Exhibit 10.2

(Composite Credit Agreement (including amendments 1-8))

EXHIBIT A

REVISED CREDIT AGREEMENT

CREDIT AGREEMENT

DATED AS OF MARCH 1, 2017

by and among

CONDOR HOSPITALITY LIMITED PARTNERSHIP,

AS THE BORROWER,

KEYBANK NATIONAL ASSOCIATION,

THE OTHER LENDERS WHICH ARE PARTIES TO THIS AGREEMENT

AND

OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

KEYBANK NATIONAL ASSOCIATION,

AS THE AGENT,

AND

KEYBANC CAPITAL MARKETS INC.,

THE HUNTINGTON NATIONAL BANK,

AND

BMO CAPITAL MARKETS CORP.,

AS JOINT LEAD ARRANGERS

AND

THE HUNTINGTON NATIONAL BANK,

AS SYNDICATION AGENT

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Table of Contents

 

              Page  

§1.

  DEFINITIONS AND RULES OF INTERPRETATION.      1     §1.1    Definitions      1
    §1.2    Rules of Interpretation      3640  

§2.

  THE CREDIT FACILITY      3842     §2.1    Revolving Credit Loans      3842    
§2.2    [Intentionally Omitted]      3943     §2.3    Unused Fee      3943    
§2.4    Reduction and Termination of the Commitments      3944     §2.5    Swing
Loan Commitment      3944     §2.6    Interest on Loans      4246     §2.7   
Requests for Revolving Credit Loans      4247     §2.8    Funds for Loans     
4348     §2.9    Use of Proceeds      4348     §2.10    Letters of Credit     
4348     §2.11    Increase in Total Commitment [Intentionally Omitted]      4752
    §2.12    Extension of Maturity Date [Intentionally Omitted]      4954    
§2.13    Defaulting Lenders      5156  

§3.

  REPAYMENT OF THE LOANS      5559     §3.1    Stated Maturity      5559    
§3.2    Mandatory Prepayments ; Commitment Reductions      5560     §3.3   
Optional Prepayments      5661     §3.4    Partial Prepayments      62     §3.5
   Effect of Prepayments      62  

§4.

  CERTAIN GENERAL PROVISIONS      62     §4.1    Conversion Options      62    
§4.2    Fees      63     §4.3    Funds for Payments      63     §4.4   
Computations      68     §4.5    Suspension of LIBOR Rate Loans      68     §4.6
   Illegality      6368     §4.7    Additional Interest      6369     §4.8   
Additional Costs, Etc.      69     §4.9    Capital Adequacy      70     §4.10   
Breakage Costs      6571     §4.11    Default Interest; Late Charge      6571  
  §4.12    Certificate      71     §4.13    Limitation on Interest      71    
§4.14    Certain Provisions Relating to Increased Costs      6672     §4.15   
Effect of Benchmark Transition Event Replacement Setting      6773  

 

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Table of Contents

(continued)

 

              Page  

§5.

  COLLATERAL SECURITY; GUARANTORS      7080     §5.1    Collateral      7080    

§5.2

   Appraisal      7080    

§5.3

   Additional Collateral      7181    

§5.4

   Additional Guarantors; Release of Guarantors      7383    

§5.5

   Partial Release of Collateral      7484    

§5.6

   Release of Collateral      7585  

§6.

  REPRESENTATIONS AND WARRANTIES      7585    

§6.1

   Corporate Authority, Etc.      7585    

§6.2

   Governmental Approvals      7686    

§6.3

   Title to Properties      7687    

§6.4

   Financial Statements      7787    

§6.5

   No Material Changes      7787    

§6.6

   Franchises, Patents, Copyrights, Etc.      7788    

§6.7

   Litigation      7888    

§6.8

   No Material Adverse Contracts, Etc.      7889    

§6.9

   Compliance with Other Instruments, Laws, Etc.      7889    

§6.10

   Tax Status      7889    

§6.11

   No Event of Default      7989    

§6.12

   Investment Company Act      7989    

§6.13

   Setoff; Absence of UCC Financing Statements      7989    

§6.14

   Certain Transactions      7990    

§6.15

   Employee Benefit Plans      7990    

§6.16

   Disclosure      8090    

§6.17

   Trade Name; Place of Business      8191    

§6.18

   Regulations T, U and X      8191    

§6.19

   Environmental Compliance      8192    

§6.20

   Subsidiaries; Organizational Structure      8394    

§6.21

   Leases      8394    

§6.22

   Property      8495    

§6.23

   Brokers      8697    

§6.24

   Other Debt      8697    

§6.25

   Solvency      8697    

§6.26

   No Bankruptcy Filing      8698    

§6.27

   No Fraudulent Intent      8698    

§6.28

   Transaction in Best Interests of the Borrower and Guarantors; Consideration
     8698    

§6.29

   Contribution Agreement      8798    

§6.30

   Representations and Warranties of Guarantors      8798    

§6.31

   OFAC      8799    

§6.32

   Labor Matters      8899    

§6.33

   Ground Lease      8899    

§6.34

   Material Contracts      89100    

§6.35

   Intellectual Property      89100    

§6.36

   EEA Financial Institutions      89101    

§6.37

   Initial Borrowing Base Properties      89101  

 

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Table of Contents

(continued)

 

             Page   §7.   AFFIRMATIVE COVENANTS      89101    

§7.1

  Punctual Payment      89101    

§7.2

  Maintenance of Office      89101    

§7.3

  Records and Accounts      90101    

§7.4

  Financial Statements, Certificates and Information      90101    

§7.5

  Notices      94106    

§7.6

  Existence; Maintenance of Properties      96108    

§7.7

  Insurance; Condemnation      96109    

§7.8

  Taxes; Liens      102114    

§7.9

  Inspection of Properties and Books      102115    

§7.10

  Compliance with Laws, Contracts, Licenses, and Permits      103115    

§7.11

  Further Assurances      103116    

§7.12

  Leases of the Property      103116    

§7.13

  Material Contracts      104117    

§7.14

  Business Operations      105117    

§7.15

  Registered Service Mark      105117    

§7.16

  Ownership of Real Estate      105118    

§7.17

  Distributions of Income to the Borrower      105118    

§7.18

  Plan Assets      106118    

§7.19

  Completion of Renovations      106118    

§7.20

  Borrowing Base Properties      107119    

§7.21

  Sanctions Laws and Regulations      110123    

§7.22

  Assignment of Interest Rate Protection      110123    

§7.23

  Post-Closing ItemsLiquidity Trigger Event      110123  

§8.

  NEGATIVE COVENANTS      111125    

§8.1

  Restrictions on Indebtedness      111125    

§8.2

  Restrictions on Liens, Etc.      112127    

§8.3

  Restrictions on Investments      114128    

§8.4

  Merger, Consolidation      116130    

§8.5

  Sale and Leaseback      116131    

§8.6

  Compliance with Environmental Laws      117131    

§8.7

  Distributions      118133    

§8.8

  Asset Sales      118133    

§8.9

  Restriction on Prepayment of Indebtedness      118134    

§8.10

  Zoning and Contract Changes and Compliance      119134    

§8.11

  Derivatives Contracts      119134    

§8.12

  Transactions with Affiliates      119134    

§8.13

  Management Fees      119134    

§8.14

  Changes to Organizational Documents      119135    

§8.15

  Equity Pledges      120135    

§8.16

  Non-Encumbrance      120135    

§8.17

  Subordinate Debt      135  

§9.

  FINANCIAL COVENANTS      120136    

§9.1

  Debt YieldBorrowing Base Implied DSCR      120136  

 

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Table of Contents

(continued)

 

            Page    

§9.2

  Leverage [Intentionally Omitted]     120136    

§9.3

  Borrowing Base Leverage     120137    

§9.4

  [Intentionally Omitted] Liquidity     120137    

§9.5

  Adjusted Consolidated EBITDA to Fixed Charges     120137    

§9.6

  [Intentionally Omitted]     121138    

§9.7

  [Intentionally Omitted]     121138    

§9.8

  [Intentionally Omitted]     121138  

§10.

 

CLOSING CONDITIONS

    121138    

§10.1

  Loan Documents     121138    

§10.2

  Certified Copies of Organizational Documents     121138    

§10.3

  Resolutions     121138    

§10.4

  Incumbency Certificate; Authorized Signers     121138    

§10.5

  Opinion of Counsel     122139    

§10.6

  Payment of Fees     122139    

§10.7

  Performance; No Default     122139    

§10.8

  Representations and Warranties     122139    

§10.9

  Proceedings and Documents     122139    

§10.10

  Borrowing Base Qualification Documents     122139    

§10.11

  Compliance Certificate and Borrowing Base Certificate     122139    

§10.12

  Appraisals     122139    

§10.13

  Consents     122139    

§10.14

  Contribution Agreement     122139    

§10.15

  Insurance     123140    

§10.16

  Other     123140  

§11.

 

CONDITIONS TO ALL BORROWINGS

    123140    

§11.1

  Prior Conditions Satisfied     123140    

§11.2

  Representations True; No Default     123140    

§11.3

  Borrowing Documents     123140    

§11.4

  Endorsement to Title Policy     123140    

§11.5

  Future Advances Tax Payment     124141  

§12.

 

EVENTS OF DEFAULT; ACCELERATION; ETC.

    124141    

§12.1

  Events of Default and Acceleration     124141    

§12.2

  Certain Cure Periods; Limitation of Cure Periods     127145    

§12.3

  Termination of Commitments     128145    

§12.4

  Remedies     128146    

§12.5

  Distribution of Collateral Proceeds     128146    

§12.6

  Collateral Account     129147  

§13.

 

SETOFF

    130148  

§14.

  THE AGENT     131149    

§14.1

  Authorization     131149    

§14.2

  Employees and Agents     131149    

§14.3

  No Liability     131149    

§14.4

  No Representations     132150  

 

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Table of Contents

(continued)

 

             Page    

§14.5

  Payments      132151    

§14.6

  Holders of Notes      133151    

§14.7

  Indemnity      133151    

§14.8

  The Agent as Lender      133151    

§14.9

  Resignation      133152    

§14.10

  Duties in the Case of Enforcement      134152    

§14.11

  Request for Agent Action      135153    

§14.12

  Bankruptcy      135153    

§14.13

  Reliance by the Agent      135154    

§14.14

  Approvals      135154    

§14.15

  The Borrower Not Beneficiary      136154    

§14.16

  Reliance on Hedge Provider      136154    

§14.17

  Comfort Letters      136155    

§14.18

  Subordination and Standstill Agreements      155  

§15.

 

EXPENSES

     136155  

§16.

 

INDEMNIFICATION

     137156  

§17.

 

SURVIVAL OF COVENANTS, ETC.

     138157  

§18.

 

ASSIGNMENT AND PARTICIPATION

     139157    

§18.1

  Conditions to Assignment by Lenders      139157    

§18.2

  Register      140159    

§18.3

  New Notes      140159    

§18.4

  Participations      140160    

§18.5

  Pledge by Lender      141160    

§18.6

  No Assignment by the Borrower      141161    

§18.7

  Disclosure      141161    

§18.8

  Mandatory Assignment      142162    

§18.9

  Amendments to Loan Documents      143162    

§18.10

  Titled Agents      143163  

§19.

 

NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATIONS

     143163  

§20.

 

RELATIONSHIP

     145165  

§21.

 

GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE

     146165  

§22.

 

HEADINGS

     146166  

§23.

 

COUNTERPARTS

     146166  

§24.

 

ENTIRE AGREEMENT, ETC.

     147166  

§25.

 

WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

     147167  

§26.

 

DEALINGS WITH THE BORROWER

     147167  

§27.

 

CONSENTS, AMENDMENTS, WAIVERS, ETC.

     148168  

§28.

 

SEVERABILITY

     149169  

§29.

 

TIME OF THE ESSENCE

     149169  

§30.

 

NO UNWRITTEN AGREEMENTS

     149169  

§31.

 

REPLACEMENT NOTES

     149169  

§32.

 

NO THIRD PARTIES BENEFITED

     150169  

§33.

 

PATRIOT ACT

     150170  

§34.

 

ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS

     150170  

 

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EXHIBITS AND SCHEDULES

 

Exhibit A    FORM OF JOINDER AGREEMENT Exhibit B    FORM OF REVOLVING CREDIT
NOTE Exhibit C    FORM OF SWING LOAN NOTE Exhibit D    FORM OF REQUEST FOR
REVOLVING CREDIT LOAN Exhibit E    FORM OF LETTER OF CREDIT REQUEST Exhibit F   
FORM OF LETTER OF CREDIT APPLICATION Exhibit G    FORM OF COMPLIANCE CERTIFICATE
Exhibit H    FORM OF BORROWING BASE CERTIFICATE Exhibit I    FORM OF ASSIGNMENT
AND ACCEPTANCE AGREEMENT Exhibits J    FORMS OF U.S. TAX COMPLIANCE CERTIFICATES
Exhibit K    RESERVEDFORM OF CONVERTIBLE PROMISSORY NOTE AND LOAN AGREEMENT
Schedule 1.1    LENDERS AND COMMITMENTS Schedule 1.3    INITIAL BORROWING BASE
PROPERTIES, TIER I PROPERTIES AND TIER II PROPERTIES Schedule 2.9(a)   
PERMITTED ACQUISITIONS Schedule 2.9(b)    PERMITTED REFINANCES Schedule 4.3   
ACCOUNTS Schedule 5.3    BORROWING BASE QUALIFICATION DOCUMENTS Schedule 5.5   
MINIMUM RELEASE PRICES Schedule 6.3    TITLE TO PROPERTIES Schedule 6.5    NO
MATERIAL CHANGES Schedule 6.7    PENDING LITIGATION Schedule 6.10    TAX STATUS
Schedule 6.14    CERTAIN TRANSACTIONS Schedule 6.20(a)    SUBSIDIARIES OF REIT
Schedule 6.20(b)    UNCONSOLIDATED AFFILIATES OF REIT AND ITS SUBSIDIARIES
Schedule 6.21    LEASES Schedule 6.22    PROPERTY Schedule 6.24    OTHER DEBT
Schedule 6.34    MATERIAL CONTRACTS Schedule 6.37    INITIAL BORROWING BASE
PROPERTIES Schedule 7.23    RESERVED

 

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”) is made as of March 1, 2017, by and
among CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership
(the “Borrower”), KEYBANK NATIONAL ASSOCIATION (“KeyBank”), the other lending
institutions which are parties to this Agreement as “Lenders”, and the other
lending institutions that may become parties hereto as “Lenders” pursuant to
§18, and KEYBANK NATIONAL ASSOCIATION, as Agent for the Lenders (the “Agent”).

R E C I T A L S

WHEREAS, the Borrower has requested that the Lenders provide a revolving credit
facility to the Borrower; and

WHEREAS, the Agent and the Lenders are willing to provide such revolving credit
facility to the Borrower on and subject to the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the recitals herein and mutual covenants and
agreements contained herein, the parties hereto hereby covenant and agree as
follows:

 

§1.

DEFINITIONS AND RULES OF INTERPRETATION.

 

  §1.1

Definitions. The following terms shall have the meanings set forth in this §l or
elsewhere in the provisions of this Agreement referred to below:

Additional Commitment Request Notice. See §2.11(a).

Additional Guarantor. Each additional Subsidiary of the Borrower which becomes a
Subsidiary Guarantor pursuant to §5.4.

Adjusted Consolidated EBITDA. On any date of determination, the sum of
(i) Consolidated EBITDA for the four (4) fiscal quarters most recently ended
less, less (ii) except for any test period occurring in 2021 or 2022, the FF&E
Reserve for all Real Estate of the REIT and its Subsidiaries and, less (iii) the
Franchise Fees of the REIT and its Subsidiaries and less (iv) the Management
Fees of the REIT and its Subsidiaries (to the extent not previously included in
Consolidated EBITDA), in each case for the four (4) fiscal quarters most
recently ended. Adjusted Consolidated EBITDA for the period shall be adjusted on
a proforma basis to account for properties acquired or sold in the period in a
manner satisfactory to the Agent. Notwithstanding the foregoing, in connection
with the determination of whether the Distribution Conditions exist and at any
time following a Distribution Event, the amounts excluded from the calculation
of Adjusted Consolidated EBITDA pursuant to clause (ii) above shall be included
in the calculation of Adjusted Consolidated EBITDA.

Adjusted Net Operating Income. On any date of determination Net Operating Income
from the Borrowing Base Properties or other Real Estate, as applicable, for the
prior four (4) fiscal quarters most recently ended less the FF&E Reserve
applicable to the Borrowing Base Properties or other Real Estate, as applicable,
for such period. Adjusted Net Operating Income for the period shall be adjusted
on a pro forma basis to account for properties acquired in the period in a
manner satisfactory to the Agent.

 

1

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Affected Lender. See §4.14.

Affiliate. An Affiliate, as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the stock, shares,
voting trust certificates, beneficial interest, partnership interests, member
interests or other interests having voting power for the election of directors
of such Person or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise, or (b) the ownership of (i) a general partnership
interest, (ii) a managing member’s or manager’s interest in a limited liability
company or (iii) a limited partnership interest or preferred stock (or other
ownership interest) representing ten percent (10%) or more of the outstanding
limited partnership interests, preferred stock or other ownership interests of
such Person.

Agent. KeyBank National Association, acting as administrative agent for the
Lenders, and its successors and assigns.

Agent’s Head Office. The Agent’s head office located at 127 Public Square,
Cleveland, Ohio 44114-1306, or at such other location as the Agent may designate
from time to time by notice to the Borrower and the Lenders.

Agent’s Special Counsel. Dentons US LLP or such other counsel as selected by the
Agent.

Agreement. This Credit Agreement, including the Schedules and Exhibits hereto.

Agreement Regarding Fees. See §4.2.

Aloft Atlanta Term Loan. A term loan in the original principal face amount of up
to $34,080,000.00 from KeyBank now or hereafter made, jointly and severally, to
Condor Hospitality Limited Partnership, Spring Street Hotel Property LLC, a
Delaware limited liability company (“Spring Street Fee Owner”), and Spring
Street Hotel OpCo LLC, a Delaware limited liability company (“Spring Street
Operating Lessee”), which term loan will be secured by, among other things, the
real property and improvements commonly known as the Aloft Atlanta Downtown
located at 300 Ted Turner Drive NW, Atlanta, Georgia 30308.

Applicable Law. All applicable provisions of constitutions, statutes, rules,
regulations, guidelines and orders of all Governmental Authorities and all
orders and decrees of all courts, tribunals and arbitrators.

 

2

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Applicable Margin. The Applicable Margin for LIBOR Rate Loans and Base Rate
Loans shall be a percentage per annum as set forth below:

 

Period:

   Applicable Margin for
LIBOR Rate Loans     Applicable Margin for
Base Rate Loans  

From March 30, 2020 through and including October 1, 2020

     3.25 %      2.25 % 

From October 2, 2020 through and including April 1, 2021

     3.50 %      2.50 % 

From April 2, 2021 through and including October 1, 2021

     3.75 %      2.75 % 

For the period from October 2, 2021 and thereafter

     4.00 %      3.00 % 

In the event that, with respect to any period when the Applicable Margin was
determined based upon the Leverage Ratio, the Agent, REIT or the Borrower
determine that any financial statements previously delivered were incorrect or
inaccurate (regardless of whether this Agreement or the Commitments are in
effect when such inaccuracy is discovered), and such inaccuracy, if corrected,
would have led to the application of a higher Applicable Margin for any period
(an “Applicable Period”) than the Applicable Margin applied for such Applicable
Period, then (a) the Borrower shall as soon as practicable deliver to the Agent
the corrected financial statements for such Applicable Period, (b) the
Applicable Margin shall be determined as if the Pricing Level for such higher
Applicable Margin were applicable for such Applicable Period, and (c) the
Borrower shall within three (3) Business Days of demand thereof by the Agent pay
to the Agent the accrued additional amount owing as a result of such increased
Applicable Margin for such Applicable Period, which payment shall be promptly
applied by the Agent in accordance with this Agreement.

Appraisal. An MAI appraisal reasonably acceptable to the Agent of the value of
Real Estate, determined on an “as-is” value or “as-stabilized” value basis, as
applicable, performed by an independent appraiser and ordered, with respect to
the Borrowing Base Properties, by the Agent, and with respect to any Real Estate
that is not a Borrowing Base Property, by the Agent, or with Agent’s prior
approval, another Person.

Appraised Value. The “as-is” value of a parcel of Real Estate determined by the
most recent Appraisal of such Real Estate, obtained pursuant to §2.12, §5.2,
§5.3 or §10.12; subject, however, to such changes or adjustments to the value
determined thereby as may be required by the appraisal department of the Agent
in its good faith business judgment as a result of errors, inconsistencies or
flaws in methodology or assumptions.

Approved Brand. Any of the hotel brands owned by the following hotel companies:
(a) Marriott (including Starwood Hotels), (b) Hilton, (c) Hyatt or
(d) International Hotels Group.

 

3

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Approved Budget. The annual budget of the REIT and its Subsidiaries, which
budget shall be prepared by REIT and approved by the Required Lenders (such
approval not to be unreasonably withheld, conditioned or delayed) and shall be a
detailed estimate of projected income, cash flow, corporate overhead, general
and administrative expense, operating costs, FF&E and other planned or required
capital expenditures, fees payable to Franchisors and Managers, and debt service
of the REIT and its Subsidiaries for each month and quarter of the calendar year
in question, the projected cash flows for such year, a summary of the
significant assumptions upon which such projections are based, and any proposed
items to be included in Permitted Borrowings. Each budget shall be prepared by
the REIT in good faith and in accordance with GAAP (adjusted to remove non-cash
items) applied on a consistent basis.

Arranger. KCM, The Huntington National Bank and BMO Capital Markets.

Assignment and Acceptance Agreement. See §18.1.

Assignment of Leases and Rents. Each of the assignments of leases and rents from
Borrower or a Subsidiary Guarantor that is an owner of a Borrowing Base Property
to the Agent, as it may be modified or amended, pursuant to which there shall be
assigned to the Agent for the benefit of the Lenders a security interest in the
interest of Borrower or such Subsidiary Guarantor as lessor with respect to all
leases of all or any part of each Borrowing Base Property (to which Borrower or
such Subsidiary Guarantor is a lessor), each such assignment entered into after
the date hereof to be substantially in the form as the initial Assignment of
Leases and Rents executed and delivered by each of Borrower or the Subsidiary
Guarantors on the Closing Date, with such changes thereto as Agent may
reasonably require as a result of state law or practice.

As-Stabilized Appraised Value. The “as-stabilized” value of a parcel of Real
Estate determined by the most recent Appraisal of such Real Estate, obtained
pursuant to §5.2 or §5.3; subject, however, to such changes or adjustments to
the value determined thereby as may be required by the appraisal department of
the Agent in its good faith business judgment as a result of errors,
inconsistencies or flaws in methodology or assumptions. For purposes of §9.3(a),
the As-Stabilized Appraised Value shall be based upon new Appraisals or updates
to existing Appraisals, in either case, obtained after January 1, 2022.

Authorized Officer. Any of the following Persons: J. William Blackham, Arinn
Cavey, Jill Burger and such other Persons as the Borrower shall designate in a
written notice to the Agent.

Bail-In Action. The exercise of any Write-Down and Conversion Powers by the
applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

Bail-In Legislation. With respect to any EEA Member Country implementing Article
55 of Directive 2014/59/EU of the European Parliament and of the Council of the
European Union, the implementing law for such EEA Member Country from time to
time which is described in the EU Bail-In Legislation Schedule.

Balance Sheet Date. September 30, 2016.December 31, 2019.

Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.

 

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Base Rate. The greater of (a) the fluctuating annual rate of interest announced
from time to time by the Agent at the Agent’s Head Office as its “prime rate”,
(b) one half of one percent (0.5%) above the Federal Funds Effective Rate, and
(c) LIBOR for an Interest Period of one (1) month plus one percent (1.0%). The
Base Rate is a reference rate used by the lender acting as Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged by the lender acting as the Agent or any other lender on any
extension of credit to any debtor. Any change in the rate of interest payable
hereunder resulting from a change in the Base Rate shall become effective as of
12:01 a.m. on the Business Day on which such change in the Base Rate becomes
effective, without notice or demand of any kind.

Base Rate Loans. Collectively, (a) the Revolving Credit Loans bearing interest
calculated by reference to the Base Rate and (b) the Swing Loans.

Borrower. As defined in the preamble hereto.

Borrower Security Agreement. The Security Agreement dated as of the date hereof
among the Agent, the Borrower and the REIT.

Borrowing Availability. The Borrowing Availability shall equal the amount by
which (a) the lesser of (1) the Total Commitment and (2) the maximum principal
amount of Revolving Credit Loans, Swing Loans and Letter of Credit Liabilities
that would cause compliance with the covenants in §9.1 and §9.3 (as and when
compliance with such covenant is determined, which amount determined thereunder
shall also thereafter constitute a limit on the outstanding principal balance of
the Revolving Credit Loans, Swing Loans and Letter of Credit Liabilities),
exceeds (b) the aggregate outstanding principal balance of the Revolving Credit
Loans, Swing Loans and Letter of Credit Liabilities. The Borrowing Availability
that may be utilized for purposes other than the payment of interest and fees
due under this Agreement shall further be reduced by the amount of the Interest
Holdback.

Borrowing Base Certificate. See §7.4(c).

Borrowing Base Property or Borrowing Base Properties. The Real Estate owned (or
leased pursuant to a Ground Lease) by Borrower or a Subsidiary Guarantor and
leased by a Subsidiary Guarantor pursuant to an Operating Lease that is security
for the Obligations pursuant to the Mortgages, as required by the terms of this
Agreement.

Borrowing Base Qualification Documents. See Schedule 5.3 attached hereto.

Breakage Costs. The cost to any Lender of re-employing funds bearing interest at
LIBOR incurred (or reasonably expected to be incurred) in connection with
(a) any payment of any portion of the Loans bearing interest at LIBOR prior to
the termination of any applicable Interest Period, (b) the conversion of a LIBOR
Rate Loan to any other applicable interest rate on a date other than the last
day of the relevant Interest Period, or (c) the failure of the Borrower to draw
down, on the first day of the applicable Interest Period, any amount as to which
the Borrower has elected a LIBOR Rate Loan.

 

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Building. With respect to any Real Estate, all of the buildings, structures and
improvements now or hereafter located thereon.

Business Day. Any day on which banking institutions located in the same city and
State as the Agent’s Head Office are located are open for the transaction of
banking business and, in the case of LIBOR Rate Loans, which also is a LIBOR
Business Day.

Capitalization Rate. The Capitalization Rate shall be (a) eight and one-half
percent (8.5%) for Real Estate that is not a Borrowing Base Property and that
satisfies the requirements of §7.20(a)(v) (except that Agent shall not be
required to approve the Franchise Agreement and Management Agreement), and
(b) twelve percent (12%) for all other Real Estate that is not a Borrowing Base
Property.

Capitalization Value. As of any date of determination with respect to Real
Estate that is not a Borrower Base Property, as applicable, the amount equal to
the Adjusted Net Operating Income for such Real Estate for the prior four
(4) fiscal quarters most recently ended, divided by the Capitalization Rate.

Capitalized Lease. A lease under which the discounted future rental payment
obligations of the lessee or the obligor are required to be capitalized on the
balance sheet of such Person in accordance with GAAP.

Cash Collateral Agreement. The Cash Collateral Account Agreement, by and among
the Borrower, the Subsidiary Guarantors, each Additional Subsidiary Guarantor
that may hereafter become a party thereto and Agent, in its capacity as
administrative agent, providing for the deposit of revenues from the Borrowing
Base Properties into the Collection Account, and the granting of a security
interest in and control of such account to Agent for the benefit of the Lenders,
such agreement to be in form and substance reasonably satisfactory to Agent.

Cash Flow Waterfall. The cash flow waterfall described in Section 6.2(b) of the
Cash Collateral Agreement.

Cash Equivalents. As of any date, (a) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of not more than one year from such
date, (b) time deposits and certificates of deposits having maturities of not
more than one (1) year from such date and issued by (i) any Lender or (ii) any
domestic commercial bank having (A) senior long term unsecured debt rated at
least A or the equivalent thereof by S&P or A2 or the equivalent thereof by
Moody’s and (B) capital and surplus in excess of $100,000,000.00, (c) commercial
paper rated at least A-1 or the equivalent thereof by S&P or P-1 or the
equivalent thereof by Moody’s and in either case maturing within one hundred
twenty (120) days from such date, and (d) shares of any money market mutual fund
rated at least AAA or the equivalent thereof by S&P or at least Aaa or the
equivalent thereof by Moody’s.

CERCLA. The federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended from time to time, and regulations promulgated
thereunder.

 

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Change of Control. A Change of Control shall exist upon the occurrence of any of
the following:

(a) any Person (including a Person’s Affiliates and associates) or group (as
that term is understood under Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the rules and regulations thereunder)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of a percentage (based on voting power, in the event different
classes of stock or interests shall have different voting powers) of the voting
stock or voting interests of REIT equal to at least thirty percent
(30%) (excluding the existing and future interests of the Existing Shareholders
as of the date hereof and the interests in the REIT into which the Existing
Shareholders may convert, provided that in no event shall any Existing
Shareholder have beneficial ownership of the voting stock or voting interests of
REIT greater than forty-nine and 9/10ths percent (49.9%); or

(b) as of any date a majority of the Board of Directors or Trustees or similar
body (the “Board”) of REIT consists of individuals who were not either
(i) directors or trustees of REIT as of the corresponding date of the previous
year, or (ii) selected or nominated to become directors or trustees by the Board
of REIT of which a majority consisted of individuals described in clause
(i) above, or (iii) selected or nominated to become directors or trustees by the
Board of REIT which majority consisted of individuals described in clause
(i) above and individuals described in clause (ii) above; or

(c) [Intentionally Omitted];

(d) J. William Blackham shall cease to be Chief Executive Officer of the REIT,
provided that if J. William Blackham shall not be the Chief Executive Officer of
the REIT as a result of his death or disability or termination by the Board,
then no Change of Control shall occur under this clause (d) if a competent and
experienced officer to replace him as Chief Executive Officer is approved by the
Required Lenders within ninety (90) days of his death or disability, which
approval the Required Lenders shall not unreasonably withhold, condition or
delay; or

(e) REIT, General Partner or the Borrower consolidates with, is acquired in
whole by, or merges into or with any Person (other than a merger permitted by
§8.4); or

(f) General Partner fails to (i) be the sole general partner of Borrower,
(ii) own directly, free of any lien, encumbrance or other adverse claim, at
least eighty-five percent (85%) of the economic, voting and beneficial interest
of the Borrower (other than any Lien of the Agent granted pursuant to the Loan
Documents), or (iii) hold all management powers over the business and affairs of
the Borrower and control the Borrower; or

(g) REIT fails to (i) own directly, free of any lien, encumbrance or other
adverse claim (other than any Lien of the Agent granted pursuant to the Loan
Documents), one hundred percent (100%) of the economic, voting and beneficial
interest of the General Partner, or (ii) hold all management powers over the
business and affairs of the Borrower and General Partner and control the
Borrower and General Partner; or

 

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(h) the Borrower fails to (i) own, directly or indirectly, free of any lien,
encumbrance or other adverse claim (other than any Lien of the Agent granted
pursuant to the Loan Documents), at least ninety-nine percent (99%) of the
economic, voting and beneficial interest of each Subsidiary Guarantor (other
than TRS and the other TRS Lessees) (the other one percent (1%) of which shall
be owned, directly or indirectly, free of any lien, encumbrance or other adverse
claim (other than any Lien of the Agent granted pursuant to the Loan Documents),
by the REIT); or (ii) hold all management powers over the business and affairs
of the Subsidiary Guarantors (other than TRS and the other TRS Lessees) and
control the Subsidiary Guarantors (other than TRS and the other TRS Lessees); or

(i) General Partner fails to (i) own directly, free of any lien, encumbrance or
other adverse claim (other than any Lien of the Agent granted pursuant to the
Loan Documents), one hundred percent (100%) of the economic, voting and
beneficial interest of TRS, or (ii) hold all management powers over the business
and affairs of TRS and control TRS; or

(j) TRS fails to (i) own directly, free of any lien, encumbrance or other
adverse claim (other than any Lien of the Agent granted pursuant to the Loan
Documents), at least one hundred percent (100%) of the economic, voting and
beneficial interest of each other TRS Lessee, or (ii) hold all management powers
over the business and affairs of each other TRS Lessee and control each other
TRS Lessee.

Closing Date. The date of this Agreement.

Code. The Internal Revenue Code of 1986, as amended, and all regulations and
formal guidance issued thereunder.

Collateral. All of the property, rights and interests of the Borrower or the
Guarantors which are or are intended to be subject to the security interests,
liens and mortgages created by the Security Documents, including, without
limitation, the Borrowing Base Properties.

Collateral Account. A special deposit account established by the Agent pursuant
to §12.6 and under its sole dominion and control.

Collection Account. A deposit account maintained initially at Huntington, and
thereafter at Agent or another depository approved by Agent more particularly
described in the Cash Collateral Agreement, or any successor deposit accounts
approved by Agent.

Commitment. With respect to each Lender, the amount set forth on Schedule 1.1
hereto as the amount of such Lender’s commitment to make or maintain Loans to
the Borrower and to participate in Letters of Credit for the account of the
Borrower, as the same may be changed from time to time in accordance with the
terms of this Agreement.

Commitment Increase. An increase in the Total Commitment to not more than the
amount permitted pursuant to §2.11.

Commitment Increase Date. See §2.11(a).

 

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Commitment Percentage. With respect to each Lender, the percentage set forth on
Schedule 1.1 hereto as such Lender’s percentage of the Total Commitment, as the
same may be changed from time to time in accordance with the terms of this
Agreement; provided that if the Commitments of the Lenders have been terminated
as provided in this Agreement, then the Commitment of each Lender shall be
determined based on the Commitment Percentage of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof.

Commodity Exchange Act. The Commodity Exchange Act (7 U.S.C. §1 et seq.), as
amended from time to time, and any successor statute.

Communications. See §7.4.

Compliance Certificate. See §7.4(c).

Condemnation Proceeds. All compensation, awards, damages, judgments and proceeds
awarded to the Borrower or a Subsidiary Guarantor by reason of any Taking, net
of all reasonable and customary amounts actually expended to collect the same,
including, without limitation, reasonable and customary amounts expended in
negotiating, litigating, if appropriate, or investigating the amount of such
compensation, awards, damages, judgments and proceeds.

Connection Income Taxes. Other Connection Taxes that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch
profits Taxes.

Consolidated. With reference to any term defined herein, that term as applied to
the accounts of a Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.

Consolidated EBITDA. For any period, for the REIT and its Subsidiaries on a
consolidated basis (and without double-counting), consolidated Net Income for
such period, adjusted by (x) adding thereto (i) to the extent actually deducted
in determining said consolidated Net Income, Consolidated Interest Expense,
minority interest and provision for income taxes for such period (excluding,
however, Consolidated Interest Expense and income taxes attributable to
non-Wholly-Owned Subsidiaries and Unconsolidated Affiliates of the REIT and any
of its Subsidiaries), and (ii) the amount of all amortization of intangibles and
depreciation that were deducted determining consolidated Net Income for such
period, and (iii) any non-recurring non-cash charges in such period to the
extent that (A) such non-cash charges do not give rise to a liability that would
be required to be reflected on the consolidated balance sheet of the REIT (and
so long as no cash payments or cash expenses will be associated therewith
(whether in the current period or for any future period)) and (B) the same were
deducted in determining consolidated Net Income for such period, and
(y) subtracting therefrom, to the extent included in determining consolidated
Net Income for such period, the amount of non-recurring non-cash gains during
such period; provided that Consolidated EBITDA shall be determined without
giving effect to any extraordinary gains or losses (including any taxes
attributable to any such extraordinary gains or losses) or gains or losses
(including any taxes attributable to such gains or losses) from sales of assets
other than from sales of inventory (excluding real property) in the ordinary
course of business. Consolidated EBITDA shall be adjusted to include only the
REIT’s or its Subsidiaries’ Equity Percentage of Consolidated EBITDA from any
non-Wholly-Owned Subsidiary and Unconsolidated Affiliate.

 

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Consolidated Interest Expense. As of any date of determination and for any
applicable period, with respect to REIT and its Subsidiaries, without
duplication, total interest expense accruing or paid on Indebtedness of REIT and
its Subsidiaries, on a consolidated basis, during such period (including
interest expense attributable to Capitalized Leases and amounts attributable to
interest incurred under Derivatives Contracts, but excluding, to the extent
non-cash, amortization of defeasance financing costs and charges), determined in
accordance with GAAP, and including (without duplication) the Equity Percentage
of the foregoing items for the Unconsolidated Affiliates and non-Wholly-Owned
Subsidiaries of REIT and its Subsidiaries. Consolidated Interest Expense shall
not include capitalized interest funded under a construction loan by an interest
reserve.Consolidated Tangible Net Worth. As of any date of determination, for
the REIT and its Subsidiaries, an amount determined by subtracting the
Consolidated Total Indebtedness from the Consolidated Total Asset Value.
Interest expense accruing on any PPP Loan, the IRSA Note and any Subordinate
Debt of the REIT, to the extent such expense is subject to a Subordination and
Standstill Agreement, shall be excluded from the calculation of Consolidated
Interest Expense.

Consolidated Total Asset Value. As of any date of determination, with respect to
REIT and its Subsidiaries on a consolidated basis, the sum of:

(a) The amount of Unrestricted Cash and Cash Equivalents of the Borrower; plus

(b) The amount of Restricted Cash of the Borrower and its Subsidiaries; plus

(c) With respect to any Real Estate of the REIT and its Subsidiaries which is a
Borrowing Base Property as of the date of determination, the most recent
Appraised Value thereof; plus

(d) The book value determined in accordance with GAAP of all Development
Properties owned by REIT and its Subsidiaries; plus

(e) With respect to all Real Estate (other than Development Properties and
assets included under subparagraph (c) above), the most recent Appraised Value
thereof; plus

(f) The Borrower’s pro rata share of such assets described in subparagraphs (c),
(d) and (e) above held by a non-Wholly-Owned Subsidiary or Unconsolidated
Affiliate (determined based upon its Equity Percentage in such non-Wholly-Owned
Subsidiary and Unconsolidated Affiliate), the value of which shall be determined
consistent with the above-described treatment for wholly owned assets.

 

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Consolidated Total Asset Value will be adjusted, as appropriate, for
acquisitions, dispositions and other changes to the portfolio during the fiscal
quarter most recently ended prior to a date of determination. All income,
expense and value associated with assets included in Consolidated Total Asset
Value disposed of during the fiscal quarter period most recently ended prior to
a date of determination will be eliminated from calculations. To the extent that
Consolidated Total Asset Value attributable to Development Properties would
exceed ten percent (10%) of Consolidated Total Asset Value, then such excess
shall be excluded.

Consolidated Total Indebtedness. All Indebtedness and, to the extent not
included in Indebtedness, all liabilities (determined in accordance with GAAP)
(but excluding trade debt incurred in the ordinary course of business which is
not more than sixty (60) days past due) of the REIT and its Subsidiaries
determined on a Consolidated basis and shall include (without duplication), such
Person’s Equity Percentage of the Indebtedness of its non-Wholly-Owned
Subsidiaries and Unconsolidated Affiliates. Any PPP Loan, the IRSA Note and, to
the extent any Subordinate Debt of the REIT is subject to a Subordination and
Standstill Agreement, such Subordinate Debt, shall be excluded from the
calculation of Consolidated Total Indebtedness.

Contribution Agreement. The Contribution Agreement dated as of even date
herewith among the Borrower, General Partner, REIT and the Subsidiary Guarantors
that are a party thereto as of the Closing Date, and each Additional Guarantor
which may hereafter become a party thereto, as the same may be modified, amended
or ratified from time to time.

Conversion/Continuation Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with §4.1.

Debt Yield. The ratio (expressed as a percentage) of (i) Adjusted Net Operating
Income (determined solely for the Borrowing Base Properties) to (ii) the
Outstanding Loans. For the purposes of calculating Adjusted Net Operating
Income, Adjusted Net Operating Income shall be calculated (i) for the fiscal
quarter ending September 30, 2020, by multiplying the Adjusted Net Operating
Income for the period from July 1, 2020 through and including September 30,
2020, by four (4), (ii) for the fiscal quarter ending December 31, 2020, by
multiplying the Adjusted Net Operating Income for the period from July 1, 2020
through and including December 31, 2020, by two (2), (iii) for the fiscal
quarter ending March 31, 2021, by multiplying the Adjusted Net Operating Income
for the period from July 1, 2020 through and including March 31, 2021, by one
and one-third (1.33), and (iv) for each calendar quarter thereafter, Adjusted
Net Operating Income shall be calculated for the prior four (4) consecutive
fiscal quarters most recently ended.

Default. See §12.1.

Default Rate. See §4.11.

Defaulting Lender. Any Lender that, as reasonably determined by the Agent,
(a) has failed to (i) fund all or any portion of its Loans within two
(2) Business Days of the date such Loans were required to be funded by it
hereunder unless such Lender notifies the Agent and the Borrower in writing that
such failure is the result of such Lender’s determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied, or (ii) pay to Agent, any Issuing Lender, any Swing Loan
Lender or any other Lender any other amount required to be paid by it hereunder
(including in respect of its participation in Letters of Credit or Swing Loans)
within two (2) Business Days of the date when due, (b) has notified the
Borrower, the Agent or

 

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any Lender that it does not intend to comply with its funding obligations
hereunder or has made a public statement to that effect unless with respect to
this clause (b), such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on
such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically
identified in such writing or public statement) cannot be satisfied, (c) has
failed, within three (3) Business Days after request by the Agent, to confirm in
a manner reasonably satisfactory to the Agent that it will comply with its
funding obligations; provided that, notwithstanding the provisions of §2.13,
such Lender shall cease to be a Defaulting Lender upon the Agent’s receipt of
confirmation that such Defaulting Lender will comply with its funding
obligations, or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any bankruptcy, insolvency,
reorganization, liquidation, conservatorship, assignment for the benefit of
creditors, moratorium, receivership, rearrangement or similar debtor relief law
of the United States or other applicable jurisdictions from time to time in
effect, including any law for the appointment of the Federal Deposit Insurance
Corporation or any other state or federal regulatory authority as receiver,
conservator, trustee, administrator or any similar capacity, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person, including the Federal Deposit Insurance Corporation
or any other state or federal regulatory authority acting in such capacity,
charged with reorganization or liquidation of its business or a custodian
appointed for it, (iii) taken any action in furtherance of, or indicated its
consent to, approval of or acquiescence in any such proceeding or appointment or
(iv) is the subject of a Bail-In Action; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
governmental authority (including any agency, instrumentality, regulatory body,
central bank or other authority) so long as such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
of the United States or from the enforcement of judgments or writs of attachment
of its assets or permit such Lender (or such governmental authority or
instrumentality) to reject, repudiate, disavow, or disaffirm any contracts or
agreements made with such Person). Any determination by the Agent that a Lender
is a Defaulting Lender under any one or more of clauses (a) through (d) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to §2.13(g)) upon delivery of written
notice of such determination to the Borrower and each Lender.

Derivatives Contract. Any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement. Not in limitation of the foregoing, the term “Derivatives
Contract” includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement of similar type, including any such
obligations or liabilities under any such master agreement.

 

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Derivatives Termination Value. In respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contracts, (a) for any date on or
after the date such Derivatives Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) above, the amount(s)
determined as the mark-to-market value(s) for such Derivatives Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Derivatives Contracts
(which may include the Agent or any Lender).

Designated Person. See §6.31.

Development Property. Any Real Estate owned or acquired by the REIT, any
Subsidiary of REIT or any Unconsolidated Affiliate and on which such Person is
pursuing construction of one or more buildings for use as a Hotel Property of
the type permitted by §8.3(h)(i) and for which construction is proceeding to
completion without undue delay from permit denial, construction delays or
otherwise, all pursuant to the ordinary course of business of the REIT, any
Subsidiary of REIT or any Unconsolidated Affiliate; provided that any Real
Estate will no longer be considered to be a Development Property at the date on
which all improvements related to the development of such Development Property
have been substantially completed and a certificate of occupancy has been issued
for twelve (12) months (provided that following such substantial completion, the
REIT may by delivering written notice to Agent elect to no longer treat such
property as a Development Property).

Directions. See §14.14.

Distribution. Any (a) dividend or other distribution, direct or indirect, on
account of any Equity Interest of REIT or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in Equity Interests of
identical class to the holders of that class; (b) redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Equity Interest of REIT or any
of its Subsidiaries now or hereafter outstanding; and (c) payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any Equity Interests of REIT or any of its Subsidiaries
now or hereafter outstanding. Distributions from any Subsidiary of the Borrower
to, directly or indirectly, the Borrower shall be excluded from this definition.
Any conversion of Subordinate Debt to common equity of the REIT or payment of
the Subordinate Debt in accordance with the terms of this Agreement and the
terms of the applicable Subordination and Standstill Agreement shall not
constitute a Distribution.

Distribution Conditions. The Distribution Conditions shall be deemed to have
occurred from and after the date of the Ninth Amendment to Credit Agreement and
to exist when (a) no Default or Event of Default has occurred and is continuing
or would occur as the result of the making of a Distribution pursuant to
§8.7(b), (b) the Agent shall have obtained new Appraisals or updates to existing
Appraisals with respect to the Borrowing Base Properties in order to determine
compliance with §9.3 as the same would be in effect upon the occurrence of a

 

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Distribution Event, (c) any Preferred Distributions paid or to be paid shall be
included in the calculation of Fixed Charges as if paid in the preceding fiscal
quarter, (d) Agent shall have received and approved a Compliance Certificate and
supporting calculations showing that (i) after making the Distribution, the REIT
and its Subsidiaries shall have Liquidity of not less than $10,000,000.00,
(ii) the ratio of Adjusted Consolidated EBITDA determined separately for each of
the three (3) preceding most recently ended fiscal quarters to Fixed Charges
determined separately for each of the three (3) preceding most recently ended
fiscal quarters shall not be less than 1.50 to 1, and (iii) Borrower shall be in
compliance with the covenant set forth in §9.3 (determined as if the
Distribution Event had occurred) and the sum of the aggregate outstanding
principal amount of the Revolving Credit Loans, the Swing Loans and the Letter
of Credit Liabilities shall not exceed the amount that would cause compliance
with the covenant in §9.3 as so determined.

Distribution Event. The making of a Distribution pursuant to §8.7(b).

Dollars or $. Dollars in lawful currency of the United States of America.

Domestic Lending Office. Initially, the office of each Lender designated as such
on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any,
located within the United States that will be making or maintaining Base Rate
Loans.

Drawdown Date. The date on which any Loan is made or is to be made, and the date
on which any Loan which is made prior to the Maturity Date, as applicable, is
converted in accordance with §4.1.

EEA Financial Institution. (a) Any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

EEA Member Country. Any of the member states of the European Union, Iceland,
Liechtenstein, and Norway.

EEA Resolution Authority. Any public administrative authority or any person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

Electronic System. See §7.4.

Eligible Real Estate. Real Estate:

(a) which is located within the continental United States;

(b) which is improved by an operating income-producing Hotel Property;

(c) as to which all of the representations set forth in §6 of this Agreement
concerning the subject Borrowing Base Property are true and correct in all
material respects;

 

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(d) as to which the Agent and the Required Lenders, as applicable, have received
and approved all Borrowing Base Qualification Documents, or will receive and
approve them prior to inclusion of such Real Estate as a Borrowing Base
Property; and

(e) as to which, notwithstanding anything to the contrary contained herein, the
Agent and the Required Lenders have approved for inclusion as a Borrowing Base
Property.

Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by REIT or any ERISA
Affiliate, other than a Multiemployer Plan.

Environmental Engineer. Any firm of independent professional engineers or other
scientists generally recognized as expert in the detection, analysis and
remediation of Hazardous Substances and related environmental matters and
acceptable to the Agent in its reasonable discretion.

Environmental Laws. As defined in the Indemnity Agreement.

Environmental Reports. See §6.19.

EPA. See §6.19(b).

Equity Interests. With respect to any Person, (a) any share of capital stock of
(or other ownership or profit interests in) such Person, (b) any warrant, option
or other right for the purchase or other acquisition from such Person of (i) any
share of capital stock of (or other ownership or profit interests in) such
Person, or (ii) any security convertible into or exchangeable for any share of
capital stock of (or other ownership or profit interests in) such Person or
warrant, right or option for the purchase or other acquisition from such Person
of such shares (or such other interests) and whether or not such share, warrant,
option, right or other interest is authorized or otherwise existing on any date
of determination, and (c) any other ownership or profit interest in such Person
(including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting.

Equity Offering. The issuance and sale after the Closing Date by REIT or any of
its Subsidiaries of any equity securities of such Person (other than equity
securities issued to REIT or any one or more of its Subsidiaries in their
respective Subsidiaries), and the contribution of additional equity capital to
Borrower.

Equity Percentage. The aggregate ownership percentage of REIT or its
Subsidiaries in each Unconsolidated Affiliate or Subsidiary that is not a
Wholly-Owned Subsidiary, which shall be calculated as the greater of (a) such
Person’s direct or indirect nominal capital ownership interest in the
Unconsolidated Affiliate or Subsidiary that is not a Wholly-Owned Subsidiary as
set forth in the Unconsolidated Affiliate’s or Subsidiaries’ organizational
documents, and (b) such Person’s direct or indirect economic ownership interest
in the Unconsolidated Affiliate or Subsidiary that is not a Wholly-Owned
Subsidiary reflecting such Person’s current allocable share of income and
expenses of the Unconsolidated Affiliate Subsidiary that is not a Wholly-Owned
Subsidiary.

 

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ERISA. The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time and all regulations and formal guidelines issued
thereunder.

ERISA Affiliate. Any Person which is treated as a single employer with REIT or
its Subsidiaries under Section 414 of the Code or Section 4001 of ERISA and any
predecessor entity of any of them.

ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension
Plan within the meaning of Section 4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived or any
other event with respect to which the Borrower, a Guarantor or an ERISA
Affiliate could have liability under Section 4062(e) or Section 4063 of ERISA.

EU Bail-In Legislation Schedule. The EU Bail-In Legislation Schedule published
by the Loan Market Association (or any successor person), as in effect from time
to time.

Event of Default. See §12.1.

Excess Offering Proceeds. Net proceeds from an “Unsolicited Cash Offer” (as
defined in the Initial Subordination and Standstill Agreement) in excess of the
outstanding principal balance of the Initial Subordinate Debt.

Excluded Hedge Obligation. With respect to any Guarantor, any Hedge Obligation,
if, and to the extent that, all or a portion of the guarantee of such Guarantor
of, or the grant by such Guarantor of a security interest to secure, such Hedge
Obligation (or any guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by
virtue of such Guarantor’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guarantee of such Guarantor or the grant
of such security interest becomes effective with respect to such Hedge
Obligation. If a Hedge Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Hedge
Obligation that is attributable to swaps for which such guarantee or security
interest is or becomes illegal.

Excluded Subsidiary. Any Subsidiary of the Borrower which is prohibited from
guaranteeing the Indebtedness of any other Person pursuant to (i) any document,
instrument or agreement evidencing Secured Indebtedness permitted by this
Agreement or (ii) a provision of such Subsidiary’s organizational documents,
which provision is included as a condition to the extension of such Secured
Indebtedness. Notwithstanding the foregoing, the Excluded Subsidiaries as of the
date hereofMarch 1, 2017 also include: Supertel Hospitality Management, Inc.;
E&P Financing Limited Partnership; and E&P REIT Trust; provided that any of such
Subsidiaries shall no longer be an Excluded Subsidiary if it shall own any asset
(other than immaterial assets) or engage in any business operations.

 

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Excluded Taxes. Any of the following Taxes imposed on or with respect to a
Recipient or required to be withheld or deducted from a payment to a Recipient,
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such
Recipient being organized under the laws of, or having its principal office or,
in the case of any Lender, its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or its Commitment
pursuant to an Applicable Law in effect on the date on which (i) such Lender
acquires such interest in the Loan or its Commitment (other than pursuant to an
assignment request by the Borrower under §4.14 as a result of costs sought to be
reimbursed pursuant to §4.3) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to §4.3, amounts with respect
to such Taxes were payable either to such Lender’s assignor immediately before
such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with §4.3(g) and (d) any U.S. federal withholding Taxes imposed under
FATCA.

Existing Shareholders. IRSA Inversiones y Representaciones Sociedad Anónima,
Real Estate Strategies, L.P., StepStone Group LP, SREP III Flight-Investco,
L.P., and as to each such Person its respective Affiliates.

Extension Request See §2.12(a)(i).

FATCA. Sections 1471 through 1474 of the Code, as of the date of this Agreement
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code.

Federal Funds Effective Rate. For any day, the rate per annum (rounded upward to
the nearest one-hundredth of one percent (1/100 of 1%)) announced by the Federal
Reserve Bank of Cleveland on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate.”

Fee Owner. See §6.33(a).

FF&E. All fixtures, furnishings, equipment, furniture, and other items of
tangible personal property now or hereafter located on a Borrowing Base Property
or other Real Estate or used in connection with the ownership, use, occupancy,
operation or maintenance of all or any part of such Borrowing Base Property or
other Real Estate, other than stocks of food and other supplies held for
consumption in normal operation but including, without limitation, appliances,
machinery, equipment, signs, artwork, office furnishings and equipment, guest
room furnishings, beds, linens, televisions, radios, telephones, specialized
equipment for kitchens, dishware, utensils, tables, chairs, laundries, bars,
restaurants, public rooms, health and recreational facilities, all partitions,
screens, awnings, shades, blinds, floor coverings, hall and lobby equipment,
heating, lighting, plumbing, ventilating, refrigerating, incinerating,
elevators, escalators, air conditioning and communication plants or systems with
appurtenant fixtures, vacuum cleaning systems, call or beeper systems, security
systems, sprinkler systems and other fire prevention and extinguishing apparatus
and materials, reservation system computer and related equipment, and vehicles.

 

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FF&E Reserve. For any period and with respect to any of the Real Estate for the
most recently completed four (4) fiscal quarters, an amount equal to four
percent (4%) of Gross Hotel Revenues from such Real Estate for such period.

Fixed Charges. As of any date of determination for any applicable period for
REIT and its Subsidiaries, determined on a consolidated basis, an amount equal
to (i) Consolidated Interest Expense for such period plus (ii) the aggregate
amount of scheduled principal or amortization payments of Indebtedness
(excluding balloon payments at maturity) required to be made during such period
by the REIT and its Subsidiaries on a consolidated basis plus (iii) the
Preferred Distributions, if any, paid or required to be included in the
calculation of Fixed Charges pursuant to the definition of Distribution
Conditions or paid during such period following a Distribution Event plus
(iv) the REIT’s or its Subsidiaries’ pro rata share (based upon their Equity
Percentage in such Unconsolidated Affiliate) of all Fixed Charges from any
non-Wholly-Owned Subsidiary and Unconsolidated Affiliate of REIT and its
Subsidiaries. Fixed Charges shall not include the amount of any Preferred
Distributions, if any, required to be paid during such period except as provided
in clause (iii) above or the amount of any debt service payable with respect to
any PPP Loan, the IRSA Note or Subordinate Debt of the REIT, to the extent
subject to a Subordination and Standstill Agreement. Fixed Charges for the
period shall be adjusted on a proforma basis to account for properties acquired
or sold in the period in a manner satisfactory to the Agent.

Foreign Lender. If the Borrower is a U.S. Person, a Lender that is not a U.S.
Person, and if the Borrower is not a U.S. Person, a Lender that is resident or
organized under the laws of a jurisdiction other than that in which the Borrower
is resident for tax purposes.

Franchise Agreement. A license or franchise agreement between the Borrower (as
to Borrower only with respect to the Initial Borrowing Base Properties, as
applicable) or a Subsidiary Guarantor and a Franchisor for the operation of a
Hotel Property using the brand of the Franchisor.

Franchise Fees. For any Real Estate, a deemed franchise fee in an amount equal
to the greater of (i) the actual franchise fees payable with respect to such
Real Estate for the period of determination and (ii) an amount equal to four
percent (4%) of Gross Hotel Revenues from such Real Estate for such period.

Franchisor. A person that licenses or franchises its hotel brand to hotel owners
or operators, including the Borrower, the REIT (as to Borrower and the REIT only
with respect to the Initial Borrowing Base Properties, as applicable) or a
Subsidiary Guarantor.

Fronting Exposure. At any time there is a Defaulting Lender, (a) with respect to
the Issuing Lender, such Defaulting Lender’s Commitment Percentage of the
outstanding Letter of Credit Liabilities other than Letter of Credit Liabilities
as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or cash collateral or other credit support
acceptable to the Issuing Lender shall have been provided in accordance with the
terms

 

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hereof and (b) with respect to the Swing Loan Lender, such Defaulting Lender’s
Commitment Percentage of Swing Loans other than Swing Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders, repaid by the Borrower or for which cash collateral or other credit
support acceptable to the Swing Loan Lender shall have been provided in
accordance with the terms hereof.

Funds Available for Distribution. As of any date of determination, an amount
equal to the sum of (a) Consolidated EBITDA for the prior three (3) consecutive
fiscal quarters most recently ended (for the initial Distribution pursuant to
§8.7(b), and thereafter the prior four (4) consecutive fiscal quarters most
recently ended minus (b) all Fixed Charges for such applicable period, minus
(c) Recurring Capital Expenditures for such applicable period.

Future Subordinate Debt. The unsecured debt provided by any Future Subordinate
Lender to the REIT, the documentation for which shall be in accordance with the
Subordinate Debt Terms.

Future Subordinate Lenders. Any lender or lenders which provide Future
Subordinate Debt to the REIT, the identity of such Future Subordinate Lenders
(if not an Existing Shareholder) to be acceptable to the Required Lenders in
their sole, absolute and unfettered discretion.

Future Subordination and Standstill Agreements. Each Subordination and
Standstill Agreement by and among the REIT, the Agent and each Future
Subordinate Lender evidencing the subordination of amounts payable by the REIT
to such Future Subordinate Lender with respect to the applicable Future
Subordinate Debt to the Obligations, the agreement of such Future Subordinate
Lender to standstill in the taking of actions or exercising remedies and
evidencing other agreements and protections in favor of the Agent and the
Lenders, as the same may be amended, restated, supplemented or otherwise
modified in accordance with the terms hereof and thereof.

GAAP. Principles that are (a) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time and (b) consistently applied with past financial
statements of the Person adopting the same principles.

General Partner. Condor Hospitality REIT Trust, a Maryland real estate
investment trust.

Governmental Authority. Any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau, commission, board, department or other entity
(including, without limitation, the Federal Deposit Insurance Corporation, the
Comptroller of the Currency or the Federal Reserve Board, any central bank or
any comparable authority) or any arbitrator with authority to bind a party at
law, and including any supra-national bodies such as the European Union or the
European Central Bank.

 

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Gross Hotel Revenues. All revenues and receipts of every kind derived from
operating a Hotel Property and parts thereof, including, without limitation,
income (from both cash and credit transactions), before commissions and
discounts for prompt or cash payments, from rentals or sales of rooms, stores,
offices, meeting space, exhibit space, or sales space of every kind; license,
lease, and concession fees and rentals (not including gross receipts of
licensees, lessees, and concessionaires); net income from vending machines;
health club membership fees; food and beverage sales; parking; sales of
merchandise (other than proceeds from the sale of FF&E no longer necessary to
the operation of such Hotel Property); service charges, to the extent not
distributed to the employees at such Hotel Property as, or in lieu of,
gratuities; and proceeds, if any, from business interruption or other loss of
income insurance; provided, however, that, Gross Hotel Revenues shall not
include gratuities to employees of such Hotel Property; federal, state, or
municipal excise, sales, use, or similar taxes collected directly from tenants,
patrons, or guests or included as part of the sales price of any goods or
services; insurance proceeds (other than proceeds from business interruption or
other loss of income insurance); condemnation proceeds; or any proceeds from any
sale of such Hotel Property. Gross Hotel Revenues shall not include any rents,
reimbursements or other payments by a tenant under a Lease which is in default
of any monetary or other material obligation or which is the subject of any
bankruptcy, insolvency or similar debtor relief proceeding.

Ground Lease. A ground lease relating to a Borrowing Base Property as to which
no default or event of default has occurred or with the passage of time or the
giving of notice would occur and which Agent determines in its reasonable
discretion is a financeable ground lease and that contains the following terms
and conditions (in the ground lease or, if approved by Agent, in any other
agreement in favor of Agent): (a) a remaining term (exclusive of any unexercised
extension options that are subject to terms or conditions not yet agreed upon
and specified in such ground lease or an amendment thereto, other than a
condition that the lessee not be in default under such ground leases) of at
least thirty (30) years or more from the date such asset becomes a Borrowing
Base Property; (b) the right of the lessee to mortgage and encumber its interest
in the leased property without the consent of the lessor; (c) the obligation of
the lessor to give the holder of any mortgage lien on such leased property
written notice of any defaults on the part of the lessee and agreement of such
lessor that such lease will not be terminated until such holder has had a
reasonable opportunity to cure or complete foreclosure, and fails to do so;
(d) reasonable transferability of the lessee’s interest under such lease,
including the ability to sublease; and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder of
the leasehold estate demised pursuant to a ground lease.

Ground Lease Default. See §6.33(d).

Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of
Section 3(2) of ERISA maintained or contributed to by REIT or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantor. Collectively, REIT, General Partner, each Subsidiary Guarantor and
each Additional Guarantor, and individually any one of them.

 

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Guaranty. The Unconditional Guaranty of Payment and Performance dated of even
date herewith made by REIT, General Partner, the Subsidiary Guarantors that are
a party thereto as of the Closing Date, and each Additional Guarantor in favor
of the Agent and the Lenders, as the same may be modified, amended, restated or
ratified, such Guaranty to be in form and substance reasonably satisfactory to
the Agent.

Hazardous Substances. As defined in the Indemnity Agreement.

Hedge Obligations. All obligations of Borrower to any Lender Hedge Provider to
make any payments under any agreement with respect to an interest rate swap,
collar, cap or floor or a forward rate agreement or other agreement regarding
the hedging of interest rate risk exposure relating to the Obligations, and any
confirming letter executed pursuant to such hedging agreement, and which shall
include, without limitation, any obligation to pay or perform under any
agreement, contract or transaction that constitutes a “swap” within the meaning
of Section 1a(47) of the Commodity Exchange Act, all as amended, restated or
otherwise modified. Under no circumstances shall any of the Hedge Obligations
secured or guaranteed by any Loan Document as to a Guarantor include any
obligation that constitutes an Excluded Hedge Obligation of such Guarantor.

Hotel Property. Any Real Estate that operates or, in the case of Land Assets or
a Development Property is intended to be operated, as a hotel or similar lodging
for transient uses of rooms.

Huntington. The Huntington National Bank.

Increase Notice. See §2.11(a).

Indebtedness. With respect to a Person, at the time of computation thereof, all
of the following (without duplication): (a) all obligations of such Person in
respect of money borrowed (other than trade debt incurred in the ordinary course
of business which is not more than sixty (60) days past due); (b) all
obligations of such Person, whether or not for money borrowed (i) represented by
notes payable, or drafts accepted, in each case representing extensions of
credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or services rendered; (c) obligations of such
Person as a lessee or obligor under a Capitalized Lease; (d) all reimbursement
obligations of such Person under any letters of credit or acceptances (whether
or not the same have been presented for payment); (e) all Off-Balance Sheet
Obligations of such Person; (f) all obligations of such Person in respect of any
purchase obligation, repurchase obligation, takeout commitment or forward equity
commitment, in each case evidenced by a binding agreement (excluding any such
obligation to the extent the obligation can be satisfied solely by the issuance
of Equity Interests); (g) net obligations under any Derivatives Contract not
entered into as a hedge against existing Indebtedness, in an amount equal to the
Derivatives Termination Value thereof; (h) all Indebtedness of other Persons
which such Person has guaranteed or is otherwise recourse to such Person (except
for guaranties of customary exceptions for fraud, misapplication of funds,
environmental indemnities, violations of “special purpose entity” covenants,
bankruptcy and other similar exceptions to non-recourse liability until

 

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a claim is made with respect thereto, and then shall be included only to the
extent of the amount of such claim), including liability of a general partner in
respect of liabilities of a partnership in which it is a general partner which
would constitute “Indebtedness” hereunder, any obligation to supply funds to or
in any manner to invest directly or indirectly in a Person, to maintain working
capital or equity capital of a Person or otherwise to maintain net worth,
solvency or other financial condition of a Person, to purchase indebtedness, or
to assure the owner of indebtedness against loss, including, without limitation,
through an agreement to purchase property, securities, goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise; (i) all Indebtedness of another
Person secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property or assets
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness or other payment obligation; (j) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Mandatorily Redeemable Stock issued by such
Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; and
(k) such Person’s pro rata share of the Indebtedness (based upon its Equity
Percentage) of any Unconsolidated Affiliate or non-Wholly-Owned Subsidiary of
such Person. For the avoidance of doubt, if a Person has guaranteed Indebtedness
of an Unconsolidated Affiliate or non-Wholly-Owned Subsidiary, the greater of
the Indebtedness guaranteed or the Equity Percentage of such Indebtedness shall
be included in Indebtedness. Indebtedness shall be adjusted to remove any impact
of intangibles pursuant to FAS 141, as issued by the Financial Accounting
Standards Board in June of 2001. Any PPP Loan, the IRSA Note and any Subordinate
Debt of the REIT shall not constitute “Indebtedness” for purposes of §9 of this
Agreement; provided, that in the case of Subordinate Debt, such Subordinate Debt
is subject to a Subordination and Standstill Agreement.

Indemnified Taxes. (a) Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
or any Guarantor under any Loan Document and (b) to the extent not otherwise
described in the immediately preceding clause (a), Other Taxes.

Indemnity Agreement. The Indemnity Agreement Regarding Hazardous Materials made
by the Borrower and Guarantors, in favor of the Agent and the Lenders, as the
same may be modified, amended or ratified, pursuant to which each of the
Borrower and the Guarantors agrees to indemnify the Agent and the Lenders with
respect to Hazardous Substances and Environmental Laws.

Information Materials. See §7.4.

Initial Borrowing Base Properties. The Initial Borrowing Base Properties shall
include those properties described on Schedule 1.3 hereto.

Initial Subordinate Debt. The unsecured debt provided by the Initial Subordinate
Lender to the REIT pursuant to (a) that certain Convertible Promissory Note and
Loan Agreement dated November 18, 2020 by the REIT to SREP III Flight – Investco
2, L.P. as an Initial Subordinate Lender in the principal amount of
$7,220,443.00 and (b) that certain Convertible Promissory Note and Loan
Agreement dated November 18, 2020 by the REIT to Efanur S.A. as an Initial
Subordinate Lender in the principal amount of $2,779,557.00 (as the same may be
increased by capitalized interest), which documentation shall be in accordance
with the Subordinate Debt Terms.

 

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Initial Subordinate Lender. Individually and collectively, SREP III Flight –
Investco 2, L.P. and Efanur S.A..

Initial Subordination and Standstill Agreement. Those certain Subordination and
Standstill Agreements dated as of the date of the Ninth Amendment to Credit
Agreement by and among REIT, the Agent and each Initial Subordinate Lender
evidencing the subordination of amounts payable by the REIT to such Initial
Subordinate Lender with respect to the Initial Subordinate Debt to the
Obligations, the agreement of such Initial Subordinate Lender to standstill in
the taking of actions or exercising remedies and evidencing other agreements and
protections in favor of the Agent and the Lenders, as the same may be amended,
restated, supplemented or otherwise modified in accordance with the terms hereof
and thereof.

Insurance Proceeds. All insurance proceeds, damages and claims and the right
thereto under any insurance policies relating to any portion of any Borrowing
Base Property, net of all reasonable and customary amounts actually expended to
collect the same, including, without limitation, reasonable and customary
amounts expended in negotiating, litigating, if appropriate, or investigating
the amount of such insurance, proceeds, damages and claims.

Interest Hedge. See §7.22.

Interest Holdback. As of the date of the Ninth Amendment to Credit Agreement,
the sum of $4,000,000.00, as the same may be reduced through use thereof or
replenished as provided in this Agreement. The Interest Holdback may be used by
Borrower only through and including November 1, 2021 or upon the occurrence of a
Liquidity Trigger Event and solely to pay interest due under this Agreement.

Interest Payment Date. As to each Loan, the first day of each calendar month
during the term of such Loan.

Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period
commencing on the Drawdown Date of such LIBOR Rate Loan and ending one (1), two
(2) or three (3) months thereafter, and (b) thereafter, each period commencing
on the day following the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one (1) of the periods set
forth above, as selected by the Borrower in a Loan Request or
Conversion/Continuation Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:

(i) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end
on a day that is not a LIBOR Business Day, such Interest Period shall end on the
next succeeding LIBOR Business Day, unless such next succeeding LIBOR Business
Day occurs in the next calendar month, in which case such Interest Period shall
end on the next preceding LIBOR Business Day, as determined conclusively by the
Agent in accordance with the then current bank practice in London;

 

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(ii) if the Borrower shall fail to give notice as provided in §4.1, the Borrower
shall be deemed to have requested a continuation of the affected LIBOR Rate Loan
as a Base Rate Loan on the last day of the then current Interest Period with
respect thereto;

(iii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the applicable calendar month; and

(iv) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the
Maturity Date.

