Common use of Replacement Reserve Clause in Contracts

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement capital improvement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work which would normally be treated as Mortgagor deems necessary or appropriate a capital improvement under generally accepted accounting principles (collectively, the “RepairsReplacements”). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly first Payment Date under the NoteNote and continuing on each Payment Date thereafter, concurrently with and Mortgagor shall pay to Mortgagee, in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$1,163 per month. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Replacements within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor in a form approved in writing by Mortgagee that the applicable item of Repair Replacement has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the RepairsReplacements; (c) for disbursement requests with individual items in excess of $50,000.0025,000, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs Replacements and verifying the completion of the Repairs Replacements and the value of the completed RepairsReplacements; and (e) for disbursement requests costing in excess of $50,000.0050,000, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such RepairsReplacements, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety sixty (9060) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs Replacements of the Mortgaged Property; such inspection to be no more frequent than once in any calendar year unless a Default or an Event of Default shall have occurred and is continuing. In the event that such inspection reveals that further Repairs Replacements of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs Replacements and Mortgagor shall respond complete such Replacements to the reasonable satisfaction of Mortgagee within thirty one hundred twenty (30120) days after the receipt of such requestdescription from Mortgagee, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within in its sole discretion. (b) Mortgagee shall cause funds in the Replacement Reserve to be deposited into interest bearing accounts of the type customarily maintained by Mortgagee or its servicing agent for the investment of similar reserves, which accounts may not yield the highest interest rate then available. Interest payable on such time period as may amounts shall be mutually agreed uponcomputed based on the daily outstanding balance in the Replacement Reserve. Funds contained in Such interest shall be calculated on a simple, non-compounded interest basis based solely on contributions made to the Replacement Reserve by Mortgagor. All interest earned on amounts contributed to the Replacement Reserve shall be placed in an interest-bearing account upon receipt retained by Mortgagee and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security accumulated for the payment benefit of Mortgagor and performance by Mortgagor of all duties, responsibilities and obligations under added to the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest balance in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely disbursed for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any other funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Replacement Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments are to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretodisbursed.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Grantor shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Beneficiary for payment of costs and expenses incurred by Mortgagor Grantor in connection with the repairperformance of work related to the maintenance, replacement and maintenance and/or repair of the furnitureTrust Property, fixtures and equipment at the Mortgaged Property and the performance of including without limitation, work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor Grantor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Grantor shall pay to Beneficiary, concurrently with and in addition to the monthly payments due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,375.00 per month. So long as no Event of Default has occurred and is continuing, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Beneficiary in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expense of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuing, Mortgagee Beneficiary shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Grantor the amount paid or incurred by Mortgagor Grantor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Beneficiary of a written request from Mortgagor Grantor for disbursement from the Replacement Reserve and a certification by Mortgagor Grantor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Beneficiary of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to MortgageeBeneficiary, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items costing in excess of $50,000.00, the delivery to Mortgagee Beneficiary of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Beneficiary showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Trust Property have been paid all amounts due for labor and materials furnished to the Mortgaged Trust Property; (d) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a certification from an inspecting architect or other a third party acceptable to Mortgagee Beneficiary describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Grantor that no new certificate of occupancy is required. Mortgagee Beneficiary shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee Beneficiary shall be entitled to rely on such request from Mortgagor Grantor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Beneficiary may, at Mortgagor’s Grantor's expense, make or cause to be made during the term of this Mortgage Xxxx xx Trust an annual inspection of the Mortgaged Trust Property to determine the need, as determined by Mortgagee Beneficiary in its reasonable judgment, for further Repairs of the Mortgaged Trust Property. In the event that such inspection reveals that further Repairs of the Mortgaged Trust Property are required, Mortgagee Beneficiary shall provide Mortgagor Grantor with a written description of the required Repairs and Mortgagor Grantor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor Grantor shall make such Repairs Repairs, as may be mutually agreed upon by Mortgagor Grantor and Mortgagee Beneficiary and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Grantor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor Grantor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor Grantor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeBeneficiary, and hereby grants to Mortgagee Beneficiary a security interest in Mortgagor’s Grantor's right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor Grantor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s Beneficiary's name or the name of any entity servicing the Note for Mortgagee Beneficiary and hereby acknowledges and agrees that MortgageeBeneficiary, or at Mortgagee’s Beneficiary's election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee Beneficiary herein may be delivered by Mortgagee Beneficiary at any time to the financial institution wherein the Reserves have been established, and MortgageeBeneficiary, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor Grantor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of MortgageeBeneficiary. Mortgagor Grantor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s Grantor's direction and is not the exercise by Mortgagee Beneficiary of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee Beneficiary may, without notice or demand on MortgagorGrantor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor Grantor under the other Loan Documents in such manner as Mortgagee Beneficiary shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to MortgagorGrantor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s Beneficiary's option and in Mortgagee’s Beneficiary's discretion, may either be held in a separate account or be commingled by Mortgagee Beneficiary with the general funds of MortgageeBeneficiary. The Reserves are solely for the protection of Mortgagee Beneficiary and entail no responsibility on Mortgagee’s Beneficiary's part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage Deed of Trust by Mortgagee Beneficiary and assumption by assignee of Mortgagee’s Beneficiary's obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of MortgageeBeneficiary, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee Beneficiary for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee Beneficiary on subsequent payments to be made hereunder or, at the option of MortgageeBeneficiary, refunded to MortgagorGrantor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor Grantor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee Beneficiary the full amount of any such deficiency. If Mortgagor Grantor shall fail to deposit with Mortgagee Beneficiary the full amount of such deficiency as provided above, Mortgagee Beneficiary shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by MortgageeBeneficiary, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee Beneficiary until actually paid by MortgagorGrantor, shall be immediately paid by Mortgagor Grantor on demand and shall be secured by this Mortgage Deed of Trust and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage Deed of Trust that shall have occurred and be continuing, Mortgagee Beneficiary may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee Beneficiary shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee Beneficiary may elect, the balance of any or all of the Reserves then in Mortgagee’s Beneficiary's possession shall be paid over to Mortgagor Grantor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Trust Property is currently managed by Residence Inn by MarriottPromus Hotels, Inc. (“Marriott”"Promus"), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 1029, 20041999, between AHM RES II Limited Partnership Promus and Marriott Apple Suites Management, Inc. (together, the “Marriott "Promus Management Agreement”"). If the Marriott Promus Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Grantor shall establish and maintain a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Beneficiary for payment of costs and expenses incurred by Mortgagor Grantor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Trust Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage Deed of Trust continues in effect after the termination of the Marriott Promus Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Trust Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Trust Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Trust Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Trust Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee Beneficiary shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Grantor the amount paid or incurred by Mortgagor Grantor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Beneficiary of a written request from Mortgagor Grantor for disbursement from the Replacement Reserve and a certification by Mortgagor Grantor in a form reasonably approved in writing by Beneficiary that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Beneficiary of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeBeneficiary, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Beneficiary of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Beneficiary showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Trust Property have been paid all amounts due for labor and materials furnished to the Mortgaged Trust Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Beneficiary of a certification from an inspecting architect or other third party acceptable to Mortgagee Beneficiary describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Beneficiary of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Grantor that no new certificate of occupancy is required. Mortgagee Beneficiary shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee Beneficiary shall be entitled to rely on such request from Mortgagor Grantor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Beneficiary may, at Mortgagor’s Grantor's expense, make or cause to be made during the term of this Mortgage xxxx Xeed of Trust an annual inspection of the Mortgaged Trust Property to determine the need, as determined by Mortgagee Beneficiary in its reasonable judgment, for further Repairs of the Mortgaged Trust Property. In the event that such inspection reveals that further Repairs of the Mortgaged Trust Property are required, Mortgagee Beneficiary shall provide Mortgagor Grantor with a written description of the required Repairs and Mortgagor Grantor shall respond complete such Repairs to the reasonable satisfaction of Beneficiary within thirty ninety (3090) days after the receipt of such requestdescription from Beneficiary, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponBeneficiary in its reasonable discretion. Funds Interest on the funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Grantor as provided in Section 4.31 4.32 hereof. (b) As additional security for the payment and performance by Mortgagor Grantor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor Grantor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeBeneficiary, and hereby grants to Mortgagee Beneficiary a security interest in Mortgagor’s Grantor's right, title and interest in, (i) the Impound Account, Account and the Replacement Reserve, the Repair and Remediation Reserve (as hereinafter defined) and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor Grantor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s Beneficiary's name or the name of any entity servicing the Note for Mortgagee Beneficiary and hereby acknowledges and agrees that MortgageeBeneficiary, or at Mortgagee’s Beneficiary's election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee Beneficiary herein may be delivered by Mortgagee Beneficiary at any time to the financial institution wherein the Reserves have been established, and MortgageeBeneficiary, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor Grantor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of MortgageeBeneficiary. Mortgagor Grantor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s Grantor's direction and is not the exercise by Mortgagee Beneficiary of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee Beneficiary may, without notice or demand on MortgagorGrantor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor Grantor under the other Loan Documents in such manner as Mortgagee Beneficiary shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to MortgagorGrantor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s Beneficiary's option and in Mortgagee’s Beneficiary's discretion, may either be held in a separate account or be commingled by Mortgagee Beneficiary with the general funds of MortgageeBeneficiary. The Reserves are solely for the protection of Mortgagee Beneficiary and entail no responsibility on Mortgagee’s Beneficiary's part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage Deed of Trust by Mortgagee Beneficiary and assumption by assignee of Mortgagee’s Beneficiary's obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of MortgageeBeneficiary, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee Beneficiary for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee Beneficiary on subsequent payments to be made hereunder or, at the option of MortgageeBeneficiary, refunded to MortgagorGrantor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor Grantor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee Beneficiary the full amount of any such deficiency. If Mortgagor Grantor shall fail to deposit with Mortgagee Beneficiary the full amount of such deficiency as provided above, Mortgagee Beneficiary shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by MortgageeBeneficiary, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee Beneficiary until actually paid by MortgagorGrantor, shall be immediately paid by Mortgagor Grantor on demand and shall be secured by this Mortgage Deed of Trust and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage Deed of Trust that shall have occurred and be continuing, Mortgagee Beneficiary may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee Beneficiary shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee Beneficiary may elect, the balance of any or all of the Reserves then in Mortgagee’s Beneficiary's possession shall be paid over to Mortgagor Grantor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Tenant shall establish and maintain in effect throughout the Term hereof a repair and replacement cash reserve (the “Replacement Reserve”) with Mortgagee in an amount equal to $500 per licensed bed for each of the Facilities, which amount shall be funded by Tenant as hereinafter set forth and held by Landlord in a cash account on its books and records, for the payment of costs and expenses incurred by Mortgagor in connection associated with capital improvements, repairs and replacements of every kind and nature to be performed at the repairFacilities (“Capital Improvements”), replacement and maintenance for no other purpose. During the initial two (2) Lease Years, Tenant shall deliver to Landlord, simultaneously with each of the furniturefour installments of Base Rent to be paid during each calendar month, fixtures and equipment at the Mortgaged Property and the performance of work in addition to the roofsall other amounts due hereunder, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate an amount equal to one-ninety-sixth (collectively, the “Repairs”). Upon the termination 1/96th) of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment required Replacement Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve On or before the last day of each Lease Year, Tenant shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to deposit into the Replacement Reserve if and for so long such additional amounts as may be necessary to replenish any amounts drawn from the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into Replacement Reserve during such Lease Year. Disbursements shall be made from the Replacement Reserve only in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated abovethis paragraph. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shalland no event or circumstance exists which, with the giving of notice, the passage of time or both, would become an Event of Default, Landlord shall disburse to Tenant from the extent funds are available for such purpose Replacement Reserve (but in no event to exceed amounts on deposit in the Replacement Reserve), disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) business days following: (a) the receipt by Mortgagee of a after Tenant’s written request from Mortgagor (and provision to Landlord of any supporting documentation reasonably required by Landlord), the costs and expenses incurred installing or constructing any Capital Improvements, provided such written notice includes a detailed description of the Capital Improvements installed or constructed together with an invoice for disbursement from the Replacement Reserve and work done. With each draw request, Tenant will deliver to Landlord (i) a certification by Mortgagor Tenant that the applicable item of Repair work for which the draw to be funded has been completed; completed in accordance with applicable legal requirements, and (bii) the delivery to Mortgagee of such additional supporting evidence as may be requested by Landlord in its reasonable judgment, including such items as invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) such work, together with affidavits and/or lien waivers from those providing work, materials or supplies for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the such portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee work (provided it shall not be a requirement that Tenant shall have made any payment on such invoice, unless necessary to procure the required lien waiver). Tenant will additionally furnish to make advances Landlord evidence that all necessary or required approvals or consents from the Replacement Reserve more frequently than once in any ninety (90) day periodgovernmental authorities have been obtained. In making authorizing any payment disbursement from the Replacement Reserve, Mortgagee Landlord shall be entitled to rely on such Tenant’s written request from Mortgagor and supporting documentation without any inquiry into the accuracy, validity or contestability of any such amountamount or the nature or necessity of the materials provided or the work performed. Mortgagee Landlord may, at Mortgagor’s expenseany time and from time to time, but shall have no obligation to, make or cause to be made during the term inspections of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Propertyany Facility. In the event that any inspection report from any such inspection reveals reasonably recommends that further Repairs Capital Improvements are required or anticipated that are the obligation of Tenant in accordance the Mortgaged Property are requiredterms of this Lease, Mortgagee Landlord shall provide Mortgagor Tenant with a written description of such Capital Improvements and Tenant shall then complete those Capital Improvements to the required Repairs and Mortgagor shall respond within thirty (30) days reasonable satisfaction of Landlord as expeditiously as is reasonably practicable under the circumstances after the receipt of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereofdescription from Landlord. (b) As additional security for It is specifically hereby stipulated and agreed that notwithstanding the payment preceding provisions of this Section 11.2, the management, uses and performance disbursement procedures and requirements of the Replacement Reserve may be taken over by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto a Facility Mortgagee, and hereby grants Tenant agrees to negotiate in good faith any changes to this Section 11.2 as may be reasonably requested by a Facility Mortgagee a security interest in Mortgagor’s right, title such event and interest in, (i) to pay the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds reasonable costs of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held Facility Mortgagee in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Defaultprocessing draw requests. (c) The Reserves Tenant shall not, unless otherwise explicitly required by applicable law, be provide Landlord with an engineering or be deemed to be escrow or trust funds, but, property condition report (at MortgageeTenant’s option sole cost and expense and in Mortgageeform and substance satisfactory to Landlord in Landlord’s sole discretion) with respect to each Facility, may either be held in a separate account or be commingled by Mortgagee with not more than twenty-four (24) months nor less than eighteen (18) months prior to the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment end of the respective items for which they are held following receipt of bills, invoices Initial Term (unless Tenant has elected a renewal option pursuant to Article 3) or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the (if Tenant has elected a renewal option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated pursuant to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property Borrower shall not initially be under any obligation to establish or maintain a reserve for periodic replacements at the Property. Notwithstanding the foregoing, however, in the event that an Event of Default has occurred and is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminatedcontinuing, then, as additional security for the Debtindebtedness secured hereby, Mortgagor Borrower shall establish and maintain at all times while this Security Deed continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repaircapital improvements, replacement repairs and maintenance of the furniture, fixtures and equipment replacements performed at the Mortgaged Property and Property, including, but not limited to, the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each first monthly Payment Date under the NoteCountryside Lake Lanier Xxxx after the occurrence of an Event of Default and continuing thereafter on each monthly Payment Date, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Countryside Lake Lanier Xxxx, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of $2,283.34 per month. All sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred Repairs, and is continuing, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower to Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; and (c) for disbursement requests with individual items (i) in excess of $50,000.0020,000.00 with respect to any single Repair, the or (ii) for any single Repair that is structural in nature, delivery to Mortgagee Lender of (1) affidavits, lien waiverswaivers (provided, cancelled checks however, Lender shall not unreasonably withhold its consent to Borrower's provision of a conditional lien waiver subject only to the payment of the amount specified in such disbursement request so long as such conditional lien waiver is accompanied by a final unconditional lien waiver corresponding to any conditional lien waiver previously delivered) or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material materials or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d2) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e3) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is requiredrequired by law. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at Mortgagor’s expenseLender's expense (provided that Borrower shall be responsible for any such expenses incurred by Lender during the occurrence and continuation of an Event of Default), make or cause to be made during the term of this Mortgage Security Deed an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponLender in its sole discretion. Funds Interest or other earnings on the funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Borrower as provided in Section 4.31 Section_4.28 hereof. (b) As additional security for . In the payment and performance by Mortgagor of all duties, responsibilities and obligations under event that the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit or available in the Reserves, unless finally determined by a court of competent jurisdiction Replacement Reserve are inadequate to have been caused by pay the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement cost of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default Repairs, Borrower shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed pay the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Borrower shall establish and maintain a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Lender as additional security for repayment of the Indebtedness and satisfaction of the Obligations. Commencing on the earlier to occur of (i) the Amortization Commencement Date or (ii) the first Payment Date after an Event of Default and continuing thereafter on each successive Payment Date until the Maturity Date, including during the Extension Period, if applicable, Borrower shall pay to Lender, concurrently with the monthly payment due under the Note, a deposit to the Replacement Reserve in an amount equal to amount equal to $3,208.33. (b) The Replacement Reserve is established for the payment of costs and expenses as may be incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Borrower for Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuing, Mortgagee (i) all sums in the Replacement Reserve shall be held by Lender in the Replacement Reserve to pay the costs and expenses of Replacement Reserve Repairs, and (ii) Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount Borrower, as Lender may approve, in Lender's reasonable discretion, amounts paid or incurred by Mortgagor in Borrower and performing such Replacement Reserve Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for a disbursement from the Replacement Reserve and a certification by Mortgagor from Borrower to Lender that the applicable item of Replacement Reserve Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receiptsreceipts of other evidence verifying the cost of performing such Replacement Reserve Repairs; and (c) in the case of a disbursement request from the Replacement Reserve in excess of $25,000 with respect to any single Replacement Reserve Repair, cancelled checks delivery to Lender of (1) affidavits, lien waivers or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material materials or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e2) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Replacement Reserve Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is requiredrequired by law. Mortgagee Lender shall not be required or requested to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee . (c) Lender may, at Mortgagor’s Borrower's expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the adequacy of the scheduled deposits into the Replacement Reserve and the need, as determined by Mortgagee Lender in its reasonable judgment, for further Replacement Reserve Repairs of to the Mortgaged Property. In the event that such inspection reveals that further Replacement Reserve Repairs of the Mortgaged Property are required, Mortgagee then, in addition to any other remedy Lender may be entitled to hereunder, Lender shall provide Mortgagor Borrower with a written description of the required Replacement Reserve Repairs and Mortgagor Borrower shall respond complete such Replacement Reserve Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor Lender in its reasonable discretion. Additionally, Lender may, as a product of any such inspection, require that the amount of the scheduled monthly deposits into the Replacement Reserve described in subsection (a) above be increased in order to accommodate Lender's estimation, in Lender's sole discretion, of the likely increased cost of future Replacement Reserve Repairs. In the event that the amount on deposit and Mortgagee and within such time period as may be mutually agreed upon. Funds contained available in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited is ever inadequate to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for pay the payment and performance by Mortgagor cost of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement ReserveReserve Repairs, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed pay the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveEXHIBIT B, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Special Provisions Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.Service Coverage Ratio Calculation Methodology – Page 4 667404; Miami-Dade County – Florida

