S-11

As filed with the Securities and Exchange Commission on May 13, 2010

Registration Statement No. 333-      

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form S-11

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933 OF CERTAIN REAL ESTATE COMPANIES

FELCOR LODGING TRUST INCORPORATED

(Exact Name of Registrant as Specified in its Governing Instruments)

545 E. John Carpenter Frwy., Suite 1300

Irving, Texas 75062

(972) 444-4900

(Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)

Jonathan H. Yellen

Executive Vice President and General Counsel

545 E. John Carpenter Frwy., Suite 1300

Irving, Texas 75062

(972) 444-4900

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

With copies to:

Robert W. Dockery
Akin Gump Strauss Hauer & Feld LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
(214) 969-4316 William M. Hartnett
Stuart G. Downing
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005-1702
(212) 701-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, or Securities Act, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering  o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company o

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

	Proposed maximum
	aggregate offering		Amount of
Title of securities to be registered	price(1)(2)		registration fee(3)
Common Stock, $0.01 par value per share	$	201,250,000	$	14,350

(1)	Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended.
(2)	Includes common stock issuable pursuant to an option to purchase additional shares granted to the underwriters.
(3)	Calculated pursuant to Rule 457(o) of the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 13, 2010

PROSPECTUS

           Shares

FELCOR LODGING TRUST INCORPORATED

Common Stock

FelCor Lodging Trust Incorporated, or FelCor, a Maryland corporation, operates as a real estate investment trust, or REIT. We are the sole general partner of, and the owner of a greater than 99% partnership interest in, FelCor Lodging Limited Partnership, or FelCor LP, through which we held ownership interests in 84 hotels with approximately 24,000 rooms at March 31, 2010. We own a diversified portfolio of high quality, upper-upscale and upscale hotels located in major metropolitan and resort markets. We focus on maximizing stockholder value and return on invested capital by optimizing the use of our real estate and enhancing property cash flow through renovations and redevelopment, exploring new or enhanced revenue streams, and executing an aggressive asset management approach. Our portfolio management philosophy contemplates a continuous examination of our portfolio to address market supply and demand, capital needs of each hotel and concentration risk. As market conditions permit, we sell hotels that no longer meet our investment criteria and selectively acquire hotels based on strict underwriting standards.

Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol “FCH.” We are offering           shares of our common stock. The closing price of our common stock on the NYSE on          , 2010 was $      per share.

We elected to be treated as a REIT under U.S. federal income tax laws. To assist us in qualifying as a REIT, ownership of our common stock by any person is generally limited to 9.9% in value or in number of shares, whichever is more restrictive, of any class or series of the outstanding shares of our capital stock. In addition, our charter contains various other restrictions on the ownership and transfer of our common stock. See “Description of Common Stock” and “Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 11 of this prospectus for a discussion of those risks.

	Per share	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to us, before expenses	$	$

We have granted the underwriters a 30-day option to purchase up to an additional           shares of common stock from us on the same terms and conditions as set forth above.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to investors on or about          , 2010.

J.P. Morgan Goldman, Sachs & Co. BofA Merrill Lynch Deutsche Bank Securities

The date of this prospectus is          , 2010.

Table of contents

	Page
Prospectus summary		1
Risk factors		11
Forward looking statements		26
Price range of common stock		27
Dividend policy		28
Use of proceeds		29
Capitalization		30
Investment policies and policies with respect to capital activities		31
Description of common stock		35
Description of preferred stock		36
Certain provisions of the Maryland general corporation law and our charter and bylaws		49
Partnership agreement		56
Certain united stated federal income tax considerations		59
Underwriting		83
Legal matters		89
Experts		89
Where you can find more information		89
Information incorporated by reference		90

We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

This prospectus contains registered trademarks and service marks owned or licensed by companies other than us. In addition, this prospectus contains references to Hotel EBITDA, which is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which is incorporated by reference herein.

Prospectus summary

This summary highlights some of the information contained elsewhere in this prospectus or documents incorporated herein by reference. It is not complete and does not contain all of the information that you should consider before investing in our common stock. You should carefully read this entire prospectus, including the information set forth under “Risk Factors” and “Forward Looking Statements,” our financial statements and the related notes and the other documents incorporated by reference, before you decide to invest in our common stock. Unless otherwise indicated, the information in this prospectus assumes (i) the common stock to be sold in this offering is to be sold at $      per share, which is the last reported sales price per share on the NYSE, on          , 2010, and (ii) no exercise by the underwriters of their option to purchase up to an additional           shares of our common stock.

Unless otherwise indicated or the context otherwise requires, the words “we,” “our,” “ours,” “us,” and the “Company” refer to FelCor and its subsidiaries, collectively.

General

FelCor is a Maryland corporation operating as a REIT. We are the sole general partner of, and the owner of a greater than 99% partnership interest in, FelCor LP through which we held ownership interests in 84 hotels with approximately 24,000 rooms at March 31, 2010.

Of the 84 hotels in which we had an ownership interest at March 31, 2010, we owned a 100% interest in 64 hotels, a 90% or greater interest in entities owning four hotels, an 81% interest in an entity owning one hotel, a 60% interest in an entity owning one hotel and a 50% interest in entities owning 14 hotels. We consolidate our real estate interests in the 70 hotels in which we held greater than 50% ownership interests and we record the real estate interests of the 14 hotels in which we held 50% ownership interests using the equity method.

At March 31, 2010, 83 of the 84 hotels in which we had ownership interest were leased to operating lessees, and one 50%-owned hotel was operated without a lease. We held greater than 50% ownership interests and had direct or indirect controlling interests in the lessees of the hotels that were leased to operating lessees. Because we owned controlling interests in these lessees (including lessees of 13 of the 14 hotels in which we owned 50% of the real estate interests), we consolidated our lessee interests in these hotels (we refer to these 83 hotels as our Consolidated Hotels) and reflect 100% of the hotel’s revenues and expenses, including lease expenses, on our statement of operations. Of our Consolidated Hotels, we owned 50% of the real estate interests in each of 13 hotels (we accounted for the ownership in our real estate interests of these hotels by the equity method) and more than 50% of the real estate interests in each of the remaining 70 hotels (we consolidate our real estate interest in these hotels).

At March 31, 2010, our Consolidated Hotels were located in the United States (81 hotels in 23 states) and Canada (two hotels in Toronto, Ontario), with concentrations in major metropolitan and resort areas. Our hotel portfolio consists primarily of upper-upscale and upscale hotels and resorts, which are flagged under global brands such as Embassy Suites Hotels, Doubletree, Hilton, Marriott, Renaissance, Sheraton, Westin and Holiday Inn.

Our business is conducted in one reportable segment: hospitality. During 2009, we derived 97% of our revenues from hotels located within the United States, with the balance derived from our Canadian hotels.

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We own a diversified portfolio of high quality, upper-upscale and upscale hotels located in major metropolitan and resort markets. We focus on maximizing stockholder value and return on invested capital by optimizing the use of our real estate and enhancing property cash flow through renovations and redevelopment, exploring new or enhanced revenue streams, and executing an aggressive asset management approach. Our portfolio management philosophy contemplates a continuous examination of our portfolio to address market supply and demand, capital needs of each hotel and concentration risk. As market conditions permit, we sell hotels that no longer meet our investment criteria and selectively acquire hotels based on strict underwriting standards.

At March 31, 2010, we had an aggregate of 65,722,628 shares and units outstanding, consisting of 65,427,668 shares of FelCor common stock and 294,960 units of limited partnership interest of FelCor LP not owned by FelCor.

The properties

We own a diversified portfolio of globally branded hotels managed and branded by Hilton Hotels Corporation, Starwood Hotels & Resorts Worldwide, Inc., Marriott International, Inc., and InterContinental Hotels Group PLC. We consider our hotels to be high-quality lodging properties with respect to desirability of location, size, facilities, physical condition, quality and variety of services offered in the markets in which they are located. Our hotels are designed to appeal to a broad range of hotel customers, including frequent business travelers, groups and conventions, as well as leisure travelers. The hotels generally feature comfortable, modern guest rooms with a full range of amenities, meeting and convention facilities and full-service restaurant and catering facilities.

The following table shows the distribution of hotel brands among our 83 Consolidated Hotels at March 31, 2010:

	Number of properties
Hilton Brands:
Embassy Suites Hotels		47
Doubletree and Doubletree Guest Suites		7
Hilton and Hilton Suites		2
InterContinental Brands:
Holiday Inn		15
Starwood Brands:
Sheraton and Sheraton Suites		8
Westin		1
Marriott Brands:
Renaissance		2
Marriott		1
Total Hotels		83

We are committed to maintaining the high standards of our hotels. Our hotels have an average of 287 rooms, with seven hotels having 400 or more rooms. In 2009, we completed the final phase of a multi-year, portfolio-wide renovation program costing more than $450 million. The program was designed to upgrade, modernize and renovate all of our hotels to enhance or maintain their competitive position. For 2009, our pro rata share of capital expenditures spent

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on consolidated and unconsolidated hotels, including renovations and redevelopment projects, was $79.3 million.

Business strategy

Our long-term strategic plan is to own a diversified portfolio of high quality, upper-upscale hotels located in major urban and resort markets. We focus on maximizing stockholder value and return on invested capital by optimizing the use of our real estate and enhancing property cash flow through renovations and redevelopment, exploring new or enhanced revenue streams, and executing an aggressive asset management approach. Our portfolio management philosophy contemplates continual examination of our portfolio to address market supply and demand, capital needs of each hotel and concentration risk. As market conditions permit, we sell hotels that no longer meet our investment criteria and selectively acquire hotels based on strict underwriting standards. In order to achieve our objectives, we are focused on the following areas:

Asset Management. We seek to improve the competitive position of our hotels through aggressive asset management. We benefit from our brand/manager alliances with Hilton Hotels Corporation, Starwood Hotels & Resorts Worldwide, Inc., Marriott International, Inc., and InterContinental Hotels Group PLC. These relationships enable us to work effectively with our managers to maximize Hotel EBITDA margins and operating cash flow from our hotels. While REIT requirements prohibit us from managing our hotels directly, we employ an intensive approach to asset management. We press our brand/managers to implement best practices in expense and revenue management at our hotels, and we strive to influence brand strategy on marketing and revenue enhancement programs. We work closely with our brand/managers to monitor and review hotel operations. As part of our focus on controlling hotel operating margins, we work closely with our operators to align the cost structure of our hotels with current business levels. During the current downturn, we worked with our operators to lower hotel expenses by reducing headcount and improving productivity and energy efficiency, while maintaining guest satisfaction. At the same time, we are very focused on revenue management and enhancement. Our asset managers have exceptionally thorough knowledge of the markets where our hotels operate, as well as overall demand dynamics, which enables us to work closely with our brand/managers to optimize revenue, customer mix and profit generation. Our asset management approach also entails looking for value-added enhancements at our hotels, such as maximizing use of public areas, implementing new restaurant concepts, changing management of food and beverage operations and seeking new revenue sources.

Renovations. In 2009, we completed the final phase of a multi-year, portfolio-wide renovation program designed to enhance the competitive positioning and value of our hotels. We invested more than $450 million in our hotels and successfully generated expected returns through growth in market share. Our overall portfolio increased market share by an average of 3.0% during 2008, while the 70 hotels that completed renovations in 2007 and 2008 grew their aggregate market share by more than 5%, from 114% to 120%. In 2009, our hotel portfolio increased market share by an additional 1.4% compared to prior year. Our ongoing capital expenditures will generally be consistent with ordinary course improvements and maintenance of our hotels. Given the substantial renovations and the current industry conditions, we are able to limit near-term capital expenditures without harming the value or quality of our hotels.

Redevelopment. In June 2009, we completed the final phase of the comprehensive redevelopment of the San Francisco Marriott-Union Square, which is situated in one of the premier hotel

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markets in the United States. The hotel was rebranded as a Marriott hotel in April 2009. Revenue per available room, or RevPAR, during the second half of 2009 (under the Marriott flag) increased 64% at this hotel, compared to 2008, and its market share increased by 105%. Its market share index during the second half of 2009 was 106% compared to 80% for 2007 (before renovation).

During 2008, we completed a new 35,000 square foot convention center adjacent to our Hilton Myrtle Beach Resort, added meeting space at the Doubletree Guest Suites in Dana Point, California and added a spa and food and beverage areas at the Embassy Suites Hotel Deerfield Beach Resort & Spa. These new assets enhanced the hotels’ competitiveness in a difficult environment, and contributed to their 5% increase in market share in 2009.

We are progressing with the approval and entitlement process for additional redevelopment projects, in the interest of building long-term value. However, we are committed to a disciplined approach toward capital allocation and will commit capital to new projects only when prudent, especially in the light of lingering effects of the global recession.

Balance Sheet Strategy. We are committed to strengthening our balance sheet to provide the necessary capacity to withstand lodging cycles and also provide us with capacity to take advantage of opportunities that may arise in the future. We strive to maintain a flexible balance sheet, utilizing a mix of common and preferred equity, public notes, and utilizing floating rates on a portion of our debt as a hedge against economic cycles. Although our leverage increased as a result of the economic downturn, we expect to reduce our leverage when operating performance improves, with future asset sales and other opportunities. To preserve our liquidity, we have limited 2010 capital expenditures, postponed further redevelopment projects, suspended dividend payments and reduced expenses at our hotels and corporate office. We have also increased our cash balance by over $200 million in the past year to ensure we have sufficient liquidity to cover any cash flow needs during the current period of depressed RevPAR. We continue to look for additional opportunities to reduce financing costs, increase our flexibility and ensure adequate liquidity on an economically sound basis.

We successfully refinanced all of our debt that matured in 2009, refinanced all but two of our 2010 debt maturities on terms that are significantly more favorable than the refinanced debt, and refinanced nearly all of our corporate debt that was scheduled to mature in 2011.

Portfolio Review. In 2006, we implemented an initial phase of asset sales, which totaled 45 hotels, and we received total gross proceeds of $720 million. We regularly review and evaluate our hotel portfolio and will identify additional hotels to sell based upon strategic considerations, such as future supply growth, changes in demand dynamics, concentration risk, strategic fit, return on future capital needs and return on invested capital. We expect to execute a second phase of asset sales of 30 or more hotels when hotel cash flows recover and the hotel transaction market improves, in order to maximize proceeds. Proceeds from asset sales will be used to improve stockholder value, including reducing debt. None of our hotels are currently being marketed for sale.

External Growth. While we are focused on preserving liquidity and reducing leverage in the current environment, we also are considering acquisitions that will improve the overall quality of our portfolio and further diversify our portfolio by market, customer type and brand. We may look for properties where we can utilize our competitive strengths, such as ones that have redevelopment opportunity to further enhance our return on investment. We take a highly disciplined approach to analyzing any potential acquisition, which must meet strict criteria, including minimum targeted rates of return. We expect future acquisitions will be restricted to

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high quality hotels in major urban and resort markets with high barriers to entry and high growth potential. Consistent with our acquisition strategy, we are continuously reviewing opportunities to make hotel acquisitions in specific major urban markets, and we intend to use a portion of the net proceeds of this offering to pursue such acquisitions. Our ability to complete acquisitions is subject to a variety of factors beyond our control, including economic conditions in general, availability of hotels meeting our standards and our ability to obtain financing to fund such acquisitions. There can be no assurance that we will be able to make acquisitions on terms favorable to us or at all.

Recent developments

In May 2010, we obtained a new $212 million loan, secured by nine hotels, that matures in 2015. The new loan bears interest at LIBOR (subject to a 3.0% floor) plus 5.1%. The proceeds were used to repay $210 million in loans that were secured by 11 hotels and were scheduled to mature in May 2010. With this financing, we resolved all but two of our remaining 2010 debt maturities on terms that are significantly more favorable than the refinanced debt, and we were able to unencumber two previously mortgaged hotels. The two remaining loans (totaling $32 million) were scheduled to mature in May 2010. The cash flows for the hotels that secure those loans do not cover debt service, and we stopped funding the shortfalls in December 2009. We were unable to negotiate an acceptable debt modification or reduction that would be in the best interests of our stockholders with regard to these loans. Therefore, these two hotels will be transferred to the lenders in full satisfaction of the debt.

Strategic relationships

We benefit from our brand/manager alliances with Hilton Hotels Corporation (Embassy Suites Hotels, Doubletree and Hilton), Starwood Hotels & Resorts Worldwide, Inc. (Sheraton and Westin), Marriott International, Inc. (Renaissance and Marriott) and InterContinental Hotels Group PLC (Holiday Inn). These relationships enable us to work effectively with our managers to maximize Hotel EBITDA margins and operating cash flow from our hotels.

•  Hilton Hotels Corporation is recognized internationally as a preeminent hospitality company. Hilton owns, manages or franchises more than 3,500 hotels in 81 countries. Its portfolio includes many of the world’s best-known and most highly regarded hotel brands, including Waldorf Astoria, Conrad, Hilton, Doubletree, Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn, Homewood Suites by Hilton, Home2 Suites by Hilton, and Hilton Grand Vacations. Subsidiaries of Hilton managed 54 of our Consolidated Hotels at March 31, 2010. Hilton is a 50% partner in joint ventures with us that own 11 hotels and manage residential condominiums. Hilton also holds 10% equity interests in certain of our consolidated subsidiaries that own three hotels.

•  Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with 960 properties in 100 countries. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Element and aloft. Subsidiaries of Starwood managed nine of our Consolidated Hotels at March 31, 2010. Starwood is a 40% joint venture partner with us in the ownership of one hotel and a 50% joint venture partner with us in the ownership of one hotel.

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•  Marriott International, Inc. is a leading lodging company with more than 3,000 lodging properties located in the United States and 67 other countries and territories. Its portfolio includes 17 lodging and vacation resort ownership brands including Ritz Carlton, Marriott Hotels & Resorts, Renaissance Hotels & Resorts, JW Marriott Hotels & Resorts, Courtyard by Marriott, Fairfield Inn by Marriott and Residence Inn by Marriott. Subsidiaries of Marriott managed three of our Consolidated Hotels at March 31, 2010.

•  InterContinental Hotels Group PLC of the United Kingdom is one of the world’s largest hotel companies by number of rooms. IHG owns, manages, leases or franchises, through various subsidiaries, more than 4,400 hotels and over 640,000 guest rooms in nearly 100 countries. IHG owns a portfolio of well recognized and respected hotel brands including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, Holiday Inn Express, Hotel Indigo, Staybridge Suites and Candlewood Suites, and also manages the world’s largest hotel loyalty program, Priority Club Rewards. At March 31, 2010, subsidiaries of IHG managed 15 of our Consolidated Hotels.

Tax status

We elected to be treated as a REIT under U.S. federal income tax laws. As a REIT, we generally are not subject to federal income taxation at the corporate level on taxable income that is distributed to our stockholders. We may, however, be subject to certain state and local taxes on our income and property and to federal income and excise taxes on our undistributed taxable income. Our taxable REIT subsidiaries, or TRSs, formed to lease our hotels are subject to federal, state and local income taxes. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual taxable income to its stockholders (determined without regard to the deductions for dividends paid and excluding net capital gain). If we fail to qualify as a REIT in any taxable year (including any prior taxable year for which the statute of limitations remains open), we will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not qualify as a REIT for at least four years after the failure is remedied. In connection with our election to be treated as a REIT, our charter imposes restrictions on the ownership and transfer of shares of our common stock. FelCor LP expects to make distributions on its units sufficient to enable us to meet our distribution obligations as a REIT. At March 31, 2010, we had a federal income tax loss carryforward of $106.6 million, which we expect to use to offset future distribution requirements and our TRSs had a federal income tax loss carryforward of $337.6 million.

Restrictions on ownership of our common stock

To assist us in complying with the limitations on the concentration of ownership of REIT shares imposed by the Internal Revenue Code of 1986, as amended, or Code, our charter generally prohibits any stockholder from beneficially or constructively (applying certain attribution rules under the Code) owning more than 9.9% in value or in number of shares, whichever is more restrictive, of any class or series of our capital stock. Our board of directors may, in its sole discretion, waive the 9.9% ownership limit with respect to a particular stockholder if it is presented with evidence satisfactory to it that such ownership will not then or in the future jeopardize our qualification as a REIT.

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Competition

The lodging industry is highly competitive. Each of our hotels is located in a developed area that includes other hotel properties and competes for guests primarily with other full service and limited service hotels in its immediate vicinity and secondarily with other hotel properties in its geographic market. We believe that price, location, brand recognition, the quality of the hotel, and the services provided are the principal competitive factors affecting our hotels.

Our corporate information

Our principal executive offices are located at 545 E. John Carpenter Freeway, Suite 1300, Irving, TX 75062-3933, and our telephone number is (972) 444-4900. The website for the Company is www.felcor.com. The contents of our website are not a part of this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. Information contained on our website is not incorporated into this prospectus and you should not consider information contained on our website to be part of this prospectus.

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Summary of the offering

Common stock offered by us	shares (plus up to an additional           shares of our common stock that we may issue and sell upon exercise of the underwriters’ option to purchase additional shares).
Common stock outstanding immediately after the offering	shares, based on           shares of common stock outstanding on          , 2010.
Dividend policy	U.S. federal income tax law requires that a REIT distribute at least 90% of its REIT taxable income for such tax year, determined without regard to the deduction for dividends paid and excluding net capital gain. For more information, please see “Certain United States Federal Income Tax Considerations.”
	We suspended payment of our common dividend in December 2008 and our preferred dividend in March 2009 in light of the deepening recession and dysfunctional capital markets, and the attendant impact on our industry and us. In addition, and except to the extent required to satisfy minimum REIT distribution requirements, we are currently restricted by covenants applicable to our senior secured notes from making distributions on any capital stock. We cannot assure that we will make any dividends or other cash distributions to our stockholders in the future. Any future dividends that we make will be at the discretion of our board of directors and will depend upon, among other things, our actual results of operations. These results and our ability to pay dividends will be affected by various factors, including net interest expense, other income from our hotel portfolio, operating expenses and other expenditures. For more information, please see “Dividend Policy.”
Trading market and symbol	Our common stock is quoted on the NYSE under the symbol “FCH.”
Ownership and transfer restrictions	In order to assist us in satisfying the limitations on the concentration of ownership of interests imposed by the Code on REITs, our charter generally prohibits, among other things, any stockholder from beneficially or constructively owning more that 9.9% in value or in number of shares, whichever is more restrictive, of any class or series of the outstanding shares of our capital stock.
Risk factors	Investing in our common stock involves a high degree of risk. You should carefully read and consider the information set forth under the caption “Risk Factors” beginning on page 11 and all other information in this prospectus before investing in our common stock.
Other information about this prospectus	The number of shares of common stock outstanding after the offering is based upon the number of shares outstanding as of March 31, 2010 and, except as otherwise noted, assumes no exercise of the

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	underwriter’s option to purchase up to an additional           shares of our common stock, 40,000 shares reserved for issuance upon exercise of stock options issued and outstanding as of March 31, 2010 under our existing stock option and restricted stock plans, or 303,993 shares reserved for future grants under our existing stock option and restricted stock plans as of March, 31 2010.
Use of proceeds	We estimate that our net proceeds from this offering, after deducting the underwriting discount and other estimated offering expenses payable by us, will be approximately $      million (approximately $      million if the underwriters exercise their option to purchase additional shares in full). We intend to use a substantial portion of the net proceeds as described below.
	• We intend to use the net proceeds to further strengthen our balance sheet, including repaying or repurchasing certain of our mortgage debt and/or acquiring shares of our preferred stock at discounts. For example, we are currently in negotiations regarding paying off various secured loans, the aggregate outstanding principal of which is nearly $200 million, at substantial discounts to par. These negotiations are ongoing; to the extent these negotiations are successful, such transactions will reduce our leverage, be accretive to our stockholders and will enhance long-term stockholder value.
	• We also intend to use the net proceeds of this offering to pursue acquisition opportunities that are accretive to long-term stockholder value and exceed our cost of capital on a risk-adjusted basis. We will actively seek properties in our target markets (i.e., central Boston, New York City (Manhattan) and Washington, DC’s central business districts) that further improve our portfolio quality, diversification and concentration risk, have high barriers to entry, and can be acquired at prices significantly below replacement cost, which would allow for substantial appreciation potential. Our pipeline of suitable hotel acquisition opportunities continues to improve, and we are reviewing and/or engaged in negotiations concerning various potential transactions in our target markets that meet our underwriting and strategic criteria. For example, we have made an offer to purchase a hotel in one of our target markets, and negotiations are ongoing.
	• We intend to use any remaining net proceeds for other general corporate purposes.
	Given market dynamics, it is critical that we have the ability to act quickly when opportunities arise that fit our strategic objectives. Under ordinary circumstances, we would seek to raise additional equity capital through the public equity markets by utilizing an effective “shelf” registration statement on Form S-3 that has been reviewed and declared effective in advance by the SEC. Solely because our preferred stock dividends are in arrears, we are ineligible to offer shares registered on Form S-3. Instead, we must execute public offerings using a registration statement on Form S-11, which does not provide the same market timing flexibility as an effective “shelf”

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registration statement would provide. Pending application of the net proceeds from this offering as described above, we may invest such proceeds in short-term, interest bearing investments. See “Risk Factors—Risks Related to The Offering—If there are delays in applying the proceeds of this offering, then receipts from investments and our investment returns may take longer to attain.”

We have agreed to pay all costs and expenses incurred in connection with the registration under the Securities Act of the shares of our common stock being registered hereby, including, without limitation, all registration and filing fees, printing expenses and fees and disbursements of our counsel and our accountants.

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Risk factors

Investing in our common stock involves a high degree of risk. In connection with the forward looking statements that appear in this prospectus, you should carefully review and consider the risks described below, as well as other information contained in or incorporated by reference into this prospectus, before making a decision to purchase our common stock in this offering. If any of the risks described below should occur, our business, prospects, financial condition, cash flows, liquidity, results of operations, funds from operations, and our ability to make cash distributions to our stockholders could be materially and adversely affected. In that case, the trading price of our common stock could decline and you may lose some or all of your investment in our common stock.

The risks and uncertainties described below are not the only risks that may have a material adverse effect on us. Additional risks and uncertainties that we currently are unaware of, or that we currently deem to be immaterial, also may become important factors that adversely impact us and your investment in our common stock. Further, the extent any of the information contained in this prospectus constitutes forward-looking information, the risk factors set forth below and incorporated by reference into this prospectus are cautionary statements identifying important factors that could cause our actual results for various financial reporting periods to differ materially from those expressed in any forward-looking statements made by or on behalf of us.

Risks related to the offering

We have suspended paying dividends on our common and preferred stock and all accrued and unpaid dividends on our preferred stock must be paid before we can resume paying dividends on our common stock.

Recognizing the need to maintain financial flexibility in light of the current state of the capital markets, we suspended payment of our common dividend in December 2008 and our preferred dividend in March 2009. Unpaid preferred dividends continue to accrue, and accrued and current preferred dividends must be paid in full prior to payment of any common dividends. At March 31, 2010, the aggregate amount of accrued and unpaid dividends on our preferred stock was $47.3 million. Dividends on our outstanding preferred stock continue to accrue by approximately $9.7 million quarterly. If preferred dividends accrue and remain unpaid for six or more quarters, our preferred stockholders may seek to elect up to two directors (in addition to the 10 directors elected by our common stockholders). See “Description of Preferred Stock—Description of Series A Preferred Stock—Voting Rights” and “Description of Preferred Stock—Description of Series C Preferred Stock and Depository Shares—Voting Rights.”

The decision to declare and pay dividends on our common and preferred stock in the future, as well as the timing, amount, and composition of any such future dividends, is at the sole discretion of our board of directors and will depend on our earnings, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions, or other limitations under our indebtedness and preferred shares, the annual distribution requirements under the REIT provisions of the Code, state law, and such other factors as our board of directors deems relevant. Any change in our dividend policy could have a material effect on the market price of our common and preferred stock.

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We are currently prohibited from paying dividends on our common and preferred stock.

Except to the extent required to satisfy minimum REIT distribution requirements, we are restricted by the indenture governing our senior secured notes from making any cash distributions on our common and preferred stock. We are currently below the minimum thresholds set forth in the indenture for which discretionary cash distributions are permitted.

Broad market fluctuations could negatively impact the market price of our common stock.

The capital markets continue to experience extreme price and volume fluctuations that have affected the market price of the shares of many companies in industries similar or related to ours and that have been unrelated to these companies’ operating performances. These broad market fluctuations could reduce the market price of our common stock. Furthermore, our operating results and prospects may be below the expectations of public market analysts and investors or may be lower than those of companies with comparable market capitalizations, which could lead to a material decline in the market price of our common stock.

You may experience significant dilution as a result of additional issuances of our securities, which could harm our stock price.

Investors in this offering do not have preemptive rights to any shares issued by us in the future. Therefore, investors purchasing shares in this offering may experience dilution of their equity investment if we:

•  sell additional common shares in the future, whether publicly or privately;

•  sell securities that are convertible into common shares;

•  issue restricted shares to our officers or directors; or

•  issue common stock upon the exercise of options.

After giving effect to the issuance of common stock in this offering, the receipt of the expected net proceeds and the use of those proceeds, we expect that this offering will have a dilutive effect on our earnings per share and funds from operations per share. The actual amount of dilution from this offering, or from any future offering of common or preferred stock, will be based on numerous factors and cannot be determined at this time. Additionally, the market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market pursuant to this offering, or otherwise, or as a result of the perception or expectation that such sales could occur.

If there are delays in applying the proceeds of this offering, then receipts from investments and our investment returns may take longer to attain.

We may delay applying the proceeds from this offering if we are unable to identify or consummate the opportunities described under “Use of Proceeds” on acceptable terms that are accretive to our stockholders and are consistent with our long-term objectives to enhance stockholder value. If we are not able to consummate the transactions described under “Use of Proceeds,” our management and board of directors will have considerable discretion in the specific application of the net proceeds and may apply the net proceeds in ways other than those we currently expect, including in ways that may not increase our revenues or our market value. Pending application of the net proceeds from this offering as described above, we may invest such proceeds in short-term, interest bearing investments.

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Future offerings of debt securities, which would be senior to our common stock upon liquidation, or equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of distributions, may harm the value of our common stock.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes and classes of preferred stock. Upon our liquidation, holders of our debt securities and shares of preferred stock, lenders with respect to other borrowings and all of our creditors will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings by us may dilute the holdings of our existing stockholders or reduce the value of our common stock, or both. Our preferred stock, if issued, would have a preference on distributions that could limit our ability to make distributions to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the value of our common stock and diluting their stock holdings in us.

Risks related to our business

We depend on external sources of capital and recent disruptions in the financial markets may affect our ability to obtain financing or obtain financing on reasonable and acceptable terms.

As a REIT our ability to reduce our debt and finance our growth must largely be funded by external sources of capital because we are required to distribute to our stockholders at least 90% of our taxable income (determined without regard to the deduction for dividends paid and other than net capital gains) including, in some cases, taxable income we recognize for federal income tax purposes but with regard to which we do not receive corresponding cash. Our ability to obtain the external capital we require could be limited by a number of factors, many of which are outside our control, including general market conditions, unfavorable market perception of our future prospects, lower current and/or estimated future earnings, excessive cash distributions or a lower market price for our common stock. The financial markets, and specifically the credit markets, experienced significant contraction and dysfunction in the recent recession. When the financial markets are constrained—in particular, when the availability of credit is severely diminished—our ability to obtain financing on satisfactory terms or to extend maturing loans has been substantially limited. Under such conditions, when financing is available, it has been more expensive and likely includes other terms, such as lower loan-to-value ratios and limitations or prohibitions of subordinated secured debt, minimum debt service coverage, etc., that are more restrictive. In addition, as loan default rates increase (as they have recently), lenders impose more restrictive underwriting criteria and tighten appraisal standards, further limiting credit availability. Although we have successfully resolved our 2010 maturities, we have various other loans that will mature in 2011, and in order to refinance those loans, adequate credit on reasonable terms must be available. With regard to refinancing our maturing debt, our alternatives are limited compared to refinancing in prior years. If credit is only available at unacceptable cost or otherwise requires the application of resources that unacceptably constrains our liquidity, we may be unable to refinance maturing loans on acceptable or reasonable terms. There can be no assurance that the financial markets and credit availability will enable us to refinance or extend maturing debt on acceptable terms. If we are unable to refinance existing debt on acceptable terms or obtain appropriate extensions of maturing debt, the relevant loans could default, in which case the lenders may foreclose on the

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hotels mortgaged as security for the repayment of those loans. Although our secured debt is generally non-recourse to us, loan defaults under certain circumstances could adversely affect our credit ratings and our ability to borrow funds in the future. If our ability to borrow funds in the future is impaired, our corresponding ability to reinvest in our hotels and pursue growth through acquisitions, while maintaining targeted overall leverage (which we believe helps us achieve desired overall returns for our stockholders), could be constrained.

The global recession has had an adverse effect on our revenue per available room, or RevPAR, performance and results of operations. The effects of a continued or deepening recession on our financial condition could be material.

The overall weakness in the U.S. economy, particularly the turmoil in the credit markets, weakness in the housing market, and volatile energy and commodity costs, has resulted in considerable negative pressure on both consumer and business spending (this includes increased emphasis in cost containment with focus on travel and entertainment limitations). While demand has begun to improve, we anticipate that lodging demand will not improve materially until economic trends show consistent growth, particularly the weakened overall economy and illiquid credit markets. For 2010, we believe RevPAR will begin to grow, but at a moderate pace. Further, as hotels adjust to new demand levels by shifting their occupancy mix, we expect to see average room rates and ancillary spending decline in most markets. Decreased occupancy and declining room rates have an adverse effect on RevPAR, Hotel EBITDA margins and results of operations.

Our RevPAR declined in 2009, reflecting decreases in both average daily rate, or ADR, and occupancy. Hotel occupancy trends have reversed and demand has begun to improve in 2010, after reaching historic lows in 2009. Despite improving occupancy, we expect continued pressure in ADR until demand increases significantly. While we have experienced an increase in demand in recent periods, consumers and business travelers continue to take advantage of historically high number of available rooms and a near-term shift in pricing power, as well as correspondingly lower ADR. The combination of increased occupancy and lower ADR results in additional pressure on hotel margins because our hotels have more guests, who are paying less. This has the potential to negatively affect our results of operations unless we are able to reduce costs to mitigate that effect. Because we are a REIT and do not directly manage our hotels, we rely on third-party managers to drive both revenue and contain costs, and while we make every effort to work with our managers to maximize cost containment and improve revenue, there can be no assurance that these efforts will be successful or otherwise mitigate declining RevPAR, Hotel EBITDA margins or results of operations.

In response to the economic decline, we suspended payment of all dividends. Significant decreases in RevPAR or Hotel EBITDA margins, or material deterioration in the capital markets in the future, could reduce our ability to begin paying dividends again or to service our debt.

Compliance with, or failure to comply with, our financial covenants may adversely affect our financial position and results of operations.

The agreements governing our senior secured notes require that we satisfy total leverage, secured leverage and interest coverage tests in order to: (i) incur additional indebtedness except to refinance maturing debt with replacement debt, as defined under our indentures; (ii) pay dividends in excess of the minimum distributions required to meet the REIT qualification test; (iii) repurchase capital stock; or (iv) merge. We are currently restricted from paying dividends

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(except to the extent necessary to satisfy the REIT qualification requirement that we distribute currently at least 90% of our taxable income) and repurchasing capital stock. These restrictions may adversely affect our ability to finance our operations or engage in other business activities that may be in our best interest.

Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants and financial tests. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity of the obligations under these agreements and to foreclose upon any collateral securing those obligations. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations. In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. We cannot assure you that we will be granted waivers or amendments to these agreements if, for any reason, we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.

Certain of our subsidiaries have been formed as special purpose entities, or SPEs. These SPEs have incurred mortgage debt secured by the assets of those SPEs, which is non-recourse to us. However, a breach of any of the recourse carve-out provisions, including fraud, misapplication of funds and other customary recourse carve-out provisions, could cause this debt to become fully recourse to us.

We have substantial financial leverage.

At March 31, 2010, our consolidated debt of $1.8 billion represented approximately 72% of our total enterprise value. Declines in revenues and cash flow may adversely affect our public debt ratings, and may limit our access to additional debt. Our senior secured notes, as currently rated by Moody’s Investors Service and Standard & Poor’s, are considered below investment grade. Historically, we have incurred debt for acquisitions and to fund our renovation, redevelopment and rebranding programs. Limitations upon our access to additional debt could adversely affect our ability to fund these programs or acquire hotels in the future.

Our financial leverage could have important consequences. For example, it could:

•  limit our ability to obtain additional financing for working capital, renovation, redevelopment and rebranding plans, acquisitions, debt service requirements and other purposes;

•  limit our ability to refinance existing debt;

•  require us to agree to additional restrictions and limitations on our business operations and capital structure to obtain financing;

•  increase our vulnerability to adverse economic and industry conditions, and to interest rate fluctuations;

•  require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for capital expenditures, future business opportunities, paying dividends or other purposes;

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•  limit our flexibility to make, or react to, changes in our business and our industry; and

•  place us at a competitive disadvantage, compared to our competitors that have less debt.

Most of our hotel mortgage debt is recourse solely to the specific assets securing the debt.

Our debt agreements will allow us to incur additional debt that, if incurred, could exacerbate the other risks described herein.

We may be able to incur substantial debt in the future. Although the instruments governing our indebtedness contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. If new debt is added to our current debt levels, the risks described above would intensify.

We have substantial variable rate debt.

At March 31, 2010, approximately 35% of our consolidated outstanding debt had variable interest rates. Significant increases in variable interest rates could have a material adverse impact on our liquidity, earnings, and financial condition.

We are subject to the risks of real estate ownership, which could increase our costs of operations.

General Risks. Our investment in hotels is subject to the numerous risks generally associated with owning real estate, including among others:

•  adverse changes in general or local economic or real estate market conditions;

•  the ability to refinance debt on favorable terms at maturity;

•  changes in zoning laws;

•  increases in lodging supply or competition;

•  decreases in demand;

•  changes in traffic patterns and neighborhood characteristics;

•  increases in assessed property taxes from changes in valuation or real estate tax rates;

•  increases in the cost of our property insurance;

•  the potential for uninsured or underinsured property losses;

•  costly governmental regulations and fiscal policies;

•  changes in tax laws;

•  our ability to acquire hotel properties at prices consistent with our investment criteria;

•  our ability to fund capital expenditures at our hotels to maintain or enhance their competitive position; and

•  other circumstances beyond our control.

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Moreover, real estate investments are relatively illiquid, and we may not be able to adjust our portfolio in a timely manner to respond to changes in economic and other conditions.

Compliance with environmental laws may adversely affect our financial condition. Owners of real estate are subject to numerous federal, state, local and foreign environmental laws and regulations. Under these laws and regulations, a current or former owner of real estate may be liable for the costs of remediating hazardous substances found on its property, whether or not they were responsible for its presence. In addition, if an owner of real property arranges for the disposal of hazardous substances at another site, it may also be liable for the costs of remediating the disposal site, even if it did not own or operate the disposal site. Such liability may be imposed without regard to fault or the legality of a party’s conduct and may, in certain circumstances, be joint and several. A property owner may also be liable to third parties for personal injuries or property damage sustained as a result of its release of hazardous or toxic substances, including asbestos-containing materials, into the environment. Environmental laws and regulations may require us to incur substantial expenses and limit the use of our properties. We could have substantial liability for a failure to comply with applicable environmental laws and regulations, which may be enforced by the government or, in certain instances, by private parties. The existence of hazardous substances on a property can also adversely affect the value of, and the owner’s ability to use, sell or borrow against, the property.

We cannot provide assurances that future or amended laws or regulations, or more stringent interpretations or enforcement of existing environmental requirements, will not impose any material environmental liability, or that the environmental condition or liability relating to our hotels will not be affected by new information or changed circumstances, by the condition of properties in the vicinity of such hotels, such as the presence of leaking underground storage tanks, or by the actions of unrelated third parties.

Compliance with the Americans with Disabilities Act may adversely affect our financial condition. Under the Americans with Disabilities Act of 1990, all public accommodations, including hotels, are required to meet certain federal requirements for access and use by disabled persons. Various state and local jurisdictions have also adopted requirements relating to the accessibility of buildings to disabled persons. We believe that our hotels substantially comply with the requirements of the Americans with Disabilities Act and other applicable laws. However, a determination that our hotels are not in compliance with these laws could result in liability for both governmental fines and payments to private parties. If we were required to make unanticipated major modifications to our hotels to comply with the requirements of the Americans with Disabilities Act and other similar laws, it could adversely affect our ability to make distributions to our stockholders and to satisfy our other obligations.

Lodging industry-related risks may adversely affect our business.

We are subject to the risks inherent to hotel operations. We have ownership interests in the operating lessees of our hotels; consequently, we are subject to the risk of fluctuating hotel operating expenses at our hotels, including, but not limited to:

•  wage and benefit costs, including hotels that employ unionized labor;

•  repair and maintenance expenses;

•  gas and electricity costs;

•  insurance costs, including health, general liability and workers compensation; and

•  other operating expenses.

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In addition, we are subject to the risks of a decline in Hotel EBITDA margins, which occur when hotel operating expenses increase disproportionately to revenues or fail to shrink at least as fast as revenues decline. These operating expenses and Hotel EBITDA margins are within the control of our independent managers over whom we have limited control.

Investing in hotel assets involves special risks. We have invested in hotel-related assets, and our hotels are subject to all of the risks common to the hotel industry. These risks could adversely affect hotel occupancy and the rates that can be charged for hotel rooms, and generally include:

•  adverse effects of declines in general and local economic activity;

•  competition from other hotels;

•  construction of more hotel rooms in a particular area than needed to meet demand;

•  any further increases in energy costs and other travel expenses;

•  other events, such as terrorist acts or war that reduce business and leisure travel;

•  fluctuations in our revenue caused by the seasonal nature of the hotel industry;

•  an outbreak of a pandemic disease affecting the travel industry;

•  a downturn in the hotel industry; and

•  risks generally associated with the ownership of hotels and real estate, as discussed herein.

We could face increased competition. Each of our hotels competes with other hotels in its geographic area. A number of additional hotel rooms have been, or may be, built in a number of the geographic areas in which our hotels are located, which could adversely affect both occupancy and rates in those markets. A significant increase in the supply of midprice, upscale and upper-upscale hotel rooms and suites, if demand fails to increase at least proportionately, could have a material adverse effect on our business, financial condition and results of operations.

We face reduced coverages and increased costs of insurance. Our property insurance has a $100,000 all-risk deductible, a deductible (5% of insured value) for named windstorm coverage and a deductible (2% to 5% of insured value) for California earthquake coverage. Substantial uninsured or not fully-insured losses would have a material adverse impact on our operating results, cash flows and financial condition. Catastrophic losses, such as the losses caused by hurricanes in 2005, could make the cost of insuring against these types of losses prohibitively expensive or difficult to find. In an effort to limit insurance costs, we purchase catastrophic insurance coverage based on probable maximum losses based on 250-year events and have only purchased terrorism insurance to the extent required by our lenders. We have established a self-insured retention ($250,000 per occurrence) for general liability insurance with regard to 56 of our hotels. The remainder of our hotels participate in general liability programs sponsored by our managers, with no deductible.

We could have property losses not covered by insurance. Our property policies provide that all of the claims from each of our properties resulting from a particular insurable event must be combined together for purposes of evaluating whether the aggregate limits and sub-limits contained in our policies have been exceeded. Therefore, if an insurable event occurs that affects more than one of our hotels, the claims from each affected hotel will be added together to determine whether the aggregate limit or sub-limits, depending on the type of claim, have been reached, and each affected hotel may only receive a proportional share of insurance proceeds provided for under the policy if the total value of the loss exceeds the aggregate limits available. We may incur losses in excess of insured limits and, as a result, we may be even less likely to receive sufficient coverage for risks that affect multiple properties such as earthquakes

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or catastrophic terrorist acts. Risks such as war, catastrophic terrorist acts, nuclear, biological, chemical, or radiological attacks, and some environmental hazards may be deemed to fall completely outside the general coverage limits of our policies or may be uninsurable or may be too expensive to justify insuring against.

We may also encounter disputes concerning whether an insurance provider will pay a particular claim that we believe is covered under our policy. Should a loss in excess of insured limits or an uninsured loss occur or should we be unsuccessful in obtaining coverage from an insurance carrier, we could lose all, or a portion of, the capital we have invested in a property, as well as the anticipated future revenue from the hotel. In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

We obtain terrorism insurance to the extent required by lenders as a part of our all-risk property insurance program, as well as our general liability and directors’ and officers’ coverages. However, our all-risk policies have limitations such as per occurrence limits and sub-limits which might have to be shared proportionally across participating hotels under certain loss scenarios. Also, all-risk insurers only have to provide terrorism coverage to the extent mandated by the Terrorism Risk Insurance Act, or TRIA, for “certified” acts of terrorism—namely those which are committed on behalf of non-United States persons or interests. Furthermore, we do not have full replacement coverage at all of our properties for acts of terrorism committed on behalf of United States persons or interests (“non-certified” events) as our coverage for such incidents is subject to sub-limits and/or annual aggregate limits. In addition, property damage related to war and to nuclear, biological and chemical incidents is excluded under our policies. While TRIA will reimburse insurers for losses resulting from nuclear, biological and chemical perils, TRIA does not require insurers to offer coverage for these perils and, to date, insurers are not willing to provide this coverage, even with government reinsurance. Additionally, there is a possibility that Congress will not renew TRIA in the future, which would eliminate the federal subsidy for terrorism losses. Therefore, the extent and adequacy of terrorism coverage that will be available to protect our interests in the event of future terrorist attacks that impact our properties is uncertain.

We have geographic concentrations that may create risks from regional or local economic, seismic or weather conditions. At March 31, 2010, approximately 46% of our hotel rooms were located in, and 45% of our 2009 Hotel EBITDA was generated from, three states: California, Florida and Texas. Additionally, at March 31, 2010, we had concentrations in six major metropolitan areas, the San Francisco Bay area, Atlanta, South Florida, Orlando, Dallas and the Los Angeles area, which together represented approximately 32% of our 2009 Hotel EBITDA. Therefore, adverse economic, seismic or weather conditions in these states or metropolitan areas may have a greater adverse effect on us than on the industry as a whole.

Transferability of franchise license and management agreements and termination of such agreements may be prohibited or restricted. Hotel managers and franchise licensors may have the right to terminate their agreements or suspend their services in the event of default under such agreements or other third party agreements such as ground leases and mortgages, upon the loss of liquor licenses, or in the event of the sale or transfer of the hotel. Franchise license agreements may expire by their terms, and we may not be able to obtain replacement franchise license agreements.

The sale of a hotel, replacement of the brand, or material default under a management or franchise license agreement may give rise to payment of liquidated damages or termination fees that may be guaranteed by us or certain of our subsidiaries. The loss of a manager or franchise

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license could have a material impact on the operations and value of a hotel because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchise licensor or operations management provided by the manager. Most of our management agreements restrict our ability to encumber our interests in the applicable hotels under certain circumstances without the managers’ consent.

Terminating management agreements in connection with the sale of two hotels may result in liquidated damages. In 2009, we sold two non-strategic hotels in Florida operating under management agreements with IHG. We will be required to pay replacement management fees for up to one year and liquidated damages (net of any replacement management fees previously paid) in December 2010—or reinvest in another hotel to be managed by IHG and carrying an IHG brand. Substitution of a replacement hotel appears unlikely prior to December 2010, and we will likely have to pay IHG at least some portion of replacement management fees and/or liquidated damages. Liquidated damages are computed based on operating results prior to termination. The aggregate liability related to these hotels, if paid, will be approximately $11 million. We accrued the full amount of liquidated damages in 2008.

We are subject to possible adverse effects of management, franchise and license agreement requirements. All of our hotels are operated under existing management, franchise or license agreements with nationally recognized hotel companies. Each agreement requires that the licensed hotel be maintained and operated in accordance with specific standards and restrictions in order to maintain uniformity within the brand. Compliance with these standards, and changes in these standards, could require us to incur significant expenses or capital expenditures, which could adversely affect our results of operations and ability to pay dividends to our stockholders and service on our indebtedness.

We are subject to the risks of brand concentration. We are subject to the potential risks associated with the concentration of our hotels under a limited number of brands. A negative public image or other adverse event that becomes associated with the brand could adversely affect hotels operated under that brand.

The following table reflects the percentage of Hotel EBITDA from our 83 Consolidated Hotels by brand:

			% of 2009
			hotel
	Hotels		EBITDA(a)
Embassy Suites Hotels		47		60%
Holiday Inn		15		18
Sheraton and Westin		9		9
Doubletree		7		7
Renaissance and Marriott		3		3
Hilton		2		3

(a) Hotel EBITDA is a non-GAAP financial measure. A detailed reconciliation and further discussion of Hotel EBITDA is contained in the “Non GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which is incorporated by reference herein.

If any of these brands suffer a significant decline in popularity with the traveling public, the revenues and profitability of our branded hotels could be adversely affected.

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The lodging business is seasonal in nature. Generally, hotel revenues for our hotel portfolio are greater in the second and third calendar quarters than in the first and fourth calendar quarters, although this may not be true for hotels in major tourist destinations. Revenues for hotels in tourist areas are generally substantially greater during tourist season than other times of the year. We expect that seasonal variations in revenue at our hotels will cause quarterly fluctuations in our revenues.

Future terrorist activities may adversely affect, and create uncertainty in, our business.

Terrorism in the United States or elsewhere could have an adverse effect on our business, although the degree of impact will depend on a number of factors, including the U.S. and global economies and global financial markets. Previous terrorist attacks in the United States and subsequent terrorism alerts have adversely affected the travel and hospitality industries over the past several years. Such attacks, or the threat of such attacks, could have a material adverse effect on our business, our ability to finance our business, our ability to insure our properties, and/or our results of operations and financial condition, as a whole.

We face risks related to pandemic diseases, which could materially and adversely affect travel and result in reduced demand for our hotels.

Our business could be materially and adversely affected by the effect of a pandemic disease on the travel industry. For example, the outbreaks of SARS and avian flu in 2003 had a severe impact on the travel industry, and the recent outbreaks of H1N1 flu threatened to have a similar impact. A prolonged recurrence of SARS, avian flu, H1N1 flu or another pandemic disease also may result in health or other government authorities imposing restrictions on travel. Any of these events could result in a significant drop in demand for our hotels and adversely affect our financial conditions and results of operations.

If we fail to comply with applicable privacy laws and regulations, we could be subject to payment of fines, damages or face restrictions on our use of guest data.

We collect information relating to our guests for various business purposes, including marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and regulations enacted in the United States and other jurisdictions around the world. Privacy regulations continue to evolve and on occasion may be inconsistent from one jurisdiction to another. Compliance with applicable privacy regulations may increase our operating costs and/or adversely impact our ability to market our products, properties and services to our guests. In addition, non-compliance with applicable privacy regulations by us (or in some circumstances non-compliance by third parties engaged by us) or a breach of security on systems storing our data may result in fines, payment of damages or restrictions on our use or transfer of data.

As a REIT, we are subject to specific tax laws and regulations, the violation of which could subject us to significant tax liabilities.

U.S. federal income tax laws governing REITs are complex. We have operated, and intend to continue to operate, in a manner that is intended to enable us to qualify as a REIT under U.S. federal income tax laws. The REIT qualification requirements are extremely complicated, and interpretations of U.S. federal income tax laws governing qualification as a REIT are limited. Accordingly, we cannot be certain that we have been, or will continue to be, successful in operating so as to qualify as a REIT.

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U.S. federal income tax laws governing REITs are subject to change. At any time, U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. These new laws, interpretations, or court decisions may change U.S. federal income tax laws relating to, or the federal income tax consequences of, qualification as a REIT. Any of these new laws or interpretations may take effect retroactively and could adversely affect us, or you as a stockholder.

Failure to make required distributions would subject us to tax. Each year, a REIT must pay out to its stockholders at least 90% of its taxable income, other than any net capital gain. To the extent that we satisfy the 90% distribution requirement, but distribute less than 100% of our taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible tax if the actual amount we pay out to our stockholders in a calendar year is less than the minimum amount specified under federal tax laws. Our only source of funds to make such distributions comes from distributions from FelCor LP. Accordingly, we may be required to borrow money or sell assets to enable us to pay out enough of our taxable income to satisfy the distribution requirements and to avoid corporate income tax and the 4% tax in a particular year.

Failure to qualify as a REIT would subject us to federal income tax. If we fail to qualify as a REIT in any taxable year (including any prior taxable year for which the statute of limitations remains open), we would be subject to federal income tax at regular corporate rates on our taxable income for any such taxable year. We might need to borrow money or sell hotels in order to obtain the funds necessary to pay any such tax. If we cease to be a REIT, we no longer would be required to distribute most of our taxable income to our stockholders. Unless our failure to qualify as a REIT was excused under U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year following the year in which we failed to qualify.

We may become subject to a 100% excise tax if the rent our TRSs pay us is determined to be excessive. While we believe that the terms of the leases that exist between us and our TRSs were negotiated at arm’s length and are consistent with the terms of comparable leases in the hotel industry, there can be no assurance that the Internal Revenue Service, or IRS, would not challenge the rents paid to us by our TRSs as being excessive, or that a court would not uphold such challenge. In that event, we could owe a tax of 100% on the amount of rents determined to be in excess of an arm’s length rate. Imposition of a 100% excise tax could materially affect the value of an investment in our stock.

We lack control over the management and operations of our hotels. Because U.S. federal income tax laws restrict REITs and their subsidiaries from operating hotels, we do not manage our hotels. Instead, we are dependent on the ability of independent third-party managers to operate our hotels pursuant to management agreements. As a result, we are unable to directly implement strategic business decisions for the operation and marketing of our hotels, such as decisions with respect to the setting of room rates, the salary and benefits provided to hotel employees, the conduct of food and beverage operations and similar matters. While our taxable REIT subsidiaries monitor the third-party manager’s performance, we have limited specific recourse under our management agreements if we believe the third-party managers are not performing adequately. Failure by our third-party managers to fully perform the duties agreed to in our management agreements could adversely affect our results of operations. In addition, our third-party managers or their affiliates manage hotels that compete with our hotels, which may result in conflicts of interest. As a result, our third-party managers may have in the past

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made, and may in the future make, decisions regarding competing lodging facilities that are not or would not be in our best interests.

Complying with REIT requirements may cause us to forego attractive opportunities that could otherwise generate strong risk-adjusted returns and instead pursue less attractive opportunities, or none at all.

To continue to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of generating strong risk-adjusted returns on invested capital for our stockholders.

Complying with REIT requirements may force us to liquidate otherwise attractive investments, which could result in an overall loss on our investments.

To continue to qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% for tax years beginning prior to July 31, 2008) of the value of our total securities can be represented by securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. If we fail to comply with these requirements at the end of any calendar quarter, we may be able to preserve our REIT status by benefiting from certain statutory relief provisions. Except with respect to a de minimis failure of the 5% asset test or the 10% vote or value test, we can maintain our REIT status only if the failure was due to reasonable cause and not to willful neglect. In that case, we will be required to dispose of the assets causing the failure within six months after the last day of the quarter in which we identified the failure, and we will be required to pay an additional tax of the greater of $50,000 or the product of the highest applicable tax rate (currently 35%) multiplied by the net income generated on those assets. As a result, we may be required to liquidate otherwise attractive investments.

We own, and may acquire, interests in hotel joint ventures with third parties that expose us to some risk of additional liabilities or capital requirements.

We own, through our subsidiaries, interests in several real estate joint ventures with third parties. Joint ventures that are not consolidated into our financial statements owned real estate interests in a total of 14 hotels, in which we had an aggregate investment of $80 million, at March 31, 2010. The lessee operations of 13 of these 14 hotels are included in our consolidated results of operations due to our majority ownership of those lessees. Our joint venture partners are affiliates of Hilton with respect to 11 hotels, affiliates of Starwood with respect to one hotel, and private entities or individuals (all of whom are unaffiliated with us) with respect to two hotels. The ventures and hotels were subject to non-recourse mortgage loans aggregating $211 million at March 31, 2010.

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The personal liability of our subsidiaries under existing non-recourse loans secured by the hotels owned by our joint ventures is generally limited to the guaranty of the borrowing ventures’ personal obligations to pay for the lender’s losses caused by misconduct, fraud or misappropriation of funds by the ventures and other typical exceptions from the non-recourse covenants in the mortgages, such as those relating to environmental liability. We may invest in other ventures in the future that own hotels and have recourse or non-recourse debt financing. If a venture defaults under its mortgage loan, the lender may accelerate the loan and demand payment in full before taking action to foreclose on the hotel. As a partner or member in any of these ventures, our subsidiary may be exposed to liability for claims asserted against the venture, and the venture may not have sufficient assets or insurance to discharge the liability.

Our subsidiaries may be contractually or legally unable to unilaterally control decisions regarding these ventures and their hotels. In addition, the hotels in a joint venture may perform at levels below expectations, resulting in potential insolvency unless the joint venturers provide additional funds. In some ventures, the joint venturers may elect not to make additional capital contributions. We may be faced with the choice of losing our investment in a venture or investing additional capital in it with no guaranty of receiving a return on that investment.

Our directors may have interests that may conflict with our interests.

A director who has a conflict of interest with respect to an issue presented to our board will have no inherent legal obligation to abstain from voting upon that issue. We do not have provisions in our bylaws or charter that require an interested director to abstain from voting upon an issue, and we do not expect to add provisions in our charter and bylaws to this effect. Although the legal standard of care applicable to each director requires loyalty to us, there is a risk that, should an interested director vote upon an issue in which a director or one of his or her affiliates has an interest, his or her vote may reflect a bias that could be contrary to our best interests. In addition, even if an interested director abstains from voting, that director’s participation in the meeting and discussion of an issue in which they have, or companies with which he or she is associated have, an interest could influence the votes of other directors regarding the issue.

Departure of key personnel would deprive us of the institutional knowledge, expertise and leadership they provide.

Our executive management team includes our President and Chief Executive Officer and four Executive Vice Presidents. In addition, we have several other long-tenured senior officers. These executives and officers generally possess institutional knowledge about our organization and the hospitality or real estate industries, have significant expertise in their fields, and possess leadership skills that are important to our operations. The loss of any of our executives or other long-serving officers could adversely affect our ability to execute our business strategy.

Our charter contains limitations on ownership and transfer of shares of our stock that could adversely affect attempted transfers of our capital stock.

To maintain our status as a REIT, no more than 50% in value of our outstanding stock may be owned, actually or constructively, under the applicable tax rules, by five or fewer persons during the last half of any taxable year. Our charter prohibits, subject to some exceptions, any person from owning more than 9.9%, as determined in accordance with the Code and the Exchange Act, of the number of outstanding shares of any class of our stock. Our charter also prohibits any transfer of our stock that would result in a violation of the 9.9% ownership limit, reduce the number of stockholders below 100 or otherwise result in our failure to qualify as a REIT. Any

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attempted transfer of shares in violation of the charter prohibitions will be void, and the intended transferee will not acquire any right in those shares. We have the right to take any lawful action that we believe is necessary or advisable to ensure compliance with these ownership and transfer restrictions and to preserve our status as a REIT, including refusing to recognize any transfer of stock in violation of our charter.

Some provisions in our charter and bylaws and Maryland law make a takeover more difficult.

Ownership Limit. The ownership and transfer restrictions of our charter may have the effect of discouraging or preventing a third party from attempting to gain control of us without the approval of our board of directors. Accordingly, it is less likely that a change in control, even if beneficial to stockholders, could be effected without the approval of our board.

Staggered Board. Our board of directors is divided into three classes. Directors in each class are elected for terms of three years. As a result, the ability of stockholders to effect a change in control of us through the election of new directors is limited by the inability of stockholders to elect a majority of our board at a single annual meeting.

Authority to Issue Additional Preferred Shares. Under our charter, our board of directors may issue up to an aggregate of 20 million shares of preferred stock without stockholder action. The preferred stock may be issued, in one or more series, with the preferences and other terms designated by our board that may delay or prevent a change in control of us, even if the change is in the best interests of stockholders. At March 31, 2010, we had outstanding 12,880,475 shares of our Series A preferred stock and 67,980 shares, represented by 6,798,000 depositary shares, of our Series C preferred stock.

Maryland Anti-Takeover Statutes. As a Maryland corporation, we are subject to various provisions under the Maryland General Corporation Law, including the Maryland Business Combination Act, that may have the effect of delaying or preventing a transaction or a change in control that might involve a premium price for the stock or otherwise be in the best interests of stockholders. Under the Maryland business combination statute, some “business combinations,” including some issuances of equity securities, between a Maryland corporation and an “interested stockholder,” which is any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding shares, or an affiliate of that stockholder, are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any of these business combinations must be approved by a stockholder vote meeting two separate super majority requirements, unless, among other conditions, the corporation’s common stockholders receive a minimum price, as defined in the statute, for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its common shares, other than a business combination with affiliates or related entities of the chairman of our board of directors. See “Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws—Maryland Anti-takeover Statute.” Our charter currently provides that the Maryland Control Share Acquisition Act will not apply to any of our existing or future stock. That statute may deny voting rights to shares involved in an acquisition of one-tenth or more of the voting stock of a Maryland corporation. There can be no assurance that this provision will not be amended or eliminated in the future. If the foregoing exemption in the charter is amended, the Control Share Statute could have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any such offer. To the extent these or other laws are applicable to us, they may have the effect of delaying or preventing a change in control of us even though beneficial to our stockholders.

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Forward looking statements

This prospectus and the documents incorporated by reference in this prospectus, as well as other written and oral statements made or incorporated by reference from time to time by us and our representatives in other reports, filings with the SEC, press releases, conferences, or otherwise, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that involve a number of risks and uncertainties. Forward-looking statements can be identified by the use of forward-looking terminology, including, without limitation, “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “pro forma” or other variations of these terms, including their use in the negative, or by discussions of strategies, plans or intentions. A number of factors could cause actual results to differ materially from those anticipated by these forward-looking statements. Among these factors are:

•  general economic and lodging industry conditions, adverse changes in the overall economy, the impact of the United States’ military involvement in the Middle East and elsewhere, future acts of terrorism, the threat or outbreak of a pandemic disease affecting the travel industry, the impact on the travel industry of high fuel costs and increased security precautions;

•  our overall debt levels and our ability to obtain new financing and service debt;

•  our inability to retain earnings;

•  our liquidity and capital expenditures;

•  our growth strategy and acquisition activities; and

•  competitive conditions in the lodging industry.

In addition, these forward-looking statements are necessarily dependent upon assumptions and estimates that may prove to be incorrect. Accordingly, while we believe that the plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these plans, intentions or expectations will be achieved. The forward-looking statements included in this prospectus, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, are expressly qualified in their entirety by the information contained in this prospectus, including “Risk Factors,” and the documents incorporated by reference, which identify important factors that could cause these differences. All forward-looking statements speak only as of the date of this prospectus. We undertake no obligation to update any forward-looking statements to reflect future events or circumstances.

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Price range of common stock

Our common stock is traded on the NYSE under the symbol “FCH.” The following table sets forth the high and low intraday sales prices per share of our common stock, as reported by the NYSE, and dividends declared on our common stock, for the periods indicated.

					Common dividends
	High		Low		declared
Year Ended December 31, 2010:
First Quarter	$	6.42	$	3.49	$	—
Second Quarter (through May 11, 2010)	$	8.99	$	5.63	$	—
Year Ended December 31, 2009:
First Quarter	$	2.19	$	0.72	$	—
Second Quarter	$	3.60	$	1.22	$	—
Third Quarter	$	5.31	$	1.86	$	—
Fourth Quarter	$	4.90	$	2.85	$	—
Year Ended December 31, 2008:
First Quarter	$	15.69	$	11.90	$	0.35
Second Quarter	$	15.87	$	10.39	$	0.35
Third Quarter	$	10.67	$	6.27	$	0.15
Fourth Quarter	$	7.12	$	0.66	$	—

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Dividend policy

We suspended payment of our common dividend in December 2008 and our preferred dividend in March 2009 in light of the deepening recession and dysfunctional capital markets, and the attendant impact on our industry and us. Our board of directors will determine the amount of future common and preferred dividends for each quarter, if any, based upon various factors including operating results, economic conditions, other operating trends, our financial condition and capital requirements, as well as the minimum REIT distribution requirements. Unpaid preferred dividends continue to accrue, and accrued and current preferred dividends must be paid in full prior to payment of any common dividends.

Except to the extent required to satisfy minimum REIT distribution requirements, we are restricted by the indenture governing our senior secured notes from making any cash distributions on our capital stock. We are currently below the minimum thresholds set forth in the indenture for which discretionary cash distributions are permitted. While we are below the thresholds, we do not expect to pay any dividends in the near-term and we expect to retain all available funds for use in the operation and expansion of our business, including growth through acquisitions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, incorporated by reference herein.

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Use of proceeds

We estimate that our net proceeds from this offering, after deducting the underwriting discount and other estimated offering expenses payable by us, will be approximately $      million (approximately $      million if the underwriters exercise their option to purchase additional shares in full). We intend to use a substantial portion of the net proceeds as described below.

•  We intend to use the net proceeds to further strengthen our balance sheet, including repaying or repurchasing certain of our mortgage debt and/or acquiring shares of our preferred stock at discounts. For example, we are currently in negotiations regarding paying off various secured loans, the aggregate outstanding principal of which is nearly $200 million, at substantial discounts to par. These negotiations are ongoing; to the extent these negotiations are successful, such transactions will reduce our leverage, be accretive to our stockholders and will enhance long-term stockholder value.

•  We also intend to use the net proceeds of this offering to pursue acquisition opportunities that are accretive to long-term stockholder value and exceed our cost of capital on a risk-adjusted basis. We will actively seek properties in our target markets (i.e., central Boston, New York City (Manhattan) and Washington, DC’s central business districts) that further improve our portfolio quality, diversification and concentration risk, have high barriers to entry, and can be acquired at prices significantly below replacement cost, which would allow for substantial appreciation potential. Our pipeline of suitable hotel acquisition opportunities continues to improve, and we are reviewing and/or engaged in negotiations concerning various potential transactions in our target markets that meet our underwriting and strategic criteria. For example, we have made an offer to purchase a hotel in one of our target markets, and negotiations are ongoing.

•  We intend to use any remaining net proceeds for other general corporate purposes.

Given market dynamics, it is critical that we have the ability to act quickly when opportunities arise that fit our strategic objectives. Under ordinary circumstances, we would seek to raise additional equity capital through the public equity markets by utilizing an effective “shelf” registration statement on Form S-3 that has been reviewed and declared effective in advance by the SEC. Solely because our preferred stock dividends are in arrears, we are ineligible to offer shares registered on Form S-3. Instead, we must execute public offerings using a registration statement on Form S-11, which does not provide the same market timing flexibility as an effective “shelf” registration statement would provide. Pending application of the net proceeds from this offering as described above, we may invest such proceeds in short-term, interest bearing investments. See “Risk Factors—Risks Related to The Offering—If there are delays in applying the proceeds of this offering, then receipts from investments and our investment returns may take longer to attain.”

We have agreed to pay all costs and expenses incurred in connection with the registration under the Securities Act of the shares of our common stock being registered hereby, including, without limitation, all registration and filing fees, printing expenses and fees and disbursements of our counsel and our accountants.

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Capitalization

The following table sets forth (1) our cash and cash equivalents and (2) our capitalization as of March 31, 2010, in each case:

•  on an actual basis

•  on an adjusted basis to reflect the sale of our common stock offered hereby at the offering price of $      per share of common stock and the completion of the May 2010 secured debt transaction (as discussed under “Prospectus Summary—Recent Developments”), as if these transactions had been completed on March 31, 2010 and assuming:

•  net proceeds of the offering are $     , after deducting the estimated offering expenses and the underwriting discount and commissions; and

•  the underwriter’s option to purchase additional shares is not exercised.

You should review this information together with “Use of Proceeds” and our consolidated financial statements and related notes incorporated by reference in this prospectus.

	March 31, 2010
(in thousands)	Actual			As Adjusted
Cash and cash equivalents	$	276,008
Short term debt:
Current portion of mortgage and capital leases debt	$	252,286
Long term debt:
Unsecured debt		86,622
New mortgage debt		—
Senior Secured Notes due 2014 (net of discount)		574,913
Mortgage and capital lease debt		857,294
Total long-term debt		1,518,829
Redeemable FelCor LP Units at redemption value		1,681
Preferred stock		478,774
Common stock		694
Additional paid in capital		2,022,235
Accumulated other comprehensive income		25,598
Accumulated deficit		(1,864,898	)
Less: Common stock in treasury		(72,229	)
Total FelCor stockholders’ equity		590,174
Non-controlling interest in other partnerships		21,752
Total capitalization	$	2,384,722

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Investment policies and policies with
respect to capital activities

The following is a discussion of our investment policies and our policies with respect to certain other activities, including financing matters and conflicts of interest. These policies may be amended or revised from time to time at the discretion of our board of directors, without a vote of our stockholders. Any change to any of these policies by our board of directors, however, would be made only after a thorough review and analysis of that change, in light of then existing business and other circumstances, and then only if, in the exercise of its business judgment, our board of directors believes that it is advisable to do so in our and our stockholders’ best interests. We cannot assure you that our investment objectives will be attained.

Investments in real estate or interests in real estate

We invest, directly and indirectly, in hotel properties, and all such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. We conduct substantially all of our investment activities through our operating partnership, FelCor LP, and its subsidiaries. Our primary investment objectives are to maximize stockholder value over time and return on invested capital by optimizing the use of our real estate and enhancing property cash flow. Additional criteria with respect to our hotel properties and acquisition criteria is described in “Prospectus Summary—Business Strategy.”

We are not limited as to (i) the amount or percentage of our total assets that may be invested in any single property, or (ii) the concentration of investments by location or type. We seek hotel acquisitions that will improve the overall quality of our portfolio, further diversify our portfolio by market, customer type and brand, and improve future Hotel EBITDA growth. We may look for hotel properties where we can utilize our competitive strengths, such as ones that have redevelopment opportunity to further enhance our return on investment. We take a highly disciplined approach to analyzing any potential hotel acquisition, which must meet strict criteria, including minimum targeted rates of return. We will seek properties that we can acquire at prices significantly below replacement cost with substantial appreciation potential in high-growth markets as the economy recovers from the recent recession. We expect potential future acquisitions will be restricted to high quality hotels in major urban and resort markets with high barriers to entry and high growth potential.

Investments in mortgages, structured financings, and other lending policies

We do not currently invest in loans secured by real estate and we have no current intention of investing in loans secured by properties or making loans to persons, other than in connection with the acquisition of mortgage loans through which we expect to achieve equity ownership of the underlying hotel property in the near-term.

Investments in securities of or interests in persons primarily engaged in real estate activities and other issuers

We may consider joint venture investments with other investors for the purpose of investing in hotels. We may also invest in the securities of other issuers in connection with acquisitions of

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indirect interests in hotels (normally general or limited partnership interests in special purpose partnerships owning hotels). We may in the future acquire some, all or substantially all of the securities or assets of other REITs or similar entities where that investment would be consistent with our investment policies and the REIT qualification requirements. There are no limitations on the amount or percentage of our total assets that may be invested in any one issuer, other than those imposed by the gross income and asset tests that we must satisfy to qualify as a REIT. Any acquisition of securities of or interests in persons primarily engaged in real estate activities is reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions.

We do not intend that our investments in securities will require us to register as an “investment company” under the Investment Company Act of 1940, as amended, and we intend to divest securities before any registration would be required. We do not currently, and we do not intend to, engage in trading, underwriting, agency distribution, or sales of securities of other issuers.

Policies with respect to certain activities

Purchase and Sale (or Turnover) of Investments. We regularly review and evaluate our hotel portfolio based upon strategic considerations, such as future supply growth, changes in demand dynamics, concentration risk, strategic fit, return on future capital needs and return on invested capital. When timing is appropriate, we sell those hotels that no longer meet our investment criteria and minimum return thresholds. Such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. Subject to REIT qualification and prohibited transaction rules under the Code, we may dispose of hotel properties if our management determines that a sale of a property would be in our best interests based on the price being offered for the hotel, the operating performance of the hotel, the tax consequences of the sale, and other factors and circumstances surrounding the proposed sale. See “Risk Factors—Risks Related to Our Business.” In 2009, we sold two consolidated hotels (Holiday Inn Cocoa Beach—Oceanfront and Holiday Inn Orlando—International Drive) for aggregate gross proceeds of $26 million. In 2007, we (i) acquired two hotels (the Renaissance Esmeralda Resort & Spa in Indian Wells, California and the Renaissance Vinoy Resort & Golf Club in St. Petersburg, Florida) for $225 million, in the aggregate, (ii) sold 11 consolidated hotels for $191 million, in the aggregate (completing the disposition of non-strategic hotels that were originally identified for sale in 2005), and (iii) completed construction of the Royale Palms condominium project at Kingston Plantation in Myrtle Beach, South Carolina and sold 179 (out of 184) units.

Senior Securities. We have no formal policy concerning the issuance of senior securities other than that such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. Our charter authorizes the issuance of up to 20,000,000 shares of preferred stock, which can be issued from time to time upon authorization of the board of directors. Any increase in the number of shares of preferred stock authorized for issuance (including outstanding preferred stock) must be approved by our common stockholders. Any change to the foregoing must be approved by our board of directors and, with respect to amending our charter, our common stockholders.

Borrowing Money. Such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. We consider a number of factors when evaluating our

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leverage and borrowing money, such as the interest rate, timing of debt maturity, prepayment penalty, flexibility to prepay prior to maturity, overall impact to our capital structure, fixed to floating ratio and purchase price of properties that are acquired with financing. During the past three years, we have borrowed money as follows:

•  May 2010. We obtained a $212 million non-recourse loan secured by nine hotels.

•  October 2009. Our subsidiary, FelCor LP, issued $636 million of senior secured notes, which notes were guaranteed by us.

•  June 2009. We obtained a $201 million non-recourse loan secured by nine hotels.

•  March 2009. We obtained a $120 million non-recourse loan secured by seven hotels.

•  December 2007. We assumed (i) an existing loan in the original principal amount of $88.0 million in connection with the acquisition of a hotel and (ii) an existing loan in the original principal amount of $89.3 million in the connection with the acquisition of a second hotel.

•  August 2007. We amended our line of credit agreement to increase the amount available under the line from $125 million to $250 million and to provide the ability to further increase the facility up to $500 million under certain conditions. (In June 2009, we repaid all balances then outstanding and terminated this line of credit.)

Loans to Other Persons. We have no formal policy concerning making loans to third parties other than that such transactions are reviewed and approved by our board of directors. We do not currently make loans to third parties.

Invest in the Securities of Other Issuers for the Purpose of Exercising Control. We have no formal policy concerning our investing in the securities of other issuers other than that such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. We may in the future acquire some, all or substantially all of the securities or assets of other REITs or similar entities where that investment would be consistent with our investment policies and the REIT qualification requirements. However, we do not currently invest in securities of other issuers for the purpose of exercising control nor do we anticipate investing in other issuers for the purpose of acquiring any investments primarily for sale in the ordinary course of business or holding any investments with a view to making short-term profits from their sale.

Underwrite Securities of Other Issuers. We have no formal policy concerning our underwriting securities of other issuers other than that such transactions are reviewed and approved by our board of directors. We do not currently underwrite securities of other issues.

Securities in Exchange for Property. We have no formal policy concerning our offering of securities in exchange for property other than that such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. Subject to applicable law and the requirements for listed companies on the NYSE, our board of directors has the authority, without further stockholder approval, to issue additional authorized common shares and preferred shares or otherwise raise capital, including through the issuance of senior securities, in any manner and on the terms and for the consideration it deems appropriate, including in exchange for property. Existing stockholders will have no preemptive right to additional shares issued in any offering, and any offering might cause a dilution of investment. We have

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previously used limited partnership units of FelCor LP to acquire hotels. We have not offered securities in exchange for property during the past three years.

Repurchase or Reacquire Shares or Other Securities. We have no formal policy concerning our repurchase or re-acquisition of shares or other securities other than that such transactions are reviewed and approved by our board of directors. Management generally negotiates the terms of such transactions, but does not have the authority to approve such transactions. Under certain circumstances, our charter restricts our ability to repurchase or otherwise reacquire our shares, and any change to those provisions would require an amendment of our charter, which would be subject to stockholder approval under Maryland corporate law. The indenture governing our senior secured notes restricts our ability, under certain circumstances, to repurchase or otherwise reacquire our shares, and any change to those provisions would require an amendment of our indenture, which would be subject to trustee and noteholder consent.

Reporting Policy. We are subject to the information reporting requirements of the Exchange Act and the NYSE, as a consequence of which, we file periodic reports, proxy statements and other information, including audited financial statements, with the SEC and distribute our annual report and proxy statement to our stockholders.

Policies with respect to conflicts of interest

Our Code of Business Conduct and Ethics, or CBCE, covers conflicts of interest, generally, and applies to all of our officers, directors, and employees, but not directly to 10% or greater stockholders. Under the CBCE, conflicts of interest are prohibited as a matter of policy. If any officer, director, or employee becomes aware of any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest, that person is required to report the transaction or relationship in writing to our president or general counsel. The CBCE also provides guidelines on what may constitute conflicts of interest and sets forth standards to be followed in common situations where potential conflicts of interest may arise.

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Description of common stock

The description of our common stock set forth below describes certain general terms and provisions of the common stock. The following description of our common stock is a summary and is not intended to be complete. You also should review our charter and bylaws, copies of which are available from us upon request. See “Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws” and “Where You Can Find More Information.”

General

Under our charter, we have the authority to issue up to 200,000,000 shares of common stock, par value $0.01 per share. Under Maryland law, stockholders generally are not responsible for the corporation’s debts or obligations. At March 31, 2010, we had outstanding 65,427,668 shares of common stock.

Terms

Subject to the preferential rights of any series of our preferred stock outstanding, the holders of our common stock are entitled to one vote per share on all matters voted on by stockholders, including in the election of directors. Our charter does not provide for cumulative voting in the election of directors. Except as otherwise required by law or provided in articles supplementary relating to preferred stock of any series, the holders of our common stock exclusively possess all voting power.

Subject to any preferential rights of any series of our preferred stock outstanding, the holders of our common stock are entitled to those dividends, if any, as may be declared from time to time by our board of directors from funds legally available therefor and, upon liquidation, are entitled to receive, pro rata, all assets of FelCor available for distribution to holders of shares of common stock. All shares of common stock, when issued, will be fully paid and nonassessable and will have no preemptive rights. FelCor may, however, enter into contracts with certain stockholders to grant those holders preemptive rights.

Restrictions on ownership and transfer

The shares of our common stock are subject to certain restrictions upon their ownership and transfer, which were adopted for the purpose of enabling FelCor to preserve its status as a REIT. For a description of these restrictions and the Maryland anti-takeover statutes, see “Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws.”

Exchange listing

The common stock is listed on the NYSE under the symbol “FCH.”

Transfer agent

The transfer agent and registrar for the common stock is American Stock Transfer Company, New York, New York.

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Description of preferred stock

General

Under our charter, we have the authority to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share, of which 12,880,475 shares designated as the $1.95 Series A Cumulative Convertible Preferred Stock and 67,980 shares designated as the 8% Series C Cumulative Redeemable Preferred Stock were outstanding as of March 31, 2010. Accordingly, up to 7,051,545 additional shares of preferred stock may be issued from time to time, in one or more classes or series, as authorized by our board of directors and without any further vote or action by the stockholders, subject to the rights of the holders of the outstanding $1.95 Series A Cumulative Convertible Preferred Stock and 8% Series C Cumulative Redeemable Preferred Stock. See “—Description of Series A Preferred Stock” and “—Description of Series C Preferred Stock and Depositary Shares.” Subject to the limitations prescribed by Maryland law and our charter and bylaws, our board of directors is authorized to establish the number of shares constituting each series of preferred stock and to designate and issue, from time to time, one or more classes or series of preferred stock with the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption as may be fixed by our board of directors or duly authorized committee of our board of directors. Our board of directors could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying or preventing a change of control or other transaction that holders of our common stock might believe to be in their best interests or in which holders of some, or a majority, of the shares of common stock might receive a premium for their shares over the then market price of those shares of common stock.

Description of Series A preferred stock

The following is a summary of the material terms and provisions of our $1.95 Series A Cumulative Convertible Preferred Stock, or the Series A preferred stock. This summary is not intended to be complete. Accordingly, you also should review the terms and provisions of our charter (including the articles supplementary to the charter setting forth the particular terms of the Series A preferred stock), and bylaws, copies of which are available from us upon request. See “Where You Can Find More Information.”

General

In April 1996, our board of directors adopted articles supplementary that classified and created a series of preferred stock originally consisting of 6,900,000 shares, which was subsequently reduced to 6,050,000 shares, designated $1.95 Series A Cumulative Convertible Preferred Stock. In March and August 2004, our board of directors adopted articles supplementary that classified an additional 4,600,000 shares and 2,300,000 shares, respectively, of Series A preferred stock thereby increasing the aggregate number of authorized shares of the Series A preferred stock to 12,950,000. As of March 31, 2010, we had 12,880,475 shares of Series A preferred stock outstanding.

The outstanding shares of Series A preferred stock are validly issued, fully paid and nonassessable. The holders of the Series A preferred stock have no preemptive rights with respect to any shares of our capital stock or any of our other securities convertible into, or carrying rights or options to purchase, any shares of our capital stock. The shares of Series A preferred stock are

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not subject to any sinking fund or other obligation of us to redeem or retire the Series A preferred stock. Unless converted or redeemed by us into common stock, the Series A preferred stock will have a perpetual term, with no maturity.

Ranking

The Series A preferred stock ranks pari passu with our outstanding Series C preferred stock (as described below), and senior to our common stock, with respect to the payment of dividends and amounts upon liquidation, dissolution or winding up.

While any shares of Series A preferred stock are outstanding, we may not authorize, create or increase the authorized amount of any class or series of stock that ranks senior to the Series A preferred stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up without the consent of the holders of two-thirds of the outstanding Series A preferred stock (voting as one class with any other class or series of parity stock). We, however, may create additional classes of stock, increase the authorized number of shares of preferred stock or issue series of preferred stock ranking junior to, or on a parity with, the Series A preferred stock with respect, in each case, to the payment of dividends and amounts upon liquidation, dissolution or winding up without the consent of any holder of Series A preferred stock.

Dividends

Holders of shares of Series A preferred stock are entitled to receive, when, as and if declared by our board of directors, out of funds legally available for payment, cash dividends for the corresponding period in an amount per share equal to the greater of $0.4875 per quarter (equivalent to $1.95 per annum) or the cash distributions declared or paid for the corresponding period (determined as of the record date for each of the respective quarterly dividend payment dates referred to below) on the number of shares of common stock, or portion thereof, into which a share of Series A preferred stock is then convertible. Dividends on the Series A preferred stock are payable quarterly in arrears on the last calendar day of January, April, July and October of each year. Each dividend is payable in arrears to holders of record as they appear on our stock records at the close of business on the record dates that are fixed by our board of directors so long as those dates do not exceed 60 days preceding the payment dates. Dividends are cumulative, whether or not in any dividend period there are funds legally available for the payment of the dividends and whether or not the dividends are authorized. Accumulations of dividends on the shares of Series A preferred stock do not bear interest. Dividends payable on the Series A preferred stock are computed on the basis of a 360-day year consisting of twelve 30-day months.

Except as provided in the next sentence, no dividend will be declared or paid, or set apart for payment, on any parity stock unless full cumulative dividends have been, or contemporaneously are, declared and paid, or set apart for payment, on the Series A preferred stock for all prior dividend periods and the then current dividend period. If accrued dividends on the Series A preferred stock and any parity stock for all prior dividend periods have not been paid in full, then any dividend declared on the Series A preferred stock and any parity stock for any dividend period will be declared ratably in proportion to accrued and unpaid dividends on the Series A preferred stock and any parity stock.

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Unless full cumulative dividends then required to be paid on the Series A preferred stock and any parity stock have been, or contemporaneously are, declared and paid, or set apart for payment, we will not declare, pay or set apart funds for the payment of any dividend or other distribution with respect to any junior stock or redeem, purchase or otherwise acquire for consideration any junior stock, subject to certain exceptions as described in our charter. Notwithstanding the foregoing limitations, we may, at any time, acquire shares of our stock, without regard to rank, for the purpose of preserving our status as a REIT.

As used for these purposes,

•  the term “dividend” does not include dividends or distributions payable solely in shares of junior stock on junior stock, or in options, warrants or rights to holders of junior stock to subscribe for or purchase any junior stock;

•  the term “junior stock” means the common stock, and any other class or series of our stock now or hereafter issued and outstanding that ranks junior to the Series A preferred stock as to the payment of dividends or amounts upon the liquidation, dissolution or winding up of FelCor; and

•  the term “parity stock” means any other class or series of our stock now or hereafter issued and outstanding (including the Series C preferred stock) that ranks equally with the Series A preferred stock as to the payment of dividends and amounts upon the liquidation, dissolution or winding up of FelCor.

FelCor LP issued to us Series A preferred units in FelCor LP, the economic terms of which are substantially identical to the Series A preferred stock. FelCor LP is required to make all required distributions to us on the Series A preferred units that mirror our payment of dividends on the Series A preferred stock, including accrued and unpaid dividends upon redemption and the liquidation preference amount of the Series A preferred stock. These distributions have priority over any distribution of cash or assets to the holders of the common partnership units of FelCor LP or to the holders of any other interests in FelCor LP, except for distributions required in connection with any of our other shares ranking senior to, or on a parity with, the Series A preferred stock as to dividends or liquidation rights and except for distributions required to enable us to maintain our qualification as a REIT.

The indenture under which our senior secured notes are issued includes covenants that restrict our ability to declare and pay dividends. In general, the indenture contains exceptions to the limitations to allow FelCor LP to make distributions necessary to allow us to maintain our status as a REIT. We are currently below the minimum thresholds set forth in the indenture for which discretionary cash distributions are permitted, and as a result, we are unable to distribute the full amount of dividends accruing under our outstanding preferred stock.

Optional redemption

Shares of Series A preferred stock are redeemable, in whole or in part, at our option, for either:

•  the number of shares of common stock that are issuable at a conversion rate of 0.7752 shares of common stock for each share of Series A preferred stock, subject to adjustment in certain circumstances; or

•  cash in an amount per share equal to the aggregate market value (determined as of the date of the notice of redemption) of such number of shares of common stock that are issuable at a

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conversion rate of 0.7752 shares of common stock for each share of Series A preferred stock, subject to adjustment in certain circumstances.

We may not exercise this redemption option, however, unless for 20 trading days within any period of 30 consecutive trading days, including the last trading day of that period, the closing price of the common stock on the NYSE equals or exceeds the conversion price per share, currently $32.25, subject to adjustment in certain circumstances. In order to exercise our redemption option, we must issue a press release announcing the redemption prior to the opening of business on the second trading day after the conditions in the preceding sentences have been met.

Notice of redemption will be given by mail or by publication in The Wall Street Journal or The New York Times or, if neither is then being published, in any other daily newspaper of national circulation (with subsequent prompt notice by mail) to the holders of the Series A preferred stock not more than four business days after we issue the press release. No failure to give notice or any defect therein or in the mailing thereof will affect the sufficiency of the notice or the validity of the proceedings for the redemption of any Series A preferred stock, except as to the holder to whom notice was defective or not given. The redemption date will be a date selected by us not less than 30 nor more than 60 days after the date on which we issue the press release announcing our intention to redeem the Series A preferred stock. If fewer than all of the shares of Series A preferred stock are to be redeemed, the shares shall be selected by lot or pro rata or in some other equitable manner determined by us.

On the redemption date, we must pay on each share of Series A preferred stock to be redeemed any accrued and unpaid dividends, in arrears, for any full dividend period ending on or prior to the redemption date. In the case of a redemption date falling after a dividend payment record date and prior to the related payment date, the holders of the Series A preferred stock at the close of business on that record date will be entitled to receive the dividend payable on those shares on the corresponding dividend payment date, notwithstanding the redemption of their shares prior to the dividend payment date. Except as provided for in the preceding sentence, no payment or allowance will be made for accrued dividends on any shares of Series A preferred stock called for redemption or on the shares of common stock issuable upon that redemption.

Unless full cumulative dividends then required to be paid on the Series A preferred stock and any parity stock have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof set apart for payment, the Series A preferred stock may not be redeemed in whole or in part, and we may not, except as set forth in the following sentence, redeem, purchase or otherwise acquire for consideration any shares of Series A preferred stock, otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of shares of Series A preferred stock. Notwithstanding the foregoing limitations, we may, at any time, acquire shares of our stock, without regard to rank, for the purpose of preserving our status as a REIT.

On and after the date fixed for redemption, provided that we have made available at the office of the registrar and transfer agent a sufficient number of shares of common stock or a sufficient amount of cash to effect the redemption, dividends will cease to accrue on the Series A preferred stock called for redemption, those shares shall no longer be deemed to be outstanding and all rights of the holders of those shares of Series A preferred stock shall cease, except for the right to receive the shares of common stock or any cash payable upon redemption, without interest from the date of redemption, and except that, in the case of a redemption date after a dividend payment record date and prior to the related dividend payment date,

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holders of Series A preferred stock on the dividend payment record date will be entitled on the dividend payment date to receive the dividend payable on those shares. At the close of business on the redemption date, each holder of Series A preferred stock (unless we default in the delivery of the shares of common stock or cash) will be, without any further action, deemed a holder of the number of shares of common stock for which the Series A preferred stock is redeemable, or be entitled to receive the cash amount applicable to those shares.

Fractional shares of common stock will not be issued upon redemption of the Series A preferred stock, but, in lieu thereof, we will pay a cash adjustment based on the current market price of the common stock on the day prior to the redemption date.

Liquidation preference

The holders of shares of Series A preferred stock are entitled to receive, in the event of any liquidation, dissolution or winding up of FelCor, whether voluntary or involuntary, a liquidation preference (the “Series A Liquidation Preference”) of $25 per share of Series A preferred stock, plus an amount per share of Series A preferred stock equal to all accrued and unpaid dividends, whether or not earned or declared, to the date of final distribution to such holders and will not be entitled to any other payment.

Until the holders of the Series A preferred stock have been paid the Series A Liquidation Preference in full, no payment will be made to any holder of junior stock upon the liquidation, dissolution or winding up of FelCor. If, upon any liquidation, dissolution or winding up of FelCor, the assets of FelCor or proceeds thereof distributable among the holders of the shares of Series A preferred stock and any parity stock are insufficient to pay in full the Series A Liquidation Preference and the liquidation preference applicable to any parity stock, then those assets will be distributed among the holders of shares of Series A preferred stock and any parity stock, ratably, in accordance with the respective amounts that would be payable on those shares if all amounts payable on those shares were to be paid in full. Neither a consolidation or merger of us with another corporation, a statutory share exchange by us, nor a sale or transfer of all or substantially all of our assets will be considered a liquidation, dissolution or winding up, voluntary or involuntary, of us.

Voting rights

If six quarterly dividends, whether or not consecutive, payable on the Series A preferred stock, or any parity stock, are in arrears, whether or not earned or declared, the number of directors then constituting our board of directors will be increased by two, and the holders of shares of Series A preferred stock and any other parity stock, voting together as a single class, which are referred to as the voting preferred shares, will have the right to elect two additional directors to serve on our board of directors. This voting right will be applicable to any annual meeting or special meeting of stockholders, or a properly called special meeting of the holders of the voting preferred shares, until all the delinquent dividends, together with the dividends for the current quarterly period, on the voting preferred shares have been paid or declared and set aside for payment.

The approval of two-thirds of the outstanding shares of Series A preferred stock and any parity stock similarly affected, voting together as a single class, is required in order to:

•  amend our charter to affect materially and adversely the rights, preferences or voting power of the holders of the Series A preferred stock and the parity stock; or

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•  amend our charter to authorize, reclassify, create or increase the authorized amount of any class of stock having rights senior to the Series A preferred stock with respect to the payment of dividends or amounts upon the liquidation, dissolution or winding up of FelCor.

We may, however, increase the authorized number of shares of preferred stock and may create additional classes of parity stock and junior stock, increase the authorized number of shares of parity stock and junior stock and issue additional series of parity stock and junior stock, all without the consent of any holder of Series A preferred stock.

Except as required by law, the holders of Series A preferred stock will not be entitled to vote on any merger or consolidation involving us or a sale, lease or transfer of all or substantially all of our assets. See “Conversion Price Adjustments” below.

Conversion rights

Shares of Series A preferred stock are convertible, in whole or in part, at any time, at the option of the holders, into a number of shares of common stock obtained by dividing the aggregate liquidation preference (equal to $25.00 per share of Series A preferred stock), excluding any accrued but unpaid dividends, by a conversion price of $32.25 per share of common stock (equivalent to a conversion rate of 0.7752 shares of common stock for each share of Series A preferred stock), subject to adjustment as described below (“Conversion Price Adjustments”). The right to convert shares of Series A preferred stock called for redemption will terminate at the close of business on the redemption date. For information as to notices of redemption, see “Optional Redemption” above.

Conversion of shares of Series A preferred stock, or a specified portion thereof, may be effected by delivering a certificate or certificates evidencing these shares, together with written notice of conversion and a proper assignment of the certificate or certificates to us or in blank, to the office or agency to be maintained by us for that purpose. That office is currently the principal corporate trust office of American Stock Transfer Company located in New York, New York.

Each conversion will be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Series A preferred stock shall have been surrendered and notice shall have been received by us as aforesaid (and if applicable, payment of an amount equal to the dividend payable on those shares shall have been received by us as described below), and the conversion shall be at the conversion price in effect at that time and date.

Holders of shares of Series A preferred stock at the close of business on a dividend payment record date will be entitled to receive the dividend payable on those shares on the corresponding dividend payment date, notwithstanding the conversion of those shares following the dividend payment record date and prior to the dividend payment date. Shares of Series A preferred stock surrendered for conversion during the period between the close of business on any dividend payment record date and the opening of business on the corresponding dividend payment date (except shares converted after the issuance by us of a notice of redemption providing for a redemption date during that period, which shares will be entitled to the dividend), however, must be accompanied by payment of an amount equal to the dividend payable on those shares on the dividend payment date. A holder of shares of Series A preferred stock on a dividend payment record date who (or whose transferee) tenders any shares for conversion into shares of common stock on a dividend payment date will receive the dividend payable by us on those shares of Series A preferred stock on that date, and the converting

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holder need not include payment of the amount of the dividend upon surrender of shares of Series A preferred stock for conversion. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares or for dividends on the shares of common stock issued upon conversion.

Fractional shares of common stock will not be issued upon conversion, but, in lieu thereof, we will pay a cash adjustment based on the current market price of the common stock on the day prior to the conversion date.

Conversion price adjustments

The conversion price is subject to adjustment upon certain events, including:

•  dividends (and other distributions) payable in shares of our common stock;

•  the issuance to all holders of our common stock of certain rights, options or warrants entitling them to subscribe for or purchase common stock at a price per share less than the fair market value per share of common stock;

•  subdivisions, combinations and reclassifications of our common stock; and

•  distributions to all holders of our common stock of shares of capital stock (other than common stock) or evidences of our indebtedness or assets (including securities, but excluding those dividends, rights, warrants and distributions referred to above for which an adjustment previously has been made and excluding permitted common stock cash distributions, as described below).

As used for these purposes, “permitted common stock cash distributions” means cash dividends and distributions paid with respect to the common stock after December 31, 1995, not in excess of the sum of our cumulative undistributed net earnings at December 31, 1995, plus the cumulative amount of funds from operations, as determined by our board of directors on a basis consistent with our financial reporting practices, after December 31, 1995, minus the cumulative amount of dividends accrued or paid on the Series A preferred stock or any other class of preferred stock after January 1, 1996.

In addition to the foregoing adjustments, we will be permitted to make such reductions in the conversion price as we consider to be advisable in order that any event treated for federal income tax purposes as a dividend of stock or stock rights will not be taxable to the holders of the common stock, or, if that is not possible, to diminish any income taxes that are otherwise payable because of such event.

In case we shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the shares of common stock or sale of all or substantially all of our assets), in each case as a result of which shares of common stock will be converted into the right to receive stock, securities or other property (including cash or any combination thereof), each share of Series A preferred stock, if convertible after the consummation of the transaction, will thereafter be convertible into the kind and amount of shares of stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a holder of that number of shares, or fraction thereof, of common stock into which one share of Series A preferred stock was convertible immediately prior to such transaction (assuming that a holder of common stock failed to exercise any rights of election and received per share the kind and

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amount received per share by a plurality of non-electing shares). We may not become a party to any of these transactions unless the terms thereof are consistent with the foregoing.

No adjustment of the conversion price will be required to be made in any case until cumulative adjustments amount to one percent or more of the conversion price. Any adjustments not so required to be made will be carried forward and taken into account in subsequent adjustments.

Exchange listing

The Series A preferred stock is listed on the NYSE under the symbol “FCHPRA.”

Transfer agent

The transfer agent and registrar for the Series A preferred stock is American Stock Transfer Company, New York, New York.

Description of Series C preferred stock and depositary shares

The following is a summary of the material terms and provisions of our 8% Series C Cumulative Redeemable Preferred Stock, or the Series C preferred stock. This summary is not intended to be complete. Accordingly, you also should review the terms and provisions of our charter (including the articles supplementary to the charter setting forth the particular terms of the Series C preferred stock), and bylaws, copies of which are available from us upon request. See “Where You Can Find More Information.”

General

In March 2005, our board of directors adopted articles supplementary that classified and created a series of preferred stock consisting of 54,000 shares, designated 8% Series C Cumulative Redeemable Preferred Stock. In August 2005, our board of directors adopted articles supplementary that classified an additional 13,980 shares of Series C preferred stock thereby increasing the aggregate number of authorized shares of the Series C preferred stock to 67,980. At March 31, 2010, we had outstanding 67,980 shares of Series C preferred stock represented by 6,798,000 depositary shares.

The outstanding shares of Series C preferred stock are validly issued, fully paid and nonassessable. The holders of the Series C preferred stock have no preemptive rights with respect to any shares of our capital stock or any of our other securities convertible into, or carrying rights or options to purchase, any shares of our capital stock. The shares of Series C preferred stock are not subject to any sinking fund or other obligation of us to redeem or retire the Series C preferred stock. Unless converted or redeemed by us into common stock, the Series C preferred stock will have a perpetual term, with no maturity.

Each depositary share represents a 1/100 fractional interest in a share of Series C preferred stock. The shares of Series C preferred stock are deposited with American Stock Transfer Company, or the Series C Preferred Stock Depositary, under a Deposit Agreement, or the Depositary Agreement, among FelCor, the Series C Preferred Stock Depositary and the holders from time to time of the depositary receipts issued by the Series C Preferred Stock Depositary under the Depositary Agreement. The depositary receipts evidence the depositary shares. Subject to the terms of the Depositary Agreement, each holder of a depositary receipt evidencing a depositary share is

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entitled to all the rights and preferences of a ¹/100 fractional interest in a share of Series C preferred stock (including dividend, voting, redemption and liquidation rights and preferences).

Ranking

The Series C preferred stock ranks pari passu with our outstanding Series A preferred stock (as described above) and senior to our common stock with respect to the payment of dividends and amounts upon liquidation, dissolution or winding up.