Inventory. All inventory as defined in the Uniform Commercial Code, and
including within the term items which would be entered on a balance sheet under
the line items for “Inventories” or “China, glassware, silver, linen and
uniforms” under the Uniform Systems of Accounts.

Investments. With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person and owned by
such Person, all loans, advances, or extensions of credit to, or contributions
to the capital of, any other Person, all purchases of the securities or business
or integral part of the business of any other Person and commitments and options
to make such purchases, all interests in real property, and all other
investments; provided, however, that the term “Investment” shall not include
(x) equipment, inventory and other tangible personal property acquired in the
ordinary course of business, or (y) current trade and customer accounts
receivable for services rendered in the ordinary course of business and payable
in accordance with customary trade terms. In determining the aggregate amount of
Investments outstanding at any particular time: (a) there shall be included as
an Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (b) there shall be deducted
in respect of each Investment any amount received as a return of capital;
(c) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the foregoing
clause (a) shall be deducted when paid; and (d) there shall not be deducted in
respect of any Investment any decrease in the value thereof.

IRSA Note. The convertible note described as item 2 on Schedule 6.24 hereto
(without any increases, amendments or modifications thereto).

Issuing Lender. KeyBank, in its capacity as the Lender issuing the Letters of
Credit and any successor thereto.

Joinder Agreement. The Joinder Agreement with respect to the Guaranty, the
Contribution Agreement, the Indemnity Agreement and the Cash Collateral
Agreement to be executed and delivered pursuant to §5.4 by any Additional
Guarantor, such Joinder Agreement to be substantially in the form of Exhibit A
hereto.

KCM. KeyBanc Capital Markets Inc.

 

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KeyBank. As defined in the preamble hereto.

Land Assets. Land to be used as a Hotel Property with respect to which the
commencement of grading, construction of improvements (other than improvements
that are not material and are temporary in nature) or infrastructure has not yet
commenced and for which no such work is reasonably scheduled to commence within
the following twelve (12) months.

Lease. Each lease entered into or assumed by Borrower or a Guarantor with
respect to a Borrowing Base Property, as amended, extended or restated. A lease
shall not include agreements permitting users to occupy a Hotel Property in the
ordinary course of business.

Lender Hedge Provider. With respect to any Hedge Obligations, any counterparty
thereto that, at the time the applicable hedge agreement was entered into, was a
Lender or an Affiliate of a Lender.

Lenders. KeyBank, the other lending institutions which are party hereto and any
other Person which becomes an assignee of any rights of a Lender pursuant to
this Agreement (but not including any participant as described in §18). The
Issuing Lender shall be a Lender, as applicable. The Swing Loan Lender shall be
a Lender.

Letter of Credit. Any standby letter of credit issued at the request of the
Borrower and for the account of the Borrower in accordance with §2.10.

Letter of Credit Commitment. An amount equal to Zero and No/100 Dollars ($0.00),
as the same may be changed from time to time in accordance with the terms of
this Agreement. For the avoidance of doubt, from and after the effectiveness of
the Sixth Amendment to Credit Agreement, Issuing Lender has no obligation to
issue Letters of Credit.

Letter of Credit Liabilities. At any time and in respect of any Letter of
Credit, the sum of (a) the maximum undrawn face amount of such Letter of Credit
plus (b) the aggregate unpaid principal amount of all drawings made under such
Letter of Credit which have not been repaid (including repayment by a Revolving
Credit Loan). For purposes of this Agreement, a Lender (other than the Lender
acting as the Issuing Lender) shall be deemed to hold a Letter of Credit
Liability in an amount equal to its participation interest in the related Letter
of Credit under §2.10, and the Lender acting as the Issuing Lender shall be
deemed to hold a Letter of Credit Liability in an amount equal to its retained
interest in the related Letter of Credit after giving effect to the acquisition
by the Lenders other than the Lender acting as the Issuing Lender of their
participation interests under §2.10.

Letter of Credit Request. See §2.10(a).

LIBOR. For any LIBOR Rate Loan for any Interest Period, the average rate as
shown in Reuters Screen LIBOR 01 Page (or any successor service, or if such
Person no longer reports such rate as determined by the Agent, by another
commercially available source providing such quotations approved by the Agent)
at which deposits in U.S. dollars are offered by first class banks in the London
Interbank Market at approximately 11:00 a.m. (London time) on the day that is
two (2) LIBOR Business Days prior to the first day of such Interest Period with
a maturity

 

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approximately equal to such Interest Period and in an amount approximately equal
to the amount to which such Interest Period relates, adjusted for reserves and
taxes if required by future regulations. If such service or such other Person
approved by the Agent described above no longer reports such rate or the Agent
determines in good faith that the rate so reported no longer accurately reflects
the rate available to the Agent in the London Interbank Market, Loans shall
accrue interest at the Base Rate plus the Applicable Margin for such Loan. For
any period during which a Reserve Percentage shall apply, LIBOR with respect to
LIBOR Rate Loans shall be equal to the amount determined above divided by an
amount equal to 1 minus the Reserve Percentage. Notwithstanding the foregoing,
if the rate shown on Reuters Screen LIBOR01 Page (or any successor service
designated pursuant to this definition) shall be less than positive 0.50%, such
rate shall be deemed to be positive 0.50% for the purposes of this Agreement.

LIBOR Business Day. Any day on which commercial banks are open for international
business (including dealings in Dollar deposits) in London, England.

LIBOR Lending Office. Initially, the office of each Lender designated as such on
Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that
shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate Loans. Those Loans bearing interest calculated by reference to LIBOR.

Licenses. All certifications, permits, licenses and approvals, including
certificates of completion, certificates of occupancy, and food and beverage and
liquor licenses, required for the legal use, occupancy and operation of a
Borrowing Base Property as used at the time at which it is added to the
Borrowing Base Property and from time to time thereafter.

Lien. See §8.2.

Liquidity. As of any date of determination, the sum of (i) Unrestricted Cash and
Cash Equivalents of the REIT and its Subsidiaries plus (ii) the amount of
Revolving Credit Loans (including the unfunded Interest Holdback) which may be
borrowed under this Agreement by Borrower.

Liquidity Trigger Event. A Liquidity Trigger Event shall be deemed to have
occurred if at any time the Liquidity of Borrower shall be less than
$6,000,000.00 and such deficiency is not cured by the infusion of new
Subordinate Debt within fifteen days of such occurrence; provided if thereafter
the Borrower shall deliver evidence reasonably satisfactory to Agent that
Liquidity is equal to or greater than $6,000,000.00, then such Liquidity Trigger
Event shall terminate until Liquidity shall thereafter be less than
$6,000,000.00.

LLC Division. In the event Borrower or any Guarantor is a limited liability
company, (i) the division of Borrower or any such Guarantor into two or more
newly formed limited liability companies (whether or not Borrower or any such
Guarantor is a surviving entity following any such division) pursuant to, in the
event Borrower or any such Guarantor is organized under the laws of the State of
Delaware, Section 18-217 of the Delaware Limited Liability Company Act or, in
the event Borrower or any such Guarantor is organized under the laws of a

 

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State or Commonwealth of the United States (other than Delaware) or of the
District of Columbia, any similar provision under any similar act governing
limited liability companies organized under the laws of such State or
Commonwealth or of the District of Columbia, or (ii) the adoption of a plan
contemplating, or the filing of any certificate with any applicable Governmental
Authority that results or may result in, any such division.

Loan Documents. This Agreement, the Notes, the Guaranty, each Letter of Credit
Request, the Security Documents, and all other documents, instruments or
agreements now or hereafter executed or delivered by or on behalf of the
Borrower or any Guarantor in connection with the Loans.

Loan Request. See §2.7.

Loan and Loans. An individual loan or the aggregate loans (including a Revolving
Credit Loan and a Swing Loan (or Loans)), as the case may be, in the maximum
principal amount of the Total Commitment. All Loans shall be made in Dollars.
Amounts drawn under a Letter of Credit shall also be considered Revolving Credit
Loans as provided in §2.10.

Make Whole Fee. As defined in Convertible Promissory Notes and Loan Agreements
described in the definition of Initial Subordinate Debt.

Management Agreements. An agreement entered into by any Subsidiary Guarantor
pursuant to which it engages a Manager to manage and operate a Hotel Property.

Management Fees. For any Borrowing Base Property for any period of
determination, a deemed base management fee in an amount equal to the greater of
(i) the actual base management fees payable with respect to such Borrowing Base
Property for such period and (ii) an amount equal to four percent (4%) of Gross
Hotel Revenues from such Borrowing Base Property for such period.

Management Projections. In the event that under this Agreement REIT or any of
its Subsidiaries is required to provide a budget projection for the following
four (4) calendar quarters, and to the extent property level budgets from
Managers or capital expenditure requirements from Franchisors are not available,
then such projections as to such matters at such Real Estate shall be made by
the REIT on a best efforts basis based upon information available to it and
market conditions and prospects.

Manager. The management company that manages and operates a Hotel Property
pursuant to the Management Agreement for such Hotel Property.

Mandatorily Redeemable Stock. With respect to any Person, any Equity Interest of
such Person which by the terms of such Equity Interest (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (a) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than an Equity Interest to the extent redeemable in exchange for common
stock or other equivalent common Equity Interests), (b) is convertible into or
exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or
(c) is redeemable at the option of the holder thereof, in whole or in part
(other than an Equity Interest which is redeemable solely in exchange for common
stock or other equivalent common Equity Interests).

 

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Material Adverse Effect. A material adverse effect on (a) the business,
properties, assets, condition (financial or otherwise), prospects or results of
operations of REIT and its Subsidiaries, taken as a whole; (b) the ability of
the Borrower or any Guarantor to perform any of its material obligations under
the Loan Documents; (c) the validity or enforceability of any of the Loan
Documents or the creation, perfection and priority of any Liens of the Agent in
the Collateral; or (d) the rights or remedies of the Agent or the Lenders
thereunder. For the avoidance of doubt, the effects of the outbreak of the novel
coronavirus (COVID-19) shall not constitute a Material Adverse Effect.

Material Contract. Collectively, (i) each contract (excluding purchase and sale
contracts for Real Estate) to which the REIT or any of its Subsidiaries is a
party involving aggregate consideration payable to or by the REIT or such
Subsidiary in an amount of Three Million and No/100 Dollars ($3,000,000.00) or
more, and (ii) each Operating Lease, each Management Agreement and each
Franchise Agreement. For the avoidance of doubt, any contract to which the REIT
is a party or which otherwise relates to the purchase or sale of securities
(including, but not limited to, underwriting agreements and private placement
agreements) shall not constitute a Material Contract.

Material Renovation. Any Renovation to any Hotel Property (whether separately or
as part of an overall plan or other similar related renovations, even if not
performed at the same time) that has resulted, or is reasonably expected to
result in, twenty percent (20%) or more of the rooms in such Hotel Property not
being available for occupancy for a period of forty-five (45) days or more.

Material Subsidiary. Material Subsidiaries shall mean (i) any Wholly-Owned
Subsidiary of Borrower or REIT that directly or indirectly owns or leases an
interest in a Borrowing Base Property and (ii) any Wholly-Owned Subsidiary of
Borrower or REIT which is not an Excluded Subsidiary.

Maturity Date. April 1, 2021, as the same may be extended as provided in
§2.12,January 2, 2023, or such earlier date on which the Loans shall become due
and payable pursuant to the terms hereof.

Merger Agreement. See §3.2(c)(ii).

Moody’s. Moody’s Investor Service, Inc., and any successor thereto.

Mortgage Constant. As of any date of determination, the monthly factoran amount
determined by the Agent by reference to a standard level constant payment table
for a fully amortizing loan with a maturity of thirty (30) years based upon an
assumedto be equal to the annual principal and interest payment sufficient to
amortize in full over a thirty (30) year period a loan amount equal to the
aggregate Outstanding principal balance of all Loans and Swing Loans and Letter
of Credit Liabilities calculated using a per annum interest rate equal to the
greatest of (i) the ten-year U.S. Treasury rate plus 3.0%2.5% and (ii) 6.50% and
(iii) the weighted average interest rate then applicable to outstanding
Loans5.0%.

 

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Mortgage Note Receivables. A first priority mortgage loan on a completed Hotel
Property of the type permitted by §8.3(o), and which Mortgage Note Receivable
includes, without limitation, the indebtedness secured by a related first
priority security instrument.

Mortgages. The Mortgages, Deeds to Secure Debt and/or Deeds of Trust from
Borrower or a Subsidiary Guarantor (which shall include at the Agent’s option
the applicable TRS Lessee) to the Agent for the benefit of the Lenders (or to
trustees named therein acting on behalf of the Agent for the benefit of the
Lenders), as the same may be modified or amended, pursuant to which Borrower or
a Subsidiary Guarantor has conveyed or granted a mortgage lien upon or a
conveyance in fee simple (or of a leasehold under a Ground Lease, as applicable)
(or with respect to a TRS Lessee, its leasehold interest under the Operating
Lease and its other assets) of a Borrowing Base Property as security for the
Obligations, each such mortgage entered into after the date hereof to be
substantially in the form of the initial Mortgages executed and delivered by
Borrower or the Subsidiary Guarantors on the Closing Date, with such changes
thereto as Agent may reasonably require as a result of state law or practice.

Multiemployer Plan. Any multiemployer plan within the meaning of Section 3(37)
of ERISA maintained or contributed to by REIT or any ERISA Affiliate.

Net Cash Flow. The amount of cash available to be disbursed pursuant to
Section 6.2(b)(vii) of the Cash Flow Waterfall.

Net Income (or Loss). With respect to any Person (or any asset of any Person)
with respect to any period, the net income (or loss) of such Person (or
attributable to such asset), determined in accordance with GAAP.

Net Offering Proceeds. The total gross cash proceeds received by REIT or any of
its Subsidiaries as a result of an Equity Offering or as a result of receipt of
any contribution of capital less the customary and reasonable costs, expenses
and discounts paid by REIT or such Subsidiary in connection therewith. Net
Offering Proceeds shall include any and all amounts advanced by the Subordinate
Lenders to the REIT as Subordinate Debt.

Net Operating Income. For any Real Estate as of any date of determination, an
amount equal to (A) the total Gross Hotel Revenues of such Real Estate during
such period; minus (B) the sum of all expenses and other proper charges incurred
in connection with and directly attributable to the ownership and operation of
such Real Estate during such period (including real estate taxes, Management
Fees, Franchise Fees, payments under ground leases, insurance premiums, and bad
debt expenses, but excluding any general and administrative expense, impairment
charges, and any non-cash charges (such as depreciation or amortization of
financing costs) related to the operation of the Borrower.

 

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Net Sale Proceeds. With respect to any sale, conveyance, transfer or other
disposition of any Real Estate by the Borrower or any of its Subsidiaries (each
referred to for the purposes of this definition as a “disposition”), the
aggregate cash payments or other cash equivalent financial instruments received
by Borrower or such Subsidiary from such disposition (including, without
limitation, cash received by way of deferred payment pursuant to a note
receivable, conversion of non-cash consideration, cash payments in respect of
purchase price adjustments or otherwise, but only as and when such cash is
received), minus the direct out-of-pocket costs and expenses paid to
unaffiliated third parties incurred in connection with such disposition.

Ninth Amendment to Credit Agreement. The Ninth Amendment to Credit Agreement and
Other Loan Documents dated November 18, 2020 among Borrower, Guarantors, Agent
and the Lenders.

Non-Consenting Lender. See §18.8.

Non-Defaulting Lender. At any time, any Lender that is not a Defaulting Lender
at such time.

Non-Recourse Exclusions. With respect to any Non-Recourse Indebtedness of any
Person, any usual and customary exclusions from the non-recourse limitations
governing such Indebtedness, including, without limitation, exclusions for
claims that (a) are based on fraud, intentional or material misrepresentation,
misapplication of funds, gross negligence or willful misconduct, (b) result from
intentional mismanagement of or waste at the Real Property securing such
Non-Recourse Indebtedness, (c) arise from the presence of Hazardous Substances
on the Real Property securing such Non-Recourse Indebtedness, (d) are the result
of any unpaid real estate taxes and assessments (whether contained in a loan
agreement, promissory note, indemnity agreement or other document) or (e) result
from the borrowing Subsidiary and/or its assets becoming the subject of a
voluntary or involuntary bankruptcy, insolvency or similar proceeding.

Non-Recourse Indebtedness. With respect to a Person, (a) Indebtedness for
borrowed money in respect of which recourse for payment (except for Non-Recourse
Exclusions until a claim is made with respect thereto, and then such
Indebtedness shall not constitute Non-Recourse Indebtedness only to the extent
of the amount of such claim) is contractually limited to specific assets of such
Person encumbered by a Lien securing such Indebtedness or (b) if such Person is
a Single Asset Entity, any Indebtedness solely of such Person (except for
guarantees of Non-Recourse Exclusions by another Person).

Notes. Collectively, the Revolving Credit Notes and the Swing Loan Note.

Notice. See §19.

Obligations. All indebtedness, obligations and liabilities of the Borrower or
any Guarantor to any of the Lenders or the Agent, individually or collectively,
under this Agreement or any of the other Loan Documents or in respect of any of
the Loans, the Notes or the Letters of Credit, or other instruments at any time
evidencing any of the foregoing, whether existing on the date of this Agreement
or arising or incurred hereafter, or whether arising before or after any
bankruptcy or insolvency proceeding, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise.

 

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OFAC. Office of Foreign Asset Control of the Department of the Treasury of the
United States of America, or any successor thereto carrying out similar
functions.

Off-Balance Sheet Obligations. Liabilities and obligations of REIT or any of its
Subsidiaries or any other Person in respect of “off-balance sheet arrangements”
(as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the
Securities Act, which REIT would be required to disclose in the “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
section of REIT’s report on Form 10-Q or Form 10-K (or their equivalents) which
REIT is required to file with the SEC or would be required to file if it were
subject to the jurisdiction of the SEC (or any Governmental Authority
substituted therefor).

Operating Lease. The operating lease of a Borrowing Base Property between the
Borrower or applicable Subsidiary Guarantor that owns such Borrowing Base
Property (whether in fee simple or subject to a Ground Lease) and the applicable
TRS Lessee that leases such Borrowing Base Property, as each may be amended,
restated, supplemented or otherwise modified from time to time.

Other Connection Taxes. With respect to any Recipient, Taxes imposed as a result
of a present or former connection between such Recipient and the jurisdiction
imposing such Tax (other than connections arising solely from such Recipient
having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).

Other Taxes. All present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
§4.14 as a result of costs sought to be reimbursed pursuant to §4.3).

Outstanding. With respect to the Loans, the aggregate unpaid principal thereof
as of any date of determination. With respect to Letters of Credit, the
aggregate undrawn face amount of issued Letters of Credit.

Participant Register. See §18.4.

Patriot Act. The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may
be amended from time to time, and corresponding provisions of future laws.

PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of ERISA
and any successor entity or entities having similar responsibilities.

Permits. With respect to any Person, any permit, approval, authorization,
license, registration, certificate, concession, grant, franchise, variance or
permission from, and any other contractual obligations with, any Governmental
Authority, in each case whether or not having the force of law and applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

 

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Permitted Borrowings. The uses for which the Borrowing Availability may be used
by Borrower, which shall be limited to (a) payment of interest and fees due and
payable under this Agreement, (b) such other items as approved by the Required
Lenders and set forth in the Approved Budget, (c) payment of items set forth in
the Approved Budget for which there is insufficient cash due to unanticipated
revenue shortfalls not covered by cost savings, (d) new items not included in
the Approved Budget and approved by the Required Lenders, and (e) to the extent
not included in the Approved Budget, payment of up to $500,000.00 of the Make
Whole Fee (less any amount paid from funds of the Borrower or the REIT).
Permitted Borrowings shall be further subject to the terms of §7.23.

Permitted Liens. Liens, security interests and other encumbrances permitted by
§8.2.

Person. Any individual, corporation, limited liability company, partnership,
trust, unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.

PIP. A property improvement plan for a Hotel Property prepared by a Franchisor
or a Manager of such Hotel Property.

Plan Assets. Assets of any employee benefit plan subject to Part 4, Subtitle B,
Title I of ERISA.

Potential Collateral. Any Real Estate which is not at the time included in the
Collateral and which Real Estate consists of (i) Eligible Real Estate and the
related rights under an Operating Lease, or (ii) Real Estate which is capable of
becoming Eligible Real Estate through the approval of the Required Lenders and
the related rights under the Operating Lease, and the completion and delivery of
Borrowing Base Qualification Documents as required by the Agent and the related
rights under an Operating Lease.

PPP Loan. See §8.1.

Preferred Distributions. With respect to any period and without duplication, all
Distributions paid, declared but not yet paid or otherwise due and payable
during such period on Preferred Securities issued by REIT or any of its
Subsidiaries, whether now issued and outstanding or hereafter issued and
outstanding. Preferred Distributions shall not include dividends or
distributions: (a) paid or payable solely in Equity Interests (other than
Mandatorily Redeemable Stock) of identical class payable to holders of such
class of Equity Interests; or (b) paid or payable to the Borrower or any of its
Subsidiaries.

Preferred Securities. With respect to any Person, Equity Interests in such
Person which are entitled to preference or priority over any other Equity
Interest in such Person in respect of the payment of dividends or distribution
of assets upon liquidation, or both.

 

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Project Approvals. See §6.23(a)(v).

Qualified Capital Raise. The Qualified Capital Raise shall be deemed to have
occurred at such time as Agent shall have received from Borrower evidence
reasonably satisfactory to Agent of the occurrence after May 11, 2017 of one or
more Equity Offerings of common shares of the REIT that shall have resulted in
REIT receiving not less than $50,000,000.00 in gross equity proceeds and that
the net proceeds thereof have been contributed to Borrower.

Publicly Available Information. See §18.7.

Real Estate. All real property, including, without limitation, the Borrowing
Base Properties, at the time of determination then owned or leased (as lessee or
sublessee) in whole or in part or operated by REIT or any of its Subsidiaries,
or an Unconsolidated Affiliate of the Borrower and which is located in the
United States of America or the District of Columbia.

Recipient. The Agent and any Lender.

Record. The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Agent with
respect to any Loan referred to in such Note.

Recourse Indebtedness. As of any date of determination, any Indebtedness
(whether secured or unsecured) which is recourse to REIT or any of its
Subsidiaries. Recourse Indebtedness shall not include Non-Recourse Indebtedness,
but shall include any Non-Recourse Exclusions at such time a written claim is
made with respect thereto.

Recurring Capital Expenditures. Items that would be reflected in the “hotel and
property operations” line item of REIT’s financial statements for repairs and
maintenance in accordance with GAAP and the Uniform System of Accounts, and
consistent with the financial statements delivered to the Agent prior to the
date of this Agreement.

Register. See §18.2.

REIT. Condor Hospitality Trust, Inc., a Maryland corporation.

REIT Status. With respect to a Person, its status as a real estate investment
trust as defined in Section 856(a) of the Code.

Related Fund. With respect to any Lender which is a fund that invests in loans,
any Affiliate of such Lender or any other fund that invests in loans that is
managed by the same investment advisor as such Lender or by an Affiliate of such
Lender or such investment advisor.

Release. Any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (other than (i) storing
of materials in reasonable quantities to the extent necessary for the operation
of property in the ordinary course of business, and in any event in compliance
with all Environmental Laws and (ii) any isolated and de minimis spills or other
dispositions of Hazardous Substances which do not give rise to any obligation to
notify or report to any Governmental Authority and which do not violate any
Environmental Law) of Hazardous Substances.

 

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Renovations. Any renovations, remodeling, expansion, refurbishment or other
capital improvements to a Hotel Property.

Representative. See §14.16.

Required Lenders. As of any date, the Lender or Lenders whose aggregate
Commitment Percentage is equal to or greater than sixty-six and 67/100 percent
(66.67%) of the Total Commitment; provided that in determining said percentage
at any given time, all then existing Defaulting Lenders will be disregarded and
excluded and the Commitment Percentages of the Lenders shall be redetermined for
voting purposes only to exclude the Commitment Percentages of such Defaulting
Lenders; provided that if there are three (3) or fewer Lenders, then Required
Lenders shall mean all Lenders that are Non-Defaulting Lenders.

Requirements. See §6.22(a)(iii).

Reserve Percentage. For any Interest Period, that percentage which is specified
three (3) Business Days before the first day of such Interest Period by the
Board of Governors of the Federal Reserve System (or any successor) or any other
Governmental Authority with jurisdiction over the Agent or any Lender for
determining the maximum reserve requirement (including, but not limited to, any
marginal reserve requirement) for the Agent or any Lender with respect to
liabilities constituting of or including (among other liabilities) Eurocurrency
liabilities in an amount equal to that portion of the Loan affected by such
Interest Period and with a maturity equal to such Interest Period.

Restricted Cash. As of any date of determination, the aggregate amount of cash
that is subject to any escrow, cash trap, reserves, Liens or claims of any kind
in favor of any Person.

Revolving Credit Loan or Loans. An individual Revolving Credit Loan or the
aggregate Revolving Credit Loans, as the case may be, in the maximum principal
amount of the Total Commitment to be made by the Lenders hereunder as more
particularly described in §2. Without limiting the foregoing, Revolving Credit
Loans shall also include Revolving Credit Loans made pursuant to §2.10(f).

Revolving Credit Notes. See §2.1(b).

Sanctions Laws and Regulations. Any applicable sanctions, prohibitions or
requirements imposed by any applicable executive order or by any applicable
sanctions program administered by OFAC, the United Nations Security Council, the
European Union or Her Majesty’s Treasury.

S&P. S&P Global, Inc.

SEC. The federal Securities and Exchange Commission.

 

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Secured Indebtedness. With respect to REIT and its Subsidiaries as of any given
date, the aggregate principal amount of all Indebtedness of such Persons
outstanding at such date and that is secured in any manner by any Lien.

Securities Act. The Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.

Security Agreement. The Security Agreement dated as of the date hereof among the
Agent and the TRS Lessees now or hereafter a party thereto, and any joinder
thereto.

Security Documents. Collectively, the Joinder Agreements, the Mortgages, the
Assignments of Leases and Rents, the Security Agreement, the Borrower Security
Agreement, the Indemnity Agreement, the Guaranty, the UCC-1 financing statements
and any further collateral assignments to the Agent for the benefit of the
Lenders.

Series D Preferred Stock. The REIT’s 6,245,156 shares of 6.25% Series D
Preferred Stock issued on March 16, 2016 pursuant to the Amended and Restated
Articles of Incorporation of the REIT, as amended.

Single Asset Entity. A bankruptcy remote, single purpose entity which is a
Subsidiary of the Borrower and which is not a Subsidiary Guarantor or an owner
of a direct or indirect interest in a Subsidiary Guarantor which owns real
property and related assets which are security for Indebtedness of such entity,
and which Indebtedness does not constitute Indebtedness of any other Person
except as provided in the definition of Non-Recourse Indebtedness (except for
Non-Recourse Exclusions).

Sixth Amendment to Credit Agreement. The Sixth Amendment to Credit Agreement and
Other Loan Documents dated March 30, 2020 among Borrower, Guarantors, Agent and
the Lenders.

Stabilized Properties. Hotel Properties that are open for business, have at
least one (1) full year of operating history, and are not subject to a Material
Renovation.

State. A state of the United States of America and the District of Columbia.

Submarket. Submarket shall have the meaning as used by Smith Travel Research in
its STAR Report (or if such report shall no longer be available to Agent or such
term shall no longer be used in such report, then such other definition as Agent
may reasonably determine).

Subordinate Debt. Collectively the Initial Subordinate Debt and any Future
Subordinate Debt.

Subordinate Debt Terms. Any Subordinate Debt (and related note) issued or made
by the REIT (a) shall have a minimum remaining term of not less than the then
effective Maturity Date or any earlier date approved by the Super-Required
Lenders in connection with the Initial Subordinate Debt, (b) shall be Unsecured
Indebtedness and not guaranteed by any other Person, (c) shall impose no
financial, negative or other covenants (or other covenants, representations or

 

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defaults which have the same practical effect thereof) on the REIT, the Borrower
or their respective Subsidiaries, (d) pursuant to which all claims and
liabilities of the REIT with respect thereto are subordinate to the payment of
the Obligations of the Borrower, the REIT and the Guarantors on terms acceptable
to the Agent pursuant to a Subordination and Standstill Agreement, and (e) which
is otherwise approved in writing by the Required Lenders in their sole,
exclusive and unfettered discretion (provided that the Required Lenders shall
not withhold their approval of any document evidencing Future Subordinate Debt
in the event that it is in the form of the Convertible Promissory Note and Loan
Agreement attached hereto as Exhibit K (except that the interest rate may vary
and there may be other modifications that are immaterial to the Lenders (it
being agreed that, for example, the addition of covenants, required payments and
defaults shall be material)), provided that such document evidencing Future
Subordinate Debt shall not contain any requirement to pay any interest or fees
other than on the maturity date thereof which is in accordance with clause
(a) of this definition above).

Subordinate Lenders. Collectively, the Initial Subordinate Lender and the Future
Subordinate Lenders.

Subordination and Standstill Agreements. Collectively, the Initial Subordination
and Standstill Agreement and each Future Subordination and Standstill Agreement.

Subsidiary. For any Person, any corporation, partnership, limited liability
company or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, partnership, limited liability company or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and
shall include all Persons the accounts of which are consolidated with those of
such Person pursuant to GAAP. Notwithstanding any ownership interest in the
Borrower, the Borrower shall at all times be considered a Subsidiary of REIT.

Subsidiary Guarantor. Each Person, other than REIT and General Partner that is a
party to the Guaranty as of the date of this Agreement and each Additional
Guarantor.

Super-Required Lenders. As of any date, the Lender or Lenders whose aggregate
Commitment Percentage is equal to or greater than eighty percent (80.0%) of the
Total Commitment; provided that if there are three (3) or more Non-Defaulting
Lenders, then the Super-Required Lenders shall also be not less than three
(3) Non-Defaulting Lenders; and provided further that in determining said
percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Commitment Percentages of the Lenders shall be
redetermined for voting purposes only to exclude the Commitment Percentages of
such Defaulting Lenders.

Survey. An instrument survey of each parcel of Borrowing Base Property prepared
by a registered land surveyor which shall show the location of all buildings,
structures, easements and utility lines on such property, shall be sufficient to
remove with respect to the Tier I Properties the standard survey exception from
the Title Policy, shall show that all buildings and structures

 

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are within the lot lines of the Borrowing Base Property and shall not show any
encroachments by others (or to the extent any encroachments are shown, such
encroachments shall be acceptable to the Agent in its reasonable discretion),
shall show rights of way, adjoining sites, establish building lines and street
lines, the distance to and names of the nearest intersecting streets and such
other details as the Agent may reasonably require; and shall show whether or not
the Borrowing Base Property is located in a flood hazard district as established
by the Federal Emergency Management Agency or any successor agency or is located
in any flood plain, flood hazard or wetland protection district established
under federal, state or local law, shall contain a certification satisfactory to
Agent, and shall otherwise be in form and substance reasonably satisfactory to
the Agent.

Swing Loan. See §2.5(a).

Swing Loan Commitment. An amount equal to Zero and No/100 Dollars ($0.00), as
the same may be changed from time to time in accordance with the terms of this
Agreement. For the avoidance of doubt, from and after the effectiveness of the
Sixth Amendment to Credit Agreement, Swing Loan Lender has no obligation to make
Swing Loans.

Swing Loan Lender. KeyBank, in its capacity as Swing Loan Lender and any
successor thereof.

Swing Loan Note. See §2.5(b).

Taking. The taking or appropriation (including by deed in lieu of condemnation)
of any Borrowing Base Property, or any part thereof or interest therein, whether
permanently or temporarily, for public or quasi-public use under the power of
eminent domain, by reason of any public improvement or condemnation proceeding,
or in any other manner or any damage or injury or diminution in value through
condemnation, inverse condemnation or other exercise of the power of eminent
domain.

Taxes. All present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

Tier I Properties. Collectively the Hotel Properties owned or leased under a
Ground Lease by a Wholly-Owned Subsidiary of Borrower that is Eligible Real
Estate and leased under an Operating Lease by a TRS Lessee and which satisfy the
requirements of §7.20(a) (other than §7.20(a)(vi)) that have been included as
Borrowing Base Properties and not removed from the calculation of Debt Yield.
The initial Tier I Properties as of the date of this Agreement are described on
Schedule 1.3 hereto.

Tier II Properties. Collectively the Hotel Properties owned or leased under a
Ground Lease by Borrower or a Wholly-Owned Subsidiary of Borrower that is
Eligible Real Estate and leased under an Operating Lease by a TRS Lessee and
which satisfy the requirements of §7.20 (a) (other than §7.20(a)(v)) that have
been included as Borrowing Base Properties and not removed from the calculation
of Debt Yield. The initial Tier II Properties as of the date of this Agreement
are described on Schedule 1.3 hereto.

 

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Title Insurance Company. Any title insurance company or companies approved by
the Agent and the Borrower.

Title Policy. With respect to each of the Borrowing Base Properties, an ALTA
standard form title insurance policy (or, if such form is not available, an
equivalent, legally promulgated form of mortgagee title insurance policy
reasonably acceptable to the Agent) issued by a Title Insurance Company (with
such reinsurance as the Agent may reasonably require, any such reinsurance to be
with direct access endorsements to the extent available under Applicable Law) in
an amount as the Agent may reasonably require based upon the fair market value
of the applicable Borrowing Base Property (but in any event not to exceed 110%
of fair market value) insuring the priority of the Mortgage thereon and that the
Borrower or a Subsidiary Guarantor, as applicable, holds marketable or
indefeasible (with respect to Texas) fee simple title or a valid and subsisting
leasehold interest to such parcel, subject only to the encumbrances acceptable
to Agent in its reasonable discretion and which shall not contain standard
exceptions for mechanics liens, persons in occupancy (other than tenants as
tenants only under Leases) or matters which would be shown by a survey (other
than with respect to any Tier II Properties as to which the survey delivered in
connection with the closing under this Agreement has not been updated), shall
not insure over any matter except to the extent that any such affirmative
insurance is acceptable to the Agent in its reasonable discretion, and shall
contain (a) a revolving credit endorsement and (b) such other endorsements and
affirmative insurance as the Agent may reasonably require and is available in
the State in which the Borrowing Base Property is located, including but not
limited to (i) a comprehensive endorsement, (ii) a variable rate of interest
endorsement, (iii) a usury endorsement, (iv) a doing business endorsement,
(v) if required by Agent, an ALTA form 3.1 zoning endorsement, (vi) a “tie-in”
endorsement relating to all Title Policies issued by such Title Insurance
Company in respect of other Borrowing Base Properties, (vii) “first loss” and
“last dollar” endorsements, and (viii) a utility location endorsement. With
respect to each Borrowing Base Property as to which Agent does not receive a
Mortgage, an ALTA standard form owner’s title insurance policy (or, if such form
is not available, an equivalent, legally promulgated form of owner’s title
insurance policy reasonably acceptable to the Agent) issued by a Title Insurance
Company (with such reinsurance as the Agent may reasonably require, any such
reinsurance to be with direct access endorsements to the extent available under
Applicable Law) in an amount approved by the Agent insuring that the Subsidiary
Guarantor holds marketable or indefeasible (with respect to Texas) fee simple
title or a valid and subsisting leasehold interest to such parcel, subject only
to the encumbrances acceptable to Agent in its reasonable discretion and which
shall not contain standard exceptions for mechanics liens, persons in occupancy
(other than tenants as tenants only under Leases) or matters which would be
shown by a survey, and shall not insure over any matter except to the extent
that any such affirmative insurance is acceptable to the Agent in its reasonable
discretion.

Titled Agents. The Arranger, and any syndication agent or documentation agent.

Total Commitment. The sum of the Commitments of the Lenders, as in effect from
time to time. As of May 13,November 18, 2020, the Total Commitment is One
Hundred Thirty-Six Million Eighty Thousand and No/100 Dollars ($136,080,000.00).
The Total Commitment may increase in accordance with §2.11.130,000,000.00).

 

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TRS. TRS Leasing, Inc., a Virginia corporation.

TRS Lessee. TRS and each Wholly-Owned Subsidiary of TRS that is a lessee of a
Borrowing Base Property pursuant to an Operating Lease. Each TRS Lessee shall be
a Subsidiary Guarantor.

Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

Unconsolidated Affiliate. In respect of any Person, any other Person in whom
such Person holds an Investment, which Investment is accounted for in the
financial statements of such Person on an equity basis of accounting and whose
financial results would not be consolidated under GAAP with the financial
results of such first Person on the consolidated financial statements of such
first Person if such financial statements were prepared in accordance with the
full consolidation method of GAAP as of such date.

Unhedged Variable Rate Debt. Any Indebtedness with respect to which the interest
is not fixed (or hedged to a fixed rate) for the entire term of such
Indebtedness to maturity.

Uniform System of Accounts. The Uniform System of Accounts for the Lodging
Industry, Eleventh Revised Edition, 2014, as published by the Educational
Institute of the American Hotel & Motel Association, as revised from time to
time to the extent such revision has been or is in the process of being
generally implemented within such Uniform System of Accounts.

Unrestricted Cash and Cash Equivalents. As of any date of determination, the sum
of (a) the aggregate amount of Unrestricted cash and (b) the aggregate amount of
Unrestricted Cash Equivalents (valued at fair market value). As used in this
definition, “Unrestricted” means the specified asset is not subject to any
escrow, cash trap, reserves, Liens or claims of any kind in favor of any Person.

Unsecured Indebtedness. Indebtedness of a Person outstanding at any time which
is not Secured Indebtedness.

Unused Fee. See §2.3.

Unused Fee Percentage. With respect to any day during a calendar quarter,
(a) 0.20% per annum, if the sum of the Revolving Credit Loans, Swing Line Loans
and Letter of Credit Liabilities outstanding on such day is more than 50% of the
Total Commitment, or (b) 0.25% per annum if the sum of the Revolving Credit
Loans, Swing Line Loans and Letter of Credit Liabilities outstanding on such day
is less than or equal to 50% of the Total Commitment.

U.S. Person. Any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate. See §4.3(g)(ii)(B)(iii).

West Virginia Lease. The Lease dated March 24, 2016 between Solomons Beacon Inn
Limited Partnership as landlord and Beanery 119, LLC as tenant.

 

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Wholly-Owned Subsidiary. As to the Borrower, REIT or TRS, any Subsidiary of the
Borrower, REIT or TRS that is directly or indirectly owned one hundred percent
(100%) by the Borrower, REIT or TRS, respectively. For the purposes of this
Agreement, the Borrower shall be deemed to be a Wholly-Owned Subsidiary of the
REIT. Also for purposes of this Agreement, any Subsidiary owned ninety-nine
percent (99%) by the Borrower and one percent (1%), directly or indirectly, by
the REIT, shall be deemed to be a Wholly-Owned Subsidiary of the Borrower.

Withholding Agent. The REIT, the Borrower, any other Guarantor and the Agent, as
applicable.

Write-Down and Conversion Powers. With respect to any EEA Resolution Authority,
the write-down and conversion powers of such EEA Resolution Authority from time
to time under the Bail-In Legislation for the applicable EEA Member Country,
which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

§1.2 Rules of Interpretation.

(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) A reference to any law includes any amendment or modification of such law.

(d) A reference to any Person includes its permitted successors and permitted
assigns, and in the event Borrower or a Guarantor is a limited liability company
and shall undertake an LLC Division (any such LLC Division being a violation of
this Agreement), shall be deemed to include each limited liability company
resulting from any such LLC Division.

(e) Accounting terms not otherwise defined herein have the meanings assigned to
them by GAAP applied on a consistent basis by the accounting entity to which
they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) The words “approval” and “approved”, as the context requires, means an
approval in writing given to the party seeking approval after full and fair
disclosure to the party giving approval of all material facts necessary in order
to determine whether approval should be granted.

(h) All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in the State of New York,
have the meanings assigned to them therein.

(i) Reference to a particular “§”, refers to that section of this Agreement
unless otherwise indicated.

 

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(j) The words “herein”, “hereof”, “hereunder” and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

(k) In the event of any change in GAAP after the date hereof or any other change
in accounting procedures pursuant to §7.3 which would affect the computation of
any financial covenant, ratio or other requirement set forth in any Loan
Document, then upon the request of the Borrower or the Agent, the Borrower, the
Guarantors, the Agent and the Lenders shall negotiate promptly, diligently and
in good faith in order to amend the provisions of the Loan Documents such that
such financial covenant, ratio or other requirement shall continue to provide
substantially the same financial tests or restrictions of the Borrower and the
Guarantors as in effect prior to such accounting change, as determined by the
Required Lenders in their good faith judgment. Until such time as such amendment
shall have been executed and delivered by the Borrower, the Guarantors, the
Agent and the Required Lenders, such financial covenants, ratio and other
requirements, and all financial statements and other documents required to be
delivered under the Loan Documents, shall be calculated and reported as if such
change had not occurred.

(l) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made (i) without
giving effect to any election under Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of the REIT or any of its Subsidiaries at “fair value”, as defined
therein, (ii) without giving effect to any treatment of Indebtedness in respect
of convertible debt instruments under Accounting Standards Codification 470-20
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced
or bifurcated manner as described therein, and such Indebtedness shall at all
times be valued at the full stated principal amount thereof

(m) To the extent that any of the representations and warranties contained in
this Agreement or any other Loan Document is qualified by “Material Adverse
Effect” or any other materiality qualifier, then any further qualifier as to
representations and warranties being true and correct “in all material respects”
contained elsewhere in the Loan Documents shall not apply with respect to any
such representations and warranties.

(n) Notwithstanding the terms of the definitions of Consolidated EBITDA, Fixed
Charges, Consolidated Interest Expense, Consolidated Total Asset Value,
Consolidated Total Indebtedness, Adjusted Consolidated EBITDA and Funds
Available for DistributionLiquidity when determining any results under such
definitions which are to be done on a Consolidated Basis, the results of any
non-Wholly-Owned Subsidiaries shall not be Consolidated but only the REIT’s
Equity Percentage of such Persons shall be included.

(o) If a certain action or event is not prohibited by the terms of this
Agreement or the other Loan Documents, such action or event shall be deemed to
be expressly permitted under the terms of this Agreement or the other Loan
Documents provided that such action or event would not otherwise create or cause
a Default or Event of Default.

 

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(p) The interest rate on LIBOR Rate Loans is determined by reference to the
LIBOR, which is derived from the London interbank offered rate. The London
interbank offered rate is intended to represent the rate at which contributing
banks may obtain short-term borrowings from each other in the London interbank
market. In July 2017, the U.K. Financial Conduct Authority announced that, after
the end of 2021, it would no longer persuade or compel contributing banks to
make rate submissions to the ICE Benchmark Administration (together with any
successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA
setting the London interbank offered rate. As a result, it is possible that
commencing in 2022, the London interbank offered rate may no longer be available
or may no longer be deemed an appropriate reference rate upon which to determine
the interest rate on LIBOR Rate. In light of this eventuality, public and
private sector industry initiatives are currently underway to identify new or
alternative reference rates to be used in place of the London interbank offered
rate. In the event that the London interbank offered rate is no longer available
or in certain other circumstances as set forth in §4.16 of this Agreement, such
§4.16 provides a mechanism for determining an alternative rate of interest. The
Agent will notify the Borrower, pursuant to §4.16, in advance of any change to
the reference rate upon which the interest rate on LIBOR Loans is based.
However, the Agent does not warrant or accept any responsibility for, and shall
not have any liability with respect to, the administration, submission or any
other matter related to the London interbank offered rate or other rates in the
definition of “LIBOR” or with respect to any alternative or successor rate
thereto, or replacement rate therefor or thereof, including, without limitation,
whether the composition or characteristics of any such alternative, successor or
replacement reference rate, as it may or may not be adjusted pursuant to §4.16,
will be similar to, or produce the same value or economic equivalence of, the
LIBOR or have the same volume or liquidity as did the London interbank offered
rate prior to its discontinuance or unavailability.

 

§2.

THE CREDIT FACILITY.

 

  §2.1

Revolving Credit Loans.

(a) Subject to the terms and conditions set forth in this Agreement, each of the
Lenders severally agrees to lend to the Borrower, and the Borrower may borrow
(and repay and reborrow) from time to time between the Closing Date and the
Maturity Date upon notice by the Borrower to the Agent given in accordance with
§2.7, such sums as are requested by the Borrower for the purposes set forth in
§2.9 up to a maximum aggregate principal amount outstanding (after giving effect
to all amounts requested) at any one time equal to the lesser of (i) such
Lender’s Commitment and (ii) [reserved]; provided, that, in all events no
Default or Event of Default shall have occurred and be continuing or would
occur; and provided, further, that the outstanding principal amount of the
Revolving Credit Loans (after giving effect to all amounts requested), Swing
Loans and Letter of Credit Liabilities shall not at any time exceed the Total
Commitment or cause a breach of §9.1 or §9.3; and provided further that any
Loans on or after the effectiveness of the Sixth Amendment to Credit Agreement
shall be limited to (x) the funding of the Interest Reserve Account (as defined
in the Cash Collateral Agreement) and (y) if the Commitment Increase is
exercised and the property securing the Aloft Atlanta Term Loan becomes a
Borrowing Base Property, the repayment of the Aloft Atlanta Term Loan. The
Lenders shall have no further obligation to make Loans, but if all of the
Lenders elect in their sole, absolute and unfettered discretion to make
additional Loans, such Loans shall only be for the purposes approved by all

 

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ofPermitted Borrowings; and provided further that the maximum aggregate
principal amount of any Loans on or after the effectiveness of the Ninth
Amendment to Credit Agreement shall not exceed the Borrowing Availability.
Notwithstanding anything in this Agreement to the contrary, Borrower shall not
be entitled to request or obtain an advance of a Revolving Credit Loan more
often than one (1) time per calendar month unless approved by the LendersAgent
in theirits sole, absolute and unfettered discretion. (excluding any advances to
pay interest and fees due and payable under this Agreement). The Revolving
Credit Loans shall be made pro rata in accordance with each Lender’s Commitment
Percentage. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrower that all of the conditions
required of the Borrower set forth in §§10 and 11 have been satisfied on the
date of such request. The Agent may assume that the conditions in §§10 and 11
have been satisfied unless it receives prior written notice from a Lender that
such conditions have not been satisfied. No Lender shall have any obligation to
make Revolving Credit Loans to the Borrower or participate in Letter of Credit
Liabilities in the maximum aggregate principal outstanding balance of more than
the lesser of the amount equal to its Commitment Percentage of the Commitments
and the principal face amount of its Revolving Credit Note.

(b) The Revolving Credit Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of Exhibit B hereto (collectively, the
“Revolving Credit Notes”), dated of even date with this Agreement (except as
otherwise provided in §18.3) and completed with appropriate insertions. One
Revolving Credit Note shall be payable to the order of each Lender in the
principal amount equal to such Lender’s Commitment or, if less, the outstanding
amount of all Revolving Credit Loans made by such Lender, plus interest accrued
thereon, as set forth below. The Borrower irrevocably authorizes the Agent to
make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or the time of receipt of any payment of principal
thereof, an appropriate notation on the Agent’s Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on the Agent’s
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to each Lender, but the failure to record, or any error in so recording,
any such amount on the Agent’s Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Revolving Credit Note to make
payments of principal of or interest on any Revolving Credit Note when due.

 

  §2.2

[Intentionally Omitted].

§2.3 Unused Fee. The Borrower agrees to pay to the Agent for the account of the
Lenders (other than a Defaulting Lender for such period of time as such Lender
is a Defaulting Lender) in accordance with their respective Commitment
Percentages a facility unused fee (the “Unused Fee”) calculated by multiplying
the Unused Fee Percentage applicable to such day, calculated as a per diem rate,
times the excess of the Total Commitment over the outstanding principal amount
of Revolving Credit Loans, Swing Loans and the face amount of Letters of Credit
Outstanding on such day. The Unused Fee shall be payable quarterly in arrears on
the first (1st) day of each calendar quarter for the immediately preceding
calendar quarter or portion thereof, and on any earlier date on which the
Commitments shall be reduced or shall terminate as provided in §2.10, with a
final payment on the Maturity Date.

 

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§2.4 Reduction and Termination of the Commitments. The Borrower shall have the
right at any time and from time to time upon five (5) Business Days’ prior
written notice to the Agent to reduce by $5,000,000.00 or an integral multiple
of $1,000,000.00 in excess thereof or to terminate entirely the Commitments,
whereupon the Commitments of the Lenders shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated, any such termination or reduction to
be without penalty except as otherwise set forth in §4.7; provided, however,
that no such termination or reduction shall be permitted if, after giving effect
thereto, the sum of Outstanding Revolving Credit Loans, the Outstanding Swing
Loans and the Letter of Credit Liabilities would exceed the Commitments of the
Lenders as so terminated or reduced. The Commitments shall also be reduced as
provided in §3.2(cd) and (e). Promptly after receiving any notice from the
Borrower delivered pursuant to this §2.4, the Agent will notify the Lenders of
the substance thereof. Any reduction of the Commitments shall also result in a
proportionate reduction (rounded to the next lowest integral multiple of
$100,000.00) in the maximum amount of Swing Loans and Letters of Credit. Upon
the effective date of any such reduction or termination, the Borrower shall pay
to the Agent for the respective accounts of the Lenders the full amount of any
fee under §2.3 then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.

 

  §2.5

Swing Loan Commitment.

(a) Subject to the terms and conditions set forth in this Agreement, the Swing
Loan Lender agrees to lend to the Borrower (the “Swing Loans”), and the Borrower
may borrow (and repay and reborrow) from time to time between the Closing Date
and the date which is five (5) Business Days prior to the Maturity Date upon
notice by the Borrower to the Swing Loan Lender given in accordance with this
§2.5, such sums as are requested by the Borrower for the purposes set forth in
§2.9 in an aggregate principal amount at any one time outstanding not exceeding
the Swing Loan Commitment; provided that in all events (i) no Default or Event
of Default shall have occurred and be continuing; and (ii) the outstanding
principal amount of the Revolving Credit Loans and Swing Loans (after giving
effect to all amounts requested) plus Letter of Credit Liabilities shall not at
any time exceed the Total Commitment. Notwithstanding anything to the contrary
contained in this §2.5, the Swing Loan Lender shall not be obligated to make any
Swing Loan at a time when any other Lender is a Defaulting Lender, unless the
Swing Loan Lender is satisfied that the participation therein will otherwise be
fully allocated to the Lenders that are Non-Defaulting Lenders consistent with
§2.13(c) and the Defaulting Lender shall not participate therein, except to the
extent the Swing Loan Lender has entered into arrangements with the Borrower or
such Defaulting Lender that are satisfactory to the Swing Loan Lender in its
good faith determination to eliminate the Swing Loan Lender’s Fronting Exposure
with respect to any such Defaulting Lender, including the delivery of cash
collateral. Swing Loans shall constitute “Revolving Credit Loans” for all
purposes hereunder. The funding of a Swing Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set forth
in §§10 and 11 have been satisfied on the date of such funding. The Swing Loan
Lender may assume that the conditions in §§10 and 11 have been satisfied unless
the Swing Loan Lender has received written notice from a Lender that such
conditions have not been satisfied. Each Swing Loan shall be due and payable
within one (1) Business Day of demand by Agent but in any event no later than
five (5) Business Days of the date such Swing Loan was provided and the Borrower
hereby agrees (to the extent not repaid as contemplated by §2.5(d)) to repay
each Swing Loan on or before the date that is five (5) Business Days from the
date such Swing Loan was provided. A Swing Loan may not be refinanced with
another Swing Loan.

 

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(b) The Swing Loans shall be evidenced by a separate promissory note of the
Borrower in substantially the form of Exhibit C hereto (the “Swing Loan Note”),
dated the date of this Agreement and completed with appropriate insertions. The
Swing Loan Note shall be payable to the order of the Swing Loan Lender in the
principal face amount equal to the Swing Loan Commitment, or, if less, the
outstanding amount of all Swing Loans, and shall be payable as set forth below.
The Borrower irrevocably authorizes the Swing Loan Lender to make or cause to be
made, at or about the time of the Drawdown Date of any Swing Loan or at the time
of receipt of any payment of principal thereof, an appropriate notation on the
Swing Loan Lender’s Record reflecting the making of such Swing Loan or (as the
case may be) the receipt of such payment. The outstanding amount of the Swing
Loans set forth on the Swing Loan Lender’s Record shall be prima facie evidence
of the principal amount thereof owing and unpaid to the Swing Loan Lender, but
the failure to record, or any error in so recording, any such amount on the
Swing Loan Lender’s Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under the Swing Loan Note to make payments of
principal of or interest on any Swing Loan Note when due.

(c) The Borrower shall request a Swing Loan by delivering to the Swing Loan
Lender a Loan Request executed by an Authorized Officer no later than 11:00 a.m.
(Cleveland time) on the requested Drawdown Date specifying the amount of the
requested Swing Loan (which shall be in the minimum amount of $1,000,000.00 or
an integral multiple of $250,000.00 in excess thereof) and providing the wire
instructions for the delivery of the Swing Loan proceeds. The Loan Request shall
also contain the statements and certifications required by §2.7(a) and (b). Each
such Loan Request shall be irrevocable and binding on the Borrower and shall
obligate the Borrower to accept such Swing Loan on the Drawdown Date.
Notwithstanding anything herein to the contrary, a Swing Loan shall be a Base
Rate Loan and shall bear interest at the Base Rate plus the Applicable Margin.
The proceeds of the Swing Loan will be disbursed by wire by the Swing Loan
Lender to the Borrower no later than 1:00 p.m. (Cleveland time).

(d) The Swing Loan Lender shall, within two (2) Business Days after the Drawdown
Date with respect to such Swing Loan, request each Lender to make a Revolving
Credit Loan pursuant to §2.1 in an amount equal to such Lender’s Commitment
Percentage of the amount of the Swing Loan outstanding on the date such notice
is given. In the event that the Borrower does not notify the Agent in writing
otherwise on or before noon (Cleveland Time) on the Business Day of the Drawdown
Date with respect to such Swing Loan, the Agent shall notify the Lenders that
such Loan shall be a LIBOR Rate Loan with an Interest Period of one (1) month,
provided that the making of such LIBOR Rate Loan will not be in contravention of
any other provision of this Agreement, or if the making of a LIBOR Rate Loan
would be in contravention of this Agreement, then such notice shall indicate
that such loan shall be a Base Rate Loan. The Borrower hereby irrevocably
authorizes and directs the Swing Loan Lender to so act on its behalf, and agrees
that any amount advanced to the Agent for the benefit of the Swing Loan Lender
pursuant to this §2.5(d) shall be considered a Revolving Credit Loan pursuant to
§2.1. Unless any of the events described in §§12.1(g), 12.1(h) or 12.1(i) shall
have occurred (in which event the procedures of §2.5(e) shall apply), each
Lender shall make the proceeds of its Revolving Credit Loan available

 

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to the Swing Loan Lender for the account of the Swing Loan Lender at the Agent’s
Head Office prior to 12:00 noon (Cleveland time) in funds immediately available
no later than one (1) Business Day after the date such request was made by the
Swing Line Lender just as if the Lenders were funding directly to the Borrower,
so that thereafter such Obligations shall be evidenced by the Revolving Credit
Notes. The proceeds of such Revolving Credit Loan shall be immediately applied
to repay the Swing Loans.

(e) If for any reason a Swing Loan cannot be refinanced by a Revolving Credit
Loan pursuant to §2.5(d), each Lender will, on the date such Revolving Credit
Loan pursuant to §2.5(d) was to have been made, purchase an undivided
participation interest in the Swing Loan in an amount equal to its Commitment
Percentage of such Swing Loan. Each Lender will immediately transfer to the
Swing Loan Lender in immediately available funds the amount of its participation
and upon receipt thereof the Swing Loan Lender will deliver to such Lender a
Swing Loan participation certificate dated the date of receipt of such funds and
in such amount.

(f) Whenever at any time after the Swing Loan Lender has received from any
Lender such Lender’s participation interest in a Swing Loan, the Swing Loan
Lender receives any payment on account thereof, the Swing Loan Lender will
distribute to such Lender its participation interest in such amount
(appropriately adjusted in the case of interest payments to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded); provided, however, that in the event that such payment received by the
Swing Loan Lender is required to be returned, such Lender will return to the
Swing Loan Lender any portion thereof previously distributed by the Swing Loan
Lender to it.

(g) Each Lender’s obligation to fund a Loan as provided in §2.5(d) or to
purchase participation interests pursuant to §2.5(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (a) any setoff, counterclaim, recoupment, defense or other right
which such Lender or the Borrower may have against the Swing Loan Lender, the
Borrower or anyone else for any reason whatsoever; (b) the occurrence or
continuance of a Default or an Event of Default; (c) any adverse change in the
condition (financial or otherwise) of REIT or any of its Subsidiaries; (d) any
breach of this Agreement or any of the other Loan Documents by the Borrower or
any Guarantor or any Lender; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. Any portions of a
Swing Loan not so purchased or converted may be treated by the Agent and the
Swing Loan Lender as against such Lender as a Revolving Credit Loan which was
not funded by the non-purchasing Lender, thereby making such Lender a Defaulting
Lender. Each Swing Loan, once so sold or converted, shall cease to be a Swing
Loan for the purposes of this Agreement, but shall be a Revolving Credit Loan
made by each Lender under its Commitment.

 

  §2.6

Interest on Loans.

(a) Each Base Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the date on which such Base Rate Loan is
repaid or converted to a LIBOR Rate Loan at the rate per annum equal to the sum
of the Base Rate plus the Applicable Margin.

 

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(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of each Interest Period with
respect thereto at the rate per annum equal to the sum of LIBOR determined for
such Interest Period plus the Applicable Margin.

(c) The Borrower promises to pay interest on each Loan in arrears on each
Interest Payment Date with respect thereto.

(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other
Type as provided in §4.1.

 

  §2.7

Requests for Revolving Credit Loans. The Borrower shall give to the Agent
written notice executed by an Authorized Officer in the form of Exhibit D hereto
(or telephonic notice confirmed in writing in the form of Exhibit D hereto) of
each Revolving Credit Loan requested hereunder (a “Loan Request”) by 11:00 a.m.
(Cleveland time) one (1) Business Day prior to the proposed Drawdown Date with
respect to Base Rate Loans and three (3) Business Days prior to the proposed
Drawdown Date with respect to LIBOR Rate Loans. Each such notice shall specify
with respect to the requested Revolving Credit Loan the proposed principal
amount of such Revolving Credit Loan, the Type of Revolving Credit Loan, the
initial Interest Period (if applicable) for such Revolving Credit Loan and the
Drawdown Date, the Drawdown Date, the intended use of the funds (which shall be
permitted by this Agreement) and a reconciliation to the Approved Budget through
the date of the requested advance, for the balance of the calendar year and for
the next four (4) calendar quarters (which as for the next four (4) calendar
quarters may in part be based upon the Management Projections). In the event
that a Liquidity Trigger Event has occurred, Borrower shall also deliver as part
of the Loan Request (a) the specific items for which such advance is requested
and the amount thereof, (b) an identification of where such requested items fit
within the waterfall set forth in §7.23(d), and (c) evidence satisfactory to the
Agent that all other items of higher priority set forth in the waterfall in
§7.23(d) have been paid for the month to which such requested advance relates.
Promptly upon receipt of any such notice, the Agent shall notify each of the
Lenders thereof. Each such Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Lenders on the proposed Drawdown Date. Nothing herein shall
prevent the Borrower from seeking recourse against any Lender that fails to
advance its proportionate share of a requested Revolving Credit Loan as required
by this Agreement. Each Loan Request shall be (a) for a Base Rate Loan in a
minimum aggregate amount of $1,000,000.00 or an integral multiple of $250,000.00
in excess thereof; or (b) for a LIBOR Rate Loan in a minimum aggregate amount of
$1,000,000.00 or an integral multiple of $250,000.00 in excess thereof;
provided, however, that there shall be no more than six (6) LIBOR Rate Loans
outstanding at any one time.

 

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  §2.8

Funds for Loans.

(a) Not later than 1:00 p.m. (Cleveland time) on the proposed Drawdown Date of
any Revolving Credit Loans, each of the Lenders, will make available to the
Agent, at the Agent’s Head Office, in immediately available funds, the amount of
such Lender’s Commitment Percentage of the amount of the requested Loans which
may be disbursed pursuant to §2.1. Upon receipt from each such Lender of such
amount, and upon receipt of the documents required by §§10 and 11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Lenders, as
applicable, by crediting such amount to the account of the Borrower maintained
at the Agent’s Head Office. The failure or refusal of any Lender to make
available to the Agent at the aforesaid time and place on any Drawdown Date the
amount of its Commitment Percentage of the requested Loans shall not relieve any
other Lender from its several obligation hereunder to make available to the
Agent the amount of such other Lender’s Commitment Percentage of any requested
Loans, including any additional Revolving Credit Loans that may be requested
subject to the terms and conditions hereof to provide funds to replace those not
advanced by the Lender so failing or refusing.

(b) Unless the Agent shall have been notified by any Lender prior to the
applicable Drawdown Date that such Lender will not make available to the Agent
such Lender’s Commitment Percentage of a proposed Loan, the Agent may in its
discretion assume that such Lender has made such Loan available to the Agent in
accordance with the provisions of this Agreement and the Agent may, if it
chooses, in reliance upon such assumption make such Loan available to the
Borrower, and such Lender shall be liable to the Agent for the amount of such
advance. If such Lender does not pay such corresponding amount upon the Agent’s
demand therefor, the Agent will promptly notify the Borrower, and the Borrower
shall promptly pay such corresponding amount to the Agent. The Agent shall also
be entitled to recover from the Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the date
such corresponding amount is recovered by the Agent at a per annum rate equal to
(i) from the Borrower at the applicable rate for such Loan or (ii) from a Lender
at the Federal Funds Effective Rate plus one percent (1%).

 

  §2.9

Use of Proceeds. The Borrower will use the proceeds of the Loans solely for
(a) payment of interest and fees due under this Agreement, and (b) as permitted
in the Sixth Amendment to Credit AgreementPermitted Borrowings.

 

  §2.10

Letters of Credit.

(a) Subject to the terms and conditions set forth in this Agreement, at any time
and from time to time from the Closing Date through the day that is ninety
(90) days prior to the Maturity Date, the Issuing Lender shall issue such
Letters of Credit as the Borrower may request upon the delivery of a written
request in the form of Exhibit E hereto (a “Letter of Credit Request”) to the
Issuing Lender, provided that (i) no Default or Event of Default shall have
occurred and be continuing, (ii) upon issuance of such Letter of Credit, the
Letter of Credit Liabilities shall not exceed the Letter of Credit Commitment,
(iii) in no event shall the sum of the outstanding principal amount of the
Revolving Credit Loans, Swing Loans and Letter of Credit Liabilities (after
giving effect to any requested Letters of Credit) exceed the Total Commitment,
(iv) the conditions set

 

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forth in §§10 and 11 shall have been satisfied, and (v) in no event shall any
amount drawn under a Letter of Credit be available for reinstatement or a
subsequent drawing under such Letter of Credit. Notwithstanding anything to the
contrary contained in this §2.10, the Issuing Lender shall not be obligated to
issue, amend, extend, renew or increase any Letter of Credit at a time when any
other Lender is a Defaulting Lender, unless the Issuing Lender is satisfied that
the participation therein will otherwise be fully allocated to the Lenders that
are Non-Defaulting Lenders consistent with §2.13(c) and the Defaulting Lender
shall have no participation therein, except to the extent the Issuing Lender has
entered into arrangements with the Borrower or such Defaulting Lender which are
satisfactory to the Issuing Lender in its good faith determination to eliminate
the Issuing Lender’s Fronting Exposure with respect to any such Defaulting
Lender, including the delivery of cash collateral. The Issuing Lender may assume
that the conditions in §§10 and 11 have been satisfied unless it receives
written notice from a Lender that such conditions have not been satisfied. Each
Letter of Credit Request shall be executed by an Authorized Officer of the
Borrower. The Issuing Lender shall be entitled to conclusively rely on such
Person’s authority to request a Letter of Credit on behalf of the Borrower. The
Issuing Lender shall have no duty to verify the authenticity of any signature
appearing on a Letter of Credit Request. The Borrower assumes all risks with
respect to the use of the Letters of Credit. Unless the Issuing Lender and the
Required Lenders otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending one year after the date of issuance thereof (or such longer period as
Issuing Lender may approve); provided, however, that a Letter of Credit may
contain a provision providing for the automatic extension of the expiration date
in the absence of a notice of non-renewal from the Issuing Lender but in no
event shall any such provision permit the extension of the expiration date of
such Letter of Credit beyond the Maturity Date. The amount available to be drawn
under any Letter of Credit shall reduce on a dollar-for-dollar basis the amount
available to be drawn under the Total Commitment as a Revolving Credit Loan.

(b) Each Letter of Credit Request shall be submitted to the Issuing Lender at
least five (5) Business Days (or such shorter period as the Issuing Lender may
approve) prior to the date upon which the requested Letter of Credit is to be
issued. The Borrower shall further deliver to the Issuing Lender such additional
applications (which application as of the date hereof is in the form of Exhibit
F attached hereto) and documents as the Issuing Lender may require, in
conformity with the then standard practices of its letter of credit department,
in connection with the issuance of such Letter of Credit; provided that in the
event of any conflict, the terms of this Agreement shall control.

(c) The Issuing Lender shall, subject to the conditions set forth in this
Agreement, issue the Letter of Credit on or before five (5) Business Days
following receipt of the documents last due pursuant to §2.10(b). Each Letter of
Credit shall be in form and substance reasonably satisfactory to the Issuing
Lender in its reasonable discretion.

(d) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have
purchased a participation therein from the Issuing Lender in an amount equal to
its respective Commitment Percentage of the amount of such Letter of Credit. No
Lender’s obligation to participate in a Letter of Credit shall be affected by
any other Lender’s failure to perform as required herein with respect to such
Letter of Credit or any other Letter of Credit.

 

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(e) Upon the issuance of each Letter of Credit, the Borrower shall pay to the
Issuing Lender (i) for its own account, a Letter of Credit fronting fee
calculated at the rate equal to one-eighth of one percent (0.125%) per annum of
the face amount of such Letter of Credit (which fee shall not be less than
$1,500 in any event) and an administrative charge of $250, and (ii) for the
accounts of the Lenders (including the Issuing Lender) in accordance with their
respective percentage shares of participation in such Letter of Credit, a Letter
of Credit fee calculated at the rate per annum equal to the Applicable Margin
then applicable to LIBOR Rate Loans on the face amount of such Letter of Credit.
Such fees shall be payable in quarterly installments in arrears with respect to
each Letter of Credit on the first day of each calendar quarter following the
date of issuance and continuing on each quarter or portion thereof thereafter,
as applicable, or on any earlier date on which the Commitments shall terminate
and on the expiration or return of any Letter of Credit. In addition, the
Borrower shall pay to the Issuing Lender for its own account within five
(5) days of demand of the Issuing Lender the standard issuance, documentation
and service charges for Letters of Credit issued from time to time by the
Issuing Lender.

(f) In the event that any amount is drawn under a Letter of Credit by the
beneficiary thereof, the Borrower shall reimburse the Issuing Lender by having
such amount drawn treated as an outstanding Base Rate Loan under this Agreement
(the Borrower being deemed to have requested a Base Rate Loan on such date in an
amount equal to the amount of such drawing and such amount drawn shall be
treated as an outstanding Base Rate Loan under this Agreement) and the Agent
shall promptly notify each Lender by telecopy, email, telephone (confirmed in
writing) or other similar means of transmission, and each Lender shall promptly
and unconditionally pay to the Agent, for the Issuing Lender’s own account, an
amount equal to such Lender’s Commitment Percentage of such Letter of Credit (to
the extent of the amount drawn). If and to the extent any Lender shall not make
such amount available on the Business Day on which such draw is funded, such
Lender agrees to pay such amount to the Agent forthwith on demand, together with
interest thereon, for each day from the date on which such draw was funded until
the date on which such amount is paid to the Agent, at the Federal Funds
Effective Rate until three (3) days after the date on which the Agent gives
notice of such draw and at the Federal Funds Effective Rate plus one percent
(1%) for each day thereafter. Further, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Revolving
Credit Loans, amounts due with respect to its participations in Letters of
Credit and any other amounts due to it hereunder to the Agent to fund the amount
of any drawn Letter of Credit which such Lender was required to fund pursuant to
this §2.10(f) until such amount has been funded (as a result of such assignment
or otherwise). In the event of any such failure or refusal, the Lenders not so
failing or refusing shall be entitled to a priority secured position for such
amounts as provided in §12.5. The failure of any Lender to make funds available
to the Agent in such amount shall not relieve any other Lender of its obligation
hereunder to make funds available to the Agent pursuant to this §2.10(f).

(g) If after the issuance of a Letter of Credit pursuant to §2.10(c) by the
Issuing Lender, but prior to the funding of any portion thereof by a Lender, for
any reason a drawing under a Letter of Credit cannot be refinanced as a
Revolving Credit Loan, each Lender will, on the date such Revolving Credit Loan
pursuant to §2.10(f) was to have been made, purchase an undivided participation
interest in the Letter of Credit in an amount equal to its Commitment Percentage
of the amount of such Letter of Credit. Each Lender will immediately transfer to
the Issuing Lender in immediately available funds the amount of its
participation and upon receipt thereof the Issuing Lender will deliver to such
Lender a Letter of Credit participation certificate dated the date of receipt of
such funds and in such amount.

