Exhibit 10.5

LOAN MODIFICATION AGREEMENT

(COMM 2015-LC23; Loan No. 028000779)

 

THIS LOAN MODIFICATION AGREEMENT (this “Agreement”) is executed this 3rd day of
August, 2020 (“Execution Date”), to be effective as of the 6th day of May, 2020
(“Effective Date”), and is entered into by and between WILMINGTON TRUST,
NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFIT OF THE HOLDERS OF COMM
2015-LC23 MORTGAGE TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, IN SUCH
CAPACITY, AND ON BEHALF OF ANY RELATED SERVICED COMPANION LOAN NOTEHOLDERS
(together with its successors and assigns, “Lender”), having an address at c/o
Wells Fargo Bank, N.A., Wells Fargo Commercial Mortgage Servicing, Three Wells
Fargo, 401 S. Tryon Street, 8th Floor, MAC D1050-084, Charlotte, North Carolina
28202, Re: COMM 2015-LC23; Loan No. 028000779; and HIT PORTFOLIO II HIL TRS, LLC
(formerly known as ARC HOSPITALITY PORTFOLIO II HIL TRS, LLC), HIT PORTFOLIO II
OWNER, LLC (formerly known as ARC HOSPITALITY PORTFOLIO II OWNER, LLC), HIT
PORTFOLIO II MISC TRS, LLC (formerly known as ARC HOSPITALITY PORTFOLIO II MISC
TRS, LLC), HIT PORTFOLIO II NTC OWNER, LP (formerly known as ARC HOSPITALITY
PORTFOLIO II NTC OWNER, LP), HIT PORTFOLIO II NTC HIL TRS, LP (formerly known as
ARC HOSPITALITY PORTFOLIO II NTC HIL TRS, LP), HIT PORTFOLIO II NTC TRS, LP,
(formerly known as ARC HOSPITALITY PORTFOLIO II NTC TRS, LP), HIT PORTFOLIO II
TRS, LLC (formerly known as ARC HOSPITALITY PORTFOLIO II TRS, LLC), HIT
STRATFORD, LLC (formerly known as ARC HOSPITALITY STRATFORD, LLC) and HIT TRS
STRATFORD, LLC (formerly known as ARC HOSPITALITY TRS STRATFORD, LLC), each a
Delaware limited liability company or limited partnership (individually or
collectively as the context requires, “Borrower”), and each having an address at
c/o Hospitality Investors Trust, Inc., Park Avenue Tower, 65 East 55th Street,
Suite 801, New York, New York 10022.

 

PRELIMINARY STATEMENT

 

A.     On or about October 6, 2015 (the “Loan Origination Date”), Ladder Capital
Finance LLC (“LCF”) and German American Capital Corporation (“GACC”, and
together with LCF, collectively, “Original Lender”) made a loan (“Loan”) in the
original principal amount of $232,000,000.00 to Borrower with respect to
premises more particularly described on the attached Exhibit A (each, a
“Property” and collectively, the “Properties”), which such Loan is evidenced or
secured by, among others, the documents described on the attached Exhibit B
(collectively referred to as “Loan Documents”). For all purposes, this Agreement
and all other Modification Documents (hereinafter defined) shall constitute a
Loan Document after the Effective Date.

 

B.     Lender is now the holder of the Security Instruments described in Exhibit
B and has authority to enter into this Agreement.

 

C.     The operations of the Properties have been affected by the coronavirus
(COVID-19) pandemic (“Public Health Event”).

 

D.     Lender and Borrower have agreed to modify the Loan Documents on the terms
and conditions set forth in this Agreement.

 

In consideration of $10.00 paid by each of the Parties (as hereinafter defined)
to the other, the mutual covenants set forth below, and other good and valuable
consideration, receipt and sufficiency of which are acknowledged, the Parties
agree as follows:

 

ARTICLE 1     
DEFINITIONS

 

The terms set forth below have the meaning ascribed to them for purposes of this
Agreement. Other capitalized terms contained in this Agreement shall have the
meanings assigned to them herein. Any capitalized terms utilized in this
Agreement and not defined in this Agreement shall have the meanings set forth in
the Loan Documents.

 

1.1     “Bankruptcy Code” means Title 11 of the U.S. Code, as amended.

 

1.2     “Borrower Signatory” means any of Jonathan P. Mehlman, the Chief
Executive Officer and President of Borrower, Bruce A. Riggins, the Chief
Financial Officer and Treasurer of Borrower, or Paul C. Hughes, the General
Counsel and Secretary of Borrower.

 

1.3     “Collateral” means any and all real and personal property described in
any of the Loan Documents as security for Borrower’s obligations under the Loan,
including, without limitation, the Properties.

 

1.4     “Debt” means the total amount described in Section 2.2(b) plus all other
amounts that may subsequently be due from Borrower to Lender under the Loan
Documents, this Agreement, and at law or in equity, including advances made by
any Servicer, together with any interest thereon. The term “Debt” also includes
any and all other interest, advances, debts, obligations and liabilities of
Borrower under the Loan Documents or this Agreement, whether voluntary or
involuntary, however arising, including, without limitation, advances made by a
Servicer together with any interest thereon, and administrative charges.

 

1.5     “Debtor Proceeding” means any proceeding for relief, protection,
reorganization, liquidation, dissolution or similar relief for debtors under any
present or future local, state, federal or other insolvency law or laws
providing relief for debtors.

 

1.6     “Guarantor” means Hospitality Investors Trust, Inc. (formerly known as
American Realty Capital Hospitality Trust, Inc.), a Maryland corporation.

 

1.7      “Joinder” means the Joinder by and Agreement of Guarantor attached to
this Agreement.

 

1.8     “Lender Parties” means, collectively, Lender, Trustee, Servicer, all
subsidiaries, parents and affiliates of Lender, Trustee and Servicer, and each
of the foregoing parties’ predecessors in interest, and each and all of their
respective past, present and future partners, members, managers, certificate
holders, officers, directors, shareholders, employees, agents, contractors,
representatives, participants and heirs and each and all of the successors and
assigns of each of the foregoing.

 

1.9     “Modification Documents” means collectively this Agreement, those
certain amendments to Security Instruments by and between Lender and Borrower,
being entered into on the Execution Date, and any and all documents executed in
connection herewith.

 

1.10      “Party” means any, and “Parties” means all, of the signatories to this
Agreement.

 

1.11     “Servicer” means collectively, Wells Fargo Bank, N.A., as master
servicer and LNR Partners, LLC, as special servicer, and any and all other
parties appointed and/or serving as servicers of the Loan.

 

1.12      “Trustee” means Wilmington Trust, National Association.

 

ARTICLE 2     
WARRANTIES AND REPRESENTATIONS

 

Borrower warrants and represents as follows as of the Execution Date and the
Effective Date:

 

2.1     Authority of Borrower.

 

(a)     Each LLC Borrower is a duly organized and validly existing limited
liability company in good standing under the laws of the State of Delaware and
is qualified to transact business in each state where any Property it owns or
leases is located. Borrower Signatory is an officer of each LLC Borrower.
Borrower Signatory, acting alone without the joinder of any other members or
managers of any LLC Borrower or any other party, has the power and authority to
execute and deliver the Modification Documents on behalf of and to duly bind
each LLC Borrower under this Agreement and the Modification Documents. The
execution and delivery of, and performance under, this Agreement and the
Modification Documents by each LLC Borrower has been duly and properly
authorized pursuant to all requisite limited liability company action of each
LLC Borrower and does not and will not (x) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to any LLC Borrower or any LLC
Borrower’s certificate of formation, limited liability company agreement or any
other organizational document of any LLC Borrower or (y) result in a breach of
or constitute or cause a default under any indenture, agreement, lease or
instrument to which any LLC Borrower is a party or by which the Properties may
be bound or affected.

 

(b)     Each LP Borrower is a duly organized and validly existing limited
partnership in good standing under the laws of the State of Delaware and is
qualified to transact business in each state where any Property it owns or
leases is located. Each SPC Party is a duly organized and validly existing
limited liability company in good standing under the laws of the State of
Delaware and is qualified to transact business in each state where the conduct
of its business requires such qualification. Borrower Signatory is an officer of
each SPC Party, the general partners of the LP Borrowers. Borrower Signatory,
acting alone without the joinder of any other members or managers of any LP
Borrower, SPC Party or any other party, has the power and authority to execute
and deliver the Modification Documents on behalf of and to duly bind each LP
Borrower under this Agreement and the Modification Documents. The execution and
delivery of, and performance under, this Agreement and the Modification
Documents by each LP Borrower has been duly and properly authorized pursuant to
all requisite limited partnership action of each LP Borrower and limited
liability company action of each SPC Party and does not and will not (x) violate
any provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to any
LP Borrower, SPC Party or any LP Borrower’s or SPC Party’s certificate of
formation, limited liability company agreement, certificate of limited
partnership or partnership agreement or any other organizational document of any
LP Borrower or SPC Party or (y) result in a breach of or constitute or cause a
default under any indenture, agreement, lease or instrument to which any LP
Borrower or SPC Party is a party or by which the Properties may be bound or
affected.

 

(c)     Each Liquor License Subsidiary is a duly organized and validly existing
limited liability company in good standing under the laws of the State of
Delaware and is qualified to transact business in the State of Texas. Jonathan
P. Mehlman is an officer of each Liquor License Subsidiary. Jonathan P. Mehlman,
acting alone without the joinder of any other members or managers of any Liquor
License Subsidiary or any other party, has the power and authority to execute
and deliver the Modification Documents on behalf of and to duly bind each Liquor
License Subsidiary under this Agreement and the Modification Documents. The
execution and delivery of, and performance under, this Agreement and the
Modification Documents by each Liquor License Subsidiary has been duly and
properly authorized pursuant to all requisite limited liability company action
of each Liquor License Subsidiary and does not and will not (x) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to any
Liquor License Subsidiary or any Liquor License Subsidiary’s certificate of
formation, limited liability company agreement or any other organizational
document of any Liquor License Subsidiary or (y) result in a breach of or
constitute or cause a default under any indenture, agreement, lease or
instrument to which any Liquor License Subsidiary is a party or by which the
Properties may be bound or affected.

 

2.2     Status of Loan.

 

(a)     Loan Documents. The Loan Documents to which Borrower is a party
constitute valid and legally binding obligations of Borrower and are enforceable
against Borrower and the Properties in accordance with their terms. There are no
modifications, verbal or written, to the Loan Documents other than those, if
any, described on the attached Exhibit B and set forth in this Agreement and the
other Modification Documents. The Modification Documents do not constitute the
creation of a new debt or the extinguishment of the debt evidenced by the Loan
Documents, nor will they in any way affect or impair the liens and security
interests created by the Loan Documents, which Borrower acknowledges to be valid
and existing liens and security interests in the Properties. Borrower agrees
that the lien and security interests created by the Loan Documents continue to
be in full force and effect, unaffected and unimpaired by the Modification
Documents or any collateral described in financing statements filed in
connection with the Loan Documents and that said liens and security interests
shall so continue in their perfection and priority until the debt secured by the
Loan Documents is fully discharged.