While any shares of Series C preferred stock are outstanding, we may not authorize, create or increase the authorized amount of any class or series of stock that ranks senior to the Series C preferred stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up without the consent of the holders of two-thirds of the outstanding shares of Series C preferred stock. We, however, may create additional classes of stock, increase the authorized number of shares of preferred stock or issue series of preferred stock ranking junior to, or on a parity with, the Series C preferred stock with respect, in each case, to the payment of dividends and amounts upon liquidation, dissolution and winding up without the consent of any holder of Series C preferred stock.

Dividends

Holders of the Series C preferred stock are entitled to receive, when, as and if declared by our board of directors, out of funds legally available for payment, cash distributions declared or paid for the corresponding period payable at the rate of 8% of the liquidation preference per year (equivalent to $2.00 per year per depositary share). Dividends on the Series C preferred stock are payable quarterly in arrears on the last calendar day of January, April, July and October (or, if not a business day, on the next succeeding business day) of each year (and, in the case of any accrued but unpaid dividends, at such additional times and for such interim periods, if any, as determined by our board of directors). Each dividend is payable to holders of record as they appear on our stock records at the close of business on the record dates, not exceeding 60 days preceding the payment dates thereof, as shall be fixed by our board of directors. Dividends will be cumulative, whether or not in any dividend period or periods FelCor shall have funds legally available for the payment of dividends and whether or not such dividends are authorized. Accumulations of dividends on the Series C preferred stock do not bear interest. Dividends payable on the Series C preferred stock are computed on the basis of a 360-day year consisting of twelve 30-day months.

Except as provided in the next sentence, no dividend will be declared or paid, or set apart for payment, on any parity stock unless full cumulative dividends have been, or contemporaneously are, declared and paid, or set apart for payment, on the Series C preferred stock for all prior dividend periods and the then current dividend period. If accrued dividends on the Series C preferred stock and any parity stock for all prior dividend periods have not been paid in full, then any dividend declared on the Series C preferred stock and any parity stock for any dividend period will be declared ratably in proportion to accrued and unpaid dividends on the Series C preferred stock and any parity stock.

Unless full cumulative dividends then required to be paid on the Series C preferred stock and any parity stock have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment, we will not declare, pay or set apart funds for the payment of any dividend or other distribution with respect to any junior

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stock or, except as set forth in the following sentence, redeem, purchase or otherwise acquire for consideration any junior stock (subject to certain exceptions as described in our charter), through a sinking fund or otherwise. Notwithstanding the foregoing limitations, we may, at any time, acquire shares of our stock, without regard to rank, for the purpose of preserving our status as a REIT.

As used for these purposes,

•  the term “dividend” does not include dividends or distributions payable solely in shares of junior stock on junior stock, or in options, warrants or rights to holders of junior stock to subscribe for or purchase any junior stock;

•  the term “junior stock” means the common stock, and any other class or series of our capital stock now or hereafter issued and outstanding that ranks junior to the Series C preferred stock as to the payment of dividends or amounts upon the liquidation, dissolution or winding up of FelCor; and

•  the term “parity stock” means any other class or series of our capital stock now or hereafter issued and outstanding (including the Series A preferred stock) that ranks equally with the Series C preferred stock as to the payment of dividends and amounts upon the liquidation, dissolution or winding up of FelCor.

FelCor LP issued to us Series E preferred units in FelCor LP, the economic terms of which are substantially identical to the Series C preferred stock. FelCor LP is required to make all required distributions on the Series E preferred units (which will mirror the payments of dividends, including accrued and unpaid dividends upon redemption, and of the liquidation preference amount of the Series C preferred stock) prior to any distribution of cash or assets to the holders of the common units or to the holders of any other interests in FelCor LP, except for any other series of preference units ranking on a parity with the Series E preferred units as to distributions or liquidation rights and except for distributions required to enable us to maintain our qualification as a REIT.

The indenture under which our senior secured notes are issued includes covenants that restrict our ability to declare and pay dividends. In general, the indenture contains exceptions to the limitations to allow FelCor LP to make distributions necessary to allow us to maintain our status as a REIT. We are currently below the minimum thresholds set forth in the indenture for which discretionary cash distributions are permitted, and as a result, we are unable to distribute the full amount of distributions accruing under our outstanding preferred stock.

Optional redemption

At our option, upon not less than 30 nor more than 60 days prior written notice, we may redeem the Series C preferred stock (and the Series C Preferred Stock Depositary will redeem a number of depositary shares representing the shares of Series C preferred stock so redeemed upon not less than 30 days prior written notice to the holders thereof), in whole or in part, at any time or from time to time, at a redemption price of $2,500 per share (equivalent to $25 per depositary share), plus all accrued and unpaid distributions thereon, if any, to the date fixed for redemption without interest, to the extent we have funds legally available therefor. The redemption price of the Series C preferred stock may be paid from any source. Holders of depositary receipts evidencing depositary shares to be redeemed shall surrender such depositary receipts at the place designated in the notice and shall be entitled to the redemption price and

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any accrued and unpaid distributions payable upon redemption following the surrender. If notice of redemption of any depositary shares has been given and if the funds necessary for such redemption have been set aside by us in trust for the benefit of the holders of any depositary shares so called for redemption, then from and after the redemption date, distributions will cease to accrue on those depositary shares, those depositary shares will no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price. If fewer than all of the outstanding depositary shares are to be redeemed, the depositary shares to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional depositary shares) or by any other equitable method determined by us.

Notice of redemption will be given by mail or by publication (with subsequent prompt notice by mail) in The Wall Street Journal or The New York Times or, if neither is then being published, in any other daily newspaper of national circulation, to the holders of the Series C preferred stock not less than 30 days nor more than 60 days prior to the redemption date. A similar notice furnished by us will be mailed by the Series C Preferred Stock Depositary, by first class mail, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the depositary receipts evidencing the depositary shares to be redeemed at their respective addresses as they appear on the share transfer records of the Series C Preferred Stock Depositary. No failure to give notice or any defect therein or in the mailing thereof will affect the sufficiency of the notice or the validity of the proceedings for the redemption of any shares of Series C preferred stock or depositary shares, except as to the holder to whom notice was defective or not given. Each notice will state:

•  the redemption date;

•  the redemption price;

•  the number of shares of Series C preferred stock to be redeemed (and the corresponding number of depositary shares) from that holder;

•  the place or places where the depositary receipts evidencing the depositary shares are to be surrendered for payment of the redemption price; and

•  that dividends on the shares to be redeemed will cease to accrue on the redemption date.

Unless full cumulative dividends then required to be paid on the Series C preferred stock and any parity stock have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof set apart for payment, the Series C preferred stock may not be redeemed in part and we may not, except as set forth in the following sentence, purchase or otherwise acquire for value any shares of Series C preferred stock, otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of shares of Series C preferred stock. Notwithstanding the foregoing limitations, we may, at any time, acquire shares of our shares of stock, without regard to rank, for the purpose of preserving our status as a REIT.

Liquidation preference

The holders of shares of Series C preferred stock are entitled to receive in the event of the liquidation, dissolution or winding up of FelCor, whether voluntary or involuntary, a liquidation preference (the “Series C Liquidation Preference”) $2,500 per share of Series C preferred stock (equivalent to $25 per depositary share), plus an amount per share of Series C preferred stock

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equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders and shall not be entitled to any further payment.

Until the holders of the Series C preferred stock have been paid the Series C Liquidation Preference in full, no payment will be made to any holder of junior stock upon the liquidation, dissolution or winding up of FelCor. If, upon the liquidation, dissolution or winding up of FelCor, the assets of FelCor, or proceeds thereof, distributable among the holders of the shares of Series C preferred stock and any parity stock are insufficient to pay in full the Series C Liquidation Preference and the liquidation preference applicable with respect to any parity stock, then such assets, or the proceeds thereof, will be distributed among the holders of shares of Series C preferred stock and any parity stock, ratably, in accordance with the respective amounts that would be payable on the shares of Series C preferred stock and any parity stock if all amounts payable thereon were to be paid in full. Neither a consolidation or merger of us with another corporation, a statutory share exchange by us, nor a sale, lease or transfer of all or substantially all of our assets will be considered a liquidation, dissolution or winding up, voluntary or involuntary, of us.

Voting rights

In any matter in which the Series C preferred stock is entitled to vote (as expressly described herein or as may be required by law), including any action by written consent, each share of Series C preferred stock shall be entitled to 100 votes, each of which 100 votes may be directed separately by the holder thereof (or by any proxy or proxies of such holder). With respect to each share of Series C preferred stock, the holder thereof may designate up to 100 proxies, with each such proxy having the right to vote a whole number of votes (totaling 100 votes per share of Series C preferred stock). As a result, each depositary share will be entitled to one vote.

If six quarterly dividends (whether or not consecutive) payable on the Series C preferred stock or any parity stock are in arrears, whether or not earned or declared, the number of directors then constituting our board of directors will be increased by two and the holders of the depositary shares representing the Series C preferred stock and any other parity stock, voting together as a single class, identified as voting preferred shares, will have the right to elect two additional directors to serve on our board of directors at an annual meeting of stockholders or a special meeting held in place thereof, or at a special meeting of the holders of the voting preferred shares, until all delinquent dividends, together with the dividends for the current quarterly period, on the voting preferred shares have been paid or declared or set aside for payment.

The approval of two-thirds of the outstanding depositary shares representing the Series C preferred stock and any parity stock similarly affected, voting together as a single class, is required in order to:

•  amend our charter, whether by way of merger, consolidation or otherwise, to affect materially and adversely the rights, preferences or voting power of the holders of the Series C preferred stock and any parity stock,

•  enter into a share exchange that affects the Series C preferred stock, consolidate with or merge into another entity, or permit another entity to consolidate with or merge into us, unless in each such case, each share of Series C preferred stock remains outstanding without a material and adverse change to its terms and rights or is converted into, or exchanged for, a share of preferred stock of the surviving entity having preferences, rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of

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redemption identical to those of a share of Series C preferred stock (except for changes that do not materially and adversely affect the holders of the Series C preferred stock); or

•  amend our charter to authorize, reclassify, create or increase the authorized amount of any class of stock having rights senior to the Series C preferred stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of FelCor.

We may, however, increase the authorized number of shares of preferred stock and may create additional classes of parity stock and junior stock, increase the authorized number of shares of parity stock and junior stock and issue additional series of parity stock and junior stock, all without the consent of any holder of Series C preferred stock.

Conversion rights

Shares of Series C preferred stock are not convertible into, or exchangeable for, any other property or securities of us.

Exchange listing

The depositary shares representing the Series C preferred stock are listed on the NYSE under the symbol “FCHPRC.”

Transfer agent

The transfer agent and registrar for the depositary shares representing the Series C preferred stock is American Stock Transfer Company, New York, New York.

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Certain provisions of the Maryland general
corporation law and our charter and bylaws

Charter and bylaw provisions

Restrictions on ownership and transfer

For us to qualify as a REIT under U.S. federal income tax laws, we must meet certain requirements concerning the ownership of our outstanding stock. Specifically, not more than 50% in value of our outstanding stock may be owned, actually and constructively under the applicable attribution provisions of U.S. federal income tax laws, by five or fewer individuals (as defined to include certain entities) during the last half of a taxable year, or the 5/50 Rule, and we must be beneficially owned by 100 or more persons during at least 335 days of a taxable year or during a proportionate part of a shorter taxable year. See “Certain United States Federal Income Tax Consequences—Requirements for Qualification.” For the purpose of preserving our REIT qualification, our charter contains certain provisions that restrict the ownership and transfer of our stock under certain circumstances, or the Ownership Limitation Provisions.

The Ownership Limitation Provisions provide that, subject to certain exceptions specified in our charter, no person may own, or be deemed to own by virtue of the applicable attribution provisions of the Code, more than 9.9% of the outstanding shares of any class of our stock, or the Ownership Limit. Our board of directors may, but in no event will be required to, waive the Ownership Limit if it determines that such ownership will not jeopardize our status as a REIT. As a condition of such waiver, the board of directors may require opinions of counsel satisfactory to it and/or undertakings or representations from the applicant with respect to preserving our REIT status. The board of directors has waived the Ownership Limit, subject to certain conditions, for certain parties. In determining that it is appropriate to provide such waivers of the Ownership Limit, the board of directors has consulted with counsel, has obtained, or will obtain, appropriate undertakings or representations and has imposed, or will impose, appropriate conditions with respect to such waivers to assure that the 5/50 Rule will not be violated. The Ownership Limitation Provisions will not apply if the board of directors and the holders of 662/3% of the outstanding shares of stock entitled to vote on such matter determine that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

Any purported transfer of our stock, and any other event that would otherwise result in any person or entity violating the Ownership Limit, will be void and of no force or effect as to that number of shares in excess of the Ownership Limit, and the purported transferee, or Prohibited Transferee, shall acquire no right or interest (or, in the case of any event other than a purported transfer, the person or entity, or Prohibited Owner, holding record title to any such shares in excess of the Ownership Limit, or the Excess Shares, shall cease to own any right or interest) in the Excess Shares. In addition, if any purported transfer of our stock or any other event otherwise would cause us to become “closely held” under the Code or otherwise fail to qualify as a REIT under the Code (other than as a result of a violation of the requirement that a REIT have at least 100 stockholders) then any such purported transfer will be void and of no force or effect as to that number of shares in excess of the number that could have been transferred without such result, and the Prohibited Transferee shall acquire no right or interest (or, in the case of any event other than a transfer, the Prohibited Owner shall cease to own any right or interest) in such Excess Shares. Also, if any purported transfer of our capital stock or any other event would otherwise cause us to violate the 5/50 Rule or to own, or be deemed to own by

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virtue of the applicable attribution provisions of the Code, 10% or more of the ownership interests in any entity that leases any hotels or in any sublessee, other than a TRS, then any such purported transfer will be void and of no force or effect as to that number of shares in excess of the number that could have been transferred without such result, and the Prohibited Transferee shall acquire no right or interest (or, in the case of any event other than a transfer, the Prohibited Owner shall cease to own any right or interest) in such Excess Shares.

Any such Excess Shares will be transferred automatically, by operation of law, to a trust, the beneficiary of which will be a qualified charitable organization selected by us, or the Beneficiary. The trustee of the trust, who shall be designated by us and be unaffiliated with us and any Prohibited Owner, will be empowered to sell such Excess Shares to a qualified person or entity and distribute to a Prohibited Transferee an amount equal to the lesser of the price paid by the Prohibited Transferee for such Excess Shares or the sales proceeds received by the trust for such Excess Shares. In the case of any Excess Shares resulting from any event other than a transfer, or from a transfer for no consideration, the trustee will be empowered to sell such Excess Shares to a qualified person or entity and distribute to the Prohibited Owner an amount equal to the lesser of the fair market value of such Excess Shares on the date of such event or the sales proceeds received by the trust for such Excess Shares. Prior to a sale of any such aggregate fractional shares by the trust, the trustee will be entitled to receive, in trust for the benefit of the Beneficiary, all dividends and other distributions paid by us with respect to such Excess Shares, and also will be entitled to exercise all voting rights with respect to the Excess Shares.

Any purported transfer of our stock that would otherwise cause us to be beneficially owned by fewer than 100 persons will be null and void in its entirety, and the intended transferee will acquire no rights in such stock.

All certificates representing shares of stock will bear a legend referring to the restrictions described above.

Every owner of more than 5% (or such lower percentage as may be required under U.S. federal income tax laws) of the outstanding shares of our stock must file a written notice with us containing the information specified in our charter no later than January 30 of each year. In addition, each stockholder shall, upon demand, be required to disclose to us in writing such information as we may request in order to determine the effect, if any, of such stockholder’s actual and constructive ownership on our status as a REIT and to ensure compliance with the Ownership Limit.

The Ownership Limitation Provisions may have the effect of precluding an acquisition of control of us without approval of our board of directors.

Staggered board of directors

Our charter provides that our board of directors is divided into three classes of directors, each class constituting approximately one-third of the total number of directors and with the classes serving staggered three-year terms. The classification of directors will have the effect of making it more difficult for stockholders to change the composition of our board of directors. We believe, however, that the longer time required to elect a majority of our board of directors will help to ensure continuity and stability of our management and policies.

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The classification provisions could also have the effect of discouraging a third party from accumulating large blocks of our stock or attempting to obtain control of us, even though such an attempt might be beneficial to us and our stockholders. Accordingly, stockholders could be deprived of certain opportunities to sell their securities at a higher price than might otherwise be the case.

Number of directors; removal; filling vacancies

Our charter and bylaws provide that, subject to any rights of holders of shares of preferred stock to elect additional directors under specified circumstances, the number of directors will consist of not less than three nor more than nine persons, subject to increase or decrease by the affirmative vote of 80% of the members of the entire board of directors, provided, however, that in no event shall the number of directors be less than the minimum required by the Maryland General Corporation Law. At all times a majority of the directors shall be Independent Directors, as defined by our charter, except that upon the death, removal or resignation of an Independent Director, such requirement shall not be applicable for 60 days. As of October 31, 2008, in accordance with the bylaws, the number of directors was fixed at ten directors, eight of whom are Independent Directors. The holders of shares of common stock shall be entitled to vote on the election or removal of directors, with each share entitled to one vote. Our charter provides that, subject to any rights of holders of shares of preferred stock any vacancies may be filled by the affirmative vote of a majority of the remaining directors, even if less than a quorum. Any director so elected may qualify as an Independent Director only if he has received the affirmative vote of at least a majority of the remaining Independent Directors, if any. Accordingly, our board of directors could temporarily prevent any holder of shares of common stock from enlarging our board of directors and filling the new directorships with such stockholder’s own nominees. In accordance with Maryland law, any director so elected by our board of directors shall serve until the next annual meeting of our stockholders, even if the term of the class to which the director was elected does not expire at that annual meeting of stockholders.

Any director or the entire board may be removed with cause by the vote of the holders of a majority of the outstanding shares of common stock at a special meeting of the stockholders called for the purpose of removing him or them.

Additionally, our charter and Maryland law provide that if stockholders of any class of our capital stock are entitled separately to elect one or more directors, such directors may not be removed except by the affirmative vote of a majority of all of the shares of such class or series entitled to vote for such directors.

Limitation of liability

Our charter provides that, to the maximum extent that Maryland law in effect from time to time permits limitation of liability of directors and officers, none of our directors or officers shall be liable to us or our stockholders for money damages. Under Maryland law, the effect of our charter provision will be that our directors and officers will not be liable to us or our stockholders for money damages, except to the extent of an improper benefit actually received by them or a finding of active and deliberate dishonesty on their part.

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Indemnification of directors and officers

Our charter and bylaws require us to indemnify our directors, officers, employees and agents to the fullest extent permitted from time to time by Maryland law. Maryland law permits a corporation to indemnify its directors, officers, employees and agents against judgments, penalties, fines, settlements and reasonable expenses (including attorneys’ fees) actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service to, or at the request of, the corporation, unless it is established that:

•  the act or omission of the indemnified party was material to the matter giving rise to the proceeding and the act or omission was committed in bad faith or was the result of active and deliberate dishonesty; or

•  the indemnified party actually received an improper personal benefit in money, property or services; or

•  in the case of any criminal proceeding, the indemnified party had reasonable cause to believe that the act or omission was unlawful.

Indemnification is mandatory if the indemnified party has been successful on the merits or otherwise in the defense of any proceeding unless such indemnification is not otherwise permitted as provided in the preceding sentence. In addition to the foregoing, a court of competent jurisdiction, under certain circumstances, may order indemnification if it determines that the indemnified party is fairly and reasonably entitled to indemnification in view of all the relevant circumstances. An indemnified party may not be indemnified if the proceeding was an action by or in the right of the Company and the indemnified party was adjudged to be liable to the Company, or the indemnified party was adjudged to be liable on the basis that he received an improper personal benefit.

Reasonable expenses incurred by an indemnified party may be paid or reimbursed by the Company in advance of the final disposition of the proceeding if the indemnified provides the Company with a written affirmation of the indemnified party’s good faith belief that the requisite standard of conduct has been met and that the expenses will be repaid if it is ultimately determined that the standard of conduct has not been met.

Our board of directors approved a form of indemnification agreement for our officers and directors. The rights of an indemnitee under that indemnification agreement complement any rights such an indemnitee may already have under our charter or bylaws, under Maryland law or otherwise. This indemnification agreement requires us to indemnify and advance expenses and costs incurred by an indemnitee in connection with any claims, suits or proceedings arising as a result of the indemnitee’s service as our officer or director.

Amendment

Subject to the rights of any shares of preferred stock outstanding from time to time (including the rights of the Series A preferred stock and the Series C preferred stock), our charter may be amended by the affirmative vote of the holders of a majority of the outstanding shares of stock entitled to vote on the matter after the directors have adopted a resolution approving the amendment and submitted the amendment to the stockholders at either an annual or special meeting for approval by the stockholders; provided, that our charter provision providing for the classification of our board of directors into three classes may not be amended, altered, changed or repealed without the affirmative vote of at least 80% of the members of our board of

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directors and the affirmative vote of holders of 75% of the outstanding shares of capital stock entitled to vote on that matter. The provisions relating to restrictions on transfer, designation of shares-in-trust, shares-in-trust and ownership of the lessee may not be amended, altered, changed or repealed without the affirmative vote of a majority of the members of our board of directors and approved by an affirmative vote of the holders of not less than 662/3% of the outstanding shares of our stock entitled to vote on that matter. Similarly, we may not take any action to cause us not to qualify as a REIT or to revoke our election to be taxed as a REIT without the affirmative vote of the holders of not less than 662/3% of the outstanding shares of our stock entitled to vote on the matter.

Operations

We generally are prohibited from engaging in certain activities, including acquiring or holding property or engaging in any activity that would cause us to fail to qualify as a REIT.

Maryland anti-takeover statutes

Under the Maryland General Corporation Law, the MGCL, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and (i) any person who beneficially owns 10% or more of the voting power of the outstanding voting stock of the corporation, (ii) an affiliate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation, or an Interested Stockholder, or (iii) an affiliate thereof are prohibited for five years after the most recent date on which the Interested Stockholder became an Interested Stockholder. Thereafter, any “business combination” must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least (a) 80% of the votes entitled to be cast by holders of outstanding voting shares of the corporation voting together as a single group and (b) two-thirds of the votes entitled to be cast by holders of outstanding voting shares of the corporation other than voting shares held by the Interested Stockholder with whom (or with whose affiliate) the business combination is to be effected, voting together as a single group unless, among other conditions, the corporation’s stockholders receive a minimum price (as defined under Maryland law) for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Stockholder for its shares. These provisions of the MGCL do not apply, however, to business combinations of a corporation (i) that are, with specifically identified or unidentified existing or future Interested Stockholders, approved or exempted by the board of directors of the corporation prior to the time that the Interested Stockholder becomes an Interested Stockholder, or (ii) if the stockholders of the corporation adopt a charter amendment electing not to be governed by the business combination statute by a vote of at least 80% of the votes entitled to be cast by outstanding shares of voting stock of the corporation, voting together in a single group, and two-thirds of the votes entitled to be cast by persons (if any) who are not Interested Stockholders or affiliates thereof voting together as a single group, provided that the charter amendment may not be effective for 18 months after the vote and may not apply to a business combination with any person who became an Interested Stockholder on or before the date of the vote. Our charter has exempted from these provisions of the MGCL, any business combination involving the chairman of our board, or any present or future affiliates, associates or other persons acting in concert or as a group with our chairman of the board.

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Sections 3-701 et seq. of the MGCL, or the Control Share Statute, provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of stock owned by the acquiring person, or by officers or directors who are employees of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock previously acquired by that person or in respect of which the acquiring person is able to exercise or direct the exercise of voting power, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: (i) one-tenth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions. Voting rights will not be denied to “control shares” if the acquisition of such shares, as to specifically identified or unidentified future or existing stockholders or their affiliates, has been approved in the charter or bylaws of the corporation prior to the acquisition of such shares.

A person who has made, or proposes to make, a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders’ meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders’ meeting and the acquiring person becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of the appraisal rights may not be less than the highest price per share paid by the acquiring person in the control share acquisition. Certain limitations and restrictions otherwise applicable to the exercise of dissenters’ rights do not apply in the context of a control share acquisition.

The Maryland Control Share Statute does not apply to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction, or to acquisitions approved or exempted by a provision contained in the corporation’s charter or bylaws prior to the acquisition.

Our charter contains a provision exempting any and all acquisitions of shares of our stock from the Control Share Statute. There can be no assurance that this provision will not be amended or eliminated in the future. If the foregoing exemption in the charter is amended, the Control Share Statute could have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any such offer.

Maryland law also provides that a Maryland corporation that is subject to the Exchange Act and has at least three outside directors can elect by resolution of the board of directors to be subject to some corporate governance provisions that may be inconsistent with the corporation’s charter

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and bylaws. Under the applicable statute, a board of directors may classify itself without the vote of stockholders. A board of directors classified in that manner cannot be altered by amendment to the charter of the corporation. Further, the board of directors may, by electing into the applicable statutory provisions and notwithstanding the charter or bylaws:

•  provide that a special meeting of stockholders will be called only at the request of stockholders entitled to cast at least a majority of the votes entitled to be cast at the meeting;

•  reserve for itself the right to fix the number of directors;

•  provide that a director may be removed only by the vote of the holders of two-thirds of the stock entitled to vote; and

•  retain for itself sole authority to fill vacancies created by the death, removal or resignation of a director.

In addition, a director elected to fill a vacancy under this provision will serve for the balance of the unexpired term instead of until the next annual meeting of stockholders. A board of directors may implement all or any of these provisions without amending the charter or bylaws and without stockholder approval. A corporation may be prohibited by its charter or by resolution of its board of directors from electing any of the provisions of the statute. We are not prohibited from implementing any or all of the statute. If implemented, these provisions could discourage offers to acquire our stock and could increase the difficulty of completing an offer.

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Partnership agreement

The following summary of the Second Amended and Restated Agreement of Limited Partnership of FelCor LP, or the Partnership Agreement, and the descriptions of certain provisions thereof set forth in this prospectus, are qualified in their entirety by reference to the Partnership Agreement, which is an exhibit to the registration statement of which this prospectus is a part.

Management

FelCor LP is a limited partnership organized under the laws of the State of Delaware and was formed pursuant to the terms of the Partnership Agreement. Pursuant to the Partnership Agreement, FelCor, as the sole general partner of FelCor LP, has full, exclusive and complete responsibility and discretion in the management and control of FelCor LP, and the limited partners of FelCor LP, or the Limited Partners, have no authority to transact business for, or participate in the management activities or decisions of, FelCor LP. Any amendment to the Partnership Agreement that would, however,

•  affect the Redemption Rights described under “—Redemption Rights” below;

•  adversely affect the Limited Partners’ rights to receive cash distributions;

•  alter FelCor LP’s allocations of income; or

•  impose on the Limited Partners any obligations to make additional contributions to the capital of FelCor LP,

requires the consent of Limited Partners holding at least a majority of the Units.

Transferability of interests

FelCor may not voluntarily withdraw from FelCor LP or transfer or assign its interest in FelCor LP unless the transaction in which such withdrawal or transfer occurs results in the Limited Partners receiving property in an amount equal to the amount they would have received had they exercised their redemption rights immediately prior to such transaction, or unless the successor to FelCor contributes substantially all of its assets to FelCor LP in return for an interest in FelCor LP. The Limited Partners may not transfer their interests in FelCor LP without the consent of FelCor, which FelCor may withhold in its sole discretion. FelCor may not consent to any transfer that would cause FelCor LP to be treated as a separate corporation for federal income tax purposes.

Capital contributions

FelCor and the original Limited Partners contributed cash and certain interests in FelCor’s six initial hotels to FelCor LP in connection with FelCor’s initial public offering of common stock in 1994, or the IPO. Subsequently, FelCor LP issued additional Units in exchange for cash contributions and for interests in additional hotels. FelCor will contribute all of the net proceeds from the sale of capital stock to FelCor LP in exchange for additional Units having distribution, liquidation and conversion provisions substantially identical to the capital stock so offered by FelCor. As required by the Partnership Agreement, immediately prior to a capital contribution by FelCor, the Partners’ capital accounts and the Carrying Value (as that term is defined in Partnership Agreement) of FelCor LP property shall be adjusted to reflect the unrealized gain or

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unrealized loss attributable to FelCor LP property as if such items had actually been recognized immediately prior to such issuance and had been allocated to the Partners at such time.

The Partnership Agreement provides that if FelCor LP requires additional funds at any time or from time to time in excess of funds available to FelCor LP from borrowing or capital contributions, FelCor may borrow such funds from a financial institution or other lender and lend such funds to FelCor LP on the same terms and conditions as are applicable to FelCor’s borrowing of such funds. As an alternative to borrowing funds required by FelCor LP, FelCor may contribute the amount of such required funds as an additional capital contribution to FelCor LP. If FelCor so contributes additional capital to FelCor LP, FelCor will receive additional Units. FelCor will contribute the proceeds from this offering to FelCor LP in exchange for the number of additional Units in FelCor LP equal to the number of shares of FelCor common stock sold in this offering.

Redemption rights

Pursuant to the Partnership Agreement, the Limited Partners are entitled to certain rights of redemption, or Redemption Rights, which enable them to cause FelCor to redeem their interests in FelCor LP (subject to certain restrictions) in exchange for shares of common stock of FelCor, cash or a combination thereof, at the election of FelCor. The Redemption Rights may not be exercised if the issuance of shares of common stock by FelCor, as general partner, for any part of the interest in FelCor LP sought to be redeemed would:

•  result in any person violating the Ownership Limit contained in FelCor’s charter;

•  cause FelCor to be “closely held” within the meaning of the Code;

•  cause FelCor to be treated as owning 10% or more of the lessee or any sublessee within the meaning of the Code; or

•  otherwise cause FelCor to fail to qualify as a REIT.

In any case, FelCor LP or FelCor (as the case may be) may elect, in its sole and absolute discretion, to pay the redemption amount in cash. The Redemption Rights may be exercised by the Limited Partners, in whole or in part (in either case, subject to the above restrictions), at any time or from time to time, following the satisfaction of any applicable holding period requirements. At March 31, 2010, the aggregate number of shares of common stock issuable upon exercise of the Redemption Rights by the Limited Partners, other than by us, was 294,960. The number of shares issuable upon the exercise of the Redemption Rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro rata share transactions, which otherwise would have the effect of diluting the ownership interests of the Limited Partners or the stockholders of FelCor.

Registration rights

The Limited Partners had certain rights to the registration for resale of any shares of common stock of FelCor held by them or received by them upon redemption of their Units. Such rights included piggyback rights and the right to include such shares in a registration statement. In connection therewith, FelCor has filed and caused to become effective registration statements relating to the resale of shares issued upon redemption of certain outstanding Units. FelCor was

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required to bear the costs of such registration statements, exclusive of underwriting discounts, commissions and certain other costs attributable to, and borne by, the selling stockholders.

Tax matters

Pursuant to the Partnership Agreement, FelCor is the tax matters partner of FelCor LP and, as such, has authority to make tax elections under the Code on behalf of FelCor LP.

Profit and loss of FelCor LP generally are allocated among the partners in accordance with their respective interests in FelCor LP based on the number of Units held by the partners.

Operations

The Partnership Agreement requires that FelCor LP be operated in a manner that enables FelCor to satisfy the requirements for being classified as a REIT and to avoid any federal income tax liability.

Distributions

The Partnership Agreement provides that FelCor LP will distribute cash from operations (including net sale or refinancing proceeds, but excluding net proceeds from the sale of FelCor LP’s property in connection with the liquidation of FelCor LP) quarterly, in amounts determined by FelCor in its sole discretion, to the partners in accordance with their respective percentage interests in FelCor LP. Upon liquidation of FelCor LP, after payment of, or adequate provision for, debts and obligations of FelCor LP, including any partner loans, any remaining assets of FelCor LP will be distributed to all partners with positive capital accounts in accordance with their respective positive capital account balances. If any partner, including FelCor, has a negative balance in its capital account following a liquidation of FelCor LP, it will be obligated to contribute cash to FelCor LP equal to the negative balance in its capital account.

Term

FelCor LP will continue in perpetuity or until sooner dissolved upon:

•  the bankruptcy, dissolution or withdrawal of FelCor as general partner (unless the Limited Partners elect to continue FelCor LP);

•  the sale or other disposition of all or substantially all the assets of FelCor LP;

•  the redemption of all limited partnership interests in FelCor LP (other than those held by FelCor, if any); or

•  the election by general partner.

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Certain united states federal income tax considerations

The following discussion is a summary of certain U.S. federal income tax consequences and, in the case of non-U.S. stockholders (as defined below), U.S. federal estate tax consequences of qualification and taxation as a REIT and of the ownership and disposition of our common stock. Because this section is a summary, it does not address all of the tax issues that may be important to you in light of your personal investment or tax circumstances. In addition, this section does not address the tax issues that may be important to certain types of holders of our common stock that are subject to special treatment under U.S. federal income tax laws, such as insurance companies, partnerships or other pass-through entities (or investors in such entities), expatriates, taxpayers subject to the alternative minimum tax, tax-exempt organizations (except as discussed herein), financial institutions or broker-dealers, and dealers in securities. This discussion applies only to persons who purchase our common stock described in this prospectus in this offering and who hold our common stock as a capital asset for U.S. federal income tax purposes. In addition, this discussion does not address any consequences resulting from the newly enacted Medicare tax on investment income.

The statements of law in this discussion are based on current provisions of the Code, existing temporary and final Treasury regulations thereunder, and current administrative rulings and court decisions. No assurance can be given that future legislative, judicial, or administrative actions or decisions, any of which may take effect retroactively, will not affect the accuracy of any statements in this discussion. We have not and will not seek any rulings or opinions from the IRS regarding the matters discussed below. There can be no assurance that the IRS will not take positions which are different from those discussed below.

As used in this discussion, a “U.S. stockholder” is a beneficial owner of our common stock that, for United States federal income tax purposes, is:

•  an individual who is a citizen or resident of the United States;

•  a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

•  an estate if its income is subject to U.S. federal income taxation regardless of its source; or

•  a trust, if a U.S. court is able to exercise primary supervision over administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust, or if the trust has validly elected to continue to be treated as a domestic trust.

As used in this discussion, a “non-U.S. stockholder” is a beneficial owner of our common stock that, for United States federal income tax purposes, is an individual, corporation, estate or trust and is not a U.S. stockholder.

If any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes is a beneficial owner of our common stock, the treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership that is considering purchasing our common stock, you should consult with your tax advisor.

This discussion assumes that a stockholder will structure its ownership of our common stock so as to not be subject to the newly enacted withholding tax discussed in “— Additional Holding Requirements.”

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THIS SUMMARY IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO BE CONSTRUED AS TAX ADVICE. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF INVESTING IN OUR COMMON STOCK AND OF OUR ELECTION TO BE TAXED AS A REIT. SPECIFICALLY, WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES (INCLUDING ANY FEDERAL ESTATE OR GIFT TAX CONSEQUENCES AND ANY CONSEQUENCES RESULTING FROM THE NEWLY ENACTED MEDICARE TAX ON INVESTMENT INCOME) OF SUCH INVESTMENT AND ELECTION, AND REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

Our taxation

We are currently taxed as a REIT under U.S. federal income tax laws. We elected to be taxed as a REIT under U.S. federal income tax laws beginning with our short taxable year ended December 31, 1994. We believe that since our election to be a REIT we have operated in such a manner as to qualify for taxation as a REIT, and we intend to continue to operate in such a manner, but no assurance can be given that we have or will continue to qualify as a REIT under the Code. This section discusses the laws governing the U.S. federal income tax treatment of a REIT and holders of its common stock. These laws are highly technical and complex.

Our qualification as a REIT depends on our ability to meet on a continuing basis qualification tests set forth in the U.S. federal income tax laws. Those qualification tests involve the percentage of income that we earn from specified sources, the percentages of our assets that fall within specified categories, the diversity of our share ownership and the percentage of our taxable income that we distribute. We describe the REIT qualification tests in more detail below. For a discussion of the federal income tax consequences of our failure to qualify as a REIT, see “—Requirements For Qualification—Failure To Qualify.”

If we qualify as a REIT, we generally will not be subject to U.S. federal income tax on the taxable income that we distribute to our stockholders. The benefit of that tax treatment is that we avoid the “double taxation,” or taxation at both the corporate and stockholder levels, that generally results from owning stock in a corporation. We will, however, be subject to federal tax in the following circumstances:

•  We will pay federal income tax on our taxable income, including net capital gain, that we do not distribute to our stockholders during, or within a specified time period after, the calendar year in which the income is earned.

•  Under certain circumstances we may be subject to the “alternative minimum tax” on items of tax preference that we do not distribute to our stockholders.

•  We will pay income tax at the highest corporate rate on (1) net income from the sale or other disposition of property acquired through foreclosure (“foreclosure property”) that we hold primarily for sale to customers in the ordinary course of our business and (2) other non-qualifying income from foreclosure property.

•  We will pay a 100% tax on net income from sales or other dispositions of property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of our business.

•  If we fail to satisfy the 75% gross income test or the 95% gross income test, as described below under “—Requirements For Qualification—Income Tests,” and nonetheless continue to qualify as a REIT because we meet other requirements, we will pay a 100% tax on (1) the

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greater of the amount by which we fail the 75% gross income test or the amount by which 95% of our gross income exceeds the amount of our income qualifying under the 95% gross income test, multiplied by (2) a fraction intended to reflect our profitability.

•  In the event of a more than de minimis failure of any of the asset tests as described below under “—Requirements For Qualification—Asset Tests,” as long as the failure was due to reasonable cause and not to willful neglect, we dispose of the assets or otherwise comply with the asset tests within six months after the last day of the quarter in which we discovered the failure of the asset test and we provide a schedule of the disqualifying assets to the IRS, we will pay a tax equal to the greater of (1) $50,000, or (2) the amount determined by multiplying the highest rate of income tax for corporations (currently 35%) by the net income from the nonqualifying assets during the period in which we failed to satisfy the asset test or tests.

•  If we fail to satisfy one or more requirements for REIT qualification during a taxable year, other than a gross income test or an asset test, and continue to qualify as a REIT because we meet other requirements, we will be required to pay a penalty of $50,000 for each such failure.

•  If we fail to distribute during a calendar year at least the sum of (1) 85% of our REIT ordinary income for such year, (2) 95% of our REIT capital gain net income for such year, and (3) any undistributed taxable income from prior periods, we will pay a 4% excise tax on the excess of this required distribution over the amount we actually distributed.

•  We will incur a 100% excise tax on transactions with a “taxable REIT subsidiary” that are not conducted on an arm’s-length basis.

•  We may elect to retain and pay income tax on our net long-term capital gain.

•  If we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax, in a merger or other transaction in which we acquire a basis in the asset that is determined by reference to the C corporation’s basis in the asset or another asset we will pay tax at the highest regular corporate rate applicable if we recognize gain on the sale or disposition of such asset during the ten-year period after we acquire such asset, provided no election is made for the transaction to be taxable on a current basis. The amount of gain on which we will pay tax is generally the lesser of (1) the amount of gain that we recognize at the time of the sale or disposition of the asset and (2) the amount of gain that we would have recognized if we had sold the asset at the time we acquired the asset. Accordingly, any gain we recognize on the disposition of any such asset during the ten-year period beginning on the date of acquiring the asset, to the extent of such asset’s “built-in gain,” will be subject to tax at the highest regular corporate rate.

Requirements for qualification

A REIT is a corporation, trust, or association that meets the following requirements:

1. it is managed by one or more trustees or directors;

2. its beneficial ownership is evidenced by transferable shares, or by transferable certificates of beneficial interest;

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3. it would be taxable as a domestic corporation, but for the REIT provisions of U.S. federal income tax laws;

4. it is neither a financial institution nor an insurance company subject to special provisions of U.S. federal income tax laws;

5. at least 100 persons are beneficial owners of its shares or ownership certificates;

6. no more than 50% in value of its outstanding shares or ownership certificates is owned, directly or indirectly, by five or fewer individuals, as defined in U.S. federal income tax laws to include certain entities, during the last half of any taxable year;

7. it elects to be a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status;

8. it uses a calendar year for federal income tax purposes and complies with the recordkeeping requirements of U.S. federal income tax laws; and

9. it meets certain other qualification tests, described below, regarding the nature of its income and assets, and the amount of its distributions.

We must meet requirements 1 through 4 during our entire taxable year and must meet requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. If we comply with all the requirements for ascertaining the ownership of our outstanding shares in a taxable year and have no reason to know that we violated requirement 6, we will be deemed to have satisfied requirement 6 for such taxable year. For purposes of determining share ownership under requirement 6, an “individual” generally includes a supplemental unemployment compensation benefit plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes. An “individual,” however, generally does not include a trust that is a qualified employee pension or profit sharing trust under U.S. federal income tax laws, and beneficiaries of such a trust will be treated as holding our shares in proportion to their actuarial interests in the trust for purposes of requirement 6. In addition, for purposes of applying requirement 6, a look-through rule applies so that generally shares of our capital stock that are held by a corporation, partnership, estate or trust (except as summarized above) will be considered owned proportionately by their respective stockholders, partners or beneficiaries.

We have issued sufficient stock with sufficient diversity of ownership to satisfy requirements 5 and 6 set forth above. In addition, our charter restricts the ownership and transfer of our stock so that we should continue to satisfy requirements 5 and 6. The provisions of the charter restricting the ownership and transfer of our stock are described in “Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws.”

A corporation that is a “qualified REIT subsidiary” (i.e., a corporation that is 100% owned by a REIT with respect to which no taxable REIT subsidiary (TRS election has been made) is not treated as a corporation separate from its parent REIT. All assets, liabilities, and items of income, deduction, and credit of a “qualified REIT subsidiary” are treated as assets, liabilities, and items of income, deduction, and credit of the parent REIT. Thus, in applying the requirements described in this section, any “qualified REIT subsidiary” that we own will be ignored, and all assets, liabilities, and items of income, deduction, and credit of that subsidiary will be treated as our assets, liabilities, and items of income, deduction, and credit.

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In the case of a REIT that is a partner in a partnership, in general, the REIT is treated as owning its proportionate share (based on capital interests) of the assets of the partnership and as earning its allocable share of the gross income of the partnership for purposes of the applicable REIT qualification tests. Thus, our proportionate share of the assets, liabilities, and items of gross income of FelCor LP and of any other partnership or joint venture or limited liability company that is treated as a partnership for federal income tax purposes in which we own, or will acquire an interest, directly or indirectly (together, the “Subsidiary Partnerships”), are treated as our assets and gross income for purposes of applying the various REIT qualification requirements.

A REIT may own up to 100% of the stock of a TRS. A TRS can lease hotels from its parent REIT as long as it engages an “eligible independent contractor” to manage and operate the hotels. In addition, a TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS by jointly filing Form 8875 with the IRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. A TRS will pay tax at regular corporate rates on any income that it earns. In addition, special rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. Further, the rules impose a 100% excise tax on transactions between a TRS and its parent REIT or the REIT’s tenants that are not conducted on an arm’s-length basis. We hold ownership interests in several TRSs through FelCor LP.

Income tests

We must satisfy two gross income tests annually to maintain our qualification as a REIT. First, at least 75% of our gross income for each taxable year must consist of defined types of income that we derive, directly or indirectly, from investments relating to real property or mortgages on real property or temporary investment income. Qualifying income for purposes of the 75% gross income test generally includes:

•  rents from real property;

•  interest on debt secured by mortgages on real property or on interests in real property;

•  dividends or other distributions on and gain from the sale of shares in other REITs;

•  gain from the sale of certain real estate assets;

•  income and gain derived from qualifying “foreclosure property;” and

•  income derived from the temporary investment of new capital that is attributable to the issuance of our shares or a public offering of our debt with a maturity date of at least five years and that we receive during the one-year period beginning on the date on which we received such new capital.

Second, in general, at least 95% of our gross income for each taxable year must consist of (1) income that is qualifying income for purposes of the 75% gross income test, (2) other types of dividends and interest, (3) gain from the sale or disposition of stock or securities, or (4) any combination of the foregoing. Gross income from our sale of any property that we hold primarily for sale to customers in the ordinary course of our business is excluded from both income tests.

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In addition, if we enter into a transaction in the normal course of our business primarily to manage risk of interest rate, price changes or currency fluctuations with respect to any item of income or gain that would be qualified income under the 75% or 95% gross income tests (or any property which generates such qualified income or gain), including gain from the termination of such a transaction, and we properly identify the “hedges” as required by the Code and Treasury regulations, the income from the transaction will be excluded from gross income for purposes of the 95% gross income test and the 75% gross income test (after July 30, 2008). In addition, our gross income, for purposes of the 75% (after July 30, 2008) and 95% gross income tests, will not include any of our gross income from properly identified “hedges,” including any gain from the sale or disposition of such a transaction, to the extent the transaction hedges any indebtedness incurred (or to be incurred) by us to acquire or carry real estate assets. If we have any foreign currency gain, certain “real estate foreign exchange gain” is excluded from both gross income tests (after July 30, 2008). In addition, if we have any foreign currency gain, certain “passive foreign exchange gain” is excluded from our gross income for purposes of the 95% gross income test (but is included in our gross income and treated as non-qualifying income to the extent such gain is not also considered “real estate foreign exchange gain” for purposes of the 75% gross income test) (after July 30, 2008). If we acquire any “qualified business unit” that remits certain foreign currency gain to us, such gain will not be included in our gross income for purposes of the 75% or 95% gross income tests (after July 30, 2008). Provided that, if we become dealers or regular traders in securities, any foreign currency gain will be gross income to us that doesn’t qualify under either gross income test (after July 30, 2008).

The following paragraphs discuss the specific application of the gross income tests to us.

Rent that we receive from real property that we own and lease to tenants will qualify as “rents from real property,” which is qualifying income for purposes of the 75% and 95% gross income tests, only if the following conditions are met:

•  First, the rent must not be based, in whole or in part, on the income or profits of any person, but may be based on a fixed percentage or percentages of gross receipts or gross sales.

•  Second, neither we nor a direct or indirect owner of 10% or more of our stock may own, actually or constructively, 10% or more of a tenant, other than a TRS, from whom we receive rent. If the tenant is a TRS leasing a hotel, such TRS may not directly or indirectly operate or manage the related hotel. Instead, the property must be operated on behalf of the TRS by a person who qualifies as an “independent contractor” and who is, or is related to a person who is, actively engaged in the trade or business of operating qualified lodging facilities for any person unrelated to us and the TRS.

•  Third, if the rent attributable to personal property leased in connection with a lease of real property exceeds 15% of the total rent received under the lease, then the portion of rent attributable to that personal property will not qualify as “rents from real property.”

•  Finally, we generally must not operate or manage our real property or furnish or render services to our tenants, other than through an “independent contractor” who is adequately compensated and from whom we do not derive revenue, and who does not, directly or through its stockholders, own more than 35% of our shares of capital stock, taking into consideration the applicable ownership attribution rules. However, we need not provide services through an “independent contractor,” but instead may provide services directly to our tenants, if the services are “usually or customarily rendered” in the geographic area in connection with the rental of space for occupancy only and are not considered to be provided

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for the tenants’ convenience. In addition, we may provide a minimal amount of “noncustomary” services to the tenants of a property, other than through an independent contractor, as long as our income from the services (valued at not less than 150% of our direct cost of performing such services) does not exceed 1% of our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS which may provide customary and noncustomary services to our tenants without tainting our rental income from the related properties.

Pursuant to percentage leases, our lessees lease from FelCor LP and the Subsidiary Partnerships the land, buildings, improvements, furnishings and equipment comprising our hotels, for terms of five to ten years, with options to renew for total terms, including the initial term, of not more than 15 years. The percentage leases provide that the lessees are obligated to pay to FelCor LP and the Subsidiary Partnerships (1) the greater of a minimum base rent or percentage rent and (2) “additional charges” or other expenses, as defined in the leases. Percentage rent is calculated by multiplying fixed percentages by gross room or suite revenues, and food and beverage revenues and rent for each of our hotels. Both base rent and the thresholds in the percentage rent formulas are adjusted for inflation. Base rent and percentage rent accrue and are due monthly.

In order for the base rent, percentage rent, and additional charges to constitute “rents from real property,” the percentage leases must be respected as true leases for federal income tax purposes and not treated as service contracts, joint ventures, or some other type of arrangement. The determination of whether the percentage leases are true leases depends on an analysis of all the surrounding facts and circumstances. In making such a determination, courts have considered a variety of factors, including the following:

•  the intent of the parties;

•  the form of the agreement;

•  the degree of control over the property that is retained by the property owner, or whether the lessee has substantial control over the operation of the property or is required simply to use its best efforts to perform its obligations under the agreement; and

•  the extent to which the property owner retains the risk of loss with respect to the property, or whether the lessee bears the risk of increases in operating expenses or the risk of damage to the property or the potential for economic gain or appreciation with respect to the property.

In addition, federal income tax law provides that a contract that purports to be a service contract (or a partnership agreement) will be treated instead as a lease of property if the contract is properly treated as such, taking into account all relevant factors, including whether:

•  the service recipient is in physical possession of the property;

•  the service recipient controls the property;

•  the service recipient has a significant economic or possessory interest in the property, or whether the property’s use is likely to be dedicated to the service recipient for a substantial portion of the useful life of the property, the recipient shares the risk that the property will decline in value, the recipient shares in any appreciation in the value of the property, the recipient shares in savings in the property’s operating costs, or the recipient bears the risk of damage to or loss of the property;

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•  the service provider bears the risk of substantially diminished receipts or substantially increased expenditures if there is nonperformance under the contract;

•  the service provider uses the property concurrently to provide significant services to entities unrelated to the service recipient; and

•  the total contract price substantially exceeds the rental value of the property for the contract period.

Since the determination of whether a service contract should be treated as a lease is inherently factual, the presence or absence of any single factor may not be dispositive in every case.

We believe that the percentage leases will be treated as true leases for federal income tax purposes. Such belief is based, in part, on the following facts:

•  FelCor LP and the Subsidiary Partnerships, on the one hand, and the lessees, on the other hand, intend for their relationship to be that of a lessor and lessee and such relationship is documented by lease agreements;

•  the lessees have the right to the exclusive possession, use and quiet enjoyment of our hotels during the term of the percentage leases;

•  the lessees bear the cost of, and are responsible for, day-to-day maintenance and repair of our hotels, other than the cost of maintaining underground utilities, structural elements and capital improvements, and generally dictate how our hotels are operated, maintained, and improved;

•  the lessees bear all of the costs and expenses of operating our hotels, including the cost of any inventory used in their operation, during the term of the percentage leases, other than real estate and personal property taxes and property and casualty insurance premiums;

•  the lessees benefit from any savings in the costs of operating our hotels during the term of the percentage leases;

•  the lessees generally have indemnified FelCor LP and the Subsidiary Partnerships against all liabilities imposed on FelCor LP and the Subsidiary Partnerships during the term of the percentage leases by reason of (1) injury to persons or damage to property occurring at our hotels, (2) the lessees’ use, management, maintenance or repair of our hotels, (3) any environmental liability caused by acts or grossly negligent failures to act of the lessees, (4) taxes and assessments in respect of our hotels that are the obligations of the lessees, or (5) any breach of the percentage leases or of any sublease of a hotel by the lessees;

•  the lessees are obligated to pay substantial fixed rent for the period of use of our hotels;

•  the lessees stand to incur substantial losses or reap substantial gains depending on how successfully they operate our hotels; and

•  FelCor LP and the Subsidiary Partnerships cannot use our hotels concurrently to provide significant services to entities unrelated to the lessees.

Investors should be aware that there are no controlling Treasury regulations, published rulings or judicial decisions involving leases with terms substantially the same as the percentage leases that discuss whether such leases constitute true leases for federal income tax purposes. If the percentage leases are characterized as service contracts or partnership agreements, rather than

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as true leases, part or all of the payments that FelCor LP and the Subsidiary Partnerships receive from the lessees may not be considered rent or may not otherwise satisfy the various requirements for qualification as “rents from real property.” In that case, we likely would not be able to satisfy either the 75% or 95% gross income test and, as a result, could lose our REIT status (unless we qualify for relief, as described below under “—Failure to Satisfy Gross Income Tests”).

As described above, in order for the rent received by us to constitute “rents from real property,” several other requirements must be satisfied. One requirement is that the percentage rent must not be based in whole or in part on the income or profits of any person. The percentage rent, however, will qualify as “rents from real property” if it is based on percentages of gross receipts or gross sales and the percentages:

•  are fixed at the time the percentage leases are entered into;

•  are not renegotiated during the term of the percentage leases in a manner that has the effect of basing percentage rent on income or profits; and

•  conform with normal business practice.

More generally, the percentage rent will not qualify as “rents from real property” if, considering the percentage leases and all the surrounding circumstances, the arrangement does not conform with normal business practice, but is in reality used as a means of basing the percentage rent on income or profits. Since the percentage rent is based on fixed percentages of the gross revenues from our hotels that are established in the percentage leases, and we have represented that the percentages (1) will not be renegotiated during the terms of the percentage leases in a manner that has the effect of basing the percentage rent on income or profits and (2) conform with normal business practice, the percentage rent should not be considered based in whole or in part on the income or profits of any person. Furthermore, we have represented that, with respect to other hotel properties that we acquire in the future, we will not charge rent for any property that is based in whole or in part on the income or profits of any person, except by reason of being based on a fixed percentage of gross revenues, as described above.

Another requirement for qualification of our rent as “rents from real property” is that we must not own, actually or constructively, 10% or more of the stock or voting power of any corporate lessee (other than a TRS) or 10% or more of the assets or net profits of any non-corporate lessee (a “related party tenant”). The constructive ownership rules generally provide that, if 10% or more in value of our stock is owned, directly or indirectly, by or for any person, we are considered as owning the stock owned, directly or indirectly, by or for such person. We do not own any stock or assets or net profits of any non-TRS lessee directly. In addition, our charter prohibits transfers of our stock that would cause us to constructively own 10% or more of the ownership interests in a lessee. Those charter provisions will not apply to our indirect ownership of several of our lessees through our TRS because transfers of our stock will not affect our indirect ownership of such lessees, and we will not constructively own stock in such lessees as a result of attribution of stock ownership from our stockholders (although, as noted below, rents received from the TRS generally will not be disqualified as related party rents). Thus, we should never own, actually or constructively, 10% or more of any non-TRS lessee. Furthermore, we have represented that, with respect to other hotel properties that we acquire in the future, we will not rent any property to a related party tenant. However, because the constructive ownership rules are broad and it is not possible to monitor continually direct and indirect transfers of our stock, no absolute assurance can be given that such transfers or other events of which we have

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no knowledge will not cause us to own constructively 10% or more of a lessee at some future date.

As described above, we may own up to 100% of the stock of a TRS. Rent received by us from a TRS will qualify as “rents from real property” if the TRS engages an “eligible independent contractor” to manage and operate our hotels leased by the TRS. An “eligible independent contractor” must either be, or be related to a person who is, actively engaged in the trade or business of operating “qualified lodging facilities” for any person who is not related to us or the TRS. A “qualified lodging facility” is a hotel, motel, or other establishment in which more than one-half of the dwelling units are used on a transient basis, unless wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility. In addition, we cannot directly or indirectly derive any income from an eligible independent contractor, an eligible independent contractor cannot own 35% or more of our stock, and no more than 35% of an eligible independent contractor’s ownership interests can be owned by persons owning 35% or more of our stock, taking into account applicable constructive ownership rules. We hold ownership interests in several TRSs that lease our hotels. Each of those TRSs has engaged a third-party hotel manager to manage and operate our hotels leased by that TRS. We believe that all of the existing third-party hotel managers of hotels leased by our TRSs qualify as “eligible independent contractors,” and we anticipate that all of the third-party hotel managers that will be retained by our TRSs in the future to manage our hotels leased by the TRSs from us will qualify as “eligible independent contractors.”

We will be subject to a 100% excise tax to the extent that the IRS successfully asserts that the rents received from our TRSs exceed an arm’s-length rate. We believe that the terms of the leases that exist between us and our TRSs were negotiated at arm’s length and are consistent with the terms of comparable leases in the hotel industry, and that the excise tax on excess rents therefore should not apply. There can be no assurance, however, that the IRS would not challenge the rents paid to us by our TRSs as being excessive, or that a court would not uphold such challenge. In that event, we could owe a tax of 100% on the amount of rents determined to be in excess of an arm’s-length rate.

A third requirement for qualification of the rent received by us as “rents from real property” is that the rent attributable to the personal property leased in connection with the lease of a hotel must not be greater than 15% of the total rent received under the lease. The rent attributable to the personal property contained in a hotel is the amount that bears the same ratio to total rent for the taxable year as the average of the fair market values of the personal property at the beginning and at the end of the taxable year bears to the average of the aggregate fair market values of both the real and personal property contained in the hotel at the beginning and at the end of such taxable year (the “15% test ratio”). With respect to each hotel, we believe either that the 15% test ratio is 15% or less or that any income attributable to excess personal property will not jeopardize our ability to qualify as a REIT. There can be no assurance, however, that the IRS would not challenge our calculation of the 15% test ratio, or that a court would not uphold such assertion. If such a challenge were successfully asserted, we could fail to satisfy the 95% or 75% gross income test and thus could lose our REIT status.

A fourth requirement for qualification of the rent received by us as “rents from real property” is that, other than within the 1% de minimis exception described above, we cannot furnish or render noncustomary services to the tenants of our hotels, or manage or operate our hotels, other than through an eligible independent contractor who is adequately compensated and

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from whom we do not derive or receive any income. However, we may own up to 100% of the stock of a TRS, and the TRS may provide customary and noncustomary services to our tenants without tainting our rental income. Provided that the percentage leases are respected as true leases, we should satisfy that requirement, because FelCor LP and the Subsidiary Partnerships do not perform any services other than customary ones for the lessees (other than within the 1% de minimis exception or through a TRS). Furthermore, we have represented that, with respect to other hotel properties that we acquire in the future, we will not perform impermissible noncustomary services with respect to the tenant of the property.

If a portion of the rent received by us from a hotel does not qualify as “rents from real property” because the rent attributable to personal property exceeds 15% of the total rent for a taxable year, the portion of the rent that is attributable to personal property will not be qualifying income for purposes of either the 75% or 95% gross income tests. Thus, if such rent attributable to personal property, plus any other income that is nonqualifying income for purposes of the 95% gross income test, during a taxable year exceeds 5% of our gross income during the year, we could lose our REIT status. In addition, if the rent from a particular hotel does not qualify as “rents from real property” because either (1) the percentage rent is considered based on the income or profits of the related lessee, (2) we own, actually or constructively, 10% or more of a non-TRS lessee, or (3) we furnish noncustomary services to the tenants of the hotel, or manage or operate our hotels, other than through a qualifying independent contractor or a TRS, none of the rent from that hotel would qualify as “rents from real property.” In that case, we also could lose our REIT status because we would be unable to satisfy either the 75% or 95% gross income test.

In addition to the rent, the lessees are required to pay to FelCor LP and the Subsidiary Partnerships certain additional charges. To the extent that such additional charges represent either (1) reimbursements of amounts that the FelCor LP and the Subsidiary Partnerships are obligated to pay to third parties such as a lessee’s proportionate share of a property’s operational or capital expenses, or (2) penalties for nonpayment or late payment of such amounts, such charges should qualify as “rents from real property.” However, to the extent that such charges represent interest that is accrued on the late payment of the rent or additional charges, such charges will not qualify as “rents from real property,” but instead should be treated as interest that qualifies for the 95% gross income test.

Interest

The term “interest” generally does not include any amount received or accrued, directly or indirectly, if the determination of such amount depends in whole or in part on the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term “interest” solely by reason of being based on a fixed percentage or percentages of receipts or sales. Furthermore, to the extent that interest from a loan that is based on the residual cash proceeds from the sale of the property securing the loan constitutes a “shared appreciation provision,” income attributable to such participation feature will be treated as gain from the sale of the secured property.

Prohibited transactions

A REIT will incur a 100% tax on the net income (including any foreign currency gain or loss, if any, included in such net income after July 30, 2008) derived from any sale or other disposition of property, other than foreclosure property, that the REIT holds primarily for sale to customers

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in the ordinary course of a trade or business. We believe that none of our or FelCor LP’s assets is held for sale to customers and that a sale of any such asset would not be in the ordinary course of a trade or business. Whether a REIT holds an asset “primarily for sale to customers in the ordinary course of a trade or business” depends on the facts and circumstances in effect from time to time, including those related to a particular asset. We believe that none of our assets are held primarily for sale to customers and that a sale of any such assets would not be in the ordinary course of the owning entity’s business. We will attempt to comply with the terms of the safe-harbor provisions in U.S. federal income tax laws prescribing when an asset sale will not be characterized as a prohibited transaction. We cannot provide assurance, however, that we can comply with such safe-harbor provisions or that we or FelCor LP will avoid owning property that may be characterized as property held “primarily for sale to customers in the ordinary course of a trade or business.”

Foreclosure property

We will be subject to tax at the maximum corporate rate on any income from foreclosure property, other than income that would be qualifying income for purposes of the 75% gross income test, less expenses directly connected with the production of such income. However, income from qualified foreclosure property will be included in our gross income for purposes of the 75% and 95% gross income tests and the gain from the sale of such qualified foreclosure property should be exempt from the 100% tax on prohibited transactions. “Foreclosure property” is any real property, including interests in real property, and any personal property incident to such real property:

•  that is acquired by a REIT as the result of such REIT having bid in such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such property or on an indebtedness that such property secured;

•  for which the related loan was acquired by the REIT at a time when the default was not imminent or anticipated; and

•  for which such REIT makes a proper election to treat such property as foreclosure property.

However, a REIT will not be considered to have foreclosed on a property where the REIT takes control of the property as a mortgagee-in-possession and cannot receive any profit or sustain any loss except as a creditor of the mortgagor. Property generally ceases to be foreclosure property with respect to a REIT at the end of the third taxable year following the taxable year in which the REIT acquired such property, or longer if an extension is granted by the Secretary of the Treasury. The foregoing grace period is terminated and foreclosure property ceases to be foreclosure property on the first day:

•  on which a lease is entered into with respect to such property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after such day that will give rise to income that does not qualify for purposes of the 75% gross income test;

•  on which any construction takes place on such property, other than completion of a building, or any other improvement, where more than 10% of the construction of such building or other improvement was completed before default became imminent; or

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•  which is more than 90 days after the day on which such property was acquired by the REIT and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income.

As a result of the rules with respect to foreclosure property, if (1) a lessee defaults on its obligations under a percentage lease, (2) we terminate the lessee’s leasehold interest, and (3) we are unable to find a replacement lessee for the hotel within 90 days of such foreclosure, gross income from hotel operations conducted by us from such hotel would cease to qualify for the 75% and 95% gross income tests unless we are able to hire an independent contractor to manage and operate the hotel. In such event, we might be unable to satisfy the 75% and 95% gross income tests and, thus, might fail to qualify as a REIT.

Hedging transactions

From time to time, we or FelCor LP may enter into hedging transactions with respect to one or more of our assets or liabilities. Our hedging activities may include entering into interest rate, commodity or currency swaps, caps, and floors, options to purchase such items, and futures and forward contracts. A “hedging transaction” means any transaction entered into in the normal course of our trade or business primarily to manage the risk of interest rate or price changes, or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets.

If we enter into a transaction in the normal course of our business primarily to manage risk of currency fluctuations with respect to any item of income or gain that would be qualified income under the 75% or 95% gross income tests (or any property which generates such qualified income or gain), including gain from the termination of such a transaction, and we properly identify the “hedges” as required by the Code and Treasury regulations, the income from the transaction will be excluded from gross income for purposes of the 95% gross income test and the 75% gross income test (after July 30, 2008). In addition, our gross income, for purposes of the 75% (after July 30, 2008) and 95% gross income tests, will not include any of our gross income from properly identified “hedges”, including any gain from the sale or disposition of such a transaction, to the extent the transaction hedges any indebtedness incurred (or to be incurred) by us to acquire or carry real estate assets.

We intend to structure any hedging transactions in a manner that does not jeopardize our status as a REIT. The REIT income and asset rules may limit our ability to hedge loans or securities acquired as investments.

Failure to satisfy gross income tests

If we fail to satisfy one or both of the gross income tests for any taxable year, we nevertheless may qualify as a REIT for such year if we qualify for relief under certain provisions of U.S. federal income tax laws. Those relief provisions generally will be available if:

•  our failure to meet those tests is due to reasonable cause and not to willful neglect, and

•  following our identification of the failure to meet one or both gross income tests for a taxable year, a description of each item of our gross income included in the 75% and 95% gross income tests is set forth in a schedule for such taxable year and filed as specified by Treasury regulations.

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We cannot predict, however, whether in all circumstances we would qualify for the relief provisions. In addition, as discussed above in “—Our Taxation,” even if the relief provisions apply, we would incur a 100% tax on the gross income attributable to the greater of the amounts by which we fail the 75% and 95% gross income tests, multiplied by a fraction intended to reflect our profitability.

Asset tests

To maintain our qualification as a REIT, we also must satisfy the following asset tests at the close of each quarter of each taxable year. First, at least 75% of the value of our total assets must consist of:

•  cash or cash items, including certain receivables and certain foreign currency;

•  government securities;

•  real property and interests in real property, including leaseholds and options to acquire real property and leaseholds;

•  interests in mortgages on real property;

•  stock in other REITs; and

•  investments in stock or debt instruments during the one-year period following our receipt of new capital that we raise through equity offerings or public offerings of debt with at least a five-year term.

Second, of our investments not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of our total assets.

Third, of our investments not included in the 75% asset class, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities.

Fourth, no more than 20% of the value of our total assets (25% for tax years beginning after July 30, 2008) may consist of the securities of one or more TRSs.

Fifth, no more than 25% of the value of our total assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test.

For purposes of the second and third asset tests, the term “securities” does not include stock in another REIT, equity or debt securities of a qualified REIT subsidiary or TRS, mortgage loans that constitute real estate assets, or equity interests in a partnership. For purposes of the 10% value test, the term “securities” does not include:

•  “Straight debt,” defined as a written unconditional promise to pay on demand or on a specified date a sum certain in money if (i) the debt is not convertible, directly or indirectly, into stock, and (ii) the interest rate and interest payment dates are not contingent on profits, the borrower’s discretion, or similar factors. “Straight debt” securities do not include any securities issued by a partnership or a corporation in which we or any (i.e. a TRS in which we own, directly or indirectly, more than 50% of the voting power or value of the stock) holds non-“straight debt” securities that have an aggregate value of more than 1% of the issuer’s

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outstanding securities. However, “straight debt” securities include debt subject to the following contingencies:

•  a contingency relating to the time of payment of interest or principal, as long as either (i) there is no change to the effective yield of the debt obligation, other than a change to the annual yield that does not exceed the greater of 0.25% or 5% of the annual yield, or (ii) neither the aggregate issue price nor the aggregate face amount of the issuer’s debt obligations held by us exceeds $1 million and no more than 12 months of unaccrued interest on the debt obligations can be required to be prepaid; and

•  a contingency relating to the time or amount of payment upon a default or prepayment of a debt obligation, as long as the contingency is consistent with customary commercial practice;

•  any loan to an individual or an estate;

•  any “section 467 rental agreement,” other than an agreement with a related party tenant;

•  any obligation to pay “rents from real property”;

•  certain securities issued by governmental entities;

•  any security issued by a REIT;

•  any debt instrument issued by an entity treated as a partnership for federal income tax purposes to the extent of our interest as a partner in the partnership; or

•  any debt instrument issued by an entity treated as a partnership for federal income tax purposes not described in the preceding bullet points if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test described above in “—Requirements for Qualification-Income Tests.”

If we failed to satisfy the asset tests at the end of a calendar quarter, we would not lose our REIT status if (1) we satisfied the asset tests at the close of the preceding calendar quarter, and (2) the discrepancy between the value of our assets and the asset test requirements arose from changes in the market values of our assets or because of a change in the foreign currency exchange rates used to value any foreign assets, and, in either case, was not wholly or partly caused by the acquisition of one or more non-qualifying assets. If we did not satisfy the condition described in clause (2) of the preceding sentence, we still could avoid disqualification as a REIT by eliminating any discrepancy within 30 days after the close of the calendar quarter in which the discrepancy arose.

If we fail to satisfy the 5% asset test or the 10% vote or value test for a particular quarter and do not correct it within the 30-day period described in the prior sentence, we will not lose our REIT status if the failure is due to the ownership of assets, the total value of which does not exceed the lesser of (i) 1% of the total value of our assets at the end of the quarter for which such measurement is done or (ii) $10,000,000; provided in either case that, we either dispose of the assets within 6 months after the last day of the quarter in which we identify the failure (or such other time period prescribed by the Treasury), or otherwise meet the requirements of those rules by the end of such time period. In addition, if we fail to meet any asset test for a particular quarter, other than a de minimis failure described in the preceding sentence, we still will be deemed to have satisfied the requirements if: (1) following our identification of the failure, we

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file a schedule with a description of each asset that caused the failure in accordance with regulations prescribed by the Treasury; (2) the failure was due to reasonable cause and not willful neglect; (3) we dispose of the assets within 6 months after the last day of the quarter in which the identification occurred (or such other time period prescribed by the Treasury) or the requirements of the rules are otherwise met within such period; and (4) we pay a tax on the failure which is the greater of $50,000 or the amount determined by multiplying the highest rate of income tax for corporations (currently 35%) by the net income generated by the assets for the period beginning on the first date of the failure and ending on the date we have disposed of the assets or otherwise satisfy the requirements.

Distribution requirements

Each taxable year, we must distribute dividends, other than capital gain dividends and deemed distributions of retained capital gain, to our stockholders in an aggregate amount at least equal to:

•  the sum of (1) 90% of our “REIT taxable income,” computed without regard to the dividends paid deduction and our net capital gain or loss, and (2) 90% of our after-tax net income, if any, from foreclosure property; minus

•  the sum of certain items of non-cash income.

We must pay such distributions in the taxable year to which they relate, or in the following taxable year if we declare the distribution before we timely file our federal income tax return for such year, pay the distribution on or before the first regular dividend payment date after such declaration and we elect on our federal income tax return for the prior year to have a specified amount of the subsequent dividend treated as if paid in the prior year.

We will pay federal income tax on our taxable income, including net capital gain, that we do not distribute to stockholders. Furthermore, if we fail to distribute during a calendar year, or by the end of January following such calendar year in the case of distributions with declaration and record dates falling in the last three months of the calendar year, at least the sum of:

•  85% of our REIT ordinary income for such year;

•  95% of our REIT capital gain net income for such year; and

•  any undistributed taxable income from prior periods,

we will incur a 4% nondeductible excise tax on the excess of such required distribution over the amounts we actually distributed. We may elect to retain and pay income tax on the net long-term capital gain we receive in a taxable year. If we so elect, we will be treated as having distributed any such retained amount for purposes of the 4% excise tax described above. We have made, and we intend to continue to make, timely distributions sufficient to satisfy the annual distribution requirements.

It is possible that, from time to time, we may experience timing differences between (1) the actual receipt of income and actual payment of deductible expenses and (2) the inclusion of that income and deduction of such expenses in arriving at our REIT taxable income. For example, we may not deduct recognized capital losses from our “REIT taxable income.” Further, it is possible that, from time to time, we may be allocated a share of net capital gain attributable to the sale of depreciated property that exceeds our allocable share of cash attributable to that sale. As a result of the foregoing, we may have less cash than is necessary to distribute all of our taxable income and thereby avoid corporate income tax and the 4%

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nondeductible excise tax imposed on certain undistributed income. In such a situation, we may need to borrow funds or issue additional common or preferred stock.

Under certain circumstances, we may be able to correct a failure to meet the distribution requirement for a year by paying “deficiency dividends” to our stockholders in a later year. We may include such deficiency dividends in our deduction for dividends paid for the earlier year. Although we may be able to avoid income tax on amounts distributed as deficiency dividends, we will be required to pay interest to the IRS based upon the amount of any deduction we take for deficiency dividends in order to raise sufficient cash to satisfy the distribution requirement.

Recordkeeping requirements

We must maintain certain records in order to qualify as a REIT. In addition, to avoid a monetary penalty, we must request on an annual basis information from our stockholders designed to disclose the actual ownership of our outstanding stock. We have complied, and we intend to continue to comply, with such requirements.

Failure to qualify

If we failed to qualify as a REIT in any taxable year for which the statute of limitations remains open, and no relief provision applied, we would be subject to federal income tax and any applicable alternative minimum tax on our taxable income at regular corporate rates. In calculating our taxable income in a year in which we failed to qualify as a REIT, we would not be able to deduct amounts paid out to stockholders. In fact, we would not be required to distribute any amounts to stockholders in such year. In such event, to the extent of our current and accumulated earnings and profits, all distributions to stockholders would be taxable as dividend income. Unless we qualified for relief under specific statutory provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT. We cannot predict whether in all circumstances we would qualify for such statutory relief.

If we fail to satisfy one or more requirements for REIT qualification, other than the gross income tests and the asset tests, we could avoid disqualification if our failure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. In addition, there are relief provisions for a failure of the gross income tests and asset tests, as described above in “—Income Tests” and “—Asset Tests.”

Federal income taxation of U.S. stockholders

Distributions

As long as we qualify as a REIT, distributions made to our taxable U.S. stockholders out of current or accumulated earnings and profits (and not designated as capital gain dividends) generally will be taken into account by such U.S. stockholders as ordinary income and will not be eligible for the qualified dividends rate generally available to non-corporate holders or for the dividends received deduction generally available to corporations. Distributions in excess of current and accumulated earnings and profits will not be taxable to a stockholder to the extent that they do not exceed the adjusted basis of the stockholder’s common stock (determined on a share-by-share basis), but rather will reduce the adjusted basis of those shares. To the extent that distributions in excess of current and accumulated earnings and profits exceed the adjusted

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basis of a stockholder’s shares, such distributions will be included in income as long-term capital gain if the stockholder has held its shares for more than one year and otherwise as short-term capital gain. In addition, any distribution declared by us in October, November or December of any year and payable to a stockholder of record on a specified date in any such month shall be treated as both paid by us and received by the stockholder on December 31 of such year, provided that the distribution is actually paid by us during January of the following calendar year.

Distributions that are designated as capital gain dividends will be taxed as long-term capital gain (to the extent such distributions do not exceed our actual net capital gain for the taxable year) without regard to the period for which the stockholder has held our common shares. However, corporate U.S. stockholders may be required to treat up to 20% of certain capital gain dividends as ordinary income. The tax rates applicable to such capital gains are discussed below.

We may elect to treat all or a part of our undistributed net capital gain as if it had been distributed to our stockholders (including for purposes of the 4% excise tax discussed above). If we make such an election, our U.S. stockholders would be required to include in their income as long-term capital gain their proportionate share of our undistributed net capital gain, as designated by us. Each such U.S. stockholder would be deemed to have paid its proportionate share of the income tax imposed on us with respect to such undistributed net capital gain, and this amount would be credited or refunded to the U.S. stockholder. In addition, the tax basis of the U.S. stockholder’s shares would be increased by its proportionate share of undistributed net capital gains included in its income, less its proportionate share of the income tax imposed on us with respect to such gains.

U.S. stockholders may not include in their individual income tax returns any of our net operating losses or net capital losses. Instead, such losses would be carried over by us for potential offset against our future income (subject to certain limitations). Taxable distributions from us and gain from the disposition of our common stock will not be treated as passive activity income, and, therefore, U.S. stockholders generally will not be able to apply any “passive activity losses” (such as losses from certain types of limited partnerships in which the U.S. stockholder is a limited partner) against such income. In addition, taxable distributions from us generally will be treated as investment income for purposes of the investment interest limitations. Capital gains from the disposition of common stock (or distributions treated as such) will be treated as investment income only if the U.S. stockholder so elects, in which case such capital gains will be taxed at ordinary income rates.

We will notify U.S. stockholders after the close of our taxable year as to the portions of the distributions attributable to that year that constitute ordinary income, return of capital and capital gain. Except as noted below, the maximum tax rate on long-term capital gain applicable to non-corporate taxpayers is 15% for sales and exchanges of assets held for more than one year occurring in tax years beginning on or before December 31, 2010 (or 20% thereafter). The maximum tax rate on long-term capital gain from the sale or exchange of “section 1250 property,” or depreciable real property, is 25% to the extent that such gain would have been treated as ordinary income if the property were “section 1245 property” (i.e., to the extent of depreciation recapture). With respect to distributions that we designate as capital gain dividends and any retained capital gain that we are deemed to distribute, we generally will designate whether such a distribution is taxable to our non-corporate U.S. stockholders at a 15% or 25% tax rate. Thus, the tax rate differential between capital gain and ordinary income for non-corporate taxpayers may be significant. In addition, the characterization of income as

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capital gain or ordinary income may affect the deductibility of capital losses. A non-corporate taxpayer may deduct capital losses not offset by capital gains against its ordinary income only up to a maximum annual amount of $3,000. A non-corporate taxpayer may carry forward unused capital losses indefinitely. A corporate taxpayer must pay tax on its net capital gain at ordinary corporate rates. A corporate taxpayer may deduct capital losses only to the extent of capital gains, with unused losses being carried back three years and forward five years.

Taxation of U.S. stockholders on the disposition of shares of common stock

Upon the taxable disposition of common stock, a U.S. stockholder generally will recognize gain or loss equal to the difference between (i) the amount of cash and the fair market value of any property received (less any portion thereof attributable to accumulated and declared but unpaid dividends, which will be taxable as a dividend to the extent of our current and accumulated earnings and profits) and (ii) the U.S. stockholder’s adjusted tax basis in such stock. In general, a U.S. stockholder must treat any gain or loss realized upon a taxable disposition of our common stock as long-term capital gain or loss if the U.S. stockholder has held the shares for more than one year, and otherwise as short-term capital gain or loss. However, a U.S. stockholder must treat any loss upon a sale or exchange of shares of our common stock held for six months or less (after applying certain holding period rules) as a long-term capital loss to the extent of capital gain dividends and any other actual or deemed distributions from us which the U.S. stockholder treats as long-term capital gain. All or a portion of any loss that a U.S. stockholder realizes upon a taxable disposition of our common stock may be disallowed if the U.S. stockholder purchases substantially identical stock within 30 days before or after the disposition.

Treatment of tax-exempt stockholders

While many investments in real estate generate unrelated business taxable income, or UBTI, the IRS has issued a ruling that dividend distributions from a REIT to an exempt employee pension trust do not constitute UBTI, provided that the shares of the REIT are not otherwise used in an unrelated trade or business of the exempt employee pension trust. Based on that ruling, except as otherwise provided below, distributions by us to a tax-exempt U.S. stockholder generally should not constitute UBTI provided that (i) the U.S. stockholder has not financed the acquisition of its common stock with “acquisition indebtedness” within the meaning of the Code and (ii) our common stock is not otherwise used in an unrelated trade or business of such tax-exempt U.S. stockholder.

Notwithstanding the preceding paragraph, under certain circumstances, qualified trusts that hold more than 10% (by value) of our shares of stock may be required to treat a certain percentage of dividends as UBTI. This requirement will only apply if we are treated as a “pension-held REIT.”

Furthermore, social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from taxation under paragraphs (7), (9), (17), and (20), respectively, of Section 501(c) of the Code, are subject to different UBTI rules, which generally will require them to characterize income or gain from us as UBTI.

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Federal income taxation of non-U.S. stockholders

The following discussion addresses the rules governing the U.S. federal income taxation of the ownership and disposition of common stock by non-U.S. stockholders. These rules are complex, and no attempt is made herein to provide more than a brief summary of such rules. Accordingly, the discussion does not address all aspects of U.S. federal income taxation and does not address state, local or foreign tax consequences that may be relevant to a non-U.S. stockholder in light of its particular circumstances. Non-U.S. stockholders should consult their own tax advisors to determine the impact of U.S. federal, state, local and foreign tax consequences to them of an investment in our common stock, including tax return filing requirements and withholding requirements.

Distributions

Distributions to a non-U.S. stockholder that are neither attributable to gain from sales or exchanges by us of “U.S. real property interests” nor designated as capital gains dividends will be treated as dividends of ordinary income to the extent that they are made out of current or accumulated earnings and profits. These distributions ordinarily will be subject to withholding of U.S. federal income tax on a gross basis at a rate of 30%, or a lower rate as permitted under an applicable income tax treaty, unless the dividends are treated as effectively connected with the conduct by the non-U.S. stockholder of a U.S. trade or business. Under some treaties, however, lower withholding rates generally applicable to dividends do not apply to dividends from REITs. Applicable certification and disclosure requirements must be satisfied to be exempt from withholding under the effectively connected income exemption. Dividends that are effectively connected with a trade or business generally will be subject to tax on a net basis in the same manner as U.S. stockholders are taxed, and are generally not subject to withholding. Any dividends received by a corporate non-U.S. stockholder that is engaged in a U.S. trade or business also may be subject to an additional branch profits tax at a 30% rate, or lower applicable treaty rate, on its effectively connected earnings and profits attributable to such dividends.

Distributions in excess of current and accumulated earnings and profits that exceed the non-U.S. stockholder’s basis in its common stock will be taxable to a non-U.S. stockholder as gain from the sale of common stock, which is discussed below. Distributions in excess of current or accumulated earnings and profits that do not exceed the adjusted basis of the non-U.S. stockholder in its common stock (determined on a share-by-share basis) will reduce the non-U.S. stockholder’s adjusted basis in its common stock and will not be subject to U.S. federal income tax, but will be subject to U.S. withholding tax as described below.

Because we generally cannot determine at the time a distribution is made whether or not it will be in excess of earnings and profits, we expect to withhold on the gross amount of each distribution made to a non-U.S. stockholder at the 30% rate (other than distributions subject to the 35% FIRPTA withholding rules discussed below) unless: (i) a lower treaty rate applies and the non-U.S. stockholder files an IRS Form W-8BEN evidencing eligibility for that reduced treaty rate; or (ii) the non-U.S. stockholder files an IRS Form W-8ECI claiming that the distribution is income effectively connected with the non-U.S. stockholder’s trade or business. A non-U.S. stockholder may seek a refund of these amounts from the IRS if the non-U.S. stockholder’s U.S. tax liability with respect to the distribution is less than the amount withheld.

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Distributions to a non-U.S. stockholder that are designated at the time of the distribution as capital gain dividends, other than those arising from the disposition of a U.S. real property interest, generally should not be subject to U.S. federal income taxation unless: (i) the investment in our common stock is effectively connected with the non-U.S. stockholder’s U.S. trade or business, in which case the non-U.S. stockholder generally will be subject to the same treatment as U.S. stockholders with respect to any gain, and a stockholder that is a foreign corporation also may be subject to the 30% branch profits tax, as discussed above, or (ii) the non-U.S. stockholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the nonresident alien individual will be subject to a 30% tax on the individual’s capital gains (which gains may be offset by certain United States source capital losses).

Except as hereinafter discussed, under the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”), distributions to a non-U.S. stockholder that are attributable to gain from sales or exchanges by us of U.S. real property interests, whether or not designated as a capital gain dividend, will cause the non-U.S. stockholder to be treated as recognizing gain that is income effectively connected with a U.S. trade or business. Non-U.S. stockholders generally will be taxed on this gain at the same rates applicable to U.S. stockholders, and a 30% branch profits tax may apply to any non-U.S. stockholder that is a corporation. However, even if a distribution is attributable to a sale or exchange of U.S. real property interests, the distribution will not be treated as gain recognized from the sale or exchange of U.S. real property interests, but as an ordinary dividend subject to the general withholding regime discussed above, if

(i) the distribution is made with respect to a class of stock that is considered regularly traded under applicable Treasury regulations on an established securities market located in the United States, such as the New York Stock Exchange; and

(ii) the stockholder owns 5% or less of that class of stock at all times during the one-year period ending on the date of the distribution.

We will be required to withhold and remit to the IRS 35% of any distributions made to non-U.S. stockholders that own more than 5% of our common shares if such distributions are, or, if greater, could have been, designated as capital gain dividends and are attributable to gain recognized from the sale or exchange of U.S. real property interests. Distributions can be designated as capital gains to the extent of our net capital gain for the taxable year of the distribution. Moreover, if we designate previously made distributions as capital gain dividends attributable to U.S. real property interests, subsequent distributions (up to the amount of such prior distributions) will be treated as capital gain dividends subject to FIRPTA withholding. The amount withheld, which for individual non-U.S. stockholders may substantially exceed the actual tax liability, is creditable against the non-U.S. stockholder’s U.S. federal income tax liability and is refundable to the extent such amount exceeds the non-U.S. stockholder’s actual U.S. federal income tax liability, and the non-U.S. stockholder timely files an appropriate claim for refund.

Sale of common stock

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless:

(i) the investment in our common stock is effectively connected with the non-U.S. stockholder’s U.S. trade or business, in which case the non-U.S. stockholder generally will be

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subject to the same treatment as U.S. stockholders with respect to any gain (and a foreign corporation also may be subject to the 30% branch profits tax, as discussed above);

(ii) the non-U.S. stockholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the nonresident alien individual will be subject to a 30% tax on the individual’s net capital gains for the taxable year (which gains may be offset by certain United States source capital losses);

(iii) our common stock constitutes a U.S. real property interest within the meaning of FIRPTA, as described below; or

(iv) our common stock is disposed of in a “wash sale” by a person owning more than 5% of the common stock.

Whether Our common stock is a U.S. real property interest

Our common stock will not constitute a U.S. real property interest if we are a “domestically controlled REIT.” We will be a domestically controlled REIT if, at all times during a specified testing period, less than 50% in value of our stock is held directly or indirectly by non-U.S. stockholders. We believe that, currently, we are a domestically controlled REIT and, therefore, that the sale of our common stock would not be subject to taxation under FIRPTA. Because our common stock is publicly traded, however, we cannot guarantee that we are or will continue to be a domestically controlled REIT. Even if we do not qualify as a domestically controlled REIT at the time a non-U.S. stockholder sells our common stock, gain arising from the sale still would not be subject to FIRPTA tax if:

(i) our common stock is considered regularly traded under applicable Treasury regulations on an established securities market, such as the New York Stock Exchange; and

(ii) the selling non-U.S. stockholder owned, actually or constructively, 5% or less in value of our common stock during the shorter of (i) the five-year period ending on the date of the sale or exchange or (ii) the period in which the stockholder held our common stock.

If gain on the sale or exchange of our common stock were subject to taxation under FIRPTA, the non-U.S. stockholder generally would be subject to regular U.S. income tax with respect to any gain in the same manner as a taxable U.S. stockholder.

Wash sales

In general, a wash sale of common stock occurs if a stockholder of a domestically controlled REIT (at any time during the one-year period preceding the taxable distribution discussed in this paragraph) avoids a taxable distribution of gain recognized from the sale or exchange of U.S. real property interests by selling common stock before the ex-dividend date of the distribution and then, within a designated period, acquires or enters into an option or contract to acquire common stock. However, the wash sale rules will not apply to a sale of our common stock if (i) our common is considered regularly traded under applicable Treasury regulations on an established securities market, such as the New York Stock Exchange and (ii) the non-U.S. stockholder does not own more than 5% of our common stock at any time during the one-year period ending on the date of the distribution. If a wash sale occurs, then the seller/repurchaser

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will be treated as having gain recognized from the sale or exchange of U.S. real property interests in the same amount as if the avoided distribution had actually been received.

Federal estate tax

Our common stock that is owned (or treated as owned) by non-U.S. stockholder at the time of death will be included in such stockholder’s gross estate for United States federal estate tax purposes, unless an applicable estate or other tax treaty provides otherwise, and, therefore, may be subject to United States federal estate tax.

Information reporting requirements and backup withholding tax

Information reporting to our stockholders and to the IRS will apply to the amount of distributions paid during each calendar year and distributions required to be treated as so paid during a calendar year, and the amount of tax withheld, if any, and to the proceeds of a sale or other disposition of our common stock. Under the backup withholding rules, a stockholder may be subject to backup withholding at the applicable rate (currently 28%) with respect to distributions paid and proceeds from a disposition of our common stock unless such holder (i) is a corporation, non-U.S. person or comes within certain other exempt categories and, when required, demonstrates this fact or (ii) in the case of a U.S. stockholder, provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. A U.S. stockholder who does not provide us with its correct taxpayer identification number also may be subject to penalties imposed by the IRS.

As a general matter, backup withholding and information reporting will not apply to a payment of the proceeds of a sale of our common stock by or through a foreign office of a foreign broker. Information reporting (but not backup withholding) will apply, however, to a payment of the proceeds of a sale of our common stock by a foreign office of a broker that (i) is a U.S. person, (ii) is a foreign partnership that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, or more than 50% of whose capital or profit interests are owned during certain periods by U.S. persons, or (iii) is a “controlled foreign corporation” for U.S. tax purposes, unless the broker has documentary evidence in its records that the holder is a Non-U.S. stockholder and certain other conditions are satisfied, or the stockholder otherwise establishes an exemption. Payment to or through a U.S. office of a broker of the proceeds of a sale of our common stock is subject to both backup withholding and information reporting unless the stockholder certifies under penalties of perjury that the stockholder is a Non-U.S. stockholder or otherwise establishes an exemption.

Stockholders should consult their own tax advisors regarding their qualifications for an exemption from backup withholding and the procedure for obtaining such an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a stockholder will be allowed as a credit against the stockholder’s U.S. federal income tax liability and may entitle the stockholder to a refund, provided that the required information is furnished timely to the IRS.

Additional Withholding Requirements

Under recently enacted legislation, the relevant withholding agent may be required to withhold 30% of any dividends and the proceeds of a sale of our common stock paid after December 31,

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2012 to (i) a foreign financial institution (whether holding stock for its own account or on behalf of its account holders/investors) unless such foreign financial institution agrees to verify, report and disclose its U.S. account holders and meets certain other specified requirements or (ii) a non-financial foreign entity that is the beneficial owner of the payment unless such entity certifies that it does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial United States owner and such entity meets certain other specified requirements. Stockholders should consult their own tax advisors regarding the effect of this newly enacted legislation.

State and local taxes

We and/or you may be subject to state and local tax in various states and localities, including those states and localities in which we or you transact business, own property, or reside. The state and local tax treatment in those jurisdictions may differ from the federal income tax treatment described above. Consequently, you should consult your own tax advisor regarding the effect of state and local tax laws upon your investment in our common stock.

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Underwriting

J.P. Morgan Securities Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc. are acting as joint book running managers of the offering.

We and the underwriters named below have entered into an underwriting agreement covering the common stock to be sold in this offering. Each underwriter has severally agreed to purchase, and we have agreed to sell to each underwriter, the number of shares of common stock set forth opposite its name in the following table. The offering of the shares by the underwriters is subject to receipt and acceptance in whole or in part.

	Number of
Name	shares
J.P. Morgan Securities Inc.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith       Incorporated
Deutsche Bank Securities Inc.
Total

The underwriting agreement provides that if the underwriters take any of the shares presented in the table above, then they must take all of the shares. No underwriter is obligated to take any shares allocated to a defaulting underwriter except under limited circumstances. The underwriting agreement provides that the obligations of the underwriters are subject to certain conditions precedent, including the absence of any material adverse change in our business and the receipt of certain certificates, opinions and letters from us, our counsel and our independent auditors.

The underwriters are offering the shares of common stock, subject to the prior sale of shares, when, as and if such shares are delivered to and accepted by them. The underwriters will initially offer to sell shares to the public at the public offering price shown on the front cover page of this prospectus. The underwriters may sell shares to securities dealers at a discount of up to           per share from the public offering price. Any such securities dealers may resell shares to certain other brokers or dealers at a discount of up to           per share from the public offering price. After the public offering commences, the underwriters may vary the public offering price and other selling terms.

If the underwriters sell more shares than the total number shown in the table above, the underwriters have the option to buy up to an additional           shares of common stock from us to cover such sales. They may exercise this option during the 30-day period from the date of this prospectus. If any shares are purchased under this option, the underwriters will purchase shares in approximately the same proportion as shown in the table above.

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The following table shows the per share and total underwriting discounts and commissions that we will pay to the underwriters. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

	Without	With full
	option to purchase	option to purchase
	additional shares	additional shares
	exercise	exercise
Per share	$	$
Total	$	$

The underwriters have advised us that they may make short sales of our common stock in connection with this offering, resulting in the sale by the underwriters of a greater number of shares than they are required to purchase pursuant to the underwriting agreement. The short position resulting from those short sales will be deemed a “covered” short position to the extent that it does not exceed the shares subject to the underwriters’ option to purchase additional shares and will be deemed a “naked” short position to the extent that it exceeds that number. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the trading price of the common stock in the open market that could adversely affect investors who purchase shares in this offering. The underwriters may reduce or close out their covered short position either by exercising their option to purchase additional shares or by purchasing shares in the open market. In determining which of these alternatives to pursue, the underwriters will consider the price at which shares are available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. Any “naked” short position will be closed out by purchasing shares in the open market. Similar to the other stabilizing transactions described below, open market purchases made by the underwriters to cover all or a portion of their short position may have the effect of preventing or retarding a decline in the market price of our common stock following this offering. As a result, our common stock may trade at a price that is higher than the price that otherwise might prevail in the open market.

The underwriters have advised us that, pursuant to Regulation M under the Exchange Act, they may engage in transactions, including stabilizing bids or the imposition of penalty bids, that may have the effect of stabilizing or maintaining the market price of the shares of common stock at a level above that which might otherwise prevail in the open market. A “stabilizing bid” is a bid for or the purchase of shares of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the common stock. A “penalty bid” is an arrangement permitting the underwriters to claim the selling concession otherwise accruing to an underwriter or syndicate member in connection with the offering if the common stock originally sold by that underwriter or syndicate member is purchased by the underwriters in the open market pursuant to a stabilizing bid or to cover all or part of a syndicate short position. The underwriters have advised us that stabilizing bids and open market purchases may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise and, if commenced, may be discontinued at anytime.

One or more of the underwriters may facilitate the marketing of this offering online directly or through one of its affiliates. In those cases, prospective investors may view offering terms and a prospectus online and, depending upon the particular underwriter, place orders online or through their financial advisor.

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We estimate that our total expenses for this offering, excluding underwriting discounts and commissions, will be approximately $     .

We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

We have agreed that for a period ending 60 days after the date of this prospectus, we will not, directly or indirectly, offer, sell, offer to sell, contract to sell or otherwise dispose of any shares of our common stock or common stock equivalents without the prior written consent of J.P. Morgan Securities Inc. and Goldman, Sachs & Co., other than the offering and sale in this offering and the issuance by us of any securities or options to purchase common stock under our current employee benefit plans.

Our directors and executive officers have entered in to lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons for a period ending 60 days after the date of this prospectus, may not, directly or indirectly, offer, sell, pledge, offer to sell, contract to sell or otherwise dispose of any shares of our common stock or common stock equivalents without the prior written consent of J.P. Morgan Securities Inc. and Goldman, Sachs & Co., other than (a) transfers of shares of common stock as a bona fide gift of gifts or by will or intestacy, (b) transfer to a member or members of such person’s immediate family or to a trust, the beneficiary of which are such person an or a member or members of such person’s immediate family and (c) distributions of shares of common stock to members or stockholders of the undersigned; provided, that in the case of any transfer or distribution pursuant to clause (a), (b) or (c), each donee or distributee shall execute and deliver to the underwriters a lock-up letter; and provided further that in the case of any transfer or distribution pursuant to clause (a), (b) or (c), no filing by any party (donor, donee, transferor or transferee) under the Exchange Act shall be required, and no such filing or public announcement, as the case maybe, shall be made voluntarily, in connection with such transfer or distribution (other than a filing on a Form 5). In addition, they have agreed that, without the prior written consent of J.P. Morgan Securities Inc. and Goldman, Sachs & Co., they will not, during the period ending 60 days after the date of this prospectus, make any demand for or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock. For purposes of the lock-up agreements, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. Notwithstanding the foregoing, if (1) during the last 16 days of the 60-day restricted period, we issue an earnings release or material news or a material event relating to us occurs; or (2) prior to the expiration of the 60-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 60-day period, the restrictions imposed by the lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the issuer, for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and

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equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the issuer. Certain of the underwriters and their respective affiliates have provided and may in the future provide financial advisory, investment banking and commercial banking services in the ordinary course of business to, or hold equity positions in, entities with which we are, or in the future may be, engaged in discussions concerning acquisition opportunities. To the extent any net proceeds from this offering are used to complete any such acquisition opportunities, proceeds from this offering may be directed to such underwriters.

Our common stock is listed on the New York Stock Exchange under the symbol “FCH.”

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

(d) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue

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or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

We have not and will not register with the Swiss Financial Market Supervisory Authority (FINMA) as a foreign collective investment scheme pursuant to Article 119 of the Federal Act on Collective Investment Scheme of 23 June 2006, as amended (CISA), and accordingly the shares being offered pursuant to this prospectus have not and will not be approved, and may not be licenseable, with FINMA. Therefore, the shares have not been authorized for distribution by FINMA as a foreign collective investment scheme pursuant to Article 119 CISA and the shares offered hereby may not be offered to the public (as this term is defined in Article 3 CISA) in or from Switzerland. The shares may solely be offered to “qualified investors,” as this term is defined in Article 10 CISA, and in the circumstances set out in Article 3 of the Ordinance on Collective Investment Scheme of 22 November 2006, as amended (CISO), such that there is no public offer. Investors, however, do not benefit from protection under CISA or CISO or supervision by FINMA. This prospectus and any other materials relating to the shares are strictly personal and confidential to each offeree and do not constitute an offer to any other person. This prospectus may only be used by those qualified investors to whom it has been handed out in connection with the offer described herein and may neither directly or indirectly be distributed or made available to any person or entity other than its recipients. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in Switzerland or from Switzerland. This prospectus does not constitute an issue prospectus as that term is understood pursuant to Article 652a and/or 1156 of the Swiss Federal Code of Obligations. We have not applied for a listing of the shares on the SIX Swiss Exchange or any other regulated securities market in Switzerland, and consequently, the information presented in this prospectus does not necessarily comply with the information standards set out in the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange.

This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this document you should consult an authorised financial adviser.

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any

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person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

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Legal matters

The validity of the securities offered by this prospectus will be passed upon for us by Akin Gump Strauss Hauer & Feld LLP, Dallas, Texas. In addition, the description of federal income tax consequences contained in the prospectus under the caption “Certain United Stated Federal Income Tax Considerations—Federal Income Tax Consequences Of Our Status As A REIT” is based upon an opinion of Akin Gump Strauss Hauer & Feld LLP, Dallas, Texas. The validity of the securities offered hereby will be passed upon for the Underwriters by Cahill Gordon & Reindel LLP, New York, New York. Akin Gump Strauss Hauer & Feld LLP and Cahill Gordon & Reindel LLP will rely on the opinion of Miles & Stockbridge P.C., Baltimore, Maryland, with respect to all matters involving Maryland law.

Experts

The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2009, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

Where you can find more information

We are subject to the informational requirements of the Exchange Act. Accordingly, we file periodic reports, proxy statements, and other information with the SEC. You may inspect or copy these materials at the Public Reference Room at the SEC at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. For a fee, you may also obtain copies of these materials by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the SEC public reference room. Our filings are also available to the public on the SEC’s website on the Internet at http://www.sec.gov.