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $1,479.24 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debtindebtedness secured hereby, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “"Replacement Reserve”) "), with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repaircapital improvements, replacement repairs and maintenance of the furniturereplacements, fixtures and equipment at the Mortgaged Property and including the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, collectively the “"Repairs”). Upon Commencing on the termination of first monthly payment date under the Marriott Management AgreementNote and continuing thereafter on each monthly payment date under the Note, all funds held by Marriott thereunder in Mortgagor shall pay to Mortgagee, concurrently with the Repairs and Equipment Reserve (as defined in monthly payment due under the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; providedNote, however, no monthly deposits will be required a deposit to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$517.83. So long as no Default default here under or Event of Default under the other Loan Documents has occurred and is continuing, (i) all sums in the Replacement Reserve shall be held by Mortgagee in the Replacement Reserve to pay the costs and expense of Repairs, and (ii) Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor to Mortgagee that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; and (c) for disbursement requests with individual items (i) in excess of $50,000.0020,000.00 with respect to any single Repair, the or (ii) for any single Repair that is structural in nature, delivery to Mortgagee of (I) affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens Liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d2) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e3) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is was required by law, or a certification by Mortgagor that no new certificate of occupancy is requiredwas required by law. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making malting any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense's expense (not to exceed $2,500.00 annually), make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond complete such Repairs to the reasonable satisfaction of Mortgagee within thirty ninety (3090) days (subject to force maj eure) after the receipt of such requestdescription from Mortgagxx, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponin its reasonable discretion. Funds Interest or other earnings on the funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for 4.28 hereof in the payment and performance by Mortgagor of all duties, responsibilities and obligations under event that the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit or available in the Reserves, unless finally determined by a court of competent jurisdiction Replacement Reserve are inadequate to have been caused by pay the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement cost of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default Repairs, Mortgagor shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed pay the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by MarriottBorrower shall deposit, Inc. (“Marriott”)or cause to be deposited, pursuant to that certain Amended $0.00 on the Closing Date and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve $21,322.00 (the “"Replacement Reserve”Reserve Amount") with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited on each Payment Date into the Replacement ReserveReserve Account. The Replacement Reserve Subaccount shall be maintained for so long as at Clearing Bank and proceeds therefrom shall be applied in accordance with this Mortgage continues in effect after the termination Mortgage. Provided that no Event of the Marriott Default shall have occurred and be continuing and no Cash Management Agreement; providedPeriod has occurred, however, no monthly deposits will be required to Lender shall make disbursements from the Replacement Reserve if Subaccount to Borrower from time to time, but not more than once during each calendar month, upon delivery to Lender of evidence reasonably satisfactory to Lender that replacement and deferred maintenance items identified on Schedule 2 attached hereto or other replacement and deferred maintenance items reasonably approved by Lender have been completed, which work shall be subject to the reasonable inspection of Lender for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance compliance with the provisions requirements of Section 1.30 hereofthis Mortgage. If deposits In no event shall Lender be obligated to disburse funds from the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in Subaccount if an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written exists. Each request from Mortgagor for disbursement from the Replacement Reserve Subaccount shall be in a form reasonably specified or reasonably approved by Lender and a certification by Mortgagor that be submitted together with an Officer's Certificate specifying the applicable item of Repair has been completed; (b) specific items for which the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying disbursement is requested and the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors each replacement and any other parties who might or could claim statutory or common law liens deferred maintenance item and are furnishing or have furnished material or labor to updated title search against the Mortgaged Property have been paid all amounts due for labor and materials furnished disclosing no liens, charges or encumbrances other than Permitted Encumbrances at least ten (10) Business Days prior to the Mortgaged Property; (d) date of the requested disbursement. Each request for disbursement requests in excess shall include copies of $50,000.00, delivery invoices for all costs incurred and each request shall include evidence satisfactory to Mortgagee Lender of payment of all such amounts or an Officer's Certificate that such amounts will be paid with such proceeds. Borrower shall not make a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) request for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve Subaccount more frequently than once in any ninety (90) day period. In making calendar month and the total amount of any payment request shall not be less than $10,000 or a lesser amount if such disbursement will be the last disbursement from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. Borrower shall establish and maintain a replacement reserve (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, "Replacement Reserve") with Lender as additional security for the Debt, Mortgagor shall establish Indebtedness and maintain a repair and replacement reserve (Obligations. Commencing on the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve first Payment Date (as defined in the Marriott Management AgreementNote) and attributable continuing thereafter on each successive Payment Date until the Maturity Date, Borrower shall pay to Lender, concurrently with the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into monthly payment due under the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; providedNote, however, no monthly deposits will be required a deposit to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage quotient of (i) Zero and five percent 25/100 Dollars (5%$0.25) per square foot of the gross revenues Improvements (excluding any rentable square feet for which tenants of the Property Improvements are responsible for maintaining the structure of such Improvements) divided by (ii) twelve (12). Lender shall have the right to review the amount of the Replacement Reserve annually and to assess, in its sole discretion, whether the amount deposited into the Replacement Reserve needs to be increased or decreased. (b) The Replacement Reserve is established for the payment of costs and expenses as calculated abovemay be incurred by Borrower for Repairs. So long as no Default or Event of Default has occurred and is continuing, Mortgagee (i) all sums in the Replacement Reserve shall be held by Lender in the Replacement Reserve to pay the costs and expenses of Repairs, and (ii) Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount Borrower, as Lender may approve, in Lender's reasonable discretion, amounts paid or incurred by Mortgagor in Borrower and performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for a disbursement from the Replacement Reserve and a certification by Mortgagor from Borrower to Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receiptsreceipts of other evidence verifying the cost of performing such Repairs; and (c) in the case of a disbursement request from the Replacement Reserve in excess of $25,000 with respect to any single Repair, cancelled checks delivery to Lender of (1) affidavits, lien waivers or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material materials or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e2) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is requiredrequired by law. Mortgagee Lender shall not be required or requested to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee . (c) Lender may, at Mortgagor’s Borrower's expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the adequacy of the scheduled deposits into the Replacement Reserve and the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of to the Mortgaged Property; provided, however, absent the then existence of an Event of Default, Borrower shall only be required to reimburse Lender for the reasonable costs of any such inspection a maximum of once in any calendar year. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee then, in addition to any other remedy Lender may be entitled to hereunder, Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor Lender in its reasonable discretion. Additionally, Lender may, as a product of any such inspection, require that the amount of the scheduled monthly deposits into the Replacement Reserve described in Section 2.8(b) above be increased in order to accommodate Lender's reasonable estimation of the likely increased cost of future Repairs. In the event that the amount on deposit and Mortgagee and within such time period as may be mutually agreed upon. Funds contained available in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited is ever inadequate to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for pay the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds cost of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that MortgageeRepairs, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed pay the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,416.67 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. On the Closing Date, Borrowers shall deposit with Lender (aor such agent of Lender as Lender may designate in writing to Borrowers from time to time) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. $1,073,000.00 (“Marriott”the "Initial Replacement Reserve Deposit"), pursuant and thereafter Borrowers shall deposit with Lender monthly, on each Payment Date commencing with the First Payment Date, $19,135.17 (subject to that certain Amended and Restated Management Agreement dated adjustment as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (togetherprovided below, the “Marriott Management Agreement”"Monthly Replacement Reserve Amount") for the purpose of creating a reserve for Capital Expenditures (said funds, together with any interest thereon and additions thereto, the "Replacement Reserve"). If In the Marriott Management Agreement is terminatedevent of a Partial Release permitted under this Loan Agreement, thenLender agrees, as additional security upon written request from Borrowers, to adjust the Monthly Replacement Reserve Amount to account for the Debtrelease of such Individual Property(ies), Mortgagor which adjustment shall establish and maintain a repair and replacement reserve be in the amount such that the Monthly Replacement Reserve Amount equals the product of $214 multiplied by the number of Units in the remaining Properties divided by twelve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”12). Upon the termination Lender's determination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property such adjusted amount shall be immediately assigned sent to Mortgagee Borrowers within forty-five (45) days after Lender's receipt of Borrowers' written request therefor, and absent manifest error, Lender's determination shall be deemed reasonable and final, and shall constitute the Monthly Replacement Reserve Amount required to be deposited into the Replacement ReserveReserve on each Payment Date thereafter. The Replacement Reserve In no event shall be maintained for so long as this Mortgage continues the balance in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long be reduced as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee consequence of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is requiredPartial Release. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds The funds contained in the Replacement Reserve shall be placed utilized solely to pay for or reimburse Borrowers for the actual bona fide out-of-pocket cost of Capital Expenditures performed during the term of the Loan in an interest-bearing accordance with the schedule of permitted capital expenditures attached hereto as Schedule 6.4, or for such other Capital Expenditures as are approved by Lender for disbursements from the Replacement Reserve (collectively, "Approved Capital Expenditures"), and shall not be used by Borrowers for purposes for which any other Reserve is established. Upon Borrowers' written request for disbursement, Lender shall disburse funds from the Replacement Reserve to or for the account of Borrowers, to pay for or to reimburse Borrowers for such Approved Capital Expenditures, on the Payment Date following such request, upon receipt satisfaction of each of the conditions listed on Schedule 6.6 and interest thereon credited to Mortgagor as provided each of the conditions set forth in Section 4.31 hereof. (b) As additional security for 6.6, provided, in no event shall Lender be obligated to disburse to Borrowers more than the payment and performance by Mortgagor aggregate of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document Annualized Disbursement Amount (collectively, the “Reserves”), as defined below) plus (ii) the accounts into which the Reserves have been deposited, twenty percent (iii20%) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoingInitial Replacement Reserve Deposit in any calendar year. Mortgagor hereby authorizes and consents The "Annualized Disbursement Amount" shall be equal to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name zero for purposes of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds determining disbursements from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents Replacement Reserve prior to January, 2005, and shall be continuing$229,622.00 thereafter, Mortgagee mayless, without notice or demand on Mortgagorif a Partial Release of any Individual Property(ies) occurs, at its option: (A) withdraw any or all an amount equal to the product of $214 multiplied by the funds (including, without limitation, interest) then remaining number of Units in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery Individual Property(ies) subject to such Partial Release divided by twelve (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default12). (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. In addition to any other construction, renovation and maintenance requirements set forth in this Agreement, commencing with the first Loan Year, Borrower shall expend at least $250 per unit per year (aexclusive of Insurance Proceeds) The Mortgaged Property is currently managed by Residence Inn by Marriotton maintenance of the Project. To the extent Borrower does not provide evidence, Inc. (“Marriott”)reasonably satisfactory to Lender, pursuant to that certain Amended and Restated Management Agreement dated as of August 28Borrower has spent such sum on a cumulative annual basis, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”)Borrower shall pay Lender such amount not spent. If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Lender shall establish and maintain a repair and replacement hold such sum in reserve (the “"Replacement Reserve”") with Mortgagee for payment of costs and Borrower's use to fund future maintenance expenses incurred by Mortgagor after Borrower has spent in connection with the repair, replacement and aggregate at least $52,000 on maintenance of the furnitureProject during the then current Loan Year. Each request for disbursement from the Replacement Reserve shall include copies of invoices for all items or materials purchased and all contracted labor or services provided, fixtures waivers of lien from each contractor providing materials, labor or services, and equipment at the Mortgaged Property other evidence satisfactory to Lender of payment of all such amounts and the performance completion of work such maintenance to the roofsProject. Borrower hereby grants Lender a first priority security interest in the Replacement Reserve, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors all funds contained therein and doorways, windows, carpets, appliances, fixtures, furnishings, elevators all products and mechanical proceeds thereof and HVAC equipment all such funds are pledged as additional collateral for the Loan and Borrower shall execute any other documents and take any other actions reasonably necessary to provide Lender with such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”)a perfected security interest in such funds. Upon the termination Maturity Date or at any time following an Event of Default, the Marriott Management Agreementmoneys then remaining in the Replacement Reserve shall, all funds at Lender's option, be applied against the Indebtedness. All sums held in the Replacement Reserve may be commingled with other borrower reserves held by Marriott thereunder Lender, and shall not be deemed to be held in trust for the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reservebenefit of Borrower. The Replacement Reserve shall be maintained for at a financial institution designated by Lender from time to time, in its sole and absolute discretion (so long as this Mortgage continues in effect after such institution's deposits are insured by the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefromFederal Deposit Insurance Corporation), and (ix) all proceeds shall be under the sole dominion and control of the foregoing. Mortgagor hereby authorizes Lender, and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive no right to control over said account. Notice or direct the investment of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretotherein.

