; THENCE SOUTH 27 DEG. 02’05” EAST ALONG THE WATERSIDE FACE OF EASTERLY BULKHEAD 257.93
FEET; THENCE WEST ACROSS THE NORTH YACHT BASIN, 964.25 FEET TO THE INTERSECTION WITH THE WATERSIDE
FACE OF THE WESTERLY BULKHEAD; THENCE NORTH 24 DEG. 55’28” EAST ALONG SAID WATERSIDE FACE 252.65
FEET TO THE POINT OF BEGINNING.

TOGETHER WITH RIGHTS OF USE OR EASEMENT OVER AND ACROSS THE EXISTING BULKHEADS LYING ALONG THE
BOUNDARY OF THE AFOREDESCRIBED SUBMERGED LANDS TO PROVIDE FOR ADEQUATE INGRESS AND EGRESS TO AND
FROM DOCKS AND BOAT SLIPS TO BE LOCATED IN OR ON THE AFORESAID PROPERTY TO AND FROM THE PUBLIC
STREETS AND SIDEWALKS.

 

 

ALSO KNOWN AS

THOSE CERTAIN SUBMERGED LANDS WITHIN THE NORTH YACHT BASIN (ALSO KNOWN AS THE VINOY YACHT BASIN)
LYING WITHIN THE NORTH 1/2 OF SECTION 20, TOWNSHIP 31, SOUTH RANGE 17 EAST, COMMENCING AT THE
SOUTHWEST CORNER OF LOT 1, BLOCK 1, ACCORDING TO THE VINOY REPLAT, AS RECORDED IN PLAT BOOK 105,
PAGES 91 AND 92, PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA; RUN THENCE EAST ALONG THE SOUTH LINE
OF LOT N, ACCORDING TO THE REVISED MAP OF BAYSHORE SUBDIVISION PLAT BOOK 3, PAGE 41, PUBLIC RECORDS
OF HILLSBOROUGH COUNTY, FLORIDA, OF WHICH PINELLAS COUNTY WAS FORMERLY A PART OF AND FURTHER
REVISED IN PLAT BOOK 10, PAGE 35, PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, 24.79 FEET TO A
CONCRETE MONUMENT; THENCE CONTINUE EAST ALONG SAID SOUTH LOT LINE 389.03 FEET; THENCE SOUTH ACROSS
THE RIGHT OF WAY OF 5TH AVENUE N.E., 80 FEET TO THE SOUTH RIGHT OF WAY LINE OF 5TH AVENUE N.E. TO
THE WATERSIDE FACE OF EXISTING BULKHEAD AND THE POINT OF BEGINNING; THENCE RUN NORTH 89 DEG. 57’05”
EAST ALONG SAID WATERSIDE NORTH BULKHEAD FACE 740.54 FEET; THENCE SOUTH 27 DEG. 02’05” EAST ALONG
THE WATERSIDE FACE OF EASTERLY BULKHEAD 257.93 FEET; THENCE WEST ACROSS THE NORTH YACHT BASIN,
964.25 FEET TO THE INTERSECTION WITH THE WATERSIDE FACE OF THE WESTERLY BULKHEAD; THENCE NORTH 24
DEG. 55’28” EAST ALONG SAID WATERSIDE FACE 252.65 FEET TO THE POINT OF BEGINNING.

PARCEL 3

GOLF COURSE

FROM THE SOUTHWEST CORNER OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 8, TOWNSHIP 31
SOUTH, RANGE 17 EAST, RUN NORTH 56 DEG. 49’22” EAST, 586.15 FEET TO A POINT OF BEGINNING, THENCE
NORTH 49 DEG. 02’31” WEST, 218.41 FEET; THENCE SOUTH 47 DEG. 09’00” WEST, 501.00 FEET; THENCE NORTH
88 DEG. 03’59” WEST, 261.00 FEET; THENCE NORTH 49 DEG. 18’00” WEST, 101.78 FEET; THENCE SOUTH 47
DEG. 09’ WEST, 27.81 FEET; THENCE NORTH 86 DEG. 52’29” WEST, 344.12 FEET; THENCE NORTH 84 DEG.
41’23” WEST, 530.23 FEET; THENCE SOUTH 77 DEG. 25’19” WEST, 114.21 FEET; THENCE NORTH 37 DEG.
57’46” WEST, 114.28 FEET; THENCE NORTH 50 DEG. 06’53” WEST, 297.93 FEET; THENCE NORTH 12 DEG.
05’15” WEST, 809.77 FEET; THENCE NORTH 01 DEG. 06’29” WEST, 309.86 FEET; THENCE NORTH 05 DEG.
44’51” EAST, 287.0 FEET; THENCE NORTH 00 DEG. 32’49” WEST, 284.38 FEET; THENCE SOUTH 84 DEG. 18’51”
WEST, 401.64 FEET; THENCE NORTH 85 DEG. 18’39” WEST, 437.03 FEET; THENCE NORTH 01 DEG. 18’50” WEST,
380.00 FEET THENCE NORTH 88 DEG. 45’03” EAST, 1263.30 FEET; THENCE SOUTH 72 DEG. 44’32” EAST, 67.25
FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 508.64 FEET, ARC 11.75 FEET, CHORD SOUTH 86 DEG.
47’18” EAST, 11.75 FEET; THENCE SOUTH 06 DEG. EAST, 1083.74; THENCE BY A CURVE TO THE LEFT,