 

(b)     Loan Figures. As of the Effective Date and prior to the implementation
of the modifications contained in this Agreement, the Outstanding Principal
Balance is $232,000,000.00.

 

(c)     Assignment of Leases. The Assignment of Leases described in Exhibit B
constitutes an absolute, unconditional, current, assignments of rents, issues
and profits from the Properties, and all actions, if any, required to be taken
by Lender to perfect its rights to collect such rents, issues and profits have
been duly and properly taken by Lender. It is the intent of the Parties that
Lender’s security interest pursuant to the Assignment of Leases remains and
shall at all times remain perfected.

 

(d)     Transfer of Interests. Except as reflected in the organizational chart
set forth in Schedule 2.2(d) attached hereto and except for certain permitted
transfers which occurred prior to the Execution Date, no holder of a direct or
indirect beneficial ownership interest in any Borrower has assigned,
transferred, pledged or otherwise disposed of all or any part of its beneficial
ownership interests in any Borrower since the Loan Origination Date. Attached
hereto as Schedule 2.2(d) is the organizational chart relating to Borrower,
Guarantor, certain Affiliates and other parties, which is true, complete and
correct as of the Execution Date. No Person other than those Persons shown on
Schedule 2.2(d) have any ownership interest in, or right of Control, directly or
indirectly, in Borrower or Guarantor. Except as set forth in Schedule 2.2(d), no
Person, individually or together with Affiliates, owns an amount equal to or
greater than twenty percent (20%) of all legal and beneficial interests
(including on an as-converted basis) in Guarantor.

 

(e)     Representations in Loan Agreement, Security Instruments and Other Loan
Documents. Except as otherwise set forth on Schedule 2.2(e), the representations
and warranties contained in the Loan Agreement described in Exhibit B, the
Security Instruments described in Exhibit B and in the other Loan Documents are
true and correct in all material respects, as of the Execution Date and the
Effective Date as if made on such dates, except for those that are no longer
true due to facts or circumstances that occurred after the Loan Origination Date
and which, in each case, do not constitute a Default or Event of Default, taking
into account the terms and provisions of this Agreement.

 

2.3     No Bankruptcy Intent. No Borrower, SPC Party or Guarantor (collectively,
“Borrower Parties”) has been a party to any Debtor Proceeding within seven (7)
years prior to the Effective Date or Execution Date. None of the Borrower
Parties has any present intent to (a) file a voluntary petition with any
bankruptcy court of competent jurisdiction or be the subject of any petition
under the Bankruptcy Code; (b) seek, consent to, acquiesce in, any order for
relief issued under the Bankruptcy Code; (c) file or seek, consent to, or
acquiesce in any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors; (d) seek or consent to or acquiesce in the appointment of
any trustee, receiver, conservator, liquidator or assignee for the benefit of
creditors; or (e) seek, consent to, or acquiesce in, any order, judgment, or
decree entered by any court of competent jurisdiction approving a petition filed
against such party in connection with any Debtor Proceeding.

 

2.4     Financial Statements. The financial statements of each Borrower and
Guarantor previously delivered by Borrower to Lender in connection with this
Agreement (the “Financial Statements”) (i) are true, complete and accurate in
every material respect and (ii) accurately represent, in all material respects,
the financial condition and business operations of each Borrower and Guarantor
and the income and expenses related to the Properties, as of the date thereof.
The Financial Statements have been prepared in accordance with the requirements
of the Loan Documents applied on a consistent basis throughout the period
involved. Except as previously disclosed in writing to Lender with respect to
the Public Health Event, there has not been any material adverse change between
the dates of the Financial Statements and the Execution Date. Borrower
acknowledges that the Financial Statements are being relied upon by Lender in
connection with Lender agreeing to enter into this Agreement.

 

2.5     Status of the Properties.

 

(a)     Title to Properties and Legal Proceedings. There are no: (i) actions,
suits, appeals, judgments, arbitration proceedings, administrative claims,
executions or other legal or equitable actions or proceedings pending or, to
Borrower’s knowledge threatened against any Borrower, any SPC Party, Guarantor,
any officer or director of Borrower or Guarantor, any Property Manager or any
Property, in any court or by or before any other Governmental Authority which,
if adversely determined, might have a Material Adverse Effect (ii) liens,
mortgages (other than the Security Instruments), claims of lien or other
encumbrances, except for the Permitted Encumbrances, against any Property which
could reasonably have a Material Adverse Effect, or (iii) except as set forth on
Schedule 2.5(a)(iii), pending, or to Borrower’s knowledge contemplated,
condemnation proceedings or annexation proceedings affecting any Property or the
relocation of roadways providing access to any of the Properties, nor any
agreements to convey any portion of any Property, or any rights thereto to any
person or entity not disclosed in this Agreement, including, without limitation,
any government or governmental agency. Borrower agrees to reimburse, indemnify
and hold Lender harmless from and against any and all liabilities, judgments,
out-of-pocket costs or expenses, claims, damages (other than consequential
damages except to the extent paid to a third party), penalties, losses or
charges (including, but not limited to, all reasonable, out-of-pocket legal fees
and court costs) which may now or in the future be undertaken, suffered, paid,
awarded, assessed or otherwise incurred as a result of or arising out of any
breach of any of the representations or warranties made in this Section (the
“Title Indemnification Costs”).

 

(b)     Compliance with Laws. Borrower has not received any written notice from
any governmental entity claiming that Borrower or any Property is not presently
in compliance with any laws, ordinances, rules and regulations bearing upon the
use and operation of any Property, including, without limitation, any notice
relating to building, zoning, environmental, life safety, wetlands, or
handicapped accessibility laws, codes or regulations. All permits, licenses or
other evidences of authority to use and operate the Properties as each is
presently being operated and as contemplated by the Loan Documents are current,
valid and in full force and effect.

 

(c)     Taxes. To the extent required under Legal Requirements and the Loan
Documents, all real estate taxes, personal property taxes, sales taxes and
similar liabilities, assessments or expenses currently due and payable with
respect to the Properties have been fully and timely paid.

 

(d)     Required Repairs. Except as set forth on Schedule 2.5(d), all Required
Repairs set forth in Schedule V to the Loan Agreement have been completed by
Borrower in accordance with Section 4.1.20 of the Loan Agreement.

 

(e)     O&M Program. Borrower hereby represents and warrants that it has, as of
the date hereof, complied in all material respects with the O&M Program attached
as Schedule XVI to the Loan Agreement. Borrower hereby covenants and agrees
that, during the Term, including any extension or renewal thereof, Borrower
shall comply in all material respects with the terms and conditions of the O&M
Program.

 

(f)     Franchise Agreement. Since the Loan Origination Date, except as set
forth on Schedule 2.5(f), no Franchise Agreement has been subsequently amended,
modified, supplemented or altered. No Borrower nor to the best of Borrower’s
knowledge any other party to any Franchise Agreement is in default under any
Franchise Agreement, and to the best of Borrower’s knowledge, no event has
occurred (other than payments due but not yet delinquent) that, with the passage
of time and/or giving of notice, or both, would constitute a default, breach or
violation by any party under any Franchise Agreement. Borrower has delivered to
Lender copies of the most recent quality assurance reports prepared by the
Franchisors for each of the Properties and such reports are true, complete and
correct in all material respects.

 

(g)     PIPs. True, correct, and complete copies of the existing PIP Plans
(including any amendments, modifications and extensions relating thereto) for
each of the Properties known as Courtyard San Diego Carlsbad, Hampton Inn Austin
North @ IH 35 & Highway 183, Hampton Inn Champaign Urbana, Hampton Inn Chicago
Naperville, Hampton Inn College Station, Hampton Inn East Lansing, Hampton Inn
Indianapolis Northeast Castleton, Hampton Inn Knoxville Airport, Hampton Inn
Milford, Hampton Inn Orlando International Drive Convention Center, Homewood
Suites Orlando International Drive Convention Center, and Stratford Homewood
Suites (collectively, the “PIP Properties”) are attached as Schedule 2.5(g)-1
hereto. Borrower’s estimate of the PIP Budget, as well as the anticipated PIP
start dates and the PIP Completion Dates for the PIP Plans is attached as
Schedule 2.5(g)-2 hereto. Except as set forth on Schedule 2.5(g)-3 hereto,
Borrower has not received any written notice or demand from any Franchisor
demanding any repair, maintenance, alterations or improvement to any Property
other than as specifically identified in a PIP Plan. To Borrower’s knowledge,
each PIP Budget is sufficient to complete the applicable PIP Plan. No PIP is
outstanding with respect to any Property other than the PIP Properties. Except
as set forth on Schedule 2.5(g)-3 hereto, to Borrower’s knowledge, no Franchisor
intends to require any other renovations or capital improvement projects for the
Properties prior to the Stated Maturity Date (as amended by this Agreement).

 

(h)     Existing Management Agreement. All Intermediate Management Agreements
are of no further force and effect. Each Property Management Agreement described
on Schedule 2.5(h) attached hereto, between the applicable Borrower and
applicable Property Manager, as described in Schedule 2.5(h) (each, an “Existing
Management Agreement”), is in full force and effect and has not been further
amended, modified or assigned other than pursuant to the applicable Assignment
of Property Management Agreements set forth on Exhibit B attached hereto. No
Borrower nor to the best of Borrower’s knowledge, any Property Manager, is in
default under any Existing Management Agreement and Borrower knows of no event
which, but for the passage of time or the giving of notice or both would
constitute an event of default under any Existing Management Agreement. Except
for the force majeure notice described in Schedule 2.5(h) (which is being
included out of an abundance of caution), neither Borrower nor to the best of
Borrower’s knowledge, any Property Manager, has commenced any action or given or
received any notice for the purpose of terminating any Existing Management
Agreement. The management fees and all other sums due and payable to the
applicable Property Manager under each Existing Management Agreement as of the
date hereof have been paid in full.

 

(i)     Collective Bargaining. To Borrower’s knowledge, except the Collective
Bargaining Agreement, set forth on Schedule 2.5(i) attached hereto, there are no
collective bargaining agreements affecting any Property. No Borrower has
violated in any material respects any applicable laws, rules and regulations
relating to the employment of labor, including those relating to wages, hours,
collective bargaining and the payment and withholding of taxes and other sums as
required by appropriate Governmental Authorities. To Borrower’s knowledge, there
are no outstanding obligations with respect to pending pension obligations.

 

(j)     Preferred Equity Investors. The Preferred Equity Investors no longer
have any direct or indirect ownership interests in any Borrower or any Property
or any approval rights with respect thereto. All obligations with respect to the
Preferred Equity Interests have been satisfied in full.

 

2.6     Continuity of Representations. The representations and warranties
contained in this Agreement are true and correct in all material respects as of
the Execution Date and the Effective Date and will survive as long as any
amounts remain outstanding to Lender under this Agreement or any other Loan
Documents.