Replacement Reserve. (a) The Mortgaged Property Borrower shall not initially be under any obligation to establish or maintain a reserve for periodic replacements at the Property. Notwithstanding the foregoing, however, in the event that an Event of Default has occurred and is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminatedcontinuing, then, as additional security for the Debtindebtedness secured hereby, Mortgagor Borrower shall establish and maintain at all times while this Security Deed continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repaircapital improvements, replacement repairs and maintenance of the furniture, fixtures and equipment replacements performed at the Mortgaged Property and Property, including, but not limited to, the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each first monthly Payment Date under the NoteCountryside Atlanta Note after the occurrence of an Event of Default and continuing thereafter on each monthly Payment Date, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Countryside Atlanta Note. Deposits , a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of $1,129.17 per month. All sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred Repairs, and is continuing, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower to Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; and (c) for disbursement requests with individual items (i) in excess of $50,000.0020,000.00 with respect to any single Repair, the or (ii) for any single Repair that is structural in nature, delivery to Mortgagee Lender of (1) affidavits, lien waiverswaivers (provided, cancelled checks however, Lender shall not unreasonably withhold its consent to Borrower's provision of a conditional lien waiver subject only to the payment of the amount specified in such disbursement request so long as such conditional lien waiver is accompanied by a final unconditional lien waiver corresponding to any conditional lien waiver previously delivered) or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.could

Replacement Reserve. In addition to any other construction, renovation and maintenance requirements set forth in this Agreement, commencing with the first Loan Year, Borrower shall expend at least $250 per unit per year (aexclusive of Insurance Proceeds) The Mortgaged Property is currently managed by Residence Inn by Marriotton maintenance of the Project. To the extent Borrower does not provide evidence, Inc. (“Marriott”)reasonably satisfactory to Lender, pursuant to that certain Amended and Restated Management Agreement dated as of August 28Borrower has spent such sum on a cumulative annual basis, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”)Borrower shall pay Lender such amount not spent. If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Lender shall establish and maintain a repair and replacement hold such sum in reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and Borrower’s use to fund future maintenance expenses incurred by Mortgagor after Borrower has spent in connection with the repair, replacement and aggregate at least $123,500 on maintenance of the furnitureProject during the then current Loan Year. Each request for disbursement from the Replacement Reserve shall include copies of invoices for all items or materials purchased and all contracted labor or services provided, fixtures waivers of lien from each contractor providing materials, labor or services, and equipment at the Mortgaged Property other evidence satisfactory to Lender of payment of all such amounts and the performance completion of work such maintenance to the roofsProject. Borrower hereby grants Lender a first priority security interest in the Replacement Reserve, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors all funds contained therein and doorways, windows, carpets, appliances, fixtures, furnishings, elevators all products and mechanical proceeds thereof and HVAC equipment all such funds are pledged as additional collateral for the Loan and Borrower shall execute any other documents and take any other actions reasonably necessary to provide Lender with such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”)a perfected security interest in such funds. Upon the termination Maturity Date or at any time following an Event of Default, the Marriott Management Agreementmoneys then remaining in the Replacement Reserve shall, all funds at Lender’s option, be applied against the Indebtedness. All sums held in the Replacement Reserve may be commingled with other borrower reserves held by Marriott thereunder Lender, and shall not be deemed to be held in trust for the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reservebenefit of Borrower. The Replacement Reserve shall be maintained for at a financial institution designated by Lender from time to time, in its sole and absolute discretion (so long as this Mortgage continues in effect after such institution’s deposits are insured by the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefromFederal Deposit Insurance Corporation), and (ix) all proceeds shall be under the sole dominion and control of the foregoing. Mortgagor hereby authorizes Lender, and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive no right to control over said account. Notice or direct the investment of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretotherein.

Replacement Reserve. The Customers shall spend, or cause to have spent, a minimum spending amount (athe "Minimum Spending Requirement") The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve Grand Hotel equal to 4% of the annual Gross Revenues (as defined below) from the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the Grand Hotel per annum on repair, replacement and maintenance of the furnitureGrand Hotel during the applicable calendar year, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property which Minimum Spending Requirement for calendar year 1996 shall be immediately assigned expended to Mortgagee complete the work recommended by Oldham & Seltx xx the Architecture and deposited into the Replacement Reserve. Engineering Report, dated as of December 1, 1995, prepared by Oldham & Seltx, x copy of which is attached hereto as Exhibit B. The Replacement Reserve Minimum Spending Requirement for each calendar year shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provideddetermined annually by Lehmxx, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits xxd shall be made based on each monthly Payment Date under Gross Revenues for the Noteimmediately preceding calendar year. In the event the Customers have spent more than the Minimum Spending Requirement in any calendar year, concurrently with and in addition Customers may apply such excess, up to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) 2% of the gross revenues annual Gross Revenues from the Grand Hotel to reduce the amount of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall Minimum Spending Requirement that must be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose spent in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other immediately succeeding calendar year. The Customers shall deliver evidence reasonably satisfactory to MortgageeLehmxx xx more frequently than monthly, verifying the cost but at least quarterly, of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered Minimum Spending Requirement that has been spent; such evidence shall include copies of paid invoices or other receipts for work done or materials provided and such other information as reasonably requested by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is requiredLehmxx. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term Xor purposes of this Mortgage an annual inspection of the Mortgaged Property to determine the needSection 4.20, as determined by Mortgagee in its reasonable judgmentGross Revenues shall mean all income, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are requiredrents, Mortgagee shall provide Mortgagor with a written description of the required Repairs room rates, additional rents, revenues, issues and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor profits and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (items including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in all revenues and credit card receipts collected from guest rooms, restaurants, meeting rooms, bars, mini-bars, banquet rooms, recreation facilities, vending machines and concessions derived from the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application customary operation of the funds contained in the Reserves shall be deemed to cure any Default or Event of DefaultGrand Hotel. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto."

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Security Deed continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs first Payment Date and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $1,916.18 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Security Deed an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $3,522.03 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Security Deed continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,125.00 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Security Deed an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. Borrowers shall deposit with Administrative Agent on each Payment Date the product of Twenty-Five Dollars (a$25.00) The Mortgaged Property is currently managed multiplied by Residence Inn the number of Senior Housing Units in the Borrowing Base Assets, which shall be held by Marriott, Inc. (“Marriott”), pursuant Administrative Agent or its servicer for replacements and repairs required to that certain Amended and Restated Management Agreement dated as be made to the Borrowing Base Assets during the term of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve Loan (the “"Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”Escrow Fund"). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuingexists hereunder, Mortgagee shall, Administrative Agent shall credit for Borrowers' account interest at the interest rate actually available to Administrative Agent's servicer on the extent funds are available for held in such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the needaccount, as determined by Mortgagee Administrative Agent in its reasonable judgment, sole discretion. Borrowers hereby pledge to Administrative Agent for further Repairs the benefit of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are requiredLenders, Mortgagee shall provide Mortgagor with and grant a written description of the required Repairs security interest in, any and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained all monies now or hereafter deposited in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Escrow Fund as provided in Section 4.31 hereof. (b) As additional security for the payment of the Loan. Administrative Agent may reasonably reassess its estimate of the amount necessary for the Replacement Escrow Fund from time to time and performance may adjust the monthly amounts required to be deposited into the Replacement Escrow Fund upon thirty (30) days' notice to Borrowers. Administrative Agent shall make disbursements from the Replacement Escrow Fund as requested by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeBorrowers, and hereby grants approved by Administrative Agent in its reasonable discretion, on a quarterly basis in increments of no less than $5,000.00 upon delivery by Borrowers of Administrative Agent's standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Administrative Agent for any draw request for an invoice exceeding $15,000.00, 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 Borrowing Base Assets at Borrowers' expense prior to Mortgagee making a security quarterly disbursement in order to verify completion of replacements and repairs for which reimbursement is sought. The Replacement Escrow Fund shall be held without interest in Mortgagor’s right, title Administrative Agent's name and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered commingled with Administrative Agent's general funds at financial institutions selected by Mortgagee at any time to Administrative Agent in its reasonable discretion. Upon the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession occurrence of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under , Administrative Agent may apply any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) sums then remaining present in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) Replacement Escrow Fund to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of billsLoan in any order in its reasonable discretion. Until expended or applied as above provided, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit Replacement Escrow Fund shall constitute additional security for the sums actually receivedLoan. Upon assignment Administrative Agent shall have no obligation to release any of this Mortgage the Replacement Escrow Fund while any Event of Default or Default exists. All costs and expenses incurred by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds Administrative Agent in the Reserves disbursement of any of the Replacement Escrow Fund shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied paid by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder Borrowers promptly upon demand or, at the option of MortgageeAdministrative Agent's sole discretion, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate deducted from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretoReplacement Escrow Fund.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $2,020.08 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. Repair Escrow (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. Lender has this day established an interest bearing reserve account at a federally insured institution (“Marriott”the "Replacement Reserve"), pursuant to that certain Amended the balance of which shall be maintained and Restated Management disbursed in accordance with the Replacement Reserve Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended the date hereof between Borrower and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott Lender (together, the “Marriott Management "Replacement Agreement”"). If Borrower shall deposit with Lender, on the Marriott Management Agreement is terminatedfirst day of each calendar month during any given fiscal year, thenan amount equal to one-twelfth of four (4%) percent of the gross income derived from the Mortgaged Property during the preceding fiscal year. For the remaining portion of Borrower's current fiscal year, Borrower shall deposit $37,246.00 monthly into the Replacement Reserve. Notwithstanding anything to the contrary in this Section, in no event shall the monthly payments in respect of the Replacement Reserve ever fall below $37,246.00 as more particularly set forth in the Replacement Agreement. Borrower hereby pledges to Lender any and all monies now or hereafter deposited in the Replacement Reserve as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary Debt. All earnings or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made interest on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) and become part of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a such Replacement Reserve deposit and shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property disbursed as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose provided in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor Agreement and in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereofSection. (b) As Borrower has this day deposited with Lender, and Lender has this day established, an interest bearing escrow account at a federally insured institution the sum of $1,583,000.00 (the "Repair Escrow") to be maintained and disbursed in accordance with the Repair Escrow Agreement dated as of the date hereof between Borrower and Lender (the "Repair Agreement"). Borrower shall deposit with Lender, on or before August 1, 1996, an additional $1,583,000.00 for deposit by Lender into the Repair Escrow. Borrower hereby pledges to Lender any and all monies now or hereafter deposited in the Repair Escrow as additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security Debt. All earnings or interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, on the Repair Escrow shall be and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences become part of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents Repair Escrow and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining disbursed as provided in the Reserves Repair Agreement and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Defaultthis Section. (c) The Reserves Funds on deposit with Lender shall notbe invested in direct obligations of, unless otherwise explicitly required by applicable law, be or be deemed obligations fully guaranteed as to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of principal and interest by, the respective items United States or any agency or instrumentality thereof, provided that such obligations are backed by the full faith and credit of the United States of America, and are fully FDIC-insured demand and time deposits. Lender shall exercise best efforts to direct such investments to obtain for which they are held following receipt Borrower the highest rate of billsreturn, invoices or statements therefor in accordance with given the terms hereof amounts available for investment and beyond the allowing of due credit Borrower's timing requirements as communicated to Lender for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over access to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretofunds.