 

 

RADIUS 735 FEET; ARC 436.88 FEET, CHORD SOUTH 23 DEG. 01’41” EAST, 430.47 FEET; THENCE NORTH 65
DEG. 49’07” EAST, 112.03 FEET; THENCE SOUTH 47 DEG. 44’36” EAST, 56.44 FEET; THENCE NORTH 59 DEG.
45’20” EAST, 61.47 FEET; THENCE NORTH 51 DEG. 35’40” EAST, 56.34 FEET; THENCE NORTH 61 DEG. 30’48”
EAST, 124.56 FEET; THENCE NORTH 62 DEG. 28’49” EAST, 50.19 FEET; THENCE NORTH 54 DEG. 36’55” EAST,
78.19 FEET; THENCE NORTH 46 DEG. 39’10” EAST, 21.33 FEET; THENCE NORTH 35 DEG. 43’40” EAST, 8.89
FEET TO THE INTERSECTION WITH THE EAST-WEST CENTERLINE OF SECTION 8, TOWNSHIP 31 SOUTH, RANGE 17
EAST, THENCE NORTH 88 DEG. 33’59” EAST, 175.05 FEET ALONG SAID CENTERLINE; THENCE NORTH 49 DEG.
02’31” WEST, 63.10 FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 830 FEET, ARC 699.44 FEET, CHORD
NORTH 39 DEG. 25’30” EAST, 678.93 FEET; THENCE NORTH 63 DEG. 34’ EAST, 950.00 FEET; THENCE BY A
CURVE TO THE RIGHT, RADIUS 100 FEET, ARC 203.21 FEET, CHORD SOUTH 58 DEG. 13’ EAST, 170.01 FEET;
THENCE SOUTH 610 FEET; THENCE BY A CURVE TO THE LEFT, RADIUS 645 FEET; ARC 260.38 FEET, CHORD SOUTH
11 DEG. 33’53” EAST, 258.61 FEET TO THE INTERSECTION WITH THE EAST-WEST CENTERLINE OF SECTION 8,
TOWNSHIP 31 SOUTH, RANGE 17 EAST, THENCE NORTH 88 DEG. 33’59” EAST, 275.22 FEET ALONG SAID
CENTERLINE; THENCE SOUTH 67.57 FEET; THENCE SOUTH 16 DEG. 05’04” WEST, 421.32 FEET; THENCE BY A
CURVE TO THE LEFT, RADIUS 4,000 FEET, ARC 922.04 FEET, CHORD SOUTH 88 DEG. 46’28” EAST, 920.00
FEET; THENCE BY A CURVE TO THE LEFT, RADIUS 800 FEET, ARC 128.85 FEET, CHORD NORTH 80 DEG. 00’28”
EAST, 128.71 FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 850 FEET, ARC 424.38 FEET, CHORD NORTH 89
DEG. 41’49” EAST, 419.99 FEET; THENCE BY A CURVE TO THE LEFT, RADIUS 615 FEET, ARC 591.44 FEET,
CHORD SOUTH 13 DEG. 33’02” EAST, 568.91 FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 435 FEET, ARC
77.96 FEET; CHORD SOUTH 70 DEG. 28’56” WEST, 77.86 FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS
1806 FEET, ARC 604.26 FEET, CHORD SOUTH 85 DEG. 12’06” WEST, 601.45 FEET; THENCE SOUTH 03 DEG.
12’02” WEST, 197.07 FEET; THENCE BY A CURVE TO THE LEFT, RADIUS 981.18 FEET, ARC 46.16 FEET, CHORD
SOUTH 88 DEG. 55’54” WEST, 46.16 FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 620 FEET, ARC 272.72
FEET, CHORD NORTH 79 DEG. 48’53” WEST 270.52 FEET, THENCE BY A CURVE TO THE LEFT, RADIUS 915 FEET,
ARC 172.98 FEET, CHORD NORTH 72 DEG. 37’47” WEST, 172.19 FEET; THENCE BY A CURVE TO THE RIGHT,
RADIUS 1009.00 FEET, ARC 234.51 FEET, CHORD NORTH 71 DEG. 23’15” WEST, 233.98 FEET; THENCE BY A
CURVE TO THE LEFT, RADIUS 612.07 FEET, ARC 404.66 FEET, CHORD NORTH 83 DEG. 40’10” WEST, 397.33
FEET; THENCE BY A CURVE TO THE RIGHT, RADIUS 272 FEET, ARC 209.42 FEET; CHORD NORTH 80 DEG. 33’12”
WEST, 204.28 FEET; THENCE NORTH 58 DEG. 29’48” WEST, 190.86 FEET; THENCE NORTH 49 DEG. 02’31” WEST,
30 FEET; THENCE SOUTH 40 DEG. 57’29” WEST, 171.10 FEET; THENCE NORTH 49 DEG. 02’31” WEST, 30 FEET
TO THE POINT OF BEGINNING.