 

ARTICLE 3     
COVENANTS OF BORROWER

 

Borrower covenants and agrees with Lender that:

 

3.1     Compliance with Loan Documents. Borrower agrees to comply with and be
bound by all the terms, covenants and agreements, conditions and provisions set
forth in the Loan Documents, as modified pursuant to this Agreement and the
other Modification Documents.

 

3.2     Notice of Proceedings. Borrower shall notify Lender in writing, promptly
after acquiring knowledge, either directly or through any agent, of the
institution of any suit, administrative proceeding, adversary proceeding or
other legal proceedings which may materially affect the operations, financial
condition, title or business of any Property or the transactions contemplated by
this Agreement.

 

3.3     Release and Covenant Not To Sue. In consideration of Lender’s agreement
to the terms of this Agreement, Borrower and Guarantor, by execution of the
Joinder, on behalf of themselves and their partners, members, officers,
directors, shareholders, and trustees and each of their respective heirs,
successors and assigns, waive, remise, release, acquit, satisfy and forever
discharge all of Lender Parties, from any and all manner of debts, accountings,
bonds, warranties, representations, covenants, promises, contracts,
controversies, agreements, liabilities, obligations, expenses, damages,
judgments, executions, actions, claims, counterclaims, demands, defenses,
setoffs, and causes of action of any kind or nature whatsoever, at law or in
equity, known or unknown, either now accrued or subsequently maturing, which any
of them now has or hereafter can, shall or may have by reason of any matter,
cause or thing, from the beginning of the world to and including the later of
the Execution Date and the Effective Date, including, without limitation,
matters arising out of or relating to (a) the Loan, (b) the Loan Documents, (c)
the Debt, (d) the Properties, and (e) any other agreement or transaction between
Borrower and/or Guarantor and any of Lender Parties concerning matters arising
out of or relating to the items set forth in subsections (a) - (d) above.
Borrower and Guarantor, by execution of the Joinder, on behalf of themselves and
their partners, members, officers, directors, shareholders, and trustees and
each of their respective heirs, successors and assigns, covenant and agree never
to institute or cause to be instituted or continue prosecution of any suit or
other form of action or proceeding of any kind or nature whatsoever against any
of Lender Parties by reason of or in connection with any of the foregoing
matters, claims or causes of action.

 

As further consideration of Lender’s agreement to the terms of this Agreement,
Borrower and Guarantor, by execution of the Joinder, on behalf of themselves and
their partners, members, officers, directors, shareholders, and trustees and
each of their respective heirs, successors and assigns, agree, represent and
warrant that the matters released in this Agreement are not limited to matters
which are known or disclosed, and Borrower and Guarantor, by execution of the
Joinder, on behalf of themselves and partners, members, officers, directors,
shareholders, and trustees and each of their respective heirs, successors and
assigns, waive any and all rights and benefits with respect to any matters
arising out of or relating to any matter, cause or thing, from the beginning of
the world to and including the later of the Execution Date and the Effective
Date, including, without limitation, matters arising out of or relating to (a)
the Loan, (b) the Loan Documents, (c) the Debt, (d) the Properties, and (e) any
other agreement or transaction between Borrower and/or Guarantor and any of
Lender Parties concerning matters arising out of or relating to the items set
forth in subsections (a) - (d) above, which Borrower or Guarantor now have, or
in the future may have, conferred upon any of Borrower or Guarantor by virtue of
the provisions of Section 1542 of the Civil Code of the State of California,
which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

In this connection, Borrower and Guarantor, by execution of the Joinder, on
behalf of themselves and their partners, members, officers, directors,
shareholders, and trustees and each of their respective heirs, successors and
assigns, agree, represent, and warrant that they realize and acknowledge that
factual matters now unknown to one or more of Borrower or Guarantor may have
given or may hereafter give rise to causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses which are presently unknown,
unanticipated and unsuspected, Borrower and Guarantor, by execution of the
Joinder, on behalf of themselves and their partners, members, officers,
directors, shareholders, and trustees and each of their respective heirs,
successors and assigns, agree, represent and warrant that the release herein
contained has been negotiated and agreed upon in light of that realization and
that Borrower and Guarantor, by execution of the Joinder, on behalf of
themselves and their partners, members, officers, directors, shareholders, and
trustees and each of their respective heirs, successors and assigns,
nevertheless hereby intend to release, discharge and acquit all parties so
released from any such unknown claims.

 

The provisions of this Section 3.3 shall survive the termination of this
Agreement.

 

3.4     Bankruptcy. (a) In the event that any Borrower shall take any action
constituting a voluntary Debtor Proceeding, and such action causes Lender to
seek necessary or appropriate relief: (i) Lender shall thereupon be entitled to
and Borrower irrevocably consents to (1) the relief from any automatic stay
imposed by Section 362 of Bankruptcy Code, or otherwise, on or against the
exercise of the rights and remedies otherwise available to Lender as provided in
this Agreement with respect to any Property or the Properties and as otherwise
provided by law, and Borrower hereby irrevocably waives any right to object to
such relief, and acknowledges that no reorganization in bankruptcy is feasible,
and (2) an order from the bankruptcy court prohibiting Borrower’s use of all
“cash collateral” (as defined in Section 363 of the Bankruptcy Code); (ii)
Borrower waives its exclusive right pursuant to Section 1121(b) of the
Bankruptcy Code to file a plan of reorganization and irrevocably agrees and
consents that Lender may file a plan immediately upon the entry of an order for
relief if an involuntary petition is filed against Borrower or upon the filing
of a voluntary petition by Borrower; (iii) in the event that Lender shall move
pursuant to Section 1121(d) of the Bankruptcy Code for an order reducing the 120
day exclusive period, Borrower shall not object to any such motion, and (iv)
Borrower waives any rights it may have pursuant to Section 108(b) of the
Bankruptcy Code. The provisions of this Section shall survive the termination of
this Agreement until payment in full of the Debt.

 

(b)     If any Borrower files or colludes in the filing of any petition in
bankruptcy or any application to any tribunal for the appointment of a receiver
or trustee for Borrower or any substantial part of its property, or any
proceeding relating to any Borrower under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction whether now or hereafter in effect, Borrower acknowledges and
agrees that such filing shall have been made in bad faith. Lender shall
immediately become entitled, among other relief to which Lender may be entitled
under the Loan Documents, and at law or in equity, to obtain an order from the
court dismissing such filing as a bad faith filing and Borrower agrees that such
filing shall have been made in bad faith. Lender shall immediately become
entitled, among other relief to which Lender may be entitled under the Loan
Documents, and at law or in equity, to obtain an order from the court dismissing
such filing as a bad faith filing and Borrower agrees that it will take no
action to oppose the entry of such order of dismissed or to dispute a finding of
fact by the court that such filing was made in bad faith.

 

3.5     Modification Fee and Special Servicing Fee. Contemporaneously with the
execution and delivery of this Agreement by Borrower, Borrower shall pay Lender
a non-refundable modification fee (“Modification Fee”) and a non-refundable
special servicing fee (“Special Servicing Fee”) in the amounts set forth in the
settlement statement delivered on the Execution Date, each of which shall be
payable simultaneously with the execution of this Agreement. Borrower
acknowledges and agrees that the Modification Fee and Special Servicing Fee
shall be deemed earned by Lender and due to Lender upon execution of this
Agreement by Lender, notwithstanding the date upon which Borrower ultimately
pays the Debt, and shall not be applied by Lender at any time to reduce the
Debt.

 

3.6     Payment of Transaction Costs and Expenses. Borrower shall pay all
reasonable, out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation, execution and delivery of the Modification Documents,
including, without limitation (collectively, the “Transaction Expenses”): (a)
the legal fees and disbursements of Lender’s outside counsel; (b) all recording
costs, taxes, documentary stamps, transfer taxes and other charges, costs and
fees due upon the recording of any Modification Documents; (c) the costs of an
updated title search with respect to each Property and modification endorsements
for Lender’s policy of title insurance insuring the Security Instrument (the
“Title Endorsements”) to reflect that the modification of the Loan set forth in
this Agreement shall not impact Lender’s lien on any Property or adversely
impact the Lender’s coverage under such title policy; (d) the costs of obtaining
and delivering to Lender tax, municipal violation, UCC records, judgment and
bankruptcy searches in the applicable Secretary of State for all Borrower and in
the local jurisdictions where the Properties and Borrowers’ principal place of
business is located (the “Searches”), each reasonably satisfactory to Lender;
and (e) certificates of good standing issued by the applicable Secretary of
State for all Borrower Parties (the “Certificates of Good Standing”). The
Transaction Expenses shall be paid by Borrower simultaneously with the execution
of this Agreement. To the extent invoices for any Transaction Expenses are
received after the execution of this Agreement, Borrower shall reimburse Lender
for such amounts within ten (10) Business Days of Borrower’s receipt of invoices
therefor. Borrower acknowledges and agrees that Lender shall not apply any of
the Transaction Expenses at any time to reduce the Debt.

 

3.7     Additional Documents. To the extent requested by Lender, simultaneously
with the Execution Date, Borrower shall deliver or cause to be delivered to
Lender, an updated title search for the Properties, the Title Endorsements, the
Searches, the Certificates of Good Standing, estoppels from the Property
Managers and Franchisors, and such affidavits, indemnities, certificates and
legal opinions, and all other instruments and agreements provided for under this
Agreement regarding among other things formation and authorization of Borrower
Parties and enforceability of the Modification Documents, as may be reasonably
requested by Lender.

 

3.8     Further Assurances. Borrower shall execute and deliver to Lender such
agreements, instruments, documents, financing statements and other writings as
may be reasonably requested from time to time by Lender to perfect and to
maintain the perfection of Lender’s security interest in and to the Properties
and to consummate the transactions contemplated by or in the Loan Documents and
this Agreement.

 

ARTICLE 4     
MODIFICATIONs

 

4.1     Stated Maturity Date. From and after the Effective Date, the “Stated
Maturity Date” shall be October 6, 2022 for all purposes under the Loan
Documents. From and after the Effective Date, the “Open Prepayment Date” shall
be July 6, 2020.

 

4.2     Extension of Maturity Date. Provided there is no Event of Default under
any of the Loan Documents at the time that the Stated Maturity Date is extended
and on the Stated Maturity Date, Borrower may extend the Stated Maturity Date to
April 6, 2023 by delivering to Lender written notice of its desire to so extend
(“Extension Notice”) not less than thirty (30) days prior to the Stated Maturity
Date and simultaneously therewith paying to Lender a payment of principal in the
amount of five percent (5%) of the Outstanding Principal Balance as of the
Stated Maturity Date (the “Extension Payment”), to be applied solely in
reduction of Outstanding Principal Balance on the Stated Maturity Date, without
any Yield Maintenance Premium, prepayment premium, defeasance fee or other
similar fee due in connection therewith. On or prior to the Stated Maturity
Date, Borrower shall pay all of Lender’s out-of-pocket costs and expenses
incurred in connection with the exercise of such extension.

 

In the event Borrower does not timely deliver the Extension Notice or the
Extension Payment to Lender as stated herein, Borrower’s extension rights shall
be deemed terminated and of no further force or effect and Borrower shall be
deemed to have elected not to extend the Stated Maturity Date.