Replacement Reserve. 7.1 Tenant shall pay to Landlord, each month during the Term, the sum of $2,583.33/month (a$31,000/year) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”the "Replacement Reserve Installment"), which is the amount to be deposited by Landlord in a fund (the "Replacement Reserve Fund") to be utilized for capital improvements and repairs to the Facility, under the terms of the "Reserve Fund For Replacement" requirements of the U.S. Department of Housing and Urban Development ("HUD") pursuant to that certain Amended the existing Mortgage applicable to the Facility, which is HUD-insured under Section 232 of the National Housing Act. If a new Mortgage (or Mortgages) should be granted by Landlord, in accordance with Section 21 below, and Restated Management Agreement dated as the terms of August 28, 2002, as amended by that First Amendment such new Mortgage(s) require Landlord to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (togethermake greater payments to a Replacement Reserve Fund or similar fund than the amount of the Replacement Reserve Installment described above, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Replacement Reserve Installments due from Tenant shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work be increased to conform to the roofsrequirements of such new Mortgage(s); provided, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate that Replacement Reserve Installments which Tenant is required to pay under this Lease shall not exceed the initial Replacement Reserve Installment amount stated above by more than ten percent (collectively, 10%). 7.2 Landlord shall deposit the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Replacement Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited Installments received from Tenant into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into Fund in accordance with the provisions requirements of Section 1.30 hereofHUD and Landlord's Mortgage. If deposits to Landlord shall make the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Fund (both the balance of such fund as of the Commencement Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to additions thereto from the Replacement ReserveReserve Installments paid by Tenant) available to Tenant for reimbursement of amounts spent by Tenant for capital improvements and repairs, when requiredin accordance with the standards utilized by HUD for release of funds from a Reserve Fund For Replacement as set out in Chapter 4 of HUD Handbook 4350.01 Rev-1 ("Multifamily Asset Management And Project Servicing", September, 1992)(hereafter referred to as the "HUD Standards"). Promptly upon Landlord's receipt of a request from Tenant for reimbursement from the Replacement Reserve Fund ("Draw Request"), Landlord shall be in an amount equal submit a request to five percent (5.0%) Landlord's Mortgagee for the release of such funds, and shall use its best efforts to cause the mortgagee and HUD to approve the Draw Request. Upon HUD's approval of the gross revenues Draw Request, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the Mortgaged Property based upon funds. 7.3 If the most recent annual balance sheets and statement of operations for Facility is subject to a Mortgage which is not HUD-insured, but the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) terms of the gross revenues of the Mortgaged Property as calculated above, then Mortgage require that a fund similar to a Replacement Reserve deposit Fund ("Mortgagee Reserve Fund") be held under the control of the Mortgagee, Tenant shall submit Draw Requests, and Landlord shall make funds available to Tenant, in accordance with the standards of the Mortgagee, which shall be required commercially reasonable. Upon approval of a Tenant Draw Request by the Mortgagee, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the funds from the Mortgagee. 7.4 If the Facility is not subject to a Mortgage which requires that a Replacement Reserve Fund or Mortgagee Reserve Fund, the Replacement Reserve Installments shall be held in an amount equal a segregated federally-insured bank account to be controlled by Landlord to be used solely for holding Replacement Reserve Installments under this Lease (with, at Landlord's discretion, similar payments from one or more of the Affiliated Tenants pursuant to the difference between Other Leases) (such Management Agreement reserve percentage and five percent (5%) account, the "Reserve Account"). Funds in the Reserve Account shall be the property of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuingTenant, Mortgagee shall, subject to the extent condition that such funds are may not be used for any purpose other than reimbursement of Tenant for improvements to the Leased Property pursuant to this Lease and the HUD Standards. Tenant shall submit Draw Requests to Landlord for reimbursement from the Reserve Account in accordance with the HUD Standards, and Landlord shall make funds from the Reserve Account available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Tenant within ten (10) days following: Business Days of Landlord's receipt of Tenant's Draw Request (aincluding supporting documentation) in accordance with the receipt HUD Standards. 7.5 All interest earned on the funds paid by Mortgagee of a written request from Mortgagor for disbursement from Tenant under this Section 7 shall be added to the Replacement Reserve Fund, Mortgagee Reserve Fund, or Reserve Fund, as applicable, and a certification by Mortgagor that shall be reported for tax purposes as income of Tenant. At the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion end of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00Lease Term, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained funds remaining in the Replacement Reserve Fund, Mortgagee Reserve Fund or Reserve Account shall be placed in an interest-bearing account upon receipt and interest thereon credited become the property of Landlord. Tenant's obligations to Mortgagor maintain the Leased Premises as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties11 below, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgageeto make capital improvements as provided in Section 24 below, and hereby grants to Mortgagee a security interest replace Equipment and Supplies as provided in Mortgagor’s right, title and interest in, (i) Section 29 below shall not be conditioned upon the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or availability of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Replacement Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveFund, Mortgagee shall have the optionReserve Fund, but not the obligation, to make or Reserve Account for such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretopurposes.

Replacement Reserve. 7.1 Tenant shall pay to Landlord, each month during the Term, the sum of $2,475.00/month (a$29,700/year) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”the "Replacement Reserve Installment"), pursuant which is the amount to that certain Amended be deposited by Landlord in a fund (the "Replacement Reserve Fund") to be utilized for capital improvements and Restated Management Agreement dated repairs to the Facility, under the same terms as the "Reserve Fund For Replacement" requirements of August 28the U.S. Department of Housing and Urban Development ("HUD") for properties subject to mortgages which are HUD-insured under Section 232 of the National Housing Act (the Facility is not now, 2002but is expected in the future to be, as amended by that First Amendment subject to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”such a Mortgage). If the Marriott Management Agreement is terminateda new Mortgage (or Mortgages) should be granted by Landlord, thenin accordance with Section 21 below, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance terms of work such new Mortgage(s) require Landlord to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable make greater payments to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The a Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after Fund or similar fund than the termination amount of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long Installment described above, the Replacement Reserve Installments due from Tenant shall be increased to conform to the requirements of such new Mortgage(s). 7.2 At such time as the Mortgaged Property is managed pursuant Facility becomes subject to a Management Agreement (as hereinafter defined) subsequently entered HUD-insured Mortgage, Landlord shall deposit the Replacement Reserve Installments received from Tenant into a Replacement Reserve Fund in accordance with the provisions requirements of Section 1.30 hereofHUD and Landlord's Mortgage. If deposits to Landlord shall make the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Fund (both the balance of such fund as of the Commencement Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to additions thereto from the Replacement ReserveReserve Installments paid by Tenant) available to Tenant for reimbursement of amounts spent by Tenant for capital improvements and repairs, when requiredin accordance with the standards utilized by HUD for release of funds from a Reserve Fund For Replacement as set out in Chapter 4 of HUD Handbook 4350.01 Rev-1 ("Multifamily Asset Management And Project Servicing", September, 1992)(hereafter referred to as the "HUD Standards"). Promptly upon Landlord's receipt of a request from Tenant for reimbursement from the Replacement Reserve Fund ("Draw Request"), Landlord shall be in an amount equal submit a request to five percent (5.0%) Landlord's Mortgagee for the release of such funds, and shall use its best efforts to cause the mortgagee and HUD to approve the Draw Request. Upon HUD's approval of the gross revenues Draw Request, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the Mortgaged Property based upon funds. 7.3 If the most recent annual balance sheets and statement of operations for Facility is subject to a Mortgage which is not HUD-insured, but the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) terms of the gross revenues of the Mortgaged Property as calculated above, then Mortgage require that a fund similar to a Replacement Reserve deposit Fund ("Mortgagee Reserve Fund") be held under the control of the Mortgagee, Tenant shall submit Draw Requests, and Landlord shall make funds available to Tenant, in accordance with the standards of the Mortgagee, which shall be required commercially reasonable. Upon approval of a Tenant Draw Request by the Mortgagee, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the funds from the Mortgagee. 7.4 If the Facility is not subject to a Mortgage which requires that a Replacement Reserve Fund or Mortgagee Reserve Fund, the Replacement Reserve Installments shall be held in an amount equal a segregated federally-insured bank account to be controlled by Landlord to be used solely for holding Replacement Reserve Installments under this Lease (with, at Landlord's discretion, similar payments from one or more of the Affiliated Tenants pursuant to the difference between Other Leases) (such Management Agreement reserve percentage and five percent (5%) account, the "Reserve Account"). Funds in the Reserve Account shall be the property of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuingTenant, Mortgagee shall, subject to the extent condition that such funds are may not be used for any purpose other than reimbursement of Tenant for improvements to the Leased Property pursuant to this Lease and the HUD Standards. Tenant shall submit Draw Requests to Landlord for reimbursement from the Reserve Account in accordance with the HUD Standards, and Landlord shall make funds from the Reserve Account available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Tenant within ten (10) days following: Business Days of Landlord's receipt of Tenant's Draw Request (aincluding supporting documentation) in accordance with the receipt HUD Standards. 7.5 All interest earned on the funds paid by Mortgagee of a written request from Mortgagor for disbursement from Tenant under this Section 7 shall be added to the Replacement Reserve Fund, Mortgagee Reserve Fund, or Reserve Fund, as applicable, and a certification by Mortgagor that shall be reported for tax purposes as income of Tenant. At the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion end of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00Lease Term, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained funds remaining in the Replacement Reserve Fund, Mortgagee Reserve Fund or Reserve Account shall be placed in an interest-bearing account upon receipt and interest thereon credited become the property of Landlord. Tenant's obligations to Mortgagor maintain the Leased Premises as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties11 below, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgageeto make capital improvements as provided in Section 24 below, and hereby grants to Mortgagee a security interest replace Equipment and Supplies as provided in Mortgagor’s right, title and interest in, (i) Section 29 below shall not be conditioned upon the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or availability of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Replacement Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveFund, Mortgagee shall have the optionReserve Fund, but not the obligation, to make or Reserve Account for such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretopurposes.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Borrower shall establish and maintain a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Lender as additional security for Borrower's repayment of the Indebtedness and satisfaction of the Obligations. Commencing on the earlier to occur of (i) the Amortization Commencement Date or (ii) the first Payment Date after an Event of Default and continuing thereafter on each successive Payment Date until the Maturity Date, including during the Extension Period, if applicable, Borrower shall pay to Lender, concurrently with the monthly payment due under the Note, a deposit to the Replacement Reserve in an amount equal to amount equal to $3,333. (b) The Replacement Reserve is established for the payment of costs and expenses as may be incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Borrower for Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuing, Mortgagee (i) all sums in the Replacement Reserve shall be held by Lender in the Replacement Reserve to pay the costs and expenses of Replacement Reserve Repairs, and (ii) Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount Borrower, as Lender may approve, in Lender's reasonable discretion, amounts paid or incurred by Mortgagor in Borrower and performing such Replacement Reserve Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for a disbursement from the Replacement Reserve and a certification by Mortgagor from Borrower to Lender that the applicable item of Replacement Reserve Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receiptsreceipts of other evidence verifying the cost of performing such Replacement Reserve Repairs; and (c) in the case of a disbursement request from the Replacement Reserve in excess of $25,000 with respect to any single Replacement Reserve Repair, cancelled checks delivery to Lender of (1) affidavits, lien waivers or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material materials or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e2) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Replacement Reserve Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is requiredrequired by law. Mortgagee Lender shall not be required or requested to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee . (c) Lender may, at Mortgagor’s Borrower's expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the adequacy of the scheduled deposits into the Replacement Reserve and the need, as determined by Mortgagee Lender in its reasonable judgment, for further Replacement Reserve Repairs of to the Mortgaged Property. In the event that such inspection reveals that further Replacement Reserve Repairs of the Mortgaged Property are required, Mortgagee then, in addition to any other remedy Lender may be entitled to hereunder, Lender shall provide Mortgagor Borrower with a written description of the required Replacement Reserve Repairs and Mortgagor Borrower shall respond complete such Replacement Reserve Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor Lender in its reasonable discretion. Additionally, Lender may, as a product of any such inspection, require that the amount of the scheduled monthly deposits into the Replacement Reserve described in subsection (a) above be increased in order to accommodate Lender's estimation, in Lender's sole discretion, of the likely increased cost of future Replacement Reserve Repairs. In the event that the amount on deposit and Mortgagee and within such time period as may be mutually agreed upon. Funds contained available in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited is ever inadequate to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for pay the payment and performance by Mortgagor cost of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement ReserveReserve Repairs, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed pay the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveEXHIBIT B, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Special Provisions Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.Service Coverage Ratio Calculation Methodology – Page 4 641926; Miami-Dade County – Florida