 

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(h) Whenever at any time after the Issuing Lender has received from any Lender
any such Lender’s payment of funds under a Letter of Credit and thereafter the
Issuing Lender receives any payment on account thereof, then the Issuing Lender
will distribute to such Lender its participation interest in such amount
(appropriately adjusted in the case of interest payments to reflect the period
of time during which such Lender’s participation interest was outstanding and
funded); provided, however, that in the event that such payment received by the
Issuing Lender is required to be returned, such Lender will return to the
Issuing Lender any portion thereof previously distributed by the Issuing Lender
to it.

(i) The issuance of any supplement, modification, amendment, renewal or
extension to or of any Letter of Credit shall be treated in all respects the
same as the issuance of a new Letter of Credit.

(j) The Borrower assumes all risks of the acts, omissions, or misuse of any
Letter of Credit by the beneficiary thereof. Neither the Agent, the Issuing
Lender nor any Lender will be responsible for (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or
any document submitted by any party in connection with the issuance of any
Letter of Credit, even if such document should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of any beneficiary of any Letter of Credit to comply fully with the conditions
required in order to demand payment under a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telecopy, email or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document or draft required by or from a beneficiary in order to make a
disbursement under a Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent or any Lender. None of the foregoing
will affect, impair or prevent the vesting of any of the rights or powers
granted to the Agent, the Issuing Lender or the Lenders hereunder. In
furtherance and extension and not in limitation or derogation of any of the
foregoing, any act taken or omitted to be taken by the Agent, the Issuing Lender
or the other Lenders in good faith will be binding on the Borrower and will not
put the Agent, the Issuing Lender or the other Lenders under any resulting
liability to the Borrower; provided nothing contained herein shall relieve the
Issuing Lender for liability to the Borrower arising as a result of the gross
negligence or willful misconduct of the Issuing Lender as determined by a court
of competent jurisdiction after the exhaustion of all applicable appeal periods.

 

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  §2.11

Increase in Total Commitment[Intentionally Omitted].

(a) Provided that no Default or Event of Default has occurred and is continuing,
subject to the terms and conditions set forth in this §2.11, the Borrower shall
have the option at any time and from time to time prior to the Maturity Date to
request an increase in the Total Commitment by an amount of not more than
$34,080,000.00 by giving written notice to the Agent (an “Increase Notice”; and
the amount of such requested increase is the “Commitment Increase”). Upon
receipt of any Increase Notice, the Agent shall consult with KCM and shall
notify the Borrower of the amount of the facility fees to be paid to any Lenders
who provide an additional Commitment in connection with such increase in
addition to the fees to be paid pursuant to the Agreement Regarding Fees. If the
Borrower agrees to pay the facility fees so determined, the Agent shall send a
notice to all Lenders (the “Additional Commitment Request Notice”) informing
them of the Borrower’s request to increase the Total Commitment and of the
facility fees to be paid with respect thereto. Each Lender who desires to
provide an additional Commitment upon such terms shall provide Agent with a
written commitment letter specifying the amount of the additional Commitment
which it is willing to provide prior to such deadline as may be specified in the
Additional Commitment Request Notice. If the requested increase is
oversubscribed then the Agent and KCM shall allocate the Commitment Increase
among the Lenders who provide such commitment letters on such basis as the Agent
and KCM, shall determine in their sole discretion. If the additional Commitments
so provided are not sufficient to provide the full amount of the Commitment
Increase requested by the Borrower, then the Agent, KCM, or the Borrower may,
but shall not be obligated to, invite one or more banks or lending institutions
(which banks or lending institutions shall be acceptable to Agent, KCM, and the
Borrower) to become a Lender and provide an additional Commitment. The Agent
shall provide all Lenders with a notice setting forth the amount, if any, of the
additional Commitment to be provided by each Lender and the revised Commitment
Percentages which shall be applicable after the effective date of the Commitment
Increase specified therein (the “Commitment Increase Date”). In no event shall
any Lender be obligated to provide an additional Commitment.

(b) On any Commitment Increase Date the outstanding principal balance of the
Revolving Credit Loans shall be reallocated among the Lenders such that after
the applicable Commitment Increase Date the outstanding principal amount of
Revolving Credit Loans owed to each Lender shall be equal to such Lender’s
Commitment Percentage (as in effect after the applicable Commitment Increase
Date) of the outstanding principal amount of all Revolving Credit Loans. The
participation interests of the Lenders in Swing Loans and shall be similarly
adjusted. On any Commitment Increase Date, those Lenders whose Commitment
Percentage is increasing shall advance the funds to the Agent and the funds so
advanced shall be distributed among the Lenders whose Commitment Percentage is
decreasing as necessary to accomplish the required reallocation of the
outstanding Revolving Credit Loans. The funds so advanced shall be Base Rate
Loans until converted to LIBOR Rate Loans which are allocated among all Lenders
based on their Commitment Percentages.

(c) Upon the effective date of each increase in the Total Commitment pursuant to
this §2.11, the Agent may unilaterally revise Schedule 1.1 to reflect the name
and address, Commitment and Commitment Percentage of each Lender following such
increase and the Borrower shall execute and deliver to the Agent new Revolving
Credit Notes for each Lender whose Commitment has changed so that the principal
amount of such Lender’s Revolving Credit Note shall equal its Commitment. The
Agent shall deliver such replacement Revolving Credit

 

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Note to the respective Lenders in exchange for the Revolving Credit Notes
replaced thereby which shall be surrendered by such Lenders. Such new Revolving
Credit Notes shall provide that they are replacements for the surrendered
Revolving Credit Notes and that they do not constitute a novation, shall be
dated as of the Commitment Increase Date and shall otherwise be in substantially
the form of the replaced Revolving Credit Notes. In connection with the issuance
of any new Revolving Credit Notes pursuant to this §2.11(c), the Borrower shall
deliver an opinion of counsel, addressed to the Lenders and the Agent, relating
to the due authorization, execution and delivery of such new Revolving Credit
Notes the enforceability thereof, in form and substance substantially similar to
the opinion delivered in connection with the first disbursement under this
Agreement. The surrendered Revolving Credit Notes shall be canceled and returned
to the Borrower.

(d) Notwithstanding anything to the contrary contained herein, the obligation of
the Agent and the Lenders to increase the Total Commitment pursuant to this
§2.11 shall be conditioned upon satisfaction of the following conditions
precedent which must be satisfied prior to the effectiveness of any increase of
the Total Commitment:

(i) Payment of Activation Fee. The Borrower shall pay (A) to the Agent and KCM
those fees described in and contemplated by the Agreement Regarding Fees with
respect to the applicable Commitment Increase, and (B) to KCM such facility fees
as the Lenders who are providing an additional Commitment may require to
increase the aggregate Commitment, which fees shall, when paid, be fully earned
and non-refundable under any circumstances. KCM shall pay to the Lenders
acquiring the increased Commitment certain fees pursuant to their separate
agreement; and

(ii) No Default. On the date any Increase Notice is given and on the date such
increase becomes effective, both immediately before and after the Total
Commitment is increased, there shall exist no Default or Event of Default; and

(iii) Representations True. The representations and warranties made by the
Borrower in the Loan Documents or otherwise made by or on behalf of the Borrower
in connection therewith or after the date thereof shall have been true and
correct in all material respects when made and shall also be true and correct in
all material respects on the date of such Increase Notice and on the date the
Total Commitment is increased, both immediately before and after the Total
Commitment is increased, except to the extent of changes resulting from
transactions permitted by the Loan Documents (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct only as of such specified date);
and

(iv) Additional Documents and Expenses. The Borrower shall execute and deliver
to Agent and the Lenders such additional documents (including, without
limitation, amendments to the Security Documents), instruments, certifications
and opinions as the Agent may reasonably require in its sole and absolute
discretion (including, without limitation, in the case of the Borrower, a
Compliance Certificate and Borrowing Base Certificate, demonstrating compliance
with all covenants, representations and warranties set forth in the Loan
Documents after giving effect to the increase) and the Borrower shall pay the
cost of any updated UCC searches, all recording costs and fees, and any and all
intangible taxes or other documentary or mortgage taxes, assessments or charges
or any similar fees, taxes or expenses which are required to be paid in
connection with such increase; and

 

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(v) Other. The Borrower shall satisfy such other conditions to such increase as
Agent may require in its reasonable discretion.

 

  §2.12

Extension of Maturity Date[Intentionally Omitted].

(a) The Borrower shall have the one-time right and option to extend the Maturity
Date to October 1, 2021 upon satisfaction of the following conditions precedent,
which must be satisfied prior to the effectiveness of any extension of the
Maturity Date:

(i) Extension Request. The Borrower shall deliver written notice of such request
(the “Extension Request”) to the Agent not earlier than the date which is one
hundred twenty (120) days and not later than the date which is sixty (60) days
prior to the Maturity Date (as determined without regard to such extension). Any
such Extension Request shall be irrevocable and binding on the Borrower.

(ii) Payment of Extension Fee. The Borrower shall pay to the Agent for the pro
rata accounts of the Lenders in accordance with their respective Commitments an
extension fee in an amount equal to forty (40) basis points on the Total
Commitment in effect on the Maturity Date (as determined without regard to such
extension), which fee shall, when paid, be fully earned and non-refundable under
any circumstances.

(iii) No Default. On the date the Extension Request is given and on the Maturity
Date (as determined without regard to such extension) there shall exist no
Default or Event of Default.

(iv) Representations and Warranties. The representations and warranties made by
the Borrower and the Guarantors in the Loan Documents or otherwise made by or on
behalf of the Borrower and the Guarantors in connection therewith or after the
date thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the date the
Extension Request is given and on the Maturity Date (as determined without
regard to such extension), except to the extent of changes resulting from
transactions permitted by the Loan Documents (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct only as of such specified date).

(v) Pro Forma Covenant Compliance. Borrower shall have delivered to Agent
evidence reasonably satisfactory to Agent that Borrower will be in pro forma
compliance with §9.1 and the other covenants set forth in §9 immediately after
giving effect to the extension.

(vi) Appraisals. At the option of Agent, Agent shall have obtained at Borrower’s
expense new Appraisals or an update to the existing Appraisals of the Borrowing
Base Properties and determined the current Appraised Value of the Borrowing Base
Properties.

 

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(vii) Additional Documents and Expenses. The Borrower and the Guarantors shall
execute and deliver to Agent and Lenders such additional consents and
affirmations and other documents (including, without limitation, amendments to
the Security Documents) as the Agent may reasonably require, and the Borrower
shall pay the cost of any title endorsement or update thereto or any update of
UCC searches, recordings costs and fees, and any and all intangible taxes or
other documentary or mortgage taxes, assessments or charges or any similar fees,
taxes or expenses which are required to be paid in connection with such
extension.

(b) In the event that the Maturity Date has been extended as provided in
§2.12(a), the Borrower shall have the one-time right and option to extend the
Maturity Date to March 1, 2022 upon satisfaction of the following conditions
precedent, which must be satisfied prior to the effectiveness of any extension
of the Maturity Date:

(i) Extension Request. The Borrower shall deliver the Extension Request to the
Agent not earlier than the date which is one hundred twenty (120) days and not
later than the date which is sixty (60) days prior to the Maturity Date (as
determined without regard to such extension). Any such Extension Request shall
be irrevocable and binding on the Borrower.

(ii) Payment of Extension Fee. The Borrower shall pay to the Agent for the pro
rata accounts of the Lenders in accordance with their respective Commitments an
extension fee in an amount equal to fifty (50) basis points on the Total
Commitment in effect on the Maturity Date (as determined without regard to such
extension), which fee shall, when paid, be fully earned and non-refundable under
any circumstances.

(iii) No Default. On the date the Extension Request is given and on the Maturity
Date (as determined without regard to such extension) there shall exist no
Default or Event of Default.

(iv) Representations and Warranties. The representations and warranties made by
the Borrower and the Guarantors in the Loan Documents or otherwise made by or on
behalf of the Borrower and the Guarantors in connection therewith or after the
date thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the date the
Extension Request is given and on the Maturity Date (as determined without
regard to such extension), except to the extent of changes resulting from
transactions permitted by the Loan Documents (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct only as of such specified date).

(v) Pro Forma Covenant Compliance. Borrower shall have delivered to Agent
evidence reasonably satisfactory to Agent that Borrower will be in pro forma
compliance with §9.1 and the other covenants set forth in §9 immediately after
giving effect to the extension.

(vi) Appraisals. If Agent has not obtained an updated Appraisal pursuant to
§2.12(a), then at Agent’s option, Agent shall have obtained at Borrower’s
expense new Appraisals or an update to the existing Appraisals of the Borrowing
Base Properties and determined the current Appraised Value of the Borrowing Base
Properties.

 

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(vii) Additional Documents and Expenses. The Borrower and the Guarantors shall
execute and deliver to Agent and Lenders such additional consents and
affirmations and other documents (including, without limitation, amendments to
the Security Documents) as the Agent may reasonably require, and the Borrower
shall pay the cost of any title endorsement or update thereto or any update of
UCC searches, recordings costs and fees, and any and all intangible taxes or
other documentary or mortgage taxes, assessments or charges or any similar fees,
taxes or expenses which are required to be paid in connection with such
extension.

 

  §2.13

Defaulting Lenders.

(a) If for any reason any Lender shall be a Defaulting Lender, then, in addition
to the rights and remedies that may be available to the Agent or the Borrower
under this Agreement or Applicable Law, such Defaulting Lender’s right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Agent or to be taken
into account in the calculation of the Required Lenders, all of the Lenders or
affected Lenders, shall, except as specifically provided in §27, be suspended
during the pendency of such failure or refusal. If a Lender is a Defaulting
Lender because it has failed to make timely payment to the Agent of any amount
required to be paid to the Agent hereunder (without giving effect to any notice
or cure periods), in addition to other rights and remedies which the Agent or
the Borrower may have under the immediately preceding provisions or otherwise,
the Agent shall be entitled (i) to collect interest from such Defaulting Lender
on such delinquent payment for the period from the date on which the payment was
due until the date on which the payment is made at the Federal Funds Effective
Rate plus one percent (1%), (ii) to withhold or setoff and to apply in
satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest. Any amounts received by the Agent in respect of a
Defaulting Lender’s Loans shall be applied as set forth in §2.13(d).

(b) Any Non-Defaulting Lender may, but shall not be obligated, in its sole
discretion, to acquire all or a portion of a Defaulting Lender’s Commitments.
Any Lender desiring to exercise such right shall give written notice thereof to
the Agent and the Borrower no sooner than two (2) Business Days and not later
than five (5) Business Days after such Defaulting Lender became a Defaulting
Lender. If more than one Lender exercises such right, each such Lender shall
have the right to acquire an amount of such Defaulting Lender’s Commitments in
proportion to the Commitments of the other Lenders exercising such right. If
after such fifth Business Day, the Lenders have not elected to purchase all of
the Commitments of such Defaulting Lender, then the Borrower (so long as no
Default or Event of Default exists) or the Required Lenders may, by giving
written notice thereof to the Agent, such Defaulting Lender and the other
Lenders, demand that such Defaulting Lender assign its Commitments to an
eligible assignee subject to and in accordance with the provisions of §18.1 for
the purchase price provided for below. No party hereto shall have any obligation
whatsoever to initiate any such replacement or to assist in finding an eligible
assignee. Upon any such purchase or assignment, and any such demand with respect
to which the conditions specified in §18.1 have been satisfied, the Defaulting
Lender’s interest in the Loans and its rights hereunder (but not its liability
in respect thereof or under the Loan Documents

 

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or this Agreement to the extent the same relate to the period prior to the
effective date of the purchase) shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement. The purchase price
for the Commitments of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender plus any accrued but unpaid interest thereon and accrued but
unpaid fees. Prior to payment of such purchase price to a Defaulting Lender, the
Agent shall apply against such purchase price any amounts retained by the Agent
pursuant to §2.13(d).

(c) During any period in which there is a Defaulting Lender, all or any part of
such Defaulting Lender’s obligation to acquire, refinance or fund participations
in Letters of Credit pursuant to §2.10(g) or Swing Loans pursuant to §2.5(e)
shall be reallocated among the Lenders that are Non-Defaulting Lenders in
accordance with their respective Commitment Percentages (computed without giving
effect to the Commitment of such Defaulting Lender; provided that (i) each such
reallocation shall be given effect only if, at the date the applicable Lender
becomes a Defaulting Lender, no Default or Event of Default exists, (ii) the
conditions set forth in §§10 and 11 are satisfied at the time of such
reallocation (and, unless the Borrower shall have notified the Agent at such
time, the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at the time), (iii) the representations and warranties
in the Loan Documents shall be true and correct in all material respects on and
as of the date of such reallocation with the same effect as though made on and
as of such date, except to the extent of changes resulting from transactions
permitted by the Loan Documents (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date), and
(iv) the aggregate obligation of each Lender that is a Non-Defaulting Lender to
acquire, refinance or fund participations in Letters of Credit and Swing Loans
shall not exceed the positive difference, if any, of (a) the Commitment of that
Non-Defaulting Lender minus (b) the sum of (1) the aggregate outstanding
principal amount of the Revolving Credit Loans of that Lender plus (2) such
Lender’s pro rata portion in accordance with its Commitment Percentage of
outstanding Letter of Credit Liabilities and Swing Loans. Subject to §34, no
reallocation hereunder shall constitute a waiver or release of any claim of any
party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.

(d) Any payment of principal, interest, fees or other amounts received by the
Agent for the account of such Defaulting Lender (whether voluntary or mandatory,
at maturity, or otherwise, and including any amounts made available to the Agent
for the account of such Defaulting Lender pursuant to §13), shall be applied at
such time or times as may be determined by the Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Agent (other than
with respect to Letter of Credit Liabilities) hereunder; second, to the payment
of any amounts owing by such Defaulting Lender to the Issuing Lender (with
respect to Letter of Credit Liabilities) and/or the Swing Loan Lender hereunder;
third, if so determined by the Agent or requested by the Issuing Lender or the
Swing Loan Lender, to be held as cash collateral for future funding obligations
of such Defaulting Lender of any participation in any Letter of Credit or Swing
Loan; fourth, as the Borrower may request (so long as no Default or

 

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Event of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Agent; fifth, if so determined by the Agent and
the Borrower, to be held in a non-interest bearing deposit account and released
pro rata in order to (x) satisfy obligations of such Defaulting Lender to fund
Loans or participations under this Agreement and (y) be held as cash collateral
for future funding obligations of such Defaulting Lender of any participation in
any Letter of Credit or Swing Loan; sixth, to the payment of any amounts owing
to the Agent or the Lenders (including the Issuing Lender and the Swing Loan
Lender) as a result of any judgment of a court of competent jurisdiction
obtained by the Agent or any Lender (including the Issuing Lender and the Swing
Loan Lender) against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Borrower as a result of any judgment of a court of competent jurisdiction
obtained by the Borrower against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (i) such payment is a payment of the principal
amount of any Revolving Credit Loans or funded participations in Letters of
Credit or Swing Loans in respect of which such Defaulting Lender has not fully
funded its appropriate share and (ii) such Revolving Credit Loans or funded
participations in Letters of Credit or Swing Loans were made at a time when the
conditions set forth in §§10 and 11, to the extent required by this Agreement,
were satisfied or waived, such payment shall be applied solely to pay the
Revolving Credit Loans of, and funded participations in Letters of Credit or
Swing Loans owed to, all Non-Defaulting Lenders on a pro rata basis until such
time as all Revolving Credit Loans and funded and unfunded participations in
Letters of Credit and Swing Loans are held by the Lenders pro rata in accordance
with their Commitment Percentages without regard to §2.13(c), prior to being
applied to the payment of any Revolving Credit Loans of, or funded
participations in Letters of Credit or Swing Loans owed to, such Defaulting
Lender. Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post cash collateral pursuant to this §2.13(d) shall be deemed paid
to and redirected by such Defaulting Lender, and each Lender irrevocably
consents hereto, and to the extent allocated to the repayment of principal of
the Loan, shall not be considered outstanding principal under this Agreement.

(e) Within five (5) Business Days of demand by the Issuing Lender or the Swing
Loan Lender from time to time, the Borrower shall deliver to the Agent for the
benefit of the Issuing Lender and the Swing Loan Lender cash collateral in an
amount sufficient to cover all Fronting Exposure with respect to the Issuing
Lender and the Swing Loan Lender (after giving effect to §§2.5(a), 2.10(a) and
2.13(c)) on terms satisfactory to the Issuing Lender and/or the Swing Loan
Lender in its good faith determination (and such cash collateral shall be in
Dollars). Any such cash collateral shall be deposited in the Collateral Account
as collateral (solely for the benefit of the Issuing Lender and/or the Swing
Loan Lender) for the payment and performance of each Defaulting Lender’s pro
rata portion in accordance with their respective Commitment Percentages of
outstanding Letter of Credit Liabilities and Swing Loans. Moneys in the
Collateral Account deposited pursuant to this §2.13(e) shall be applied by the
Agent to reimburse the Issuing Lender and/or the Swing Loan Lender immediately
for each Defaulting Lender’s pro rata portion in accordance with their
respective Commitment Percentages of any funding obligation with respect to a
Letter of Credit or Swing Loan which has not otherwise been reimbursed by the
Borrower or such Defaulting Lender.

 

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(f) (i) Each Lender that is a Defaulting Lender shall not earn and shall not be
entitled to receive any Unused Fee pursuant to §2.3 for any period during which
that Lender is a Defaulting Lender.

(ii) Each Lender that is a Defaulting Lender shall not earn and shall not be
entitled to receive Letter of Credit fees pursuant to §2.10(e) for any period
during which that Lender is a Defaulting Lender.

(iii) With respect to any Unused Fee or Letter of Credit fees not required to be
paid to any Defaulting Lender pursuant to clause (i) or (ii) above, the Borrower
shall (x) pay to each Non-Defaulting Lender that is a Lender that portion of any
such fee otherwise payable to such Defaulting Lender with respect to such
Defaulting Lender’s participation in Letter of Credit Liabilities or Swing Loans
that has been reallocated to such Non-Defaulting Lender pursuant to §2.13(c),
(y) pay to the Issuing Lender and the Swing Loan Lender the amount of any such
fee otherwise payable to such Defaulting Lender to the extent allocable to the
Issuing Lender’s or the Swing Loan Lender’s Fronting Exposure to such Defaulting
Lender and (z) not be required to pay any remaining amount of any such fee.

(g) If the Borrower (so long as no Default or Event of Default exists) and the
Agent agree in writing in their sole discretion that a Defaulting Lender should
no longer be deemed to be a Defaulting Lender, the Agent will so notify the
parties hereto, whereupon as of the date specified in such notice and subject to
any conditions set forth therein (which may include arrangements with respect to
any cash collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Agent may determine to be necessary to cause the Loans and funded and
unfunded participations in Letters of Credit and Swing Loans to be held on a pro
rata basis by the Lenders in accordance with their Commitments (without giving
effect to §2.13(c)), whereupon such Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while such Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from such Lender’s having been a Defaulting Lender.

 

§3.

REPAYMENT OF THE LOANS.

 

  §3.1

Stated Maturity. The Borrower promises to pay on the Maturity Date and there
shall become absolutely due and payable on the Maturity Date all of the
Revolving Credit Loans, Swing Loans and other Letter of Credit Liabilities
Outstanding on such date, together with any and all accrued and unpaid interest
thereon.

 

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  §3.2

Mandatory Prepayments; Commitment Reductions.

(a) If at any time the sum of the aggregate outstanding principal amount of the
Revolving Credit Loans, the Swing Loans and the Letter of Credit Liabilities
exceeds the lesser of (i) the Total Commitment or (ii) the amount that would
cause compliance with the covenant in §9.1, then the Borrower shall, within five
(5) Business Days of such occurrence, pay the amount of such excess to the Agent
for the respective accounts of the Lenders for application to the Revolving
Credit Loans as provided in §3.4, together with any additional amounts payable
pursuant to §4.7, except that the amount of any Swing Loans shall be paid solely
to the Swing Loan Lender.

(b) In the event there shall have occurred a casualty or Taking with respect to
any Borrowing Base Property, the Borrower shall prepay the Loans concurrently
with the date of receipt by Borrower, such Subsidiary Guarantor or the Agent of
any Insurance Proceeds or Condemnation Proceeds in respect of such casualty or
Taking to the extent required by §7.7.

(c) The Borrower shall give notice to Agent one (1) Business Days’ prior written
notice of the expected date of the occurrence of any event described in this
§3.2(c), and shall prepay the Loans within one (1) Business Day after the date
of receipt by Borrower, any Guarantor or any of their respective Subsidiaries in
an amount equal to:

(i) one hundred percent (100%) of the net proceeds of all capital events by the
REIT, the Borrower or any of their respective Subsidiaries including, without
limitation, all asset sales, refinancings and financings (secured, unsecured or
otherwise) (but excluding any Subordinate Debt), recapitalizations, equity
issuances (but excluding (A) any conversion of Subordinate Debt into common
equity of the REIT, (B) the proceeds of any issuance of common equity in
connection with a rights offering of common equity of the REIT to the extent
used to convert the Subordinate Debt of the applicable Subordinate Lender to
common equity of the REIT or to repay the Subordinate Debt as permitted by the
applicable Subordination and Standstill Agreement, (C) the proceeds of any
issuance of common equity or securities convertible into common equity (other
than Indebtedness or Subordinate Debt) to a Person other than a Subordinate
Lender permitted to be made pursuant to the agreements evidencing the applicable
Subordinate Debt (and not made as part of a rights offering), in connection with
an offering of common equity or securities convertible into common equity (other
than Indebtedness or Subordinate Debt) of the REIT to the extent promptly used
to satisfy the Subordinate Debt in full as permitted by the applicable
Subordinate Debt and Subordination and Standstill Agreement, (D) the portion of
Excess Offering Proceeds which may be used to pay the Make Whole Fee pursuant to
§8.17 and the Initial Subordination and Standstill Agreement, and (E) any
proceeds of an Equity Offering received during any period for cure of Defaults
under this Agreement) and other similar capital transactions consummated by the
REIT, the Borrower or any Subsidiary thereof. For the purposes of this §3.4(c),
net proceeds shall be an amount equal to the gross proceeds of such transaction
less payment of all usual and customary closing costs incurred in closing such
transactions and the repayment of any Indebtedness (if any) securing the subject
asset(s) (provided that for the avoidance of doubt, the provisions of §5.5 shall
govern the release of Borrowing Base Properties);

 

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(ii) fifty percent (50%) of the netgross proceeds (less reasonable expenses of
collection not previously deducted) of any “breakup fees” or other proceeds from
contractual obligations (including without limitation any such amounts received
pursuant to the Agreement and Plan of Merger dated as of July 19, 2019 by and
among NHT Operating Partnership, LLC, NHT REIT Merger Sub, LLC, NHT Operating
Partnership II, LLC, Borrower and REIT, as amended (the “Merger Agreement”),
regardless of when paid);

(iii) fifty percent (50%) of the Net Cash Flow; provided that if the Borrower,
the Guarantors and their Subsidiaries in the aggregate have in excess of
$6,000,000.00 of Unrestricted Cash and Cash Equivalents, then one hundred
percent (100%) of the Net Cash Flow shall be paid to Agent pursuant to this
clause (iii); and[Intentionally Omitted]; and

(iv) one hundred percent (100%) of the amount of Unrestricted Cash and Cash
Equivalents of Borrower, the Guarantors and their Subsidiaries which in the
aggregate is in excess of $6,000,000.00.

(d) Any prepayment pursuant to this §3.2, §3.3§3.2(b), §3.2(c)(i) or §5.5 shall
result in a dollar-for-dollar permanent reduction of the Commitments (provided
that any prepayment pursuant to §3.2(c)(i) solely as a result of a new Equity
Offering shall only result in a permanent reduction of the Commitments in an
amount equal to fifty percent (50%) of the net proceeds of such new Equity
Offering), which reduction shall be allocated to the Lenders pro rata in
accordance with their respective Commitment Percentages.

(e) If the sum of the aggregate outstanding principal amount of the Revolving
Credit Loans, the Swing Loans and the Letter of Credit Liabilities exceeds the
amount that would cause compliance with the covenant in §9.3, then the Borrower
shall, within thirty (30) days of such occurrence, pay the amount of such excess
to the Agent for the respective accounts of the Lenders for application to the
Revolving Credit Loans as provided in §3.4, together with any additional amounts
payable pursuant to §4.7.

 

  §3.3

Optional Prepayments.

(a) The Borrower shall have the right, at its election, to prepay the
outstanding amount of the Revolving Credit Loans and Swing Loans, as a whole or
in part, at any time without penalty or premium; provided, that if any
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this
§3.3 is made on a date that is not the last day of the Interest Period relating
thereto, such prepayment shall be accompanied by the payment of any amounts due
pursuant to §4.7.

(b) The Borrower shall give the Agent, no later than 10:00 a.m. (Cleveland time)
at least three (3) Business Days prior written notice of any prepayment of any
LIBOR Rate Loans, or at least one (1) Business Day prior written notice of any
prepayment of a Base Rate Loan, pursuant to this §3.3, in each case specifying
the proposed date of prepayment of the Loans and the principal amount to be
prepaid (provided that any such notice may be revoked or modified upon one
(1) day’s prior notice to the Agent). Notwithstanding the foregoing, no prior
notice shall be required for the prepayment of any Swing Loan.

 

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  §3.4

Partial Prepayments . Each prepayment of the Loans under §3.3 shall be in a
minimum amount of $500,000.00100,000.00 or an integral multiple of $100,000.00
in excess thereof. Each partial payment under §§3.2 and 3.3 shall be applied
first to the principal of any Outstanding Swing Loans, then, in the absence of
instruction by the Borrower and then to the principal of Revolving Credit Loans
(and with respect to each category of Loans, first to the principal of Base Rate
Loans, and then to the principal of LIBOR Rate Loans).

 

  §3.5

Effect of Prepayments . Amounts of the Revolving Credit Loans prepaid under
§§3.2 and 3.3 prior to the Maturity Date may not be reborrowed but only up to
the amount of the undisbursed Borrowing Availability and for Permitted
Borrowings.

 

§4.

CERTAIN GENERAL PROVISIONS.

 

  §4.1

Conversion Options.

(a) The Borrower may elect from time to time to convert any of its outstanding
Revolving Credit Loans to a Revolving Credit Loan of another Type and such
Revolving Credit Loans shall thereafter bear interest as a Base Rate Loan or a
LIBOR Rate Loan, as applicable; provided that (i) with respect to any such
conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower shall give the
Agent at least one (1) Business Day’s prior written notice of such election, and
such conversion shall only be made on the last day of the Interest Period with
respect to such LIBOR Rate Loan; (ii) with respect to any such conversion of a
Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Agent at least
three (3) LIBOR Business Days’ prior written notice of such election and the
Interest Period requested for such Loan, the principal amount of the Loan so
converted shall be in a minimum aggregate amount of $1,000,000.00 or an integral
multiple of $250,000.00 in excess thereof and, after giving effect to the making
of such Loan, there shall be no more than six (6) LIBOR Rate Loans outstanding
at any one time; and (iii) no Loan may be converted into a LIBOR Rate Loan when
any Default or Event of Default has occurred and is continuing. All or any part
of the outstanding Revolving Credit Loans of any Type may be converted as
provided herein, provided that no partial conversion shall result in a Base Rate
Loan in a principal amount of less than $1,000,000.00 or an integral multiple of
$250,000.00 or a LIBOR Rate Loan in a principal amount of less than
$1,000,000.00 or an integral multiple of $250,000.00. On the date on which such
conversion is being made, each Lender shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Domestic Lending Office
or its LIBOR Lending Office, as the case may be. Each Conversion/Continuation
Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrower.

(b) Any LIBOR Rate Loan may be continued as such Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
terms of §4.1; provided that no LIBOR Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Default or Event of
Default.

(c) In the event that the Borrower does not notify the Agent of its election
hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically
converted at the end of the applicable Interest Period to a Base Rate Loan.

 

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  §4.2

Fees. The Borrower agrees to pay to KeyBank, the Agent and KCM for their own
account certain fees for services rendered or to be rendered in connection with
the Loans as provided pursuant to the fee letter or letters among the Borrower,
KeyBank and KCM (, and the agreement regarding fees executed on or about the
date of the Ninth Amendment to Credit Agreement among Borrower, the Lenders and
KCM (collectively, the “Agreement Regarding Fees”). Without duplication, in
addition, on October 1, 2020 the Borrower shall pay to the Agent for the pro
rata accounts of all of the Lenders in accordance with their respective
Commitments an amendment fee in an amount equal to thirty (30) basis points on
the Total Commitment in effect on such date. All such fees shall be fully earned
when paid and nonrefundable under any circumstances. The Borrower agrees to pay
to Huntington for its own account certain fees for services rendered or to be
rendered in connection with the Loans as provided pursuant to the fee letter
among the Borrower and Huntington.

 

  §4.3

Funds for Payments.

(a) All payments of principal, interest, facility fees, Letter of Credit fees,
closing fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the Lenders
and the Agent, as the case may be, at the Agent’s Head Office, not later than
2:00 p.m. (Cleveland time) on the day when due, in each case in lawful money of
the United States in immediately available funds. The Agent is hereby authorized
to charge the accounts of the Borrower with KeyBank set forth on Schedule 4.3,
on the dates when the amount thereof shall become due and payable, with the
amounts of the principal of and interest on the Loans and all fees, charges,
expenses and other amounts owing to the Agent and/or the Lenders (including the
Swing Loan Lender) under the Loan Documents. Subject to the foregoing, all
payments made to the Agent on behalf of the Lenders, and actually received by
the Agent, shall be deemed received by the Lenders on the date actually received
by the Agent.

(b) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim, and free and clear of
and without deduction or withholding for any Taxes, except as required by
Applicable Law. If any Applicable Law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with Applicable Law and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower or other
applicable Guarantor shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this §4.3) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c) The Borrower and the Guarantors shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at the option of
the Agent timely reimburse it for the payment of, any Other Taxes.

 

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(d) The Borrower and the Guarantors shall jointly and severally indemnify each
Recipient, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this §4.3) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error; provided that the determinations in such
statement are made on a reasonable basis and in good faith.

(e) Each Lender shall severally indemnify the Agent, within ten (10) days after
demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but
only to the extent that the Borrower or a Guarantor has not already indemnified
the Agent for such Indemnified Taxes and without limiting the obligation of the
Borrower and the Guarantors to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of §18.4 relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such Lender, in each case, that are payable or paid by the Agent in
connection with any Loan Document, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to any Lender by the Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Agent to set off and apply any and all amounts at any time owing to such Lender
under any Loan Document or otherwise payable by the Agent to the Lender from any
other source against any amount due to the Agent under this subsection.

(f) As soon as practicable after any payment of Taxes by the Borrower or any
Guarantor to a Governmental Authority pursuant to this §4.3, the Borrower or
such Guarantor shall deliver to the Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

(g) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Agent, at the time or times reasonably requested
by the Borrower or the Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Agent as will permit such payments
to be made without withholding or at a reduced rate of withholding. In addition,
any Lender, if reasonably requested by the Borrower or the Agent, shall deliver
such other documentation prescribed by Applicable Law or reasonably requested by
the Borrower or the Agent as will enable the Borrower or the Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in the immediately
following clauses (ii)(A), (ii)(B) and (ii)(D)) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

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(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person:

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Agent
on or prior to the date on which such Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower or the Agent), an electronic copy (or an original if requested by the
Borrower or the Agent) of an executed IRS Form W-9 (or any successor form)
certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:

(I) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, an electronic copy (or an original if
requested by the Borrower or the Agent) of an executed IRS Form W-8BEN or
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

(II) an electronic copy (or an original if requested by the Borrower or the
Agent) of an executed IRS Form W-8ECI;

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit J-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN or W-8BEN-E; or

(IV) to the extent a Foreign Lender is not the beneficial owner, an electronic
copy (or an original if requested by the Borrower or the Agent) of an executed
IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-2 or
Exhibit J-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-4 on
behalf of each such direct and indirect partner;

 

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(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), an electronic copy (or an
original if requested by the Borrower or the Agent) of any other form prescribed
by Applicable Law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by Applicable Law to permit the Borrower or
the Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Agent at the time or times prescribed by
Applicable Law and at such time or times reasonably requested by the Borrower or
the Agent such documentation prescribed by Applicable Law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or the Agent as may be
necessary for the Borrower and the Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Agent in writing
of its legal inability to do so.

(h) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this §4.3 (including by the payment of additional amounts pursuant
to this §4.3), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this §4.3 with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses (including Taxes) of such indemnified party and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid over pursuant to
this subsection (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this subsection, in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
subsection the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund has not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This subsection
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it reasonably
deems confidential) to the indemnifying party or any other Person.

 

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(i) Each party’s obligations under this §4.3 shall survive the resignation or
replacement of the Agent or any assignment of rights by, or the replacement of,
a Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all obligations under any Loan Document.

(j) The obligations of the Borrower to the Lenders under this Agreement with
respect to Letters of Credit (and of the Lenders to make payments to the Issuing
Lender with respect to Letters of Credit and to the Swing Loan Lender with
respect to Swing Loans) shall be absolute, unconditional and irrevocable, and
shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances: (i) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any of the other Loan Documents; (ii) any
improper use which may be made of any Letter of Credit or any improper acts or
omissions of any beneficiary or transferee of any Letter of Credit in connection
therewith; (iii) the existence of any claim, set-off, defense or any right which
the Borrower or any of its Subsidiaries or Affiliates may have at any time
against any beneficiary or any transferee of any Letter of Credit (or persons or
entities for whom any such beneficiary or any such transferee may be acting) or
the Lenders (other than the defense of payment to the Lenders in accordance with
the terms of this Agreement) or any other person, whether in connection with any
Letter of Credit, this Agreement, any other Loan Document, or any unrelated
transaction; (iv) any draft, demand, certificate, statement or any other
documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (v) any breach of any agreement
between the Borrower or any of its Subsidiaries or Affiliates and any
beneficiary or transferee of any Letter of Credit; (vi) any irregularity in the
transaction with respect to which any Letter of Credit is issued, including any
fraud by the beneficiary or any transferee of such Letter of Credit;
(vii) payment by the Issuing Lender under any Letter of Credit against
presentation of a sight draft, demand, certificate or other document which does
not comply with the terms of such Letter of Credit, provided that such payment
shall not have constituted gross negligence or willful misconduct on the part of
the Issuing Lender as determined by a court of competent jurisdiction after the
exhaustion of all applicable appeal periods; (viii) any non-application or
misapplication by the beneficiary of a Letter of Credit of the proceeds of such
Letter of Credit; (ix) the legality, validity, form, regularity or
enforceability of the Letter of Credit; (x) the failure of any payment by the
Issuing Lender to conform to the terms of a Letter of Credit (if, in the Issuing
Lender’s good faith judgment, such payment is determined to be appropriate);
(xi) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; (xii) the
occurrence of any Default or Event of Default; and (xiii) any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing.

(k) For purposes of this §4.3, the term “Lender” includes any Issuing Lender and
the term “Applicable Law” includes FATCA.

 

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  §4.4

Computations. All computations of interest on the Base Rate Loans to the extent
applicable shall be based on a three hundred sixty-five (365) or three hundred
sixty-six (366)-day year, as applicable, and paid for the actual number of days
elapsed. All other computations of interest on the Loans and of other fees to
the extent applicable shall be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
Outstanding Loans and Letter of Credit Liabilities as reflected on the records
of the Agent from time to time shall be considered prima facie evidence of such
amount absent manifest error.

 

  §4.5

Suspension of LIBOR Rate Loans. In the event that, prior to the commencement of
any Interest Period relating to any LIBOR Rate Loan, the Agent shall determine
that adequate and reasonable methods do not exist for ascertaining LIBOR for
such Interest Period, or the Agent shall reasonably determine that LIBOR will
not accurately and fairly reflect the cost of the Lenders making or maintaining
LIBOR Rate Loans for such Interest Period, the Agent shall forthwith give notice
of such determination (which shall be conclusive and binding on the Borrower and
the Lenders absent manifest error) to the Borrower and the Lenders. In such
event (a) any Loan Request with respect to a LIBOR Rate Loan shall be
automatically withdrawn and shall be deemed a request for a Base Rate Loan and
(b) each LIBOR Rate Loan will automatically, on the last day of the then current
Interest Period applicable thereto, become a Base Rate Loan, and the obligations
of the Lenders to make LIBOR Rate Loans shall be suspended until the Agent
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent shall so notify the Borrower and the Lenders.

 

  §4.6

Illegality. Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or the interpretation or application
thereof shall make it unlawful, or any central bank or other Governmental
Authority having jurisdiction over a Lender or its LIBOR Lending Office shall
assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans,
such Lender shall forthwith give notice of such circumstances to the Agent and
the Borrower and thereupon (a) the commitment of the Lenders to make LIBOR Rate
Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Rate Loans or within such earlier
period as may be required by law. Notwithstanding the foregoing, before giving
such notice, the applicable Lender shall designate a different lending office if
such designation will void the need for giving such notice and will not, in the
judgment of such Lender, be otherwise materially disadvantageous to such Lender
or increase any costs payable by the Borrower hereunder.

 

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  §4.7

Additional Interest. If any LIBOR Rate Loan or any portion thereof is repaid or
is converted to a Base Rate Loan for any reason on a date which is prior to the
last day of the Interest Period applicable to such LIBOR Rate Loan, or if
repayment of the Loans has been accelerated as provided in §12.1, or if the
Borrower fails to draw down on the first day of the applicable Interest Period
any amount as to which the Borrower has elected a LIBOR Rate Loan, the Borrower
will pay to the Agent upon demand for the account of the applicable Lenders in
accordance with their respective Commitment Percentages (or to the Swing Loan
Lender with respect to a Swing Loan), in addition to any amounts of interest
otherwise payable hereunder, the Breakage Costs. The Borrower understands,
agrees and acknowledges the following: (a) no Lender has any obligation to
purchase, sell and/or match funds in connection with the use of LIBOR as a basis
for calculating the rate of interest on a LIBOR Rate Loan; (b) LIBOR is used
merely as a reference in determining such rate; and (c) the Borrower has
accepted LIBOR as a reasonable and fair basis for calculating such rate and any
Breakage Costs. The Borrower further agrees to pay the Breakage Costs, if any,
whether or not a Lender elects to purchase, sell and/or match funds.

 

  §4.8

Additional Costs, Etc. Notwithstanding anything herein to the contrary, if any
present or future Applicable Law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time (or from time to time)
hereafter made upon or otherwise issued to any Lender or the Agent by any
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall:

(a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, such Lender’s Commitment, a Letter of Credit or the Loans (other
than for Indemnified Taxes, Taxes described in clauses (b) through (d) of the
definition of Excluded Taxes, and Connection Income Taxes), or

(b) impose on any Lender or Issuing Lender or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein, or

(c) impose or increase or render applicable any special deposit, compulsory
loan, insurance charge, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law and which are
not already reflected in any amounts payable by the Borrower hereunder) against
assets held by, or deposits in or for the account of, or loans by, or
commitments of an office of any Lender, or

(d) impose on any Lender or the Agent any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, such Lender’s
Commitment, a Letter of Credit or any class of loans or commitments of which any
of the Loans or such Lender’s Commitment forms a part; and the result of any of
the foregoing is:

 

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(i) to increase the cost to any Lender of making, continuing, converting to,
funding, issuing, renewing, extending or maintaining any of the Loans, the
Letters of Credit or such Lender’s Commitment, or

(ii) to reduce the amount of principal, interest or other amount payable to any
Lender or the Agent hereunder on account of such Lender’s Commitment or any of
the Loans or the Letters of Credit, or

(iii) to require any Lender or the Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Agent from the Borrower
hereunder,

then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Lender or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may arise, pay to such
Lender or the Agent such additional amounts as such Lender or the Agent shall
determine in good faith to be sufficient to compensate such Lender or the Agent
for such additional cost, reduction, payment or foregone interest or other sum.
Each Lender and the Agent in determining such amounts may use any reasonable
averaging and attribution methods generally applied by such Lender or the Agent.

 

  §4.9

Capital Adequacy. If after the date hereof any Lender determines that (a) the
adoption of or change in any Applicable Law regarding liquidity or capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (b) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding liquidity or capital adequacy (whether or not having the force of
law), has the effect of reducing the return on such Lender’s or such holding
company’s capital as a consequence of such Lender’s commitment to make Loans or
participate in Letters of Credit hereunder to a level below that which such
Lender or holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify the Borrower thereof. The Borrower agrees
to pay to such Lender the amount of such reduction in the return on capital as
and when such reduction is determined, upon presentation by such Lender of a
statement of the amount setting forth the Lender’s calculation thereof. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods generally applied by such Lender. For purposes of §4.8 and
this §4.9, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, publications, orders, guidelines and directives thereunder or
issued in connection therewith and all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall be
deemed to have been adopted and gone into effect after the date hereof
regardless of when adopted, enacted or issued.

 

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  §4.10

Breakage Costs. The Borrower shall pay all Breakage Costs required to be paid by
it pursuant to this Agreement and incurred from time to time by any Lender upon
demand within fifteen (15) days from receipt of written notice from the Agent,
or such earlier date as may be required by this Agreement.

 

  §4.11

Default Interest; Late Charge. Following the occurrence and during the
continuance of any Event of Default, and regardless of whether or not the Agent
or the Lenders shall have accelerated the maturity of the Loans, all Loans shall
bear interest payable on demand at a rate per annum equal to the sum of the Base
Rate plus the Applicable Margin plus four percent (4.0%) (the “Default Rate”),
until such amount shall be paid in full (after as well as before judgment) and
the fee payable with respect to Letters of Credit shall be increased to a rate
equal to four percent (4.0%) above the Letter of Credit fee that would otherwise
be applicable to such time, if any of such amounts shall exceed the maximum rate
permitted by law, then at the maximum rate permitted by law. In addition, the
Borrower shall pay a late charge equal to four percent (4%) of any amount of
interest and/or principal payable on the Loans or any other amounts payable
hereunder or under the other Loan Documents, which is not paid by the Borrower
within ten (10) days of the date when due (or, in the case of amounts due at the
Maturity Date, within fifteen (15) Business Days of such date).

 

  §4.12

Certificate. A certificate setting forth any amounts payable pursuant to §4.7,
§4.8, §4.9, §4.10 or §4.11 and a reasonably detailed explanation of such amounts
which are due, submitted by any Lender or the Agent to the Borrower, shall be
conclusive in the absence of manifest error, and shall be promptly provided to
the Agent and the Borrower upon their written request.

 

  §4.13

Limitation on Interest. Notwithstanding anything in this Agreement or the other
Loan Documents to the contrary, all agreements between or among the Borrower,
the Guarantors, the Lenders and the Agent, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under Applicable Law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under Applicable Law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by Applicable Law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations,
such excess shall be refunded to the

 

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  Borrower. All interest paid or agreed to be paid to the Lenders shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by Applicable Law. This §4.13 shall control all agreements between or
among the Borrower, the Guarantors, the Lenders and the Agent.

 

  §4.14

Certain Provisions Relating to Increased Costs. If a Lender gives notice of the
existence of the circumstances set forth in §4.8 or any Lender requests
compensation for any losses or costs to be reimbursed pursuant to any one or
more of the provisions of §4.3 (as a result of the imposition of U.S.
withholding taxes on amounts paid to such Lender under this Agreement), §4.8 or
§4.9, then, upon request of the Borrower, such Lender, as applicable, shall use
reasonable efforts in a manner consistent with such institution’s practice in
connection with loans like the Loan of such Lender to eliminate, mitigate or
reduce amounts that would otherwise be payable by the Borrower under the
foregoing provisions, provided that such action would not be otherwise
prejudicial to such Lender, including, without limitation, by designating
another of such Lender’s offices, branches or affiliates; the Borrower agreeing
to pay all reasonably incurred costs and expenses incurred by such Lender in
connection with any such action. Notwithstanding anything to the contrary
contained herein, if no Default or Event of Default shall have occurred and be
continuing, and if any Lender has given notice of the existence of the
circumstances set forth in §4.8 or has requested payment or compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of §4.3 (as a result of the imposition of U.S. withholding taxes on amounts paid
to such Lender under this Agreement), §4.8 or §4.9 and following the request of
the Borrower has been unable to take the steps described above to mitigate such
amounts (each, an “Affected Lender”), then, within thirty (30) days after such
notice or request for payment or compensation, the Borrower shall have the
one-time right as to such Affected Lender, to be exercised by delivery of
written notice delivered to the Agent and the Affected Lender within thirty
(30) days of receipt of such notice, to elect to cause the Affected Lender to
transfer its Commitment, provided that the Borrower shall pay to the Agent the
assignment fee (if any) specified in §18.2, such assignment will result in a
reduction in such compensation or payments thereafter, and such assignment does
not conflict with Applicable Law. The Agent shall promptly notify the remaining
Lenders that each of such Lenders shall have the right, but not the obligation,
to acquire a portion of the Commitment, pro rata based upon their relevant
Commitment Percentages, of the Affected Lender (or if any of such Lenders does
not elect to purchase its pro rata share, then to such remaining Lenders in such
proportion as approved by the Agent). In the event that the Lenders do not elect
to acquire all of the Affected Lender’s Commitment, then the Agent shall
endeavor to obtain a new Lender to acquire such remaining Commitment. Upon any
such purchase of the Commitment of the Affected Lender, the Affected Lender’s
interest in the Obligations and its rights hereunder and under the Loan
Documents shall terminate at the date of purchase, and the Affected Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest. The purchase price for the Affected Lender’s Commitment shall
equal any and all amounts outstanding and owed by the Borrower to the Affected
Lender including principal, prepayment premium or fee, and all accrued and
unpaid interest or fees.

 

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  §4.15

Effect of Benchmark Transition EventReplacement Setting.

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in
any other Loan Document, (i) upon the determination of the Agent (which shall be
conclusive absent manifest error) thatif a Benchmark Transition Event has
occurred or (ii) upon the occurrence ofor an Early Opt-in Election, as
applicable, the Agent and the Borrower may amend this Agreement to replace LIBOR
with a Benchmark Replacement, by a written document executed by the Borrower and
the Agent, subject to the requirements of this §4.15. Notwithstandingand its
related Benchmark Replacement Date have occurred prior to the Reference Time in
respect of any setting of the then-current Benchmark, then (x) if a Benchmark
Replacement is determined in accordance with clause (1) or (2) of the definition
of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark
Replacement will replace such Benchmark for all purposes hereunder and under any
Loan Document in respect of such Benchmark setting and subsequent Benchmark
settings without any amendment to, or further action or consent of any other
party to, this Agreement or any other Loan Document and (y) if a Benchmark
Replacement is determined in accordance with clause (3) of the definition of
“Benchmark Replacement” for such Benchmark Replacement Date, in each instance
notwithstanding the requirements of §27 or anything else to the
contrarycontained herein or in any other Loan Document, any such amendment with
respect to a Benchmark Transition Event will become effective and binding upon
the Agent, the Borrower and the Lenders atsuch Benchmark Replacement will
replace such Benchmark for all purposes hereunder and under any Loan Document in
respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on
the fifth (5th) Business Day after the Agent has posted such proposed amendment
to all Lenders and the Borrowerdate notice of such Benchmark Replacement is
provided to the Lenders without any amendment to, or further action or consent
of any other party to, this Agreement or any other Loan Document so long as the
Agent has not received, by such time, written notice of objection to such
amendmentBenchmark Replacement from Lenders comprising the Required Lenders, and
any such amendment with respect to an Early Opt-in Election will become
effective and binding upon the Agent, the Borrower and the Lenders on the date
that Lenders comprising the Required Lenders have delivered to the Agent written
notice that such Required Lenders accept such amendment. No replacement of LIBOR
with a Benchmark Replacement pursuant to this §4.15 will occur prior to the
applicable Benchmark Transition Start Date. .

(b) Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, the Agent will have the right to make
Benchmark Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective
without any further action or consent of any other party to this Agreement or
theany other Loan DocumentsDocument .

 

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(c) Notices; Standards for Decisions and Determinations. The Agent will promptly
notify the Borrower and the Lenders in writing of (i) any occurrence of a
Benchmark Transition Event or an Early Opt-in Election, as applicable, and its
related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the
implementation of any Benchmark Replacement, (iii) the effectiveness of any
Benchmark Replacement Conforming Changes and, (iv) the removal or reinstatement
of any tenor of a Benchmark pursuant to clause (d) below and (v) the
commencement or conclusion of any Benchmark Unavailability Period. Any
determination, decision or election that may be made by the Agent or, if
applicable, any Lender (or group of Lenders) pursuant to this §4.15,4.16
including, without limitation, any determination with respect to a tenor,
comparable replacement rate or adjustment, or implementation of any Benchmark
Replacement Rate Conforming Changes, or of the occurrence or non-occurrence of
an event, circumstance or date and any decision to take or refrain from taking
any action or any selection, will be conclusive and binding on all parties
hereto or to the other Loan Documents absent manifest error and may be made in
its or their sole discretion and without consent from any other party heretoto
this Agreement or any other Loan Document, except, in each case, as expressly
required pursuant to this §4.154.16 and shall not be a basis of any claim of
liability of any kind or nature by any party hereto or thereto, all such claims
being hereby waived individually bybe each party hereto and thereto.

(d) Benchmark Unavailability Period.Unavailability of Tenor of Benchmark.
Notwithstanding anything to the contrary herein or in any other Loan Document,
at any time (including in connection with the implementation of a Benchmark
Replacement), (i) if the then-current Benchmark is a term rate (including Term
SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed
on a screen or other information service that publishes such rate from time to
time as selected by the Agent in its reasonable discretion or (B) the regulatory
supervisor for the administrator of such Benchmark or a Relevant Governmental
Body has provided a public statement or publication of information announcing
that any tenor for such Benchmark is or will be no longer representative, then
the Agent may modify the definition of “Interest Period” for any Benchmark
settings at or after such time to remove such unavailable or non-representative
tenor and (ii) if a tenor that was removed pursuant to clause (i) above either
(A) is subsequently displayed on a screen or information service for a Benchmark
(including a Benchmark Replacement) or (B) is not, or is no longer, subject to
an announcement that it is or will no longer be representative for a Benchmark
(including a Benchmark Replacement), then the Agent may modify the definition of
“Interest Period” for all Benchmark settings at or after such time to reinstate
such previously removed tenor.

(e) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of
the commencement of a Benchmark Unavailability Period, the Borrower may revoke
any request for a borrowing of Loans that is to be a LIBOR Rate Loan, conversion
to or continuation of LIBOR Rate Loans to be made, converted or continued during
any Benchmark Unavailability Period and, failing that, the Borrower will be
deemed to have converted any such request into a request for a borrowing of or
conversion to Base Rate Loans. During any Benchmark Unavailability Period, the
components or at any time that a tenor for the then-current Benchmark is not an
Available Tenor, the component of Base Rate based upon LIBORthe then-current
Benchmark or such tenor for such Benchmark, as applicable, will not be used in
any determination of the Base Rate.

 

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  (f)

(e)  Certain Defined Terms. As used in this §4.154.16:

“Available Tenor” means, as of any date of determination and with respect to the
then-current Benchmark, as applicable, any tenor for such Benchmark or payment
period for interest calculated with reference to such Benchmark, as applicable,
that is or may be used for determining the length of an Interest Period pursuant
to this Agreement as of such date and not including, for the avoidance of doubt,
any tenor for such Benchmark that is then-removed from the definition of
“Interest Period” pursuant to clause (d) of this Section titled “Benchmark
Replacement Setting.”

“Benchmark ” means, initially, USD LIBOR; provided that if a Benchmark
Transition Event or an Early Opt-in Election, as applicable, and its related
Benchmark Replacement Date have occurred with respect to USD LIBOR or the
then-current Benchmark, then “Benchmark” means the applicable Benchmark
Replacement to the extent that such Benchmark Replacement has replaced such
prior benchmark rate pursuant to clause (a) of this §4.16.

“Benchmark Replacement” means, for any Available Tenor, the first alternative
set forth in the order below that can be determined by the Agent for the
applicable Benchmark Replacement Date:

 

  (1)

the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (2)

the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement
Adjustment;

 

  (3)

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by the Agent and the
Borrower as the replacement for the then-current Benchmark for the applicable
Corresponding Tenor giving due consideration to (i) any selection or
recommendation of a replacement benchmark rate or the mechanism for determining
such a rate by the Relevant Governmental Body or (ii) any evolving or
then-prevailing market convention for determining a benchmark rate of interest
as a replacement to LIBORfor the then-current Benchmark for U.S.
dollar-denominated syndicated credit facilities at such time and (b) the related
Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as
so determined would be less than positive 0.50%

provided that, in the case of clause (1), such Unadjusted Benchmark Replacement
is displayed on a screen or other information service that publishes such rate
from time to time as selected by the Agent in its reasonable discretion. If the
Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above
would be less than the Floor, the Benchmark Replacement will be deemed to be
positive 0.50%the Floor for the purposes of this Agreement and the other Loan
Documents.

 

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“Benchmark Replacement Adjustment” means, with respect to any replacement of
LIBORthe then- current Benchmark with an Unadjusted Benchmark Replacement for
eachany applicable Interest Period, and Available Tenor for any setting of such
Unadjusted Benchmark Replacement:

 

  (1)

for purposes of clauses (1) and (2) of the definition of “Benchmark
Replacement,” the first alternative set forth in the order below that can be
determined by the Agent:

 

  (a)

the spread adjustment, or method for calculating or determining such spread
adjustment, (which may be a positive or negative value or zero) as of the
Reference Time such Benchmark Replacement is first set for such Interest Period
that has been selected or recommended by the Relevant Governmental Body for the
replacement of such Benchmark with the applicable Unadjusted Benchmark
Replacement for the applicable Corresponding Tenor;

 

  (b)

the spread adjustment (which may be a positive or negative value or zero) as of
the Reference Time such Benchmark Replacement is first set for such Interest
Period that would apply to the fallback rate for a derivative transaction
referencing the ISDA Definitions to be effective upon an index cessation event
with respect to such Benchmark for the applicable Corresponding Tenor; and

 

  (2)

for purposes of clause (3) of the definition of “Benchmark Replacement,” the
spread adjustment, or method for calculating or determining such spread
adjustment, (which may be a positive or negative value or zero) that has been
selected by the Agent and the Borrower for the applicable Corresponding Tenor
giving due consideration to (i) any selection or recommendation of a spread
adjustment, or method for calculating or determining such spread adjustment, for
the replacement of LIBORsuch Benchmark with the applicable Unadjusted Benchmark
Replacement by the Relevant Governmental Body on the applicable Benchmark
Replacement Date or (ii) any evolving or then-prevailing market convention for
determining a spread adjustment, or method for calculating or determining such
spread adjustment, for the replacement of LIBORsuch Benchmark with the
applicable Unadjusted Benchmark Replacement for U.S. dollar- denominated
syndicated credit facilities at such time;

provided that, in the case of clause (1) above, such adjustment is displayed on
a screen or other information service that publishes such Benchmark Replacement
Adjustment from time to time as selected by the Agent in its reasonable
discretion.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate,” the definition of “Business Day,” the
definition of “LIBOR Business Day,” the definition of “Interest Period,” timing
and frequency of determining rates and making payments of interest and other,
timing of borrowing requests or prepayment, conversion or continuation notices,
length of lookback periods, the applicability of breakage provisions, and other
technical, administrative or operational matters) that the Agent decides may be
appropriate to reflect the adoption and implementation of such Benchmark
Replacement and to permit the

 

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administration thereof by the Agent in a manner substantially consistent with
market practice (or, if the Agent decides that adoption of any portion of such
market practice is not administratively feasible or if the Agent determines that
no market practice for the administration of thesuch Benchmark Replacement
exists, in such other manner of administration as the Agent decides is
reasonably necessary in connection with the administration of this Agreement and
the other Loan Documents).

“Benchmark Replacement Date” means the earlierearliest to occur of the following
events with respect to LIBORthe then-current Benchmark:

 

  (1)

in the case of clause (1) or (2) of the definition of “Benchmark Transition
Event,” the later of (a) the date of the public statement or publication of
information referenced therein and (b) the date on which the administrator of
LIBORsuch Benchmark (or the published component used in the calculation thereof)
permanently or indefinitely ceases to provide LIBOR; orall Available Tenors of
such Benchmark (or such component thereof);

 

  (2)

in the case of clause (3) of the definition of “Benchmark Transition Event,” the
date of the public statement or publication of information referenced therein.;
or

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to LIBOR:

 

  (3)

in the case of an Early Opt-in Election, the sixth (6th) Business Day after the
date notice of such Early Opt-in Election is provided to the Lenders, so long as
the Agent has not received, by 5:00 p.m. (New York City time) on the fifth
(5th) Business Day after the date notice of such Early Opt-in Election is
provided to the Lenders, written notice of objection to such Early Opt-in
Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark
Replacement Date occurs on the same day as, but earlier than, the Reference Time
in respect of any determination, the Benchmark Replacement Date will be deemed
to have occurred prior to the Reference Time for such determination and (ii) the
“Benchmark Replacement Date” will be deemed to have occurred in the case of
clause (1) or (2) with respect to any Benchmark upon the occurrence of the
applicable event or events set forth therein with respect to all then-current
Available Tenors of such Benchmark (or the published component used in the
calculation thereof).

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the then-current Benchmark:

 

  (1)

a public statement or publication of information by or on behalf of the
administrator of LIBORsuch Benchmark (or the published component used in the
calculation thereof) announcing that such administrator has ceased or will cease
to provide LIBORall Available Tenors of such Benchmark (or such component
thereof), permanently or indefinitely, provided that, at the time of such
statement or publication, there is no successor administrator that will continue
to provide LIBORany Available Tenor of such Benchmark (or such component
thereof);

 

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  (2)

a public statement or publication of information by the regulatory supervisor
for the administrator of LIBOR, the U.S.such Benchmark (or the published
component used in the calculation thereof), the Board of Governors of the
Federal Reserve System, the Federal Reserve Bank of New York, an insolvency
official with jurisdiction over the administrator for LIBORsuch Benchmark (or
such component), a resolution authority with jurisdiction over the administrator
for LIBORsuch Benchmark (or such component) or a court or an entity with similar
insolvency or resolution authority over the administrator for LIBORsuch
Benchmark (or such component), which states that the administrator of LIBORsuch
Benchmark (or such component) has ceased or will cease to provide LIBORall
Available Tenors of such Benchmark (or such component thereof) permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide LIBORany Available
Tenor of such Benchmark (or such component thereof); or

 

  (3)

a public statement or publication of information by the regulatory supervisor
for the administrator of LIBORsuch Benchmark (or the published component used in
the calculation thereof) or a Relevant Governmental Body announcing that LIBOR
isall Available Tenors of such Benchmark (or such component thereof) are no
longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Agent or the
Required Lenders, as applicable, by notice to the Borrower, the Agent (in the
case of such notice by the Required Lenders) and the Lenders.For the avoidance
of doubt, a “Benchmark Transition Event” will be deemed to have occurred with
respect to any Benchmark if a public statement or publication of information set
forth above has occurred with respect to each then-current Available Tenor of
such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to LIBOR and
solely to the extent that LIBOR has not been replaced with a Benchmark
Replacement, the period (if any) (x) beginning at the time that sucha Benchmark
Replacement Date pursuant to clauses (1) or (2) of that definition has occurred
if, at such time, no Benchmark Replacement has replaced LIBORthe then-current
Benchmark for all purposes hereunder and under any Loan Document in accordance
with this §4.154.16 and (y) ending at the time that a Benchmark Replacement has
replaced LIBORthe then-current Benchmark for all purposes hereunder pursuant
toand under any Loan Document in accordance with this §4.15.4.16.

 

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“Corresponding Tenor” with respect to any Available Tenor means, as applicable,
either a tenor (including overnight) or an interest payment period having
approximately the same length (disregarding business day adjustment) as such
Available Tenor.

“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate
(which will include a lookback) being established by the Agent in accordance
with the conventions for this rate selected or recommended by the Relevant
Governmental Body for determining “Daily Simple SOFR” for syndicated business
loans; provided, that if the Agent decides that any such convention is not
administratively feasible for the Agent, then the Agent may establish another
convention in its reasonable discretion.

“Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the
occurrence of:

 

  (1)

(i) a determination by the Agent thatnotification by the Agent to (or the
request by the Borrower to the Agent to notify) each of the other parties hereto
that at least five (5) currently outstanding U.S. dollar-denominated syndicated
credit facilities being executed at such time, or that include language similar
to that contained in this §4.15 are being executed or amended, as applicable, to
incorporate or adopt a new benchmark interest rate to replace LIBOR, and at such
time contain (as a result of amendment or as originally executed) a SOFR-based
rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a
benchmark rate (and such syndicated credit facilities are identified in such
notice and are publicly available for review), and

 

  (2)

the joint election by the Agent to declare that an Early Opt-in Election has
occurredand the Borrower to trigger a fallback from USD LIBOR and the provision
by the Agent of written notice of such election to the Borrower and the Lenders.

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Floor ” means the benchmark rate floor (i.e. positive 0.50%) provided in this
Agreement initially (as of the execution of this Agreement, the modification,
amendment or renewal of this Agreement or otherwise) with respect to USD LIBOR.

“ISDA Definitions” means the 2006 ISDA Definitions published by the
International Swaps and Derivatives Association, Inc. or any successor thereto,
as amended or supplemented from time to time, or any successor definitional
booklet for interest rate derivatives published from time to time by the
International Swaps and Derivatives Association, Inc. or such successor thereto.

“Reference Time” with respect to any setting of the then-current Benchmark means
(1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is
two London banking days preceding the date of such setting, and (2) if such
Benchmark is not USD LIBOR, the time determined by the Agent in its reasonable
discretion.

 

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“Relevant Governmental Body” means the Board of Governors of the Federal Reserve
Board and/System or the Federal Reserve Bank of New York, or a committee
officially endorsed or convened by the Board of Governors of the Federal Reserve
Board and/System or the Federal Reserve Bank of New York, or any successor
thereto, including without limitation the Alternative Reference Rates Committee.

“SOFR” means, with respect to any day meansBusiness Day, a rate per annum equal
to the secured overnight financing rate for such Business Day published for such
day by the Federal Reserve Bank of New York, as the administrator of the
benchmark, (or a successor administrator) on the Federal Reserve Bank of New
Yorkby the SOFR Administrator on the SOFR Administrator’s Website on the
immediately succeeding Business Day.

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor
administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” means the website of the Federal Reserve Bank of
New York, currently at http://www.newyorkfed.org, or any successor source for
the secured overnight financing rate identified as such by the SOFR
Administrator from time to time.

“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable
Reference Time, the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement
excluding the related Benchmark Replacement Adjustment.

“USD LIBOR” means the London interbank offered rate for U.S. dollars.

 

§5.

COLLATERAL SECURITY; GUARANTORS.

 

  §5.1

Collateral. The Obligations shall be secured by a perfected first priority lien
and security interest (subject to Liens permitted with respect thereto by §8.2)
to be held by the Agent for the benefit of the Lenders on the Collateral,
pursuant to the terms of the Security Documents.

 

  §5.2

Appraisal.

(a) The Agent may obtain new Appraisals or an update to existing Appraisals with
respect to the Borrowing Base Properties, or any of them, as the Agent or the
Required Lenders shall determine (i) at any time that the regulatory
requirements of any Lender generally applicable to real estate loans of the
category made under this Agreement as reasonably interpreted by such Lender
shall require more frequent Appraisals, (ii) at any time following a Default or
Event of Default, (iii) if there is change in the Franchisor of a Borrowing Base
Property or if the Agent reasonably believes that there has been a casualty,
Taking or material adverse change or deterioration with respect to any Borrowing
Base Property, including, without limitation, a material change in the market in
which any Borrowing Base Property is located, (iv) one (1) time during the term
of the Loans at the request of Agent or the Required Lenders, which may be in

 

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connection with the Borrower’s exercise of the option to extend the Maturity
Date as provided in §2.12(a) and (b),(v) to determine compliance with §9.3, or
(vvi ) at any time that Agent or the Required Lenders determine that a more
updated Appraisal is required by Applicable Law. Notwithstanding the foregoing,
Agent shall obtainorder on or before October  1,31, 2020 new Appraisals or
updates to existing Appraisals with respect to the Borrowing Base Properties
(provided that for the avoidance of doubt no new Appraised Value obtained
pursuant to this sentence shall be included in the calculation of Consolidated
Total Asset Value prior to April 2, 2021March 31, 2022). The expense of such
Appraisals and/or updates performed pursuant to this §5.2(a) shall be borne by
the Borrower and payable to the Agent within ten (10) days of demand; provided
the Borrower shall not be obligated to pay for an Appraisal of a Borrowing Base
Property obtained pursuant to this §5.2(a) more often than once in any period of
twelve (12) months if no Event of Default exists. After determination of the
covenant in §9.3, the Borrower shall have the one-time right to request that
Agent obtain new Appraisals or updates to existing Appraisals with respect to
all of the Borrowing Base Properties for the purpose of increasing the Borrowing
Availability under clause (a)(2) of such definition as if the covenant in §9.3
was being re-determined based on such new or updated Appraisals (provided that
such re-determination shall not affect any prior payments that may have been
required pursuant to §9.3).

(b) The Borrower shall deliver to the Agent an Appraisal with respect to any
Real Estate that is not a Borrowing Base Property on or prior to the date such
Real Estate is acquired by Borrower or any of its Subsidiaries or Unconsolidated
Affiliates.