 

4.3     Principal Paydown Payments.

 

(a)     Commencing on the Monthly Payment Date in October 2021 and on each
Monthly Payment Date thereafter, through and including the Monthly Payment Date
occurring in September 2022, Borrower shall pay to Lender an amount equal to
$250,000.00 (each payment, a “Principal Paydown Payment”) from sources other
than revenues generated by the Properties, and each Principal Paydown Payment
shall be applied to reduce the Outstanding Principal Balance. Lender shall waive
any Yield Maintenance Premium, prepayment premium or other similar fee due in
connection with the Principal Paydown Payments. In no event shall the
application of Excess Cash Flow to the Outstanding Principal Balance reduce
Borrower’s obligations to make the Principal Paydown Payments in the amounts set
forth in this Section 4.3.

 

(b)     From and after the Effective Date, the second sentence of Section
2.4.1(a) of the Loan Agreement is hereby amended to replace the phrase “in whole
only” with “in whole, or in part”.

 

4.4     Reserve Account Payments; Cash Management.

 

(a)     Monthly Reserve Account Payments. From and after the Effective Date,
Borrower shall continue to be required to make all monthly deposits to the
Reserve Funds in accordance with the Loan Documents, subject to the below
provisions of Section 4.4(a)(i).

 

(i)     FF&E Funds. During the period commencing on the Effective Date through
and including the Monthly Payment Date occurring in December 2020, subject to
earlier automatic termination (and without any further action of any Person) as
set forth herein upon the occurrence of an Event of Default (such period, the
“Suspension Period”), Lender will suspend the requirement of the Borrower to
make monthly deposits to the FF&E Reserve Account required pursuant to Section
6.5.1 of the Loan Agreement (the “FF&E Reserve Monthly Deposit”). Upon the
occurrence of an Event of Default, Lender’s agreement to suspend Borrower’s
obligations to pay the FF&E Reserve Monthly Deposit as set forth above shall
automatically (and without any further action of any Person) terminate and
Borrower’s obligations to pay the FF&E Reserve Monthly Deposit set forth in the
Loan Agreement (without giving effect to this Agreement) shall automatically
(and without any further action of any Person) be reinstated and be in full
force and effect from and after the occurrence of such Event of Default. During
the Suspension Period, Borrower will in accordance with the Loan Agreement
continue to make all monthly payments required pursuant to Section 6.11.1(a)(i)
to Section 6.11.1(a)(vi) of the Loan Agreement.

 

(b)     Cash Sweep Event Period. Borrower acknowledges and agrees that as of the
Effective Date, (i) a Cash Sweep Event has occurred and it is not a
Franchise/Management Agreement Cash Sweep Event, (ii) a Cash Sweep Event Period
shall remain in effect for the remainder of the Term, (iii) the provisions of
Section 6.11.1(b) of the Loan Agreement shall be of no further effect and all
provisions of the Loan Documents containing references to Section 6.11.1(b) of
the Loan Agreement shall be read without giving any effect to such references,
and (iv) Section 6.11.1(a)(ix) of the Loan Agreement is hereby deleted in its
entirety.

 

(c)     Excess Cash Flow. From and after the Effective Date, clause (viii) of
Section 6.11.1(a) of the Loan Agreement is hereby amended so that on each
Monthly Payment Date, except during the continuance of an Event of Default, all
remaining amounts in the Cash Management Account after the payment of the
amounts set forth in clauses (i) through (vii) of Section 6.11.1(a) of the Loan
Agreement (the “Excess Cash Flow”), shall be applied as a principal payment to
reduce the Outstanding Principal Balance without any Yield Maintenance Premium.

 

(d)     Event of Default. The first clause of the first sentence of Section
6.11.2 of the Loan Agreement is hereby amended and restated as follows:

 

“The failure of Borrower to make all of the payments required under clauses
(a)(i) through clause (a)(vii) of Section 6.11.1 in full on each Monthly Payment
Date shall constitute an Event of Default under this Agreement;”

 

4.5     Closing Payment. On the Execution Date, Borrower shall pay to Lender the
Modification Fee, Special Servicing Fee and Lender’s fees and expenses in
connection with the modification of the Loan, as further detailed in the
settlement statement delivered on the Execution Date.

 

4.6     Approved Annual Budgets. The updated 2020 Annual Budgets for each
Property are attached hereto as Exhibit C and have been approved by Lender,
which collectively constitute the Approved Annual Budget for 2020. To the extent
Borrower submits an updated Annual Budget for any Property for any calendar year
(or remaining portion thereof), Lender agrees to use good faith efforts to
review and provide its approval or disapproval of such Annual Budget (which
Lender may do in its sole discretion) within fourteen (14) days of receipt,
provided that if Lender fails to provide its approval or disapproval within such
time period, Lender shall not be in breach of this Agreement and in no event
shall such Annual Budget be deemed approved. Without the prior written consent
of Lender, Borrower shall not use any Gross Revenue from operations of the
Properties for any purpose other than for the purposes set forth in the Approved
Annual Budget for such Property, in amounts not to exceed one hundred ten
percent (110%) of the budgeted line items for such expenses for the applicable
month as set forth in the Approved Annual Budget for such Property.

 

4.7     Operating Expense Reconciliations. Within forty-five (45) days after the
end of each calendar quarter (“Quarterly Reconciliation”), commencing with the
quarter ending on September 30, 2020, Borrower shall deliver to Lender a
statement and accounting certified as true, correct and complete from the chief
financial officer or other authorized person of Borrower with knowledge and
responsibility for such matters (each a “Reconciliation Certificate”),
certifying (a) the actual amount of Operating Expenses paid or incurred by or on
behalf of Borrower with respect to the Properties (the “Actual Expenditures”)
during the immediately preceding calendar quarter, (b) the amounts, if any,
disbursed from the Borrower’s account during the prior calendar quarter, with a
detailed breakdown by line item, and (c) the account balance of such working or
operating account of Borrower as of such date of certification. Such
Reconciliation Certificate shall: (i) identify the amounts, if any, by which the
sums distributed to Borrower from the Cash Management Account for Operating
Expenses set forth on the Approved Annual Budget on each Monthly Payment Date
during the immediately preceding calendar quarter exceeded the Actual
Expenditures paid by Borrower during such calendar quarter (the aggregate amount
reported for the quarterly period pursuant to the Quarterly Reconciliation is a
“Surplus Amounts”), (ii) identify the amount, if any, by which Borrower paid
Actual Expenditures during the prior quarter in excess of the sum distributed to
Borrower from the Cash Management Account for Operating Expenses set forth on
the Approved Annual Budget on each Monthly Payment Date during the prior quarter
(the aggregate amount reported for the quarterly period pursuant to the
Quarterly Reconciliation is a “Shortfall Amount”), (iii) be in a form reasonably
acceptable to Lender, and (iv) provide such evidence of Actual Expenditures as
may be reasonably requested by Lender in order to verify any applicable
component of the Shortfall Amount or Surplus Amounts. On the Monthly Payment
Date following Lender’s receipt of a Quarterly Reconciliation with all
supporting documentation required by Lender, and provided no Event of Default
has occurred and is continuing beyond the expiration of any applicable cure
period, Lender will make or cause to be made the following adjustments
(“Reconciliation Adjustments”) to the Monthly Operating Expense Budgeted Amount
for such month: (A) in the event of any Surplus Amounts, the amount thereof
shall be deducted from the Monthly Operating Expense Budgeted Amount budgeted to
be disbursed on the next Monthly Payment Date; and (B) in the event of a
Shortfall Amount, the amount of such Shortfall Amount approved in writing by
Lender based on the Quarterly Reconciliation shall be added to the Monthly
Operating Expense Budgeted Amount budgeted to be disbursed on the next Monthly
Payment Date from funds on deposit in the Cash Management Account, but only to
the extent funds are available in the Cash Management Account. If sums in the
Cash Management Account are not sufficient to fund the amount of any Shortfall
Amount approved by Lender, then such shortfall shall be funded on the next
following Monthly Payment Date on which funds are available in the Cash
Management Account. Should Lender in good faith dispute any Actual Expenditures
set forth on the Reconciliation Certificate and such dispute is not resolved
between the parties, the disputed expenditure will not be included in the
Reconciliation Adjustments unless or until resolved by Lender and Borrower.
Notwithstanding anything to the contrary, Borrower shall obtain Lender’s prior
written consent prior to payment of any operating expenses which exceed one
hundred ten percent (110%) of the budgeted line item amount for such expense set
forth in the Approved Annual Budget.

 

4.8     Personal to Borrower. The terms of this Agreement shall be personal to
Borrower and shall not be assumable in connection with any sale, assignment or
transfer of any Property or inure to the direct or indirect benefit to any
transferee in connection with any sale, assignment or transfer of direct or
indirect interests in Borrower. Borrower and Guarantor, by execution of the
Joinder, acknowledge and agree that from and after the Effective Date, none of
Borrower, Guarantor or any party acting through or on behalf of them will have
any right or ability to cause the Loan or any part thereof to be assumed by or
benefit any another person or entity. For the avoidance of doubt, Sections 8.1
and 8.2(c), (d), (e) and (f) of the Loan Agreement are of no further force and
effect. Further, all other transfers permitted under Sections 8.2(a), 8.2(b) and
8.2(g) of the Loan Agreement shall continue to be permitted in accordance with
the terms thereof, except that any transfers permitted under the Loan Documents
without Lender consent which would result in a change in control of Guarantor,
ARCHOP or Borrower shall no longer be permitted without Lender’s prior written
consent, unless such transfer results in a change in control of Guarantor,
ARCHOP or Borrower to Brookfield Strategic Real Estate Partners II Hospitality
REIT II LLC or one of its Affiliates that is a Qualified Equity Holder (such, an
entity, a “Brookfield Transferee”). Any such change of control to a Brookfield
Transferee shall require (i) compliance with the requirements of Section 8.2(b)
of the Loan Agreement, including without limitation, unless otherwise agreed to
by Lender, the requirement to provide a Satisfactory Replacement Guarantor that
satisfies the Satisfactory Guarantor Substitution Conditions, and (ii) such
Satisfactory Replacement Guarantor shall be a Brookfield Transferee that owns,
directly or indirectly, at least fifty-one percent (51%) of all beneficial and
economic interests in, and Controls, the Guarantor, ARCHOP and Borrowers. Any
violation of the foregoing shall be an Event of Default under this Agreement and
the Loan Documents.

 

4.9     Partial Releases. From and after the Effective Date, in addition to
complying with the requirements set forth in Section 2.5.1 of the Loan Agreement
with respect to any Property Release (except as explicitly modified by this
Section 4.9), Borrower shall also satisfy the following conditions in connection
with any Property Release:

 

(a)     Borrower’s written request to Lender for a Property Release must be
submitted at least sixty (60) days prior to the Property Release, which request
shall include (in addition to the materials required pursuant to Section
2.5.1(b) of the Loan Agreement), (i) a copy of an executed purchase agreement
with the proposed purchaser that provides for an all-cash sale, certified by
Borrower as a true, correct and complete copy, (ii) copies of all material
marketing materials and, to the extent practicable, lists of parties that were
sent the marketing materials and parties that made offers, and (iii) other
evidence reasonably satisfactory to Lender that the proposed Property Sale has
been broadly marketed by an unrelated third party broker which is not an
Affiliate of Borrower or any member, principal or sponsor of Borrower or
Guarantor and that is experienced in selling assets similar to the Property
being sold in the same market as such Property.