TOGETHER WITH:

THAT CERTAIN PARCEL VACATED STREET AND/OR EASEMENT FOR STREET

 

 

SHOWN AS CENTER CIRCLE IN THE MAP OR PLAT OF SNELL ISLE ACREAGE (UNPLATTED LANDS), RECORDED IN PLAT
BOOK 16, PAGE 90, AND IN THE MAP OR PLAT OF BRIGHTWATERS SECTION 2 OF SNELL ISLE RECORDED IN PLAT
BOOK 13, PAGE 74, PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA.

TOGETHER WITH:

LOT 376 OF SNELL ISLE INC., BRIGHTWATERS SECTION 2, OF SNELL ISLE, AS RECORDED IN PLAT BOOK 13,
PAGE 74, PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA.

LESS AND EXCEPT THE FOLLOWING DESCRIBED PORTIONS THEREOF:

	A)	 	THOSE LANDS PLATTED AS SUNSET SNELL ISLE SHORES REPLAT, AS RECORDED IN PLAT BOOK 54, PAGE 61,
PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA;

	B)	 	THOSE LANDS PLATTED AS SUNSET BRIGHTSIDE SUBDIVISION, AS RECORDED IN PLAT BOOK 52, PAGE 21,
PUBLIC RECORDS OF PINELLAS COUNTY; FLORIDA;

	C)	 	THOSE LANDS PLATTED AS SNELL ISLE SUNSET SUBDIVISION, AS RECORDED IN PLAT BOOK 78, PAGE 90,
PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA;

	D)	 	THOSE LANDS PLATTED AS EDEN SHORES-RIETH REPLAT, AS RECORDED IN PLAT BOOK 60, PAGE 53, PUBLIC
RECORDS OF PINELLAS COUNTY, FLORIDA;

	E)	 	THOSE LANDS PLATTED AS SUNSET SHORES, AS RECORDED IN PLAT BOOK 35, PAGE 63, PUBLIC RECORDS OF
PINELLAS COUNTY, FLORIDA;

	F)	 	THOSE LANDS PLATTED AS EDEN SHORES SECTION EIGHT, AS RECORDED IN PLAT BOOK 48, PAGE 19,
PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA;

	G)	 	THAT CERTAIN PARCEL OF LAND BEGINNING AT THE SOUTHWEST CORNER OF LOT 26, BLOCK 4, EDEN SHORES
SECTION THREE, AS RECORDED IN PLAT BOOK 34, PAGE 2, PUBLIC RECORDS OF PINELLAS COUNTY,
FLORIDA; THENCE RUN NORTH 29 DEG. 38’31” WEST 138.14 FEET TO THE SOUTHWEST CORNER OF LOT 1 OF
EDEN SHORES SECTION EIGHT, AS RECORDED IN PLAT BOOK 48, PAGE 19, PUBLIC RECORDS OF PINELLAS
COUNTY, FLORIDA; THENCE ALONG THE SOUTH BOUNDARY OF SAID LOT 1 TO THE NORTHWEST CORNER OF SAID
LOT 26, BLOCK 4, EDEN SHORES

 

 

	 	 	SECTION THREE, RUN THENCE SOUTH ALONG THE WEST BOUNDARY OF SAID LOT 26 TO THE POINT OF
BEGINNING.