We have filed with the SEC a registration statement on Form S-11 (together with all amendments, schedules and exhibits thereto, the Registration Statement) with respect to the common stock offered by this prospectus. This prospectus, filed as part of the Registration Statement, does not contain all of the information included in the Registration Statement. Certain items were omitted from this prospectus as permitted by the rules and regulations of the SEC. Statements made in this prospectus as to the contents of any contract, agreement, or document are summaries and are not necessarily complete and, in each instance, we refer you to a copy of the contract, agreement, or other document filed as an exhibit to the Registration Statement and each such statement is qualified in its entirety by such reference. You may read and copy any contract, agreement or other document that we have filed as an exhibit to the Registration Statement or any other portion of our Registration Statement at the SEC’s Public Reference Room. For further information about us and the shares of common shares offered by this prospectus, please refer to the Registration Statement and its exhibits. You may obtain a copy of the Registration Statement through the public reference facilities of the SEC described above. You may also access a copy of the Registration Statement by means of the SEC’s website at http://www.sec.gov.

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Information incorporated by reference

This prospectus is part of a registration statement on Form S-11 filed with the SEC. This prospectus does not contain all of the information included in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC.

The SEC allows us to “incorporate by reference” certain documents that we filed with the SEC prior to the date of this prospectus, which means that we can disclose important information to you by referring to those documents that are considered part of this prospectus. We incorporate by reference the documents listed below (excluding current reports or portions thereof which are furnished to but are not filed with the Commission under Items 2.02, 7.01 or 8.01 of Form 8-K, unless such current reports or portions thereof specifically reference their contents as being filed):

•  Our annual report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the SEC on February 26, 2010;

•  Our quarterly report on Form 10-Q for the three months ended March 31, 2010, as filed with the SEC on May 3, 2010; and

•  Our current reports on Form 8-K filed with the SEC on February 19, 2010, February 24, 2010 and May 3, 2010.

•  Our definitive Proxy Statement pertaining to the 2010 Annual Meeting of Stockholders, as filed with the SEC on April 2, 2010.

Any statement contained in this prospectus or in a document incorporated by reference shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this prospectus or in any other document which is also incorporated by reference modifies or supersedes that statement.

You may request a copy of any or all of these documents, at no cost, upon written or oral request made to us at our principal executive offices at the following address and phone number: 545 E. John Carpenter Frwy., Suite 1300, Irving, Texas, 75062, (972) 444-4900, attention Investor Relations. You can also access the Company’s filings with the SEC at www.felcor.com.

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Part II

Information not required in prospectus

Item 30.  Quantitative and qualitative disclosures about market risk

The following tables provide information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the tables present scheduled maturities and weighted average interest rates, by maturity dates. The fair value of our fixed rate debt indicates the estimated principal amount of debt having the same debt service requirements that could have been borrowed at the date presented, at then current market interest rates.

At March 31, 2010, approximately 65% of our consolidated debt had fixed interest rates.

	March 31, 2010
	Expected maturity date
(dollars in thousands)	2010		2011		2012		2013		2014		Thereafter		Total			Fair value
Liabilities
Fixed-rate:
Debt	$	247,918	$	105,965	$	4,544	$	32,690	$	805,052	$	9,376	$	1,205,545		$	1,234,079
Average interest rate		8.70%		8.62%		7.68%		8.61%		9.61%		5.81%		9.27%
Floating-rate:
Debt		1,809		448,300		177,225		—		—		—		627,334			558,681
Average interest rate(a)		5.20%		3.76%		4.26%		—		—		—		3.91%
Total debt	$	249,727	$	554,265	$	181,769	$	32,690	$	805,052	$	9,376	$	1,832,879
Average interest rate		8.67%		4.69%		4.35%		8.61%		9.61%		5.81%		7.43%
Net discount														(61,764	)
Total debt													$	1,771,115

(a) The average floating interest rate represents the implied forward rates in the yield curve at March 31, 2010.

At December 31, 2009, approximately 65% of our consolidated debt had fixed interest rates. In some cases, market rates of interest are below the rates we are obligated to pay on our fixed-rate debt.

	December 31, 2009
	Expected maturity date
(dollars in thousands)	2010		2011		2012		2013		2014		Thereafter		Total			Fair value
Liabilities
Fixed-rate:
Debt	$	251,840	$	105,955	$	4,539	$	32,742	$	805,126	$	9,376	$	1,209,578		$	1,207,728
Average interest rate		8.69%		8.62%		7.67%		8.61%		9.61%		5.81%		9.27%
Floating-rate:
Debt		1,978		448,800		177,225		—		—		—		628,003			541,773
Average interest rate(a)		5.28%		4.01%		4.91%		—		—		—		4.27%
Total debt	$	253,818	$	554,755	$	181,764	$	32,742	$	805,126	$	9,376	$	1,837,581
Average interest rate		8.66%		4.89%		4.98%		8.61%		9.61%		5.81%		7.56%
Net discount														(64,267	)
Total debt													$	1,773,314

(a) The average floating interest rate represents the implied forward rates in the yield curve at December 31, 2009.

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	December 31, 2008
	Expected maturity date
(dollars in thousands)	2009		2010		2011		2012		2013		Thereafter		Total			Fair value
Liabilities
Fixed-rate:
Debt	$	142,427	$	274,014	$	303,029	$	2,415	$	2,590	$	73,245	$	797,720		$	685,512
Average interest rate		7.27%		8.70%		8.49%		6.49%		6.49%		6.54%		8.15%
Floating-rate:
Debt		285		—		578,000		177,225		—		—		755,510			565,555
Average interest rate(a)		4.25%		—		3.91%		4.65%		—		—		4.08%
Total debt	$	142,712	$	274,014	$	881,029	$	179,640	$	2,590	$	73,245	$	1,553,230
Average interest rate		7.27%		8.70%		5.48%		4.67%		6.49%		6.54%		6.17%
Net discount														(1,544	)
Total debt													$	1,551,686

(a) The average floating interest rate represents the implied forward rates in the yield curve at December 31, 2008.

Item 31.  Other expenses of issuance and distribution

The following table sets forth the approximate amount of the fees and expenses, other than underwriting discounts and commissions, payable by the registrant in connection with the sale of common stock being registered.

SEC registration fee	$	14,350.00
FINRA filing fee	$	*
NYSE listing fee	$	*
Printing and engraving expenses	$	*
Legal fees and expenses (including Blue Sky fees)	$	*
Accounting fees and expenses	$	*
Transfer agent and registrar fees	$	*
Miscellaneous expenses	$	*
Total	$	*

*  To be completed by amendment.

Item 32.  Sales to special parties

None

Item 33.  Recent sales of unregistered securities

None

Item 34.  Indemnification of directors and officers

The charter of the Company limits the liability of the Company’s directors and officers to the Company and its stockholders for money damages to the fullest extent permitted, from time to time, by the laws of the State of Maryland. The Maryland General Corporation Law, or MGCL, and Maryland law authorize Maryland corporations to limit the liability of directors and officers to the corporation and its stockholders for money damages, except to the extent that it is

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proved that the director or officer actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit actually received or to the extent that a judgment or other final adjudication adverse to the director or officer is entered in a proceeding based on a finding in the proceeding that the director’s or officer’s action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding.

The Company’s charter also provides for the indemnification of, and advance of expenses on behalf of, directors and officers, among others, to the fullest extent permitted by Maryland law. The MGCL authorizes Maryland corporations to indemnify present and past directors and officers of the corporation or of another corporation for which they serve at the request of the corporation against judgments, penalties, fines, settlements and reasonable expenses (including attorneys’ fees) actually incurred in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation in respect of which the person is adjudicated to be liable to the corporation), in which they are made parties by reason of being, or having been, directors or officers, unless it is proved that (i) the act or omission of the person was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, (ii) the person actually received an improper personal benefit in money, property or services or (iii) in the case of any criminal proceeding, the person had reasonable cause to believe that the act or omission was unlawful. The MGCL also provides that, unless limited by the corporation’s charter, a corporation shall indemnify present and past directors and officers of the corporation who are successful, on the merits or otherwise, in the defense of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, against reasonable expenses (including attorneys’ fees) incurred in connection with the proceeding. The Company’s charter does not limit the extent of this indemnity.

An indemnification agreement has been entered into between the Company and (1) each of the directors of the Company; and (2) each Executive Vice President and certain Senior Vice Presidents of the Company (each, an Indemnitee”). The rights of an Indemnitee under the Indemnification Agreement complement any rights the Indemnitee may already have under FelCor’s charter or bylaws, under Maryland law or otherwise. The Indemnification Agreement requires the Company to indemnify and advance expenses and costs incurred by the Indemnitee in connection with any claims, suits or proceedings arising as a result of the Indemnitee’s service as an officer or director of the Company.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors and officers of the Company pursuant to the foregoing provisions or otherwise, the Company has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.

The Company may purchase director and officer liability insurance for the purpose of providing a source of funds to pay any indemnification described above. The MGCL authorizes Maryland corporations to purchase and maintain insurance for former or existing directors or officers of the corporation against any liability assessed against, and incurred, by persons in that capacity or arising out of that person’s position, whether or not the corporation would have the power to indemnify against liability under the MGCL. The Company’s charter does not limit this authority to obtain insurance.

II-3

Item 35.  Treatment of proceeds from stock being registered

Not Applicable

Item 36.  Financial statements and exhibits

(a) The following is a list of documents filed as a part of this report:

(1) Financial Statements.

Incorporated herein by reference.

(2) Financial Statement Schedules.

Incorporated herein by reference.

(b) Exhibits.

The following exhibits are provided pursuant to the provisions of Item 601 of Regulation S-K:

Exhibit
number			Description of exhibit
	1	.1**	Underwriting Agreement
	3	.1	Articles of Amendment and Restatement dated June 22, 1995, amending and restating t Charter of FelCor Lodging Trust Incorporated (“FelCor”), as amended or supplemented by Articles of Merger dated June 23, 1995, Articles Supplementary dated April 30, 1996, Articles of Amendment dated August 8, 1996, Articles of Amendment dated June 16, 1997, Articles of Amendment dated October 30, 1997, Articles Supplementary filed May 6, 1998, Articles of Merger and Articles of Amendment dated July 27, 1998, Certificate of Correction dated March 11, 1999, Certificate of Correction to the Articles of Merger between FelCor and Bristol Hotel Company, dated August 30, 1999, Articles Supplementary, dated April 1, 2002, Certificate of Correction, dated March 29, 2004, to Articles Supplementary filed May 2, 1996, Articles Supplementary filed April 2, 2004, Articles Supplementary filed August 20, 2004, Articles Supplementary filed April 6, 2005, and Articles Supplementary filed August 29, 2005 (filed as Exhibit 4.1 to FelCor’s Registration Statement on Form S-3 (Registration No. 333-128862) and incorporated herein by reference).
	3	.2	Bylaws of FelCor Lodging Trust Incorporated (filed as Exhibit 4.2 to FelCor’s Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference).
	4	.1	Form of Share Certificate for Common Stock (filed as Exhibit 4.1 to FelCor’s Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference).
	4	.2	Form of Share Certificate for $1.95 Series A Cumulative Convertible Preferred Stock (filed as Exhibit 4.4 to FelCor’s Form 8-K, dated May 1, 1996, and incorporated herein by reference).
	4	.3	Form of Share Certificate for 8% Series C Cumulative Redeemable Preferred Stock (filed as Exhibit 4.10.1 to FelCor’s Form 8-K, dated April 6, 2005, and incorporated herein by reference).
	4	.4	Deposit Agreement, dated April 7, 2005, between FelCor and SunTrust Bank, as preferred share depositary (filed as Exhibit 4.11.1 to FelCor’s Form 8-K, dated April 6, 2005, and incorporated herein by reference).

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Exhibit
number			Description of exhibit
	4	.4.1	Supplement and Amendment to Deposit Agreement, dated August 30, 2005, between the Company and SunTrust Bank, as depositary (filed as Exhibit 4.11.2 to FelCor’s Form 8-K, dated April 6, 2005, and incorporated herein by reference).
	4	.5	Form of Depositary Receipt evidencing the Depositary Shares, which represent the 8% Series C Cumulative Redeemable Preferred Stock (filed as Exhibit 4.12.1 to FelCor’s Form 8-K, dated April 6, 2005, and incorporated herein by reference).
	4	.6	Indenture, dated as of October 1, 2009, by and between FelCor Escrow Holdings, L.L.C. and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to FelCor’s Form 8-K, dated October 1, 2009, and incorporated herein by reference).
	4	.6.1	First Supplemental Indenture dated as of October 12, 2009, by and between FelCor Escrow Holdings, L.L.C. and U.S. Bank National Association (filed as Exhibit 4.1 to FelCor’s Form 8-K, dated October 13, 2009, and incorporated herein by reference).
	4	.6.2	Second Supplemental Indenture dated as of October 13, 2009, by and among FelCor, FelCor Lodging Limited Partnership (“FelCor LP”), certain subsidiary guarantors named therein, FelCor Holdings Trust, FelCor Escrow Holdings, L.L.C. and U.S. Bank National Association (filed as Exhibit 4.2 to FelCor’s Form 8-K dated, October 13, 2009, and incorporated herein by reference).
	4	.7	Registration Rights Agreement dated October 1, 2009 to be effective as of October 13, 2009, by and among FelCor, FelCor LP, certain subsidiary guarantors named therein, and J.P. Morgan Securities Inc. on behalf of itself and the initial purchasers (filed as Exhibit 4.3 to FelCor’s Form 8-K, dated October 13, 2009, and incorporated herein by reference).
	4	.8	Third Supplemental Indenture, dated as of March 23, 2010, by and among FelCor, FelCor LP, certain of their subsidiaries, as guarantors, and U.S. Bank National Association, as trustee and collateral agent, relating to the 10% Senior Secured Notes due 2014 (filed as Exhibit 4.1 to FelCor’s Form 10-Q for the quarter ended March 31, 2010, and incorporated herein by reference).
	5	.1**	Opinion of Akin Gump Strauss Hauer & Feld LLP regarding the validity of the securities being offered.
	5	.2**	Opinion of Miles & Stockbridge P.C. regarding the validity of the securities being offered.
	8	.1**	Opinion of Akin Gump Strauss Hauer & Feld LLP regarding certain tax matters.
	10	.1	Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of December 31, 2001 (filed as Exhibit 10.1 to FelCor’s Form 10-K for the fiscal year ended December 31, 2001 (the “2001 Form 10-K”) and incorporated herein by reference).
	10	.1.1	First Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated April 1, 2002 (filed as Exhibit 10.1.1 to FelCor’s Form 8-K, dated April 1, 2002, and incorporated herein by reference).
	10	.1.2	Second Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated August 31, 2002 (filed as Exhibit 10.1.2 to FelCor’s Form 10-K for the fiscal year ended December 31, 2002 (the “2002 Form 10-K”), and incorporated herein by reference).

II-5

Exhibit
number			Description of exhibit
	10	.1.3	Third Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated October 1, 2002 (filed as Exhibit 10.1.3 to the 2002 Form 10-K and incorporated herein by reference).
	10	.1.4	Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of July 1, 2003 (filed as Exhibit 10.1.4 to FelCor’s Form 10-Q for the quarter ended March 31, 2004, and incorporated herein by reference).
	10	.1.5	Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of April 2, 2004 (filed as Exhibit 10.1.5 to FelCor’s Form 10-Q for the quarter ended March 31, 2004, and incorporated herein by reference).
	10	.1.6	Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of August 23, 2004 (filed as Exhibit 10.1.6 to FelCor’s Form 8-K, dated August 26, 2004, and incorporated herein by reference).
	10	.1.7	Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of April 7, 2005, which contains Addendum No. 4 to the Second Amended and Restated Agreement of Limited Partnership of FelCor Lodging Limited Partnership (filed as Exhibit 10.1.8 to FelCor’s Form 8-K, dated April 6, 2006, and incorporated herein by reference).
	10	.1.8	Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership of FelCor LP, dated as of August 30, 2005 (filed as Exhibit 10.1.9 to FelCor’s Form 8-K, dated August 29, 2005, and incorporated herein by reference).
	10	.2.1	Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of InterContinental Hotels, as manager, with respect to FelCor’s InterContinental Hotels branded hotels (included as an exhibit to the Leasehold Acquisition Agreement, which was filed as Exhibit 10.28 to FelCor’s Form 10-Q for the quarter ended March 31, 2001, and incorporated herein by reference).
	10	.2.2	Omnibus Agreement between FelCor and all its various subsidiaries, controlled entities and affiliates, and Six Continents Hotels, Inc. and all its various subsidiaries, controlled entities and affiliates, with respect to FelCor’s InterContinental Hotels branded hotels (filed as Exhibit 10.2.2 to FelCor’s Form 10-K for the fiscal year ended December 31, 2005 (the “2005 Form 10-K”), and incorporated herein by reference).
	10	.3.1	Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of Hilton Hotels Corporation, as manager, with respect to FelCor’s Embassy Suites Hotels branded hotels, including the form of Embassy Suites Hotels License Agreement attached as an exhibit thereto, effective prior to July 28, 2004 (filed as Exhibit 10.5 to the 2001 Form 10-K, and incorporated herein by reference).
	10	.3.2	Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of Hilton Hotels Corporation, as manager, with respect to FelCor’s Embassy Suites Hotels branded hotels, including the form of Embassy Suites Hotels License Agreement attached as an exhibit thereto, effective July 28, 2004 (filed as Exhibit 10.3.2 to FelCor’s Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Form 10-K”), and incorporated herein by reference).

II-6

Exhibit
number			Description of exhibit
	10	.4	Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of Hilton Hotels Corporation, as manager, with respect to FelCor’s Doubletree and Doubletree Guest Suites branded hotels (filed as Exhibit 10.6 to the 2001 Form 10-K and incorporated herein by reference).
	10	.5	Form of Management Agreement between subsidiaries of FelCor, as owner, and a subsidiary of Starwood Hotels & Resorts, Inc., as manager, with respect to FelCor’s Sheraton and Westin branded hotels (filed as Exhibit 10.7 to the 2001 Form 10-K and incorporated herein by reference).
	10	.6	Executive Employment Agreement, dated effective as of February 1, 2006, between FelCor and Thomas J. Corcoran, Jr. (filed as Exhibit 10.36 to FelCor’s Form 8-K, dated February 7, 2006, and incorporated herein by reference).
	10	.6.1	Letter Agreement dated March 1, 2008 between Thomas J. Corcoran, Jr. and FelCor (filed as Exhibit 101 to FelCor’s Form 10-Q for the quarter ended March 31, 2008, and incorporated herein by reference).
	10	.7	Executive Employment Agreement dated October 19, 2007, between FelCor and Richard A. Smith (filed as Exhibit 10.1 to FelCor’s Form 10-Q for the quarter ended September 30, 2007, and incorporated herein by reference).
	10	.8	Form of 2007 Change in Control and Severance Agreement between FelCor and each of Rick Smith, Andy Welch, Mike DeNicola, Troy Pentecost, Jon Yellen and Tom Corcoran (filed as Exhibit 10.1 to FelCor’s Form 8-K dated October 23, 2007, and incorporated herein by reference).
	10	.9	Savings and Investment Plan of FelCor (filed as Exhibit 10.10 to the 2001 Form 10-K and incorporated herein by reference).
	10	.10	1998 Restricted Stock and Stock Option Plan (filed as Exhibit 4.2 to FelCor’s Registration Statement on Form S-8 (Registration File No. 333-66041) and incorporated herein by reference).
	10	.11	2001 Restricted Stock and Stock Option Plan of FelCor (filed as Exhibit 10.14 to the 2002 Form 10-K and incorporated herein by reference).
	10	.12	Form of Nonstatutory Stock Option Contract under Restricted Stock and Stock Option Plans of FelCor (filed as Exhibit 10.16 to the 2004 Form 10-K and incorporated herein by reference).
	10	.13	Form of Employee Stock Grant Contract under Restricted Stock and Stock Option Plans of FelCor (filed as Exhibit 10.17 to the 2004 Form 10-K and incorporated herein by reference).
	10	.14	FelCor’s 2005 Restricted Stock and Stock Option Plan as amended (filed as Exhibit 4.4 to FelCor’s Registration Statement on Form S-8 (Registration File No. 333-151066) and incorporated herein by reference).
	10	.15	Form of Employee Stock Grant Contract under Restricted Stock and Stock Option Plans of FelCor applicable to grants in 2005 and thereafter (filed as Exhibit 10.33 to FelCor’s Form 8-K, dated April 26, 2005, and incorporated herein by reference).
	10	.16	Form of Employee Stock Grant and Supplemental Long-Term Cash Payment Agreement dated as of February 19, 2009 (filed as Exhibit 10.1 to FelCor’s Form 8-K, dated February 20, 2009, and incorporated herein by reference).

II-7

Exhibit
number			Description of exhibit
	10	.16.1	Amendment to Employee Stock Grant and Supplemental Long-Term Cash Payment Agreement dated as of February 19, 2009 (filed as Exhibit 10.1 to FelCor’s Form 8-K, dated December 28, 2009, and incorporated herein by reference).
	10	.17	Form of Restricted Payment Contract (filed as Exhibit 10.2 to FelCor’s Form 8-K, dated December 28, 2009, and incorporated herein by reference).
	10	.18	Form of Employee Stock Grant Contract (filed as Exhibit 10.3 to FelCor’s Form 8-K, dated December 28, 2009, and incorporated herein by reference).
	10	.19	Form of Indemnification Agreement by and among FelCor, FelCor LP and individual officers and directors of FelCor (filed as Exhibit 10.1 to FelCor’s 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference; superseding the form of Indemnification Agreement that was filed as Exhibit 10.1 to FelCor’s Form 8-K, dated November 9, 2006, and incorporated herein by reference).
	10	.20	Form of Guaranty Agreement by and among FelCor, FelCor LP and individual employees of FelCor (filed as Exhibit 10.2 to FelCor’s Form 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference).
	10	.21	Summary of Amended Annual Compensation Program for Directors of FelCor (filed as Exhibit 10.21 to FelCor’s Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Form 10-K”), and incorporated herein by reference).
	10	.22	Summary of FelCor’s Performance-Based Annual Incentive Compensation Programs (filed as Exhibit 10.1 to FelCor’s Form 8-K, dated February 18, 2010, and incorporated herein by reference).
	10	.23.1	Form Deed of Trust and Security Agreement and Fixture Filing with Assignment of Leases and Rents, each dated as of April 20, 2000, from FelCor/MM S-7 Holdings, L.P., as Mortgagor, in favor of Massachusetts Mutual Life Insurance Company and Teachers Insurance and Annuity Association of America, as Mortgagee, each covering a separate hotel and securing one of the separate Promissory Notes described in Exhibit 10.22.3 (filed as Exhibit 10.24 to FelCor’s Form 10-Q for the quarter ended June 30, 2000 (the “June 2000 10-Q”) and incorporated herein by reference).
	10	.23.2	Form of Accommodation Cross-Collateralization Mortgage and Security Agreement, each dated as of April 20, 2000, executed by FelCor/MM S-7 Holdings, L.P., in favor of Massachusetts Mutual Life Insurance Company and Teachers Insurance and Annuity Association of America (filed as Exhibit 10.24.1 to the June 2000 10-Q and incorporated herein by reference).

II-8

Exhibit
number			Description of exhibit
	10	.23.3	Form of fourteen separate Promissory Notes, each dated April 20, 2000, each made by FelCor/MM S-7 Holdings, L.P., each separately payable to the order of Massachusetts Mutual Life Insurance Company and Teachers Insurance and Annuity Association of America, respectively, in the respective original principal amounts of $13,500,000 (Phoenix (Crescent), Arizona), $13,500,000 (Phoenix (Crescent), Arizona), $6,500,000 (Cypress Creek/Ft. Lauderdale, Florida), $6,500,000 (Cypress Creek/Ft. Lauderdale, Florida), $9,000,000 (Atlanta Galleria, Georgia), $9,000,000 (Atlanta Galleria, Georgia), $12,500,000 (Chicago O’Hare Airport, Illinois), $12,500,000 (Chicago O’Hare Airport, Illinois), $3,500,000 (Lexington, Kentucky), $3,500,000 (Lexington, Kentucky), $17,000,000 (Philadelphia Society Hill, Philadelphia), $17,000,000 (Philadelphia Society Hill, Philadelphia), $10,500,000 (South Burlington, Vermont) and $10,500,000 (South Burlington, Vermont) (filed as Exhibit 10.24.2 to the June 2000 10-Q and incorporated herein by reference).
	10	.24.1	Form Deed of Trust and Security Agreement, each dated as of May 2, 2000, from each of FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Deerfield Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB New Orleans Hotel, L.L.C., FelCor/CMB Piscataway Hotel, L.L.C., and FelCor/CMB SSF Holdings, L.P., each as Borrower, in favor of The Chase Manhattan Bank, as Beneficiary, each covering a separate hotel and securing one of the separate Promissory Notes described in Exhibit 10.23.2 (filed as Exhibit 10.25 to the June 2000 10-Q and incorporated herein by reference).
	10	.24.2	Form of eight separate Promissory Notes, each dated May 2, 2000, made by FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Deerfield Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB New Orleans Hotel, L.L.C., FelCor/CMB Piscataway Hotel, L.L.C. and FelCor/CMB SSF Holdings, L.P., each separately payable to the order of The Chase Manhattan Bank in the respective original principal amounts of $38,250,000 (Atlanta Buckhead, Georgia), $20,500,000 (Boston Marlborough, Massachusetts), $16,575,000 (Chicago Deerfield, Illinois), $5,338,000 (Corpus Christi, Texas), $25,583,000 (Orlando South, Florida), $32,650,000 (New Orleans, Louisiana), $20,728,000 (Piscataway, New Jersey) and $26,268,000 (South San Francisco, California) (filed as Exhibit 10.25.1 to the June 2000 10-Q and incorporated herein by reference).
	10	.25.1	Form of Loan Agreement, each dated either May 26, 2004, June 10, 2004 or July 19, 2004, between JPMorgan Chase Bank, as lender, and each of FelCor/JPM Boca Raton Hotel, L.L.C., FelCor/JPM Phoenix Hotel, L.L.C., FelCor/JPM Wilmington Hotel, L.L.C., FelCor/JPM Atlanta ES Hotel, L.L.C., FelCor/JPM Austin Holdings, L.P., FelCor/JPM Orlando Hotel, L.L.C., and FelCor/JPM BWI Hotel, L.L.C. and FCH/DT BWI Hotel, L.L.C., as borrowers, and acknowledged and agreed by FelCor LP (filed as Exhibit 10.34 to FelCor’s Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by reference).

II-9

Exhibit
number			Description of exhibit
	10	.25.2	Form of Mortgage, Renewal Mortgage, Deed of Trust, Deed to Secure Debt, Indemnity Deed of Trust and Assignment of Leases and Rents, Security Agreement and Fixture Filing, each dated either May 26, 2004, June 10, 2004 or July 19, 2004, from FelCor/JPM Wilmington Hotel, L.L.C., DJONT/JPM Wilmington Leasing, L.L.C., FelCor/JPM Phoenix Hotel, L.L.C., DJONT/JPM Phoenix Leasing, L.L.C., FelCor/JPM Boca Raton Hotel, L.L.C., DJONT/JPM Boca Raton Leasing, L.L.C., FelCor/JPM Atlanta ES Hotel, L.L.C., DJONT/JPM Atlanta ES Leasing, L.L.C., FelCor/JPM Austin Holdings, L.P., DJONT/JPM Austin Leasing, L.P., FelCor/JPM Orlando Hotel, L.L.C., DJONT/JPM Orlando Leasing, L.L.C., FCH/DT BWI Holdings, L.P., FCH/DT BWI Hotel, L.L.C. and DJONT/JPM BWI Leasing, L.L.C., to, and for the benefit of, JPMorgan Chase Bank, as mortgagee or beneficiary (filed as Exhibit 10.34.1 to FelCor’s Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by reference).
	10	.25.3	Form of seven separate Promissory Notes, each dated either May 26, 2004, June 10, 2004 or July 19, 2004, made by FelCor/JPM Wilmington Hotel, L.L.C., FelCor/JPM Phoenix Hotel, L.L.C., FelCor/JPM Boca Raton Hotel, L.L.C., FelCor/JPM Atlanta ES Hotel, L.L.C., FelCor/JPM Austin Holdings, L.P., FelCor/JPM Orlando Hotel, L.L.C., and FelCor/JPM BWI Hotel, L.L.C., each separately payable to the order of JPMorgan Chase Bank in the respective original principal amounts of $11,000,000 (Wilmington, Delaware), $21,368,000 (Phoenix, Arizona), $5,500,000 (Boca Raton, Florida), $13,500,000 (Atlanta, Georgia), $9,616,000 (Austin, Texas), $9,798,000 (Orlando, Florida), and $24,120,000 (Linthicum, Maryland) (filed as Exhibit 10.34.2 to FelCor’s Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by reference).
	10	.25.4	Form of Guaranty of Recourse Obligations of Borrower, each dated either May 26, 2004, June 10, 2004 or July 19, 2004, made by FelCor LP in favor of JPMorgan Chase Bank (filed as Exhibit 10.34.3 to FelCor’s Form 10-Q for the quarter ended June 30, 2004, and incorporated herein by reference).
	10	.26.1	Loan Agreement, dated as of November 10, 2006, by and among FelCor/JPM Hotels, L.L.C. and DJONT/JPM Leasing, L.L.C., as borrowers, and Bank of America, N.A., as lender, relating to a $250 million loan from lender to borrower (filed as Exhibit 10.35.1 to the FelCor’s Form 10-K for the fiscal year ended December 31, 2006 (the “2006 Form 10-K”), and incorporated herein by reference).
	10	.26.1.1	First Amendment to Loan Agreement and Other Loan Documents, dated as of January 31, 2007, by and among FelCor/JPM Hotels, L.L.C. and DJONT/JPM Leasing, L.L.C., as borrowers, and Bank of America, N.A., as lender (filed as Exhibit 10.35.1.1 to the 2006 Form 10-K and incorporated herein by reference).
	10	.26.2	Form of Mortgage, Deed of Trust and Security Agreement, each dated as of November 10, 2006, from FelCor/JPM Hotels, L.L.C. and DJONT/JPM Leasing, L.L.C., as borrowers, in favor of Bank of America, N.A., as lender, each covering a separate hotel and securing the Mortgage Loan (filed as Exhibit 10.35.2 to the 2006 Form 10-K and incorporated herein by reference).
	10	.26.3	Form of Amended and Restated Promissory Note, each dated as of January 31, 2007, made by FelCor/JPM Hotels, L.L.C. and DJONT/JPM Leasing, L.L.C. payable to the order of either Bank of America, N.A. or JPMorgan Chase Bank, N.A., as lender, in the original aggregate principal amount of $250 million (filed as Exhibit 10.35.3 to the 2006 Form 10-K and incorporated herein by reference).

II-10

Exhibit
number			Description of exhibit
	10	.26.4	Guaranty of Recourse Obligations of Borrower, dated as of November 10, 2006, made by FelCor LP in favor of Bank of America, N.A (filed as Exhibit 10.35.4 to the 2006 Form 10-K and incorporated herein by reference).
	10	.27.1	Assumption Agreement dated December 14, 2007 by Greenwich Capital Financial Products, Inc., WSRH Indian Wells, L.L.C., FelCor Esmeralda (SPE), L.L.C. and FelCor Esmeralda Leasing (SPE), L.L.C. (filed as Exhibit 10.28.1 to the FelCor’s Form 10-K for the fiscal year ended December 31, 2007 (the “2007 Form 10-K”), and incorporated herein by reference).
	10	.27.2	Amended and Restated Loan Agreement dated December 14, 2007 between FelCor Esmeralda (SPE), L.L.C. and FelCor Esmeralda Leasing (SPE), L.L.C., as borrowers, and Greenwich Financial Products, Inc., as lender (filed as Exhibit 10.28.2 to the 2007 Form 10-K and incorporated herein by reference).
	10	.27.3	Amended and Restated Promissory Note dated December 14, 2007, in the amount of $87,975,000, made by FelCor Esmeralda (SPE), L.L.C. and FelCor Esmeralda Leasing (SPE), L.L.C., as borrower, in favor of Greenwich Capital Financial Products, Inc., as lender (filed as Exhibit 10.28.3 to the 2007 Form 10-K and incorporated herein by reference).
	10	.27.4	Amended and Restated Deed of Trust, Security Agreement and Fixture Filing dated December 14, 2007 by FelCor Esmeralda (SPE), L.L.C. and FelCor Esmeralda Leasing (SPE), L.L.C., as trustors, to First American Title Insurance Company, as trustee, and Greenwich Capital Financial Products, Inc., as lender(filed as Exhibit 10.28.4 to the 2007 Form 10-K and incorporated herein by reference).
	10	.28.1	Assumption Agreement dated December 14, 2007 by Greenwich Capital Financial Products, Inc., WSRH VSP, L.P., FelCor St. Pete (SPE), L.L.C. and FelCor St. Pete Leasing (SPE), L.L.C. (filed as Exhibit 10.29.1 to the 2007 Form 10-K and incorporated herein by reference).
	10	.28.2	Second Amended and Restated Loan Agreement dated December 14, 2007 between FelCor St. Pete (SPE), L.L.C. and FelCor St. Pete Leasing (SPE), L.L.C., as borrowers, and Greenwich Financial Products, Inc., as lender (filed as Exhibit 10.29.2 to the 2007 Form 10-K and incorporated herein by reference).
	10	.28.3	Second Amended and Restated Promissory Note dated December 14, 2007, in the amount of $89,250,000, made by FelCor St. Pete (SPE), L.L.C. and FelCor St. Pete Leasing (SPE), L.L.C., as borrower, in favor of Greenwich Capital Financial Products, Inc., as lender (filed as Exhibit 10.29.3 to the 2007 Form 10-K and incorporated herein by reference).
	10	.28.4	Second Amended and Restated Leasehold Mortgage, Security Agreement and Fixture Filing dated December 14, 2007 by FelCor St. Pete (SPE), L.L.C. and FelCor St. Pete Leasing (SPE), L.L.C., as borrower, and Greenwich Capital Financial Products, Inc., as lender (filed as Exhibit 10.29.4 to the 2007 Form 10-K and incorporated herein by reference).
	10	.29.1	Loan Agreement, dated March 31, 2009, by and between FelCor/CSS (SPE), L.L.C., as borrower, The Prudential Insurance Company of America, as lender, and joined by DJONT Operations, L.L.C. (filed as Exhibit 10.3 to FelCor’s Form 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference).

II-11

Exhibit
number			Description of exhibit
	10	.29.2	Form of Mortgage and Security Agreement, dated March 31, 2009, executed by FelCor/CSS (SPE), L.L.C. and DJONT Operations, L.L.C. for the benefit of The Prudential Insurance Company of America (filed as Exhibit 10.4 to FelCor’s Form 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference).
	10	.29.3	Promissory Note, dated March 31, 2009, made by FelCor/CSS (SPE), L.L.C., as borrower, in favor of The Prudential Insurance Company of America (filed as Exhibit 10.5 to FelCor’s Form 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference).
	10	.29.4	Recourse Liabilities Guarantee, dated March 31, 2009, made by FelCor and FelCor LP in favor of The Prudential Insurance Company of America (filed as Exhibit 10.6 to FelCor’s Form 10-Q for the quarter ended March 31, 2009, and incorporated herein by reference).
	10	.30.1	Term Loan Agreement, dated as of June 12, 2009, among FelCor/JPM Hospitality (SPE), L.L.C. and DJONT/JPM Hospitality Leasing (SPE), L.L.C., as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party hereto (filed as Exhibit 10.1 to FelCor’s Form 10-Q for the quarter ended June 3, 2009, and incorporated herein by reference).
	10	.30.2	Form of Mortgage/Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of June 12, 2009, granted by FelCor/JPM Hospitality (SPE), L.L.C. and DJONT/JPM Hospitality Leasing (SPE), L.L.C. for the benefit of JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.2 to FelCor’s Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference).
	10	.30.3	Form of Note, dated as of June 12, 2009, executed by FelCor/JPM Hospitality (SPE), L.L.C. and DJONT/JPM Hospitality Leasing (SPE), L.L.C. for the benefit of the lenders (filed as Exhibit 10.3 to FelCor’s Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference).
	10	.30.4	Form of Carve Out Guaranty, dated as of June 12, 2009, by FelCor in favor of JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.4 to FelCor’s Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference).
	10	.30.5	Form of Recourse Guaranty, dated as of June 12, 2009, by FelCor in favor of JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.5 to FelCor’s Form 10-Q for the quarter ended June 30, 2009, and incorporated herein by reference).
	10	.31	Pledge Agreement dated October 13, 2009, by and among FelCor, FelCor LP, certain subsidiary pledgors named therein, FelCor Holdings Trust, and U.S. Bank National Association (filed as Exhibit 10.1 to FelCor’s Form 8-K dated October 13, 2009, and incorporated herein by reference).
	10	.32	Form of Mortgage, Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by and among FelCor, FelCor LP, certain of their subsidiaries, as guarantors, and U.S. Bank National Association, as trustee and collateral agent, relating to the 10% Senior Secured Notes due 2014 (filed as Exhibit 10.1 to FelCor’s Form 10-Q for the quarter ended March 31, 2010, and incorporated herein by reference).

II-12

Exhibit
number			Description of exhibit
	10	.33.1*	Credit Agreement, dated as of May 3, 2010, by and among FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB SSF Holdings, L.P., FelCor S-4 Hotels (SPE), L.L.C., DJONT/CMB Buckhead Leasing, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB Corpus Leasing, L.L.C., DJONT/CMB Orsouth Leasing, L.L.C., DJONT/CMB SSF Leasing, L.L.C., FelCor S-4 Leasing (SPE), L.L.C., FCH/SH Leasing II, L.L.C., and Fortress Credit Corp. (as administrative agent and initial lender).
	10	.33.2*	Form of Promissory Note, dated as of May 3, 2010, executed by FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB SSF Holdings, L.P., FelCor S-4 Hotels (SPE), L.L.C., DJONT/CMB Buckhead Leasing, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB Corpus Leasing, L.L.C., DJONT/CMB Orsouth Leasing, L.L.C., DJONT/CMB SSF Leasing, L.L.C., and FelCor S-4 Leasing (SPE), L.L.C.
	10	.33.3*	Pledge and Security Agreement, dated as of May 3, 2010, by and among FelCor LP, DJONT Operations, L.L.C., FelCor TRS Holdings, L.L.C., FelCor/CSS Holdings, L.P., and Fortress Credit Corp.
	10	.33.4*	Form of Mortgage, Fixture Filing and Security Agreement, dated as of May 3, 2010, granted by FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB SSF Holdings, L.P., FelCor S-4 Hotels (SPE), L.L.C., DJONT/CMB Buckhead Leasing, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB Corpus Leasing, L.L.C., DJONT/CMB Orsouth Leasing, L.L.C., DJONT/CMB SSF Leasing, L.L.C., and FelCor S-4 Leasing (SPE), L.L.C for the benefit of Fortress Credit Corp.
	10	.33.5*	Guaranty, dated as of May 3, 2010, granted by FelCor LP in favor of Fortress Credit Corp.
	21	.1*	List of subsidiaries of the registrant.
	23	.1*	Consent of PricewaterhouseCoopers LLP.
	23	.2	Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 5.1).
	23	.3	Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 8.1).
	23	.4	Consent of Miles & Stockbridge P.C. (included in Exhibit 5.2).
	24	.1	Power of Attorney (included on signature page).

*	Filed herewith.
**	To be filed by amendment.

Item 37.  Undertakings

(a) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in

II-13

the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrant hereby undertakes that:

(1) For purposes of determining liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of the registration statement in reliance on Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-14

Signatures

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas on the 12^th day of May, 2010.

FELCOR LODGING TRUST INCORPORATED,
a Maryland corporation

By:  /s/  Jonathan H. Yellen

Jonathan H. Yellen

Executive Vice President, Secretary

and General Counsel

II-15

Power of attorney

Each person whose signature appears below hereby constitutes and appoints each of Richard A. Smith and Jonathan H. Yellen, with full power to act without the other, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities (until revoked in writing) to sign any and all amendments (including post-effective amendments) to this Registration Statement, to file the same, together with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, to sign any and all applications, registration statements, notices and other documents necessary or advisable to comply with the applicable state securities laws, and to file the same, together with all other documents in connection therewith, with the appropriate state securities authorities, granting unto said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, full power and authority to perform and do each and every act and thing necessary and advisable as fully to all intents and purposes as he or she might or could perform and do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

	Signature	Title	Date
/s/  Thomas J. Corcoran, Jr. Thomas J. Corcoran, Jr.		Chairman of the Board and Director	April 28, 2010
/s/  Richard A. Smith Richard A. Smith		President and Chief Executive Officer and Director	April 28, 2010
/s/  Andrew J. Welch Andrew J. Welch		Executive Vice President and Chief Financial Officer (Principal Financial Officer)	April 28, 2010
/s/  Lester C. Johnson Lester C. Johnson		Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)	April 28, 2010
/s/  Melinda J. Bush Melinda J. Bush		Director	April 28, 2010
/s/  Glenn A. Carlin Glenn A. Carlin		Director	April 28, 2010
/s/  Robert F. Cotter Robert F. Cotter		Director	April 28, 2010
/s/  Thomas C. Hendrick Thomas C. Hendrick		Director	April 28, 2010
/s/  Charles A. Ledsinger Charles A. Ledsinger		Director	April 28, 2010

II-16

	Signature	Title	Date
/s/  Robert H. Lutz, Jr. Robert H. Lutz, Jr.		Director	April 28, 2010
/s/  Robert A. Mathewson Robert A. Mathewson		Director	April 28, 2010
/s/  Mark D. Rozells Mark D. Rozells		Director	April 28, 2010

II-17

EX-10.33.1

EXHIBIT 10.33.1

CREDIT AGREEMENT

Dated as of May 3, 2010

among

FELCOR/CMB BUCKHEAD HOTEL, L.L.C.

FELCOR/CMB MARLBOROUGH HOTEL, L.L.C.,

FELCOR/CMB CORPUS HOLDINGS, L.P.,

FELCOR/CMB ORSOUTH HOLDINGS, L.P.,

FELCOR/CMB SSF HOLDINGS, L.P.,

FELCOR S-4 HOTELS (SPE), L.L.C.,

DJONT/CMB BUCKHEAD LEASING, L.L.C.,

DJONT/CMB FCOAM, L.L.C.,

DJONT/CMB CORPUS LEASING, L.L.C.,

DJONT/CMB ORSOUTH LEASING, L.L.C.,

DJONT/CMB SSF LEASING, L.L.C.,

FELCOR S-4 LEASING (SPE), L.L.C., and

FCH/SH LEASING II, L.L.C.,

each as a Borrower,

FORTRESS CREDIT CORP.,

as Administrative Agent,

FORTRESS CREDIT CORP.,

as Initial Lender,

and

The Other Lenders Party Hereto

TABLE OF CONTENTS

	Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms		1
1.2 Other Interpretive Provisions		47
1.3 Accounting Terms		47
1.4 Rounding		48
1.5 Times of Day		48
1.6 Joint and Several Obligations		48
ARTICLE II
THE LOAN
2.1 The Loan		49
2.2 Interest Rate; Interest Calculation		49
2.3 Late Charge; Default Rate; Past Due Amounts		49
2.4 Loan Payments		50
2.5 Interest Rate Cap Agreements		50
2.6 Prepayments		53
2.7 Evidence of Debt		54
2.8 Administrative Agent’s Clawback and Insufficient Funds		54
2.9 Sharing of Payments by Lenders		54
2.10 Collateral Property Releases		55
2.11 Release on Payment in Full		56
ARTICLE III
CASH MANAGEMENT
3.1 Establishment of Accounts		57
3.2 Deposits into Lockbox Account		57
3.3 Account Name		59
3.4 Eligible Accounts		59
3.5 Permitted Investments		59
3.6 Disbursements from the Lockbox Account		59
3.7 Lockbox Trigger Event Cure		61
3.8 Sole Dominion and Control		61
3.9 Security Interest		61
3.10 Rights on Default		61
3.11 Financing Statement; Further Assurances		62
3.12 Borrowers Obligations Not Affected		62
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes		62
4.2 Illegality		64
4.3 Inability to Determine Rates		64
4.4 Increased Costs; LIBOR Reserves		64

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TABLE OF CONTENTS
(Continued)

	Page
4.5 Compensation for Losses		65
4.6 Mitigation Obligations		66
4.7 Survival		66
ARTICLE V
CONDITIONS PRECEDENT TO FUNDING OF THE LOAN
5.1 Conditions to the Loan		66
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Existence, Qualification and Power		70
6.2 Proceedings		71
6.3 No Conflicts		71
6.4 Litigation		71
6.5 Agreements		71
6.6 Solvency		71
6.7 Full and Accurate Disclosure		72
6.8 No Plan Assets		72
6.9 Compliance with Legal Requirements		72
6.10 Financial Information		72
6.11 Condemnation		73
6.12 Federal Reserve Regulations		73
6.13 Utilities and Public Access		73
6.14 Foreign Person		73
6.15 Fee/Leasehold Ownership		73
6.16 Separate Tax Lots; Assessments		73
6.17 Enforceability		74
6.18 No Prior Assignment		74
6.19 Insurance		74
6.20 Use of Property		74
6.21 Certificate of Occupancy; Licenses		74
6.22 Flood Zone		74
6.23 Physical Condition		74
6.24 Boundaries		75
6.25 Leases		75
6.26 Survey		75
6.27 Filing and Recording Taxes		75
6.28 Franchise Agreements; Property Improvement Plans		75
6.29 Management Agreements		76
6.30 Illegal Activity		76
6.31 No Change in Facts or Circumstances; Disclosure		76
6.32 Investment Company Act		76
6.33 Principal Place of Business; State of Organization; Tax Identification Number		76
6.34 Single Purpose Entity		76
6.35 Business Purposes		81

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TABLE OF CONTENTS
(Continued)

	Page
6.36 Taxes		81
6.37 Environmental Representations and Warranties		81
6.38 Ground Lease Representations		81
6.39 Operating Lease Representations		83
6.40 Deposit Accounts		84
6.41 Liens		84
6.42 Service Contracts		84
6.43 Personal Property Leasing and Financing		84
6.44 Reciprocal Easement Agreements		84
6.45 Collective Bargaining Agreement		85
6.46 Organizational Chart		85
6.47 SPE Representations of Recycled Borrowers		85
6.48 Survival of Representations		88
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 Existence; Compliance with Legal Requirements		89
7.2 Taxes and Other Charges		90
7.3 Litigation		90
7.4 Access to Collateral Properties		90
7.5 Notice of Default		90
7.6 Cooperation in Legal Proceedings		90
7.7 Award and Insurance Benefits		90
7.8 Further Assurances		91
7.9 Mortgage and Intangible Taxes		91
7.10 Financial Reporting		91
7.11 Business and Operations		94
7.12 Costs of Enforcement		94
7.13 Estoppel Statements		94
7.14 Use of Proceeds		95
7.15 Performance by Borrowers		95
7.16 Leasing Matters		96
7.17 Management Agreement		97
7.18 Environmental Covenants		100
7.19 Alterations		101
7.20 Franchise Agreement		101
7.21 Operating Leases		103
7.22 OFAC		103
7.23 The Ground Leases		103
7.24 Asbestos Operations and Maintenance (“O&M”) Program		106
7.25 Sheraton Burlington Parking Lease		106
7.26 Sheraton Society Hill Letter Agreement		107
7.27 Sheraton Atlanta Galleria Property Fire Code Violations		107
7.28 Sheraton Atlanta Galleria Incentive Fee Tie-In		107
7.29 Compliance with Brand Standards Letter Agreement		107

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TABLE OF CONTENTS
(Continued)

	Page
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Indebtedness		108
8.2 Investments		108
8.3 Liens		108
8.4 Personal Property Leasing and Financing		109
8.5 Operation and Service Agreements		110
8.6 Restricted Payments		110
8.7 [Intentionally Omitted]		110
8.8 Dispositions		110
8.9 Dissolution		112
8.10 No Subsidiaries		112
8.11 Burdensome Agreements		112
8.12 Change In Business		112
8.13 Debt Cancellation		112
8.14 Zoning		112
8.15 No Joint Assessment		112
8.16 Name, Identity, Structure, or Principal Place of Business		113
8.17 ERISA		113
8.18 Affiliate Transactions		113
8.19 Transfers		113
8.20 REA		116
8.21 No Other Liens		116
8.22 Operation of Hotels		116
ARTICLE IX
INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS
9.1 Insurance		117
9.2 Casualty		121
9.3 Condemnation		121
9.4 Restoration		122
9.5 Required Repairs		126
9.6 Required Environmental Remediation		126
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default		126
10.2 Remedies upon Event of Default		129
10.3 Application of Funds		130
ARTICLE XI
ADMINISTRATIVE AGENT
11.1 Appointment and Authority		130
11.2 Rights as a Lender		131

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TABLE OF CONTENTS
(Continued)

	Page
11.3 Exculpatory Provisions		131
11.4 Reliance by Administrative Agent		132
11.5 Delegation of Duties		132
11.6 Resignation of Administrative Agent		132
11.7 Non-Reliance on Administrative Agent and Other Lenders		133
11.8 [Intentionally Omitted]		133
11.9 Administrative Agent May File Proofs of Claim		133
11.10 Collateral and Guaranty Matters		133
11.11 Indemnity by Lenders		134
ARTICLE XII
MISCELLANEOUS
12.1 Amendments, Etc.		134
12.2 Notices; Effectiveness; Electronic Communications		135
12.3 No Waiver; Cumulative Remedies		137
12.4 Expenses; Indemnity; Damage Waiver		137
12.5 Payments Set Aside		139
12.6 Successors and Assigns		139
12.7 Treatment of Certain Information; Confidentiality		143
12.8 Right of Setoff		144
12.9 Exculpation		144
12.10 Interest Rate Limitation		147
12.11 Counterparts; Integration; Effectiveness		148
12.12 Survival of Representations and Warranties		148
12.13 Severability		148
12.14 [Intentionally Omitted		148
12.15 Governing Law; Jurisdiction; Etc.		148
12.16 Waiver of Jury Trial		149
12.17 No Advisory or Fiduciary Responsibility		149
12.18 USA PATRIOT Act Notice		150
12.19 Time of the Essence		150
12.20 ENTIRE AGREEMENT		150
12.21 Sheraton Burlington Operating Lessee		150
12.22 Contribution		150
ARTICLE XIII
RESERVE FUNDS
13.1 Tax Escrow Fund		151
13.2 FF&E Reserve Fund		152
13.3 Required Repair Reserve		153
13.4 [Intentionally Omitted]		154
13.5 Environmental Remediation Reserve		154
13.6 Reserve Funds, Generally		155

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TABLE OF CONTENTS
(Continued)

	Page
ARTICLE XIV
SPECIAL PROVISIONS
14.1 Sale of Notes and Secondary Market Transaction ; Syndication		155
14.1.1 Cooperation		155
14.1.2 Use of Information		156
14.1.3 Borrowers Obligations Regarding Disclosure Documents		157
14.1.4 Borrowers Indemnity Regarding Filings		158
14.1.5 Indemnification Procedure		158
14.1.6 Contribution		158
14.1.7 Rating Surveillance		159
14.1.8 Restructuring of Loan		159
14.1.9 Secondary Market Transaction Financials		159
ARTICLE XV
FUTURE SUBORDINATE FINANCING
15.1 Permitted Mezzanine Indebtedness		160
SIGNATURES		S-1

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TABLE OF CONTENTS
(Continued)

SCHEDULES
1	Allocated Loan Amounts
2	Schedule of Monthly Amortization Payments
3	Permitted Fund Managers
3.1(a)	Property Account Banks; List of Accounts
3.2	Initial Monthly Pegged Amount
4	Borrower Account Information
6.11	Condemnation Matters
6.15	Ownership of Collateral Properties
6.25	Leases
6.33	Borrowers Principal Place of Business, State of Organization; Tax Identification Number
6.37	Environmental Matters
6.39	Schedule of Operating Rent Arrearages
6.42	Service Contracts
6.43	Personal Property Leases and Financings
6.46	Organizational Chart
7.10(d)	Form of Manager’s Monthly Report
7.10(e)	2010 Approved Budgets for each of the Collateral Properties
8.3	Existing Liens
9.5	Required Repairs
12.2	Administrative Agent’s Office, Certain Addresses for Notices
EXHIBITS
Exhibit A —	Form of Assignment and Assumption
Exhibit B —	Form of Note
Exhibit C —	Intentionally Omitted
Exhibit D —	Form of Credit Card Direction Letter
Exhibit E —	Survey Requirements
Exhibit F —	Operating Statement
Exhibit G—	Form of FF&E Draw Request

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CREDIT AGREEMENT

          THIS CREDIT AGREEMENT is entered into as of May 3, 2010, among FELCOR/CMB BUCKHEAD HOTEL, L.L.C., FELCOR/CMB MARLBOROUGH HOTEL, L.L.C., and FELCOR S-4 HOTELS (SPE), L.L.C., each a Delaware limited liability company, FELCOR/CMB ORSOUTH HOLDINGS, L.P., FELCOR/CMB CORPUS HOLDINGS, L.P., and FELCOR/CMB SSF HOLDINGS, L.P., each a Delaware limited partnership,(each, an “Owner,” and collectively, the “Owners”), DJONT/CMB BUCKHEAD LEASING, L.L.C., DJONT/CMB FCOAM LEASING, L.L.C., DJONT/CMB CORPUS LEASING, L.L.C., DJONT/CMB ORSOUTH LEASING, L.L.C., DJONT/CMB SSF, L.L.C., FELCOR S-4 LEASING (SPE), L.L.C., and FCH/SH LEASING II, L.L.C., each a Delaware limited liability company (each an “Operating Lessee,” and collectively, the “Operating Lessees”) (Owners and Operating Lessees to be referred to collectively as “Borrowers” and each a “Borrower”), FORTRESS CREDIT CORP., a Delaware corporation (in such capacity, the “Initial Lender”) and each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and FORTRESS CREDIT CORP., a Delaware corporation, as Administrative Agent.

PRELIMINARY STATEMENTS:

          Each Borrower is a special purpose entity owned directly or indirectly by FelCor Lodging Limited Partnership (“FelCor Op”) to make and administer various investments in the Collateral Properties (hereinafter defined).

          Borrowers have requested that the Lenders provide a loan to (a) refinance certain existing Indebtedness secured, in part, by the Collateral Properties (the “Existing Indebtedness”), (b) make deposits into the Reserve Accounts on the date hereof in the amounts provided herein, (c) purchase the Initial Rate Cap Agreement, and (d) pay costs and expenses incurred in connection with the closing of the Loan, as approved by Lender, and the Lenders have indicated their willingness to lend to Borrowers, on a joint and several basis, on the terms and subject to the conditions set forth herein.

          In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

     1.1 Defined Terms.

          As used in this Agreement, the following terms shall have the meanings set forth below:

          “Acceptable Appraisal” means an appraisal acceptable to Administrative Agent as to form, assumptions, substance and appraisal date, prepared by a qualified professional appraiser acceptable to Administrative Agent, and having the minimum qualifications required by Administrative Agent from time to time.

          “Acceptable Counterparty” means any counterparty to an Interest Rate Cap Agreement that has and shall maintain, until the expiration of the applicable Interest Rate Cap Agreement, a long-term unsecured debt rating of at least “A” by S&P and “A2” from Moody’s, which rating shall not include a “t” or otherwise reflect a termination risk.

          “Account Collateral” means: (a) the Accounts, and all cash, checks, drafts, certificates and instruments, if any, from time to time deposited or held in the Accounts from time to time; (b) any

and all amounts invested in Permitted Investments; (c) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and (d) to the extent not covered by clauses (a) — (c) above, all “proceeds” (as defined under the UCC) of any or all of the foregoing.

          “Accounts” means the Property Accounts and the Lockbox Account.

          “Accounts Receivable” has the meaning specified in Article I of the Mortgage with respect to each Collateral Property.

          “Act” has the meaning specified in Section 6.34.

          “Appraised Loan to Value Ratio” means, as of any date of determination the ratio of (a) the Outstanding Amount to (b) the aggregate Appraised Value of all Collateral Properties.

          “Additional Interest Rate Cap Agreements” means, individually and collectively, as the context requires, the Second Interest Rate Cap Agreement, the Third Interest Rate Cap Agreement and the Fourth Interest Rate Cap Agreement.

          “Administrative Agent” means Fortress Credit Corp., a Delaware corporation, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

          “Administrative Agent’s Consultant” shall mean an environmental consultant selected by Administrative Agent in its sole and absolute discretion.

          “Administrative Agent’s Office” means Administrative Agent’s address and, as appropriate, account as set forth on Schedule 12.2, or such other address or account as Administrative Agent may from time to time notify to Borrowers and the Lenders.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by Administrative Agent.

          “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

          “Agent Parties” has the meaning specified in Section 12.2(c).

          “Aggregate Debt Service Coverage Ratio” means, as of any date of determination, the ratio in which:

     (a) the numerator is EBITDA for the twelve (12) month period ending on last day of the calendar month immediately preceding such date of determination (or, if Borrowers have not yet received from the applicable Managers the financial reporting information for the immediately preceding calendar month, based upon the then most recent twelve (12) month period for which Borrowers have received reporting), less the sum of (i) Capital Expenditure reserves equal to four percent (4%) of Gross Income from Operations and (ii) to the extent not deducted in the calculation of EBITDA, assumed Management Fees of two percent (2%) of Gross Income from Operations; and

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     (b) the denominator is the sum of (i) the aggregate amount of principal and interest on the Loan and (ii) the aggregate amount of principal and interest that would have been due and payable on the Permitted Future Mezzanine Loan during such period;

provided, however, that if any Collateral Property Release(s) were effected, or if any Back-End Amortization Payments were made, during the reference period, the numerator and denominator of this definition shall be adjusted to reflect such Collateral Property Release(s) (in which case, the amounts shall be calculated as if such Collateral Property Release occurred on the first day of the reference period) or Back-End Payment (in which case, the amounts shall be calculated as if such Back-End Amortization Payment was made on the first day of the reference period).

          “Agreement” means this Credit Agreement, as modified by the Letter Agreement.

          “Allocable Amount” means, with respect to any Borrower, as of any date of determination, an amount equal to the maximum amount which could then be claimed under such Borrower’s Co-Borrower Obligations without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the United States Federal Bankruptcy Code (11 U.S.C. Sec. 101 et seq.) or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

          “Allocated Loan Amount” means for a Collateral Property, as of any date of determination:

     (a) the ratio of (i) the Appraised Value of such Collateral Property to (ii) the aggregate Appraised Value of all Collateral Properties, expressed as a percentage; multiplied by

     (b) the principal amount of the Outstanding Obligations.

For the purposes of this definition, the Allocated Loan Amounts for the Collateral Properties as of the date of this Agreement are set forth on Schedule 1 attached hereto and made a part hereof. Unless Administrative Agent requests otherwise and requires new Acceptable Appraisals, the Allocated Loan Amounts on said Schedule 1 shall remain in place throughout the term of the Loan.

          “ALTA” means the American Land Title Association, or any successor thereto.

          “Annual Budget” means an operating budget, including all planned Capital Expenditures, and FF&E budgeted information, for each Collateral Property prepared by the appropriate Manager and approved by the applicable Borrower for the applicable fiscal year or other period, and which operating budget shall contain specific Operating Expense allocations for each calendar month during such fiscal year or other period.

          “Applicable Interest Rate” means, the rate or rates at which the outstanding principal amount of the Loan bears interest from time to time in an amount equal to the greater of (i) LIBOR plus the Spread for the applicable Interest Period, and (ii) eight and one-tenth percent (8.10%) per annum; provided, however, that if the Loan is converted to a Prime Rate Loan pursuant to the provisions of Section 4.2 or Section 4.3, Borrowers shall pay interest on the outstanding principal amount of the Loan at the greater of (x) the Prime Rate plus the Prime Rate Spread and (y) eight and one-tenth percent (8.10%) per annum; and provided, further, however, that at any time that more than one (1) Note is issued and outstanding and such Notes accrue at different rates of interest, (A) notwithstanding anything contained in this definition to the contrary, the “Applicable Interest Rate” shall equal the weighted average interest rate of the Notes then outstanding, and (B) provided no Event of Default has occurred,

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the weighted average interest rate of the Notes then outstanding shall not exceed the greater of (1) LIBOR plus the Spread for the applicable Interest Period, and (2) eight and one-tenth percent (8.10%) per annum, unless the Loan has been converted to a Prime Rate Loan pursuant to the provisions of Section 4.2 or Section 4.3, in which case the weighted average interest rate of the Notes then outstanding shall not exceed the greater of (x) the Prime Rate plus the Prime Rate Spread and (y) eight and one-tenth percent (8.10%) per annum.

          “Applicable Percentage” means, with respect to each Lender, the percentage (carried out to the ninth decimal place) of the Loan represented by the principal amount of the Loan held by such Lender at such time.

          “Appraised Value” means the value for a Collateral Property set forth in the most recent Acceptable Appraisal.

          “Approved Annual Budget” has the meaning specified in Section 7.10(d).

          “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

          “Approved Servicer” has the meaning provided in the definition of “Qualified Institutional Lender.”

          “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of the Administrative Agent, to the extent required under Section 12.6(b)), in substantially the form of Exhibit A or any other form, approved by Administrative Agent.

          “Assignment and Assumption of Operating Leases” means the Assignment and Assumption of Leases by and between FelCor Lodging LP as “Assignor” and FelCor/MM S-7 Holdings, L.P. as “Assignee” dated April 20, 2000, affecting each of the Sheraton Operating Leases.

          “Assignment of Agreements, Licenses, Permits, and Contracts” means that certain Assignment of Agreements, Licenses, Permits, and Contracts, dated as of the date hereof, made by Borrowers in favor of Administrative Agent.

          “Assignment of Leases and Rents” means with respect to each Collateral Property that certain first priority Assignment of Leases and Rents dated as of the date hereof, from each applicable Borrower, as assignor to Administrative Agent, as assignee, assigning to Administrative Agent on behalf of Lenders all of such Borrowers’ interest in and to the Leases and Rents of such Collateral Property as security for the Obligations.

          “Assumed Rate” means, as of the date on which the Loan (or any portion thereof) is prepaid, the Applicable Interest Rate as of such date of prepayment.

          “Assumption” has the meaning set forth in Section 8.19(b).

          “Assumption Fee” has the meaning set forth in Section 8.19(c).

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          “Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

          “Award” means any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of any Collateral Property.

          “Back-End Amortization Payment” means a payment equal to the greater of (x) an amount sufficient to reduce the outstanding principal balance of the Loan such that the Debt Service Coverage Ratio after the application of such payment shall be equal to 1.10 to 1.00, and (y) $15,000,000.

          “Base Management Fee” means the base management fee to be paid under the applicable Management Agreement, which shall not include any incentive or similar performance based fees pursuant to such agreement.

          “Borrower” and “Borrowers” have the meanings specified in the introductory paragraph hereto.

          “Borrower Account” shall mean that certain account set forth on Schedule 4,¹ or such other account as Borrowers may designate from time to time by written notice to Administrative Agent.

          “Borrower Determined Loan to Value Ratio” means, as of any date of determination, the ratio of (a) the Outstanding Amount to (b) the aggregate market value of all Collateral Properties as reasonably determined by Borrowers in their good faith judgment, and which determination shall have been certified by a Responsible Officer of Borrowers and delivered to Administrative Agent together with the applicable Collateral Property Release Notice.

          “Borrower Materials” means information and materials made available by Administrative Agent to Lenders which were provided by or on behalf of Borrowers.

          “Brand Standards Letter Agreement” means that certain Letter Agreement re: Brand Standards and QA Understandings, dated as of June 23, 2009, by and between TRS Holdings (on behalf, among other parties, Embassy Corpus Christi Operating Lessee), Hilton Hotels Corp., HLT Existing Franchise Holdings LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Brand Standards Renovation” has the meaning set forth in Section 7.29.

          “Brand Standards Renovation Payment Amount” has the meaning set forth in Section 7.29.

          “Brand Standards Renovation Work Plan” has the meaning set forth in Section 7.29.

          “Breakage Costs” has the meaning set forth in Section 4.05.

¹ We need this info from Borrowers. This is the bank account(s) into which money flows out of the Sheraton lockbox account (pre-Lockbox Trigger Event).

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          “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of the State of New York, or are in fact closed in, the state where Administrative Agent’s Office is located, and if such day relates to the determination of the Applicable Interest Rate, means any such day on which dealings in U.S. Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

          “Business Party” has the meaning specified in Section 6.34(x).

          “Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).

          “Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

          “cash” means coin or currency of the United States of America or immediately available federal funds, including such funds delivered by wire transfer.

          “Casualty” has the meaning specified in Section 9.2.

          “Casualty Consultant” has the meaning specified in Section 9.4(e).

          “Casualty Retainage” has the meaning specified in Section 9.4(f).

          “CDO” shall have the meaning assigned to such term in the definition of “Qualified Institutional Lender.”

          “CDO Asset Manager” with respect to any Securitization Vehicle which is a CDO, means the entity which is responsible for managing or administering the Loan (or any interest therein) as an underlying asset of such Securitization Vehicle or, if applicable, as an asset of any Intervening Trust Vehicle (including, without limitation, the right to exercise any consent and control rights available to the holder of the Loan or the interest therein).

          “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity Interests representing more than 49.99% of the then-exercisable aggregate ordinary voting power represented by the issued and outstanding Equity Interests of FelCor Trust or FelCor Op; (b) the acquisition of Control of FelCor Trust or FelCor Op by any Person or group; or (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of FelCor Trust by Persons who were neither (i) nominated by the board of directors of FelCor Trust nor (ii) appointed by directors so nominated.

          “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

          “Closing Date” means the first date all the conditions precedent in Section 5.1 are satisfied or waived in accordance with Section 12.1.

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          “Co-Borrower Obligations” means the joint and several liability of each Borrower for the full and prompt payment of the Obligations.

          “Co-Borrower Payment” has the meaning set forth in Section 12.22.

          “Code” means the Internal Revenue Code of 1986.

          “Collateral” means (a) all of the “Property” referred to in each of the Mortgages, (b) all Account Collateral, and (c) all of the other property that is or is intended under the terms of the Loan Documents to be subject to Liens in favor of the Secured Parties.

          “Collateral Accounts” has the meaning specified in Section 6.40.

          “Collateral Assignment of Interest Rate Cap Agreement” means (i) that certain Collateral Assignment of Interest Rate Cap Agreement dated as of the date hereof, executed by Borrowers for the benefit of the Lender in connection with the Loan and the Initial Interest Rate Cap Agreement, and (ii) with respect to each of the Additional Interest Rate Cap Agreements, a Collateral Assignment of Interest Rate Cap Agreement delivered in connection with each such Additional Interest Rate Cap Agreements (which shall be substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date, with any changes subject to Administrative Agreements approval, which shall not be unreasonably withheld, conditioned or delayed), in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “Collateral Document” means, collectively, each Mortgage, each Operating Lease Subordination Agreement, each Assignment of Leases and Rents, each Property Account Agreement, each Manager’s Consent and Subordination of Management Agreement, each Franchisor Comfort Letter, and all financing statements, instruments, documents or filings necessary to establish or maintain Liens in favor of the Secured Parties.

          “Collateral Property” means, each hotel project listed on Schedule 6.15 together with all “Property” defined in the Mortgages with respect to such project.

          “Collateral Property Release” has the meaning specified in Section 2.10.

          “Collateral Property Release Notice” has the meaning specified in Section 2.10.

          “Condemnation” means a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of any Collateral Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting such Collateral Property or any part thereof.

          “Condemnation Proceeds” has the meaning specified in Section 9.4.

          “Constituent Member” has the meaning specified in Section 12.9.

          “Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

          “Contribution Obligations” has the meaning set forth in Section 12.22.

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          “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Counterparty” means, with respect to the Initial Interest Rate Cap Agreement, the counterparty thereunder, and with respect to any Replacement Interest Rate Cap Agreement or any Additional Interest Rate Cap Agreement, any substitute Acceptable Counterparty.

          “Culinaire Lease” means the Restaurant Lease Agreement dated as of September 22, 2000, between Embassy Orlando South Operating Lessee, as landlord, and Culinaire of Florida, Inc., a Florida corporation, as tenant, as amended prior to the date hereof, and as the same may be further amended in accordance with the terms hereof.

          “Debt Service” means, the sum of (a) all interest, amortization payments, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, (b) all interest paid or payable with respect to discontinued operations and (c) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by Borrowers and their Subsidiaries, on a consolidated basis, for the most recently completed four (4) fiscal quarters.

          “Debt Service Coverage Ratio” means, as of any date of determination, the ratio in which:

     (a) the numerator is EBITDA for the twelve (12) month period ending on last day of the calendar month immediately preceding such date of determination (or, if Borrowers have not yet received from the applicable Managers the financial reporting information for the immediately preceding calendar month, based upon the then most recent twelve (12) month period for which Borrowers have received reporting), less the sum of (i) Capital Expenditure reserves equal to four percent (4%) of Gross Income from Operations and (ii) to the extent not deducted in the calculation of EBITDA, assumed Management Fees of two percent (2%) of Gross Income from Operations; and

     (b) the denominator is the aggregate amount of principal and interest on the Loan due and payable during such period;

provided, however, that if any Collateral Property Release(s) were effected, or if any Back-End Amortization Payments were made, during the reference period, the numerator and denominator of this definition shall be adjusted to reflect such Collateral Property Release(s) (in which case, the amounts shall be calculated as if such Collateral Property Release occurred on the first day of the reference period) or Back-End Payment (in which case, the amounts shall be calculated as if such Back-End Amortization Payment was made on the first day of the reference period).

          “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

          “Debt Yield” means (i) the Net Operating Income of Borrowers, divided by (i) the Outstanding Amount.

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          “Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

          “Default Rate” means a rate per annum equal to the lesser of (a) the Maximum Rate, or (b) the Applicable Interest Rate plus five percent (5%) per annum.

          “Defaulting Lender” means any Lender that (a) has failed to pay over to Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (b) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

          “Determination Date” means, with respect to any Interest Period, the date that is two (2) London Business Days prior to the first day of such Interest Period.

          “Disclosure Document” has the meaning set forth in Section 14.1.2.

          “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

          “Dollar” and “$” mean lawful money of the United States.

          “Doubletree Management” means Doubletree Management LLC, a Delaware limited liability company.

          “DJONT Operations” means DJONT Operations, L.L.C., a Delaware limited liability company.

          “DSCR Trigger Event” means the occurrence, as of the last day of any calendar quarter, of a Debt Service Coverage Ratio of less than 1.10 to 1.0.

          “EBITDA” means, at any date of determination, an amount equal to (a) the aggregate Net Income of Borrowers for the most recently completed twelve (12) months of Borrowers (or, if Borrowers have not yet received from the applicable Managers the financial reporting information for the immediately preceding calendar month, based upon the then most recent twelve (12) month period for which Borrowers have received reporting), plus (b) the following to the extent deducted in calculating such Net Income: (i) Debt Service; (ii) the provision for Federal, state and local income taxes payable; (iii) depreciation and amortization expense; (iv) other non-recurring expenses reducing such Net Income which do not represent a cash item in such period or any future period (in each case of or by Borrowers for such period) and (v) amortization of intangibles for such period, all extraordinary non-recurring items of expenses, such as employee severance expenses and hurricane expenses non-cash write-off of deferred financing costs (provided, however, that in the case of clause (iv) and clause (v) above, Borrowers will use the same amounts for “non-recurring expenses” as Borrowers’ Affiliates have included in public disclosure as a reconciling item to “Adjusted EBITDA”, allocated to the Collateral Properties to the extent applicable to the Collateral Properties), and costs, premiums, and penalties arising by contract in connection with the prepayment of Indebtedness, minus (c) the following to the extent included in calculating such Net Income: (i) Federal, state and local income tax credits and (ii) all non-recurring non-cash items increasing Net Income (in each case of or by Borrowers for such period), if and to the extent that such amounts of “non-recurring non-cash items” have been included by Borrowers’ Affiliates in

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public disclosures as a reconciling item to “Adjusted EBITDA”, allocated to the Collateral Properties, to the extent applicable to such Collateral Properties.

          “Eligible Account” means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or State-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or State chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a State chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R.§ 9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and State authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument

          “Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 12.6(b)(iv), (v) and (vi) (subject to such consents, if any, as may be required under Section 12.6(b)(iii)).

          “Eligible Institution” means a depository institution or trust company, insured by the Federal Deposit Insurance Corporation, (a) the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by S&P, P-1 by Moody’s and F-1 by Fitch in the case of accounts in which funds are held for thirty (30) days or less, or (b) the long term unsecured debt obligations of which are rated at least AA by Fitch and S&P and Aa2 by Moody’s in the case of accounts in which funds are held for more than thirty (30) days.

          “Eligibility Requirements” means, with respect to any Person, that such Person (i) has at least $200,000,000 in capital/statutory surplus or shareholders’ equity (except with respect to a pension advisory firm or similar fiduciary) and at least $600,000,000 in total assets (in name or under management), and (ii) is regularly engaged in the business of making or owning commercial real estate loans (or interests in commercial real estate loans) or mezzanine loans (or interests in mezzanine loans).

          “Embassy Atlanta Buckhead Fee Owner” means FelCor Op and any successor thereto, as permitted pursuant to this Agreement.

          “Embassy Atlanta Buckhead Franchise Agreement” means the Embassy Suites License Agreement dated October 17, 1996 by and between DJONT Operations, as licensee, and Promus Hotels, as licensor, with respect to the Embassy Atlanta Buckhead Property, as assigned by DJONT Operations to DJONT Leasing, L.L.C., a Delaware limited liability company, pursuant to that certain Assignment and Assumption of Operating Agreements dated January 31, 1997, as modified by that certain Letter Agreement Re: Brand Standards and QA Understandings dated June 23, 2009, between FelCor TRS Holdings, for itself and on behalf of all its subsidiaries in the list attached thereto, Hilton Hotels Corporation, HLT Existing Franchise Holding LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Embassy Atlanta Buckhead Ground Lease” means the Ground Lease dated April 30, 2000, by and between Embassy Atlanta Buckhead Fee Owner, as lessor, and Embassy Atlanta Buckhead Owner, as lessee, and evidenced by that certain First Amendment to Ground Lease and Memorandum of Lease dated May 3, 2010, to be recorded in the Office of the Clerk of Superior Court of Fulton County, Georgia.

          “Embassy Atlanta Buckhead Management Agreement” means the Management Agreement dated as of October 17, 2006 by and between Embassy Atlanta Buckhead Operating Lessee,

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as “Owner,” and Promus Hotels, as “Manager,” with respect to the Embassy Atlanta Buckhead Property, as assigned by Promus Hotels to Embassy Suites Management pursuant to that certain Agreement of Assignment of Management Agreement dated October 24, 2007, as modified by that certain Master Agreement for Extension of Management Agreements, dated January 1, 2009, by and between FelCor TRS Holdings, for itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management.

          “Embassy Atlanta Buckhead Operating Lease” means the Lease Agreement dated October 17, 1996, by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and DJONT Operations, as lessee, as assigned by DJONT Operations, to DJONT Leasing, L.L.C., pursuant to that certain Assignment and Assumption of Agreements dated January 31, 1997, as modified by the Omnibus Operating Lease Amendment, and further assigned by DJONT Leasing, L.L.C. to Embassy Atlanta Buckhead Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, and assigned by FelCor Op to Embassy Atlanta Buckhead Owner, pursuant to that certain Assignment and Assumption of Lease dated April 30, 2000, and evidenced by that certain Memorandum of Lease recorded on May 4, 2000, in the Office of the Clerk of Superior Court of Fulton County, Georgia in Deed Book 28998, Page 69, as further modified by that certain Agreement for Extension of Lease dated October 31, 2006 by and between Embassy Atlanta Buckhead Owner and Embassy Atlanta Buckhead Operating Lessee, and as further modified by that certain Second Agreement for Extension of Lease dated January 1, 2010 by and between Embassy Atlanta Buckhead Owner and Embassy Atlanta Buckhead Operating Lessee, as further evidenced by that certain First Amendment to Memorandum of Lease dated as of May 3, 2010, to be recorded in the Office of the Clerk of Superior Court of Fulton County, Georgia.

          “Embassy Atlanta Buckhead Operating Lessee” means DJONT/CMB Buckhead Leasing, L.L.C., a Delaware limited liability company.

          “Embassy Atlanta Buckhead Owner” means FelCor/CMB Buckhead Hotel, L.L.C., a Delaware limited liability company.

          “Embassy Atlanta Buckhead Property” means the Embassy Suites — Atlanta Buckhead.

          “Embassy Boston Marlborough Fee Owner” means FelCor Op and any successor thereto as permitted pursuant to this Agreement.

          “Embassy Boston Marlborough Franchise Agreement” means the Embassy Suites License Agreement dated June 30, 1995 by and between FCOAM, Inc., a wholly-owned subsidiary of DJONT Operations, as licensee, and Embassy Suites, as licensor, with respect to the Embassy Boston Marlborough Property, as assigned by FCOAM Inc. to Embassy Boston Marlborough Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated as of April 30, 2000, as modified by that certain Letter Agreement Re: Brand Standards and QA Understandings dated June 23, 2009, between FelCor TRS Holdings, for itself and on behalf of all its subsidiaries in the list attached thereto, Hilton Hotels Corporation, HLT Existing Franchise Holding LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Embassy Boston Marlborough Ground Lease” means the Ground Lease dated April 30, 2000, by and between Embassy Boston Marlborough Fee Owner, as lessor, and Embassy Boston Marlborough Owner, as lessee, and evidenced by that certain Memorandum of Lease recorded with Middlesex South Registry of Deeds as Document # 651 in Book 31380, Page 438, on May 5, 2000, as extended by that certain First Amendment to Ground Lease and Notice of Lease dated May 3, 2010 to be recorded in the Middlesex South Registry of Deeds.

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          “Embassy Boston Marlborough Management Agreement” means the Management Agreement dated as of June 30, 2005 by and between Embassy Boston Marlborough Operating Lessee, as “Owner,” and Promus Hotels, as “Manager,” with respect to the Embassy Boston Marlborough Property, as modified by that certain Letter Agreement Re: Clarification of Management Agreements, dated March 31, 2006, between Promus Hotels and FelCor Trust, on behalf of its subsidiaries listed on the signature page thereto, as assigned by Promus Hotels to Embassy Suites Management pursuant to that certain Agreement of Assignment of Management Agreement dated October 24, 2007, as modified by that certain Master Agreement for Extension of Management Agreements, dated January 1, 2009, by and between FelCor TRS Holdings, for itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management.

          “Embassy Boston Marlborough Operating Lease” means the Lease Agreement dated June 30, 1995, by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and FCOAM, Inc., as lessee, as modified by that certain Amendment to Lease Agreement dated September 23, 1996, as further modified by the Omnibus Operating Lease Amendment dated June 30, 1998 and assigned by FCOAM, Inc. to Embassy Boston Marlborough Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, and assigned by FelCor Op to Embassy Boston Marlborough Owner pursuant to that certain Assignment and Assumption of Lease dated April 30, 2000, and evidenced by that certain Memorandum of Lease recorded with Middlesex South Registry of Deeds as Document # 652 in Book 31380, Page 442, on May 5, 2000, as further modified by that certain Agreement for Extension of Lease dated January 1, 2010 by and between Embassy Boston Marlborough Owner and Embassy Boston Marlborough Operating Lessee, as further evidenced by that certain First Amendment to Memorandum of Lease dated as of May 3, 2010, to be recorded in the Middlesex South Registry of Deeds.

          “Embassy Boston Marlborough Operating Lessee” means DJONT/CMB FCOAM, L.L.C., a Delaware limited liability company.

          “Embassy Boston Marlborough Owner” means FelCor/CMB Marlborough Hotel, L.L.C., a Delaware limited liability company.

          “Embassy Boston Marlborough Property” means the Embassy Suites — Boston Marlborough.

          “Embassy Corpus Christi Owner” means FelCor/CMB Corpus Holdings, L.P., a Delaware limited partnership, and any successor thereto as permitted pursuant to this Agreement.

          “Embassy Corpus Christi Franchise Agreement” means the Embassy License Agreement dated July 19, 1995 by and between DJONT Operations, as licensee, and Promus Hotels, as licensor, with respect to the Embassy Corpus Christi Property, as assigned by DJONT Operations to Embassy Corpus Christi Operating Lessee pursuant to that certain Assignment and Assumption of Agreements dated as of April 30, 2000, as modified by that certain Letter Agreement Re: Brand Standards and QA Understandings dated June 23, 2009, between FelCor TRS Holdings, for itself and on behalf of all its subsidiaries in the list attached thereto, Hilton Hotels Corporation, HLT Existing Franchise Holding LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Embassy Corpus Christi Franchisor” means the Franchisor under the Embassy Corpus Christi Franchise Agreement.

          “Embassy Corpus Christi Management Agreement” means the Management Agreement dated as of July 19, 2005 by and between Embassy Corpus Christi Operating Lessee, as “Owner,” and

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Promus Hotels, as “Manager,” with respect to the Embassy Corpus Christi Property, as modified by that certain Letter Agreement Re: Clarification of Management Agreements, dated March 31, 2006, between Promus Hotels and FelCor Trust, on behalf of its subsidiaries listed on the signature page thereto, as assigned by Promus Hotels to Embassy Suites Management pursuant to that certain Agreement of Assignment of Management Agreement dated October 24, 2007, as modified by that certain Master Agreement for Extension of Management Agreements, dated January 1, 2009, by and between FelCor TRS Holdings, for itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management.

          “Embassy Corpus Christi Operating Lease” means the Lease Agreement dated July 19, 1995, by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and DJONT Operations, as lessee, as modified by that certain Amendment to Lease Agreement dated as of September 23, 1996, as further modified by the Omnibus Operating Lease Amendment, and assigned by FelCor Op to Embassy Corpus Christi Owner, pursuant to that certain Assignment and Assumption of Lease dated April 30, 2000, and assigned by DJONT Operations to Embassy Corpus Christi Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, and evidenced by that certain Memorandum of Lease recorded on May 4, 2000 as Document No. 2000018163, in the Official Public Records of Nueces County, Texas, as further modified by that certain Agreement for Extension of Lease dated January 1, 2010 by and between Embassy Corpus Christi Owner and Embassy Corpus Christi Operating Lessee, as further evidenced by that certain First Amendment to Memorandum of Lease, dated as of May 3, 2010, to be recorded in the Official Public Records of Nueces County, Texas.

          “Embassy Corpus Christi Operating Lessee” means DJONT/CMB Corpus Leasing, L.L.C., a Delaware limited liability company.

          “Embassy Corpus Christi Property” means the Embassy Suites — Corpus Christi.

          “Embassy Management Agreements” means the Embassy Atlanta Buckhead Management Agreement, Embassy Boston Marlborough Management Agreement, Embassy Corpus Christi Management Agreement, Embassy Orlando South Management Agreement and Embassy SF Airport Management Agreement, and “Embassy Management Agreement” means any one of the Embassy Management Agreements.

          “Embassy Manager” means the Manager of the Embassy Atlanta Buckhead Property, Embassy Boston Marlborough Property, Embassy Corpus Christi Property, Embassy Orlando South Property and Embassy SF Airport Property.

          “Embassy Manager Account” means such bank account as any Embassy Manager may from time to time designate by written notice to Administrative Agent.

          “Embassy Operating Lessees” means the Embassy Atlanta Buckhead Operating Lessee, Embassy Boston Marlborough Operating Lessee, Embassy Corpus Christi Operating Lessee, Embassy Orlando South Operating Lessee and Embassy SF Airport Operating Lessee, and “Embassy Operating Lessee” means any one of the Embassy Operating Lessees.

          “Embassy Orlando South Fee Owner” means FelCor Op and any successor thereto as permitted pursuant to this Agreement.

          “Embassy Orlando South Franchise Agreement” means the Embassy Suites License Agreement dated July 28, 1994 by and between DJONT Operations, as licensee, and Promus Hotels,

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successor in interest to Embassy Suites, Inc., as licensor, with respect to the Embassy Orlando South Property, as assigned by DJONT Operations to Embassy Orlando South Operating Lessee pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, as modified by that certain Letter Agreement Re: Brand Standards and QA Understandings dated June 23, 2009, between FelCor TRS Holdings, for itself and on behalf of all its subsidiaries in the list attached thereto, Hilton Hotels Corporation, HLT Existing Franchise Holding LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Embassy Orlando South Ground Lease” means the Ground Lease dated April 30, 2000, by and between Embassy Orlando South Fee Owner, as lessor, and Embassy Orlando South Owner, as lessee, and evidenced by that certain Memorandum of Lease recorded in the office of the Orange County Recorder in Official Records Book 5997, Page 1405 on May 9, 2000, as extended by that certain First Amendment to Ground Lease and Memorandum of Lease dated May 3, 2010, to be recorded in the office of the Orange County Recorder.

          “Embassy Orlando South Management Agreement” means the Management Agreement dated as of July 28, 2004 by and between Embassy Orlando South Operating Lessee, as “Owner,” and Promus Hotels, as “Manager,” with respect to the Embassy Orlando South Property, as modified by that certain Letter Agreement Re: Clarification of Management Agreements, dated March 31, 2006, between Promus Hotels and FelCor Trust, on behalf of its subsidiaries listed on the signature page attached thereto, as assigned by Promus Hotels to Embassy Suites Management pursuant to that certain Agreement of Assignment of Management Agreement dated October 24, 2007, as modified by that certain Master Agreement for Extension of Management Agreements, dated January 1, 2009, by and between FelCor TRS Holdings, for itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management, as modified by that certain Extension and Amendment to Management Agreement, dated July 20, 2009, between Embassy Orlando South Operating Lessee and Embassy Suites Management.

          “Embassy Orlando South Owner” means FelCor/CMB Orsouth Holdings, L.P., a Delaware partnership.

          “Embassy Orlando South Operating Lease” means the Lease Agreement dated July 28, 1994, by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and DJONT Operations, as lessee, as modified by the Omnibus Operating Lease Amendment, and assigned by FelCor Op to Embassy Orlando South Owner, pursuant to that certain Assignment and Assumption of Lease dated April 30, 2000, and assigned by DJONT Operations to Embassy Orlando South Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, and evidenced by that certain Memorandum of Lease recorded in the office of the Orange County Recorder in OR Book 5997, Page 1409 on May 9, 2000, as further modified by that certain Agreement for Extension of Lease dated January 1, 2010 by and between Embassy Orlando South Owner and Embassy Orlando South Operating Lessee, as further evidence by that certain First Amendment to Memorandum of Lease dated as of May 3, 2010, to be recorded in the office of the Orange County Recorder.

          “Embassy Orlando South Operating Lessee” means DJONT/CMB Orsouth Leasing, L.L.C., a Delaware limited liability company.

          “Embassy Orlando South Property” means the Embassy Suites — Orlando South.

          “Embassy Properties” means the Embassy Atlanta Buckhead Property, Embassy Boston Marlborough Property, Embassy Corpus Christi Property, Embassy Orlando South Property and Embassy SF Airport Property, and “Embassy Property” means any one of the Embassy Properties.

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          “Embassy Property Account” and “Embassy Property Accounts” has the meaning set forth in Section 3.1(a).

          “Embassy Property Account Agreement” has the meaning set forth in Section 3.1(a).

          “Embassy SF Airport Fee Owner” means FelCor/CSS Holdings, L.P., a Delaware limited partnership, and any successor thereto as permitted pursuant to this Agreement.

          “Embassy SF Airport Franchise Agreement” means the Embassy Suites License Agreement dated June 14, 1996 by and between DJONT Operations, as licensee, and Promus Hotels, as licensor, with respect to the Embassy SF Airport Property, as assigned by DJONT Operations to Embassy SF Airport Operating Lessee pursuant to that certain Assignment and Assumption Agreement dated April 30, 2000, as modified by that certain Letter Agreement Re: Brand Standards and QA Understandings dated June 23, 2009, between FelCor TRS Holdings, for itself and on behalf of all its subsidiaries in the list attached thereto, Hilton Hotels Corporation, HLT Existing Franchise Holding LLC, Embassy Suites Franchise LLC and Doubletree Franchise LLC.

          “Embassy SF Airport Ground Lease” means the Ground Lease dated April 30, 2000, by and between Embassy SF Airport Fee Owner, as lessor, and Embassy SF Airport Owner, as lessee, and evidenced by that certain Memorandum of Lease recorded in the Official Records of San Mateo County as document number 2000 — 052255, as extended by that certain First Amendment to Ground Lease and Memorandum of Lease dated May 3, 2010 to be recorded in the official records of San Mateo County.

          “Embassy SF Airport Management Agreement” means the Management Agreement dated as of January 3, 2006 by and between DJONT Operations, as “Owner,” and Promus Hotels, as “Manager,” with respect to the Embassy SF Airport Property, as modified by that certain Amendment and Ratification of Management Agreement dated January 3, 2006 between Embassy SF Airport Operating Lessee and Embassy Suites Management, as assigned by Promus Hotels to Embassy Suites Management pursuant to that certain Agreement of Assignment of Management Agreement dated October 24, 2007, as modified by that certain Master Agreement for Extension of Management Agreements, dated January 1, 2009, by and between FelCor TRS Holdings, for itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management.

          “Embassy SF Airport Owner” means FelCor/CMB SSF Holdings, L.P., a Delaware limited liability company.

          “Embassy SF Airport Operating Lease” means the Lease Agreement dated January 3, 1996, by and between Embassy SF Airport Fee Owner, as lessor, and DJONT Operations, as lessee, as modified by that certain Amendment to Lease Agreement dated September ___, 1996 with an effective date of January 3, 1996, as further modified by the Omnibus Operating Lease Amendment, and assigned by DJONT Operations, to Embassy SF Airport Operating Lessee, pursuant to that certain Assignment and Assumption of Agreements dated April 30, 2000, and assigned by Embassy SF Airport Fee Owner to Embassy SF Airport Owner pursuant to that certain Assignment and Assumption of Lease dated April 30, 2000, and evidenced by that certain Memorandum of Lease recorded in the official records of San Mateo County as document number 2000 — 052256, as further modified by that certain Agreement for Extension of Lease dated January 1, 2010 by and between Embassy SF Airport Owner and Embassy SF Airport Operating Lessee, as further evidenced by that certain First Amendment to Memorandum of Lease dated May 3, 2010, to be recorded in the official records of San Mateo County.

          “Embassy SF Airport Operating Lessee” means DJONT/CMB SSF Leasing, L.L.C., a Delaware limited liability company.

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          “Embassy SF Airport Property” means the Embassy Suites — San Francisco Airport South.

          “Embassy Suites Management” means Embassy Suites Management LLC, a Delaware limited liability company.

          “Emergency Repairs” has the meaning specified in Section 9.4(b).

          “Environmental Indemnity” means that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrowers and Guarantor in favor of the Secured Parties.

          “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes (including mold), air emissions and discharges to waste or public systems.

          “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of a Borrower directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Environmental Lien” has the meaning specified in Section 7.18.

          “Environmental Remediation Reserve Account” has the meaning specified in Section 13.5.

          “Environmental Remediation Reserve Fund” has the meaning specified in Section 13.5.

          “Environmental Report” has the meaning specified in Section 5.1(a)(xiii).

          “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

          “ERISA” means the Employee Retirement Income Security Act of 1974.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with a Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

          “Event of Default” has the meaning specified in Section 10.1.

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          “Exchange Act” has the meaning set forth in Section 14.1.2.

          “Excluded Taxes” means, with respect to Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of Borrowers hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Borrower is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 4.1(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from such Borrower with respect to such withholding tax pursuant to Section 4.1(a).

          “Existing Indebtedness” has the meaning set forth in the preliminary statements.

          “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to JP Morgan Chase, N.A. on such day on such transactions as determined by Administrative Agent.

          “Fee Owners” means the Embassy Atlanta Buckhead Fee Owner, the Embassy Boston Marlborough Fee Owner, the Embassy Orlando South Fee Owner, the Embassy SF Airport Fee Owner, the Sheraton Cypress Creek Fee Owner, the Sheraton Atlanta Galleria Fee Owner and the Sheraton Society Hill Fee Owner, and “Fee Owner” means any of the Fee Owners.

          “FCH/SH Leasing” means FCH/SH Leasing, L.L.C., a Delaware limited liability company.

          “FelCor/MM S-7” means FelCor/MM S-7 Holdings, L.P., a Delaware limited partnership.

          “FelCor Op” has the meaning assigned in the preliminary statements.

          “FelCor Suites LP” means FelCor Suites Limited Partnership, a Delaware limited partnership.

          “FelCor Trust” means FelCor Lodging Trust Incorporated, a Maryland corporation.

          “FelCor TRS Holdings” means FelCor TRS Holdings, L.L.C., a Delaware limited liability company.

          “FF&E” means all furniture, furnishings, fixtures and equipment required for the operation of the Collateral Properties, including, without limitation, lobby furniture, carpeting, draperies,

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paintings, bedspreads, television sets, office furniture and equipment such as safes, cash registers, and accounting, duplicating and communication equipment, telephone systems, back and front of the house computerized systems, guest room furniture, specialized hotel equipment such as equipment required for the operation of kitchens, laundries, the front desk, dry cleaning facilities, bar and cocktail lounges, restaurants, recreational facilities as they may exist from time to time, and decorative lighting, material handling equipment and cleaning and engineering equipment and all other fixtures, equipment, apparatus and personal property needed for such purposes; but excluding, (a) Collateral Property building equipment and systems (including, but not limited to, the heating, ventilating and air conditioning system, elevators, electrical distribution system, life safety systems and plumbing), (b) other fixtures attached to and forming part of the Improvements (including, but not limited to, lighting fixtures and bars) installed during construction of the Collateral Properties (but replacements thereof shall be included) and (c) Operating Equipment and Supplies.

          “FF&E Expenditures” means amounts expended for the purchase, replacement and/or the installation of FF&E at a Collateral Property or any Capital Expenditures at a Collateral Property.

          “FF&E Reserve Account” means a bank account (or subaccount) established by Administrative Agent into which Administrative Agent shall deposit FF&E Escrow Reserve Deposit Amounts in accordance with the terms of Section 3.6 and FF&E True-Up Payments in accordance with the terms of Section 13.2(a).

          “FF&E Reserve Deposit Amount” means an amount equal to four percent (4%) of the aggregate amount of the Gross Income from Operations at the Collateral Properties during the immediately preceding calendar month, or, if, as of the date of determination, Borrowers have not yet received financial reports from the applicable Managers for such calendar month, the most recent calendar month for which Borrowers’ have received financial reports; provided, however, that the Monthly FF&E Reserve Deposit Amount shall be reduced if, and to the extent that, Borrowers can demonstrate to Administrative Agent’s reasonable satisfaction that the Sheraton Managers are maintaining an FF&E reserve pursuant to the applicable Sheraton Management Agreement.

          “FF&E Reserve Fund” means all amounts on deposit from time to time in the FF&E Reserve Account.

          “FF&E True-Up Amount” means, with respect to each calendar year, an amount equal to the amount of any shortfall between (i) four percent (4%) of Gross Receipts from Operations from all Collateral Properties and (ii) the actual amount of FF&E Expenditures made by the Borrowers (in the aggregate) at the Collateral Properties for such calendar year; provided, however, that if the aggregate amount of the Individual Collateral Property FF&E Shortfalls exceeds the FF&E True-Up Amount (calculated without regard to this proviso), then the FF&E True-Up Amount shall be increased by the amount of such excess.

          “FF&E True-Up Payment” has the meaning set forth in Section 13.2(a) hereof.

          “Fiscal Year” means each twelve (12) month period commencing on January 1 and ending on December 31, during the term of the Loan.

          “Fitch” means Fitch, Inc.

          “Flood Insurance Acts” has the meaning specified in Section 9.1(a)(vii).

          “Flood Insurance Policy” has the meaning specified in Section 9.1(a)(vii).

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          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Borrowers are resident for tax purposes. For purposes of this definition, the United States, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

          “Fortress Group” has the meaning set forth in Section 14.1.3.

          “Fourth Interest Rate Cap Agreement” has the meaning set forth in Section 2.5(d).

          “Fourth Interest Rate Cap Agreement Delivery Date” means May 1, 2014.

          “Fourth Interest Rate Cap Period” means the period beginning with and including May 11, 2014 and ending on and including the Maturity Date.

          “Franchise Agreements” means, the Embassy Atlanta Buckhead Franchise Agreement, the Embassy Boston Marlborough Franchise Agreement, the Embassy Corpus Christi Franchise Agreement, the Embassy Orlando South Franchise Agreement and the Embassy SF Airport Franchise Agreement, and “Franchise Agreement” means any one of the Franchise Agreements.

          “Franchisor” means the current hotel franchisor with respect to each Collateral Property.

          “Franchisor Comfort Letter” means, for each Collateral Property, a comfort letter or similar instrument from the related Franchisor to Administrative Agent acknowledging the Loan and providing certain assurances, in form and substance reasonably satisfactory to Administrative Agent.

          “Full Recourse Event” has the meaning set forth in Section 12.9.

          “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

          “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

          “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

          “Gross Income from Operations” means, for any period, all income, room revenues, food and beverage revenue, telephone revenue, computed in accordance with GAAP derived from the ownership and operation of the Collateral Properties from whatever source, including, but not limited to, the Rents, utility charges, service fees or charges, license fees, parking fees, rent concessions or credits, and other required pass-throughs, but excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrowers to any Governmental Authority, interest on credit accounts, refunds and uncollectible accounts, sales of furniture, fixtures and equipment, Insurance Proceeds (other

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than business interruption or other loss of income insurance), Awards, unforfeited security deposits, utility and other similar deposits, escalations, forfeited security deposits. Gross income shall not be diminished as a result of the Mortgages or the creation of any intervening estate or interest in a Collateral Property or any part thereof.

          “Ground Lease Properties” means the Collateral Properties so identified on Schedule 6.15, and “Ground Lease Property” means any of them.

          “Ground Leases” means the Embassy Atlanta Buckhead Ground Lease, the Embassy Boston Marlborough Ground Lease, the Embassy Orlando South Ground Lease, the Embassy SF Airport Ground Lease, the Sheraton Cypress Creek Ground Lease, the Sheraton Atlanta Galleria Ground Lease, the Sheraton Society Hill Ground Lease and the Sheraton Burlington Parking Lease, and “Ground Lease” means any one of the Ground Leases.

          “Ground Lessor” means the landlord under each Ground Lease.

          “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

          “Guarantor” means FelCor Op.

          “Guaranty” means, that certain Guaranty, dated as of the date hereof, made by Guarantor in favor of Administrative Agent and Lenders, and any other Guaranty executed by any other person from time to time in favor of Administrative Agent and Lenders.

          “Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; toxic mold; lead and lead-based paint; asbestos or asbestos-containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Property is prohibited by any federal, state or local authority; any substance that requires special handling; and any other material or substance now or in the future defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,”

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“contaminant,” “pollutant” or other words of similar import within the meaning of any Environmental Law.

          “Hilton Management” means Hilton Management LLC, a Delaware limited liability company.

          “Hospitality Inns” means Hospitality Inns, Inc. d/b/a Sheraton-Burlington Inn.

          “Improvements” shall have the meaning specified in the related Mortgage with respect to each Collateral Property.

          “Incentive Management Fee” means any incentive or similar performance based fees payable to any Manager pursuant to a Management Agreement.

          “Incentive Management Fee Tie-In Amount” has the meaning set forth in Section 7.28.

          “Indebtedness”² means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

     (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

     (b) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

     (c) net obligations of such Person under any Swap Contract;

     (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and not past due for more than sixty (60) days after the date on which such trade account was created);

     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

     (f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;

(h)	all obligations of such Person pursuant to any trust preferred security; and
(i)	all Guarantees of such Person in respect of any of the foregoing.