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve Commencing with First Payment Date (as defined in the Marriott Management AgreementNote) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $1,833.83 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Borrower agrees that it will perform, or cause to be performed, all repairs and replacements necessary to maintain the Property is currently managed by Residence Inn by Marriottin good working order, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated in accordance with its condition as of August 28the date hereof. Simultaneously herewith, 2002and on each Payment Date until the Note is paid in full, as amended by that First Amendment Borrower shall pay to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, Lender the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain sum of $588.34 to be held in a repair and replacement reserve fund (the “Replacement Reserve”) with Mortgagee subject to this Mortgage and the Other Mortgages, for payment of costs certain repairs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment replacements at the Mortgaged Property which, under generally accepted accounting principles, are categorized as capital expenses and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work not as Mortgagor deems necessary or appropriate operating expenses (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if Borrower shall not be required to make a Management Agreement reserves funds for deposit into the Replacement Reserve to the extent that any such deposit would increase the amount in the Replacement Reserve (after deducting any pending disbursement requests therefrom) above $62,100.00. Borrower shall perform, or cause Principal Tenant to perform, all Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property a good and workmanlike manner, in accordance with all applicable codes and regulations, and each case in a manner satisfactory to Lender and as calculated above, then a Replacement Reserve deposit shall be required in an amount equal necessary to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of maintain the Property as calculated abovein good condition and in compliance with all applicable laws, ordinances, rules and regulations. So long as no Default or Event of Default has occurred shall exist and is be continuing, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such the Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion as required above upon satisfaction of the Repairs and the value requirements set forth in Section 1.29 of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is requiredthis Mortgage. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs, and Borrower shall complete, or cause Principal Tenant to complete, such Repairs and Mortgagor shall respond to Lender’s reasonable satisfaction within thirty ninety (3090) days of after Lender’s notice, or such request, and, thereafter, Mortgagor shall make such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debtindebtedness secured by the Deed of Trust, Mortgagor Assumptor shall establish and maintain at all times while the Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Noteholder for payment of costs and expenses incurred by Mortgagor Assumptor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, carpet, appliances, landscaping, signs, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work items as Mortgagor deems necessary or appropriate the Noteholder may approve from time to time (collectively, the “Repairs”). Upon Commencing on the termination of first monthly payment date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect Note which occurs after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if Closing Date and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date payment date under the Note, Assumptor shall pay to Noteholder, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Note and all other indebtedness secured by the Deed of Trust is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$1,230.00 per month. So long as no Default default hereunder or Event of Default under the other Loan Documents has occurred and is continuing, Mortgagee all sums in the Replacement Reserve shall be held by Noteholder in the Replacement Reserve to pay the costs and expenses of the Repairs. So long as no default hereunder or under the other Loan Documents has occurred and is continuing beyond any applicable cure period as provided in the Note and/or the Loan Documents, Noteholder shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Assumptor the amount paid or incurred by Mortgagor Assumptor in performing such Repairs within ten thirty (1030) days following: (a1) the receipt by Mortgagee Noteholder of a written request from Mortgagor Assumptor for disbursement from the Replacement Reserve and a certification by Mortgagor Assumptor in a form approved in writing by Noteholder that the applicable item of Repair has been completed; (b2) the delivery to Mortgagee Noteholder of invoices, receipts, cancelled checks receipts or other reasonable evidence reasonably satisfactory to MortgageeNoteholder, verifying the cost of performing the Repairs; (c3) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee Noteholder of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Noteholder showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d4) for disbursement requests in excess of $50,000.00, delivery to Mortgagee Noteholder of a certification from an inspecting architect or other third party acceptable to Mortgagee Noteholder describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; : and (e5) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee Noteholder of a new certificate of occupancy or local equivalent for the portion of the Improvements (as defined in the Deed of Trust) covered by such Repairs, if said new certificate of occupancy is required by applicable law, or a certification by Mortgagor Assumptor that no new certificate of occupancy is required. Mortgagee Noteholder shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day periodperiod or in amounts less than $2,500.00. In making any payment from the Replacement Reserve, Mortgagee Noteholder shall be entitled to rely on such request from Mortgagor Assumptor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Noteholder may, at MortgagorAssumptor’s expense, make or cause to be made during the term of this Mortgage the Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Noteholder in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Noteholder shall provide Mortgagor Assumptor with a written description of the required Repairs and Mortgagor Assumptor shall respond complete such Repairs to the reasonable satisfaction of Noteholder within thirty (30) days after the receipt of such requestdescription from Noteholder, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponNoteholder in its sole discretion. Funds contained in the The Replacement Reserve shall be placed deposited in an interest-interest bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security accrue interest in Mortgagor’s right, title and the same manner as the TILC Reserve accrues interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds under Section 4.28 of the foregoingDeed of Trust. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at MortgageeAt Noteholder’s option and in MortgageeNoteholder’s discretion, the Replacement Reserve funds may either be held in a separate account or be commingled by Mortgagee Noteholder with the general funds of MortgageeNoteholder. The Reserves are Replacement Reserve is solely for the protection of Mortgagee Noteholder and entail entails no responsibility on MortgageeNoteholder’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor costs and expenses described in this Section in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. In the event that the amounts on deposit or available in the Replacement Reserve are inadequate to pay the cost of the Repairs, Assumptor shall pay the amount of such deficiency. Upon assignment of this Mortgage Deed of Trust by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunderNoteholder, any funds in the Reserves Replacement Reserve shall be turned over to the assignee and any responsibility of MortgageeNoteholder, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event a default under the Deed of Default under this Mortgage that shall have occurred and be continuingTrust which is not cured within any applicable grace or cure period, Mortgagee Noteholder may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves Replacement Reserve against the Debt indebtedness secured by the Deed of Trust hereby in whatever order Mortgagee Noteholder shall subjectively determine. No such application of any or all of the Reserves Replacement Reserve shall be deemed to cure any Event default under the Deed of DefaultTrust. Upon full payment of the Debt indebtedness secured hereby in accordance with its terms or at such earlier time as Mortgagee Noteholder may elect, the balance of any or all of the Reserves Replacement Reserve then in MortgageeNoteholder’s possession shall be paid over to Mortgagor Assumptor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the Improvements including but not limited to roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical mechanical, electrical, plumbing and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs provided such costs and Equipment Reserve expenses are incurred for repairs (as defined in the Marriott Management Agreementi) not incurred for ordinary wear and attributable to tear at the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve(ii) categorized under generally accepted accounting principles as a capital expense and not as an operating expense. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; providedCommencing on June 1, however, no monthly deposits will be required to the Replacement Reserve if 2004 and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing on each monthly Payment Date thereafter under the Note, Mortgagor shall pay to Mortgagee, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $3,502.70 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Mortgagee in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default (as hereinafter defined) or Event of Default has occurred and is continuingoccurred, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount incurred and paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that in the applicable item of Repair has been completedform attached hereto as Exhibit B; (b) the delivery to Mortgagee of paid invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost and payment of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0010,000.00 per item, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property, conditioned only upon such parties' actual receipt (if by check, subject to collection) of such amount due for said labor and materials; (d) for disbursement requests in excess of $50,000.0010,000.00 per item, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the state of completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0010,000.00 per item, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required; and (f) the receipt by Mortgagee of an administrative fee in the amount of $150.00. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s 's expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond complete such Repairs to the reasonable satisfaction of Mortgagee within thirty ninety (3090) days after the receipt of such requestdescription from Mortgagee, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponin its reasonable discretion. Funds Interest on the funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve (as hereinafter defined) and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s 's name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s 's election, such servicing agent, shall have exclusive control over said account, subject to the applicable provisions of the Loan Documents. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Reserves so long as such amounts are deposited into "Permitted Investments" as defined in Exhibit D. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s 's direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon an event, which with the passage of time or the giving of notice or both would constitute an Event of Default (a Default "Default") or an Event of Default. Mortgagor hereby waives all right to withdraw funds from the Reserves except as provided for in this Mortgage. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $7,125 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by MarriottAt the Conversion Date, Inc. (“Marriott”)Borrower shall deposit with *Senior Lender or the Escrow Agent $qcq, pursuant to that certain Amended and Restated Management Agreement dated which funds will be used as of August 28a replacement reserve. Thereafter, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, beginning on the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance first day of the furniturefirst full month after the Conversion Date and continuing on the same day of each subsequent month until the Loan is paid in full or the Compliance Period expires, fixtures and equipment at whichever is later, Borrower shall deposit $qc with *Senior Lender or the Mortgaged Property and the performance of work Escrow Agent, which amounts shall be added to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreementreplacement reserve; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made year during the term of this Mortgage an annual inspection the Loan on the anniversary date of the Mortgaged Property to determine Conversion Date the need, as determined monthly amount due under this section shall increase by Mortgagee in its reasonable judgment, for further Repairs of 3% over the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security amount payable for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security prior year. All interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance earned on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve reserve shall exceed be part of the reserve. The funds in the replacement reserve shall only be used to replace or make capital improvements to the Premises (as defined below). Before Borrower may draw on the replacement reserve, Borrower must notify Lender in writing, explain the need for the withdrawal, and receive Xxxxxx’s approval of the withdrawal, which approval will not be unreasonably withheld. When all amounts due under the Loan Documents are paid in full or when the Compliance Period has expired, whichever is later, the Escrow Agent (if it is holding this reserve) shall release to Borrower the amount remaining in the replacement reserve (if any). As used in this section, “capital improvements” means improvements to the Premises, the cost of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is heldwould exceed $10,000.00, such excess may be credited by Mortgagee on subsequent payments as re-roofing, structural repairs, or major projects to be made hereunder orreplace or upgrade existing furnishings, at the option of Mortgageeequipment, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the optionor fixtures, but not including replacement of individual appliances or minor repairs. *Even though Senior Lender may be holding the obligationreplacement reserve, to make such depositBorrower may not draw on the replacement reserve without Xxxxxx’s prior written consent, which consent will not be unreasonably withheld, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No Xxxxxxxx’s failure to obtain such application of any or all of the Reserves consent shall be deemed to cure any Event a material breach of Default. Upon full payment this Agreement, notwithstanding Senior Lender’s disbursement of funds from the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretoreplacement reserve.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve Commencing with First Payment Date (as defined in the Marriott Management AgreementNote) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $919.00 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property Borrower shall not initially be under any obligation to establish or maintain a reserve for periodic replacements at the Property. Notwithstanding the foregoing, however, in the event that an Event of Default has occurred and is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminatedcontinuing, then, as additional security for the Debtindebtedness secured hereby, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repaircapital improvements, replacement repairs and maintenance of the furniture, fixtures and equipment replacements performed at the Mortgaged Property and Property, including, but not limited to, the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each first monthly Payment Date under the NoteSun Villa Note after the occurrence of an Event of Default and continuing thereafter on each monthly Payment Date, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Sun Villa Note. Deposits , a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of $1,350.00 per month. All sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred Repairs, and is continuing, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower to Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; and (c) for disbursement requests with individual items (i) in excess of $50,000.0020,000.00 with respect to any single Repair, the or (ii) for any single Repair that is structural in nature, delivery to Mortgagee Lender of (1) affidavits, lien waiverswaivers (provided, cancelled checks however, Lender shall not unreasonably withhold its consent to Borrower's provision of a conditional lien waiver subject only to the payment of the amount specified in such disbursement request so long as such conditional lien waiver is accompanied by a final unconditional lien waiver corresponding to any conditional lien waiver previously delivered) or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material materials or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d2) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e3) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new (or amended) certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is requiredrequired by law. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once one time in any ninety (90) day periodcalendar month. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at Mortgagor’s expense, make or cause to Lender's expense (provided that Borrower shall be made responsible for any such expenses incurred by Lender during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs occurrence and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.continuation of

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $1,264,26 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Mortgagor shall pay to Mortgagee, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $4,388.49 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Mortgagee in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor in a form approved in writing by Mortgagee that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0010,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0010,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0010,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s 's expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond complete such Repairs to the reasonable satisfaction of Mortgagee within thirty ninety (3090) days after the receipt of such requestdescription from Mortgagee, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed uponin its sole discretion. Funds Interest on the funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve (as hereinafter defined) and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s 's name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s 's election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s 's direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. Mortgagor hereby waives all right to withdraw funds from the Reserves except as provided for in this Mortgage. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s 's option and in Mortgagee’s 's discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s 's part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty ten (3010) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuingMortgage, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s 's possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. Borrower shall deposit with Lender (or such agent of Lender as Lender may designate in writing from time to time): (a) The Mortgaged Property is currently managed by Residence Inn by Marriottat Closing, Inc. an amount equal to $28,125, and (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as b) on each Payment Date the amount of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security $4,410 for the Debtpurpose of creating a reserve for capital improvement items in accordance with the applicable Capital Expenditure Budget approved by Lender (said funds, Mortgagor shall establish together with any interest thereon and maintain a repair and replacement reserve (additions thereto, the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all The funds held by Marriott thereunder contained in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained utilized by Borrower solely for so long as this Mortgage continues capital improvements in effect after the termination accordance with Capital Expenditure Budget approved annually in advance by Lender. Upon written application of the Marriott Management Agreement; providedBorrower (not more often than once per calendar quarter), however, no monthly deposits will Borrower shall be required entitled to draw upon the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations pay for the Mortgaged Property. Notwithstanding the foregoingcosts of such capital improvements, if a Management Agreement reserves funds for Repairs in an amount less than five percent provided that (5%i) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuingcontinues without cure, Mortgagee shall(ii) Borrower shall provide to Lender such documentation and certifications as Lender may reasonably request to substantiate the requirement for and entitlement to such disbursement, (iii) Borrower shall provide Lender with all invoices, receipts, lien waivers and other documentation of lawful and workmanlike progress or completion and lien-free status requested by Lender, (iv) at the request of Lender, Borrower provides Lender either with (1) a search of title to the extent funds are available Property effective to the date of the draw, or (2) an endorsement to the Title Policy insuring Lender’ interest in the Property which updates the effective date of the Title Policy to the date of disbursement, which search or title endorsement shows that no mechanics’ or materialmen’s liens or other liens of any nature have been placed against the Property since the date of recordation of the Deed of Trust (other than liens which Borrower is contesting in accordance with Section 5.3) and that title to the Property is free and clear of all liens (other than Permitted Encumbrances), (v) at the request of Lender, Borrower has delivered, at Borrower’s expense, an inspection report by an appropriate independent qualified professional acceptable to Lender (and/or Lender has conducted its own inspection of the Property, at its discretion), and (vi) if estimated improvement costs at the Property exceed $50,000, Lender have approved the expenditures proposed by Borrower in advance. The Replacement Reserve shall not be used for such purpose any tenant improvements in connection with the Lender-approved Leases or for purposes for which any other Reserve is established. The insufficiency of any balance in the Replacement ReserveReserve shall not abrogate the Borrower’s agreement to fulfill all preservation and maintenance covenants in the Loan Documents. In the event that the sum to be disbursed by Lender to Borrower out of the Replacement Reserve is less than the current estimated cost to pay for the applicable capital improvement item in accordance with the applicable Capital Expenditure Budget most-recently approved by Lender, disburse to Mortgagor Borrower shall deposit the amount paid or incurred by Mortgagor in performing such Repairs shortage within ten (10) days following: (a) the receipt of request by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged PropertyLender. In the event Lender determines, in its reasonable discretion, from time to time and based on Lender’s inspections, that such inspection reveals that further Repairs the amount of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description monthly deposit is insufficient to fund the cost of likely capital improvement items and related contingencies that may arise during the remaining term of the required Repairs and Mortgagor shall respond within Loan, Lender may require an increase in the amount of the monthly deposits upon thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of prior written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretoBorrower.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $647.93 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,002.67 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the ““ Replacement ReserveReserve ”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs“ Repairs ”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $647.93 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Grantor shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Beneficiary for payment of costs and expenses incurred by Mortgagor Grantor in connection with the repairperformance of work related to the maintenance, replacement and maintenance and/or repair of the furnitureTrust Property, fixtures and equipment at the Mortgaged Property and the performance of including without limitation, work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor Grantor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Grantor shall pay to Beneficiary, concurrently with and in addition to the monthly payments due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$4,416.67 per month. So long as no Default or Event of Default has occurred and is continuing, Mortgagee all sums in the Replacement Reserve shall be held by Beneficiary in the Replacement Reserve to pay the costs and expense of Repairs. So long as no Event of Default has occurred and is continuing, Beneficiary shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Grantor the amount paid or incurred by Mortgagor Grantor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Beneficiary of a written request from Mortgagor Grantor for disbursement from the Replacement Reserve and a certification by Mortgagor Grantor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Beneficiary of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to MortgageeBeneficiary, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items costing in excess of $50,000.00, the delivery to Mortgagee Beneficiary of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Beneficiary showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Trust Property have been paid all amounts due for labor and materials furnished to the Mortgaged Trust Property; (d) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a certification from an inspecting architect or other a third party acceptable to Mortgagee Beneficiary describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Grantor that no new certificate of occupancy is required. Mortgagee Beneficiary shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee Beneficiary shall be entitled to rely on such request from Mortgagor Grantor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Beneficiary may, at Mortgagor’s Xxxxxxx's expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Trust Property to determine the need, as determined by Mortgagee Beneficiary in its reasonable judgment, for further Repairs of the Mortgaged Trust Property. In the event that such inspection reveals that further Repairs of the Mortgaged Trust Property are required, Mortgagee Beneficiary shall provide Mortgagor Grantor with a written description of the required Repairs and Mortgagor Grantor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor Grantor shall make such Repairs Repairs, as may be mutually agreed upon by Mortgagor Grantor and Mortgagee Beneficiary and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Grantor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor Grantor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor Grantor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeBeneficiary, and hereby grants to Mortgagee Beneficiary a security interest in Mortgagor’s Grantor's right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor Grantor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s Beneficiary's name or the name of any entity servicing the Note for Mortgagee Beneficiary and hereby acknowledges and agrees that MortgageeBeneficiary, or at Mortgagee’s Beneficiary's election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee Beneficiary herein may be delivered by Mortgagee Beneficiary at any time to the financial institution wherein the Reserves have been established, and MortgageeBeneficiary, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor Grantor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of MortgageeBeneficiary. Mortgagor Grantor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s Grantor's direction and is not the exercise by Mortgagee Beneficiary of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee Beneficiary may, without notice or demand on MortgagorGrantor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor Grantor under the other Loan Documents in such manner as Mortgagee Beneficiary shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to MortgagorGrantor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s Beneficiary's option and in Mortgagee’s Beneficiary's discretion, may either be held in a separate account or be commingled by Mortgagee Beneficiary with the general funds of MortgageeBeneficiary. The Reserves are solely for the protection of Mortgagee Beneficiary and entail no responsibility on Mortgagee’s Beneficiary's part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage Deed of Trust by Mortgagee Beneficiary and assumption by assignee of Mortgagee’s Beneficiary's obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of MortgageeBeneficiary, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee Beneficiary for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee Beneficiary on subsequent payments to be made hereunder or, at the option of MortgageeBeneficiary, refunded to MortgagorGrantor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor Grantor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee Beneficiary the full amount of any such deficiency. If Mortgagor Grantor shall fail to deposit with Mortgagee Beneficiary the full amount of such deficiency as provided above, Mortgagee Beneficiary shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by MortgageeBeneficiary, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee Beneficiary until actually paid by MortgagorGrantor, shall be immediately paid by Mortgagor Grantor on demand and shall be secured by this Mortgage Deed of Trust and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage Deed of Trust that shall have occurred and be continuing, Mortgagee Beneficiary may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee Beneficiary shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee Beneficiary may elect, the balance of any or all of the Reserves then in Mortgagee’s Beneficiary's possession shall be paid over to Mortgagor Grantor and no other party shall have any right or claim thereto.