ALSO DESCRIBED AS FOLLOWS:

LOT 376 AND A PORTION OF CENTER CIRCLE OF SNELL ISLE INC. BRIGHTWATERS SECTION 2 OF SNELL ISLE, AS
RECORDED IN PLAT BOOK 13, PAGE 74, PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, TOGETHER WITH THOSE
PORTIONS OF BLOCK 2, OF OWENS, BASKIN AND OWENS REPLAT, AS RECORDED IN PLAT BOOK 25, PAGE 15, OF
THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA, TOGETHER WITH THOSE PORTIONS OF TRACT F OF MAP OF
SNELL ISLE ACREAGE, AS RECORDED IN PLAT BOOK 16, PAGE 91, PUBLIC RECORDS OF PINELLAS COUNTY,
FLORIDA, TOGETHER WITH THOSE PORTIONS OF SECTIONS 8 AND 9 TOWNSHIP 31 SOUTH, RANGE 17 EAST,
PINELLAS COUNTY, FLORIDA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCE AT THE SOUTHWEST CORNER OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION 8;
THENCE NORTH 56 DEG. 49’22” EAST, 586.15 FEET TO THE POINT OF BEGINNING; THENCE NORTH 49 DEG.
02’31” WEST, 218.41 FEET; THENCE SOUTH 47 DEG. 09’00” WEST, 501.00 FEET; THENCE NORTH 88 DEG.
03’59” WEST, 261.00 FEET; THENCE NORTH 49 DEG. 18’00” WEST, 101.78 FEET; THENCE SOUTH 47 DEG.
09’00” WEST, 27.81 FEET; THENCE NORTH 86 DEG. 52’29” WEST, 344.12 FEET; THENCE NORTH 84 DEG. 41’23”
WEST, 530.23 FEET; THENCE SOUTH 77 DEG. 25’19” WEST, 114.21 FEET; THENCE NORTH 37 DEG. 57’46” WEST,
114.28 FEET; THENCE NORTH 50 DEG. 06’53” WEST, 297.93 FEET; THENCE NORTH 12 DEG. 05’15” WEST,
809.77 FEET; THENCE NORTH 01 DEG. 06’29” WEST, 309.86 FEET; THENCE NORTH 05 DEG. 44’51” EAST,
287.00 FEET; THENCE NORTH 00 DEG. 32’49” WEST, 284.38 FEET; THENCE SOUTH 84 DEG. 18’51” WEST,
401.64 FEET; THENCE NORTH 85 DEG. 18’39” WEST, 437.03 FEET; THENCE NORTH 01 DEG. 18’50” WEST,
280.00 FEET; THENCE NORTH 88 DEG. 45’03” EAST, 80.00 FEET; THENCE NORTH 01 DEG. 18’50” WEST, 20
FEET; THENCE NORTH 88 DEG. 45’03” EAST 20 FEET, THENCE NORTH 01 DEG. 18’50” WEST, 80 FEET; THENCE
NORTH 88 DEG. 45’03” EAST, 1163.30 FEET; THENCE SOUTH 72 DEG. 44’32” EAST, 67.25 FEET TO A CURVE
CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 508.64 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE,
11.75 FEET (C.B. SOUTH 86 DEG. 47’18” EAST, 11.75 FEET); THENCE NON-TANGENT, SOUTH 06 DEG. 00’00”
EAST, 1083.74 FEET TO A CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 735.00 FEET; THENCE
SOUTHEASTERLY ALONG SAID CURVE, 436.88 FEET (C.B. SOUTH 23 DEG. 01’41” EAST, 430.47 FEET); THENCE
NON-TANGENT, NORTH 65 DEG. 49’07” EAST, 112.03 FEET; THENCE SOUTH 47 DEG. 44’36” EAST, 56.44 FEET;
THENCE NORTH 59 DEG. 45’20” EAST, 61.47 FEET; THENCE NORTH 51 DEG. 35’40” EAST, 56.34 FEET; THENCE
NORTH 61 DEG. 30’48” EAST, 124.56 FEET; THENCE NORTH 62 DEG. 28’49” EAST, 50.19 FEET; THENCE NORTH
54 DEG. 36’55” EAST, 78.19 FEET; THENCE NORTH 46 DEG. 39’10” EAST, 21.33 FEET; THENCE NORTH 35 DEG.
43’40” EAST, 8.89 FEET TO THE INTERSECTION WITH THE EAST-WEST CENTERLINE OF SAID SECTION 8; THENCE
NORTH 88 DEG. 33’59” EAST, 175.05 FEET ALONG SAID