² Subject to Drawbridge review.

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          For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Indemnitees” has the meaning specified in Section 12.4(b).

          “Independent Director” has the meaning specified in Section 6.34(x).

          “Individual Collateral Property FF&E Shortfall” means, with respect to each Collateral Property, the amount, if any, by which three percent (3%) of Gross Receipts from Operations from such Collateral Property during any calendar year period exceeds the actual FF&E Expenditures made by the applicable Borrower with respect to such Collateral Property during such calendar year.

          “Information” has the meaning specified in Section 12.7.

          “Initial Interest Rate Cap” has the meaning set forth in Section 2.05(a).

          “Initial Lender” has the meaning specified in the introductory paragraph.

          “Insolvency Opinion” has the meaning specified in Section 14.1.1.

          “Insolvency Proceeding” means any proceeding under the Debtor Relief Laws or any other insolvency, liquidation, reorganization or other similar proceeding concerning any Person, any action for the dissolution of the applicable Person, any proceeding (judicial or otherwise) concerning the application of the assets of the applicable Person for the benefit of its creditors, the appointment of or any proceeding seeking the appointment of a trustee, receiver or other similar custodian for all or any substantial part of the assets of the applicable Person or any other action concerning the adjustment of the debts of the applicable Person, the cessation of business by the applicable Person, except following a sale, transfer or other disposition of all or substantially all of the assets of such.

          “Insurance Premiums” has the meaning specified in Section 9.1(b).

          “Insurance Proceeds” has the meaning specified in Section 9.4.

          “Insurance Reserve Account” means a bank account (or subaccount) established by Administrative Agent into which Administrative Agent shall deposit Insurance Reserve Deposit Amounts in accordance with the terms of Section 3.6.

          “Insurance Reserve Deposit Amount” means one-twelfth (1/12) of the budgeted Insurance Premiums set forth in the Approved Annual Budget for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate with Administrative Agent sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies.

          “Insurance Reserve Fund” means all amounts on deposit from time to time in the Insurance Reserve Account.

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          “Interest Period” means, with respect to any Payment Date, the period commencing on the eleventh (11th) day of the preceding calendar month and terminating on the tenth (10th) day of the calendar month in which such Payment Date occurs; provided, however, that no Interest Period shall end later than the Maturity Date (other than for purposes of calculating interest at the Default Rate), and the initial Interest Period shall begin on the Closing Date and shall end on the immediately following tenth (10th) day of the calendar month; provided that an Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day.

          “Interest Rate Cap Agreement” means, as applicable, an Interest Rate Cap Agreement (together with the confirmation and schedules relating thereto) in form and substance reasonably satisfactory to Administrative Agent between Borrowers and an Acceptable Counterparty, an Additional Interest Rate Cap Agreement or a Replacement Interest Rate Cap Agreement.

          “Intervening Trust Vehicle” with respect to any Securitization Vehicle which is a CDO, means a trust vehicle or entity which holds the Loan (or any interest therein) as collateral securing (in whole or in part) any obligation or security held by such Securitization Vehicle as collateral for the CDO.

          “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person.

          “Issuer” has the meaning set forth in Section 14.1.3.

          “Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

          “Leases” has the meaning specified in Article I of the Mortgage with respect to each Collateral Property, but excluding the Operating Lease and Ground Lease with respect to such Collateral Property.

          “Legal Requirements” means, with respect to each Collateral Property, Laws affecting any Borrower or any Manager (and for which any such party is liable under a Ground Lease) with respect to any Collateral Property or any part thereof, or the ownership, zoning, construction, use, alteration, occupancy or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all material permits, licenses and authorizations and regulations relating thereto, and all material covenants, REA’s, agreements, restrictions and encumbrances contained in any instruments, either of record or known to any Borrower, at any time in force affecting such Collateral Property or any part thereof, including, without limitation, any which may (a) require repairs, modifications or alterations in or to such Collateral Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.

          “Lender” has the meaning specified in the introductory paragraph.

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          “Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Borrowers and Administrative Agent.

          “Letter Agreement” means that certain Letter Agreement, dated as of the date hereof, between Administrative Agent, Initial Lender, Borrowers and Guarantor, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

          “Leverage Ratio” means the ratio determined by dividing (i) the total outstanding Indebtedness of FelCor Trust or its successor, as applicable, on a consolidated basis, by (ii) EBITDA of FelCor Trust or its successor, as applicable, on a consolidated basis (computed in the same manner as EBITDA except as applied to FelCor Trust or its successor, as applicable, instead of Borrowers).

          “Liabilities” has the meaning set forth in Section 14.1.3.

          “LIBOR” means, with respect to each Interest Period, the rate (expressed as a percentage per annum and rounded upward, if necessary, to the next nearest 1/16 of 1%) for deposits in U.S. dollars, for a one-month period, that appears on Reuters Screen LIBOR01 (or the successor thereto) as of 11:00 a.m., London time, on the related Determination Date. If such rate does not appear on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such Determination Date, Administrative Agent shall request the principal London office of any four major reference banks in the London interbank market selected by Administrative Agent to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. dollars for a one-month period as of 11:00 a.m., London time, on such Determination Date for amounts of not less than $1,000,000. If at least two such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, Administrative Agent shall request any three major banks in New York City selected by Lender to provide such bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars to leading European banks for a one-month period as of approximately 11:00 a.m., New York City time on the applicable Determination Date for amounts of not less than $1,000,000. If at least two such rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined by Administrative Agent or its agent, which determination shall be conclusive absent manifest error.

          “LIBOR Floor” means three percent (3.00%) per annum.

          “LIBOR Loan” means a Loan that bears interest at a rate based on LIBOR.

          “Licenses” has the meaning specified in Section 6.21.

          “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, lien (statutory or other, and including without limitation any lien imposed by any Governmental Authority, including any taxing authority), encumbrance, charge, deed of trust or other security interest, or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

          “LLC Agreement” has the meaning specified in Section 6.34.

          “Loan” has the meaning specified in Section 2.1.

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          “Loan Documents” means, collectively, this Agreement, the Notes, each Guaranty, the Collateral Documents, the Environmental Indemnity, the Collateral Assignment of Interest Rate Cap Agreement, the Letter Agreement, the Assignment of Agreements, Licenses, Permits and Contracts, the Upper Tier Pledge Agreement and all other documents executed and/or delivered in connection with the Loan.

          “Loan Parties” means, collectively, each Borrower, Guarantor and each Fee Owner and “Loan Party” means any one of the Loan Parties.

          “Lock Out Date” means April 30, 2013.

          “Lockbox Account” has the meaning specified in Section 3.1(a).

          “Lockbox Bank” means any Eligible Institution selected by Administrative Agent.

          “Lockbox Leakage” has the meaning set forth in Section 3.06(c).

          “Lockbox Period” means the period commencing upon the occurrence of a Lockbox Trigger Event and ending upon the occurrence of a Lockbox Trigger Event Cure.

          “Lockbox Trigger Event” means the occurrence of one or more of the following: (a) a Default; (b) an Event of Default; (c) a DSCR Trigger Event, or (d) a Management Agreement Default Trigger Event.

          “Lockbox Trigger Event Cure” has the meaning specified in Section 3.7.

          “Lockbox Trigger Event Cure Notice” means a notice by Administrative Agent to any Property Account Bank that a Lockbox Trigger Event Cure has occurred and that a Lockbox Period is no longer in effect.

          “Lockbox Trigger Event Notice” means a notice by Administrative Agent to any Property Account Bank that a Lockbox Trigger Event has occurred and that a Lockbox Period is in effect.

          “London Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in London, England are not open for business.

          “Losses” means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges, fees, expenses, judgments, awards, and amounts paid in settlement of whatever kind or nature (including, but not limited to, reasonable attorney’s fees and other costs of defense).

          “Major Lease” means: (a) any Ground Lease, (b) any Operating Lease, (c) the Ruth’s Chris Lease, (d) the Culinaire Lease (d) any Lease which together with all other Leases to the same tenant and to all Affiliates of such tenant, (i) provides for ten percent (10%) or more of the total gross income for such Collateral Property, (ii) covers five percent (5%) or more of the total space at such Collateral Property, in the aggregate and (iii) provides for a Lease term of more than ten (10) years including options to renew; and (d) any instrument guaranteeing or providing credit support for any Major Lease.

          “Make Whole Amount” means, as of the date the loan is prepaid, an amount equal to the amount of all interest that would accrue on the Loan Amount, at the Assumed Rate, from the date of such prepayment through the Lock Out Date, and with respect to partial prepayment of the Loan, the Make

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Whole Amount shall be an amount equal to the amount of all interest that would accrue on the portion of the Loan Amount being prepaid, at the Assumed Rate, from the date of such prepayment through the Lock Out Date.

          “Management Agreements” means, the Embassy Atlanta Buckhead Management Agreement, the Embassy Boston Marlborough Management Agreement, the Embassy Corpus Christi Management Agreement, the Embassy Orlando South Management Agreement, the Embassy SF Airport Management Agreement, the Sheraton Cypress Creek Management Agreement, the Sheraton Atlanta Galleria Management Agreement, the Sheraton Society Hill Management Agreement and the Sheraton Burlington Management Agreement or, if the context requires, any Replacement Management Agreement executed in accordance with the terms and provisions of this Agreement and “Management Agreement” means any of the Management Agreements.

          “Management Agreement Default Trigger Event” means any period during which the Embassy Manager is the subject of any Insolvency Proceeding.

          “Management Fee” means, collectively, the Base Management Fees and any Incentive Management Fees payable to any Manager pursuant to its applicable Management Agreement.

          “Manager” means, for each Collateral Property, the property manager identified in the definition of each Management Agreement, or, if the context requires, any other Qualified Manager who is managing any Collateral Property in accordance with the terms and provisions of this Agreement.

          “Manager Account” means individually and collectively the Embassy Manager Account and the Sheraton Manager Account.

          “Manager’s Consent and Subordination of Management Agreement” means, for each Collateral Property, a consent of Manager and subordination in form and substance satisfactory to Administrative Agent.

          “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or condition (financial or otherwise) of Borrowers, taken as a whole, or the condition of or ownership by Borrowers of the Collateral Properties, taken as a whole; (b) a material impairment of the rights and remedies of Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

          “Material Hotel Shutdown” means the cessation of operation or taking out of service of more than ten percent (10%) of the rooms of any Collateral Property for a period of thirty (30) days or more.

          “Material Property Event” means, with respect to any Collateral Property, the occurrence of any event or circumstance that could reasonably be expected to result in a (a) material adverse effect with respect to the financial condition or the operations of such Collateral Property, (b) material adverse effect on the Appraised Value of such Collateral Property (except to the extent that Borrowers can demonstrate to the reasonable satisfaction of Administrative Agent that such change in Appraised Value is due to a general decline in the relevant market for such real property), or (c) material adverse effect on the title of such Collateral Property.

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          “Material Title Defects” means, with respect to any Collateral Property, defects, Liens (other than Liens for local real estate taxes and similar local governmental charges and Permitted Liens), and other encumbrances in the nature of easements, servitudes, restrictions, and rights-of-way that would customarily be deemed unacceptable title exceptions for a prudent lender (i.e., a prudent lender would reasonably determine that such exceptions, individually or in the aggregate, materially impair the title, ownership, use value or operations of the Collateral Property in question) or which could reasonably be expected to result in a Material Property Event).

          “Maturity Date” means the earliest of (a) the Stated Maturity Date, and (b) the date upon which Administrative Agent declares the Obligations due and payable after the occurrence of an Event of Default.

          “Maximum Rate” has the meaning specified in Section 12.10.

          “Member” has the meaning specified in Section 6.34.

          “Mezzanine Borrower” has the meaning set forth in Section 15.1.

          “Monthly Amortization Payments” means the monthly payments of principal for each Payment Date as set forth on Schedule 2 attached hereto; which payment amounts were calculated based upon a thirty (30) year amortization schedule, beginning with the first anniversary of the Closing Date, at an assumed interest rate of ten and one-tenth percent (10.10%) per annum. If a portion of the Loan is prepaid pursuant Section 2.6 or in connection with the application of casualty insurance proceeds or condemnation awards in accordance with the terms of this Agreement, Administrative Agent shall recalculate the Monthly Amortization Payments based upon the then remaining outstanding principal amount of the Loan in accordance with the foregoing assumptions and deliver a revised Schedule 2 to Borrowers, which revised schedule shall replace Schedule 2 hereto in its entirety.

          “Monthly Budgeted Amount” means the amount for such month set forth in the Approved Annual Budget (or if no Approved Annual Budget for such year has yet been approved, then the amount set forth in the preliminary annual budget for such year (delivered to Administrative Agent in accordance with the terms of Section 7.10(e), adjusted in the manner described in Section 7.10(e)).

          “Monthly Debt Service Payment Amount” means, (i) with respect to the Payment Date occurring in June, 2010 and on each Payment Date thereafter to and including the Payment Date occurring in May, 2011, the amount of interest due and payable on such Payment Date pursuant to this Agreement, and (ii) with respect on the Payment Date occurring in June, 2011 and on each Payment Date thereafter, the sum of (x) amount of interest due and payable on such Payment Date pursuant to this Agreement and (y) the Monthly Amortization Payment due on such Payment Date.

          “Monthly Pegged Amount” means the aggregate of (a) an aggregate amount, which amount shall be determined no later than April 1st of each Fiscal Year, equal to one hundred ten percent (110%) of the monthly Operating Expenses for each of the Embassy Properties projected to be paid during the then current Fiscal Year by the applicable Embassy Manager, on behalf of a Borrower, in accordance with the Approved Annual Budget for such calendar month; provided, however, that such annual Operating Expenses shall not include Taxes, Insurance Premiums, Incentive Management Fees, sales and use taxes that are due and owing on the Gross Income from Operations and revenues collected on behalf of unaffiliated operators of the restaurants located at the Embassy Properties in the ordinary course of business, and (b) actual amounts collected by any Embassy Manager or Borrower in the immediately preceding monthly period on account of: (i) sales and use taxes on the Gross Income from Operations and (ii) revenues collected on behalf of unaffiliated operators located at, and gratuities

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collected on behalf of employees employed at, the Embassy Properties in the ordinary course of business, provided that Borrower or the applicable Embassy Manager shall have delivered to Administrative Agent a report detailing the basis for any disbursement pursuant to this subsection (b), and such other information and documentation as Administrative Agent may reasonably request in connection therewith. The Monthly Pegged Amount shall be adjusted based upon the release of any of the Embassy Properties in accordance with the terms hereof. As of the date hereof, the amount comprising clause (a) of this definition of Monthly Pegged Amount for each Collateral Property is set forth on Schedule 3.2 hereof. If for any reason, a new amount comprising clause (a) of this definition of Monthly Pegged Amount is not established by April 1st of each year, the current amount comprising clause (a) of this definition of Monthly Pegged Amount shall be in effect until such time as the new amount comprising clause (a) of this definition of Monthly Pegged Amount is established.

          “Moody’s” means Moody’s Investors Service, Inc

          “Mortgage” means, with respect to each Collateral Property, that certain first priority (i) Fee, Leasehold and Subleasehold Mortgage, Fixture Filing and Security Agreement, (ii) Open-End Fee, Leasehold and Subleasehold Mortgage, Fixture Filing and Security Agreement, (iii) Deed to Secure Debt and Security Agreement, (iv) Fee and Leasehold Deed of Trust, Fixture Filing and Security Agreement, or (v) Fee, Leasehold and Subleasehold Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement, as applicable, executed and delivered by the applicable Owner and Operating Lessee for the applicable Collateral Property, and, for each Collateral Property that is subject to a Ground Lease, the related Fee Owner with respect to such Collateral Property, in favor of the Secured Parties as security for the Obligations and encumbering such Collateral Property.

          “Net Income” means, at any date of determination, the net income (or loss) of Borrowers for the most recently completed twelve (12) months (as determined in accordance with GAAP); provided that Net Income shall exclude extraordinary gains and extraordinary losses for such period.

          “Net Operating Income” means, for the twelve (12) month period ending on last day of the calendar month immediately preceding such date of determination (or, if the applicable Managers have not yet produced financial reporting information for the immediately preceding calendar month, such calculations shall be based upon the then most recent twelve (12) month period for which Borrowers have received reporting), an amount equal to EBITDA, minus capital expenditures reserves in an amount equal to four percent (4%) of Gross Income from Operations for such period; provided that if any Collateral Property Release(s) were effected during the reference period, this definition shall be adjusted to reflect such Collateral Property Release(s) (in which case, the amounts shall be calculated as if such Collateral Property Release occurred on the first day of the reference period).

          “Net Proceeds” has the meaning specified in Section 9.4(b).

          “Net Proceeds Deficiency” has the meaning specified in Section 9.4(h).

          “New Mezzanine Loan” has the meaning set forth in Section 14.1.8.

          “Non-Exempt Person” means any Person other than a Person who (i) is a U.S. Person or (ii) has on file with the Administrative Agent for the relevant year such duly executed form(s) or statement(s) that may, from time to time, be prescribed by law and which, pursuant to applicable provisions of (A) any income tax treaty between the United States and the country of residence of such Person, (B) the Code or (C) any applicable rules or regulations in effect under clauses (A) or (B) above, permit the Administrative Agent to make payments contemplated hereby free of any obligation or liability for withholding.

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          “Non-Designated Collateral Property” means any Collateral Property that is not a Qualified Collateral Property.

          “Note” means a promissory note made by a Borrower in favor of a Lender evidencing the portion of the Loan made by such Lender substantially in the form of Exhibit B.

          “O&M Program” means, with respect to each Collateral Property, the asbestos operations and maintenance program developed by the applicable Fee Owner or Borrower and approved by Administrative Agent in accordance with Section 7.24, as the same may be amended, replaced, supplemented or otherwise modified from time to time.

          “Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

          “Omnibus Operating Lease Amendment” means the Omnibus Lease Amendment Agreement by and between FelCor Trust, FelCor Op and each of the lessor and lessee entities that are signatories thereto dated June 30, 1998, affecting each of the Operating Leases.

          “Operating Equipment and Supplies” means all chinaware, glassware, linens, silverware, tools, kitchen utensils, uniforms, engineering and housekeeping tools and utensils, food and beverage items, fuel, soap, mechanical stores, cleaning supplies and materials, matches, stationary, paper supplies, laundry supplies, food service preparation utensils, housekeeping supplies, accounting supplies and other immediately consumable items used in the operation of a Collateral Property.

          “Operating Expenses” means the total of all expenditures, computed in accordance with GAAP, of whatever kind relating to the operation, maintenance and management of the Collateral Properties that are incurred on a regular monthly or other periodic basis, including without limitation, utilities, ordinary repairs and maintenance, insurance premiums, license fees, property taxes and assessments, advertising expenses, Management Fees, franchise fees, payroll and related taxes, computer processing charges, operational equipment or other lease payments as approved by Administrative Agent, and other similar costs, but excluding depreciation, Debt Service and Capital Expenditures.

          “Operating Lease Subordination Agreements” means subordination agreements in form and substance satisfactory to Administrative Agent relating to each Operating Lease.

          “Operating Lessees” means, the Embassy Atlanta Buckhead Operating Lessee, the Embassy Boston Marlborough Operating Lessee, the Embassy Corpus Christi Operating Lessee, the Embassy Orlando South Operating Lessee, the Embassy SF Airport Operating Lessee, the Sheraton Operating Lessee SPE, and “Operating Lessee” means any one of the Operating Lessees.

          “Operating Lessee” has the meaning specified in the introductory paragraph.

          “Organizational Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint

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venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

          “Origination Fee” means an amount equal to $1,060,000.

          “Other Charges” means all personal property taxes, ground rents under the Ground Lease, maintenance charges, impositions other than Taxes and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining any Collateral Property, now or hereafter levied or assessed or imposed against such Collateral Property or any part thereof.

          “Other Taxes” means all present or future stamp, transfer, recording or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

          “Outstanding Amount” means the aggregate outstanding principal amount of the Loan after giving effect to any borrowings and prepayments or repayments as the case may be, occurring on such date.

          “Owners” means, the Embassy Atlanta Buckhead Owner, the Embassy Boston Marlborough Owner, the Embassy Corpus Christi Owner, the Embassy Orlando South Owner, the Embassy SF Airport Owner, the Sheraton Owner SPE, and “Owner” means any one of the Owners, and “Owner” means any one of the Owners.

          Participant” has the meaning specified in Section 12.6(d).

          “Participant Register” has the meaning specified in Section 12.6(d).

          “Patriot Act” has the meaning specified in Section 12.18.

          “Payment Date”³ means the eleventh (11^th) day of each calendar month during the term of the Loan or, if such day is not a Business Day, the immediately preceding Business Day.

          “Permitted Assumption” has the meaning set forth in Section 8.19(c).

          “Permitted Change in Control” means a Transfer of Equity in FelCor Op or FelCor Trust Interests or any other event or occurrence that results in a Change in Control of FelCor Op or FelCor Trust, provided that one (1) or more of the following criteria is satisfied:

          (i) the credit rating on FelCor Trust’s outstanding senior notes (or any replacement notes or financing) shall be “CCC” (or the equivalent) or higher as rated by S&P, or “Caa2” (or the equivalent) or higher as rated by Moody’s; provided, in each case, that such ratings are publicly available; or

          (ii) the Debt Yield of the Borrowers shall be not less than fifteen percent (15%); or

³ Subject to Drawbridge approval.

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          (iii) (a) the Leverage Ratio of FelCor Trust immediately after the Change in Control, minus the Leverage Ratio of FelCor Trust immediately prior to the Change in Control shall not exceed 3.0, and (b) the Leverage Ratio of FelCor Trust immediately after the Change in Control shall not exceed 9.0.

          “Permitted Equity Transfer” means Transfers of direct or indirect Equity Interests in a Fee Owner, Borrower, Operating Lessee or their respective Principals, provided that (a) FelCor Trust must continue to Control, directly or indirectly such Fee Owner, Borrower or Principals, as applicable, (b) FelCor Trust or FelCor Op is, directly or indirectly, the sole managing partner or managing member, as applicable of such Fee Owner, Borrower, Operating Lessee or Principal, as applicable, and (c) FelCor Trust and FelCor Op own, directly or indirectly at least seventy-five percent (75%) of the issued and outstanding Equity Interests in such Fee Owner, Borrower, Operating Lessee or Principal, as the case may be. Additionally, as a condition to each such transfer Administrative Agent shall receive not less than thirty (30) days prior written notice of such proposed transfer.

          “Permitted Fund Manager” means any Person that on the date of determination is (x) an entity listed on Schedule 3 attached hereto or any other nationally recognized manager of investment funds investing in debt or equity interests relating to commercial real estate, (y) investing through a fund with committed capital of at least $250,000,000 and (z) not a debtor in an Insolvency Proceeding.

          “Permitted Future Mezzanine Loan” has the meaning set forth in Section 15.1.

          “Permitted Future Mezzanine Loan Documents” has the meaning set forth in Section 15.1.

          “Permitted Investments” means any one or more of the following obligations or securities acquired at a purchase price of not greater than par, payable on demand or having a maturity date not later than the Business Day immediately prior to the date it is anticipated such funds will be needed to meet Borrowers’ obligations hereunder and meeting one of the appropriate standards set forth below:

     (a) obligations of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality thereof provided such obligations are backed by the full faith and credit of the United States of America including, without limitation, obligations of: the U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home Administration (certificates of beneficial ownership), the General Services Administration (participation certificates), the U.S. Maritime Administration (guaranteed Title XI financing), the Small Business Administration (guaranteed participation certificates and guaranteed pool certificates), the U.S. Department of Housing and Urban Development (local authority bonds) and the Washington Metropolitan Area Transit Authority (guaranteed transit bonds); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

     (b) Federal Housing Administration debentures;

     (c) obligations of the following United States government sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations), the

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Federal National Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

     (d) federal funds, unsecured certificates of deposit, time deposits, bankers’ acceptances and repurchase agreements with maturities of not more than 365 days of any bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

     (e) fully Federal Deposit Insurance Corporation-insured demand and time deposits in, or certificates of deposit of, or bankers’ acceptances with maturities of not more than 365 days and issued by, any bank or trust company, savings and loan association or savings bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating); provided, however, that the investments described in this clause must (i) have a predetermined fixed Dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

     (f) debt obligations with maturities of not more than 365 days and at all times rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency) in its highest long-term unsecured rating category; provided, however, that the investments described in this clause must (i) have a predetermined fixed Dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

     (g) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) with maturities of not more than 365 days and that at all times is rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency) in its highest short-term unsecured debt rating; provided, however, that the investments described in this clause must (i) have a predetermined fixed Dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

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     (h) units of taxable money market funds, with maturities of not more than 365 days and which funds are regulated investment companies, seek to maintain a constant net asset value per share and invest solely in obligations backed by the full faith and credit of the United States, which funds have the highest rating available from each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency) for money market funds; and

provided, however, that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive only interest payments or (B) the right to receive principal and interest payments on such obligation or security are derived from an underlying investment that provides a yield to maturity in excess of one hundred twenty percent (120)% of the yield to maturity at par of such underlying investment.

          “Permitted Lien” has the meaning specified in Section 8.3.

          “Permitted Mezzanine Lender” means (a) Initial Lender or any Affiliate thereof, or (b) any Qualified Institutional Lender.

          “Permitted Personal Property Lien” has the meaning specified in Section 8.4.

          “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

          “Personal Property” has the meaning specified in Article I of the Mortgage with respect to each Collateral Property.

          “Physical Conditions Report” means, with respect to each Collateral Property, a structural engineering report prepared by NewFields, or such other company satisfactory to Administrative Agent, regarding the physical condition of such Collateral Property, satisfactory in form and substance to Administrative Agent in its sole discretion, which report shall, among other things, (a) confirm that such Collateral Property and its use complies, in all material respects, with all applicable Legal Requirements (including, without limitation, zoning, subdivision and building laws) and (b) include a copy of a final certificate of occupancy with respect to all Improvements on such Collateral Property.

          “PIP” has the meaning set forth in Section 7.29.

          “PIP Payment Amount” has the meaning set forth in Section 7.29.

          “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by a Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

          “Plan Assets” has the meaning set forth in 29 C.F.R. section 2510.3-101, as modified by Section 3(42) of ERISA.

          “Platform” means IntraLinks or another similar electronic system.

          “Policy” has the meaning specified in Section 9.1(b).

          “Prepayment Revocation Deadline” has the meaning set forth in Section 2.6(a).

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          “Prime Rate” means the prime rate reported in the Money Rates section of The Wall Street Journal. In the event that The Wall Street Journal should cease or temporarily interrupt publication, the term “Prime Rate” means the daily average prime rate published in another business newspaper, or business section of a newspaper, of national standing and general circulation chosen by Lender. In the event that a prime rate is no longer generally published or is limited, regulated or administered by a governmental or quasi-governmental body, then Administrative Agent shall select a comparable interest rate index which is readily available and verifiable to Borrowers but is beyond Administrative Agent’s control.

          “Prime Rate Spread” means the difference (expressed as the number of basis points) between (a) the higher of (i) LIBOR plus the Spread on the date LIBOR was last applicable to the Loan and (ii) 8.10% per annum, minus (b) the Prime Rate as of the date that LIBOR was last applicable to the Loan; provided, however, in no event shall such difference be a negative number.

          “Principal” has the meaning specified in Section 6.34.

          “Prior Borrower” has the meaning specified in Section 6.47.

          “Prior Lender” has the meaning specified in Section 6.47.

          “Prior Loans” has the meaning specified in Section 6.47.

          “Promus Hotels” means Promus Hotels, LLC, a Delaware limited liability company, formerly known as Promus Hotels, Inc., a Delaware corporation.

          “Property Account Agreements” means the Embassy Property Account Agreements and the Sheraton Property Account Agreements, and “Property Account Agreement” means any one of the Property Account Agreements.

          “Property Accounts” means the Embassy Property Accounts and the Sheraton Property Accounts, and “Property Account” means any one of the Property Accounts.

          “Property Account Bank” means for each Collateral Property, that certain property account bank set forth on Schedule 3.1(a), provided that such bank remains an Eligible Institution, and any successor Eligible Institution or other Eligible Institution selected by the applicable Borrower, subject to Administrative Agent’s approval.

          “Qualified Institutional Lender” means each of the Administrative Agent, each of the Lenders and any other Person that is not a Non-Exempt Person that is:

          (i) an entity Controlled (as defined below) by, or under common Control (as defined below) with, the Administrative Agent or any of the Lenders, or

          (ii) one or more of the following:

          (A) an insurance company, bank, savings and loan association, investment bank, trust company, commercial credit corporation, pension plan, pension fund, pension fund advisory firm, mutual fund, real estate investment trust, governmental entity or plan, provided that any such Person referred to in this clause (ii) (A) satisfies the Eligibility Requirements or,

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          (B) an investment company, money management firm or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an “institutional accredited investor” (“IAI”) within the meaning of Regulation D under the Securities Act of 1933, as amended, provided that any such Person referred to in this clause (ii) (B) satisfies the Eligibility Requirements or,

          (C) a Qualified Trustee in connection with (A) a securitization of, (B) the creation of collateralized debt obligations (“CDO”) secured by, or (C) a financing through an “owner trust” of, a Participation (any of the foregoing, a “Securitization Vehicle”), provided that (1) one or more classes of securities issued by such Securitization Vehicle is initially rated at least investment grade by each of the Rating Agencies which assigned a rating to one or more classes of securities issued in connection with a Securitization (it being understood that with respect to any Rating Agency that assigned such a rating to the securities issued by such Securitization Vehicle, a Rating Agency Confirmation will not be required in connection with a transfer of the Loan or any interest therein to such Securitization Vehicle); (2) in the case of a Securitization Vehicle that is not a CDO, the special servicer of such Securitization Vehicle has a Required Special Servicer Rating (such entity, an “Approved Servicer”) and such Approved Servicer is required to service and administer the Loan (or the interest therein) in accordance with servicing arrangements for the assets held by the Securitization Vehicle which require that such Approved Servicer act in accordance with a servicing standard notwithstanding any contrary direction or instruction from any other Person; or (3) in the case of a Securitization Vehicle that is a CDO, the CDO Asset Manager and, if applicable, each Intervening Trust Vehicle that is not administered and managed by a CDO Asset Manager which is a Qualified Institutional Lender, are each either (i) an Initial Participant or (ii) a Qualified Institutional Lender; or

          (D) an investment fund, limited liability company, limited partnership or general partnership having capital and/or capital commitments of at least $250,000,000 and as to which any of the Administrative Agent, any Lender, a Qualified Institutional Lender or a Permitted Fund Manager acts as the managing general partner, managing member, or the fund manager responsible for the day-to-day management and operation of such investment vehicle and provided that at least fifty percent (50%) of the equity interests in such investment vehicle are owned, directly or indirectly, by one (1) or more entities that are otherwise Qualified Institutional Lenders, or

          (E) an institution substantially similar to any of the foregoing that, in the case of entities referred to in clause (ii)(A), (B), (C)(1) or (D) of this definition, satisfies the Eligibility Requirements; provided that, in the case of an entity similar to an entity described in clause (D) above, the requirements of this clause may be satisfied by the general partner, managing member or the fund manager responsible for the day-to-day management and operation of such entity and the holders of at least fifty percent (50%) of the equity interests in such entity; or

          (F) (1) a commercial paper conduit whose commercial paper is rated at least “A-1” by S&P or at least “P-1” by Moody’s Investors Service, Inc. (“CP Transaction”), or (2) the purchaser(s) under a repurchase transaction (“Repo Transaction,” and, collectively with a transaction effected through a Securitization Vehicle and a CP Transaction, “Securitization Transactions”), if such entity would otherwise be a Qualified Institutional Lender so long as with respect to any CP Transaction, (A) any entity that would exercise the rights of the “controlling holder” in such transaction is a Qualified Institutional Lender and (B) all of the “equity interest” (other than any nominal or de minimis equity interest) in the special purpose entity that issues notes or certificates in connection with such CP Transaction is owned by one or more entities that are Qualified Institutional Lenders; or

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          (G) a Person that is otherwise a Qualified Institutional Lender but that is acting in an agency capacity for a syndicate of lenders where at least 51% (by loan balance owned) of the lenders in such syndicate are otherwise Qualified Institutional Lenders under clauses (A) through (E) above; or

          (iii) any entity Controlled (as defined below) by, or under common Control (as defined below) with, any of the entities described in subsections (A) through (E), inclusive, in clause (ii) above.

          For purposes of this definition only, “Control” means the ownership, directly or indirectly, in the aggregate, of more than fifty percent (50%) of the beneficial ownership interests of an entity and the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such entity, whether through the ability to exercise voting power, by contract or otherwise (“Controlled” has the meaning correlative thereto).

          “Provided Information” has the meaning set forth in Section 14.1.1.

          “Purchase Money Property” has the meaning set forth in Section 6.47.

          “Qualified Insurer” has the meaning specified in Section 9.1(b).

          “Qualified Manager” means Manager, Aimbridge Hospitality, Davidson Hotel Company, or another reputable and experienced professional management organization (a) which manages, together with its Affiliates, one hundred fifty (150) properties of a type, quality and size similar to the Collateral Properties, totaling in the aggregate no less than 30,000 guest rooms and (b) prior to whose employment as manager of a Collateral Property shall have been approved by Administrative Agent, which approval shall not be unreasonably withheld, delayed or conditioned; provided, however, that following a Securitization, any proposed Manager (other than Aimbridge Hospitality, Davidson Hotel Company) shall be required to delivery Rating Agency Confirmation as a condition to becoming a Qualified Manager.

          “Qualified Collateral Property” means the Embassy Corpus Christi Property, the Sheraton Cypress Creek Property and the Sheraton Atlanta Galleria Property.

          “Qualified Release Price Prepayment” means the payment of the Release Price due in connection with the release of:

     (i) the Embassy Corpus Christi Property,

     (ii) the Sheraton Cypress Creek Property, if such Release Price is paid at any time after the two (2) year anniversary of the Closing Date, and

     (iii) Sheraton Atlanta Galleria Property, if such Release Price is paid at any time after the two (2) year anniversary of the Closing Date.

          “Qualified Servicer” means either (i) a mortgage finance institution, insurance company, bank or mortgage servicing institution (x) organized and doing business under the laws of the United States or any state of the United States or the District of Columbia, (y) authorized to transact business in each jurisdiction of the United States, if and to the extent required by applicable law to enable such institution to perform its obligations hereunder and, in the event that such institution is acting as a subservicer, under the applicable sub-servicing agreement, or (z) which, except in the case of a subservicer, has a net worth of $15,000,000 or more (or, if such institution does not have a net worth of $15,000,000 or more, its obligations are guaranteed or otherwise supported by another entity that has a

36

net worth of $15,000,000 or more) and approved by Moody’s, S&P or another rating agency service acceptable to Administrative Agent, or (ii) after Securitization, any other mortgage finance institution, insurance company, bank or mortgage servicing institution as to which each of the Rating Agencies shall have delivered to the trustee under such Securitization written confirmation to the effect that the service by such entity as master servicer or special servicer, as the case may be, in connection with such Securitization, or the Loan or the portion thereof included in such Securitization, would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to the certificates issued in such Securitization.

          “Qualified Trustee” means (i) a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any State or the United States, authorized under such laws to exercise corporate trust powers and to accept the trust conferred, having a combined capital and surplus of at least $100,000,000 and subject to supervision or examination by federal or state authority, (ii) an institution whose deposits insured by the Federal Deposit Insurance Corporation or (iii) an institution whose long-term senior unsecured debt is rated in either of the two highest rating categories of each of the Rating Agencies.

          “Quarterly Budgeted Amount Comparison” has the meaning specified in Section 7.10(f).

          “Rating Agencies” means each of S&P, Moody’s, and Fitch, and any other nationally-recognized statistical rating agency which has been approved by Administrative Agent.

          “Rating Agency Confirmation” means, at any time that the Loan (or any portion of or interest in the Loan) is an asset of a Securitization Trust, a written confirmation from each Rating Agency that its credit rating of each class of the securities issued under the Servicing Agreement to which it has assigned a rating, in effect immediately prior to the occurrence of the event with respect to which such Rating Agency Confirmation is sought, will not be qualified, downgraded or withdrawn as a result of the occurrence of such event.

          “Real Estate Taxes” means all real estate and personal property taxes, assessments, water rates or sewer rents (if applicable), now or hereafter levied or assessed or imposed against the Collateral Properties or part thereof.

          “REAs” means each construction, operation, and reciprocal easement agreements or similar agreements (including any separate agreements or other agreements between a Loan Party and one or more other parties to any REA with respect to such REA) affecting any Collateral Property or portion thereof, and “REA” means any one of the REAs.

          “Register” has the meaning specified in Section 12.6(c).

          “Registration Statement” has the meaning set forth in Section 14.1.3.

          “Related Loan” has the meaning set forth in Section 14.1.9.

          “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

          “Release Property” has the meaning set forth in Section 14.1.9.

          “Relevant Portions” has the meaning set forth in Section 14.1.3.

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          “Release” of any Hazardous Materials means any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.

          “Release Price” means (i) in the case of Qualified Collateral Property, an amount equal to one hundred fifteen percent (115%) of the Allocated Loan Amount for such Collateral Property, and (ii) in the case of Non-Designated Collateral Property, an amount equal to one hundred twenty-five percent (125%) of the Allocated Loan Amount for such Collateral Property.

          “Renewal Lease” has the meaning specified in Section 7.16.

          “Rents” has the meaning specified in Article I of the Mortgage with respect to each Collateral Property.

          “Replacement Franchise Agreement” means, with respect to any Collateral Property, (a) either (i) a franchise agreement with the applicable Franchisor in place for such Collateral Property on the date hereof substantially in the same form and substance as the initial Franchise Agreement for such Collateral Property, or (ii) a franchise agreement with a franchisor other than the applicable Franchisor in place for such Collateral Property on the date hereof, which new franchisor shall be subject to Administrative Agent’s approval, and which franchise agreement shall be acceptable to Administrative Agent in form and substance, in each case, in Administrative Agent’s sole and absolute discretion provided that (x) all material business terms in such franchise agreement shall be on the same or more favorable terms to the applicable Operating Lessee than those in the initial Franchise Agreement, and (y) the remaining term of such franchise agreement upon the execution and delivery of same shall be equal to the terms generally granted by the applicable Franchisor in the then prevailing market, but in no event shorter than seven (7) years, or (iii) a franchise agreement with the applicable Franchisor in place for such Collateral Property on the date hereof, which franchise agreement shall be acceptable to Administrative Agent in form and substance, and (b) in connection with any agreement referred to in clause (a) above, a franchisor estoppel and recognition agreement or other “comfort letter” substantially in the form delivered to Administrative Agent on the date hereof (or such other form acceptable to Administrative Agent), executed and delivered to Administrative Agent by the applicable Operating Lessee and the applicable Franchisor at Borrowers’ expense; provided, however, with respect to any expiring or replacement Franchise Agreement, Borrowers shall notify Administrative Agent, but shall not be required to obtain Administrative Agent’s consent if the Franchise Agreement in effect on the date hereof is extended (to result in a remaining term of such Franchise Agreement from the date of the delivery of such extension agreement equal to the terms then generally granted by the applicable Franchisor in the then prevailing market, but in no event shorter than seven (7) years) on the same or more favorable terms to the applicable Operating Lessee as prior to the expiration thereof, provided further that if such Franchise Agreement is modified, extended, supplemented or replaced a franchisor estoppel and recognition or other “comfort letter” shall be provided as described in (b) above.

          “Replacement Interest Rate Cap Agreement” means an interest rate cap agreement from an Acceptable Counterparty with financial terms identical to the Interest Rate Cap Agreement then in effect and with other terms substantially similar to those in the Interest Rate Cap Agreement then in effect, except that the same shall be effective in connection with replacement of the Interest Rate Cap Agreement following a downgrade, withdrawal or qualification of the long-term unsecured debt rating of the Counterparty.

          “Replacement Management Agreement” means, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the initial Management Agreement for such Collateral Property, or (ii) a management agreement with a Qualified

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Manager, which management agreement shall be acceptable to Administrative Agent in form and substance, and (b) if requested by Administrative Agent, a conditional assignment of management agreement in such form acceptable to Administrative Agent executed and delivered to Administrative Agent by Operating Lessee and such Qualified Manager at Borrowers’ expense; provided, however, with respect to any expiring or replacement Management Agreement, Borrowers shall notify Administrative Agent but shall not be required to obtain Administrative Agent’s consent if the Management Agreement in effect on the date hereof is extended on the same or more favorable terms to Operating Lessee as prior to the expiration thereof; provided, further, that in such event the applicable Borrowers will be required to deliver an extension of the conditional assignment of management agreement obtained by Administrative Agent on the date hereof in connection with the original Management Agreement.

          “Required Lenders” means, as of any date of determination, Lenders holding Notes evidencing more than fifty-one percent (51%) of the sum of the total Outstanding Amount; provided that the portion of the Outstanding Amount held, or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

          “Required Repairs” has the meaning specified in Section 9.5.

          “Required Repair Account” has the meaning set forth in Section 13.3(a) hereof.

          “Required Repair Fund” has the meaning set forth in Section 13.3(a) hereof.

          “Reserve Accounts” means, collectively, the Tax Reserve Account, the Insurance Reserve Account, the FF&E Reserve Account, the Required Repairs Reserve Account, the Environmental Remediation Reserve Account and any other escrow fund established pursuant to the Loan Documents

          “Reserve Funds” means, collectively, the Tax Reserve Fund, the Insurance Reserve Fund, the FF&E Reserve Fund, the Required Repair Fund, the Environmental Remediation Reserve Fund, and any other escrow fund established pursuant to the Loan Documents.

          “Responsible Officer” means the president or any vice president of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary organizational action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

          “Restoration” means the repair and restoration of a Collateral Property after a Casualty or Condemnation as nearly as possible to the condition the Collateral Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be approved by Administrative Agent, and in accordance with applicable Laws and the requirements of any applicable Management Agreement, Franchise Agreement and Operating Lease.

          “Restricted Party” means any Borrower, any Principal or any shareholder, partner or member or any direct or indirect legal or beneficial owner of, any Borrower, or any Principal; provided, however, that in no event shall (i) FelCor Trust or FelCor Op be deemed a Restricted Party, nor (ii) any direct or indirect beneficial owner of the Persons listed in clause (i) above be deemed a Restricted Party solely because of its direct or indirect beneficial ownership of such Persons.

          “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking

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fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

          “Ruth’s Chris Lease” means the Restaurant Lease and Services Agreement dated as of November 6, 2006 between Embassy Atlanta Buckhead Operating Lessee, as landlord, and Brook’s Investments, Inc., a Georgia corporation, as tenant, as amended prior to the date hereof, and as the same may be further amended in accordance with the terms hereof.

          “S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.

          “Second Interest Rate Cap Agreement” has the meaning set forth in Section 2.5(b).

          “Second Interest Rate Cap Agreement Delivery Date” means May 1, 2012.

          “Second Interest Rate Cap Period” means the period beginning with and including May 11, 2012 and ending on and including May 10, 2013.

          “Secondary Market Transaction” has the meaning set forth in Section 14.1.1.

          “Secured Parties” means, collectively, Administrative Agent, Lenders, each co-agent or sub-agent appointed by Administrative Agent from time to time pursuant to Section 11.5, and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

          “Securities” has the meaning set forth in Section 14.1.1.

          “Securities Act” has the meaning set forth in Section 14.1.2.

          “Securitization” means the transfer of the Loan (or any portion thereof or any interest therein and, if applicable, subject to any junior participation or other subordinated interest in the Loan) to a Securitization Trust that will hold the Loan (or such portion thereof or such interest therein) in connection with a securitization of the Loan (or such portion thereof or such interest therein) and, if applicable, one or more other mortgage assets.

          “Securitization Date” means the date on which a Securitization is consummated.

          “Securitization Transaction” shall have the meaning assigned to such term in the definition of “Qualified Institutional Lender.”

          “Securitization Trust” means the trust formed pursuant to a Securitization which holds the Loan (subject to any junior participation(s) or other interest therein).

          “Securitization Vehicles” shall have the meaning assigned to such term in the definition of “Qualified Institutional Lender.”

          “Security Deposit” has the meaning specified in Section 7.16.

          “Service Contracts” means any Contractual Obligation with respect to property or services to be provided by third parties with respect to any Collateral Property that exceeds $25,000 in annual expense or that is over one year in duration.

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          “Servicing Agreement” means, from and after the Securitization Date, the pooling and servicing agreement executed in connection with a Securitization.

          “Sheraton Atlanta Galleria Fee Owner” means FelCor/MM S-7 and any successor thereto as permitted pursuant to this Agreement.

          “Sheraton Atlanta Galleria Ground Lease” means the Ground Lease dated as of May 3, 2010, by and between FelCor/MM S-7, as lessor, and Sheraton Owner SPE, as lessee, as evidenced by that certain Memorandum of Lease dated as of May 3, 2010, to be recorded in the Office of the Clerk of Superior Court of Cobb County, Georgia.

          “Sheraton Atlanta Galleria Management Agreement” means the Management Agreement dated as of June 30, 1997 by and between FCH/SH Leasing, as “Owner,” and Sheraton PeachTree Corporation, a Delaware corporation, as “Operator,” with respect to the Sheraton Atlanta Galleria Property, as modified pursuant to that certain First Amendment to Management Agreement dated November 1, 1998, between FCH/SH Leasing and Sheraton Peachtree Corporation, a Delaware corporation, as assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE pursuant to that certain Assignment and Assumption of Agreements dated as of the date hereof.

          “Sheraton Atlanta Galleria Operating Lease” means the Lease Agreement dated June 30, 1997 by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and FCH/SH Leasing, as lessee, as modified by the Omnibus Operating Lease Amendment, and assigned by FelCor Op to FelCor/MM S-7 pursuant to the Assignment and Assumption of Leases dated as of April 20, 2000, as evidenced by that certain Memorandum of Lease recorded on April 26, 2000 in the Office of the Clerk of Superior Court of Cobb County, Georgia in Deed Book 13258, Page 1448 and further assigned by FelCor/MM S-7 to Sheraton Owner SPE pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010, and assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010.

          “Sheraton Atlanta Galleria Property” means the Sheraton Suites — Atlanta Galleria.

          “Sheraton Burlington Condemnation Parcel” has the meaning set forth in Section 8.8(d).

          “Sheraton Burlington Management Agreement” means the Lease and Management Agreement dated as of December 4, 1997 by and between FCH/SH Leasing as “Owner,” and Sheraton Vermont Corporation, a Vermont corporation, as “Operator,” with respect to the Sheraton Burlington Property, as assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE pursuant to that certain Assignment and Assumption of Agreements dated as of the date hereof.

          “Sheraton Burlington Operating Lease” means the Lease Agreement dated December 4, 1997 by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and Sheraton Burlington Operating Lessee, as modified by the Omnibus Operating Lease Amendment, and assigned by FelCor Op to FelCor/MM S-7 pursuant to the Assignment and Assumption of Leases dated April 20, 2000, as evidenced by that certain Memorandum of Lease, dated April 20, 2000 and recorded in Volume 473 at Pages 664-671 of the City of South Burlington Land Records, Vermont and further assigned by FelCor/MM S-7 to Sheraton Owner SPE pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010.

          “Sheraton Burlington Operating Lessee” means FCH/SH Leasing II, L.L.C., a Delaware limited liability company.

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          “Sheraton Burlington Parking Lease” means the Lease Agreement dated August 28, 1986, between the University of Vermont and State Agricultural College, an educational institution existing under the laws of the State of Vermont, and Hospitality Inns, as amended pursuant to that certain Amendment to Lease Agreement dated May 1, 1987 between University and Hospitality Inns, as further amended pursuant to that certain Second Amendment to Lease Agreement dated August 30, 1990 by University and Hospitality Inns, as further amended pursuant to that certain Third Amendment to Lease Agreement and Waiver of Right of First Refusal dated December 3, 1997 by University and Hospitality Inns, as assigned by Hospitality to FelCor Suites LP pursuant to that certain Assignment and Assumption of Lease dated December 3, 1997, and as further amended pursuant to that certain Fourth Amendment to Lease between University and FelCor Op.

          “Sheraton Burlington Property” means the Sheraton — Burlington Hotel and Conference Center.

          “Sheraton Burlington Tanks” has the meaning set forth in Section 9.7.

          “Sheraton Cypress Creek Fee Owner” means FelCor Op and any successor thereto as permitted pursuant to this Agreement.

          “Sheraton Cypress Creek Ground Lease” means the Ground Lease dated as of the date hereof, between Sheraton Cypress Creek Fee Owner and Sheraton Owner SPE, a memorandum of which Borrowers shall cause to be recorded in the appropriate land records promptly after the date hereof.

          “Sheraton Cypress Creek Management Agreement” means the Management Agreement dated as of May 1, 1998 by and between FCH/SH Leasing, as “Owner,” and Sheraton Operating Corporation, a Delaware corporation, as “Operator,” with respect to the Sheraton Cypress Creek Property, as assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE pursuant to that certain Assignment and Assumption of Agreements dated as of the date hereof.

          “Sheraton Cypress Creek Operating Lease” means the Lease Agreement dated May 1, 1998 by and between FelCor Op (formerly known as FelCor Suites LP), as lessor, and FCH/SH Leasing, as lessee, as modified by that certain Omnibus Operating Lease Amendment, and assigned by FelCor Op to FelCor/MM S-7 pursuant to the Assignment and Assumption of Leases dated as of April 20, 2000, as evidenced by that certain Memorandum of Lease recorded on April 26, 2000 in Official Records Book 30453, Page 692, of the Public Records of Broward County, Florida, as affected by that certain Recognition Agreement dated May 3, 2010, by and between FelCor Op and FCH/SH Leasing, and further assigned by FelCor Op to Sheraton Owner SPE pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010, and assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE, pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010.

          “Sheraton Cypress Creek Property” means the Sheraton — Cypress Creek.

          “Sheraton Cypress Creek Tank” has the meaning set forth in Section 13.5.

          “Sheraton Manager” means the Manager of the Sheraton Cypress Creek Property, Sheraton Atlanta Galleria Property, Sheraton Society Hill Property and/or Sheraton Burlington Property.

          “Sheraton Management Agreements” means the Sheraton Cypress Creek Management Agreement, Sheraton Atlanta Galleria Management Agreement, Sheraton Society Hill Management Agreement and Sheraton Burlington Management Agreement, and “Sheraton Management Agreement” means any one of the Sheraton Management Agreements.

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          “Sheraton Manager Account” means such account as any Sheraton Manager may from time to time designate by written notice to Administrative Agent.

          “Sheraton Operating Lessees” means the Sheraton Cypress Creek Operating Lessee, the Sheraton Atlanta Galleria Operating Lessee, the Sheraton Society Hill Operating Lessee, and the Sheraton Burlington Operating Lessee, and “Sheraton Operating Lessee” means any one of the Sheraton Operating Lessees.

          “Sheraton Operating Leases” means the Sheraton Cypress Creek Operating Lease, the Sheraton Atlanta Galleria Operating Lease, the Sheraton Society Hill Operating Lease, and the Sheraton Burlington Operating Lease.

          “Sheraton Operating Lessee SPE” means FelCor S-4 Leasing (SPE), L.L.C.

          “Sheraton Owner SPE” means FelCor S-4 Hotels (SPE), L.L.C.

          “Sheraton Properties” means the Sheraton Cypress Creek Property, Sheraton Atlanta Galleria Property, Sheraton Society Hill Property and Sheraton Burlington Property, and “Sheraton Property” means any one of the Sheraton Properties.

          “Sheraton Property Account” and “Sheraton Property Accounts” has the meaning set forth in Section 3.1(b).

          “Sheraton Property Account Agreement” has the meaning set forth in Section 3.1(b).

          “Sheraton Society Hill Fee Owner” means FCH/PSH, L.P., a Pennsylvania limited partnership, and any successor thereto as permitted pursuant to this Agreement.

          “Sheraton Society Hill Ground Lease” means the Ground Lease dated April 20, 2000, by and between Sheraton Society Hill Fee Owner, as lessor, and FelCor Op, lessee, as assigned by FelCor Op to FelCor/MM S-7 pursuant to that certain Assignment and Assumption of Leases dated April 20, 2000, as evidenced by that certain Memorandum of Lease recorded April 26, 2000 in the Department of Records of and for the City and County of Philadelphia as Document No. 50071401, and further assigned by FelCor/MM S-7 to Sheraton Owner SPE pursuant to that certain Assignment, Assumption and Modification of Ground Lease dated as of May 3, 2010.

          “Sheraton Society Hill Letter Agreement” has the meaning specified in Section 7.26.

          “Sheraton Society Hill Management Agreement” means the Management Agreement dated as of September 30, 1997 by and between FCH/SH Leasing, as “Owner,” and Sheraton Operating Corporation, a Delaware corporation, as “Operator,” with respect to the Sheraton Society Hill Property, as amended pursuant to that certain Letter Agreement dated December 21, 2005 between Sheraton Operating Corporation and FCH/SH Leasing Re: Sheraton Society Hill, as assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE pursuant to that certain Assignment and Assumption of Agreements dated as of the date hereof.

          “Sheraton Society Hill Operating Lease” means Lease Agreement dated September 30, 1997 by and between Sheraton Society Hill Fee Owner (formerly known as Rouse & Associates — SHS), as lessor, and FCH/SH Leasing, as lessee, as amended by that certain First Amendment to Operating Lease executed in April 2010 to be effective as of September 30, 1997, as modified by that certain Omnibus Operating Lease Amendment, and assigned by Sheraton Society Hill Fee Owner to FelCor Op

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pursuant to the Assignment and Assumption of Leases dated April 20, 2000, and further assigned by FelCor Op to FelCor/MM S-7 pursuant to the Assignment and Assumption of Leases dated April 20, 2000, as evidenced by that certain Memorandum of Lease recorded April 26, 2000 in Department of Records of and for the City and County of Philadelphia as Document No. 50071400, and further assigned by FelCor/MM S-7 to Sheraton Owner SPE pursuant to that certain Assignment and Assumption of Lease dated as of May 3, 2010, and assigned by FCH/SH Leasing to Sheraton Operating Lessee SPE, pursuant to that certain Assignment and Assumption of Lease dated May 3, 2010.

          “Sheraton Society Hill Property” means the Sheraton — Society Hill.

          “Special Member” has the meaning set forth in Section 6.34.

          “Spread” means five and one-tenth percent (5.10%) per annum.

          “Stated Maturity Date” means, April 30, 2015.

          “Strike Price” has the meaning set forth in Section 2.05(a).

          “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Borrowers.

          “Survey” has the meaning specified in Section 5.1(a)(x).

          “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

          “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

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          “Syndication” has the meaning set forth in Section 14.1.1.

          “Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

          “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

          “Taxes” means any and all present or future income, franchise, sales, use, excise, stamp or other taxes, duties, levies, imposts, fees, assessments, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing and restrictions or other charges of whatever nature now or hereafter imposed, levied, collected, withheld or assessed by any jurisdiction (whether pursuant to federal, state, local or foreign law) or by any Governmental Authority, including any political subdivision or taxing authority thereof or therein, and all interest, penalties or additional amounts payable in respect thereof.

          “Tax Reserve Account” has the meaning set forth in Section 13.1.

          “Tax Reserve Deposit Amount” means an amount equal to one-twelfth (1/12) of the Real Estate Taxes budgeted in the Approved Annual Budget in order to accumulate with Administrative Agent sufficient funds to pay all such Real Estate Taxes at least thirty (30) days prior to their respective due dates.

          “Tax Reserve Fund” has the meaning set forth in Section 13.1.

          “Tax Return” means any report, filing, return, information return, document, election, including amendments to any of the foregoing, filed or furnished or required to be filed or furnished with respect to Taxes.

          “Terrorism Exclusion” has the meaning specified in Section 9.1(a)(x).

          “Terrorism Insurance” has the meaning specified in Section 9.1(a)(x).

          “Terrorism Insurance Cap” has the meaning specified in Section 9.1(a)(x).

          “Terrorism Insurance Required Amount” has the meaning specified in Section 9.1(a)(x).

          “Third Interest Rate Cap Agreement” has the meaning set forth in Section 2.5(c).

          “Third Interest Rate Cap Agreement Delivery Date” means May 1, 2013.

          “Third Interest Rate Cap Period” means the period beginning with and including May 11, 2013 and ending on and including May 10, 2014.

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          “Tie-In Hotels” has the meaning set forth in Section 7.28.

          “Title Company” means such title insurance companies acceptable to Administrative Agent.

          “Title Insurance Commitments” means the commitments to issue the Title Policies, issued by the Title Company for each Collateral Property, along with copies of all instruments creating or evidencing exceptions or encumbrances to title.

          “Title Policies” means an ALTA or equivalent form of Mortgagee Title Policy from the Title Company and insuring the priority and sufficiency of the Mortgages as first Liens upon the applicable Collateral Properties, (a) in the aggregate amount of the Loan, (b) showing all easements or other matters affecting the Collateral Properties, all subject only to such exceptions or qualifications as are reasonably acceptable to Administrative Agent, (c) insuring the priority of Secured Party’s Liens granted by the Mortgages against all possible contractors’, suppliers, and mechanics’ lien claims that heretofore or hereafter arise, as well as survey matters which could result in a Material Title Defect, and (d) to the extent available, containing any customary endorsements or assurances that Administrative Agent acting on behalf of the Secured Parties may request for protection of its interests including, but not limited to (i) zoning endorsements, (ii) variable rate endorsements, (iii) usury endorsements, (iv) comprehensive endorsements, (v) access endorsements, insuring that there will be at least one location at each Collateral Property with unlimited vehicular ingress and egress to an adjacent street, and (vii) other customary endorsements requested by Administrative Agent and its counsel.

          “Transfer” means, with respect to any property, rights, or interests, any sale, deed, conveyance, lease, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of options with respect to, installment sales contracts for, or other transfer or disposition, in whole or in part, with respect to such property, rights or interest, or any legal or beneficial interest therein, directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise (including as a result of a merger), and whether or not for consideration or of record. With respect to Restricted Parties, the term “Transfer” shall include the following: (a) if a Restricted Party is a corporation, any merger, consolidation or sale or pledge of such corporation’s stock or the creation or issuance of new stock; (b) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the sale or pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the sale or pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interests or the creation or issuance of new limited partnership interests; (c) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the sale or pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the sale or pledge of non-managing membership interests or the creation or issuance of new non-managing membership interests; and (d) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the sale or pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests.

          “Transferee Borrower” has the meaning set forth in Section 8.19(b).

          “UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time

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in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

          “Underwriters” has the meaning set forth in Section 14.1.3.

          “Underwriter Group” has the meaning set forth in Section 14.1.3.

          “United States” and “U.S.” mean the United States of America.

          “Upper Tier Pledge Agreement” means that certain Pledge Agreement, dated as of the date hereof, made by FelCor Op and FelCor TRS Holdings, in favor of Administrative Agent.

     1.2 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

          (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organizational Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

     (i) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

     (ii) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

     1.3 Accounting Terms. (a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time.

          (b) Changes in GAAP. If at any time any change in GAAP occurring after the Closing Date would affect the Borrowers’ computation of any financial ratio or requirement set forth in

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any Loan Document, and either Borrowers or the Required Lenders shall so request, Administrative Agent, the Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrowers shall provide to Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

     1.4 Rounding. Any financial ratios required to be maintained by Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

     1.5 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

     1.6 Joint and Several Obligations.

          (a) All representations contained herein shall be deemed individually made by each Borrower, and each of the covenants, agreements, and obligations set forth herein shall be deemed to be the joint and separate covenants, agreements, and obligations of each Borrower. Any notice, request, consent, report, or other information or agreement delivered to any Loan Party by any Borrower shall be deemed to be ratified by, consented to, and also delivered by the other Borrowers. Each Borrower recognizes and agrees that each covenant and agreement of a “Borrower” and “Borrowers” in this Agreement and in any other Loan Document shall create a joint and several obligation of such entities, which may be enforced against such entities jointly, or against each entity separately.

          (b) Each Borrower hereby irrevocably and unconditionally agrees: (i) that it is jointly and severally liable to Administrative Agent and Lenders for the full and prompt payment of the Obligations and the performance by each Borrower of its obligations hereunder in accordance with the terms hereof; (ii) to fully and promptly perform all of its obligations hereunder with respect to the Obligations; and (iii) as a primary obligation to indemnify Administrative Agent and Lenders on demand for and against any loss (including losses due to Administrative Agent’s or any Lender’s negligence but excluding losses determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of Administrative Agent or any Lender) actually incurred by such Administrative Agent or any Lender as a result of any of the obligations of any one or more of Borrowers being or becoming void, voidable, unenforceable, or ineffective for any reason whatsoever, whether or not known to Administrative Agent, any Lender, or any other Person.

          (c) Each Borrower waives as to each other Borrower: (i) the amendment, extension, renewal, compromise, discharge, acceleration or otherwise changing the time for payment of, or any other terms with respect to, the Obligations or any part thereof or any substitution of Collateral (to the extent the foregoing has occurred in accordance with any applicable requirements of Section 12.1); (ii) any defense arising by reason of any disability or other defense of any other Borrower or the cessation from any cause whatsoever (including any act or omission of any Borrower or Principal) of the liability of any other Borrower; (iii) any right to require Administrative Agent or any Lender to proceed against or exhaust any security for the Obligations, or pursue any other remedy in Administrative Agent or any Lender’s power whatsoever; and (iv) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties.

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ARTICLE II
THE LOAN

     2.1 The Loan. Subject to the terms and conditions set forth herein, Initial Lender agrees to make a single loan to Borrowers on the Closing Date in an amount equal to TWO HUNDRED TWELVE MILLION AND 00/100 DOLLARS ($212,000,000.00) (the “Loan”). Amounts borrowed under this Section 2.1 and repaid or prepaid may not be reborrowed.

     2.2 Interest Rate; Interest Calculation.

          (a) Interest on the outstanding principal balance of the Loan shall accrue from and including the Closing Date to but excluding the Maturity Date at the Applicable Interest Rate. Borrower shall pay to Lender on each Payment Date the interest accrued on the Loan for the preceding Interest Period.

          (b) Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (x) the actual number of days elapsed in the period for which the calculation is being made by (y) a daily rate based on a three hundred sixty (360) day year by (c) the outstanding principal balance.

          (c) The Loan shall be a LIBOR Loan, and Borrowers shall pay interest on the outstanding principal amount of the Loan at the Applicable Interest Rate; provided, however, that at any time that more than one (1) Note is issued and outstanding and the Notes are accruing at different interest rates the “Applicable Interest Rate” shall equal the weighted average interest rate of the Notes then outstanding.

          (d) Any change in the rate of interest hereunder due to a change in the Applicable Interest Rate shall become effective as of the opening of business on the first day on which such change in the Applicable Interest Rate shall become effective. Each determination by Administrative Agent of the Applicable Interest Rate shall be conclusive and binding for all purposes, absent manifest error

          (e) Administrative Agent shall promptly notify Borrowers and Lenders of the Applicable Interest Rate applicable to any Interest Period upon determination of such interest rate.

     2.3 Late Charge; Default Rate; Past Due Amounts.

          (a) If any amount payable by Borrowers under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

          (b) If, and for so long as, any Event of Default shall have occurred and be continuing, Borrowers shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

          (c) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

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     2.4 Loan Payments.

          (a) On the Closing Date, Borrowers shall make a payment to Administrative Agent of interest only with respect to the initial Interest Period. Borrowers shall make a payment to Administrative Agent equal to the Monthly Debt Service Payment Amount on the Payment Date occurring in June, 2010 and on each Payment Date thereafter to and including the Payment Date immediately preceding the Maturity Date. Each payment shall be applied first to interest accrued, or to be accrued, for the Interest Period in which the Payment Date or Maturity Date occurs and the balance to principal. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. All amounts due pursuant to this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever.

          (b) On the Maturity Date, Borrower shall pay to the Administrative Agent the outstanding principal balance of the Loan, all accrued and unpaid interest, all other amounts due hereunder and under the Notes, the Mortgages and the other Loan Documents.

          (c) Except as otherwise expressly provided herein, all payments by Borrowers hereunder shall be made in Dollars and in immediately available funds not later than 4:00 p.m. on the date specified herein, and such sums shall be paid to Administrative Agent at Administrative Agent’s Office for the account of the respective Lenders to which such payment is owed. Administrative Agent will promptly distribute to each Lender such Lender’s Applicable Percentage in respect of the Loan (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office; provided, however, that if the Notes are accruing interest at different interest rates, then in lieu of distributing proceeds in relation to each Lender’s Applicable Percentage, Administrative Agent shall distribute interest amounts to the Lenders based upon the amount of interest accrued due under their respective Notes and shall distribute principal to the Lenders pro rata in accordance with their respective Applicable Percentages, except that after and during the continuance of an Event of Default funds shall be allocated and disbursed to the Lenders in accordance with the terms of any applicable co-lender agreement, intercreditor agreement or other similar agreement among the applicable Lenders. All payments received by Administrative Agent after 4:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.

          (d) At any time that more than one (1) Note is outstanding, Borrowers confirm and agree that Borrowers shall have no right to direct the payment of funds to repay any particular Note, and that all funds received by Administrative Agent from or on behalf of Borrowers shall be allocated among the Lenders as more particularly set forth in this Section 2.4. Borrowers shall not be permitted to make any permitted prepayment of any particular outstanding Note unless, simultaneously with such permitted prepayment of such Note, Borrowers also prepay the other Notes in accordance with the terms of this Agreement, except that after the occurrence and during the continuance of an Event of Default, prepayments shall be allocated and disbursed to the Lenders in accordance with the terms of any applicable co-lender agreement, intercreditor agreement or other similar agreement among the applicable Lenders.

     2.5 Interest Rate Cap Agreements.

          (a) On or before the Closing Date, Borrowers shall enter into an Interest Rate Cap Agreement with an Acceptable Counterparty for the period from the Closing Date through May 11, 2012,

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with a LIBOR strike price (the “Strike Price”) equal to five percent (5.0%) (such Interest Rate Cap Agreement, the “Initial Interest Rate Cap Agreement”).

          (b) On or prior to Second Interest Rate Cap Agreement Delivery Date, in lieu of making the applicable Back-End Amortization Payment due and payable on such date pursuant to Section 2.6(b), Borrower may enter into an Interest Rate Cap Agreement with an Acceptable Counterparty for the Second Interest Rate Cap Period with a Strike Price equal to a Strike Price which when added to the Spread in effect on the Second Interest Rate Cap Agreement Delivery Date would produce a Debt Service Coverage Ratio of 1.10 to 1.00, as calculated by Administrative Agent (the “Second Interest Rate Cap Agreement”).

          (c) On or prior to Third Interest Rate Cap Agreement Delivery Date, in lieu of making the applicable Back-End Amortization Payment due and payable on such date pursuant to Section 2.6(b), Borrower may enter into an Interest Rate Cap Agreement with an Acceptable Counterparty for the Third Interest Rate Cap Period with a Strike Price equal to a Strike Price which when added to the Spread in effect on the Third Interest Rate Cap Agreement Delivery Date would produce a Debt Service Coverage Ratio of 1.10 to 1.00, as calculated by Administrative Agent (the “Third Interest Rate Cap Agreement”).

          (d) On or prior to Fourth Interest Rate Cap Agreement Delivery Date, in lieu of making the applicable Back-End Amortization Payment due and payable on such date pursuant to Section 2.6(b), Borrower may enter into an Interest Rate Cap Agreement with an Acceptable Counterparty for the Fourth Interest Rate Cap Period with a Strike Price equal to a Strike Price which when added to the Spread in effect on the Fourth Interest Rate Cap Agreement Delivery Date would produce a Debt Service Coverage Ratio of 1.10 to 1.00, as calculated by Administrative Agent (the “Fourth Interest Rate Cap Agreement”).

          (e) On the Closing Date, and if Borrowers elect to deliver the Second Interest Rate Cap Agreement, the Third Interest Rate Cap Agreement and the Fourth Interest Rate Cap Agreement, as applicable, on each of the Second Interest Rate Cap Agreement Delivery Date, Third Interest Rate Cap Agreement Delivery Date and Fourth Interest Rate Cap Agreement Delivery Date, Borrowers shall deliver to Administrative Agent a written confirmation (signed by the Acceptable Counterparty) that the applicable interest rate cap has been purchased which shall identify the Acceptable Counterparty, the Strike Price and other negotiated terms and conditions, which shall be acceptable to Administrative Agent in Administrative Agent’s reasonable discretion. Within three (3) Business Days after the delivery of the written confirmation, Borrowers shall, and shall cause the Acceptable Counterparty to, execute and deliver an Interest Rate Cap Agreement and a counterpart to the Collateral Assignment of Interest Rate Cap Agreement, and deliver the opinions required in Section 2.5(i) below. Each Interest Rate Cap Agreement (i) shall be in a form and substance reasonably acceptable to Administrative Agent, (ii) shall be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the Lockbox Account any amounts due Borrowers under such Interest Rate Cap Agreement so long as any portion of the Obligations exists, provided that the Obligations shall be deemed to exist if the Property is transferred by judicial or non-judicial foreclosure or deed-in-lieu thereof, (iv) shall be applicable to, and provide for monthly payments during, for the period set forth in Sections 2.5(a), (b), (c) or (d) (as applicable) and (v) shall have a notional amount equal to or greater than the then outstanding principal balance of the Loan. Borrowers shall collaterally assign to Administrative Agent, pursuant to a Collateral Assignment of Interest Rate Cap Agreement, all of Borrowers’ right, title and interest to receive any and all payments under each Interest Rate Cap Agreement, and shall deliver to Administrative Agent an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Administrative Agent and require that payments be deposited directly into the Lockbox Account).

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          (f) Borrowers shall comply with all of their respective obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts payable to Borrowers or Administrative Agent by the Acceptable Counterparty under the Interest Rate Cap Agreements shall be deposited by such Acceptable Counterparty directly into the Lockbox Account. Borrowers shall take all reasonable actions requested by Administrative Agent to enforce Administrative Agent’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder, without the prior written consent of Administrative Agent.

          (g) In the event of any downgrade, withdrawal or qualification by the Rating Agencies of the rating of the counterparty under an Interest Rate Cap Agreement required hereunder results in such counterparty’s ratings failing to satisfy the requirements for Acceptable Counterparty, Borrowers shall replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement issued by an Acceptable Counterparty not later than ten (10) Business Days following receipt of notice from Administrative Agent of such downgrade, withdrawal or qualification. Notwithstanding the foregoing, upon the renewal or replacement of the Interest Rate Cap Agreement as required hereunder, the Counterparty must satisfy the qualifications of an Acceptable Counterparty unless Administrative Agent otherwise agrees in writing.

          (h) If Borrowers fail to purchase and deliver to Administrative Agent the Interest Rate Cap Agreement in accordance with the provisions of this Section 2.5 or fails to maintain the Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, in addition to Administrative Agent’s other rights and remedies in connection with such Default, Administrative Agent may purchase the Interest Rate Cap Agreement and the cost incurred by Administrative Agent in purchasing such Interest Rate Cap Agreement shall be paid by Borrowers to Administrative Agent with interest thereon at the Default Rate from the date such cost was incurred by Administrative Agent until such cost is reimbursed by Borrowers to Administrative Agent.

          (i) In connection with each Interest Rate Cap Agreement, Borrowers shall obtain and deliver to Administrative Agent an opinion from counsel (which counsel may be in-house counsel for the counterparty thereunder) for the applicable counterparty thereunder (upon which Administrative Agent and its successors and assigns may rely) which shall provide, in relevant part, substantially as follows:

     (i) such counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, such Interest Rate Cap Agreement;

     (ii) the execution and delivery of such Interest Rate Cap Agreement by such counterparty, and any other agreement which such counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;

     (iii) all consents, authorizations and approvals required for the execution and delivery by such counterparty of such Interest Rate Cap Agreement, and any other agreement which such counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and

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no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and

     (iv) such Interest Rate Cap Agreement has been duly executed and delivered by such counterparty and constitutes the legal, valid and binding obligation of such counterparty, enforceable against such counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

     2.6 Prepayments.

          (a) Optional Prepayments. Borrowers may, at their option and upon not less than thirty (30) days prior written notice to Administrative Agent, prepay the Loan in whole, or, (i) at any time prior to the Lock Out Date or (ii) in connection with a Collateral Property Release (including any additional prepayment made to satisfy Debt Service Coverage Ratio or Loan to Value conditions required hereunder in connection with any Collateral Property Release), in part; provided, that (x) any prepayment made prior to the Lock Out Date, other than a Qualified Release Price Prepayment, shall be accompanied by the applicable Make Whole Amount, and (y) any prepayment made on a date other than a Payment Date, shall include interest on the amount being prepaid through the next Payment Date to occur. Administrative Agent shall not be obligated to accept any prepayment unless it is accompanied by payment of any other sums due and payable under this Agreement and the other Loan Documents, including without limitation any Breakage Costs and, if applicable, the related Make Whole Amount due in connection therewith, and all of Administrative Agent’s reasonable costs and expenses incurred in connection with such prepayment. Borrowers may revoke their election to prepay the Loan at any time prior to the date which is five (5) Business Days prior to the scheduled prepayment date set forth in the prepayment notice (such fifth (5^th) Business Day prior to the scheduled prepayment date, the “Prepayment Revocation Deadline”). Following the Prepayment Revocation Deadline, Borrowers’ election to prepay the Loan shall be deemed irrevocable and Borrowers shall make such prepayment and the payment amount specified in the related notice shall be due and payable on the date specified therein. Administrative Agent will promptly notify each Lender of its receipt of each prepayment notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the Loan).

          (b) Mandatory Prepayments—Back-End Amortization Payments. On or before each of the second, third and fourth anniversary of the Closing Date, Borrowers pay to Administrative Agent a Back-End Amortization Payment (and, if applicable, any Make Whole Payment) to be applied to pay down the outstanding principal balance of the Loan; provided, however, that if (i) Borrowers shall have entered into the Second Interest Rate Cap Agreement and complied with the relevant provisions of the Section 2.5(e), Borrowers shall be released from their obligation to make the Back-End Amortization Payment due on the second anniversary of the Closing Date, (ii) Borrowers shall have entered into the Third Interest Rate Cap Agreement and complied with the relevant provisions of the Section 2.5(e), Borrowers shall be released from their obligation to make the Back-End Amortization Payment due on the third anniversary of the Closing Date, and (iii) Borrowers shall have entered into the Fourth Interest Rate Cap Agreement and complied with the relevant provisions of the Section 2.5(e), Borrowers shall be released from their obligation to make the Back-End Amortization Payment due on the fourth anniversary of the Closing Date.

          (c) Acceleration of Maturity Date. If the Maturity Date is accelerated prior the Lock Out Date, in addition to all other sums due and payable hereunder, Borrowers shall be obligated to pay to Administrative Agent the Make Whole Amount.

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     2.7 Evidence of Debt. The Loan shall be evidenced by one or more promissory notes, substantially in the form of Exhibit B, made by Borrowers in favor of each Lender, payable to such Lender in the principal amount equal to the amount of such Lender’s portion of the Loan.

     2.8 Administrative Agent’s Clawback and Insufficient Funds.

          (a) Presumption by Administrative Agent. Unless Administrative Agent shall have received notice from Borrowers prior to the time at which any payment is due to Administrative Agent for the account of the Lenders hereunder that Borrowers will not make such payment, Administrative Agent may assume that Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if Borrowers have not in fact made such payment, then each of the Lenders severally agree to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation.

          (b) Obligations of Lenders Several. The obligations of the Lenders hereunder to make the Loan and to make payments under Section 12.4(c) are several and not joint. The failure of any Lender to make the Loan or to make any payment under Section 12.4(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make the Loan or to make its payment under Section 12.4(c).

          (c) Insufficient Funds. If at any time insufficient funds are received by and available to Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

          2.9 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of the Loan due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Loan due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Loan due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time, or (b) Obligations in respect of the Loan owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Loan owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations in respect of the Loan owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (x) notify Administrative Agent of such fact, and (y) purchase (for cash at face value) participations in the portion of the Loan held by the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by Lenders ratably in accordance with the aggregate

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amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

     (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

     (ii) the provisions of this Section shall not be construed to apply to (A) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in its portion of the Loan to any assignee or participant, other than to Borrowers (as to which the provisions of this Section shall apply).

          Each of the Borrowers consents to the foregoing and agrees, to the extent such Borrower may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against any such Borrower’s rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

     2.10 Collateral Property Releases. Upon the satisfaction of the following conditions, Borrowers may obtain the release of a Collateral Property from the Lien of the Mortgage (and related Collateral Documents) encumbering such Collateral Property and the release of the applicable Borrowers’ obligations under the Loan Documents with respect to such Collateral Property (other than those expressly stated to survive) (each a “Collateral Property Release”):

          (a) In the case of a Collateral Property Release of Qualified Collateral Property, such Collateral Property Release is in connection with a sale of such Collateral Property, and Administrative Agent shall have received evidence that such Collateral Property shall be conveyed to a Person other than a Borrower, Principal or Guarantor or an Affiliate of Borrower, Principal or Guarantor;

          (b) No Default or Event of Default has occurred and is continuing, or would occur as a result of giving effect to such Collateral Property Release;

          (c) Borrowers shall provide Administrative Agent with at least thirty (30) days prior written notice of their irrevocable election to obtain such Collateral Property Release (each, a “Collateral Property Release Notice”); provided, however, that, the foregoing notwithstanding, any Collateral Property Release Notice may be revoked by Borrowers at any time prior to the Prepayment Revocation Date;

          (d) After giving effect to such Collateral Property Release, the Debt Service Coverage Ratio for the Collateral Properties remaining after such release (calculated as if the Collateral Property had been released twelve (12) months prior to the applicable release date, or, if Borrowers have not yet received from the applicable Managers the financial reporting information for the immediately preceding calendar month, based upon the then most recent twelve (12) month period for which Borrowers have received reporting), shall be greater than or equal to the Debt Service Coverage Ratio immediately prior to such release;

          (e) In the case of a Collateral Property Release of Non-Designated Collateral Property, after giving effect to such Collateral Property Release, (i) the Borrower Determined Loan to Value Ratio shall be equal to or less than the Borrower Determined Loan to Value Ratio immediately

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prior to such Collateral Property Release, and (ii) if Administrative Agent determines to require Borrowers to order new appraisals of the Collateral Properties, after giving effect to such release, the Appraised Loan to Value Ratio shall be equal to or less than the Appraised Loan to Value Ratio immediately prior to such Collateral Property Release; provided, however, notwithstanding the foregoing, Borrowers shall be permitted to make voluntary prepayments of the Outstanding Amount of the Loan after the Lock Out Date with no premium or Make Whole Amount payment in order to satisfy the Loan to Value Ratio and Debt Service Coverage Ratio conditions set forth above;

          (f) In no event shall Borrowers be entitled to cause the release of more than two (2) Non-Designated Qualified Collateral Properties;

          (g) Administrative Agent shall have received a wire transfer of immediately available federal funds in an amount equal to the Release Price for the applicable Collateral Property, together with (i) all accrued and unpaid interest on the amount of principal being prepaid through and including the next Payment Date, (ii) any amounts, if any, required to be paid pursuant to Section 4.5, (iii) in connection with releases of Non-Designated Collateral Property, the related Make Whole Amount, and (iv) all other sums due under this Agreement or the other Loan Documents in connection with such release;

          (h) Borrowers shall submit to Administrative Agent, not less than five (5) days prior to the date of such Collateral Property Release, (i) a release of Lien (and related Loan Documents) for such Collateral Property for execution by Administrative Agent in a form reasonably acceptable to Administrative Agent and appropriate in the State in which such Collateral Property is located, which release and shall contain standard provisions, protecting the rights of Administrative Agent and Lenders, (ii) all other documentation Administrative Agent reasonably requires to be delivered by Borrowers in connection with such Collateral Property Release, (iii) an Officer’s Certificate certifying that (A) such documentation is in compliance with all applicable Legal Requirements, (B) the proposed Collateral Property Release complies with the requirements of clauses (d) and (e) of this Section 2.10, and (B) release will not impair or otherwise adversely affect the Liens, security interests and other rights of Administrative Agent and Lenders under the Loan Documents not being released (or as to the parties to the Loan Documents and Collateral Properties subject to the Loan Documents not being released);

          (i) Provided that the Borrower owning the applicable Collateral Property to be released owns no other Collateral Property securing the Loan Documents, Administrative Agent shall deliver to Borrowers a release of such Borrower from any obligations under the Loan Documents and release any pledge of such released Borrower’s equity that may have been delivered to Administrative Agent; and

          (j) Administrative Agent shall have received payment of all of its reasonable out of pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with such Collateral Property Release and the review and approval of the documents and information required to be delivered in connection therewith.

     2.11 Release on Payment in Full. Administrative Agent shall, upon the written request and at the expense of Borrowers, upon payment in full of all Obligations, release the Lien of the Mortgages and any other Loan Document on each Collateral Property not theretofore released.

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ARTICLE III
CASH MANAGEMENT

     3.1 Establishment of Accounts.

          (a) Each Embassy Operating Lessee shall, within sixty (60) days after the Closing Date, (i) establish, at Borrowers’ sole cost and expense, a Property Account (each an “Embassy Property Account,” and collectively, the “Embassy Property Accounts”) with one or more Property Account Banks into which the applicable Embassy Manager shall deposit all Gross Income from Operations from the related Embassy Property, and (ii) execute agreements with Administrative Agent and each Property Account Bank, and if required by Administrative Agent, the applicable Embassy Manager (1) providing that Administrative Agent shall have the sole dominion and control over such Embassy Property Account and that neither Borrowers nor any Manager shall have access to or control over the Embassy Property Account, (2) providing that, prior to any Property Account Bank’s receipt of a Lockbox Period Trigger Notice, such Property Account Bank shall remit all available funds on deposit in the Embassy Property Account by wire transfer (or transfer via the ACH System) on each Business Day to the Embassy Manager Account, (3) providing that, from and after Property Account Bank’s receipt of a Lockbox Period Trigger Notice, such Property Account Bank shall remit all available funds on deposit in the Embassy Property Account by wire transfer (or transfer via the ACH System) on each Business Day to the Lockbox Account, and (4) otherwise in form and substance satisfactory to Administrative Agent (the “Embassy Property Account Agreement”).

          (b) Each Sheraton Operating Lessee shall within sixty (60) days after the Closing Date, (i) establish, at Borrowers’ sole cost and expense, a Property Account (each a “Sheraton Property Account,” and collectively, the “Sheraton Property Accounts”) with one or more Property Account Banks into which the applicable Sheraton Manager shall deposit all Gross Income from Operations from the related Sheraton Property, and (ii) execute agreements with Administrative Agent and each Property Account Bank, and if required by Administrative Agent, the applicable Sheraton Manager (1) providing that Administrative Agent shall have the sole dominion and control over such Sheraton Property Account and that neither Borrowers nor any Manager shall have access to or control over the Sheraton Property Account, (2) providing that such Property Account Bank shall remit all available funds on deposit in the Sheraton Property Account by wire transfer (or transfer via the ACH System) on each Business Day to the Sheraton Manager Account, and (3) otherwise in form and substance satisfactory to Administrative Agent (the “Sheraton Property Account Agreement”).

          (c) Administrative Agent shall, within thirty (30) days after the Closing Date, establish, at Borrowers’ sole cost and expense, an account (the “Lockbox Account”) into which (i) during a Lockbox Period, all funds on deposit in the Embassy Property Accounts shall be transferred on a daily basis as described in clause (a) above, and (ii) all funds payable to Borrowers or their Affiliates by the Sheraton Managers pursuant to the Sheraton Management Agreements shall be deposited as and when provided in the Sheraton Management Agreements.

     3.2 Deposits into Lockbox Account.

          (a) Borrowers warrant and covenant that, immediately after establishing the Embassy Property Accounts: (i) unless provided for in the related Manager’s Consent and Subordination of Management Agreements, each Embassy Operating Lessee shall irrevocably instruct its respective Embassy Manager to deposit all Accounts Receivable for the related Embassy Property, and any Gross Income from Operations collected by such Embassy Manager on account of such Embassy Property, directly into the applicable Embassy Property Account, (ii) each Embassy Operating Lessee or its respective Embassy Manager shall deliver an irrevocable direction letter substantially in the form of

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Exhibit D to all credit card companies directing them to pay all Accounts Receivable directly into the applicable Embassy Property Account for such Embassy Property, (iii) other than the Accounts, there shall be no other accounts (other than property-level petty cash accounts, so-called “change order” accounts (created for the purpose of permitting the applicable Embassy Manager to make change for hotel guests) or similar type accounts) maintained by any Borrower or any other Person into which revenues from the ownership and operation of the Embassy Properties are deposited, and (iv) no Borrower nor any other Person shall open any other such account with respect to the deposit of income in connection with the Embassy Properties. Until deposited into the applicable Embassy Property Account, any Gross Income from Operations from the Embassy Properties held by Borrowers shall be deemed to be Collateral and shall be held in trust by it for the benefit, and as the property, of Administrative Agent for the benefit of the Secured Parties and shall not be commingled with any other funds or property of Borrowers or any other Person.

          (b) Borrowers warrant and covenant that, immediately after establishing the Sheraton Property Accounts: (i) unless provided for in the related Manager’s Consent and Subordination of Management Agreement, each Sheraton Operating Lessee shall irrevocably instruct its respective Sheraton Manager to (1) deposit all Accounts Receivable for the related Sheraton Property, and any Gross Income from Operations collected by such Sheraton Manager on account of such Sheraton Property, directly into the applicable Sheraton Property Account or the Sheraton Manager Account, and (2) remit all amounts payable to such Sheraton Operating Lessee into the Lockbox Account, as and when such Sheraton Manager is obligated to remit such funds to such Sheraton Operating Lessee pursuant to the applicable Sheraton Management Agreement, or any other agreement between Borrowers (or its Affiliates) and such Sheraton Manager (or its Affiliates) related thereto, (ii) each Sheraton Operating Lessee or its respective Sheraton Manager shall deliver an irrevocable direction letter substantially in the form of Exhibit D to all credit card companies directing them to pay all Accounts Receivable relating to the Sheraton Properties directly into the applicable Sheraton Property Account or the Sheraton Manager Account, (iii) other than the Accounts, there shall be no other accounts (other than property-level petty cash accounts, so-called “change order” accounts (created for the purpose of permitting the applicable Sheraton Manager to make change for hotel guests) or similar type accounts) maintained by any Borrower or any other Person into which revenues from the ownership and operation of the Sheraton Properties are deposited, and (iv) no Borrower nor any other Person shall open any other such account with respect to the deposit of income in connection with the Sheraton Properties. Until deposited into the applicable Sheraton Property Account, any Gross Income from Operations from the Sheraton Properties held by Borrowers shall be deemed to be Collateral and shall be held in trust by it for the benefit, and as the property, of Administrative Agent for the benefit of the Secured Parties and shall not be commingled with any other funds or property of Borrowers or any other Person.

          (c) At all times other than during a Lockbox Period, each Property Account Bank maintaining a Embassy Property Account shall, pursuant to the applicable Embassy Property Account Agreement, cause all funds on deposit in any Embassy Property Account to be deposited in the Embassy Manager Account on each Business Day. Upon receipt by any Property Account Bank maintaining a Embassy Property Account of a Lockbox Trigger Event Notice, and for so long as such Property Account Bank has not received a Lockbox Trigger Event Cure Notice, such Property Account Bank shall, pursuant to the applicable Embassy Property Account Agreement, cause all funds on deposit in any Embassy Property Account to be deposited into the Lockbox Account on each Business Day.

          (d) Each Property Account Bank maintaining a Sheraton Property Account shall at all times, pursuant to the applicable Sheraton Property Account Agreement, cause all funds on deposit in any Sheraton Property Account to be deposited in the Sheraton Manager Account on each Business Day.

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          (e) Each Borrower warrants and covenants that it shall not rescind, withdraw or change any notices or instructions required to be sent by it pursuant to this Section 3.2 without Administrative Agent’s prior written consent.

     3.3 Account Name.

          (a) The Embassy Property Accounts and the Sheraton Property Accounts shall each be in the name of the applicable Borrower(s) for the benefit of Administrative Agent, as secured party.

          (b) If Administrative Agent is replaced, Borrowers agree to cause each Property Account Bank, at Administrative Agent’s request and direction to, shall change the name of each Property Account to the name of the applicable Borrower for the benefit of the successor Administrative Agent, as secured party.

     3.4 Eligible Accounts. Each Operating Lessee shall cause each Property Account Bank to maintain each Property Account as an Eligible Account.

     3.5 Permitted Investments. Sums on deposit in the Lockbox Account may be invested in Permitted Investments, provided (i) such investments are then regularly offered by Lockbox Bank for accounts of this size, category and type, (ii) such investments are permitted by applicable Law, (iii) the maturity date of the Permitted Investment is not later than the date on which sums in the applicable Account are anticipated by Administrative Agent to be required for payment of an obligation for which such Account was created, and (iv) no Event of Default shall have occurred and be continuing. All income earned from Permitted Investments shall be deemed for income tax purposes to have been earned by Borrowers and shall be added to and disbursed in the same manner and under the same conditions as the principal sum on which said interest accrued. Borrowers hereby irrevocably authorize and direct Lockbox Bank to hold any income earned from Permitted Investments as part of the Lockbox Account during a Lockbox Period. Borrowers shall be responsible for payment of any federal, state or local income or other tax applicable to income earned from Permitted Investments. No other investments of the sums on deposit in the Accounts shall be permitted except as set forth in this Section 3.5. Administrative Agent and Lenders shall not be liable for any loss sustained on the investment of any funds deposited in the related Accounts. Notwithstanding anything to the contrary contained herein, Borrowers acknowledge that the only Permitted Investment which Lockbox Bank may offer is an interest bearing escrow account (bearing interest at a money market rate as determined by Lockbox Bank).

     3.6 Disbursements from the Lockbox Account.

          (a) During any Lockbox Period resulting solely from a Management Agreement Default Trigger Event, on the Business Day immediately preceding each Payment Date, Administrative Agent shall cause Lockbox Bank to disburse the funds in the Lockbox Account in the following order of priority:

     (i) First, to the Embassy Manager Account in an amount equal to the applicable Monthly Pegged Amount for the then current month;

     (ii) Second, to the Lockbox Bank in an amount sufficient to pay Lockbox Bank for customary and reasonable fees and expenses incurred in connection with this Agreement and the accounts established hereunder; and

     (iii) Third, the remainder to Borrowers.

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          (b) During any Lockbox Period, other than a Lockbox Period resulting from an Event of Default or Management Agreement Default Trigger Event, but prior to the occurrence of an Event of Default, on the Business Day immediately preceding each Payment Date, Administrative Agent shall cause Lockbox Bank to disburse the funds in the Lockbox Account in the following order of priority:

     (i) First, to the Embassy Manager Account in an amount equal to the applicable Monthly Pegged Amount for the then current month;

     (ii) Second, to Administrative Agent, to be deposited into the Tax Reserve Account, in an amount equal to, and on account of, the required Tax Reserve Deposit Amount;

     (iii) Third, to Administrative Agent, to be deposited into the Insurance Reserve Account, in an amount equal to, and on account of, the required Insurance Reserve Deposit Amount;

     (iv) Fourth, to Administrative Agent, in amount equal to the Monthly Debt Service Payment Amount and any other amount due to Administrative Agent or Lenders under the Loan Agreement;

     (v) Fifth, to Administrative Agent, in an amount equal to the FF&E Reserve Deposit Amount, to be deposited into the FF&E Reserve Fund to be held by Administrative Agent in the FF&E Reserve Account;

     (vi) Sixth, to the Lockbox Bank in an amount sufficient to pay Lockbox Bank for customary and reasonable fees and expenses incurred in connection with this Agreement and the accounts established hereunder;

     (vii) Seventh, to the Embassy Manager Account in an amount equal to any Incentive Management Fees then due and payable to the Embassy Manager; and

     (viii) Eighth, the remainder, to Administrative Agent, to be applied to the repayment of the outstanding principal balance of the Loan.

          (c) On or before the forty-fifth (45th) day following the last day of each fiscal quarter of Borrowers, Borrowers shall direct each Embassy Manager in writing and otherwise use commercially reasonable efforts to cause the Embassy Managers to disburse to Administrative Agent an amount equal to the Quarterly Budgeted Amount Adjustment, if any, which amount shall be applied by Administrative Agent in accordance with the order of priority established in the then applicable waterfall provision in this Section 3.6. In addition, to the extent that, during any Lockbox Period, any Borrower receives any funds from Manager that were remitted with respect to one or more of the Collateral Properties (such funds received by Borrowers, “Lockbox Leakage”), then on or before the forty-fifth (45th) day following the last day of each fiscal quarter of Borrowers, Borrowers shall pay all such Lockbox Leakage to Administrative Agent, which amounts shall be applied by Administrative Agent in accordance with the order of priority established in the then applicable waterfall provision in this Section 3.6.

          (d) During the occurrence and continuance of an Event of Default, all funds on deposit in the Lockbox Account shall be applied in accordance with Section 3.10.

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          (e) Except during a Lockbox Period, Administrative Agent shall cause the Lockbox Bank to remit all funds on deposit in the Lockbox Account into the Borrower Account on each Business Day.

     3.7 Lockbox Trigger Event Cure. A Lockbox Trigger Event shall be deemed cured (a “Lockbox Trigger Event Cure”) upon the occurrence of the following:

     (i) in the case of a Lockbox Trigger Event resulting solely by a DSCR Trigger Event, if the Debt Service Coverage Ratio ending on the last day of two consecutive fiscal quarters is greater than 1.15 to 1.0;

     (ii) Embassy Manager is no longer the subject of any Insolvency Proceeding; and

     (iii) no Default or Event of Default exists hereunder.

In such event, such Lockbox Period shall no longer be outstanding, and until such time as another Lockbox Period exists or an Event of Default occurs, any funds thereafter deposited into the Lockbox Account shall be distributed in accordance with Section 3.6(a) hereof. Upon the occurrence of a Lockbox Trigger Event Cure, Administrative Agent shall promptly send Lockbox Trigger Event Cure Notice to each Property Account Bank and instruct each such Property Account Bank to distribute funds thereafter deposited therein accordingly (unless an until a new Lockbox Period occurs or an Event of Default occurs). Promptly after delivery of the foregoing notice to the Property Account Banks, Administrative Agent shall cause to be released and paid to Borrower any amounts in the Insurance Reserve Account and any amounts in the FF&E Reserve Account.

     3.8 Sole Dominion and Control. Borrowers acknowledge and agree that the Accounts, including, without limitation, the Property Accounts and the Lockbox Account, are subject to the sole dominion, control and discretion of Administrative Agent, its authorized agents or designees, and that Borrowers shall have no right of withdrawal with respect to any Account, except with the prior written consent of Administrative Agent.

     3.9 Security Interest. Borrowers hereby grant to the Administrative Agent for the benefit of the Secured Parties a first-priority security interest in each of the Accounts and the Account Collateral as additional security for the Obligations.

     3.10 Rights on Default. Notwithstanding anything to the contrary in this Article III, upon the occurrence of an Event of Default, Administrative Agent shall promptly notify each Property Account Bank and Lockbox Bank in writing of such Event of Default and, without notice from any Property Account Bank, Lockbox Bank or Administrative Agent, (a) Borrowers shall continue to have no further right in respect of the Accounts, (b) Administrative Agent may direct Lockbox Account to liquidate and transfer any amounts then invested in Permitted Investments to the Accounts or reinvest such amounts in other Permitted Investments as Administrative Agent may reasonably determine is necessary to perfect or protect any security interest granted or purported to be granted hereby or pursuant to the other Loan Documents or to enable Lockbox Bank, as agent for Administrative Agent, or Administrative Agent to exercise and enforce Administrative Agent’s or Lenders rights and remedies hereunder or under any other Loan Document with respect to any Account or any Account Collateral, and (c) Administrative Agent shall have all rights and remedies with respect to the Accounts and the amounts on deposit therein and the Account Collateral as described in this Agreement and in the Mortgages, in addition to all of the rights and remedies available to a secured party under the UCC, and, notwithstanding anything to the contrary contained in this Agreement or in the Mortgages, Administrative Agent may apply the amounts of such

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Accounts in such order as Administrative Agent determines in Administrative Agent’s sole discretion including, but not limited to, payment of the Obligations.

     3.11 Financing Statement; Further Assurances. Borrowers hereby authorize Administrative Agent to file a financing statement or statements under the UCC in connection with any of the Accounts and the Account Collateral with respect thereto in the form required to properly perfect the security interest of the Secured Parties therein. Borrowers agree that at any time and from time to time, at the expense of Borrowers, Borrowers will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Administrative Agent may request, in order to perfect and protect any security interest granted or purported to be granted hereby (including, without limitation, any security interest in and to any Permitted Investments) or to enable Lockbox Bank or Administrative Agent to exercise and enforce its rights and remedies hereunder with respect to any Account or Account Collateral.

     3.12 Borrowers Obligations Not Affected. The insufficiency of funds on deposit in the Accounts shall not absolve Borrowers of the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.

ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY

     4.1 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of Borrowers hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if any Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable hereunder shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) Administrative Agent or any Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, and (iii) such Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) Payment of Other Taxes by Borrowers. Without limiting the provisions of subsection (a) above, Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Indemnification by Borrowers. Borrowers shall, jointly and severally, indemnify Administrative Agent and each Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver to Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority

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evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent.

          (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to such Borrower (with a copy to Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by such Borrower or Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by any Borrower or Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by such Borrower or Administrative Agent as will enable such Borrower or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

     Without limiting the generality of the foregoing, if any Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to such Borrower and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of any Borrower or Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

     (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of a Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN, or

     (iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit such Borrower to determine the withholding or deduction required to be made.

          (f) Treatment of Certain Refunds. If Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by Borrowers or with respect to which a Borrower has paid additional amounts pursuant to this Section, it shall pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that such Borrower, upon the request of Administrative Agent or such Lender agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority)

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to Administrative Agent or such Lender if Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

     4.2 Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund the Loan, or to determine or charge interest rates based upon LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to Borrowers through Administrative Agent, any obligation of the Lenders to continue of the Loan shall be suspended until such Lender notifies Administrative Agent and Borrowers that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, Borrowers shall, upon demand from such Lender (with a copy to Administrative Agent), prepay or, if applicable, convert the Loan a Prime Rate Loan, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain the LIBOR Loan to such day, or immediately, if such Lender may not lawfully continue to maintain the LIBOR Loan. Upon any such prepayment or conversion, Borrowers shall also pay accrued interest on the amount so prepaid or converted.

     4.3 Inability to Determine Rates. If the Required Lenders determine that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount of the Loan, (b) adequate and reasonable means do not exist for determining LIBOR, or (c) LIBOR does not adequately and fairly reflect the cost to the Lenders of funding the Loan, Administrative Agent will promptly so notify Borrowers and each Lender. Thereafter, the obligation of the Lenders to maintain the Loan shall be suspended until Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Loan will be converted to a Prime Rate Loan.

     4.4 Increased Costs; LIBOR Reserves. (a) Increased Costs Generally. If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 4.4(e));

     (ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement or the LIBOR Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 4.1 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or

     (iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Loan;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining the LIBOR Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Borrowers will pay to such Lender such additional amount or amounts as will compensate such for such additional costs incurred or reduction suffered.

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          (b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loan, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

          (c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to Borrowers shall be conclusive absent manifest error. Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

          (d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that Borrowers shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).