(c) The Borrower acknowledges that the Agent has the right to approve any
Appraisal performed pursuant to this Agreement. The Borrower further agrees that
the Lenders and the Agent do not make any representations or warranties with
respect to any such Appraisal and shall have no liability as a result of or in
connection with any such Appraisal for statements contained in such Appraisal,
including without limitation, the accuracy and completeness of information,
estimates, conclusions and opinions contained in such Appraisal, or variance of
such Appraisal from the fair value of such property that is the subject of such
Appraisal given by the local tax assessor’s office, or the Borrower’s idea of
the value of such property.

 

  §5.3

Additional Collateral.

Provided no Default or Event of Default exists, the Borrower shall have the
right, subject to consent of the Agent and the Required Lenders (which consent
may be withheld in its sole and absolute discretion) and the satisfaction by the
Borrower of the conditions set forth in this §5.3, to add Potential Collateral
as a Borrowing Base Property and to the calculation of Debt Yield.the covenants
set forth in §9.1 and §9.3. In the event the Borrower desires to add additional
Potential Collateral as a Borrowing Base Property and to the calculation of Debt
Yieldthe covenants set forth in §9.1 and §9.3 as aforesaid, the Borrower shall
provide written notice to the Agent of such request. The Required Lenders shall
have ten (10) Business Days following receipt of all items required under this
Agreement to add Real Estate as a Borrowing Base Property to grant or deny
approval for such proposed Potential Collateral. If a Lender shall fail to
respond within such ten (10) Business Day period, such Lender shall be deemed to
have approved such proposed Potential Collateral. Agent shall notify Borrower if
and when the Required Lenders have granted such approval. For the avoidance of
doubt, only Real Estate that satisfies the requirement to be a Tier 1 Property
may be included as Borrowing Base Properties after the date of this Agreement.
Notwithstanding the foregoing, Potential Collateral shall not be included as a
Borrowing Base Property and in the calculation of Debt Yieldthe covenants set
forth in §9.1 and §9.3 unless and until the following conditions precedent shall
have been satisfied as determined by Agent (or as required by this Agreement,
the Required Lenders):

 

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(a) such Potential Collateral shall be Eligible Real Estate and shall not cause
a Default under §7.20;

(b) such Real Estate shall be owned (or leased under a Ground Lease) by a
Wholly-Owned Subsidiary of the Borrower and leased pursuant to an Operating
Lease to a TRS Lessee, and said Wholly-Owned Subsidiary, TRS Lessee and any
other Persons required by §5.4 shall have executed a Joinder Agreement and
satisfied the conditions of §5.4;

(c) prior to or contemporaneously with such addition, the Borrower shall have
submitted to the Agent a Compliance Certificate prepared using the financial
statements of the Borrower most recently provided or required to be provided to
the Agent under §6.4 or §7.4 and a Borrowing Base Certificate, both prepared on
a pro forma basis and adjusted to give effect to such addition, and shall
certify that after giving effect to such addition, no Default or Event of
Default shall exist;

(d) the Borrower, its Wholly-Owned Subsidiary, REIT, TRS Lessee and any other
Wholly-Owned Subsidiary of Borrower or REIT owning an interest therein, as
applicable, which is the owner and/or lessee (whether under a Ground Lease or
Operating Lease) of the Real Estate, as applicable, shall have executed and
delivered to the Agent all Borrowing Base Qualification Documents, all of which
instruments, documents or agreements shall be in form and substance reasonably
satisfactory to the Agent;

(e) after giving effect to the inclusion of such Eligible Real Estate, each of
the representations and warranties made by or on behalf of the Borrower or the
Guarantors or any of their respective Subsidiaries contained in this Agreement,
the other Loan Documents or in any document or instrument delivered pursuant to
or in connections with this Agreement shall be true in all material respects
both as of the date of which it was made and shall also be true as of the time
of the addition of such Borrowing Base Property with the same effect as if made
at and as of that time, except to the extent of changes resulting from
transactions permitted by the Loan Documents (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct only as of such specified date),
and no Default of Event of Default shall have occurred and be continuing and the
Agent shall have received a certificate of the Borrower to such effect; and

(f) the Agent and the Required Lenders as required above shall have consented to
the inclusion of such Real Estate as a Borrowing Base Property and to the
calculation of Debt Yield,the covenants set forth in §9.1 and §9.3, which
consent may be granted in the Agent’s and the Required Lender’s sole and
absolute discretion. The Required Lenders approve the Real Estate securing the
Aloft Atlanta Term Loan as a Borrowing Base Property, subject to the other
requirements for the addition of a Borrowing Base Property. In the event that
the Real Estate securing the Aloft Atlanta Term Loan becomes a Borrowing Base
Property, Agent and Borrower shall revise Schedule 5.5 to include the minimum
release price for such property, which shall be an amount equal to ninety
percent (90%) of its Appraised Value.

 

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  §5.4

Additional Guarantors; Release of Guarantors.

(a) In the event that the Borrower shall request that certain Real Estate owned
(or leased under a Ground Lease) by a Wholly-Owned Subsidiary of the Borrower be
included as a Borrowing Base Property as contemplated by §5.3 and such Real
Estate is included as a Borrowing Base Property in accordance with the terms
hereof, the Borrower shall, as a condition to such Real Estate being included as
a Borrowing Base Property, cause each such Wholly-Owned Subsidiary of Borrower
that owns or leases under a Ground Lease such Real Estate and any TRS Lessee
that leases such Real Estate under an Operating Lease and each other
Wholly-Owned Subsidiary of Borrower or TRS that owns a direct or indirect
interest in any of such Subsidiaries, to execute and deliver to the Agent a
Joinder Agreement, and such Subsidiary shall become a Guarantor hereunder and
thereunder. In addition, in the event any Subsidiary of the Borrower shall
constitute a Material Subsidiary, the Borrower shall promptly cause such
Subsidiary to execute and deliver to Agent a Joinder Agreement, and such
Subsidiary shall become a Guarantor hereunder and thereunder. Each such
Subsidiary shall be specifically authorized, in accordance with its respective
organizational documents, to be a Guarantor hereunder and thereunder and to
execute the Contribution Agreement and such Security Documents as the Agent may
require. The Borrower shall further cause all representations, covenants and
agreements in the Loan Documents with respect to the Guarantors to be true and
correct with respect to each such Subsidiary. In connection with the delivery of
such Joinder Agreement, the Borrower shall deliver to the Agent such
organizational agreements, resolutions, consents, opinions and other documents
and instruments as the Agent may reasonably require.

(b) In the event that all Borrowing Base Properties owned or leased by a
Subsidiary Guarantor shall have been removed as Borrowing Base Properties and
from the calculation of Debt Yieldthe covenants set forth in §9.1 and §9.3 and
released as Collateral for the Obligations and Hedge Obligations in accordance
with the terms of this Agreement, then such Subsidiary Guarantor shall be
released by Agent from liability under this Agreement and the other Loan
Documents, provided that such Subsidiary Guarantor is not otherwise required to
be a Guarantor.

(c) The Borrower may request in writing that the Agent release, and upon receipt
of such request the Agent shall release (subject to the terms hereof), a
Subsidiary Guarantor that is a Guarantor solely by virtue of being a Material
Subsidiary pursuant to clause (ii) of the definition thereof from the Guaranty
so long as: (i) no Default or Event of Default shall then be in existence or
would occur as a result of such release; (ii) the Agent shall have received such
written request at least five (5) Business Days prior to the requested date of
release; (iii) such Subsidiary Guarantor is not the direct or indirect owner or
lessee of a Borrowing Base Property; and (iv) the Borrower shall deliver to
Agent evidence reasonably satisfactory to Agent that (A) the Borrower has
disposed of or simultaneously with such release will dispose of its entire
interest in such Guarantor or that all of the assets of such Guarantor will be
disposed of in compliance with the terms of this Agreement, and if such
transaction involves the disposition by such Guarantor of all of its assets, the
net cash proceeds, if any, from such disposition are being distributed to the

 

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Borrower in connection with such disposition and applied as provided in §3.2(c),
or (B) such Guarantor will be the borrower with respect to Secured Indebtedness
that is not prohibited under this Agreement, which Indebtedness will be secured
by a Lien on the assets of such Guarantor, or (C) the Borrower has contributed
or simultaneously with such release will contribute its entire direct or
indirect interest in such Guarantor to an Unconsolidated Affiliate or a
Subsidiary which is not a Wholly-Owned Subsidiary or that such Guarantor will be
contributing all of its assets to an Unconsolidated Affiliate or a Subsidiary
which is not a Wholly-Owned Subsidiary in compliance with the terms of this
Agreement and the proceeds therefrom are applied as provided in §3.2(c), or
(C) [reserved], or (D) such Guarantor is an Excluded Subsidiary. Delivery by the
Borrower to the Agent of any such request for a release shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request.

(d) The provisions of §5.4 shall not entitle Borrower, REIT, General Partner or
TRS to any release from the Loan Documents.

 

  §5.5

Partial Release of Collateral. Provided no Default or Event of Default shall
have occurred hereunder and be continuing (or would exist immediately after
giving effect to the transactions contemplated by this §5.5), the Agent shall
release a Borrowing Base Property and the personal property solely used on or
with respect to such Borrowing Base Property pledged under the Security
Agreement or Borrower Security Agreement applicable thereto upon the request of
the Borrower in connection with a sale or other permanent disposition or
refinancing of such Borrowing Base Property, subject to and upon the following
terms and conditions:

(a) the Borrower shall deliver to the Agent written notice of its desire to
obtain such release no later than ten (10) days prior to the date on which such
release is to be effected;

(b) the Borrower shall submit to the Agent with such request a Compliance
Certificate and Borrowing Base Certificate prepared using the financial
statements of the Borrower most recently provided or required to be provided to
the Agent under §6.4 or §7.4 adjusted in the best good faith estimate of the
Borrower to give effect to the proposed release and demonstrating that no
Default or Event of Default with respect to the covenants referred to therein
shall exist after giving effect to such release;

(c) all release documents to be executed by the Agent shall be in form and
substance reasonably satisfactory to the Agent;

(d) the Borrower shall pay all reasonable costs and expenses of the Agent in
connection with such release, including without limitation, reasonable
attorney’s fees;

(e) the Required Lenders shall have approved such release in writing, provided
that said approval shall not be required if (i) such property is being sold to a
third party that is not Borrower, a Guarantor, or a Subsidiary, Unconsolidated
Affiliate or Affiliate of Borrower or any Guarantor, (ii) the Net Sales Proceeds
from such sale are not less than the minimum release price for such a Borrowing
Base Property set forth in Schedule 5.5, and (iii) such Net Sales Proceeds are
paid to the Agent for the account of the Lenders as a release price to the
extent required by §5.5(f), which is applied to reduce the outstanding principal
balance of the Loans as provided in §3.4; and

 

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(f) the Borrower shall pay to the Agent for the account of the Lenders a release
price, which payment shall be applied to reduce the outstanding principal
balance of the Loans as provided in §3.4 and permanently reduce the Commitments
as provided in §3.4,, in an amount equal the greater of (i) the amount necessary
to reduce the outstanding principal balance of the Loans and Letter of Credit
Liabilities so that no violation of the covenantcovenants set forth in §9.1 and
§9.3 shall occur, and (ii) the Net Sales Proceeds described in §5.5(e)(ii). The
release price paid under this §5.5(f) shall reduce the net proceeds to Borrower
and the Guarantors for the purposes of amounts to be paid under §3.2(c)(i) (for
sales of Borrowing Base Properties).

Notwithstanding the foregoing, in the event that any Borrowing Base Property is
to be released from a Mortgage, Agent may condition such release upon (x) the
increase of the coverages under the Title Policies for the remaining Borrowing
Base Properties subject to Mortgages to 110% of the Appraised Value attributed
to such remaining Borrowing Base Properties, and (y) the Borrower paying to the
Agent or the Person entitled thereto any mortgage, recording, intangible,
documentary stamp or other similar taxes and charges which the Agent reasonably
determines to be payable with respect to the remaining Borrowing Base Properties
subject to Mortgages as a result of such release to any state or any county or
municipality thereof in which any of the Borrowing Base Properties subject to a
Mortgage is located, and the Borrower delivering to the Agent such affidavits or
other information which the Agent reasonably determines to be necessary in
connection with such payment in order to insure that the Mortgages on the
Borrowing Base Properties located in such state secure the Borrower’s obligation
with respect to the Obligations.

 

  §5.6

Release of Collateral. Upon the refinancing or repayment of the Obligations in
full and termination of the obligation to provide additional Loans or issue
Letters of Credit to Borrower, then the Agent shall release the Collateral from
the lien and security interest of the Security Documents and release the
Borrower and Guarantors (other than with respect to obligations that survive
termination of this Agreement), provided that Agent has not received a notice
from the Representative or the holder of the Hedge Obligations that any Hedge
Obligation is then due and payable to the holder thereof.

 

§6.

REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and the Lenders as follows.

 

  §6.1

Corporate Authority, Etc..

(a) Incorporation; Good Standing. REIT is a Maryland corporation duly organized
pursuant to articles of incorporation filed with the Maryland Secretary of
State, and is validly existing and in good standing under the laws of Maryland.
REIT conducts its business in a manner which enables it to qualify as a real
estate investment trust under, and to be entitled to the benefits of,
Section 856 of the Code, and has elected to be treated as and is entitled to the
benefits of a real estate investment trust thereunder. The Borrower is a
Virginia limited partnership

 

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duly organized pursuant to its certificate of limited partnership filed with the
Virginia State Corporation Commission, and is validly existing and in good
standing under the laws of Virginia. The Borrower (i) has all requisite power to
own its property and conduct its business as now conducted and as presently
contemplated, and (ii) is in good standing and is duly authorized to do business
in the jurisdiction of its organization and where any of the Borrowing Base
Properties owned or leased by it are located and in each other jurisdiction
where a failure to be so qualified in such other jurisdiction could reasonably
be expected to have a Material Adverse Effect.

(b) Subsidiaries. Each of the Guarantors and each of the Subsidiaries of the
Borrower and the Guarantors (i) is a corporation, limited partnership, general
partnership, limited liability company or trust duly organized under the laws of
its State of organization and is validly existing and in good standing under the
laws thereof, (ii) has all requisite power to own or lease its property and
conduct its business as now conducted and as presently contemplated and (iii) is
in good standing and is duly authorized to do business in each jurisdiction
where it is organized and where any of the Borrowing Base Properties owned or
leased by it are located and in each other jurisdiction where a failure to be so
qualified could reasonably be expected to have a Material Adverse Effect.

(c) Authorization. The execution, delivery and performance of this Agreement and
the other Loan Documents to which any of the Borrower or any Guarantor is a
party and the transactions contemplated hereby and thereby (i) are within the
authority of such Person, (ii) have been duly authorized by all necessary
proceedings on the part of such Person, (iii) do not and will not conflict with
or result in any breach or contravention of any provision of law, statute, rule
or regulation to which such Person is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, (iv) do not and will
not conflict with or constitute a default (whether with the passage of time or
the giving of notice, or both) under any provision of the partnership agreement,
operating agreement, articles of incorporation or other charter documents or
bylaws of, or any agreement or other instrument binding upon, such Person or any
of its properties, (v) do not and will not result in or require the imposition
of any lien or other encumbrance on any of the properties, assets or rights of
such Person other than the liens and encumbrances in favor of the Agent
contemplated by this Agreement and the other Loan Documents, and (vi) do not
require the approval or consent of any Person other than those already obtained
and delivered to the Agent.

(d) Enforceability. This Agreement and the other Loan Documents to which any of
the Borrower or any Guarantor is a party are valid and legally binding
obligations of such Person enforceable in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and general principles
of equity.

 

  §6.2

Governmental Approvals. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower or any Guarantor is
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing or registration with, or the giving of any
notice to, any court, department, board, governmental agency or authority other
than those already obtained, and the filing of the Security Documents in the
appropriate records office with respect thereto.

 

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  §6.3

Title to Properties. Except as indicated on Schedule 6.3 hereto, REIT and its
Subsidiaries own or lease all of the assets reflected in the consolidated
balance sheet of the REIT as of the Balance Sheet Date or acquired or leased
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date) subject to no rights of others,
including any mortgages, leases pursuant to which REIT or any of its
Subsidiaries or any of their respective Affiliates is the lessee, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens and otherwise with respect to any Indebtedness being repaid with
the proceeds of Loans on the date hereof.

 

  §6.4

Financial Statements. The Borrower has furnished to the Agent: (a) the
consolidated balance sheet of REIT and its Subsidiaries as of the Balance Sheet
Date and the related consolidated statement of operations and cash flow as of
the Balance Sheet Date certified by the chief financial officer of REIT, (b) an
unaudited statement of Net Operating Income for the period ending SeptemberJune
30, 2016,2020, reasonably satisfactory in form to the Agent and certified by the
chief financial officer of REIT as fairly presenting the Net Operating Income
for such periods, and (c) certain other financial information relating to the
Borrower, the Guarantors, the Borrowing Base Properties and the Collateral. The
balance sheet and statements referred to in clauses (a) and (b) above have been
prepared in accordance with generally accepted accounting principles and fairly
present the consolidated financial condition of REIT and its Subsidiaries as of
such dates and the consolidated results of the operations of REIT and its
Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, of REIT or any of its Subsidiaries involving material amounts not
disclosed in said financial statements and the related notes thereto.

 

  §6.5

No Material Changes. Since the Balance Sheet Date or the date of the most recent
financial statements delivered pursuant to §7.4 (with the date which is the most
recent being applicable), there has occurred no materially adverse change in the
financial condition, operations, prospects, business or assets of REIT and its
Subsidiaries taken as a whole (excluding the effects of the outbreak of the
novel coronavirus (COVID-19)) as shown on or reflected in the consolidated
balance sheets of REIT as of the Balance Sheet Date, or its consolidated
statement of income or cash flows as of the Balance Sheet Date, other than
changes in the ordinary course of business that have not and could not
reasonably be expected to have a Material Adverse Effect. As of the date hereof,
except as set forth on Schedule 6.5 hereto, there has occurred no materially
adverse change in the financial condition, operations, prospects, business or
assets of REIT, its Subsidiaries or any of the Real Estate from the condition
shown on the financial statements delivered to the Agent pursuant to §6.4
(excluding the effects of the outbreak of the novel coronavirus (COVID-19))
other than changes in the ordinary course of business that have not had any
materially adverse effect either individually or in the aggregate on the
business, assets, operations, prospects or financial condition of REIT and its
Subsidiaries, considered as a whole, or of any of the Borrowing Base Properties.

 

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  §6.6

Franchises, Patents, Copyrights, Etc.. The Borrower, the Guarantors and their
respective Subsidiaries possess all franchises, patents, copyrights, trademarks,
trade names, service marks, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now
conducted without known conflict with any rights of others. Except for any
rights granted pursuant to any approved Franchise Agreement for a Borrowing Base
Property, none of the Borrowing Base Properties is owned or operated by the
Borrower or its Subsidiaries under or by reference to any trademark, trade name,
service mark or logo (provided that the Borrowing Base Properties may have signs
or other indications that such properties are owned or operated by REIT or its
Subsidiaries), and except for any rights granted pursuant to any approved
Franchise Agreement for a Borrowing Base Property, none of the trademarks,
tradenames, service marks or logos (other than those indications that such
property is owned or operated by REIT or one of its Subsidiaries) are registered
or subject to any license or provision of law limiting their assignability or
use.

 

  §6.7

Litigation. Except as stated on Schedule 6.7, there are no actions, suits,
proceedings or investigations of any kind pending or to the knowledge of the
Borrower threatened against the Borrower, any Guarantor or any of their
respective Subsidiaries before any court, tribunal, arbitrator, mediator or
administrative agency or board which question the validity of this Agreement or
any of the other Loan Documents, any action taken or to be taken pursuant hereto
or thereto, the Borrowing Base Properties, the Collateral (provided that with
respect to the Initial Borrowing Base Properties and the Collateral, this
representation is only made as of the Closing Date and as of the date of the
Ninth Amendment to Credit Agreement and excludes matters that are fully insured
(other than deductibles)) or any lien, security title or security interest
created or intended to be created pursuant hereto or thereto, or which if
adversely determined could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 6.7, as of the Closing Datedate of the
Ninth Amendment to Credit Agreement there are no judgments, final orders or
awards outstanding against or affecting the Borrower, any Guarantor, any of
their respective Subsidiaries, any Collateral, any Material Contract or any
Borrowing Base Property which are not fully covered by insurance (other than
deductibles). No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

 

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  §6.8

No Material Adverse Contracts, Etc.. None of the Borrower, any Guarantor or any
of their respective Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a Material Adverse Effect. None of the
Borrower, any Guarantor or any of their respective Subsidiaries is a party to
any contract or agreement that has or could reasonably be expected to have a
Material Adverse Effect.

 

  §6.9

Compliance with Other Instruments, Laws, Etc.. None of the Borrower, any
Guarantor or any of their respective Subsidiaries is in violation of any
provision of its charter or other organizational documents, bylaws, or any
agreement or instrument to which it is subject or by which it or any of its
properties is bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that has had or could
reasonably be expected to have a Material Adverse Effect.

 

  §6.10

Tax Status. Each of the Borrower, the Guarantors and their respective
Subsidiaries (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject or has obtained an extension for filing, (b) has paid prior to
delinquency all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations except those
which are being contested in good faith and by appropriate proceedings as
permitted by this Agreement, and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. Except as set
forth on Schedule 6.10, there are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers or
partners of such Person know of no basis for any such claim. Except as set forth
on Schedule 6.10, there are no audits pending or to the knowledge of the
Borrower threatened with respect to any tax returns filed by the Borrower, any
Guarantor or their respective Subsidiaries. The taxpayer identification number
for REIT is 52-1889548, and the taxpayer identification number for the Borrower
is 52-1889549.

 

  §6.11

No Event of Default. No Default or Event of Default has occurred and is
continuing.

 

  §6.12

Investment Company Act. None of the Borrower, the Guarantors or any of their
respective Subsidiaries is an “investment company”, or an “affiliated company”
or a “principal underwriter” of an “investment company”, as such terms are
defined in the Investment Company Act of 1940.

 

  §6.13

Setoff; Absence of UCC Financing Statements.

(a) The Collateral and the rights of the Agent and the Lenders with respect to
the Collateral are not subject to any setoff, claims (except for Liens with
respect thereto permitted by §8.2), withholdings or other defenses by REIT, the
Borrower or any of their Subsidiaries or Affiliates or, to the best knowledge of
the Borrower, any other Person.

 

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(b) Except with respect to Liens with respect to such Person permitted by §8.2
or as disclosed on the lien search reports delivered to and approved by the
Agent, there is no financing statement (but excluding any financing statements
that may be filed against Borrower or any Guarantor thereof without the consent
or agreement of such Persons), security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any applicable filing records,
registry, or other public office, that purports to cover, affect or give notice
of any present or possible future lien on, or security interest or security
title in, any property of Borrower or any Guarantor or rights thereunder.

 

  §6.14

Certain Transactions. Except as disclosed on Schedule 6.14 hereto, none of the
partners, officers, trustees, managers, members, directors, or employees of the
Borrower, any Guarantor or any of their respective Subsidiaries is, nor shall
any such Person become, a party to any transaction with the Borrower, any
Guarantor or any of their respective Subsidiaries or Affiliates (other than for
services as partners, managers, members, employees, officers and directors),
including any agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any partner, officer, trustee,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any partner, officer, trustee,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, which are on terms less favorable to the Borrower,
a Guarantor or any of their respective Subsidiaries than those that would be
obtained in a comparable arms-length transaction.

 

  §6.15

Employee Benefit Plans. The Borrower, each Guarantor and each ERISA Affiliate
has fulfilled its obligation, if any, under the minimum funding standards of
ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.
Neither the Borrower, any Guarantor nor any ERISA Affiliate has (a) sought a
waiver of the minimum funding standard under Section 412 of the Code in respect
of any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan,
(b) failed to make any contribution or payment to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, or made any amendment to any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Code, or (c) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. None of the assets of REIT or any of its Subsidiaries,
including, without limitation, any Borrowing Base Property or other Collateral,
constitutes a “plan asset” of any Employee Plan, Multiemployer Plan or
Guaranteed Pension Plan.

 

  §6.16

Disclosure. All of the representations and warranties made by or on behalf of
the Borrower, the Guarantors and their respective Subsidiaries in this Agreement
and the other Loan Documents or any document or instrument delivered to the
Agent or the Lenders pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects, except to the extent of
changes resulting

 

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  from transactions permitted by the Loan Documents (it being, understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date), and neither the Borrower nor any Guarantor has failed to
disclose such information as is necessary to make such representations and
warranties not misleading. All information contained in this Agreement, the
other Loan Documents or otherwise furnished to or made available to the Agent or
the Lenders by or on behalf of the Borrower, any Subsidiary or any Guarantor, as
supplemented to date, taken as a whole, is and, when delivered, will be true and
correct in all material respects and, as supplemented to date, does not, and
when delivered will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein not
misleading. The written information, reports and other papers and data with
respect to the Borrower, any Subsidiary, any Guarantor, the Borrowing Base
Properties or the Collateral, including, without limitation, the Borrowing Base
Properties (other than projections and estimates) furnished to the Agent or the
Lenders in connection with this Agreement or the obtaining of the Commitments of
the Lenders hereunder was, at the time so furnished, taken as a whole, complete
and correct in all material respects, or has been subsequently supplemented by
other written information, reports or other papers or data, to the extent
necessary to give in all material respects a true and accurate knowledge of the
subject matter in all material respects; provided that such representation shall
not apply to (a) the accuracy of any appraisal, title commitment, survey, or
engineering and environmental reports prepared by third parties or legal
conclusions or analysis provided by the Borrower’s or the Guarantors’ counsel
(although the Borrower and the Guarantors have no reason to believe that the
Agent and the Lenders may not rely on the accuracy thereof) or (b) budgets,
projections and other forward-looking speculative information prepared in good
faith by the Borrower (except to the extent the related assumptions were when
made manifestly unreasonable).

 

  §6.17

Trade Name; Place of Business. Neither the Borrower nor any Guarantor uses any
trade name or conducts business under any name other than its actual name set
forth in the Loan Documents or names licensed to them by Franchisors. The
principal place of business of the Borrower is 4800 Montgomery Lane1800 West
Pasewalk Avenue, Suite 220, Bethesda, Maryland 20814.120, Norfolk, Nebraska
68701.

 

  §6.18

Regulations T, U and X. No portion of any Loan is to be used for the purpose of
purchasing or carrying any “margin security” or “margin stock” as such terms are
used in Regulations T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 220, 221 and 224. Neither the Borrower nor any Guarantor
is engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any “margin security” or “margin stock” as such terms are used in
Regulations T, U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. Parts 220, 221 and 224.

 

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  §6.19

Environmental Compliance. The Borrower has obtained and provided to the Agent,
or in the case of Borrowing Base Properties acquired after the date hereof will
obtain and provide to the Agent, written environmental site assessment reports
of the Environmental Engineer, which reports shall be in form and substance
satisfactory to the Agent (collectively, the “Environmental Reports”). Except as
set forth in the Environmental Reports with respect to Borrowing Base
Properties, the Borrower makes the following representations and warranties:

(a) None of the Borrower, the Guarantors or their respective Subsidiaries nor
any manager of the Real Estate, nor any tenant or operations thereon, is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under any Environmental Law, which violation
(i) involves Real Estate (other than the Borrowing Base Properties) and has had
or could reasonably be expected to have a Material Adverse Effect or
(ii) involves a Borrowing Base Property and has had or could reasonably be
expected, when taken together with other matters covered by this §6.19 and §8.6,
to result in liability, clean up, remediation, containment, correction or other
costs to the Borrower or any Guarantor individually or in the aggregate with
other Borrowing Base Properties in excess of $250,000.00 or could reasonably be
expected to materially adversely affect the operation of or ability to use such
property.

(b) None of the Borrower, any Guarantor nor any of their respective Subsidiaries
has received notice from any third party including, without limitation, any
Governmental Authority, (i) that it has been identified by the United States
Environmental Protection Agency (“EPA”) as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any Hazardous Substance(s) which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower, any Guarantor or any of their respective Subsidiaries conduct
a remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any third party’s incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances, which in any case (i) involves Real Estate
(other than the Borrowing Base Properties) and has had or could reasonably be
expected to have a Material Adverse Effect or (ii) involves a Borrowing Base
Property.

(c) (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws, and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any portion of the
Real Estate except those which are being operated and maintained in compliance
with Environmental Laws; (ii) in the course of any activities conducted by the
Borrower, the Guarantors, their respective Subsidiaries or the users or
operators of their properties, no Hazardous Substances have been generated or
are being used on the Real Estate except in the ordinary course of the
Borrower’s, the Guarantors’ and their respective Subsidiaries’ respective
businesses and in accordance with applicable Environmental Laws; (iii) there has
been no past or present Release or threatened Release of Hazardous Substances
on, upon, into or from the Real

 

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Estate; (iv) there have been no Releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on the Real Estate; and
(v) any Hazardous Substances that have been generated on any of the Real Estate
have been transported off-site in accordance with all applicable Environmental
Laws (except with respect to the foregoing in this §6.19(c) as to (A) any Real
Estate (other than the Borrowing Base Properties) where the foregoing has not
had or could not reasonably be expected to have a Material Adverse Effect) and
(B) any Borrowing Base Property where the foregoing has not had or could not
reasonably be expected, when taken together with other matters covered by this
§6.19 and §8.6, to result in liability, clean up, remediation, containment,
correction or other costs to the Borrower or any Guarantor individually or in
the aggregate with other Borrowing Base Properties in excess of $250,000.00 and
could not reasonably be expected to materially adversely affect the operation of
or ability to use such property.

(d) none of the Borrower, the Guarantors, their respective Subsidiaries nor the
Borrowing Base Properties is subject to any applicable Environmental Law
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement in each case by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to the
recording of the Mortgages or to the effectiveness of any other transactions
contemplated hereby, except for such matters with which the Borrower, the
Guarantors, their respective Subsidiaries shall have complied with as of the
Closing Date.

(e) There are no existing or closed sanitary landfills, solid waste disposal
sites, or hazardous waste treatment, storage or disposal facilities (i) on or
affecting the Real Estate (other than the Borrowing Base Properties) except
where such existence has not had or could not be reasonably be expected to have
a Material Adverse Effect, or (ii) on or affecting a Borrowing Base Property.

(f) There has been no claim by any party that any use, operation, or condition
of the Real Estate has caused any nuisance or any other liability or adverse
condition on any other property, nor is there any basis for such a claim, except
where such existence (1) as to any Real Estate other than a Borrowing Base
Property has not had or could not be reasonably be expected to have a Material
Adverse Effect or (2) with respect to any Borrowing Base Property has not had or
could not reasonably be expected, when taken together with other matters covered
by this §6.19 and §8.6, to result in liability, clean up, remediation,
containment, correction or other costs to the Borrower or any Guarantor
individually or in the aggregate with other Borrowing Base Properties in excess
of $250,000.00 or could not reasonably be expected to materially adversely
affect the operation of or ability to use such property.

(g) Except as disclosed in a report of an Environmental Engineer delivered to
Agent in connection with the inclusion of Real Estate as a Borrowing Base
Property, no asbestos is located in or on any Building, except for nonfriable
asbestos or contained friable asbestos which is being monitored and/or
remediated in accordance with the recommendations of an Environmental Engineer.

 

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  §6.20

Subsidiaries; Organizational Structure . Schedule 6.20(a) sets forth, as of the
date hereofof the Ninth Amendment to Credit Agreement, all of the Subsidiaries
of REIT, the form and jurisdiction of organization of each of the Subsidiaries,
and REIT’s direct and indirect ownership interests therein. Schedule 6.20(b)
sets forth, as of the date hereofof the Ninth Amendment to Credit Agreement, all
of the Unconsolidated Affiliates of the REIT and its Subsidiaries, the form and
jurisdiction of organization of each of the Unconsolidated Affiliates, REIT’s or
its Subsidiary’s ownership interest therein and the other direct owners of the
applicable Unconsolidated Affiliate. No Person owns any legal, equitable or
beneficial interest in any of the Persons set forth on Schedules 6.20(a) and
6.20(b) except (i) as to Borrower, the limited partners of Borrower, (ii) as to
any interests not owned by REIT or its Wholly-Owned Subsidiaries, the indirect
owners of any Unconsolidated Affiliate, and (iii) as set forth on such
Schedules. Each Subsidiary Guarantor is a Wholly-Owned Subsidiary of Borrower,
General Partner (as to TRS) or TRS (as to the other TRS Lessees).

 

  §6.21

Leases. Except as set forth on Schedule 6.21 with respect to the Initial
Borrowing Base Properties or as disclosed in writing to Agent prior to the
acceptance of any additional Borrowing Base Properties, none of the Borrowing
Base Properties is subject to any Lease or other occupancy agreement, other than
an Operating Lease to a Subsidiary Guarantor and a Ground Lease, as applicable.
The Borrower has delivered to the Agent true copies of the Leases and any
amendments thereto relating to each Borrowing Base Property required to be
delivered as a part of the Borrowing Base Qualification Documents (other than
the boat slip leases with respect to the Borrowing Base Properties located at
255 Lore Road, Solomons, Maryland and 201 Ocean Drive, Key Largo, Florida). Such
Leases constitute as of such date thereof the sole leases or licenses or other
agreements pertaining to the occupancy or use of space (except for occupants of
the Hotel Property in the ordinary course of business) at such Borrowing Base
Property and in the Building relating thereto. Except as reflected on Schedule
6.21, no tenant under any Lease (i) is entitled to any free rent, partial rent,
rebate of rent payments, credit, offset or deduction in rent, including, without
limitation, lease support payments, lease buy-outs or abatements or credits, and
(ii) has made any prepayments of rent or other payments due under such Lease for
more than one (1) month in advance of the due date of such payment. Except as
set forth in Schedule 6.21 and except with respect to defaults under the West
Virginia Lease as set forth in the tenant estoppel certificate delivered on or
about the date hereof,6.21, the Leases reflected therein are, as of the date of
inclusion of the applicable Borrowing Base Property as a Borrowing Base
Property, in full force and effect in accordance with their respective terms,
without basic rental payments or other payments to the landlord thereunder being
in default beyond any applicable cure period or, to the best of Borrower’s
knowledge, any other material default thereunder, nor are there any defenses,
counterclaims, offsets, concessions, rebates, or tenant improvement allowances,
contributions or landlord construction obligations available to any tenant
thereunder, and, except as reflected in Schedule 6.21 and except with respect to
defaults under the West Virginia Lease as set forth in the tenant estoppel
certificate delivered on or about the date hereof,6.21, neither the Borrower nor
any Guarantor has given or made, any notice of any payment or other material
default, or any claim, which remains uncured or unsatisfied, with respect to any
of the Leases, and to the best of the knowledge and belief of the Borrower,
there is no basis for any such claim or notice of default by any tenant under a
Lease.

 

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  §6.22

Property. Except as set forth on Schedule 6.22, (i) all of the Borrowing Base
Properties, and all major building systems located thereon, are structurally
sound, in good condition and working order and free from material defects,
subject to ordinary wear and tear, (ii) all of the other Real Estate of the
Borrower, the Guarantors and their respective Subsidiaries is structurally
sound, in good condition and working order, subject to ordinary wear and tear,
except where such defects have not had and could not reasonably be expected to
have a Material Adverse Effect, (iii) the Real Estate, and the use and operation
thereof, is in material compliance with all applicable federal and state law and
governmental regulations and any local ordinances, orders or regulations,
including without limitation, laws, regulations and ordinances relating to
zoning, building codes, parking, subdivision, fire protection, health, safety,
handicapped access, historic preservation and protection, wetlands, tidelands
and flood control, including without limitation, the American With Disabilities
Act or any state laws regarding disability requirements, and any agreement,
declaration, covenant or instrument to which Borrower, any Subsidiary Guarantor
or its respective Borrowing Base Property may be subject (hereinafter referred
to collectively as the “Requirements”) (but excluding for purposes of this
§6.22, Environmental Laws) except where a failure to so comply as to Real Estate
other than Borrowing Base Properties has not and could not reasonably be
expected to have a Material Adverse Effect, and no Building located on a
Borrowing Base Property is a so-called non-conforming use in violation of
applicable zoning regulations, (iv) except as shown on the Survey for such
Borrowing Base Property, such Borrowing Base Property is not located in a flood
hazard area as defined by the Federal Insurance Administration, and such
Borrowing Base Property is not located in Zone 3 or Zone 4 of the “Seismic Zone
Map of the U.S.,” (v) neither Borrower nor any Subsidiary Guarantor has received
any written notice of, and has no knowledge of, any approvals, consents,
licenses, permits, utility installations and connections (including, without
limitation, drainage facilities), curb cuts and street openings, required by
Applicable Laws or any agreement affecting such Borrowing Base Property for the
maintenance, operation, servicing and use of such Borrowing Base Property or any
Building for its current use (hereinafter referred to as the “Project
Approvals”) which have not been granted, effected, or performed and completed
(as the case may be), in accordance with the timeline required thereunder, or
any fees or charges therefor which have not been fully paid before becoming
delinquent, or which are no longer in full force and effect, and no Project
Approvals will terminate, or become void or voidable or terminable on any
foreclosure sale of such Borrowing Base Property pursuant to the applicable
Mortgage, (vi) there are no outstanding notices, suits, orders, decrees or
judgments relating to zoning, building use and occupancy, fire, health,
sanitation or other violations affecting, against, or with respect to, such

 

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  Borrowing Base Property or any part thereof for any material matter (including
any matter that could affect the use or operation of the Property for its
intended purposes), (vii) neither Borrower nor any Subsidiary Guarantor has
received any written notice of, nor has any knowledge of, any material violation
of any applicable Requirements or Project Approvals or any other material
violation of restrictions or agreements by which Borrower, such Subsidiary
Guarantor or such Borrowing Base Property is bound; (viii) all utilities
necessary for the use and operation of the Borrowing Base Properties are
installed to the property lines of the Borrowing Base Properties through
dedicated public rights of way or through perpetual private easements approved
by the Agent with respect to which, as applicable, any applicable Mortgage
creates a valid and enforceable first lien and, except in the case of drainage
facilities, are connected to the Building located thereon with valid permits and
are adequate to service the Building in compliance with Applicable Law, (ix) the
streets abutting the Borrowing Base Properties are dedicated and accepted public
roads, to which the Borrowing Base Properties in each case has direct access or
are perpetual private ways (with direct access to public roads) to which the
Borrowing Base Properties have direct access approved by the Agent and with
respect to which, as applicable, any applicable Mortgage creates a valid and
enforceable first lien (subject to Liens permitted by §8.2(ix)), (x) there are
no unpaid or outstanding real estate or other taxes (including payments in lieu
of taxes) or assessments on or against any of the Borrowing Base Properties
which are payable by the Borrower, any Guarantor or any of their respective
Subsidiaries (except only real estate or other taxes or assessments, that are
not yet delinquent or are being protested as permitted by this Agreement),
(xi) there are no unpaid or outstanding gross receipts, rent or sales taxes
payable by Borrower or any Subsidiary Guarantor, with respect to the use and
operation of such Borrowing Base Property which are due and payable,
(xii) Borrower has delivered to Agent a true, correct and complete copy of the
Management Agreement and Franchise Agreement relating to such Borrowing Base
Property, (xiii) neither the improvements located on such Borrowing Base
Property nor any operations therein, is now or has been damaged, impacted, or
otherwise affected in any material respect by or subject to the growth or
existence of a Mold Condition (as defined in the Indemnity Agreement);
(xiv) except as set forth on Schedule 6.22 with respect to the Borrowing Base
Properties as of the date of this Agreement or with respect to additional
Borrowing Base Properties as disclosed in writing to Agent and the Lenders prior
to acceptance of such Real Estate as a Borrowing Base Property, Borrower or the
Subsidiary Guarantors have completed all PIP or other work required to be
performed or completed under the Franchise Agreements with respect to each
Borrowing Base Property by the date of acceptance of such Real Estate as a
Borrowing Base Property, (xv) each Borrowing Base Property is separately
assessed for purposes of real estate tax assessment and payment, (xvi) there are
no pending, or to the knowledge of the Borrower, threatened or contemplated,
eminent domain proceedings against any Borrowing Base Property except as
disclosed to Agent pursuant to §7.7,

 

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  (xvii) none of the Borrowing Base Property is now damaged in any material
respect as a result of any fire, explosion, accident, flood or other casualty
except as disclosed to Agent pursuant to §7.7, (xviii) none of the Borrower, the
Guarantors or any of their respective Subsidiaries has received any outstanding
notice from any insurer or its agent requiring performance of any work with
respect to any of the Borrowing Base Property (other than with respect to
outstanding claims in the ordinary course of business that are not material), or
canceling or threatening to cancel any policy of insurance, and each of the
Borrowing Base Properties complies with the material requirements of all of the
Borrower’s, Guarantors’ and their respective Subsidiaries’ insurance carriers,
and (xix) no person or entity has any right or option to acquire any Borrowing
Base Property or any portion thereof or interest therein. There have been no
changes to any of the Tier II Properties that are Borrowing Base Properties
(including, without limitation, changes or additions to the improvements,
condemnations, changes in ingress, egress or parking, easements or
encroachments) that would be shown by a current and accurate Survey from these
conditions shown on the Surveys for the Tier II Properties provided to the Agent
prior to the Closing Date.

 

  §6.23

Brokers. None of REIT nor any of its Subsidiaries has engaged or otherwise dealt
with any broker, finder or similar entity in connection with this Agreement or
the Loans contemplated hereunder.

 

  §6.24

Other Debt. As of the date of this Agreement and as of the date of the Ninth
Amendment to Credit Agreement, (a) none of the Borrower, any Guarantor nor any
of their respective Subsidiaries is in default of the payment of any
Indebtedness, the performance of any related agreement, mortgage, deed of trust,
security agreement, financing agreement, indenture or lease to which any of them
is a party, and (b) no Indebtedness of the Borrower, any Guarantor or any of
their respective Subsidiaries has been accelerated. Neither the Borrower nor any
Guarantor is a party to or bound by any agreement, instrument or indenture that
may require the subordination in right or time or payment of any of the
Obligations to any other indebtedness or obligation of the Borrower or any
Guarantor. Schedule 6.24 hereto sets forth all agreements, mortgages, deeds of
trust, financing agreements or other material agreements binding upon the
Borrower and each Guarantor or their respective properties and entered into by
the Borrower and/or such Guarantor as of the date of thisthe Ninth Amendment to
Credit Agreement with respect to any Indebtedness of the Borrower or any
Guarantor in an amount greater than $1,000,000.00 (other than with respect to
any Indebtedness being repaid with the proceeds of Loans on the date hereof),
and the Borrower has provided the Agent with such true, correct and complete
copies thereof.

 

  §6.25

Solvency. After giving effect to the transactions contemplated by this Agreement
and the other Loan Documents, including all Loans made or to be made hereunder,
neither the Borrower nor any Guarantor is insolvent on a balance sheet basis
such that the sum of such Person’s assets exceeds the sum of such Person’s
liabilities, the Borrower and each Guarantor is able to pay its debts as they
become due, and the Borrower and each Guarantor has sufficient capital to carry
on its business.

 

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  §6.26

No Bankruptcy Filing. Neither the Borrower nor any Guarantor is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or for the liquidation of its assets or property, and the
Borrower has no knowledge of any Person contemplating the filing of any such
petition against it or any Guarantor.

 

  §6.27

No Fraudulent Intent. Neither the execution and delivery of this Agreement or
any of the other Loan Documents nor the performance of any actions required
hereunder or thereunder is being undertaken by the Borrower, any Guarantor or
any of their respective Subsidiaries with or as a result of any actual intent by
any of such Persons to hinder, delay or defraud any entity to which any of such
Persons is now or will hereafter become indebted.

 

  §6.28

Transaction in Best Interests of the Borrower and Guarantors; Consideration. The
transaction evidenced by this Agreement and the other Loan Documents is in the
best interests of the Borrower, each Guarantor and their respective
Subsidiaries. The Borrower and the Guarantors are engaged in common business
enterprises related to those of the Borrower and each Guarantor will derive
substantial direct and indirect benefit from the effectiveness and existence of
this Agreement. The direct and indirect benefits to inure to the Borrower, each
Guarantor and their respective Subsidiaries pursuant to this Agreement and the
other Loan Documents constitute substantially more than “reasonably equivalent
value” (as such term is used in Section 548 of the Bankruptcy Code) and
“valuable consideration,” “fair value,” and “fair consideration” (as such terms
are used in any applicable state fraudulent conveyance law), in exchange for the
benefits to be provided by the Borrower, the Guarantors and their respective
Subsidiaries pursuant to this Agreement and the other Loan Documents, and but
for the willingness of each Guarantor to guaranty the Loan, the Borrower would
be unable to obtain the financing contemplated hereunder which financing will
enable the Borrower, each Guarantor and their respective Subsidiaries to have
available financing to conduct and expand their business.

 

  §6.29

Contribution Agreement. The Borrower and the Guarantors have executed and
delivered the Contribution Agreement, and the Contribution Agreement constitutes
the valid and legally binding obligations of such parties enforceable against
them in accordance with the terms and provisions thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

 

  §6.30

Representations and Warranties of Guarantors. The Borrower has no knowledge that
any of the representations or warranties of any Guarantor contained in any Loan
Document to which such Guarantor is a party are untrue or inaccurate in any
material respect.

 

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  §6.31

OFAC. None of the Borrower, the Guarantors, any of their Subsidiaries or any of
their respective officers or, to the knowledge of any Borrower, their respective
directors, employees, agents, advisors or Affiliates (a) is (or will be) a
Person: (i) that is, or is owned or controlled by Persons that are: (x) the
subject or target of any Sanctions Laws and Regulations or (y) located,
organized or resident in a country or territory that is, or whose government is,
the subject of Sanctions Laws and Regulations, which includes, as of the Closing
Date, Crimea, Cuba, Iran, North Korea, Sudan and Syria or (ii) listed in any
list related to or otherwise designated under any Sanctions Laws and Regulations
maintained under OFAC (including, those Persons named on OFAC’s Specially
Designated and Blocked Persons list), the U.S. Department of State or by the
United Nations Security Council, the European Union or Her Majesty’s Treasury of
the United Kingdom or under the September 24, 2001 Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (any such Person described in clauses (i) or (ii),
a “Designated Person”) and (b) is not and shall not engage in any dealings or
transactions or otherwise be associated with a Designated Person. In addition,
the Borrower hereby agrees to provide to the Lenders any additional information
that a Lender reasonably deems necessary from time to time in order to ensure
compliance with Sanctions Laws and Regulations and all Applicable Laws
concerning money laundering and similar activities. Neither Borrower, any
Guarantor, nor any Subsidiary, director or officer of Borrower or Guarantor or,
to the knowledge of Borrower, any Affiliate, agent or employee of Borrower or
any Guarantor, has engaged in any activity or conduct which would violate any
applicable anti-bribery, anti-corruption or anti-money laundering laws or
regulations in any applicable jurisdiction, including without limitation, any
Sanctions Laws and Regulations.

 

  §6.32

Labor Matters. Except as, in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against REIT or any of its Subsidiaries pending
or, to the knowledge of the Borrower, threatened; (b) hours worked by and
payment made to employees of the REIT or any of its Subsidiaries have not been
in material violation of the Fair Labor Standards Act or any other applicable
requirement of law dealing with such matters; and (c) all payments due from REIT
or any of its Subsidiaries on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of the REIT or such
Subsidiary.

 

  §6.33

Ground Lease.

(a) Each Ground Lease with respect to a Borrowing Base Property, if any,
contains the entire agreement of the Borrower or applicable Subsidiary Guarantor
and the applicable owner of the fee interest in such Borrowing Base Property
(the “Fee Owner”), pertaining to the Borrowing Base Property covered thereby.
The Borrower or applicable Subsidiary Guarantors have no estate, right, title or
interest in or to the Borrowing Base Property affected by a Ground Lease except
under and pursuant to the Ground Lease. The Borrower has delivered a true and
correct copy of the Ground Lease to the Agent and the Ground Lease has not been
modified, amended or assigned, with the exception of written instruments that
have been recorded in the applicable real estate records and referenced in the
Title Policy for such Borrowing Base Property.

 

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(b) The applicable Fee Owner is the exclusive fee simple owner of the Borrowing
Base Property, subject only to the Ground Lease and all Liens and other matters
disclosed in the applicable Title Policy for such Borrowing Base Property
subject to the Ground Lease, and the applicable Fee Owner is the sole owner of
the lessor’s interest in the Ground Lease.

(c) There are no rights to terminate the Ground Lease other than the applicable
Fee Owner’s right to terminate by reason of default, casualty, condemnation or
other reasons, in each case as expressly set forth in the Ground Lease.

(d) Each Ground Lease is in full force and effect and no breach or default or
event that with the giving of notice or passage of time would constitute a
breach or default under any Ground Lease (a “Ground Lease Default”) exists or
has occurred on the part of Borrower a Subsidiary Guarantor or, to Borrower’s
knowledge, on the part of a Fee Owner under any Ground Lease. All base rent and
additional rent, if any, due and payable under each Ground Lease has been paid
through the date hereof and neither Borrower nor a Subsidiary Guarantor is
required to pay any deferred or accrued rent after the date hereof under any
Ground Lease. Neither Borrower nor a Subsidiary Guarantor has received any
written notice that a Ground Lease Default has occurred or exists, or that any
Fee Owner or any third party alleges the same to have occurred or exist.

(e) The Borrower or applicable Subsidiary Guarantor is the exclusive owner of
the ground lessee’s interest under and pursuant to each Ground Lease and has not
assigned, transferred or encumbered its interest in, to, or under the Ground
Lease, except to Agent under the Loan Documents or the lender of any
Indebtedness being repaid with the proceeds of Loans on the date hereof and
which is to be released in connection with the closing under this Agreement.

 

  §6.34

Material Contracts. Schedule 6.34 is, as of the date of thisthe Ninth Amendment
to Credit Agreement, a true, correct and complete listing of all Material
Contracts. Each of the Material Contracts is valid and enforceable in accordance
with its terms and is in full force and effect. Each Borrower or Guarantor that
is a party to any Material Contract has performed and is in compliance in all
material respects with all of the terms of such Material Contract, and no
default or event of default, or event or condition which with the giving of
notice, the lapse of time, or both, would constitute such a default or event of
default, exists with respect to any such Material Contract.

 

  §6.35

Intellectual Property. The Borrower and the Guarantors own or have the right to
use, under valid license agreements or otherwise, all patents, licenses,
franchises, trademarks, trademark rights, trade names, trade name rights, trade
secrets and copyrights, if any, necessary to the conduct of its businesses,
without known conflict with any patent, license, franchise, trademark, trade
secret, trade name, copyright, or other proprietary right of any other Person.

 

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  §6.36

EEA Financial Institutions. None of the Borrower, any Guarantor, nor their
respective Subsidiaries is an EEA Financial Institution.

 

  §6.37

Initial Borrowing Base Properties. Schedule 6.37 is, as of the date of thisthe
Ninth Amendment to Credit Agreement, a true, correct and complete listing of the
owners, TRS Lessees, Managers and franchisees or licensees under the Franchise
Agreements for the Initial Borrowing Base Properties. The rights of the
franchisee or licensee under the Franchise Agreements for the Borrowing Base
Properties and of the Borrower or Subsidiary Guarantor under the Management
Agreements for the Borrowing Base Properties are included in the Collateral.

 

§7.

AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any Lender has any obligation to make any Loans or
issue Letters of Credit:

 

  §7.1

Punctual Payment. The Borrower will duly and punctually pay or cause to be paid
the principal and interest on the Loans and all interest and fees provided for
in this Agreement, all in accordance with the terms of this Agreement and the
Notes, as well as all other sums owing pursuant to the Loan Documents.

 

  §7.2

Maintenance of Office. The Borrower and each Guarantor will maintain their
respective chief executive office at 4800 Montgomery Lane1800 W. Pasewalk
Avenue, Suite 220, Bethesda, Maryland 20814,120, Norfolk, Nebraska 68701, or at
such other place in the United States of America as the Borrower or any
Guarantor shall designate upon thirty (30) days prior written notice to the
Agent and the Lenders, where notices, presentations and demands to or upon the
Borrower or such Guarantor in respect of the Loan Documents may be given or
made.

 

  §7.3

Records and Accounts. The Borrower and each Guarantor will (a) keep, and cause
each of their respective Subsidiaries to keep true and accurate records and
books of account in which full, true and correct entries will be made in
accordance with GAAP and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation and amortization of its properties
and the properties of their respective Subsidiaries, contingencies and other
reserves. Neither the Borrower, any Guarantor nor any of their respective
Subsidiaries shall, without the prior written consent of the Agent, (x) make any
material change to the accounting policies/principles used by such Person in
preparing the financial statements and other information described in §6.4 or
§7.4, unless such change is required by GAAP or is mandated by GAAP to became
effective, or (y) change its fiscal year. The Agent and the Lenders acknowledge
that REIT’s fiscal year is a calendar year.

 

  §7.4

Financial Statements, Certificates and Information. The Borrower will deliver or
cause to be delivered to the Agent, in form and substance reasonably
satisfactory to the Agent, with sufficient copies for each of the Lenders:

 

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(a) not later than ninety (90) days after the end of each calendar year, the
audited consolidated balance sheet of REIT and its Subsidiaries at the end of
such year, and the related audited consolidated statements of operations,
equity, and cash flows for such year, setting forth in comparative form the
figures for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with GAAP, together with a certification by the
chief financial officer, chief executive officer, treasurer or chief accounting
officer of the REIT, that the information contained in such financial statements
fairly presents the financial position of REIT and its Subsidiaries, and
accompanied by an auditor’s report prepared without qualification as to the
scope of the audit by an independent nationally recognized accounting firm
reasonably approved by the Agent and who shall have authorized REIT to deliver
such financial statements and certifications thereof to the Agent and the
Lenders (notwithstanding the foregoing and for the avoidance of doubt, a going
concern qualification within such auditor’s report shall not constitute a
default hereunder);

(b) not later than forty-five (45) days after the end of each of the first three
(3) fiscal quarters of each year, copies of the unaudited consolidated balance
sheet of REIT and its Subsidiaries, at the end of such quarter, and the related
unaudited consolidated statements of operations, equity and cash flows for the
portion of REIT’s fiscal year then elapsed, all in reasonable detail and
prepared in accordance with GAAP, together with a certification by the chief
financial officer, chief executive officer, treasurer or chief accounting
officer of REIT that the information contained in such financial statements
fairly presents the financial position of REIT and its Subsidiaries on the date
thereof (subject to year-end adjustments);

(c) simultaneously with the delivery of the financial statements referred to in
§§7.4(a) and 7.4(b), (i) a statement (a “Compliance Certificate”) certified by
the chief financial officer, chief executive officer, treasurer or chief
accounting officer of REIT in the form of Exhibit G hereto (or in such other
form as the Agent may approve from time to time) setting forth in reasonable
detail computations evidencing compliance or non-compliance (as the case may be)
with the covenants contained in §9 and the other covenants described in such
certificate and (if applicable) setting forth reconciliations to reflect changes
in GAAP since the Balance Sheet Date, and (ii) a projection for the current and
next three (3) succeeding fiscal quarters of compliance with the covenants
described in the Compliance Certificate. The Borrower shall submit with the
Compliance Certificate a Borrowing Base Certificate in the form of Exhibit H
attached hereto (a “Borrowing Base Certificate”) pursuant to which the Borrower
shall calculate the Debt Yieldcovenants set forth in §9.1 and §9.3, as
applicable, and the components thereof as of the end of the immediately
preceding fiscal quarter, together with such supporting information as Agent may
request, if reasonably available. Such Borrowing Base Certificate shall specify
whether there are any monetary or other defaults under Ground Leases at a
Borrowing Base Property. All income, expense and value associated with Real
Estate or other Investments disposed of during any quarter will be eliminated
from calculations, where applicable. All income, expense and value associated
with Real Estate or other Investments acquired during any quarter will be added
to calculations, where applicable, in a manner reasonably acceptable to Agent.
The Compliance Certificate shall be accompanied by copies of the statements of
the Consolidated EBITDA, Consolidated Adjusted EBITDA, Funds Available for
Distribution, Net Operating Income, Liquidity (as of Monday and Thursday of each
week) and Adjusted Net Operating Income for such fiscal quarter, prepared on a
basis consistent with the statements furnished to the Agent prior to the date
hereof and otherwise in form and substance reasonably satisfactory to the Agent,
together with a certification by the chief financial officer, chief executive
officer, treasurer or chief accounting officer of REIT that

 

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the information contained in such statement fairly presents the Consolidated
EBITDA, Consolidated Adjusted EBITDA, Funds Available for Distribution, Net
Operating Income, Liquidity and Adjusted Net Operating Income for such periods.
Such statements shall also include (i) a report on the average daily rate,
occupancy levels and revenues per available room for each Borrowing Base
Property individually and in the aggregate and for all Real Estate of the REIT
and its Subsidiaries in the aggregate for (A) the current month (as compared to
the current budgetApproved Budget and comparable period for the prior year),
(B) on a year-to-date basis (as compared to the current budgetApproved Budget
and the comparable period of the prior year), (C) on a trailing 12-month basis
(on a month-by-month basis), and (ii) a budget reforecast (expressed on a
month-by-month fiscal year basis, showing year-to-date actual results (including
operations, debt service, capital expenditures and extraordinary expenses) plus
projections for the remainder of the year); and the next four (4) calendar
quarters) (which as to the next four (4) calendar quarters may in part be based
upon the Management Projections), and (iii) a statement showing the amounts
excluded from the calculation of Adjusted Consolidated EBITDA pursuant to clause
(ii) of the definition thereof and the amounts excluded from the calculation of
Fixed Charges pursuant to the definition thereof;

(d) simultaneously with the delivery of the financial statements referred to in
subsections (a) and (b) above, (i) an operating statement for each of the
Borrowing Base Properties for each such fiscal quarter and year to date,
together with a comparison against the operating statement for the prior year,
and a consolidated operating statement for the Borrowing Base Properties for
each such fiscal quarter and year to date, together with a comparison against
the consolidated operating statement for the prior year (such statements and
reports to be in form reasonably satisfactory to Agent), (ii) a consolidated
operating statement for all of the Real Estate of the Borrower and its
Subsidiaries for each such fiscal quarter and year to date (such statements and
reports to be in form reasonably satisfactory to Agent), (iii) an updated twelve
(12) month cash flow projection including details of the taxes, insurance, and
capital expenditures, and (iv) the status of any PIP or any Renovations at any
Borrowing Base Property;

(e) simultaneously with the delivery of the financial statements referred to in
§§7.4(a) and 7.4(b) above, a statement (i) listing the Real Estate owned or
leased by REIT and its Subsidiaries (or in which REIT or any of its Subsidiaries
owns an interest) and stating the location thereof, the date acquired and the
acquisition cost, the number of rooms and occupancy, and whether such Real
Estate constitutes a Land Asset or a Development Property, and (ii) listing the
Indebtedness of REIT and its Subsidiaries (excluding Indebtedness of the type
described in §§8.1(a), 8.1(c), 8.1(d) and 8.1(f)), which statement shall
include, without limitation, a statement of the original principal amount of
such Indebtedness and the current amount outstanding, the holder thereof, the
maturity date and any extension options, the interest rate, the collateral
provided for such Indebtedness and whether such Indebtedness is Recourse
Indebtedness or Non-Recourse Indebtedness;

(f) contemporaneously with the filing or mailing thereof, copies of all material
of a financial nature, reports, proxy statements and all other material
information sent to the owners of the Borrower or REIT (other than personal tax
information);

 

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(g) promptly following the Agent’s request, after they are filed with the
Internal Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower and REIT;

(h) notice of any audits pending or threatened in writing with respect to any
tax returns filed by REIT or any of its Subsidiaries promptly following notice
of such audit;

(i) promptly following the occurrence thereof, written notice to the Agent of
any new or additional Indebtedness in excess of $1,000,000 or monetary Liens on
any Real Estate directly or indirectly owned or leased by Borrower;

(j) within five (5) Business Days of receipt, copies of any written claim made
with respect to any Non-Recourse Exclusion;

(k) not earlier than November 30 and not later than JanuaryDecember 31 of each
year, a budget and business plan for the REIT and its Subsidiaries and each
Borrowing Base Property for the then-currentfollowing calendar year, which shall
include a budget of planned capital expenditures on both an individual and a
consolidated basis for each Hotel Property of REIT and its Subsidiaries and a
marketing plan for each Hotel Property of the REIT and its Subsidiaries, and
Borrower shall obtain Required Lender’s approval of such budget on or before
thirty (30) days after delivery thereof to the Required Lenders (such approval
not to be unreasonably withheld, conditioned or delayed), and following such
approval such budget shall be the Approved Budget for the following calendar
year (provided that for the avoidance of doubt, no advances for Permitted
Borrowings pursuant to clause (b) of the definition thereof shall be permitted
for the calendar year subject to such proposed budget until such budget is
approved by the Required Lenders);

(l) within forty-five (45) days after the end of each fiscal quarter, for each
Borrowing Base Property, a group booking pace report and market segmentation
report, if reasonably available;

(m) upon the request of Agent, the most current Smith Travel Research STR Report
available, comparing such Borrowing Base Property to its primary competitive
set;

(n) prompt notice of (i) any change in the senior management of the REIT, and
(ii) any change in the business, assets, liabilities, financial condition,
results of operations or business prospects of Borrower, any Guarantor, or any
of their respective Subsidiaries which has had or could have a Material Adverse
Effect;

(o) evidence reasonably satisfactory to Agent of the timely payment of all real
estate taxes for the Borrowing Base Properties;

(p) Within twenty-five (25) days after the end of each calendar month,
(i) individual and consolidated operating statements prepared in accordance with
GAAP and containing (iA) a report on the average daily rate, occupancy levels
and revenues per available room for each Borrowing Base Property for
(A(individually and in the aggregate) and other Real Estate (in the aggregate)
for (1) the current month (as compared to the current budget and

 

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comparable period for the prior year), (B2) on a year-to-date basis (as compared
to the current budgetApproved Budget and the comparable period of the prior
year), (C3) on a trailing 12-month basis (on a month-by-month basis), (iiB) a
budget reforecast (expressed on a month-by-month fiscal year basis, showing
year-to-date actual results plus projections for the remainder of the year),
(iii and the next four (4) calendar quarters) (which as to the next four
(4) calendar quarters may in part be based upon the Management Projections),
(C) a reconciliation of all cash balances, including deposit accounts, reserve
accounts, escrow accounts, and other Restricted Cash and Unrestricted Cash and
Cash Equivalents, (iv) an accounting of amounts funded, disbursed and applied
pursuant to the Cash Flow Waterfall and ofand (D) at the request of Agent, an
explanation of any variances in excess of five percent (5%) of the Approved
Budget, (ii) an accounting of accrued expenses and amounts described in §3.2(c),
(viii) the most current Smith Travel Research STR Report available, comparing
such Borrowing Base Property to its primary competitive set; and (vi, (iv) a
reconciliation for the previous month and year to date to the Approved Budget,
(v) a statement showing the Liquidity of the Borrower as of each Monday and
Thursday together with reasonably detailed supporting calculations, (vi) a
description of any capital-raising events (including sales, financings and
Equity Offerings) during the preceding month, (vii) a description of any amounts
received by the REIT or Borrower under the Merger Agreement, and (viii) such
other information as Agent or the Required Lenders may reasonably request for
the REIT and its Subsidiaries and each Borrowing Base Property or other Real
Estate, including a group booking pace report and market segmentation report, if
reasonably available; and

(q) from time to time, such other financial data and information in the
possession of REIT or its Subsidiaries (including without limitation auditors’
management letters, status of litigation or investigations against REIT or any
of its Subsidiaries and any settlement discussions relating thereto, property
inspection and environmental reports and information as to zoning and other
legal and regulatory changes affecting REIT or any of its Subsidiaries) as the
Agent may reasonably request.

The Borrower shall cooperate with the Agent in connection with the publication
of certain materials and/or information provided by or on behalf of the
Borrower. Documents required to be delivered pursuant to the Loan Documents
shall be delivered by or on behalf of the Borrower to the Agent and the Lenders
(collectively, “Information Materials”) pursuant to this Section and the
Borrower shall designate Information Materials (a) that are either available to
the public or not material with respect to the Borrower and its Subsidiaries or
any of their respective securities for purposes of United States federal and
state securities laws, as “Public Information” and (b) that are not Public
Information as “Private Information.”. Any material to be delivered pursuant to
this §7.4 may be delivered electronically directly to Agent and the Lenders
provided that such material is in a format reasonably acceptable to Agent, and
such material shall be deemed to have been delivered to Agent and the Lenders
upon Agent’s receipt thereof. Upon the request of Agent, the Borrower shall
deliver paper copies thereof to Agent and the Lenders. The Borrower and the
Guarantors authorize Agent and Arranger to disseminate any such materials,
including without limitation the Information Materials through the use of
Intralinks, SyndTrak or any other electronic information dissemination system
(an “Electronic System”). Any such Electronic System is provided “as is” and “as
available.” The Agent and the Arranger do not warrant the adequacy of any
Electronic System and expressly disclaim liability for errors or omissions in
any notice, demand, communication, information or other material provided by or
on behalf of Borrower that

 

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is distributed over or by any such Electronic System (“Communications”). No
warranty of any kind, express, implied or statutory, including, without
limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third-party rights or freedom from viruses or other code
defects, is made by Agent or the Arranger in connection with the Communications
or the Electronic System. In no event shall the Agent, the Arranger or any of
their directors, officers, employees, agents or attorneys have any liability to
the Borrower or the Guarantors, any Lender or any other Person for damages of
any kind, including, without limitation, direct or indirect, special, incidental
or consequential damages, losses or expenses (whether in tort, contract or
otherwise) arising out of the Borrower’s, any Guarantors’, the Agent’s or any
Arranger’s transmission of Communications through the Electronic System, and the
Borrower and the Guarantors release Agent, the Arranger and the Lenders from any
liability in connection therewith. Certain of the Lenders (each, a “Public
Lender”) may have personnel who do not wish to receive material non-public
information with respect to the Borrower, its Subsidiaries or its Affiliates, or
the respective securities of any of the foregoing, and who may be engaged in
investment and other market related activities with respect to such Persons’
securities. The Borrower hereby agrees that it will identify that portion of the
Information Materials that may be distributed to the Public Lenders and that
(i) all such Information Materials shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (ii) by marking Information Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Agent, the Lenders
and the Arranger to treat suchall Publicly Available Information Materials as
not containing any material non-public information with respect to the Borrower,
its Subsidiaries, its Affiliates or their respective securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Information Materials constitute confidential information, they
shall be treated as provided in §18.7); (iii) all Publicly Available Information
Materials marked “PUBLIC” areis permitted to be made available through a portion
of any electronic dissemination system designated “Public Investor” or a similar
designation; and (iv) the Agent and the Arranger shall be entitled to treat any
Information Materials that are not marked “PUBLIC”Publicly Available Information
as being suitable only for posting on a portion of any electronic dissemination
system not designated “Public Investor” or a similar designation.

 

  §7.5

Notices.

(a) Defaults. The Borrower will promptly upon becoming aware of same notify the
Agent in writing of the occurrence of any Default or Event of Default, which
notice shall describe such occurrence with reasonable specificity and shall
state that such notice is a “notice of default”. If any Person shall give any
notice of the existence of a claimed default or take any other action in respect
of a claimed default (whether or not constituting an Event of Default) under
this Agreement or under any note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower, any Guarantor or any
of their respective Subsidiaries is a party or obligor, whether as principal or
surety, and such default would permit the holder of such note or obligation or
other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would either cause a Default or have a Material Adverse Effect, the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Lenders, describing the notice or action and the nature of the claimed
default.

 

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(b) Environmental Events. The Borrower will give notice to the Agent within five
(5) Business Days of becoming aware of (i) any potential or known Release, or
threat of Release, of any Hazardous Substances in violation of any applicable
Environmental Law; (ii) any violation of any Environmental Law that the
Borrower, any Guarantor or any of their respective Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency or (iii) any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
of any federal, state or local environmental agency or board, that in any case
involves (A) any Borrowing Base Property, (B) any other Real Estate and could
reasonably be expected to have a Material Adverse Effect or (C) the Agent’s
liens or security title on the Collateral pursuant to the Security Documents.

(c) Notification of Claims Against Collateral. The Borrower will give notice to
the Agent in writing within five (5) Business Days of becoming aware of any
material setoff, claims (including, with respect to any Borrowing Base Property,
environmental claims), withholdings or other defenses to which any of the
Collateral, or the rights of the Agent or the Lenders with respect to the
Collateral, are subject (other than Liens permitted with respect thereto
pursuant to §8.2).

(d) Notice of Litigation and Judgments. The Borrower will give notice to the
Agent in writing within five (5) Business Days of becoming aware of any
litigation, government investigations or proceedings threatened in writing or
any pending litigation, government investigations and proceedings affecting the
Borrower, any Guarantor or any of their respective Subsidiaries or to which the
Borrower, any Guarantor or any of their respective Subsidiaries is or is to
become a party involving an uninsured claim against the Borrower, any Guarantor
or any of their respective Subsidiaries that could either reasonably be expected
to cause a Default or could reasonably be expected to have a Material Adverse
Effect and stating the nature and status of such litigation, government
investigations or proceedings. The Borrower will give notice to the Agent, in
writing, in form and detail reasonably satisfactory to the Agent and each of the
Lenders, within ten (10) days of any judgment not covered by insurance, whether
final or otherwise, against the REIT or any of its Subsidiaries in an amount in
excess of $1,000,000.00.