 

 

CENTERLINE; THENCE NORTH 49 DEG. 02’31” WEST, 63.10 FEET TO A NON-TANGENT CURVE CONCAVE
SOUTHEASTERLY AND HAVING A RADIUS OF 830.00 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE, 699.44
FEET (C.B. NORTH 39 DEG. 25’30” EAST, 678.93 FEET); THENCE NORTH 63 DEG. 34’00” EAST, 950.00 FEET
TO A CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 100.00 FEET; THENCE SOUTHEASTERLY ALONG
SAID CURVE, 203.21 FEET (C.B. SOUTH 58 DEG. 13’00” EAST, 170.01 FEET); THENCE SOUTH 610.00 FEET TO
A CURVE CONCAVE-NORTHEASTERLY AND HAVING A RADIUS OF 645.00 FEET; THENCE SOUTHEASTERLY ALONG SAID
CURVE, 260.38 FEET (C.B. SOUTH 11 DEG. 33’53” EAST, 258.61 FEET); THENCE NON-TANGENT, NORTH 88 DEG.
33’59” EAST, 161.91 FEET; THENCE SOUTH 11 DEG. 36’16” WEST, 356.88 FEET; THENCE SOUTH 29 DEG.
38’31” EAST, 138.14 FEET TO A NON-TANGENT CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 4000.00
FEET; THENCE EASTERLY ALONG SAID CURVE, 922.04 FEET (C.B. SOUTH 88 DEG. 46’28” EAST, 920.00 FEET)
TO A COMPOUND CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE EASTERLY ALONG
SAID CURVE, 128.85 (C.B. NORTH 80 DEG. 00’28” EAST, 128.71 FEET) TO A REVERSE CURVE CONCAVE
SOUTHERLY AND HAVING A RADIUS OF 850.00 FEET; THENCE EASTERLY ALONG SAID CURVE 424.38 FEET (C.B.
NORTH 89 DEG. 41’49” EAST, 419.99 FEET) TO A NON-TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS
OF 615.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE 418.66 FEET (C.B. SOUTH 05 DEG. 30’08” EAST,
410.62 FEET); THENCE NON-TANGENT, SOUTH 78 DEG. 11’18” WEST, 210.00 FEET; THENCE SOUTH 19 DEG.
34’40” EAST, 172.05 FEET TO A NON-TANGENT CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 1806.00
FEET; THENCE WESTERLY ALONG SAID CURVE, 432.22 FEET (C.B. SOUTH 87 DEG. 55’51” WEST, 431.18 FEET);
THENCE NON-TANGENT, SOUTH 03 DEG. 12’02” WEST, 9.45 FEET; THENCE NORTH 59 DEG. 58’58” WEST, 92.55
FEET; THENCE SOUTH 79 DEG. 05’21” WEST, 147.62 FEET; THENCE SOUTH 89 DEG. 24’59” WEST, 52.28 FEET;
THENCE NORTH 85 DEG. 56’14” WEST, 163.39 FEET; THENCE SOUTH 03 DEG. 12’02” WEST, 127.87 FEET TO A
NON-TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 915.00 FEET; THENCE NORTHWESTERLY
ALONG SAID CURVE, 41.36 FEET (C.B. NORTH 76 DEG. 45’02” WEST, 41.35 FEET) TO A REVERSE CURVE
CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1009.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE
234.51 FEET (C.B. NORTH 71 DEG. 23’15” WEST, 233.98 FEET) TO A REVERSE CURVE CONCAVE SOUTHWESTERLY
AND HAVING A RADIUS OF 612.07 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE 404.66 FEET (C.B. NORTH
83 DEG. 40’10” WEST, 397.33 FEET) TO A REVERSE CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF
272.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE, 209.42 FEET (C.B. NORTH 80 DEG. 33’12” WEST,
204.28 FEET); THENCE NORTH 58 DEG. 29’48” WEST, 119.85 FEET; THENCE SOUTH 40 DEG. 58’09” WEST,
182.66 FEET; THENCE NORTH 49 DEG. 02’31” WEST, 130.00 FEET TO THE POINT OF BEGINNING.