 

(b)     Borrower shall deliver to Lender a preliminary closing statement
reflecting the gross sales price and items comprising the Borrower’s closing
costs as preliminarily computed shall be submitted to Lender for its review and
approval of the calculation of Net Sale Proceeds no less than three (3) Business
Days prior to the Property Release, and shall promptly deliver copies of any
material changes to the draft the closing statement to Lender, with the final
closing statement to be submitted to Lender for its final review and approval of
the calculation of Net Sale Proceeds prior to the Property Release.

 

(c)     To the extent the Net Sales Proceeds for any Property Sale are less than
the Allocated Loan Amount for the Property being sold, such Property Sale shall
be referred to as a “Low Proceeds Sale”, and such Low Proceeds Sale shall be
subject to Lender’s approval, in its sole discretion. Notwithstanding the
foregoing, in the event of a Low Proceeds Sale, if Borrower elects (such
election by Borrower, the “Remedial Payment Option”) to deposit an amount equal
to the difference between the Allocated Loan Amount for the applicable Property
and the Net Sales Proceeds for such Property (such difference, the “Remedial
Amount”) with Lender to be applied to the Outstanding Principal Balance, then
such Low Proceeds Sale shall not be subject to Lender’s approval.

 

(d)     The definition of Net Sale Proceeds set forth in the Loan Agreement is
hereby deleted in its entirety and replaced with the following: “Net Sale
Proceeds” shall mean, in connection with any Property Sale, the value of all
consideration received by Borrowers in connection with such Property Sale,
including cash, notes, assumed indebtedness, deferred payments (contingent or
otherwise), prepaid expenses and noncustomary prorations in favor of Borrowers
(collectively, “Sales Proceeds”), less the reasonable and actual costs and
expenses of such Property Sale reasonably approved by Lender, including broker’s
commissions paid to third parties, market rate sales and marketing expenses,
legal fees and transfer and recording taxes (but excluding income taxes
attributable to such Property Sale), all of which costs and expense shall not
exceed six percent (6.0%) of the Sales Proceeds, provided that in no event shall
such any of such costs and expenses include any commissions or fees be paid to
any Affiliate of Borrower, Guarantor or any of their principals or sponsors.

 

(e)     Section 2.5.1(c) of the Loan Agreement is hereby deleted in its entirety
and replaced with the following:

 

“(c)     Borrowers shall have paid, or shall have arranged to be paid
contemporaneously with the Property Release, to Lender, and Lender shall have
received by wire transfer of immediately available federal funds, an amount
equal to the sum of (i) one hundred percent (100%) of the Net Sale Proceeds for
the Property or Properties to be released, which shall be applied by Lender as a
prepayment of the Outstanding Principal Balance, plus (ii) the Remedial Amount
if Borrower exercises the Remedial Payment Option, plus (iii) all interest which
would have accrued on the portion of the Outstanding Principal Balance being
prepaid through, but not including, the next occurring Monthly Payment Date (or,
if such prepayment occurs on a Monthly Payment Date, through, but not including,
such Monthly Payment Date), plus, without duplication, (iv) all other sums then
due and payable under the Loan Documents;”

 

(f)     The provisions of Sections 2.5.1(g) and (h) of the Loan Agreement are
hereby deleted and shall be of no further force and effect.

 

4.10     No Subordinate or Mezzanine Financing. Borrower and Guarantor, by
execution of the Joinder in form and substance attached hereto, acknowledge and
agree that Borrower and Guarantor shall have no right to obtain any subordinate
or mezzanine financing of any kind with respect to any Property or interests in
Borrower at any time prior to the Loan being paid and the Properties released
from the lien of the Security Instruments. All references in the Loan Documents
to a New Mezzanine Loan or any permitted subordinate financing and/or mezzanine
financing shall be deleted and of no further force or effect.

 

4.11     Receipt of Insurance Proceeds. Borrower has not received any business
interruption, income or other insurance proceeds relative to the performance of
any Property or the operation of any business thereon for the calendar year
2020. If Borrower does receive any business interruption, income or other
insurance proceeds relative to the performance of any Property or the operation
of any business thereon as a result of the Public Health Event, within five (5)
Business Days of receipt of the same, Borrower shall forward all such proceeds
for deposit with Lender.

 

4.12     Receipt of Relief. None of Borrower or Guarantor has received or
applied for any governmental, grant, loan or other economic or non-economic
relief pertaining to any Property, including any Paycheck Protection Program
loan under the CARES Act that has not been disclosed to Lender in writing, and
none of Borrower or Guarantor shall apply for any such relief with respect to
any Property without Lender’s prior consent.

 

4.13     Operating Lease. In addition to the other obligations with respect to
the Operating Lease set forth in the Loan Documents, Borrower shall not allow
the Operating Lease to expire during the Term without Lender’s prior written
consent. Borrower and Guarantor consent and agree that Borrower and Guarantor
shall be subject to recourse for payment of any Losses arising out of, or in
connection with any, non-renewal or expiration of the Operating Lease during the
Term.

 

4.14     Guarantor. As a condition to Lender’s execution of this Agreement,
Guarantor shall execute and deliver to Lender, simultaneously with the execution
of this Agreement, the Joinder in form and substance attached hereto.

 

4.15     UCC Financing Statements. Borrower hereby grants and confirms unto
Lender a first lien priority security interest in all Collateral to the maximum
extent permitted by the Uniform Commercial Code, as may have been amended
subsequent to the making of the Loan. Borrower hereby further consents to the
filing of any financing statements or Uniform Commercial Code forms required to
be filed in the applicable states or any other filing office (collectively
“Filings”) in order to perfect said interest and, notwithstanding anything
contained in any of the Loan Documents to the contrary, in accordance with the
Uniform Commercial Code, as amended subsequent to the making of the Loan, said
Filings may be made by Lender without the consent or signature of Borrower.

 

4.16     Hotel Operations. Borrower shall promptly send Lender copies of all
quality assurance reports with respect to the Properties and any material
written correspondence to or from any Franchisor or any Property Manager with
respect to any Property.

 

4.17     Reaffirmation of Loan Documents. Each Borrower hereby ratifies,
reaffirms and confirms all of its payment and performance obligations under the
Loan Documents in accordance with their respective terms and conditions.

 

4.18     Reaffirmation of Environmental Indemnity. The Environmental Indemnity
constitutes the valid, legally binding obligation of Borrower, enforceable
against Borrower, in accordance with its terms. By its execution hereof,
Borrower waives and releases any and all defenses, affirmative defenses,
setoffs, claims, counterclaims and causes of action of any kind or nature which
Borrower has asserted, or might assert, against Lender which in any way relate
to or arise out of the Environmental Indemnity or any of the other Loan
Documents, and such waiver and release shall survive the termination of this
Agreement for so long as the obligations and liabilities under the Environmental
Indemnity survive. Borrower hereby expressly confirms and reaffirms all
obligations of the Borrower under the Environmental Indemnity. To Borrower’s
actual knowledge, the representations and warranties contained in the
Environmental Indemnity are true and correct in all material respects as of the
Execution Date and the Effective Date as if made on such dates, except for those
that are no longer true due to facts or circumstances that occurred after the
Loan Origination Date and which, in each case, do not constitute a Default or an
Event of Default, taking into account the terms and provisions of this
Agreement.

 

4.19     Additional Recourse.

 

(a)     Borrower and Guarantor consent and agree that the Obligations shall be
fully recourse to Borrower and Guarantor upon the occurrence of Guarantor or any
of its Affiliates colluding with or otherwise assisting any Person in filing an
involuntary petition against any Borrower and/or any SPC Party under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law.

 

(b)     The definition of “Guaranteed Obligations” under Section 1.2(c) of the
Guaranty is hereby amended to include the recourse liabilities set forth in this
Section 4.19.

 

4.20     Amendment to Loan Agreement, Security Instruments Guaranty and Loan
Documents. This Agreement is a “Loan Document” for all purposes under this
Agreement and the other Loan Documents. As used in the Loan Agreement, the
Security Instruments, Guaranty and the other Loan Documents, the term “Note”
shall mean the Note for the Loan, as the same has been amended hereby and as the
same may hereafter be amended, modified, extended or renewed from time to time.

 

4.21     References to Note, Loan Agreement, Security Instruments, Guaranty and
Loan Documents. All references to the Note, Loan Agreement, Security
Instruments, Guaranty and Loan Documents in the Loan Documents for the Loan
shall mean and refer to the Note, Loan Agreement, Security Instruments, Guaranty
and other Loan Documents for the Loan, all as modified by the terms of this
Agreement and any subsequent modifications, renewals or replacements thereof.

 

ARTICLE 5     
EVENTS OF DEFAULT; REMEDIES

 

5.1     Events of Default. Each of the following shall constitute an additional
Event of Default under the Loan Documents. The reference to Events of Default
contained in this Section shall not be deemed exclusive and, notwithstanding
Section 6.15 of this Agreement, shall not supersede all other Events of Default
contained in the Loan Documents.

 

(a)     Payments. If Borrower shall fail to pay any payment provided for in this
Agreement or the other Modification Documents when the same shall become due,
(provided, however, that if no other Event of Default shall have occurred and be
continuing and adequate funds have been allocated pursuant to Section 6.11.1 of
the Loan Agreement for payment of any required monthly installment of principal,
interest and required deposit of Reserve Funds, the failure by Cash Management
Bank to disburse any payments due to Lender and/or allocate such funds to the
appropriate Reserve Account in violation of the Loan Documents shall not
constitute an Event of Default).

 

(b)     Debt. If Borrower shall fail to pay the entire Debt when due under the
terms of the Loan Documents and this Agreement.

 

(c)     Misrepresentations. If any representation or warranty of any Borrower
Party in this Agreement shall be proved to be untrue or inaccurate in any
material respect when made; provided, however, that if any such representation
being untrue or inaccurate (A) is not intentional, (B) shall not have a Material
Adverse Effect, and (C) can be made true and correct by action of Borrower, the
same shall be an Event of Default hereunder only if the same is not cured within
thirty (30) days following written notice thereof to Borrower to undertake and
complete all action necessary to make such representation or warranty, true and
correct in all material respects; provided, that if the same cannot be cured
within such thirty (30) day period, if Borrower commences to take action to cure
such breach within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, Borrower shall have such time as is
reasonably necessary to effect such cure, but in no event in excess of an
additional ninety (90) days.