          (e) Reserves on LIBOR Loan. Borrowers shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of the LIBOR Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided Borrowers shall have received at least ten (10) days’ prior notice (with a copy to Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice ten (10) days prior to the relevant Payment Date, such additional interest shall be due and payable ten (10) days from receipt of such notice.

     4.5 Compensation for Losses. Upon demand of any Lender (with a copy to Administrative Agent) from time to time, Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

          (a) any continuation, conversion, payment or prepayment of the Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

          (b) any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay the Loan on the date or in the amount notified by such Borrower;

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. Borrowers shall also pay any customary administrative

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fees charged by such Lender in connection with the foregoing (the foregoing losses or costs, collectively, “Breakage Costs”).

     For purposes of calculating amounts payable by Borrowers to the Lenders under this Section 4.5, each Lender shall be deemed to have funded the LIBOR Loan made by it at LIBOR by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such the LIBOR Loan was in fact so funded.

     4.6 Mitigation Obligations. If any Lender requests compensation under Section 4.4, or any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1, or if any Lender gives a notice pursuant to Section 4.2, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking the Loan or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.1 or 4.4, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 4.2, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

     4.7 Survival. All of Borrowers’ obligations under this Article IV shall survive the repayment of all other Obligations hereunder.

ARTICLE V
CONDITIONS PRECEDENT TO FUNDING OF THE LOAN

     5.1 Conditions to the Loan. The obligation of the Initial Lender to make the Loan hereunder on the Closing Date is subject to satisfaction of the following conditions precedent:

          (a) Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to Administrative Agent and its legal counsel:

     (i) counterparts executed by the Loan Parties of this Agreement, the Guaranty, the Upper Tier Pledge Agreement, and with respect to each Collateral Property the Environmental Indemnity and the Collateral Documents, the Letter Agreement, the Assignment of Agreements, Licenses, Permits and Contract and all other Loan Documents, in each case, sufficient in number for distribution to Administrative Agent, each Lender, and Borrowers;

     (ii) One or more Notes executed by Borrowers in favor of the Initial Lender;

     (iii) fully executed Operating Lease Subordination Agreements;

     (iv) such certificates of resolutions or other action, incumbency certificates, and/or other certificates of Responsible Officers of each Loan Party as Administrative Agent may require evidencing the identity, authority, and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

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     (v) such documents and certifications as Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing, and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

     (vi) a favorable opinion of one or more firms counsel to the Loan Parties, addressed to Administrative Agent and each Lender, including such local counsel opinions as Administrative Agent shall request, in each case as to such matters concerning the Loan Parties and the Loan Documents as Administrative Agent may reasonably request;

     (vii) a certificate of a Responsible Officer of each Loan Party (other than Borrowers) either (A) attaching copies of all consents, licenses, and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses, and approvals shall be in full force and effect, or (B) stating that no such consents, licenses, or approvals are so required;

     (viii) Intentionally Omitted;

     (ix) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect;

     (x) unless otherwise agreed or approved by Administrative Agent, (A) two (2) prints of an original survey (a “Survey”) of each Collateral Property and improvements thereon dated not more than sixty (60) days prior to the date of this Agreement (or dated such earlier date, if any, as is satisfactory to Administrative Agent and the Title Company, but in any event not more than one hundred eighty (180) days prior to the date of this Agreement) and otherwise complying with Exhibit E to the extent required by Administrative Agent and the Title Company; and (B) a Flood Insurance Policy for each Collateral Property in an amount required by Administrative Agent, but in no event less than the amount sufficient to meet the requirements of applicable law and the Flood Insurance Acts, or evidence satisfactory to Administrative Agent that none of such Collateral Property is located in a flood hazard area and appropriate flood certificates acceptable to Administrative Agent;

     (xi) unless otherwise agreed or approved by Administrative Agent, true and correct copies of all existing plans with respect to the Collateral Properties within the possession or control of the Loan Parties or any Operating Lessee which is an Affiliate of a Loan Party (including the site plan) requested by Administrative Agent, together with evidence satisfactory to Administrative Agent that the same comply in all material respects to applicable requirements of Governmental Authorities;

     (xii) with respect to each Collateral Property: (A) true and correct copies of each Lease, and (if applicable) Guarantees thereof; (B) estoppel certificates and subordination and attornment agreements (including nondisturbance agreements if and to the extent agreed by Administrative Agent in its discretion), dated within thirty (30) days prior to this Agreement and in form and content satisfactory to Administrative Agent, from the tenants and subtenants as Administrative Agent requires; (C) copies of all

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personal property leases; (D) copies of all Service Contracts, and if reasonably requested by Administrative Agent, estoppel and recognition agreements relating thereto and (E) evidence of the applicable Borrower’s or the applicable Loan Party’s compliance with each Lease delivered pursuant to clause (A) above;

     (xiii) evidence satisfactory to Administrative Agent that no portion of any Collateral Property is “wetlands” under any applicable Law and no Collateral Property contains nor is within or near any area designated as a hazardous waste site by any Governmental Authority, that no Collateral Property or any adjoining property contains or has ever contained any Hazardous Material under any Law pertaining to health or the environment, and that no Collateral Property or any use or activity thereon violates or is or could be subject to any response, remediation, clean up, or other obligation under any Law pertaining to health or the environment including without limitation, a written report of an environmental assessment of each Collateral Property, made within thirty (30) days prior to the date of this Agreement (an “Environmental Report”), by an engineering firm, and of a scope and in form and content satisfactory to Administrative Agent, complying with Administrative Agent’s established guidelines, showing that there is no evidence of any Hazardous Material which has been generated, treated, stored, released, or disposed of in any Collateral Property, and such additional evidence as may be required by Administrative Agent. All reports, drafts of reports, and recommendations, whether written or oral, from such engineering firm shall be made available and communicated to Administrative Agent;

     (xiv) (A) evidence that each Collateral Property abuts and has fully adequate direct and free access to one or more public streets, dedicated to public use, fully installed and accepted by the appropriate Governmental Authority, that all fees, costs and expenses of the installation and acceptance thereof have been paid in full, and that there are no restrictions on the use and enjoyment of such streets which would adversely affect such Collateral Property; (B) evidence that all applicable zoning ordinances, restrictive covenants, and Laws affecting each Collateral Property permit the use for which such Collateral Property is intended and have been or will be complied with without the existence of any variance, non-complying use, nonconforming use or other special exception; (C) evidence that each Collateral Property and Improvements comply and will comply with all Laws regarding subdivision and platting and would so comply if such Collateral Property and the Improvements thereon were conveyed as a separate parcel; and (D) evidence of compliance by Borrowers and each Collateral Property, and any proposed construction, use and occupancy of the Improvements, with such other applicable Laws as Administrative Agent may request, including all Laws regarding access and facilities for handicapped or disabled persons including, without limitation and to the extent applicable, The Federal Architectural Barriers Act (42 U.S.C. § 4151 et seq.), The Fair Housing Amendments Act of 1988 (42 U.S.C. § 3601 et seq.), The Americans With Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), The Rehabilitation Act of 1973 (29 U.S.C. § 794), and any applicable state requirements, with such exceptions therefrom as previously disclosed in writing and accepted by Administrative Agent;

     (xv) evidence (A) of the identity of all taxing authorities and utility districts (or similar authorities) currently exercising ad valorem or real property taxing or assessment jurisdiction over any Collateral Property or any portion thereof; (B) that all taxes, standby fees and any other similar charges have been paid, including copies of receipts or statements marked “paid” by the appropriate authority; and (C) that each

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Collateral Property is a separate tax lot or lots with separate assessment or assessments of the Collateral Property and Improvements, independent of any other Collateral Property or improvements and that each Collateral Property is a separate legally subdivided parcel;

     (xvi) executed, acknowledged, and/or sworn to as required counterparts of the Mortgages and Assignments of Leases and Rents for each Collateral Property, which shall have been delivered to the Title Company and released for recordation in the official records of the city or county in which each Collateral Property is located, and UCC-1 financing statements which shall have been furnished for filing in all filing offices that Administrative Agent may require;

     (xvii) a Title Policy or a Title Policy Commitment (or a Title Policy promulgated by the Laws of the state in which each respective Collateral Property is located if an ALTA insurance policy is not available), in the amount of the Loan plus any other amount secured by the applicable Mortgage. No Borrower and none of Borrowers’ counsel shall not have any interest, direct or indirect, in the Title Company (or its agent) or any portion of the premium paid for the Title Insurance;

     (xviii) (A) evidence that immediately prior to the Closing Date and as of the time the Mortgages will be filed for record, except for Permitted Liens: (1) no contract, or memorandum thereof, for construction, design, surveying, or any other service relating to any Collateral Property has been filed for record in the county where such Collateral Property is located; and (2) no mechanic’s or materialman’s Lien claim or notice, lis pendens, judgment, or other claim or encumbrance against such Collateral Property has been filed for record in the county where the Collateral Property is located or in any other public record which by Law provides notice of claims or encumbrances regarding such Collateral Property; (B) a certificate or certificates of a reporting service acceptable to Administrative Agent, reflecting the results of searches made not earlier than forty-five (45) days prior to the date of this Agreement, (1) of the central and local Uniform Commercial Code records, showing no filings against any of the collateral for the Obligations or against Borrowers or any Fee Owner (with respect to such Fee Owner’s interest in the Collateral Properties) otherwise except as consented to by Administrative Agent; and (2) if required by Administrative Agent, of the appropriate judgment and tax Lien records, showing no outstanding judgment or tax Lien against Borrowers or any Fee Owner;

     (xix) to the extent reasonably deemed necessary by Administrative Agent, an executed REA estoppel letter from each party to any REA for any applicable Collateral Property;

     (xx) a true and correct copy of (A) each Franchise Agreement and the related Franchisor Comfort Letter in favor of Administrative Agent, and (B) each Management Agreement for each Collateral Property together with a fully executed Manager’s Consent and Subordination of Management Agreement relating to each such Management Agreement;

     (xxi) with respect to each Collateral Property: (A) true, correct and complete copies of (1) the Ground Lease (if any) for such Collateral Property, (2) the Operating Lease for such Collateral Property, (3) the Franchise Agreement (if any) for such Collateral Property, and (4) the Management Agreement for such Property, in each case

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certified by a Responsible Officer that such copies delivered to Administrative Agent are true, correct and complete;

     (xxii) a Physical Conditions Report for each Collateral Property;

     (xxiii) an Acceptable Appraisal of each Collateral Property;

     (xxiv) such payoff letters in respect of the repayment of any Existing Indebtedness;

     (xxv) such other assurances, certificates, documents, consents, or opinions as Administrative Agent or the Required Lenders reasonably may require.

     (b) Borrowers shall have paid to Initial Lender the Origination Fee, and any fees required to be paid on or before the Closing Date.

     (c) Borrowers shall have paid all attorneys’ fees and disbursement of Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of attorney costs as shall constitute its reasonable estimate of such costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between Borrowers and Administrative Agent).

     (d) The representations and warranties contained in this Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct on and as of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes of this clause (d), the representations and warranties contained in Section 6.10 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.10.

     (e) No Default or Event of Default shall exist, or would result from the making of the Loan on the Closing Date.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

Borrowers each represent and warrant to Administrative Agent and the Lenders that, except as otherwise provided in the Schedules hereto, as of the Closing Date and after giving effect to the making of the Loan and the application of proceeds thereof, that:

     6.1 Existence, Qualification and Power. Each Borrower and each Fee Owner (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and consummate the transactions contemplated thereby, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.

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     6.2 Proceedings. Each Borrower and Fee Owner has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party. This Agreement and the other Loan Documents have been duly executed and delivered by or on behalf of each Borrower and Fee Owner and constitute legal, valid and binding obligations of such Borrower or Fee Owner, enforceable against such Borrower or Fee Owner in accordance with their respective terms, subject only to applicable Debtor Relief Laws, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

     6.3 No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents by each Borrower or Fee Owner will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of such Borrower or Fee Owner, as applicable pursuant to the terms of its Organizational Documents, any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement, franchise agreement, or other agreement or instrument to which any Borrower or Fee Owner is a party or by which any of such Borrower or Fee Owner’s property or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any court or Governmental Authority or body having jurisdiction over any Borrower or Fee Owner or any of the Collateral Properties or any of such Loan Party’s other assets, or any license or other approval required to operate the Collateral Properties, and any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by any Borrower of this Agreement or by Borrowers or any Fee Owner of any other Loan Document has been obtained and is in full force and effect, in each case if such Borrower or Fee Owner’s noncompliance with this Section 6.3 would reasonably be expected to have a Material Adverse Effect.

     6.4 Litigation. There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now pending or, to its knowledge, threatened against or affecting any Borrower or any Collateral Property, which actions, suits or proceedings, if determined against such Borrower or any Collateral Property, would reasonably be expected to have a Material Adverse Effect.

     6.5 Agreements. No Borrower is party to any agreement or instrument or subject to any restriction which would reasonably be expected to have a Material Adverse Effect or cause a Material Property Event. No Borrower is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Contractual Obligation, Law or Legal Requirement to which it is a party or by which such Borrower or any of the Collateral Properties are bound. No Borrower has any material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Borrower is a party or by which such Borrower or any Collateral Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Collateral Properties as permitted by this Agreement and (b) obligations under the Loan Documents.

     6.6 Solvency. No Borrower (a) has entered into the transaction or executed the Notes, this Agreement or any other Loan Document with the actual intent to hinder, delay or defraud any creditor and (b) has not received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effect to the Loan, the fair saleable value of each Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed such Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. Each Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. No Borrower intends to incur debt

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and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by such Borrower and the amounts to be payable on or in respect of obligations of such Borrower). No petition under any Debtor Relief Laws has been filed against any Borrower or any constituent Person in the last seven (7) years, and neither such Borrower nor any constituent Person in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither any Borrower nor any of its constituent Persons are contemplating either the filing of a petition by it under any Debtor Relief Laws or the liquidation of all or a major portion of such Borrower’s assets or property, and no Borrower has knowledge of any Person contemplating the filing of any such petition against it or such constituent Persons.

     6.7 Full and Accurate Disclosure. No statement of fact made by any Borrower in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading in any material respect. There is no fact presently known to any Borrower which has not been disclosed to Administrative Agent which would have a Material Adverse Effect or could reasonably be expected to cause a Material Property Event.

     6.8 No Plan Assets. No Borrower is a Plan and none of the assets of any Borrower constitute or will constitute “Plan Assets”. In addition, (a) no Borrower is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with any Borrower are not subject to state or local statutes regulating investment of, and fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Agreement.

     6.9 Compliance with Legal Requirements. Borrowers and the Collateral Properties and the ownership, operation and use thereof comply in all material respects with all applicable Legal Requirements, including, without limitation, all Environmental Laws, building and zoning ordinances and codes except for compliance with Laws regarding access and facilities for handicapped and disabled persons to the extent previously disclosed in writing and accepted by Administrative Agent. No Borrower is in default or violation in any material respect of any order, writ, injunction, decree or demand of any Governmental Authority. There has not been committed by any Borrower or any other Person in occupancy of or involved with the operation or use of the Collateral Properties any act or omission affording the Federal government or any other Governmental Authority the right of forfeiture as against any Collateral Property or any part thereof or any monies paid in performance of any Borrower’s obligations under any of the Loan Documents.

     6.10 Financial Information.

          (a) All financial data, including, without limitation, the statements of cash flow and income and operating expense, that have been delivered to Administrative Agent by or on behalf of Borrowers and the Collateral Properties (a) considered in the aggregate, are true, complete and correct in all material respects, (b) fairly present the financial condition of Borrowers and the Collateral Properties, as applicable, as of the date of such reports, and (c) have been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein (but subject to normal year-end adjustments). Except for Permitted Liens, no Borrower has any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to such Borrower and reasonably likely to have a materially adverse effect on any Collateral Property or the operation thereof as hotels except as referred to or reflected in said financial statements. Since the date of the most recent such financial statements supplied to

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Administrative Agent, there has been no materially adverse change in the financial condition, operations or business of Borrowers from that set forth in said financial statements.

          (b) The Debt Service Coverage Ratio as of March 31, 2010 was not less than 1.10 to 1, and as of March 31, 2010, no Lockbox Trigger Event has occurred.

     6.11 Condemnation. Except as provided on Schedule 6.11, no Condemnation or other similar proceeding has been commenced or, to the best of Borrowers’ knowledge, is threatened or contemplated with respect to all or any portion of any Collateral Property or for the relocation of roadways providing access to any Collateral Property.

     6.12 Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.

     6.13 Utilities and Public Access. Each Collateral Property has rights of access to public ways and is served by public water, sewer, sanitary sewer and storm drain facilities adequate to service such Collateral Property for its respective intended uses. All public utilities necessary or convenient to the full use and enjoyment of each Collateral Property are located either in the public right-of-way abutting each Collateral Property (which are connected so as to serve each Collateral Property without passing over other property) or in recorded easements serving each Collateral Property and such easements are set forth in and insured by the Title Policies. All roads necessary for the use of each Collateral Property for their current respective purposes have been completed, are physically open and except as disclosed on the Surveys, are dedicated to public use and have been accepted by all Governmental Authorities.

     6.14 Foreign Person. No Borrower is a “foreign person” within the meaning of § 1445(f)(3) of the Code.

     6.15 Fee/Leasehold Ownership.

          (a) Each Fee Owner shown on Schedule 6.15 is the sole legal and equitable fee owner of good and marketable to title to the Collateral Property owned by such Fee Owner as set forth on such Schedule, subject only to Permitted Liens.

          (b) Each Owner shown on Schedule 6.15 as owning a leasehold estate under a Ground Lease, is the owner of good and marketable title to such leasehold estate, subject only to Permitted Liens.

          (c) Each Owner shown on Schedule 6.15 as owning the fee estate of any Collateral Property, is the sole legal and equitable fee owner of good and marketable to such Collateral Property, subject only to Permitted Liens.

          (d) Each Operating Lessee shown on Schedule 6.15 is the legal and equitable owner of good and marketable title to the leasehold estate under each Operating Lease set forth on such Schedule, subject only to Permitted Liens.

     6.16 Separate Tax Lots; Assessments. Each Collateral Property is comprised of one (1) or more parcels which constitute a separate tax lot or lots and does not constitute a portion of any other tax lot not a part of such Collateral Property. To the best of each Borrower’s knowledge, except for

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Permitted Liens, there are no pending or proposed special or other assessments for public improvements or otherwise affecting any Collateral Property, nor are there any contemplated improvements to any Collateral Property that may result in such special or other assessments, except for Permitted Liens.

     6.17 Enforceability. The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by any Borrower, including the defense of usury, and no Borrower has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

     6.18 No Prior Assignment. There are no prior assignments of the Leases or any portion of the Rents due and payable or to become due and payable which are presently outstanding.

     6.19 Insurance. Borrowers have obtained and have delivered to Administrative Agent certified copies of all insurance policies reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. To the best of each Borrower’s knowledge, no Person, including any Borrower, has done, by act or omission, anything which would impair the coverage of any such policy.

     6.20 Use of Property. Each Collateral Property is used exclusively for hotel purposes and other appurtenant and related uses, including but not limited to restaurants and lounges.

     6.21 Certificate of Occupancy; Licenses. All material certifications, permits, licenses and approvals, including without limitation, certificates of completion and occupancy permits required for the legal use, occupancy and operation of each Collateral Property by any Borrower as a hotel for its current uses and amenities (collectively, the “Licenses”), have been obtained and are in full force and effect and are not subject to revocation, suspension or forfeiture. Borrowers shall keep and maintain all Licenses necessary for the operation of each Collateral Property as a hotel for its other uses and amenities. The use being made of each Collateral Property is in conformity with the certificate of occupancy issued for such Collateral Property.

     6.22 Flood Zone. Except as disclosed on the Surveys, none of the Improvements on any Collateral Property are located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards and, if so located, the flood insurance required pursuant to Section 9.1(a)(vii) is in full force and effect with respect to each such Collateral Property.

     6.23 Physical Condition. To the extent any Borrower’s noncompliance with this Section 6.23 would reasonably be expected to have a Material Adverse Effect or a Material Property Event, and except as was disclosed in any Environmental Report, Property Condition Report, or Survey, each Collateral Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; there exists no structural or other material defects or damages in any Collateral Property, whether latent or otherwise, and no Borrower has received notice from any insurance company or bonding company of any defects or inadequacies in any Collateral Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond. Each Collateral Property is free from damage caused by fire or other casualty. All liquid and solid waste disposal, septic and sewer systems located on each Collateral Property are, in all material respects, in a good and safe condition and repair and in compliance with all Legal Requirements.

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     6.24 Boundaries. Except as disclosed on the Surveys, other than Permitted Liens, all of the Improvements which were included in determining the Appraised Value as set forth in the Acceptable Appraisal of each Collateral Property lies wholly within the boundaries and building restriction lines of such Collateral Property, and other than Permitted Liens, no improvements on adjoining properties encroach upon such Collateral Property, and other than Permitted Liens, no easements or other encumbrances upon the applicable Collateral Property encroach upon any of the Improvements.

     6.25 Leases. All Leases at the Collateral Properties are listed on Schedule 6.25, and each Operating Lessee is the lessor under each of the Leases set forth on said Schedule 6.25. No Person (other than hotel guests) other than with respect to Permitted Liens has any possessory interest in any Collateral Property or right to occupy the same except under and pursuant to the provisions of the Leases and the Management Agreements. The current Leases are in full force and effect and, there are no defaults by any Borrower or, to the best of each Borrower’s knowledge, any tenant under any Lease, and there are no conditions that, with the passage of time or the giving of notice, or both, would constitute defaults under any Lease. With respect to the Major Leases, no Rent has been paid more than one (1) month in advance of its due date. There are no offsets or defenses to the payment of any portion of the Rents. All work to be performed by any Borrower under each Lease has been performed as required and has been accepted by the applicable tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by any Borrower to any tenant has already been received by such tenant. There has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein which is still in effect. No tenant under any Lease has sublet all or any portion of the premises demised thereby, nor does anyone except such tenant and its employees occupy such leased premises other than with respect to Permitted Liens. No tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of Collateral Property. Except as set forth in the Leases, no tenant under any Lease has any right or option for additional space in any Collateral Property.

     6.26 Survey. To the best of each Borrower’s knowledge, the Survey for each Collateral Property delivered to Administrative Agent in connection with this Agreement does not fail to reflect any material matter affecting such Collateral Property or any Material Title Defect.

     6.27 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the transfer of the Collateral Properties to the respective Borrower have been paid. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgages, have been paid.

     6.28 Franchise Agreements; Property Improvement Plans.

          (a) The Franchise Agreement, if applicable, for each Collateral Property is in full force and effect, all franchise fees, reservation fees, royalties and other sums due and payable thereunder have been paid in full to date, and neither any Borrower nor, to the best of any Borrower’s knowledge, the respective Franchisor is in default thereunder. No unpaid fees are due and payable under any Franchise Agreement, including without limitation, all franchise fees, reservation fees, and royalties.

          (b) There exists no property improvement plan with respect to any Collateral Property pursuant to which improvements or repairs to such Collateral Property required by the applicable Franchisor remains incomplete or unsatisfied in accordance with such plan or other requirements of such Franchisor.

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     6.29 Management Agreements(a) . The Management Agreement for each Collateral Property is in full force and effect and there is no default thereunder by any Borrower or, to any Borrower’s knowledge, the Manager thereunder and, to the best of each Borrower’s knowledge, no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder. No Management Fees under any Management Agreement are accrued and unpaid except as provided or permitted under the express terms of a Management Agreement.

     6.30 Illegal Activity. No portion of any Collateral Property has been or will be purchased by Borrowers with proceeds of any illegal activity and to the best of Borrowers’ knowledge, there are no illegal activities or activities relating to any controlled substances at any Collateral Property.

     6.31 No Change in Facts or Circumstances; Disclosure. All information submitted by Borrowers to Administrative Agent or any Lender and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection with this Agreement or in satisfaction of the terms thereof and all statements of fact made by any Borrower in this Agreement or in any other Loan Document, considered in the aggregate, are accurate, complete and correct in all material respects. There has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects or would reasonably be expected to cause a have a Material Adverse Effect.

     6.32 Investment Company Act. No Borrower is (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

     6.33 Principal Place of Business; State of Organization; Tax Identification Number. (a) Each Fee Owner’s principal place of business, state of organization, organizational identification number and tax identification number as of the date hereof is set forth in Schedule 6.33 to this Agreement; (b) Owner’s principal place of business, state of organization, organizational identification number and tax identification number as of the date hereof is set forth in Schedule 6.33 to this Agreement; (c) Operating Lessee’s state of organization, organizational identification number and tax identification number is set forth in Schedule 6.33.

     6.34 Single Purpose Entity. Each Owner and Operating Lessee covenants and agrees that it shall not, and its Organizational Documents provide that it shall not, and that its general partner(s), if such Borrower is a partnership, or its managing member(s), if such Borrower is a limited liability company (in each case, “Principal”) shall not, and each of their organizational documents provide that they shall not:

          (a) with respect to such Borrower, engage in any business or activity other than the acquisition, development, ownership, operation, disposition, leasing, managing and maintenance of its respective Collateral Properties, and entering into the Loan, and activities incidental thereto and with respect to Principal, engage in any business or activity other than the ownership of its interest in such Borrower, and activities incidental thereto;

          (b) with respect to such Borrower, acquire or own any material assets other than (i) (A) in the case of Owner, its respective Collateral Properties and (B) in the case of the Operating Lessee, its interest in the Operating Leases, and (ii) such incidental Personal Property as may be necessary for the

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operation of its Collateral Property or Collateral Properties, as the case may be and with respect to Principal, acquire or own any material asset other than its interest in such Borrower;

          (c) merge into or consolidate with any Person or, to the fullest extent permitted by law, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;

          (d) (i) fail to observe its organizational formalities or preserve its existence as an entity duly formed, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation, and qualification to do business in the state where its Collateral Property or Collateral Properties are located, if applicable, or (ii) without the prior written consent of the Required Lenders, amend, modify, terminate or fail to comply with the special purpose entity/bankruptcy remoteness provisions of such Borrower’s or Principal’s Organizational Documents;

          (e) other than with respect to any Principal’s interest as general partner of any Borrower, own any Subsidiary or make any Investment in, any Person without the prior written consent of the Required Lenders;

          (f) commingle its assets with the assets of any of its members, general partners, Affiliates, Principals or of any other Person, participate in a cash management system (other than pursuant to a Management Agreement or in accordance with this Agreement) with any other Person or fail to use its own separate stationery, invoices and checks;

          (g) with respect to such Borrower, incur any Indebtedness, other than (i) Permitted Liens, (ii) the Obligations and (iii) trade payables in the ordinary course of its business of owning and operating the Collateral Property or Properties as applicable, provided that such trade debt (A) is not evidenced by a note, (B) is paid within sixty (60) days of the date incurred, (C) does not exceed, in the aggregate among all of the Borrowers, two percent (2%) of the outstanding principal balance of the Loan, and (D) is payable to trade creditors and in amounts as are normal and reasonable under the circumstances and with respect to Principal, incur any debt secured or unsecured, direct or contingent (including guaranteeing any obligations); or (iv) in the case of Operating Lessees and Owners of the Collateral Properties managed by Embassy Manager, the Existing Indebtedness, which Borrowers represent and warrant was repaid on or prior to the date hereof;

          (h) (i) fail to maintain its records (including financial statements), books of account and bank accounts separate and apart from those of the members, general partners, Principals and Affiliates of a Borrower or of a Principal, as the case may be, the Affiliates of a member, general partner or Principal of such Borrower or of its Principal, as the case may be, and any other Person, (ii) permit its assets or liabilities to be listed as assets or liabilities on the financial statement of any other Person or (iii) include the assets or liabilities of any other Person on its financial statements; except for consolidated financial statements which contain a note indicating that, except to the extent otherwise required in any Principal’s capacity as general partner of any Borrower, such Borrower’s and Principal’s separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;

          (i) to the fullest extent permitted by law, seek the dissolution or winding up in whole, or in part, of such Borrower or of its Principal, as the case may be;

          (j) fail to correct any known misunderstandings regarding the separate identity of any Borrower, or any Principal, as the case may be, or any member, general partner, Principal or Affiliate thereof or any other Person;

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          (k) guarantee or, except to the extent otherwise required in any Principal’s capacity as general partner of any Borrower, become obligated for the debts of any other Person or hold itself out to be responsible for the debts of another Person, other than with respect to the Obligations or any guaranty of any Management Agreement, Replacement Management Agreement, Franchise Agreement or Replacement Franchise Agreement;

          (l) make any loans or advances to any third party, including any member, general partner, Principal or Affiliate of Borrowers or of Principal, as the case may be, or any member, general partner, Principal or Affiliate thereof, and, except to the extent otherwise required in any Principal’s capacity as general partner of any Borrower, shall not acquire obligations or securities of any member, general partner, Principal or Affiliate of a Borrower or Principal, as the case may be, or any member, general partner, or Affiliate thereof;

          (m) fail to file its own tax returns or be included on the tax returns of any other Person except as required by applicable Law;

          (n) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name or a name franchised or licensed to it by an entity other than an Affiliate of a Borrower or of Principal, as the case may be, and not as a division or part of any other entity in order not (i) to mislead others as to the identity with which such other party is transacting business, or (ii) to suggest that such Borrower or its Principal, as the case may be, is responsible for the debts of any third party (including any member, general partner, Principal or Affiliate of a Borrower, or of Principal, as the case may be, or any member, general partner, Principal or Affiliate thereof);

          (o) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

          (p) hold itself out as or be considered as a department or division of (i) any general partner, Principal, member or Affiliate of a Borrower or of Principal, as the case may be, (ii) any Affiliate of a general partner, Principal or member of a Borrower or of Principal, as the case may be, or (iii) any other Person;

          (q) fail to allocate fairly and reasonably any overhead expenses that are shared with a Loan Party, including paying for office space and services performed by any employee of an Affiliate of such Loan Party;

          (r) pledge its assets for the benefit of any other Person other than with respect to the Obligations;

          (s) fail to maintain a sufficient number of employees in light of its contemplated business operations;

          (t) fail to provide in its Organizational Documents that for so long as the Loan is outstanding pursuant to the Notes, this Agreement and the other Loan Documents, it shall not file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable Debtor Relief Law, including, without limitation, filing a voluntary bankruptcy petition on behalf of a Borrower or make an assignment for the benefit of creditors without the affirmative vote of the Independent Director and of all other general partners/managing members/directors;

          (u) fail to hold its assets in its own name;

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          (v) if such Borrower or Principal is a corporation, fail to consider the interests of its creditors in connection with all corporate actions to the extent required by applicable Law;

          (w) have any of its obligations guaranteed by an Affiliate, other than with respect to the Obligations hereunder;

          (x) with respect to Principal, or if such Borrower is a single member limited liability company that complies with the requirements of Section 6.34 below, fail at any time to have at least two independent directors/managers (each, an “Independent Director”) that, in each case, will be employees of CT Corporation, Corporation Service Company, National Registered Agents, Inc. or Wilmington Trust Company or another nationally recognized company reasonably approved by Administrative Agent, provided that such provider (i) is not an Affiliate of any Borrower or Principal and (ii) provides professional independent directors and other corporate services in the ordinary course of its business, and which individual is not, and has never been, and will not be while serving as Independent Director: (A) a stockholder, director (other than an Independent Director of the Borrower or an Affiliate of a Borrower that is not in the direct chain of ownership of the Person in which such Independent Director is serving and that is required by a creditor to be a single-purpose, bankruptcy-remote entity), officer, employee, partner (other than a special limited partner or similar capacity), member (other than a Special Member of the Borrower or an Affiliate of a Borrower that is not in the direct chain of ownership of the Person in which such Special Member is serving and that is required by a creditor to be a single-purpose, bankruptcy-remote entity), attorney or counsel of any Borrower or of any Principal or any Affiliate of any of the foregoing; (B) a customer, supplier or other Person who derives its purchases or revenues (other than any fee paid to such director as compensation for such director to serve as an Independent Director) from its activities with such Borrower, Principal or any Affiliate of either of them (a “Business Party”); (C) a Person or other entity Controlling or under common Control with any such stockholder, partner, member, director, officer, attorney, counsel or Business Party; or (D) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, attorney, counsel or Business Party;

          (y) the Organizational Documents of each Principal and each Borrower that is a single member limited liability company that complies with the requirements of Section 6.34 below, shall provide that no Independent Director may be replaced or substituted unless the applicable Principal or Borrower gives Administrative Agent not less than two (2) Business Days prior written notice thereof, which notice will identify the proposed replacement Independent Director(s) and shall contain a certificate that such Person(s) comply with the requirements set forth in clause (x) above;

          (z) the Organizational Documents of each Principal and each Borrower that is a single member limited liability company that complies with the requirements of Section 6.34 below, shall provide that:

To the fullest extent permitted by law, and notwithstanding any duty otherwise existing at law or in equity, the Independent Directors shall consider only the interests of the [Company], including its respective creditors, in acting or otherwise voting on the matters requiring the vote of the Independent Directors. Except for duties to the [Company] as set forth in the immediately preceding sentence (including duties to the Member and the [Company’s] creditors solely to the extent of their respective economic interests in the [Company], but excluding (i) all other interests of the Member, (ii) the interests of other Affiliates of the [Company], and (iii) the interests of any group of Affiliates of which the [Company] is a party), the Independent Directors shall not have any fiduciary duties to the Member, and Officer or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith

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and fair dealing. To the fullest extent permitted by law, including Section 18-1101(e) of the Act, an Independent Director shall not be liable to the [Company], the Member and Officer or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless such Independent Director acted in bad faith or engaged in willful misconduct. Notwithstanding anything in the Organizational Documents, for so long as the Loan is outstanding pursuant to the Notes, the Loan Agreement, and the other Loan Documents, (a) in the event of the death, incapacity, resignation, or removal of an Independent Director, the Member shall promptly appoint a replacement Independent Director, and (b) no Independent Director may be removed unless his or her successor has been appointed.

          (aa) with respect to Principal, or if such Borrower is a single member limited liability company that complies with the requirements of Section 6.34 below, permit its board of directors/managers to take any action which, under the terms of any applicable Organizational Documents, requires the unanimous vote of one hundred percent (100%) of the members of the board without the vote of both of the Independent Directors.

In the event such Borrower is a Delaware limited liability company that does not have a managing member which complies with the requirements for a Principal under this Section 6.34, the limited liability company agreement of such Borrower (the “LLC Agreement”) shall provide that (i) the Member shall at all times cause there to be two persons (other than the Member) bound by the Organizational Documents as Special Members and (ii) upon the occurrence of any event that causes the last remaining member of a Borrower (“Member”) to cease to be the member of such Borrower (other than (1) upon continuation of the Company without dissolution, upon an assignment by Member of all of its limited liability company interest in a Borrower and the admission of the transferee in accordance with the LLC Agreement, the persons bound by the Organizational Documents as Special Members shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of such Borrower, automatically be admitted to such Borrower (“Special Member”) and shall continue such Borrower without dissolution and (ii) Special Member may not resign from such Borrower or transfer its rights as Special Member unless a successor Special Member has been admitted to such Borrower as Special Member by executing a counterpart to the Organizational Documents. The LLC Agreement shall further provide that (v) Special Member shall automatically cease to be a member of such Borrower upon the admission to such Borrower of a substitute Member, (w) Special Member shall be a member of such Borrower that has no interest in the profits, losses and capital of such Borrower and has no right to receive any distributions of such Borrower’s assets, (x) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to such Borrower and shall not receive a limited liability company interest in such Borrower, (y) Special Member, in its capacity as Special Member, may not bind such Borrower and (z) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, such Borrower, including, without limitation, the merger, consolidation or conversion of such Borrower. In order to implement the admission to such Borrower of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to such Borrower as Special Member, Special Member shall not be a member of such Borrower.

          Upon the occurrence of any event that causes the last remaining Member of the Borrower to cease to be a member of the Borrower or that causes the Member to cease to be a member of such Borrower (other than upon continuation of the Borrower without dissolution upon an assignment by the Member of all of its Membership Interest and the admission of the transferee pursuant to the Organizational Documents), to the fullest extent permitted by law, the personal representative of all Members shall, within ninety (90) days after the occurrence of the event that terminated the continued

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membership of such Member in such Borrower, agree in writing (A) to continue such Borrower and (B) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such Borrower, effective as of the occurrence of the event that terminated the continued membership of Member of such Borrower in such Borrower. Any action initiated by or brought against Member or any Special Member under any Debtor Relief Laws shall not cause Member or any Special Member to cease to be a member of such Borrower and upon the occurrence of such an event, the business of such Borrower shall continue without dissolution. The LLC Agreement shall provide that each of Member and each Special Member waives any right it might have to agree in writing to dissolve such Borrower upon the occurrence of any action initiated by or brought against Member or any Special Member under any Debtor Relief Laws, or the occurrence of an event that causes Member or any Special Member to cease to be a member of such Borrower.

     6.35 Business Purposes. The Loan is solely for the business purposes of Borrowers, and is not for personal, family, household, or agricultural purposes.

     6.36 Taxes. Each Borrower has timely filed all federal, state, county, municipal, and city income and other Tax Returns required to have been filed by it and has paid, prior to delinquency thereof, all Taxes and related liabilities which are required to have been paid, withheld, deducted or deposited, whether pursuant to such returns, to any assessments received by it, or otherwise. No Borrower knows of any basis for any additional assessment in respect of any such taxes and related liabilities for prior years.

     6.37 Environmental Representations and Warranties. Each Borrower represents and warrants, except as specifically disclosed in those certain Environmental Reports identified on Schedule 6.37 with respect to each Collateral Property that: (a) there are no Hazardous Materials or underground storage tanks in, on, or under any of the Collateral Properties, except those that are both (i) in compliance with current Environmental Laws and with permits issued pursuant thereto (if such permits are required), and (ii) either (A) in amounts not in excess of that necessary to operate, clean, repair and maintain the applicable Collateral Property or each tenant’s respective business at such Collateral Property as set forth in their respective Leases, or (B) held by a tenant for sale to the public in its ordinary course of business, (b) there are no past, present or threatened Releases of Hazardous Materials in violation of any Environmental Law and which would require remediation by a Governmental Authority in, on, under or from any of the Collateral Properties; (c) there is no threat of any Release of Hazardous Materials migrating to any of the Collateral Properties; (d) there is no present or, to any Borrower’s knowledge, prior non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with any of the Collateral Properties; (e) each Borrower does not know of, and has not received, any written or oral notice or other communication from any Person (including but not limited to a Governmental Authority) relating to Hazardous Materials located or Released in, on, under or from any of the Collateral Properties or relating to any Environmental Liability; and (f) each Borrower has truthfully and fully provided to Administrative Agent, in writing, any and all information relating to environmental conditions in, on, under or from any of the Collateral Properties known to such Borrower or contained in such Borrower’s files and records, including but not limited to any reports relating to Hazardous Materials in, on, under or migrating to or from any of the Collateral Properties and/or to the environmental condition of the Collateral Properties.

     6.38 Ground Lease Representations.

          (a) Each Collateral Property that is subject to a Ground Lease, and, other than with respect to the Sheraton Burlington Parking Lease, the applicable Fee Owner thereof, is set forth on Schedule 6.15, and (i) each Ground Lease is in full force and effect and has not been modified or amended in any manner whatsoever, (ii) there are no defaults under any Ground Lease by any party thereunder, and no event has occurred which but for the passage of time, or notice, or both would

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constitute a default under such Ground Lease, (iii) all rents, additional rents and other sums due and payable under each Ground Lease have been paid in full, (iv) none of Owner, applicable Fee Owner, or the Ground Lessor under the Sheraton Burlington Parking Lease, has commenced any action or given or received any notice for the purpose of terminating such Ground Lease and (v) the certificate delivered pursuant to Section 5.1(a)(xxi)contains attached thereto true, correct and complete copies of each of the Ground Leases and all modifications or amendments thereto;

          (b) Other than with respect to the Sheraton Burlington Parking Lease, each Mortgage which is secured by Owner’s interest in a Ground Lease is also secured by the related Fee Owner’s interest in the applicable Collateral Property, and the fee interest is subject and subordinate of record to the Lien of the applicable Mortgage, and such Mortgage does not by its terms provide that it will be subordinated to the Lien of any other mortgage or other Lien upon such fee interest, and upon the occurrence of an Event of Default, Administrative Agent has the right to foreclose or otherwise exercise its rights with respect to the Fee Owner’s fee simple interest;

          (c) The Ground Leases or a memorandum thereof have been duly recorded, the Ground Leases permit the interest of the lessee thereunder to be encumbered by the applicable Mortgage. There has not been any change in the terms of the Ground Leases since their recordation. The Ground Leases cannot be cancelled, terminated, surrendered or amended without the prior written consent of Administrative Agent;

          (d) The applicable interests of Owner and the applicable Fee Owners in the Ground Leases are not subject to any Liens (other than Permitted Liens and statutory landlord liens, if applicable) superior to, or of equal priority with, the applicable Mortgage; provided, however, that the Fee Owners, to the extent permitted by Law, each hereby subordinates the Lien of any such statutory landlord lien to the Lien of the applicable Mortgage;

          (e) The applicable Owner’s interest in the Ground Leases (other than with respect to Reciprocal Right of Refusal set forth in Section 7 of the Sheraton Burlington Parking Lease) are assignable upon notice to, but without the consent of, the lessor thereunder and, in the event that it is so assigned, it is further assignable upon notice to, but without the need to obtain the consent of, such lessor;

          (f) The Ground Leases require the lessor thereunder to give notice of any default by the applicable Borrower to Administrative Agent and the Ground Leases further provide that notice of termination given under the Ground Leases are not effective against Administrative Agent or any Lender unless a copy of the notice has been delivered to Administrative Agent or Lenders in the manner described in the applicable Ground Lease;

          (g) Under the terms of the Ground Leases, Administrative Agent is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the applicable Borrower under the Ground Leases) to cure any default under the Ground Leases, which is curable after the receipt of notice of any default before the lessor thereunder may terminate such Ground Lease;

          (h) Each Ground Lease (other than the Sheraton Burlington Parking Lease) has a term which extends to at least the lesser of (x) fifty (50) years beyond the Maturity Date, and (y) the maximum lease term which would not subject the entering into or modification of such Ground Lease to real property transfer tax (as determined based on the applicable laws of the applicable jurisdiction); provided, however, that the Ground Leases shall in no event have a term which is less than fifteen (15) years beyond the Maturity Date;

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          (i) The Ground Leases require the lessor to enter into a new lease on similar terms and conditions upon termination of the applicable Ground Lease for any reason, including rejection of such Ground Lease in a proceeding under any Debtor Relief Law;

          (j) Under the terms of each Ground Lease and the applicable Loan Documents, taken together, any Net Proceeds will be applied either to the Restoration of all or part of the Collateral Properties, with Administrative Agent or a trustee appointed by Administrative Agent having the right to hold and disburse such Net Proceeds as the Restoration progresses, or to the payment of the outstanding principal balance of the Loan together with any accrued interest thereon; and

          (k) The Ground Leases do not impose restrictions on subletting.

     6.39 Operating Lease Representations.

          (a) (i) Each Operating Lease is in full force and effect and has not been modified or amended in any manner whatsoever, (ii) there are no defaults under any Operating Lease by any party thereunder, and no event has occurred which but for the passage of time, or notice, or both would constitute a default under such Operating Lease, (iii) except as set forth on Schedule 6.39 hereof, all rents, additional rents and other sums due and payable under each Operating Lease have been paid in full, and (iv) neither the Operating Lessee nor the applicable Lessor under each Operating Lease has commenced any action or given or received any notice for the purpose of terminating such Operating Lease, and (v) the certificate delivered pursuant to Section 5.1(a)(xxi) hereof contains attached thereto true, correct and complete copies of each of the Operating Leases and all modifications or amendments thereto;

          (b) Each Operating Lease which is secured by Operating Lessee’s interest in a Collateral Property is subject and subordinate of record to the applicable Mortgage;

          (c) The Operating Leases cannot be cancelled, terminated, surrendered or amended without the prior written consent of Administrative Agent;

          (d) The interests of the Operating Lessees, the Owners, and the Fee Owners, as the case may be, in the Operating Leases are not subject to any Liens (other than Permitted Liens) superior to, or of equal priority with, the applicable Mortgage;

          (e) The Operating Leases require the lessor thereunder to give notice of any default by the applicable Borrower to Administrative Agent and the Operating Leases further provide that notice of termination given under the Operating Leases are not effective against Administrative Agent or any Lender, unless a copy of the notice has been delivered to Administrative Agent or Lenders in the manner described in the applicable Operating Lease;

          (f) Under the terms of the Operating Leases, Administrative Agent is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the Operating Lessee or any Borrower under the Operating Leases) to cure any default under the Operating Leases, which is curable after the receipt of notice of any default before the lessor thereunder may terminate such Operating Lease;

          (g) Under the terms of each Operating Lease and the applicable Loan Documents, taken together, any Net Proceeds will be applied either to the Restoration of all or part of the Collateral Properties, with Administrative Agent or a trustee appointed by Administrative Agent having the right to hold and disburse such Net Proceeds as the Restoration progresses, or to the payment of the outstanding principal balance of the Loan together with any accrued interest thereon; and

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          (h) The Operating Leases do not impose restrictions on subletting.

          6.40 Deposit Accounts. With respect to the Property Accounts, the Reserve Accounts and the Lockbox Account (collectively, the “Collateral Accounts”):

          (a) This Agreement and the Property Account Agreements create valid and continuing security interests (as defined in the UCC) in the Collateral Accounts, in favor of the Secured Parties, which security interests are prior to all other Liens and are enforceable as such against creditors of and purchasers from Borrowers;

          (b) The Collateral Accounts, each constitute “deposit accounts” within the meaning of the applicable UCC;

          (c) The applicable Borrower(s) own and have good and marketable title to its Collateral Accounts, free and clear of any Lien or claim of any Person (other than Administrative Agent);

          (d) Not later than sixty (60) days after the date hereof, each Borrower will deliver to Administrative Agent fully executed agreements pursuant to which the banks maintaining the Collateral Accounts have agreed to comply with all instructions originated by Administrative Agent directing disposition of the funds in such accounts without further consent by such Borrower;

          (e) Other than the security interest granted to the Secured Parties pursuant to this Agreement and the Property Account Agreements, no Borrower has pledged, assigned, or sold, granted a security interest in, or otherwise conveyed any of the Collateral Accounts;

          (f) The Collateral Accounts are not in the name of any Person other than a Borrower or Administrative Agent; and

          (g) No Borrower has authorized the banks maintaining, the Collateral Accounts to comply with instructions of any Person other than Administrative Agent.

     6.41 Liens. The Collateral Documents provide first priority Liens in the Collateral in favor of the Secured Parties, subject to no other Liens, other than Permitted Liens.

     6.42 Service Contracts. Other than the Leases, no Borrower has entered into any Contractual Obligation with respect to property or services to be provided by third parties with respect to any Collateral Property, except (a) those listed on Schedule 6.42, (b) after the Closing Date, those permitted under Section 8.5, and (c) those that are otherwise not material to Borrowers or any Collateral Property.

     6.43 Personal Property Leasing and Financing. No Personal Property used in the ownership or operation of any hotel, is subject to any financing or leasing arrangements, except (a) as disclosed on Schedule 6.43, (b) after the Closing Date, those permitted under Section 8.4, and (c) those that are otherwise not material to Borrowers or any Collateral Property.

     6.44 Reciprocal Easement Agreements.

          (a) No Loan Party is currently in default in any respect (nor has any notice been given or received with respect to an alleged or current default) under any of the terms and conditions of any REA, and each REA remains unmodified and in full force and effect.

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          (b) All sums due and owing by any Loan Party to the other parties to each REA (or by the other parties to each REA to any Loan Party) pursuant to the terms of such REA, have been paid, are current, and no lien has attached on any Collateral Property (or threat thereof been made) for failure to pay any of the foregoing, except where such failure could not reasonably be expected to cause a Material Property Event.

     6.45 Collective Bargaining Agreement. No Borrower is a party to (or otherwise subject to the terms of) any collective bargaining agreement.

     6.46 Organizational Chart. Attached hereto as Schedule 6.46 is an organizational chart that accurately reflects the current organizational structure of the Fee Owners, the Borrowers and the Principals.

     6.47 SPE Representations of Recycled Borrowers. Each of the Borrowers that has a fee, leasehold or subleasehold interest in one of the Embassy Properties (each a “Prior Borrower,” and collectively, the “Prior Borrowers”) was subject to certain indebtedness under one of five loans, in an aggregate principal amount of $97,000,000, originally from The Chase Manhattan Bank (collectively, the “Prior Loans”). Each Prior Borrower and its Principal represents and warrants that it has not, and the organizational documents of each Prior Borrower and its Principal have, prior to the date hereof, provided that such Prior Borrower and Principal, at all times since its formation, until the Closing Date, shall not:

          (a) acquire or own any material asset other than (i) its respective Collateral Property, and (ii) such incidental personal property of and for such respective Collateral Property;

          (b) merge into or consolidate with any person or entity or, to the full extent permitted by law, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;

          (c) (i) fail to observe its organizational formalities or preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, and qualification to do business in the state where the Prior Borrower’s property is located; or (ii) without the prior written consent of the lenders under the Prior Loans (each, a “Prior Lender”), amend, modify, terminate or fail to comply with the provisions of its certificate of formation or certificate of limited partnership, as the case may be, and the agreements governing the Prior Loans;

          (d) own any subsidiary or make any investment in any person or entity without the consent of the Prior Lender;

          (e) except as described in its organizational documents, commingle its assets with the assets of any other person or entity, participate in a cash management system with any other entity or person or fail to use its own separate stationery, invoices and checks;

          (f) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the principal balance of the Prior Loan, except for trade payables in the ordinary course of its business of owning its respective Collateral Property (which shall include the Permitted Purchase Money Indebtedness (defined below)), provided that such debt (i) is not evidenced by a note, (ii) is paid within sixty (60) days of the date incurred, (iii) does not exceed in the aggregate four percent (4%) of the outstanding principal balance of the Prior Loan and (iv) is payable to trade creditors and in amounts as are normal and reasonable under the circumstances. The term “Permitted Purchase Money Indebtedness” shall mean purchase money indebtedness and equipment financing incurred in

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connection with the purchase of telephone equipment, computer equipment, televisions, audiovisual equipment, copiers, motor vehicles and other equipment related thereto (the “Purchase Money Property”), provided (i) the Prior Lender has received prior written notification of the Prior Borrower’s intent to obtain such financing, (ii) said financing (x) is subject to commercially prudent terms and conditions and (y) does not exceed $300,000 in the aggregate at any given time and (iii) the Purchase Money Property is readily replaceable without material interference or interruption to the operation of its respective Collateral Property as a hotel and, if applicable, a restaurant;

          (g) fail to pay its debts and liabilities (including as applicable, shared personnel and overhead expenses) from its assets as the same shall become due;

          (h) (i) fail to maintain its records (including financial statements), books of account and bank accounts separate and apart from those of its affiliates, (ii) permit its assets or liabilities to be listed as assets or liabilities on the financial statement of any other entity or person or (iii) include the assets or liabilities of any other person or entity on its financial statements; provided, however, that the Prior Borrower’s financial position, results of operations and cash flows may be included in the consolidated financial statements of any parent of the Prior Borrower in accordance with GAAP; provided, further, that any such consolidated financial statements contain a note indicating that the Prior Borrower and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate and apart from any other person or entity;

          (i) enter into any contract or agreement with any affiliate of the Prior Borrower, any person guaranteeing payment of the Prior Loan or any portion thereof, or with any affiliate thereof (other than a business management services agreement with an affiliate of the Prior Borrower, provided that (1) such agreement is acceptable to Prior Lender, (2) the other party under such agreement holds itself out as agent of the Prior Borrower and (3) the agreement meets the standards set forth in this subsection following this parenthetical), except upon terms and conditions that are commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any affiliate of the Prior Borrower or person guaranteeing payment of the Prior Loan;

          (j) to the full extent permitted by law, seek the dissolution or winding up in whole, or in part, of the Prior Borrower;

          (k) fail to correct any known misunderstanding regarding the separate identity of the Prior Borrower or any affiliate thereof or any other person;

          (l) guarantee or become obligated for the debts of any other entity or person or hold itself out to be responsible for the debts of another entity or person;

          (m) make any loans or advances to any third party, including any affiliate of the Prior Borrower, and acquire obligations or securities of any affiliate of the Prior Borrower;

          (n) fail to file its own tax returns or be included on the tax returns of any other person or entity except as required by applicable law;

          (o) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or person or to conduct its business solely in its own name or a name franchised or licensed to it by an entity other than an affiliate of the Prior Borrower and not as a division or part of any other entity in order not (i) to mislead others as to the identity with which such other party is transacting

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business, or (ii) to suggest that the Prior Borrower is responsible for the debts of any third party (including any affiliate of the Prior Borrower);

          (p) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

          (q) except for sharing any common logo of FelCor Trust, share any common logo with or hold itself out as or be considered as a department or division of (i) any affiliate of the Prior Borrower or (ii) any other person or entity;

          (r) fail to allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including paying for office space and services performed by any employee of an affiliate;

          (s) other than the personal property purchased in connection with the Permitted Purchase Money Indebtedness, pledge its assets for the benefit of any other person or entity other than with respect to the Prior Loan;

          (t) fail to maintain a sufficient number of employees in light of its contemplated business operations;

          (u) fail to hold its assets in its own name;

          (v) fail, or in the case of a limited partnership, its general partner fail, at any time to have at least one Independent Director, except in the event of the death, incapacity or resignation of the Independent Director, in which event the member or general partner, as the case may be, of such Prior Borrower shall promptly appoint a replacement Independent Director; provided that any person serving as an Independent Director is not, and has not been for at least five (5) years prior to the date of such appointment or election: (a) a stockholder, director, officer, employee, partner, member, attorney or counsel of the Prior Borrower or any affiliate (other than an independent director, manager or like position with limited powers and rights substantially similar to those possessed by the Independent Director hereunder); (b) a Business Party; (c) a person or other entity controlling or under common control with any such stockholder, partner, member, director, officer, attorney, counsel or Business Party; or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, attorney, counsel or Business Party. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise;

          (w) take any action which, under the terms of such Prior Borrower’s, or in the case of a limited partnership, such Prior Borrower’s general partner’s, organizational documents, requires the unanimous vote of one hundred percent (100%) of the members of the board unless at the time of such action there shall be at least one member of the board who is an Independent Director.

          (x) do any of the following without the unanimous approval of 100% of the members of the board (including the Independent Director) of such Prior Borrower or, in the case of a limited partnership, the general partner of such Prior Borrower:

     (i) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding; institute any proceedings under any applicable insolvency law or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally;

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     (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Prior Borrower or a substantial portion of its properties; or

     (iii) take any action in furtherance of any of the foregoing;

          (y) The organizational documents of each Prior Borrower that is a limited liability company have provided that:

     (i) upon the occurrence of any event that causes the last remaining member of the Prior Borrower to cease to be a member of the Prior Borrower, to the fullest extent permitted by law, the personal representative of such member is authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in the Prior Borrower, agree in writing (i) to continue the Prior Borrower and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Prior Borrower, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Prior Borrower in the Prior Borrower; and

     (ii) upon the occurrence of any event that causes the member of such Prior Borrower to cease to be a member of the Prior Borrower (other than upon an assignment by the member of all of its membership interest and the admission of the transferee and continuation of the Prior Borrower without dissolution), the special member of such Prior Borrower, without any action of any Person and simultaneously with the member ceasing to be a member of the Prior Borrower, automatically be admitted to the Prior Borrower as the Special Member and shall continue the Prior Borrower without dissolution. No Special Member may resign from the Prior Borrower or transfer its rights as Special Member unless a successor Special Member has been admitted to the Prior Borrower as Special Member by executing a counterpart to such Prior Borrower’s organizational documents; provided, however, the Special Member shall automatically cease to be a member of the Prior Borrower upon the admission to the Prior Borrower of a substitute member. A Special Member shall be a member of the Prior Borrower that has no interest in the profits, losses and capital of the Prior Borrower and has no right to receive any distributions of the Prior Borrower’s assets. A Special Member shall not be required to make any capital contributions to the Prior Borrower and shall not receive a limited liability company interest in the Prior Borrower. A Special Member, in its capacity as Special Member, may not bind the Prior Borrower. Except as required by any mandatory provision of the Delaware Limited Liability Company Act, each Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Prior Borrower, including, without limitation, the merger, consolidation or conversion of the Prior Borrower.

     6.48 Survival of Representations. Borrowers agree that all of the representations and warranties set forth in this Article VI and elsewhere in this Agreement and in the other Loan Documents (as such representations and warranties are modified by the Schedules and other certificates and instruments delivered to Administrative Agent pursuant to this Agreement) shall survive for so long as any amount remains owing by any Loan Party under this Agreement or any of the other Loan Documents. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by any Loan Party shall be deemed to have been relied upon by Administrative Agent and Lenders notwithstanding any investigation heretofore or hereafter made by any of Administrative Agent or Lenders or on its behalf.

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ARTICLE VII
AFFIRMATIVE COVENANTS

          From the date hereof until payment and performance in full of all Obligations under the Loan Documents or, in respect of a specific Collateral Property, until the earlier release of the Liens of all Mortgages encumbering such Collateral Property in accordance with the terms of this Agreement and the other Loan Documents, Borrowers each covenant as follows:

     7.1 Existence; Compliance with Legal Requirements.

          (a) There shall never be committed by any Borrower or any other Person in occupancy of or involved with the operation or use of the Collateral Properties any act or omission affording the Federal government or any state or local government the right of forfeiture against any Collateral Property or any part thereof or any monies paid in performance of such Borrower’s obligations under any of the Loan Documents. Each Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. To the extent that any Borrower’s noncompliance with this Section 7.1(a) would reasonably be expected to have a Material Adverse Effect: (i) such Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises, and comply, in all material respects, with all Legal Requirements applicable to it and its Collateral Properties; (ii) such Borrower shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Collateral Properties in good working order and repair, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Mortgages; (iii) such Borrower shall keep the Collateral Properties insured at all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Agreement; and (iv) such Borrower shall operate any Collateral Property that is the subject of any O&M Program in accordance with the terms and provisions thereof in all material respects.

          (b) Borrower shall comply with all Laws affecting the Collateral Properties and all uses thereof, other than noncompliance with which would not reasonably be expected to result in, either individually or in the aggregate, a Material Property Event. Borrowers, at their own expense, may contest by appropriate legal proceeding promptly initiated and conducted in good faith and with due diligence, the validity of any Legal Requirement, the applicability of any Legal Requirement to Borrowers or any Collateral Property or any alleged violation of any Legal Requirement, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any Contractual Obligation to which the applicable Borrowers are subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Laws; (iii) no Collateral Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrowers shall promptly upon final determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (v) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrowers or any Collateral Property; and (vi) Borrowers shall furnish such security as may be required in the proceeding, to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Administrative Agent may apply any such security or part thereof, as necessary to cause compliance with such Legal Requirement at any time when, in the judgment of Administrative Agent, the validity, applicability or violation of such Legal Requirement is finally established or any Collateral Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost.

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     7.2 Taxes and Other Charges. Each Borrower shall duly and timely file all Tax Returns that it is required by to file pursuant to applicable Law, and pay all Taxes and Other Charges imposed upon it or now or hereafter levied or assessed or imposed against the Collateral Properties or any part thereof prior to delinquency thereof. Upon Administrative Agent’s request, each Borrower shall furnish to Administrative Agent receipts, or other evidence for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent. Borrowers shall not suffer and shall promptly cause to be paid and discharged any Lien or charge whatsoever which may be or become a Lien or charge against the Collateral Properties, and shall promptly pay for all utility services provided to the Collateral Properties. Borrowers, at their 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 Taxes or Other Charges, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any Contractual Obligation to which a Borrower is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Laws; (iii) no Collateral Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrowers shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (v) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the applicable Collateral Properties; and (vi) each Borrower shall furnish such security as may be required in the proceeding to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Administrative Agent may apply such security or part thereof held by Administrative Agent at any time when, in the judgment of Administrative Agent, the validity or applicability of such Taxes or Other Charges are established or any Collateral Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of any Mortgage being primed by any related Lien.

     7.3 Litigation. Borrowers shall give prompt written notice to Administrative Agent of any litigation or governmental proceedings pending or threatened in writing against any Borrower which might have a Material Adverse Effect.

     7.4 Access to Collateral Properties. Borrowers shall permit agents, representatives and employees of Administrative Agent and Lenders to inspect the Collateral Properties or any part thereof at reasonable hours upon reasonable advance notice and shall cause each Operating Lessee and Manager to permit such access.

     7.5 Notice of Default. Borrowers shall promptly advise Administrative Agent of any material adverse change in any Borrower’s condition, financial or otherwise, or of the occurrence of any Default, Event of Default or Material Property Event of which a Borrower has knowledge.

     7.6 Cooperation in Legal Proceedings. Borrowers shall cooperate fully with Administrative Agent with respect to any proceedings relating to Borrowers, the Collateral Properties or the Loan before any court, board or other Governmental Authority which may in any way adversely affect the rights of Administrative Agent or any Lender hereunder or any rights obtained by Administrative Agent or any Lender under any of the other Loan Documents and, in connection therewith, permit Administrative Agent on behalf of Lenders, at its election, to participate in any such proceeding.

     7.7 Award and Insurance Benefits. Borrowers shall cooperate with Administrative Agent in obtaining for Lenders the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection with any Collateral Property, and Administrative Agent shall be reimbursed for any expenses incurred in connection therewith (including reasonable attorneys’ fees and disbursements, and the payment by Borrowers of the expense of an Acceptable Appraisal on behalf of Lenders in case of

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Casualty or Condemnation affecting any Collateral Property or any part thereof) out of such Award or Insurance Proceeds.

     7.8 Further Assurances. Borrowers shall, at Borrowers’ sole cost and expense:

          (a) furnish to Administrative Agent all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument required to be furnished by Borrowers pursuant to the terms of the Loan Documents or reasonably requested by Administrative Agent in connection therewith;

          (b) execute and deliver to Administrative Agent such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the Collateral at any time securing or intended to secure the Obligations under the Loan Documents and the Liens in favor of the Secured Parties and priority thereof, as Administrative Agent may reasonably require including, without limitation (i) the authorization of Administrative Agent to execute and/or the execution by Borrowers of UCC financing statements, (ii) the execution and delivery of all such writings necessary to transfer any liquor licenses into the name of Administrative Agent or its designee after the occurrence of any Event of Default to the extent such liquor licenses are transferrable, and (iii) in respect of Collateral consisting of motor vehicles in excess of $50,000.00 in value only, notification by Borrowers of the existence of such vehicles whether or not requested by Administrative Agent and upon the request of Administrative Agent such information relating to and instruments of title relating thereto as may be necessary to perfect Liens; and

          (c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Administrative Agent shall reasonably require from time to time.

     7.9 Mortgage and Intangible Taxes. Borrowers shall pay (to the extent permitted by applicable Law) all state, county and municipal recording, mortgage, intangible, and all other taxes imposed upon the execution and recordation of the Mortgage and/or upon the execution and delivery of Notes.

     7.10 Financial Reporting.

          (a) Borrowers will keep and maintain or will cause to be kept and maintained on a Fiscal Year basis, in accordance with GAAP (or such other accounting basis acceptable to Administrative Agent) proper and accurate books, records and accounts reflecting all of the financial affairs of Borrowers and all items of income and expense in connection with the operation on an individual basis of the Collateral Properties. Administrative Agent, at its cost and expense (except as provided in the next sentence) shall have the right from time to time at all times during normal business hours upon reasonable notice to examine such books, records and accounts at the office of Borrowers or any other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Administrative Agent shall desire. Upon the occurrence and during the continuance of an Event of Default, Borrowers shall pay any reasonable costs and expenses incurred by Administrative Agent to examine Borrowers’ accounting records with respect to the Collateral Properties, as Administrative Agent shall determine to be necessary or appropriate. All operating and profits and loss statements required pursuant to this Section 7.10 shall be prepared for each Collateral Property and for the Collateral Properties taken as a whole. All other statements required pursuant to this Section 7.10 shall be prepared for each individual Collateral Property, as well as the Collateral Properties taken as a whole.

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          (b) Borrowers will furnish to Administrative Agent annually, within ninety (90) days following the end of each Fiscal Year: a complete copy of (i) Borrowers’ annual financial statements certified by a Responsible Officer of Borrowers, both in accordance with GAAP (or such other accounting basis acceptable to Administrative Agent) covering the Collateral Properties for such Fiscal Year and containing statements of profit and loss and a balance sheet, and (ii) an operating statement certified by a Responsible Officer of Borrowers for each Collateral Property and the Collateral Properties taken as a whole which present the operating results of the Collateral Properties in a manner consistent with those operating statements given by Borrowers to Administrative Agent prior to the Closing Date, which operating statement shall be in substantially the form of Exhibit F. Such statements referred to in subsection (ii) above shall set forth the financial condition and the results of operations of the Collateral Properties for such Fiscal Year, and shall include, but not be limited to, amounts representing annual net cash flow, Net Operating Income, EBITDA, Gross Income from Operations and Operating Expenses, and (iii) calculations, set forth in reasonable detail of the Debt Service Coverage Ratio, certified by a Responsible Officer of Borrowers’. Borrowers’ annual financial statements shall be accompanied by (1) a comparison of the income and expenses contained in the prior Fiscal Year’s Approved Annual Budget and the actual income and expenses for the prior Fiscal Year, (2) a certificate executed by a Responsible Officer of Borrowers’, stating that each such annual financial statement presents fairly the financial condition and the results of operations of Borrowers and the Collateral Properties being reported upon and has been prepared in accordance with GAAP, (3) an annual occupancy report for such year, including the average daily room rate for such year.

          (c) Borrowers will furnish, or cause to be furnished, to Administrative Agent on or before sixty (60) days after the end of each calendar quarter the following items, accompanied by a certificate of a Responsible Officer of Borrowers, stating that such items are true, correct, accurate, and complete and fairly present the results of the operations of Borrowers and the Collateral Properties: (i) a report of occupancy for the subject quarter including an average daily rate, accompanied by an Officer’s Certificate with respect thereto; (ii) quarterly and year-to-date operating statements (including Capital Expenditures) presented for each Collateral Property and the Collateral Properties taken as a whole in a form consistent with the operating statements delivered by Borrowers to Administrative Agent in connection with Lenders’ underwriting of the Loan which operating statement shall be in substantially the form of Exhibit F) and prepared for such calendar quarter, noting Net Operating Income, EBITDA, Gross Income from Operations, and Operating Expenses, and other information necessary and sufficient to fairly present the results of operation of the Collateral Properties during such calendar quarter, and containing a comparison of budgeted income and expenses and the actual income and expenses, (iii) a detailed explanation of any variances which are both (I) ten percent (10%) or more and (II) in excess of $50,000 between budgeted and actual amounts for any Collateral Property, all in form satisfactory to Administrative Agent; (iv) calculations, set forth in reasonable detail of the Debt Service Coverage Ratio, certified by a Responsible Officer of Borrowers and (v) a Smith Travel Research STAR Report or similar market benchmarking service for each Collateral Property.

          (d) Each Borrower will furnish, or cause to be furnished, to Administrative Agent on or before thirty (30) days after the end of each calendar month the following items: (i) a report of occupancy for the subject quarter including an average daily rate, accompanied by an Officer’s Certificate with respect thereto; (ii) monthly operating statements (including Capital Expenditures) presented for each Collateral Property and the Collateral Properties taken as a whole in a form consistent with the operating statements delivered by Borrowers to Administrative Agent in connection with the underwriting of the Loan which operating statement shall be in substantially the form of Exhibit F) and prepared for such calendar month, noting Net Operating Income, EBITDA, Gross Income from Operations, and Operating Expenses, and other information necessary and sufficient to fairly present the results of operation of the Collateral Properties during such calendar month. Together with the delivery of the monthly financial reporting required under this clause (d), Borrower shall also furnish, or cause to be

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furnished, to Administrative Agent (x) a copy of the applicable Manager’s monthly report, in the form annexed hereto as Schedule 7.10(d) and made a part hereof, and (y) a Smith Travel Research STAR Report or similar market benchmarking service for each Collateral Property for the applicable calendar month.

          (e) Borrowers have submitted to Administrative Agent the Annual Budgets for each of the Collateral Properties for 2010, copies of which are attached hereto as Schedule 7.10(e), each of which is hereby approved by the Administrative Agent. Beginning in Fiscal Year 2011, and for each Fiscal Year thereafter, (I) Borrowers shall submit to Administrative Agent a preliminary Annual Budget for each Collateral Property not later than thirty (30) days prior to the commencement of such Fiscal Year, and (II) Borrowers shall submit to Administrative Agent a final proposed Annual Budget for each Collateral Property not later than sixty (60) days after to the commencement of such Fiscal Year. The final budget shall be in form reasonably satisfactory to Administrative Agent, and shall be subject to Administrative Agent’s written approval, which approval shall not be unreasonably withheld or delayed (each such Annual Budget after it has been approved in writing by Administrative Agent shall be hereinafter referred to as an “Approved Annual Budget”). If Administrative Agent objects to the final proposed Annual Budget submitted by Borrowers, Administrative Agent shall advise Borrowers of such objections within fifteen (15) days after receipt respectively thereof (and deliver to Borrowers a reasonably detailed description of such objections), and Borrowers shall promptly revise such Annual Budget and resubmit the same to Administrative Agent. Administrative Agent shall advise Borrowers of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrowers a reasonably detailed description of such objections), and Borrowers shall promptly revise the same in accordance with the process described in this subsection until Administrative Agent approves the Annual Budget. Until such time that Administrative Agent approves a proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect estimated increases in Taxes, Insurance Premiums and utilities expenses and to delete items that were non-recurring costs that were particular to the prior year and any incremental increases required by a Manager under the terms of the applicable Management Agreement. Any such final proposed Annual Budget submitted to Administrative Agent for Administrative Agent’s approval shall be deemed approved if Administrative Agent shall have failed to notify Borrowers of its approval or disapproval within fifteen (15) Business Days following Administrative Agent’s receipt of Borrowers’ written request together with such final proposed Annual Budget, as the case may be, and any and all required information and documentation reasonably required by Administrative Agent to reach a decision, provided, such request to Administrative Agent is marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND ADMINISTRATIVE AGENT” and the envelope containing the request must be marked “PRIORITY.” With respect to the Annual Budgets, to the extent that the timing and the procedures relating to the preparation and approval of such Annual Budgets as set forth herein is inconsistent with the timing and the procedures for the preparation and approval of Annual Budgets under the Management Agreements, the timing and procedures set forth in the Management Agreements shall control, provided that the foregoing shall not in any way limit Administrative Agent’s rights to approve such Annual Budgets as set forth above prior to the Borrowers’ agreement on such Annual Budgets with the applicable Manager.

          (f) Borrowers shall, on or before the forty-fifth (45th) day following the last day of each fiscal quarter, provide a certificate from a Responsible Officer of Borrowers, in respect of each Monthly Budgeted Amount in that quarter for each Embassy Property and for category of expenditures for which the Monthly Budgeted Amount has been established of (i) the actual expenditures paid in the immediately preceding fiscal quarter, bills payable and accruals, and (ii) a comparison of whether such actual expenditures, bills payable and necessary estimated accruals were either more of less than the

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aggregate amount of Monthly Pegged Amount payments disbursed from the Lockbox Account for such fiscal quarter (the amount, if any, by which the amount described in clause (ii) above exceeds the amount described in clause (i) above, the “Quarterly Budgeted Amount Comparison”).

          (g) Upon the request of Administrative Agent, Borrowers shall promptly deliver to Administrative Agent any and all financial or other reports prepared by the Managers or the Franchisors with respect to the Borrowers, the Collateral Properties or the operation and use of the Collateral Properties.

          (h) Any reports, statements or other information required to be delivered under this Agreement shall be delivered (i) on a diskette or via email, (ii) if requested by Administrative Agent and within the capabilities of Borrowers’ data systems without change or modification thereto, in electronic form and prepared using a Microsoft Excel, Microsoft Word for Windows or WordPerfect for Windows files (which files may be prepared using a spreadsheet program and saved as word processing files) and (iii) if requested by Administrative Agent, in paper form.

     7.11 Business and Operations. Each Borrower will continue to engage in the businesses presently conducted by them as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Collateral Properties. Borrowers will remain in good standing under the laws of each jurisdiction to the extent required for the ownership, maintenance, management and operation of the Collateral Properties.

     7.12 Costs of Enforcement. In the event (a) that any Mortgage encumbering any Collateral Property is foreclosed in whole or in part or that any such Mortgage is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to any Mortgage encumbering any Collateral Property in which proceeding Administrative Agent or any Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of any Borrower, Ground Lessor or any of their constituent Persons or an assignment by any Borrower, Ground Lessor or any of their constituent Persons for the benefit of its creditors, Borrowers, Ground Lessor, their successors or assigns, shall be chargeable with and agree to pay all costs of collection and defense, including attorneys’ fees and costs, incurred by Administrative Agent, any Lender, Borrowers or Ground Lessor in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, together with all required service, stamp, transfer, recording, excise or use taxes.

     7.13 Estoppel Statements.

          (a) After written request by Administrative Agent, Borrowers shall within ten (10) Business Days furnish Administrative Agent, with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Obligations, (ii) the unpaid principal amount of the Obligations, (iii) the LIBOR Spread or, if applicable, the Prime Rate Spread, (iv) the date installments of interest and/or principal were last paid, (v) any offsets or defenses to the payment of the Indebtedness hereunder, and (vi) that the Notes, this Agreement, the Mortgages and the other Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification.

          (b) Borrowers shall use commercially reasonable efforts to deliver to Administrative Agent upon request, and not more than three (3) times every twelve (12) months, tenant estoppel certificates from each commercial tenant under a Major Lease in form and substance reasonably satisfactory to Administrative Agent.

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          (c) Borrowers shall use commercially reasonable efforts, promptly upon request of Administrative Agent, and not more than three (3) times every twelve (12) months, to deliver an estoppel certificate from each Franchisor stating that (i) its Franchise Agreement is in full force and effect and has not been modified, amended or assigned, (ii) neither such Franchisor nor the respective Operating Lessee is in default under any of the terms, covenants or provisions of the Franchise Agreement, and such Franchisor knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under such Franchise Agreement, (iii) neither Franchisor nor Operating Lessee has commenced any action or given or received any notice for the purpose of terminating such Franchise Agreement and (iv) all sums due and payable to such Franchisor under its Franchise Agreement have been paid in full.

          (d) Borrowers shall use commercially reasonable efforts, promptly upon request of Administrative Agent, and not more often than three (3) times every twelve (12) months, to deliver an estoppel certificate from each Manager stating that (i) its Management Agreement is in full force and effect and has not been modified, amended or assigned, (ii) neither such Manager nor the respective Operating Lessee is in default under any of the terms, covenants or provisions of the Management Agreement and such Manager knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under such Management Agreement, (iii) neither Manager nor Operating Lessee has commenced any action or given or received any notice for the purpose of terminating such Management Agreement and (iv) all sums due and payable to such Manager under its Management Agreement have been paid in full.

          (e) Borrowers shall, promptly upon request of Administrative Agent, deliver to Administrative Agent an estoppel certificate from Operating Lessee stating that (i) the Operating Lease is in full force and effect and has not been modified, amended or assigned, (ii) Borrowers are not in default under any of the terms, covenants or provisions of any Operating Lease and no Operating Lessee knows of any event which, but for the passage of time or the giving of notice or both, would constitute an event of default under its Operating Lease, (iii) no Borrower has commenced any action or given or received any notice for the purpose of terminating any Operating Lease and (iv) all sums due and payable under any Operating Lease have been paid in full.

          (f) Borrowers shall, promptly upon request of Administrative Agent, deliver to Administrative Agent an estoppel certificate from each Ground Lessor stating that (i) the applicable Ground Lease is in full force and effect and has not been modified, amended or assigned, (ii) neither Ground Lessor nor applicable Borrower is in default under any of the terms, covenants or provisions of the Ground Lease and Ground Lessor knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under the Ground Lease, (iii) neither Ground Lessor nor applicable Borrower has commenced any action or given or received any notice for the purpose of terminating the Ground Lease and (iv) all sums due and payable under the Ground Lease have been paid in full.

     7.14 Use of Proceeds. Borrowers shall use the proceeds of the Loan only to (a) refinance certain existing Indebtedness secured, in part, by the Collateral Properties, (b) make deposits into the Reserve Accounts on the date hereof in the amounts provided herein, (c) purchase the Initial Rate Cap Agreement, and (d) pay certain costs and expenses incurred in connection with the closing of the Loan and approved by Lender.

     7.15 Performance by Borrowers. Each Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed and delivered by, or applicable to such Borrower, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by,

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or applicable to, such Borrower without the prior written consent of Administrative Agent or Requisite Lenders as required herein or in such Loan Document.

     7.16 Leasing Matters.

          (a) With respect to any Collateral Property, the applicable Operating Lessee may enter into a proposed Lease (including the renewal or extension of an existing Lease (a “Renewal Lease”)) without the prior written consent of Administrative Agent, provided such proposed Lease or Renewal Lease (i) provides for rental rates and terms comparable to existing local market rates and terms (taking into account the type and quality of the tenant) as of the date such Lease is executed by such Borrower (unless, in the case of a Renewal Lease, the rent payable during such renewal, or a formula or other method to compute such rent, is provided for in the original Lease), (ii) is an arms-length transaction with a bona fide, independent third-party tenant, (iii) would not cause a Material Property Event, (iv) is subject and subordinate to the Lien of the related Mortgage and, upon Administrative Agent’s reasonable request, the lessee thereunder agrees to attorn to Administrative Agent and Lenders pursuant to an agreement acceptable to Administrative Agent and (v) is not a Major Lease. All proposed Leases which do not satisfy the requirements set forth in this Section 7.16(a) shall be subject to the prior approval of Administrative Agent, which approval shall not be unreasonably withheld, delayed or conditioned. At Administrative Agent’s request, Borrowers shall promptly deliver to Administrative Agent copies of all Leases which are entered into pursuant to this Subsection together with Borrowers’ certification that they have satisfied all of the conditions of this Section.

          (b) Borrowers (i) shall observe and perform all the obligations imposed upon the lessor under the Major Leases and shall not do or permit to be done anything to impair the value of any of the Major Leases as security for the Obligations; (ii) shall promptly send copies to Administrative Agent of all notices of default or other material matters which Borrowers shall send or receive with respect to the Major Leases; (iii) shall enforce all of the material terms, covenants and conditions contained in the Major Leases upon the part of the tenant thereunder to be observed or performed (except for termination of a Major Lease which shall require Administrative Agent’s prior written approval); (iv) shall not collect any of the Rents more than one (1) month in advance (except Security Deposits shall not be deemed Rents collected in advance); (v) shall not execute any other assignment of the lessor’s interest in any of the Leases or the Rents; and (vi) shall not consent (to the extent that lessor’s consent is required under a Major Lease) to any assignment of or subletting under any Major Leases, without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld, delayed or conditioned.

          (c) Borrowers may, without the consent of Administrative Agent, amend, modify or waive the provisions of any Lease or terminate, reduce rents under, accept a surrender of space under, or shorten the term of, any Lease (including any guaranty, letter of credit or other credit support with respect thereto) provided that such Lease is not a Major Lease and that such action (taking into account, in the case of a termination, reduction in rent, surrender of space or shortening of term, the planned alternative use of the affected space) would not cause a Material Property Event, and provided that such Lease, as amended, modified or waived, is otherwise in compliance with the requirements of this Agreement and any Lease subordination agreement binding upon Administrative Agent with respect to such Lease. A termination of a Lease (other than a Major Lease) with a tenant who is in default beyond applicable notice and grace periods shall not be considered an action which constitutes a Material Property Event unless it causes a breach, default or failure of performance under a Management Agreement or Franchise Agreement. Any amendment, modification, waiver, termination, rent reduction, space surrender or term shortening which does not satisfy the requirements set forth in this Subsection shall be subject to the prior written approval of Administrative Agent and its counsel, at Borrowers’ expense. At Administrative Agent’s request, Borrowers shall promptly deliver to Administrative Agent copies of all Leases,

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amendments, modifications and waivers which are entered into pursuant to this Section 7.16(c) together with each applicable Borrower’s certification that it has satisfied all of the conditions of this Section 7.16(c).

          (d) Notwithstanding anything contained herein to the contrary, with respect to any Collateral Property, no Borrower shall, without the prior written consent of Administrative Agent (which consent shall not be unreasonably withheld, delayed or conditioned), enter into, materially amend, materially modify, waive any material provisions of, terminate, reduce rents under, accept a surrender of space under, or shorten the term of, or renew or extend upon terms and conditions less favorable to such Borrower, any Major Lease or any instrument guaranteeing or providing credit support for any Major Lease; provided, however, such Borrower shall not be required to obtain Administrative Agent’s written consent to any immaterial, non-economic change or beneficial economic change to a Major Lease (provided that, changes materially altering the square footage leased, the location or use of the premises demised under such Major Lease or extending the term including any renewal option for a period in excess of five (5) years shall, in each case, be considered a material change; and provided, further, that no consent shall be required for an amendment of any Operating Lease to the extent that such amendment could not result in a decrease in the Net Operating Income of the related Collateral Property. For the avoidance of doubt, to the extent that the lessor’s consent is required under the applicable Major Lease, any assignment or sublease of a Major Lease shall require the consent of Administrative Agent.

          (e) To the extent actually received by Administrative Agent, Administrative Agent shall hold any and all monies representing security deposits under the Leases (the “Security Deposits”) received by Administrative Agent, in accordance with the terms of this Agreement and the respective Lease, and shall only release the Security Deposits in order to return a tenant’s Security Deposit to such tenant if such tenant is entitled to the return of the Security Deposit under the terms of the Lease.

          (f) To the extent that Administrative Agent’s consent or approval is required under this Section 7.16, any such proposed modification, change, supplement, alteration, amendment, assignment or sublease of a Lease or Major Lease submitted to Administrative Agent for approval shall be deemed approved if (i) Borrowers deliver to Administrative Agent a written request for such approval marked in bold lettering with the following language: ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND ADMINISTRATIVE AGENT” and the envelope containing the request must be marked “PRIORITY”; and (ii) Administrative Agent shall have failed to notify Borrowers of its approval or disapproval within such fifteen (15) Business Days following Administrative Agent’s receipt of Borrowers’ written request together with such proposed modification, change, supplement, alteration, amendment, assignment or sublease of a Lease or Major Lease, and any and all other information and documentation relating thereto reasonably required by Administrative Agent to reach a decision; provided, however, that in no event shall Administrative Agent be deemed to have approved any change (i) having a Material Adverse Effect or a Material Property Event, (ii) contained business terms which are not on then fair market terms, or (iii) with respect to any Ground Lease or any Operating Lease. Upon Borrowers’ request, Administrative Agent shall deliver to Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.16.

     7.17 Management Agreement.

          (a) Each Collateral Property is operated under the terms and conditions of the applicable Management Agreement. In no event shall the Base Management Fees under any Management Agreement exceed two percent (2%) of the gross income derived from the applicable Collateral Property (excluding any Incentive Management Fees which are subordinate to the Loan).

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Operating Lessee shall (i) diligently perform and observe all of the terms, covenants and conditions of the Management Agreements on the part of Operating Lessee to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Operating Lessee under the Management Agreements and (ii) promptly notify Administrative Agent of the giving of any notice by any Manager to Operating Lessee of any default by Operating Lessee in the performance or observance of any of the terms, covenants or conditions of any Management Agreement on the part of Operating Lessee to be performed and observed and deliver to Administrative Agent a true copy of each such notice. Operating Lessee shall not surrender any Management Agreement, consent to the assignment by any Manager of its interest under a Management Agreement, or terminate or cancel any Management Agreement, or modify, change, supplement, alter or amend any Management Agreement, in any material respect, either orally or in writing without Administrative Agent’s prior written consent, and following a Securitization, without Rating Agency Confirmation. Borrowers hereby assign to Administrative Agent for benefit of the Secured Parties as further security for the payment of the Obligations and for the performance and observance of the terms, covenants and conditions of this Agreement, all the rights, privileges and prerogatives of Borrowers to surrender any Management Agreement, or to terminate, cancel, modify, change, supplement, alter or amend such Management Agreements, in any material respect, and any such surrender of such Management Agreements, or termination, cancellation, modification, change, supplement, alteration or amendment of any Management Agreement in any material respect, without the prior consent of Administrative Agent, and following a Securitization, without Rating Agency Confirmation, shall be void and of no force and effect. Upon a Borrower’s request, Administrative Agent shall deliver to such Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.17. Borrowers shall not enter into any Replacement Management Agreement without Administrative Agent’s prior written consent; provided, however, with respect to any expiring or replacement Management Agreement, Borrowers shall notify Administrative Agent but shall not be required to obtain Administrative Agent’s consent (or Rating Agency Confirmation) if the Management Agreement in effect on the date hereof is extended on the same or more favorable terms to Operating Lessee as prior to the expiration thereof; provided, further, that in such event the applicable Borrowers will be required to deliver an extension of the conditional assignment of management agreement obtained by Administrative Agent on the date hereof in connection with the original Management Agreement. Any such proposed modification, change, supplement, alteration or amendment of the Management Agreement submitted to Administrative Agent for approval shall be deemed approved if (i) Borrowers deliver to Administrative Agent a written request for such approval marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND ADMINISTRATIVE AGENT” and the envelope containing the request must be marked “PRIORITY,” and (ii) Administrative Agent shall have failed to notify Borrowers of its approval or disapproval within such fifteen (15) Business Days following Administrative Agent’s receipt of Borrowers’ written request together with such proposed modification, change, supplement, alteration or amendment of the Management Agreement, and any and all other information and documentation relating thereto reasonably required by Administrative Agent to reach a decision; provided, however, that in no event shall Administrative Agent be deemed to have approved (1) a surrender, termination or cancellation of the Management Agreement, (2) any modification, change, supplement, alteration or amendment of the Management Agreement that affects any of the material business terms of the Management Agreement, (3) any change under the Management Agreement that could result in a Material Property Event, or (4) any Replacement Management Agreement. Upon a Borrower’s request, Administrative Agent shall deliver to such Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.17. For avoidance of doubt, Administrative Agent hereby approves modifications to the Management Agreements affecting the Embassy Properties, to the extent (A) such modifications are required solely to implement the agreed-upon terms set forth in that certain Master Agreement for Extension of Management Agreements dated January 1, 2009, by and between FelCor TRS Holdings, for

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itself and its subsidiaries listed on Exhibit “A” attached thereto, Embassy Suites Management, Doubletree Management and Hilton Management, and (B) such modifications do not contain any other substantive terms. In addition, Borrowers have advised Administrative Agent that Borrowers have entered into discussions with Sheraton Vermont Corporation relating to (1) the potential acquisition by DJONT Operations, L.L.C. of one hundred percent (100%) of the Class B Preferred Member interest in the Sheraton Burlington Operating Lessee, and (2) the modification of the manager incentive compensation provisions contained in the Sheraton Burlington Management Agreement to conform them to make them consistent in format with the incentive compensation provisions set forth in the other Sheraton Management Agreements and to provide, in effect, that the Manager thereunder shall be paid incentive compensation in an amount equal to the amount that would have been distributable to Sheraton Vermont Corporation on account of the Class B Preferred Member interest in the Sheraton Burlington Operating Lessee. Administrative Agent agrees that Administrative Agent will not unreasonably withhold Administrative Agent’s consent to such restructuring of the ownership of the Sheraton Burlington Operating Lessee and the modification to the incentive compensation provisions as aforesaid, provided that such modification agreements do not contain any other substantive terms; and, provided, further, that (i) Sheraton Burlington Operating Lessee shall executed a joinder agreement and agree to become jointly and severally liable with the other Borrowers for the repayment of the Obligations, and (ii) the Borrowers execute and deliver any other modification documents reasonably required by Administrative Agent in connection with such restructuring.

          (b) If any Operating Lessee shall default in the performance or observance of any material term, covenant or condition of any Management Agreement on the part of Operating Lessee to be performed or observed, after expiration of any applicable notice and cure periods provided in such Management Agreement, then, without limiting the generality of the other provisions of this Agreement, and without waiving or releasing such Borrower from any of its obligations hereunder, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of such Management Agreement on the part of Operating Lessee to be performed or observed to be promptly performed or observed on behalf of Operating Lessee to the end that the rights of Operating Lessee in, to and under such Management Agreement shall be kept unimpaired and free from default in all material respects. Administrative Agent and any Person designated by Administrative Agent by written notice to Borrowers shall have, and are hereby granted, the right to enter upon the applicable Collateral Property at any time and from time to time for the purpose of taking any such action. If any Manager shall deliver to Administrative Agent a copy of any notice of default under the Management Agreement, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent in good faith, in reliance thereon. No Operating Lessee shall, and shall not permit any Manager to, sub-contract all or any material portion of its management responsibilities under any Management Agreement to a third-party without the prior written consent of Administrative Agent, which consent shall not be unreasonably withheld, delayed or conditioned. Operating Lessees shall request of Managers and deliver to Administrative Agent upon receipt such certificates of estoppel with respect to compliance by Operating Lessee with the terms of its respective Management Agreement as may be reasonably requested by Administrative Agent. Operating Lessees shall exercise each individual option, if any, to extend or renew the term of its respective Management Agreements to the extent required to continue it in full force and effect until after the Maturity Date, and each Operating Lessee hereby authorizes and appoints Administrative Agent its attorney-in-fact to exercise any such option in the name of and upon behalf of such Operating Lessee, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest. Any sums expended by Administrative Agent pursuant to this paragraph (i) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, (ii) shall be deemed to constitute a portion of the Obligations, (iii) shall be secured by the lien of the Mortgages and the other Loan Documents and (iv) shall be immediately due and payable upon demand by Administrative Agent therefor.

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          (c) Without limitation of the foregoing, the applicable Borrower shall, upon request of Administrative Agent and in accordance with the provisions of the applicable Assignment of Management Agreement, terminate any Management Agreement and replace the Manager thereunder, without penalty or fee payable by Borrowers or Administrative Agent, if at any time during the Loan: (i) such Manager shall become insolvent or a debtor in bankruptcy or insolvency proceeding or (ii) there exists an event of default by such Manager under the applicable Management Agreement which continues beyond any applicable cure period, except that the requirements of this Section 7.17(c)(ii) shall not apply if each and all of the following conditions shall be satisfied (1) the applicable Borrower shall be diligently prosecuting the resolution of such default in a commercially reasonable manner, (2) Administrative Agent shall receive copies of all notices and correspondence sent and/or received by the applicable Borrower with respect to such default, (3) no Event of Default exists and is continuing and (4) no Material Adverse Effect or Material Property Event shall have occurred.

     7.18 Environmental Covenants.

          (a) Borrowers covenant and agree that so long as the Loan is outstanding (i) all uses and operations on or of the Collateral Properties, whether by a Borrower or any other Person, shall be in compliance in all material respects with all Environmental Laws and permits issued pursuant thereto; (ii) there shall be no Releases of Hazardous Materials in, on, under or from any of the Collateral Properties; (iii) there shall be no Hazardous Materials stored or located in, on, or under any of the Collateral Properties, except those that are both (A) in compliance with all Environmental Laws and with permits issued pursuant thereto, if and to the extent required, and (B) (1) in amounts not in excess of that necessary to operate, clean, repair and maintain the applicable Collateral Property as a hotel or (2) fully disclosed to and approved by Administrative Agent in writing; (iv) Borrowers shall keep the Collateral Properties free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrowers or any other Person (the “Environmental Liens”); (v) Borrowers shall, at their sole cost and expense, fully and expeditiously cooperate in all activities pursuant to paragraph (b) below, including but not limited to providing all relevant information and making knowledgeable persons available for interviews; (vi) Borrowers shall, at their sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with any of the Collateral Properties, pursuant to any reasonable written request of Administrative Agent, upon Administrative Agent’s reasonable belief that a Collateral Property is not in full compliance with all Environmental Laws or has been the subject of any Release of Hazardous Materials, and deliver to Administrative Agent full and complete copies of the reports and other results thereof, and Administrative Agent and other Indemnitee shall be entitled to rely on such reports and other results thereof; (vii) Borrowers shall, at their sole cost and expense (A) promptly and reasonably effectuate remediation of any Hazardous Materials in, on, under or from any Collateral Property in strict compliance with all requirements of Environmental Law; and (B) comply with any Environmental Law, in either case whether or not requested to do so by Administrative Agent; (viii) Borrowers shall not allow any tenant or other user of any of the Collateral Properties to violate any Environmental Law; and (ix) Borrowers shall immediately notify Administrative Agent in writing after any Borrower has become aware of (A) any presence or Release or threatened Releases of Hazardous Materials in, on, under, from or migrating towards any of the Collateral Properties; (B) any non-compliance with any Environmental Laws related in any way to any of the Collateral Properties; (C) any actual or potential Environmental Lien; (D) any required or proposed remediation of environmental conditions relating to any of the Collateral Properties; and (E) any written or oral notice or other communication of which a Borrower becomes aware from any source whatsoever (including but not limited to a Governmental Authority) relating in any way to Hazardous Materials in connection with the Collateral Properties.

          (b) Administrative Agent and any other Person designated by Administrative Agent by written notice to Borrowers, including but not limited to any representative of a Governmental

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Authority, and any environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall have the right, but not the obligation, to enter upon any Collateral Property at all reasonable times to assess any and all aspects of the environmental condition of any Collateral Property and its use. If any Event of Default shall have occurred or if Administrative Agent shall reasonably believe that any Hazardous Materials are located on the Collateral Property in violation of the terms and conditions of this Agreement or that any Release of any Hazardous Material has occurred to, from or onto any Collateral Property, then Administrative Agent and any other Person designated by Administrative Agent shall have the right, at the cost and expense of Borrowers, payable by Borrowers on demand from Administrative Agent, to conduct an environmental assessment or audit (the scope of which shall be determined in Administrative Agent’s sole and absolute discretion) of the Collateral Property, including, without limitation, the taking of samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing. Borrowers shall cooperate with and provide access to Administrative Agent and any such Person or entity designated by Administrative Agent by written notice to Borrowers.

     7.19 Alterations. Other than the purchase, replacement and/or installation of FF&E or Capital Expenditures contemplated by the most recent Approved Annual Budget, Borrowers shall obtain Administrative Agent’s prior written consent to (i) any structural alteration or (ii) with respect to each Collateral Property, any other alteration to any Improvements thereon which is estimated to cost in excess of four percent (4%) of the value of the applicable Collateral Property, which consent shall not be unreasonably withheld, delayed or conditioned, except with respect to alterations that could have a Material Adverse Effect or could cause a Material Property Event. To the extent that Administrative Agent’s consent or approval is required under this Section 7.19, any such proposed alterations to any Improvements submitted to Administrative Agent for approval shall be deemed approved if (i) Borrowers deliver to Administrative Agent a written request for such approval marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND ADMINISTRATIVE AGENT” and the envelope containing the request must be marked “PRIORITY”; and (ii) Administrative Agent shall have failed to notify Borrowers of its approval or disapproval within such fifteen (15) Business Days following Administrative Agent’s receipt of Borrowers’ written request together with a reasonably detailed description of such proposed alteration and any and all other information and documentation relating thereto reasonably required by Administrative Agent to reach a decision; provided, however, that in no event shall Administrative Agent be deemed to have approved alterations that (i) are structural in nature, (ii) will cost in excess of five percent (5%) of the value of the applicable Collateral Property, or (iii) could cause a Material Adverse Effect or could cause a Material Property Event. Upon a Borrower’s request, Administrative Agent shall deliver to such Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.19.

     7.20 Franchise Agreement.

        (a) Each Collateral Property shall be operated under the terms and conditions of the applicable Franchise Agreement. Borrowers shall (i) pay all sums required to be paid by any Operating Lessee under each Franchise Agreement, (ii) diligently perform, observe and enforce all of the terms, covenants and conditions of each Franchise Agreement on the part of such Operating Lessee to be performed, observed and enforced to the end that all things shall be done which are necessary to keep unimpaired the rights of any Borrower and/or Operating Lessee under any Franchise Agreement, (iii) promptly notify Administrative Agent of the giving of any notice to any Operating Lessee of any default by such Operating Lessee in the performance or observance of any of the terms, covenants or conditions of any Franchise Agreement on the part of such Operating Lessee to be performed and observed and deliver to Administrative Agent a true copy of each such notice, and (iv) promptly deliver to

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Administrative Agent a copy of each financial statement, business plan, capital expenditure plan, notice, report and estimate received by it under any Franchise Agreement. Borrowers shall not, without the prior consent of Administrative Agent, surrender any Franchise Agreement or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement, in any material respect, either orally or in writing, and Borrowers hereby assign to Administrative Agent as further security for the payment of the Obligations and for the performance and observance of the terms, covenants and conditions of this Agreement, all the rights, privileges and prerogatives of Borrowers and Operating Lessees to surrender any Franchise Agreement or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement in any material respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement in any material respect without the prior consent of Administrative Agent shall be void and of no force and effect.

        (b) If any Operating Lessee shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement on the part of such Operating Lessee to be performed or observed after expiration of any applicable notice and cure periods provided in the Franchise Agreement, then, without limiting the generality of the other provisions of this Agreement, and without waiving or releasing a Borrower from any of its obligations hereunder, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement on the part of the respective Operating Lessee to be performed or observed to be promptly performed or observed on behalf of such Operating Lessee, to the end that the rights of such Operating Lessee in, to and under such Franchise Agreement shall be kept unimpaired and free from default in all material respects. Administrative Agent and any Person designated by Administrative Agent by written notice to Borrowers shall have, and are hereby granted, the right to enter upon the Collateral Properties at any time and from time to time for the purpose of taking any such action. If any Franchisor shall deliver to Administrative Agent a copy of any notice of default under any Franchise Agreement, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent in good faith, in reliance thereon. Borrowers shall, from time to time, use their best efforts to obtain from each Franchisor such certificates of estoppel with respect to compliance by each Operating Lessee with the terms of its Franchise Agreement as may be requested by Administrative Agent. Each Operating Lessee shall exercise each individual option, if any, to extend or renew the term of its respective Franchise Agreement to the extent required to continue it in full force and effect until after the Maturity Date, and each Operating Lessee hereby expressly authorizes and appoints Administrative Agent as its attorney-in-fact to exercise any such option in the name of and upon behalf of such Operating Lessee, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest. Any sums expended by Administrative Agent pursuant to this paragraph shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the lien of the Mortgages and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.