(e) Notice of Defaults Under Organizational Agreements. The Borrower will,
within five (5) Business Days of notice or receipt, provide to the Agent copies
of any and all written notices of default under any partnership agreement,
operating agreement or other organizational agreement to which Borrower or any
of its Subsidiaries is a party or of any failure by the Borrower or any of its
Subsidiaries to perform any material obligation under any such partnership
agreement, operating agreement or other organizational agreement.

(f) ERISA. The Borrower will give notice to the Agent within five (5) Business
Days after REIT or any ERISA Affiliate (i) gives or is required to give notice
to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with
respect to any Guaranteed Pension Plan, Multiemployer Plan or Employee Benefit
Plan, or knows that the plan administrator of any such plan has given or is
required to give notice of any such reportable event; (ii) gives a copy of any
notice of complete or partial withdrawal liability under Title IV of ERISA; or
(iii) receives any notice from the PBGC under Title IV of ERISA of an intent to
terminate or appoint a trustee to administer any such plan.

 

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(g) Notices of Default Under Management Agreements, Franchise Agreements and
Operating Leases. The Borrower will give notice to the Agent in writing within
three (3) Business Days after the Borrower or any Guarantor (i) receives written
notice from a Manager, Franchisor or TRS Lessee pursuant to a Management
Agreement, Franchise Agreement or Operating Lease relating to a Borrowing Base
Property of a default by the Borrower or Subsidiary Guarantor under such
Management Agreement, Franchise Agreement or Operating Lease, or a termination
of any such agreement, or (ii) delivers a written notice to any Manager,
Franchisor or TRS Lessee under a Management Agreement, Franchise Agreement or
Operating Lease of a Borrowing Base Property of a default by such Manager,
Franchisor or TRS Lessee under a Management Agreement, Franchise Agreement or
Operating Lease or a termination of any such agreement.

(h) [Intentionally Omitted];

(i) Notification of Lenders. Within five (5) Business Days after receiving any
notice under this §7.5, the Agent will forward a copy thereof to each of the
Lenders, together with copies of any certificates or other written information
that accompanied such notice.

 

  §7.6

Existence; Maintenance of Properties.

(a) Except as permitted under §§8.4 and 8.8, the Borrower and each Guarantor
will (i) preserve and keep in full force and effect their legal existence in the
jurisdiction of its incorporation or formation and (ii) will cause each of their
respective Subsidiaries that are not Guarantors to preserve and keep in full
force and effect their legal existence in the jurisdiction of its incorporation
or formation except where such failure has not had and could not reasonably be
expected to have a Material Adverse Effect. The Borrower and each Guarantor will
preserve and keep in full force all of their rights and franchises and those of
their respective Subsidiaries, the preservation of which is necessary to the
conduct of their business (except with respect to Subsidiaries of the Borrower
that are not Guarantors, where such failure has not had and could not reasonably
be expected to have a Material Adverse Effect). REIT shall at all times comply
with all requirements and applicable laws and regulations necessary to maintain
REIT Status and shall continue to receive REIT Status. The common stock of REIT
shall at all times during the term of this Agreement be listed for trading and
be traded on the New York Stock Exchange, NASDAQ or another nationally
recognized exchange. The REIT, Borrower, General Partner or TRS shall continue
to own directly or indirectly one hundred percent (100%) of the Subsidiary
Guarantors. In the event the Borrower or any Guarantor is a limited liability
company, the Borrower and each Guarantor shall not, nor shall any of its members
or managers, take any action in furtherance of, or consummate, an LLC Division.

(b) The Borrower and each Guarantor (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment, provided, that the foregoing, shall not prohibit the sale
of properties in the ordinary course of business in accordance with the terms of
this Agreement, and (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof.

 

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  §7.7

Insurance; Condemnation.

(a) The Borrower and each Subsidiary Guarantor will, at its expense, procure and
maintain for the benefit of the Borrower, each such Subsidiary Guarantor and the
Agent, insurance policies issued by such insurance companies, in such amounts,
in such form and substance, and with such coverages, endorsements, deductibles
and expiration dates as are acceptable to the Agent, providing the following
types of insurance covering each Borrowing Base Property:

(i) “Cause of Loss-Special Form” property insurance (including broad form flood,
broad form earthquake, coverage from loss or damage arising from acts of
terrorism, and comprehensive boiler and machinery coverages) on each Building
and the contents therein of the Borrower and its Subsidiaries in an amount not
less than one hundred percent (100%) of the full replacement cost of each
Building and the contents therein of the Borrower and its Subsidiaries or such
other amount as the Agent may approve, with deductibles not to exceed
$100,000.00 for any one occurrence, with a replacement cost coverage
endorsement, an agreed amount endorsement, and, if requested by the Agent, a
contingent liability from operation of building laws endorsement in such amounts
as the Agent may require. Full replacement cost as used herein means the cost of
replacing the Building (exclusive of the cost of excavations, foundations and
footings below the lowest basement floor) and the contents therein of the
Borrower and its Subsidiaries without deduction for physical depreciation
thereof;

(ii) During the course of construction or repair of any Building, the insurance
required by clause (i) above shall be written on a builders risk, completed
value, non-reporting form, meeting all of the terms required by clause
(i) above, covering the total value of work performed, materials, equipment,
machinery and supplies furnished, existing structures, and temporary structures
being erected on or near the Borrowing Base Property, including coverage against
collapse and damage during transit or while being stored off-site, and
containing a soft costs (including loss of rents) coverage endorsement and a
permission to occupy endorsement;

(iii) Flood insurance if at any time any Building is located in any federally
designated “special hazard area” (including any area having special flood,
mudslide and/or flood-related erosion hazards, and shown on a Flood Hazard
Boundary Map or a Flood Insurance Rate Map published by the Federal Emergency
Management Agency as Zone A, AO, Al-30, AE, A99, AH, VO, V1-30, VE, V, M or E)
and the broad form flood coverage required by clause (i) above is not available,
in an amount equal to the full replacement cost or the maximum amount then
available under the National Flood Insurance Program;

(iv) Business interruption insurance in an amount sufficient to recover at least
the total estimated gross receipts from all sources of income for the Borrowing
Base Property for a twelve (12) month period with an extended period of recovery
provision covering at least 180 days following the resumption of operations;

 

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(v) Commercial general liability insurance against claims for personal injury
(to include, without limitation, bodily injury and personal and advertising
injury) and property damage liability, all on an occurrence basis, if
commercially available, with such coverages as the Agent may reasonably request
(including, without limitation, contractual liability coverage, completed
operations coverage for a period of two (2) years following completion of
construction of any improvements on the Borrowing Base Property, and coverages
equivalent to an ISO broad form endorsement), with a general aggregate limit of
not less than $2,000,000.00, a completed operations aggregate limit of not less
than $2,000,000.00, and a combined single “per occurrence” limit of not less
than $1,000,000.00 for bodily injury and property damage;

(vi) During the course of construction or repair of any improvements on the
Borrowing Base Property, the general contractor selected to oversee such
improvements shall provide commercial general liability insurance (including
completed operations coverage) naming Borrower as an additional insured, or in
lieu thereof, may provide for such coverage by

way of an owner’s contingent or protective liability insurance covering claims
not covered by or under the terms or provisions of the insurance required by
clause (v) above;

(vii) Employer’s liability insurance with respect to the Borrower’s employees
(or if the Borrower have no employees, with respect to the employees of the
managers under the Management Agreements);

(viii) Umbrella liability insurance with limits of not less than $25,000,000.00
to be in excess of the limits of the insurance required by clauses (v), (vi) and
(vii) above, with coverage at least as broad as the primary coverages of the
insurance required by clauses (v), (vi) and (vii) above, with any excess
liability insurance to be at least as broad as the coverages of the lead
umbrella policy. All such policies shall be endorsed to provide defense coverage
obligations;

(ix) Workers’ compensation insurance for all employees of the Borrower or its
Subsidiaries engaged on or with respect to the Borrowing Base Property with
limits as required by Applicable Law (or if Borrower have no employees, for all
employees of the managers under the Management Agreements); and

(x) If the Borrower or a Subsidiary Guarantor is directly engaged in operating
the businesses of the Hotel Properties, the Borrower shall maintain such
additional insurance appropriate to the nature of the operations in such forms
and amounts as the Agent may reasonably require, including but not limited to
innkeeper/bailee legal liability coverage, general liability coverages for
restaurant and food service operations, liquor legal liability coverage,
garagekeepers legal liability coverage, and automobile liability coverage. If
the Borrower or a Subsidiary Guarantor contracts with a third party operator or
manager to conduct the business operations of the Hotel Properties, the Borrower
or such Subsidiary Guarantor shall cause its contracts to require these
coverages to be maintained by the operator or manager. In either case, the
insurance shall be written with appropriate extensions of coverage for the
Borrower, the Subsidiary Guarantors, and the Agent and Lenders as additional
insureds; and

 

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(xi) Such other insurance in such form and in such amounts as may from time to
time be reasonably required by the Agent against other insurable hazards and
casualties which at the time are commonly insured against in the case of
properties of similar character and location to the Borrowing Base Property.

The Borrower shall pay all premiums on insurance policies. The insurance
policies with respect to all Borrowing Base Properties provided for in clauses
(v), (vi) and (viii) above shall name the Agent as an additional insured and
shall contain a cross liability/severability endorsement. The insurance policies
provided for in clauses (i), (ii), (iii), (iv) and (vi) above shall name the
Agent as mortgagee (with respect to each Borrowing Base Property subject to a
Mortgage) and loss payee, shall be first payable in case of loss to the Agent,
and shall contain mortgage clauses (with respect to each Borrowing Base Property
subject to a Mortgage) and lender’s loss payable endorsements in form and
substance acceptable to the Agent. The Borrower shall deliver certificates of
insurance evidencing all such policies to the Agent, and the Borrower shall
promptly furnish to the Agent all renewal notices and evidence that all premiums
or portions thereof then due and payable have been paid. Borrower shall provide
to Agent a duplicate original or certified copy of the insurance policies
required hereunder promptly after the original policy is received by Borrower.
Not less than ten (10) days prior to the expiration date of the policies, as the
same may be reduced by Agent, the Borrower shall deliver to the Agent evidence
of continued coverage, as may be satisfactory to the Agent, and within five
(5) Business Days after the renewal date of such policies, the Borrower shall
deliver a certificate of insurance to Agent, in form and substance satisfactory
to the Agent.

(b) All policies of insurance required by this Agreement shall contain clauses
or endorsements to the effect that (i) no act or omission of the Borrower or any
Subsidiary or anyone acting for the Borrower or any Subsidiary (including,
without limitation, any representations made in the procurement of such
insurance), which might otherwise result in a forfeiture of such insurance or
any part thereof, no occupancy or use of the Borrowing Base Property for
purposes more hazardous than permitted by the terms of the policy, and no
foreclosure or any other change in title to the Borrowing Base Property or any
part thereof, shall affect the validity or enforceability of such insurance
insofar as the Agent is concerned, (ii) the insurer waives any right of set off,
counterclaim, subrogation, or any deduction in respect of any liability of the
Borrower or any Subsidiary and the Agent, (iii) such insurance is primary and
without right of contribution from any other insurance which may be available,
(iv) such policies shall not be modified so as to reduce or in any way
negatively affect insurance coverage on any Mortgaged Property, canceled or
terminated prior to the scheduled expiration date thereof without the insurer
thereunder giving at least thirty (30) days prior written notice to the Agent by
certified or registered mail; provided, however, that only ten (10) days prior
written notice to Agent shall be required if such cancellation or termination is
due to non-payment of any insurance premium, and (v) that the Agent or the
Lenders shall not be liable for any premiums thereon or subject to any
assessments thereunder, and shall in all events be in amounts sufficient to
avoid any coinsurance liability.

(c) The insurance required by this Agreement may be effected through a blanket
policy or policies covering additional locations and property of the Borrower
and other Persons not included in the Borrowing Base Properties, provided that
such blanket policy or policies comply with all of the terms and provisions of
this §7.7, and contain endorsements or clauses assuring that any claim or
recovery will not be less than that which a separate policy would provide.

 

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(d) All policies of insurance required by this Agreement shall be issued by
companies licensed to do business in the State where the policy is issued and
also in the States where the Real Estate is located and shall be issued by
companies having a rating in Best’s Key Rating Guide of at least “A” and a
financial size category of at least “X”.

(e) Neither the Borrower nor any Subsidiary shall carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Agreement unless such insurance complies with the
terms and provisions of this §7.7.

(f) In the event of any loss or damage to or Taking of any Borrowing Base
Property, the Borrower or the applicable Guarantor shall give prompt written
notice to the insurance carrier and the Agent. Each of the Borrower and the
Guarantors hereby irrevocably authorizes and empowers the Agent, at the Agent’s
option and in the Agent’s sole discretion or at the request of the Required
Lenders in their sole discretion, as its attorney in fact, to make proof of such
loss, to adjust and compromise any claim under insurance policies or as a result
of a Taking, to appear in and prosecute any action arising from such insurance
policies or as a result of a Taking, to collect and receive Insurance Proceeds
and Condemnation Proceeds, and to deduct therefrom the Agent’s reasonable
expenses incurred in the collection of such Insurance Proceeds and Condemnation
Proceeds; provided, however, that so long as no Default or Event of Default has
occurred and is continuing and so long as the Borrower or any Guarantor shall in
good faith diligently pursue such claim, the Borrower or such Guarantor may make
proof of loss and appear in any proceedings or negotiations with respect to the
adjustment of such claim, except that the Borrower or such Guarantor may not
settle, adjust or compromise any such claim without the prior written consent of
the Agent, which consent shall not be unreasonably withheld or delayed;
provided, further, that the Borrower or such Guarantor may make proof of loss
and adjust and compromise any claim under casualty insurance policies which is
in an amount less than $500,000.00 so long as no Default or Event of Default has
occurred and is continuing and so long as the Borrower or such Guarantor shall
in good faith diligently pursue such claim. The Borrower and each Guarantor
further authorize the Agent, at the Agent’s option, to (i) apply the balance of
such Insurance Proceeds and Condemnation Proceeds to the payment of the
Obligations whether or not then due, or (ii) if the Agent shall require the
reconstruction or repair of the Borrowing Base Property, to hold the balance of
such proceeds as trustee to be used to pay taxes, charges, sewer use fees, water
rates and assessments which may be imposed on the Borrowing Base Property and
the Obligations as they become due during the course of reconstruction or repair
of the Borrowing Base Property and to reimburse the Borrower or such Guarantor,
in accordance with such terms and conditions as the Agent may prescribe, for, or
to pay directly, the costs of reconstruction or repair of the Borrowing Base
Property, and upon completion of such reconstruction or repair to pay any excess
Insurance Proceeds to the Borrower, provided that (i) upon completion of such
reconstruction or repair, such Borrowing Base Property is in compliance with all
applicable state, federal and local laws, ordinances and regulations, including,
without limitation, all building and zoning laws, ordinances and regulations and
(ii) no Defaults or Events of Default exist or are continuing under this
Agreement on the date of such payment to the Borrower.

 

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(g) Notwithstanding the foregoing or anything to the contrary contained in the
Mortgages, the Agent shall make net Insurance Proceeds and Condemnation Proceeds
available to the Borrower or such Guarantor to reconstruct and repair the
Borrowing Base Property, in accordance with such terms and conditions as the
Agent may prescribe in the Agent’s discretion for the disbursement of the
proceeds, provided that (i) the cost of such reconstruction or repair is not
estimated by the Agent to exceed twenty-five percent (25%) of the replacement
cost of the damaged Building (as reasonably estimated by the Agent), (ii) no
Default or Event of Default shall have occurred and be continuing, (iii) the
Borrower or such Guarantor shall have provided to the Agent additional cash
security in an amount equal to the amount reasonably estimated by the Agent to
be the amount in excess of such proceeds which will be required to complete such
repair or restoration, (iv) the Agent shall have approved the plans and
specifications, construction budget, construction contracts, and construction
schedule for such repair or restoration and reasonably determined that the
repaired or restored Borrowing Base Property will provide the Agent with
adequate security for the Obligations (provided that the Agent shall not
disapprove such plans and specifications if the Building is to be restored to
substantially its condition immediately prior to such damage), (v) the Borrower
or such Guarantor shall have delivered to the Agent written agreements binding
upon the Franchisor and Manager agreeing upon a date for delivery of possession
of the Borrowing Base Property to permit time which is sufficient in the
judgment of the Agent for such repair or restoration and approving the plans and
specifications for such repair or restoration, or other evidence satisfactory to
the Agent that none of the Franchisor or Manager may terminate the Franchise
Agreement or the Management Agreement as a result of such casualty or as a
result of having a right to approve the plans and specifications for such repair
or restoration and prior to the expiration of any business interruption
coverage, (vi) the Agent shall reasonably determine that such repair or
reconstruction can be completed prior to the Maturity Date, (vii) the Agent
shall receive evidence reasonably satisfactory to it that any such restoration,
repair or rebuilding complies in all respects with the Franchise Agreement, the
Management Agreement and any and all applicable state, federal and local laws,
ordinances and regulations, including without limitation, zoning laws,
ordinances and regulations, and that all required permits, licenses and
approvals relative thereto have been or will be issued in a manner so as not to
materially impede the progress of restoration, (viii) the Agent shall receive
evidence reasonably satisfactory to it that the insurer under such policies of
fire or other casualty insurance does not assert any defense to payment under
such policies against the Borrower, any Guarantor or the Agent, and (ix) with
respect to any Taking, (a) the value of the land taken under such condemnation
is less than $500,000.00; (b) less than five percent (5%) of the land is taken;
(c) the land that is taken is located along the perimeter or periphery of the
land; (d) access to the Borrowing Base Property is not affected in any way by
the Taking; (e) no portion of the improvements are taken; and (f) Agent shall
determine that following such repair or restoration there shall be no reduction
in occupancy or income from the Borrowing Base Property so affected by such
specific condemnation or taking (excluding any proceeds from business
interruption insurance or proceeds from such award allocable to such income).
Any excess Insurance Proceeds shall be paid to the Borrower, or if a Default or
Event of Default has occurred and is continuing, such proceeds shall be applied
to the payment of the Obligations, unless in either case by the terms of the
applicable insurance policy the excess proceeds are required to be returned to
such insurer. Any excess Condemnation Proceeds shall be applied to the payment
of the Obligations. In no event shall the provisions of this Section be
construed to extend the Maturity Date or to limit in any way any right or remedy
of the Agent upon the occurrence of an Event of Default hereunder. If the
Borrowing Base Property is acquired by the Agent, all right, title and interest
of the Borrower and any Guarantor in and to any insurance policies to the extent
that they relate to Borrowing Base Properties and unearned premiums thereon and
in and to the proceeds thereof resulting from loss or damage to the Borrowing
Base Property prior to the acquisition shall pass to the Agent or any other
successor in interest to the Borrower or purchaser of the Borrowing Base
Property.

 

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(h) The Borrower, the Guarantors and their respective Subsidiaries (as
applicable) will, at their expense, procure and maintain insurance covering the
Borrower, the Guarantors and their respective Subsidiaries (as applicable) and
the Real Estate other than the Borrowing Base Properties in such amounts and
against such risks and casualties as are customary for properties of similar
character and location, due regard being given to the type of improvements
thereon, their construction, location, use and occupancy.

(i) The Borrower and the Guarantors will provide to the Agent for the benefit of
the Lenders Title Policies for all of the Borrowing Base Properties.

 

  §7.8

Taxes; Liens. The Borrower and the Guarantors will, and will cause their
respective Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become delinquent, all taxes, assessments and
other governmental charges imposed upon them or upon the Borrowing Base
Properties or the other Real Estate, sales and activities, or any part thereof,
or upon the income or profits therefrom as well as all claims for labor,
materials or supplies that if unpaid might by law become a lien or charge upon
any of its property or other Liens affecting any of the Collateral, any
Borrowing Base Property or any other property of the Borrower, the Guarantors or
their respective Subsidiaries and all non-governmental assessments, levies,
maintenance and other charges, whether resulting from covenants, conditions and
restrictions or otherwise, water and sewer rents and charges assessments on any
water stock, utility charges and assessments and owner association dues, fees
and levies, provided that any such tax, assessment, charge or levy or claim need
not be paid if the validity or amount thereof shall currently be contested in
good faith by appropriate proceedings which shall suspend the collection thereof
with respect to such property and the Borrower or applicable Guarantor shall not
be subject to any fine, suspension or loss of privileges or rights by reason of
such proceeding, neither such property nor any portion thereof or interest
therein would be in any danger of sale, forfeiture, loss or suspension of
operation by reason of such proceeding and the Borrower, such Guarantor or any
such Subsidiary shall have set aside on its books adequate reserves in
accordance with GAAP (or if such aggregate amount so contested relates to a
Borrowing Base Property and equals or exceeds $500,000, then Borrower shall have
deposited with Agent as additional Collateral adequate reserves as reasonably
determined by Agent); and provided, further, that forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor, the Borrower, such Guarantor or any such Subsidiary either
(i) will provide a bond issued by a surety reasonably acceptable to the Agent
and sufficient to stay all such proceedings or (ii) if no such bond is provided,
will pay each such tax, assessment, charge or levy. Borrower shall deliver to
the Agent evidence of payment of taxes, other assessments, levies and charges
described in this §7.8 with respect to the Borrowing Base Properties not later
than ten (10) Business Days prior to the date upon which such amounts are due
and payable unless the same are being contested in accordance with the terms
hereof and the other Loan Documents.

 

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  §7.9

Inspection of Properties and Books. The Borrower and the Guarantors will, and
will cause their respective Subsidiaries to, permit the Agent and the Lenders,
at the Borrower’s expense and upon reasonable prior notice, to visit and inspect
any of the properties of the Borrower, each Guarantor or any of their respective
Subsidiaries (subject to the rights of tenants under their leases), to examine
the books of account of the Borrower, any Guarantor and their respective
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Borrower, any Guarantor and their
respective Subsidiaries with, and to be advised as to the same by, their
respective officers, partners or members, all at such reasonable times and
intervals as the Agent or any Lender may reasonably request, provided that so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower shall not be required to pay for such visits and inspections more
often than once in any twelve (12) month period. The Lenders shall use good
faith efforts to coordinate such visits and inspections so as to minimize the
interference with and disruption to the normal business operations of such
Persons.

 

  §7.10

Compliance with Laws, Contracts, Licenses, and Permits. The Borrower and the
Guarantors will, and will cause each of their respective Subsidiaries to, comply
in all respects with (a) all applicable laws and regulations now or hereafter in
effect wherever its business is conducted, including all Environmental Laws,
(b) the provisions of its corporate charter, partnership agreement, limited
liability company agreement or declaration of trust, as the case may be, and
other charter documents and bylaws, (c) all agreements and instruments to which
it is a party or by which it or any of its properties may be bound, (d) all
applicable decrees, orders, and judgments, and (e) all licenses and permits
required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties, except where failure to so
comply with either clause (a), (c) or (e) would not result in the material
non-compliance with the items described in such clauses. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Borrower,
any Guarantor or their respective Subsidiaries may fulfill any of its
obligations hereunder, the Borrower, such Guarantor or such Subsidiary will
promptly take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Lenders with evidence thereof. The Borrower shall develop and implement such
programs, policies and procedures as are necessary to comply with the Patriot
Act and shall promptly advise the Agent in writing in the event that the
Borrower shall determine that any investors in the Borrower are in violation of
such act.

 

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  §7.11

Further Assurances. The Borrower and each Guarantor will and will cause each of
their respective Subsidiaries to, cooperate with the Agent and the Lenders and
execute such further instruments and documents as the Lenders or the Agent shall
reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.

 

  §7.12

Leases of the Property. Neither Borrower nor any Guarantor will without the
prior written consent of the Agent, such approval to not be unreasonably
withheld, (i) enter into a new Lease of all or any portion of a Borrowing Base
Property (other than with respect to the Leases of boat slips at the Borrowing
Base Properties located at 255 Lore Road, Solomons, Maryland and 201 Ocean
Drive, Key Largo, Florida), (ii) amend, supplement or otherwise modify any Lease
in a manner materially adverse to the interest of the Lenders (it being
understood that, without limitation, any shortening of a lease term, reduction
of rents or other payment obligations, granting of abatements, increasing
allowances, contributions or otherwise providing economic concessions to the
tenant hereunder, creating economic obligations of the landlord thereunder,
increasing the landlord’s obligations or decreasing the landlord’s rights,
altering the “triple net” or “double net” (as applicable) nature of any Lease,
decreasing the tenant’s obligations, creating additional remedies, rights of
self-help, offset, termination, co-tenancy or other similar provisions for the
benefit of the tenant thereunder, or creating rights of first offer or first
refusal, shall be deemed to be materially adverse to the Lenders),
(iii) terminate or cancel, or accept the surrender of, any Lease, (iv) if
Borrower’s or such Guarantor’s consent is required under the terms of such
Lease) consent to the assignment or subletting of, any Lease, or (v) grant any
concessions to or waive the performance of any material obligations of any
tenant, lessee or licensee under, any now existing or future Lease. Agent
consents to Borrower or the applicable Guarantor pursuing remedies against the
tenant under the West Virginia Lease and terminating the West Virginia Lease,
provided that, as provided above in this §7.12, any new Lease shall be subject
to the approval of Agent, such approval to not be unreasonably withheld. The
Lenders acknowledge that the existence of defaults under the West Virginia Lease
in and of themselves shall not be a Default or Event of Default. Any new Lease
(other than with respect to the Leases of boat slips at the Borrowing Base
Properties located at 255 Lore Road, Solomons, Maryland and 201 Ocean Drive, Key
Largo, Florida)Any new Lease shall contain customary mortgagee provisions
(including the ability of the landlord to assign its interest without consent
and the subordination of the Lease and the tenant’s rights thereunder to any
mortgage, deed of trust or deed to secure debt encumbering such property).
Borrower shall promptly deliver to Agent a copy of any amendment to a Lease
(other than with respect to the Leases of boat slips at the Borrowing Base
Properties located at 255 Lore Road, Solomons, Maryland and 201 Ocean Drive, Key
Largo, Florida).

 

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  §7.13

Material Contracts.

(a) The Borrower and the Guarantors shall perform each and all of their
obligations under each Material Contract. Borrower shall not, and shall not
permit a Guarantor to, directly or indirectly cause or permit to exist any
condition which could result in the termination or cancellation of, or which
would relieve the performance of any obligations of any other party thereto
under, any Material Contract for all or any portion of the Borrowing Base
Properties.

(b) Neither the Borrower nor any Guarantor shall do any of the following without
the AgentRequired Lender’s prior written consent (which as to clause (i) shall
not be unreasonably withheld, conditioned or delayed): (i) enter into, surrender
or terminate any Material Contract, including any new or replacement Operating
Lease, Franchise Agreement or Management Agreement; (ii) be or become a party to
a Management Agreement that provides for base management fees in excess of 4.0%
of Gross Hotel Revenues; or (iii) reduce the term of, increase the charges or
fees payable by such Person under, decrease the charges or fees payable to such
Person under, or otherwise modify or amend in any material respect, any Material
Contract. Borrower shall cause each Borrowing Base Property to be managed by a
third party manager approved by the Required Lenders and operated under a
Management Agreement reasonably satisfactory to the Required Lenders which is in
full force and effect, and operated under an Approved Brand pursuant to a
Franchise Agreement which is in full force and effect and approved by the
Required Lenders. As a condition to any approval of a new Manager, Borrower
shall deliver to Agent upon Agent’s request a collateral assignment of such
Management Agreement to Agent and a subordination of the Manager’s rights
thereunder to the rights of the Agent and the Lenders under the Loan Documents.
AgentThe Required Lenders may condition the approval of any Franchise Agreement
upon the execution and delivery by the Franchisor to Agent of a “comfort letter”
in form and substance reasonably satisfactory to Agent.

(c) The Borrower shall upon the request of the Agent obtain updated comfort
letters from such Franchisors as the Agent may request.

 

  §7.14

Business Operations. REIT and its Subsidiaries shall operate their respective
businesses in substantially the same manner and in substantially the same fields
and lines of business as such business is now conducted and such other lines of
business that are reasonably related or incidental thereto and in compliance
with the terms and conditions of this Agreement and the Loan Documents. Neither
REIT nor the Borrower will, or permit any of their respective Subsidiaries to,
directly or indirectly, engage in any line of business other than the
acquisition, ownership, operation and development of Hotel Properties.

 

  §7.15

Registered Service Mark. Without prior written notice to the Agent, except for
such rights as are granted pursuant to the approved Franchise Agreement for a
Borrowing Base Property or, only with respect to the Borrowing Base Property
located at 800 Laurel Street, Creston, Iowa, those owned by the REIT or its
Subsidiaries, none of the Borrowing Base Properties shall be owned or operated
by the Borrower or any Guarantor under any trademark, tradename, service mark or
logo (provided that the foregoing shall not preclude signs or other indications
that a Borrowing Base Property is owned or operated by REIT or one of its
Subsidiaries). In the event any of the Borrowing Base Properties shall be owned
or operated under

 

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  any tradename, trademark, service mark or logo, except those pursuant to a
permitted Franchise Agreement or, only with respect to the Borrowing Base
Property located at 800 Laurel Street, Creston, Iowa, those owned by the REIT or
its Subsidiaries and excluding any such item that simply indicates that the
property is owned or operated by REIT or a Subsidiary, the Borrower or the
applicable Guarantor shall enter into such agreements with the Agent in form and
substance reasonably satisfactory to the Agent, as the Agent may reasonably
require to grant the Agent a perfected first priority security interest therein
and to grant to the Agent or any successful bidder at a foreclosure sale of such
Borrowing Base Property the right and/or license to continue operating such
Borrowing Base Property under such tradename, trademark, service mark or logo as
determined by the Agent.

 

  §7.16

Ownership of Real Estate. Without the prior written consent of the Agent, all
Real Estate and all interests (whether direct or indirect) of REIT or the
Borrower in any Real Estate assets now owned or leased or acquired or leased
after the date hereof shall be owned or leased directly by the Borrower or TRS
or a Wholly-Owned Subsidiary of the Borrower or TRS; provided, however that the
Borrower shall be permitted to own or lease interests in Real Estate through
non-Wholly-Owned Subsidiaries and Unconsolidated Affiliates of the Borrower as
permitted by §8.3(m).

 

  §7.17

Distributions of Income to the Borrower. The Borrower shall cause all of its
Subsidiaries (subject to the terms of any loan documents under which such
Subsidiary is the borrower) to distribute to the Borrower (but not less
frequently than once each calendar quarter, unless otherwise approved by the
Agent), whether in the form of dividends, distributions or otherwise, all
profits, proceeds or other income relating to or arising from its Subsidiaries’
use, operation, financing, refinancing, sale or other disposition of their
respective assets and properties after (a) the payment by each Subsidiary of its
debt service, operating expenses, capital improvements and leasing commissions
for such quarter and (b) the establishment of reasonable reserves for the
payment of operating expenses not paid on at least a quarterly basis and capital
improvements and tenant improvements to be made to such Subsidiary’s assets and
properties approved by such Subsidiary in the course of its business consistent
with its past practices.

 

  §7.18

Plan Assets. The Borrower, the Guarantors and each of their respective
Subsidiaries will do, or cause to be done, all things necessary to ensure that
none of its Real Estate or other assets will be deemed to be Plan Assets at any
time.

 

  §7.19

Completion of Renovations.

(a) In the event that Borrower or any Subsidiary Guarantor shall undertake any
Renovations to a Borrowing Base Property pursuant to a PIP or otherwise, the
Borrower shall (i) obtain the prior written approval of Agentthe Required
Lenders (which approval shall not be unreasonably withheld, conditioned or
delayed) of such Renovation if the total budgeted cost for such Renovation
(together with any related Renovations at such Borrowing Base Property) exceeds
$500,000.00; (ii) cause the same to be performed diligently and promptly and to
be

 

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commenced, performed and completed within the time limits set forth in the PIP
(if applicable) and any Material Contract; (iii) cause to be obtained all
governmental permits required for such Renovations; (iv) cause such Renovations
to be constructed, performed and completed in compliance, in all material
respects, with Applicable Law and all applicable requirements of the Manager and
Franchisor, in a good and workmanlike manner, with materials of high quality,
free of defects, and in accordance with the plans and specifications therefor
and the PIP (if applicable), without substantial deviation therefrom unless
approved by the Agent (which approval shall not be unreasonably withheld,
conditioned or delayed) and by the Manager or Franchisor, as applicable;
(v) cause such Renovations to be constructed and completed free and clear of any
mechanic’s liens, materialman’s liens and equitable liens; (vi) pay or cause to
be paid all costs of such Renovations when due; (vii) subject to Borrower’s or
Subsidiary Guarantor’s rights pursuant to §7.19(c), fully pay and discharge, or
cause to be fully paid and discharged, all claims for labor performed and
material and services furnished in connection with such Renovations; and
(viii) subject to Borrower’s or Subsidiary Guarantor’s rights pursuant to
§7.19(c), promptly release and discharge, or cause to be released and
discharged, all claims of stop notices, mechanic’s liens, materialman’s liens
and equitable liens that may arise in connection with such Renovations.

(b) Borrower shall notify the Agent of any Material Renovations that are
scheduled or planned for any Borrowing Base Property and shall, if reasonably
requested by the Agent, promptly furnish or cause to be furnished to the Agent
(i) copies of any plans and specifications, contracts and governmental permits
for such Material Renovations, and (ii) upon substantial completion of such
Material Renovations (A) a written statement or certificate executed by the
architect designated or shown on the plans and specifications (or, if no
architect has been retained, from the general contractor for such Material
Renovations) certifying, without qualification or exception, that such Material
Renovations are substantially completed, (B) all required occupancy permit(s)
for the Borrowing Base Property issued by the local government agency having
jurisdiction and authority to issue same, and (C) such other evidence of lien
free completion as the Agent deems satisfactory in its reasonable discretion.

(c) The Borrower shall not suffer or permit any mechanics’, materialmen’s,
suppliers’ or other Lien claims to be filed or otherwise asserted against any
Borrowing Base Property, subject to Borrower’s rights pursuant to §7.19(c). If a
claim of lien is recorded which affects any Borrowing Base Property, the
Borrower shall, within fifteen (15) days of such recording, or within ten
(10) days of the Agent’s demand, whichever occurs first: (i) pay and discharge,
or cause to be paid and discharged, the claim of Lien; or (ii) provide the Agent
with other assurances (which may include a bond) which the Agent deems, in its
reasonable discretion, to be satisfactory for the payment of such claim of Lien
and for the full and continuous protection of the Agent and the Lenders from the
effect of such Lien.

 

  §7.20

Borrowing Base Properties.

(a) Borrower shall cause the Eligible Real Estate included in the calculation of
the Debt Yieldcovenants set forth in §9.1 and §9.3 and inclusion as Borrowing
Base Properties to at all times satisfy all of the following conditions:

 

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(i) Such Real Estate shall be Eligible Real Estate, and the Eligible Real Estate
shall be owned one hundred percent (100%) in fee simple or leased under a Ground
Lease by Borrower or a Subsidiary Guarantor (provided that notwithstanding
anything to the contrary in this Agreement, from and after the date of this
Agreement, the Borrowing Base Properties shall only be owned by Subsidiary
Guarantors) and leased to a Subsidiary Guarantor that is a TRS Lessee pursuant
to an Operating Lease, free and clear of all Liens other than the Liens
permitted by §8.2(ix) (provided that with respect to any Real Estate that
becomes a Borrowing Base Property on or after the Closing Date, such TRS Lessee
shall be a Wholly-Owned Subsidiary of TRS), and such Eligible Real Estate and
all assets of the TRS Lessee shall not have applicable to it any negative pledge
or restriction on the sale, pledge, transfer, mortgage or assignment of such
property (including any restrictions contained in any applicable organizational
documents);

(ii) none of the Eligible Real Estate shall have any material environmental,
structural or other defects, and not be subject to any condemnation proceeding,
that in any event would give rise to a materially adverse effect as to the
value, use of, operation of or ability to sell or finance such property, and
such property shall be in compliance with federally mandated flood insurance
requirements (including the maintenance of flood insurance if all or any portion
of any Building is located within a federally designated flood hazard zone);

(iii) the only assets of such Subsidiary Guarantor (including the TRS Lessee)
shall be the Eligible Real Estate included in the calculation of the Debt
Yieldcovenants set forth in §9.1 and §9.3 and as a Borrowing Base Property
together with related fixtures and personal property;

(iv) no strike, lockout, labor dispute, embargo, injunction or other proceeding
has occurred which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities of the
Borrower or any Guarantor at such Borrowing Base Property;

(v) to qualify as a Tier IBorrowing Base Property:

(A) such Eligible Real Estate is used as a limited service, select service or
full service, in each case of upscale or midscale quality or better;

(B) such Eligible Real Estate is (1) managed by a third party manager approved
by the AgentRequired Lenders; and (2) operated under a Management Agreement
reasonably satisfactory to the AgentRequired Lenders which is in full force and
effect;

(C) such Eligible Real Estate is operated under an Approved Brand pursuant to a
Franchise Agreement which is in full force and effect and approved by Agentthe
Required Lenders;

(D) such Eligible Real Estate was first acquired by such Subsidiary Guarantor
after September 30, 2015 (other than the Hilton Garden Inn located in Dowell,
Maryland); and

(E) the construction of the Hotel Property on such Eligible Real Estate was
either substantially completed or has undergone a complete renovation consistent
with the applicable PIP within fifteen (15) years of the date such Eligible Real
Estate is first included as a Borrowing Base Property;

 

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(vi) with respect to any Tier II Property, such Eligible Real Estate is managed
by a third-party manager approved by the Agent and operated under a Management
Agreement reasonably satisfactory to Agent;[Intentionally Omitted];

(vii) [Intentionally Omitted];

(viii) (A) at least ninety percent (90%) of the aggregate hotel rooms in the
Borrowing Base Properties must be open for business, not under Material
Renovation, and have at least one year of operating history; and

(B) not more than ten percent (10%) of the total Adjusted Net Operating Income
of the Borrowing Base Properties shall be attributable to Hotel Properties which
are recently-completed developments or assets undergoing Material Renovation,
but which assets included as Borrowing Base Properties shall in any event have
at least three (3) months of operating history (notwithstanding the foregoing, a
failure to satisfy the requirements of this clause (viii) (B) shall not result
in any Real Estate not being included as a Borrowing Base Property, but any such
Adjusted Net Operating Income in excess of such limitation shall be excluded for
purposes of calculating Debt Yieldthe covenant set forth in §9.1;

(ix) no Person other than the Borrower, the REIT or another Subsidiary Guarantor
(and excluding for the purposes hereof ownership of other Persons in the
Borrower or the REIT) has any direct or indirect ownership of any legal,
equitable or beneficial interest in such Subsidiary Guarantors, and no direct or
indirect ownership or other interests or rights in any such Subsidiary Guarantor
shall be subject to any Lien (other than Liens in favor of Agent);

(x) [Intentionally Omitted];

(xi) no more than fifteen percent (15%) of the total Adjusted Net Operating
Income shall be attributable to Tier IBorrowing Base Properties which are
subject to Ground Leases (notwithstanding the foregoing, a failure to satisfy
the requirements of this clause (xi) shall not result in any such Real Estate
not being included as a Borrowing Base Property, but any such Adjusted Net
Operating Income in excess of such limitation shall be excluded for purposes of
calculating Debt Yieldthe covenant set forth in §9.1;

(xii) [Intentionally Omitted]; and

(xiii) such Eligible Real Estate has not been removed as a Borrowing Base
Property and from the calculation of the Debt Yieldcovenants set forth in §9.1
and §9.3 pursuant to §5.4 or §7.20(c) or (d).

Notwithstanding the foregoing, the provisions of §7.20(a)(x), (xi) and (xii) and
§9.7 shall not be applicable until June 30, 2018 and then shall be applicable at
all times thereafter.

(b) The Borrower shall, and shall cause each Subsidiary Guarantor to:

 

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(i) operate each Borrowing Base Property in compliance with Applicable Law in
all material respects;

(ii) promptly perform and/or observe (or cause to be performed and/or observed)
in all material respects the covenants and agreements required to be performed
and observed by it under the Material Contracts to which it is a party and do
all things necessary to preserve and to keep unimpaired their rights thereunder;

(iii) enforce in all respects the performance and observance of all of the
material covenants and agreements required to be performed or observed by the
other parties to each Material Contract;

(iv) promptly deliver to the Agent a copy of each PIP, and any other material
written notice or report received by it or to it under any Management Agreement
or Franchise Agreement;

(v) maintain Inventory at the applicable Borrowing Base Property in amounts
reasonably required to meet the standards from time to time required by the
applicable Manager and Franchisor; and

(vi) maintain all Licenses required to operate the applicable Borrowing Base
Property in full force and effect and promptly comply with all material
conditions thereof.

(c) In the event that all or any material portion of any Eligible Real Estate
included as a Borrowing Base Property shall be damaged in any material respect
or taken by condemnation, then such property shall no longer be included in the
calculation of the Debt Yieldcovenants set forth in §9.1 and §9.3 unless and
until (i) any damage to such real estate is repaired or restored, such real
estate becomes fully operational and the Agent shall receive evidence
satisfactory to the Agent of the value of such real estate following such repair
or restoration (both at such time and prospectively) or (ii) the Agent shall
receive evidence satisfactory to the Agent (which evidence may include the
availability of business interruption insurance) that the value of such real
estate (both at such time and prospectively) shall not be materially adversely
affected by such damage or condemnation. In the event that such damage or
condemnation only partially affects such Eligible Real Estate included as a
Borrowing Base Property, then the Agent may in good faith reduce the Adjusted
Net Operating Income attributable thereto based on such damage until such time
as the Agent receives evidence satisfactory to the Agent that the value of such
real estate (both at such time and prospectively) shall no longer be materially
adversely affected by such damage or condemnation.

(d) Upon any asset ceasing to qualify to be included as a Borrowing Base
Property, such asset shall no longer be included in the calculation of the Debt
Yieldcovenants set forth in §9.1 and §9.3 unless otherwise approved in writing
by the Required Lenders. Within five (5) Business Days of any such
disqualification, the Borrower shall deliver to the Agent a certificate
reflecting such disqualification, together with the identity of the disqualified
asset, a statement as to whether any Default or Event of Default arises as a
result of such disqualification, and a calculation of the Adjusted Net Operating
Income attributable to such asset. Simultaneously with the delivery of the items
required pursuant above, the Borrower shall deliver to the Agent an updated
Borrowing Base Certificate demonstrating, after giving effect to such removal or
disqualification, compliance with the conditions and covenants contained in
§§7.20, 9.1 and 9.7.9.3 (provided that for the avoidance of doubt, a Borrowing
Base Property shall not be released from the Collateral except in compliance
with §5.5).

 

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  §7.21

Sanctions Laws and Regulations. The Borrower shall not, directly or indirectly,
use the proceeds of the Loans or any Letter of Credit or lend, contribute or
otherwise make available such proceeds to any Guarantor, Subsidiary,
Unconsolidated Affiliate or other Person (i) to fund any activities or business
of or with any Designated Person, or in any country or territory, that at the
time of such funding is itself the subject of territorial sanctions under
applicable Sanctions Laws and Regulations, (ii) in any manner that would result
in a violation of applicable Sanctions Laws and Regulations by any party to this
Agreement, or (iii) in any manner that would cause the Borrower, the Guarantors
or any of their respective Subsidiaries to violate the United States Foreign
Corrupt Practices Act. None of the funds or assets of the Borrower or Guarantors
that are used to pay any amount due pursuant to this Agreement shall constitute
funds obtained from transactions with or relating to Designated Persons or
countries which are themselves the subject of territorial sanctions under
applicable Sanctions Laws and Regulations. Borrower shall maintain policies and
procedures designed to promote and achieve compliance with Sanctions Laws and
Regulations.

 

  §7.22

Assignment of Interest Rate Protection. In the event that the Borrower or any
Guarantor shall enter into an interest rate cap, swap, collar or other interest
rate protection agreement with a Lender Hedge Provider (the “Interest Hedge”),
then as a condition to the obligations of Borrower or such Guarantor with
respect thereto constituting Hedge Obligations for the purposes of the Loan
Documents, Borrower or such Guarantor shall execute and deliver to Agent a
collateral assignment of such Interest Hedge in form and substance reasonably
satisfactory to Agent, and shall further deliver such legal opinions as to
Borrower or such Guarantor, and consents to and acknowledgments of such pledge
by the provider of the Interest Hedge, as Agent may reasonably require. For the
avoidance of doubt, unless the provisions of this §7.22 are complied with, no
Lender Hedge Provider shall have any right or benefit under or from the Loan
Documents or the Collateral.

 

  §7.23

Post-Closing ItemsLiquidity Trigger Event. Borrower has been unable, as of the
date hereof, to satisfy all of the conditions precedent to the acceptance of
certain assets for the calculation of Borrowing Base Availability under this
Agreement but Agent and the Lenders are willing to enter into this Agreement and
accept certain Loan Documents subject to the terms of this Section. Borrower
shall cause each of the items described on Schedule 7.23 attached hereto and
made a part hereof to be delivered to and approved by Agent on or before
March 15, 2017, as such period may be extended by Agent in its discretion. All
such items shall be in form and substance reasonably satisfactory to Agent.
Borrower further acknowledges that with respect to the each of the Initial
Borrowing Base Properties identified as numbers 3 (Creston, Iowa - Supertel), 4
(Billings, Montana - Super 8), 7 (Creston,

 

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  Iowa - Super 8) and 14 (Bossier City, Louisiana - Days Inn) on Schedule 1.3
hereto, notwithstanding the delivery to Agent and recording of Security
Documents with respect to such properties, such property shall not be included
in the calculation of Borrowing Base Availability until the items described in
Item 2 on Schedule 7.23 hereto with respect to such property are satisfied in
accordance with the terms of this §7.23.In the event that a Liquidity Trigger
Event shall occur, then:

(a) The Agent may engage a financial advisor to advise Agent and the Lenders
with respect to the REIT and its Subsidiaries and the Loans, such advisor to be
subject to the reasonable approval of the Required Lenders, and the Borrower
shall pay within ten (10) days of demand the fees (provided that such fees are
market fees) and expenses of such financial advisor as the same may be incurred
(which fees and expense may be funded through advances of Loans to the extent of
availability);

(b) In the event that the Interest Holdback shall then be less than
$2,000,000.00, such Interest Holdback shall be increased up to the sum of
$2,000,000.00;

(c) The reporting required pursuant to §7.4(p) shall be provided on a weekly
basis, and the Borrower shall deliver to the Agent within ten (10) days of the
occurrence of such Liquidity Trigger Event a budget reforecast (expressed on a
month-by-month fiscal year basis, showing year-to-date actual results (including
operations, debt service, capital expenditures and extraordinary expenses) plus
projections for the remainder of the year and the next four (4) calendar
quarters) (which as to the next four (4) calendar quarters may in part be based
upon the Management Projections);

(d) Any proceeds of the Loans advanced during or following the occurrence of a
Liquidity Trigger Event shall, subject to §2.7, only be advanced for the
following purposes and in the following order of priority;

(i) First, to pay interest and other amounts due under the Loan Documents;

(ii) Next, to fund the Tax and Insurance Reserve Account (as defined in the Cash
Collateral Agreement):

(iii) Next, to fund the FF&E Reserve Account (as defined in the Cash Collateral
Agreement);

(iv) Next, to pay for any Borrowing Base Property level operating expenses
directly attributable to the ownership and operation of the Borrowing Base
Properties (and excluding items which can be paid from the FF&E Reserve Account
and the Taxes and Insurance Reserve Account) for the current month in accordance
with the Approved Budget;

(v) Next, to the payment of the current month’s corporate overhead and general
and administrative expense of REIT in accordance with the Approved Budget;

 

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(vi) Next, to pay for any property level operating expenses or capital
expenditures (excluding any amounts for principal or interest) directly
attributable to the ownership and operation of Hotel Properties other than
Borrowing Base Properties of the Borrower and its Subsidiaries (and excluding
any items which can paid from any reserves or loan proceeds maintained or
available with respect to such properties) for the current month in accordance
with the Approved Budget; and

(vii) Next, to pay for any interest for the current month due with respect to
any Hotel Property that is not Borrowing Base Property of the Borrower and its
Subsidiaries as approved by the Lenders in their sole and absolute discretion.

 

§8.

NEGATIVE COVENANTS.

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any of the Lenders has any obligation to make any Loans
or issue any Letter of Credit:

 

  §8.1

Restrictions on Indebtedness. The Borrower will not, and will not permit any
Guarantor or their respective Subsidiaries to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:

(a) Indebtedness to the Lenders arising under any of the Loan Documents;

(b) Indebtedness to the Lender Hedge Providers in respect of any Hedge
Obligations;

(c) current liabilities of the Borrower, the Guarantors or their respective
Subsidiaries incurred in the ordinary course of business but not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact extended in
connection with normal purchases of goods and services;

(d) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of §7.8;

(e) Indebtedness in respect of judgments only to the extent, for the period and
for an amount not resulting in a Default;

(f) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;

(g) subject to the provisions of §9, Non-Recourse Indebtedness;

(h) [Intentionally Omitted]; and subject to the terms of this §8.1, any PPP
Loan; and

 

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(i) subject to the provisions of §9, Recourse Indebtedness of the REIT and its
Subsidiaries, provided that the aggregate amount of such Recourse Indebtedness
(excluding the Obligations) shall not at any time exceed ten percent (10%) of
Consolidated Total Asset Value; provided further, however, that the Aloft
Atlanta Term Loan shall be excluded for the purposes of determining the amount
of Recourse Indebtedness in this §8.1(i) during the period beginning on the date
of the incurrence of the Aloft Atlanta Term Loan, and ending six (6) calendar
months thereafter.

Notwithstanding anything in this Agreement to the contrary, except as provided
in clause (x) below of this paragraph, (i) none of the Indebtedness described in
§8.1(g), (h) or (i) above shall have any of the Borrowing Base Properties or any
interest therein or any direct or indirect ownership interest in the Borrower or
any Subsidiary Guarantor as collateral, a borrowing base, asset pool or any
similar form of credit support for such Indebtedness, and (ii) none of the
Subsidiary Guarantors or any other Subsidiary of Borrower which, directly or
indirectly, owns or leases (whether pursuant to a Ground Lease or an Operating
Lease) a Borrowing Base Property shall create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness
(including, without limitation, pursuant to any conditional or limited guaranty
or indemnity agreement creating liability with respect to usual and customary
exclusions from the non-recourse limitations governing the Non-Recourse
Indebtedness of any Person, or otherwise) other than Indebtedness described in
§§8.1(a), 8.1(b), 8.1(c), 8.1(d), 8.1(e) and 8.1(f); provided further that (x) a
Subsidiary Guarantor may be liable with respect to Capital Leases and purchase
money Liens financing equipment used solely at such Subsidiary Guarantor’s Hotel
Property (whether owned or leased), provided that the aggregate of all such
obligations for all Subsidiary Guarantors shall not exceed $250,000.00 at any
time.

Notwithstanding anything to the contrary in this Agreement, including without
limitation, this §8.1, neither the Borrower, Guarantor, nor any of their
respective Subsidiaries shall create, incur, assume, guarantee or become liable,
contingently or otherwise, (A) on or after March 30, 2020 with respect to any
Recourse Indebtedness expect for (i) Recourse Indebtedness under this Agreement
and, (ii) a Paycheck Protection Program loanloans under the Coronavirus Aid,
Relief, and Economic Security Act in an aggregate amount not to exceed
$2,700,000.00 (individually and collectively, the “PPP Loan”) (provided that for
the purposes of calculating compliance with the financial covenants, such
Paycheck Protection Program loan shall not be considered Indebtedness for so
long as no principal and interest is payable with respect thereto), (iii) the
Initial Subordinate Debt provided that such Indebtedness is recourse solely to
the REIT, is Unsecured Indebtedness and otherwise complies with the terms of
§8.17, and such Indebtedness is subject to a Subordination and Standstill
Agreement, (iv) Future Subordinate Debt provided that such Indebtedness is
recourse solely to the REIT, such Indebtedness is Unsecured Indebtedness, such
Indebtedness otherwise complies with the terms of §8.17, and such Indebtedness
is subject to a Subordination and Standstill Agreement, and (v) the IRSA Note,
or (B) on or after the date of the Ninth Amendment to Credit Agreement, with
respect to any other Indebtedness except (i) as permitted by cause (A) above of
this paragraph, and (ii) the refinancing of existing Indebtedness (but for the
avoidance of doubt, specifically excluding Subordinate Debt and the IRSA Note)
permitted by this Agreement provided that the amount of such refinancing
Indebtedness shall not exceed the principal amount of the Indebtedness being
refinanced (plus reasonable costs and expenses related thereto), the collateral,
if any, for such refinancing Indebtedness shall be limited

 

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only to the collateral security the Indebtedness being refinanced, and no Person
shall have any direct or indirect liability with respect to such refinancing
Indebtedness except those Persons directly liable with respect to the
Indebtedness being refinanced and only to the extent of such liability with
respect to the original Indebtedness being refinanced.

 

  §8.2

Restrictions on Liens, Etc.. The Borrower will not, and will not permit any
Guarantor or their respective Subsidiaries to (a) create or incur or suffer to
be created or incurred or to exist any lien, security title, encumbrance,
mortgage, deed of trust, security deed, pledge, negative pledge, charge,
restriction or other security interest of any kind upon any of their respective
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (b) transfer any of their property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement (or any
financing lease having substantially the same economic effect as any of the
foregoing); (d) suffer to exist for a period of more than thirty (30) days after
the same shall have been incurred any Indebtedness or claim or demand against
any of them that if unpaid could by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over any of their general creditors;
(e) sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse; or
(f) incur or maintain any obligation to any holder of Indebtedness of any of
such Persons which prohibits the creation or maintenance of any lien securing
the Obligations (collectively, “Liens”); provided that notwithstanding anything
to the contrary contained herein, the Borrower, any Guarantor or any such
Subsidiary may create or incur or suffer to be created or incurred or to exist:

(i) Liens on properties to secure taxes, assessments and other governmental
charges (excluding any Lien imposed pursuant to any of the provisions of ERISA
or pursuant to any Environmental Laws) or claims for labor, material or supplies
incurred in the ordinary course of business in respect of obligations not then
delinquent or which are being contested as permitted under this Agreement;

(ii) Liens on assets other than (A) the Collateral, (B) the Borrowing Base
Properties and any Material Contracts that are not Collateral, or (C) any direct
or indirect interest of the Borrower, any Guarantor or any Subsidiary of the
Borrower in any Guarantor which owns or leases a Borrowing Base Property or in
any other Subsidiary, in respect of judgments permitted by §8.1(e);

(iii) deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance, old age pensions or other social
security obligations;

(iv) encumbrances on Real Estate other than Borrowing Base Properties consisting
of easements, rights of way, zoning restrictions, leases and other occupancy
agreements, restrictions on the use of real property and defects and
irregularities in the title thereto, and other minor non-monetary liens or
encumbrances none of which interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower or any such
Subsidiary, which defects do not individually or in the aggregate have a
Material Adverse Effect;

 

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(v) Liens on Real Estate and incidental personal property used in connection
therewith (other than the Borrowing Base Properties or other Collateral or any
direct or indirect interest therein) to secure Indebtedness of Subsidiaries of
the Borrower that are not Subsidiary Guarantors or owners of interests in
Subsidiary Guarantors permitted by §8.1(g), (h)(i)(B), (h)(ii), (h)(iii) and
(i);

(vi) rights of setoff or bankers’ liens upon deposits of cash in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such deposit accounts in the ordinary course of
business;

(vii) Liens of Capitalized Leases on the property leased thereby and Liens with
respect to property financed pursuant to §8.1(h)(iii) and §8.1(i);

(viii) Liens in favor of the Agent and the Lenders under the Loan Documents to
secure the Obligations and the Hedge Obligations; and

(ix) Leases, liens and encumbrances on a Borrowing Base Property expressly
permitted under the terms of this Agreement (with respect to Leases) and the
Mortgage relating thereto (with respect to liens and encumbrances), or if there
is no Mortgage, as set forth in the Title Policy approved by Agent in connection
with the acceptance of a Hotel Property as a Borrowing Base Property.

Notwithstanding anything in this Agreement to the contrary, (i) no Guarantor
shall create or incur or suffer to be created or incurred or to exist any Lien
other than Liens contemplated in (A) with respect to any Subsidiary Guarantor,
§§8.2(i), 8.2(vi), 8.2(viii) and 8.2(ix), and Liens securing the Indebtedness
permitted by clause (x) in the last paragraph of §8.1, (B) with respect to REIT,
General Partner and TRS, §§8.2(i), 8.2(iii), 8.2(vi) and 8.2(viii), and (C) with
respect to a Subsidiary Guarantor, §8.2(vii) (but subject to the terms of clause
(x) in the last paragraph of §8.1), and (ii)  eitherneither Borrower, any
Guarantor nor any of their respective Subsidiaries shall grant any Liens secured
by Equity Interests or any distributions or any other rights or interests
relating thereto except for Liens granted to Agent under the Loan Documents and
Liens secured by Equity Interests of Subsidiaries of the Borrower that are not
Subsidiary Guarantors and that do not have direct or indirect interests in any
Borrowing Base Property or TRS Lessee. For the avoidance of doubt, no vehicles
used in connection with the operation of a Borrowing Base Property shall be
subject to any Lien.

 

  §8.3

Restrictions on Investments. Neither the Borrower will, nor will it permit any
Guarantor or any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by the REIT or its
Subsidiary;

 

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(b) marketable direct obligations of any of the following: Federal Home Loan
Mortgage Corporation, Student Loan Marketing Association, Federal Home Loan
Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;

(c) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $100,000,000;
provided, however, that the aggregate amount at any time so invested with any
single bank having total assets of less than $1,000,000,000 will not exceed
$200,000;

(d) commercial paper assigned the highest rating by two (2) or more national
credit rating agencies and maturing not more than ninety (90) days from the date
of creation thereof;

(e) bonds or other obligations having a short term unsecured debt rating of not
less than A-1+ by S&P and P-1+ by Moody’s and having a long term debt rating of
not less than A by S&P and A1 by Moody’s issued by or by authority of any state
of the United States, any territory or possession of the United States,
including the Commonwealth of Puerto Rico and agencies thereof, or any political
subdivision of any of the foregoing;

(f) repurchase agreements having a term not greater than ninety (90) days and
fully secured by securities described in the foregoing §§8.3(a), 8.3(b) or
8.3(c) with banks described in the foregoing §8.3(c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000; and

(g) shares of so-called “money market funds” registered with the SEC under the
Investment Company Act of 1940 which maintain a level per-share value, invest
principally in investments described in the foregoing §§8.3(a) through 8.3(f)
and have total assets in excess of $50,000,000.

(h) The acquisition of fee interests by the Borrower or its Subsidiaries in
(i) Real Estate which is utilized as a full service, select service or limited
service Hotel Property located in the continental United States or the District
of Columbia and businesses and investments incidental thereto, and (ii) subject
to the restrictions set forth in this §8.3, the acquisition of Land Assets to be
developed for the foregoing purpose;

(i) Investments by the Borrower in Wholly-Owned Subsidiaries of the Borrower,
which in turn own Investments permitted by this §8.3;

(j) Investments by the REIT in the General Partner and in Subsidiaries of
Borrower as contemplated in the definition of Wholly-Owned Subsidiary;

(k) Investments by General Partner in Borrower and in TRS;

 

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(l) Investments in Land Assets, provided that the aggregate Investment pursuant
to this §8.3(l) shall not at any time exceed five percent (5%) of Consolidated
Total Asset Value;

(m) Investments in non-Wholly-Owned Subsidiaries and Unconsolidated Affiliates,
which in turn own Investments permitted by this §8.3, provided that the
aggregate Investment pursuant to this §8.3(m) shall not at any time exceed ten
percent (10%) of Consolidated Total Asset Value;

(n) Investments in Development Properties for properties of the type described
in §8.3(h)(i), provided that the aggregate Investment pursuant to this §8.3(n)
shall not at any time exceed ten percent (10%) of Consolidated Total Asset
Value; and

(o) Investments in Mortgage Note Receivables created by seller-financing
provided by Borrower with respect to any Tier II Properties included as
Borrowing Base Properties existing on the date hereof, provided that the
aggregate Investment pursuant to this §8.3(o) shall not exceed in the aggregate
$5,000,000.00.[Intentionally Omitted];

(p) Investments in Mortgage Note Receivables (other than seller-financing),
provided that the aggregate Investment pursuant to §8.3(o) and this §8.3(p)
shall not at any time exceed five percent (5%) of Consolidated Total Asset
Value.

Notwithstanding the foregoing, in no event shall the aggregate value of the
holdings of the Borrower, any Guarantor and their Subsidiaries in the
Investments described in §8.3(l), (m), (n) (o) and (p) at any time exceed twenty
percent (20%) of Consolidated Total Asset Value at any time. Notwithstanding
anything to the contrary in this Agreement, including without limitation this
§8.3, neither the Borrower, the Guarantor nor any other their respective
Subsidiaries shall on or after March 30, 2020 make any new (which shall include
any increase to existing Investments) Investment of the types described in
§8.3(h) - (p).

For the purposes of this §8.3, the Investment of REIT or any of its Subsidiaries
in any non-Wholly-Owned Subsidiaries and Unconsolidated Affiliates will equal
(without duplication) the sum of (i) such Person’s Equity Percentage of their
non-Wholly-Owned Subsidiaries’ and Unconsolidated Affiliates’ Investments valued
in the manner set forth for the determination of Consolidated Total Asset Value,
or if not included therein, valued at the GAAP book value.

 

  §8.4

Merger, Consolidation. Other than with respect to or in connection with any
disposition permitted under §8.8, the Borrower will not, nor will it permit the
Guarantors or any of their respective Subsidiaries to, dissolve, liquidate,
dispose of (including, without limitation, by way of an LLC Division) or lease
(but not including Operating Leases) all or substantially all of its assets or
business, merge, reorganize, consolidate or do any other business combination,
individually or in a series of transactions which may have a similar effect as
any of the foregoing, in each case without the prior written consent of the
Required Lenders. Notwithstanding the foregoing, so long as no Default or Event
of Default has occurred and is continuing immediately before and after giving
effect thereto, the

 

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  following shall be permitted without the consent of the Agent or any Lender:
(i) the merger or consolidation of one or more of the Subsidiaries of the
Borrower (other than any Subsidiary that is a Guarantor) with and into the
Borrower (it being understood and agreed that in any such event the Borrower
will be the surviving Person), (ii) the merger or consolidation of two or more
Subsidiaries of the Borrower; provided that no such merger or consolidation
shall involve any Subsidiary that is a Guarantor unless such Guarantor will be
the surviving Person, and (iii) the liquidation or dissolution of any Subsidiary
of the Borrower that does not own or lease any assets so long as such Subsidiary
is not a Guarantor (or if such Subsidiary is a Guarantor, so long as the
Borrower and such Subsidiary comply with the provisions of §5.4). Nothing in
this §8.4 shall prohibit the dissolution of a Subsidiary which has disposed of
its assets in accordance with this Agreement. A Subsidiary of the Borrower may
sell all of its assets (and may effectuate such sale by merger or consolidation
with another Person, with such other Person being the surviving entity) subject
to compliance with the terms of this Agreement (including, without limitation,
§§5.4 and 8.8), and after any such permitted sale, may dissolve.

 

  §8.5

Sale and Leaseback. The Borrower will not, and will not permit its Subsidiaries,
to enter into any arrangement, directly or indirectly, whereby the Borrower or
any such Subsidiary shall sell or transfer any Real Estate owned or leased by it
in order that then or thereafter the Borrower or any such Subsidiary shall lease
back such Real Estate without the prior written consent of the Agent, such
consent not to be unreasonably withheld.

 

  §8.6

Compliance with Environmental Laws. None of the Borrower nor any Guarantor will,
nor will any of them permit any of their respective Subsidiaries or any other
Person to, do any of the following: (a) use any of the Real Estate or any
portion thereof as a facility for the handling, processing, storage or disposal
of Hazardous Substances, except for quantities of Hazardous Substances used in
the ordinary course of operating single tenant commercial operating properties
as permitted under this Agreement and in material compliance with all applicable
Environmental Laws, (b) cause or permit to be located on any of the Real Estate
any underground tank or other underground storage receptacle for Hazardous
Substances except in compliance with Environmental Laws, (c) generate any
Hazardous Substances on any of the Real Estate except in compliance with
Environmental Laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner that could reasonably be contemplated to cause a Release of
Hazardous Substances on, upon or into the Real Estate or any surrounding
properties or any threatened Release of Hazardous Substances which could
reasonably be expected to give rise to liability under CERCLA or any other
Environmental Law, or (e) directly or indirectly transport or arrange for the
transport of any Hazardous Substances (except in compliance with all
Environmental Laws), except, with respect to any Real Estate that is not a
Borrowing Base Property, where any such use, generation, conduct or other
activity has not had and could not reasonably be expected to have a Material
Adverse Effect.

 

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The Borrower and the Guarantors shall, and shall cause their respective
Subsidiaries to:

(i) in the event of any change in Environmental Laws governing the assessment,
release or removal of Hazardous Substances, take all reasonable action
(including, without limitation, the conducting of engineering tests at the sole
expense of the Borrower) to confirm that no Hazardous Substances are or ever
were Released or disposed of on the Borrowing Base Properties in violation of
applicable Environmental Laws; and

(ii) if any Release or disposal of Hazardous Substances which any Person may be
legally obligated to contain, correct or otherwise remediate or which may
otherwise expose it to liability shall occur or shall have occurred on any
Mortgage Property (including, without limitation, any such Release or disposal
occurring prior to the acquisition or leasing of such Mortgage Property by the
Borrower or any Guarantor), the Borrower shall, after obtaining knowledge
thereof, cause the prompt containment and removal of such Hazardous Substances
and remediation of the Mortgage Property in full compliance with all applicable
Environmental Laws; provided, that each of the Borrower and a Guarantor shall be
deemed to be in compliance with Environmental Laws for the purpose of this
clause (ii) so long as it or a responsible third party with sufficient financial
resources is taking reasonable action to remediate or manage any event of
noncompliance to the reasonable satisfaction of the Agent and no action shall
have been commenced or filed by any enforcement agency. The Agent may engage its
own Environmental Engineer to review the environmental assessments and the
compliance with the covenants contained herein.

(iii) At any time after an Event of Default shall have occurred hereunder, the
Agent may at its election (and will at the request of the Required Lenders)
obtain such environmental assessments of any or all of the Borrowing Base
Properties prepared by an Environmental Engineer as may be necessary or
advisable for the purpose of evaluating or confirming (A) whether any Hazardous
Substances are present in the soil or water at or adjacent to any such Borrowing
Base Property and (B) whether the use and operation of any such Borrowing Base
Property complies with all Environmental Laws to the extent required by the Loan
Documents. Additionally, at any time that the Agent or the Required Lenders
shall have reasonable grounds to believe that a Release or threatened Release of
Hazardous Substances which any Person may be legally obligated to contain,
correct or otherwise remediate or which otherwise may expose such Person to
liability may have occurred, relating to any Borrowing Base Properties, or that
any of the Borrowing Base Properties is not in compliance with Environmental
Laws to the extent required by the Loan Documents, the Borrower shall promptly
upon the request of the Agent obtain and deliver to the Agent such environmental
assessments of such Borrowing Base Properties prepared by an Environmental
Engineer as may be necessary or advisable for the purpose of evaluating or
confirming (A) whether any Hazardous Substances are present in the soil or water
at or adjacent to such Borrowing Base Property and (B) whether the use and
operation of such Real Estate comply with all Environmental Laws to the extent
required by the Loan Documents. Environmental assessments may include detailed
visual inspections of such Borrowing Base Property including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and the taking of soil samples, as well as such other
investigations or analyses as are reasonably necessary or appropriate for a
complete determination of the compliance of such Borrowing Base Property and the
use and operation thereof with all applicable Environmental Laws. All
environmental assessments contemplated by this §8.6 shall be at the sole cost
and expense of the Borrower.

 

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  §8.7

Distributions. (a) The Borrowers, General Partner and REIT shall not pay any
Distributions (including without limitation Preferred DividendsDistributions) to
their partners or shareholder in cash or in the form of any other asset or
property, other than by the issuance of common stock of the REIT as and to the
extent necessary to maintain the REIT Status of REIT; provided, that if a
Distribution is required to be paid in cash to maintain the REIT Status of REIT,
any such Distribution may, with the prior written consent of the Required
Lenders, which consent may be granted or withheld in their sole, absolute and
unfettered discretion (and which consent, if granted, may be conditioned upon,
among other things, REIT paying such Distributions in shares of common stock of
the REIT to the maximum extent permitted by the Code), be paid in cash.