Replacement Reserve. In addition to any other construction, renovation and maintenance requirements set forth in this Agreement, commencing with the first Loan Year, Borrower shall expend at least $250 per unit per year (aexclusive of Insurance Proceeds) The Mortgaged Property is currently managed by Residence Inn by Marriotton maintenance of the Project. To the extent Borrower does not provide evidence, Inc. (“Marriott”)reasonably satisfactory to Lender, pursuant to that certain Amended and Restated Management Agreement dated as of August 28Borrower has spent such sum on a cumulative annual basis, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”)Borrower shall pay Lender such amount not spent. If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Lender shall establish and maintain a repair and replacement hold such sum in reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and Borrower’s use to fund future maintenance expenses incurred by Mortgagor after Borrower has spent in connection with the repair, replacement and aggregate at least $74,250 on maintenance of the furnitureProject during the then current Loan Year. Each request for disbursement from the Replacement Reserve shall include copies of invoices for all items or materials purchased and all contracted labor or services provided, fixtures waivers of lien from each contractor providing materials, labor or services, and equipment at the Mortgaged Property other evidence satisfactory to Lender of payment of all such amounts and the performance completion of work such maintenance to the roofsProject. Borrower hereby grants Lender a first priority security interest in the Replacement Reserve, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors all funds contained therein and doorways, windows, carpets, appliances, fixtures, furnishings, elevators all products and mechanical proceeds thereof and HVAC equipment all such funds are pledged as additional collateral for the Loan and Borrower shall execute any other documents and take any other actions reasonably necessary to provide Lender with such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”)a perfected security interest in such funds. Upon the termination Maturity Date or at any time following an Event of Default, the Marriott Management Agreementmoneys then remaining in the Replacement Reserve shall, all funds at Lender’s option, be applied against the Indebtedness. All sums held in the Replacement Reserve may be commingled with other borrower reserves held by Marriott thereunder Lender, and shall not be deemed to be held in trust for the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reservebenefit of Borrower. The Replacement Reserve shall be maintained for at a financial institution designated by Lender from time to time, in its sole and absolute discretion (so long as this Mortgage continues in effect after such institution’s deposits are insured by the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefromFederal Deposit Insurance Corporation), and (ix) all proceeds shall be under the sole dominion and control of the foregoing. Mortgagor hereby authorizes Lender, and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, Borrower shall have exclusive no right to control over said account. Notice or direct the investment of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretotherein.

Replacement Reserve. In addition to any other construction, renovation and maintenance requirements set forth in this Agreement, commencing with the first Loan Year, Borrowers shall expend at least $0.20 per square foot of net rentable space (aexclusive of Insurance Proceeds and proceeds from the Holdback) The Mortgaged Property is currently managed by Residence Inn by Marriotton maintenance of the Projects. To the extent Borrowers do not provide evidence, Inc. (“Marriott”)reasonably satisfactory to Lender, pursuant to that certain Amended and Restated Management Agreement dated as of August 28Borrowers have spent such sum on an annual basis, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”)Borrowers shall deposit with Lender such amount not spent. If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Lender shall establish and maintain a repair and replacement hold such sum in reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and Borrowers’ use to fund future maintenance expenses incurred by Mortgagor Borrowers in connection with any Loan Year after Borrowers have spent in the repair, replacement and aggregate at least $0.20 per square foot of net rentable space on maintenance of the furniture, fixtures and equipment at Projects during the Mortgaged Property and then current Loan Year. Such amounts shall be disbursed from the performance Replacement Reserve upon satisfaction of work the same conditions applicable to the roofsHoldback (other than obtaining a date down endorsement to the Title Policies). Borrowers hereby grant Lender a first priority security interest in the Replacement Reserve, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors all funds contained therein and doorways, windows, carpets, appliances, fixtures, furnishings, elevators all products and mechanical proceeds thereof and HVAC equipment all such funds are pledged as additional collateral for the Loan and Borrowers shall execute any other documents and take any other actions necessary to provide Lender with such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”)a perfected security interest in such funds. Upon the termination Maturity Date or at any time following an Event of Default, the Marriott Management Agreementmoneys then remaining in the Replacement Reserve shall, all funds at Lender’s option, be applied against the Indebtedness. All sums held in the Replacement Reserve may be commingled with other borrower reserves held by Marriott thereunder Lender and shall not be deemed to be held in trust for the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reservebenefit of Borrowers. The Replacement Reserve shall be maintained for at a financial institution designated by Lender from time to time, in its sole and absolute discretion (so long as this Mortgage continues in effect after such institution’s deposits are insured by the termination of the Marriott Management Agreement; providedFederal Deposit Insurance Corporation), however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Notesole dominion and control of Lender, concurrently with and in addition Borrowers shall have no right to control or direct the monthly payments due under the Noteinvestment of funds therein. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred Sums held by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained Lender in the Replacement Reserve shall accrue interest at rates determined by Lender to be placed in an interest-bearing account upon receipt and equivalent to any interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance received by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeLender on its own general funds, and hereby grants any interest accruing and paid on such amounts shall be deemed to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, be part of the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If absent an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if anyhereunder, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor applied in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretoSection 4.1(n).

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement capital improvement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofswhich would normally be treated as a capital improvement under generally accepted accounting principles, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate consistently applied (collectively, the “RepairsReplacements”). Upon Commencing on the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly first Payment Date under the NoteNote and continuing on each Payment Date thereafter, concurrently with and Mortgagor shall pay to Mortgagee, in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$3,459.00 on each Payment Date. So long as no Default or Event of Default has occurred and is continuingcontinuing and then exists and has not been waived, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Replacements within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor in a form approved in writing by Mortgagee, which approval shall not be unreasonably withheld, conditioned or delayed that the applicable item of Repair Replacement has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the RepairsReplacements; (c) for disbursement requests with individual items in excess of $50,000.0050,000, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid paid, or upon the making of the requested disbursements, will be paid, all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0050,000, delivery to Mortgagee of a certification from an inspecting architect or other third party reasonably acceptable to Mortgagee describing the completed Repairs Replacements and verifying the completion of the Repairs Replacements and the value of the completed RepairsReplacements; and (e) for disbursement requests costing in excess of $50,000.0050,000, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such RepairsReplacements, if said new certificate of occupancy is required by law, or a an architect’s certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs Replacements of the Mortgaged Property; such inspection to be no more frequent than once in any calendar year unless an Event of Default shall have occurred and is continuing and not been waived. In the event that such inspection reveals reveals, in Mortgagee’s reasonable opinion, that further Repairs Replacements of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs Replacements and Mortgagor shall respond complete such Replacements to the reasonable satisfaction of Mortgagee within thirty ninety (3090) days (or such additional time as reasonably required so long as Mortgagor has begun the completion of such requestReplacements within such ninety (90) day period and diligently continues such work) after the receipt of such description from Mortgagee, andsubject to extension for force majeure, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within in its reasonable discretion. (b) Mortgagee shall cause funds in the Replacement Reserve to be deposited into interest bearing accounts of the type customarily maintained by Mortgagee or its servicing agent for the investment of similar reserves, which accounts may not yield the highest interest rate then available. Interest payable on such time period as may amounts shall be mutually agreed uponcomputed based on the daily outstanding balance in the Replacement Reserve. Funds contained in Such interest shall be calculated on a simple, non-compounded interest basis based solely on contributions made to the Replacement Reserve by Mortgagor. All interest earned on amounts contributed to the Replacement Reserve shall be placed retained by Mortgagee and accumulated for the benefit of Mortgagor and added to the balance in an interest-bearing account upon receipt the Replacement Reserve and interest thereon credited shall be disbursed for payment of the items for which other funds in the Replacement Reserve are to Mortgagor as provided in Section 4.31 hereofbe disbursed. (bc) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note Note, this Mortgage and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over assigns and confirms unto pledges to Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iviii) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (viiv) all replacements, substitutions or proceeds thereof, (viiv) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viiivi) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), ) and (ixvii) all replacements, substitutions and all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the each account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the loan evidenced by the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said each account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee to Mortgagor at any time to the financial institution institutions wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless Reserves other than any such loss resulting solely from the willful misconduct or gross negligence of Mortgagee as finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgageejurisdiction. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. Mortgagor hereby waives all right to withdraw funds from the Reserves except as provided for in this Mortgage. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuingwhich is not cured or waived, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all reasonable, out-of-pocket costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, Code or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (cd) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate, provided that the assignee assumes all obligations related to such Reserves and Mortgagor is provided with notice of such assignment. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty ten (3010) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. 7.1 Tenant shall pay to Landlord, each month during the Term, the sum of $2,137.50/month (a$25,650/year) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”the "Replacement Reserve Installment"), which is the amount to be deposited by Landlord in a fund (the "Replacement Reserve Fund") to be utilized for capital improvements and repairs to the Facility, under the terms of the "Reserve Fund For Replacement" requirements of the U.S. Department of Housing and Urban Development ("HUD") pursuant to that certain Amended the existing Mortgage applicable to the Facility, which is HUD-insured under Section 232 of the National Housing Act. If a new Mortgage (or Mortgages) should be granted by Landlord, in accordance with Section 21 below, and Restated Management Agreement dated as the terms of August 28, 2002, as amended by that First Amendment such new Mortgage(s) require Landlord to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (togethermake greater payments to a Replacement Reserve Fund or similar fund than the amount of the Replacement Reserve Installment described above, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor Replacement Reserve Installments due from Tenant shall establish and maintain a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work be increased to conform to the roofsrequirements of such new Mortgage(s); provided, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate that Replacement Reserve Installments which Tenant is required to pay under this Lease shall not exceed the initial Replacement Reserve Installment amount stated above by more than ten percent (collectively, 10%). 7.2 Landlord shall deposit the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Replacement Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited Installments received from Tenant into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into Fund in accordance with the provisions requirements of Section 1.30 hereofHUD and Landlord's Mortgage. If deposits to Landlord shall make the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Fund (both the balance of such fund as of the Commencement Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to additions thereto from the Replacement ReserveReserve Installments paid by Tenant) available to Tenant for reimbursement of amounts spent by Tenant for capital improvements and repairs, when requiredin accordance with the standards utilized by HUD for release of funds from a Reserve Fund For Replacement as set out in Chapter 4 of HUD Handbook 4350.01 Rev-1 ("Multifamily Asset Management And Project Servicing", September, 1992)(hereafter referred to as the "HUD Standards"). Promptly upon Landlord's receipt of a request from Tenant for reimbursement from the Replacement Reserve Fund ("Draw Request"), Landlord shall be in an amount equal submit a request to five percent (5.0%) Landlord's Mortgagee for the release of such funds, and shall use its best efforts to cause the mortgagee and HUD to approve the Draw Request. Upon HUD's approval of the gross revenues Draw Request, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the Mortgaged Property based upon funds. 7.3 If the most recent annual balance sheets and statement of operations for Facility is subject to a Mortgage which is not HUD-insured, but the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) terms of the gross revenues of the Mortgaged Property as calculated above, then Mortgage require that a fund similar to a Replacement Reserve deposit Fund ("Mortgagee Reserve Fund") be held under the control of the Mortgagee, Tenant shall submit Draw Requests, and Landlord shall make funds available to Tenant, in accordance with the standards of the Mortgagee, which shall be required commercially reasonable. Upon approval of a Tenant Draw Request by the Mortgagee, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the funds from the Mortgagee. 7.4 If the Facility is not subject to a Mortgage which requires that a Replacement Reserve Fund or Mortgagee Reserve Fund, the Replacement Reserve Installments shall be held in an amount equal a segregated federally-insured bank account to be controlled by Landlord to be used solely for holding Replacement Reserve Installments under this Lease (with, at Landlord's discretion, similar payments from one or more of the Affiliated Tenants pursuant to the difference between Other Leases) (such Management Agreement reserve percentage and five percent (5%) account, the "Reserve Account"). Funds in the Reserve Account shall be the property of the gross revenues of the Property as calculated above. So long as no Default or Event of Default has occurred and is continuingTenant, Mortgagee shall, subject to the extent condition that such funds are may not be used for any purpose other than reimbursement of Tenant for improvements to the Leased Property pursuant to this Lease and the HUD Standards. Tenant shall submit Draw Requests to Landlord for reimbursement from the Reserve Account in accordance with the HUD Standards, and Landlord shall make funds from the Reserve Account available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Tenant within ten (10) days following: Business Days of Landlord's receipt of Tenant's Draw Request (aincluding supporting documentation) in accordance with the receipt HUD Standards. 7.5 All interest earned on the funds paid by Mortgagee of a written request from Mortgagor for disbursement from Tenant under this Section 7 shall be added to the Replacement Reserve Fund, Mortgagee Reserve Fund, or Reserve Fund, as applicable, and a certification by Mortgagor that shall be reported for tax purposes as income of Tenant. At the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion end of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00Lease Term, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained funds remaining in the Replacement Reserve Fund, Mortgagee Reserve Fund or Reserve Account shall be placed in an interest-bearing account upon receipt and interest thereon credited become the property of Landlord. Tenant's obligations to Mortgagor maintain the Leased Premises as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties11 below, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgageeto make capital improvements as provided in Section 24 below, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title replace Equipment and interest Supplies as provided in, (i) . Section 29 below shall not be conditioned upon the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or availability of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Replacement Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveFund, Mortgagee shall have the optionReserve Fund, but not the obligation, to make or Reserve Account for such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretopurposes.

Replacement Reserve. (a) The Mortgaged Borrower agrees that it will perform, or cause to be performed, all repairs and replacements necessary to maintain the Property is currently managed by Residence Inn by Marriottin good working order, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated in accordance with its condition as of August 28the date hereof. Simultaneously herewith, 2002and on each Payment Date until the Note is paid in full, as amended by that First Amendment Borrower shall pay to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, Lender the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain sum of $194.74 to be held in a repair and replacement reserve fund (the “Replacement Reserve”) with Mortgagee subject to this Mortgage and the Other Mortgages, for payment of costs certain repairs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment replacements at the Mortgaged Property which, under generally accepted accounting principles, are categorized as capital expenses and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work not as Mortgagor deems necessary or appropriate operating expenses (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made on each monthly Payment Date under the Note, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if Borrower shall not be required to make a Management Agreement reserves funds for deposit into the Replacement Reserve to the extent that any such deposit would increase the amount in the Replacement Reserve (after deducting any pending disbursement requests therefrom) above $62,100.00. Borrower shall perform, or cause Principal Tenant to perform, all Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property a good and workmanlike manner, in accordance with all applicable codes and regulations, and each case in a manner satisfactory to Lender and as calculated above, then a Replacement Reserve deposit shall be required in an amount equal necessary to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of maintain the Property as calculated abovein good condition and in compliance with all applicable laws, ordinances, rules and regulations. So long as no Default or Event of Default has occurred shall exist and is be continuing, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such the Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion as required above upon satisfaction of the Repairs and the value requirements set forth in Section 1.29 of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is requiredthis Mortgage. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs, and Borrower shall complete, or cause Principal Tenant to complete, such Repairs and Mortgagor shall respond to Lender’s reasonable satisfaction within thirty ninety (3090) days of after Lender’s notice, or such request, and, thereafter, Mortgagor shall make such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Borrower shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “Replacement Reserve”) with Mortgagee Lender for payment of costs and expenses incurred by Mortgagor Borrower in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon Commencing on the termination of first monthly Payment Date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Borrower shall pay to Lender, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,125.00 per month. So long as no Event of Default has occurred, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Lender in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expenses of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuingoccurred, Mortgagee Lender shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Borrower the amount paid or incurred by Mortgagor Borrower in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Lender of a written request from Mortgagor Borrower for disbursement from the Replacement Reserve and a certification by Mortgagor Borrower in a form approved in writing by Lender that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Lender of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to MortgageeLender, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0025,000.00, the delivery to Mortgagee Lender of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee Lender showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a certification from an inspecting architect or other third party acceptable to Mortgagee Lender describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.0025,000.00, delivery to Mortgagee Lender of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Borrower that no new certificate of occupancy is required. Mortgagee Lender shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety thirty (9030) day period. In making any payment from the Replacement Reserve, Mortgagee Lender shall be entitled to rely on such request from Mortgagor Borrower without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Lender may, at MortgagorBorrower’s expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee Lender in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender shall provide Mortgagor Borrower with a written description of the required Repairs and Mortgagor Borrower shall respond complete such Repairs to the reasonable satisfaction of Lender within thirty ninety (3090) days after the receipt of such requestdescription from Lender, and, thereafter, Mortgagor shall make or such Repairs later date as may be mutually agreed upon approved by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate Lender in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.