        (c) Borrower shall not enter into any Replacement Franchise Agreement without Administrative Agent’s prior written consent; provided, however, that with respect to any expiring or replacement Franchise Agreement, Borrowers shall notify Administrative Agent, but shall not be required to obtain Administrative Agent’s consent if the Franchise Agreement in effect on the date hereof is extended (to result in a remaining term of such Franchise Agreement from the date of the delivery of such extension agreement equal to the terms then generally granted by the applicable Franchisor in the then prevailing market, but in no event shorter than seven (7) years) on the same or more favorable terms to the applicable Operating Lessee as prior to the expiration thereof, provided further that if such Franchise Agreement is modified, extended, supplemented or replaced a franchisor estoppel and recognition or

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other “comfort letter” shall be provided as described in clause (b) of the definition of “Replacement Franchise Agreement.” To the extent that Administrative Agent’s consent or approval is required under this Section 7.20, any such proposed modification, change, supplement, alteration or amendment of the Franchise Agreement submitted to Administrative Agent for approval shall be deemed approved if (i) Borrowers deliver to Administrative Agent a written request for such approval marked in bold lettering with the following language: “ADMINISTRATIVE AGENT’S RESPONSE IS REQUIRED WITHIN FIFTEEN (15) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND ADMINISTRATIVE AGENT” and the envelope containing the request must be marked “PRIORITY;” and (ii) Administrative Agent shall have failed to notify Borrowers of its approval or disapproval within such fifteen (15) Business Days following Administrative Agent’s receipt of Borrowers’ written request together with such proposed modification, change, supplement, alteration or amendment of the Franchise Agreement and any and all other information and documentation relating thereto reasonably required by Administrative Agent to reach a decision; provided, however, that in no event shall Administrative Agent be deemed to have approved (1) a surrender, termination or cancellation of the Franchise Agreement, (2) any modification, change, supplement, alteration or amendment of the Franchise Agreement that affects any of the material business terms of the Franchise Agreement, (3) any change under the Franchise Agreement that could result in a Material Property Event, or (4) a Replacement Franchise Agreement. Upon a Borrower’s request, Administrative Agent shall deliver to such Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.20.

     7.21 Operating Leases. Each Operating Lessee shall:

        (a) promptly perform and/or observe all of the covenants and agreements required to be performed and observed by it under the Operating Lease to which it is a party and do all things necessary to preserve and to keep unimpaired its rights thereunder;

        (b) promptly notify Administrative Agent of any event of default under any Operating Lease;

        (c) promptly enforce the performance and observance of all of the covenants and agreements required to be performed and/or observed by any Operating Lessee under any Operating Lease; and

        (d) maintain each Operating Lease in full force and effect during the term of the Loan.

     7.22 OFAC. At all times throughout the term of the Loan, each Loan Party shall be in compliance in all material respects with all applicable orders, rules, regulations and recommendations of The Office of Foreign Assets Control of the U.S. Department of the Treasury.

     7.23 The Ground Leases.

        (a) With respect to each Ground Lease, Borrowers shall (i) pay all rents, additional rents and other sums required to be paid by any Owner, as tenant under and pursuant to the provisions of a Ground Lease, (ii) diligently perform and observe all of the terms, covenants and conditions of each Ground Lease on the part of such Owner, as tenant thereunder, (iii) promptly notify Administrative Agent of the giving of any notice by the landlord under the applicable Ground Lease to any Borrower of any default by such Owner, as tenant thereunder, and deliver to Administrative Agent a true copy of each such notice within two (2) days after such Borrower’s receipt thereof and (iv) promptly notify Administrative Agent of any bankruptcy, reorganization or insolvency of the landlord under the applicable Ground Lease

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or of any notice thereof, and deliver to Administrative Agent a true copy of such notice within five (5) days of such Borrower’s receipt. No Owner nor any Fee Owner shall, without the prior consent of Administrative Agent, surrender the leasehold estate created by the applicable Ground Lease or terminate or cancel any Ground Lease or modify, change, supplement, alter, amend or waive any material term of any Ground Lease, either orally or in writing, and if any Owner shall default in the performance or observance of any term, covenant or condition of any Ground Lease on the part of such Owner, as tenant thereunder, and shall fail to cure the same prior to the expiration of any applicable cure period provided thereunder, Administrative Agent shall have the right, but shall be under no obligation, 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 such Ground Lease on the part of such Owner or Fee Owner to be performed or observed on behalf of such Owner or Fee Owner, as applicable, to the end that the rights of such Owner in, to and under such Ground Lease shall be kept unimpaired and free from default. If the landlord under the applicable Ground Lease shall deliver to Administrative Agent a copy of any notice of default under such Ground Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Owner and Fee Owners shall exercise each individual option, if any, to extend or renew the term of each Ground Lease upon demand by Administrative Agent made at any time within one (1) year prior to the last day upon which any such option may be exercised, and each Owner and Fee Owner hereby expressly authorizes and appoints Administrative Agent its attorney-in-fact to exercise any such option in the name of and upon behalf of such Owner, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest.

        (b) Notwithstanding anything contained in any Ground Lease to the contrary and except for Operating Leases, no Owner shall further sublet any portion of the related Collateral Property (other than as permitted pursuant to Section 7.16) without prior written consent of Administrative Agent. Each sublease hereafter made shall provide that, (a) in the event of the termination of the related Ground Lease, the sublease shall not terminate or be terminable by the lessee thereunder; (b) in the event of any action for the foreclosure of the Mortgage with respect to the related Collateral Property, the sublease shall not terminate or be terminable by the lessee thereunder by reason of the termination of the Ground Lease, unless such lessee is specifically named and joined in any such action and unless a judgment is obtained therein against such lessee; and (c) in the event that such Ground Lease is terminated as aforesaid, the lessee under the sublease shall attorn to the lessor under such Ground Lease or to the purchaser at the sale of the related Collateral Property on such foreclosure, as the case may be. If any portion of such Collateral Property shall be sublet pursuant to the terms of this subsection, such sublease shall be deemed to be included in the Collateral Property. Upon a Borrower’s request, Administrative Agent shall deliver to such Borrower a reasonably detailed description of the reasons for any disapprovals under this Section 7.23.

        (c) Notwithstanding anything to the contrary contained herein with respect to any Ground Lease:

     (i) The Lien of the Mortgages attach to each Owner’s rights and remedies at any time arising under or pursuant to subsection 365(h) of the Bankruptcy Code, including, without limitation, all of each Owner’s rights, as debtor, to remain in possession of the related Collateral Property which is subject to a Ground Lease;

     (ii) No Owner shall, without Administrative Agent’s prior written consent, elect to treat a Ground Lease as terminated under subsection 365(h)(1) of the Bankruptcy Code. Any such election made without Administrative Agent’s prior written consent shall be void;

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     (iii) As security for the Obligations, each Owner unconditionally assigns, transfers and sets over to Administrative Agent all of such Owner’s claims and rights to the payment of damages arising from any rejection by any Fee Owner or Ground Lessor under the Bankruptcy Code. Administrative Agent and the applicable Owner shall proceed jointly or in the name of such Owner in respect of any claim, suit, action or proceeding relating to the rejection of a Ground Lease, including, without limitation, the right to file and prosecute any proofs of claim, complaints, motions, applications, notices and other documents in any case in respect of a Fee Owner or Ground Lessor under the Bankruptcy Code. This assignment constitutes a present, irrevocable and unconditional assignment of the foregoing claims, rights and remedies, and shall continue in effect until all of the Obligations shall have been satisfied and discharged in full. Any amounts received by Administrative Agent or any Owner as damages arising out of the rejection of a Ground Lease as aforesaid shall be applied to all costs and expenses of Administrative Agent (including, without limitation, reasonable attorneys’ fees and costs) incurred in connection with the exercise of any of its rights or remedies in accordance with the applicable provisions hereof;

     (iv) If pursuant to subsection 365(h) of the Bankruptcy Code, any Fee Owner or Ground Lessor seeks to offset, against the rent reserved in a Ground Lease, the amount of any damages caused by the nonperformance by the applicable Fee Owner or Ground Lessor of any of its obligations thereunder after the rejection by such Fee Owner or Ground Lessor under the Bankruptcy Code, then the applicable Owner shall not effect any offset of the amounts so objected to by Administrative Agent. If Administrative Agent has failed to object as aforesaid within ten (10) days after notice from such Owner in accordance with the first sentence of this subsection, such Owner may proceed to offset the amounts set forth in such Owner’s notice to Administrative Agent;

     (v) If any action, proceeding, motion or notice shall be commenced or filed in respect of any Fee Owner or Ground Lessor of all or any part any Collateral Property subject to a Ground Lease in connection with any case under the Bankruptcy Code, Administrative Agent and the applicable Owner shall cooperatively conduct and control any such litigation with counsel agreed upon between such Owner and Administrative Agent in connection with such litigation. Borrowers shall, upon demand, pay to Administrative Agent all costs and expenses (including reasonable attorneys’ fees and costs) actually paid or actually incurred by Administrative Agent or any Lender in connection with the cooperative prosecution or conduct of any such proceedings. All such costs and expenses shall be secured by the Lien of the applicable Mortgage; and

     (vi) Each Owner shall promptly, after obtaining knowledge of such filing, notify Administrative Agent orally of any filing by or against a Fee Owner or Ground Lessor of a petition under the Bankruptcy Code. The applicable Owner shall thereafter promptly give written notice of such filing to Administrative Agent, setting forth any information available to such Owner as to the date of such filing, the court in which such petition was filed, and the relief sought in such filing. Such Owner shall promptly deliver to Administrative Agent any and all notices, summons, pleadings, applications and other documents received by Administrative Agent in connection with any such petition and any proceedings relating to such petition.

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        (d) Fee Owner and Owner acknowledge and confirm that, with respect to each Ground Lease (other than the Sheraton Burlington Parking Lease):

     (i) the Mortgage encumbering such Ground Lease Property is and shall be deemed to be a “Leasehold Mortgage” as set forth in each Ground Lease for all purposes thereunder;

     (ii) Administrative Agent, as mortgagee, grantee or beneficiary, as applicable, thereunder, together with its successors and assigns in such capacity, shall constitute a “Leasehold Mortgagee” thereunder;

     (iii) the Mortgages encumbering the Ground Leased Properties shall be entitled to all the rights, benefits and privileges of a “Leasehold Mortgage” under the Ground Leases;

     (iv) Administrative Agent shall be entitled to all the rights, benefit and privileges of a “Leasehold Mortgagee” under the Ground Lease;

     (v) the notice for address for the “Leasehold Mortgagee” under the Ground Leases shall be the address of Administrative Agent as set forth in this Agreement; and

     (vi) all references to “Chase” in the Ground Leases relating the Embassy Properties shall henceforth refer to “Fortress Credit Corp. in its capacity as administrative agent under that certain Credit Agreement, dated as of May 3, 2010, together with its successors and assigns as the Administrative Agent thereunder.”

     7.24 Asbestos Operations and Maintenance (“O&M”) Program.

        (a) With respect to the Sheraton Burlington Property, the applicable Borrower shall enter into a contract with a licensed industrial hygienist to develop a fully documented O&M Program which the applicable Borrower shall submit within thirty (30) days of the date hereof to Administrative Agent. Borrower shall address any reasonable objections the Administrative Agent makes to the O&M Program. Borrowers further covenant and agree to implement and follow the terms and conditions of such O&M Program during the term of the Loan, including any extension or renewal thereof. With respect to all Collateral Properties other than the Sheraton Burlington Property, the applicable Borrowers shall draft and implement one fully documented O&M Program covering all such properties (“Multi-Site O&M Program”) which each applicable Borrower shall submit within thirty (30) days of the date hereof to Administrative Agent. Borrower shall address any reasonable objections the Administrative Agent makes to the Multi-Site O&M Program. Borrowers further covenant and agree to implement and follow the terms and conditions of the Multi-Site O&M Program during the term of the Loan, including any extension or renewal thereof. The requirement that a Borrower develops and complies with an O&M Program shall not be deemed to constitute a waiver or modification of any of Borrowers’ covenants and agreements with respect to Hazardous Materials or Environmental Laws.

        (b) Borrowers shall, not later than sixty (60) days after the date hereof, conduct engage an environmental engineer to conduct radon testing at the Embassy Suites Marlborough Property and deliver the results of such testing to Administrative Agent.

     7.25 Sheraton Burlington Parking Lease. Borrowers agree to use all commercially reasonable efforts to cause the Lessor under the Sheraton Burlington Parking Lease to enter into a modification and amendment to the Sheraton Burlington Parking Lease which provides to Administrative Agent (and any

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other holder of the Loan or any interest therein) and to any future leasehold mortgagee with respect to the Sheraton Burlington Parking Lease customary leasehold mortgagee protection provisions, including without limitation, notice and cure rights in connection with defaults occurring under the Sheraton Burlington Parking Lease, the right to foreclosure the lien of the leasehold mortgage and to succeed to the rights of the tenant under the Burlington Parking Lease, attornment rights, leasehold mortgagee’s right to enter into a replacement lease (on identical terms as those set forth in the Sheraton Burlington Parking Lease) upon any termination of the Sheraton Burlington Parking Lease, including in connection with a rejection of the Sheraton Burlington Parking Lease in any Insolvency Proceeding, and mortgagee’s right to exercise on behalf of the tenant under the Sheraton Burlington Parking Lease any renewal options and purchase rights contained therein, and such other leasehold mortgagee protection rights as are consistent with customary and prudent lender practices. Borrowers shall obtain Administrative Agent’s prior written consent before entering into any modification of the Sheraton Burlington Parking Lease, which consent shall not be unreasonably withheld, conditioned or delayed with respect to the matters set forth above in this Section 7.25.

     7.26 Sheraton Society Hill Letter Agreement. Sheraton Society Hill Operating Lessee and the Sheraton Manager under the Sheraton Society Hill Management Agreement are parties to that certain Letter Agreement, dated December 21, 2005 (the “Sheraton Society Hill Letter Agreement”), pursuant to which Sheraton Society Hill Operating Lessee is entitled to receive a portion of the licensing fees payable to such Sheraton Manager (or its Affiliates) on account of the Franklin Plaza Hotel (as defined therein). Borrowers hereby covenant and agree to deposit, or to cause Sheraton Manager to deposit, all funds payable to Sheraton Society Hill Operating Lessee on account of the Sheraton Society Hill Letter Agreement directly into the Sheraton Society Hill Property Account.

     7.27 Sheraton Atlanta Galleria Property Fire Code Violations. Borrowers shall deliver evidence to Administrative Agent that Borrowers have remedied all outstanding code violations at the Sheraton Atlanta Galleria Property set forth in that certain Fire Marshal’s Office Field Inspection Report (Occupancy ID 01817) dated January 6, 2010, by no later than October 1, 2010.

7.28 Sheraton Atlanta Galleria Incentive Fee Tie-In. The Sheraton Atlanta Galleria Management Agreement, as in effect on the Closing Date, provides that the related Incentive Management Fee is calculated based on the aggregate financial performance of the Sheraton Atlanta Galleria Property and certain other hotels more particularly described therein (such other hotels, the “Tie-In Hotels”). If during any Lockbox Period any Incentive Management Fee is paid to the Sheraton Manager from the revenue collected at the Sheraton Atlanta Galleria Property, and if the amount of any such Incentive Management Fee exceeds the amount of the Incentive Management Fee that would have been payable if the Incentive Management Fee had been calculated solely based upon the performance of the Sheraton Atlanta Galleria Property without regard to any of the Tie-In Hotels (the amount of any such excess payment to Sheraton Manager, the “Incentive Management Fee Tie-In Amount”), then on or before the fifth (5th) Business Day following the date upon which Borrowers receive the Sheraton Manager operating statement for the applicable Accounting Period (as defined in the Sheraton Management Agreement), Borrowers shall pay to Administrative Agent an amount equal to the Incentive Fee Tie-In Amount, to be applied by Administrative Agent in accordance with the order of priority established in the then applicable waterfall provision in this Section 3.6.

     7.29 Compliance with Brand Standards Letter Agreement. Pursuant to the Brand Standards Letter Agreement, if (i) Embassy Corpus Christi Owner has not sold the Embassy Corpus Christi Property by June 30, 2013, and (ii) the Embassy Corpus Christi Franchisor requires the Embassy Corpus Christi Property to be renovated to comply with the Embassy Corpus Christi Franchisor’s brand standards (the “Brand Standards Renovation”), then Borrowers shall diligently pursue and negotiate a work plan acceptable to the Embassy Corpus Christi Franchisor which sets forth the scope of the Brand Standards

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Renovation related work and the timeline for the completion of such work (the “Brand Standards Renovation Work Plan”). Borrowers shall complete the Brand Standards Renovation in accordance with the Brand Standards Renovation Work Plan. If Borrowers fail to complete the Brand Standards Renovation as and when set forth in the Brand Standards Work Plan, Borrowers shall immediately pay to Administrative Agent an amount necessary to complete the Brand Standards Renovation (as determined by Administrative Agent in its reasonable discretion based upon the matters and the timetable set forth in the Brand Standards Renovation Work Plan) (such amount, the “Brand Standards Renovation Payment Amount”). Notwithstanding the foregoing, if, following the occurrence and continuance of an Event of Default and Administrative Agent’s exercise of Administrative Agent’s rights and remedies in connection therewith (or Administrative Agent’s (or its nominee’s) acceptance of a deed-in-lieu thereof), Administrative Agent, Administrative Agent’s successor or assign, or a third-party purchaser at foreclosure (or a third-party purchaser from Administrative Agent (or Administrative Agent’s nominee that was the purchaser at foreclosure)) is required by Embassy Corpus Christi Franchisor to effect a change in ownership product improvement plan (“PIP”), Borrowers shall immediately pay to Administrative Agent, in lieu of any Brand Standards Renovation Payment Amount, the amount necessary to complete such PIP (as determined by Administrative Agent in its reasonable discretion); provided, however, that Administrative Agent agrees that Borrowers’ obligation to pay the cost to complete a PIP shall be capped at $2,000,000 (the amount required to be paid by Borrowers in connection with any PIP, the “PIP Payment Amount”).

ARTICLE VIII
NEGATIVE COVENANTS

        From the date hereof until payment and performance in full of all Obligations under the Loan Documents or, in respect of a specific Collateral Property, until the earlier release of the Liens of all Mortgages encumbering such Collateral Property in accordance with the terms of this Agreement and the other Loan Documents, each Borrower covenants and agrees that it will not do, directly or indirectly, any of the following:

     8.1 Indebtedness. No Borrower shall create, incur, assume or suffer to exist any Indebtedness other than the Obligations, except for Indebtedness of the type described pursuant to Section 6.34(g) or permitted by Section 8.4.

     8.2 Investments. No Borrower shall make any Investments except:

        (a) Investments in the form of Permitted Investments; and

        (b) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss.

     8.3 Liens. No Borrower shall, nor shall any Borrower permit any other Person to, create, incur, assume, or suffer to exist any Lien upon any Collateral Property or any Equity Interest in any Restricted Party other than any of the following (each a “Permitted Lien”):

        (a) Liens pursuant to any Loan Document;

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        (b) Liens existing on the date hereof and listed on Schedule 8.3;⁴

        (c) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

        (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, or other like Liens arising in the ordinary course of business which are discharged of record (by payment, bonding or otherwise) within sixty (60) days, provided that such Liens are being contested in good faith by appropriate proceedings diligently conducted;

        (e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

        (f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds, performance bonds, and other obligations of a like nature incurred in the ordinary course of business;

        (g) Liens set forth in the Title Policies issued with respect to the Mortgages;

        (h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 10.1(m) or securing appeal or other surety bonds related to such judgments;

        (i) with respect to Personal Property constituting a part of the Collateral Property, a Permitted Personal Property Lien;

        (j) with respect to an Equity Interest in any Restricted Party, a Permitted Equity Transfer; and

        (k) Liens related to financing or leasing arrangements permitted by permitted by Section 8.4.

     8.4 Personal Property Leasing and Financing. Without the prior consent of Administrative Agent, which consent may be withheld in Administrative Agent’s sole discretion, no Borrower shall, nor shall any Borrower permit any other Person to, create, incur, assume, or suffer to exist in connection with the ownership or operation of any hotel, any Personal Property subject to any financing or any leasing arrangements, except (each a “Permitted Personal Property Lien”):

        (a) those disclosed on Schedule 6.43;

        (b) extensions, renewals, replacements and refinancings of any such financing or leasing arrangement referred to in (a) that are on an arm’s-length basis and that do not materially increase the outstanding principal amount thereof, except for amounts attributable to (i) fees and expenses for extensions and renewals and (ii) market increases for refinancings and replacements; or

        (c) any other equipment or personal property financing or leasing arrangements for equipment or personal property used at the Collateral Properties in the ordinary course of business; provided, however, that the aggregate amount of debt service or lease payments in respect of all financing

⁴ Sidley received a little while ago. We are reviewing this now.

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and leasing arrangements shall be less than $50,000 in the aggregate per annum for any individual Collateral Property.

     8.5 Operation and Service Agreements. No Borrower has entered into any material Contractual Obligation with respect to property or services to be provided by third parties with respect to any Collateral Property other than:

        (a) those listed on Schedule 6.42;

        (b) any renewal, replacement or extension of the foregoing on substantially similar financial terms or reasonable increases thereof made on an arm’s-length basis; or

        (c) any other material Contractual Obligation entered into in the ordinary course of business consistent with past practices.

     8.6 Restricted Payments. No Borrower shall declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:

        (a) each Borrower may make Restricted Payments so long as there is no Default or Event of Default has occurred and is continuing or would result therefrom;

        (b) each Borrower may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

        (c) each Loan Party may purchase, redeem, or otherwise acquire shares of its common stock or other common Equity Interests or warrants or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests.

provided, however, that notwithstanding the foregoing Borrowers may declare and make any Restricted Payments that are necessary for FelCor Trust to maintain its status as a REIT, but then only in the minimum amount necessary to maintain such status as a REIT.

     8.7 [Intentionally Omitted].

     8.8 Dispositions. No Borrower shall make any Disposition or enter into any agreement to make any Disposition except:

        (a) Dispositions of Personal Property, whether now owned or hereafter acquired, in the ordinary course of business for fair consideration and on an arm’s-length basis, provided that if such property was required under any Loan Document to be subject to a first priority Lien in favor of Administrative Agent, such property shall be replaced by an item of equal or greater value which is subject to a first-priority Lien in favor of Administrative Agent;

        (b) Dispositions permitted by Section 8.9;

        (c) Dispositions of Collateral Properties (including any leasehold interest (or subleasehold interest, as the case may be, created under any Ground Lease or Operating Lease)), so long as such Collateral Properties (or leasehold or subleasehold interests) are released pursuant to Section 2.10 prior to or contemporaneously with such Disposition; and

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        (d) The Disposition in lieu of condemnation by the Owner of the Sheraton Burlington Property, in favor of the City of South Burlington, of that certain strip of land which is between eleven (11) and sixteen (16) feet in width running along Williston Road (the “Sheraton Burlington Condemnation Parcel”); provided, however, that

     (i) Borrowers deliver to Administrative Agent evidence that would be reasonably acceptable to a prudent lender that the release of the Burlington Condemnation Parcel will not adversely affect (other than to a de minimis extent) the economic value of, or the revenue produced by the Sheraton Burlington Property;

     (ii) As of date of the release, no Event of Default has occurred which is continuing and no Event of Default would result from the proposed release;

     (iii) Borrowers deliver to Administrative Agent evidence which would be satisfactory to a prudent lender that (A) the Sheraton Burlington Condemnation Parcel has been or concurrently with the release will be legally subdivided from the remainder of the Sheraton Burlington Property (to the extent required by applicable Law), and (B) the Sheraton Burlington Condemnation Parcel (together with any appurtenant easements or other rights with respect to adjacent property) is not necessary for the related Sheraton Burlington Property to comply with any zoning, building, land use or parking or other similar Legal Requirements with respect to the related Sheraton Burlington Property or for the then current use of the Sheraton Burlington Condemnation Property, including without limitation for access, driveways, parking, utilities or drainage or, to the extent that the Sheraton Burlington Condemnation Parcel is necessary for any such purpose, a reciprocal easement agreement or other agreement has been executed and recorded that would allow the owner of the Sheraton Burlington Property to continue to use the Sheraton Burlington Condemnation Parcel to the extent necessary for such purpose, which reciprocal easement agreement shall be superior to the related Security Instrument;

     (iv) If requested by Administrative Agent, Borrowers shall deliver to Administrative Agent an endorsement to the applicable Title Insurance Policy insuring the applicable Mortgage, which endorsement (i) extends the effective date of such Title Insurance Policy to the effective date of the release, (ii) confirms no change in the priority of the Mortgage on the balance of the Sheraton Burlington Property (exclusive of the Sheraton Burlington Condemnation Parcel); and (iii) insures the rights and benefits under any new or amended reciprocal easement agreement or such other agreement required pursuant to subclause (iii) above that has been executed and recorded, if any;

     (v) Administrative Agent receives evidence in the form of a certificate executed by a Responsible Officer of the Owner of the Sheraton Burlington Property that the Owner of the Sheraton Burlington Property has complied with any requirements applicable to the reciprocal easement agreements, Operating Lease, parking agreements or other similar agreements affecting the related Sheraton Burlington Property and that the release does not violate any of the provisions of such documents in any respect and that any such release of the Sheraton Burlington Condemnation Parcel shall not result in any right in favor of a third party of offset, abatement or reduction of rent payable to any Borrower or any right in favor of a third party of termination, cancellation or surrender under any Leases, reciprocal easement agreements or other material agreement by which any Borrower or the Sheraton Burlington Property is bound or encumbered;

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     (vi) Borrowers pay all of Administrative Agent’s reasonable out-of-pocket expenses relating to the release of the Sheraton Burlington Condemnation Parcel; and

     (vii) Borrower shall simultaneously with the release of Sheraton Burlington Condemnation Parcel transfer title to the Sheraton Burlington Condemnation Parcel to the City of South Burlington;

provided, further, that any Disposition pursuant to clauses (a), (b), and (c) shall be for fair market value.

     8.9 Dissolution. No Borrowers shall (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) transfer, lease or sell, in one transaction or any combination of transactions, the assets or all or substantially all of the properties or assets of such Borrower except to the extent expressly permitted by the Loan Documents, (c) except as expressly permitted under the Loan Documents, modify, amend, waive or terminate its organizational documents or its qualification and good standing in any jurisdiction or (d) cause any Principal to (i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which Principal would be dissolved, wound up or liquidated in whole or in part, or (ii) except as expressly permitted under the Loan Documents, amend, modify, waive or terminate the certificate of incorporation, bylaws or similar organizational documents of any Principal, in each case, without obtaining the prior written consent of Administrative Agent, which consent (with respect to (d)(ii) only) shall not be unreasonably withheld, delayed or conditioned.

     8.10 No Subsidiaries. Except as may be previously approved by Administrative Agent in writing, no Borrower shall create or suffer to exist any Subsidiary.

     8.11 Burdensome Agreements. No Borrower shall enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Guarantor to Guarantee the Indebtedness of Borrowers under the Guaranty or (ii) of any Borrower to create, incur, assume or suffer to exist Liens on property of such Person; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

     8.12 Change In Business. Borrowers shall not enter into any line of business other than the ownership, acquisition, development, operation, leasing and management of the Collateral Properties (including providing services in connection therewith), or make any material change in the scope or nature of their respective business objectives, purposes or operations or undertake or participate in activities other than the continuance of its present business.

     8.13 Debt Cancellation. Borrowers shall not cancel or otherwise forgive or release any material claim or debt (other than termination of Leases in accordance herewith) owed to Borrowers by any Person, except for adequate consideration and in the ordinary course of Borrowers’ business.

     8.14 Zoning. Without the prior written consent of Administrative Agent, Borrowers shall not (a) initiate or consent to any zoning reclassification of any portion of any Collateral Property, (b) seek any variance under any existing zoning ordinance or (c) use or permit the use of any portion of any Collateral Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable Law.

     8.15 No Joint Assessment. Borrowers shall not suffer, permit or initiate the joint assessment of any Collateral Property with (a) any other real property constituting a tax lot separate from such Collateral Property, or (b) any portion of such Collateral Property which may be deemed to constitute

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personal property, or any other procedure whereby the Lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such Collateral Property.

     8.16 Name, Identity, Structure, or Principal Place of Business.

        (a) No Borrower shall change its name, identity (including its trade name or names), or principal place of business as set forth in Schedule 6.33, without, in each case, first giving Administrative Agent thirty (30) days prior written notice. Borrowers shall not change its corporate, partnership or other structure, or the place of its organization as set forth in Schedule 6.33, without, in each case, the consent of Administrative Agent. Upon Administrative Agent’s request, such Borrower shall execute and deliver additional financing statements, security agreements and other instruments which may be necessary to effectively evidence or perfect the Secured Parties’ security interest in the Collateral as a result of such change of principal place of business or place of organization.

     8.17 ERISA.

        (a) During the term of the Loan or while any Obligations are outstanding, no Borrower or any Fee Owner shall be a Plan and none of the assets of any Borrower or any Fee Owner shall constitute Plan Assets.

        (b) Borrowers further covenant and agree to deliver to Administrative Agent such certifications or other evidence from time to time throughout the term of the Loan, as requested by Administrative Agent in its sole discretion, and represent and covenant that (A) each Borrower and each Fee Owner is not and each Borrower and each Fee Owner and any ERISA Affiliate do not maintain or otherwise have any liability (contingent or otherwise) with respect to an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Section 412 of the Code or Title I or Title IV of ERISA, or a “governmental plan” within the meaning of Section 3(3) of ERISA; (B) no Borrower or any Fee Owner is subject to state or local statutes regulating investments and fiduciary obligations with respect to governmental plans; and (C) one or more of the following circumstances is true:

     (i) Equity interests in such Borrower or such Fee Owner are publicly offered securities, within the meaning of 29 C.F.R. § 2510.3-101(b)(2);

     (ii) Less than twenty-five percent (25%) of each outstanding class of Equity Interests in such Borrower or such Fee Owner are held by “benefit plan investors” within the meaning of 29 C.F.R. § 2510.3-101(f)(2), as modified by Section 3(42) of ERISA; or

     (iii) Such Borrower or such Fee Owner qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. § 2510.3-101(c) or (e).

     8.18 Affiliate Transactions. Except for the Ground Leases and the Operating Leases, Borrowers shall not enter into, or be a party to, any transaction with an Affiliate of Borrowers or any Principal or any of the partners of Borrowers or any Principal except in the ordinary course of business and are no less favorable to Borrowers or such Affiliate than would be obtained in a comparable arm’s-length transaction with an unrelated third party.

     8.19 Transfers.

        (a) Except for (i) Permitted Liens, (ii) Permitted Equity Transfers, (iii) Permitted Personal Property Liens, (iv) sales or dispositions of Personal Property in accordance with the provisions

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of Section 8.8, (v) in connection with a release of any Collateral Property in accordance with the provisions of Section 2.10, (vi) Condemnation of Collateral Property, and (vii) Permitted Changes of Control, no Borrower shall, nor shall any Borrower permit, any Transfer of any Collateral Property or any Equity Interest in any Restricted Party or any part thereof or any legal or beneficial interest therein without the prior written consent of the Required Lenders, which may be withheld in their sole discretion. Administrative Agent and Lenders shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Obligations immediately due and payable upon a Transfer in violation of this Section 8.19. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Administrative Agent or Required Lenders have consented to any previous Transfer. Notwithstanding anything to the contrary contained in this Section 8.19, no transfer (whether or not such transfer shall constitute a Transfer) shall be made to any Person which is not permitted pursuant to applicable Law.

        (b) Borrowers shall have the right to request that Administrative Agent consent to (i) a transfer of all of the Collateral Properties to another Person (the “Transferee Borrower”) and the assumption by the Transferee Borrower of all of Borrowers’ obligations under the Loan Documents, and (ii) the replacement of Guarantor with new guarantors and indemnitors who shall assume all of the obligations of the Guarantors arising from and after such date and release of Borrowers and Guarantor from obligations arising from and after such date (collectively, an “Assumption”), subject to the conditions set forth in subsections (c) and (d) of this Section 8.19. Together with such written application, Borrowers shall pay to Administrative Agent a review fee of $25,000. Borrowers shall also pay on demand all of the out-of-pocket costs and expenses incurred by Administrative Agent, including attorneys’ fees and expenses, and the fees and expenses of the Rating Agencies, if any, and other outside entities, in connection with considering any proposed Assumption, whether or not the same is permitted or occurs.

        (c) Administrative Agent shall not withhold its consent to an Assumption (any such Assumption consented to by Administrative Agent, a “Permitted Assumption”) provided, and upon the condition, that:

     (i) No Event of Default shall have occurred and be continuing at the time of such Assumption;

     (ii) Borrowers shall have submitted to Administrative Agent true, correct and complete copies of any and all information and documents reasonably requested by Administrative Agent concerning the Transferee Borrower, replacement guarantors and indemnitors and all of such information and documents shall be reasonably acceptable to Administrative Agent;

     (iii) Evidence reasonably satisfactory to Administrative Agent shall have been provided showing that the Transferee Borrower and such of its Affiliates as shall reasonably be designated by Administrative Agent comply and will comply with Section 6.34, as those provisions may be modified by Administrative Agent taking into account the ownership structure of Transferee Borrower and its Affiliates;

     (iv) If required by Administrative Agent, Borrowers shall have obtained, and delivered to Administrative Agent, Rating Agency Confirmation with respect to the Assumption, the Transferee Borrower, the new guarantors and indemnitors and all related transactions;

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     (v) Borrowers shall have paid all of Administrative Agent’s out-of-pocket costs and expenses in connection with considering the Assumption, and shall have paid the amount reasonably requested by Administrative Agent as a deposit against Administrative Agent’s costs and expenses in connection with effecting the Assumption;

     (vi) Borrowers, the Transferee Borrower, and the replacement guarantors and indemnitors shall have indicated in writing in form and substance reasonably satisfactory to Administrative Agent their readiness and ability to satisfy the conditions set forth in subsection (d) below;

     (vii) The identity, experience and financial condition of the Transferee Borrower shall otherwise be satisfactory to Administrative Agent in its sole and absolute discretion;

     (viii) The identity and financial condition of the replacement guarantors and indemnitors shall be satisfactory to Administrative Agent in its sole and absolute discretion;;

     (ix) Borrower shall have delivered to Administrative Agent an assumption fee equal to one percent (1.00%) of the Outstanding Amount as of the date of Transfer and Assumption (the “Assumption Fee”); and

     (x) The Loan shall not have previously been the subject of an Assumption.

        (d) If Administrative Agent consents to the proposed Assumption, the Transferee Borrower and/or Borrowers, as the case may be, shall promptly and as a condition to the Assumption deliver the following to Administrative Agent:

     (i) Borrowers, the Transferee Borrower, the original and replacement guarantors and indemnitors shall execute and deliver any and all documents reasonably required by Administrative Agent to evidence the Transfer and Assumption of the Loan, in form and substance reasonably required by Administrative Agent and similar to those received by Administrative Agent in connection with the origination of the Loan;

     (ii) Counsel to the Transferee Borrower and replacement guarantors and indemnitors shall deliver to Administrative Agent opinions in form and substance reasonably satisfactory to Administrative Agent as to such matters as Administrative Agent shall reasonably require in connection with such Assumption, which may include opinions as to substantially the same matters as were required in connection with the origination of the Loan including, without limitation, a bankruptcy non-consolidation opinion;

     (iii) Borrowers shall cause to be delivered to Administrative Agent, an endorsement (relating to the change in the identity of Borrowers and execution and delivery of the Assumption documents) to Administrative Agent’s policy of title insurance in form and substance acceptable to Administrative Agent, in Administrative Agent’s reasonable discretion; and

     (iv) Borrowers shall deliver to Administrative Agent a payment in the amount of the Assumption Fee and all remaining unpaid reasonable costs incurred by Administrative Agent in connection with the Transfer and Assumption, including but not

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limited to Administrative Agent’s attorneys’ fees and expenses, all recording fees, and all fees payable to the title company in connection with the Transfer and Assumption.

        (e) Transfers of Equity Interests (or otherwise) in FelCor Op or FelCor Trust that result in a Change in Control are prohibited without the consent of Administrative Agent (which consent may be granted or withheld in Administrative Agent’s sole and absolute discretion), unless they constitute Permitted Changes of Control. If FelCor Trust or FelCor Op is the subject of any Change in Control that is not a Permitted Change in Control, the Maturity Date shall automatically be accelerated and the Obligations shall be immediately due and payable and Administrative Agent shall be entitled to exercise its rights and remedies hereunder if such amount is not paid on or before the date such Change in Control takes effect; provided, however, that, notwithstanding anything contained in Section 2.6(c) to the contrary, there shall be no Make Whole Amount due in connection with such prepayment. Contemporaneously with the consummation of any Permitted Change in Control, Borrower shall pay to Administrative Agent a fee equal to one percent (1%) of the then outstanding principal balance of the Loan.

     8.20 REA. No Borrower shall:

        (a) enter into, terminate, or modify any REA in any material respect without Administrative Agent’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; or

        (b) fail to enforce, comply with, or cause each of the parties to the REA to comply with all of the material economic terms and conditions contained in any REA.

     8.21 No Other Liens. Other than Permitted Liens, no Borrower shall, without the prior written consent of Administrative Agent, create, place, or permit to be created or placed, or through any act or failure to act, acquiesce in the placing of, or allow to remain, any deed of trust, mortgage, voluntary or involuntary lien, whether statutory, constitutional, or contractual, security interest, encumbrance, or charge, or conditional sale or other title retention document, against or covering any Collateral Property, or any part thereof and should any of the foregoing become attached hereafter in any manner to any part of the Collateral Property without the prior written consent of Administrative Agent, each Borrower will cause the same to be promptly discharged and released. Except as provided in Section 8.4, each Borrower will own all parts of the Collateral Properties and will not acquire any fixtures, equipment, or other property (including software embedded therein) forming a part of any Collateral Property pursuant to a Lease, license, security agreement, or similar agreement, whereby any party has or may obtain the right to repossess or remove same, without the prior written consent of Administrative Agent.

     8.22 Operation of Hotels. Except in connection with a Casualty, Condemnation or to the extent necessary in connection with an alteration permitted pursuant to the Section 7.19, Borrowers agree to operate each of the Collateral Properties as hotels (and, in the case of Collateral Properties with conference centers, as hotels and conference centers), and no Borrower shall cause or allow a Material Hotel Shutdown without the prior written consent of Administrative Agent which shall not be unreasonably withheld, conditioned or delayed. The foregoing notwithstanding, unless and until Borrowers shall have received written notice from Administrative Agent to the contrary, Borrowers may shutdown the “Champlain Wing” of the Sheraton Burlington Property for so long as Borrowers’, in the exercise of Borrowers’ commercially reasonable judgment, deem necessary or prudent.

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ARTICLE IX
INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

     9.1 Insurance.

        (a) Borrowers shall obtain and maintain, or cause to be maintained, Policies for each Borrower and the Collateral Properties providing at least the following coverages:

     (i) so called “All Risk” or “Special Form” insurance on the Improvements and the Personal Property, in each case (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost,” which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation; (B) containing an agreed amount endorsement or its equivalent with respect to the Improvements, business income, rent loss and Personal Property waiving all co-insurance provisions; (C) providing for no deductible in excess of $100,000, other than deductibles for named windstorm and California earthquake coverage, which shall with respect to each Collateral Property, be no more than five percent (5%) of the insurable value of each Collateral Property; and (D) providing coverage for contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements together with customary “Ordinance or Law Coverage” if any of the Improvements or the use of each Collateral Property shall constitute legal non-conforming structures or uses in an amount acceptable to Administrative Agent;

     (ii) commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about each Collateral Property, including “Dram Shop” or other liquor liability coverage if alcoholic beverages are sold from or may be consumed at the Collateral Property such insurance (A) to be on the so-called “occurrence” form with a combined single limit of not less than $1,000,000; (B) to continue at not less than the aforesaid limit until required to be changed by Administrative Agent in writing by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if any” basis; (3) independent contractors; (4) blanket contractual liability for all written and oral contracts; and (5) contractual liability covering the indemnities contained in Article X of the Mortgages to the extent the same is available;

     (iii) business interruption/loss of rents insurance (A) with loss payable to Administrative Agent on behalf of Lenders; (B) covering all risks required to be covered by the insurance provided for in Section 9.1(a)(i); (C) in an amount equal to one hundred percent (100%) of the projected gross income from each Collateral Property (on an actual loss sustained basis) for a period continuing until the Restoration of the Collateral Property is completed; the amount of such business interruption/loss of rents insurance shall be determined prior to the Closing Date and at least once each year thereafter based on the greatest of: (x) Borrowers’ reasonable estimate of the gross income from each Collateral Property and (y) the highest gross income received during the term of the Notes for any full calendar year prior to the date the amount of such insurance is being determined, in each case for the succeeding eighteen (18) month period and (D) containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and the Personal Property has been repaired, the continued loss of income will be insured until such income either returns to the same

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level it was at prior to the loss, or the expiration of twelve (12) months from the date that the applicable Collateral Property is repaired and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; All insurance proceeds payable to Administrative Agent pursuant to this Section 9.1(a)(iii) shall be held by Administrative Agent and shall be applied to the obligations secured hereunder from time to time due and payable hereunder and under the Notes and this Agreement; provided, however, that nothing herein contained shall be deemed to relieve any Borrower of its obligations to pay the obligations secured hereunder on the respective dates of payment provided for in the Notes and this Agreement except to the extent such amounts are actually paid out of the proceeds of such business interruption/loss of rents insurance.

     (iv) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements if not covered under Section 9.1(a) (i) or (ii) above, (A) owner’s contingent or protective liability insurance covering claims not covered by or under the terms or provisions of the insurance provided for in Section 9.1(c)(ii); and (B) the insurance provided for in Section 9.1(a)(i) shall be written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to Section 9.1(a)(i), (3) shall include permission to occupy each Collateral Property, and (4) shall contain an agreed amount endorsement waiving co-insurance provisions; provided, however, the insurance required pursuant to this Section 9.1(a)(iv) may be obtained by a Manager for the benefit of the applicable Borrower and the applicable Collateral Property.

     (v) workers’ compensation, subject to the statutory limits of the state in which each Collateral Property is located, and employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 for disease aggregate in respect of any work or operations on or about each Collateral Property, or in connection with such Collateral Property or its operation (if applicable);

     (vi) comprehensive boiler and machinery insurance covering all mechanical and electrical equipment and boilers and pressure valves, if applicable, in amounts as shall be reasonably required by Administrative Agent on terms consistent with the commercial property insurance policy required under Section 9.1(a)(i);

     (vii) if any portion of the Improvements is at any time located in an area identified by the Secretary of Housing and Urban Development or any successor thereto as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended, or any successor law (the “Flood Insurance Acts”), flood hazard insurance of the following types and in the following amounts (A) coverage under Policies issued pursuant to the Flood Insurance Acts (the “Flood Insurance Policies”) in an amount equal to the maximum limit of coverage available for the applicable Collateral Property under the Flood Insurance Acts, subject only to customary deductibles under such Policies and (B) coverage under supplemental private Policies in an amount, which when added to the coverage provided under the Flood Act Policies with respect to an Collateral Property, is not less than the Appraised Value for such Collateral Property;

     (viii) if required by Administrative Agent, earthquake, sinkhole and mine subsidence insurance in amounts as determined by Administrative Agent in its sole

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discretion and in form and substance satisfactory to Administrative Agent, provided that the insurance pursuant to this Section 9.1(a)(vii) shall be on terms consistent with the all risk insurance policy required under Section 9.1(a)(i);

     (ix) umbrella liability insurance in an amount not less than ($150,000,000) per occurrence on terms consistent with the commercial general liability insurance policy required under Section 9.1(a)(ii);

     (x) insurance against certified and non-certified terrorism, terrorist acts or similar acts of sabotage (“Terrorism Insurance”) pursuant to a (A) blanket insurance policy with aggregate limits of not less than $50,000,000 or (B) a stand-alone insurance policy covering only the Collateral Properties with coverage of not less than $50,000,000, and, in either case with a deductible of not more than $100,000 (the “Terrorism Insurance Required Amount”). Notwithstanding the foregoing sentence, in the event a Borrower has obtained a stand-alone insurance policy pursuant to subsection (B) above, such Borrower shall not be obligated to expend more than $400,000 in any Fiscal Year on Insurance Premiums for Terrorism Insurance (the “Terrorism Insurance Cap”) on the properties which are collateral for this agreement and if the cost of the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap, such Borrower shall purchase the maximum amount of Terrorism Insurance available with funds equal to the Terrorism Insurance Cap; provided, however, in the event it is customary among owners of Class A hotel properties in the United States to have “All Risk” coverage without any exclusion (a “Terrorism Exclusion”) from coverage under such Policy for loss or damage incurred as a result of an act of terrorism, terrorist acts or similar acts of sabotage, such Borrower shall (provided the same does not add any material cost to such Borrower’s Insurance Premiums) obtain a Policy without any such Terrorism Exclusion. After the occurrence of any event which reduces the amount of insurance available under the Terrorism Insurance required hereunder (whether due to a claim or otherwise), such Borrower shall be obligated to immediately increase the coverage of such Terrorism Insurance so that at least $50,000,000 of coverage is available thereunder at all times;

     (xi) a blanket fidelity bond and errors and omissions insurance coverage insuring against losses resulting from dishonest or fraudulent acts committed by in an amount of $1,000,000 (A) a Borrower’s personnel; (B) any employees of outside firms that provide appraisal, legal, data processing or other services for a Borrower or (C) temporary contract employees or student interns; provided, however, the insurance required pursuant to this Section 9.1(a)(xi) may be obtained by a Manager for the benefit of the applicable Borrowers and the applicable Collateral Property;

     (xii) such other insurance and in such amounts as are required pursuant to the Franchise Agreement or as Administrative Agent from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to each Collateral Property located in or around the region in which the each Collateral Property is located; and

        (b) All insurance provided for in Section 9.1(a) shall be obtained under valid and enforceable policies (the “Policies” or in the singular, the “Policy”), in such forms and, from time to time after the date hereof, in such amounts as may be satisfactory to Administrative Agent, issued by financially sound and responsible insurance companies authorized to do business in the state in which the property is located, and approved by Administrative Agent. The primary $15,000,000 in coverage shall be provided by carriers having a claims paying ability rating of A- or better by at least two approved

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Rating Agencies. The excess layers up to $50,000,000 in coverage shall be provided by carriers having a claims paying ability rating of A- or better by S&P, or such other Rating Agency approved by Administrative Agent. At least seventy-five percent (75%) of the remaining coverage shall be provided by carriers having a claims paying ability rating of A- or better by S&P, or such other Rating Agency approved by Administrative Agent. All insurance companies providing (i) property or liability insurance in the primary $50 Million property or liability layer shall have a general policy rating of A-XI or better by A.M. Best Company Inc., any other insurance companies shall have a general policy rating of A-VIII or better by A.M. Best Company Inc. (each such insurer shall be referred to as a “Qualified Insurer”). Not less than thirty (30) days prior to the expiration dates of the Policies theretofore furnished to Administrative Agent pursuant to Section 9.1(a), Borrowers shall deliver, electronically or by hard copy, certified copies of insurance certificates marked “premium paid” or accompanied by evidence satisfactory to Administrative Agent of payment of the premiums due thereunder or first loss reserves required under any insurance programs in which Borrowers participate to be held by FelCor Trust (the “Insurance Premiums”). In the event any Borrower desires to obtain the insurance required hereunder from an insurer not meeting the requirements of this Section 9.1(b), such Borrower may request, in writing, Administrative Agent’s approval of such insurer, which approval may not be unreasonably withheld.

        (c) Borrowers shall not obtain (i) any umbrella or blanket liability or casualty Policy unless, in each case, such Policy is at least equal in scope of coverage as if a “stand-alone” Policy meeting all of the requirement noted above is provided as such Policy is approved in advance in writing by Administrative Agent and Administrative Agent’s interest is included therein as provided in this Agreement and such Policy is issued by a Qualified Insurer, or (ii) separate insurance concurrent in form or contributing in the event of loss with that required in Section 9.1(a) to be furnished by, or which may be reasonably required to be furnished by, a Borrower. In the event any Borrower obtains separate insurance or an umbrella or a blanket policy, such Borrower shall notify Administrative Agent of the same and shall cause certified copies of each Policy to be delivered as required in Section 9.1(a). Any blanket insurance Policy shall specifically allocate to the Collateral Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection as would a separate Policy insuring only the Collateral Property in compliance with the provisions of Section 9.1(a). Notwithstanding Administrative Agent’s approval of any umbrella or blanket liability or casualty Policy hereunder, Administrative Agent reserves the right, in its sole discretion, to require any Borrower to obtain a separate Policy in compliance with this Section 9.1.

        (d) All Policies provided for or contemplated by Section 9.1(a), except for the Policy referenced in Section 9.1(a)(v), shall name Administrative Agent on behalf of Lenders and Borrowers as the insured or additional insured, as their respective interests may appear, and in the case of property damage, boiler and machinery, and flood insurance, shall contain a so-called New York standard non-contributing mortgagee clause or equivalent in favor of Administrative Agent providing that the loss thereunder shall be payable to Administrative Agent.

        (e) All Policies provided for in Section 9.1(a) shall contain clauses or endorsements to the effect that:

     (i) no act or negligence of Borrowers, or anyone acting for Borrowers, or failure to comply with the provisions of any Policy which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity or enforceability of the insurance insofar as Administrative Agent is concerned;

     (ii) the Policy shall not be materially changed (other than to increase the coverage provided thereby) or cancelled without at least thirty (30) days’ written notice to Administrative Agent and any other party named therein as an insured;

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     (iii) each Policy shall provide that the issuers thereof shall give written notice to Administrative Agent if the Policy has not been renewed thirty (30) days prior to its expiration; and

     (iv) Administrative Agent and Lenders shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder.

        (f) Borrowers shall furnish to Administrative Agent, on or before thirty (30) days after the close of Borrowers’ Fiscal Year, a statement certified by Borrowers or a duly authorized officer of Borrowers of the amounts of insurance maintained in compliance herewith, of the risks covered by such insurance and of the insurance company or companies which carry such insurance and, if requested by Administrative Agent, verification of the adequacy of such insurance by an independent insurance broker or appraiser acceptable to Administrative Agent.

        (g) If at any time Administrative Agent is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Administrative Agent shall have the right, with prior notice to Borrowers, to take such action as Administrative Agent deems necessary to protect its interest in the Collateral Properties, including, without limitation, the obtaining of such insurance coverage as Administrative Agent in its sole discretion deems appropriate, and all expenses incurred by Administrative Agent in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrowers to Administrative Agent upon demand and until paid shall be secured by the Mortgages and shall bear interest at the Default Rate.

        (h) In the event of a foreclosure of any of the Mortgages, or other transfer of title to any Collateral Property in extinguishment in whole or in part of the Obligations all right, title and interest of Borrowers in and to the Policies then in force and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Administrative Agent or other transferee in the event of such other transfer of title.

     9.2 Casualty. If a Collateral Property shall be damaged or destroyed, in whole or in part, by fire or other casualty resulting in an amount greater than $100,000 to repair (a “Casualty”), Borrowers shall give prompt notice of such damage to Administrative Agent and shall promptly commence and diligently prosecute the completion of the Restoration of the Collateral Property as nearly as possible to the condition the Collateral Property was in immediately prior to such Casualty in accordance with Section 9.4. Borrowers shall pay all costs of such Restoration whether or not such costs are covered by insurance. Administrative Agent may, but shall not be obligated to make proof of loss if not made promptly by Borrowers.

     9.3 Condemnation. Borrowers shall promptly give Administrative Agent notice of the actual or threatened commencement of any proceeding for the Condemnation of all or any part of any Collateral Property and shall deliver to Administrative Agent copies of any and all papers served in connection with such proceedings. Administrative Agent may participate in any such proceedings, and Borrowers shall from time to time deliver to Administrative Agent all instruments requested by it to permit such participation. Each Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Administrative Agent, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including, but not limited to, any transfer made in lieu of or in anticipation of the exercise of such taking), Borrowers shall continue to pay the Obligations at the time and in the manner provided for its payment in the Notes and in this Agreement and the Obligations shall not be reduced until any Award shall have been actually received and applied by Administrative Agent, after the deduction of expenses of collection, to the reduction or discharge of the Obligations.

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Administrative Agent shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Notes. If any Collateral Property or any portion thereof is taken by a condemning authority, Borrowers shall, promptly commence and diligently prosecute the Restoration of the applicable Collateral Property and otherwise comply with the provisions of Section 9.4. If any Collateral Property is sold, through foreclosure or otherwise, prior to the receipt by Administrative Agent of the Award, Administrative Agent shall have the right, whether or not a deficiency judgment on the Notes shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Obligations.

     9.4 Restoration. The following provisions shall apply in connection with the Restoration of any Collateral Property:

        (a) If the Net Proceeds shall be less than $1,500,000 and the costs of completing the Restoration shall be less than $1,500,000, the Net Proceeds will be disbursed by Administrative Agent to a Borrower upon receipt, provided that all of the conditions set forth in Section 9.4(c)(i) and (iii) are met, and Borrowers deliver to Administrative Agent a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.

        (b) If the Net Proceeds are equal to or greater than $1,500,000 or the costs of completing the Restoration is equal to or greater than $1,500,000, Administrative Agent shall make the Net Proceeds available for the Restoration, subject to the provisions of this Section 9.4. Notwithstanding the immediately preceding sentence, a portion of the Net Proceeds not to exceed $1,500,000 shall be made available to Borrowers after receipt thereof by Administrative Agent to pay or reimburse a Borrower for any immediate and necessary repair or work required (i) to prevent further damage to the Collateral Property, (ii) to protect life or to provide safety or (iii) to restore hotel operations at the Collateral Property (collectively, the “Emergency Repairs”), provided all the conditions set forth in clauses (i) and (iii) of Section 9.4(c) are met and Borrowers deliver to Administrative Agent a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Emergency Repairs in accordance with the terms of this Agreement. The term “Net Proceeds” means: (A) the net amount of all insurance proceeds received by Administrative Agent pursuant to Section 9.4(a), (iv), (vii) and (viii) as a result of such damage or destruction, after deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”), or (B) the net amount of the Award, after deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case may be.

        (c) The Net Proceeds shall be made available to a Borrower for Restoration provided that each of the following conditions are met:

     (i) no Default or Event of Default (unless caused solely by the Condemnation or Casualty) shall have occurred and be continuing;

     (ii) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty percent (30%) of the total floor area of the Improvements on the Collateral Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less than ten percent (10%) of the land constituting the Collateral Property is taken, and such land is located along the perimeter or periphery of the Collateral Property, and no portion of the Improvements is located on such land;

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     (iii) The respective Ground Lease (if applicable) and Operating Lease shall remain in full force and effect during and after the completion of the Restoration;

     (iv) Such Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than thirty (30) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion in compliance with all applicable Laws, including, without limitation, all applicable Environmental Laws and in accordance with the terms and conditions of the applicable Franchise Agreement;

     (v) Administrative Agent shall be satisfied that any operating deficits, including all scheduled payments of principal and interest under the Notes, which will be incurred with respect to the Collateral Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will be covered out of (A) the Net Proceeds, (B) the insurance coverage referred to in Section 9.1(a)(iii) if applicable, or (C) by other funds of Borrowers;

     (vi) Administrative Agent shall be satisfied that the Restoration will be completed (with reasonable allowance for time to make such repairs) on or before the earliest to occur of (A) twelve (12) months after the occurrence of such Casualty or Condemnation, (B) the date that is twelve (12) months prior to the Maturity Date, or (C) the earliest date required for such completion under the terms of any Leases which are required in accordance with the provisions of this Section 9.4 to remain in effect subsequent to the occurrence of such Casualty or Condemnation and the completion of the Restoration, or (D) the date required for such completion pursuant to the applicable Franchise Agreement, or (E) such time as may be required under applicable Law, in order to repair and restore the applicable Collateral Property to the condition it was in immediately prior to such Casualty or Condemnation or (F) the expiration of the insurance coverage referred to in Section 9.1(a)(ii);

     (vii) the Collateral Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Laws;

     (viii) Lender shall be satisfied that the Debt Service Coverage Ratio for the four (4) fiscal quarters immediately succeeding the completion of the Restoration shall be equal to or greater than 1.10 to 1.00 (calculated by Administrative Agent in good faith (which shall be deemed conclusive for all purposes of this clause (viii));

     (ix) Such Casualty or Condemnation, as applicable, does not result in the loss of access in any material respect to the Collateral Property or the related Improvements;

     (x) Borrowers shall deliver, or cause to be delivered, to Administrative Agent a signed detailed scope of damages and repairs, including cost estimates for each repair item, approved in writing by Borrowers’ architect, engineer or project manager stating the entire cost of completing the Restoration, which scope shall be acceptable to Administrative Agent;

     (xi) the Net Proceeds together with any cash or Permitted Investments deposited by Borrowers with Administrative Agent are sufficient in Administrative Agent’s discretion to cover the cost of the Restoration;

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     (xii) any applicable Management Agreement in effect as of the date of the occurrence of such Casualty or Condemnation, whichever the case may be, shall (A) remain in full force and effect during the Restoration and shall not otherwise terminate as a result of the Casualty or Condemnation or the Restoration or (B) if terminated, shall have been replaced with a Replacement Management Agreement with a Qualified Manager, prior to the opening or reopening of the applicable Collateral Property or any portion thereof for business with the public; and

     (xiii) any applicable Franchise Agreement is not terminated as a result of such Casualty or Condemnation.

        (d) The Net Proceeds shall be held by Administrative Agent in an interest-bearing account and, until disbursed in accordance with the provisions of this Section 9.4, shall constitute additional security for the Obligations and other obligations under the Loan Documents. The Net Proceeds shall be disbursed by Administrative Agent to, or as directed by, such Borrower from time to time during the course of the Restoration, subject to the terms and provisions set forth in this Section 9.4, upon disbursement procedures acceptable to Administrative Agent (in Administrative Agent’s reasonable discretion), including Administrative Agent’s receipt of evidence satisfactory to Administrative Agent that (i) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (ii) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other Liens or encumbrances of any nature whatsoever on the Collateral Property which have not either been fully bonded to the satisfaction of Administrative Agent and discharged of record or in the alternative fully insured to the satisfaction of Administrative Agent by the title company issuing the Title Policy.

        (e) All plans and specifications required in connection with the Restoration, the cost of which is greater than $1,500,000, shall be subject to prior review and acceptance in all respects by Administrative Agent and by an independent consulting engineer selected by Administrative Agent (the “Casualty Consultant”), which acceptance shall not be unreasonably withheld, conditioned or delayed. Administrative Agent shall have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration the cost of which is greater than $1,500,000, as well as the contracts under which they have been engaged, shall be subject to prior review and acceptance by Administrative Agent and the Casualty Consultant, which acceptance shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Administrative Agent’s prior review and acceptance of plans and specifications, identity of contractors and contracts shall not be required in connection with Restoration which shall be required on an emergency basis (i) to prevent further damage to the Collateral Property, (ii) to protect life or to provide safety or (iii) to restore hotel operations at the Collateral Property; provided that in such cases, such plans, specifications, identity of contractors and contracts shall be made available to Administrative Agent and the Casualty Consultant as soon as practicable. All costs and expenses incurred by Administrative Agent in connection with making the Net Proceeds available for the Restoration including, without limitation, reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrowers.

        (f) In no event shall Administrative Agent be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage” shall mean an amount equal to ten percent (10%), of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed. The Casualty Retainage shall in no event, and notwithstanding anything

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to the contrary set forth above in this Section 9.4(f), be less than the amount actually held back by Borrowers from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Administrative Agent that the Restoration has been completed in accordance with the provisions of this Section 9.4 and that all approvals necessary for the re-occupancy and use of the Collateral Property have been obtained from all appropriate Governmental Authorities, and Administrative Agent receives evidence satisfactory to Administrative Agent that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Administrative Agent will release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty Consultant certifies to Administrative Agent that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Administrative Agent or by the title company issuing the Title Policy for the related Collateral Property, and Administrative Agent receives an endorsement to such Title Policy insuring the continued priority of the Lien of the related Mortgage and evidence of payment of any premium payable for such endorsement. If required by Administrative Agent, the release of any such portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.

        (g) Administrative Agent shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

        (h) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the opinion of Administrative Agent in consultation with the Casualty Consultant, if any, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrowers shall deposit the deficiency (the “Net Proceeds Deficiency”) with Administrative Agent before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Administrative Agent shall be held by Administrative Agent and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 9.4(b) shall constitute additional security for the Obligations and other obligations under the Loan Documents.

        (i) The excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Administrative Agent after the Casualty Consultant certifies to Administrative Agent that the Restoration has been completed in accordance with the provisions of this Section 9.4(b), and the receipt by Administrative Agent of evidence satisfactory to Administrative Agent that all costs incurred in connection with the Restoration have been paid in full, shall be promptly remitted by Administrative Agent to Borrowers, provided no Default or Event of Default shall have occurred and shall be continuing under the Notes, this Agreement or any of the other Loan Documents.

        (j) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrowers as excess Net Proceeds pursuant to Section 9.4(h) may be retained and applied by Administrative Agent toward the payment of the Obligations whether or not then due and payable in such order, priority and proportions as Administrative Agent in its sole discretion shall deem proper, or, at the discretion of Administrative Agent, the same may be paid, either in whole or in part, to Borrowers for such purposes as Administrative Agent shall approve, in its discretion. If Administrative Agent shall receive and retain Net Proceeds, the Lien of the Mortgages shall be reduced only by the

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amount thereof received and retained by Administrative Agent and actually applied by Administrative Agent in reduction of the Obligations.

     9.5 Required Repairs. Borrowers shall perform the repairs at the Collateral Properties, as more particularly set forth on Schedule 9.5 (such repairs hereinafter referred to as “Required Repairs”). Borrowers shall complete the Required Repairs on or before the date set forth on Schedule 9.5 with respect to the applicable repair; provided that such date may be extended upon request by Borrowers subject to Administrative Agent’s approval in its sole discretion. It shall be an Event of Default under this Agreement if Borrowers do not complete the Required Repairs at each Collateral Property within the time period set forth on Schedule 9.5 with respect to the applicable repair, as such date may be extended as aforesaid. Borrowers shall provide Administrative Agent evidence of completion reasonably satisfactory to Administrative Agent of Required Repairs in accordance with the terms hereof.

     9.6 Required Environmental Remediation. Within sixty (60) days after the Closing Date, Borrowers shall submit to Administrative Agent documentation for Administrative Agent’s Consultant, in its sole and absolute discretion, to determine whether or not further action is needed with regard to underground storage tanks not currently in use on the Sheraton Burlington Property (“Sheraton Burlington Tanks”).

ARTICLE X
EVENTS OF DEFAULT AND REMEDIES

10.1 Events of Default. Any of the following shall constitute an Event of Default (“Event of Default”):

          (a) if any portion of the Obligations are not paid on or before the date the same is due and payable, provided, however, with respect to any failure by Borrowers to pay when due any regularly scheduled installment of principal and interest hereunder (other than the payment due on the Maturity Date), not more than two (2) times during any twelve (12) month period and in no event more than five (5) times in the aggregate during the term of the Loan, Borrowers shall have two (2) Business Days in which to cure such Event of Default (which cure shall include payment of the late payment charge, if applicable);

          (b) if any of the Taxes or Other Charges are not paid prior to delinquency;

          (c) if (i) the Policies are not kept in full force and effect or if (ii) certified copies of the Policies are not delivered to Administrative Agent promptly on request;

          (d) if any representation or warranty made by any Borrower, any other Loan Party or any Principal herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Administrative Agent or Lenders shall have been false or misleading in any material respect as of the date the representation or warranty was made;

          (e) if a Transfer occurs in violation of the provisions of Section 8.19 of this Agreement or Article VII of the Mortgages;

          (f) if a receiver, liquidator or trustee shall be appointed for any Borrower, any other Loan Party, or any Principal, or any other guarantor under any guarantee issued in connection with the Loan or if any Borrower, any other Loan Party, any Principal or such other guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to the Bankruptcy Code, or any similar federal or State law, shall be filed by or against, consented to, or

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acquiesced in by, any Borrower, any other Loan Party, any Principal or such other guarantor, or if any proceeding for the dissolution or liquidation of any Borrower, any other Loan Party, any Principal or such other guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by such Borrower, any other Loan Party, any Principal or such other guarantor, upon the same not being discharged, stayed or dismissed within ninety (90) days;

          (g) if any Borrower or other Loan Party attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents;

          (h) other than with respect to a default which is expressly contemplated by another subsection of this Section 10.1, if any Borrower breaches any of its respective negative covenants contained in Sections 8.1-8.9, 8.15-8.17 and 8.19.

          (i) if any Borrower violates or does not comply in any material respect with any of the provisions of Section 7.16, that results in a Material Adverse Effect or a Material Property Event;

          (j) if a (i) default has occurred and continues beyond any applicable cure period under any Management Agreement (or any Replacement Management Agreement) if such default permits the Manager thereunder to terminate or cancel such Management Agreement (or any Replacement Management Agreement) or (ii) any Management Agreement (or Replacement Management Agreement) expires or otherwise terminates and is not replaced with a Replacement Management Agreement or (iii) if any Collateral Property operates for any time without the Management Agreement or a Replacement Management Agreement;

          (k) if any Borrower or Principal violates or does not comply in all material respects with the provisions of Section 6.34 or Section 6.47; provided, however, that such violation or failure to comply shall not constitute an Event of Default if (i) such violation or failure to comply was inadvertent, immaterial and non-recurring, (ii) such violation or failure to comply is curable and Borrowers shall promptly cure such violation or failure to comply within fifteen (15) calendar days of notice from Administrative Agent and (iii) within fifteen (15) Business Days after the request by Administrative Agent, if Borrowers have previously delivered to Lender an Insolvency Opinion in accordance with Section 14.1.1, then Borrowers shall cause their legal counsel to deliver a revised or updated Insolvency Opinion to the effect that such violation or failure to comply shall not impair, negate or amend the opinions rendered in the Insolvency Opinion delivered in connection with the Loan, which opinion shall be acceptable to Administrative Agent in its reasonable discretion;

          (l) if any federal tax Lien or state or local income tax Lien in excess of $2,000,000 is filed against any Borrower, any Principal or any Guarantor and same is not discharged of record within thirty (30) days after same is filed;

          (m) There is entered against any Borrower, Fee Owner or Guarantor (i) a final judgment or order for the payment of money in an aggregate amount exceeding, in the case of any Borrower or any Fee Owner (other than Guarantor), $500,000, and in the case of Guarantor, $20,000,000 (which is not covered by insurance or unless being appealed and such Loan Party has posted a bond or cash collateral); provided, however, it shall not be an Event of Default if a final judgment or order for the payment of money in an aggregate amount exceeding $20,000,000 is entered against Guarantor, unless the maturity date of FelCor Trust’s outstanding senior notes (or any replacement notes or financing) shall be accelerated, or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is

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a period of ten (10) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;

          (n) (i) any Borrower or any Fee Owner is a Plan or its assets constitute Plan Assets; or (ii) any Borrower or any Fee Owner consummates a transaction which would cause the Mortgages or Administrative Agent or any Lender’s exercise of its rights under the Mortgages, the Notes, this Agreement or the other Loan Documents to constitute a nonexempt prohibited transaction under ERISA or Section 4975 of the Code or result in a violation of a state or local statute regulating governmental plans, subjecting Lenders to liability for a violation of ERISA, the Code, a state or local statute or other similar law;

          (o) if any default occurs under any guaranty or indemnity executed in connection herewith (including, without limitation, the Guaranty and the Environmental Indemnity) and such default continues after the expiration of applicable grace periods, if any;

          (p) if any Borrower or any Fee Owner shall be in default in any material respect beyond applicable notice and grace periods under any other mortgage, deed of trust, deed to secure debt or other security agreement permitted hereunder and covering any part of any Collateral Property whether it be superior or junior in lien to the related Mortgage;

          (q) with respect to any term, covenant or provision set forth herein which specifically contains a notice requirement or grace period, if any Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace period;

          (r) if any of the assumptions contained in the Insolvency Opinion, or in any other “non-consolidation” opinion delivered to Administrative Agent in connection with the Loan, or in any other “non-consolidation” opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect; provided, however, that any such assumption becoming untrue shall not constitute an Event of Default if (i) the event(s) underlying any assumption becoming untrue (the “Event”) was inadvertent, immaterial and non-recurring, (ii) such Event is curable and the applicable Borrower shall promptly cure such Event within fifteen (15) calendar days of notice from Administrative Agent and (iii) within fifteen (15) Business Days of the request by Administrative Agent, such Borrower causes its legal counsel to deliver a revised or updated Insolvency Opinion to the effect that such Event shall not impair, negate or amend the opinions rendered in the Insolvency Opinion delivered in connection with the closing of the Loan or subsequent to the closing, which opinion shall be acceptable to Administrative Agent in its reasonable discretion;

          (s) if (i) a material default has occurred and continues beyond any applicable cure period under any Franchise Agreement, and such default permits a party to terminate or cancel the Franchise Agreement or (ii) any Franchise Agreement expires or otherwise terminates without Administrative Agent’s prior written consent and is not replaced with a Replacement Franchise Agreement;

          (t) if any Borrower ceases to operate a hotel on any Collateral Property or terminates such business for any reason whatsoever (other than temporary cessation in connection with any renovations to an Collateral Property or restoration of the Collateral Property after Casualty or Condemnation);

          (u) if there shall occur any default by any Owner, as tenant under any Ground Lease, in the observance or performance of any material term, covenant or condition of the Ground Lease on the part of any Owner to be observed or performed and said default is not cured following the expiration of

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any applicable grace and notice periods therein provided, or if the leasehold estate created by the Ground Lease shall be surrendered, or if the Ground Lease shall cease to be in full force and effect or the Ground Lease shall be terminated or canceled for any reason or under any circumstances whatsoever, or if any of the material terms, covenants or conditions of the Ground Lease shall in any manner be modified, changed, supplemented, altered, or amended without the consent of Administrative Agent;

          (v) if there shall occur any default by any Operating Lessee, as tenant under any Operating Lease, in the observance or performance of any material term, covenant or condition of any Operating Lease on the part of any Operating Lessee to be observed or performed and said default is not cured following the expiration of any applicable grace and notice periods therein provided, or if the leasehold estate created by the Operating Lease shall be surrendered, or if the Operating Lease shall cease to be in full force and effect or the Operating Lease shall be terminated or canceled for any reason or under any circumstances whatsoever, or if any of the material terms, covenants or conditions of the Operating Lease shall in any manner be modified, changed, supplemented, altered, or amended without the consent of Administrative Agent;

          (w) if any Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified in (a) — (v) above, for ten (10) Business Days after written notice to Borrowers from Administrative Agent, in the case of any Default which can be cured by the payment of a sum of money, or for thirty (30) days after written notice from Administrative Agent in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably be cured within such 30-day period and provided further that Borrowers shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrowers in the exercise of due diligence to cure such Default, such additional period not to exceed sixty (60) days; or

          (x) if there shall occur any default by any Borrower or any other Loan Party, or any default in respect of any Collateral Property, under the Mortgages or any of the other Loan Documents beyond any applicable notice and cure periods as contained in such documents.

     10.2 Remedies upon Event of Default. If any Event of Default occurs and is continuing, Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

          (a) declare the unpaid principal amount of all the Loan, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate or other notice of any kind, all of which are hereby expressly waived by Borrowers; and

          (b) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under any Debtor Relief Laws, the unpaid principal amount of the Loan and all interest and other amounts as aforesaid shall automatically become due and payable without further act of Administrative Agent or any Lender.

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     10.3 Application of Funds. After the exercise of remedies provided for in Section 10.2 (or after the Loan has automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by Administrative Agent in the following order:

     (i) First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to Administrative Agent and amounts payable under Article IV) payable to Administrative Agent in its capacity as such;

     (ii) Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders and including fees and time charges for attorneys who may be employees of any Lender) and amounts payable under Article IV, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

     (iii) Third, to payment of that portion of the Obligations constituting accrued and unpaid and interest on the Loan and other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

     (iv) Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loan;

     (v) Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to Borrowers or as otherwise required by Law.

ARTICLE XI
ADMINISTRATIVE AGENT

     11.1 Appointment and Authority. (a) Each Lender hereby irrevocably appoints Fortress Credit Corp. to act on its behalf as Administrative Agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Fortress Credit Corp. has advised the Lenders that Fortress Credit Corp. intends to assign its interest in the Loan and to resign as the Administrative Agent shortly after the origination of the Loan. Fortress Credit Corp. has selected Fortress Credit Opportunities I LP, a Delaware limited partnership, to serve as the successor Administrative Agent after Fortress Credit Corp. resigns, and each of the Lenders hereby approves Fortress Credit Opportunities I LP, a Delaware limited partnership, to serve as Administrative Agent and consents to such substitution and replacement. The provisions of this Article are solely for the benefit of Administrative Agent and Lenders and no Borrower shall have rights as a third party beneficiary of any of such provisions.

          (b) Administrative Agent shall also act as the “Collateral Agent” under the Loan Documents, and each Lender hereby irrevocably appoints and authorizes Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by Administrative Agent pursuant to Section 11.5 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of Administrative Agent, shall be entitled to the benefits of all provisions of this Article XI and

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Article XII (including Section 12.4(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

     11.2 Rights as a Lender. The Person serving as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Borrower or Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to the Lenders.

     11.3 Exculpatory Provisions. Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, Administrative Agent:

          (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

          (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

          (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity.

          Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 12.1 and 10.2) or (ii) in the absence of its own gross negligence or willful misconduct. Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to Administrative Agent by Borrowers or a Lender.

          Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

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     11.4 Reliance by Administrative Agent. Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. Administrative Agent may consult with legal counsel (who may be counsel for Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

     11.5 Delegation of Duties. Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to Related Parties of Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

     11.6 Resignation of Administrative Agent. Administrative Agent may at any time give notice of its resignation to Lenders and Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with Borrowers, to appoint a successor, which shall be (a) a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States, (b) a Qualified Institutional Lender, (c) a Qualified Trustee, (d) a Qualified Servicer or (e) a CDO Asset Manager; provided, however, that, the foregoing notwithstanding, Fortress Credit Corp. hereby acknowledges and agrees that Fortress Credit Corp. shall not appoint LNR Property Corporation as its successor Administrative Agent, or sell the servicing rights for the Loan to LNR Property Corporation. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if Administrative Agent shall notify Borrowers and Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by Administrative Agent on behalf of Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the

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provisions of this Article XI and Section 12.4 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

     11.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

     11.8 [Intentionally Omitted]

     11.9 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise

          (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loan and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and Administrative Agent under Section 12.4) allowed in such judicial proceeding; and

          (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, if Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Section 12.4.

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize Administrative Agent to vote in respect of the claim of any Lender or in any such proceeding.

     11.10 Collateral and Guaranty Matters. Lenders irrevocably authorize Administrative Agent, at its option and in its discretion, to release any Lien on any property granted to or held by Administrative Agent under any Loan Document and any Borrowers from any obligations under the Loan Documents (a) upon payment in full of all Obligations (other than contingent indemnification obligations), (b) in

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connection with any sale of one (1) or more of the Collateral Properties permitted hereunder or under any other Loan Document, or (c) if approved, authorized or ratified in writing in accordance with Section 12.1.

          Upon request by Administrative Agent at any time, the Required Lenders will confirm in writing Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 11.10. In each case as specified in this Section 11.10, Administrative Agent will, at Borrowers’ expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 11.10.

     11.11 Indemnity by Lenders. To the extent determined by the Administrative Agent, in its sole discretion, to be required by any applicable law, the Administrative Agent may withhold from any interest, fees or other payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any penalties or interest and together with all expenses (including legal expenses, allocated internal costs and out-of-pocket expenses) incurred. The obligations of the Lenders under this Section 11.11 shall survive the payment in full of the Loan and the termination of this Agreement.

ARTICLE XII
MISCELLANEOUS

     12.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and Borrowers or the applicable Loan Party, as the case may be, and acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

          (a) waive any condition set forth in Section 5.1, without the written consent of each Lender;

          (b) [Intentionally Omitted];

          (c) postpone any date fixed by this Agreement or any other Loan Document for (i) any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment or (ii) any scheduled reduction of the Loan hereunder or under any other Loan Document without the written consent of each Lender;

          (d) reduce the principal of, or the rate of interest specified herein on, any Loan or any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required

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Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of Borrowers to pay interest at the Default Rate;

          (e) change (i) Section 10.3 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of application of any prepayment of the Loan from the application thereof set forth in the applicable provisions of Section 2.3, in any manner that materially and adversely affects the Lenders without the written consent of the Required Lenders;

          (f) change (i) any provision of this Section 12.1 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

          (g) release all or substantially all of the Collateral or any of the Borrowers in any transaction or series of related transactions, without the written consent of each Lender except in connection with the repayment in full of the Obligations or a Collateral Property Release in accordance with Section 2.10;

          (h) release all or substantially all of the value of the Guaranty, without the written consent of each Lender; or

          (i) impose any greater restriction on the ability of any Lender to assign any of its rights or obligations hereunder without the written consent of the Required Lenders;

and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by Administrative Agent in addition to such Lenders required above, affect the rights or duties of Administrative Agent under this Agreement or any other Loan Document. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder.

     12.2 Notices; Effectiveness; Electronic Communications. (a) Notices Generally. Except for (i) notices and other communications expressly permitted to be given by telephone hereunder and under each of the other Loan Documents, (ii) any notice given in accordance with the requirements of any applicable statute (including, without limitation, statutes governing foreclosure or notice of foreclosure) which shall be effective when given in accordance with statutory requirements, notwithstanding anything to the contrary contained herein or in any other Loan Document, and as (iii) as provided in subsection (b) below, all notices and other communications provided for herein and in each of the other Loan Documents shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

     (i) if to any Borrower or Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 12.2; and

     (ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

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Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or refused; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

          (b) Electronic Communications. Notices and other communications to Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. Administrative Agent or Borrowers may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

          Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

          (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

          (d) Change of Address, Etc. Each of Borrowers and Administrative Agent may change its address, electronic mail address, telecopier or telephone number for notices and other communications hereunder and under the other Loan Documents by notice to the other parties hereto. Each other Lender may change its address, electronic mail address, telecopier or telephone number for notices and other communications hereunder by notice to Borrowers and Administrative Agent. In addition, each Lender agrees to notify Administrative Agent from time to time to ensure that

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Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

          (e) Reliance by Administrative Agent and Lenders. Administrative Agent and Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of any Borrower or any other party under the other Loan Documents even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrowers shall indemnify Administrative Agent, each Lender and Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower or such other Party, including by such party’s own negligence. All telephonic notices to and other telephonic communications with Administrative Agent may be recorded by Administrative Agent, and each of the parties hereto hereby consents to such recording.

     12.3 No Waiver; Cumulative Remedies. No failure by any Lender or Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege, including in each case, the right of Lender to bring any action or exercise any right, remedy, power or privilege in respect of the enforcement of any Loan Document or in respect of Collateral in any State without waiving its rights, remedies, powers or privileges as to any enforcement of any Loan Document or in respect of any Collateral in any other State. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

     12.4 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out of pocket expenses incurred by Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for Administrative Agent or any Lender), and shall pay all reasonable fees and time charges for attorneys who may be employees of Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loan made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Loan.

          (b) Indemnification by Borrowers. Each Borrower shall indemnify Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument

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contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) arising out of or relating to any Collateral Property, and any actual or alleged presence or release of Hazardous Materials on or from any Collateral Property or any other property owned or operated by any Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of its Subsidiaries, (iv) enforcing any obligations of or collecting any payments due from any Loan Party under this Agreement, the other Loan Documents or with respect to the Collateral Properties or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of Debtor Relief Laws; (v) losses incurred in correcting any non-exempt prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA, the Code, any state or local statute or other similar law that may be necessary in Administrative Agent’s sole discretion to correct such prohibited transaction or loan sale and any losses that Administrative Agent or any Lender may incur, directly or indirectly, as a result of a default under Sections 6.8 or 8.17; or (vi) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Borrower or any other Loan Party or any of Borrowers’ or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if any Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

          (c) Reimbursement by Lenders. To the extent that any Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for Administrative Agent (or any such sub-agent in connection with such capacity). The obligations of Lenders under this subsection (c) are subject to the provisions of Section 2.09(c).

          (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof, including due to such Indemnitee’s own negligence. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission

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systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

          (e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

          (f) Survival. The agreements in this Section shall survive the resignation of Administrative Agent, the replacement of any Lender, and the repayment, satisfaction or discharge of all the other Obligations.

     12.5 Payments Set Aside. To the extent that any payment by or on behalf of any Borrower is made to Administrative Agent or any Lender, or Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

     12.6 Successors and Assigns. (a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 12.6(b), (ii) by way of participation in accordance with the provisions of Section 12.6(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 12.6(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

          (b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and in and to such Lender’s Applicable Percentage of the Loan; provided that any such assignment shall be subject to the following conditions:

     (i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s interest in the Loan at the time owing to it hereunder or in the case of an

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assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in Section 12.6(b)(i)(A), the aggregate amount of the outstanding balance of the Loan of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000 unless Administrative Agent otherwise consents (such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

     (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to such Lender’s Applicable Percentage of the Loan assigned;

     (iii) Required Consents. No Borrower nor any other Loan Party shall have any right whatsoever to consent to or approve any assignment by any Lender to any Person of the Loan, any portion of the Loan or any interest in the Loan. No other consent shall be required from any other Person in connection with any assignment, except for the consent required under subsection (b)(i)(B) of this Section and, in addition the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund;

     (iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $2,500; provided, however, that Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to Administrative Agent an Administrative Questionnaire.

     (v) No Assignment to Borrowers. No such assignment shall be made to any Borrower or any of Borrowers’ Affiliates or Subsidiaries.

     (vi) No Assignment to Natural Persons. No such assignment shall be made to a natural Person.

Subject to acceptance and recording thereof by Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee

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thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.1, 4.4, 4.5 and 12.4 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, Borrowers (at their expense) shall execute and deliver one or more Notes to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.6(d).

          (c) Register. Administrative Agent, acting solely for this purpose as a non-fiduciary agent of Borrowers, shall maintain at Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and principal amounts of the Loan owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and Borrowers, Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

          (d) Participations. Any Lender may at any time, without the consent of, or notice to, Borrowers or Administrative Agent, sell participations to any Person (other than a natural Person or Borrowers or any of Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of the Loan owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Borrowers, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 12.6 that affects such Participant. Subject to subsection (e) of this Section, Borrowers agree that each Participant shall be entitled to the benefits of Sections 4.1, 4.4 and 4.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.6(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.8 as though it were a Lender, provided such Participant agrees to be subject to Section 2.11 as though it were a Lender. If any Lender sells participations, such Lender shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the name and the address of each Participant and the principal amounts of each Participant’s participation interest in the Loan (or other rights or obligations) held by it (the “Participant Register”). The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation interest as the owner thereof for all purposes notwithstanding any notice to the contrary. The Participant Register shall be available for inspection by Borrowers and the Administrative Agent, at any reasonable time and from time to time upon reasonable prior notice.

          (e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 4.1 or 4.4, than the applicable Lender would have been entitled to

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receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with Borrowers’ prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.1 unless Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrowers, to comply with Section 4.1(e) as though it were a Lender.

          (f) Pledges to the Federal Reserve Board. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          (g) Other Pledges. Notwithstanding any other provision hereof, any Lender may pledge (a “Pledge”) its Note and its interest hereunder and in and to the other Loan Documents to any entity (other than a Borrower or a Principal or an Affiliate of a Borrower or a Principal) that has extended credit (including by means of a repurchase arrangement) to such Lender and that is either a Qualified Institutional Lender or a financial institution whose long-term unsecured debt is rated “A” (or the equivalent) or better by each Rating Agency (a “Loan Pledgee”), on terms and conditions set forth in this Section 12.6(g), it being further agreed that a financing that is secured by such Lender’s Note and such Lender’s interest in the Loan and is structured as a repurchase (or similar) arrangement shall qualify as a “Pledge” hereunder; provided that a Loan Pledgee that is not a Qualified Institutional Lender may not take title to the pledged Note without a Administrative Agent’s prior written consent. The Lenders hereby agree that effective upon receipt of written notice from the pledging Lender to the Administrative Agent that a Pledge has been effected (including the name and address of the applicable Loan Pledgee): (i) no amendment, modification, waiver or termination of this Agreement shall be effective against such Loan Pledgee without the written consent of such Loan Pledgee, which consent shall not be unreasonably withheld, conditioned or delayed; (ii) Administrative Agent shall give to such Loan Pledgee copies of any notice of default under this Agreement simultaneously with the giving thereof to the pledging Lender and for a period of ten (10) days after the giving of such notice shall accept any cure thereof by such Loan Pledgee that such pledging Lender has the right to effect hereunder, as if such cure were made by such pledging Lender; and (iii) Administrative Agent shall deliver to Loan Pledgee such estoppel certificate(s) as Loan Pledgee shall reasonably request, provided that any such certificate(s) shall be in a form reasonably satisfactory to Administrative Agent; and (iv) upon written notice (a “Redirection Notice”) to Administrative Agent by such Loan the other Participant Pledgee that the pledging Lender is in default, beyond any applicable cure periods, under the credit or other agreements relating to such Pledge (which notice need not be joined in or confirmed by the pledging Lender), the Loan Pledgee shall be entitled to receive any payments that the pledging Lender would otherwise be obligated to receive from time to time pursuant to this Agreement. Any pledging Lender unconditionally and absolutely releases Administrative Agent and each other Lender from any liability to the pledging Lender on account of Administrative Agent’s or another Lender’s Participant’s compliance with any Redirection Notice that it believes to have been delivered by a Loan Pledgee. A Loan Pledgee shall be permitted to exercise fully its rights and remedies against the pledging Lender (and accept an assignment in lieu of foreclosure as to the pledged Note), in accordance with applicable law and this Agreement. In such event, Administrative Agent and the other Lenders shall recognize such Loan Pledgee (and any future transferee (other the Borrowers, the Principals or any Affiliate of any of the Borrowers or any of the Principals) that is also a Qualified Institutional Lender) as the successor to the pledging Lender’s rights, including at a foreclosure sale, remedies and obligations under this Agreement. The rights of any Loan Pledgee shall remain in effect unless and until such Loan Pledgee shall have notified the Administrative Agent and the other Lenders Participants in writing that such Loan Pledgee’s interest in the Pledged Note has terminated.

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          (h) Pledges to Commercial Paper Conduits. Notwithstanding any provisions herein to the contrary, each Lender shall have the right to grant a security interest in its Note and its interest hereunder to a commercial paper conduit (a “Conduit”), notwithstanding that such Conduit is not a Qualified Institutional Lender, if the following conditions are satisfied:

     (i) The loan (the “Conduit Inventory Loan”) made by the Conduit to such Lender will require a third party (the “Conduit Credit Enhancer”) to provide credit enhancement to securities issued by the Conduit;

     (ii) The Conduit Credit Enhancer will be a Qualified Institutional Lender;

     (iii) The Conduit Credit Enhancer and the Conduit agree in writing that, if such Lender defaults under the Conduit Inventory Loan, or if the Conduit is unable to refinance its outstanding commercial paper even if there is no default by such Lender, the Conduit Credit Enhancer will purchase the Conduit Inventory Loan from the Conduit; and

     (iv) Unless the Conduit is then a Qualified Institutional Lender, the Conduit acknowledges in writing that it will not, without the written consent of Administrative Agent (or, following the Securitization Date, without obtaining a Rating Agency Confirmation), have any greater right to acquire the interest in the pledged Note, by foreclosure or otherwise, than would any other purchaser that is not a Qualified Institutional Lender at a foreclosure sale conducted by a Loan Pledgee.

          (i) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

     12.7 Treatment of Certain Information; Confidentiality. Subject to Administrative Agent’s rights and the Lenders’ rights under Article XIV, each of Administrative Agent and Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrowers and their obligations, (g) with the consent of Borrowers, (h) in connection with any Secondary Market Transaction contemplated under Article XIV, or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or

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(ii) becomes available to Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than Borrowers.

          For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or their respective businesses, other than any such information that is available to Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

          Each of Administrative Agent and Lenders acknowledge that (a) the Information may include material non-public information concerning Borrowers or any Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

     12.8 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of any Borrower against any and all of the obligations of Borrowers now or hereafter existing under this Agreement or any other Loan Document to such Lender irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of Borrowers or any of them may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have. Each Lender agrees to notify Borrowers and Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

     12.9 Exculpation. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, no present or future Constituent Member (as hereinafter defined) in any Borrower or Fee Owner, nor any present or future shareholder, officer, director, employee, trustee, beneficiary, advisor, member, partner, principal, participant or agent of or in any Borrower or any Fee Owner or of or in any Person that is or becomes a Constituent Member in any Borrower or any Fee Owner, shall have any personal or other liability, directly or indirectly, under or in connection with the Loan Documents, except as may occur by virtue of such Person becoming a successor to any Borrower or any Fee Owner pursuant to, in respect of the Borrower, Section 12.6(a) or in respect of any Fee Owner, as a result of any merger, consolidation or sale permitted under the Loan Documents. Administrative Agent and each Lender each, on behalf of itself and its respective successors and assigns, hereby waives any and all such personal or other liability. The term “Constituent Member,” as used herein, shall mean any direct partner or member in any Borrower or any Fee Owner and any Person that, directly or indirectly through one or more other partnerships, limited liability companies, corporations or other entities, is a partner or member in any Borrower or any Fee Owner Notwithstanding anything to the contrary contained in the Loan Documents, neither the negative capital account of any Constituent Member in any Borrower or any Fee Owner nor any obligation of any Constituent Member in any Borrower or any Fee Owner to restore a

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negative capital account or to contribute or loan capital to any Borrower or Fee Owner or to any other Constituent Member in any Borrower or any Fee Owner shall at any time be deemed to be the property or an asset of Borrower or Fee Owner (or any such other Constituent Member) and neither any Borrower, any Fee Owner nor any of their respective successors or assigns shall have any right to collect, enforce or proceed against any Constituent Member with respect to any such negative capital account or obligation to restore, contribute or loan. Nothing contained in this Section 12.9 shall apply to, or be deemed to be a release or exculpation from liability of, (a) any general partner of any Borrower or any Fee Owner, and (b) any Guarantor or any other Person who executes, or is required by any Loan Document to execute, a Guaranty or the Environmental Indemnity.

          (a) Except as otherwise provided in this Section 12.9 and comparable provisions in the Security Instruments or in the other Loan Documents, Lender shall not enforce the liability and obligation of any Borrower or Affiliates of any Borrower to perform and observe the obligations contained in this Agreement, the Note or the Security Instruments by any action or proceeding wherein a money judgment shall be sought against such Borrower or any of such Borrower’s Affiliates, except that Lender may bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable Lender to enforce and realize upon this Agreement, the Note, the Security Instruments, the other Loan Documents, and the interest in the Properties, the Rents and any other Collateral created by this Agreement, the Note, the Security Instruments and the other Loan Documents; provided, however, that any judgment in any such action or proceeding shall be enforceable against Borrowers only to the extent of Borrowers’ interests in the Properties, in the Rents and in any other Collateral. Lender, by accepting this Agreement, the Note and the Security Instruments, agrees that it shall not, except as otherwise provided in this Section 12.9 and comparable provisions in the Security Instruments, sue for, seek or demand any deficiency judgment against Borrowers or any Affiliates of any of the Borrowers in any such action or proceeding, under or by reason of or under or in connection with this Agreement, the Note, the Security Instruments or the other Loan Documents. The provisions of this Section shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note, the Security Instruments or the other Loan Documents; (ii) impair the right of Lender to name one or more of the Borrowers as a party defendant in any action or suit for judicial foreclosure and sale under the Security Instruments; (iii) except as set forth in this Section 12.9, affect the validity or enforceability of any indemnity (including, without limitation, the Environmental Indemnity), guaranty (including, without limitation, the Guaranty), master lease or similar instrument made in connection with this Agreement, the Note, the Security Instruments, or the other Loan Documents; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) except as set forth in this Section 12.9, impair the enforcement of the Assignment of Leases; (vi) impair the right of Lender to enforce the provisions of Section 10.2 of the Security Instruments or Sections 6.8, 6.27, 7.9 and 8.17 hereof; or (vii) impair the right of Lender to obtain a deficiency judgment or other judgment on the Note against one or more of the Borrowers to the extent necessary to (A) preserve or enforce its rights and remedies against any Collateral Property, or (B) obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under the terms of this Agreement or the Security Instruments; provided, however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.

          (b) Notwithstanding the provisions of this Section 12.9 to the contrary, Borrowers shall be personally liable to Lender for Losses Lender incurs to the extent due to:

     (i) fraud or material misrepresentation in connection with the execution and the delivery of this Agreement, the Note, the Security Instrument, or the other Loan Documents;

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     (ii) any Borrower’s misapplication or misappropriation of Rents received by any Owner or any Operating Lessee after the occurrence of an Event of Default;

     (iii) any Borrower’s misapplication or misappropriation of Security Deposits or Rents collected more than thirty (30) days in advance;

     (iv) any Borrower’s misapplication or the misappropriation of Insurance Proceeds or Awards;

     (v) any Borrower’s failure to pay Taxes, Other Charges, charges for labor or materials or other Taxes or charges imposed upon any Borrower, any Guarantor or any Affiliate (including FelCor Trust) that can create Liens on the Collateral;

     (vi) any Borrower’s failure to return or to reimburse Lender for all Personal Property taken from any Properties by or on behalf of such Borrower and not replaced with Personal Property of comparable utility and value;

     (vii) any act of intentional waste or arson to the Collateral by any Borrower, Principal or any Affiliate or thereof or by any Guarantor;

     (viii) any fees or commissions paid by any Borrower to any Principal or any Affiliate of any Borrower, any Principal or any Guarantor in violation of the terms of this Agreement, the Note, the Security Instruments or the other Loan Documents;

     (ix) any Borrower’s failure to comply with the provisions of Sections 6.37 and 7.18 of this Agreement;

     (x) any Loss resulting from a Casualty due to one or more Borrower’s failure to obtain the insurance required pursuant to Section 9.1;

     (xi) Borrowers’ default under Section 7.10 hereof (after ten (10) Business Days prior written notice to Borrowers);

     (xii) Borrowers’ failure to make any FF&E True-Up Payment as when due in accordance with Section 13.2;

     (xiii) Borrowers’ failure to pay or to cause the applicable Embassy Manager(s) to pay to Administrative Agent the Quarterly Budgeted Amount Adjustment, or Borrowers’ failure to pay any Lockbox Leakage, in each case, in accordance with Section 3.6(c); provided, however, that Administrative Agent agrees that Borrowers shall not be liable under this clause (xiii) for the failure of a Manager to remit to the Lockbox Account the Quarterly Budgeted Amount Adjustment, so long as Borrowers have directed such Manager in writing to pay such sums to the Lockbox Account and Borrowers are using commercially reasonable efforts to cause such Manager to remit such sums;

     (xiv) Borrowers’ failure to deposit, or to cause the applicable Manager to deposit, any all amounts received on account of the Sheraton Society Hill Letter Agreement into the applicable Property Account; provided, however, that Administrative Agent agrees that Borrowers shall not be liable under this clause (xiv) for the failure of a Manager to remit such sums to the applicable Property Account, so long as Borrowers

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have directed such Manager in writing to pay such sums to the applicable Property Account and Borrowers are using commercially reasonable efforts to cause such Manager to remit such sums;

     (xv) the failure of the lessor under the Sheraton Burlington Parking Lease to recognize Sheraton Owner SPE as the lessee thereunder as a result of one (1) of more prior lessee’s failure to comply with the Reciprocal Right of Refusal provisions set forth in Section 7 of the Sheraton Burlington Parking Lease; and

     (xvi) Borrowers’ failure to obtain (in accordance with Section 7.25) a modification of the Sheraton Burlington Parking Lease providing to Administrative Agent (and any other holder of the Loan or any interest therein) and to any future leasehold mortgagee with respect to the Sheraton Burlington Parking Lease customary leasehold mortgagee protection provisions, including without limitation, notice and cure rights in connection with defaults occurring under the Sheraton Burlington Parking Lease, the right to foreclose the lien of the leasehold mortgage and to succeed to the rights of the tenant under the Burlington Parking Lease, attornment rights, leasehold mortgagee’s right to enter into a replacement lease (on identical terms as those set forth in the Sheraton Burlington Parking Lease) upon any termination of the Sheraton Burlington Parking Lease, including in connection with a rejection of the Sheraton Burlington Parking Lease in any Insolvency Proceeding, and mortgagee’s right to exercise on behalf of the tenant under the Sheraton Burlington Parking Lease any renewal options and purchase rights contained therein, and such other leasehold mortgagee protection rights as are consistent with customary and prudent lender practices.

          (c) Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the obligation to repay the Obligations shall become a personal recourse obligation of Borrowers in the event that one or more of the following occurs (each, a “Full Recourse Event”): (i) if any Borrower’s or any Principal’s default under Section 6.34 or Section 6.47 hereof (such that such failure was considered by a court as a factor in the court’s finding for a consolidation of the assets of one ore more of the Borrowers or one or more of the Principals with the assets of another Person) or any Transfer in violation of the provisions of Section 8.19 hereof or Article 7 of the Security Instruments, or (ii) if any Collateral Property or any part thereof shall become an asset, or if any Borrower, any Principal or any Ground Lessor shall be a debtor, in (A) a voluntary bankruptcy or insolvency proceeding or (B) an involuntary bankruptcy or insolvency proceeding commenced by any Person (other than Lender) and, with respect to such involuntary proceeding, one or more of the Borrowers or the Principals consents or fails to object to such proceedings), or if one or more of the Borrowers, Principals or Ground Lessors, has acted in concert with, colluded or conspired with the party to cause the filing of such involuntary proceeding.

          (d) Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim against one or more of the Borrowers or one or more of the Principals for the full amount of the indebtedness secured by the Security Instruments or to require that all Collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Security Instruments and the other Loan Documents.

     12.10 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If

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Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to Borrowers. In determining whether the interest contracted for, charged, or received by Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

     12.11 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.1, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     12.12 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by Administrative Agent and each Lender, regardless of any investigation made by Administrative Agent or any Lender or on their behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of the Loan, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

     12.13 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     12.14 [Intentionally Omitted.

     12.15 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT AND (EXCEPT AS MAY BE OTHERWISE PROVIDED THEREIN) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          (b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH

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OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (c) WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

          (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     12.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     12.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by Administrative Agent are arm’s-length commercial transactions between Borrowers and their respective Affiliates, on the one hand, and Administrative Agent, on the other hand, (B) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) Administrative Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary

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for any Borrower or any of their respective Affiliates, or any other Person and (B) Administrative Agent does not have any obligation to Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) Administrative Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their respective Affiliates, and Administrative Agent does not have any obligation to disclose any of such interests to Borrowers or any of their respective Affiliates. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have against Administrative Agent with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

     12.18 USA PATRIOT Act Notice. Each Lender that is subject to the Patriot Act (as hereinafter defined) and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or Administrative Agent, as applicable, to identify each Loan Party in accordance with the Patriot Act.

     12.19 Time of the Essence. Time is of the essence of the Loan Documents.

     12.20 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     12.21 Sheraton Burlington Operating Lessee. Notwithstanding anything contained herein to the contrary, Administrative Agent and Lenders hereby acknowledge and agree that Sheraton Burlington Operating Lessee is joining in this Agreement solely for the purposes of making the representations and covenants set forth herein, and that Sheraton Burlington Operating Lessee shall in no event be liable to the Lenders for the repayment of the Loan.

     12.22 Contribution.

          (a) To the extent that a payment is made on the Obligations by a Borrower pursuant to a Co-Borrower Obligation (a “Co-Borrower Payment”), which, taking into account all other Co-Borrower Payments then previously or concurrently made by or attributable to any other Borrower, exceeds the amount of the Co-Borrower Payment which otherwise would have been made by or attributable to such Borrower if each such Borrower had paid the aggregate Obligations satisfied by such Co-Borrower Payments in the same proportion as such Borrower’s Allocable Amount in effect immediately prior to such Co-Borrower Payment bore to the aggregate Allocable Amounts of all such Borrower in effect immediately prior to such Co-Borrower Payment, then such Borrower shall be entitled to contribution and indemnification from, and to be reimbursed by, the other Borrower for the amount of such excess, pro rata based upon its respective Allocable Amounts in effect immediately prior to such Co-Borrower Payment (and such obligations of one Borrower to another are herein referred to as the “Contribution Obligations”).