(b) Notwithstanding the terms of §8.7(a), in the event that the Distribution
Conditions have occurred and are continuing, the Borrower, General Partner and
REIT may pay a Distribution to their partners or shareholders, respectively,
pursuant to this §8.7(b) provided that (i) the aggregate amount of such initial
Distribution paid pursuant to this §8.7(b) does not exceed fifty percent
(50%) of Funds Available for Distribution for the three (3) quarter period for
which the test described in clause (d)(ii) of the definition of Distribution
Conditions is calculated, and (ii) for any quarter following the quarter of the
initial Distribution pursuant to this §8.7(b), the aggregate amount of such
Distributions, when added to the aggregate amount of all other Distributions
paid in any period of four (4) consecutive fiscal quarters pursuant to this
§8.7(b), does not exceed fifty percent (50%) of Funds Available for Distribution
for such period. The Borrower may make Distributions to the General Partner and
the General Partner may make Distributions to the REIT to facilitate
Distributions by the REIT otherwise permitted in this §8.7(b) (and Distributions
from the Borrower to the General Partner and Distributions from the General
Partner to the REIT shall not be counted in the fifty percent (50%) limitation
set forth above). Notwithstanding the foregoing in this §8.7(b), if a Default or
Event of Default shall have occurred and be continuing or would occur as a
result of any Distribution, the Borrower, General Partner and REIT shall make no
Distributions to their respective partners, members or other owners pursuant to
this §8.7(b).

 

  §8.8

Asset Sales. The Borrower will not, and will not permit the Guarantors or their
respective Subsidiaries to, sell, transfer or otherwise dispose of (a) all or
substantially all of their assets (provided that any direct or indirect
Subsidiary of the REIT (except for the Borrower or General Partner) may sell,
transfer or otherwise dispose of all of its assets as permitted by this
Agreement provided that the aggregate of all sales by the Borrower, the
Guarantors and their respective Subsidiaries shall not constitute a sale,
transfer or disposition of all or substantially all of the assets of the
Borrower and its Subsidiaries) or (b) any material asset other than pursuant to
a bona fide arm’s length transaction.

 

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  §8.9

Restriction on Prepayment of Indebtedness. The Borrower and the Guarantors will
not, and will not permit their respective Subsidiaries to, (a) during the
existence of any Default or Event of Default, prepay, redeem, defease, purchase
or otherwise retire the principal amount, in whole or in part, of any
Indebtedness other than the Obligations; provided, that the foregoing shall not
prohibit (x) the prepayment of Indebtedness which is financed solely from the
proceeds of a new loan which would otherwise be permitted by the terms of §8.1,
and (y) the prepayment, redemption, defeasance or other retirement of the
principal of Indebtedness secured by Real Estate which is satisfied solely from
the proceeds of a sale of the Real Estate securing such Indebtedness; or
(b) modify any document evidencing any Indebtedness (other than the Obligations)
to accelerate the maturity date or required payments of principal of such
Indebtedness during the existence of an Event of Default.

 

  §8.10

Zoning and Contract Changes and Compliance. Neither the Borrower nor any
Guarantor shall (a) initiate or consent to any zoning reclassification of any of
the Borrowing Base Property or seek any variance under any existing zoning
ordinance or use or permit the use of any Borrowing Base Property in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation or
(b) initiate any change in any laws, requirements of governmental authorities or
obligations created by private contracts and Leases which now or hereafter may
materially adversely affect the ownership, occupancy, use or operation of any
Borrowing Base Property.

 

  §8.11

Derivatives Contracts. Neither the Borrower, the Guarantors nor any of their
respective Subsidiaries shall contract, create, incur, assume or suffer to exist
any Derivatives Contracts except for Hedge Obligations and interest rate swap,
collar, cap or similar agreements providing interest rate protection and
currency swaps and currency options made in the ordinary course of business and
permitted pursuant to §8.1.

 

  §8.12

Transactions with Affiliates. The Borrower shall not, and shall not permit any
Guarantor or Subsidiary of any of them to, permit to exist or enter into, any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate (but not including the Borrower
or any Guarantor), except (i) transactions set forth on Schedule 6.14 attached
hereto and (ii) transactions in the ordinary course of business pursuant to the
reasonable requirements of the business of such Person and upon fair and
reasonable terms which are no less favorable to such Person than would be
obtained in a comparable arm’s length transaction with a Person that is not an
Affiliate.

 

  §8.13

Management Fees. Borrower shall not pay, and shall not permit to be paid, any
management fees or other payments under any Management Agreement for any
Borrowing Base Property to any manager that is an Affiliate of Borrower or REIT
in the event that an Event of Default shall have occurred and be continuing.

 

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  §8.14

Changes to Organizational Documents. Borrower shall not amend or modify, or
permit the amendment or modification of, the articles, bylaws, limited liability
company agreements or other formation or organizational documents of Borrower or
any Guarantor in any material respect, without the prior written consent of
Agent, not to be unreasonably withheld, conditioned or delayed. For the
avoidance of doubt, amendments or modifications to the organizational documents
of Borrower, General Partner or REIT related to governance matters (e.g., board
size) or capitalization including, but not limited to, the establishment of new
classes or series of preferred stock and effecting stock splits shall not be
deemed to be material for purposes of this §8.14.8.14 provided that no new
rights, powers, remedies, approvals, consents, restrictions or other limitations
are included in any thereof that are materially adverse to the Lenders, that
would directly or indirectly limit, restrict or mandate actions by the Board or
the executive management of the REIT or its Subsidiaries, or that otherwise
would require consent or approval for the Board or the executive management of
the REIT or its Subsidiaries to take actions.

 

  §8.15

Equity Pledges. Notwithstanding anything in this Agreement to the contrary,
neither the Borrower, the General Partner nor the REIT will create or incur or
suffer to be created or incurred any Lien on any legal, equitable or beneficial
interest of the REIT in the General Partner or the Borrower, or of Borrower in
any Subsidiary Guarantor, including, without limitation, any Distributions or
rights to Distributions on account thereof (other than those in favor of Agent).

 

  §8.16

Non-Encumbrance. Without implying any limitation upon the generality of §8.2,
the Borrower will not, and will not permit any other Person to, create or incur
or suffer to be created or incurred or to exist (a) any lien, encumbrance,
mortgage, pledge, negative pledge, change, restriction or other security
interest of any kind upon any Borrowing Base Property, or (b) any provision of a
document, instrument or agreement (other than a Loan Document) which, in the
case of (a) or (b), prohibits or purports to prohibit the creation or assumption
of any Lien on any Borrowing Base Property or interest therein as security for
the Obligations.

 

  §8.17

Subordinate Debt. The Borrower shall not permit the REIT to incur any
Indebtedness other than Subordinate Debt as permitted by this Agreement
(including compliance with the Subordinate Debt Terms) and only if such funds
are necessary for the REIT and its Subsidiaries to have sufficient liquidity to
fund their operations in accordance with the Approved Budget or to maintain
compliance with the financial covenants under this Agreement, as demonstrated by
the Borrower to the Agent and shared with the Lenders. The Borrower and the REIT
will not make or permit any amendment (other than an extension of the maturity
date), modification or waiver to the indenture, note or other agreements
evidencing or governing any Subordinate Debt without the Required Lender’s prior
written approval, which approval may be withheld in the Required Lender’s sole,
exclusive and unfettered discretion, or directly or indirectly pay, prepay,
defease or in substance defease, purchase, amortize, redeem, retire or otherwise
acquire any Subordinate Debt (whether principal, interest or other amount)
except as permitted in the applicable Subordination and Standstill Agreement.
The Borrower shall not permit the REIT to pay any Make Whole Fee in excess of
the sum of (x) $500,000.00 in the aggregate for all Make Whole Fees plus (y) one
hundred percent (100%) of any Excess Offering Proceeds.

 

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§9.

FINANCIAL COVENANTS.

The Borrower covenants and agrees that, so long as any Loan, Note or Letter of
Credit is outstanding or any Lender has any obligation to make any Loans or
issue any Letter of Credit:

 

  §9.1

Debt YieldBorrowing Base Implied DSCR. Commencing November 30, 2020 and
continuing thereafter, the Debt Yield shall at all times be greater than ten
percent (10%).Borrower will not at any time permit the aggregate Outstanding
Loans and Swing Loans and Letter of Credit Liabilities to cause the ratio of
(a) the aggregate Adjusted Net Operating Income from the Borrowing Base
Properties divided by (b) the Mortgage Constant, to be less than the following:

 

For the Period:

   Ratio  

Commencing and ending on September 30, 2021

     1.00 to 1  

Commencing October 1, 2021 through and including December 31, 2021

     1.00 to 1  

Commencing January 1, 2022 through and including March 31, 2022

     1.25 to 1  

Commencing April 1, 2022 through and including June 30, 2022

     1.25 to 1  

Commencing July 1, 2022 and continuing thereafter

     1.50 to 1  

For the purposes of determining compliance with this §9.1, commencing upon
September 30, 2021, the Adjusted Net Operating Income shall be calculated
(i) for the fiscal quarter ending September 30, 2021, by multiplying the
Adjusted Net Operating Income for the period from July 1, 2021 through and
including September 30, 2021, by four (4), (ii) for the fiscal quarter ending
December 31, 2021, by multiplying the Adjusted Net Operating Income for the
period from July 1, 2021 through and including December 31, 2021, by two (2),
(iii) for the fiscal quarter ending March 31, 2022, by multiplying the Adjusted
Net Operating Income for the period from July 1, 2021 through and including
March 31, 2022, by one and one-third (1.33), and (iv) for each calendar quarter
thereafter, Adjusted Net Operating Income shall be calculated for the prior four
(4) consecutive fiscal quarters most recently ended.

 

  §9.2

Leverage[Intentionally Omitted].

(a) The Borrower will not at any time permit the ratio of Consolidated Total
Indebtedness to Consolidated Total Asset Value (expressed as a percentage) to
exceed 60%.

(b) [Intentionally Omitted.]

 

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  §9.3

Borrowing Base Leverage. Commencing on April 2, 2021 and continuing thereafter,
the(a) The Borrower will not as of March 31, 2022 or at any time thereafter
permit the ratio of the aggregate Outstanding Loans and Swing Loans and Letter
of Credit Liabilities to the aggregate As-Stabilized Appraised Value of the
Borrowing Base Properties (expressed as a percentage) to exceed 65%.

 

  §9.4

[Intentionally Omitted]

(b) .Notwithstanding the terms of §9.3(a), the Borrower will not as of the
occurrence of a Distribution Event or at any time thereafter permit the ratio of
the aggregate Outstanding Loans and Swing Loans and Letter of Credit Liabilities
to the aggregate As-Stabilized Appraised Value of the Borrowing Base Properties
(expressed as a percentage) to exceed 60%.

 

  §9.4

Liquidity. The Borrower will not at any time permit its Liquidity to be less
than $3,000,000.00.

 

  §9.5

Adjusted Consolidated EBITDA to Fixed Charges. The Borrower will not at any time
permit the ratio of Adjusted Consolidated EBITDA determined for the most
recently ended four (4) fiscal quarters to Fixed Charges determined for the most
recently ended four (4) fiscal quarters to be less than the following.:

 

For the Period:

   Ratio  

Commencing and ending on September 30, 2021

     1.00 to 1  

Commencing October 1, 2021 through and including December 31, 2021

     1.00 to 1  

Commencing January 1, 2022 through and including March 31, 2022

     1.25 to 1  

Commencing April 1, 2022 through and including June 30, 2022

     1.25 to 1  

Commencing November 30, 2020July 1, 2022 and continuing thereafter

     1.50 to 1  

Notwithstanding the above, commencing on the occurrence of a Distribution Event,
whenever it occurs, and continuing thereafter

     1.50 to 1  

For the purposes of determining compliance with this §9.5,9.5 (other than in
connection with the occurrence of a Distribution Event), commencing upon
NovemberSeptember 30, 2020,2021, the Consolidated EBITDA and Fixed Charges shall
be calculated (i) [reserved]for the fiscal quarter ending September 30, 2021, by
multiplying the Consolidated EBITDA and Fixed Charges for the period from
July 1, 2021 through and including September 30, 2021, by four (4), (ii) for the
fiscal quarter ending December 31, 2020,2021, by multiplying the Consolidated
EBITDA and Fixed Charges for the period from July 1, 20202021 through and
including December 31, 2020,2021, by two (2), (iii) for the fiscal quarter
ending March 31, 2021,2022, by multiplying the Consolidated EBITDA and Fixed
Charges for the period from July 1, 20202021 through and including March

 

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31, 2021,2022, by one and one-third (1.33), and (iv) for each calendar quarter
thereafter, Consolidated EBITDA and Fixed Charges shall be calculated for the
prior four (4) consecutive fiscal quarters most recently ended. Upon the
occurrence of a Distribution Event, compliance with this §9.5 shall initially be
calculated as provided in the definition of Distribution Conditions, and
thereafter shall be determined for the most recently ended four (4) fiscal
quarters.

 

  §9.6

[Intentionally Omitted].

 

  §9.7

[Intentionally Omitted].

 

  §9.8

[Intentionally Omitted].

 

§10.

CLOSING CONDITIONS.

The obligation of the Lenders to make the Loans or issue the Letter(s) of Credit
shall be subject to the satisfaction of the following conditions precedent:

 

  §10.1

Loan Documents. Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto and shall be in full force and
effect. The Agent shall have received a fully executed counterpart of each such
document, except that each Lender shall have receive the fully-executed original
of its Note.

 

  §10.2

Certified Copies of Organizational Documents. The Agent shall have received from
the Borrower and each Guarantor a copy, certified as of a recent date by the
appropriate officer of each State in which such Person is organized and (with
respect to Borrower or any Guarantor that owns or leases a Borrowing Base
Property) in which such Borrowing Base Property is located and a duly authorized
officer, partner or member of such Person, as applicable, to be true and
complete, of the partnership agreement, corporate charter or operating agreement
and/or other organizational agreements of the Borrower and each such Guarantor,
as applicable, and its qualification to do business, as applicable, as in effect
on such date of certification.

 

  §10.3

Resolutions. All action on the part of the Borrower and each Guarantor, as
applicable, necessary for the valid execution, delivery and performance by such
Person of this Agreement and the other Loan Documents to which such Person is or
is to become a party shall have been duly and effectively taken, and evidence
thereof reasonably satisfactory to the Agent shall have been provided to the
Agent.

 

  §10.4

Incumbency Certificate; Authorized Signers. The Agent shall have received from
the Borrower and each Guarantor an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Person and giving the
name and bearing a specimen signature of each individual who shall be authorized
to sign, in the name and on behalf of such Person, each of the Loan Documents to
which such Person is or is to become a party.

 

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  §10.5

Opinion of Counsel. The Agent shall have received an opinion addressed to the
Lenders and the Agent and dated as of the Closing Date from counsel to the
Borrower and each Guarantor in form and substance reasonably satisfactory to the
Agent.

 

  §10.6

Payment of Fees. The Borrower shall have paid to the Agent the fees payable
pursuant to §4.2.

 

  §10.7

Performance; No Default. The Borrower and each Guarantor shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it on or prior to the Closing Date, and on the Closing Date
there shall exist no Default or Event of Default.

 

  §10.8

Representations and Warranties. The representations and warranties made by the
Borrower and each Guarantor in the Loan Documents or otherwise made by or on
behalf of the Borrower, the Guarantors and their respective Subsidiaries in
connection therewith or after the date thereof shall have been true and correct
in all material respects when made and shall also be true and correct in all
material respects on the Closing Date.

 

  §10.9

Proceedings and Documents. All proceedings in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be reasonably
satisfactory to the Agent and the Agent’s counsel in form and substance, and the
Agent shall have received all information and such counterpart originals or
certified copies of such documents and such other certificates, opinions,
assurances, consents, approvals or documents as the Agent and the Agent’s
counsel may reasonably require.

 

  §10.10

Borrowing Base Qualification Documents. The Borrowing Base Qualification
Documents for each Borrowing Base Property included as of the Closing Date shall
have been delivered to the Agent at the Borrower’s expense and shall be in form
and substance reasonably satisfactory to the Agent.

 

  §10.11

Compliance Certificate and Borrowing Base Certificate. The Agent shall have
received a Compliance Certificate and Borrowing Base Certificate dated as of the
date of the Closing Date demonstrating compliance with each of the covenants
calculated therein as of the most recent fiscal quarter for which the Borrower
has provided financial statements under §6.4.

 

  §10.12

Appraisals. The Agent shall have received the Appraisals of each Borrowing Base
Property and the other Real Estate of the Borrower.

 

  §10.13

Consents. The Agent shall have received evidence reasonably satisfactory to the
Agent that all necessary stockholder, partner, member or other consents required
in connection with the consummation of the transactions contemplated by this
Agreement and the other Loan Documents have been obtained.

 

  §10.14

Contribution Agreement. The Agent shall have received a fully executed
counterpart of the Contribution Agreement.

 

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  §10.15

Insurance. The Agent shall have received certificates evidencing that the Agent
is named as mortgagee and/or additional insured, as applicable, on all policies
of insurance as required by this Agreement or the other Loan Documents.

 

  §10.16

Other. The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent’s Special Counsel may reasonably have requested.

 

§11.

CONDITIONS TO ALL BORROWINGS.

The obligations of the Lenders to make any Loan or issue any Letter of Credit,
whether on or after the Closing Date, shall also be subject to the satisfaction
of the following conditions precedent:

 

  §11.1

Prior Conditions Satisfied. All conditions set forth in §10 shall continue to be
satisfied as of the date upon which any Loan is to be made or any Letter of
Credit is to be issued.

 

  §11.2

Representations True; No Default. Each of the representations and warranties
made by or on behalf of the Borrower, the Guarantors or any of their respective
Subsidiaries contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true and correct in all material respects both as of the date
as of which they were made and shall also be true and correct in all material
respects as of the time of the making of such Loan or the issuance of such
Letter of Credit, with the same effect as if made at and as of that time, except
to the extent of changes resulting from transactions permitted by the Loan
Documents (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct only as of such specified date), and no Default or Event of Default
shall have occurred and be continuing.

 

  §11.3

Borrowing Documents. The Agent shall have received a fully completed Loan
Request for such Loan and the other documents and information as required by
§2.7, or a fully completed Letter of Credit Request required by §2.10, as
applicable.

 

  §11.4

Endorsement to Title Policy. To the extent the Agent is a beneficiary of any
Mortgage, at such times as the Agent shall determine in its discretion at any
time, to the extent available under Applicable Law, a “date down” endorsement to
each Title Policy indicating no change in the state of title and containing no
survey exceptions not approved by the Agent, which endorsement shall, expressly
or by virtue of a proper “revolving credit” clause or endorsement in each Title
Policy, increase the coverage of each Title Policy to the aggregate amount of
all Loans advanced and outstanding and Letters of Credit issued and outstanding
(provided that the amount of coverage under an individual Title Policy for an
individual Borrowing Base Property need not equal the aggregate amount of all
Loans), or if such endorsement is not available, such other evidence and
assurances as the Agent may reasonably require (which evidence may include,
without limitation, an affidavit from the Borrower stating that there have been
no changes in title from the date of the last effective date of the Title
Policy).

 

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  §11.5

Future Advances Tax Payment. To the extent the Agent is a beneficiary of any
Mortgage, as a condition precedent to any Lender’s obligations to make any Loans
available to the Borrower hereunder, the Borrower will pay to the Agent or the
Person entitled thereto any mortgage, recording, intangible, documentary stamp
or other similar taxes and charges which the Agent reasonably determines to be
payable as a result of such Loan to any state or any county or municipality
thereof in which any of the Borrowing Base Properties is located, and deliver to
the Agent such affidavits or other information which the Agent reasonably
determines to be necessary in connection with such payment in order to insure
that the Mortgages on the Borrowing Base Properties located in such state secure
the Borrower’s obligation with respect to the Loans then being requested by the
Borrower. The provisions of this §11.5 shall not limit the Borrower’s
obligations under other provisions of the Loan Documents, including §15.

 

§12.

EVENTS OF DEFAULT; ACCELERATION; ETC..

 

  §12.1

Events of Default and Acceleration. If any of the following events (“Events of
Default” or, if the giving of notice or the lapse of time or both is required,
then, prior to such notice or lapse of time, “Defaults”) shall occur:

(a) the Borrower shall fail to pay any principal of the Loans when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;

(b) the Borrower shall fail to pay any interest on the Loans, any reimbursement
obligations with respect to the Letters of Credit or any fees or other sums due
hereunder or under any of the other Loan Documents when the same shall become
due and payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;

(c) the Borrower shall fail to perform any term, covenant or agreement contained
in §9;

(d) any of the Borrower, the Guarantors or any of their respective Subsidiaries
shall fail to perform any other term, covenant or agreement contained herein or
in any of the other Loan Documents which they are required to perform (other
than those specified in the other subsections or clauses of this §12 or in the
other Loan Documents);

(e) any representation or warranty made by or on behalf of the Borrower, the
Guarantors or any of their respective Subsidiaries in this Agreement or any
other Loan Document, or any report, certificate, financial statement, request
for a Loan, Letter of Credit Request, or in any other document or instrument
delivered pursuant to or in connection with this Agreement, any advance of a
Loan, the issuance of any Letter of Credit or any of the other Loan Documents
shall prove to have been false in any material respect upon the date when made
or deemed to have been made or repeated;

 

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(f) (i) the Borrower, any Guarantor or any of their Subsidiaries shall fail to
pay when due (including, without limitation, at maturity), or within any
applicable period of grace, any obligation for borrowed money or credit received
or other Indebtedness (including under any Derivatives Contract) or any
Subordinate Debt (other than the Initial Subordinate Debt), or shall fail to
observe or perform any term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing any obligation for borrowed money or
credit received or other Indebtedness (including under any Derivatives Contract)
or any Subordinate Debt (other than the Initial Subordinate Debt) for such
period of time as would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof or require the prepayment, redemption,
purchase, termination or other settlement thereof; provided, however, that the
events described in this §12.1(f)(i) shall not constitute an Event of Default
unless such failure to perform, together with other failures to perform as
described in §12.1(f)(i), involves singly or in the aggregate (iA) any
obligations for Indebtedness or under Derivative Contracts (other than
Non-Recourse Indebtedness) totaling $500,000.00 or greater or (ii, (B) any
obligation with respect to any Subordinate Debt (other than the Initial
Subordinate Debt), or (C) Non-Recourse Indebtedness totaling $10,000,000.00 or
greater, provided that after the date of the Ninth Amendment to Credit
Agreement, any such event with respect to such Non-Recourse Indebtedness as to
which the revenue from the collateral for such Non-Recourse Indebtedness is
insufficient to pay the interest due and payable thereon and the Required
Lenders have not permitted proceeds of a Revolving Credit Loan to be used to pay
such interest, then the occurrence of such event with respect to such
Non-Recourse Indebtedness shall not be counted against such $10,000,000.00
limit, or (ii) the obligations under the Initial Subordinate Debt shall be or
have been accelerated;

(g) any of the Borrower, the Guarantors, or any of their respective
Subsidiaries, (i) shall make an assignment for the benefit of creditors, or
admit in writing its general inability to pay or generally fail to pay its debts
as they mature or become due, or shall petition or apply for the appointment of
a trustee or other custodian, liquidator or receiver for it or any substantial
part of its assets, (ii) shall commence any case or other proceeding relating to
it under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or (iii) shall take any action to authorize or in
furtherance of any of the foregoing;

(h) a petition or application shall be filed for the appointment of a trustee or
other custodian, liquidator or receiver of any of the Borrower, the Guarantors,
or any of their respective Subsidiaries or any substantial part of the assets of
any thereof, or a case or other proceeding shall be commenced against any such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, and any such Person shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within sixty
(60) days following the filing or commencement thereof;

(i) a decree or order is entered appointing a trustee, custodian, liquidator or
receiver for any of the Borrower, the Guarantors, or any of their respective
Subsidiaries or adjudicating any such Person, bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of any such Person in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;

 

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(j) there shall remain in force, undischarged, unsatisfied and unstayed, for
more than thirty (30) days, whether or not consecutive, one (1) or more
uninsured or unbonded final judgments against the Borrower, any Guarantor or any
of their respective Subsidiaries that, either individually or in the aggregate,
exceed $2,500,000.00 per occurrence or during any twelve (12) month period;

(k) any of the Loan Documents or, the Contribution Agreement or a Subordination
and Standstill Agreement shall be disavowed, canceled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or the express
prior written agreement, consent or approval of the Lenders, or any action at
law, suit in equity or other legal proceeding to disavow, cancel, revoke,
rescind or challenge or contest the validity or enforceability of any of the
Loan Documents or, the Contribution Agreement or a Subordination and Standstill
Agreement shall be commenced by or on behalf of the Borrower or any Guarantor or
any Subordinate Lender, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination, or
issue a judgment, order, decree or ruling, to the effect that any one or more of
the Loan Documents or, the Contribution Agreement or a Subordination and
Standstill Agreement is illegal, invalid or unenforceable in accordance with the
terms thereof;

(l) any dissolution, termination, partial or complete liquidation, merger or
consolidation of the Borrower, any Guarantor or any of their respective
Subsidiaries shall occur or any sale, transfer or other disposition of the
assets of the Borrower, any Guarantor or any of their respective Subsidiaries
shall occur, in each case, other than as permitted under the terms of this
Agreement or the other Loan Documents;

(m) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall
have occurred and the Required Lenders shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower, the Guarantors or any of their respective Subsidiaries to the
PBGC or such Guaranteed Pension Plan in excess of $2,500,000.00 and (x) such
event in the circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or (y) a trustee shall have been appointed by the
United States District Court to administer such Plan; or (z) the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;

(n) the Borrower, any Guarantor or any of their respective Subsidiaries or any
shareholder, officer, director, partner or member of any of them shall be
indicted for a federal crime, a punishment for which could include the
forfeiture of (i) any assets of the Borrower or any of their respective
Subsidiaries which in the good faith judgment of the Required Lenders could
reasonably be expected to have a Material Adverse Effect, (ii) any Borrowing
Base Property or any Material Contract, or (iii) the Collateral;

 

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(o) any Guarantor denies that it has any liability or obligation under the
Guaranty or any other Loan Document, or shall notify the Agent or any of the
Lenders of such Guarantor’s intention to attempt to cancel or terminate the
Guaranty or any other Loan Document, or shall fail to observe or comply with any
term, covenant, condition or agreement under any Guaranty or any other Loan
Document;

(p) any Change of Control shall occur; or

(q) an Event of Default under any of the other Loan Documents shall occur;

(r) any default, material misrepresentation or breach of warranty in a
Subordination and Standstill Agreement by the REIT or any Subordinate Lender; or

(s) The Initial Subordinate Debt is not converted to common stock of the REIT or
paid in full as permitted by the Initial Subordination and Standstill Agreement
on or before July 1, 2021, provided that in the event that the conversion of the
Initial Subordinate Debt to common stock of the REIT becomes the subject of an
SEC review proceeding, such date may be extended provided that (i) the REIT
diligently and continuously pursues approval from the SEC of the necessary
documentation and (ii) such conversion occurs no later than August 30, 2021;

then, and in any such event, the Agent may, and, upon the request of the
Required Lenders, shall by notice in writing to the Borrower declare all amounts
owing with respect to this Agreement, the Notes, the Letters of Credit and the
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in §§12.1(g), 12.1(h) or
12.1(i), all such amounts shall become immediately due and payable automatically
and without any requirement of presentment, demand, protest or other notice of
any kind from any of the Lenders or the Agent, the Borrower hereby expressly
waiving any right to notice of intent to accelerate and notice of acceleration.
Upon demand by the Agent or the Required Lenders in their absolute and sole
discretion after the occurrence and during the continuance of an Event of
Default, and regardless of whether the conditions precedent in this Agreement
for a Revolving Credit Loan have been satisfied, the Lenders will cause a
Revolving Credit Loan to be made in the undrawn amount of all Letters of Credit.
The proceeds of any such Revolving Credit Loan will be pledged to and held by
the Agent as security for any amounts that become payable under the Letters of
Credit and all other Obligations and Hedge Obligations. In the alternative, if
demanded by the Agent in its absolute and sole discretion after the occurrence
and during the continuance of an Event of Default, the Borrower will deposit
into the Collateral Account and pledge to the Agent cash in an amount equal to
the amount of all undrawn Letters of Credit. Such amounts will be pledged to and
held by the Agent for the benefit of the Lenders as security for any amounts
that become payable under the Letters of Credit and all other Obligations and
Hedge Obligations. Upon any draws under Letters of Credit, at the Agent’s sole
discretion, the Agent may apply any such amounts to the repayment of amounts
drawn thereunder and upon the expiration of the Letters of Credit any remaining
amounts will be applied to the payment of all other Obligations and Hedge
Obligations or if there are no outstanding Obligations and Hedge Obligations and
the Lenders have no further obligation to make Revolving Credit Loans or issue
Letters of Credit or if such excess no longer exists, such proceeds deposited by
the Borrower will be released to the Borrower.

 

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  §12.2

Certain Cure Periods; Limitation of Cure Periods. Notwithstanding anything
contained in §12.1 to the contrary, (i) no Event of Default shall exist
hereunder upon the occurrence of any failure described in §12.1(b) in the event
that the Borrower cures such Default within five (5) Business Days after the
date such payment is due (or, with respect to any payments other than interest
on the Loans, any reimbursement obligations with respect to the Letters of
Credit, any fees due under the Loan Documents or any deposits to the Tax and
Insurance Reserve Account or the FF&E Reserve Account (as defined in the Cash
Collateral Agreement), within five (5) Business Days after written notice
thereof shall have been given to the Borrower by the Agent), provided, however,
that the Borrower shall not be entitled to receive more than two (2) grace or
cure periods in the aggregate pursuant to this clause (i) in any period of 365
days ending on the date of any such occurrence of Default, and provided further,
that no such cure period shall apply to any payments due upon the maturity of
the Notes, and (ii(ii) no Event of Default shall exist hereunder upon the
occurrence of any failure described in §12.1(c) solely with respect to a breach
of the covenant set forth in §9.4 (it being acknowledged that no other cure
right is provided for any other Default under §9) in the event that the Borrower
cures (or causes to be cured) such Default by the infusion of new Subordinate
Debt within fifteen days of such occurrence, and (iii) no Event of Default shall
exist hereunder upon the occurrence of any failure described in §12.1(d) in the
event that the Borrower cures (or causes to be cured) such Default within thirty
(30) days following receipt of written notice of such default, provided that the
provisions of this clause (iiiii) shall not pertain to defaults consisting of a
failure to provide insurance as required by §7.7, to any default (whether of the
Borrower, any Guarantor or any Subsidiary thereof) consisting of a failure to
comply with §§7.4(c), 7.14, 7.18, 7.19(c), 7.20, 7.23, 8.1, 8.2, 8.3, 8.4, 8.7,
8.8, 8.9, 8.11, 8.13, 8.14, 8.15 or8.15, 8.16 or 8.17 or to any Default excluded
from any provision of cure of defaults contained in any other of the Loan
Documents.

In the event that there shall occur any Default that affects only certain
Borrowing Base Properties or the owner(s) thereof, then the Borrower may elect
to cure such Default (so long as no other Default or Event of Default would
arise as a result) by electing to have Agent remove such Borrowing Base
Properties from the calculation of Debt Yieldthe covenants set forth in §9.1 and
§9.3 and by reducing the outstanding Loans by the greater of (A) the Appraised
Value attributable to such Borrowing Base Property, and (B) the minimum release
price for such Borrowing Base Property set forth in Schedule 5.5, in which event
such removal and reduction shall be completed within ten (10) Business Days
after receipt of notice of such Default from the Agent or the Required Lenders
and the expiration of any applicable cure period provided under this §12.2.

 

  §12.3

Termination of Commitments. If any one or more Events of Default specified in
§12.1(g), 12.1(h) or 12.1(i) shall occur, then immediately and without any
action on the part of the Agent or any Lender any unused portion of the credit
hereunder shall terminate and the Lenders shall be relieved of all obligations
to make Loans or issue Letters of Credit to the Borrower. If any other Event of
Default shall have

 

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  occurred, the Agent may, and upon the election of the Required Lenders, shall,
by notice to the Borrower terminate the obligation to make Revolving Credit
Loans to and issue Letters of Credit for the Borrower. No termination under this
§12.3 shall relieve the Borrower or the Guarantors of their obligations to the
Lenders arising under this Agreement or the other Loan Documents.

 

  §12.4

Remedies. In case any one or more Events of Default shall have occurred and be
continuing, and whether or not the Lenders shall have accelerated the maturity
of the Loans pursuant to §12.1, the Agent, on behalf of the Lenders may, and
upon the direction of the Required Lenders, shall proceed to protect and enforce
their rights and remedies under this Agreement, the Notes and/or any of the
other Loan Documents by suit in equity, action at law or other appropriate
proceeding, including to the full extent permitted by Applicable Law the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents, the obtaining of the ex parte appointment of a
receiver, requiring the establishment of a hard lockbox and cash management
system with Agent, and, if any amount shall have become due, by declaration or
otherwise, the enforcement of the payment thereof. No remedy herein conferred
upon the Agent or the holder of any Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law. Notwithstanding
the provisions of this Agreement providing that the Loans may be evidenced by
multiple Notes in favor of the Lenders, the Lenders acknowledge and agree that
only the Agent may exercise any remedies arising by reason of a Default or Event
of Default. If the Borrower or any Guarantor fails to perform any agreement or
covenant contained in this Agreement or any of the other Loan Documents beyond
any applicable period for notice and cure, the Agent may itself perform, or
cause to be performed, any agreement or covenant of such Person contained in
this Agreement or any of the other Loan Documents which such Person shall fail
to perform, and the out-of-pocket costs of such performance, together with any
reasonable expenses, including reasonable attorneys’ fees actually incurred
(including attorneys’ fees incurred in any appeal) by the Agent in connection
therewith, shall be payable by the Borrower upon demand and shall constitute a
part of the Obligations and shall if not paid within five (5) days after demand
bear interest at the Default Rate. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower shall
pay all costs of collection including, but not limited to, reasonable attorney’s
fees.

 

  §12.5

Distribution of Collateral Proceeds. In the event that, following the occurrence
and during the continuance of any Event of Default, any monies are received in
connection with the enforcement of any of the Loan Documents, or otherwise with
respect to the realization upon any of the Collateral or other assets of the
Borrower or the Guarantors, such monies shall be distributed for application as
follows:

 

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(a) First, to the payment of, or (as the case may be) the reimbursement of the
Agent for or in respect of, all reasonable out-of-pocket costs, expenses,
disbursements and losses which shall have been paid or incurred or sustained by
the Agent to protect or preserve the Collateral or in connection with the
collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any of the other
Loan Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent or the Lenders to such
monies;

(b) Second, to all other Obligations and Hedge Obligations (including any
interest, expenses or other obligations incurred after the commencement of a
bankruptcy) in such order or preference as the Required Lenders shall determine;
provided, that (i) Swing Loans shall be repaid first, (ii) distributions in
respect of such other Obligations shall include, on a pari passu basis, any
Agent’s fee payable pursuant to §4.2, (iii) in the event that any Lender is a
Defaulting Lender, payments to such Lender shall be governed by §2.13, and
(iv) except as otherwise provided in clause (iii), Obligations owing to the
Lenders with respect to each type of Obligation such as interest, principal,
fees and expenses and Hedge Obligations (but excluding the Swing Loans) shall be
made among the Lenders and Lender Hedge Providers, pro rata; and provided,
further that the Required Lenders may in their discretion make proper allowance
to take into account any Obligations not then due and payable; and

(c) Third, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.

 

  §12.6

Collateral Account.

(a) As collateral security for the prompt payment in full when due of all Letter
of Credit Liabilities, Swing Loans and the other Obligations and Hedge
Obligations, the Borrower hereby pledges and grants to the Agent, for the
ratable benefit of the Agent and the Lenders as provided herein, a security
interest in all of its right, title and interest in and to the Collateral
Account and the balances from time to time in the Collateral Account (including
any interest provided for below). The balances from time to time in the
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities or Swing Loans until applied by the Agent as provided herein.
Anything in this Agreement to the contrary notwithstanding, funds held in the
Collateral Account shall be subject to withdrawal only as provided in this
§12.6.

(b) Amounts on deposit in the Collateral Account shall not be invested by the
Agent, and will earn interest at a rate paid by Agent with respect to similar
accounts, and shall be held in the name of and be under the sole dominion and
control of the Agent for the ratable benefit of the Lenders. The Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the Agent
accords other funds deposited with the Agent, it being understood that the Agent
shall not have any responsibility for taking any necessary steps to preserve
rights against any parties with respect to any funds held in the Collateral
Account.

(c) If a drawing pursuant to any Letter of Credit occurs on or prior to the
expiration date of such Letter of Credit, the Borrower and the Lenders authorize
the Agent to use the monies deposited in the Collateral Account to make payment
to the beneficiary with respect to such drawing or the payee with respect to
such presentment. If a Swing Loan is not refinanced as a Base Rate Loan as
provided in §2.5 above, then the Agent is authorized to use monies deposited in
the Collateral Account to make payment to the Swing Loan Lender with respect to
any participation not funded by a Defaulting Lender.

 

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(d) If an Event of Default exists, the Required Lenders may, in their
discretion, at any time and from time to time, instruct the Agent to liquidate
or withdraw any amounts in the Collateral Account and apply proceeds thereof to
the Obligations and Hedge Obligations in accordance with §12.5.

(e) So long as no Default or Event of Default exists, and to the extent amounts
on deposit in the Collateral Account exceed the aggregate amount of the Letter
of Credit Liabilities then due and owing and the pro rata share of any Letter of
Credit Obligations and Swing Loans of any Defaulting Lender after giving effect
to §2.13(c), the Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within ten (10) Business Days after the Agent’s receipt
of such request from the Borrower, against receipt but without any recourse,
warranty or representation whatsoever, such of the balances in the Collateral
Account as exceed the aggregate amount of the Letter of Credit Liabilities and
Swing Loans at such time.

(f) The Borrower shall pay to the Agent from time to time such fees as the Agent
normally charges for similar services in connection with the Agent’s
administration of the Collateral Account. The Borrower authorizes the Agent to
file such financing statements as the Agent may reasonably require in order to
perfect the Agent’s security interest in the Collateral Account, and the
Borrower shall promptly upon demand execute and deliver to the Agent such other
documents as the Agent may reasonably request to evidence its security interest
in the Collateral Account.

 

§13.

SETOFF.

Regardless of the adequacy of any Collateral, during the continuance of any
Event of Default, any deposits (general or specific, time or demand, provisional
or final, regardless of currency, maturity, or the branch where such deposits
are held) or other sums credited by or due from any Lender to the Borrower or
the Guarantors and any securities or other property of the Borrower or the
Guarantors in the possession of such Lender may, without notice to the Borrower
or any Guarantor (any such notice being expressly waived by the Borrower and
each Guarantor) but with the prior written approval of the Agent, be applied to
or set off against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower or the Guarantors to such Lender under the
Loan Documents. Each of the Lenders agree with each other Lender that if such
Lender shall receive from the Borrower or the Guarantors, whether by voluntary
payment, exercise of the right of setoff, or otherwise, and shall retain and
apply to the payment of the Note or Notes held by such Lender (but excluding the
Swing Loan Note) any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Notes held by all of the
Lenders, such Lender will make such disposition and arrangements with the other
Lenders with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Lender
receiving in respect of the Notes held by it its proportionate payment

 

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as contemplated by this Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest. In the event that any Defaulting Lender shall
exercise any such right of setoff, (a) all amounts so set off shall be paid over
immediately to the Agent for further application in accordance with the
provisions of this Agreement and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the
benefit of the Agent and the Lenders, and (b) such Defaulting Lender shall
provide promptly to the Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff.

 

§14.

THE AGENT.

 

  §14.1

Authorization. The Agent is authorized to take such action on behalf of each of
the Lenders and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Agent. The obligations of the Agent
hereunder are primarily administrative in nature, and nothing contained in this
Agreement or any of the other Loan Documents shall be construed to constitute
the Agent as a trustee for any Lender or to create an agency or fiduciary
relationship. The Agent shall act as the contractual representative of the
Lenders hereunder, and notwithstanding the use of the term “Agent”, it is
understood and agreed that the Agent shall not have any fiduciary duties or
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and is acting as an independent contractor, the duties and
responsibilities of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. The Borrower and any other Person shall
be entitled to conclusively rely on a statement from the Agent that it has the
authority to act for and bind the Lenders pursuant to this Agreement and the
other Loan Documents.

 

  §14.2

Employees and Agents. The Agent may exercise its powers and execute its duties
by or through employees or agents and shall be entitled to take, and to rely on,
advice of counsel concerning all matters pertaining to its rights and duties
under this Agreement and the other Loan Documents. The Agent may utilize the
services of such Persons as the Agent may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower
to the extent otherwise required hereunder.

 

  §14.3

No Liability. Neither the Agent nor any of its shareholders, directors, officers
or employees nor any other Person assisting them in their duties nor any agent,
or employee thereof, shall be liable for (a) any waiver, consent or approval
given or any action taken, or omitted to be taken, in good faith by it or them
hereunder or under any of the other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, shall be liable for losses due to its willful misconduct or gross negligence
as finally determined by a court of competent jurisdiction after the expiration
of all applicable appeal periods or (b) any action taken or not taken by the
Agent with the consent or at the request of the Required Lenders. The Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default, unless the Agent has received notice from a Lender or the
Borrower referring to the Loan Documents and describing with reasonable
specificity such Default or Event of Default and stating that such notice is a
“notice of default”.

 

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  §14.4

No Representations. The Agent shall not be responsible for the execution or
validity or enforceability of this Agreement, the Notes, any of the other Loan
Documents or any instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein, or any agreement, instrument or
certificate delivered in connection therewith or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by or on
behalf of the Borrower, the Guarantors or any of their respective Subsidiaries,
or be bound to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements herein or in any of the other
Loan Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower, the Guarantors or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the creditworthiness or financial
condition of the Borrower, the Guarantors or any of their respective
Subsidiaries, or the value of the Collateral or any other assets of the
Borrower, any Guarantor or any of their respective Subsidiaries. Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender, based upon such information and
documents as it deems appropriate at the time, continue to make its own credit
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents. The Agent’s Special Counsel has only represented the
Agent and KeyBank in connection with the Loan Documents and the only attorney
client relationship or duty of care is between the Agent’s Special Counsel and
the Agent or KeyBank. Each Lender has been independently represented by separate
counsel on all matters regarding the Loan Documents and the granting and
perfecting of liens in the Collateral.

 

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  §14.5

Payments.

(a) A payment by the Borrower or any Guarantor to the Agent hereunder or under
any of the other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Agent agrees to distribute to each Lender not later
than one Business Day after the Agent’s receipt of good funds, determined in
accordance with the Agent’s customary practices, such Lender’s pro rata share of
payments received by the Agent for the account of the Lenders except as
otherwise expressly provided herein or in any of the other Loan Documents.
Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, each payment by the Borrower hereunder shall be
applied in accordance with §2.13(d).

(b) If in the opinion of the Agent the distribution of any amount received by it
in such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making such
distribution until its right to make such distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

 

  §14.6

Holders of Notes. Subject to the terms of §18, the Agent may deem and treat the
payee of any Note as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.

 

  §14.7

Indemnity. To the extent that Borrower for any reason fails to indefeasibly pay
any amount required under §15 or §16 to be paid by it to the Agent, the Lenders
ratably agree hereby to indemnify and hold harmless the Agent from and against
any and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent has not
been reimbursed by the Borrower as required by §15), and liabilities of every
nature and character arising out of or related to this Agreement, the Notes, or
any of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Agent’s actions taken hereunder or thereunder, except
to the extent that any of the same shall be directly caused by the Agent’s
willful misconduct or gross negligence as finally determined by a court of
competent jurisdiction after the expiration of all applicable appeal periods.
The agreements in this §14.7 shall survive the payment of all amounts payable
under the Loan Documents.

 

  §14.8

The Agent as Lender. In its individual capacity, KeyBank shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.

 

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  §14.9

Resignation. The Agent may resign at any time by giving written notice thereof
to the Lenders and the Borrower. Any such resignation may at the Agent’s option
also constitute the Agent’s resignation as the Issuing Lender and the Swing Loan
Lender. Upon any such resignation, the Required Lenders, subject to the terms of
§18.1, shall have the right to appoint as a successor Agent and, if applicable,
Issuing Lender and Swing Loan Lender, any Lender or any bank whose senior debt
obligations are rated not less than “A” or its equivalent by Moody’s or not less
than “A” or its equivalent by S&P and which has a net worth of not less than
$500,000,000.00. If no successor Agent shall have been appointed and shall have
accepted such appointment within ten (10) days after the retiring Agent’s giving
of notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be any Lender or any bank whose senior
debt obligations are rated not less than “A2” or its equivalent by Moody’s or
not less than “A” or its equivalent by S&P and which has a net worth of not less
than $500,000,000.00. In either case, unless an Event of Default shall have
occurred and be continuing, suchSuch successor Agent and, if applicable, Issuing
Lender and Swing Loan Lender, shall be reasonably acceptablenot be subject to
the prior approval or consent of Borrower. Upon the acceptance of any
appointment as the Agent and, if applicable, the Issuing Lender and the Swing
Loan Lender, hereunder by a successor Agent and, if applicable, Issuing Lender
and Swing Loan Lender, such successor Agent and, if applicable, Issuing Lender
and Swing Loan Lender, shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and, if applicable,
Issuing Lender and Swing Loan Lender, and the retiring Agent and, if applicable,
Issuing Lender and Swing Loan Lender, shall be discharged from its duties and
obligations hereunder as the Agent and, if applicable, the Issuing Lender and
the Swing Loan Lender. After any retiring Agent’s resignation, the provisions of
this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent, the Issuing Lender and the Swing Loan Lender. If the
resigning Agent shall also resign as the Issuing Lender, such successor Agent
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or shall make other arrangements
satisfactory to the current Issuing Lender, in either case, to assume
effectively the obligations of the current Agent with respect to such Letters of
Credit. Upon any change in the Agent under this Agreement, the resigning Agent
shall execute such assignments of and amendments to the Loan Documents as may be
necessary to substitute the successor Agent for the resigning Agent.

 

  §14.10

Duties in the Case of Enforcement. In case one or more Events of Default have
occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent may and, if (a) so requested by the
Required Lenders and (b) the Lenders have provided to the Agent such additional
indemnities and assurances in accordance with their respective Commitment
Percentages against expenses and liabilities as the Agent may reasonably
request, shall proceed to exercise all or any legal and equitable and other
rights or remedies as it may have; provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders. Without limiting the generality of the foregoing, if the Agent
reasonably determines payment is in the best interest of

 

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  all the Lenders, the Agent may without the approval of the Lenders pay taxes
and insurance premiums and spend money for maintenance, repairs or other
expenses which may be necessary to be incurred, and the Agent shall promptly
thereafter notify the Lenders of such action. Each Lender shall, within thirty
(30) days of request therefor, pay to the Agent its Commitment Percentage of the
reasonable costs incurred by the Agent in taking any such actions hereunder to
the extent that such costs shall not be promptly reimbursed to the Agent by the
Borrower or the Guarantors or out of the Collateral within such period. The
Required Lenders may direct the Agent in writing as to the method and the extent
of any such exercise, the Lenders hereby agreeing to indemnify and hold the
Agent harmless in accordance with their respective Commitment Percentages from
all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, provided that the Agent need not comply with
any such direction to the extent that the Agent reasonably believes the Agent’s
compliance with such direction to be unlawful in any applicable jurisdiction or
commercially unreasonable under the UCC as enacted in any applicable
jurisdiction.

 

  §14.11

Request for Agent Action. The Agent and the Lenders acknowledge that in the
ordinary course of business of the Borrower, (a) a Borrowing Base Property may
be subject to a Taking, or (b) the Borrower or any Subsidiary Guarantor may
desire to enter into easements or other agreements affecting the Borrowing Base
Properties, or take other actions or enter into other agreements in the ordinary
course of business which similarly require the consent, approval or agreement of
the Agent. In connection with the foregoing, the Lenders hereby expressly
authorize the Agent to (x) execute releases of liens in connection with any
Taking, (y) execute consents or subordinations in form and substance
satisfactory to the Agent in connection with any easements or agreements
affecting the Borrowing Base Property, or (z) execute consents, approvals, or
other agreements in form and substance satisfactory to the Agent in connection
with such other actions or agreements as may be necessary in the ordinary course
of the Borrower’s business.

 

  §14.12

Bankruptcy. In the event a bankruptcy or other insolvency proceeding is
commenced by or against the Borrower or any Guarantor with respect to the
Obligations, the Agent shall have the sole and exclusive right to file and
pursue a joint proof claim on behalf of all Lenders. Any votes with respect to
such claims or otherwise with respect to such proceedings shall be subject to
the vote of the Required Lenders or all of the Lenders as required by this
Agreement. Each Lender irrevocably waives its right to file or pursue a separate
proof of claim in any such proceedings unless the Agent fails to file such claim
within thirty (30) days after receipt of written notice from the Lenders
requesting that the Agent file such proof of claim.

 

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  §14.13

Reliance by the Agent. The Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by an
Authorized Officer. The Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, that by its terms must be
fulfilled to the satisfaction of a Lender, the Agent may presume that such
condition is satisfactory to such Lender unless the Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

  §14.14

Approvals. If consent is required for some action under this Agreement, or
except as otherwise provided herein an approval of the Lenders or the Required
Lenders is required or permitted under this Agreement, each Lender agrees to
give the Agent, within ten (10) days of receipt of the request for action from
the Agent together with all reasonably requested information related thereto (or
such lesser period of time required by the terms of the Loan Documents), notice
in writing of approval or disapproval (collectively, “Directions”) in respect of
any action requested or proposed in writing pursuant to the terms hereof. To the
extent that any Lender does not approve any recommendation of the Agent, such
Lender shall in such notice to the Agent describe the actions that would be
acceptable to such Lender. If consent is required for the requested action, any
Lender’s failure to respond to a request for Directions within the required time
period shall be deemed to constitute a Direction to take such requested action.
In the event that any recommendation is not approved by the requisite number of
Lenders and a subsequent approval on the same subject matter is requested by the
Agent, then for the purposes of this paragraph each Lender shall be required to
respond to a request for Directions within five (5) Business Days of receipt of
such request. The Agent and each Lender shall be entitled to assume that any
officer of the other Lenders delivering any notice, consent, certificate or
other writing is authorized to give such notice, consent, certificate or other
writing unless the Agent and such other Lenders have otherwise been notified in
writing.

 

  §14.15

The Borrower Not Beneficiary. Except for the provisions of §14.9 relating to the
appointment of a successor Agent, the provisions of this §14 are solely for the
benefit of the Agent and the Lenders, may not be enforced by the Borrower or any
Guarantor, and except for the provisions of §14.9, may be modified or waived
without the approval or consent of the Borrower.

 

  §14.16

Reliance on Hedge Provider. For purposes of applying payments received in
accordance with §§12.1, 12.5, 12.6 or any other provision of the Loan Documents,
the Agent shall be entitled to rely upon the trustee, paying agent or other
similar representative (each, a “Representative”) or, in the absence of such a
Representative, upon the holder of the Hedge Obligations for a determination
(which each holder of the Hedge Obligations agrees (or shall agree) to provide
upon request of the Agent) of the outstanding Hedge Obligations owed to the
holder thereof. Unless it has actual knowledge (including by way of written
notice from such holder) to the contrary, the Agent, in acting hereunder, shall
be entitled to assume that no Hedge Obligations are outstanding.

 

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  §14.17

Comfort Letters. Borrower and the Lenders acknowledge that Agent has entered
into and will hereafter enter into comfort letters or other agreements with
Franchisors on forms delivered to and reasonably approved by Agent. Borrower
acknowledges that the existence of such letters and agreements and the
performance by Agent and the Lenders of any obligations under such letters and
agreements shall not affect, impair or release the obligations of Borrower or
Guarantors under the Loan Documents. Such letters and agreements are solely for
the benefit of Agent and the Lenders and not for the benefit of Borrower or
Guarantors, and Borrower and Guarantors shall have no rights thereunder or any
right to insist on the performance thereof. Agent is authorized by Lenders to
perform its obligations under such letters and agreements, and each Lender
agrees to be bound thereby and to perform its obligations thereunder.

 

  §14.18

Subordination and Standstill Agreements. The Lenders acknowledge that the Agent
may enter into Subordination and Standstill Agreements. The Borrower
acknowledges that the existence of the Subordination and Standstill Agreements
and the performance by the Agent and the Lenders of their obligations under the
Subordination and Standstill Agreements shall not affect, impair or release the
obligations of the Borrower or any Guarantor under the Loan Documents. The
Subordination and Standstill Agreements are solely for the benefit of the Agent
and the Lenders and not for the benefit of the Borrower or any Guarantor, and
the Borrower and the Guarantors shall have no rights thereunder or any right to
insist on the performance thereof. The Agent is authorized by the Lenders to
perform its obligations under the Subordination and Standstill Agreements, and
each Lender agrees to be bound thereby.

 

§15.

EXPENSES.

The Borrower agrees to pay (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein, (b) any Indemnified Taxes (including any interest
and penalties in respect thereto) payable by the Agent or any of the Lenders,
including any recording, mortgage, documentary or intangibles taxes in
connection with the Loan Documents, or other taxes relating thereto payable on
or with respect to the transactions contemplated by this Agreement, including
any such taxes payable by the Agent or any of the Lenders after the Closing Date
(the Borrower hereby agreeing to indemnify the Agent and each Lender with
respect thereto), (c) all title insurance premiums, engineer’s fees,
environmental reviews and reasonable fees, expenses and disbursements of the
counsel to the Agent and KCM and any local counsel to the Agent incurred in
connection with the preparation, administration, or interpretation of the Loan
Documents and other instruments mentioned herein, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the reasonable
out-of-pocket fees, costs, expenses and disbursements of the Agent and KCM
incurred in connection with the syndication and/or participation (by KeyBank) of
the Loans, (e) all other reasonable out-of-pocket fees, expenses and
disbursements of the Agent incurred by the Agent in

 

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connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, the addition or substitution
of additional Collateral, the release of Collateral, the making of each advance
hereunder, the issuance of Letters of Credit, and the syndication of the
Commitments pursuant to §18 (without duplication of those items addressed in
clause (d) above), (f) all reasonable out-of-pocket expenses (including
reasonable attorneys’ fees and costs, and fees and costs of appraisers,
engineers, investment bankers or other experts retained by the Agent) incurred
by any Lender or the Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
the Guarantors or the administration thereof after the occurrence of a Default
or Event of Default or any other workout of the Loan Documents and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to the Agent’s, or any of the Lenders’ relationship with the
Borrower or the Guarantors (provided that any attorneys’ fees and costs pursuant
to this §15(f) with respect to counsel separate from that retained by Agent
(including local counsel) shall be limited to those incurred by one primary
counsel retained by the Required Lenders), (g) all reasonable out-of-pocket
fees, expenses and disbursements of the Agent incurred in connection with UCC
searches, UCC filings, title rundowns, title searches or mortgage recordings,
(h) all reasonable out-of-pocket fees, expenses and disbursements (including
reasonable attorneys’ fees and costs) which may be incurred by KeyBank in
connection with the execution and delivery of this Agreement and the other Loan
Documents (without duplication of any of the items listed above), and (i) all
reasonable out-of-pocket expenses relating to the use of Intralinks, SyndTrak or
any other similar system for the dissemination and sharing of documents and
information in connection with the Loans. The covenants of this §15 shall
survive the repayment of the Loans and the termination of the obligations of the
Lenders hereunder.

 

§16.

INDEMNIFICATION.

The Borrower agrees to indemnify and hold harmless the Agent, the Lenders, the
Arranger, their respective Affiliates and Persons who control the Agent, or any
Lender or the Arranger, and each director, officer, employee, agent and attorney
of each of the foregoing Persons, against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or
relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation,
(a) any and all claims for brokerage, leasing, finders or similar fees which may
be made relating to the Borrowing Base Properties, any other Real Estate or the
Loans, (b) any condition of the Borrowing Base Properties or any other Real
Estate, (c) any actual or proposed use by the Borrower of the proceeds of any of
the Loans or Letters of Credit, (d) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the Borrower, any
Guarantor or any of their respective Subsidiaries, (e) the Borrower and the
Guarantors entering into or performing this Agreement or any of the other Loan
Documents, (f) any actual or alleged violation of any law, ordinance, code,
order, rule, regulation, approval, consent, permit or license relating to the
Borrowing Base Properties or any other Real Estate, (g) with respect to the
Borrower, the Guarantors and their respective Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the Release or
threatened Release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury, nuisance or damage to property), and (h) any use of Intralinks,

 

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SyndTrak or any other system for the dissemination and sharing of documents and
information, in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding; provided, however, that the Borrower shall not
be obligated under this §16 to indemnify any Person for liabilities arising from
such Person’s own gross negligence or willful misconduct as determined by a
court of competent jurisdiction after the exhaustion of all applicable appeal
periods. In litigation, or the preparation therefor, the Lenders and the Agent
shall be entitled to select a single law firm as their own counsel and an
additional single local counsel in each applicable local jurisdiction for all
such parties (and, to the extent reasonably necessary in the case of an actual
or perceived conflict of interest, one additional counsel) and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees
and expenses of such counsel. No person indemnified hereunder shall be liable
for any damages arising from the use by unintended recipients of any information
or other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby. If, and
to the extent that the obligations of the Borrower under this §16 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under Applicable Law. The provisions of this §16 shall survive the
repayment of the Loans and the termination of the obligations of the Lenders
hereunder.

 

§17.

SURVIVAL OF COVENANTS, ETC..

All covenants, agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower or the Guarantors or any of their
respective Subsidiaries pursuant hereto or thereto shall be deemed to have been
relied upon by the Lenders and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement or the Notes or
any of the other Loan Documents remains outstanding or any Letters of Credit
remain outstanding or any Lender has any obligation to make any Loans or issue
any Letters of Credit. The indemnification obligations of the Borrower provided
herein and in the other Loan Documents and the Borrower’s obligations under
§§4.8, 4.9 and 4.10 shall survive the full repayment of amounts due and the
termination of the obligations of the Lenders hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
delivered to any Lender or the Agent at any time by or on behalf of the
Borrower, any Guarantor or any of their respective Subsidiaries pursuant hereto
or in connection with the transactions contemplated hereby shall constitute
representations and warranties by such Person hereunder.

 

§18.

ASSIGNMENT AND PARTICIPATION.

 

  §18.1

Conditions to Assignment by Lenders. Except as provided herein, each Lender may
assign to one or more banks or other entities (but not to any natural person)
all or a portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and the
same portion of the Loans at the time owing to it and the Notes held by it);
provided that

 

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  (a) the Agent, and the Issuing Lender and, so long as no Default or Event of
Default exists hereunder, the Borrower shall have each given its prior written
consent to such assignment, which consent shall not be unreasonably withheld or
delayed, and if the Borrower does not respond to any such request for consent
within five (5) Business Days after receipt of notice, the Borrower shall be
deemed to have consented (provided that such consent shall not be required for
any assignment to another Lender, to a Related Fund, to a lender or an Affiliate
of a Lender which controls, is controlled by or is under common control with the
assigning Lender or to a wholly-owned Subsidiary of such Lender), (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Commitment, (c) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined) an assignment
and acceptance agreement in the form of Exhibit I attached hereto (an
“Assignment and Acceptance Agreement”), together with any Notes subject to such
assignment, (d) in no event shall any assignment be to any Person controlling,
controlled by or under common control with, or which is not otherwise free from
influence or control by the Borrower or any Guarantor or be to a Defaulting
Lender or an Affiliate of a Defaulting Lender, (e) such assignee of a portion of
the Revolving Credit Loans shall have a net worth or unfunded commitment as of
the date of such assignment of not less than $100,000,000.00 (unless otherwise
approved by the Agent and, so long as no Default or Event of Default exists
hereunder, the Borrower), (f) such assignee shall acquire an interest in the
Loans of not less than $5,000,000.00 and integral multiples of $1,000,000.00 in
excess thereof (or if less, the remaining Loans of the assignor), unless waived
by the Agent, and so long as no Default or Event of Default exists hereunder,
the Borrower and (g) if such assignment is less than the assigning Lender’s
entire Commitment, the assigning Lender shall retain an interest in the Loans of
not less than $5,000,000.00. Such assignment and assignee shall not be subject
to the prior approval or consent of Borrower. Upon execution, delivery,
acceptance and recording of such Assignment and Acceptance Agreement, (i) the
assignee thereunder shall be a party hereto and all other Loan Documents
executed by the Lenders and, to the extent provided in such Assignment and
Acceptance Agreement, have the rights and obligations of a Lender hereunder,
(ii) the assigning Lender shall, upon payment to the Agent of the registration
fee referred to in §18.2, be released from its obligations under this Agreement
arising after the effective date of such assignment with respect to the assigned
portion of its interests, rights and obligations under this Agreement, and
(iii) the Agent may unilaterally amend Schedule 1.1 to reflect such assignment.
In connection with each assignment, the assignee shall represent and warrant to
the Agent, the assignor and each other Lender as to whether such assignee is
controlling, controlled by, under common control with or is not otherwise free
from influence or control by, the Borrower and/or any Guarantor and whether such
assignee is a Defaulting Lender or an Affiliate of a Defaulting Lender. In
connection with any assignment of rights and obligations of any Defaulting
Lender, no such assignment shall be effective unless and until, in addition to
the other conditions thereto set forth herein, the parties to the assignment
shall make such additional payments to the Agent in an aggregate

 

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  amount sufficient, upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or actions,
including funding, with the consent of the Borrower and the Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Agent or any Lender hereunder (and
interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro
rata share of all Loans and participations in Letters of Credit and Swing Loans
in accordance with its applicable Commitment Percentage. Notwithstanding the
foregoing, in the event that any assignment of rights and obligations of any
Defaulting Lender hereunder shall become effective under Applicable Law without
compliance with the provisions of this paragraph, then the assignee of such
interest shall be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs.

 

  §18.2

Register. The Agent, acting for this purpose as a non-fiduciary agent for
Borrower, shall maintain on behalf of the Borrower a copy of each assignment
delivered to it and a register or similar list (the “Register”) for the
recordation of the names and addresses of the Lenders and the Commitment
Percentages of and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Guarantors, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Lender agrees to pay to the Agent a registration fee in the sum of $5,500.00.

 

  §18.3

New Notes. Upon its receipt of an Assignment and Acceptance Agreement executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall record the information contained therein in the
Register. Within five (5) Business Days after receipt of notice of such
assignment from the Agent, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
order of such assignee in an amount equal to the amount assigned to such
assignee pursuant to such Assignment and Acceptance Agreement and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance Agreement and
shall otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be canceled and returned to the Borrower.

 

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  §18.4

Participations. Each Lender may, without the consent of Agent or Borrower, sell
participations to one or more Lenders or other entities (but not to any natural
person) in all or a portion of such Lender’s rights and obligations under this
Agreement and the other Loan Documents; provided that (a) any such sale or
participation shall not affect the rights and duties of the selling Lender
hereunder, (b) such participation shall not entitle such participant to any
rights or privileges under this Agreement or any Loan Documents, including
without limitation, rights granted to the Lenders under §§4.8, 4.9, 4.10 and 13,
(c) such participation shall not entitle the participant to the right to approve
waivers, amendments or modifications, (d) such participant shall have no direct
rights against the Borrower, (e) such sale is effected in accordance with all
applicable laws, and (f) such participant shall not be a Person controlling,
controlled by or under common control with, or which is not otherwise free from
influence or control by the Borrower and/or any Guarantor and shall not be a
Defaulting Lender or an Affiliate of a Defaulting Lender; provided, however,
such Lender may agree with the participant that it will not, without the consent
of the participant, agree to (i) increase, or extend the term or extend the time
or waive any requirement for the reduction or termination of, such Lender’s
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the Loans or portions thereof owing to such Lender, (iii) reduce the
amount of any such payment of principal, (iv) reduce the rate at which interest
is payable thereon or (v) release any Guarantor or any material Collateral
(except as otherwise permitted under this Agreement). Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
participant or any information relating to a participant’s interest in any
Commitments, Loans, or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such Commitment, Loan, or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Agent (in its capacity as Agent) shall have no responsibility for maintaining a
Participant Register.

 

  §18.5

Pledge by Lender. Any Lender may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Note) to any of the twelve Federal Reserve Banks organized under Section 4 of
the Federal Reserve Act, 12 U.S.C. §341, any other central bank having
jurisdiction over such Lender, or to such other Person as the Agent may approve
to secure obligations of such Lender. No such pledge or the enforcement thereof
shall release the pledgor Lender from its obligations hereunder or under any of
the other Loan Documents.

 

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  §18.6

No Assignment by the Borrower. The Borrower shall not assign or transfer any of
its rights or obligations under this Agreement (including by way of an LLC
Division) without the prior written consent of each of the Lenders.

 

  §18.7

Disclosure. The Borrower agrees to promptly cooperate with any Lender in
connection with any proposed assignment or participation of all or any portion
of its Commitment. The Borrower agrees that in addition to disclosures made in
accordance with standard banking practices any Lender may disclose information
obtained by such Lender pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder. Each Lender agrees for itself
that it shall use reasonable efforts in accordance with its customary procedures
to hold confidential all non-public information obtained from the Borrower or
any Guarantor that has been identified in writing as confidential by any of
them, and shall use reasonable efforts in accordance with its customary
procedures to not disclose such information to any other Person, it being
understood and agreed that, notwithstanding the foregoing, a Lender may make
(a) disclosures to its participants (provided such Persons are advised of the
provisions of this §18.7), (b) disclosures to its directors, officers,
employees, Affiliates, accountants, appraisers, legal counsel and other
professional advisors of such Lender (provided that such Persons who are not
employees of such Lender are advised of the provision of this §18.7),
(c) disclosures customarily provided or reasonably required by any potential or
actual bona fide assignee, transferee or participant or their respective
directors, officers, employees, Affiliates, accountants, appraisers, legal
counsel and other professional advisors in connection with a potential or actual
assignment or transfer by such Lender of any Loans or any participations therein
(provided such Persons are advised of the provisions of this §18.7),
(d) disclosures to bank regulatory authorities or self-regulatory bodies with
jurisdiction over such Lender, or (e) disclosures required or requested by any
other Governmental Authority or representative thereof or pursuant to legal
process; provided that, unless specifically prohibited by Applicable Law or
court order, each Lender shall notify the Borrower of any request by any
Governmental Authority or representative thereof prior to disclosure (other than
any such request in connection with any examination of such Lender by such
Governmental Authority) for disclosure of any such non-public information prior
to disclosure of such information. In addition, each Lender may make disclosure
of such information to any contractual counterparty in swap agreements or such
contractual counterparty’s professional advisors (so long as such contractual
counterparty or professional advisors agree to be bound by the provisions of
this §18.7). In addition, the Agent and the Lenders may disclose the existence
of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service
providers to the Agent and the Lenders in connection with the administration of
this Agreement, the other Loan Documents, and the Commitments. Non-public
information shall not include any information which is or subsequently becomes
publicly available other than as a result of a disclosure of such information by
a Lender, or prior to the delivery to such Lender is within the possession of
such Lender if such information is not known by such Lender to be subject to
another confidentiality agreement with or other obligations of secrecy to the
Borrower or the Guarantors, or is disclosed with the prior approval of the
Borrower (“Publicly Available Information”). Nothing herein shall prohibit the
disclosure of non-public information to the extent necessary to enforce the Loan
Documents.

 

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  §18.8

Mandatory Assignment. In the event the Borrower requests that certain
amendments, modifications or waivers be made to this Agreement or any of the
other Loan Documents which request requires approval of the Required Lenders,
all of the Lenders or all of the Lenders directly affected thereby but is not
approved by one or more of the Lenders (any such non-consenting Lender shall
hereafter be referred to as the “Non-Consenting Lender”), then, within thirty
(30) Business Days after the Borrower’s receipt of notice of such disapproval by
such Non-Consenting Lender, the Borrower shall have the right as to such
Non-Consenting Lender, to be exercised by delivery of written notice delivered
to the Agent and the Non-Consenting Lender within thirty (30) Business Days of
receipt of such notice, to elect to cause the Non-Consenting Lender to transfer
its Commitment. The Agent shall promptly notify the remaining Lenders that each
of such Lenders shall have the right, but not the obligation, to acquire a
portion of the Commitment, pro rata based upon their relevant Commitment
Percentages, of the Non-Consenting Lender (or if any of such Lenders does not
elect to purchase its pro rata share, then to such remaining Lenders in such
proportion as approved by the Agent). In the event that the Lenders do not elect
to acquire all of the Non-Consenting Lender’s Commitment, then the Agent shall
endeavor to find a new Lender or Lenders to acquire such remaining Commitment.
Upon any such purchase of the Commitment of the Non-Consenting Lender, the
Non-Consenting Lender’s interests in the Obligations and its rights hereunder
and under the Loan Documents shall terminate at the date of purchase, and the
Non-Consenting Lender shall promptly execute and deliver any and all documents
reasonably requested by the Agent to surrender and transfer such interest,
including, without limitation, an Assignment and Acceptance Agreement and such
Non-Consenting Lender’s original Note. Notwithstanding anything in this §18.8 to
the contrary, any Lender or other Lender assignee acquiring some or all of the
assigned Commitment of the Non-Consenting Lender must consent to the proposed
amendment, modification or waiver. The purchase price for the Non-Consenting
Lender’s Commitment shall equal any and all amounts outstanding and owed by the
Borrower to the Non-Consenting Lender, including principal and all accrued and
unpaid interest or fees, plus any applicable amounts payable pursuant to §4.7
which would be owed to such Non-Consenting Lender if the Loans were to be repaid
in full on the date of such purchase of the Non-Consenting Lender’s Commitment
(provided that the Borrower may pay to such Non-Consenting Lender any interest,
fees or other amounts (other than principal) owing to such Non-Consenting
Lender).