Replacement Reserve. (a) The Mortgaged Property So long as (i) the Debt Service Coverage Ratio is currently managed by Residence Inn by Marriott, Inc. less than 1.50:1.00 and (“Marriott”), ii) less than seventy-five percent (75%) of the total number of rentable square feet at the Properties is leased pursuant to that certain Amended Wachovia Leases having terms and Restated Management Agreement dated conditions substantially similar to those Wachovia Leases in effect as of August 28the Closing Date, 2002, as amended by that First Amendment Borrower shall pay to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott Lender on each Payment Date the Replacement Reserve Monthly Deposit (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as additional security for the Debt, Mortgagor such amounts so deposited shall establish and maintain a repair and replacement reserve (hereinafter be called the “Replacement ReserveReserve Funds”) with Mortgagee for payment of costs replacements and expenses incurred by Mortgagor in connection with repairs required to be made to each Property during the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate calendar year (collectively, the “RepairsReplacements”). Upon The account in which the termination Replacement Reserve Funds are held shall hereinafter be referred to as the “Replacement Reserve Account.” Lender may reassess its estimate of the Marriott Management AgreementReplacement Reserve Monthly Deposit from time to time, and may increase same upon thirty (30) days notice to Borrower if Lender determines in its reasonable discretion that an increase is necessary to maintain the proper maintenance and operation of any of the Properties. Notwithstanding anything contained in this clause (a) to the contrary, the Replacement Reserve Funds shall not include any costs of Replacements at any Property which are required to be paid by Wachovia pursuant to the Wachovia Lease applicable to such Property. At such time as (i) the Debt Service Coverage Ratio is equal to or greater than 1.75:1.00 and (ii) seventy-five percent (75%) or more of the total number of rentable square feet at the Properties is leased pursuant to Wachovia Leases having terms and conditions substantially similar to those Wachovia Leases in effect as of the Closing Date, all funds held by Marriott thereunder then on deposit in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits Account shall be made on each monthly Payment Date under the Notereturned to Borrower, concurrently with and in addition to the monthly payments due under the Note. Deposits to the Replacement Reserve, when required, shall be in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above. So long as provided no Default or Event of Default has occurred and is then continuing. (b) Lender shall make disbursements from the Replacement Reserve Account to pay Borrower only for the costs of the Replacements at the Properties for which the Replacement Reserve Funds are being held pursuant to this Section 7.3. Lender shall not be obligated to make disbursements from the Replacement Reserve Account to reimburse Borrower for the costs of routine maintenance to any Property. For the purposes of this Section, Mortgagee any item for which a disbursement from the Replacement Reserve Account is requested shall hereinafter be called a “Work Item.” (c) Lender shall, to upon written request from Borrower and satisfaction of the extent funds are available for such purpose requirements set forth in the Replacement Reservethis Section 7.3, disburse to Mortgagor Borrower amounts from the amount paid Replacement Reserve Account necessary to pay for the actual approved costs of Replacements or incurred to reimburse Borrower therefore, upon completion of such Replacements (or, upon partial completion) as determined by Mortgagor in performing such Repairs within ten Lender. In no event shall Lender be obligated to disburse funds from the Replacement Reserve Account if an Event of Default exists. (10d) days following: (a) the receipt by Mortgagee of a written Each request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee Account shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined in a form reasonably approved by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee Lender and shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, specify (i) the Impound Account, specific Work Item for which the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”)disbursement is requested, (ii) the accounts into which quantity and price of each item purchased, if the Reserves have been depositedWork Item includes the purchase or replacement of specific items, (iii) the price of all insurance on said accountsmaterials (grouped by type or category) used in any Work Item other than the purchase or replacement of specific items, and (iv) the cost of all accounts, contract rights and general intangibles contracted labor or other rights and interests pertaining thereto, (v) services applicable to each Work Item for which such request for disbursement is made. With each request Borrower shall certify that all sums now or hereafter therein or represented thereby, (vi) Work Items have been made in accordance with all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing applicable Legal Requirements of any Governmental Authority having jurisdiction over the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom)applicable Property, and (ix) in accordance with the Condominium Documents, if applicable. Each request for disbursement shall include, upon Lender’s request, copies of invoices for all proceeds items or materials purchased and all contracted labor or services provided and, unless Lender has agreed to issue joint checks as described below in connection with a particular Work Item, each request shall include evidence satisfactory to Lender of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession payment of all passbooks or other evidences of such accounts. Mortgagor hereby assumes amounts. (e) Borrower shall pay all risk of loss invoices in connection with the Work Items with respect to amounts on deposit which a disbursement is requested prior to submitting such request for disbursement from the Replacement Reserve Account or, at the request of Borrower, Lender will issue joint checks, payable to Borrower and the contractor, supplier, materialman, mechanic, subcontractor or other party to whom payment is due in connection with a Work Item. In the case of payments made by joint check, Lender may require a waiver of lien from each Person receiving payment prior to Lender’s disbursement from the Replacement Reserve Account. Any lien waiver delivered hereunder shall conform to the requirements of applicable law and shall cover all work performed and materials supplied (including equipment and fixtures) for the applicable Property by that contractor, supplier, subcontractor, mechanic or materialman through the date covered by the current reimbursement request (or, in the Reservesevent that payment to such contractor, unless finally determined supplier, subcontractor, mechanic or materialmen is to be made by a court joint check, the release of competent jurisdiction to have been caused lien shall be effective through the date covered by the gross negligence or willful misconduct previous release of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds request). (f) Borrower shall not make a request for disbursement from the Reserves Replacement Reserve Account more frequently than twice in any calendar month and (except in connection with the final disbursement) the total cost of all Replacements in any request shall not be less than $25,000. (g) With regard to disbursements from the Replacement Reserve Account, Borrower shall make Replacements when required in order to keep the applicable Property in condition and repair consistent with other first class, office properties in the same market segment in the metropolitan area in which the applicable Property is located, and to keep the applicable Property or any portion thereof from deteriorating. Borrower shall complete all Replacements in a good and workmanlike manner as set forth herein is at Mortgagor’s direction and is not soon as practicable following the exercise by Mortgagee commencement of any right making each such Replacement. (h) During the continuance of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of a Low DSCR Period, Lender reserves the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagorright, at its option, to approve all contracts or work orders with materialmen, mechanics, suppliers, subcontractors, contractors or other parties providing labor or materials in connection with the Work Items to the extent the estimated cost thereof exceeds $100,000, provided that any such approval shall not be unreasonably withheld and should be delivered to the Borrower within five (5) Business Days of any request thereof. Upon Lender’s request, Borrower shall assign any contract or subcontract to Lender. (i) During the continuance of an Event of Default or a Low DSCR Period, if Lender determines in its reasonable discretion that any Work Item is not being performed in a workmanlike or timely manner or that any Work Item has not been completed in a workmanlike or timely manner, Lender shall have the option to withhold disbursement for such unsatisfactory Work Item and to proceed under existing contracts or to contract with third parties to complete such Work Item and to apply the Replacement Reserve Funds toward the labor and materials necessary to complete such Work Item, without providing any prior notice to Borrower and to exercise any and all other remedies available to Lender upon an Event of Default hereunder. (j) In order to facilitate Lender’s completion or making of the Work Items, Borrower grants Lender the right to enter onto the applicable Property and perform any and all work and labor necessary to complete or make the Work Items and/or employ watchmen to protect the applicable Property from damage. All sums so expended by Lender, to the extent not from the Replacement Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower and secured by the related Security Instrument. For this purpose Borrower constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution to complete or undertake the Work Items in the name of Borrower. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked. Borrower empowers said attorney-in-fact as follows: (Ai) withdraw to use any funds in the Replacement Reserve Account for the purpose of making or completing the Work Items; (ii) to make such additions, changes and corrections to the Work Items as shall be necessary or desirable to complete the Work Items; (iii) to employ such contractors, subcontractors, agents, architects and inspectors as shall be required for such purposes; (iv) to pay, settle or compromise all existing bills and claims which are or may become Liens against any Property, or as may be necessary or desirable for the completion of the Work Items, or for clearance of title; (v) to execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (vi) to prosecute and defend all actions or proceedings in connection with any Property or the rehabilitation and repair of any Property; and (vii) to do any and every act which Borrower might do in its own behalf to fulfill the terms of this Agreement. (k) Nothing in this Section 7.3 shall: (i) make Lender responsible for making or completing the Work Items; (ii) require Lender to expend funds in addition to Replacement Reserve Funds to make or complete any Work Item; (iii) obligate Lender to proceed with the Work Items; or (iv) obligate Lender to demand from Borrower additional sums to make or complete any Work Item. (l) During the continuance of an Event of Default or a Low DSCR Period, Lender may require an inspection of any Property at Borrower’s expense prior to making a monthly disbursement from the Replacement Reserve Account in order to verify completion of the Work Items for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and/or may require a copy of a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement of any amounts from the Replacement Reserve Account. Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional. (m) The Work Items and all materials, equipment, fixtures, or any other item comprising a part of any Work Item shall be constructed, installed or completed, as applicable, free and clear of all mechanic’s, materialman’s or other liens (except for those Liens existing on the date hereof which have been approved in writing by Lender). (n) Before each disbursement from the Replacement Reserve Account in excess of $250,000, Lender may require Borrower to provide Lender with a search of title to the applicable Property effective to the date of the disbursement, which search shows that no mechanic’s or materialmen’s liens or other liens of any nature have been placed against the applicable Property since the date of recordation of the related Security Instrument and that title to the applicable Property is free and clear of all Liens (other than the lien of the related Security Instrument and any other Liens previously approved in writing by Lender, if any). (o) All Work Items shall comply with all applicable Legal Requirements of all Governmental Authorities having jurisdiction over the applicable Property, the terms and conditions of the Condominium Documents, if applicable, and applicable insurance requirements including, without limitation, interestapplicable building codes, special use permits, environmental regulations, and requirements of insurance underwriters. (p) then remaining In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with a particular Work Item. All such policies shall be in form and amount reasonably satisfactory to Lender. All such policies which can be endorsed with standard mortgagee clauses making loss payable to Lender or its assigns shall be so endorsed. Certified copies of such policies shall be delivered to Lender. (q) During the Reserves and apply continuance of an Event of Default, Lender may use the sameReplacement Reserve Funds (or any portion thereof) for any purpose, after deducting all costs and expenses of safekeeping, collection and delivery (including, including but not limited to, reasonable attorneys’ fees, costs and expenses) to completion of the Debt Work Items or for any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid repair or replacement to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, Property or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full toward payment of the Debt in accordance with such order, proportion and priority as Lender may determine in its terms or at such earlier time as Mortgagee may elect, the balance sole discretion. (r) The insufficiency of any balance in the Replacement Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents. (s) Borrower shall indemnify Lender and hold Lender 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 all in any way connected with the performance of the Reserves then Replacements. Borrower shall assign to Lender all rights and claims Borrower may have against all persons or entities supplying labor or materials in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have connection with the Work Items; provided, however, that Lender may not pursue any such right or claim theretounless an Event of Default has occurred and remains uncured.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor Grantor shall establish and maintain at all times while this Deed of Trust continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee Beneficiary for payment ------------------- of costs and expenses incurred by Mortgagor Grantor in connection with the repairperformance of work related to the maintenance, replacement and maintenance and/or repair of the furnitureTrust Property, fixtures and equipment at the Mortgaged Property and the performance of including without limitation, work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor Grantor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of first monthly Payment Date ------- under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date under the Note, Grantor shall pay to Beneficiary, concurrently with and in addition to the monthly payments due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) $5,916.67 per month. So long as no Event of Default has occurred and is continuing, all sums in the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required held by Beneficiary in an amount equal the Replacement Reserve to pay the difference between such Management Agreement reserve percentage costs and five percent (5%) expense of the gross revenues of the Property as calculated aboveRepairs. So long as no Default or Event of Default has occurred and is continuing, Mortgagee Beneficiary shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor Grantor the amount paid or incurred by Mortgagor Grantor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee Beneficiary of a written request from Mortgagor Grantor for disbursement from the Replacement Reserve and a certification by Mortgagor Grantor that the applicable item of Repair has been completed; (b) the delivery to Mortgagee Beneficiary of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to MortgageeBeneficiary, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items costing in excess of $50,000.00, the delivery to Mortgagee Beneficiary of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee Beneficiary showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Trust Property have been paid all amounts due for labor and materials furnished to the Mortgaged Trust Property; (d) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a certification from an inspecting architect or other a third party acceptable to Mortgagee Beneficiary describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests with individual items costing in excess of $50,000.00, delivery to Mortgagee Beneficiary of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor Grantor that no new certificate of occupancy is required. Mortgagee Beneficiary shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee Beneficiary shall be entitled to rely on such request from Mortgagor Grantor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee Beneficiary may, at Mortgagor’s Xxxxxxx's expense, make or cause to be made during the term of this Mortgage Deed of Trust an annual inspection of the Mortgaged Trust Property to determine the need, as determined by Mortgagee Beneficiary in its reasonable judgment, for further Repairs of the Mortgaged Trust Property. In the event that such inspection reveals that further Repairs of the Mortgaged Trust Property are required, Mortgagee Beneficiary shall provide Mortgagor Grantor with a written description of the required Repairs and Mortgagor Grantor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor Grantor shall make such Repairs Repairs, as may be mutually agreed upon by Mortgagor Grantor and Mortgagee Beneficiary and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor Grantor as provided in Section 4.31 hereof.. ------------ (b) As additional security for the payment and performance by Mortgagor Grantor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor Grantor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto MortgageeBeneficiary, and hereby grants to Mortgagee Beneficiary a security interest in Mortgagor’s Grantor's right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “"Reserves”"), (ii) the accounts into which the Reserves have been deposited, -------- (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor Grantor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s Beneficiary's name or the name of any entity servicing the Note for Mortgagee Beneficiary and hereby acknowledges and agrees that MortgageeBeneficiary, or at Mortgagee’s Beneficiary's election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee Beneficiary herein may be delivered by Mortgagee Beneficiary at any time to the financial institution wherein the Reserves have been established, and MortgageeBeneficiary, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor Grantor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of MortgageeBeneficiary. Mortgagor Grantor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s Grantor's direction and is not the exercise by Mortgagee Beneficiary of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee Beneficiary may, without notice or demand on MortgagorGrantor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ ' fees, costs and expenses) to the Debt or any other obligations of Mortgagor Grantor under the other Loan Documents in such manner as Mortgagee Beneficiary shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to MortgagorGrantor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s Beneficiary's option and in Mortgagee’s Beneficiary's discretion, may either be held in a separate account or be commingled by Mortgagee Beneficiary with the general funds of MortgageeBeneficiary. The Reserves are solely for the protection of Mortgagee Beneficiary and entail no responsibility on Mortgagee’s Beneficiary's part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage Deed of Trust by Mortgagee Beneficiary and assumption by assignee of Mortgagee’s Beneficiary's obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of MortgageeBeneficiary, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee Beneficiary for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee Beneficiary on subsequent payments to be made hereunder or, at the option of MortgageeBeneficiary, refunded to MortgagorGrantor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor Grantor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee Beneficiary the full amount of any such deficiency. If Mortgagor Grantor shall fail to deposit with Mortgagee Beneficiary the full amount of such deficiency as provided above, Mortgagee Beneficiary shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by MortgageeBeneficiary, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee Beneficiary until actually paid by MortgagorGrantor, shall be immediately paid by Mortgagor Grantor on demand and shall be secured by this Mortgage Deed of Trust and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage Deed of Trust that shall have occurred and be continuing, Mortgagee Beneficiary may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee Beneficiary shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee Beneficiary may elect, the balance of any or all of the Reserves then in Mortgagee’s Beneficiary's possession shall be paid over to Mortgagor Grantor and no other party shall have any right or claim thereto.