 

(d)     Breach of Other Covenants. If any Borrower Party shall breach, default
under or fail to fully and timely perform any of its covenants, agreements and
obligations under this Agreement not specified in clauses (a) through (c) above,
and such breach, default or failure shall continue (A) for ten (10) days after
notice to Borrower from Lender in the case of any breach, default or failure
which can be cured by the payment of a sum of money, or (B) for thirty (30) days
after the earlier of (1) Borrower’s knowledge thereof and (2) notice to Borrower
from Lender, in the case of any other breach, default or failure, provided
however, that if such non-monetary breach, default or failure is susceptible of
cure but cannot reasonably be cured within such 30-day period; and provided,
further, that Borrower shall have commenced to cure such breach, default or
failure within such 30-day period and shall thereafter diligently and
expeditiously proceed to cure the same, such 30-day period shall be extended for
such additional time as is reasonably necessary for Borrower in the exercise of
due diligence to cure such breach, default or failure, such additional period
not to exceed ninety (90) days.

 

(e)     Action against Lender Parties. If any Borrower Party shall file or
institute in bad faith against any of Lender Parties any lawsuit, complaint,
administrative claim, adversary proceeding or other legal action, directly or
indirectly, relating to the Loan or any Property.

 

5.2     Lender’s Rights upon Occurrence of Event of Default.

 

(a)     Upon the occurrence of an Event of Default after the Effective Date,
Lender shall immediately be entitled, without further notice to any Borrower
Parties to exercise any or all of Lender’s rights and remedies under this
Agreement and the Loan Documents, in equity and at law (all of such rights and
remedies being cumulative), including, but not limited to and as determined by
Lender in its sole discretion, demanding immediate payment of the entire Debt,
commencing proceedings seeking appointment of a receiver (“Receiver”) for any
Property and/or the other Collateral, with or without, at Lender’s discretion,
the power, among other things, to market, sell and convey any Property, at
Lender’s option (“Receivership Proceedings”), exercising any assignment of
leases and rents (whether or not involving the appointment of a Receiver),
causing Borrower to market, sell and convey any Property, commencing or, if
already commenced, completing foreclosure proceedings against Borrower, any
Property and/or the other Collateral, whether by stipulation to judicial action
or non-judicial power of sale, if applicable (“Foreclosure Proceedings”) or
taking title to any Property and/or the other Collateral by consensual deed in
lieu of foreclosure (“Deed in Lieu of Foreclosure”), and enforcing the Guaranty
(any of same and collectively, “Lender’s Enforcement Actions”).

 

(b)     Upon the occurrence of an Event of Default after the Effective Date:

 

(i)     it is the express intent of Borrower Parties and Lender that Lender
shall acquire possession of and title to the Properties and the other Collateral
at the earliest possible date, with full cooperation of Borrower Parties and
without any action by any Borrower Parties of any kind or nature whatsoever,
either directly or indirectly, to delay, oppose, challenge, impede, obstruct,
hinder, enjoin or otherwise interfere with Lender or any of Lender’s Enforcement
Actions (any of same, “Interfere”).

 

(ii)     Borrower Parties shall cooperate and comply with the exercise by Lender
of any and all of Lender’s rights and remedies against Borrower Parties with
respect to the Loan, the Loan Documents, this Agreement, the Properties and the
other Collateral, in equity and at law, including, without limitation, any of
Lender’s Enforcement Actions.

 

(iii)     Borrower Parties agree to waive and do hereby waive and release any
and all defenses and other rights they may otherwise have to contest an Event of
Default occurring after the Effective Date and Lender’s Enforcement Actions.

 

5.3     Stipulation to Receivership and Foreclosure.

 

(a)     Without limiting Section 5.2 of this Agreement, upon the occurrence of
an Event of Default after the Effective Date and demand by Lender with respect
to any Receivership Proceedings and/or Foreclosure Proceedings, Borrower will
execute and deliver to Lender a joint or agreed stipulation, consent or similar
documentation appropriate for the jurisdiction in which any Property is located
for entry of an order appointing a Receiver and for final judgment of
foreclosure (collectively, a “Stipulation”), which provides for the entry of an
order appointing a Receiver (“Receivership Order”), if required by Lender, and a
final and non-appealable judgment of foreclosure (the “Foreclosure Judgment”),
as well as, if required by Lender, specifying the total amount of the Loan and
all other obligations of Borrower to Lender under the Loan Documents.  Upon
execution and delivery of a Stipulation by Borrower, Lender may immediately
proceed in accordance with the Stipulation to have the Receivership Order
entered and/or the Foreclosure Judgment entered, and Borrower Parties shall
cooperate with Lender to effect entry of the Receivership Order and the
Foreclosure Judgment and shall not oppose entry of either.    

 

(b)     Except as may be required by applicable law or the applicable court,
Borrower Parties agree that they have no right to receive any further notice of
any hearing regarding the application for or entry of a Receivership Order or a
Foreclosure Judgment pursuant to a Stipulation, any notice of when Lender
intends to apply for a Receivership Order or a Foreclosure Judgment pursuant to
a Stipulation or to have a Receivership Order and/or a Foreclosure Judgment
entered and recorded, or any other notice which might otherwise be applicable
pursuant to applicable state law or other applicable laws or rules (Borrower
Parties waive and renounce any and all right, whether created by statute, court
rules or pursuant to the due process clauses under the United States
Constitution or the Constitution of the applicable state, to receive any such
notices).

 

(c)     Except as may be required by applicable law or the applicable court,
Borrower Parties agree that they have no right to appear or be heard regarding
the ex parte application for a Receivership Order or a Foreclosure Judgment
pursuant to a Stipulation or the exercise by Lender of any other right or remedy
under this Agreement and/or the Loan Documents (Borrower Parties waive and
renounce any such right to appear or be heard and waive and renounce any right
that might be conferred by the laws of the applicable state or any other
applicable law or rule which would require that a Receivership Order or a
Foreclosure Judgment be entered other than through ex parte proceedings);
provided, however, if Lender determines that appearance by Borrower would be
beneficial to obtaining a Receivership Order and/or a Foreclosure Judgment,
Borrower shall make such appearance but without the right to contest Lender’s
obtaining the Receivership Order or Foreclosure Judgment.

 

(d)     Except as may be required by applicable law or the applicable court, the
absence of Borrower from any hearing (in chambers or in open court) which may be
conducted to consider Lender’s application to obtain a Receivership Order or a
Foreclosure Judgment or the exercise by Lender of any other right or remedy,
under this Agreement and/or the Loan Documents shall not in any way limit
Lender’s right to obtain or enforce a Receivership Order and/or a Foreclosure
Judgment or to exercise any such other rights and remedies.

 

(e)     None of Borrower Parties has any right (all such rights being waived) to
collaterally attack any Receivership Order or Foreclosure Judgment or to make
any attempts to open or otherwise challenge by any means whatsoever
any Receivership Order or Foreclosure Judgment.

 

(f)     Each of Borrower Parties has waived and does waive any and all rights to
require that Lender proceed in any particular order in connection with Lender’s
enforcement of other rights and remedies under this Agreement and/or the Loan
Documents.  

 

5.4      Consensual Sale.

 

(a)     Upon the acceleration of the Loan following the occurrence of an Event
of Default after the Effective Date that remains uncured following fifteen (15)
days’ notice to Borrower, at Lender’s sole discretion and upon direction to
Borrower, Borrower or, in Lender’s sole discretion, Receiver shall actively and
continuously market and seek to sell any Property or Properties (“Consensual
Sale”) through (i) a third party broker that is experienced in selling assets
similar to such Properties in the same market as such Properties which is not
affiliated with Borrower or any principal or sponsor of Borrower (the “Listing
Broker”) approved by Lender in its sole discretion and with which Borrower or
Receiver shall, within twenty (20) days thereafter, enter into a listing
agreement in a form acceptable to Lender in its absolute discretion (the
“Listing Agreement”), requiring the Listing Broker to promptly undertake to
market such Properties on an as-is, where-is basis, in a manner customarily
utilized for properties similar to such Properties in the same market as the
applicable Properties, all as approved by Lender or as otherwise directed by
Lender in its sole discretion, (ii) an on-line auction company (the “Auction
Company”) approved by Lender in its sole discretion, and with which Borrower or
Receiver shall, within twenty (20) days thereafter, enter into an auction
marketing agreement in form acceptable to Lender, in its absolute discretion
(the “Auction Marketing Agreement”), requiring Auction Company to promptly
undertake to market any Property on an as-is, where-is basis, in a manner
customarily utilized for properties similar to such Properties in the Auction
Company’s auction process, or (iii) in any other fashion approved by Lender in
its sole discretion. The Listing Agreement and Auction Marketing Agreement, as
applicable, shall provide that copies of all notices given by the Listing Broker
and Auction Company to Borrower or Receiver thereunder shall be given to Lender.
Absent Lender’s prior written consent, Borrower and Receiver shall not amend or
modify any of the terms of the Listing Agreement or Auction Marketing Agreement
or assign any of its rights thereunder. Borrower Parties shall cooperate with
Receiver, if applicable, and the Listing Broker in connection with the marketing
and Consensual Sale.

 

(b)     Borrower or Receiver shall submit or cause the Listing Broker to submit
all proposals, expressions of interest, letters of intent or similar offers for
the purchase of any Properties (“Offers”) to Lender and to provide Lender with
such other information as Lender may request with respect to the background,
financing, ownership or financial wherewithal of the potential purchaser(s)
(each, a “Potential Purchaser”), to the extent the same is obtainable. Borrower,
Receiver or Lender, all at Lender’s sole discretion, shall pursue such Offers as
Lender, in its sole discretion, shall determine and negotiate in a reasonably
diligent manner the final terms and conditions of an agreement to sell the
applicable Property or Properties.

 

(c)     Neither Borrower nor Receiver shall sell any Property or accept any
offer to purchase any Property or any interests therein, absent Lender’s prior
written consent in its sole discretion, in the event (i) the Consensual Sale of
such Property involves (A) the assumption and/or modification of the Loan or (B)
any discounted payoff of the Loan. Lender’s consent shall not be required in
connection with the Consensual Sale of the Properties to a bona fide purchaser
that will result in the payment in full of the Loan. Borrower agrees that (x) in
connection with any proposed Consensual Sale, (1) Lender may in its sole and
absolute discretion agree to allow any Potential Purchaser deemed by Lender in
its sole discretion to be a qualified purchaser and/or investor to assume the
Loan, subject to Lender’s review and approval of such Potential Purchaser,
including, without limitation, its creditworthiness and experience, and (2)
Lender may in its sole and absolute discretion agree to various amendments to
the Loan Documents (including, without limitation, the extension of the Loan
maturity date, a change in the interest rate, a reduction of the outstanding
principal balance of the Loan and changes to the reserves and escrows for the
Loan) in favor of such Potential Purchaser (it being acknowledged and agreed
that Lender shall have no obligation to offer to modify the Loan Documents in
favor of Borrower and that Lender may elect to agree to certain amendments in
favor of certain parties and not others) and (y) Lender may in its sole and
absolute discretion elect to approve a Consensual Sale of the Properties to a
Potential Purchaser in the event the sales proceeds to be paid in connection
therewith are less than the amounts due under the Loan and in the event of
multiple offers may elect to approve a Consensual Sale to a Potential Purchaser
notwithstanding that the sales price payable in connection therewith is less
than the sales price payable in connection with any other potential transaction
(it being understood and agreed that Lender may consider multiple factors in
approving any proposed Consensual Sale, including, without limitation, the
creditworthiness and experience of the Potential Purchaser in the event such
Potential Purchaser will assume the Loan); and Borrower agrees that Lender
Parties shall not incur any liability as a result of any actions taken under
clause (x) and/or (y) above and that no such actions shall be used as a defense
to Borrower’s obligations hereunder.