SNELL ISLE PARCEL

 

 

TOGETHER WITH:

THAT PORTION OF SNELL ISLE BOULEVARD (RIGHT-OF-WAY WIDTH VARIES) LYING IN SECTION 8, TOWNSHIP 31
SOUTH, RANGE 17 EAST, PINELLAS COUNTY, FLORIDA BEING FURTHER DESCRIBED AS FOLLOWS:

COMMENCE AT THE SOUTHWEST CORNER OF LOT 376 OF SNELL ISLE INC., BRIGHTWATERS SECTION 2 OF SNELL
ISLE, AS RECORDED IN PLAT BOOK 13, PAGE 74, OF THE PUBLIC RECORDS OF PINELLAS COUNTY, FLORIDA;
THENCE ALONG THE SOUTHERLY BOUNDARY OF SAID LOT 376 AND THE NORTHEASTERLY BOUNDARY OF SNELL ISLE
BOULEVARD (RIGHT-OF-WAY WIDTH VARIES), NORTH 49 DEG. 02’31” WEST, 223.41 FEET TO THE POINT OF
BEGINNING; THENCE LEAVING SAID LINE SOUTH 40 DEG. 57’29” WEST, 32.00 FEET; THENCE NORTH 49 DEG.
02’31” WEST, 128.47 FEET; THENCE NORTH 47 DEG. 09’00” EAST, 32.19 FEET TO SAID NORTH RIGHT-OF-WAY
LINE; THENCE ALONG SAID LINE SOUTH 49 DEG. 02’31” EAST, 125.00 FEET TO THE POINT OF BEGINNING.

AND TOGETHER WITH:

OUT PARCEL #1

CERTAIN REAL PROPERTY IN SECTION 8, TOWNSHIP 31 SOUTH, RANGE 17 EAST, PINELLAS COUNTY, FLORIDA,
BEING FURTHER DESCRIBED AS FOLLOWS:

COMMENCE AT THE SOUTHWEST CORNER OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SAID SECTION 8;
THENCE NORTH 56 DEG. 49’22” EAST, 586.15 FEET; THENCE NORTH 49 DEG. 02’31” WEST, 218.41 FEET;
THENCE SOUTH 47 DEG. 09’00” WEST, 501.00 FEET FOR A POINT OF BEGINNING; THENCE NORTH 88 DEG. 03’59”
WEST, 261.00 FEET; THENCE SOUTH 49 DEG. 18’00” EAST A DISTANCE OF 185.03 FEET; THENCE NORTH 47 DEG.
09’00” EAST A DISTANCE OF 164.47 FEET TO THE POINT OF BEGINNING.

PARCEL 3A:

TOGETHER WITH THE BENEFITS DERIVED FROM THAT CERTAIN TEMPORARY EASEMENT AND RESTRICTIVE COVENANT
AGREEMENT RECORDED SEPTEMBER 18, 1992 IN O.R. BOOK 8034, PAGE 793, PUBLIC RECORDS OF PINELLAS
COUNTY, FLORIDA.exv10w3

 

Exhibit 10.3

PACKETEER, INC.

STOCK OPTION AGREEMENT

RECITALS

          A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board or of the board of directors of any Parent or
Subsidiary and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).

          B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Corporation’s grant of an option to Optionee.

          C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date, an option
to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares
shall be purchasable from time to time during the option term specified in Paragraph 2 at the
Exercise Price.

          2. Option Term. This option shall have a maximum term of ten (10) years measured from the
Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless
sooner terminated in accordance with Paragraph 5 or 6.

          3. Limited Transferability.

               (a) This option shall be neither transferable nor assignable by
Optionee other than by will or by the laws of inheritance following Optionee’s death and may be
exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding such option. Such beneficiary or beneficiaries shall take
the transferred option subject to all the terms and conditions of this Agreement, including
(without limitation) the limited time period during which this option may, pursuant to Paragraph 5,
be exercised following Optionee’s death.

               (b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may, in connection with the Optionee’s estate plan, be assigned
in whole or in part during Optionee’s lifetime to one or more members of Optionee’s immediate
family or to a trust established for the exclusive benefit of one or more such family members. The
assigned portion shall be exercisable only by the person or persons who acquire a proprietary
interest in the option pursuant to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately prior to such assignment.

 

 

               4. Dates of Exercise. This option shall become exercisable for the Option Shares in one or
more installments as specified in the Grant Notice. As the option becomes exercisable for such
installments, those installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the option term under
Paragraph 5 or 6.

               5. Cessation of Service. The option term specified in Paragraph 2 shall terminate (and this
option shall cease to be outstanding) prior to the Expiration Date should any of the following
provisions become applicable:

                    (a) Should Optionee cease to remain in Service for any reason (other than death, Permanent
Disability or Misconduct) while holding this option, then Optionee shall have a period of three (3)
months (commencing with the date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time after the Expiration Date.