Replacement Reserve. 7.1 Tenant shall pay to Landlord, each month during the Term, the sum of $3,300.00/month (a$39,600/year) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”the "Replacement Reserve Installment"), pursuant which is the amount to that certain Amended be deposited by Landlord in a fund (the "Replacement Reserve Fund") to be utilized for capital improvements and Restated Management Agreement dated repairs to the Facility, under the same terms as the "Reserve Fund For Replacement" requirements of the U.S. Department of Housing and Urban Development ("HUD") for properties subject to mortgages which are HUD-insured under Section 232 of the National Housing Act (the Facility is not subject to such a Mortgage). If a new Mortgage (or Mortgages) should be granted by Landlord, in accordance with Section 21 below, and the terms of such new Mortgage(s) require Landlord to make greater payments to a Replacement Reserve Fund or similar fund than the amount of the Replacement Reserve Installment described above, the Replacement Reserve Installments due from Tenant shall be increased to conform to the requirements of such new Mortgage(s). 7.2 Landlord shall deposit the Replacement Reserve Installments received from Tenant into a Replacement Reserve Fund similar to the procedure used with HUD-insured mortgages. Landlord shall make the Replacement Reserve Fund (both the balance of such fund as of August 28the Commencement Date and additions thereto from the Replacement Reserve Installments paid by Tenant) available to Tenant for reimbursement of amounts spent by Tenant for capital improvements and repairs, 2002in accordance with the standards utilized by HUD for release of funds from a Reserve Fund For Replacement as set out in Chapter 4 of HUD Handbook 4350.01 Rev-1 ("Multifamily Asset Management And Project Servicing", September, 1992)(hereafter referred to as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”"HUD Standards"). If the Marriott Management Agreement Facility is terminated, then, as additional security for the Debt, Mortgagor shall establish and maintain subject to a repair and replacement reserve (the “Replacement Reserve”) with Mortgage requiring Mortgagee for payment approval of costs and expenses incurred by Mortgagor funds in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpets, appliances, fixtures, furnishings, elevators and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “Repairs”). Upon the termination of the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve Fund, then promptly upon Landlord's receipt of a request from Tenant for reimbursement from the Replacement Reserve Fund ("Draw Request"), Landlord shall submit a request to Landlord's Mortgagee for the release of such funds, and shall use its best efforts to cause the mortgagee to approve the Draw Request. Upon receipt of the required Mortgagee approval of the Draw Request (if and for so long as such approval is required), Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the Mortgaged Property funds. 7.3 If the Facility is managed pursuant subject to a Management Agreement Mortgage which requires that a fund similar to a Replacement Reserve Fund (as hereinafter defined"Mortgagee Reserve Fund") subsequently entered into be held under the control of the Mortgagee, Tenant shall submit Draw Requests, and Landlord shall make funds available to Tenant, in accordance with the provisions standards of Section 1.30 hereofthe Mortgagee, which shall be commercially reasonable. Upon approval of a Tenant Draw Request by the Mortgagee, Landlord shall make funds available to Tenant within five Business Days of Landlord's receipt of the funds from the Mortgagee. 7.4 If deposits the Facility is not subject to a Mortgage which requires that a Replacement Reserve Fund or Mortgagee Reserve Fund, the Replacement Reserve are required hereunder, deposits Installments shall be made on each monthly Payment Date held in a segregated federally-insured bank account to be controlled by Landlord to be used solely for holding Replacement Reserve Installments under this Lease (with, at Landlord's discretion, similar payments from one or more of the Note, concurrently with and in addition Affiliated Tenants pursuant to the monthly payments due under Other Leases) (such account, the Note"Reserve Account"). Deposits Funds in the Reserve Account shall be the property of Tenant, subject to the Replacement Reserve, when required, shall condition that such funds may not be in an amount equal to five percent (5.0%) used for any purpose other than reimbursement of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations Tenant for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal improvements to the difference between such Management Agreement reserve percentage Leased Property pursuant to this Lease and five percent (5%) of the gross revenues of HUD Standards. Tenant shall submit Draw Requests to Landlord for reimbursement from the Property as calculated above. So long as no Default or Event of Default has occurred Reserve Account in accordance with the HUD Standards, and is continuing, Mortgagee shall, Landlord shall make funds from the Reserve Account available to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs Tenant within ten (10) days following: Business Days of Landlord's receipt of Tenant's Draw Request (aincluding supporting documentation) in accordance with the receipt HUD Standards. 7.5 All interest earned on the funds paid by Mortgagee of a written request from Mortgagor for disbursement from Tenant under this Section 7 shall be added to the Replacement Reserve Fund, Mortgagee Reserve Fund, or Reserve Fund, as applicable, and a certification by Mortgagor that shall be reported for tax purposes as income of Tenant. At the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion end of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00Lease Term, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained funds remaining in the Replacement Reserve Fund, Mortgagee Reserve Fund or Reserve Account shall be placed in an interest-bearing account upon receipt and interest thereon credited become the property of Landlord. Tenant's obligations to Mortgagor maintain the Leased Premises as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties11 below, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgageeto make capital improvements as provided in Section 24 below, and hereby grants to Mortgagee a security interest replace Equipment and Supplies as provided in Mortgagor’s right, title and interest in, (i) Section 29 below shall not be conditioned upon the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or availability of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Replacement Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided aboveFund, Mortgagee shall have the optionReserve Fund, but not the obligation, to make or Reserve Account for such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim theretopurposes.

Replacement Reserve. (a) The Mortgaged Property is currently managed by Residence Inn by Marriott, Inc. (“Marriott”), pursuant to that certain Amended and Restated Management Agreement dated as of August 28, 2002, as amended by that First Amendment to Amended and Restated Management Agreement dated November 10, 2004, between AHM RES II Limited Partnership and Marriott (together, the “Marriott Management Agreement”). If the Marriott Management Agreement is terminated, then, as As additional security for the Debt, Mortgagor shall establish and maintain at all times while this Mortgage continues in effect a repair and replacement reserve (the “"Replacement Reserve”") with Mortgagee for payment of costs and expenses incurred by Mortgagor in connection with the repair, replacement and maintenance of the furniture, fixtures and equipment at the Mortgaged Property and the performance of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps, driveways, balconies, porches, patios, exterior walls, exterior doors and doorways, windows, carpetselevators, applianceslighting, fixturesballasts, furnishings, elevators lamps and mechanical and HVAC equipment and such other work as Mortgagor deems necessary or appropriate (collectively, the “"Repairs”"). Upon Commencing on the termination of first monthly payment date under the Marriott Management Agreement, all funds held by Marriott thereunder in the Repairs Note and Equipment Reserve (as defined in the Marriott Management Agreement) and attributable to the Mortgaged Property shall be immediately assigned to Mortgagee and deposited into the Replacement Reserve. The Replacement Reserve shall be maintained for so long as this Mortgage continues in effect after the termination of the Marriott Management Agreement; provided, however, no monthly deposits will be required to the Replacement Reserve if and for so long as the Mortgaged Property is managed pursuant to a Management Agreement (as hereinafter defined) subsequently entered into in accordance with the provisions of Section 1.30 hereof. If deposits to the Replacement Reserve are required hereunder, deposits shall be made continuing thereafter on each monthly Payment Date payment date under the Note, Mortgagor shall pay to Mortgagee, concurrently with and in addition to the monthly payments payment due under the Note. Deposits Note and until the Debt is fully paid and performed, a deposit to the Replacement Reserve, when required, shall be Reserve in an amount equal to five percent (5.0%) of the gross revenues of the Mortgaged Property based upon the most recent annual balance sheets and statement of operations for the Mortgaged Property. Notwithstanding the foregoing, if a Management Agreement reserves funds for Repairs in an amount less than five percent (5%) of the gross revenues of the Mortgaged Property as calculated above, then a Replacement Reserve deposit shall be required in an amount equal to the difference between such Management Agreement reserve percentage and five percent (5%) of the gross revenues of the Property as calculated above$1,044.51 per month. So long as no Default default hereunder or Event under the other Loan Documents has occurred and is continuing, all sums in the Replacement Reserve shall be held by Mortgagee in the Replacement Reserve to pay the costs and expenses of Default Repairs. So long as no default hereunder or under the other Loan Documents has occurred and is continuing, Mortgagee shall, to the extent funds are available for such purpose in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in performing such Repairs within ten (10) days following: (a) the receipt by Mortgagee of a written request from Mortgagor for disbursement from the Replacement Reserve and a certification by Mortgagor in a form approved in writing by Mortgagee that the applicable item of Repair has been completed; (b) the delivery to Mortgagee of invoices, receipts, cancelled checks receipts or other evidence reasonably satisfactory to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement requests with individual items in excess of $50,000.0020,000.00, the delivery to Mortgagee of affidavits, lien waivers, cancelled checks waivers or other evidence reasonably satisfactory to Mortgagee showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Mortgaged Property have been paid all amounts due for labor and materials furnished to the Mortgaged Property; (d) for disbursement requests in excess of $50,000.00, delivery to Mortgagee of a certification from an inspecting architect or other third party acceptable to Mortgagee describing the completed Repairs and verifying the completion of the Repairs and the value of the completed Repairs; and (e) for disbursement requests costing in excess of $50,000.00, delivery to Mortgagee of a new certificate of occupancy or local equivalent for the portion of the Improvements covered by such Repairs, if said new certificate of occupancy is required by law, or a certification by Mortgagor that no new certificate of occupancy is required. Mortgagee shall not be required to make advances from the Replacement Reserve more frequently than once in any ninety (90) day period. In making any payment from the Replacement Reserve, Mortgagee shall be entitled to rely on such request from Mortgagor without any inquiry into the accuracy, validity or contestability of any such amount. Mortgagee may, at Mortgagor’s expense, make or cause to be made during the term of this Mortgage an annual inspection of the Mortgaged Property to determine the need, as determined by Mortgagee in its reasonable judgment, for further Repairs of the Mortgaged Property. In the event that such inspection reveals that further Repairs of the Mortgaged Property are required, Mortgagee shall provide Mortgagor with a written description of the required Repairs and Mortgagor shall respond within thirty (30) days of such request, and, thereafter, Mortgagor shall make such Repairs as may be mutually agreed upon by Mortgagor and Mortgagee and within such time period as may be mutually agreed upon. Funds contained in the Replacement Reserve shall be placed in an interest-bearing account upon receipt and interest thereon credited to Mortgagor as provided in Section 4.31 hereof. (b) As additional security for the payment and performance by Mortgagor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Mortgagor hereby unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest in Mortgagor’s right, title and interest in, (i) the Impound Account, the Replacement Reserve, the Repair and Remediation Reserve and any other reserve or escrow account established pursuant to the terms hereof or of any other Loan Document (collectively, the “Reserves”), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Mortgagee’s name or the name of any entity servicing the Note for Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee’s election, such servicing agent, shall have exclusive control over said account. Notice of the assignment and security interest granted to Mortgagee herein may be delivered by Mortgagee at any time to the financial institution wherein the Reserves have been established, and Mortgagee, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts on deposit in the Reserves, unless finally determined by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of Mortgagee. Mortgagor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Mortgagor’s direction and is not the exercise by Mortgagee of any right of set-off or other remedy upon a Default or an Event of Default. If an Event of Default shall occur hereunder or under any other of the Loan Documents and shall be continuing, Mortgagee may, without notice or demand on Mortgagor, at its option: (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, reasonable attorneys’ fees, costs and expenses) to the Debt or any other obligations of Mortgagor under the other Loan Documents in such manner as Mortgagee shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity. No such use or application of the funds contained in the Reserves shall be deemed to cure any Default or Event of Default. (c) The Reserves shall not, unless otherwise explicitly required by applicable law, be or be deemed to be escrow or trust funds, but, at Mortgagee’s option and in Mortgagee’s discretion, may either be held in a separate account or be commingled by Mortgagee with the general funds of Mortgagee. The Reserves are solely for the protection of Mortgagee and entail no responsibility on Mortgagee’s part beyond the payment of the respective items for which they are held following receipt of bills, invoices or statements therefor in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of this Mortgage by Mortgagee and assumption by assignee of Mortgagee’s obligations hereunder, any funds in the Reserves shall be turned over to the assignee and any responsibility of Mortgagee, as assignor, with respect thereto shall terminate. If the funds in the applicable Reserve shall exceed the amount of payments actually applied by Mortgagee for the purposes and items for which the applicable Reserve is held, such excess may be credited by Mortgagee on subsequent payments to be made hereunder or, at the option of Mortgagee, refunded to Mortgagor. If, however, the applicable Reserve shall not contain sufficient funds to pay the sums required by the dates on which such sums are required to be on deposit in such account, Mortgagor shall, within thirty (30) days after receipt of written notice thereof, deposit with Mortgagee the full amount of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the full amount of such deficiency as provided above, Mortgagee shall have the option, but not the obligation, to make such deposit, and all amounts so deposited by Mortgagee, together with interest thereon at the Default Interest Rate from the date so deposited by Mortgagee until actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured by this Mortgage and by all of the other Loan Documents securing all or any part of the Debt. If there is an Event of Default under this Mortgage that shall have occurred and be continuing, Mortgagee may, but shall not be obligated to, apply at any time the balance then remaining in any or all of the Reserves against the Debt in whatever order Mortgagee shall subjectively determine. No such application of any or all of the Reserves shall be deemed to cure any Event of Default. Upon full payment of the Debt in accordance with its terms or at such earlier time as Mortgagee may elect, the balance of any or all of the Reserves then in Mortgagee’s possession shall be paid over to Mortgagor and no other party shall have any right or claim thereto.