 

(d)     Borrower shall retain any federal, state and local income tax benefits
and burdens resulting from any Consensual Sale or discounted payoff of the Loan,
if any is consummated in accordance with the terms of this Agreement.

 

(e)     In connection with any Consensual Sale in which the Potential Purchaser
assumes the Loan in compliance with the requirements of Section 8.1 of the Loan
Agreement, (including, without limitation, the requirements relating to a
Satisfactory Replacement Guarantor assuming the obligations under the Guaranty
and Environmental Indemnity), Guarantor shall be released from any further
liability under the Guaranty and Environmental Indemnity for acts that arise
from and after the date of such Consensual Sale and assumption.

 

5.5     Conveyance Documents. Upon the occurrence of an Event of Default after
the Effective Date and in connection with a Foreclosure Judgment, a Deed in Lieu
of Foreclosure or a Consensual Sale, Borrower shall execute and deliver to
Lender or its designee or a Potential Purchaser all documents necessary to
convey to Lender or its designee or a Potential Purchaser all ownership and
development rights with respect to the Properties, including, without
limitation, a special warranty deed or its equivalent, owner’s affidavits and
other customary affidavits and certificates, including tax withholding
certificates, all applicable state and local transfer forms and bulk sales
releases required in connection with such a conveyance, a bill of sale, an
assignment and/or other conveyance documents necessary to transfer, convey and
assign all leases, any service contracts for which Lender or its designee agrees
to accept an assignment, all tangible and intangible, real and personal and
mixed property used, useable or intended to be used in connection with the
ownership, management and/or use of the Properties, and such documents and
instruments, including, without limitation, evidence of the authority of
Borrower to convey the Properties to Lender or its designee and the good
standing of Borrower, as Lender, its designee or a Potential Purchaser or the
title company insuring title to the Properties may reasonably determine are
necessary to issue to Lender or its designee or a Potential Purchaser an owner’s
title insurance policy insuring the fee simple title to the Properties, subject
only to the Permitted Encumbrances. As further consideration of and as a
material inducement to Lender to enter into this Agreement, Borrower shall not
Interfere with or oppose Lender in and hereby consents to any (i) action to
quiet title, if any, which may be instituted by Lender and/or any title company
on behalf of Lender to perfect its right, title and interest in any Property or
the Properties, and (ii) Lender or its designee substituting into any
condemnation proceedings with respect to the Property, if any.

 

Borrower Parties and Liquor License Subsidiary agree to cooperate with Lender
and its designee, and provide such further assurances and execute such
documentation as may be reasonably necessary to effectuate the orderly transfer
of any Property and the other Collateral to Lender or its designee, including
but not limited to (i) cooperating with Lender, its designee, nominee or
assignee, or the Receiver, in the assignment, transfer or use on an interim
basis all of the alcoholic beverage licenses currently in effect for such
Property (the “Liquor Licenses”), as determined in Lender’s reasonable
discretion; (ii) use commercially reasonable efforts to cause affiliated parties
and/or the management company to cooperate with Lender, its designee, nominee or
assignee, or the Receiver, in the assignment, transfer or use on an interim
basis of the Liquor Licenses, as determined in Lender’s reasonable discretion;
and (iii) causing to be executed any transfer forms, license applications and
other documents as may be reasonably necessary to effectuate the assignments,
transfers and/or to permit Lender, its designee, nominee or assignee, or the
Receiver to use the Liquor Licenses on an interim basis.

 

5.6     Property Materials. If following an Event of Default after the Effective
Date a sheriff’s, clerk’s or trustee’s deed for any Property is issued to Lender
or its designee pursuant to a judicial or trustee’s sale, or if Lender or its
designee acquires any Property by Deed in Lieu of Foreclosure or otherwise, or
if a Consensual Sale of the Property is consummated in accordance with this
Agreement, promptly upon request by such acquiring party, Borrower shall deliver
and/or pay to Lender or its designee or a Potential Purchaser the following as
to all or any portion of such Property acquired by Lender or its designee or a
Potential Purchaser, to the extent applicable and in Borrower’s possession or
control: (i) possession of such Property, including all tangible personalty
located on, or in, or attached to, or used in connection with the hotel and/or
such Property, (ii) the originals (or true and correct copies, if the originals
are not available) of all guaranties and warranties given with respect to all or
any portion of such Property or any improvement located thereon which Borrower
has in its possession, (iii) the originals (or true and correct copies, if the
originals are not available) of all service contracts, franchise agreements and
management agreements then in effect with respect to such Property, (iv) the
originals (or true and correct copies, if the originals are not available) of
all plans, specifications, working drawings and surveys of or relating to such
Property or to the construction of the buildings and related improvements
located thereon, (v) the originals (or true and correct copies, if the originals
are not available) of all governmental consents, approvals, licenses (including,
but not limited to, liquor licenses), permits, certificates of occupancy, zoning
approvals, building permits and similar documents relating to such Property,
(vi) copies of all books and records in any way relating to such Property, (vii)
the balance of any funds in any security deposit accounts and any and all other
tenant security deposits, any and all advance room rentals, pre-paid rent or
reservation deposits paid by tenants, customers (i.e., related to banquet
services/facilities) or hotel guests, or similar fees (if any), (viii) the
originals (or true and correct copies, if the originals are not available) of
all termite or other inspection reports, bonds, warranties and guaranties
relating to such Property, (ix) any and all income from such Property received
by or on behalf of Borrower and then being held by or on behalf of Borrower
Parties, which may include receivables, revenues, profits or other value
generated from food, beverage and banquet services, room service, public room
revenues, concession agreements, health club or spa revenues and other services
rendered to guests of, or visitors to, such Property (except same shall be
delivered to Lender and not to a Potential Purchaser); (x) the originals (or
true and correct copies, if the originals are not available) of all
certificates, binders and policies of insurance relating to such Property, (xi)
the originals (or true and correct copies, if the originals are not available)
of all contracts and agreements with contractors, architects, engineers,
surveyors and others relating to all or any portion of such Property or for
service, labor (i.e. collective bargaining/union/employee benefit plans),
maintenance, repair, equipment and operation, (xii) the originals (or true and
correct copies, if the originals are not available) of all tenant leases and
occupancy agreements affecting all or any portion of such Property, if any,
(xiii) all leasing and other files, books and records with respect to all or any
portion of such Property and (xiv) any bankruptcy claims relating to any current
or former tenant(s) of such Property, duly assigned to Lender or its designee or
a Potential Purchaser.

 

5.7     Cooperation Covenants. The covenants and agreements of Borrower Parties
contained in Sections 5.2 through 5.8 of this Agreement shall be referred to as
the “Cooperation Covenants”. Borrower Parties shall be subject to personal
liability for the full Debt and all other obligations of Borrower to Lender
under the Loan Documents for any failure of any Borrower Parties after an Event
of Default occurring after the Effective Date to use commercially reasonable
efforts to comply with, or any attempt by any Borrower Parties after an Event of
Default occurring after the Effective Date to Interfere with Borrower Parties’
compliance with, the Cooperation Covenants, which failure has not been cured
within ten (10) days after written notice from Lender to Borrower and Guarantor.

 

5.8     Good Faith Defense. Notwithstanding the terms and provisions of this
Article 5, if Borrower in good faith raises a defense in any Foreclosure
Proceedings or any of the other Lender’s Enforcement Actions, prosecutes such
defense diligently and in good faith and obtains a final non-appealable ruling
by a court of competent jurisdiction upholding such defense as valid or finding
that such defense was made in good faith, then raising such defense shall not be
deemed to have been a violation of the Cooperation Covenants.

 

ARTICLE 6     
MISCELLANEOUS

 

6.1     Survival of Provisions. Except as expressly otherwise provided herein,
the covenants, acknowledgments, representations, agreements and obligations in
this Agreement shall survive until the payment in full of the Loan.

 

6.2     No Limitation of Remedies. No right, power or remedy conferred upon or
reserved to or by Lender in this Agreement is intended to be exclusive of any
other right, power or remedy conferred upon or reserved to or by Lender under
this Agreement, the Loan Documents or at law. Each and every remedy shall be
cumulative and concurrent, and shall be in addition to each and every other
right, power and remedy given under this Agreement, the Loan Documents or now or
subsequently existing in equity or at law.

 

6.3     No Waivers. Except as otherwise expressly set forth in this Agreement,
nothing contained in this Agreement shall constitute a waiver of any rights or
remedies of Lender under the Loan Documents, in equity or at law. No delay or
failure on the part of any Party in the exercise of any right or remedy under
the Loan Documents or this Agreement shall operate as a waiver, and no single or
partial exercise of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. No action or forbearance
by any Party contrary to the provisions of the Loan Documents or this Agreement
shall be construed to constitute a waiver of any of the express provisions. Any
Party may in writing expressly waive any of such Party’s rights under this
Agreement or the Loan Documents without invalidating this Agreement or the Loan
Documents.

 

6.4     Successors or Assigns. Whenever any Party is named or referred to in
this Agreement, the heirs, executors, legal representatives, successors,
successors-in-title and assigns of such Party shall be included. All covenants
and agreements in this Agreement shall bind and inure to the benefit of the
heirs, executors, legal representatives, successors, successors-in-title and
assigns of the Parties, whether so expressed or not.

 

6.5     Construction of Agreement. Each Party acknowledges that it has
participated in the negotiation of this Agreement. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
Party by any court or other governmental or judicial authority by reason of such
Party having or being deemed to have structured, dictated or drafted such
provision. Borrower at all times has had access to an attorney in the
negotiation of the terms of and in the preparation and execution of this
Agreement. Borrower has had the opportunity to review and analyze this Agreement
for a sufficient period of time prior to execution and delivery. No
representations or warranties have been made by or on behalf of Lender, or
relied upon by Borrower, pertaining to the subject matter of this Agreement,
other than those set forth in this Agreement. All prior statements,
representations and warranties, if any, are totally superseded and merged into
this Agreement, which represents the final and sole agreement of the Parties
with respect to the subject matters of this Agreement. All of the terms of this
Agreement were negotiated at arm’s length, and this Agreement was prepared and
executed without fraud, duress, undue influence or coercion of any kind exerted
by any of the Parties upon the others. The execution and delivery of this
Agreement is the free and voluntary act of Borrower.

 

6.6     Invalid Provision to Affect No Others. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or any related
transaction at the time performance of such provision shall be due, shall
involve transcending the limit of validity presently prescribed by any
applicable usury statute or any other applicable law, with regard to obligations
of like character and amount, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity. If any clause or provision
operates or would prospectively operate to invalidate this Agreement, in whole
or in part, then such clause or provision only shall be deemed deleted, as
though not contained herein, and the remainder of this Agreement shall remain
operative and in full force and effect.