 

  §18.9

Amendments to Loan Documents. Upon any such assignment, the Borrower and the
Guarantors shall, upon the request of the Agent, enter into such documents as
may be reasonably required by the Agent to modify the Loan Documents to reflect
such assignment.

 

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  §18.10

Titled Agents. The Titled Agents shall not have any additional rights or
obligations under the Loan Documents, except for those rights, if any, as a
Lender.

 

§19.

NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATIONS.

(a) Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this §19 referred to as
“Notice”), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telecopy and addressed as
follows:

If to the Agent or KeyBank:

KeyBank National Association

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attn: Tom Schmitt

Telecopy No.: (770) 510-2195

and

KeyBank National Association

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attn: Michael Colbert

Telecopy No.: (770) 510-2195

 

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and

Dentons US LLP

Suite 5300 303 Peachtree Street, N.E.

Atlanta, Georgia 30308

Attn: William F. Timmons, Esq.

Telecopy No.: (404) 527-4198

If to the Borrower:

Condor Hospitality Limited Partnership

4800 Montgomery Lane1800 W. Pasewalk Avenue, Suite 220

Bethesda, Maryland 20814120

Norfolk, Nebraska 68701

Attn: Jonathan J. GanttJ. William Blackham

Telecopy No.: (402) 371-4229513) 233-0340

With a copy to:

McGrath North Mullin & Kratz, PC LLO

First National Tower, Suite 3700

1601 Dodge Street

Omaha, Nebraska 68102

Attn: Jason D. Benson, Esq.

Telecopy No.: (402) 952-6864

to any other Lender which is a party hereto, at the address for such Lender set
forth on its signature page hereto, and to any Lender which may hereafter become
a party to this Agreement, at such address as may be designated by such Lender.
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail as
aforesaid, or if transmitted by telecopy is permitted, upon being sent and
confirmation of receipt. The time period in which a response to such Notice must
be given or any action taken with respect thereto (if any), however, shall
commence to run from the date of receipt if personally delivered or sent by
overnight courier, or if so deposited in the United States Mail, the earlier of
three (3) Business Days following such deposit or the date of receipt as
disclosed on the return receipt. Rejection or other refusal to accept or the
inability to deliver because of changed address for which no notice was given
shall be deemed to be receipt of the Notice sent. By giving at least fifteen
(15) days prior Notice thereof, the Borrower, a Lender or the Agent shall have
the right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America.

 

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(b) Loan Documents and notices under the Loan Documents may, with Agent’s
approval, be transmitted and/or signed by facsimile and by signatures delivered
in “PDF” format by electronic mail. The effectiveness of any such documents and
signatures shall, subject to Applicable Law, have the same force and effect as
an original copy with manual signatures and shall be binding on the Borrower,
the Guarantors, Agent and Lenders. Agent may also require that any such
documents and signature delivered by facsimile or “PDF” format by electronic
mail be confirmed by a manually-signed original thereof; provided, however, that
the failure to request or deliver any such manually-signed original shall not
affect the effectiveness of any facsimile or “PDF” document or signature.

(c) Notices and other communications to the Agent, the Lenders and the Issuing
Lender hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Agent, provided that the foregoing shall not apply to notices to
any Lender or Issuing Lender pursuant to §2 if such Lender or Issuing Lender, as
applicable, has notified the Agent that it is incapable of receiving notices
under such Section by electronic communication. The Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications. Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, e-mail or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

 

§20.

RELATIONSHIP.

Neither the Agent nor any Lender has any fiduciary relationship with or
fiduciary duty to the Borrower, any Guarantor or their respective Subsidiaries
arising out of or in connection with this Agreement or the other Loan Documents
or the transactions contemplated hereunder and thereunder, and the relationship
between each Lender and the Agent, and the Borrower is solely that of a lender
and borrower, and nothing contained herein or in any of the other Loan Documents
shall in any manner be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and borrower.

 

§21.

GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED HEREIN OR THEREIN, SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5- 1401, BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK (INCLUDING ANY FEDERAL COURT SITTING
THEREIN). THE BORROWER FURTHER ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE NON-

 

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EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND
IRREVOCABLY (a) AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY WITH RESPECT
TO THIS AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS AND (b) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT FORUM. THE
BORROWER FURTHER AGREES THAT SERVICE OF PROCESS IN ANY SUCH SUIT MAY BE MADE
UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN §19. IN ADDITION TO THE
COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT
OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE
ANY COLLATERAL OR OTHER ASSETS OF THE BORROWER AND THE GUARANTORS EXIST AND THE
BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN §19.

 

§22.

HEADINGS.

The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof.

 

§23.

COUNTERPARTS.

This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.

 

§24.

ENTIRE AGREEMENT, ETC..

This Agreement and the Loan Documents is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this Agreement
and the Loan Documents. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superseded by this
Agreement and the Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement and the Loan
Documents. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in §27.

 

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§25.

WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, PUNITIVE OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS §25. THE BORROWER ACKNOWLEDGES THAT
IT HAS HAD AN OPPORTUNITY TO REVIEW THIS §25 WITH LEGAL COUNSEL AND THAT THE
BORROWER AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.

 

§26.

DEALINGS WITH THE BORROWER.

The Agent, the Lenders and their affiliates may accept deposits from, extend
credit to, invest in, act as trustee under indentures of, serve as financial
advisor of, and generally engage in any kind of banking, trust or other business
with the Borrower, the Guarantors and their respective Subsidiaries or any of
their Affiliates regardless of the capacity of the Agent or the Lender
hereunder. The Lenders acknowledge that, pursuant to such activities, KeyBank or
its Affiliates may receive information regarding such Persons (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Agent shall be under no obligation to provide
such information to them. Borrower acknowledges, on behalf of itself and its
Affiliates, that the Agent and each of the Lenders and their respective
Affiliates may be providing debt financing, equity capital or other services
(including financial advisory services) in which Borrower and its Affiliates may
have conflicting interests regarding the transactions described herein and
otherwise. Neither the Agent nor any Lender will use confidential information
described in §18.7 obtained from Borrower by virtue of the transactions
contemplated hereby or its other relationships with Borrower and its Affiliates
in connection with the performance by the Agent or such Lender or their
respective Affiliates of services for other companies, and neither the Agent nor
any Lender nor their Affiliates will furnish any such information to other
companies. Borrower, on behalf of itself and its Affiliates, also acknowledges
that neither the Agent nor any Lender has any obligation to use in connection
with the transactions contemplated hereby, or to furnish to Borrower,
confidential information obtained from other companies. Borrower, on behalf of
itself and its Affiliates, further acknowledges that one or more of the Agent
and Lenders and their respective Affiliates may be a full service securities
firm and may from time to time effect transactions, for its own or its
Affiliates’ account or the account of customers, and hold positions in loans,
securities or options on loans or securities of Borrower and its Affiliates.

 

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§27.

CONSENTS, AMENDMENTS, WAIVERS, ETC..

Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower or the Guarantors
of any terms of this Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Required Lenders; provided that any amendment
or waiver of §3.2, §7.20 or §9 shall require the written consent of the
Super-Required Lenders. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Lender directly affected thereby:
(a) a reduction in the rate of interest on the Notes (other than a reduction or
waiver of default interest); (b) an increase in the amount of the Commitments of
the Lenders (except as provided in §2.11 and §18.1); (c) a forgiveness,
reduction or waiver of the principal of any unpaid Loan or any interest thereon
(other than a reduction or waiver of default interest) or fee payable under the
Loan Documents; (d) a change in the amount of any fee payable to a Lender
hereunder; (e) the postponement of any date fixed for any payment of principal
of or interest on the Loan; (f) an extension of the Maturity Date; (g) a change
in the manner of distribution of any payments to the Lenders or the Agent;
(h) the release of the Borrower, any Collateral or all or substantially all of
the Guarantors except as otherwise provided in this Agreement; (i) an amendment
of the definition of Required Lenders or of any requirement for consent by all
of the Lenders; (j) any modification to require a Lender to fund a pro rata
share of a request for an advance of the Revolving Credit Loan made by the
Borrower other than based on its Commitment Percentage; (k) an amendment to this
§27; (l) an amendment of any provision of this Agreement or the Loan Documents
which requires the approval of all of the Lenders or the Required Lenders to
require a lesser number of Lenders to approve such action, or (m) an amendment
of the definition of Change of Control or waiver of any Change of Control. The
provisions of §14 may not be amended without the written consent of the Agent.
There shall be no amendment, modification or waiver of any provision in the Loan
Documents with respect to Swing Loans without the consent of the Swing Loan
Lender, nor any amendment, modification or waiver of any provision in the Loan
Documents with respect to Letters of Credit without the consent of the Issuing
Lender. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders, except that (x) the
Commitment of any Defaulting Lender may not be increased without the consent of
such Lender and (y) any waiver, amendment or modification requiring the consent
of all Lenders or each affected Lender that by its terms affects any Defaulting
Lender more adversely than other affected Lenders shall require the consent of
such Defaulting Lender. The Borrower agrees to enter into such modifications or
amendments of this Agreement or the other Loan Documents as reasonably may be
requested by KeyBank and KCM in connection with the syndication of the Loan,
provided that no such amendment or modification affects or increases any of the
obligations of the Borrower hereunder. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.

 

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§28.

SEVERABILITY.

The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

 

§29.

TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant, agreement and
obligation of the Borrower and the Guarantors under this Agreement and the other
Loan Documents.

 

§30.

NO UNWRITTEN AGREEMENTS.

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH
BELOW.

 

§31.

REPLACEMENT NOTES.

Upon receipt of evidence reasonably satisfactory to the Borrower of the loss,
theft, destruction or mutilation of any Note, and in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Borrower or, in the case of any such mutilation, upon
surrender and cancellation of the applicable Note, the Borrower will execute and
deliver, in lieu thereof, a replacement Note, identical in form and substance to
the applicable Note and dated as of the date of the applicable Note and upon
such execution and delivery all references in the Loan Documents to such Note
shall be deemed to refer to such replacement Note.

 

§32.

NO THIRD PARTIES BENEFITED.

This Agreement and the other Loan Documents are made and entered into for the
sole protection and legal benefit of the Borrower, the Guarantors, the Lenders,
the Agent, the Arranger and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. All conditions to the performance of the obligations
of the Agent and the Lenders under this Agreement, including the obligation to
make Loans and issue Letters of Credit, are imposed solely and exclusively for
the benefit of the Agent and the Lenders and no other Person shall have standing
to require satisfaction of such conditions in accordance with their terms or be
entitled to assume that the Agent and the Lenders will refuse to make Loans or
issue Letters of Credit in the absence of strict compliance with any or all
thereof

 

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and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Agent and the Lenders at any time if in their sole
discretion they deem it desirable to do so. In particular, the Agent and the
Lenders make no representations and assume no obligations as to third parties
concerning the quality of any construction by the Borrower or any of its
Subsidiaries of any development or the absence therefrom of defects.

 

§33.

PATRIOT ACT.

Each Lender and the Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that, pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes names and addresses and other information
that will allow such Lender or the Agent, as applicable, to identify the
Borrower in accordance with the Patriot Act.

 

§34.

ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, each of the undersigned have caused this Agreement to be
executed by its duly authorized representatives as of the date first set forth
above.

 

BORROWER CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership
By:  

Condor Hospitality REIT Trust,

a Maryland real estate investment trust,

its general partner

  By:  

                     

  Name: Jonathan J. GanttJ. William Blackham   Title: Vice President   (SEAL)

[Signatures Continued on Next Page]

KEYBANK / CONDOR CREDIT AGREEMENT

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AGENT AND LENDERS

KEYBANK NATIONAL ASSOCIATION,

individually as a Lender and as the Agent

By:  

                 

Name:  

 

Title:  

 

(SEAL)

[Signatures Continued on Next Page]

KEYBANK / CONDOR CREDIT AGREEMENT

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THE HUNTINGTON NATIONAL BANK By:  

                     

Name:  

 

Title:  

 

(SEAL)

 

Address:

 

The Huntington National Bank

200 Public Square, 7th Floor

Cleveland, Ohio 44114

Attention: Scott A. Childs

Facsimile: (888) 987-9315

Email: scott.childs@huntington.com

  

 

BMO HARRIS BANK N.A. By:  

                     

Name:  

 

Title:  

 

(SEAL)

 

Address:

 

BMO Harris Bank N.A.

115 S. LaSalle Street, 36W

Chicago, Illinois 60603

Attention: Gwen Gatz

Facsimile:                                             

 

Email: Gwendolyn.gatz@bmo.com

  

KEYBANK / CONDOR CREDIT AGREEMENT

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EXHIBIT A

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (“Joinder Agreement”) is executed as of                 ,
20__, by                                                      , a
                                             (“Joining Party”), and delivered to
KeyBank National Association, as Agent, pursuant to §5.4 of that certain Credit
Agreement dated as of March 1, 2017, as from time to time in effect (the “Credit
Agreement”), by and among CONDOR HOSPITALITY LIMITED PARTNERSHIP (the
“Borrower”), KeyBank National Association, for itself and as the Agent, and the
other Lenders from time to time party thereto. Terms used but not defined in
this Joinder Agreement shall have the meanings defined for those terms in the
Credit Agreement.

RECITALS

A. Joining Party is required, pursuant to §5.4 of the Credit Agreement, to
become an additional Guarantor under the Cash Collateral Agreement, the
Guaranty, the Indemnity Agreement and the Contribution Agreement.

B. Joining Party expects to realize direct and indirect benefits as a result of
the availability to the Borrower of the credit facilities under the Credit
Agreement.

NOW, THEREFORE, Joining Party agrees as follows:

AGREEMENT

1. Joinder. By this Joinder Agreement, Joining Party hereby becomes a
“Subsidiary Guarantor” and a “Guarantor” under the Credit Agreement, the Cash
Collateral Agreement, the Guaranty, the Indemnity Agreement, and the other Loan
Documents with respect to all the Obligations of the Borrower now or hereafter
incurred under the Credit Agreement and the other Loan Documents, a “Guarantor”
under the Indemnity Agreement and the Contribution Agreement. Joining Party
agrees that Joining Party is and shall be bound by, and hereby assumes, all
representations, warranties, covenants, terms, conditions, duties and waivers
applicable to a “Subsidiary Guarantor” and a “Guarantor” under the Credit
Agreement, the Cash Collateral Agreement, the Guaranty, the Indemnity Agreement,
the other Loan Documents and the Contribution Agreement.

2. Representations and Warranties of Joining Party. Joining Party represents and
warrants to Agent that, as of the Effective Date (as defined below), the
representations and warranties contained in the Credit Agreement and the other
Loan Documents applicable to a “Subsidiary Guarantor” or “Guarantor” are true
and correct in all material respects as applied to Joining Party as a Subsidiary
Guarantor and a Guarantor on and as of the Effective Date as though made on that
date. As of the Effective Date, all covenants and agreements in the Loan
Documents and the Contribution Agreement of the Guarantors apply to Joining
Party and no Default or Event of Default shall exist or might exist upon the
Effective Date in the event that Joining Party becomes a Guarantor.

 

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3. Joint and Several. Joining Party hereby agrees that, as of the Effective
Date, the Cash Collateral Agreement, the Guaranty, the Contribution Agreement
and the Indemnity Agreement heretofore delivered to the Agent and the Lenders
shall be a joint and several obligation of Joining Party to the same extent as
if executed and delivered by Joining Party, and upon request by the Agent, will
promptly become a party to the Cash Collateral Agreement, the Guaranty, the
Contribution Agreement and the Indemnity Agreement to confirm such obligation.

4. Further Assurances. Joining Party agrees to execute and deliver such other
instruments and documents and take such other action, as the Agent may
reasonably request, in connection with the transactions contemplated by this
Joinder Agreement.

5. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401,
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

6. Counterparts. This Joinder Agreement may be executed in any number of
counterparts which shall together constitute but one and the same agreement.

7. The effective date (the “Effective Date”) of this Joinder Agreement is
                        , 201__.

IN WITNESS WHEREOF, Joining Party has executed this Joinder Agreement under seal
as of the day and year first above written.

 

“JOINING PARTY”

 

 

By:  

                 

Name:  

 

Title:  

 

(SEAL)

 

ACKNOWLEDGED: KEYBANK NATIONAL ASSOCIATION, as Agent By:  

                     

Its:  

 

 

A-2

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EXHIBIT B

FORM OF REVOLVING CREDIT NOTE

 

$                                                        , 201__

FOR VALUE RECEIVED, the undersigned (“Maker”), hereby promises to pay to
                                                                     (“Payee”),
or order, in accordance with the terms of that certain Credit Agreement, dated
as of March 1, 2017, as from time to time in effect, by and among Maker, KeyBank
National Association, for itself and as Agent, and such other Lenders as may be
from time to time named therein (the “Credit Agreement”), to the extent not
sooner paid, on or before the Maturity Date, the principal sum of
                                ($                                 ), or such
amount as may be advanced by the Payee under the Credit Agreement as a Revolving
Credit Loan with daily interest from the date thereof, computed as provided in
the Credit Agreement, on the principal amount hereof from time to time unpaid,
at a rate per annum on each portion of the principal amount which shall at all
times be equal to the rate of interest applicable to such portion in accordance
with the Credit Agreement, and with interest on overdue principal and, to the
extent permitted by Applicable Law, on overdue installments of interest and late
charges at the rates provided in the Credit Agreement. Interest shall be payable
on the dates specified in the Credit Agreement, except that all accrued interest
shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other address as Agent may
designate from time to time.

This Note is one of one or more Revolving Credit Notes evidencing borrowings
under and is entitled to the benefits and subject to the provisions of the
Credit Agreement. The principal of this Note may be due and payable in whole or
in part prior to the Maturity Date and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.

Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Maker and the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under Applicable Law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under Applicable Law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by Applicable Law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Maker and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Maker, such excess shall be
refunded to the undersigned Maker. All interest paid or agreed to be paid to the
Lenders shall, to the extent permitted by Applicable Law, be amortized,

 

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prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the undersigned Maker (including the
period of any renewal or extension thereof) so that the interest thereon for
such full period shall not exceed the maximum amount permitted by Applicable
Law. This paragraph shall control all agreements between the undersigned Maker
and the Lenders and the Agent.

In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement.

This Note shall, pursuant to New York General Obligations Law Section 5-1401, be
governed by the laws of the State of New York.

The undersigned Maker and all guarantors and endorsers hereby waive presentment,
demand, notice, protest, notice of intention to accelerate the indebtedness
evidenced hereby, notice of acceleration of the indebtedness evidenced hereby
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except as specifically otherwise
provided in the Credit Agreement, and assent to extensions of time of payment or
forbearance or other indulgence without notice.

IN WITNESS WHEREOF, the undersigned has by its duly authorized officer executed
this Note on the day and year first above written.

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  

Condor Hospitality REIT Trust,

a Maryland real estate investment trust,

its general partner

  By:  

                 

  Name:  

 

  Title:  

 

  (SEAL)

 

B-2

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EXHIBIT C

FORM OF SWING LOAN NOTE

 

$5,000,000.00                            , 2017

FOR VALUE RECEIVED, the undersigned (“Maker”), hereby promises to pay to
             (“Payee”), or order, in accordance with the terms of that certain
Credit Agreement, dated as of March 1, 2017, as from time to time in effect, by
and among Maker, KeyBank National Association, for itself and as Agent, and such
other Lenders as may be from time to time named therein (the “Credit
Agreement”), to the extent not sooner paid, on or before the Maturity Date, the
principal sum of Five Million and No/100 Dollars ($5,000,000.00), or such amount
as may be advanced by the Payee under the Credit Agreement as a Swing Loan with
daily interest from the date thereof, computed as provided in the Credit
Agreement, on the principal amount hereof from time to time unpaid, at a rate
per annum on each portion of the principal amount which shall at all times be
equal to the rate of interest applicable to such portion in accordance with the
Credit Agreement, and with interest on overdue principal and, to the extent
permitted by Applicable Law, on overdue installments of interest and late
charges at the rates provided in the Credit Agreement. Interest shall be payable
on the dates specified in the Credit Agreement, except that all accrued interest
shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof. Capitalized terms used herein and not otherwise
defined herein shall have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other address as Agent may
designate from time to time.

This Note is one of one or more Swing Loan Notes evidencing borrowings under and
is entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or in part
prior to the Maturity Date and is subject to mandatory prepayment in the amounts
and under the circumstances set forth in the Credit Agreement, and may be
prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.

Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Maker and the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under Applicable Law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under Applicable Law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by Applicable Law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Maker and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Maker, such excess shall be
refunded to the undersigned Maker. All interest paid or agreed to be paid to the
Lenders shall, to the extent permitted by Applicable Law, be amortized,

 

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prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the undersigned Maker (including the
period of any renewal or extension thereof) so that the interest thereon for
such full period shall not exceed the maximum amount permitted by Applicable
Law. This paragraph shall control all agreements between the undersigned Maker
and the Lenders and the Agent.

In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement.

This Note shall, pursuant to New York General Obligations Law Section 5-1401, be
governed by the laws of the State of New York.

The undersigned Maker and all guarantors and endorsers hereby waive presentment,
demand, notice, protest, notice of intention to accelerate the indebtedness
evidenced hereby, notice of acceleration of the indebtedness evidenced hereby
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except as specifically otherwise
provided in the Credit Agreement, and assent to extensions of time of payment or
forbearance or other indulgence without notice.

IN WITNESS WHEREOF, the undersigned has by its duly authorized officer executed
this Note on the day and year first above written.

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  

Condor Hospitality REIT Trust,

a Maryland real estate investment trust,

its general partner

  By:  

                 

  Name:  

 

  Title:  

 

  (SEAL)

 

C-2

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EXHIBIT D

FORM OF REQUEST FOR REVOLVING CREDIT LOAN

KeyBank National Association, as Agent

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attn: Shelly West

Ladies and Gentlemen:

Pursuant to the provisions of §2.7 of that certain Credit Agreement dated as of
March 1, 2017 (as the same may hereafter be amended, the “Credit Agreement”), by
and among Condor Hospitality Limited Partnership (the “Borrower”), KeyBank
National Association for itself and as Agent, and the other Lenders from time to
time party thereto, the Borrower hereby requests and certifies as follows:

1. Revolving Credit Loan. The Borrower hereby requests a [Revolving Credit Loan
under §2.1] [Swing Loan under §2.5] of the Credit Agreement:

Principal Amount: $                

Type (LIBOR Rate, Base Rate):

Drawdown Date:

Interest Period for LIBOR Rate Loans:

by credit to the general account of the Borrower with the Agent at the Agent’s
Head Office.

[If the requested Loan is a Swing Loan and the Borrower desires for such Loan to
be a LIBOR Rate Loan following its conversion as provided in §2.5(d), specify
the Interest Period following conversion:                        ]

2. Use of Proceeds. Such Loan shall be used for the following purposes permitted
by §2.9 of the Credit Agreement.:

 

Interest due under the Credit Agreement:                                        
                            

Fees due under the Credit Agreement:                                        
                                

Permitted Borrowing:                                        
                                                              (specify)

Reconciliation to Approved Budget:                                        
                                     (to be attached)

 

Liquidity Trigger Event:    [specify items and amounts requested tied to
waterfall in §7.23(d), and evidence of payment of items of higher priority in
§7.23(d).]

 

D-1

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3. No Default. Borrower certifies that the Borrower and the Guarantors are and
will be in compliance with all covenants under the Loan Documents after giving
effect to the making of the Loan requested hereby and no Default or Event of
Default has occurred and is continuing. No condemnation proceedings are pending
or, to the undersigned’s knowledge, threatened against any Borrowing Base
Property except as disclosed to Agent in writing.

4. Representations True. Borrower certifies, represents and agrees that each of
the representations and warranties made by or on behalf of the Borrower, the
Guarantors or their respective Subsidiaries, contained in the Credit Agreement,
in the other Loan Documents or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement was true in all material respects
as of the date on which it was made and, is true in all material respects as of
the date hereof and shall also be true at and as of the Drawdown Date for the
Loan requested hereby, with the same effect as if made at and as of such
Drawdown Date, except to the extent of changes resulting from transactions
permitted by the Loan Documents (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date).

5. Other Conditions. The undersigned chief executive officer, president or chief
financial officer of the Borrower certifies, represents and agrees that all
other conditions to the making of the Loan requested hereby set forth in the
Credit Agreement have been satisfied or waived in writing.

6. Definitions. Terms defined in the Credit Agreement are used herein with the
meanings so defined.

IN WITNESS WHEREOF, the undersigned has duly executed this request this
            day of             , 201__.

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  

Condor Hospitality REIT Trust,

a Maryland real estate investment trust,

its general partner

  By:  

                 

  Name:  

 

  Title:  

 

  (SEAL)

 

 

D-2

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EXHIBIT E

FORM OF LETTER OF CREDIT REQUEST

[Date]

KeyBank National Association, as Agent

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attn: Shelly West

Re:         Letter of Credit Request under Credit Agreement

Ladies and Gentlemen:

Pursuant to §2.10 of that certain Credit Agreement dated as of March 1, 2017, by
and among you, certain other Lenders and Condor Hospitality Limited Partnership
(the “Borrower”), as amended from time to time (the “Credit Agreement”), we
hereby request that you issue a Letter of Credit as follows:

Name and address of beneficiary:                 

Face amount: $            

Proposed Issuance Date:             

Proposed Expiration Date:             

Other terms and conditions as set forth in the proposed form of Letter of Credit
attached hereto.

Purpose of Letter of Credit:                                          
                                         
                                                   

This Letter of Credit Request is submitted pursuant to, and shall be governed
by, and subject to satisfaction of, the terms, conditions and provisions set
forth in §2.10 of the Credit Agreement.

The Borrower certifies that the Borrower is and will be in compliance with all
covenants under the Loan Documents after giving effect to the issuance of the
Letter of Credit requested hereby and no Default or Event of Default has
occurred and is continuing. No condemnation proceedings are pending or, to the
undersigned’s knowledge, threatened against any Borrowing Base Property except
as disclosed to Agent in writing.

We also understand that if you grant this request this request obligates us to
accept the requested Letter of Credit and pay the issuance fee and Letter of
Credit fee as required by §2.10(e). All capitalized terms defined in the Credit
Agreement and used herein without definition shall have the meanings set forth
in §1.1 of the Credit Agreement.

 

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The Borrower certifies, represents and agrees that each of the representations
and warranties made by or on behalf of the Borrower, the Guarantors or their
respective Subsidiaries, contained in the Credit Agreement, in the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true in all material respects as of the
date on which it was made, is true as of the date hereof and shall also be true
at and as of the proposed issuance date of the Letter of Credit requested
hereby, with the same effect as if made at and as of the proposed issuance date,
except to the extent of changes resulting from transactions permitted by the
Loan Documents (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date).

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  

Condor Hospitality REIT Trust,

a Maryland real estate investment trust,

its general partner

  By:  

                 

  Name:  

 

  Title:  

 

  (SEAL)

 

E-2

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KeyBank National Association Application for Irrevocable Standby Letter of
Credit To: Standby Letter of Credit Services 4900 Tiedeman, 1 floor 726 Exchange
Street, Suite 900 Cleveland, Ohio 44144-2302 Buffalo, New York 14210 Miscode:
OH-01-49-1003 Miscode: NY-00-72-0100 Fax Number: (216) 813-3719 Fax Number:
(216)813-3719 Please issue your Irrevocable Standby Letter of Credit and notify
the Beneficiary no later than (date) via Courier to Attention: (Telephone
Number) SWIFT (Advising Bank Swift Address, if known ) Advising Bank (if
applicable) Name: Address: Account Party(ies)/Applicant(s) Name and Address:
Applicant Name to appear on the Letter of Credit (if different from Account (PO
Box is not acceptable) Party): (Name and address (PO Box is not acceptable), Is
this party legally related to Account Party through ownership Yes No If yes,
please indicate relationship: O Parent Subsidiary Affiliate O Owner If no,
provide the following: Tax ID number: If an individual, date of birth: Brief
description of why account party is applying for a Letter of Credit for a
non-related entity. Beneficiary Name and Address: Brief description of
underlying transaction: Expiration Date: Dollar Amount $ and currency if other
than USD (Amount in words): Automatic Extension Clause Yes No If yes, Indicate
Number of Days for Notice: if No, leave blank. Is there an Ultimate Expiration
Date? Yes No If yes, indicate Ultimate Expiration Date: I I Available by Drafts
at sight drawn on KeyBank National Association and accompanied by the following
documentation: A statement signed by an authorized representative of Beneficiary
stating: “ , has not performed or fulfilled all of the undertakings, covenants
and conditions in accordance with the terms of the agreement dated between
(Applicant) and (Beneficiary).” I-! A certificate signed by an authorized
representative of Beneficiary stating: “We hereby certify that , has failed to
honor their contractual agreement dated _ -between (Applicant) and
(Beneficiary).” A statement signed by an authorized representative of
Beneficiary stating as follows: (insert wording that is to appear in the
statement accompanying the draft): r I No statement or document other than
Beneficiary’s draft is required to be presented under this Letter of Credit.
Issue per attached sample {00342519 vl CONFIDENT} Revised 10/06/2016 KeyCorp:
Confidential Page 1 of 2 F-1

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Partial Drawings: Permitted EJ Not Permitted Charges for: Applicant Multiple
Drawings: Permitted IT] Not Permitted Special instructions or conditions:
Account Party(ies) shall keep and maintain Demand Deposit Account No. at all
times until the Letter of Credit has finally expired and all reimbursement and
other obligations in respect thereof have been paid in full in cash. KeyBank is
authorized to debit the Demand Deposit Account or any successor account to pay
any amounts which become due by Account Party(ies) in connection with the Letter
of Credit, including any fees charged to Account Partyfies) or the amount of any
draw(s) made under the Letter of Credit by the Beneficiary. KeyBank and any
applicable Keycorp Affiliates (collectively and severally “Key”) shall have all
rights, remedies and/or collateral provided for under (a) any Standby Letter of
Credit Reimbursement and Security Agreement executed by the Account Party(ies)
in favor of Key at, prior to or after the date hereof and any other
reimbursement agreement, credit agreement, security agreement, pledge agreement
or other agreement or instrument in effect at any time between Account
Party(ies) and Key that obligate and/or secure reimbursement in respect of
letters of credit by Account Party(ies) or any of them. This application and
agreement and each letter of credit are subject to the provisions of, and Key
shall have all rights and remedies provided for under (a) Article 5 of the
Uniform Commercial Code as in effect from time to time and (b) either the
Uniform Customs and Practice for Documentary Credits or the International
Standby Practices, in each case as established by the International Chamber of
Commerce from time to time (whichever may be determined to be appropriate by Key
under the circumstances) and to the terms and conditions set forth in the
Standby Letter of Credit Reimbursement and Security Agreement dated executed by
the Account Parties. Date: Authorized Signer-Applicant Signer’s printed name
[Only required if different from Account Party] Date: Authorized Signer- Account
Party Signer’s printed name

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LOGO [g34941dsp325a.jpg]   KeyBank National Association

STANDBY LETTER OF CREDIT REIMBURSEMENT

AND SECURITY AGREEMENT

In consideration of the issuance from time to time, at the request of the
Account Parties of one or more Credits in accordance with the terms of any
Standby Letter of Credit Application(s) submitted by the Account Parties to the
Issuer, the Account Parties hereby represent, warrant and agree as follows:

1. DEFINITIONS: The following definitions shall apply herein:

“ACCOUNT PARTIES” is defined in Paragraph 13 below.

“AGREEMENT” means this Standby Letter of Credit Reimbursement and Security
Agreement, including as the same may from time to time be amended, modified,
supplements and/or restated.

“BANK LIABILITIES” is defined in Paragraph 8 below.

“CREDIT” means each letter of credit requested or described in any Letter of
Credit Application submitted to the Issuer by any of the Account Parties and
issued by the Issuer, including, in each case, as the same may be amended from
time to time.

“DEPOSIT ACCOUNT” is defined in Paragraph 2 below.

“DOCUMENTS” mean any document, however evidenced, negotiable or non-negotiable,
including, but not limited to, all documents and certificates accompanying or
relating to presentations, drafts or demands under or in respect of any Credit.

“DRAFTS” means any draft drawn under or presentment or demand made for payment
on any Credit.

“ISP” means the International Standby Practices adopted by the International
Chamber of Commerce in force at the time of issuance of the Credit, as the same
may be thereafter amended or replaced.

“ISSUER” means any KeyCorp affiliate that issues any Credit.

“LETTER OF CREDIT APPLICATION” means any request submitted by any of the Account
Parties to the Issuer (in written or electronic form and whether set forth on
the Issuer’s application form or otherwise) for the issuance of any Credit or
Credits for the account of any of the Account Parties.

“PROPERTY” means all tangible and intangible property of any kind, whether real,
personal or mixed, including, without limitation, goods, negotiable or
non-negotiable instruments, documents of title, securities, funds, choses in
action and any right or interest therein. Property in Issuer’s possession shall
include Property in possession of any person or entity other than Issuer that
holds such property as agent, trustee or otherwise for the benefit or account of
Issuer.

“REIMBURSEMENT OBLIGATIONS” means the obligations of the Account Parties to
reimburse the Issuer for all payments made by or for the account of the Issuer
with respect to any presentment on a Credit and to pay, reimburse and/or
indemnify the Issuer for all fees, charges, costs, expenses and liabilities
charged or incurred by or asserted against the Issuer in connection with this
Agreement, any Letter of Credit Application and/or any Credit and includes,
without limitation, all such obligations provided for in Sections 2, 3 and 7 of
this Agreement..

 

 

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“REQUESTS” means any request, instruction, waiver or agreement made or agreed
upon by any of the Account Parties and communicated to the Issuer in writing, by
telephone or by any means of electronic communication that is honored or relied
upon by the Issuer in connection with the issuance, terms, amendment, waiver of
discrepancies, and/or honor, dishonor, payment or acceptance of any presentment
or drawing on any Credit.

“UNIFORM CUSTOMS” means the Uniform Customs and Practice for Documentary Credits
adopted by the International Chamber of Commerce in force at the time of
issuance of the Credit, as the same may be thereafter amended or replaced.

2. PAYMENT TERMS: The Issuer may honor and accept or pay any draft, demand or
drawing presented to Issuer on or in respect of any Credit, regardless of when
drawn or presented and whether or not negotiated, if such presentment, any
related documents required to accompany the drawing and any transmittal advice
are dated on or before the expiration date of the Credit. The expiration date of
the Credit shall in all cases be the expiration date stated therein or in any
amendment expressly extending such date, and shall not be extended or deemed
extended on account of or by reference to any action or inaction of any person
or entity or the terms of any other communication or agreement. Issuer may
accept any presentment, draft, instruction or other document that appears on its
face to be signed or issued by the beneficiary or other party authorized or
specified under the Credit to draw or issue such instruments or other documents,
whether in the name of the beneficiary or other party as reflected in the Credit
or as such name may have been changed, and/or by any successor to or
administrator, executor, trustee in bankruptcy, debtor in possession assignee
for the benefit of creditors, liquidator, receiver, conservator, or other legal
representative of the beneficiary or such other party, if the same otherwise
complies on its face with the terms of the Credit. The Account Parties, jointly
and severally, agree to reimburse Issuer at its main office on demand in United
States Dollars: (A) as to drafts payable in United States Dollars drawn or to be
drawn under the Credit, the amount paid or payable thereon, or (B) as to such
drafts payable in currency other than United States Dollars, the equivalent of
the amount paid in United States Dollars at Issuer’s selling rate of exchange in
the currency in which such draft is drawn, (C) any and all other expenses or
charges incurred by Issuer in issuing or effecting payment of the Credit, for
perfecting or maintaining, and insuring the Property, and for enforcing Issuer’s
rights and remedies under this Agreement, (D) interest from the date of such
payment at a rate per annum equal to the greater of (i) zero and (ii) the Prime
Rate of KeyBank National Association in effect from time to time plus the rate
margin customarily charged by Issuer to other account parties with similar
credit worthiness and in like circumstances or as agreed by Account Parties,
upon all unpaid drafts and other payment, reimbursement and/or indemnification
obligations of Account Parties hereunder until paid in full, but in no event
higher than the highest lawful rate permitted by law, and (E) such commission,
issuance, letter of credit commitment fees, draw fees, and negotiation fees at
such rate as Issuer may determine from time to time and/or as agreed by Account
Parties. The Account Parties shall at all times keep and maintain a deposit
account at the Issuer described in the Application (the “Deposit Account”).
Without prior notice or demand Issuer is authorized to charge the Deposit
Account or any other deposit account maintained by any of the Account Parties
with Issuer or any other KeyCorp affiliate for the amount of any draft and all
other reimbursement obligations hereunder.

3. INCREASED COSTS: If any law or regulation, or change therein, or
interpretation, administration or enforcement thereof, by any person, agency or
court shall (A) impose upon or modify any reserve or special deposit
requirement, insurance assessment or other requirement against or affecting the
Credit, or (B) impose any tax, other than tax imposed upon the income of Issuer,
or withholding of any kind, or (C) impose or modify any capital requirement,
impose any condition upon, supplement to or increase of any kind to Issuer’s
capital base, and the result of any such event increases the cost or decreases
the benefit to Issuer of issuing or maintaining any Credit, then the Account
Parties shall pay to Issuer upon request such amounts as are advised by Issuer
that are necessary to compensate Issuer for all increased costs and/or decreased
benefits attributable to any of the foregoing. Upon written request, Issuer will
certify such amounts. Issuer’s certification shall be conclusive absent manifest
error.

4. REQUESTS: Requests shall be made by those persons purportedly authorized by
any of the Account Parties. Account Parties agree to provide Issuer from time to
time a written list of all such authorized representatives. Issuer shall not be
obligated to identify or confirm such persons beyond the use of the

 

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authorized name or code identification, if any, that is established by Issuer
and/or Account Parties. All requests will be confirmed by Issuer in writing or
through the use of any electronic communication system used in the ordinary
course of business between Issuer and the Account Parties. The Account Parties
will promptly report all discrepancies upon their receipt of such confirmation.
Issuer may, but shall not be obligated to, assign a unique code number or word
and require such code to be used by the Account Parties, and thereafter all
further requests shall refer to such code. Issuer shall not be liable for any
loss which the Account Parties may incur as a result of Issuer’s compliance with
any request received by Issuer that complies with the terms of this Agreement,
even if in fact unauthorized, provided that Issuer acted in good faith and
exercised reasonable care.

5. MODIFICATION OF CREDITS: Any amendment to the terms of a Credit may be
authorized by those persons purportedly authorized by any one of the Account
Parties without notice to any other of the Account Parties, but any increase in
the amount of a Credit or extension of the expiration date under a Credit for
presentation of Drafts or Documents shall only be approved by those persons
authorized by the Account Parties. Account Parties agree that if a Credit
provides for automatic renewal or extension of the expiration date unless the
beneficiary is notified to the contrary in advance of any then current
expiration date, and Account Parties determine to instruct the Issuer not to
allow such renewal or extension, Account Parties must notify Issuer in writing
to such effect not later than 60 days prior to the latest then applicable date
for notification of the beneficiary of non-renewal or non-extension under the
terms of the Credit. If such notice by the Account Parties is not timely made,
Issuer may automatically renew or extend the Credit and Account Parties will
have no claim or cause of action against Issuer and will continue to be fully
liable for all Reimbursement Obligations incurred and/or arising with respect to
such Credit, including after giving effect to any such automatic renewal or
extension. Issuer may, in its sole discretion, elect not to renew or extend any
Credit and if Issuer does not renew or extend the Credit Account Parties will
have no claim or cause of action against Issuer and will continue to be fully
liable for all Reimbursement Obligations incurred and/or arising with respect to
such Credit, including as a result of the non-renewal or non-extension thereof.
This Agreement shall in all events be and remain binding upon all of the Account
Parties with regard to the Credit, as increased, amended, extended or renewed,
notwithstanding any refusal of Issuer to agree to any increase, amendment,
renewal or extension, as to the form, content, action or inaction taken with
respect to any Drafts, Documents and/or Property associated therewith and/or any
action taken or not taken by Issuer and any of Issuer’s correspondents in
connection therewith.

6. LIMITED LIABILITY: None of Issuer, Issuer’s employees, agents or
correspondents or any person or entity advising or confirming any Credit shall
be responsible for or liable on account of: (A) the invalidity, insufficiency,
or any lack of genuineness or due authorization of any Draft or Document or any
fraud or forgery of or affecting any Draft or Document; (B) the inadequacy of
insufficiency of the coverages and/or terms of any insurance, any lack of
validity, genuineness or enforceability of any insurance or associated Document
or the insolvency of any insurer; (C) the performance, solvency or financial
responsibility of any party issuing or having liability on or under any
Document; (D) delays on non-delivery of any Draft or Document; (E) any breach of
contract or other wrongful action by or between any person and the Account
Parties; (F) failure of any Draft or Document to be sufficient in form or
content to effect a proper and conforming presentment on any Credit; (G) errors
or omissions in and/or interruptions or delays in transmission or delivery of
any messages, Drafts or Documents by mail, cable, telegraph, wireless, email,
PDF or otherwise or for any errors in translation or interpretation of terms;
(H) any action or inaction taken in conformity with the rights of the Issuer or
any adviser or confirmer under the ISP or UCP and/or (I) other consequences
arising from causes beyond the control of any Issuer, adviser or confirmer, or
any person or entity acting on behalf of any such party, including, but not
limited to, any action or omission by, or any law, regulation or restriction of,
any de facto or de jure domestic or foreign government or agency. IN NO EVENT
SHALL ISSUER BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES.

7. WARRANTIES; INDEMNITY: Each of the Account Parties hereby represents,
warrants, covenants and confirms to and for the benefit of Issuer that Account
Parties understand the general nature and operation of a letter of credit and
the obligations, rights and remedies of the Account Parties on the one hand and
the Issuer on the other in regard to letters of credit, including, without
limitation: (A) the obligation of the Account Parties to reimburse Issuer for
all payments to the beneficiary in respect of

 

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presentments on the Credit, (B) the conditions set forth in the Credit to the
obligation of Issuer to pay any drawing on the Credit, (C) that Issuer has no
responsibility or liability in connection with any underlying contract or other
transaction between any of the Account Parties and the beneficiary of the
Credit, (D) that Issuer is not acting as an agent or in any fiduciary capacity
for or on behalf of the Account Parties or the beneficiary, but solely as an
issuer of letters of credit, (E) Issuer makes no representation or warranty
regarding the value or desirability of the Account Parties’ transactions in
connection with which any Credit is issued, the decision to utilize any Credit
or the appropriateness of or risks arising from the terms or conditions of any
Credit, (F) that the Account Parties should seek advice from their legal counsel
with respect to any Letter of Credit Application, this Agreement, the issuance
and terms of any Credit and the related underlying transactions and (G) Account
Parties unconditionally approve and assume all risks associated with the terms
of each Credit, regardless of any advice provided by Issuer with respect to the
form or terms of the Credit. Each of the Account Parties hereby further
represents, warrants, covenants and confirms to and for the benefit of Issuer
that the transactions associated with each Credit do not violate any applicable
law, rule or regulation of the United States, any state or the United States
and/or any foreign nation or governmental authority thereof, including, without
limitation, anti-terrorism, anti-money laundering, export/import and/or corrupt
practices laws, orders, rules and regulations. All representations, warranties
and indemnities set forth herein shall survive Issuer’s issuance of the Credit
and any payment thereunder and shall continue until all Reimbursement
Obligations arising hereunder are finally determined and paid in full in cash.
Each of the Account Parties hereby releases Issuer from and agrees to indemnify
and hold harmless the Issuer, and its officers, agents, employees and
correspondents for and against any and all claims, costs, liabilities and
expenses (including reasonable attorney fees) incurred by or asserted against
any such indemnified party and arising out of or in any way relating to (1) any
underlying investments, transaction, and/or contracts between any one of the
Account Parties, any beneficiary of any Credit and/or any such indemnified party
and/or (2) any acceptance or payment made on account of any presentment on a
Credit that appeared on its face to conform to the applicable terms and
conditions of the Credit, any refusal to pay or honor the Credit when a
conforming presentment has not been made or for any other legally or
commercially sufficient reason, or any other action or omission by any such
indemnified party, other than in respect of gross negligence or willful
misconduct on the part of such indemnified party, as determined by a final,
non-appealable judgment of a court of competent jurisdiction.

8. SECURITY: As security for the payment and/or performance and satisfaction of
all Reimbursement Obligations and other liabilities of the Account Parties to
the Issuer with respect to any Credit and under this Agreement, in all cases
whether now existing or hereafter arising, whether joint, several independent or
otherwise, and whether absolute or contingent or due or to become due (herein
collectively, called the “Bank Liabilities”), each of the Account Parties does
hereby assign, pledge and grant to Issuer, a security interest in, and the right
of possession and disposal of: (A) all Drafts, Documents and all Property
shipped, stored or otherwise held or disposed of in connection with the Credit
and/or subject to any Document, whether or not released to any of the Account
Parties on bills of lading, warehouse or trust receipts or otherwise, (B) all
right and causes of action against all parties arising from or in connection
with any contract or agreement referred to in any Credit, and all guarantees,
agreements or other undertakings (including those in effect between or among any
of the Account Parties), credits, policies of insurance or other assurances in
connection therewith, (C) the Deposit Account and/or any other cash instruments,
deposit balances, certificates of deposit and other cash equivalents, repurchase
agreements, and other investments maintained by any of the Account Parties with
Issuer or any other KeyCorp affiliate, whether matured or unmatured, or
collected or in the process of collection and (D) all proceeds of the foregoing.
The Account Parties agree to execute, deliver, and file all further instruments
as may be reasonably required by the Issuer to carry out the purposes of this
Agreement and/or perfect or enforce the rights of Issuer hereunder.

9. DEFAULT: In the event that any of the Account Parties: (A) fails to perform
any obligation required to be performed by it under this Agreement or any other
agreement or document relating to or evidencing a Credit or any Property in
which a security interest has been granted to Issuer, (B) fails to make any
payment or perform any other obligations under this Agreement, (C) makes any
assignment for the benefit of creditors, (D) files or authorizes or consents to
the filing of any voluntary or involuntary petition in bankruptcy by or against
any one of the Account Parties as debtor, (E) applies for the appointment of a
receiver of any of its assets, (F) becomes insolvent, or ceases, becomes unable
or admits in writing its

 

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inability to pay its debts as they become due, or (G) fails to pay when due,
upon acceleration or otherwise, any other obligation to Issuer, Issuer may at
such time or any time thereafter declare, without demand or notice which are
hereby expressly waived, all Reimbursement Obligations hereunder, including such
as are then contingent, to be immediately due and payable, whereupon the same
shall be immediately due and payable in full in cash, and Issuer is authorized,
at its option, to apply (or hold as collateral) the proceeds of any Property,
the Deposit Account, any other sums due from Issuer to any one of the Account
Parties and any other collateral, to the payment of any and all Reimbursement
Obligations. In any such event Issuer shall have all of the remedies of a
secured party under the Uniform Commercial Code in effect in the State in which
the principal office of the Issuer is located and Issuer is hereby authorized
and empowered at its option, at any time or times thereafter, to sell and assign
the whole of the Property, or any part thereof then constituting security
pursuant to any of the terms hereof, at any public or private sale, at such time
and place and upon such times as Issuer may deem proper and with the right in
Issuer to be the purchaser at such sale and, after deducting all legal and other
costs and expenses of any sale, to apply the net proceeds of such sale(s) to the
payment of all of the Bank Liabilities. The residue, if any, of the proceeds of
sale and any other Property constituting security remaining after satisfaction
of the Bank Liabilities shall be returned to the respective Account Parties
unless otherwise disposed of in accordance with written instructions from the
affected Account Parties. It is agreed that, with or without notification to any
of the Account Parties, Issuer may exchange, release, surrender, realize upon,
release on trust receipt to any of them, or otherwise deal with any Property by
whomsoever pledged, mortgaged or subjected to a security interest to secure
directly or indirectly any of the Bank Liabilities and/or any offset against the
same. In addition, Issuer and its affiliates shall have all rights and remedies
provided for under the Uniform Commercial Code and other wise at law and in
equity and all rights, remedies and/or collateral provided for under any other
reimbursement agreement, credit agreement, security agreement, pledge agreement
or other agreement or instrument in effect at any time between Account
Party(ies) and Issuer or any affiliate that obligate and/or secure reimbursement
in respect of letters of credit by Account Party(ies) or any of them. All rights
and remedies of Issuer shall be cumulative and not exclusive.

10. NO WAIVER: ISSUER SHALL HAVE NO DUTY TO EXERCISE ANY RIGHT HEREUNDER OR WITH
RESPECT TO ANY PROPERTY, AND ISSUER SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO
OR DELAY IN DOING SO. NONE OF ISSUER’S OPTIONS, POWERS OR RIGHTS IN CONNECTION
WITH THE CREDIT OR THIS AGREEMENT SHALL BE WAIVED UNLESS ISSUER OR ISSUER’S
AUTHORIZED AGENT SHALL HAVE SIGNED SUCH WAIVER IN WRITING. NO SUCH WAIVER,
UNLESS EXPRESSLY AS STATED THEREIN, SHALL BE EFFECTIVE AS TO ANY TRANSACTION
WHICH OCCURS SUBSEQUENT TO THE DATE OF SUCH WAIVER NOR AS TO ANY CONTINUANCE OF
A BREACH AFTER SUCH WAIVER. NO COURSE OF DEALING BETWEEN ANY OF THE ACCOUNT
PARTIES AND ISSUER SHALL BE EFFECTIVE TO CHANGE, MODIFY OR DISCHARGE IN WHOLE OR
IN PART THIS AGREEMENT OR THE OBLIGATIONS HEREUNDER.

11. GOVERNING LAW; SEVERABILITY: THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PRINCIPAL OFFICE
OF THE ISSUER IS LOCATED. THE CREDIT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PRINCIPAL OFFICE OF THE
ISSUER IS LOCATED AND SHALL BE SUBJECT TO THE UNIFORM CUSTOMS OR THE ISP
(WHICHEVER MAY BE DETERMINED TO BE APPROPRIATE UNDER THE CIRCUMSTANCES BY ISSUER
AND INDICATED IN THE CREDIT) THEN IN EFFECT, WHICH UNIFORM CUSTOMS OR ISP, AS
THE CASE MAY BE, WILL CONTROL IN THE EVENT OF ANY CONFLICT WITH STATE LAWS. IF
ANY PROVISION HEREOF IS FOR ANY REASON HELD TO BE UNENFORCEABLE UNDER ANY LAW,
SUCH ILLEGALITY OR INVALIDITY SHALL NOT AFFECT ANY OTHER PROVISIONS HEREOF, EACH
OF WHICH SHALL BE CONSTRUED AND ENFORCED AS IF SUCH UNENFORCEABLE PROVISION WERE
NOT CONTAINED HEREIN.

12. NOTICE AND WAIVERS: EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPHS 4 AND 5
HEREIN, ANY NOTICE TO ISSUER SHALL BE DEEMED EFFECTIVE ONLY IF IN WRITING SENT
TO AND RECEIVED BY ISSUER. ANY SUCH NOTICE TO OR DEMAND ON ANY OF THE ACCOUNT
PARTIES SHALL BE BINDING ON ALL OF THEM AND SHALL BE DEEMED

 

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EFFECTIVE ONLY IF IN WRITING (A) WHEN DELIVERED PERSONALLY OR BY VERIFIABLE
FACSIMILE TRANSMISSION WITH CONFIRMATION OF RECEIPT; (B) ON THE NEXT BUSINESS
DAY AFTER DELIVERY TO A NATIONALLY-RECOGNIZED OVERNIGHT COURIER, WITH RECEIPT
ACKNOWLEDGMENT REQUESTED; (C) ON THE BUSINESS DAY ACTUALLY RECEIVED IF DEPOSITED
IN THE U.S. MAIL, OR (D) IF BY TELEPHONE, WHEN CONFIRMED BY VERIFIABLE FACSIMILE
TRANSMISSION TO THE LAST ADDRESS OR TELEPHONE NUMBER OF SUCH PERSON APPEARING ON
ISSUER’S RECORDS.

13. ACCOUNT PARTY: IF THIS AGREEMENT IS SIGNED BY ONE ACCOUNT PARTY ONLY, THE
TERMS “ACCOUNT PARTIES” AND “THEIR” AND “THEM” SHALL REFER THROUGHOUT TO THE ONE
ACCOUNT PARTY EXECUTING THIS AGREEMENT; IF THIS AGREEMENT IS SIGNED BY MORE THAN
ONE PARTY, THIS AGREEMENT SHALL BE THE JOINT AND SEVERAL OBLIGATION OF ALL SUCH
ACCOUNT PARTIES. IF THE UNDERSIGNED IS A PARTNERSHIP, THE OBLIGATIONS HEREUNDER
SHALL CONTINUE IN FORCE AND APPLY NOTWITHSTANDING ANY CHANGE IN MEMBERSHIP OF
SUCH PARTNERSHIP. THIS AGREEMENT SHALL BE BINDING UPON EACH OF THE ACCOUNT
PARTIES AND THEIR RESPECTIVE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND
ASSIGNS AND SHALL INURE TO ISSUER’S BENEFIT AND ISSUER’S SUCCESSORS AND ASSIGNS.
ISSUER MAY, WITHOUT NOTICE TO THE ACCOUNT PARTIES, ASSIGN THIS AGREEMENT IN
WHOLE OR IN PART.

 

Account Party Name typed:   

 

  

Signature:                           

 

  

Signer’s Name typed:   

 

   Title or Capacity:   

 

   Date:   

 

   Account Party Name typed:   

 

  

Signature:                           

 

  

Signer’s Name typed:   

 

   Title or Capacity:   

 

   Date:   

 

  

 

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EXHIBIT G

FORM OF COMPLIANCE CERTIFICATE

KeyBank National Association, as Agent

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attention: Tom Schmitt

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
the same may hereafter be amended, the “Credit Agreement”) by and among Condor
Hospitality Limited Partnership (the “Borrower”), KeyBank National Association
for itself and as Agent, and the other Lenders from time to time party thereto.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as defined in the Credit Agreement.

Pursuant to the Credit Agreement, the Borrower (or REIT, on the Borrower’s
behalf) is furnishing to you herewith (or has most recently furnished to you)
the consolidated financial statements of REIT for the fiscal period ended
                             (the “Balance Sheet Date”). Such financial
statements have been prepared in accordance with GAAP and present fairly the
consolidated financial position of REIT at the date thereof and the results of
its operations for the periods covered thereby.

This certificate is submitted in compliance with requirements of §2.11(d), §5.3,
§5.5(b), §7.4(c) or §10.11 of the Credit Agreement, as applicable. If this
certificate is provided under a provision other than §7.4(c), the calculations
provided below are made using the consolidated financial statements of REIT as
of the Balance Sheet Date adjusted in the best good faith estimate of REIT to
give effect to the making of a Loan, issuance of a Letter of Credit, acquisition
or disposition of property or other event that occasions the preparation of this
certificate; and the nature of such event and the estimate of REIT of its
effects are set forth in reasonable detail in an attachment hereto. The
undersigned officer is the chief financial officer, chief executive officer,
treasurer or chief accounting officer of the Borrower (or REIT, if this
certificate is delivered by REIT on the Borrower’s behalf).

The undersigned representative has caused the provisions of the Loan Documents
to be reviewed and has no knowledge of any Default or Event of Default. (Note:
If the signer does have knowledge of any Default or Event of Default, the form
of certificate should be revised to specify the Default or Event of Default, the
nature thereof and the actions taken, being taken or proposed to be taken by the
Borrower with respect thereto.)

The undersigned is providing the attached information to demonstrate compliance
as of the date hereof with the covenants described in the attachment hereto.

 

G-1

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IN WITNESS WHEREOF, the undersigned has duly executed this Compliance
Certificate this              day of                         , 201__.

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  
Condor Hospitality REIT Trust,   a Maryland real estate investment trust,   its
general partner   By:                                          
                                  Name:
                                                                       Title:
                                                                         (SEAL)

 

G-2

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APPENDIX TO COMPLIANCE CERTIFICATE

 

G-3

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LOGO [g34941page334.jpg]

Condor Hospitality Limited Partnership Covenant: Covenant Compliance Based on
XX’XX’XXXX Financials Adjusted NOI (/) Mortgage Constant [Compliant? *Not
applicable until the reporting period ended 9.30-2021; tliresliold will be I OX
foi Q3 & Q4 2021, 1.25X for QI & Q2 2022 and 1.5X thereafter |§ 9.3 Borrowing
Base Leverage Borrowing Base Indebtedness (a) Borrowing Base Indebtedness
Borrowing Base Asset Value (b) Total Asset Value Leverage (a) / (b): Covenant:
[Compliant? *Not applicable until 3/31/2022 where covenant will be 65% *
Reappraisals to be used for 2022 |§ 9.3 leverage [Compliant? * \’o longer
testing consolidated leverage Unrestricted Cash and Cash Equivalents KeyBank
Credit Facility Total Liquidity Covenant: [Compliant? Implied DSCR |§ 9.5
Adjusted Consolidated EBITDA to Fixed Charges Adjusted Consolidated EBITDA
Interest Expense Principal Amortization Preferred Dividends (b) Fixed Charges
(a) Adjusted Consolidated EBITDA Fixed Charges § 9.1 Borrowing Base Implied DSCR
9.-I Liquidity (a) Consolidated Total Indebtedness Consolidated Total Asset
Value (b) Consolidated Total Asset ValueLeverage (a) / (b): Covenant:

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LOGO [g34941page335.jpg]

Body text (2);Body text (5);Body text (6);Condor Hospitality Limited Partnership
Covenant Compliance Based on XX/XX/XXXX Financials Fixed Charge Coverage Ratio
(a) I (b): Covenant: ‘.Compliant? *Not applicable until the reporting period
ended 9/30/2021; threshold will be I OX for Q3 & Q4 2021, 1.25X for QI & Q2 2022
and 1 5X thereafter |§ 8.1 (i) Recourse Indebtedness Recourse Indebtedness Great
Western KCI Loft Great Western KCI loft PIP KeyBank Aloft Term Loan Permitted
Recourse Indebtedness (excluding the Facility) [Compliant? | 8.3 Restrictions on
Investments | Investments (l) Land Assets % o f Consolidated Total Asset Value
(not to exceed 5%) (m) Non-Wholly Owned Subsidiaries and 1 .nconsolidatcd
Affiliates 9t> of Consolidated Total Asset Value (not to exceed 10%) (n)
Development Properties % of Consolidated Total Asset Value (not to exceed 10%)
(p) Mortgage Note Receivables ?’o of Consolidated Total Asset Value (not to
exceed 5%) Aggregate of (I), (tn), (n). or (p): Covenant: ;>irt.pliant’.* |§ 8.7
Distributions | Distributions Proforma Cash Distributions Covenant: |§ 7.20
Borrowing Base Properties | Borrowing Base Properties (viii) (A) Rooms not under
a Material Renovation % of aggregate Borrowing Base Rooms (must exceed 90%)
(viii) (B) Recently completed developments % of Borrowing Base Adjusted Net
Operating Income (not to exceed 10%) (xi) Ground Leased Tier I Properties % of
total Borrowing Base Adjusted Net Operating Income (not to exceed 15%)
[Compliant.1 _

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EXHIBIT H

FORM OF BORROWING BASE CERTIFICATE

KeyBank National Association, as Agent

1200 Abernathy Road, Suite 1550

Atlanta, Georgia 30328

Attn: Tom Schmitt

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
the same may hereafter be amended, the “Credit Agreement”), by and among Condor
Hospitality Limited Partnership (the “Borrower”), KeyBank National Association
for itself and as Agent, and the other Lenders from time to time party thereto.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as defined in the Credit Agreement.

Pursuant to the Credit Agreement, the Borrower is furnishing to you herewith the
Borrowing Base Certificate. This certificate is submitted in compliance with
requirements of the Credit Agreement.

The undersigned is providing the attached information to demonstrate compliance
as of the date hereof with the covenants of the Credit Agreement relating
hereto.

IN WITNESS WHEREOF, the undersigned have duly executed this Borrowing Base
Certificate this              day of                     , 201__.

 

CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership By:  
Condor Hospitality REIT Trust,   a Maryland real estate investment trust,   its
general partner   By:                                          
                                  Name:
                                                                       Title:
                                                                         (SEAL)

 

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LOGO [g34941page337.jpg]

Header or footer;Body text (5); Condor Jlospitulity Limited Partnership

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EXHIBIT I

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Agreement”) dated
                                        , by and between
                                                              (“Assignor”), and
                                                              (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignor is a party to that certain Credit Agreement, dated March 1,
2017, as, by and among CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Delaware
limited partnership (the “Borrower”), the other lenders that are or may become a
party thereto, and KEYBANK NATIONAL ASSOCIATION, individually and as Agent (as
amended from time to time, the “Credit Agreement”); and

WHEREAS, Assignor desires to transfer to Assignee [Describe assigned Commitment]
under the Credit Agreement and its rights with respect to the Commitment
assigned and its Outstanding Loans with respect thereto;

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars
($10.00) and other good and valuable considerations, the receipt and sufficiency
of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

1. Definitions. Terms defined in the Credit Agreement and used herein without
definition shall have the respective meanings assigned to such terms in the
Credit Agreement.

2. Assignment.

(a) Subject to the terms and conditions of this Agreement and in consideration
of the payment to be made by Assignee to Assignor pursuant to Paragraph 5 of
this Agreement, effective as of the “Assignment Date” (as defined in Paragraph 7
below), Assignor hereby irrevocably sells, transfers and assigns to Assignee,
without recourse, a portion of its Revolving Credit Note in the amount of
$                             representing a $                            
Commitment, and a                              percent
(            %) Commitment Percentage, and a corresponding interest in and to
all of the other rights and obligations under the Credit Agreement and the other
Loan Documents relating thereto (the assigned interests being hereinafter
referred to as the “Assigned Interests”), including Assignor’s share of all
outstanding Revolving Credit Loans with respect to the Assigned Interests and
the right to receive interest and principal on and all other fees and amounts
with respect to the Assigned Interests, all from and after the Assignment Date,
all as if Assignee were an original Lender under and signatory to the Credit
Agreement having a Commitment Percentage equal to the amount of the respective
Assigned Interests.

(b) Assignee, subject to the terms and conditions hereof, hereby assumes all
obligations of Assignor with respect to the Assigned Interests from and after
the Assignment Date as if Assignee were an original Lender under and signatory
to the Credit Agreement, which obligations shall include, but shall not be
limited to, the obligation to make Revolving Credit Loans

 

I-1

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to the Borrower with respect to the Assigned Interests and to indemnify the
Agent as provided therein (such obligations, together with all other obligations
set forth in the Credit Agreement and the other Loan Documents are hereinafter
collectively referred to as the “Assigned Obligations”). Assignor shall have no
further duties or obligations with respect to, and shall have no further
interest in, the Assigned Obligations or the Assigned Interests.

3. Representations and Requests of Assignor.

(a) Assignor represents and warrants to Assignee (i) that it is legally
authorized to, and has full power and authority to, enter into this Agreement
and perform its obligations under this Agreement; (ii) that as of the date
hereof, before giving effect to the assignment contemplated hereby the principal
face amount of Assignor’s Revolving Credit Note is $                         and
the aggregate outstanding principal balance of the Revolving Credit Loans made
by it equals $            , and (iii) that it has forwarded to the Agent the
Revolving Credit Note held by Assignor. Assignor makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness or
sufficiency of any Loan Document or any other instrument or document furnished
pursuant thereto or in connection with the Loan, the collectability of the
Loans, the continued solvency of the Borrower or the continued existence,
sufficiency or value of the Collateral or any assets of the Borrower which may
be realized upon for the repayment of the Loans, or the performance or
observance by the Borrower of any of its obligations under the Loan Documents to
which it is a party or any other instrument or document delivered or executed
pursuant thereto or in connection with the Loan; other than that it is the legal
and beneficial owner of, or has the right to assign, the interests being
assigned by it hereunder and that such interests are free and clear of any
adverse claim.

(b) Assignor requests that the Agent obtain replacement notes for each of
Assignor and Assignee as provided in the Credit Agreement.

4. Representations of Assignee. Assignee makes and confirms to the Agent,
Assignor and the other Lenders all of the representations, warranties and
covenants of a Lender under Articles 14 and 18 of the Credit Agreement. Without
limiting the foregoing, Assignee (a) represents and warrants that it is legally
authorized to, and has full power and authority to, enter into this Agreement
and perform its obligations under this Agreement; (b) confirms that it has
received copies of such documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement;
(c) agrees that it has and will, independently and without reliance upon
Assignor, any other Lender or the Agent and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in evaluating the Loans, the Loan Documents, the
creditworthiness of the Borrower and the Guarantors and the value of the assets
of the Borrower and the Guarantors, and taking or not taking action under the
Loan Documents; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers as are reasonably incidental
thereto pursuant to the terms of the Loan Documents; (e) agrees that, by this
Assignment, Assignee has become a party to and will perform in accordance with
their terms all the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender; (f) represents and warrants that
Assignee does not control, is not controlled by, is not under common control
with and is otherwise free from influence or control by, the Borrower or any
Guarantor and is not a

 

I-2

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Defaulting Lender or Affiliate of a Defaulting Lender, (g) represents and
warrants that if Assignee is not incorporated under the laws of the United
States of America or any State, it has on or prior to the date hereof delivered
to the Borrower and the Agent certification as to its exemption (or lack
thereof) from deduction or withholding of any United States federal income taxes
and (h) if Assignee is an assignee of any portion of the Revolving Credit Notes,
Assignee has a net worth or unfunded commitments as of the date hereof of not
less than $100,000,000.00 unless waived in writing by the Borrower and the Agent
as required by the Credit Agreement. Assignee agrees that the Borrower may rely
on the representation contained in Section 4(h).

5. Payments to Assignor. In consideration of the assignment made pursuant to
Paragraph 1 of this Agreement, Assignee agrees to pay to Assignor on the
Assignment Date, an amount equal to $                         representing the
aggregate principal amount outstanding of the Revolving Credit Loans owing to
Assignor under the Loan Agreement and the other Loan Documents with respect to
the Assigned Interests.

6. Payments by Assignor. Assignor agrees to pay the Agent on the Assignment Date
the registration fee required by §18.2 of the Credit Agreement.

7. Effectiveness.

(a) The effective date for this Agreement shall be
                                 (the “Assignment Date”). Following the
execution of this Agreement, each party hereto shall deliver its duly executed
counterpart hereof to the Agent for acceptance and recording in the Register by
the Agent.

(b) Upon such acceptance and recording and from and after the Assignment Date,
(i) Assignee shall be a party to the Credit Agreement and, to the extent of the
Assigned Interests, have the rights and obligations of a Lender thereunder, and
(ii) Assignor shall, with respect to the Assigned Interests, relinquish its
rights and be released from its obligations under the Credit Agreement.

(c) Upon such acceptance and recording and from and after the Assignment Date,
the Agent shall make all payments in respect of the rights and interests
assigned hereby accruing after the Assignment Date (including payments of
principal, interest, fees and other amounts) to Assignee.

(d) All outstanding LIBOR Rate Loans shall continue in effect for the remainder
of their applicable Interest Periods and Assignee shall accept the currently
effective interest rates on its Assigned Interest of each LIBOR Rate Loan.

 

I-3

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8. Notices. Assignee specifies as its address for notices and its Lending Office
for all assigned Loans, the offices set forth below:

 

Notice Address:

                                                                           
                                                                        
                                                                        
                                                                        
Attn:                                                                
Facsimile:                                                     

Domestic Lending Office:                         Same as above

Eurodollar Lending Office:                       Same as above

9. Payment Instructions. All payments to Assignee under the Credit Agreement
shall be made as provided in the Credit Agreement in accordance with the
separate instructions delivered to the Agent.

10. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401,
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

11. Counterparts. This Agreement may be executed in any number of counterparts
which shall together constitute but one and the same agreement.

12. Amendments. This Agreement may not be amended, modified or terminated except
by an agreement in writing signed by Assignor and Assignee, and consented to by
the Agent.

13. Successors. This Agreement shall inure to the benefit of the parties hereto
and their respective successors and assigns as permitted by the terms of Credit
Agreement.

[signatures on following page]

 

I-4

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IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has
caused this Agreement to be executed on its behalf by its officers thereunto
duly authorized, as of the date first above written.

 

ASSIGNEE: By:  

                     

  Title ASSIGNOR: By:  

                     

  Title

 

RECEIPT ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO BY: KEYBANK NATIONAL
ASSOCIATION, as Agent By:  

                     

  Title

 

CONSENTED TO BY: CONDOR HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited
partnership By:         Condor Hospitality REIT Trust,                        a
Maryland real estate investment   trust, its general partner  
By:                                                          
Name:                                                     
Title:                                                        (SEAL)

 

I-5

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EXHIBIT J-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) by and among Condor Hospitality Limited Partnership (the
“Borrower”), the financial institutions party thereto and their assignees under
§18.1 thereof (the “Lenders”), KeyBank National Association, as Agent (the
“Agent”) and the other parties thereto.