          (b) This provisions of this Section 12.22 are intended only to define the relative rights of Borrowers, and nothing set forth in this Section 12.22 are intended to or shall impair the obligations of any Borrower to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement. Borrowers acknowledge that the rights of contribution and

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indemnification hereunder shall constitute assets in favor of Borrower to which such contribution and indemnification is owing. Each Borrower hereby postpones and subordinates payment of all the Contribution Obligations, and makes all the Contribution Obligations subject in right of satisfaction, payment and performance, to the full and absolute payment of the Loan and any other Obligations.

          (c) Until the date that is one (1) year and one (1) day after the date that all of the Obligations have been paid and satisfied in full none of the Borrowers shall (a) assert, collect, sue upon, or enforce all or any part of the Contribution Obligations; (b) commence or join with any other creditors of any Borrower in commencing any bankruptcy, reorganization, receivership or insolvency proceeding against any other Borrower; (c) take, accept, ask for, sue for, receive, set off or demand any payments upon the Contribution Obligations; or (d) take, accept, ask for, sue for, receive, demand or allow to be created liens, security interests, mortgages, or pledges of or with respect to any of the assets of a Borrower in favor of or for the benefit of the any other Borrower.

          (d) Each Borrower agrees that in the event of any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding relating to any other Borrower, the following shall apply:

     (i) In any such proceeding Administrative Agent may, and is hereby irrevocably authorized and empowered (in its own name or in the name of the said Borrower) but shall have no obligation to: demand, sue for, collect and receive every payment or distribution in respect of the Contribution Obligations and give acquittance therefor; and file claims and proofs of claims and take such other action (including, without limitation, voting the Contribution Obligations and approving or objecting to a plan of reorganization) as Administrative Agent may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of Administrative Agent under this Agreement.

     (ii) In any such proceeding, each Borrower will duly and promptly take such action as Administrative Agent may request to (i) collect for the account of Administrative Agent the Contribution Obligations and to file appropriate claims or proofs of claim with respect thereto; and (ii) execute and deliver to Administrative Agent such powers of attorney, assignments or other instruments as Administrative Agent may request in order to enable it to enforce any and all claims with respect to the Contribution Obligations.

ARTICLE XIII
RESERVE FUNDS

     13.1 Tax Escrow Fund. On the Closing Date, and on each Payment Date thereafter, Borrowers shall pay to Administrative Agent a sum equal to one-twelfth (1/12) of the Real Estate Taxes budgeted in the Approved Annual Budget in order to accumulate with Administrative Agent sufficient funds to pay all such Real Estate Taxes at least thirty (30) days prior to their respective due dates (said amount, the “Tax Escrow Fund,” and the account in which the Tax Escrow Fund is held shall hereinafter be referred to as the “Tax Reserve Account.”). Administrative Agent will apply the Tax Escrow Fund to payments of Taxes required to be made by Borrowers pursuant to Section 9.1 hereof. In making any payment relating to the Tax Escrow Fund, Administrative Agent may do so according to any actual bill or statement procured from the appropriate public office (with respect to Real Estate Taxes), without inquiry into the accuracy of such bill or statement or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. Borrowers agree to notify Administrative Agent promptly of any changes, to

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any Borrowers’ knowledge, to the amounts, schedules and instructions for payment of any Real Estate Taxes and authorizes Administrative Agent or its agent to obtain the bills for Real Estate Taxes directly from the appropriate taxing authority. Provided there are sufficient amounts in the Tax Escrow Fund and no Event of Default exists, Administrative Agent shall pay the Real Estate Taxes as they become due on their respective due dates on behalf of Borrowers by applying the Tax Escrow Funds to the payment of such Real Estate Taxes (taking into account any lawful extensions of the time to pay the same obtained by Borrowers and of which Borrowers have provided Administrative Agent with reasonable advance notice together with evidence reasonably satisfactory to Administrative Agent thereof). If the amount of the Tax Escrow Fund shall exceed the amounts due for Real Estate Taxes, Administrative Agent shall credit such excess against future payments to be made to the Tax Escrow Fund. Any amount remaining in the Tax Escrow Fund (including interest earned) after the Obligations have been paid in full shall be immediately returned to Borrowers. If at any time Administrative Agent reasonably determines that the Tax Escrow Fund is not or will not be sufficient to pay Real Estate Taxes by the dates set forth above in this Section 13.1, Administrative Agent shall notify Borrowers of such determination and Borrowers shall increase the monthly payments to Administrative Agent by the amount that Administrative Agent reasonably estimates is sufficient to make up the deficiency at least ten (10) Business Days prior to the due date of the Real Estate Taxes.

     13.2 FF&E Reserve Fund.

          (a) Deposits to FF&E Reserve Fund. During each calendar year, each Borrower shall spend not less than three percent (3%) of the Gross Receipts from Operations from its respective Collateral Property on FF&E Expenditures for such Collateral Property. Additionally, Borrowers agree that, during each calendar year, Borrower shall spend, in the aggregate (inclusive of the FF&E Expenditures spending requirement set forth in the immediately preceding sentence), not less than four percent (4%) of the aggregate Gross Receipts from Operations from all of the Collateral Properties received during such calendar year on FF&E Expenditures for such Collateral Properties. If, with respect to any calendar year, any Borrower shall have spent less than three percent (3%) of the Gross Receipts from Operations from its respective Collateral Property on FF&E Expenditures for such Collateral Property, or if Borrowers shall have in the aggregate spent less than four percent (4%) of the Gross Receipts from Operations from the Collateral Properties on FF&E Expenditures for the Collateral Properties, Borrowers shall, within forty-five (45) days following the end of such calendar year, deposit with Administrative Agent an amount equal to the FF&E True-Up Amount (such deposit, an “FF&E True-Up Payment”). Administrative Agent shall separately account for the aggregate amount of FF&E True-Up Payments made by particular Borrowers, and Administrative Agent shall track withdrawals made by each of the Borrowers from the FF&E Reserve Fund and shall keep a record of the current balances, if any, of each Borrower in the FF&E Reserve Fund. Additionally, during any Lockbox Period, Borrowers shall deposit (or if there are sufficient funds on deposit in the Lockbox Account, Administrative Agent shall, in accordance with Section 3.6(b), remit from the Lockbox Account) on each Payment Date the sum equal to four percent (4%) of the Gross Receipts from Operations from all of the Collateral Properties received during the month prior to the calendar month immediately preceding such Payment Date. Funds received by Administrative Agent pursuant to this Section 13.2 shall be held by Administrative Agent for costs and expenses of Borrowers related to FF&E Expenditures subsequent to the date of deposit. All such amounts so deposited shall hereinafter be referred to as the “FF&E Reserve Fund” and the account to which such amounts are held shall hereinafter be referred to as the “FF&E Reserve Account.”

          (b) Withdrawal of FF&E Reserve Funds. Provided no Event of Default shall have occurred that remains uncured, Administrative Agent shall make disbursements from the FF&E Reserve Fund for costs and expenses of Borrowers related to FF&E obligations incurred by Borrowers. As a condition for a Borrower to request a disbursement of funds from the FF&E Reserve Fund to pay for

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FF&E Expenditures, such Borrower must provide evidence reasonably acceptable to Administrative Agent that during the calendar year in question such Borrower has theretofore incurred and paid in full for FF&E Expenditures in an aggregate amount equal to or greater than four percent (4%) of the Gross Receipts from Operations from such Borrower’s respective Collateral Property received during such calendar year. Withdrawals from the FF&E Reserve Funds shall be available for FF&E Expenditures in addition to the initial expenditures in the amount of four (4%) of Gross Receipts from Operations. Each request for a withdrawal from the FF&E Reserve Fund shall certify the FF&E Expenditures for which such request is being made. If the items are set forth in the Approved Annual Budget, then provided that no Event of Default exists, Administrative Agent shall disburse the requested funds to the applicable Borrower up to the amount of such Borrower’s then current balance in the FF&E Reserve Fund. Proposed FF&E Expenditures for items and not set forth in the Approved Annual Budget shall be subject to Administrative Agent’s approval in Administrative Agent’s reasonable discretion. Provided no Event of Default shall have occurred that remains uncured, Administrative Agent shall make disbursements as requested by Borrowers on a monthly basis upon delivery by Borrowers of a payment detail in the form attached as Exhibit G, and, if required by Administrative Agent for requests in excess of $100,000 for a single item, and, if available, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment. Administrative Agent may require an inspection of the applicable Collateral Properties at Administrative Agent’s expense prior to making a monthly disbursement in order to verify completion of improvements in excess of $25,000 for any single item for which reimbursement is sought.

     13.3 Required Repair Reserve.

          (a) Deposits to the Required Repair Reserve. On the Closing Date, Borrowers shall deposit with Administrative Agent the sum of $332,411, which is an amount equal to the estimated costs of performing the Required Repairs (as set forth in Schedule 9.5). Amounts so deposited shall hereinafter be referred to as the “Required Repair Fund” and the account in which such amounts are held shall hereinafter be referred to as the “Required Repair Account.”

          (b) Release of Required Repair Funds. Provided no Event of Default shall have occurred that remains uncured, Administrative Agent shall make disbursements from the Required Repair Fund for costs and expenses of Borrowers to reimburse Borrowers for the cost incurred in performing the Required Repairs. Each request for a withdrawal from the Required Repair Fund shall certify the particular item(s) from Schedule 9.5 to which such draw request relates. Provided that no Event of Default exists, Administrative Agent shall disburse the requested funds to the applicable Borrower in accordance with the terms of this clause (b) up to the amount of such Borrower’s then current balance in the Required Repair Fund. Provided no Event of Default shall have occurred that remains uncured, Administrative Agent shall make disbursements as requested by Borrowers on a monthly basis upon delivery by Borrowers of a payment detail in the form attached as Exhibit G, and, if required by Administrative Agent for requests in excess of $100,000 for a single item, and, if available, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested payment. Administrative Agent may require an inspection of the applicable Collateral Properties at Administrative Agent’s expense prior to making a monthly disbursement in order to verify completion of improvements in excess of $25,000 for any single item for which reimbursement is sought. Administrative Agent shall not be required to make more than one disbursement from the Required Repair Fund during each calendar month. As a condition to disbursing any funds from the Required Repair Fund, Administrative Agent shall have received evidence reasonably satisfactory to Administrative Agent that the Required Repairs at such Collateral Property to be funded by the requested disbursement have been completed and are paid for or will be paid upon such disbursement to Borrowers. Administrative Agent shall not be required to make disbursements from the Required Repair Account with respect to any Collateral Property unless such requested disbursement is in an amount greater than

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$10,000 (or a lesser amount if the total amount in the Required Repair Account is less than $10,000, in which case only one disbursement of the amount remaining in the account shall be made) and such disbursement shall be made only upon satisfaction of each condition contained in this Section 13.3(b).

     13.4 [Intentionally Omitted].

     13.5 Environmental Remediation Reserve.

          (a) Deposit. On the Closing Date, Borrowers shall deposit with Administrative Agent the sum of $180,000, which is an amount equal to the estimated costs of performing certain environmental remediation, which funds shall be held as additional collateral for the Loan and shall be disbursed to Borrowers as in accordance with Section 13.5(b). Amounts so deposited shall hereinafter be referred to as the “Environmental Remediation Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as the “Environmental Remediation Reserve Account.”

          (b) Release of Environmental Remediation Reserve Funds. Administrative Agent shall disburse to Borrowers the Environmental Remediation Reserve Funds from the Environmental Remediation Reserve Account from time to time, but not more frequently than once in any thirty (30) day period, as follows:

     (i) Administrative Agent shall disburse to Borrowers $100,000 of the Environmental Remediation Reserve Funds upon Administrative Agent’s receipt of written confirmation from Administrative Agent’s Consultant that Administrative Agent’s Consultant, in its sole and absolute discretion: (a) is satisfied with the results of reviewing documents about an underground storage tank that is the basis for the Embassy Cypress Creek Property being on the database of Florida leaking petroleum storage tanks (“Sheraton Cypress Creek Tank”), and (b) determines that no further action, other than monitoring groundwater, is necessary in connection with the Sheraton Cypress Creek Tank.

     (ii) Administrative Agent shall disburse to Borrowers $50,000 of the Environmental Remediation Reserve Funds upon Administrative Agent’s receipt of written confirmation from Administrative Agent’s Consultant stating that Administrative Agent’s Consultant: (a) in its sole and absolute discretion, is satisfied that monitoring wells on the Sheraton Cypress Creek Property have been properly closed, or (b) has received and reviewed a letter issued by a government environmental agency in the State of Florida stating that no further action is needed with regard to the Sheraton Cypress Creek Tank.

     (iii) Administrative Agent shall disburse to Borrowers $15,000 of the Environmental Remediation Reserve Funds upon Administrative Agent’s receipt of written confirmation from Administrative Agent’s Consultant stating that Administrative Agent’s Consultant, in its sole and absolute discretion, has determined that no further action is needed with regard to the Sheraton Burlington Tanks.

     (iv) Administrative Agent shall disburse to Borrowers $15,000 of the Environmental Remediation Reserve Funds upon Administrative Agent’s receipt of written confirmation from Administrative Agent’s Consultant stating that Lender’s Consultant has received and verified a letter from an environmental agency in the State of Vermont stating that no further action is needed with regard to Sheraton Burlington Tanks.

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     13.6 Reserve Funds, Generally.

          (a) Borrowers grant to the Secured Parties a first priority perfected security interest in each of the Reserve Funds and in each of the Reserve Accounts and any and all monies now or hereafter deposited in each Reserve Account as additional security for payment of the Obligations. Until expended or applied in accordance herewith, the Reserve Funds and the Reserve Accounts shall constitute additional security for the Obligations. Upon the occurrence and during the existence of an Event of Default, Administrative Agent may, in addition to any and all other rights and remedies available to Administrative Agent, apply any sums then present in any or all of the Reserve Accounts to the payment of the Obligations in any order in its sole discretion. The Reserve Funds may not be commingled with other monies held by Administrative Agent; provided, however, that from and after any Securitization the Reserve Funds may be maintained by the servicer under such Securitization and such funds may be commingled with other funds held by such servicer.

          (b) Borrowers shall not, without obtaining the prior consent of Administrative Agent, further pledge, assign or grant any security interest in any Reserve Account, Reserve Fund or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC Financing Statements, except those naming the Secured Parties as the secured party, to be filed with respect thereto.

          (c) The Reserve Funds shall each be held in an Eligible Account. Borrowers shall be entitled to the earnings or interest on the Reserve Funds. The Reserve Funds shall bear interest at the thirty (30) day money market rate offered by the bank used by Administrative Agent for escrow deposits, and shall be held and released by Administrative Agent, and used by Borrowers, in accordance with the terms and conditions of this Agreement. All interest or other earnings on any of the Reserve Funds shall be added to and become a part of such Reserve Funds and shall be disbursed in the same manner as other monies deposited in such Reserve Funds. All interest or other income in connection with the deposit or placement of such funds, less the servicing fee, shall be reported under Borrower’s tax identification number, and shall only be disbursed as set forth in this Agreement. Administrative Agent shall instruct its servicer to provide to Borrowers monthly account statements on each Reserve Fund sharing such earned interest or income.

          (d) Borrowers shall indemnify Administrative Agent and hold Administrative Agent harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys fees and expenses) arising from or in any way connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds were established, except to the extent arising from the gross negligence or willful misconduct of Administrative Agent, servicer, their respective agents or employees. Borrowers shall collaterally assign to Administrative Agent all rights and claims Borrowers may have against all Persons supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that Administrative Agent may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.

ARTICLE XIV
SPECIAL PROVISIONS

     14.1 Sale of Notes and Secondary Market Transaction ; Syndication.

          14.1.1 Cooperation. (a) Borrowers shall, at the request of Administrative Agent, in connection with one or more sales or assignments of one or more of the Notes or participations therein (including, without limitation, any Syndication) or securitizations of rated single or multi-class securities

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(the “Securities”) secured by or evidencing ownership interests in the Notes and the Mortgage (each such sale, assignment, Syndication, participation and/or securitization, a “Secondary Market Transaction”): (a) (i) provide such financial and other information with respect to the Collateral Properties, Borrowers and its Affiliates, Manager and any tenants of the Collateral Properties, (ii) provide business plans and budgets relating to the Collateral Properties and (iii) perform or permit or cause to be performed or permitted such site inspection, appraisals, surveys, market studies, environmental reviews and reports, engineering reports and other due diligence investigations of the Collateral Properties, as may be reasonably requested from time to time by Administrative Agent or as may be necessary or appropriate in connection with a Secondary Market Transaction or Exchange Act requirements (the items provided to Administrative Agent pursuant to this paragraph (a) being called the “Provided Information”), together, if customary, with appropriate verification of and/or consents to the Provided Information through reliance letters of auditors or accountants, acceptable to Administrative Agent; (b) at Borrower’s expense, cause counsel to deliver for each Borrower subject to the SPE Requirements set forth in Section 6.34, (i) a bankruptcy non-consolidation opinion letter (the “Insolvency Opinion”) addressed to Administrative Agent and each Lender and in form and substance and issued by Akin Gump Strauss Hauer & Feld LLP, or another law firm satisfactory to Administrative Agent, and (ii) an opinion of counsel from Richards Layton & Finger, PA (“RLF”), or another Delaware counsel acceptable to Administrative Agent, opining as to the enforceability under federal bankruptcy laws of the provisions of the organizational documents of the Persons subject to the SPE Requirements relating to the mechanics of voluntary bankruptcy filings, (c) at Administrative Agent’s expense, (i) updates of the opinions dated as of the date hereof issued by RLF, or another Delaware counsel acceptable to Administrative Agent, opining as to the enforceability of the organizational documents of the single-member entities subject to the SPE Requirements, and (ii) any other opinions previously delivered to Administrative Agent in connection with the closing of the Loan with respect to the Collateral Properties, Borrowers and its Affiliates, which counsel and opinions shall be reasonably satisfactory to Administrative Agent; and (d) execute such amendments to the Loan Documents and Borrowers’ organizational documents, as may be requested by Administrative Agent or the Rating Agencies or otherwise to effect a Secondary Market Transaction, provided that nothing contained in this subsection (d) shall have an effect on the Maturity Date or the Applicable Interest Rate or cause the modification of any other terms and conditions of the Loan in a manner which would materially and adversely affect Borrowers. Other than those expenses set forth in this Section 14.1, any Secondary Market Transaction shall be at no cost whatsoever to Borrowers.

          (b) Borrowers acknowledge that Administrative Agent may syndicate a portion of the Loan to one or more lenders (the “Syndication”) and in connection therewith, Borrowers will take all reasonable actions as Administrative Agent may reasonably request to assist Administrative Agent in its Syndication effort. Without limiting the generality of the foregoing and of Section 14.1.1(a), Borrowers shall, at the request of Administrative Agent (i) facilitate the review of the Loan and the Collateral Properties by any prospective lender; (ii) deliver updated information on Borrowers and the Collateral Properties; (iii) make representatives of Borrowers available at reasonable times and upon reasonable notice to meet with prospective lenders at tours of the Collateral Properties and bank meetings; (iv) facilitate direct contact between the senior management and advisors of Borrowers and any prospective lender; and (v) provide Administrative Agent with all information reasonably deemed necessary by it to complete the Syndication successfully. Borrowers agree to take such further action, in connection with documents and amendments to the Loan Documents, as may reasonably be required to effect such Syndication.

          14.1.2 Use of Information. Borrowers understand that all or any portion of the Provided Information and the Required Records may be included in disclosure documents in connection with a Secondary Market Transaction, including a prospectus or private placement memorandum (each, a “Disclosure Document”) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities

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and Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers or other parties relating to the Secondary Market Transaction. If the Disclosure Document is required to be revised, Borrowers shall cooperate with Administrative Agent in updating the Provided Information or Required Records for inclusion or summary in the Disclosure Document or for other use reasonably required in connection with a Secondary Market Transaction by providing all current information pertaining to Borrowers, Manager and the Collateral Properties necessary to keep the Disclosure Document accurate and complete in all material respects with respect to such matters.

          14.1.3 Borrowers Obligations Regarding Disclosure Documents. In connection with a Disclosure Document, Borrowers shall: (a) if requested by Administrative Agent, certify in writing that Borrowers have carefully examined those portions of such Disclosure Document, pertaining to Borrowers, the Collateral Properties and the Loan (the “Relevant Portions”), and that, as of the date of such certificate, such portions do not to Borrowers’ actual knowledge contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading (except to the extent specified by Borrowers if Borrowers do not agree with the statements therein); and (b) indemnify (in a separate instrument of indemnity, if so requested by Administrative Agent) (i) any underwriter, syndicate member or placement agent (collectively, the “Underwriters”) retained by Administrative Agent or its issuing company affiliate (the “Issuer”) in connection with a Secondary Market Transaction, (ii) Administrative Agent and (iii) the Issuer that is named in the Disclosure Document or registration statement relating to a Secondary Market Transaction (the “Registration Statement”), and each of the Issuer’s directors, each of its officers who have signed the Registration Statement and each person or entity who controls the Issuer or the Administrative Agent within the meaning of Section 15 of the Securities Act or Section 30 of the Exchange Act (collectively within (iii), the “Fortress Group”), and each of its directors and each person who controls each of the Underwriters, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities arising out of third party claims (the “Liabilities”) to which Administrative Agent, the Fortress Group or the Underwriter Group may become subject (including reimbursing all of them for any actual out-of-pocket legal or other expenses actually incurred in connection with investigating or defending the Liabilities) insofar as the Liabilities arise out of or are based upon any untrue statement of any material fact contained in any of the Relevant Portions and in the Provided Information or in any of the applicable portions of such sections of the Disclosure Document that were reviewed and certified by Borrowers in accordance with this Section 14.1.3 applicable to Borrowers, the Collateral Properties or the Loan, or arise out of or are based upon the omission or alleged omission by Borrowers to state therein a material fact required to be stated in the applicable portions of such sections or necessary in order to make the statements in the applicable portions of such sections in light of the circumstances under which they were made, not misleading, provided, however, that Borrowers shall not be required to indemnify Administrative Agent for any Liabilities relating to untrue statements or omissions which Borrowers identified to Administrative Agent in writing at the time of Borrowers’ examination of such Disclosure Document. For purposes of Section 14.1, Borrowers shall be deemed to have certified as accurate any Relevant Portions or Provided Information that Administrative Agent provided to Borrowers and requested that Borrowers review to the extent Borrowers do not respond to such request within ten (10) Business Days of receipt of such Relevant Portions or Provided Information. Borrowers’ obligation to indemnify in respect of any information contained in a preliminary or final registration statement, private placement memorandum or preliminary or final prospectus that is derived in part from information provided by Borrowers and in part from information provided by others unrelated to or not employed by Borrowers shall be limited to any untrue statement or omission of material fact therein that results directly from an error or omission in any information provided by Borrowers or actually known by Borrowers to be incorrect or omitted but in all events only to the extent Borrowers have been given an opportunity to review and comment on all such materials and neither Borrowers nor Guarantor shall have any liability

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hereunder if Borrowers or Guarantor has commented on said materials in a timely manner and such comments were not incorporated into the applicable materials. Borrowers shall have no responsibility for the failure of any member of the Underwriter Group or any other Person to accurately transcribe written information supplied by Borrowers or to include any portions of the Provided Information.

          14.1.4 Borrowers Indemnity Regarding Filings. In connection with filings under the Exchange Act, Borrowers shall (i) indemnify Administrative Agent, the Fortress Group and the Underwriter Group for any Liabilities to which Administrative Agent, the Fortress Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon the omission by Borrowers to state in the Provided Information a material fact required to be stated in the Provided Information in order to make the statements in the Provided Information, in light of the circumstances under which they were made not misleading and (ii) reimburse Administrative Agent, the Fortress Group or the Underwriter Group for any reasonable and actual out-of-pocket legal or other expenses actually incurred by Administrative Agent, the Fortress Group or the Underwriter Group in connection with defending or investigating the Liabilities.

          14.1.5 Indemnification Procedure. Promptly after receipt by an indemnified party under Section 14.1.3 or 14.1.4 of notice of the commencement of any action for which a claim for indemnification is to be made against Borrowers, such indemnified party shall notify Borrowers in writing of such commencement, but the omission to so notify Borrowers will not relieve Borrowers from any liability that it may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to Borrowers. If any action is brought against any indemnified party, and it notifies Borrowers of the commencement thereof, Borrowers will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice of commencement, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party in its discretion. After notice from Borrowers to such indemnified party under this Section 14.1.5, Borrowers shall not be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof, provided, however, if the defendants in any such action include both Borrowers and an indemnified party, and any 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 Borrowers, then the indemnified party or parties 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 or parties. Borrowers shall not be liable for the expenses of separate counsel unless there are legal defenses available to it that are different from or additional to those available to another indemnified party.

          14.1.6 Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 14.1.3 or 14.1.4 is for any reason held to be unenforceable by an indemnified party in respect of any Liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 14.1.3 or 14.1.4, Borrowers shall contribute to the amount paid or payable by the indemnified party as a result of such Liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) the Fortress Group’s and Borrowers’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances.

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          14.1.7 Rating Surveillance Administrative Agent will retain the Rating Agencies to provide rating surveillance services on Securities at no cost to Borrowers.

          14.1.8 Restructuring of Loan. Administrative Agent, without in any way limiting Administrative Agent’s other rights hereunder, in its sole and absolute discretion, shall have the right at any time (and any number of times during the term of the Loan) to require Borrowers to restructure the Loan into multiple notes (which may include component notes and/or senior and junior notes) and/or to create participation interests in the Loan, and which restructuring may include reallocation of principal amounts of the Loan (including, by way of example, the increase or decrease in the principal amount of the senior note and mortgage securing same, and the corresponding decrease or increase in the principal amounts of the junior note(s) and the security instrument securing same), reallocating the sizing and interest rates of one or more Notes previously issued, or the restructuring of a portion of the Loan into a mezzanine loan (the “New Mezzanine Loan”) to the owners of the direct equity interests in Borrowers, secured by a pledge of such direct equity interests, the establishment of different interest rates and debt service payments for the Loan and the New Mezzanine Loan and the payment of the Loan and the New Mezzanine Loan in such order of priority as may be designated by Administrative Agent; provided, that (a) (i) the total amounts of the Loan and the New Mezzanine Loan shall equal the amount of the Loan immediately prior to the restructuring, (ii) except in the case of an Event of Default under the Loan and/or the New Mezzanine Loan, the weighted average interest rate of the Loan and the New Mezzanine Loan, if any, shall, in the aggregate, equal the interest rate which was applicable to the Loan immediately prior to the restructuring and (iii) except in the case of an Event of Default under the Loan and/or the New Mezzanine Loan, the debt service payments on the Loan and the New Mezzanine Loan shall equal the debt service payment which was due under the Loan immediately prior to the restructuring; provided that any such restructuring carried out after the closing of the Loan shall be at no cost to Borrowers. In addition, in the case of senior and junior notes, except in the case of an Event of Default under the Loan, the weighted average interest rate of the senior and junior notes shall in the aggregate, equal the interest rate which was applicable to the Loan immediately prior the restructuring. Borrowers shall cooperate with all reasonable requests of Administrative Agent in order to restructure the Loan and create the New Mezzanine Loan and shall (A) execute and deliver such documents including, without limitation in the case of the New Mezzanine Loan, a mezzanine note, a mezzanine loan agreement, a pledge and security agreement and a mezzanine deposit account agreement, (B) cause Borrowers’ counsel to deliver such legal opinions and (C) create such bankruptcy remote borrower under the New Mezzanine Loan as, in the case of each of (A), (B) and (C) above, shall be reasonably required by Administrative Agent and required by any Rating Agency in connection therewith, all in form and substance reasonably satisfactory to Administrative Agent and satisfactory to any such Rating Agency, including, without limitation, the severance of this Agreement, the Mortgage and other Loan Documents if requested. In the event Borrowers fails to execute and deliver such documents to Administrative Agent within ten (10) Business Days following such request by Administrative Agent, Borrowers hereby absolutely and irrevocably appoints Administrative Agent as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such transactions, Borrowers ratifying all that such attorney shall do by virtue thereof. It shall be an Event of Default if Borrowers fails to comply with any of the terms, covenants or conditions of this Section 14.1.8 after the expiration of fifteen (15) Business Days after notice thereof. Any restructuring or modification of the Loan pursuant to this Section 14.1.8 shall be at Administrative Agent’s sole cost and expense.

          14.1.9 Secondary Market Transaction Financials.

          (a) Borrowers covenant and agree that if, at the time one or more Disclosure Documents are being prepared in connection with a Secondary Market Transaction, Administrative Agent expects that Borrowers alone or Borrowers and one or more of its Affiliates collectively, or the Collateral Properties alone or the Collateral Properties and any other parcel(s) of real property, together with

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improvements thereon and personal property related thereto, that is “related”, within the meaning of the definition of Significant Obligor, to the Collateral Properties (a “Related Property”) collectively, will be a Significant Obligor, Borrowers shall promptly furnish to Administrative Agent, at Borrower’s sole cost and expense, upon request (i) the selected financial data or, if applicable, net operating income, required under Item 1112(b)(1) of Regulation AB and meeting the requirements thereof, if the applicable Administrative Agent expects that the principal amount of the Loan, together with any loans made to an Affiliate of Borrowers or secured by a Related Property that is included in a Secondary Market Transaction with the Loan (a “Related Loan”), as of the cut-off date for such Secondary Market Transaction may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Secondary Market Transaction and at any time during which the Loan and any Related Loans are included in a Secondary Market Transaction does, equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Secondary Market Transaction or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB and meeting the requirements thereof, if Administrative Agent expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such Secondary Market Transaction may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Secondary Market Transaction and at any time during which the Loan and any Related Loans are included in a Secondary Market Transaction does, equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Secondary Market Transaction. Such financial data or financial statements shall be furnished to the applicable Administrative Agent within fifteen (15) Business Days after notice from Administrative Agent in connection with the preparation of Disclosure Documents for the Secondary Market Transaction and (A) not later than thirty (30) days after the end of each fiscal quarter of Borrowers and (B) not later than seventy-five (75) days after the end of each Fiscal Year; provided, however, that Borrowers shall not be obligated to furnish financial data or financial statements pursuant to clauses (A) or (B) of this sentence with respect to any period for which a filing pursuant to the Securities Exchange Act of 1934 in connection with or relating to the Secondary Market Transaction is not required.

          (b) If requested by Administrative Agent, Borrowers shall furnish, or shall cause the applicable lessee to furnish, to Administrative Agent financial data and/or financial statements in accordance with Regulation AB for any lessee of the Collateral Properties if, in connection with a Secondary Market Transaction, Administrative Agent expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Secondary Market Transaction such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Lease does not require the related lessee to provide the foregoing information, Borrowers shall use commercially reasonable efforts (which shall not include commencing a lawsuit against the related lessee, terminating the related Lease or claiming a default under the related Lease) to cause the applicable lessee to furnish such information.

ARTICLE XV
FUTURE SUBORDINATE FINANCING

     15.1 Permitted Mezzanine Indebtedness. Notwithstanding anything the contrary contained in this Agreement, a “Permitted Equity Transfer” shall also include Transfers in the nature of a pledge by a Mezzanine Borrower (as defined below) of its direct and/or indirect equity interest in any Owner or Fee Owner (but not of any direct interest in any Borrowers or any Collateral Property) to a Permitted Mezzanine Lender as security for a loan to such Mezzanine Borrower (a “Permitted Future Mezzanine Loan”) provided that the following terms and conditions are satisfied:

          (a) no Default or Event of Default shall then exist;

160

          (b) Administrative Agent shall have received at least forty-five (45) days’ prior written notice of the proposed Permitted Future Mezzanine Loan;

          (c) Administrative Agent shall have approved the Permitted Mezzanine Lender, which consent shall not be unreasonably withheld;

          (d) the aggregate amounts of the Obligations and the Permitted Future Mezzanine Loan (as of the effective date of the Permitted Future Mezzanine Loan) shall not exceed seventy-five percent (75%) of the fair market value of the Collateral Property as determined by an Acceptable Appraisal;

          (e) the Aggregate Debt Service Coverage Ratio is at least 1.20 to 1;

          (f) Borrowers shall not be obligated to repay the Permitted Future Mezzanine Loan nor incur any obligation or liability to the Permitted Mezzanine Lender or any other Person with respect to the Permitted Future Mezzanine Loan, and the terms and conditions of the Permitted Future Mezzanine Loan, the collateral pledged as security therefor, and the documents evidencing the Permitted Future Mezzanine Loan (the “Permitted Future Mezzanine Loan Documents”), shall be reasonably satisfactory to Administrative Agent;

          (g) a new single purpose entity (in compliance with Section 6.34 hereof) shall have been formed (which shall be a “Permitted Equity Transfer”) that will directly or indirectly own 100% of the equity interests in one or more of the Owners or Fee Owners (the “Mezzanine Borrower”), the organizational documents of the applicable Owners or Fee Owners, such Mezzanine Borrower, and their respective constituent owners shall be reasonably satisfactory to Administrative Agent, and Fee Owners and such Mezzanine Borrower shall otherwise satisfy all applicable Rating Agency criteria for single-purpose entities, bankruptcy remoteness, and mezzanine borrowers applicable to the Permitted Future Mezzanine Loan so as not to cause a downgrade of the then current ratings of the Securities or any class thereof;

          (h) the Permitted Future Mezzanine Loan Documents shall provide that (i) Mezzanine Borrower shall not be permitted to prepay or repay all or any portion of the Permitted Mezzanine Loan, unless Borrowers shall simultaneously prepay or repay any equivalent proportion of the Loan, and (ii) Mezzanine Borrower shall not be permitted to prepay or repay all or any portion of the Permitted Mezzanine Loan at any time that an Event of Default exists (under the Loan), unless in connection therewith Borrowers repay the Loan in its entirety, and that if Mezzanine Borrower prepays or repays any portion of a Permitted Mezzanine Loan in violation of the foregoing prohibition any funds received by the Permitted Mezzanine Lender shall be deemed to be held in trust by the Permitted Mezzanine Lender for the benefit of Administrative Agent, and Permitted Mezzanine Lender shall immediately pay any such funds over to Administrative Agent to be applied as a prepayment of the Loan;

          (i) if required by Administrative Agent, Borrowers shall have obtained prior written confirmation from the applicable Rating Agencies that the Permitted Future Mezzanine Loan will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof;

          (j) the Permitted Mezzanine Lender shall have executed and delivered to Administrative Agent an intercreditor agreement acceptable to Administrative Agent in its reasonable discretion, which intercreditor agreement shall incorporate the covenants set forth in clause (h) above in this Section 15.1;

161

          (k) Borrowers and Guarantor shall have executed such additional Loan Documents and such amendments to and reaffirmations of the existing Loan Documents as Administrative Agent may reasonably require but not to increase the liability or obligations of Borrowers or Guarantor or change the Applicable Interest Rate, debt service due hereunder or the Maturity Date;

          (l) the Permitted Mezzanine Loan shall not be in contravention of the organizational documents of FelCor Trust or FelCor Op, or any agreement or indenture to which FelCor Trust and/or FelCor is a party;

          (m) Administrative Agent shall have received such opinions of counsel to Borrowers as Administrative Agent may reasonably require, in form and content reasonably acceptable to Administrative Agent (including a new non-consolidation opinion);

          (n) Borrowers shall have paid or reimbursed Administrative Agent for all of its costs and expenses (including attorneys’ fees and disbursements, servicer fees and fees and costs of the applicable Rating Agencies) incurred in connection with the foregoing; and

          (o) Notwithstanding anything herein to the contrary, none of Administrative Agent or its respective Affiliates shall have any obligation to provide a Permitted Future Mezzanine Loan or any other financing.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

162

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BORROWERS: FELCOR/CMB BUCKHEAD HOTEL, L.L.C.,
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
FELCOR/CMB MARLBOROUGH HOTEL, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

FELCOR/CMB CORPUS HOLDINGS, L.P.
By:	FelCor/CMB Corpus Hotel, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President

FELCOR/CMB ORSOUTH HOLDINGS, L.P.
By:	FelCor/CMB Orsouth Hotel, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President

FELCOR/CMB SSF HOLDINGS, L.P.
By:	FelCor/CMB SSF Hotel, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President

Signature Page to the Credit Agreement

FELCOR S-4 HOTELS (SPE), L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
DJONT/CMB BUCKHEAD LEASING, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
DJONT/CMB FCOAM, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
DJONT/CMB CORPUS LEASING, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
DJONT/CMB ORSOUTH LEASING, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
DJONT/CMB SSF LEASING, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President
FELCOR S-4 LEASING (SPE), L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Signature Page to the Credit Agreement

FCH/SH LEASING II, L.L.C.
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Signature Page to the Credit Agreement

ADMINISTRATIVE AGENT: FORTRESS CREDIT CORP., a Delaware corporation
By:	/s/ Constantine M. Dakolias
	Name:	Constantine M. Dakolias
	Title:	President
INITIAL LENDER: FORTRESS CREDIT CORP., a Delaware corporation
By:	/s/ Constantine M. Dakolias
	Name:	Constantine M. Dakolias
	Title:	President

Signature Page to the Credit Agreement

ACKNOWLEDGED
AND AGREED TO BY:
FEE OWNERS:
FELCOR LODGING LIMITED PARTNERSHIP
By:	FelCor Lodging Trust Incorporated,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President
FELCOR/CSS HOLDINGS, L.P.
By:	FelCor/CSS Hotels, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President
FELCOR/MM S-7 HOLDINGS, L.P.
By:	FelCor/MM S-7 Hotels, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President
FCH/PSH, L.P.
By:	FelCor/CSS Hotels, L.L.C.,
	its general partner
	By:	/s/ Jeffrey D. Symes
		Name: Jeffrey D. Symes
		Title: Vice President

Signature Page to the Credit Agreement

EX-10.33.2

Exhibit 10.33.2

PROMISSORY NOTE

$212,000,000.00 [                    ], 20[                    ]

          THIS PROMISSORY NOTE (this “Note”), is made on [                    ], 20[                    ], by FELCOR/CMB BUCKHEAD HOTEL, L.L.C., FELCOR/CMB MARLBOROUGH HOTEL, L.L.C., FELCOR S-4 HOTELS (SPE), L.L.C., DJONT/CMB BUCKHEAD LEASING, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB CORPUS LEASING, L.L.C., DJONT/CMB ORSOUTH LEASING, L.L.C., DJONT/CMB SSF LEASING, L.L.C., and FELCOR S-4 LEASING (SPE), L.L.C., each a Delaware limited liability company, FELCOR/CMB ORSOUTH HOLDINGS, L.P., FELCOR/CMB CORPUS HOLDINGS, L.P., and FELCOR/CMB SSF HOLDINGS, L.P., each a Delaware limited partnership, each having an address c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062 (individually and collectively, “Maker”), as maker, in favor of [FORTRESS CREDIT CORP., a Delaware corporation] (herein, in such capacity, together with any subsequent holder hereof, called the “Payee”), having an address at [c/o Drawbridge Special Opportunities Fund LP, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105], for the account of its applicable lending office, as payee.

          FOR VALUE RECEIVED, Maker promises to pay to the order of Payee, the principal sum of [TWO HUNDRED TWELVE MILLION and No/100 DOLLARS ($212,000,000.00)] (the “Principal Balance”), in lawful money of the United States of America, with interest on the unpaid principal balance from time to time outstanding to be computed in the manner, at the times and, subject to the provisions of Article II of the Loan Agreement (as hereinafter defined), at the Applicable Interest Rate provided in that certain Credit Agreement, dated as of May 3, 2010, by and among Maker, FCH/SH Leasing II, L.L.C., Fortress Credit Corp., in its capacity as Administrative Agent (in such capacity, "Administrative Agent”) and Fortress Credit Corp., in its capacity as the initial Lender, and certain other Persons, collectively, as lenders (collectively, the “Lenders”), as modified by that certain Letter Agreement dated as of May 3, 2010, by and among Borrower, Fortress Credit Corp., in its capacity as Administrative Agent, and Fortress Credit Corp., in its capacity as the initial Lender, and FelCor Lodging Limited Partnership (as so amended, and as the same may be further amended, modified, restated, consolidated, replaced or supplemented from time to time, the “Loan Agreement”). Capitalized terms used but not defined herein shall have the respective meanings given such terms in the Loan Agreement.

     1. Payment Terms. Maker shall pay to Payee the monthly interest on the unpaid Principal Balance in the manner and at the times specified in Article II of the Loan Agreement, which payments shall be applied in accordance with said Article II. Maker shall also pay to Payee interest at the Default Rate, and all other amounts due and payable as and when provided for in the Loan Agreement. The balance of the Principal Balance, together with all accrued and unpaid interest thereon, and all other amounts payable to Payee hereunder, under the Loan Agreement and under the other Loan Documents shall be due and payable on the Maturity Date. All payments of principal and interest shall be made in lawful money of the United States of

America in immediately available funds at the applicable office of the Administrative Agent for payments specified in the Loan Agreement.

     2. Loan Documents. This Note is evidence of all or a portion of that certain loan made by Lenders to Maker on May 3, 2010, and is executed pursuant to the terms and conditions of the Loan Agreement. This Note is secured by and entitled to the benefits of, among other things, certain mortgages, deeds of trust and deeds to secure debt which encumber Maker’s interest in the Collateral Properties, and the other Loan Documents. Reference is made to the Loan Agreement and other Loan Documents for a description of the nature and extent of the security afforded thereby, the rights of the holder hereof in respect of such security, the terms and conditions upon which this Note is secured and the rights and duties of the holder of this Note. All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Documents to be kept and performed by Maker are by this reference hereby made part of this Note to the same extent and with the same force and effect as if they were fully set forth in this Note, and Maker covenants and agrees to keep and perform the same, or cause the same to be kept and performed, in accordance with their terms.

     3. Loan Acceleration; Prepayment. The unpaid Principal Balance, and all other Obligations, shall, without notice, become immediately due and payable at the option of Payee upon the happening of any Event of Default, after any applicable notice and cure periods, as provided in the Loan Agreement. This Note may not be prepaid except as otherwise expressly provided in, and subject to the terms and conditions of, the Loan Agreement.

     4. Revival. To the extent that Maker makes a payment or Payee receives any payment or proceeds for Maker’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under the Debtor Relief Laws or any other bankruptcy law, common law or equitable cause, then, to such extent, the obligations of Maker hereunder intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Payee.

     5. Amendments. This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Maker or Payee, 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. Whenever used, the singular number shall include the plural, the plural the singular, and the words “Payee” and "Maker” shall include their respective successors, assigns, heirs, executors and administrators.

[text continues on following pages]

2

     6. Waiver. Maker and all others who may become liable for the payment of all or any part of the Obligations do hereby severally waive presentment and demand for payment, notice of dishonor, protest, notice of protest, notice of nonpayment, notice of intent to accelerate the maturity hereof and of acceleration except as otherwise expressly provided in the Loan Documents. No release of any security for the Obligations or any Person liable for payment of the Obligations, no extension of time for payment of this Note or any installment hereof, and no alteration, amendment or waiver of any provision of the Loan Documents made by agreement between Payee and any other person or party shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Maker, and any other Person or party who may become liable under the Loan Documents, for the payment of all or any part of the Obligations.

     In addition, by initialing below, DJONT/CMB SSF LEASING, L.L.C., a Delaware limited liability company, and FELCOR/CMB SSF HOLDINGS, L.P., a Delaware limited partnership, waive any right under California Civil Code §2954.10 or otherwise to prepay the Obligations, in whole or in part, without a prepayment charge, fee, or penalty. DJONT/CMB SSF LEASING, L.L.C. and FELCOR/CMB SSF HOLDINGS, L.P. acknowledge that prepayment of the Obligations (whether voluntary or involuntary) may result in Payees’ incurring additional losses, costs, expenses, and liabilities, including, but not limited to, lost revenue and lost profits. DJONT/CMB SSF LEASING, L.L.C. and FELCOR/CMB SSF HOLDINGS, L.P. therefore agree to pay any prepayment charges on the terms and conditions provided herein or in the Loan Agreement, including, without limitation, upon any Event of Default attributable to the transfer or conveyance of any right, title, or interest in the Property.

     DJONT/CMB SSF LEASING, L.L.C. and FELCOR/CMB SSF HOLDINGS, L.P. AGREE THAT LENDERS’ WILLINGNESS TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE IS ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY DJONT/CMB SSF LEASING, L.L.C., FOR THIS WAIVER AND AGREEMENT.

  DJONT/CMB SSF LEASING, L.L.C.   FELCOR/CMB SSF HOLDINGS, L.P.

[text continues on following pages]

3

     7. Exculpation. It is expressly agreed that recourse against Maker for failure to perform and observe its obligations contained in this Note shall be limited as and to the extent provided in Section 12.9 of the Loan Agreement.

     8. Notices. All notices or other communications required or permitted to be given pursuant hereto shall be given in the manner specified in Section 12.2 of the Loan Agreement directed to the parties at their respective addresses as provided therein.

     9. Joint and Several. If more than one Person constitutes Maker, each Person constituting Maker hereunder shall have joint and several liability for the obligations of Maker hereunder.

     10. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS EXCEPT THAT IT IS THE INTENT OF MAKER THAT THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS NOTE) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA, WHICH LAWS OF THE UNITED STATES OF AMERICA SHALL, TO THE EXTENT THE SAME PREEMPT SUCH STATE LAWS, GOVERN AND BE CONTROLLING.

     11. Interest Rate Limitation. Notwithstanding anything to the contrary contained in this Note or any other Loan Document, the interest paid or agreed to be paid under this Note shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If Payee shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to Maker. In determining whether the interest contracted for, charged, or received by Payee exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

     12. Severability. If any provision of this Note or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Note and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

4

THIS NOTE WAS EXECUTED OUTSIDE OF THE STATE OF FLORIDA. DOCUMENTARY STAMP TAXES WERE PAID UPON THE RECORDING OF THOSE CERTAIN FEE, LEASEHOLD AND SUBLEASEHOLD MORTGAGES, FIXTURE FILINGS AND SECURITY AGREEMENTS RECORDED ON OR ABOUT THE DATE HEREOF IN THE PUBLIC RECORDS OF BROWARD COUNTY, FLORIDA AND ORANGE COUNTY, FLORIDA.

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5

     IN WITNESS WHEREOF, Maker has executed this Note as of the date first written above.

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

MAKER: FELCOR/CMB BUCKHEAD HOTEL, L.L.C.
By:
	Name:
	Title:
FELCOR/CMB MARLBOROUGH HOTEL, L.L.C.
By:
	Name:
	Title:

FELCOR/CMB CORPUS HOLDINGS, L.P.
By:	FelCor/CMB Corpus Hotel, L.L.C.,
	its general partner
	By:
		Name:
		Title:
FELCOR/CMB ORSOUTH HOLDINGS, L.P.
By:	FelCor/CMB Orsouth Hotel, L.L.C.,
	its general partner
	By:
		Name:
		Title:

FELCOR S-4 HOTELS (SPE), L.L.C.
By:
	Name:
	Title:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

Signed, sealed and delivered

in presence of:

Name:

DJONT/CMB BUCKHEAD LEASING, L.L.C.
By:
	Name:
	Title:
DJONT/CMB FCOAM, L.L.C.
By:
	Name:
	Title:
DJONT/CMB CORPUS LEASING, L.L.C.
By:
	Name:
	Title:
DJONT/CMB ORSOUTH LEASING, L.L.C.
By:
	Name:
	Title:
DJONT/CMB SSF LEASING, L.L.C.
By:
	Name:
	Title:
FELCOR S-4 LEASING (SPE), L.L.C.
By:
	Name:
	Title:
FELCOR/CMB SSF HOLDINGS, L.P.
By:	FelCor/CMB SSF Hotel, L.L.C.,
	its general partner

By:
	Name:
	Title:

EX-10.33.3

Exhibit 10.33.3

PLEDGE AND SECURITY AGREEMENT

     This PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of May 3, 2010, from the Persons who are, or may become, party hereto as pledgors (“Assignors” and each individually, a "Assignor”), in favor of FORTRESS CREDIT CORP., a Delaware corporation (“FCC”), in its capacity as Administrative Agent for the Secured Parties (as defined below) (together with its successors and assigns “Assignee”).

     WHEREAS, Assignors are the legal and beneficial owners of the partnership interests or limited liability company membership interests, as applicable (the “Pledged Equity Interests”), of each of the respective issuers of such Pledged Equity Interests (the “Issuers” and each individually, an "Issuer”), as more particularly described on Exhibit A attached hereto;

     WHEREAS, the transactions contemplated by this Agreement are being made in connection with that certain Credit Agreement dated as of May 3, 2010, by and among FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor S-4 Hotels (SPE), L.L.C., DJONT/CMB Buckhead Leasing, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB Corpus Leasing, L.L.C., DJONT/CMB Orsouth Leasing, L.L.C., DJONT/CMB SSF Leasing, L.L.C., FelCor S-4 Leasing (SPE), L.L.C., and FCH/SH Leasing II, L.L.C., each a Delaware limited liability company, FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB Corpus Holdings, L.P., and FelCor/CMB SSF Holdings, L.P., each a Delaware limited partnership, as borrowers (collectively, “Borrowers” and each a “Borrower”), Assignee, and the lenders from time to time party thereto (the “Lenders”), pursuant to which Lenders have agreed to made a loan (the “Loan”) to the Borrowers in the original principal sum of TWO HUNDRED TWELVE MILLION and 00/100 Dollars $212,000,000.00, as modified by that certain Letter Agreement dated as of the date hereof, by and among Assignee, Lenders, Borrowers and FelCor Lodging Limited Partnership (such agreement as so modified, and as the same may be amended, modified, or amended and restated from time to time, and including any replacements thereof, the “Loan Agreement”);

     WHEREAS, each Borrower is a special purpose entity owned directly or indirectly, in whole or in part, by FelCor Lodging Limited Partnership (“FelCor Op”) or its respective subsidiaries or affiliates, to make and administer various investments in Collateral Properties;

     WHEREAS, it is a condition to the making of the Loan that Assignors execute and deliver to Assignee a pledge agreement in substantially the form hereof as additional collateral to secure the Obligations under the Loan Agreement; and

     WHEREAS, Assignors, Issuers and Borrowers are part of a group of related companies, and Assignors have received and/or expect to receive substantial direct and indirect benefits from the making of the Loan (which benefits are hereby acknowledged).

     NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. DEFINITIONS.

     All terms not specifically defined herein, which terms are defined in the Uniform Commercial Code as in effect in the State of New York, shall have the meanings assigned to them therein. The following terms shall have the following meanings herein:

     Administrative Agent. As defined in the Loan Agreement.

     Agreement. See preamble.

     Assigned Interests. See Section 2.1.

     Assignee. See preamble.

     Assignor or Assignors. See preamble.

     FCC. See preamble.

     Borrower or Borrowers. See preamble.

     Business Day. As defined in the Loan Agreement.

     Cash Collateral. See Section 4.2.

     Cash Collateral Account. See Section 4.2.

     Collateral. The Assigned Interests, the Cash Collateral, the Cash Collateral Account and all other property now or hereafter pledged or assigned to Assignee by Assignors hereunder, and all income therefrom, increases therein and proceeds thereof.

     Collateral Property. As defined in the Loan Agreement.

     Constituent Document. (a) With respect to an Issuer that is a limited liability company, the operating agreement of such Issuer, as the same may be further amended or amended and restated from time to time; and (b) with respect to an Issuer that is a partnership, the partnership agreement of such Issuer, as the same may be further amended or amended and restated from time to time.

     Default Rate. As defined in the Loan Agreement.

     Equity Interests. As defined in the Loan Agreement.

     Event of Default. See Section 5.1.

     FelCor Op. See preamble.

     Issuer or Issuers. See preamble.

     Law. As defined in the Loan Agreement.

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     Lenders. See preamble.

     Lien. As defined in the Loan Agreement.

     Loan. See preamble.

     Loan Agreement. See preamble.

     Loan Documents. As defined in the Loan Agreement.

     Obligations. As defined in the Loan Agreement.

     Person. As defined in the Loan Agreement.

     Pledged Equity Interests. See preamble.

     Secured Parties. As defined in the Loan Agreement.

     Time Deposits. See Section 4.2.

2. PLEDGE.

     2.1 Grant of Security Interest. Each Assignor hereby pledges, grants a security interest in, mortgages, and collaterally assigns and transfers to Assignee, for the benefit of the Secured Parties, as security for the payment and performance in full when due (whether at stated maturity, by acceleration or otherwise) of all of the Obligations, all the right, title and interest of such Assignor in and to the Pledged Equity Interests, wherever located and whether now owned or existing or hereafter acquired or arising, including, without limitation: (a) all payments or distributions, whether in cash, property or otherwise, at any time owing or payable to such Assignor on account of its interest as a partner or member, as the case may be, in the applicable Issuer; (b) all of such Assignor’s rights and interests as a partner or member under the applicable Constituent Document, including all voting rights and all rights to grant or withhold consents or approvals in its capacity as a partner or member; (c) all rights as a partner or member of access and inspection to and use of all books and records, including computer software and computer software programs, of the applicable Issuer; (d) all other rights, interests, property or claims to which such Assignor may be entitled in its capacity as a partner or member of the applicable Issuer; and (e) all proceeds and products of any of the foregoing (all of the foregoing rights, title and interest described in the foregoing clauses (a) through (e), together with the Pledged Equity Interests, being herein referred to collectively as the “Assigned Interests”).

     2.2 Pledge of Cash Collateral Account. Each Assignor also hereby pledges and assigns to Assignee, for the benefit of the Secured Parties, and grants to Assignee, for the benefit of the Secured Parties, a security interest in, all the right, title and interest of such Assignor, whether now owned or existing or hereafter acquired or arising, in and to the Cash Collateral Account and all of the Cash Collateral, subject to the terms of this Agreement.

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     2.3 Waiver of Certain Constituent Document Provisions.

     (a) Each Assignor irrevocably waives any and all provisions of the Constituent Document that (i) prohibit, restrict, condition or otherwise affect the grant hereunder of any lien, security interest or encumbrance on any of the Collateral or any enforcement action which may be taken in respect of any such lien, security interest or encumbrance, including without limitation, the transfer of ownership of the Pledged Equity Interests to Assignee; or (ii) otherwise conflict with the terms of this Agreement.

     (b) Each Issuer shall consent to the pledge and grant given hereby by execution and delivery of an Acknowledgment and Consent in the form attached hereto as Exhibit C.

     2.4 Authorization to File Financing Statement. Each Assignor hereby authorizes Assignee to file in any Uniform Commercial Code filing office a financing statement naming such Assignor as the debtor and indicating the Collateral as the collateral. The financing statement may indicate some or all of the collateral on the financing statement, whether specifically or generally.

     2.5 Delivery of Certificates. All of the certificates, if any, for the Pledged Equity Interests, accompanied by appropriate instruments of assignment thereof duly executed in blank by each Assignor, have been delivered to Assignee.

     2.6 Additional Interests. In case any Assignor shall acquire any additional Pledged Equity Interests in an Issuer, or any other Equity Interests exchangeable for or convertible into Pledged Equity Interests or partnership or membership interests of an Issuer, whether by purchase, dividend, split or otherwise, then (a) such Pledged Equity Interests and other Equity Interests shall automatically be subject to the pledge, assignment and security interest granted to Assignee, for the benefit of the Secured Parties, under this Agreement and the Assigned Interests as such term is used herein shall include such additional Pledged Equity Interests and additional Equity Interests and (b) the applicable Assignor shall deliver to Assignee forthwith any certificates therefor, accompanied by appropriate instruments of assignment duly executed by Assignor in blank and such Assignee may update Exhibit A hereto to reflect such additional Pledged Equity Interests or Equity Interests. In any event, on the last day of each calendar quarter, Assignors shall update Exhibit A hereto to reflect the Pledged Equity Interests then owned by each Assignor, if such updates are necessary to reflect changes thereto and Assignors and Assignee shall make deliveries of the certificates for the Pledged Equity Interests pledged under this Agreement so that such certificates are reconciled with such updated Exhibit A.

3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNORS.

     3.1 Representations and Warranties. Each Assignor hereby represents and warrants to Assignee as follows:

     (a) Each Issuer is duly organized or formed, validly existing, and, as applicable, in good standing under the Laws of the jurisdiction of its organization or formation and in all other jurisdictions where such Issuer does business; its Constituent Document is in full force and effect; each Assignor is a duly constituted partner or

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member of such Issuer pursuant to such Constituent Document; the persons and entities listed as partners or members in the applicable Constituent Document and its related certificates and schedules are the only partners or members of such Issuer; and the Pledged Equity Interests are validly issued, non-assessable and, except as set forth in Section 3.1(g), fully paid partnership or membership interests in such Issuer.

     (b) Each Assignor has full right, power and authority to make this Agreement (including the provisions enabling such Assignee or its nominee, upon the occurrence of an Event of Default, to exercise the voting or other rights provided for herein), under the applicable Constituent Document and under applicable Law, without the consent, approval or authorization of, or notice to, any other Person, including any regulatory authority or any Person having any interest in Issuers, other than any consents to this Agreement required to be given by the other partners or members under the Constituent Document, which consents, if any, have been duly received.

     (c) The execution, delivery, and performance of this Agreement and the transactions contemplated hereby (i) have been duly authorized by all necessary partnership or limited liability company proceedings, as applicable, on behalf of each Assignor, (ii) do not conflict with or result in any breach or contravention of any applicable Law, regulation, judicial order or decree to which such Assignor is subject, (iii) do not conflict with or violate any provision of the certification of formation or other organizational documents of such Assignor, and (iv) do not violate, conflict with, constitute a default or event of default under, or result in any rights to accelerate or modify any obligations under any agreement, instrument, lease, mortgage or indenture to which such Assignor is party or subject, or to which any of its assets are subject.

     (d) This Agreement has been duly executed and delivered by each Assignor and is the legal, valid, and binding obligation of such Assignor enforceable against it in accordance with the terms hereof except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any case or proceeding therefor may be brought.

     (e) Each Assignor is the sole, direct, legal and beneficial owner of its respective Assigned Interests, which Assigned Interests, together with the Assigned Interests of each of the other Assignors, constitute (except as disclosed in Exhibit B attached hereto) one hundred percent (100%) of the Equity Interests in the respective Issuer as described in Exhibit A hereto, and has good and marketable title thereto, free and clear of any Lien other than the Liens granted to Assignee hereunder; and the Liens hereunder constitute valid and perfected first priority Liens and security interests.

     (f) Each Assignor’s type and jurisdiction of organization and such Assignor’s tax identification number and organizational identification number, if such Assignor has one, is set forth below such Assignor’s

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     signature to this Agreement. Each Assignor’s principal place of business, chief executive office, and the place where its records concerning the Collateral are kept is set forth as its address below such Assignor’s signature to this Agreement. The exact legal name of each Assignor is set forth in Exhibit A hereto.

     (g) Each Assignor has no obligation to make any contribution, capital call or other payment to the applicable Issuer with respect to the Assigned Interests.

     (h) The copy of each Issuer’s Constituent Document delivered to Assignee is a true, correct, and complete copy thereof, and each such Constituent Document has not been amended or modified in any respect, except for such amendments or modifications as are attached to the copy thereof delivered to Assignee.

     (i) The Pledged Equity Interest of each Assignor in the applicable Issuer is a general intangible governed by Article 9 of the Uniform Commercial Code of the jurisdiction in which such Issuer is organized. The partnership or membership interest, as applicable, of each Assignor in the applicable Issuer is a not a “security” governed by Article 8 of the Uniform Commercial Code of the jurisdiction in which such Issuer is organized.

     3.2 Covenants. Each Assignor covenants to Assignee as follows:

     (a) No Assignor will permit or agree to any amendment or modification of each applicable Constituent Document (except for ministerial or other non-substantive amendments or modifications) as in effect on the date hereof (or other governing document with respect to the Assigned Interests), or waive any rights or benefits under such Constituent Document (or such other governing document), without the prior written consent of Assignee.

     (b) Except as permitted by the Loan Documents, no Assignor will sell, dispose of or assign, beneficially or of record, or grant, create, permit or suffer any lien or encumbrance on, any of the Assigned Interests, or withdraw as a partner or member of the applicable Issuer, in each case without the prior written consent of Assignee.

     (c) Without the prior written consent of Assignee, no Assignor shall cast any vote or give or grant any consent, waiver or ratification or take any other action which could reasonably be expected to (i) directly or indirectly authorize or permit the dissolution, liquidation or sale of an Issuer, whether by operation of Law or otherwise, (ii) have the result of materially and adversely affecting any of Assignee’s rights under this Agreement, (iii) violate the terms of this Agreement or any of the other Loan Documents, (iv) have the effect of impairing the validity, perfection or priority of the security interest of Assignee in any manner whatsoever, or (v) cause an Event of Default.

     (d) Each Assignor will comply with all laws, regulations, judicial orders or decrees applicable to the Collateral or any portion thereof, and perform and observe its duties under the applicable Constituent Document or other governing documents with respect to the Assigned Interests.

     (e) Each Assignor will (i) keep and maintain at its own cost and expense at its principal place of business satisfactory and complete records of the Collateral including a

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     record of all payments received and all other dealings of a material nature with the Collateral, and (ii) mark its books and records pertaining to the Collateral and its books and records kept in its jurisdiction of organization to evidence this Agreement and the liens and security interests granted hereby.

     (f) Each Assignor will pay promptly when due any taxes, assessments, and governmental charges or levies imposed upon the Collateral or in respect of its income or profits therefrom, as well as all claims of any kind except that no such charge need be paid if (i) the validity thereof is being diligently contested in good faith by appropriate proceedings; (ii) such proceedings do not involve any danger of the sale, forfeiture, or loss of any of the Collateral or any interest therein; and (iii) such charge is adequately reserved against in a manner acceptable to Assignee.

     (g) Assignors will advise Assignee promptly, in reasonable detail, of (i) any lien, charge, claim or other encumbrance made or asserted against any of the Collateral; (ii) any material change in the composition of the Collateral; (iii) the occurrence of any other event or condition which to their knowledge would have a material effect on the validity, perfection or priority of the liens and security interests granted hereunder; and (iv) any bankruptcy or litigation case or proceeding relating to any of the Collateral.

     (h) Each Assignor shall not (i) change its type or jurisdiction of organization or, if it has one, its organizational identification number, (ii) change its principal place of business or chief executive office or the location of the records concerning the Collateral without giving thirty (30) days prior written notice to Assignee and taking such actions as may be necessary or appropriate in the reasonable opinion of Assignee duly to perfect and continue the perfection of Assignee’s first priority lien and security interest in the Collateral pursuant to the laws of any jurisdiction into which such place of business, chief executive office, or records is or are transferred, and (iii) change its name in any matter that might make any financing statement filed hereunder misleading or invalid unless the applicable Assignor shall have notified Assignee thereof and taken all such actions as may be necessary or appropriate in the reasonable opinion of Assignee to make any financing statement filed in favor of Assignee not misleading or invalid.

     (i) Each Assignor shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and that of the applicable Issuer, the power and authority of each of such Assignor and the applicable Issuer to own its property and carry on its business, the qualification of each of such Assignor and the applicable Issuer to do business in its jurisdiction of organization, and the qualification of each of such Assignor and the applicable Issuer to do business in each other jurisdiction where such qualification is necessary except where the failure so to qualify would not have a material adverse effect on the rights and interests of Assignee hereunder.

     (j) With respect to any Assigned Interests, no Assignor shall opt in, or vote to amend the applicable Constituent Document to opt in, to Article 8 of the Uniform Commercial Code without Assignee’s prior written consent.

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     (k) Each Assignor will promptly deliver to Assignee, or cause the applicable Issuer or any other entity issuing the respective Assigned Interests to deliver directly to Assignee, partnership or membership interest certificates, if any and as applicable, representing any Assigned Interest acquired or received after the date of this Agreement with a transfer power duly executed by such Assignor in blank.

4. RIGHTS OF ASSIGNEE

     4.1 Assignee Appointed Attorney-in-Fact. Each Assignor hereby irrevocably constitutes and appoints Assignee, its successors and assigns, its true and lawful attorney-in-fact, with full power and authority and with full power of substitution, at the expense of such Assignor, either in Assignee’s own name or in the name of such Assignor, at any time and from time to time, in each case as Assignee in its sole discretion may determine (i) to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement and (ii) upon the occurrence and during the continuance of an Event of Default:

     (a) to take any action and execute any instruments that such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof;

     (b) to ask, demand, collect, receive, receipt for, sue for, compound, and give acquittance for any and all sums or properties that may be or become due, payable, or distributable in respect of the Collateral or that constitute a part thereof, with full power to settle, adjust, or compromise any claim thereunder or therefor as fully as the applicable Assignor could do;

     (c) to endorse or sign the name of the applicable Assignor on all instruments given in payment or in part payment thereof and all documents of satisfaction, discharge, or receipt required or requested in connection therewith; and

     (d) to file or take any action or institute any case or proceeding that Assignee may deem necessary or appropriate to collect or otherwise realize upon any or all of the Collateral, or effect a transfer thereof, or that may be necessary or appropriate to protect and preserve the right, title, and interest of Assignee in and to the Collateral and the security intended to be afforded hereby.

     4.2 Cash Collateral Account. Unless applied by Assignee to Obligations then due and payable, all sums of money that are paid to Assignee pursuant to this Agreement with respect to the Collateral, but expressly excluding any amounts that are paid under the provisions of Article III of the Loan Agreement, shall be deposited into an interest bearing account with Assignee or another financial institution selected by Assignee in its sole discretion (the “Cash Collateral Account”). Some or all of the funds from time to time in the Cash Collateral Account may be invested in time deposits, including certificates of deposit issued by Assignee or another financial institution selected by Assignee in its sole discretion (such certificates of deposit or other time deposits being hereinafter referred to, collectively, as “Time Deposits”) that are satisfactory to Assignee, provided, in any such case, arrangements satisfactory to Assignee are made to perfect, and to ensure the first priority of, its lien and security interest in

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such Time Deposits. Interest earned on the Cash Collateral Account and on the Time Deposits, and the principal of the Time Deposits at maturity that is not invested in new Time Deposits, shall be deposited in the Cash Collateral Account. The Cash Collateral Account, all sums from time to time standing to the credit of the Cash Collateral Account, any and all Time Deposits, any and all instruments or other writings evidencing Time Deposits, and any and all proceeds of any thereof are hereinafter referred to as the “Cash Collateral.” If the Cash Collateral Account is not maintained with Assignee, each Assignor shall, at Assignee’s request and option, pursuant to an agreement in form and substance satisfactory to Assignee, either (a) cause the depositary bank with which the Cash Collateral Account is maintained to agree to comply at any time with instructions from Assignee to such depositary bank directing the funds comprising the Cash Collateral, without further consent of Assignee, or (b) arrange for Assignee to become the customer of such depositary bank with respect to the Cash Collateral Account.

     4.3 Distributions, Conversion, Voting, etc. So long as no Event of Default shall have occurred and be continuing and to the extent permitted under the Loan Agreement, Assignors shall be entitled to:

     (a) receive all cash and other distributions paid in respect of the Assigned Interests authorized by or not made in violation of the Loan Agreement;

     (b) exercise any voting rights relating to the Assigned Interests; and

     (c) give consents, waivers, approvals, and ratifications in respect of the Assigned Interests.

All such rights of Assignors to receive cash and other distributions shall cease if an Event of Default shall have occurred and be continuing, except to the extent permitted under the Loan Agreement, and Assignors shall (i) at the request of Assignee, issue appropriate instructions that any such distributions be paid directly to Assignee or to such account as Assignee may designate, and (ii) hold in trust for Assignee and immediately pay over to Assignee any such distributions received by any Assignor, except to the extent permitted under the Loan Agreement. All such rights of Assignors referred to in clauses (b) and (c) above shall, at Assignee’s sole option, as evidenced by Assignee’s notifying the applicable Assignor in writing of its exercise of such option, cease in case an Event of Default shall have occurred and be continuing.

     4.4 No Assignment of Duties. This Agreement constitutes an assignment of the Assigned Interests and the other Collateral only and not an assignment of any duties or obligations of Assignors with respect thereto, and by its acceptance hereof and whether or not Assignee shall have exercised any of its rights or remedies hereunder, Assignee does not undertake to perform or discharge, and shall not be responsible or liable for the performance or discharge of, any such duties or responsibilities, including, without limitation, for capital calls. Each Assignor agrees that, notwithstanding the exercise by Assignee of any of its rights hereunder, each such Assignor shall remain liable for the full and prompt performance of all of such Assignor’s obligations and liabilities under the respective Constituent Document. Under no circumstances shall Assignee or any holder of any of the Obligations as such be deemed to be a partner or member of Issuers by virtue of the provisions of this Agreement unless expressly agreed to in writing by Assignee. Without limiting the generality of the foregoing, Assignee

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shall have no partnership or limited liability company fiduciary duty to Assignors, whether by virtue of the security interests and liens hereunder, or any enforcement action in respect of such security interests and liens, unless and until Assignee is admitted to the applicable Issuer, as applicable as a substitute partner or member after exercising enforcement rights under Section 9-610 or Section 9-620 of the Uniform Commercial Code in effect in the State of New York, or otherwise.

5. EVENTS OF DEFAULT.

     5.1 Events of Default. Any one or more of the following events shall constitute an “Event of Default” hereunder:

     (a) Each Assignor shall fail to perform any of its obligations under the applicable Constituent Document that results in a default thereunder following the expiration of any applicable notice and cure periods; or

     (b) The occurrence of any Event of Default (as defined in the Loan Agreement).

6. REMEDIES.

     6.1 Remedies. During the continuance of an Event of Default, Assignee shall have, in addition to the rights, powers and authorizations to collect the sums assigned hereunder, all rights and remedies of a secured party under the Uniform Commercial Code and under other applicable Law with respect to the Assigned Interests and any other Collateral hereunder, including, without limitation, the following rights and remedies:

     (a) if Assignee so elects and gives written notice of such election to an Assignor, Assignee may, in its sole discretion, (i) exercise any voting rights relating to the Assigned Interests (whether or not the same shall have been transferred into its name or the name of its nominee or nominees) of such Assignor for any lawful purpose, including for the amendment or modification of the applicable Constituent Document or other governing documents or the liquidation of the assets of the applicable Issuer, (ii) give all consents, waivers, approvals, and ratifications in respect of such Assigned Interests, and (iii) otherwise act with respect thereto as though it were the outright owner thereof (the applicable Assignor hereby irrevocably constituting and appointing Assignee the proxy and attorney-in-fact of such Assignor, with full power and authority of substitution, to do so);

     (b) Assignee may, in its sole discretion, demand, sue for, collect, compromise, or settle any rights or claims in respect of any Collateral, as attorney-in-fact pursuant to Section 4.1 or otherwise;

     (c) (i) Assignee may, in its sole discretion, sell, resell, assign, deliver, or otherwise dispose of any or all of the Collateral, for cash or credit or both and upon such terms, in such manner, at such place or places, at such time or times, and to such persons or entities as Assignee thinks expedient, all without demand for performance by the applicable Assignor or any notice or advertisement whatsoever except as expressly

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     provided herein or as may otherwise be required by applicable Law; and (ii) at the time of any such sale or other disposition, Assignee or its nominee or any purchaser of the Collateral at a foreclosure sale may, in its sole discretion, cause the applicable Issuer to make an election under Section 754 of the Internal Revenue Code as to the basis of any Assigned Interest being sold or otherwise disposed of;

     (d) Assignee may, in its sole discretion, cause all or any part of the Assigned Interests held by it to be transferred into its name or the name of its nominee or nominees; and

     (e) Assignee may, in its sole discretion, set off against the Obligations or place an administrative hold or freeze on any and all sums deposited with it or held by it, including any sums standing to the credit of the Cash Collateral Account and any Time Deposits issued by Assignee, with any withdrawal penalty relating to Time Deposits being an expense of collection.

     6.2 Remedies Not Exclusive. No single or partial exercise by Assignee of any right, power or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Each right, power and remedy herein specifically granted to Assignee or otherwise available to it shall be cumulative, and shall be in addition to every other right, power, and remedy herein specifically given or now or hereafter existing at law, in equity, or otherwise. Each such right, power and remedy, whether specifically granted herein or otherwise existing, may be exercised at any time and from time to time and as often and in such order as may be deemed expedient by Assignee in its sole discretion.

     6.3 Public Sale. In the event of any sale or other disposition of the Collateral as provided in Section 6.1(c), Assignee shall give to the applicable Assignor at least five (5) Business Days’ prior written notice of the time and place of any public sale or other disposition of the Collateral or of the time after which any private sale or any other disposition is to be made. Each Assignor hereby acknowledges that five (5) Business Days’ prior authenticated notice of such sale or other disposition or sales or other dispositions shall be reasonable notice. Assignee may enforce its rights hereunder without any other notice and without compliance with any other condition precedent now or hereafter imposed by Law, regulation, judicial order or decree or otherwise (all of which are hereby expressly waived by each Assignor, to the fullest extent permitted by Law). Assignee may buy any part or all of the Collateral at any public sale or other disposition and if any part or all of the Collateral is of a type customarily sold or otherwise disposed of in a recognized market or is of a type which is the subject of widely-distributed standard price quotations, Assignee may buy at private sale or other disposition and may make payments thereof by any means. Assignee may apply the cash proceeds actually received from any sale or other disposition to the reasonable expenses of retaking, holding, preparing for sale, selling, and the like, to reasonable attorneys’ fees, travel, and all other expenses which may be incurred by Assignee in attempting to collect the Obligations or to enforce this Agreement or in the prosecution or defense of any case or proceeding related to this Agreement, and then to the Obligations in accordance with the requirements of the Loan Agreement.

     6.4 Private Sale. Each Assignor recognizes that Assignee may be unable to effect a public sale or other disposition of the Collateral by reason of the lack of a ready market for the

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Collateral, of the limited number of potential buyers of the Collateral or of certain prohibitions contained in the Securities Act of 1933, state securities laws, and other applicable Laws, and that Assignee may be compelled to resort to one or more private sales or other dispositions thereof to a restricted group of purchasers. Each Assignor agrees that any such private sales or other dispositions may be at prices and other terms less favorable to the seller than if sold at public sales or other dispositions and that such private sales or other dispositions shall not solely by reason thereof be deemed not to have been made in a commercially reasonable manner. Assignee shall be under no obligation hereunder or otherwise (except as provided by applicable Law) to delay a sale or other disposition of any of the Collateral for the period of time necessary to permit the registration of such securities for public sale or other public disposition under the Securities Act of 1933 and applicable state securities Laws. Any such sale or other disposition of all or a portion of the Collateral may be for cash or on credit or for future delivery and may be conducted at a private sale or other disposition where Assignee or any other person or entity may be the purchaser of all or part of the Assigned Interests so sold or otherwise disposed of. Each Assignor agrees that to the extent notice of sale or other disposition shall be required by Law, at least five (5) Business Days’ prior notice to the applicable Assignor of the time and place after which any private sale is to be made shall constitute reasonable notification. Subject to the foregoing, Assignee agrees that any sale or other disposition of the Assigned Interests shall be made in a commercially reasonable manner. Assignee shall incur no liability as a result of the sale or other disposition of any of the Collateral, or any part thereof, at any private sale which complies with the requirements of this Section 6.4. Each Assignor hereby waives, to the extent permitted by applicable Law, any claims against Assignee arising by reason of the fact that the price at which any of the Collateral, or any part thereof, may have been sold or otherwise disposed of at such private sale was less than the price that might have been obtained at a public sale or other public disposition, even if Assignee accepts the first offer deemed by Assignee in good faith deemed to be commercially reasonable under the circumstances and does not offer any of the Collateral to more than one offeree.

     6.5 Title. Nothing contained in this Agreement shall be construed to require Assignee to take any action with respect to the Assigned Interests, whether by way of foreclosure or otherwise and except as required by the Constituent Document, in order to permit Assignee to become a substitute partner or member of an Issuer under its Constituent Document.

7. ASSIGNMENT NOT AFFECTED BY OTHER ACTS.

     Each Assignor acknowledges and agrees that the security interests and collateral assignments herein provided for shall remain in full force and effect and shall not be impaired by any acceptance by Assignee of any other collateral security for or guaranty of any of the Obligations, or by any failure or neglect or omission on the part of Assignee to realize upon, collect or protect any Obligations or any Collateral. The security interests and collateral assignments herein provided for shall not in any manner be affected or impaired by any renewal, extension, modification, amendment, waiver, or restatement of any of the Obligations or of any collateral security therefor, or of any guaranty thereof, each Assignor hereby waiving any and all suretyship defenses to the extent otherwise applicable. In order to sell or otherwise dispose of or otherwise realize upon the security interests and assignments herein granted and provided for, and exercise the rights granted Assignee hereunder and under applicable Law, there shall be no obligation on the part of Assignee at any time to first resort for payment to any guarantors of the

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Obligations or any part thereof or to resort to any other collateral security, property, liens or other rights or remedies whatsoever, and Assignee shall have the right to enforce the security interests and collateral assignments herein provided for irrespective of whether or not other proceedings are pending for realization upon or from any of the foregoing.

8. MISCELLANEOUS.

     8.1 Additional Instruments and Assurances. Each Assignor hereby agrees, at its own expense, to execute and deliver, from time to time, any and all further, or other, instruments, and to perform such acts, as Assignee may reasonably request to effect the purposes of this Agreement and to secure to Assignee the benefits of all rights and remedies conferred upon Assignee by the terms of this Agreement.

     8.2 Release. If and only if all of the obligations under the Loan Agreement shall have been indefeasibly paid, performed, and discharged in full in cash, or the security interest in the Collateral otherwise shall have been released by the Administrative Agent in accordance with the Loan Agreement, the lien and security interest created hereby shall be automatically released with respect to all Secured Parties and Assignee shall, upon demand and at the sole expense of Assignor, deliver, file or record the proper instrument or instruments to evidence such release, and such release shall be binding upon all of the Secured Parties notwithstanding that Obligations may then be outstanding.

     8.3 Assignee’s Exoneration. Under no circumstances shall Assignee be deemed to assume any responsibility for or obligation or duty with respect to any part or all of the Collateral of any nature or kind or any matter or proceeding arising out of or relating thereto, other than (a) to exercise reasonable care in the physical custody of the Collateral and (b) if an Event of Default shall have occurred and be continuing, to act in a commercially reasonable manner in exercising its rights and remedies with respect to the Collateral. Subject to the foregoing, Assignee shall not be required to take any action of any kind to collect, preserve or protect its or Assignors’ rights in the Collateral.

     8.4 No Waiver, etc. Any term of this Agreement may be amended or modified with, but only with, the written consent of Assignors and Assignee. Any term of this Agreement may be waived by a writing executed by the party to be charged with such waiver. No act, failure, or delay by Assignee shall constitute a waiver of its rights and remedies hereunder or otherwise. No single or partial waiver by Assignee of any default, right, or remedy that it may have shall operate as a waiver of any other default, right, or remedy or of the same default, right, or remedy on a future occasion.

     8.5 Waiver By Assignors. Each Assignor hereby waives presentment, notice of dishonor, and protest of all instruments included in or evidencing any of the Obligations or the Collateral, and any and all other notices and demands whatsoever (except as expressly provided herein or in the Loan Agreement or for notices required in connection with judicial proceedings).

     8.6 Notice, etc. All notices, requests, and other communications hereunder shall be made and effective in the manner and at the address set forth on the signature pages hereto or at

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such other address as may be set forth or in a notice from the notifying party to the other parties hereto.

     8.7 Overdue Amounts. Until paid, all amounts due and payable by Assignors hereunder shall be a debt secured by the Collateral and shall bear, whether before or after judgment, interest at the Default Rate.

     8.8 Governing Law; Consent to Jurisdiction. This Agreement is intended to take effect as a sealed instrument and shall be governed by, and construed in accordance with, the Laws of the State of New York. EACH ASSIGNOR AGREES THAT ANY PROCEEDING FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK OR ANY APPELLATE COURT FROM ANY THEREOF, AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURT AND TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING BEING MADE UPON ASSIGNORS BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 8.6. EACH ASSIGNOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH PROCEEDING OR ANY SUCH COURT OR THAT SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT COURT.

     8.9 Waiver of Jury Trial. EACH ASSIGNOR AND ASSIGNEE HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.

     8.10 Limitation of Liability. Except as prohibited by applicable Law, each of Assignors and Assignee waives any right which it may have to claim or recover in any proceeding referred to in the preceding sentence any special, exemplary, or punitive damages or any damages other than, or in addition to, actual or consequential damages. Each Assignor (a) certifies that neither Assignee nor any representative, agent, or attorney of Assignee has represented, expressly or otherwise, that Assignee would not, in the event of any proceeding, seek to enforce the foregoing waivers and (b) acknowledges that, in entering into this Agreement, Assignee is relying upon, among other things, the waivers and certifications contained in this Section 8.10.

     8.11 Severability and Enforceability. All provisions hereof are severable and the invalidity or unenforceability of any of such provisions shall in no manner affect or impair the validity and enforceability of the remaining provisions hereof.

     8.12 Successors and Assigns. This Agreement shall be binding upon Assignors and upon the legal representatives, successors and assigns of an Assignor and shall inure to the benefit of Assignee and its successors and assigns.

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     8.13 Counterparts. This Agreement may be executed in any number of counterparts, each constituting an original, but all together one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     8.14 Entire Agreement. THIS AGREEMENT AND THE LOAN DOCUMENTS AND ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH EXPRESS THE ENTIRE UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY. NEITHER THIS AGREEMENT NOR ANY TERMS HEREOF MAY BE CHANGED, WAIVED OR TERMINATED EXCEPT BY A WRITING SIGNED BY EACH PARTY HERETO.

[Signature pages follow]

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     IN WITNESS WHEREOF, Assignors and Assignee have executed this Agreement as of the date first above written, as an instrument under seal.

ASSIGNORS:

DJONT OPERATIONS, L.L.C., a Delaware limited liability company
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Type of organization: limited liability company

Jurisdiction of organization: Delaware

Tax identification number: 75-2547551

Organizational identification number (or state “none” if the jurisdiction does not issue one): Delaware - 2415165

Address:

545 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062-3933

Fax No. (972) 444-4949

Attention: General Counsel

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

Signature Page to
Pledge and Security Agreement

FELCOR LODGING LIMITED PARTNERSHIP, a Delaware limited partnership,
By:	FelCor Lodging Trust Incorporated, its General Partner

By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Type of organization: limited partnership

Jurisdiction of organization: Delaware

Tax identification number: 75-2544994

Organizational identification number (or state “none” if the jurisdiction does not issue one): Delaware - 2404748

Address:

545 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062-3933

Fax No. (972) 444-4949

Attention: General Counsel

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

Signature Page to
Pledge and Security Agreement

FELCOR TRS HOLDINGS, L.L.C., a Delaware limited liability company
By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Type of organization: limited liability company
Jurisdiction of organization: Delaware
Tax identification number: 75-2916176
Organizational identification number (or state “none” if
the jurisdiction does not issue one): Delaware —
4378932

Address:

545 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062-3933

Fax No. (972) 444-4949

Attention: General Counsel

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

Signature Page to
Pledge and Security Agreement

FELCOR/CSS HOLDINGS, L.P. a Delaware limited partnership,
By:	FelCor/CSS Hotels, L.L.C., its General Partner

By:	/s/ Jeffrey D. Symes
	Name:	Jeffrey D. Symes
	Title:	Vice President

Type of organization: limited partnership

Jurisdiction of organization: Delaware

Tax identification number: 75-2620463

Organizational identification number (or state “none” if the jurisdiction does not issue one): Delaware - 2543416

Address:

545 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062-3933

Fax No. (972) 444-4949

Attention: General Counsel

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

Signature Page to
Pledge and Security Agreement

ASSIGNEE:

FORTRESS CREDIT CORP.,

a Delaware corporation,

as Administrative Agent

By:	/s/
	Name:
	Title:

Address:

Fortress Credit Corp.

c/o Drawbridge Special Opportunities Fund LP

1345 Avenue of the Americas, 46th Floor

New York, New York 10105

Signature Page to
Pledge and Security Agreement

EX-10.33.4

Exhibit 10.33.4

Prepared by and Upon
Recordation Return to:

Attention:

Space above for Recorder’s Use

THIS MORTGAGE COVERS GOODS WHICH ARE OR ARE TO BECOME FIXTURES AND IS TO BE RECORDED IN THE REAL ESTATE RECORDS AS A FIXTURE FILING

individually and collectively, as mortgagor (Mortgagor)

to

, as mortgagee (Mortgagee)

[FEE], [LEASEHOLD] [AND] [SUBLEASEHOLD] MORTGAGE,
FIXTURE FILING AND SECURITY AGREEMENT

Dated:	As of                     , 20___
Location:
County:
File No.:

     THIS [FEE], [LEASEHOLD] [AND] [SUBLEASEHOLD] MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT (this “Security Instrument”) is made as of the       day of                     , 20     , by [                    , a(n)                     , as [fee owner and] mortgagor, having its principal place of business at                      (“Owner”),                     , a(n)                     , having its principal place of business at                      (“Ground Lessee”), as ground lessee and mortgagor, and                     , a(n)                     , having its principal place of business at                      (“Operating Lessee”, and together with Ground Lessee, each, a “                     Borrower” and collectively, the “                     Borrowers”), as operating lessee and mortgagor (Owner, Ground Lessee and Operating Lessee being sometimes referred to hereinafter, individually, as a “Mortgagor” or, collectively, as “Mortgagors”)], to FORTRESS CREDIT CORP., a Delaware corporation (“FCC”), having its principal place of business at c/o Drawbridge Special Opportunities Fund LP, 1345 Avenue of the Americas, 46th Floor, New York, New York 10105, in its capacity as the Administrative Agent for the Lenders under the Loan Agreement (in such capacity, “Mortgagee”). All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement (defined below).

RECITALS:

     [WHEREAS, Owner owns the fee simple interest in the real property described in Exhibit A attached hereto and made a part hereof (the “Land”);]

     [WHEREAS, Ground Lessee is the owner of the leasehold estate created pursuant to that certain Ground Lease dated                     , 20     , by and between Owner, as lessor, and Ground Lessee, as lessee, and evidenced by that certain [Memorandum of Lease] recorded in the                                          on                     , 20     , as modified by [list modification instruments] [to be] recorded [concurrently herewith] in the                      (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Ground Lease”)];

     [WHEREAS, Operating Lessee is the owner of the subleasehold estate created pursuant to that certain Lease Agreement dated                     , 20     , by and between Owner [(formerly known as                     )], as lessor, and                     , as lessee, as modified by [list modification instruments] [to be] recorded [concurrently herewith] in the                     , and assigned by [list assignment instruments] [to be] recorded [concurrently herewith] in the                     , and evidenced by that certain [Memorandum of Lease] recorded in the                      (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Operating Lease”)];

     WHEREAS, the                      Borrowers and certain other parties, collectively, as borrowers (together with the                      Borrowers, collectively, the “Borrowers”), Mortgagee, as Administrative Agent, and FCC, in its capacity as Initial Lender, and certain other Persons, collectively, as lenders, have entered into that certain Credit Agreement dated as of the date hereof, as modified by that certain Letter Agreement dated as of the date hereof, between Administrative Agent, Initial Lender, Borrowers and FelCor Lodging Limited Partnership (as so modified, and as the same may be further amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which the Mortgagee and the other lenders named therein have agreed to make a loan (the “Loan”) to the

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Borrowers in the original principal sum of TWO HUNDRED TWELVE MILLION and 00/100 Dollars ($212,000,000.00), which Loan shall be evidenced by the Note;

     WHEREAS,                      Borrowers are obligated under the Loan Agreement to grant to Mortgagee as security for the payment and performance of the Obligations a valid, enforceable, first-priority mortgage lien on the Property (hereinafter defined);

     WHEREAS, Owner owns 100% of the direct and indirect equity interests in the                      Borrowers, and Owner will derive significant benefits if the Borrowers consummate the transactions contemplated in the Loan Agreement. [The Loan Agreement requires Owner to execute, acknowledge and deliver a mortgage encumbering Owner’s fee simple interest in the Property, and pursuant to Section 6.01(a) of the Ground Lease, Owner is required, upon the request of Ground Lessee, to subject Owner’s fee simple estate in the Property to a security instrument encumbering the Leasehold Estate (hereinafter defined)];

     WHEREAS, Mortgagors are entering into this Security Instrument pursuant to the terms of the Loan Agreement, to secure the payment, fulfillment, and performance by                      Borrowers of their obligations thereunder and under the other Loan Documents, and each and every term and provision of the Loan Agreement, the Note, and that certain Assignment of Leases and Rents dated the date hereof, made by Mortgagors in favor of Mortgagee and delivered in connection with this Security Instrument (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 all other documents evidencing or securing the Obligations (including all additional mortgages, deeds of trust, deeds to secure debt and assignments of leases and rents) or executed or delivered in connection therewith, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, are hereinafter referred to collectively as the “Loan Documents”); and

     WHEREAS, it is in the best interest of [Owner, Ground Lessee and Operating Lessee] to execute this Security Instrument inasmuch as the                      Borrowers will derive substantial benefits from this Loan.

     NOW, THEREFORE, in consideration of the making of the Loan by Administrative Agent, FCC and the other Lenders to the Borrower and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged:

ARTICLE 1 — GRANTS OF SECURITY

     Section 1.1 Property Mortgaged. That for and in consideration of the sum of TEN AND 00/100 DOLLARS and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,

          [(A) Owner does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey to Mortgagee, and grant a security interest to Mortgagee in, the fee simple estate of Owner, now owned or hereafter acquired in and to the Land, subject to the Permitted Liens];

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          [(B) Ground Lessee does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey to Mortgagee, and grant a security interest to Mortgagee in, the Ground Lease and the leasehold estate created thereby (the “Leasehold Estate”), subject to the Permitted Liens; and]

          [(C) Operating Lessee does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey to Mortgagee, and grant a security interest to Mortgagee in, the Operating Lease and the subleasehold estate created thereby in the Land, subject to the Permitted Liens;]

          TOGETHER WITH, in the case of each of [Owner, Ground Lessee and Operating Lessee], all right, title, interest and the estate of each of the Mortgagors now owned or hereafter acquired in and to the following property, rights, interests and estates (the foregoing property, rights, interests and estates, together with the following property, rights, interests and estates being hereinafter collectively referred to as the “Property”):

          (a) [Ground Lease. The Ground Lease and the Leasehold Estate, including all assignments, modifications, extensions and renewals of the Ground Lease and all credits, deposits, options, privileges and rights of Ground Lessee as tenant under the Ground Lease, including, but not limited to, the right, if any, to renew or extend the Ground Lease for a succeeding term or terms, and also including all the right, title, claim or demand whatsoever of Ground Lessee either in law or in equity, in possession or expectancy, of, in and to Ground Lessee’s right, as tenant under the Ground Lease, to elect under the Bankruptcy Code to terminate or treat the Ground Lease as terminated or to consent to the transfer of Owner’s interest in the Land and the Improvements free and clear of the Ground Lease under Section 363 of the Bankruptcy Code in the event of (i) the bankruptcy, reorganization or insolvency of Owner, and (ii) (A) the rejection of the Ground Lease by Owner, as debtor in possession, or by a trustee for Owner, pursuant to Section 365 of the Bankruptcy Code or (B) any attempt by Owner, as debtor in possession, or by a trustee for Owner, to transfer Owner’s interest in the Land and the Improvements under Section 363 of the Bankruptcy Code;]

          (b) [Operating Lease. The Operating Lease and the subleasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Operating Lease and all credits, deposits, options, privileges and rights of Operating Lessee as tenant under the Operating Lease, including, but not limited to, rights of first refusal, if any, and the right, if any, to renew or extend the Operating Lease for a succeeding term or terms, and also including all the right, title, claim or demand whatsoever of Operating Lessee either in law or in equity, in possession or expectancy, of, in and to Operating Lessee’s right, as tenant under the Operating Lease, to elect under Section 365(h)(l) of the Bankruptcy Code, Title 11 U.S.C.A. §101 et seq. (the “Bankruptcy Code”) to terminate or treat the Operating Lease as terminated in the event of (i) the bankruptcy, reorganization or insolvency of the lessor thereunder, and (ii) the rejection of the Operating Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code;]

          (c) Additional Land. All additional lands, estates and development rights hereafter acquired by Mortgagors 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;

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          (d) Improvements. The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (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, including, but not limited to, those arising under and by virtue of the [Operating Lease], and the reversion and reversions, remainder and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Mortgagors of, in and to the Land and the Improvements, including, but not limited to, those arising under and by virtue of [the Ground Lease and/or the Operating Lease] and every part and parcel thereof, with the appurtenances thereto;

          (f) Fixtures and Personal Property. All machinery, equipment, fixtures (including, but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures, inventory and goods), inventory and articles of personal property and accessions thereof and renewals, replacements thereof and substitutions therefor (including, but not limited to, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets, glassware, silverware, foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers, icemakers, radios, television sets, intercom and paging equipment, electric and electronic equipment, dictating equipment, private telephone systems, medical equipment, potted plants, heating, lighting and plumbing fixtures, fire prevention and extinguishing apparatus, cooling and air-conditioning systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other customary hotel equipment and other tangible property of every kind and nature whatsoever owned by Mortgagors, or in which Mortgagors have or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, and usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Mortgagors, or in which Mortgagors have or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (collectively, the “Personal Property”), and the right, title and interest of Mortgagors 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;

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          (g) Leases and Rents. All leases [(including the Ground Lease)], subleases [(including the Operating Lease)], rental agreements, registration cards and agreements, if any, and other agreements, whether or not in writing, affecting the use, enjoyment or occupancy of the Land and/or the Improvements heretofore or hereafter entered into and all extensions, amendments and modifications thereto, whether before or after the filing by or against Mortgagors of any petition for relief under the Bankruptcy Code (the “Leases”) and all right, title and interest of Mortgagors, their respective successors and assigns therein and thereunder, including, without limitation, any guaranties of the lessees’ obligations thereunder, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues, registration fees, if any, and profits (including all oil and gas or other mineral royalties and bonuses and all rents, revenues, bonus money, royalties, rights and benefits accruing to Mortgagors under all present and future oil, gas and mineral leases on any parts of the Land and the Improvements) from the Land and the Improvements, all income, rents, room rates, issues, profits, revenues, deposits, accounts and other benefits from the operation of the hotel on the Land and/or the Improvements, including, without limitation, all revenues and credit card receipts collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet rooms and recreational facilities and otherwise, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of sale, lease, sublease, license, concession or other grant of the right of the possession, use or occupancy of all or any portion of the Land and/or Improvements, or personalty located thereon, or rendering of services by Mortgagors or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others including, without limitation, from the rental of any office space, retail space, commercial space, guest room or other space, halls, stores or offices, including any deposits securing reservations of such space, exhibit or sales space of every kind, license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance relating to the use, enjoyment or occupancy of the Land and/or the Improvements whether paid or accruing before or after the filing by or against Mortgagor of any petition for relief under the Bankruptcy Code (the “Rents”) and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Obligations;

          (h) Condemnation Awards. All awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Land, the Improvements, the Personal Property and the other Property granted under this Section 1.1, 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;

          (i) Insurance Proceeds. All proceeds of and any unearned premiums on any insurance policies covering the Land, the Improvements, the Personal Property and the other Property granted under this Section 1.1, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property;

          (j) Tax Certiorari. All refunds, rebates or credits in connection with a reduction in real estate taxes and assessments charged against the Land, the Improvements, the

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Personal Property and the other Property granted under this Section 1.1 as a result of tax certiorari or any applications or proceedings for reduction;

          (k) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of the foregoing including, without limitation, proceeds of insurance and condemnation awards, into cash or liquidation claims;

          (l) Rights. The right, in the name and on behalf of each of the Mortgagors, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Mortgagee in the Land, the Improvements, the Personal Property and the other Property granted under this Section 1.1;

          (m) Agreements. Except for the Franchise Agreement (hereinafter defined), all agreements, contracts, certificates, instruments, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of the Land and any part thereof and any Improvements or respecting any business or activity conducted on the Land and any part thereof and all right, title and interest of any of the Mortgagors therein and thereunder, including, without limitation, the right, upon the happening of any Event of Default to receive and collect any sums payable to any of the Mortgagors thereunder;

          (n) Intangibles. All trade names, trademarks, servicemarks, logos, copyrights, goodwill, books and records, tenant or guest lists, advertising materials, telephone exchange numbers identified in such materials and all other general intangibles relating to or used in connection with the operation of the Land, the Improvements and the Personal Property;

          (o) Accounts. All Accounts, Account Collateral, reserves, escrows and deposit accounts maintained by any of the Mortgagors with respect to the Property, including, without limitation, the Property Accounts, the Concentration Accounts and the Lockbox Account, and all complete securities, investments, property and financial assets held therein from time to time and all proceeds, products, distributions or dividends or substitutions thereon and thereof;

          (p) Causes of Action. All causes of action and claims (including, without limitation, all causes of action or claims arising in tort, by contract, by fraud or by concealment of material fact) against any Person for damages or injury to the Property or in connection with any transactions financed in whole or in part by the proceeds of the Loan (“Causes of Action”);

          (q) Interest Rate Cap Agreement. All right, title, interest and claim of any of the Mortgagors in, to, under or pursuant to any interest rate cap confirmation purchased by any of the Mortgagors pursuant to the terms of the Loan Documents (the “Confirmation”), together with the corresponding interest rate cap agreement relating thereto (the “Rate Agreement”), and in, to, under or pursuant to any and all amendments, supplements and additions thereto (the Confirmation and the Rate Agreement, together with any amendments, additions or supplements thereto being hereinafter collectively referred to as the “Cap Agreement”), and all claims of Mortgagors for breach by any counterparty of any covenant, agreement, representation or warranty contained in the Cap Agreement;

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          (r) Accounts Receivables. All right, title and interest of each of the Mortgagors arising from the operation of the Land and the Improvements in and to all payments for goods or property sold or leased or for services rendered, whether or not yet earned by performance, and not evidenced by an instrument or chattel paper, (hereinafter referred to as “Accounts Receivable”) including, without limiting the generality of the foregoing, (i) all accounts, contract rights, book debts, and notes arising from the operation of a hotel on the Land and the Improvements or arising from the sale, lease or exchange of goods or other property and/or the performance of services, (ii) each of the Mortgagors’ rights to payment from any consumer credit/charge card organization or entities which sponsor and administer such cards as the American Express Card, the Visa Card and the Mastercard, (iii) each of the Mortgagors’ rights in, to and under all purchase orders for goods, services or other property, (iv) each of the Mortgagors’ rights to any goods, services or other property represented by any of the foregoing, (v) monies due to or to become due to each of the Mortgagors under all contracts for the sale, lease or exchange of goods or other property and/or the performance of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by performance on the part of the respective Mortgagor) and (vi) all collateral security and guaranties of any kind given by any person or entity with respect to any of the foregoing. Accounts Receivable shall include those now existing or hereafter created, substitutions therefor, proceeds (whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom;

          (s) Security Interests. All right, title and interest of lessor under the [Operating Lease] as secured party in the personal property and collateral pursuant to the security interest granted by [Operating Lessee] to the lessor thereunder in the [Operating Lease] (the “Operating Lease Security Agreement”);

          (t) Proceeds. All proceeds of any of the foregoing items set forth in Subsections (a) through (s) above, including, without limitation, Insurance Proceeds and Awards and Causes of Action which may at any time be converted into cash or liquidation claims; and

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

     Section 1.2 Assignment of Leases and Rents. Each of the Mortgagors hereby absolutely and unconditionally assigns to Mortgagee all of such Mortgagor’s right, title and interest in and to all current and future Leases and Rents [and the Operating Lease Security Agreement]; it being intended by Mortgagors that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of this Section 1.2, Section 9.1(h) of this Security Instrument and the Loan Agreement, Mortgagee grants to Mortgagors a revocable license to collect and receive the Rents. Subject to the terms of the Loan Agreement relating to cash management at the Property, Mortgagors shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such sums.