                    (b) Should Optionee die while holding this option, then the personal representative of
Optionee’s estate or the person or persons to whom the option is transferred pursuant to Optionee’s
will or the laws of inheritance shall have the right to exercise this option. However, if Optionee
has designated one or more beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee’s death. Any such right to exercise this
option shall lapse, and this option shall cease to be outstanding, upon the earlier of (i) the
expiration of the twelve (12)-month period measured from the date of Optionee’s death or (ii) the
Expiration Date.

                    (c) Should Optionee cease Service by reason of Permanent Disability while holding this option,
then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation
of Service) during which to exercise this option. In no event shall this option be exercisable at
any time after the Expiration Date.

                    (d) During the limited period of post-Service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time of Optionee’s cessation of Service. Upon the expiration of such limited exercise period or
(if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for
any exercisable Option
Shares for which the option has not been exercised. However, this option shall, immediately
upon Optionee’s cessation of Service for any reason, terminate and cease to be outstanding with
respect to any Option Shares for which this option is not otherwise at that time exercisable.

                    (e) Should Optionee’s Service be terminated for Misconduct or should Optionee otherwise engage
in Misconduct while this option is outstanding, then this option shall terminate immediately and
cease to remain outstanding.

2

 

          6. Special Acceleration of Option.

               (a) This option, to the extent outstanding at the time of a Corporate
Transaction but not otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the effective date of such Corporate Transaction, become exercisable
for all of the Option Shares at the time subject to this option and may be exercised for any or all
of those Option Shares as fully vested shares of Common Stock. No such acceleration of this option
shall occur, however, if and to the extent: (i) this option is, in connection with the Corporate
Transaction, to be assumed by the successor corporation (or parent thereof) or (ii) this option is
to be replaced with a cash incentive program of the successor corporation which preserves the
spread existing at the time of the Corporate Transaction on any Option Shares for which this option
is not otherwise at that time exercisable (the excess of the Fair Market Value of those Option
Shares over the aggregate Exercise Price payable for such shares) and provides for subsequent
payout in accordance with the same option exercise/vesting schedule set forth in the Grant Notice.

               (b) Immediately following the Corporate Transaction, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction, then this option
shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to Optionee in consummation of such
Corporate Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.

               (d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

          7. Adjustment in Option Shares. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the total number and/or class of
securities subject to this option and (ii) the Exercise Price in order to reflect such change and
thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any stockholder rights with
respect to the Option Shares until such person shall have exercised the option, paid the Exercise
Price and become a holder of record of the purchased shares.

3

 

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the
Option Shares for which this option is at the time exercisable, Optionee (or any other person or
persons exercising the option) must take the following actions:

               (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares
for which the option is exercised.

               (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the
following forms:

               (A) cash or check made payable to the Corporation;

               (B) a promissory note payable to the Corporation, but only to the extent
authorized by the Plan Administrator in accordance with Paragraph 13;

               (C) shares of Common Stock held by Optionee (or any other person or persons
exercising the option) for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date; or

               (D) through a special sale and remittance procedure pursuant to which Optionee
(or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions (i) to a
Corporation-designated brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise Price payable for
the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation by reason of such
exercise and (ii) to the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale.

     Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must accompany
the Notice of Exercise delivered to the Corporation in connection with the option
exercise.

               (iii) Furnish to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

4

 

               (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary
employing or retaining Optionee) for the satisfaction of all Federal, state and local
income and employment tax withholding requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf
of Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any fractional shares.

          10. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares
upon such exercise shall be subject to compliance by the Corporation and Optionee with all
applicable requirements of law relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.

               (b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common Stock as to which such approval
shall not have been obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and 6,
the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.

          12. Notices. Any notice required to be given or delivered to the Corporation under the terms
of this Agreement shall be in writing and addressed to the Corporation at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee’s signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.

          13. Financing. The Plan Administrator may, in its absolute discretion and without any
obligation to do so, permit Optionee to pay the Exercise Price for the purchased Option Shares by
delivering a full-recourse promissory note payable to the Corporation. The terms of any such
promissory note (including the interest rate, the requirements for collateral and the terms of
repayment) shall be established by the Plan Administrator in its sole discretion.

5

 

          14. Construction. This Agreement and the option evidenced hereby are made and granted pursuant
to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions
of the Plan Administrator with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in this option.

          15. Governing Law. The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California without resort to that State’s conflict-of-laws
rules.