Pursuant to the provisions of §4.3 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) it is not a bank within the meaning of
Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of
the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it
is not a controlled foreign corporation related to the Borrower as described in
Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with a certificate of
its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Agent, and (2) the undersigned shall have at all times furnished the
Borrower and the Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER]

By:  

 

Name:  

 

Title:  

 

Date:                                , 20    

 

J-1

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EXHIBIT J-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) by and among Condor Hospitality Limited Partnership (the
“Borrower”), the financial institutions party thereto and their assignees under
§18.1 thereof (the “Lenders”), KeyBank National Association, as Agent (the
“Agent”) and the other parties thereto.

Pursuant to the provisions of §4.3 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate, (ii) it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform such Lender in
writing, and (2) the undersigned shall have at all times furnished such Lender
with a properly completed and currently effective certificate in either the
calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

By:  

 

Name:  

 

Title:  

 

Date:                                    , 20    

 

J-2

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EXHIBIT J-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) by and among Condor Hospitality Limited Partnership (the
“Borrower”), the financial institutions party thereto and their assignees under
§18.1 thereof (the “Lenders”), KeyBank National Association, as Agent (the
“Agent”) and the other parties thereto.

Pursuant to the provisions of §4.3 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in
respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such participation,
(iii) with respect such participation, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E
or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform such Lender and (2) the undersigned shall have at all
times furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF PARTICIPANT]

By:  

 

Name:  

 

Title:  

 

Date:                                    , 20    

 

J-3

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EXHIBIT J-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to that certain Credit Agreement dated as of March 1, 2017 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) by and among Condor Hospitality Limited Partnership (the
“Borrower”), the financial institutions party thereto and their assignees under
§18.1 thereof (the “Lenders”), KeyBank National Association, as Agent (the
“Agent”) and the other parties thereto.

Pursuant to the provisions of §4.3 of the Credit Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as
any Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E
or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Agent, and (2) the undersigned
shall have at all times furnished the Borrower and the Agent with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER]

By:  

 

Name:  

 

Title:  

 

Date:                                  , 20    

 

J-4

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EXHIBIT K

FORM OF CONVERTIBLE PROMISSORY NOTE AND LOAN AGREEMENT

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.

THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS OF A SUBORDINATION AND
STANDSTILL AGREEMENT DATED OF EVEN DATE HEREWITH BY AND AMONG, AMONG OTHERS,
BORROWER, KEYBANK NATIONAL ASSOCIATION AND LENDER (THE “SUBORDINATION
AGREEMENT”).

CONVERTIBLE PROMISSORY NOTE AND LOAN AGREEMENT

THIS CONVERTIBLE PROMISSORY NOTE AND LOAN AGREEMENT (as the same may from time
to time be amended, restated, modified or otherwise supplemented, this “Note”),
dated as of                         , 2020, is between CONDOR HOSPITALITY TRUST,
INC., a Maryland corporation (together with its successors and assigns, the
“Borrower”), and                             , a
                            (together with its successors and assigns, the
“Lender”).

ARTICLE 1

PROMISE TO PAY

For value received, Borrower hereby promises to pay to the order of Lender the
principal sum of             Dollars ($            ) or the unpaid balance of
all principal advanced against this Note, if that amount is less, together with
interest thereon, each as set forth herein.

ARTICLE 2

LOAN FACILITY

2.1. Description.

(a) Subject to the other terms and conditions of this Note, Lender hereby agrees
to make available to Borrower a loan in the amount of
                        Dollars ($                ) via a loan facility (the
“Loan Facility”).

 

K-1

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(b) The Loan Facility permits a single advance to be extended by Lender to or
for the benefit of Borrower hereunder in the form of a loan (the “Loan”).

(c) This Note shall evidence Borrower’s absolute and unconditional obligation to
repay Lender for the Loan made by Lender under the Loan Facility, with interest
as herein provided.

(d) The Loan under the Loan Facility shall be repaid on January 2, 2023 (the
“Maturity Date”).

2.2. Funding Procedures.

(a) Subject to the terms and conditions of this Note and so long as no Event of
Default (as defined in Article 6 hereof) has occurred hereunder, Lender shall
make the Loan to Borrower under the Loan Facility on the date this Note is
executed by the parties hereto (or the next Business Day if this Note is
executed on a Non-Business Day or after 3:00 p.m., New York time, on a Business
Day) (the “Effective Date”). For purposes of this Note, the term “Business Day”
means any day except a Saturday, Sunday or other day on which banks in New York,
New York and Ciudad Autónoma de Buenos Aires, Argentina are authorized by law to
close, other than the Jewish holidays listed by Bloomberg under CDR-JW
(including Pesach 1st day, Pesach 2nd day, Pesach 7th day, Pesach 8th day,
Shavuot, Shavuot (yizcor), Rosh Hashanah, Yom Kippur, Sucot, Shemini Atzeret and
Simjat Tora).

(b) The Loan shall be advanced by Lender to Borrower in accordance with
Borrower’s written instructions provided to Lender.

2.3. Interest.

(a) The Loan shall bear interest on the outstanding principal amount thereof
from the date made until the Loan is paid in full. Borrower agrees to pay
interest on the unpaid principal amount of the Loan from time to time
outstanding hereunder at a rate of interest per annum equal to
                    percent (            %).

(b) If any Event of Default shall occur and be continuing, the rate of interest
applicable to the Loan then outstanding shall be the rate of interest otherwise
accruing pursuant to Section 2.3(a) hereof plus four (4%) per annum (the
“Default Rate”). The Default Rate shall apply from the date of the Event of
Default until the date such Event of Default is waived or cured.

(c) Interest shall be computed for the actual number of days elapsed on the
basis of a year consisting of three hundred sixty five (365) days, including the
date the Loan is made and excluding the date the Loan or any portion thereof is
paid or prepaid.

(d) All contractual rates of interest chargeable on the Loan shall continue to
accrue and be paid even after default, maturity, acceleration, judgment,
bankruptcy, insolvency proceedings of any kind or the happening of any event or
occurrence similar or dissimilar.

 

K-2

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

2.4. Payments.

(a) All accrued interest on the Loan shall be due and payable in arrears (i) on
the Maturity Date and (ii) upon payment in full. After the Maturity Date,
interest shall be payable on demand.

(b) The entire outstanding principal balance of the Loan, together with all
unpaid and accrued interest thereon, shall be due and payable on the Maturity
Date.

(c) Borrower may prepay, without premium or penalty, the principal of the Loan
at any time.

(d) All payments and prepayments shall be applied first to any unpaid interest
and thereafter to the principal of the Loan and to other amounts due Lender.
Except as otherwise provided herein, all payments of principal, interest or
other amounts payable by Borrower hereunder shall be remitted to Lender in
immediately available funds not later than 3:00 p.m., New York time, on the day
due. Any payment received by Lender after such time shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment is stated as due
on a day which is not a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day and interest shall continue to
accrue during such extension.

(e) All payments of principal and interest hereunder shall be made for the
benefit of Lender. All payments under this Note shall be made in cash by check
or wire transfer of immediately available funds in currency of the United States
of America to such address or account as Lender shall hereafter give to Borrower
by written notice made in accordance with the provisions of this Note, without
set-off, deduction or counterclaim. Under no circumstances may Borrower offset
any amount owed by Borrower to Lender under this Note with an amount owed by
Lender to Borrower under any other arrangement.

ARTICLE 3

CONVERSION

3.1. Optional Conversion. If a rights offering, pursuant to the terms of which
existing holders of common stock of Borrower (the “Common Stock”) receive rights
to subscribe for additional shares of Common Stock (a “Rights Offering”), is
commenced, the then outstanding principal amount of this Note, together with any
then unpaid and accrued interest, may, at the election of Lender, be converted
into fully paid and nonassessable shares of Common Stock at the closing of any
such Rights Offering at a price per share equal to the subscription price for
each share of Common Stock pursuant to any such Rights Offering (as adjusted
equitably for any stock splits or stock dividends affecting the Common Stock,
the “Conversion Price”).

3.2. Conversion Procedure. If a Rights Offering is commenced, written notice
shall be delivered to Lender notifying Lender of the general terms of the
conversion that may be effected, specifying the Conversion Price, the then
outstanding principal amount of the Note, together with any then unpaid and
accrued interest that may be converted and the date on which any such conversion
shall occur (which shall be the date of the closing of any such Rights
Offering). If, upon receipt of such written notice from Borrower, Lender elects
to exercise its right to convert,

 

K-3

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

Lender shall deliver written notice thereof to Borrower within three
(3) Business Days after Lender received such written notice from Borrower.
Borrower shall, as soon as practicable after the closing of any such Rights
Offering, issue and deliver to Lender a certificate or certificates for the
number of shares to which Lender shall be entitled upon such conversion, or
shall otherwise issue such shares in book-entry form and provide Lender
confirmation thereof. Prior to the issuance of any Common Stock to Lender in
connection with any such conversion, Lender shall surrender to Borrower, in the
manner and at the place designated by Borrower, this Note. For the avoidance of
doubt, if a Rights Offering is commenced and Lender provides written notice to
exercise its right to convert, and the closing of any such Rights Offering does
not occur, then any such written notice shall be deemed to be withdrawn and no
conversion shall occur.

3.3. Fractional Shares; Interest; Effect of Conversion. No fractional shares
shall be issued upon conversion of this Note. In lieu of Borrower issuing any
fractional shares to Lender upon the conversion of this Note, Borrower shall
round up any fractional share of Common Stock which would otherwise be due to
Lender upon conversion hereof. Upon conversion of this Note in full and the
payment of the amounts specified in this paragraph, Borrower shall be forever
released from all its obligations and liabilities under this Note and this Note
shall be deemed of no further force or effect, whether or not the original of
this Note has been delivered to Borrower for cancellation.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BORROWER

4.1. Borrower represents and warrants to Lender that:

(a) Due Incorporation, Qualification, etc. Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland; (ii) has the power and authority to own, lease and operate its
properties and carry on its business as now conducted; and (iii) is duly
qualified, licensed to do business and in good standing as a foreign corporation
in each jurisdiction where the failure to be so qualified or licensed could
reasonably be expected to have a material adverse effect on Borrower.

(b) Authority. The execution, delivery and performance by Borrower of this Note
and the consummation of the transactions contemplated thereby (i) are within the
power of Borrower and (ii) have been duly authorized by all necessary actions on
the part of Borrower.

(c) Enforceability. This Note has been, or will be, duly executed and delivered
by Borrower and constitutes, or will constitute, a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and general principles of equity.

(d) Non-Contravention. The execution and delivery by Borrower of this Note and
the performance and consummation of the transactions contemplated hereby do not
and will not (i) violate the charter or bylaws of Borrower, or any material
judgment, order, writ, decree, statute,

 

K-4

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

rule or regulation applicable to Borrower or (ii) result in the creation or
imposition of any lien upon any property, asset or revenue of Borrower or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization or approval applicable to Borrower, its business
or operations, or any of its assets or properties.

(e) Approvals. No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority or other person or entity
(including, without limitation, the shareholders of any person or entity) is
required in connection with the execution and delivery of this Note by Borrower
and the performance and consummation of the transactions contemplated hereby,
other than such as have been obtained and remain in full force and effect and
other than such qualifications or filings under applicable securities laws as
may be required in connection with the transactions contemplated by this Note.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF LENDER

5.1. Lender represents and warrants to Borrower that:

(a) Binding Obligation. Lender has full legal capacity, power and authority to
execute and deliver this Note and to perform its obligations hereunder. This
Note constitutes a legal, valid and binding obligation of Lender, enforceable
against Lender in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and general principles of equity.

(b) Securities Law Compliance. Lender has been advised that this Note and the
underlying securities have not been registered under the Act and any applicable
state securities laws and, therefore, cannot be resold unless it or they are
registered under the Act and applicable state securities laws or unless an
exemption from such registration requirements is available. Lender is aware that
Borrower is under no obligation to affect any such registration with respect to
this Note or the underlying securities or to file for or comply with any
exemption from registration. Lender has not been formed solely for the purpose
of making this investment and is purchasing this Note for its own account for
investment, not as a nominee or agent, and not with a view to, or for resale in
connection with, the distribution thereof, and Lender has no present intention
of selling, granting any participation in, or otherwise distributing the same.
Lender has such knowledge and experience in financial and business matters that
Lender is capable of evaluating the merits and risks of such investment, is able
to incur a complete loss of such investment without impairing Lender’s financial
condition and is able to bear the economic risk of such investment for an
indefinite period of time. Lender is an “accredited investor” as such term is
defined in Rule 501 of Regulation D under the Act and shall submit to Borrower
such further assurances of such status as may be reasonably requested by
Borrower.

(c) Access to Information. Lender acknowledges that Borrower has given Lender
access to the corporate records and accounts of Borrower and to all information
in its possession relating to Borrower, has made its officers and
representatives available for interview by Lender, and has furnished Lender with
all documents and other information required for Lender to make an informed
decision with respect to the purchase of this Note.

 

K-5

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

(d) Tax Advisors. Lender has reviewed with its own tax advisors the U.S.
federal, state and local and non-U.S. tax consequences of this investment and
the transactions contemplated by this Note. With respect to such matters, Lender
relies solely on any such advisors and not on any statements or representations
of Borrower or any of its agents, written or oral. Lender understands that it
(and not Borrower) shall be responsible for its own tax liability that may arise
as a result of this investment and the transactions contemplated by this Note.

(e) No “Bad Actor” Disqualification Events. Neither (i) Lender, (ii) any of its
directors, executive officers, general partners or managing members, nor
(iii) any beneficial owner of any of Borrower’s voting equity securities (in
accordance with Rule 506(d) of the Act) held by Lender if such beneficial owner
is deemed to own 20% or more of Borrower’s outstanding voting securities
(calculated on the basis of voting power) is subject to any disqualifications
described in Rule 506(d)(1)(i) through (viii) of the Act (“Disqualification
Events”), except for Disqualification Events covered by Rule 506(d)(2)(ii) or
(iii) or (d)(3) under the Act and disclosed reasonably in advance of the date
hereof in writing in reasonable detail to Borrower

ARTICLE 6

EVENTS OF DEFAULT

6.1. Events of Default. Each of the following events shall constitute an event
of default (“Event of Default”) and Lender shall thereupon have the option to
declare any and all unpaid principal amount of this Note (together with all
accrued but unpaid interest thereon and all other amounts due in connection
therewith) (the “Obligations”) immediately due and payable, all without demand,
notice, presentment or protest or further action of any kind (it also being
understood that the occurrence of any of the events or conditions set forth in
subparagraphs (d), (e) or (f) shall automatically cause an acceleration of the
Obligations):

(a) Payments - if Borrower fails to make any payment of principal or interest on
the date when such payment is due and payable; or

(b) General Covenant Defaults - if Borrower fails to perform, comply with or
observe any covenant or undertaking contained in this Note, and such failure
continues for a period of thirty (30) days after Borrower becoming aware of such
failure; or

(c) Representations or Warranties - if any representation, warranty or other
statement by or on behalf of Borrower contained in or pursuant to this Note is
false, erroneous or misleading in any material respect when made; or

(d) Assignment for Benefit of Creditors, Etc. - if Borrower makes or proposes an
assignment for the benefit of creditors generally, offers a composition or
extension to creditors or makes or sends notice of an intended bulk sale of any
business or assets now or hereafter owned or conducted by Borrower; or

(e) Bankruptcy, Dissolution, Etc. - upon the commencement of any action for the
bankruptcy, dissolution or liquidation of Borrower, or the commencement of any
proceeding to avoid any transaction entered into by Borrower, or the
commencement of any case or proceeding for reorganization or liquidation of
Borrower, or any of their debts under the Bankruptcy Code or any other state or
federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against Borrower; provided, however, that Borrower shall have
sixty (60) days to obtain the dismissal or discharge of involuntary proceedings
filed against Borrower; or

 

K-6

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

(f) Receiver - upon the appointment of a receiver, liquidator, custodian,
trustee or similar official or fiduciary for Borrower or for any portion of
Borrower’s property, the value of which exceeds One Million Dollars ($1,000,000)
in the aggregate.

6.2. Cure. Nothing contained in this Note shall be deemed to compel Lender to
accept a cure of any Event of Default hereunder, except as specifically outlined
in Section 6.1 hereof.

6.3. Nature of Remedies. All rights and remedies granted Lender hereunder and
under the Note, or otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and Lender may proceed
with any number of remedies at the same time until all Obligations are satisfied
in full. The exercise of any one right or remedy shall not be deemed a waiver or
release of any other right or remedy, and Lender, upon or at any time after the
occurrence and during the continuance of an Event of Default, may proceed
against Borrower at any time, under any agreement, with any available remedy and
in any order.

ARTICLE 7

MISCELLANEOUS

7.1. Waivers. Borrower waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest and notice of dishonor. No failure or
delay on the part of Lender in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

7.2. Notice.

(a) Any notices or consents required or permitted by this Note shall be in
writing and shall be deemed given if delivered in person or if sent by
facsimile, e-mail or by nationally-recognized overnight courier, or via
first-class, certified or registered mail, postage pre-paid to the address of
the applicable party set forth below:

 

Address for notices to Borrower:

Condor Hospitality Trust, Inc.

1800 West Pasewalk Avenue, Suite 120

Norfolk, NE 68701

Attention: J. William Blackham

Fax: (513) 233-0340

E-mail: bblackham@trustcondor.com

 

K-7

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

With a copy to:

McGrath North Mullin & Kratz, PC LLO

1601 Dodge Street, Suite 3700

First National Tower

Omaha, NE 68102

Attn: Jason Benson

Fax: (402) 952-6864

Email: jbenson@mcgrathnorth.com

Address for notices to Lender:

                                                        

                                                        

                                                        

Attention:___________________

Fax:             

Email:             

With a copy to:

                                                        

                                                        

                                                        

Attention:             

Fax:             

Email:             

(b) Any notice sent by Borrower or Lender by any of the above methods shall be
deemed to be given when so received.

(c) Lender shall be fully entitled to rely upon any facsimile or e-mail
transmission or other writing purported to be sent by any authorized officer of
Borrower as being genuine and authorized.

7.3. Amendment. This Note and any provision hereof may only be amended by an
instrument in writing signed by Borrower and Lender. The term “Note” and all
references thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

7.4. Assignability. This Note shall be binding upon Borrower and its successors
and assigns and shall inure to the benefit of Lender and its successors and
assigns. Neither party hereto shall assign this Note without the prior written
consent of the other party. Lender shall not sell, assign, convey, encumber or
otherwise transfer this Note or any interest herein without the prior written
consent of Borrower. The sale, assignment, conveyance, encumbrance or other
transfer of this Note is also subject to the terms and conditions of the
Subordination Agreement.

7.5. Governing Law, Etc. This Note shall be governed by, and construed in
accordance with, the internal laws of the State of New York without regard to
the principles of conflicts of laws. Each of the Borrower and Lender hereto
hereby irrevocably consents, to the maximum extent permitted by law, that any
action or proceeding relating to this Note or the transactions contemplated
hereby shall be brought, at the option of the party instituting the action or
proceeding,

 

K-8

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

in any court of general jurisdiction in New York County, New York, in the United
States District Court for the Southern District of New York or in any state or
federal court sitting in the area currently comprising the Southern District of
New York. Each of the parties hereto waives any objection that it may have to
the conduct of any action or proceeding in any such court based on improper
venue or forum non conveniens, waives personal service of any and all process
upon it, and consents that all service of process may be made by mail or courier
service directed to it at the address set forth herein and that service so made
shall be deemed to be completed upon the earlier of actual receipt or ten days
after the same shall have been posted or delivered to a nationally recognized
courier service. Nothing contained in this shall affect the right of any party
hereto to serve legal process in any other manner permitted by law.

7.6. Lost or Stolen Note. Upon receipt by Borrower of evidence of the loss,
theft, destruction or mutilation of this Note, Borrower shall execute and
deliver a new Note, in the form hereof, in such denominations as Lender may
request.

7.7. Specific Shall Not Limit General; Construction. No specific provision
contained in this Note shall limit or modify any more general provision
contained herein. This Note shall be deemed to be jointly drafted by Borrower
and Lender and shall not be construed against any person as the drafter hereof.

7.8. Severability. If any provision (or any part of any provision) contained in
this Note shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision (or remaining part of the affected provision) of this Note,
and this Note shall be construed as if such invalid, illegal or unenforceable
provision (or part thereof) had never been contained herein, but only to the
extent such provision (or part thereof) is invalid, illegal or unenforceable.
Furthermore, there shall be automatically substituted herein for such invalid,
illegal or unenforceable provision, a provision as similar thereto as possible
which is valid, legal and enforceable.

7.9. Permitted Assignment by Lender. Lender may assign payments owed to Lender
hereunder, without requiring the consent of the Borrower, directly or indirectly
to any legal entity controlling, controlled by, or under common control with
Lender, subject to the terms and conditions of the Subordination Agreement.

7.10. Counterparts. This Note may be executed in counterparts, all of which
counterparts taken together shall constitute one completed fully executed
document.

[RESERVED] Signature Page Follows]

 

K-9

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

IN WITNESS WHEREOF, the parties have caused this Note to be signed in their name
by their duly authorized officer as of the date first written above.

 

BORROWER: CONDOR HOSPITALITY TRUST, INC. By
:                                                                          Name:
J. William Blackham   Title: President and Chief Executive Officer LENDER:

                                                                          ,

a                                                                              

By :     Name:   Title:

 

Schedule 1.1 – Page K-10

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

SCHEDULE 1.1

LENDERS AND COMMITMENTS

 

Name and Address

   Commitment      Commitment Percentage1  

KeyBank National Association

1200 Abernathy Road, N.E., Suite 1550

Atlanta, Georgia 30328

Attention: Tom Schmitt

Telephone: 770-510-2109

Facsimile: 770-510-2195

   $ 69,152,663.0466,062,950.00        50.81765362268750.817653846145 % 

LIBOR Lending Office:

Same as Above

     

The Huntington National Bank

200 Public Square, 7th Floor

Cleveland, Ohio 44114

Attention: Scott A. Childs

Telephone: 216-515-6529

Facsimile: 888-987-9315

   $ 33,463,668.4831,968,525.00        24.59117318865724.591173076923 % 

LIBOR Lending Office:

Same as Above

     

 

Schedule 1.1 - Page 1

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

BMO Harris Bank N.A.

115 S. LaSalle Street, 36W

Chicago, Illinois 60603

Attention: Gwen Gatz

Telephone: 312-461-2238

   $ 33,463,668.4831,968,525.00       
24.59117318865724.
591173076923%  
 

LIBOR Lending Office:

Same as Above

        

 

 

    

 

 

 

TOTAL

   $ 136,080,000.00130,000,000.00        100%     

 

 

    

 

 

 

 

1 

Percentages may not equal 100% due to rounding.

 

Schedule 1.1 - Page 2

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SCHEDULE 1.3

INITIAL BORROWING BASE PROPERTIES,

TIER I PROPERTIES AND TIER II PROPERTIES

 

Property Name

   City      State      Rooms      Tier I Properties         

1

   SpringHills Suites      San Antonio        TX        116  

2

   Hilton Garden Inn      Solomons        MD        100      Tier II Properties
        

3

   Supertel      Creston        IA        41  

4

   Super 8      Billings        MT        106  

5

   Quality Inn      Solomons        MD        60  

6

   Comfort Suites      South Bend        IN        135  

7

   Super 8      Creston        IA        121  

8

   Key West Inn      Key Largo        FL        40  

9

   Comfort Inn      New Castle        PA        79  

10

   Quality Inn      Morgantown        WV        80  

11

   Comfort Inn      Ft. Wayne        IN        127  

12

   Comfort Inn      Warsaw        IN        71  

13

   Comfort Inn      Lafayette        IN        62  

14

   Days Inn      Bossier City        LA        176              

 

 

     Total            1,375  

 

Schedule 1.3 - Page 1

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

SCHEDULE 2.9(a)

PERMITTED ACQUISITIONS

 

Property Name

   City      State      Rooms  

1

   Home2 Suites      Round Rock        TX        91  

2

   Home2 Suites      Lexington        KY        103  

3

   Home2 Suites      Tallahassee        FL        132  

4

   Home2 Suites      Memphis        TN        105 * 

 

*

Will not be Borrowing Base Property

SCHEDULE 2.9(b)

PERMITTED REFINANCES

 

Debt

   Payoff Amount  

Great Western Bank (Revolving Credit Facility)

   $ 3,158.61  

Latitude / NorthMarq

   $ 11,181,783.99  

Western Alliance Bank (MOA Portfolio)

   $ 4,630,171.25  

Western Alliance Bank (South Portfolio)

   $ 2,741,110.78  

Morgan Stanley / PNC Real Estate

   $ 936,232.72  

Cantor / Wells Fargo

   $ 5,847,972.38  

Huntington

   $ 7,354,814.52     

 

 

 

Total

   $ 32,695,244.25     

 

 

 

SCHEDULE 4.3

ACCOUNTS

None.

 

Schedule 2.9(a)4.3 - Page 1

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

SCHEDULE 5.3

BORROWING BASE QUALIFICATION DOCUMENTS

With respect to any parcel of Real Estate of the Borrower or a Subsidiary
Guarantor proposed to be included as a Borrowing Base Property, each of the
following:

(a) Description of Property. A narrative description of the Real Estate, the
improvements thereon and other information required pursuant to §5.3 and
evidence of compliance with the requirements of §7.20.

(b) Security Documents.

(i) With respect to any Tier I Properties and Tier II Properties included as a
Borrowing Base Property, aA Mortgage, Assignment of Leases and Rents, a joinder
and supplement to the Security Agreement and such other Security Documents
relating to such Real Estate, including any amendments to or additional Security
Documents, in order to grant to the Agent, for the benefit of the Lenders, a
first priority lien and security interest (subject to any Liens expressly
permitted with respect thereto by §8.2) in such Borrowing Base Property and all
assets of the TRS Lessee, duly executed and delivered by the respective parties
thereto, and the Agent shall have recorded such Security Documents, amendments,
UCC financing statements or amendments thereto as the Agent may reasonably
require.

(ii) [Intentionally Omitted.]

(c) Authority Documents. If such Real Estate is owned or leased by a Subsidiary
Guarantor, such organizational and formation documents of such Subsidiary
Guarantor as the Agent shall require.

(d) Opinion. If required by the Agent, the favorable legal opinion of counsel to
the Borrower or such Subsidiary Guarantor, from counsel reasonably acceptable to
the Agent, addressed to the Lenders and the Agent covering the due
authorization, execution, delivery and enforceability of such Security
Documents, the Joinder Agreement and such other matters as the Agent shall
reasonably request.

(e) Perfection of Liens. Evidence reasonably satisfactory to the Agent that the
Security Documents are effective to create in favor of the Agent a legal, valid
and enforceable first lien or security title and security interest in the
Collateral subject thereto and that all filings, recordings, deliveries of
instruments and other actions necessary or desirable to protect and preserve
such liens or security title or security interests have been duly effected.

(f) Survey and Taxes. With respect to the Borrowing Base Properties, a current
Survey of such Real Estate or with respect to the Initial Borrowing Base
Properties that are Tier II Properties, the most recent Survey, of such Real
Estate and evidence of payment of all taxes, assessments and municipal charges
on such Real Estate, which on the date of determination are required to have
been paid under §7.8.

 

Schedule 5.3 - Page 1

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

(g) Title Insurance; Title Exception Documents. The Title Policy (or “marked”
commitment/pro forma policy for a Title Policy) covering such Real Estate,
including all endorsements thereto, and together with proof of payment of all
fees and premiums for such policy, and true and accurate copies of all documents
listed as exceptions under such policy.

(h) UCC Certification; Bankruptcy and Litigation Searches. A certification from
the Title Insurance Company, records search firm, or counsel satisfactory to the
Agent that a search of the appropriate public records designated by Agent,
disclosed no (i) financing statements which affect any property, rights or
interests of the Borrower or such Subsidiary Guarantor except to the extent that
the same are discharged and removed prior to or simultaneously with the
inclusion of the Real Estate in the Collateral, (ii) bankruptcy filings, or
(iii) judgments (except those that are approved by Agent).

(i) Material Contracts. A true copy of the Operating Lease, Management Agreement
and Franchise Agreement relating to such Real Estate, which shall be in form and
substance reasonably satisfactory to the Agent, and with respect to the
Management Agreement for each Tier I Property and upon request of Agent with
respect to each Tier II Propertysuch Real Estate, an assignment of such
Management Agreement and a subordination of the manager’s rights thereunder to
the rights of Agent and the Lenders under the Loan Documents, and with respect
to the Franchise Agreement, a comfort letter in form and substance satisfactory
to Agent.

(j) Subordination Agreements. A subordination and attornment agreement from the
TRS Lessee of such Real Estate as required by Agent, each such agreement to be
in form and substance reasonably satisfactory to Agent.

(k) Estoppel Certificates. If requested by Agent, an estoppel certificate from
the TRS Lessee of such Real Estate and such certificate to be dated after
execution of the applicable Operating Lease and in any event not more than
thirty (30) days prior to the inclusion of such Real Estate as a Borrowing Base
Property, each such estoppel certificate to be in form and substance reasonably
satisfactory to Agent.

(l) Certificates of Insurance. Each of (i) a current certificate of insurance as
to the insurance maintained by the Borrower or such Subsidiary Guarantor on such
Real Estate (including flood insurance if necessary) from the insurer or an
independent insurance broker dated as of the date of determination, identifying
insurers, types of insurance, insurance limits, and policy terms; (ii) certified
copies of all policies evidencing such insurance (or certificates therefor
signed by the insurer or an agent authorized to bind the insurer); and
(iii) such further information and certificates from the Borrower or such
Subsidiary Guarantor, its insurers and insurance brokers as the Agent may
reasonably request, all of which shall be in compliance with the requirements of
this Agreement.

(m) Property Condition Report. A property condition report from a firm of
professional engineers or architects selected by Borrower or Subsidiary
Guarantor and reasonably acceptable to Agent (the “Inspector”) satisfactory in
form and content to the Agent and the Required Lenders, dated not more than one
hundred twenty (120) days prior to the inclusion of such Real Estate in the
Collateral, addressing such matters as the Agent and the Required Lenders may
reasonably require.

 

Schedule 5.3 - Page 2

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(n) Hazardous Substance Assessments. A hazardous waste site assessment report
addressed to the Agent (or the subject of a reliance letter addressed to, and in
a form reasonably satisfactory to, the Agent) concerning Hazardous Substances
and asbestos on such Real Estate dated or updated not more than one hundred
twenty (120) days prior to the inclusion of such Real Estate in the Collateral,
from the Environmental Engineer, such report to contain no qualifications except
those that are acceptable to the Required Lenders in their reasonable discretion
and to otherwise be in form and substance reasonably satisfactory to the Agent
in its reasonable discretion.

(o) Zoning and Land Use Compliance. Such evidence regarding zoning and land use
compliance as the Agent may require and approve in its reasonable discretion,
including, without limitation, a PZR Zoning report.

(p) Licenses. A copy of all Licenses necessary or desirable for the use
occupancy of the Borrowing Base Property.

(q) Equipment Leases. Copies of each lease of personal property or other
equipment used at such Real Estate.

(r) Appraisal. An Appraisal of such Real Estate, in form and substance
satisfactory to the Agent and the Required Lenders as provided in §5.2 and dated
not more than one hundred (120) days prior to the inclusion of such Real Estate
in the Collateral.

(s) Budget. An operating and capital expenditure budget for such Real Estate in
form and substance reasonably satisfactory to the Agent, together with a
thirty-six (36) month cash flow projection. The capital expenditure budget for
the Real Estate must show adequate reserves or cash flow to cover capital
expenditure needs of the Real Estate.

(t) Operating Statements. Operating statements for such Real Estate in the form
of such statements delivered to the Agent under §7.4(d) covering each of the
twelve (12) fiscal quarters ending immediately prior to the addition of such
Real Estate to the Collateral, to the extent available.

(u) Marketing Information. Such information regarding the market in which the
Real Estate is located as Agent may reasonably request.

(v) Certificate of Occupancy. A copy of the certificate(s) of occupancy issued
to the Subsidiary Guarantor for such parcel of Real Estate permitting the use
and occupancy of the Building thereon (or a copy of the certificates of
occupancy issued for such parcel of Real Estate and evidence satisfactory to the
Agent that any previously issued certificate(s) of occupancy is not required to
be reissued to the Borrower or any Subsidiary Guarantor), or a legal opinion or
certificate from the appropriate authority reasonably satisfactory to the Agent
that no certificates of occupancy are necessary to the use and occupancy
thereof.

(w) Covenant Compliance. A Compliance Certificate and Borrowing Base Certificate
demonstrating compliance with all covenants, representations and warranties set
forth in the Loan Documents after giving effect to the inclusion of such parcel
as a Borrowing Base Property.

 

Schedule 5.3 - Page 3

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(x) Environmental Disclosure. With respect to the Initial Borrowing Base
Properties, such evidence regarding compliance with §6.19(d) as the Agent may
reasonably require.

(y) Guarantor Documents. With respect to Real Estate owned or leased by a
Subsidiary, the Joinder Agreement and such other documents, instruments,
reports, assurances, or opinions as the Agent may reasonably require.

(z) Additional Documents. Such other agreements, documents, certificates,
reports or assurances as the Agent may reasonably require.

 

Schedule 5.3 - Page 4

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SCHEDULE 5.5

MINIMUM RELEASE PRICES

 

Brand

   City      Franchise      Minimum Release
Price  

Hilton Garden Inn

     Dowell        Hilton      $ 10,350,000  

Home 2 Suites

     Round Rock        Hilton      $ 15,075,000  

Home 2 Suites

     Lexington        Hilton      $ 14,850,000  

Home 2 Suites

     Tallahassee        Hilton      $ 19,350,000  

Hampton Inn & Suites

     Lake Mary        Hilton      $ 17,325,000  

Residence Inn

     Austin        Marriott      $ 19,710,000  

Fairfield Inn

     El Paso        Marriott      $ 14,670,000  

TownePlace Suites

     Austin        Marriott      $ 17,775,000  

Home 2 Suites

     Summerville        Hilton      $ 14,692,500  

Aloft

     Atlanta        Marriott      $ 50,940,000  

 

Schedule 5.5 - Page 1

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SCHEDULE 6.3

TITLE TO PROPERTIES

None.

 

Schedule 5.56.3 - Page 1

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SCHEDULE 6.5

NO MATERIAL CHANGES

None.

 

Schedule 6.5 - Page 1

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SCHEDULE 6.7

PENDING LITIGATION

 

  1.

Ellis vs. Supertel Hospitality Limited Partnership. On February 17, 2016, our
registered agent was served with a complaint filed in the Monroe County Circuit
Court, Florida. Mr. Ellis is alleging injury from a slip and fall at the Key
West Inn Key Largo on August 4, 2014. This claim is fully insured by Liberty
Mutual

None.

 

Schedule 6.7 - Page 1

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SCHEDULE 6.10

TAX STATUS

None.

 

Schedule 6.10 - Page 1

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SCHEDULE 6.14

CERTAIN TRANSACTIONS

None.

 

Schedule 6.14 - Page 1

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SCHEDULE 6.20(a)

SUBSIDIARIES OF REIT

 

1.

Condor Hospitality Limited Partnership, a Virginia limited partnership, owned
99% by Condor Hospitality REIT Trust and 1% by Limited Partners.

 

2.

Condor Hospitality REIT Trust, a Maryland real estate investment trust, owned
100% by REIT.

 

3.

Solomons Beacon Inn Limited Partnership, a Maryland limited partnership, owned
99% by Solomons GP, LLC and 1% by REIT.

 

4.

Solomons GP, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Limited Partnership.

 

5.

SPPR Holdings, Inc., a Delaware corporation, owned 100% by REIT.

 

6.

SPPR TRS Subsidiary, LLC, a Delaware limited liability company, owned 100% by
TRS Leasing, Inc.

 

7.

SPPR-Dowell Holdings, Inc., a Delaware corporation, owned 100% by REIT.

 

8.

SPPR-Dowell TRS Subsidiary, LLC, a Delaware limited liability company, owned
100% by TRS Leasing, Inc.

 

9.

SPPR-Dowell, LLC, a Delaware limited liability company, owned 99% by Condor
Hospitality Limited Partnership and 1% by SPPR-Dowell Holdings, Inc.

 

10.

SPPR-Hotels, LLC, a Delaware limited liability company, owned 99% by Condor
Hospitality Limited Partnership and 1% by SPPR Holdings, Inc.

 

11.

SPPR-South Bend, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Limited Partnership.

 

12.

TRS Subsidiary, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

13.

TRS Leasing, Inc., a Virignia corporation, owned 100% by Condor Hospitality REIT
Trust.

 

14.

CDOR San Spring, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Limited Partnership.

 

15.

TRS San Spring, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

Schedule 6.20(a) – Page 1

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16.

CDOR KCI Loft, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Limited Partnership.

 

17.

TRS KCI Loft, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

18.

CDOR JAX Court, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Partnership.

 

19.

TRS JAX Court, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

20.

CDOR ATL Indy, LLC, a Delaware limited liability company, owned 100% by Condor
Hospitality Partnership.

 

21.

TRS ATL Indy, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

22.

Supertel Hospitality Management, Inc., a Maryland corporation, owned 100% by
REIT.

 

23.

E&P REIT Trust, a Maryland real estate investment trust, owned 100% by REIT.

 

24.

E&P Financing Limited Partnership, a Maryland limited partnership, owned 99% by
REIT and 1% by E&P REIT Trust.

SCHEDULE 6.20(b)

UNCONSOLIDATED AFFILIATES OF REIT AND ITS SUBSIDIARIES

 

23.

1. Spring Street Hotel Property II LLC, a Delaware limited liability company,
owned 80100% by Condor Hospitality Limited Partnership and 20% by TWC.

 

24.

Spring Street Hotel Property LLC, a Delaware limited liability company, owned
100% by Spring Street Hotel Property II LLC.

 

25.

2. Spring Street Hotel OpCo II LLC, a Delaware limited liability company, owned
80100% by TRS Leasing, Inc. and 20% by TWC Spring OpCo LLC.

 

26.

Spring Street Hotel OpCo LLC, a Delaware limited liability company, owned 100%
by Spring Street Hotel OpCo II LLC

 

27.

CDOR MCO Village, LLC, a Delaware limited liability company, owned 100% by
Condor Hospitality Limited Partnership.

 

28.

TRS MCO Village, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

29.

CDOR TLH Magnolia, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

Schedule 6.20(a) – Page 2

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30.

TRS TLH Magnolia, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

31.

CDOR LEX Lowry, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

32.

TRS LEX Lowry, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

33.

CDOR MEM Southcrest, LLC, a Delaware limited liability company, owned 100%
Condor Hospitality Limited Partnership.

 

34.

TRS MEM Southcrest, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

35.

CDOR AUS Louis, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

36.

TRS AUS Louis, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

37.

TRS Springing Member, LLC, a Delaware limited liability company, owned 100% by
TRS Leasing, Inc.

 

38.

CDOR ELP Edge, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

39.

TRS ELP Edge, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

40.

CDOR AUS Casey, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

41.

TRS AUS Casey, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

42.

CDOR AUS Tech, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

43.

TRS AUS Tech, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

44.

CDOR CHS Holiday, LLC, a Delaware limited liability company, owned 100% Condor
Hospitality Limited Partnership.

 

45.

TRS CHS Holiday, LLC, a Delaware limited liability company, owned 100% by TRS
Leasing, Inc.

 

Schedule 6.20(a) – Page 3

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SCHEDULE 6.20(b)

UNCONSOLIDATED AFFILIATES OF REIT AND ITS SUBSIDIARIES

None.

 

Schedule 6.216.20(b) – Page 1

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

SCHEDULE 6.21

LEASES

Restaurant Leases:

 

1.

Morgantown, WV (Quality Inn) – Lease dated March 24, 2016, by and between
Solomons Beacon Inn Limited Partnership, a Maryland limited partnership
(“Landlord”) and Beanery 119, LLC (“Tenant”) for space in the building located
at Quality Inn, 226 Comfort Inn Road, Morgantown, West Virginia (the
“Property”).

 

2.

Solomons, MD (Quality Inn) – Lease dated February 10, 2014, by and between
Solomons Beacon Inn Limited Partnership, a Maryland limited partnership
(“Landlord”) and Angler Investors LLC (“Tenant”) for space in the building
located at Comfort Inn & Marina Restaurant, 255 Lore Road, Solomons, Maryland
(the “Property”) .

Parking License:

 

1.

San Antonio, TX (SpringHill Suites) – Monthly License Agreement dated
September 5, 2014, by and between Gunnels-Olivares, Inc. dba/Enter Park, a Texas
corporation (“Licensor”) and SpringHill Suites By Marriott (“Licensee”) for the
purpose of parking and storing vehicles in Licensor’s parking lot located at 510
St. Mary’s St., San Antonio, TX (the “Premises”).

Boat Slip Leases:

 

1.

Boat slip leases with respect to the Borrowing Base Properties located at 255
Lore Road, Solomons, Maryland and 201 Ocean Drive, Key Largo, Florida.None.

 

Schedule 6.21 – Page 1

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SCHEDULE 6.22

PROPERTY

 

1.

Any matters set forth in the property condition reports, Phase I environmental
site assessments and surveys delivered to Agent.

 

Schedule 6.22 – Page 1

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

SCHEDULE 6.24

OTHER DEBT

 

1.

Springing Unconditional Guaranty of Payment and Performance dated as of
December 14, 2016 by Condor Hospitality Trust, Inc. in favor of Great Western
Bank, with respect to the Loan Agreement dated as of December 14, 2016 among
CDOR KCI Loft, LLC, TRS KCI Loft, LLC and Great Western Bank, and the other Loan
Documents thereto (as defined therein).

 

2.

Convertible Promissory Note dated March 16, 2016 by Condor Hospitality Trust,
Inc. to the order of Real Estate Strategies L.P. in the original principal
amount of $1,011,599.1,011,599, as amended by Amendment dated February 28, 2017
to Convertible Promissory Note dated March 16, 2016.

 

3.

Each PPP Loan.

 

Schedule 6.24 – Page 1

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SCHEDULE 6.34

MATERIAL CONTRACTS

Management Agreements:

 

1.

1. Peachtree Hospitality Management – Hotel Management Agreement dated
October 1, 2015, by and between TRS San Spring, LLC, a Delaware limited
liability company (“Lessee”) and Peachtree Hospitality Management, LLC
(“Operator”) for the purpose of engaging Operator to operate the following
locations:Hotel Management Agreement dated effective July 1, 2016 by and between
SPPR-Dowell TRS Subsidiary, LLC and Cherry Cove Hospitality Management, LLC.

 

  a.

SpringHill Suites by Marriott hotel located at 524 St. Mary’s St., San Antonio,
TX

 

2.

Cherry Cove Hospitality Management – Hotel Management Agreement dated July 1,
2016, by and between SPPR-Dowell TRS Subsidiary LLC, a Delaware limited
liability company (“Lessee”) and Cherry Cove Hospitality Management,
LLC(“Operator”) for the purpose of engaging Operator to operate the following
locations:

 

  a.

Hilton Garden Inn by Hilton hotel located at 13100 Dowell Road, Dowell, MD

 

  b.

Quality Inn by Choice hotel located at 255 Lorre Road, Solomons, MD

 

3.

K Partners Hospitality Group – Hotel Management Agreement dated July 1, 2016, by
and between TRS Subsidiary LLC, a Delaware limited liability company (“Lessee”)
and K Partners Hospitality Group, LP(“Operator”) for the purpose of engaging
Operator to operate the following locations:

 

  a.

Comfort Inn by Choice hotel located at 1740 New Butler Road, New Castle, PA

 

  b.

Quality Inn by Choice hotel located at 225 Comfort Inn Road, Morgantown, WV

 

4.

Kinseth Hotel Corporation – Hotel Management Agreement dated July 1, 2016, by
and between TRS Leasing, Inc., a Virginia limited liability company and TRS
Subsidiary LLC. a Delaware limited liability company (collectively “Lessee”) and
Kinseth Hotel Corporation (“Operator”) for the purpose of engaging Operator to
operate the following locations:

 

  a.

Super 8 by Wyndham hotel located at 5400 Southgate Drive, Billings, MT

 

  b.

Super 8 by Wyndham hotel located at 804 West Taylor, Creston, IA

 

  c.

Supertel Inn hotel located at 800 Laurel Street, Creston, IA

 

Schedule 6.34 – Page 1

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

5.

Hospitality Management Advisors, Inc. – Hotel Management Agreement dated July 1,
2016, by and between TRS Leasing, Inc., a Virginia limited liability company and
TRS Subsidiary LLC a Delaware limited liability company and SPPR TRS Subsidiary
LLC, a Delaware limited liability company (collectively “Lessee”) and
Hospitality Management Advisors, Inc. (“Operator”) for the purpose of engaging
Operator to operate the following locations:

 

  a.

Comfort Inn & Suites by Choice hotel located 3328 E Center St, Warsaw, IN

 

  b.

Comfort Suites by Choice hotel located at 5775 Coventry Ln, Ft. Wayne, IN

 

  c.

Comfort Suites by Choice hotel located at 31 Frontage Rd, Lafayette, IN

 

  d.

Comfort Suites by Choice hotel located at 52939 US 933 N, South Bend, IN

 

  e.

Days Inn by Wyndham hotel located at 200 John Wesley Blvd, Bossier City, LA

 

  f.

Key West Inn hotel located at 201 Ocean Drive, Key Largo, FL

 

2.

Hotel Management Agreement dated February 28, 2020 between Spring Street Hotel
OpCo LLC and Aimbridge Hospitality, LLC.

 

3.

Hotel Management Agreement dated September 30, 2019 between TRS TLH Magnolia,
LLC and Aimbridge Hospitality, LLC.

 

4.

Hotel Management Agreement dated September 30, 2019 between TRS AUS Louis, LLC
and Aimbridge Hospitality, LLC.

 

5.

Hotel Management Agreement dated September 30, 2019 between TRS LEX Lowry, LLC
and Aimbridge Hospitality, LLC.

 

6.

Hotel Management Agreement dated June 1, 2020 between TRS MCO Village, LLC and
Aimbridge Hospitality, LLC.

 

7.

Hotel Management Agreement dated August 31, 2017 between TRS ELP Edge, LLC and
Pillar Hotels and Resorts, LLC.

 

8.

Hotel Management Agreement dated August 31, 2017 between TRS AUS Casey, LLC and
Pillar Hotels and Resorts, LLC.

 

9.

Hotel Management Agreement dated January 17, 2018 between TRS AUS Tech, LLC and
Pillar Hotels and Resorts, LLC.

 

10.

Hotel Management Agreement dated February 21, 2018 between TRS CHS Holiday, LLC
and Inn Ventures IVI LP.

 

Schedule 6.34 – Page 2

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

Franchise Agreements:

 

1.

San Antonio, TX (SpringHill Suites) – SpringHill Suites by Marriott Relicensing
Franchise Agreement dated October 1, 2015, by and between Marriott
International, Inc. (“Franchisor”) and TRS San Spring, LLC (“Franchisee”) for
the hotel located at 524 St. Mary’s St., San Antonio, TX, and any amendments,
assignments, modifications and any supplements thereto.

 

1.

2. Dowell, MD (Hilton Garden Inn) – Hilton Garden Inn Franchise Agreement
effective date of May 25, 2012, by and between Hilton Garden Inns Franchise LLC
(“Franchisor”) and TRS Leasing, Inc., a Virginia corporation (“Franchisee”) for
the hotel located at 13100 Dowell Road, Dowell, MD, and any amendments,
assignments, modifications and any supplements thereto.Dowell, MD (Hilton Garden
Inn) – Franchise Agreement effective date of May 25, 2012, by and between Hilton
Garden Inns Franchise LLC (“Franchisor”) and TRS Leasing, Inc., a Virginia
corporation (“Franchisee”), as affected by that certain Assignment and
Assumption of, and Amendment to, Franchise Agreement by and among TRS Leasing,
Inc., SPPR – Dowell TRS Subsidiary, LLC, and Hilton Garden Inns Franchise LLC,
dated October 11, 2012. Property Closure Approval Letter dated May 5, 2020.

 

3.

Billings, MT (Super 8) – Franchise Agreement effective date of October 11, 1999
by and between Super 8 Motels, Inc. (“Franchisor”) and MOA Hospitality, Inc., a
Delaware corporation (“Original Franchisee”) for the hotel located at 5400
Southgate Drive, Billings, MT, and any amendments, assignments, modifications
and any supplements thereto.

 

4.

Bossier City, LA (Days Inn) – License Agreement dated of March 31, 2007 by and
between Days Inn Worldwide, Inc. (“Franchisor”) and Supertel Limited
Partnership, a Virginia limited partnership and TRS Leasing, Inc. a Virginia
corporation (“Franchisee”) for the hotel located at 200 John Wesley Blvd,
Bossier City, LA, and any amendments, assignments, modifications and any
supplements thereto.

 

5.

Creston, IA (Super 8) – Franchise Agreement effective date of September 20, 1998
by and between Super 8 Motels, Inc. (“Franchisor”) and Supertel Hospitality,
Inc., a Delaware corporation (“Franchisee”) for the hotel located at 804 West
Taylor, Creston, IA, and any amendments, assignments, modifications and any
supplements thereto.

 

6.

Ft. Wayne, IN (Comfort Suites) – Franchise Agreement effective date of
November 7, 2005 by and between Choice Hotels International, Inc. (“Franchisor”)
and Supertel Hospitality, Inc., a Delaware corporation, Supertel Limited
Partnership, a Virginia limited partnership, Supertel Hospitality REIT Trust, a
Maryland REIT and TRS Leasing, Inc. a Virginia corporation (“Franchisee”) for
the hotel located at 5775 Coventry Ln, Ft. Wayne, IN and any amendments,
assignments, modifications and any supplements thereto.

 

Schedule 6.34 – Page 3

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

7.

Key Largo, FL (Key West Inn) – License Agreement effective date of December 20,
2007, by and between Key West Inns, Inc. (“Franchisor”) and TRS Leasing, Inc., a
Virginia corporation (“Franchisee”) for the hotel located at 201 Ocean Drive,
Key Largo, FL, and any amendments, assignments, modifications and any
supplements thereto.

 

8.

Lafayette, IN (Comfort Suites) – Franchise Agreement effective date of
November 7, 2005 by and between Choice Hotels International, Inc. (“Franchisor”)
and Supertel Hospitality, Inc., a Delaware corporation, Supertel Limited
Partnership, a Virginia limited partnership, Supertel Hospitality REIT Trust, a
Maryland REIT and TRS Leasing, Inc. a Virginia corporation (“Franchisee”) for
the hotel located at 31 Frontage Rd, Lafayette, IN and any amendments,
assignments, modifications and any supplements thereto.

 

9.

Morgantown, WV (Quality Inn) – Franchise Agreement effective date of
September 29, 2014 by and between Choice Hotels International, Inc.
(“Franchisor”) and TRS Subsidiary, LLC, a Delaware limited liability company
(“Franchisee”) for the hotel located at 225 Comfort Inn Road, Morgantown, WV and
any amendments, assignments, modifications and any supplements thereto.

 

10.

New Castle, PA (Quality Inn) – Franchise Agreement effective date of March 17,
1997 by and between Choice Hotels Franchising, Inc. (“Franchisor”) and Humphrey
Hospitality Management, Inc. a Maryland corporation (“Original Franchisee”) for
the hotel located at 1740 New Butler Road, New Castle, PA and any amendments,
assignments, modifications and any supplements thereto.

 

11.

Solomons, MD (Quality Inn) – Franchise Agreement effective date of December 24,
2015 by and between Choice Hotels International, Inc. (“Franchisor”) and TRS
Leasing, Inc. a Virginia corporation (“Franchisee”) for the hotel located at 255
Lorre Road, Solomons, MD and any amendments, assignments, modifications and any
supplements thereto.

 

12.

South Bend, IN (Comfort Suites – Franchise Agreement effective date of
November 7, 2005 by and between Choice Hotels International, Inc. (“Franchisor”)
and Supertel Hospitality, Inc., a Delaware corporation, Supertel Limited
Partnership, a Virginia limited partnership, Supertel Hospitality REIT Trust, a
Maryland REIT and TRS Leasing, Inc. a Virginia corporation (“Franchisee”) for
the hotel located at 52939 US 933 N, South Bend, IN and any amendments,
assignments, modifications and any supplements thereto.

 

13.

Warsaw, IN (Comfort

 

Schedule 6.34 – Page 4

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

2.

Lake Mary, FL (Hampton Inn & Suites) – Franchise Agreement effective date of
November 8, 2005 by and between Choice Hotels International, Inc. (“Franchisor”)
and Supertel Hospitality, Inc., a Delaware corporation, Supertel Limited
Partnership, a Virginia limited partnership, Supertel Hospitality REIT Trust, a
Maryland REIT and TRS Leasing, Inc. a Virginia corporation (“Franchisee”) for
the hotel located at 3328 E Center St, Warsaw, IN and any amendments,
assignments, modifications and any supplements thereto.June 19, 2017, by and
between Hilton Franchise Holding LLC (“Franchisor”) and TRS MCO Village, LLC
(“Franchisee”). Manager change approval dated May 29, 2020.

 

3.

Atlanta, GA (Aloft) – Franchise Agreement effective date of August 22, 2016, by
and between The Sheraton LLC (“Franchisor”) and Spring Street Hotel OpCo LLC
(“Franchisee”), as affected by that certain Operator Consent Letter effective
date of August 22, 2016 by Franchisor, as affected by that certain Guarantee
effective date of August 22, 2016 by Condor Hospitality Trust, Inc. for the
benefit of Franchisor. Amendment dated February 14, 2020.

 

4.

Lexington, KY (Home2 Suites) – Franchise Agreement effective date of March 24,
2017, by and between Hilton Franchise Holding LLC (“Franchisor”) and TRS LEX
Lowry, LLC (“Franchisee”).

 

5.

Round Rock, TX (Home2 Suites) – Franchise Agreement effective date of March 24,
2017, by and between Hilton Franchise Holding LLC (“Franchisor”) and TRS AUS
Louis, LLC (“Franchisee”). Manager change approval dated August 26, 2019.

 

6.

Tallahassee, FL (Home2 Suites) – Franchise Agreement effective date of March 24,
2017, by and between Hilton Franchise Holding LLC (“Franchisor”) and TRS TLH
Magnolia, LLC (“Franchisee”). Manager change approval dated August 26, 2019.

 

7.

Austin, TX (Residence Inn) – Franchise Agreement effective date of August 31,
2017, by and between Marriott International, Inc. (“Franchisor”) and TRS AUS
Casey, LLC (“Franchisee”), as affected by that certain Management Company
Acknowledgement effective date of August 31, 2017 by and between Franchisor and
Franchisee, as affected by that certain Electronic Systems License Agreement
effective date of August 31, 2017 by and between Franchisor and Franchisee, as
affected by that certain Owner Agreement effective date of August 31, 2017 by
and between Franchisor and Franchisee, as affected by that certain Guaranty
effective date of August 31, 2017 by Condor Hospitality Trust, Inc. in favor of
Franchisor.

 

8.

El Paso, TX (Fairfield Inn) – Franchise Agreement effective date of August 31,
2017, by and between Marriott International, Inc. (“Franchisor”) and TRS ELP
Edge, LLC (“Franchisee”).

 

Schedule 6.34 – Page 5

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9.

Austin, TX (TownePlace Suites) – Franchise Agreement effective date of
January 18, 2018, by and between Marriott International, Inc. (“Franchisor”) and
TRS AUS Tech, LLC (“Franchisee”), as amended by that certain Amendment to
TownePlace Suites by Marriott Relicensing Franchise Agreement and Settlement and
Release of Claims effective date of January 18, 2018 by and between Franchisor
and Franchisee, as affected by that certain Electronic Systems License Agreement
effective date of January 18, 2018 by and between Franchisor and Franchisee, as
affected by that certain Management Company Acknowledgement effective date of
January 18, 2018 by and between Franchisor and Franchisee, as affected by that
certain Owner Agreement effective date of January 18, 2018 by and between
Franchisor and CDOR AUS Tech, LLC, as affected by that certain Guaranty
effective date of January 18, 2018 by Condor Hospitality Trust, Inc. in favor of
Franchisor.

 

10.

Summerville, SC (Home2 Suites) – Franchise Agreement effective date of
February 21, 2018, by and between Hilton Franchise Holding LLC (“Franchisor”)
and TRS CHS Holiday, LLC (“Franchisee”).

 

*

Note: Through various amendments, assignments, modifications and supplements to
the foregoing Franchise Agreements, the current franchisees thereof are as
indicated on Schedule 6.37.

Operating Leases:

 

1.

Billings

 

1.

Atlanta, MTGA (Super 8Aloft) – Master Lease Agreement dated as of January 5,
2007August 22, 2016 by and between Supertel Limited Partnership, a Virginia
limited partnership (“Lessor”) and TRS Leasing, Inc., a Virginia corporation
(“Lessee”) for the hotel located at 5400 Southgate Drive, Billings, MT, and any
amendments, assignments, modifications and any supplements thereto.

 

2.

Bossier City, LA (Days Inn) – Master Lease Agreement dated as of April 4, 2007
by and between Supertel Limited Partnership, a Virginia limited partnership
(“Lessor”) and TRS Leasing, Inc., a Virginia corporation (“Lessee”) for the
hotel located at 200 John Wesley Blvd, Bossier City, LA, and any amendments,
assignments, modifications and any supplements thereto.

 

3.

Creston, IA (Super 8) – Master Lease Agreement dated as of November 26, 2002 by
and between Solomons Beacon Inn Limited Partnership, a Maryland limited
partnership (“Lessor”) and TRS Subsidiary, LLC, a Delaware limited liability
company (“Lessee”) for the hotel located at 804 West Taylor, Creston, IA, and
any amendments, assignments, modifications and any supplements thereto.

 

4.

Creston, IA (Supertel Inn) – Master Lease Agreement dated as of June 29, 2006 by
and between Supertel Limited Partnership, a Virginia limited partnership
(“Lessor”) and TRS Leasing, Inc., a Virginia corporation (“Lessee”) for the
hotel located at 800 Laurel Street, Creston, IA, and any amendments,
assignments, modifications and any supplements thereto.between Spring Street
Hotel Property LLC (“Lessor”) and Spring Street Hotel OpCo LLC (“Lessee”).

 

Schedule 6.34 – Page 6

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2.

5. Dowell, MD (Hilton Garden Inn) – Master Lease Agreement dated as of
October 11, 2012 by and between SPPR-Dowell, LLC, a Delaware limited liability
company (“Lessor”) and SPPR-Dowell TRS Subsidiary, LLC, a Delaware limited
liability company (“Lessee”) for the hotel located at 13100 Dowell Road, Dowell,
MD, and any amendments, assignments, modifications and any supplements
thereto.Dowell, MD (Hilton Garden Inn) – Master Lease Agreement dated as of
October 11, 2012 by and between SPPR-Dowell, LLC, a Delaware limited liability
company (“Lessor”) and SPPR-Dowell TRS Subsidiary, LLC, a Delaware limited
liability company (“Lessee”).

 

6.

Ft. Wayne, IN (Comfort Suites) – Master Lease Agreement dated as of November 7,
2005 by and between SPPR Hotels, LLC, a Delaware limited liability company
(“Lessor”) and SPPR TRS Subsidiary, LLC, a Delaware limited liability company
(“Lessee”) for the hotel located at 5775 Coventry Ln, Ft. Wayne, IN, and any
amendments, assignments, modifications and any supplements thereto.

 

7.

Key Largo, FL (Key West Inn) – Master Lease Agreement dated as of November 26,
2002 by and between Solomons Beacon Inn Limited Partnership, a Maryland limited
partnership (“Lessor”) and TRS Subsidiary, LLC, a Delaware limited liability
company (“Lessee”) for the hotel located at 201 Ocean Drive, Key Largo, FL, and
any amendments, assignments, modifications and any supplements thereto.

 

8.

Lafayette, IN (Comfort Suites) – Master Lease Agreement dated as of November 7,
2005 by and between SPPR Hotels, LLC, a Delaware limited liability company
(“Lessor”) and SPPR TRS Subsidiary, LLC, a Delaware limited liability company
(“Lessee”) for the hotel located at 31 Frontage Rd, Lafayette, IN, and any
amendments, assignments, modifications and any supplements thereto.

 

9.

Morgantown, WV (Quality Inn) – Master Lease Agreement dated as of November 26,
2002 by and between Solomons Beacon Inn Limited Partnership, a Maryland limited
partnership (“Lessor”) and TRS Subsidiary, LLC, a Delaware limited liability
company (“Lessee”) for the hotel located at 225 Comfort Inn Road, Morgantown,
WV, and any amendments, assignments, modifications and any supplements thereto.

 

10.

New Castle, PA (Quality Inn) – Master Lease Agreement dated as of November 26,
2002 by and between Solomons Beacon Inn Limited Partnership, a Maryland limited
partnership (“Lessor”) and TRS Subsidiary, LLC, a Delaware limited liability
company (“Lessee”) for the hotel located at 1740 New Butler Road, New Castle,
PA, and any amendments, assignments, modifications and any supplements thereto.

 

11.

San Antonio, TX (SpringHill Suites) – Master Lease Agreement dated as of
October 1, 2015 by and between CDOR San Spring, LLC, a Delaware limited
liability company (“Lessor”) and TRS San Spring, LLC, a Delaware limited
liability company (“Lessee”) for the hotel located at 524 St. Mary’s St., San
Antonio, TX, and any amendments, assignments, modifications and any supplements
thereto.

 

Schedule 6.34 – Page 7

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12.

Solomons, MD (Quality Inn) – Master Lease Agreement dated as of November 2, 2012
by and between Supertel Limited Partnership, a Virginia limited partnership
(“Lessor”) and TRS Leasing, Inc., a Virginia corporation (“Lessee”) for the
hotel located at 255 Lorre Road, Solomons, MD, and any amendments, assignments,
modifications and any supplements thereto.

 

13.

South Bend, IN (Comfort Suites) – Master Lease Agreement dated as of
November 30, 2005 by and between SPPR-South Bend, LLC, a Delaware limited
liability company (“Lessor”) and TRS Leasing, Inc., a Virginia corporation
(“Lessee”) for the hotel located at 52939 US 933 N, South Bend, IN, and any
amendments, assignments, modifications and any supplements thereto

 

3.

Lake Mary, FL (Hampton Inn & Suites) – Master Lease Agreement dated as of
June 19, 2017 by and between CDOR MCO Village, LLC, a Delaware limited liability
company (“Lessor”) and TRS MCO Village, LLC, a Delaware limited liability
company (“Lessee”).

 

4.

Lexington, KY (Home2 Suites) – Master Lease Agreement dated as of March 24, 2017
by and between CDOR LEX Lowry, LLC, a Delaware limited liability company
(“Lessor”) and TRS LEX Lowry, LLC, a Delaware limited liability company
(“Lessee”).

 

5.

Round Rock, TX (Home2 Suites) – Master Lease Agreement dated as of March 24,
2017 by and between CDOR AUS Louis, LLC, a Delaware limited liability company
(“Lessor”) and TRS AUS Louis, LLC, a Delaware limited liability company
(“Lessee”).

 

6.

Tallahassee, FL (Home2 Suites) – Master Lease Agreement dated as of March 24,
2017 by and between CDOR TLH Magnolia, LLC, a Delaware limited liability company
(“Lessor”) and TRS TLH Magnolia, LLC, a Delaware limited liability company
(“Lessee”).

 

7.

Austin, TX (Residence Inn) – Master Lease Agreement dated as of August 31, 2017
by and between CDOR AUS Casey, LLC, a Delaware limited liability company
(“Lessor”) and TRS AUS Casey, LLC, a Delaware limited liability company
(“Lessee”).

 

8.

Austin, TX (TownePlace Suites) – Master Lease Agreement dated as of January 17,
2018 by and between CDOR AUS Tech, LLC, a Delaware limited liability company
(“Lessor”) and TRS AUS Tech, LLC, a Delaware limited liability company
(“Lessee”).

 

9.

El Paso, TX (Fairfield Inn) – Master Lease Agreement dated as of August 31, 2017
by and between CDOR ELP Edge, LLC, a Delaware limited liability company
(“Lessor”) and TRS ELP Edge, LLC, a Delaware limited liability company
(“Lessee”).

 

10.

14. Warsaw, IN (Comfort Inn &Summerville, SC (Home2 Suites) – Master Lease
Agreement dated as of November 7, 2005February 21, 2018 by and between SPPR
HotelsCDOR CHS Holiday, LLC, a Delaware limited liability company (“Lessor”) and
SPPR TRS SubsidiaryCHS Holiday, LLC, a Delaware limited liability company
(“Lessee”) for the hotel located at 3328 E Center St, Warsaw, IN, and any
amendments, assignments, modifications and any supplements thereto(“Lessee”).

 

*

Note: Through various amendments, assignments, modifications and supplements to
the foregoing Operating Leases, the current TRS Lessees thereof are as indicated
on Schedule 6.37.

 

Schedule 6.34 – Page 8

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SCHEDULE 6.37

INITIAL BORROWING BASE PROPERTIES

 

Asset
#

  Tier  

Address

 

City

 

State

  Zip  

Flag

 

Manager

 

Owner

 

TRS Lessee

 

Franchisee

(if different from
TRS Lessee)

1   1   524 S. St. Mary’s St.   San Antonio   Texas   78205   Spring Hill Suites
by Marriott1   Peachtree   CDOR San Spring, LLC   TRS San Spring, LLC   2   1  
13100 Dowell Road   Dowell   Maryland   20629   Hilton Garden Inn1   Cherry Cove
  SPPR-Dowell, LLC   SPPR-Dowell TRS Subsidiary, LLC   3   2   800 Laurel Street
  Creston   Iowa   50801   Supertel Inn   Kinseth   Condor Hospitality Limited
Partnership   TRS Leasing, Inc.   4   2   5400 Southgate Drive   Billings  
Montana   59101   Super 8   Kinseth   Condor Hospitality Limited Partnership  
TRS Leasing, Inc.   Condor Hospitality Limited Partnership 5   2   255 Lore Road
  Solomons   Maryland   20688   Quality Inn   Cherry Cove2   Condor Hospitality
Limited Partnership   TRS Leasing, Inc.   6   2   52939 US 933N   South Bend  
Indiana   46637   Comfort Suites   HMA   SPPR-South Bend, LLC   TRS Leasing,
Inc.   SPPR – South Bend, LLC and TRS Leasing, Inc. 7   2   804 West Taylor
Street   Creston   Iowa   50801   Super 8   Kinseth   Solomons Beacon Inn
Limited Partnership   TRS Subsidiary, LLC   8   2   201 Ocean210 South Magnolia
132 Drive   Key LargoTallahassee   Florida   3303732301   Key West InnHome2
Suites by Hilton   HMAAimbridge   Solomons Beacon Inn Limited PartnershipCDOR
TLH Magnolia, LLC   TRS SubsidiaryTLH Magnolia, LLC   9   2   1740 New Butler
Road   New Castle   Pennsylvania   16101   Comfort Inn   K Partners   Solomons
Beacon Inn Limited Partnership   TRS Subsidiary, LLC   10   2   225 Comfort Inn
Drive300 Ted Turner Dr NW   MorgantownAtlanta   West VirginiaGeorgia  
2650830308   Quality InnAloft by Marriott   K PartnersAimbridge   Solomons
Beacon Inn Limited PartnershipSpring Street Hotel Property LLC   TRS
Subsidiary,Spring Street Hotel OpCo LLC   11   2   5775 Coventry126 East Lowry
Lane   Fort WayneLexington   IndianaKentucky   4680440503   ComfortHome2 Suites
by Hilton   HMAAimbridge   SPPR-HotelsCDOR LEX Lowry, LLC   SPPR TRS
SubsidiaryLEX Lowry, LLC       1000 W. Louis Henna 91 Blvd.   Round Rock   Texas
  78681   Home2 Suites by Hilton   Aimbridge   CDOR AUS Louis, LLC   TRS AUS
Louis, LLC  

 

 

1 

Liquor license

2 

Management Agreement is with SPPR-Dowell TRS Subsidiary, LLC

 

Schedule 6.37 – Page 1

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                          850 Village Oak Lane   Lake Mary   Florida   32746  
Hampton Inn & Suites   Aimbridge   CDOR MCO Village, LLC   TRS MCO Village, LLC
  12   2   3328 East Center Street6611 Edgemere Blvd.   WarsawEl Paso  
IndianaTexas   4658079925   ComfortFairfield Inn & Suites   HMAPillar Hotels  
SPPR-HotelsCDOR ELP Edge, LLC   SPPR TRS SubsidiaryELP Edge, LLC       3201
Caseybridge Ct.   Austin   Texas   78744   Residence Inn   Pillar Hotels   CDOR
AUS Casey, LLC   TRS AUS Casey, LLC   13   2   31 Frontage Road12427 Tech Ridge
Blvd.   LafayetteAustin   IndianaTexas   4790578743   ComfortTowne Place Suites
  HMAPillar Hotels   SPPR-HotelsCDOR AUS Tech, LLC   SPPR TRS SubsidiaryAUS
Tech, LLC   14   2   200 John Wesley Blvd221 Holiday Dr.   Bossier
CitySummerville   LouisianaSouth Carolina   7111229483   Days InnHome2 Suites by
Hilton   HMAInn Ventures   Condor Hospitality Limited PartnershipCDOR CHS
Holiday, LLC   TRS LeasingCHS Holiday, Inc.LLC   TRS Leasing, Inc. and Condor
Hospitality Limited Partnership

SCHEDULE 7.23

[RESERVED]

 

Schedule 6.37 – Page 2