     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 Mortgagors in the Property. By executing and delivering this Security Instrument, each of the Mortgagors hereby grants to Mortgagee, as security for the

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Obligations, a security interest in the Personal Property and the other collateral given as security for the repayment of the Obligations (whether denominated as part of the Property or otherwise) to the extent that under applicable law the same would be governed by the Uniform Commercial Code (collectively, “UCC Collateral”) to the full extent that the Personal Property and other UCC Collateral may be subject to the Uniform Commercial Code.

     Section 1.4 Pledge of Monies Held. Mortgagors hereby pledge to Mortgagee any and all monies now or hereafter held by Mortgagee, including, without limitation, any sums deposited in the Reserve Funds, the Accounts, Net Proceeds and Awards, as additional security for the Obligations until expended or applied as provided in the Loan Agreement or this Security Instrument.

     Section 1.5 Fixture Filing. Without in any manner limiting the generality of any of the other provision of this Security Instrument: (a) some portions of the goods described or to which reference is made herein are or are to become fixtures on the Land described or to which reference is made herein or on Exhibit A attached to this Security Instrument; (b) this Security Instrument is to be filed of record in the real estate records as a financing statement and shall constitute a “fixture filing” for purposes of the Uniform Commercial Code; and (c) Mortgagors are the record owners of the real estate or interests in the real estate constituting the Property hereunder, subject to the Permitted Liens. Information concerning the security interest herein granted may be obtained at the addresses set forth on the first page hereof. This Security Instrument shall be effective as a financing statement filed as a fixture filing with respect to all fixtures included within the Property and is to be filed for record in the real property or other applicable records in the office of the County Clerk or Recorder, as applicable, where the Property (including said fixtures) is situated. This Security Instrument shall also be effective as a financing statement covering as-extracted minerals or the like (including oil and gas) and accounts subject to the applicable provisions of the Uniform Commercial Code of the State in which the Property is located, if applicable. The address of the Debtor (Mortgagor) is set forth on the first page hereof and the address of the Secured Party (Mortgagee) is set forth below. In that regard, the following information is provided:

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Name of First Debtor:
Type of Organization:	[Limited Partnership] [Limited Liability Company]
State:	[Delaware]
Organizational ID Number:	[Delaware                     ]
Name of Secured Party:	Fortress Credit Corp., as Administrative Agent
Address of Secured Party:	c/o Drawbridge Special Opportunities Fund LP 1345 Avenue of the Americas, 46th Floor New York, New York 10105 Attention: James K. Noble, III, Esq.
Name of Second Debtor:
Type of Organization:	[Limited Partnership] [Limited Liability Company]
State:	[Delaware]
Organizational ID Number:	[Delaware                     ]
Name of Secured Party:	Fortress Credit Corp., as Administrative Agent
Address of Secured Party:	c/o Drawbridge Special Opportunities Fund LP 1345 Avenue of the Americas, 46th Floor New York, New York 10105 Attention: James K. Noble, III, Esq.
Name of Third Debtor:
Type of Organization:	[Limited Partnership] [Limited Liability Company]
State:	[Delaware]
Organizational ID Number:	[Delaware                     ]
Name of Secured Party:	Fortress Credit Corp., as Administrative Agent
Address of Secured Party:	c/o Drawbridge Special Opportunities Fund LP 1345 Avenue of the Americas, 46th Floor New York, New York 10105 Attention: James K. Noble, III, Esq.

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     Section 1.6 Conditions to Grant. TO HAVE AND TO HOLD the above granted and described Property unto and to the use and benefit of Mortgagee, and for its successors and assigns, forever, subject to the Permitted Liens; PROVIDED, HOWEVER, these presents are upon the express condition that, if                     Borrowers shall well and truly pay to Mortgagee the Obligations at the time and in the manner provided in the Loan Agreement, the Note and this Security Instrument, shall well and truly perform the Other Obligations (hereinafter 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, in the Note and in the Loan Agreement, these presents and the estate hereby granted shall cease, terminate and be void.

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 Obligations, including without limitation:

          (a) the payment of the indebtedness evidenced by the Note in lawful money of the United States of America;

          (b) the payment of interest, default interest, late charges and other sums, as provided in the Note, the Loan Agreement, this Security Instrument or the other Loan Documents;

          (c) the payment of the Breakage Costs, if any;

          (d) the payment of all other moneys agreed or provided to be paid by Borrowers in the Note, the Loan Agreement, this Security Instrument or the other Loan Documents;

          (e) the payment of all sums advanced pursuant to the Loan Agreement or this Security Instrument to protect and preserve the Property and the lien and the security interest created hereby; and

          (f) the payment of all sums advanced and costs and expenses incurred by Mortgagee in connection with the Obligations or any part thereof, any modification, amendment, renewal, extension, or change of or substitution for the Obligations or any part thereof, or the acquisition or perfection of the security therefor, whether made or incurred at the request of Mortgagors or Mortgagee.

     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 (the “Other Obligations”):

          (a) the performance of all other obligations of Mortgagors contained herein;

          (b) the performance of each obligation of Mortgagors contained in any other agreement given by the applicable Mortgagor to Mortgagee which is for the purpose of further securing the obligations secured hereby, and any renewals, extensions, substitutions, replacements, amendments, modifications and changes thereto; and

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          (c) the performance of each obligation of Mortgagors 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, this Security Instrument or the other Loan Documents.

ARTICLE 3 — MORTGAGOR COVENANTS

     Mortgagors covenant and agree as follows:

     Section 3.1 Payment of Obligations.                     Borrowers will pay and perform the Obligations at the time and in the manner provided in the Note, the Loan Agreement, this Security Instrument and the other Loan Documents.

     Section 3.2 Incorporation by Reference. All the covenants, conditions and agreements contained in the Loan Agreement, the Note and 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.                     Borrowers shall obtain and maintain, or cause to be maintained, insurance in full force and effect at all times with respect to the Borrowers and the Property as required pursuant to the Loan Agreement.

     Section 3.4 Payment of Taxes, etc.                     Borrowers shall promptly pay all Taxes and Other Charges in accordance with the terms of the Loan Agreement.

     Section 3.5 Maintenance and Use of Property.                     Borrowers shall cause the Property to be maintained in a good and safe condition and repair in accordance with the terms of the Loan Agreement. Subject to the terms of the Loan Agreement, the Improvements and the Personal Property shall not be removed, demolished or materially altered or expanded (except for normal replacement of the Personal Property) without the consent of Mortgagee. Subject to the terms of the Loan Agreement,                     Borrowers shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any Casualty, or become damaged, worn or dilapidated or which may be affected by any Condemnation and shall complete and pay for any structure at any time in the process of construction or repair on the Land. Subject to the terms of the Loan Agreement, Mortgagors shall not initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Property or any part thereof. If under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Mortgagors will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express written consent of Mortgagee.

     Section 3.6 Waste. Mortgagors shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or give cause for cancellation of any Policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security of this Security Instrument. Mortgagors will not, without the prior written consent of Mortgagee, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface

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or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof.

     Section 3.7 Payment For Labor and Materials.

          (a) Subject to Section 3.7(b) below,                     Borrowers will promptly pay (or cause to be paid) when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property (each, a “Work Charge”) and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any Lien or security interest other than the Permitted Liens, even though inferior to the Liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other or additional Lien or security interest other than the Liens or security interests hereof except for the Permitted Liens.                     Borrowers represent there are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

          (b) After prior written notice to Mortgagee, any Mortgagor, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the validity of any Work Charge, the applicability of any Work Charge to Mortgagors or to the Property or any alleged non-payment of any Work Charge, provided that (i) no Event of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which the applicable Mortgagor is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost during the duration of such legal proceeding; (iv) the applicable Mortgagor shall promptly upon final determination thereof pay (or cause to be paid) any such Work Charge determined to be valid, applicable and unpaid; (v) such proceeding shall suspend the collection of such contested Work Charge from the Property, or Mortgagors shall have paid the same (or shall have caused the same to be paid) under protest; and (vi) Mortgagors shall furnish (or cause to be furnished) such security as may be required in the proceeding by applicable Laws or Legal Requirements, or as may be reasonably requested by Mortgagee, to insure payment of such Work Charge, together with all interest and penalties payable in connection therewith. Mortgagee may apply any such security or part thereof, as necessary to pay for such Work Charge at any time when, in the sole but reasonable judgment of Mortgagee, the validity, applicability and non-payment of such Work Charge is finally established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost during or as a result of such legal proceeding or Work Charge.

     Section 3.8 Performance of Other Agreements. Mortgagors shall observe and perform each and every term to be observed or performed by Mortgagors pursuant to the terms of the Loan Agreement, any other Loan Documents and any agreement or recorded instrument affecting or pertaining to the Property, including, but not limited to, the [Operating Lease] and any management agreements or franchise agreements, or given by any Mortgagor to Mortgagee for the purpose of further securing the Obligations and any amendments, modifications or changes thereto.

     Section 3.9 Change of Name, Identity or Structure. Except as may be permitted under the Loan Agreement, no Mortgagor will change such Mortgagor’s name, identity (including its trade name or names) or corporate, partnership or other structure without first obtaining the prior

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written consent of Mortgagee. Mortgagors shall execute and deliver to Mortgagee, prior to or contemporaneously with the effective date of any such change, any financing statement or financing statement change required by Mortgagee to establish or maintain the validity, perfection and priority of the security interest granted herein. At the request of Mortgagee, Mortgagors shall execute a certificate in form satisfactory to Mortgagee listing the trade names under which the applicable Mortgagor intends to operate the Property, and representing and warranting that such Mortgagor does business under no other trade name with respect to the Property.

     Section 3.10 Property Use. The Property shall be used only for a hotel and any ancillary uses relating thereto, and for no other uses without the prior written consent of Mortgagee, which consent may be withheld in Mortgagee’s sole and absolute discretion.

     Section 3.11 Compliance with Laws.

          (a) Subject to Section 7.1(b) of the Loan Agreement, Mortgagors shall promptly comply with all Laws affecting the Property, or the use thereof, including Environmental Laws.

          (b) Mortgagors shall from time to time, upon Mortgagee’s reasonable request, provide Mortgagee with evidence reasonably satisfactory to Mortgagee that the Property complies with all Laws or is exempt from compliance with Laws.

          (c) Notwithstanding any provisions set forth herein or in any document regarding Mortgagee’s approval of alterations of the Property, Mortgagors shall not alter the Property in any manner which would materially increase Mortgagors’ responsibilities for compliance with Laws without the prior written consent of Mortgagee. Mortgagee’s approval of the plans, specifications or working drawings for alterations of the Property shall create no responsibility or liability on behalf of Mortgagee for their completeness, design, sufficiency or their compliance with Laws. The foregoing shall apply to tenant improvements constructed by Mortgagors or by any of their tenants. Mortgagee may condition any such approval upon receipt of a certificate of compliance with Laws from an independent architect, engineer or other Person reasonably acceptable to Mortgagee.

          (d) Mortgagors shall give prompt notice to Mortgagee of the receipt by Mortgagors of any notice related to a violation of any Laws and of the commencement of any proceedings or investigations which relate to compliance with Laws.

          (e) After prior written notice to Mortgagee, Mortgagors, at their own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the Laws affecting the Property, provided that (i) no Event of Default has occurred and is continuing under the Note, this Security Agreement or any other Loan Document; (ii) Mortgagors are 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 be permitted under and be conducted in accordance with the provisions of any other instrument to which Mortgagors or the Property is subject and shall not constitute a default thereunder; (iv) neither the Property, any part thereof or interest therein, any of the tenants or occupants thereof, nor Mortgagors shall be affected in any material adverse way as a result of initiating or prosecuting such proceeding; (v) either non-compliance with the Laws shall not impose civil or criminal liability on Mortgagors or Mortgagees or Mortgagors shall comply with the Laws

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during the pendency of the proceeding; (vi) Mortgagors shall have furnished the security as may be required in the proceeding or by Mortgagee to ensure compliance by Mortgagors with the Laws; and (vii) Mortgagors shall have furnished to Mortgagee all other items reasonably requested by Mortgagee.

ARTICLE 4 — REPRESENTATIONS AND WARRANTIES

     Mortgagors represent and warrant to Mortgagee that:

     Section 4.1 Warranty of Title. Mortgagors have good fee or leasehold title, as applicable, to the Property and have the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same. [(i) Owner possesses an unencumbered fee simple absolute estate, (ii) Ground Lessee possesses an unencumbered leasehold interest (created by and pursuant to the Ground Lease) in the Land and the Improvements and (iii) Operating Lessee possesses an unencumbered leasehold estate (created by and pursuant to the terms of the Operating Lease) in the Land and the Improvements]. [Owner owns the Property free and clear of all liens, encumbrances and charges whatsoever except for the Permitted Liens]. The Permitted Liens do not and will not materially adversely affect or interfere with the value, or materially adversely affect or interfere with the current use or operation, of the Property, or the security intended to be provided by this Security Instrument or the ability of                     Borrowers to repay the Note or any other amount owing under the Note, this Security Instrument, the Loan Agreement, or the other Loan Documents or to perform its obligations thereunder in accordance with the terms of the Loan Agreement, the Note, this Security Instrument or the other Loan Documents. This Security Instrument, when properly recorded in the appropriate records, together with the Assignment of Leases and any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (i) a valid, perfected first priority lien on the Property, subject only to Permitted Liens and (ii) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, subject only to Permitted Liens. The Assignment of Leases, when properly recorded in the appropriate records, creates a valid first priority assignment of, or a valid first priority security interest in, certain rights under the related Leases, subject only to a license granted to Mortgagors to exercise certain rights and to perform certain obligations of the lessor under such Leases, including the right to operate the Property. No Person other than Mortgagors owns any interest in any payments due under such Leases that is superior to or of equal priority with the Mortgagee’s interest therein. Mortgagors shall forever warrant, defend and preserve the title and the validity and priority of the lien of this Security Instrument and shall forever warrant and defend the same to Mortgagee against the claims of all persons whomsoever.

ARTICLE 5 — OBLIGATIONS AND RELIANCES

     Section 5.1 Relationship of Mortgagors and Mortgagee. The relationship between Mortgagors and Mortgagee is solely that of debtor and creditor, and Mortgagee has no fiduciary or other special relationship with any of the Mortgagors, and no term or condition of any of the Loan Agreement, the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between Mortgagors and Mortgagee to be other than that of debtor and creditor.

     Section 5.2 No Reliance on Mortgagee. The members, general partners, principals and (if any Mortgagor is a trust) beneficial owners of Mortgagors are experienced in the

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ownership and operation of properties similar to the Property, and Mortgagors and Mortgagee are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property. Mortgagors are not relying on Mortgagee’s expertise, business acumen or advice in connection with the Property.

     Section 5.3 No Mortgagee or Mortgagee Obligations. (a) Notwithstanding the provisions of Section 1.1(g), (l) and (m) or Section 1.2, Mortgagee 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 Mortgagee 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 insurance policy, Mortgagee shall not be deemed to have warranted, consented to, 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 Mortgagee.

     Section 5.4 Reliance. Mortgagors recognize and acknowledge that in accepting the Note, the Loan Agreement, this Security Instrument and the other Loan Documents, (i) Mortgagee is expressly and primarily relying on the truth and accuracy of the warranties and representations set forth in Article 6 of the Loan Agreement and Articles 3 and 4 hereof without any obligation to investigate the Property and notwithstanding any investigation of the Property by Mortgagee; (ii) that such reliance existed on the part of Mortgagee prior to the date hereof; (iii) that the warranties and representations are a material inducement to Mortgagee in accepting the Note, the Loan Agreement, this Security Instrument and the other Loan Documents; and that Mortgagee 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 Article 6 of the Loan Agreement and Articles 3 and 4 hereof.

ARTICLE 6 — FURTHER ASSURANCES

     Section 6.1 Recording of Security Instrument, etc. Mortgagors 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 Mortgagee in, the Property.                     Borrowers will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, the Loan Agreement, this Security Instrument, the other Loan Documents, 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, the other Loan Documents, or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where prohibited by law so to do.

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     Section 6.2 Further Acts, etc. Mortgagors will, at the cost of Mortgagors, and without expense to Mortgagee, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and assurances as Mortgagee shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming unto Mortgagee the Property and rights hereby deeded, mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so to be, or which Mortgagors may be or may hereafter become bound to convey or assign to Mortgagee, 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. Mortgagors, on demand, will execute and deliver and hereby authorize Mortgagee, following ten (10) days’ notice to the applicable Mortgagor(s), to execute in the name of such Mortgagor(s) or without the signature of such Mortgagor(s) to the extent Mortgagee may lawfully do so, one or more financing statements, chattel mortgages or other instruments, to evidence more effectively the security interest of Mortgagee in the Property or any UCC Collateral. Mortgagors grant to Mortgagee an irrevocable power of attorney coupled with an interest for the purpose of, from and after an Event of Default (as defined in the Loan Agreement), exercising and perfecting any and all rights and remedies available to Mortgagee at law and in equity, including, without limitation, such rights and remedies available to Mortgagee pursuant to this Section 6.2.

     Section 6.3 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 amount of the Obligations from the value of the Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the amount of the Obligations or Mortgagee’s interest in the Property,                     Borrowers will pay the tax, with interest and penalties thereon, if any. If Mortgagee is advised by counsel chosen by it that the payment of tax by                     Borrowers would be unlawful or taxable to Mortgagee or unenforceable or provide the basis for a defense of usury, then Mortgagee shall have the option, exercisable by written notice of not less than ninety (90) days to declare the Obligations immediately due and payable.

          (b) Mortgagors will not claim or demand or be entitled to any credit or credits on account of the Obligations 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 Obligations. If such claim, credit or deduction shall be required by law, Mortgagee shall have the option, exercisable by written notice of not less than ninety (90) days, to declare the Obligations immediately due and payable.

          (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, the Loan Agreement, this Security Instrument, or any of the other Loan Documents or impose any other tax or charge on the same, Mortgagors will pay for the same, with interest and penalties thereon, if any.

     Section 6.4 Replacement Documents. Upon receipt of an affidavit of an officer of Mortgagee 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 Documents,                     Borrowers will issue, in lieu

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thereof, a replacement Note or other Loan Documents, dated the date of such lost, stolen, destroyed or mutilated Note or other Loan Documents in the same principal amount thereof and containing substantially identical terms.

     Section 6.5 Performance at Mortgagors’ Expense. Mortgagors acknowledge and confirm that Mortgagee shall impose certain administrative processing and/or commitment fees in connection with (a) the extension, renewal, modification, amendment and termination of the Loan, (b) the release or substitution of collateral therefor, (c) obtaining certain consents, waivers and approvals with respect to the Property, or (d) the review of any Lease or proposed Lease or the preparation or review of any subordination, non-disturbance agreement (the occurrence of any of the above shall be called an “Event”). Mortgagors further acknowledge and confirm that Mortgagors shall be responsible for the payment of all costs of reappraisal of the Property or any part thereof, whether required by law, regulation, Mortgagee or any governmental or quasi-governmental authority. Mortgagors hereby acknowledge and agree to pay, immediately, with or without demand, all such fees (as the same may be increased or decreased from time to time), and any additional fees of a similar type or nature which may be imposed by Mortgagee from time to time, upon the occurrence of any Event. Wherever it is provided for herein that Mortgagors pay any costs and expenses, such costs and expenses shall include, but not be limited to, all reasonable legal fees and disbursements of Mortgagee (excluding legal fees for in-house staff), whether with respect to retained firms or otherwise.

     Section 6.6 Legal Fees for Enforcement. (a) Mortgagors shall pay all reasonable legal fees incurred by Mortgagee in connection with (i) the preparation of the Loan Agreement, the Note, this Security Instrument and the other Loan Documents and (ii) the items set forth in Section 6.5 above, and (b) Mortgagors shall pay to Mortgagee on demand any and all expenses, including legal expenses and reasonable attorneys’ fees, incurred or paid by Mortgagee in protecting its interest in the Property or in collecting any amount payable hereunder or in enforcing its rights hereunder with respect to the Property (including commencing any foreclosure action), whether or not any legal proceeding is commenced hereunder or thereunder, together with interest thereon at the Default Rate from the date paid or incurred by Mortgagee until such expenses are paid by Mortgagors.

ARTICLE 7 — DUE ON SALE/ENCUMBRANCE

     Section 7.1 Mortgagee Reliance. Mortgagors acknowledge that Mortgagee has examined and relied on the experience of Mortgagors and its partners, members, principals and (if any Mortgagor is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Mortgagors’ ownership of the Property as a means of maintaining the value of the Property as security for payment and performance of the Obligations. Mortgagors acknowledge that Mortgagee has a valid interest in maintaining the value of the Property so as to ensure that, should Mortgagors default in the payment and performance of the Obligations, Mortgagee can recover the Obligations by a sale of the Property.

     Section 7.2 No Sale/Encumbrance. No Mortgagor 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.

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ARTICLE 8 — PREPAYMENT

     Section 8.1 Prepayment. The Obligations may not be prepaid in whole or in part except in accordance with the express terms and conditions of the Loan Agreement.

ARTICLE 9 — RIGHTS AND REMEDIES

     Section 9.1 Remedies. Upon the occurrence and during the continuance of any Event of Default, Mortgagors agree that Mortgagee may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against one or more of the Mortgagors and in and to the Property (or any portion thereof), 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 Mortgagee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Mortgagee:

          (a) declare the entire unpaid Obligations to be immediately due and payable; provided, however, that notwithstanding the foregoing, if and to the extent the Loan Agreement provides for automatic acceleration of the Loan upon the occurrence of certain Events of Default, such provisions with respect to automatic acceleration shall govern and control, without any further notice, demand or any other action by Mortgagee or any other Person;

          (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 (or any portion thereof) 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 Law, institute proceedings for the partial foreclosure of this Security Instrument for the portion of the Obligations then due and payable, subject to the continuing lien and security interest of this Security Instrument for the balance of the Obligations 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 one or more of the Mortgagors therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, in one or more 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;

          (f) 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 Obligations and without regard for the solvency of any of the Mortgagors, any Guarantor or of any Person liable for the payment of the Obligations;

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          (h) subject to any Law, the license granted to Mortgagors under Section 1.2 hereof shall automatically be revoked, and Mortgagee may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess one or more of the Mortgagors and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude one or more of the Mortgagors and their respective agents, licensees or servants wholly therefrom, and take possession of all books, records and accounts relating thereto, and each Mortgagor agrees to surrender possession of the Property and of such books, records and accounts to Mortgagee upon demand, and thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct business thereon; (ii) complete any construction on the Property in such manner and form as Mortgagee deems advisable; (iii) make reasonably necessary alterations, additions, renewals, replacements and improvements to or on the Property to preserve the same good condition; (iv) exercise all rights and powers of each of the Mortgagors with respect to the Property, whether in the name of such Mortgagor(s) or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require one or more of the Mortgagors to pay monthly in advance to Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Mortgagors; (vi) require one or more of the Mortgagors to vacate and surrender possession of the Property to Mortgagee or to such receiver and, in default thereof, Mortgagors may be evicted by summary proceedings or otherwise; and (vii) except as otherwise expressly provided for in the Loan Agreement, apply the receipts from the Property to the payment of the Obligations, in such order, priority and proportions as Mortgagee shall deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys’ fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, Insurance Premiums and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Mortgagee, its outside counsel, agents and, to the extent hired or engaged expressly and solely for this purpose, its 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 any UCC Collateral (including, without limitation, the Personal Property) or any part thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection and preservation of the UCC Collateral (including, without limitation, the Personal Property), and (ii) request one or more of the Mortgagors at its respective expense to assemble the UCC Collateral, including without limitation, the Personal Property, and make it available to Mortgagee at a convenient place acceptable to Mortgagee. Any notice of sale, disposition or other intended action by Mortgagee with respect to the UCC Collateral, including, without limitation, the Personal Property, sent to Mortgagors in accordance with the provisions hereof at least five (5) days prior to such action, shall constitute commercially reasonable notice to Mortgagors;

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

          (i) Taxes and Other Charges;

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          (ii) Insurance Premiums;

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

          (iv) amortization of the unpaid principal balance of the Note; or

          (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 Mortgagee pursuant to the terms of this Security Instrument;

          (k) surrender the Policies, collect the unearned Insurance Premiums and apply such sums as a credit on the Obligations in such priority and proportion as Mortgagee in its discretion shall deem proper, and in connection therewith, Mortgagors hereby appoint Mortgagee as agent and attorney-in-fact (which is coupled with an interest and is therefore irrevocable) for Mortgagors to collect such Insurance Premiums;

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

          (m) foreclose by power of sale or otherwise and apply the proceeds of any recovery to the Obligations in accordance with Section 9.2 or to any deficiency under this Security Instrument;

          (n) exercise all rights and remedies under any Causes of Action, whether before or after any sale of the Property by foreclosure, power of sale, or otherwise and apply the proceeds of any recovery to the Obligations in accordance with Section 9.2 or to any deficiency under this Security Instrument; or

          (o) pursue such other remedies as Mortgagee may have under Law.

In the event of a sale, by foreclosure, power of sale, or otherwise, of less than all of the 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 9.2 Application of Proceeds. Except as otherwise expressly set forth in the Loan Agreement, the purchase money, proceeds and avails of any disposition of the Property, or any part thereof, or any other sums collected by Mortgagee pursuant to the Note, this Security Instrument, the Loan Agreement, or the other Loan Documents, may be applied by Mortgagee to the payment of the Obligations in such priority and proportions as Mortgagee in its discretion shall deem proper.

     Section 9.3 Right to Cure Defaults. Upon the occurrence and during the continuance of any Default or Event of Default, Mortgagee may, but without any obligation to do so and without notice to or demand on Mortgagors and without releasing Mortgagors from any obligation hereunder, cure any default of any of the Mortgagors’ obligation under the Loan Documents in such manner and to such extent as Mortgagee may deem necessary to protect the security hereof. Mortgagee is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Obligations. The cost and expense of any cure hereunder

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(including reasonable attorneys’ fees to the extent permitted by Law), with interest as provided below, shall constitute a portion of the Obligations and shall be due and payable to Mortgagee upon demand. All such costs and expenses incurred by Mortgagee in remedying such Default or Event of Default shall bear interest at the Default Rate for the period after notice from Mortgagee that such cost or expense was incurred to the date of payment to Mortgagee and shall be deemed to constitute a portion of the Obligations and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and payable upon demand by Mortgagee therefor.

     Section 9.4 Actions and Proceedings. Mortgagee has the right to appear in and defend any action or proceeding brought with respect to the Property and, after the occurrence and during the continuance of an Event of Default, to bring any action or proceeding, in the name and on behalf of any of the Mortgagors, which Mortgagee, in its discretion, decides should be brought to protect its interest in the Property.

     Section 9.5 Recovery of Sums Required To Be Paid. Mortgagee shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Obligations as the same become due, without regard to whether or not the balance of the Obligations shall be due, and without prejudice to the right of Mortgagee thereafter to bring an action of foreclosure, or any other action, for a Default or Defaults by one or more of the Mortgagors existing at the time such earlier action was commenced.

     Section 9.6 Other Rights, etc. (a) The failure of Mortgagee to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument. Mortgagors shall not be relieved of Mortgagors’ obligations hereunder by reason of (i) the failure of Mortgagee to comply with any request of any Mortgagor or any Guarantor 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 Obligations or any portion thereof, or (iii) any agreement or stipulation by Mortgagee extending the time of payment or otherwise modifying or supplementing the terms of the Note, the Loan Agreement, this Security Instrument or the other Loan Documents.

          (b) It is agreed that the risk of loss or damage to the Property is on Mortgagors, and Mortgagee 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 Mortgagee shall not be deemed an election of judicial relief, if any such possession is requested or obtained, with respect to the Property or any other UCC Collateral not in Mortgagee’s possession.

          (c) Mortgagee may resort for the payment of the Obligations to any other security held by Mortgagee in such order and manner as Mortgagee, in its discretion, may elect. Mortgagee may take action to recover the Obligations, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Mortgagee thereafter to foreclose this Security Instrument. The rights of Mortgagee 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 Mortgagee shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. Mortgagee 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.

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     Section 9.7 Right to Release Any Portion of the Property. Mortgagee may release any portion of the Property for such consideration as Mortgagee may require without, as to the remainder of the Property, in any way impairing or affecting the lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Mortgagee for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Mortgagee may require without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security interest in the remaining portion of the Property.

     Section 9.8 Violation of Laws. Subject to Section 7.1(b) of the Loan Agreement, if the Property is not in compliance with Legal Requirements, Mortgagee may impose reasonable additional requirements upon Mortgagors in connection herewith including, without limitation, monetary reserves or financial equivalents.

     Section 9.9 Right of Entry. Subject to the terms of the Loan Agreement, Mortgagee and its agents shall have the right to enter and inspect the Property at all reasonable times.

     Section 9.10 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, to the extent permitted by Law, Mortgagee shall be subrogated to all of the rights, claims, liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Mortgagee and are merged with the lien and security interest created herein as cumulative security for the repayment of the Obligations, and the performance and discharge of the Obligations.

     Section 9.11 Additional Provisions. With respect to the Personal Property, until the Obligations are paid and performed in full or this Security Instrument is otherwise released by written instrument executed by Mortgagee and authorized to be recorded in the applicable public records of the jurisdiction in which the Property is located, Mortgagee is hereby irrevocably appointed the true and lawful attorney of Mortgagors (coupled with an interest), in Mortgagors’ names and stead, to, upon and during the continuance of any Event of Default, make all necessary conveyances, assignments, transfers and deliveries of the Personal Property, and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more Persons with such power, Mortgagors hereby ratifying and confirming all that the said attorney or such substitute or substitutes shall lawfully do by virtue hereof. Notwithstanding the foregoing, Mortgagors, if so requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for such purpose, and as may be designated in such request. To the extent permitted by Laws, any such sale or sales made under or by virtue of this Section 9.11 shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law, or in equity, of Mortgagors in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagors and against any and all Persons claiming or who may claim the same, or any part thereof, from, through or under Mortgagors. Upon any sale made under or by virtue of this Section 9.11, Mortgagee may, to the extent permitted by Laws, bid for and acquire the Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Obligations secured

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hereby the net sales price after deducting therefrom the expenses of the sale and the cost of the auction and any other sums which Mortgagee is authorized to deduct by Laws or under this Security Instrument. At any sale pursuant to this Section 9.11, whether made under power herein granted, under or as otherwise authorized by applicable Laws or pursuant to Legal Requirements, or by virtue of any judicial proceeding or any other legal right, remedy or recourse, it shall not be necessary for Mortgagee to be physically present, or to have constructive possession of, the Property, and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually presented and delivered to the purchaser at such sale.

ARTICLE 10 — INDEMNIFICATIONS

     Section 10.1 General Indemnification. Mortgagors shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for an Indemnitee) (collectively, “Losses”) imposed upon or incurred by or asserted against any Indemnitees and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (b) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof; (d) any failure of the Property to be in compliance with any Legal Requirements; (e) any and all claims and demands whatsoever which may be asserted against Mortgagee 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 (f) the payment of any commission, charge or brokerage fee to anyone which may be payable in connection with the funding of the Loan evidenced by the Note and secured by this Security Instrument provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Losses (i) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (ii) result from a claim brought by any Mortgagor or other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if any Mortgagor or such other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. Any amounts payable to Mortgagee by reason of the application of this Section 10.1 shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Mortgagee until paid.

     Section 10.2 Mortgage and/or Intangible Tax. Mortgagors shall, at their sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all Losses upon or incurred by or asserted against any Indemnitees and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument, the Loan Agreement, the Note or any other Loan Document.

     Section 10.3 Duty to Defend; Legal Fees and other Fees and Expenses. Upon written request by any Indemnitee, Mortgagors shall defend such Indemnitee (if requested by any Indemnitee, in the name of the Indemnitee) by attorneys and other professionals reasonably approved by the Indemnitee. Notwithstanding the foregoing, any Indemnitee may, in its sole

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discretion, engage its own attorneys and other professional to defend or assist it, and, at the option of the Indemnitee, its attorneys shall act as co-counsel in connection with the resolution of any claim or proceeding; provided, however, that upon and during the continuance of any Event of Default under the Note, this Security Agreement or any of the other Loan Documents, the attorneys of Indemnitee shall control the resolution of any claim or proceeding. Upon demand, Mortgagors shall pay or, in the sole discretion of the Indemnitees, reimburse, the Indemnitees for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

     Section 10.4 Environmental Indemnity; Environmental Covenants.

          (a) Simultaneously with this Security Instrument, Borrowers and Guarantor have executed and delivered the Environmental Indemnity.

          (b) Certain Loan Parties have provided representations, warranties and covenants regarding environmental matters set forth either in the Loan Agreement or in the Environmental Indemnity, and Mortgagors shall comply with the aforesaid covenants regarding environmental matters.

     Section 10.5 Mortgagee’s Rights. Mortgagee and any other Person designated by Mortgagee, including, but not limited to, any representative of a Governmental Authority, and any environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall have the right, but not the obligation, to enter upon the Property at all reasonable times and on not less than one (1) Business Day advance notice to Mortgagors to assess any and all aspects of the environmental condition of the Property and its use, including, but not limited to, conducting any environmental assessment or audit (the scope of which shall be determined in Mortgagee’s sole (but reasonable) discretion) and taking samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing. Each Mortgagor shall cooperate with and provide access to Mortgagee and any such Person designated by Mortgagee. Mortgagee agrees that it shall not exercise its rights under this Section 10.5 more frequently than once per calendar year, unless Mortgagee reasonably believes that the Property is not in full compliance with all Environmental Laws.

ARTICLE 11 — WAIVERS

     Section 11.1 Waiver of Counterclaim. Each Mortgagor hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Mortgagee arising out of or in any way connected with this Security Instrument, the Note, the Loan Agreement, any of the other Loan Documents, or the Obligations.

     Section 11.2 Marshalling and Other Matters. Each Mortgagor hereby waives, to the extent permitted by law, 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, each Mortgagor hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of such Mortgagor, and on behalf of each Person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent permitted by Legal Requirements.

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     Section 11.3 Waiver of Notice. Mortgagors shall not be entitled to any notices of any nature whatsoever from Mortgagee except (a) with respect to matters for which this Security Instrument, the Loan Agreement or any other Loan Document, specifically and expressly provides for the giving of notice by Mortgagee to Mortgagors, and (b) with respect to matters for which Mortgagee is required by any Law to give notice, and except as provided above in this Section 11.3, each Mortgagor hereby expressly waives the right to receive any notice from Mortgagee with respect to any matter for which this Security Instrument does not specifically and expressly provide for the giving of notice by Mortgagee to Mortgagor.

     Section 11.4 Waiver of Statute of Limitations. Each Mortgagor hereby expressly waives and releases to the fullest extent permitted by Law, the pleading of any statute of limitations as a defense to payment or performance of the Obligations.

     Section 11.5 Sole Discretion of Mortgagee. Wherever pursuant to this Security Instrument (a) Mortgagee exercises any right given to it to approve or disapprove, (b) any arrangement or term is to be satisfactory to Mortgagee, or (c) any other decision or determination is to be made by Mortgagee, the decision of Mortgagee to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions and determinations made by Mortgagee, shall be in the sole and absolute discretion of Mortgagee, except as may be otherwise expressly and specifically provided herein or in any of the other Loan Documents.

     Section 11.6 Waiver of Trial by Jury. EACH MORTGAGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH MORTGAGOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.

     Section 11.7 Waiver of Foreclosure Defense. Each Mortgagor hereby waives any defense such Mortgagor might assert or have by reason of Mortgagee’s failure to make any tenant or lessee of the Property a party defendant in any foreclosure proceeding or action instituted by Mortgagee.

     Section 11.8 Mortgagors’ Knowledge. EACH MORTGAGOR SPECIFICALLY ACKNOWLEDGES AND AGREES (a) THAT IT HAS A DUTY TO READ THIS SECURITY INSTRUMENT AND THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS HEREOF, (b) THAT IT HAS IN FACT READ THIS SECURITY INSTRUMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS SECURITY INSTRUMENT, (c) THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS SECURITY INSTRUMENT AND HAS RECEIVED THE ADVICE OF SUCH COUNSEL IN CONNECTION WITH ENTERING INTO THIS SECURITY INSTRUMENT, AND (d) THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS SECURITY INSTRUMENT PROVIDE FOR (i) CERTAIN WAIVERS AND FOR (ii) THE ASSUMPTION BY ONE PARTY OF, AND/OR

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RELEASE OF THE OTHER PARTY FROM, CERTAIN LIABILITIES THAT SUCH PARTY MIGHT OTHERWISE BE RESPONSIBLE FOR UNDER APPLICABLE LAWS. EACH MORTGAGOR FURTHER AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS SECURITY INSTRUMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT SUCH PROVISIONS ARE NOT “CONSPICUOUS.”

     Section 11.9 Usury Savings. It is the intent of Mortgagee and Mortgagors in the execution of the Loan Agreement and the other Loan Documents and any other written or oral agreement by Mortgagors in favor of Mortgagee to contract in strict compliance with applicable usury Laws. In furtherance thereof, Mortgagee and Mortgagors stipulate and agree that none of the terms and provisions contained in the Loan Agreement and the other Loan Documents, or in any other written or oral agreement by Mortgagors, any other Borrower or any other party to any of the other Loan Documents in favor of Mortgagee, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, or interest at a rate in excess of the maximum interest rate permitted to be charged by applicable Laws; that neither Mortgagors nor any guarantors, endorsers or other Persons now or hereafter becoming liable for payment of the Obligations are agreeing to pay at a rate in excess of the maximum interest that may be lawfully charged under applicable Laws; and that the provisions of this subsection shall control over all other provisions of the Loan Agreement and the other Loan Documents or any other oral or written agreements which may be in apparent conflict herewith. Mortgagee expressly disavows any intention to charge or collect excessive unearned interest or finance charges in the event the maturity of the Loan or the remaining Obligations are accelerated. If the maturity of the Loan or the remaining Obligations shall be accelerated for any reason or if the principal of the Loan or the remaining Obligations are paid prior to the end of the term of the Loan or the Obligations, as applicable, and as a result thereof the interest received for the actual period of existence of the Loan or the Obligations, as applicable, exceeds the applicable maximum lawful rate, Mortgagee shall, at Mortgagee’s option, either refund to                     Borrowers the amount of such excess or credit the amount of such excess against the principal balance of the Obligations then outstanding and thereby shall render inapplicable any and all penalties of any kind provided by applicable Laws as a result of such excess interest. If Mortgagee shall contract for, charge or receive any amount or amounts and/or any other thing of value which are determined to constitute interest which would increase the effective interest rate on the Loan or the Obligations to a rate in excess of that permitted to be charged by applicable Laws, an amount equal to interest in excess of the lawful rate shall, upon such determination, at the option of Mortgagee, be either immediately returned to                     Borrowers or credited against the Obligations then outstanding, in which event any and all penalties of any kind under applicable Laws as a result of such excess interest shall be inapplicable.

ARTICLE 12 — EXCULPATION

     Section 12.1 Exculpation. Notwithstanding anything to the contrary contained in this Security Instrument, the liability of any party to this Security Instrument to pay the Obligations and for the performance of the other agreements, covenants and obligations contained herein and in the Note, the Loan Agreement and the other Loan Documents shall be limited as set forth in Section 12.9 of the Loan Agreement.

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ARTICLE 13 — SUBMISSION TO JURISDICTION

     Section 13.1 Submission to Jurisdiction. With respect to any claim or action arising hereunder or under the Note or the other Loan Documents, each of the Mortgagors (a) irrevocably submits to the nonexclusive jurisdiction of the courts of the State of New York located in the Borough of Manhattan in New York, New York and the United States District Court located in the Borough of Manhattan in New York, New York, and appellate courts from any thereof, and (b) irrevocably waives any objection which it may have at any time to the laying of venue of any suit, action or proceeding arising out of or relating to this Security Instrument brought in any such court, irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing in this Security Instrument will be deemed to preclude Mortgagee from bringing an action or proceeding with respect hereto in any other jurisdiction.

ARTICLE 14 — APPLICABLE LAW

     Section 14.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN OF THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, AND THE TRANSFER OF ANY INTEREST IN REAL PROPERTY, THE LAWS OF THE STATE WHERE THE LAND IS LOCATED SHALL APPLY.

     Section 14.2 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 Legal Requirements.

ARTICLE 15 — DEFINITIONS

     Section 15.1 General Definitions. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and the word “Mortgagor” shall mean “each Mortgagor and any subsequent owner or owners of the Property or any part thereof or any interest therein,” the word “Mortgagee” shall mean “Mortgagee 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 of any Mortgagor therein, and the phrases “legal fees”, “attorneys’ fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Mortgagee in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder.

     Section 15.2 Headings, etc. The headings and captions of various Articles and 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.

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ARTICLE 16 — MISCELLANEOUS PROVISIONS

     Section 16.1 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 Mortgagors or Mortgagee, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

     Section 16.2 Intentionally Deleted.

     Section 16.3 Liability. If Mortgagors consists of more than one Person, the obligations and liabilities of each such Person hereunder shall be joint and several. This Security Instrument shall be binding upon and inure to the benefit of Mortgagors and Mortgagee and their respective successors and assigns forever.

     Section 16.4 Inapplicable Provisions. If any term, covenant or condition of this Security Instrument or any other Loan Document is held to be invalid, illegal or unenforceable in any respect, the Note and this Security Instrument or the other Loan Documents, as the case may be, shall be construed without such provision.

     Section 16.5 Duplicate Originals; Counterparts. This Security Instrument may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Security Instrument may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Security Instrument. The failure of any party hereto to execute this Security Instrument, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

     Section 16.6 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 16.7 Notice. All notices required or permitted under this Security Instrument shall be given and be effective in accordance with Section 12.2 of the Loan Agreement.

ARTICLE 17 — CROSS-COLLATERALIZATION

     Section 17.1 Cross-Collateralization. Mortgagors acknowledge that the Obligations are secured by this Security Instrument together with those additional mortgages, deeds of trust and deeds to secure debt (collectively, the “Other Security Instruments”) given by the other Borrowers and/or certain Affiliates of Mortgagors to Mortgagee, together with their respective Assignments of Leases and other Loan Documents securing or evidencing the Obligations, and encumbering the other Collateral Properties, all as more specifically set forth in the Loan Agreement. Upon the occurrence and during the continuance of an Event of Default, Mortgagee shall have the right to institute a proceeding or proceedings for the total or partial foreclosure of this Security Instrument and any or all of the Other Security Instruments whether by court action, power of sale or otherwise, under any applicable provision of Law, for all of the Obligations or the portion of the Obligations allocated to the Property in the Loan Agreement, and the lien and the security interest created by the Other Security Instruments shall continue in full force and effect without loss of priority as a lien and security interest securing the payment of that portion of the Obligations then due and payable but still outstanding. Mortgagors acknowledge and

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agree that the Property and the other Collateral Properties are located in one or more States and counties, and therefore Mortgagee shall be permitted to enforce payment of the Obligations and the performance of any term, covenant or condition of the Note, this Security Instrument, the Loan Documents or the Other Security Instruments and exercise any and all rights and remedies under the Note, this Security Instrument, the other Loan Documents or the Other Security Instruments, or as provided by Law or at equity, by one or more proceedings, whether contemporaneous, consecutive or both, to be determined by Mortgagee, in its sole discretion, in any one or more of the States or counties in which the Property or any other Collateral Property is located. Neither the acceptance of this Security Instrument, the other Loan Documents or the Other Security Instruments nor the enforcement thereof in any one State or county, whether by court action, foreclosure, power of sale or otherwise, shall prejudice or in any way limit or preclude enforcement by court action, foreclosure, power of sale or otherwise, of the Note, this Security Instrument, the other Loan Documents, or any Other Security Instruments through one or more additional proceedings in that State or county or in any other State or county. Any and all sums received by Mortgagee under the Note, this Security Instrument, and the other Loan Documents shall be applied to the Obligations in such order and priority as Mortgagee shall determine, in its sole discretion, without regard to the Allocated Loan Amount for the Property or any other Collateral Property or the appraised value of the Property or any other Collateral Property.

ARTICLE 18 — SECONDARY MARKET

     Section 18.1 Transfer of Loan. Subject to the provisions of Article 14 of the Loan Agreement, Mortgagee may, at any time, (a) sell, transfer or assign the Note, this Security Instrument and the Other Security Instruments, and any or all servicing rights with respect thereto, or (b) grant participations therein (“Participations”), or (c) issue mortgage pass-through certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placements (the “Securities”), or (d) enter into any other Secondary Market Transaction contemplated in Article XIV of the Loan Agreement, which is incorporated herein by reference. In addition to its other right under said Article XIV of the Loan Agreement, Mortgagee may forward to each purchaser, transferee, assignee, servicer, participant or investor in such Participations or Securities, (collectively, an “Investor”) or any Rating Agency rating such Securities, each prospective Investor, and any organization maintaining databases on the underwriting and performance of commercial mortgage loans, all documents and information which Mortgagee now has or may hereafter acquire relating to the Loan and to the Mortgagors and the other Loan Parties, any Guarantor and the Property, whether furnished by the Mortgagors, any Guarantor or otherwise, as Mortgagee determines necessary or desirable. Mortgagors irrevocably waive any and all rights they may have under Laws to prohibit such disclosure, including, but not limited to any right of privacy.

     Section 18.2 Cooperation. Mortgagors and any Guarantor agree to cooperate with Mortgagee in connection with any transfer made or any Securities created pursuant to this Article 18, including, without limitation, complying with all of the terms and conditions of Article XIV of the Loan Agreement.

     Section 18.3 Reserves/Escrows. If Securities are issued in connection with the Loan, all funds held by Mortgagee in escrow or pursuant to reserves in accordance with this Security Instrument or the Other Security Instruments shall be deposited in eligible accounts at eligible institutions as then defined and required by the Rating Agencies.

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ARTICLE 19 — [GROUND LEASE PROVISIONS]

     Section 19.1 No Merger of Fee and Leasehold Estates; Releases. So long as any portion of the Obligations shall remain unpaid, unless Mortgagee shall otherwise consent, the fee title to the Land, the Leasehold Estate created by the Ground Lease and the subleasehold estate created by the Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates in Mortgagors, Owner, Ground Lessee or in any other Person by purchase, operation of law or otherwise. Mortgagee reserves the right, at any time, to release portions of the Property, including, but not limited to, the Leasehold Estate and the subleasehold estate created by the Operating Lease, with or without consideration, at Mortgagee’s election, without waiving or affecting any of its rights hereunder or under the Note or the other Loan Documents and any such release shall not affect Mortgagee’s rights in connection with the portion of the Property not so released.

     Section 19.2 Mortgagor’s Acquisition of Fee Estate. So long as any portion of the Obligations remains unpaid, the lien created by this Security Instrument shall include and be deemed to be spread to cover Owner’s fee simple title to the Land and other portions of the Property in which Owner holds an interest, and said fee simple title shall be deemed to be included in the Property. Owner agrees, at its sole cost and expense, including without limitation, Mortgagee’s reasonable attorneys’ fees, to (i) execute any and all documents or instruments necessary to subject its fee simple title to the Land to the lien of this Security Instrument; and (ii) provide a title insurance policy which shall insure that the lien of this Security Instrument is a first lien on Owner’s fee simple title to the Land.

     Section 19.3 Bankruptcy.

          (a) Subject to the terms of the Loan Agreement, Ground Lessee shall not, in any event, including the bankruptcy, reorganization or insolvency of Ground Lessee or Owner, (i) surrender the Leasehold Estate, or any portion thereof, nor terminate, cancel or acquiesce in the rejection of the Ground Lease; or (ii) modify, change, supplement, alter or amend the Ground Lease in any respect, either orally or in writing. Subject to the terms of the Loan Agreement, Ground Lessee does hereby expressly release, assign, relinquish and surrender unto Mortgagee all of Ground Lessee’s right, power and authority to terminate, cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend the Ground Lease in any respect, either orally or in writing, at any time, including in the event of the bankruptcy, reorganization or insolvency of Ground Lessee or Owner, and any attempt on the part of Ground Lessee to exercise any such right without the consent of Mortgagee shall be null and void. Notwithstanding the foregoing, in the event of a threatened termination of the Ground Lease due to the bankruptcy, reorganization or insolvency of Ground Lessee or Owner, Ground Lessee shall, at Mortgagee’s election, absolutely assign to Mortgagee, in lieu of such termination, all of Ground Lessee’s right, title and interest in and to the Ground Lease.

          (b) If the Ground Lease is rejected by Owner, as debtor in possession, or by a trustee for Owner, pursuant to Section 365 of the Bankruptcy Code, Ground Lessee shall not exercise its right to elect under Section 365(h)(1) of the Bankruptcy Code to terminate or treat the Ground Lease as terminated. Any such election made shall be null and void. In any event, Ground Lessee hereby waives, for the benefit of Mortgagee, its successors and assigns only, and not enforceable by anyone else, the provisions of Section 365 of the Bankruptcy Code, or of any statute or rule of law now or hereafter in effect which gives or purports to give Ground Lessee any right of election to terminate the Ground Lease, to acquiesce in the termination of the

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Ground Lease or to surrender possession of the Property in the event of the bankruptcy, reorganization or insolvency of Owner or any other party.

          (c) If Owner, as debtor in possession, or by a trustee for Owner, attempts to transfer its interest in the Land and the Improvements free and clear of the Ground Lease pursuant to Section 363 of the Bankruptcy Code, Ground Lessee shall not consent, acquiesce or fail to object to such attempted transfer. Any such consent, acquiescence or failure to object made shall be null and void. In any event, Ground Lessee hereby waives, for the benefit of Mortgagee, its successors and assigns only, and not enforceable by anyone else, the provisions of Section 363 of the Bankruptcy Code, or of any statute or rule of law now or hereafter in effect which gives or purports to give Ground Lessee any right to consent to or acquiesce in the transfer of Owner’s interest in the Land and the Improvements free and clear of the Ground Lease, to acquiesce in the termination of the Ground Lease or to surrender possession of the Property in the event of the bankruptcy, reorganization or insolvency of Owner or any other party.

ARTICLE 20 — [OPERATING LEASE PROVISIONS]

     Section 20.1 No Merger of Leasehold and Sub-Leasehold Estates; Release. So long as any portion of the Obligations shall remain unpaid, unless Mortgagee shall otherwise consent, the Leasehold Estate and the subleasehold estate therein created pursuant to the provision of the Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates in Operating Lessee, Ground Lessee or Owner, or in any other Person by purchase, operation of law or otherwise. Mortgagee reserves the right, at any time, to release portions of the Property, including, but not limited to, the subleasehold estate created by the Operating Lease, with or without consideration, at Mortgagee’s election, without waiving or affecting any of its rights hereunder or under the Note or any of the other Loan Documents and any such release shall not affect Mortgagee’s rights in connection with the portion of the Property not so released.

     Section 20.2 Subordination/Purchase Rights. (a) Any option to purchase, right of first refusal to purchase, right of first refusal to lease additional space at the Property or any interest therein, right to bid at any sale of the Property by foreclosure, power of sale, or otherwise, or any similar right of Operating Lessee, whether pursuant to the Operating Lease or otherwise (collectively, the “Purchase Rights”), are and shall at all times continue to be subject and subordinate in all respects to the terms, covenants and provisions of this Security Instrument and to the lien hereof, including without limitation, all renewals, increases, modifications, spreaders, consolidations, replacements and extensions thereof and to all sums secured thereby and advances made thereunder with the same force and effect as if the Security Instrument had been executed, delivered and recorded prior to the execution and delivery of the Operating Lease or such other document containing any Purchase Right. Operating Lessee hereby acknowledges and agrees that its right to receive any payments pursuant to the terms of the Operating Lease is subordinate to the payment of the interest, principal and other sums due pursuant to the Loan Agreement, the Note and the other Loan Documents.

          (b) Operating Lessee represents and warrants that (i) Operating Lessee is the sole owner and holder of all of the Purchase Rights; (ii) Operating Lessee has not granted or made any assignment, transfer, conveyance or other disposition of the Purchase Rights; (iii) Operating Lessee has not granted or created any lien or encumbrance of any Purchase Rights; and (iv) Operating Lessee has not exercised any Purchase Rights.

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          (c) Operating Lessee hereby agrees that so long as the Loan is outstanding, Operating Lessee shall not exercise any of the Purchase Rights or assign, transfer or convey all or any of the Purchase Rights.

          (d) Mortgagors agree to notify Mortgagee in writing of (i) the proposed exercise of any of the Purchase Rights not less than thirty (30) days prior to the date of the exercise of any of the Purchase Rights, (ii) any notice given to any Mortgagor with respect to exercise of any of the Purchase Rights, concurrently with the giving of such notice to the applicable Mortgagor, and shall include a copy of any notice given to such Mortgagor with respect to such exercise and (iii) any proposed assignment, transfer or conveyance of all or any of the Purchase Rights, or agreement to do so, in the case of Operating Lessee, not less than thirty (30) days prior to the date of any such assignment, transfer or conveyance, and in the case of Ground Lessee, concurrently with Ground Lessee’s receipt of any notice of such proposed assignment, transfer or conveyance.

     Section 20.3 Mortgagors’ Fee Simple Estate. The lien of this Security Instrument shall encumber and be deemed to be spread to cover the fee simple title to the Land, and said fee simple title shall be deemed to be included in the Property. Mortgagors agree, at their sole cost and expense, including without limitation, Mortgagee’s reasonable attorney’s fees, to (i) execute any and all documents or instruments necessary to further evidence or perfect the fact that the fee simple estate in the Property is subject to the lien of this Security Instrument; and (ii) provide a title insurance policy which shall insure that the lien of this Security Instrument is a first lien on Mortgagors’ fee simple title to the Property.

     Section 20.4 Consent of Ground Lessee. Notwithstanding anything to the contrary set forth in the Operating Lease, including, without limitation, Article 11 thereof, Ground Lessee hereby consents to the granting by Operating Lessee to Mortgagee, pursuant to this Security Instrument, of a security interest in the Operating Lease and the subleasehold estate created thereby in the Land, and all of Operating Lessee’s right, title and interest in and to the Property.

     Section 20.5 Consent and Waiver of Operating Lessee. Notwithstanding anything to the contrary set forth in the Operating Lease, including, without limitation, Article 34 thereof, Operating Lessee hereby consents to the granting by Ground Lessee to Mortgagee, pursuant to this Security Instrument, of a security interest in the Ground Lease and the Leasehold Estate created thereby, and all of Ground Lessee’s right, title and interest in and to the Property, and Operating Lessee hereby acknowledges and agrees that the provisions set forth in Section 34.1 of the Operating Lease with respect to the granting of encumbrances by Ground Lessee shall not be effective as to this Security Instrument.

     Section 20.6 Bankruptcy.

          (a) Subject to the terms of the Loan Agreement, Operating Lessee shall not, in any event, including the bankruptcy, reorganization or insolvency of Operating Lessee, Ground Lessee or Owner, (i) surrender the subleasehold estate in the Land created by the Operating Lease, or any portion thereof, nor terminate, cancel or acquiesce in the rejection of the Operating Lease; or (ii) modify, change, supplement, alter or amend the Operating Lease in any respect, either orally or in writing. Subject to the terms of the Loan Agreement, Operating Lessee does hereby expressly release, assign, relinquish and surrender unto Mortgagee all of Operating Lessee’s right, power and authority to terminate, cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend the Operating Lease in any respect, either orally or in

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writing, at any time, including in the event of the bankruptcy, reorganization or insolvency of Operating Lessee, Ground Lessee or Owner, and any attempt on the part of Operating Lessee to exercise any such right without the consent of Mortgagee shall be null and void. Notwithstanding the foregoing, in the event of a threatened termination of the Operating Lease due to the bankruptcy, reorganization or insolvency of Ground Lessee or Owner, Operating Lessee shall, at Mortgagee’s election, absolutely assign to Mortgagee, in lieu of such termination, all of Operating Lessee’s right, title and interest in and to the Operating Lease.

          (b) If the Operating Lease is rejected by Ground Lessee or Owner, as debtor in possession, or by a trustee for Ground Lessee or Owner, pursuant to Section 365 of the Bankruptcy Code, Operating Lessee shall not exercise its right to elect under Section 365(h)(1) of the Bankruptcy Code to terminate or treat the Operating Lease as terminated. Any such election made shall be null and void. In any event, Operating Lessee hereby waives, for the benefit of Mortgagee, its successors and assigns only, and not enforceable by anyone else, the provisions of Section 365 of the Bankruptcy Code, or of any statute or rule of law now or hereafter in effect which gives or purports to give Operating Lessee any right of election to terminate the Operating Lease, to acquiesce in the termination of the Operating Lease or to surrender possession of the Property in the event of the bankruptcy, reorganization or insolvency of Ground Lessee, Owner or any other party.

          (c) If Ground Lessee or Owner, as debtor in possession, or by a trustee for Ground Lessee or Owner, attempts to transfer its interest in the Land and the Improvements free and clear of the Operating Lease pursuant to Section 363 of the Bankruptcy Code, Operating Lessee shall not consent, acquiesce or fail to object to such attempted transfer. Any such consent, acquiescence or failure to object made shall be null and void. In any event, Operating Lessee hereby waives, for the benefit of Mortgagee, its successors and assigns only, and not enforceable by anyone else, the provisions of Section 363 of the Bankruptcy Code, or of any statute or rule of law now or hereafter in effect which gives or purports to give Operating Lessee any right to consent to or acquiesce in the transfer of Owner’s or Ground Lessee’s interest in the Land and the Improvements free and clear of the Operating Lease, to acquiesce in the termination of the Operating Lease or to surrender possession of the Property in the event of the bankruptcy, reorganization or insolvency of Ground Lessee, Owner or any other party.

ARTICLE 21 — [STATE SPECIFIC PROVISIONS]

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

                                                               ,
a(n)                                           

By:                                                                   ,
         a(n)                                           

By:

Name:

Title:

                                                               ,
a(n)                                           

By:                                                                   ,
         a(n)                                           

By:

Name:

Title:

                                                               ,
a(n)                                           

By:                                                                   ,
         a(n)                                           

By:

Name:

Title:

ACKNOWLEDGMENTS

STATE OF                      

COUNTY OF                      

     The foregoing instrument was acknowledged before me on the       day of                      , 20      by                                            , the                                            of                                           , a(n)                                            , the                       of                                            , a(n)                      , on behalf of said                      , and who        is known to me, OR                       has produced                       as identification.

[SEAL]
	Notary Public
	MY COMMISSION EXPIRES:

STATE OF                      

COUNTY OF                      

     The foregoing instrument was acknowledged before me on the       day of                      , 20___ by                                           , the                                            of                                           , a(n)                                           , the                       of                                           , a(n)                      , on behalf of said                      , and who       is known to me, OR       has produced                       as identification.

[SEAL]
	Notary Public
	MY COMMISSION EXPIRES:

STATE OF                      

COUNTY OF                      

     The foregoing instrument was acknowledged before me on the ___day of                      , 20___ by                                           , the                                            of                                           , a(n)                                           , the                       of                                           , a(n)                      , on behalf of said                      , and who       is known to me, OR       has produced                       as identification.

[SEAL]
	Notary Public
	MY COMMISSION EXPIRES:

EXHIBIT A

(DESCRIPTION OF LAND)

EX-10.33.5

Exhibit 10.33.5

GUARANTY

          THIS GUARANTY (this “Guaranty”), dated as of May 3, 2010, is made by FELCOR LODGING LIMITED PARTNERSHIP, a Delaware limited partnership, having its principal place of business at c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062 (“Guarantor”), for the benefit of FORTRESS CREDIT CORP., a Delaware corporation, having its principal place of business at c/o Fortress Investment Group LLC, 1345 Avenue of the Americas, 46^th Floor, New York, New York 10105, for benefit of the Lenders (as defined herein) from time to time parties to the Loan Agreement (defined below) (collectively with its successors and assigns, “Administrative Agent”). Capitalized terms used but not defined herein shall have the meaning set forth in the Loan Agreement.

RECITALS

     A. FelCor/CMB Buckhead Hotel, L.L.C., FelCor/CMB Marlborough Hotel, L.L.C., FelCor/CMB Orsouth Holdings, L.P., FelCor/CMB Corpus Holdings, L.P., FelCor/CMB SSF Holdings, L.P., FelCor S-4 Hotels (SPE), L.L.C., DJONT/CMB Buckhead Leasing, L.L.C., DJONT/CMB FCOAM, L.L.C., DJONT/CMB Corpus Leasing, L.L.C., DJONT/CMB Orsouth Leasing, L.L.C., DJONT/CMB SSF Leasing, L.L.C., FelCor S-4 Leasing (SPE), L.L.C., and FCH/SH Leasing II, L.L.C. (each a “Borrower,” and collectively, “Borrowers”), Administrative Agent, in its capacity as administrative agent, Administrative Agent, in its capacity as initial lender (“Initial Lender”), and certain other Persons, collectively, as lenders (each a “Lender” and, collectively, the “Lenders”), have entered into that certain Credit Agreement dated as of the date hereof (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which Administrative Agent and the Lenders have agreed to make a loan (the “Loan”) to the Borrowers in the original principal sum of TWO HUNDRED TWELVE MILLION and 00/100 Dollars ($212,000,000.00).

     B. Borrowers, Administrative Agent, Initial Lender and Guarantor are parties to a certain Letter Agreement, dated as of the date hereof, which, among other things, sets forth certain guaranty obligations of Guarantor (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Letter Agreement”).

     C. Guarantor, directly or indirectly, owns 100% of Borrowers (other than FCH/SH Leasing II, L.L.C., of which Guarantor owns, directly or indirectly, 50% of the beneficial interest, and 100% of the voting interest), and Guarantor will to benefit from the Loan, and desires that Administrative Agent and Initial Lender enter into the Loan Agreement with Borrowers.

     D. Administrative Agent and Initial Lender are not willing to make the Loan to Borrowers unless Guarantor unconditionally guarantees payment and performance to Lender of the Guaranteed Obligations (as hereinafter defined).

          NOW, THEREFORE, as an inducement to Administrative Agent and Initial Lender to make the Loan to Borrowers, and for other good and valuable consideration, the

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receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

ARTICLE I — NATURE AND SCOPE OF GUARANTY

     Section 1.1 Guaranty of Obligations. Guarantor hereby irrevocably and unconditionally guarantees to Administrative Agent the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor.

     Section 1.2 Definition of Guaranteed Obligations. As used herein, the term “Guaranteed Obligations” means (i) Borrowers’ liability under Section 12.9(b) of the Loan Agreement, (ii) Borrowers’ liability under the Letter Agreement to pay the Franchise-Related Guaranteed Amount (as defined in the Letter Agreement), (iii) Borrowers’ liability under the Loan Agreement to pay the Incentive Management Fee Tie-In Amount, (iv) Borrowers’ liability under the Loan Agreement to pay the Brand Standards Renovation Payment Amount, (v) Borrowers’ liability under the Loan Agreement to pay the PIP Payment Amount, and (vi) upon the occurrence of a Full Recourse Event, Borrowers’ liability under Section 12.9(c) to pay the full amount of the Obligations.

     Section 1.3 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising or created after any attempted revocation by Guarantor and after (if Guarantor is a natural person) Guarantor’s death (in which event this Guaranty shall be binding upon Guarantor’s estate, legal representatives and heirs).

     Section 1.4 Payment by Guarantor. Guarantor shall, immediately upon demand by Administrative Agent, pay the amount due on the Guaranteed Obligations to Administrative Agent at Administrative Agent’s address as set forth herein or as otherwise instructed by Administrative Agent. Such demand(s) may be made at any time coincident with or after the time for payment of all or any part of the Guaranteed Obligations with respect to the same or different Guaranteed Obligations.

     Section 1.5 No Duty to Pursue Others. Administrative Agent shall not be required (and Guarantor hereby waives any rights to require Administrative Agent), in order to enforce the obligations of Guarantor hereunder, first (i) to institute suit or otherwise exhaust its remedies against any Borrower or any other Persons liable on the Loan or the Guaranteed Obligations, or against any other Person, (ii) to enforce Administrative Agent’s rights against any collateral given to secure the Loan, (iii) to enforce Administrative Agent’s rights against any other guarantors of the Guaranteed Obligations, (iv) to join Borrowers or any other Persons liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (v) to exhaust any available remedies against any collateral given to secure the Loan, or (vi) to resort to any other means of obtaining payment of the Guaranteed Obligations.

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     Section 1.6 Waivers. Guarantor agrees to the provisions of the Loan Documents and hereby waives notice of (i) any loans or advances made by Administrative Agent to Borrowers, (ii) acceptance of this Guaranty, (iii) any amendment, modification, replacement or extension of any Loan Document, (iv) the execution and delivery by Borrowers and/or Administrative Agent of any other agreements, promissory notes or other documents arising under the Loan Documents or in connection with the Collateral Property, (v) any Event of Default, (vi) Administrative Agent’s transfer, participation, componentization or other disposition of the Guaranteed Obligations, or any part thereof, (vii) sale or foreclosure (or posting or advertising therefor) of any collateral for the Guaranteed Obligations, (viii) protest, presentment, intention to accelerate the maturity, acceleration of the maturity, or proof of non-payment or default by Borrowers, or (ix) any other action taken or omitted by Administrative Agent and any and all demands and notices of every kind in connection with this Guaranty, the Loan Documents, and any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and any other obligations hereby guaranteed.

     Section 1.7 Payment of Expenses. If Guarantor fails to timely perform any provisions of this Guaranty, Guarantor shall, immediately upon demand by Administrative Agent, pay Administrative Agent any and all reasonable costs and expenses (including court costs and reasonable attorneys’ fees and expenses) incurred by Administrative Agent in the enforcement hereof or the preservation of Administrative Agent’s rights hereunder. The covenant contained in this Section 1.7 shall survive the payment and performance of the Guaranteed Obligations.

     Section 1.8 Effect of Bankruptcy. If pursuant to any Insolvency Proceeding concerning any Borrower or Guarantor, Administrative Agent must rescind, restore or return any payment or any part thereof received by Administrative Agent in satisfaction (in full or in part) of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to Guarantor by Administrative Agent shall be without effect, and this Guaranty shall remain in full force and effect. Guarantor acknowledges that Guarantor’s obligations hereunder shall not be discharged except by Guarantor’s performance of same and then only to the extent of such performance. In addition, if at any time any payment of principal, interest or any other amount payable by Borrowers under any Loan Document, is rescinded or must be restored or returned pursuant to an Insolvency Proceeding concerning any Borrower or otherwise, Guarantor’s obligations hereunder with respect to such payment shall be fully reinstated as though such payment has been due but not made.

     Section 1.9 Waiver of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any and all rights it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantor to the rights of Administrative Agent), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by Guarantor under or in connection with this Guaranty or otherwise until the Obligations are paid in full. The provisions of this paragraph shall survive the termination of this Guaranty, and any satisfaction and discharge of any Borrower by virtue of any payment, court order or any applicable law.

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     Section 1.10 Borrower. The term “Borrower” or “Borrowers” as used herein shall include any new or successor corporation, association, partnership (general or limited), limited liability company, joint venture, trust or other individual or organization formed as a result of any merger, reorganization, sale, transfer, assignment, devise, gift or bequest of or by Borrower or Borrowers or any interest in Borrower, Borrowers or the Loan.

ARTICLE II — EVENTS AND CIRCUMSTANCES NOT
REDUCING OR DISCHARGING GUARANTOR’S OBLIGATIONS

     Section 2.1 Events and Circumstances Not Reducing or Discharging Guarantor’s Obligations. Guarantor hereby consents and agrees to each of the following and agrees that Guarantor’s obligations hereunder shall not be released, diminished, impaired, reduced or adversely affected in any way by any of the following, and waives any common law, equitable, statutory or other rights (including, without limitation, rights to notice) which Guarantor might have in connection with any of the following:

          (a) Modifications, Releases, Etc. Any (i) renewal, extension, increase, reduction, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, any Loan Document, or any other document or agreement between any Borrower and Administrative Agent or any other parties pertaining to the Guaranteed Obligations (including, without limitation, any sale, assignment, or negotiation of the Note); (ii) adjustment, indulgence, forbearance or compromise that might be extended, granted or given by Administrative Agent to any Borrower or Guarantor; (iii) full or partial release of the liability of Borrowers, Guarantor, or any other Person, with respect to the Guaranteed Obligations; (iv) taking or accepting of any other security, collateral or guaranty of payment for all or any part of the Guaranteed Obligations; or (v) release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including, without limitation, negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations.

          (b) Condition of Borrowers or Guarantor. The existence of an Insolvency Proceeding concerning any Borrower, Guarantor or any other party liable for the payment of all or part of the Guaranteed Obligations, or any dissolution of any Borrower or Guarantor or any sale, lease or transfer of any or all of the assets of any Borrower or Guarantor, or any changes in the shareholders, partners or members of any Borrower or Guarantor, or any merger, consolidation, or reorganization of any Borrower or Guarantor into or with any other Person.

          (c) Invalidity, Unenforceability, Offset, Etc. The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations or any Loan Document, or of any other document or agreement executed in connection with the Guaranteed Obligations for any reason whatsoever, including, without limitation, the fact that (i) the Guaranteed Obligations or any part thereof exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or representatives executing the Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) any Borrower has

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valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from one or more of Borrowers, and whether such defense, claim, or right of offset arises in connection with the Guaranteed Obligations, the transactions creating same, or otherwise (including any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal and any defense of the statute of limitations in any action hereunder or in any action for the collection or performance of any obligations hereby guaranteed), (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations, or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, (vii) any Loan Document has been forged, or is not genuine or authentic, it being agreed that Guarantor shall remain liable hereunder regardless of whether any Borrower or any other person be found not liable on the Guaranteed Obligations or any part thereof for any reason, or (viii) any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being acknowledged and agreed by Guarantor that Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations.

          (d) Care and Diligence. The failure of Administrative Agent or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of any collateral, property or security, including, without limitation, any neglect, delay, omission, failure or refusal of Administrative Agent (i) to take or prosecute any action for the collection of any of the Guaranteed Obligations, (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.

          (e) Preference. Any payment by any Borrower to Administrative Agent is held to constitute a preference under bankruptcy laws or for any reason Administrative Agent is required to refund or remit any such payment or amount to any Borrower or any other Person.

          (f) Other Actions Taken or Not Taken. Any other action taken or not taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or inaction prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof.

ARTICLE III — REPRESENTATIONS AND WARRANTIES

     Section 3.1 Representations and Warranties. To induce Administrative Agent and the Initial Lender to enter into the Loan Documents and to make the Loan, Guarantor represents and

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warrants to Administrative Agent that: (a) Guarantor will receive a direct or indirect benefit from the making of the Loan to Borrowers; (b) Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition of Borrowers and any and all collateral intended to be given as security for the payment of the Obligations; (c) after giving effect to this Guaranty, Guarantor is and will remain solvent; (d) to Guarantor’s knowledge, the execution, delivery and performance by Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation to which Guarantor is subject, or constitute a default (or which with notice, or lapse of time, or both, would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, or any contract or agreement to which Guarantor is a party or which may be applicable to Guarantor; (e) to Guarantor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any Governmental Authority or other person, and no approval, authorization or consent of any other Person is required in connection with this Guaranty; (f) to Guarantor’s knowledge, there are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now pending and served or, to Guarantor’s knowledge, threatened, involving or concerning Guarantor, and (g) this Guaranty is a legal, valid and binding obligation of Guarantor, and is enforceable in accordance with its terms, except as may be limited by principles of equity, bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights.

     Section 3.2 Additional Provisions. Without limiting anything set forth in Section 3.1 above, Guarantor hereby represents, warrants, covenants and agrees as follows:

          (a) Guarantor (i) is duly organized and validly existing in good standing under the laws of the State of Delaware, (ii) is duly qualified to do business in each jurisdiction in which the nature of its business makes such qualification necessary, (iii) has the requisite power and authority to carry on its business as now being conducted, and (iv) has the requisite power to execute and deliver, and perform its obligations under, this Guaranty and any other Loan Document to which it is a party.

          (b) The execution and delivery by Guarantor of this Guaranty and any other Loan Document to which it is a party, and Guarantor’s performance of its obligations thereunder (i) have been duly authorized by all requisite action on the part of Guarantor, (ii) will not violate any provision of any applicable Legal Requirements, and (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any Lien of any nature whatsoever upon any of the property or assets of Guarantor pursuant to, any indenture or agreement or instrument. This Guaranty and the other Loan Documents to which Guarantor is a party have been duly executed and delivered by Guarantor.

ARTICLE IV — SUBORDINATION OF CERTAIN INDEBTEDNESS

     Section 4.1 Subordination of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean any and all debts and liabilities of any Borrower owed to Guarantor, whether now existing or hereafter incurred, including, without limitation, all rights and claims of Guarantor against any Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor’s payment of all or any portion of the Guaranteed Obligations. Without

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limiting the provisions of Section 1.9, Guarantor hereby subordinates its rights to receive any payment from any Borrower on account of any Guarantor Claims to the full and indefeasible payment of the Obligations payable to Administrative Agent. Following the occurrence of an Event of Default, Guarantor shall not demand, receive or collect, directly or indirectly, from any Borrower or any other party, and shall not claim any offset or other reduction of Guarantor’s obligations hereunder because of, any amount pursuant to or in satisfaction of the Guarantor Claims until the Obligations are paid in full.

     Section 4.2 Claims in Bankruptcy. In the event of an Insolvency Proceeding involving Guarantor as debtor, Administrative Agent shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable pursuant to or in satisfaction of Guarantor Claims. Guarantor hereby assigns any and all such dividends and payments to Administrative Agent.

     Section 4.3 Payments Held in Trust. If, notwithstanding anything to the contrary contained in this Guaranty, Guarantor should receive any funds, payment, claim or distribution which is prohibited hereunder, Guarantor covenants and agrees to hold in trust for Administrative Agent an amount equal to the amount of all funds, payments, claims or distributions so received, and Guarantor acknowledges and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions so received, except to pay them promptly to Administrative Agent, and Guarantor hereby covenants and agrees promptly to pay the same to Administrative Agent.

     Section 4.4 Liens Subordinate; Standstill. Guarantor acknowledges and agrees that any liens, security interests, judgment liens, charges or other encumbrances upon any Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon such Borrower’s assets securing payment of the Guaranteed Obligations, regardless of whether such encumbrances in favor of Guarantor or Administrative Agent presently exist or are hereafter created or attach. Guarantor shall not (i) exercise or enforce any creditor’s right it may have against any Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including, without limitation, the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of any Borrower held by Guarantor.

ARTICLE V — MISCELLANEOUS

     Section 5.1 Waiver. No failure to exercise, and no delay in exercising, on the part of Administrative Agent, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of Administrative Agent hereunder shall be in addition to all other rights provided by law. No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

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     Section 5.2 Notices. All notices, consents, approvals, demands and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) hand delivery, with proof of attempted delivery, (b) certified or registered United States mail, postage prepaid, (c) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (d) by telecopier (with answerback acknowledged) provided that such telecopied notice must also be delivered by one of the means set forth in (a), (b) or (c) above, addressed to the parties as follows:

If to Administrative Agent:

Fortress Credit Corp.
1345 Avenue of the Americas, 46^th Floor
New York, New York 10105
Attention: James K. Noble III
Facsimile No.: (212) 798-6090

with a copy to:

Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attention: Robert L. Golub, Esq.
Facsimile No.: (212) 839-5599

If to Guarantor:

FelCor Lodging Limited Partnership
545 E. John Carpenter Freeway, Suite 1300
Irving, Texas 75062
Attention: General Counsel
Facsimile No.: (972 ) 444-4949

with a copy to:

Akin Gump Strauss Hauer & Feld LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention: Robert W. Dockery, Esq.
Facsimile No.: (214) 969-4343

A party receiving a notice which does not comply with the technical requirements for notice under this Section 5.2 may elect to waive any deficiencies and treat the notice as having been properly given. A notice shall be deemed to have been given: (a) in the case of hand delivery, at the time of delivery; (b) in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; (c) in the case of expedited prepaid delivery upon the first attempted delivery on a Business Day; or (d) in the case of telecopier, upon receipt of

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answerback confirmation, provided that such telecopied notice was also delivered as required in this Section 5.2.

     Section 5.3 Governing Law; Submission to Jurisdiction; Choice of Forum.

          (a) This Guaranty shall be interpreted and enforced according to the laws of the state of New York (without giving effect to rules regarding conflict of laws).

          (b) GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS GUARANTY OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES OR GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (c) GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

     Section 5.4 Severability. Wherever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

     Section 5.5 Modification; Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Guaranty, nor consent to any

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departure by Guarantor therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Guarantor, shall entitle Guarantor to any other or future notice or demand in the same, similar or other circumstances.

     Section 5.6 Number and Gender. All references to sections and exhibits are to sections and exhibits in or to this Guaranty unless otherwise specified. Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Guaranty shall refer to this Guaranty as a whole and not to any particular provision, article, section or other subdivision of this Guaranty. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined. 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 5.7 Headings, Etc. The headings and captions of various paragraphs of this Guaranty are for the 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 5.8 Counterparts. This Guaranty may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Guaranty. The failure of any party hereto to execute this Guaranty, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

     Section 5.9 Rights and Remedies. If Guarantor becomes liable for any indebtedness owing by any Borrower to Administrative Agent, by endorsement or otherwise, other than pursuant to this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Administrative Agent hereunder shall be cumulative of any and all other rights that Administrative Agent may ever have against Guarantor. The exercise by Administrative Agent of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.

     Section 5.10 Entire Agreement. This Guaranty and the other Loan Documents embody the final, entire agreement of Guarantor and Administrative Agent with respect to the Guarantor’s guaranty of the Guaranteed Obligations and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. This Guaranty is intended by Guarantor and Administrative Agent as a final and complete expression of the terms of the Guaranty, and no course of dealing between Guarantor and Administrative Agent, no course of performance, no trade practices, and no evidence of prior, contemporaneous or subsequent oral agreements or discussions or other extrinsic evidence of any nature shall be used to contradict, vary, supplement or modify any term of this Guaranty. There are no oral agreements between Guarantor and Administrative Agent.

     Section 5.11 Waiver of Right to Trial by Jury. GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

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LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ADMINISTRATIVE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ADMINISTRATIVE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     Section 5.12 Cooperation.

          (a) Guarantor acknowledges that Administrative Agent may engage in one or more Secondary Market Transactions in accordance with the Loan Agreement. Guarantor shall cooperate with Administrative Agent in effecting all such Secondary Market Transactions and shall cooperate to implement the requirements imposed by any Rating Agency involved in any Secondary Market Transaction. Guarantor shall provide such information and documents Guarantor has in its possession relating to Guarantor, any Borrower, any Collateral Property and any tenants of the Improvements as Administrative Agent may reasonably request in connection with such Secondary Market Transaction. In addition, Guarantor shall make available to Administrative Agent all information concerning its business and operations that Administrative Agent may reasonably request. Administrative Agent shall be permitted to share all such information with the investment banking firms, Rating Agencies, accounting firms, law firms and other third-party advisory firms and parties involved with the Loan and/or any Secondary Market Transaction. It is understood and acknowledged that the information provided by Guarantor to Administrative Agent may ultimately be incorporated into the offering documents for such Secondary Market Transaction, and thus, various investors may also have access to such information. Administrative Agent and all of the aforesaid third-party advisors and professional firms shall be entitled to rely on the information supplied by, or on behalf of, Guarantor in such form as provided. Administrative Agent may publicize the Loan in connection with any Secondary Market Transaction or its business development.

          (b) Upon any transfer or proposed transfer contemplated above and by Article 14 of the Loan Agreement, at Administrative Agent’s request, Guarantor shall provide an estoppel certificate to any investor or any prospective investor in a Secondary Market Transaction, in such form and substance as Administrative Agent, or such investor or prospective investor, may reasonably require.

     Section 5.13 Exculpation. Notwithstanding anything to the contrary in this Guaranty, the only entity or person with any financial or other obligation under this Guaranty, at law or in equity, is Guarantor, and Administrative Agent and Lenders shall look solely to the assets of Guarantor and its general partner(s) for the satisfaction of any claim arising under, or in connection with, this Guaranty, at law or equity. Notwithstanding anything to the contrary contained in this Guaranty, except for any general partner of Guarantor, no present or future

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Constituent Member (as hereinafter defined) in Guarantor, nor any present or future shareholder, officer, director, employee, trustee, beneficiary, advisor, member, partner, principal, participant or agent of or in Guarantor or of or in any person or entity that is or becomes a Constituent Member in Guarantor, shall have any personal or other liability, directly or indirectly, under or in connection with this Guaranty. Administrative Agent and Lenders, on behalf of themselves and their respective successors and assigns, hereby waive any and all such personal or other liability. The term “Constituent Member”, as used herein, shall mean any direct partner or member in Guarantor and any Person that, directly or indirectly through one or more other partnerships, limited liability companies, corporations or other entities, is a partner or member in Guarantor except for any general partner of Guarantor. Notwithstanding anything to the contrary contained in this Guaranty, neither the negative capital account of any Constituent Member in Guarantor nor any obligation of any Constituent Member in Guarantor to restore a negative capital account or to contribute or loan capital to Guarantor or to any other Constituent Member in Guarantor shall at any time be deemed to be the property or an asset of Guarantor (or any such other Constituent Member) and neither Administrative Agent nor Lenders nor any of their respective successors or assigns shall have any right to collect, enforce or proceed against any Constituent Member with respect to any such negative capital account or obligation to restore, contribute or loan.

     Section 5.14 California State-Specific Waiver. In the event of any inconsistencies between the terms and conditions of this Section 5.14 and the other terms and conditions of this Guaranty, the terms and conditions of this Section 5.14 shall control and be binding. Guarantor hereby waives:

     (i) Presentment, demand, protest, notice of protests, notice of dishonor, notice of intention to accelerate, notice of acceleration and notices of non-payment and notice of acceptance of this Guaranty;

     (ii) The right, if any, to the benefit of or to direct the application of, any security held by Administrative Agent, including any Collateral Properties; and all rights of subrogation, any right to enforce any remedy which Guarantor now has or hereafter may have against any Borrower and any right to participate in any security now or hereafter held by Administrative Agent;

     (iii) The right to require Administrative Agent to proceed against any Borrower or to proceed against any security now or hereafter held by Administrative Agent or to pursue any other remedy in Administrative Agent’s power;

     (iv) The benefits, if Guarantor is entitled to any benefits, of any single-action legislation or of any or all anti-deficiency statutes or regulations or judicial interpretations thereof, including, but not limited to, any protection which may be afforded Guarantor by California Code of Civil Procedure Sections 580a, 580b, 580d and 726, and any amendments or modifications thereto. Guarantor understands and agrees that by waiving the anti-deficiency protections referred to herein, Guarantor can be held liable for a deficiency judgment following a non-judicial foreclosure sale (including a non-judicial foreclosure sale of a purchase money obligation) even if the price paid for any Collateral Property at the non-judicial foreclosure sale is less than the fair value of such Collateral

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Property; and Guarantor further understands and agrees that Guarantor is waiving its defense that the price paid for any Collateral Property at a judicial foreclosure sale may not be equal to the fair value of such Collateral Property; and Guarantor further understands and agrees that by Guarantor waiving its right to a fair value hearing following the foreclosure sale that Administrative Agent can seek a deficiency against Guarantor up to the entire amount of the sums guaranteed hereby less the amount paid for any Collateral Property at the non-judicial or judicial foreclosure sale;

     (v) Any right of subrogation which Guarantor may have under California law to seek reimbursement from any Borrower of any sums paid by Guarantor to Administrative Agent pursuant to this Guaranty until the prior full and indefeasible repayment of the Loan in accordance with the Loan Documents;

     (vi) Any estoppel defense arising out of Section 580d of the California Code of Civil Procedure;

     (vii) Any defense arising out of absence, impairment or loss of any right of reimbursement or subrogation or other right or remedy of Guarantor against a Borrower or against any security resulting from the exercise or election of any remedies by Administrative Agent, including the exercise of the power of sale under any Mortgage, and any defense arising by reason of any disability or other defense of a Borrower or by reason of the cessation, from any cause, of the liability of a Borrower;

     (viii) The benefit of or right to assert any statue of limitations affecting Guarantor’s liability hereunder or the enforcement thereof, including but not limited to the provisions of California Code of Civil Procedure Sections 580a and 726 that require that any action for a deficiency be brought within three (3) months after a foreclosure under any Mortgage;

     (ix) Any partial payment by any Borrower or other circumstances which operate to toll any statute of limitations as to any Borrower shall also operate to toll the statute of limitations as to Guarantor;

     (x) Any defense based upon any change in name, location, composition or structure of any Borrower, or any change in the type of business conducted by any Borrower, or any other change in the identity or legal status of any Borrower;

     (xi) Any defense based upon the failure (if any) of Administrative Agent to (i) obtain a similar guaranty from any other Person, or (ii) file a creditor’s claim in the estate (in administration, bankruptcy or any other proceeding) of any Person;

     (xii) Any rights which Guarantor may have under California Civil Code Sections 2809, 2810, 2819, 2822(a), 2845, 2849, 2850, 2899 and 3433; and

     (xiii) Without limiting the foregoing, Guarantor waives all rights and defenses that Guarantor may have because Borrowers’ debt is secured by real property. This means, among other things:

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(A)	Administrative Agent may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by any Borrower.
(B)	If Administrative Agent forecloses on any real property collateral pledged by any Borrower:

(1)	The amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.
(2)	Administrative Agent may collect from Guarantor even if Administrative Agent, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from any Borrower.

     This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because Borrowers’ debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

     Guarantor waives all rights and defenses arising out of an election of remedies by Administrative Agent, even though the election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement against any Borrower by the operation of Section 580d of the California Code of Civil Procedure or otherwise.

[NO FURTHER TEXT ON THIS PAGE]

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

GUARANTOR:
FELCOR LODGING LIMITED PARTNERSHIP
By:	FelCor Lodging Trust Incorporated, its general partner
	By:
		Name:	Jeffrey D. Symes
		Title:	Vice President

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EX-21.1

EXHIBIT 21.1
LIST OF THE SUBSIDIARIES OF FELCOR LODGING TRUST INCORPORATED
(as of May 12, 2010)

	Name	State and Form of Organization
1.	BHR Canada Tenant Company	Nova Scotia, Canada — Unlimited Liability Company
2.	BHR Lodging Tenant Company	Delaware — Corporation
3.	BHR Operations, L.L.C.	Delaware — Limited Liability Company
4.	Brighton at Kingston Plantation, L.L.C.	Delaware — Limited Liability Company
5.	DJONT Leasing, L.L.C.	Delaware — Limited Liability Company
6.	DJONT Operations, L.L.C.	Delaware — Limited Liability Company
7.	DJONT/Charlotte Leasing, L.L.C.	Delaware — Limited Liability Company
8.	DJONT/CMB Buckhead Leasing, L.L.C.	Delaware — Limited Liability Company
9.	DJONT/CMB Corpus Leasing, L.L.C.	Delaware — Limited Liability Company
10.	DJONT/CMB Deerfield Leasing, L.L.C.	Delaware — Limited Liability Company
11.	DJONT/CMB FCOAM, L.L.C.	Delaware — Limited Liability Company
12.	DJONT/CMB New Orleans Leasing, L.L.C.	Delaware — Limited Liability Company
13.	DJONT/CMB Orsouth Leasing, L.L.C.	Delaware — Limited Liability Company
14.	DJONT/CMB Piscataway Leasing, L.L.C.	Delaware — Limited Liability Company
15.	DJONT/CMB SSF Leasing, L.L.C.	Delaware — Limited Liability Company
16.	DJONT/EPT Leasing, L.L.C.	Delaware — Limited Liability Company
17.	DJONT/EPT Manager, Inc. (f/k/a DJONT/Promus Manager, Inc.)	Delaware — Corporation
18.	DJONT/Indianapolis Leasing, L.L.C.	Delaware — Limited Liability Company
19.	DJONT/JPM Atlanta ES Leasing, L.L.C.	Delaware — Limited Liability Company
20.	DJONT/JPM Austin Leasing, L.P.	Delaware — Limited Partnership
21.	DJONT/JPM Austin Tenant Co., L.L.C.	Delaware — Limited Liability Company
22.	DJONT/JPM Boca Raton Leasing, L.L.C.	Delaware — Limited Liability Company
23.	DJONT/JPM BWI Leasing, L.L.C.	Delaware — Limited Liability Company
24.	DJONT/JPM Hospitality Leasing Holdco (SPE), L.L.C.	Delaware — Limited Liability Company

	Name	State and Form of Organization
25.	DJONT/JPM Hospitality Leasing (SPE), L.L.C.	Delaware — Limited Liability Company
26.	DJONT/JPM Leasing, L.L.C.	Delaware — Limited Liability Company
27.	DJONT/JPM Orlando Leasing, L.L.C.	Delaware — Limited Liability Company
28.	DJONT/JPM Phoenix Leasing, L.L.C.	Delaware — Limited Liability Company
29.	DJONT/JPM Wilmington Leasing, L.L.C.	Delaware — Limited Liability Company
30.	E.S. Charlotte Limited Partnership	Delaware — Limited Partnership
31.	E.S. North, an Indiana Limited Partnership	Indiana — Limited Partnership
32.	EPT Atlanta-Perimeter Center Limited Partnership	Delaware — Limited Partnership
33.	EPT Austin Limited Partnership	Delaware — Limited Partnership
34.	EPT Kansas City Limited Partnership	Delaware — Limited Partnership
35.	EPT Meadowlands Limited Partnership	Delaware — Limited Partnership
36.	EPT Raleigh Limited Partnership	Delaware — Limited Partnership
37.	FCH/DT BWI Holdings, L.P. (f/k/a B.D. Eastrich BWI No. 1 Limited Partnership)	Delaware — Limited Partnership
38.	FCH/DT BWI Hotel, L.L.C.	Delaware — Limited Liability Company
39.	FCH/DT Holdings, L.P.	Delaware — Limited Partnership
40.	FCH/DT Hotels, L.L.C.	Delaware — Limited Liability Company
41.	FCH/HHC Hotels, L.L.C.	Delaware — Limited Liability Company
42.	FCH/HHC Leasing, L.L.C.	Delaware — Limited Liability Company
43.	FCH/IHC Hotels, L.P.	Delaware — Limited Partnership
44.	FCH/IHC Leasing, L.P.	Delaware — Limited Partnership
45.	FCH/JVEIGHT Leasing, L.L.C. (f/k/a FCH/Interstate Leasing, L.L.C. and FCH/Deerfield Development Co., L.L.C.)	Delaware — Limited Liability Company
46.	FCH/PSH, L.P. (f/k/a Rouse & Associates-SHS)	Pennsylvania — Limited Partnership
47.	FCH/SH Leasing, L.L.C.	Delaware — Limited Liability Company
48.	FCH/SH Leasing II, L.L.C.	Delaware — Limited Liability Company
49.	FelCor Burlington Land, L.L.C.	Delaware — Limited Liability Company
50.	FelCor Canada Co.	Nova Scotia, Canada — Unlimited Liability Company

	Name	State and Form of Organization
51.	FelCor Canada Holding GP, L.L.C.	Delaware — Limited Liability Company
52.	FelCor Canada Holding, L.P.	Delaware — Limited Partnership
53.	FelCor Chat-Lem, L.L.C.	Delaware — Limited Liability Company
54.	FelCor Eight Hotels, L.L.C.	Delaware — Limited Liability Company
55.	FelCor Escrow Holdings, L.L.C.	Delaware — Limited Liability Company
56.	FelCor Esmeralda (SPE), L.L.C.	Delaware — Limited Liability Company
57.	FelCor Esmeralda Leasing (SPE), L.L.C.	Delaware — Limited Liability Company
58.	FelCor Holdings Trust	Massachusetts — Business Trust
59.	FelCor Hotel Asset Company, L.L.C.	Delaware — Limited Liability Company
60.	FelCor Hotel Operating Company, L.L.C.	Delaware — Limited Liability Company
61.	FelCor Lodging Holding Company, L.L.C.	Delaware — Limited Liability Company
62.	FelCor Lodging Limited Partnership (f/k/a FelCor Suites Limited Partnership)	Delaware — Limited Partnership
63.	FelCor Napa Development, L.L.C.	Delaware — Limited Liability Company
64.	FelCor Omaha Hotel Company, L.L.C.	Delaware — Limited Liability Company
65.	FelCor Pennsylvania Company, L.L.C.	Delaware — Limited Liability Company
66.	FelCor S-4 Hotels (SPE), L.L.C.	Delaware — Limited Liability Company
67.	FelCor S-4 Leasing (SPE), L.L.C.	Delaware — Limited Liability Company
68.	FelCor St. Pete (SPE), L.L.C.	Delaware — Limited Liability Company
69.	FelCor St. Pete Leasing (SPE), L.L.C.	Delaware — Limited Liability Company
70.	FelCor TRS Borrower 1, L.P.	Delaware — Limited Partnership
71.	FelCor TRS Borrower GP 1, L.L.C.	Delaware — Limited Liability Company
72.	FelCor TRS Borrower 4, L.L.C.	Delaware — Limited Liability Company
73.	FelCor TRS Guarantor, L.P.	Delaware — Limited Partnership
74.	FelCor TRS Guarantor GP, L.L.C.	Delaware — Limited Liability Company
75.	FelCor TRS Holdings, L.L.C.	Delaware — Limited Liability Company
76.	FelCor/Charlotte Hotel, L.L.C.	Delaware — Limited Liability Company
77.	FelCor/CMB Buckhead Hotel, L.L.C.	Delaware — Limited Liability Company

	Name	State and Form of Organization
78.	FelCor/CMB Corpus Holdings, L.P.	Delaware — Limited Partnership
79.	FelCor/CMB Corpus Hotel, L.L.C.	Delaware — Limited Liability Company
80.	FelCor/CMB Deerfield Hotel, L.L.C.	Delaware — Limited Liability Company
81.	FelCor/CMB Marlborough Hotel, L.L.C.	Delaware — Limited Liability Company
82.	FelCor/CMB New Orleans Hotel, L.L.C.	Delaware — Limited Liability Company
83.	FelCor/CMB Orsouth Holdings, L.P.	Delaware — Limited Partnership
84.	FelCor/CMB Orsouth Hotel, L.L.C.	Delaware — Limited Liability Company
85.	FelCor/CMB Piscataway Hotel, L.L.C.	Delaware — Limited Liability Company
86.	FelCor/CMB SSF Holdings, L.P.	Delaware — Limited Partnership
87.	FelCor/CMB SSF Hotel, L.L.C.	Delaware — Limited Liability Company
88.	FelCor/CSS Holdings, L.P.	Delaware — Limited Partnership
89.	FelCor/CSS Hotels, L.L.C.	Delaware — Limited Liability Company
90.	FelCor/CSS (SPE), L.L.C.	Delaware — Limited Liability Company
91.	FelCor/Indianapolis Hotel, L.L.C.	Delaware — Limited Liability Company
92.	FelCor/Iowa-New Orleans Chat-Lem Hotel, L.L.C.	Delaware — Limited Liability Company
93.	FelCor/JPM Atlanta ES Hotel, L.L.C.	Delaware — Limited Liability Company
94.	FelCor/JPM Austin Holdings, L.P.	Delaware — Limited Partnership
95.	FelCor/JPM Austin Hotel, L.L.C.	Delaware — Limited Liability Company
96.	FelCor/JPM Boca Raton Hotel, L.L.C.	Delaware — Limited Liability Company
97.	FelCor/JPM BWI Hotel, L.L.C.	Delaware — Limited Liability Company
98.	FelCor/JPM Hospitality Holdco (SPE), L.L.C.	Delaware — Limited Liability Company
99.	FelCor/JPM Hospitality (SPE), L.L.C.	Delaware — Limited Liability Company
100.	FelCor/JPM Hotels, L.L.C.	Delaware — Limited Liability Company
101.	FelCor/JPM Orlando Hotel, L.L.C.	Delaware — Limited Liability Company
102.	FelCor/JPM Phoenix Hotel, L.L.C.	Delaware — Limited Liability Company
103.	FelCor/JPM Wilmington Hotel, L.L.C.	Delaware — Limited Liability Company
104.	FelCor/LAX Holdings, L.P.	Delaware — Limited Partnership
105.	FelCor/LAX Hotels, L.L.C.	Delaware — Limited Liability Company

	Name	State and Form of Organization
106.	FelCor/MM S-7 Holdings, L.P.	Delaware — Limited Partnership
107.	FelCor/MM S-7 Hotels, L.L.C.	Delaware — Limited Liability Company
108.	FelCor/New Orleans Annex, L.L.C.	Delaware — Limited Liability Company
109.	FelCor/St. Paul Holdings, L.P.	Delaware — Limited Partnership
110.	FelCor/Tysons Corner Hotel Company, L.L.C.	Delaware — Limited Liability Company
111.	Grande Palms, L.L.C.	Delaware — Limited Liability Company
112.	HI Chat-Lem/Iowa-New Orleans Joint Venture	Louisiana — General Partnership
113.	Kingston Plantation Development Corp.	Delaware — Corporation
114.	Los Angeles International Airport Hotel Associates, a Texas Limited Partnership	Texas — Limited Partnership
115.	Lovefield Beverage Corporation	Texas — Corporation
116.	Margate Towers at Kingston Plantation, L.L.C.	Delaware — Limited Liability Company
117.	MHV Joint Venture	Texas — General Partnership
118.	Napa Creek Residential, L.L.C.	Delaware — Limited Liability Company
119.	Park Central Joint Venture	Texas — General Partnership
120.	Promus/FCH Condominium Company, L.L.C.	Delaware — Limited Liability Company
121.	Promus/FCH Development Company, L.L.C.	Delaware — Limited Liability Company
122.	Promus/FelCor Hotels, L.L.C.	Delaware — Limited Liability Company
123.	Promus/FelCor Lombard Venture	Illinois — General Partnership
124.	Promus/FelCor Manager, Inc.	Delaware — Corporation
125.	Promus/FelCor Parsippany Venture	New Jersey — General Partnership
126.	Promus/FelCor San Antonio Venture	Texas — General Partnership
127.	Royale Palms Rental, L.L.C.	Delaware — Limited Liability Company
128.	Tysons Corner Hotel Company, L.L.C.	Delaware — Limited Liability Company

EX-23.1

Exhibit 23.1

PriceaterhouseCoopers LLP

Suite 1800

2001 Ross Ave.

Dallas TX 75201-2997

Telephone (214) 999 1400

Facsimile (214) 754 7991

www.pwc.com

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form S-11 of our report dated February 25, 2010 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in FelCor Lodging Trust Incorporated’s Annual Report on Form 10-K for the year ended December 31, 2009. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP
Dallas, Texas
May 12, 2010