          16. Excess Shares. If the Option Shares covered by this Agreement exceed, as of the Grant
Date, the number of shares of Common Stock which may without stockholder approval be issued under
the Plan, then this option shall be void with respect to those excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.

          17. Additional Terms Applicable to an Incentive Option. In the event this option is designated
an Incentive Option in the Grant Notice, the following terms and conditions shall also apply to the
grant:

               (a) This option shall cease to qualify for favorable tax treatment as an Incentive Option if
(and to the extent) this option is exercised for one or more Option Shares: (A) more than three (3)
months after the date Optionee ceases to be an Employee for any reason other than death or
Permanent Disability or (B) more than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability.

               (b) No installment under this option shall qualify for favorable tax treatment as an Incentive
Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the
Common Stock for which such installment first becomes exercisable hereunder would, when added to
the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or
Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand
Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation
be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess
shares in such calendar year as a Non-Statutory Option.

               (c) Should the exercisability of this option be accelerated upon a Corporate Transaction, then
this option shall qualify for favorable tax treatment as an Incentive Option only to the extent the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this
option first becomes exercisable in the calendar year in which the Corporate Transaction occurs
does not, when added to the aggregate value (determined as of the respective date or dates of
grant) of the Common Stock or other securities for which this option

6

 

or one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under
the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in
the calendar year of such Corporate Transaction, the option may nevertheless be exercised for the
excess shares in such calendar year as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or more other options to purchase
Common Stock which become exercisable for the first
time in the same calendar year as this option, then the foregoing limitations on the
exercisability of such options as Incentive Options shall be applied on the basis of the order in
which such options are granted.

7

 

EXHIBIT I

NOTICE OF EXERCISE

          I hereby notify Packeteer, Inc. (the “Corporation”) that I elect to purchase                                         
shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of $                    
per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted to me under
the Corporation’s 1999 Stock Incentive Plan on ____,                     .

          Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of
my agreement with the Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in
my agreement to effect payment of the Exercise Price.

	 	, 	 	 	 
	 

	 	 

	 	 
	Date
	 	 	 	 

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Print name in exact manner it is to
appear on the stock certificate:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address to which certificate is to
be sent, if different from address
above:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Social Security Number:
	 	 	 	 	 	 
	 	 	 	 	 

 

 

APPENDIX

The following definitions shall be in effect under the Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B. Board shall mean the Corporation’s Board of Directors.

     C. Common Stock shall mean shares of the Corporation’s common stock.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Corporate Transaction shall mean either of the following stockholder-approved
transactions to which the Corporation is a party:

          (i) a merger or consolidation in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction, or

          (ii) the sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation.

     F. Corporation shall mean Packeteer, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of Packeteer, Inc. which
shall by appropriate action adopt the Plan.

     G. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.

     H. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of the Agreement.

     I. Exercise Price shall mean the exercise price per Option Share as specified in the Grant
Notice.

     J. Expiration Date shall mean the date on which the option expires as specified in the Grant
Notice.

     K. Fair Market Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

A-1

 

          (i) If the Common Stock is at the time traded on the Nasdaq National Market, then the
Fair Market Value shall be deemed equal to the closing selling price per share of Common
Stock on the date in question, as the price is reported by the National Association of
Securities Dealers on the Nasdaq National Market. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists, or

          (ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be deemed equal to the closing selling price per share of Common Stock
on the date in question on the Stock Exchange determined by the Plan Administrator to be
the primary market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.

     L. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

     M. Grant Notice shall mean the Notice of Grant of Stock Option accompanying the Agreement,
pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby.

     N. Incentive Option shall mean an option which satisfies the requirements of Code Section 422.

     O. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by
Optionee, any unauthorized use or disclosure by Optionee of confidential information or trade
secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by
Optionee adversely affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of
all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of Optionee or any other individual in the Service of the
Corporation (or any Parent or Subsidiary).

     P. Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code
Section 422.

     Q. Notice of Exercise shall mean the notice of exercise in the form attached hereto as Exhibit
I.

     R. Option Shares shall mean the number of shares of Common Stock subject to the option as
specified in the Grant Notice.

A-2

 

     S. Optionee shall mean the person to whom the option is granted as specified in the Grant
Notice.

     T. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

     U. Permanent Disability shall mean the inability of Optionee to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which is
expected to result in death or has lasted or can be expected to last for a continuous period of
twelve (12) months or more.

     V. Plan shall mean the Corporation’s 1999 Stock Incentive Plan.

     W. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.

     X. Service shall mean the Optionee’s performance of services for the Corporation (or any
Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor.

     Y. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange.

     Z. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

A-3

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