 

6.7     Usury. This Agreement and all other agreements made by Borrower relating
directly or indirectly to the Debt are expressly limited so that in no event or
contingency whatsoever shall the amount of interest received, charged or
contracted for by Lender exceed the highest lawful amount of interest
permissible under the laws of such Governmental Authority whose laws are held by
any court of competent jurisdiction to govern the interest rate provisions of
the Loan (the “State”). If, under any circumstances whatsoever, performance of
any provision of the Note, the other Loan Documents or this Agreement, at the
time performance of such provision shall be due, shall result in the highest
lawful rate of interest permissible under the laws of the State being exceeded,
then ipso facto, the amount of interest received, charged or contracted for by
Lender shall be reduced to the highest lawful amount of interest permissible
under the laws of the State, and if for any reason whatsoever, Lender shall ever
receive, charge or contract for, as interest, an amount which would be deemed
unlawful, such amount of interest deemed unlawful shall be applied to principal
(whether or not due and payable) or refunded to Borrower (if all principal has
been paid) and not to the payment of interest.

 

6.8     Indemnity. Borrower agrees to indemnify and hold harmless Lender from
any liabilities, costs, expenses (including reasonable, out-of-pocket attorneys’
fees) or claims of the State or any other governmental agency for documentary
stamps, transfer taxes or recordation taxes, recording fees, intangible taxes
and any interest or penalties thereon which may be or become due in connection
with (a) the execution, delivery or recording of any Modification Documents or
(b) the transactions contemplated by this Agreement, excluding for the avoidance
of doubt, any exercise of remedies by Lender hereunder or pursuant to the Loan
Agreement (unless such items are otherwise explicitly covered by an indemnity in
the other Loan Documents). The provisions of this Section shall survive the
termination of this Agreement.

 

6.9     Notices. Any and all notices, elections, approvals, consents, demands,
requests and responses (“Communications”) permitted or required to be given
under this Agreement or the Loan Documents shall not be effective unless in
writing, signed by or on behalf of the Party giving the same, and sent by hand
delivery or overnight courier service (such as Federal Express), to the Party to
be notified at the address of such Party set forth below or at such other
address within the continental United States as such other Party may designate
by notice specifically designated as a notice of change of address and given in
accordance with this Section. Any Communications shall be effective upon the
earlier of their receipt or three days after mailing in the manner indicated in
this Section. Receipt of Communications shall occur upon actual delivery but if
attempted delivery is refused or rejected, the date of refusal or rejection
shall be deemed the date of receipt. A courtesy copy of any Communications
required or permitted to be given hereunder shall also be provided by electronic
mail at the e-mail addresses set forth below (as the same may be updated from
time to time), but such email Communication shall not be effective notice under
this Agreement and the Loan Documents unless also sent via one of the other
delivery methods set forth above. Any Communication, if given to Lender, must be
addressed as follows, subject to change as provided above:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFIT OF THE
HOLDERS OF COMM 2015-LC23 MORTGAGE TRUST COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES, IN SUCH CAPACITY, AND ON BEHALF OF ANY RELATED SERVICED COMPANION
LOAN NOTEHOLDERS

c/o Wells Fargo Bank, N.A.

Wells Fargo Commercial Mortgage Servicing

Three Wells Fargo

401 S. Tryon Street, 8th Floor

MAC D1050-084

Charlotte, NC 28202

Attn: Nichole Kelley

Re: COMM 2015-LC23, Loan No. 028000779

Email: Nichole.kelley@wellsfargo.com

 

With a copy to:

 

LNR Partners, LLC

1601 Washington Avenue, Suite 700

Miami Beach, Florida 33139

Attn:     Director of Loan Asset Management

Re: COMM 2015-LC23, Loan No. 028000779

Email: JBittman@lnrpartners.com

 

and:

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036

Attn: Krystyna M. Blakeslee

Email: krystyna.blakeslee@dechert.com

 

and, if given to Borrower, must be addressed as follows, notwithstanding any
other address set forth in the Loan Documents to the contrary, subject to change
as provided above:

 

HIT Portfolio II Owner, LLC, et al.

c/o Hospitality Investors Trust, Inc.

Park Avenue Tower

65 East 55th St., Suite 801

New York, NY 10022

Attn: Paul C. Hughes, Esq.

Email: phughes@hitreit.com

 

with a copy to:

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Michael Weinberger, Esq.               

Email address: mweinberger@cgsh.com

6.10     Governing Law. This Agreement shall be deemed to be a contract entered
into pursuant to the laws of the State of New York and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of the
State of New York, provided, however, (a) that with respect to the creation,
perfection, priority and enforcement of any lien created by the Loan Documents,
and the determination of deficiency judgments, the laws of the state where the
applicable portion of the applicable Property is located shall apply, and (b)
with respect to the security interest in each of the Reserve Accounts and each
Clearing Account, the laws of the state where each such account is located shall
apply.

 

6.11     Future Negotiations. Borrower acknowledges and agrees that (i) Lender
has no obligation whatsoever to discuss, negotiate or to agree to any
restructuring of the Loan, or any modification, amendment, restructuring or
reinstatement of the Loan Documents or to forbear from exercising its rights and
remedies under the Loan Documents, except as expressly provided in this
Agreement; (ii) if there are any future discussions among Lender and Borrower
concerning any such restructuring, modification, amendment or reinstatement,
then no restructuring, modification, amendment, reinstatement, compromise,
settlement, agreement or understanding with respect to the Loan, the Loan
Documents, the Properties or any aspect thereof, shall constitute a legally
binding agreement or contract or have any force or effect whatsoever unless and
until reduced to writing and signed by authorized representatives of the
Parties; and (iii) Borrower Parties shall not assert or claim in any legal
proceedings or otherwise that any such agreement exists except in accordance
with the terms of this Section.

 

6.12     Relationship of Parties. The Parties do not intend by this Agreement to
create a partnership or a joint venture. Neither this Agreement nor any of the
payments herein or in the Note to be made by either Borrower or Lender shall
constitute, or shall be deemed or construed to constitute, Lender a “mortgagee
in possession” of any Property or in any manner liable for any goods or services
delivered or provided with respect to any Property or in any manner liable to
any third parties. The relationship of Lender to Borrower is that of “lender”
and “borrower” and the Parties acknowledge and agree that the obligations of
Lender and Borrower set forth herein are not intended to benefit and should not
be relied on by third parties.

 

6.13     Headings. The headings of the articles, sections and subsections of
this Agreement are for the convenience of reference only, are not to be
considered a part of this Agreement and shall not be used to construe, limit or
otherwise affect this Agreement.

 

6.14     Modifications. The terms of this Agreement may not be changed,
modified, waived, discharged or terminated orally, but only by an instrument or
instruments in writing, signed by the Party against whom the enforcement of the
change, modification, waiver, discharge or termination is asserted. Except as
modified by this Agreement, the Loan Documents shall remain unmodified and in
full force and effect.

 

6.15     Conflicts. To the extent that the provisions of this Agreement or the
other Modification Documents conflict with the provisions in any Loan Document,
the provisions of this Agreement and the other Modification Documents shall
control.

 

6.16     Time of Essence; Consents. Time is of the essence of this Agreement and
the Loan Documents. Any provisions for consents or approvals in this Agreement
shall mean that such consents or approvals shall not be effective unless in
writing and executed by Lender.

 

6.17     Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which will constitute the
same agreement. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this Agreement
identical in form hereto but having attached to it one or more additional
signature pages. This Agreement shall not be binding on either party until
executed and delivered by all parties.

 

6.18     Waiver of Trial by Jury. EACH OF BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF ANY OF BORROWER PARTIES OR LENDER RELATING TO
THE LOAN AND THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT
AND THE OTHER MODIFICATION DOCUMENTS. EACH OF BORROWER AND LENDER IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

 

6.19     Agreement to Reinstate the Loan. The Note, the Loan Agreement, Security
Instruments and the other Loan Documents are hereby reinstated, in accordance
with their respective terms and conditions, as amended contemporaneously
herewith. Notwithstanding any implication or agreement herein relating to the
reinstatement or modification of the Loan Documents (including, without
limitation, any prior course of conduct by any party hereto), Borrower agrees
that Lender shall and will hereafter require full and prompt performance of any
and all terms, conditions or requirements of this Agreement and all Loan
Documents, as amended. Borrower acknowledges and agrees that any performance or
nonperformance of the terms of the Note, the Loan Agreement, Security
Instruments, or the other Loan Documents prior to the date of this Agreement
shall not effect or diminish in any way the requirement of strict compliance of
the Note, Security Instruments and the other Loan Documents after the date
hereof.

 

6.20     No Novation. None of the transactions contemplated by the Modification
Documents, nor any amendment or restatement of any of the Loan Documents, or any
other amendment, action or event on or prior to the date hereof, constituted or
constitutes a novation of the indebtedness described in the Loan Documents.

 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

 

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The Parties have executed and delivered this Agreement, as of the day and year
first above written.

 

LENDER:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFIT OF THE
HOLDERS OF COMM 2015-LC23 MORTGAGE TRUST COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES, IN SUCH CAPACITY AND ON BEHALF OF ANY RELATED SERVICED COMPANION
LOAN NOTEHOLDERS

 

 

By:

LNR Partners, LLC, a Florida limited liability company, as attorney-in-fact

 

 

By:      /s/ Arnold Shulkin               

Name: Arnold Shulkin

Title: Vice President

 

 

 

--------------------------------------------------------------------------------

 

 

 

BORROWER:

 

HIT PORTFOLIO II HIL TRS, LLC, a Delaware limited liability company

 

 

By:      /s/ Paul C. Hughes               

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT PORTFOLIO II OWNER, LLC, a Delaware limited liability company

 

 

By:      /s/ Paul C. Hughes               

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT PORTFOLIO II MISC TRS, LLC, a Delaware limited liability company

 

 

By:      /s/ Paul C. Hughes               

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT PORTFOLIO II NTC OWNER, LP, a Delaware limited partnership

 

By: HIT Portfolio II NTC Owner GP, LLC, its

general partner

 

 

By:      /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

 

HIT PORTFOLIO II NTC HIL TRS, LP, a Delaware limited partnership

 

By: HIT Portfolio II NTC TRS GP, LLC, its

general partner

 

 

By:      /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT PORTFOLIO II NTC TRS, LP, a Delaware limited partnership

 

By: HIT Portfolio II NTC TRS GP, LLC, its

general partner

 

 

By:      /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT PORTFOLIO II TRS, LLC, a Delaware limited liability company

 

 

By:           /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT STRATFORD, LLC, a Delaware limited liability company

 

 

By:           /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary

 

 

HIT TRS STRATFORD, LLC, a Delaware limited liability company

 

 

By:           /s/ Paul C. Hughes          

Name: Paul C. Hughes

Title: General Counsel and Secretary